SEC Info  
    Home      Search      My Interests      Help      Sign In      Please Sign In

Argent Securities Inc., Asset-Backed Pass-Through Certificates, Series 2006-W1 – ‘8-K’ for 1/26/06 – EX-4.1

On:  Wednesday, 2/22/06, at 5:33pm ET   ·   For:  1/26/06   ·   Accession #:  882377-6-555   ·   File #:  333-121782-03

Previous ‘8-K’:  ‘8-K’ on 2/7/06 for 1/26/06   ·   Latest ‘8-K’:  This Filing

Find Words in Filings emoji
 
  in    Show  and   Hints

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 2/22/06  Argent Secs Inc Asset-Ba… 2006-W1 8-K:2,9     1/26/06    2:15M                                    Thacher Proffitt… LLP/FA

Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Argent Securities Inc.                              HTML     31K 
 2: EX-4.1      Pooling and Servicing Agreement                     HTML  46.01M 


EX-4.1   —   Pooling and Servicing Agreement


This exhibit is an HTML Document rendered as filed.  [ Alternative Formats ]



ARGENT SECURITIES INC.

Depositor

AMERIQUEST MORTGAGE COMPANY

Master Servicer

and

DEUTSCHE BANK NATIONAL TRUST COMPANY

Trustee

 

 

 

 

POOLING AND SERVICING AGREEMENT

Dated as of January 1, 2006

 

 

 

 

 

ASSET-BACKED PASS-THROUGH CERTIFICATES

SERIES 2006-W1

 



 

TABLE OF CONTENTS

 

ARTICLE I

 

DEFINITIONS

SECTION 1.01.

Defined Terms.

SECTION 1.02.

Allocation of Certain Interest Shortfalls.

SECTION 1.03.

Rights of the NIMS Insurer.

ARTICLE II

 

CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES

SECTION 2.01.

Conveyance of Mortgage Loans.

SECTION 2.02.

Acceptance of REMIC I by the Trustee.

SECTION 2.03.

Repurchase or Substitution of Mortgage Loans by the Seller or the Depositor; Payment of Prepayment Charge Payment Amounts.

SECTION 2.04.

[Reserved].

SECTION 2.05.

Representations, Warranties and Covenants of the Master Servicer.

SECTION 2.06.

Issuance of the REMIC I Regular Interests and the Class R-I Interest.

SECTION 2.07.

Conveyance of the REMIC I Regular Interests; Acceptance of REMIC II and REMIC III by the Trustee.

SECTION 2.08.

Issuance of Class R Certificates and Class R-X Certificates.

ARTICLE III

 

ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS

SECTION 3.01.

Master Servicer to Act as Master Servicer.

SECTION 3.02.

Collection of Certain Mortgage Loan Payments.

SECTION 3.03.

[Reserved].

SECTION 3.04.

Collection Account, Escrow Account and Distribution Account.

SECTION 3.05.

Permitted Withdrawals From the Collection Account, Escrow Account and Distribution Account.

SECTION 3.06.

Investment of Funds in the Collection Account, the Escrow Account, the REO Account and the Distribution Account.

SECTION 3.07.

Payment of Taxes, Insurance and Other Charges.

SECTION 3.08.

Maintenance of Hazard Insurance.

SECTION 3.09.

Maintenance of Mortgage Blanket Insurance.

SECTION 3.10.

Fidelity Bond; Errors and Omissions Insurance.

SECTION 3.11.

Enforcement of Due-On-Sale Clauses; Assumption Agreements.

SECTION 3.12.

Realization Upon Defaulted Mortgage Loans.

SECTION 3.13.

Title, Management and Disposition of REO Property.

SECTION 3.14.

[Reserved].

SECTION 3.15.

Reports of Foreclosure and Abandonment of Mortgaged Properties.

SECTION 3.16.

Optional Purchase of Defaulted Mortgage Loans.

SECTION 3.17.

Trustee to Cooperate; Release of Mortgage Files.

SECTION 3.18.

Servicing Compensation.

 



 

SECTION 3.19.

[Reserved]

SECTION 3.20.

Assessments of Compliance and Attestation Reports.

SECTION 3.21.

Access to Certain Documentation.

SECTION 3.22.

[Reserved].

SECTION 3.23.

Advance Facility.

ARTICLE IV

 

PAYMENTS TO CERTIFICATEHOLDERS

SECTION 4.01.

Distributions.

SECTION 4.02.

Statements to Certificateholders.

SECTION 4.03.

Remittance Reports and Other Reports to the Trustee; Advances; Payments in Respect of Prepayment Interest Shortfalls.

SECTION 4.04.

Allocation of Realized Losses.

SECTION 4.05.

Compliance with Withholding Requirements.

SECTION 4.06.

Commission Reporting.

SECTION 4.07.

[Reserved].

SECTION 4.08.

[Reserved].

SECTION 4.09.

[Reserved].

SECTION 4.10.

Swap Account

SECTION 4.11.

Tax Treatment of Swap Payments and Swap Termination Payments.

SECTION 4.12.

Net WAC Rate Carryover Reserve Account.

ARTICLE V

 

THE CERTIFICATES

SECTION 5.01.

The Certificates.

SECTION 5.02.

Registration of Transfer and Exchange of Certificates.

SECTION 5.03.

Mutilated, Destroyed, Lost or Stolen Certificates.

SECTION 5.04.

Persons Deemed Owners.

SECTION 5.05.

Certain Available Information.

ARTICLE VI

 

THE DEPOSITOR AND THE MASTER SERVICER

SECTION 6.01.

Liability of the Depositor and the Master Servicer.

SECTION 6.02.

Merger or Consolidation of the Depositor or the Master Servicer.

SECTION 6.03.

Limitation on Liability of the Depositor, the Master Servicer and Others.

SECTION 6.04.

Limitation on Resignation of the Master Servicer.

SECTION 6.05.

Rights of the Depositor in Respect of the Master Servicer.

SECTION 6.06.

Sub-Servicing Agreements Between the Master Servicer and Sub-Servicers.

SECTION 6.07.

Successor Sub-Servicers.

SECTION 6.08.

Liability of the Master Servicer.

SECTION 6.09.

No Contractual Relationship Between Sub-Servicers and the NIMS Insurer, the Trustee or Certificateholders.

SECTION 6.10.

Assumption or Termination of Sub-Servicing Agreements by Trustee.

SECTION 6.11.

Sub-Servicing Accounts.

 



 

ARTICLE VII

 

DEFAULT

SECTION 7.01.

Master Servicer Events of Default.

SECTION 7.02.

Trustee to Act; Appointment of Successor.

SECTION 7.03.

Notification to Certificateholders.

SECTION 7.04.

Waiver of Master Servicer Events of Default.

ARTICLE VIII

 

CONCERNING THE TRUSTEE

SECTION 8.01.

Duties of Trustee.

SECTION 8.02.

Certain Matters Affecting the Trustee.

SECTION 8.03.

The 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 Trustee.

SECTION 8.07.

Resignation and Removal of the Trustee.

SECTION 8.08.

Successor Trustee.

SECTION 8.09.

Merger or Consolidation of Trustee.

SECTION 8.10.

Appointment of Co-Trustee or Separate Trustee.

SECTION 8.11.

Appointment of Custodians.

SECTION 8.12.

Appointment of Office or Agency.

SECTION 8.13.

Representations and Warranties of the Trustee.

ARTICLE IX

 

TERMINATION

SECTION 9.01.

Termination Upon Repurchase or Liquidation of All Mortgage Loans.

SECTION 9.02.

Additional Termination Requirements.

ARTICLE X

 

REMIC PROVISIONS

SECTION 10.01.

REMIC Administration.

SECTION 10.02.

Prohibited Transactions and Activities.

SECTION 10.03.

Master Servicer and Trustee Indemnification.

ARTICLE XI

 

MISCELLANEOUS PROVISIONS

SECTION 11.01.

Amendment.

SECTION 11.02.

Recordation of Agreement; Counterparts.

SECTION 11.03.

Limitation on Rights of Certificateholders.

SECTION 11.04.

Governing Law.

SECTION 11.05.

Notices.

 



 

SECTION 11.06.

Severability of Provisions.

SECTION 11.07.

Notice to Rating Agencies and the NIMS Insurer.

SECTION 11.08.

Article and Section References.

SECTION 11.09.

Grant of Security Interest.

SECTION 11.10.

Third Party Rights.

 

 

 



 

Exhibits

Exhibit A-1

 

Form of Class A-1 Certificate

Exhibit A-2A

Form of Class A-2A Certificate

Exhibit A-2B

Form of Class A-2B Certificate

Exhibit A-2C

Form of Class A-2C Certificate

Exhibit A-2D

Form of Class A-2D Certificate

Exhibit A-M-1

Form of Class M-1 Certificate

Exhibit A-M-2

Form of Class M-2 Certificate

Exhibit A-M-3

Form of Class M-3 Certificate

Exhibit A-M-4

Form of Class M-4 Certificate

Exhibit A-M-5

Form of Class M-5 Certificate

Exhibit A-M-6

Form of Class M-6 Certificate

Exhibit A-M-7

Form of Class M-7 Certificate

Exhibit A-M-8

Form of Class M-8 Certificate

Exhibit A-M-9

Form of Class M-9 Certificate

Exhibit A-M-10

Form of Class M-10 Certificate

Exhibit A-CE

Form of Class CE Certificate

Exhibit A-P

Form of Class P Certificate

Exhibit A-R

Form of Class R Certificate

Exhibit A-R-X

Form of Class R-X Certificate

Exhibit B

Form of Lost Note Affidavit

Exhibit C-1

Form of Trustee’s Initial Certification

Exhibit C-2

Form of Trustee’s Final Certification

Exhibit C-3

Form of Trustee’s Receipt of Mortgage Note

Exhibit D

Form of Mortgage Loan Purchase Agreement

Exhibit E

Request for Release

Exhibit F-1

Form of Transferor Representation Letter and Form of Transferee Representation Letter in Connection with Transfer of Class CE and Class P Certificates Pursuant to Rule 144A Under the 1933 Act

Exhibit F-2

Form of Transfer Affidavit and Agreement and Form of Transferor Affidavit in Connection with Transfer of Residual Certificates

Exhibit G

Form of Certification with respect to ERISA and the Code

Exhibit H

Form of Interest Rate Swap Agreement

Exhibit I

Loss Mitigation Action Plan

Exhibit J-1

Form of Certification to Be Provided by the Depositor with Form 10-K

Exhibit J-2

Form of Certification to Be Provided to Depositor by the Trustee

Exhibit K

[Reserved]

Exhibit L

[Reserved]

Exhibit M

Servicing Criteria to Be Addressed in Assessment of Compliance

Exhibit N

Form 10-D, Form 8-K and Form 10-K Reporting Responsibility

Schedule 1

Mortgage Loan Schedule

Schedule 2

Prepayment Charge Schedule

 

 



 

This Pooling and Servicing Agreement, is dated and effective as of January 1, 2006, among ARGENT SECURITIES INC., as Depositor, AMERIQUEST MORTGAGE COMPANY, as Master Servicer, and DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee.

PRELIMINARY STATEMENT:

The Depositor intends to sell pass-through certificates (collectively, the “Certificates”), to be issued hereunder in multiple classes, which in the aggregate shall evidence the entire beneficial ownership interest in each REMIC (as defined herein) created hereunder. The Trust Fund shall consist of a segregated pool of assets consisting of the Mortgage Loans and certain other related assets subject to this Agreement.

REMIC I

As provided herein, the Trustee shall elect to treat the segregated pool of assets consisting of the Mortgage Loans and certain other related assets (other than any Master Servicer Prepayment Charge Payment Amounts, the Net WAC Rate Carryover Reserve Account, the Swap Account and the Interest Rate Swap Agreement) subject to this Agreement as a REMIC for federal income tax purposes, and such segregated pool of assets shall be designated as “REMIC I.” The Class R-I Interest shall be the sole class of “residual interests” in REMIC I for purposes of the REMIC Provisions (as defined herein). The following table irrevocably sets forth the designation, the REMIC I Remittance Rate, the initial Uncertificated Balance and, for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for each of the REMIC I Regular Interests (as defined herein). None of the REMIC I Regular Interests shall be certificated.

 

 

Designation

 

REMIC I
Remittance Rate

 

Initial
Uncertificated Balance

 

Latest Possible
Maturity Date(1)

I

 

Variable(2)

 

$

670.40

 

February 25, 2036

I-1-A

 

Variable(2)

 

$

5,882,519.59

 

February 25, 2036

I-1-B

 

Variable(2)

 

$

5,882,519.59

 

February 25, 2036

I-2-A

 

Variable(2)

 

$

7,368,064.37

 

February 25, 2036

I-2-B

 

Variable(2)

 

$

7,368,064.37

 

February 25, 2036

I-3-A

 

Variable(2)

 

$

8,845,622.63

 

February 25, 2036

I-3-B

 

Variable(2)

 

$

8,845,622.63

 

February 25, 2036

I-4-A

 

Variable(2)

 

$

10,303,747.58

 

February 25, 2036

I-4-B

 

Variable(2)

 

$

10,303,747.58

 

February 25, 2036

I-5-A

 

Variable(2)

 

$

11,730,582.02

 

February 25, 2036

I-5-B

 

Variable(2)

 

$

11,730,582.02

 

February 25, 2036

I-6-A

 

Variable(2)

 

$

13,113,539.28

 

February 25, 2036

I-6-B

 

Variable(2)

 

$

13,113,539.28

 

February 25, 2036

I-7-A

 

Variable(2)

 

$

14,440,469.15

 

February 25, 2036

I-7-B

 

Variable(2)

 

$

14,440,469.15

 

February 25, 2036

I-8-A

 

Variable(2)

 

$

15,692,586.67

 

February 25, 2036

I-8-B

 

Variable(2)

 

$

15,692,586.67

 

February 25, 2036

I-9-A

 

Variable(2)

 

$

16,724,404.79

 

February 25, 2036

 

 



 

 

I-9-B

 

Variable(2)

 

$

16,724,404.79

 

February 25, 2036

I-10-A

 

Variable(2)

 

$

17,581,267.48

 

February 25, 2036

I-10-B

 

Variable(2)

 

$

17,581,267.48

 

February 25, 2036

I-11-A

 

Variable(2)

 

$

17,620,200.68

 

February 25, 2036

I-11-B

 

Variable(2)

 

$

17,620,200.68

 

February 25, 2036

I-12-A

 

Variable(2)

 

$

16,890,455.36

 

February 25, 2036

I-12-B

 

Variable(2)

 

$

16,890,455.36

 

February 25, 2036

I-13-A

 

Variable(2)

 

$

16,190,793.46

 

February 25, 2036

I-13-B

 

Variable(2)

 

$

16,190,793.46

 

February 25, 2036

I-14-A

 

Variable(2)

 

$

15,520,320.25

 

February 25, 2036

I-14-B

 

Variable(2)

 

$

15,520,320.25

 

February 25, 2036

I-15-A

 

Variable(2)

 

$

14,877,814.13

 

February 25, 2036

I-15-B

 

Variable(2)

 

$

14,877,814.13

 

February 25, 2036

I-16-A

 

Variable(2)

 

$

14,262,098.88

 

February 25, 2036

I-16-B

 

Variable(2)

 

$

14,262,098.88

 

February 25, 2036

I-17-A

 

Variable(2)

 

$

13,672,055.17

 

February 25, 2036

I-17-B

 

Variable(2)

 

$

13,672,055.17

 

February 25, 2036

I-18-A

 

Variable(2)

 

$

13,114,101.05

 

February 25, 2036

I-18-B

 

Variable(2)

 

$

13,114,101.05

 

February 25, 2036

I-19-A

 

Variable(2)

 

$

12,628,040.23

 

February 25, 2036

I-19-B

 

Variable(2)

 

$

12,628,040.23

 

February 25, 2036

I-20-A

 

Variable(2)

 

$

12,359,760.51

 

February 25, 2036

I-20-B

 

Variable(2)

 

$

12,359,760.51

 

February 25, 2036

I-21-A

 

Variable(2)

 

$

11,838,827.86

 

February 25, 2036

I-21-B

 

Variable(2)

 

$

11,838,827.86

 

February 25, 2036

I-22-A

 

Variable(2)

 

$

22,666,323.63

 

February 25, 2036

I-22-B

 

Variable(2)

 

$

22,666,323.63

 

February 25, 2036

I-23-A

 

Variable(2)

 

$

31,479,213.77

 

February 25, 2036

I-23-B

 

Variable(2)

 

$

31,479,213.77

 

February 25, 2036

I-24-A

 

Variable(2)

 

$

26,874,336.15

 

February 25, 2036

I-24-B

 

Variable(2)

 

$

26,874,336.15

 

February 25, 2036

I-25-A

 

Variable(2)

 

$

23,065,877.13

 

February 25, 2036

I-25-B

 

Variable(2)

 

$

23,065,877.13

 

February 25, 2036

I-26-A

 

Variable(2)

 

$

14,165,788.34

 

February 25, 2036

I-26-B

 

Variable(2)

 

$

14,165,788.34

 

February 25, 2036

I-27-A

 

Variable(2)

 

$

6,767,988.02

 

February 25, 2036

I-27-B

 

Variable(2)

 

$

6,767,988.02

 

February 25, 2036

I-28-A

 

Variable(2)

 

$

6,454,323.76

 

February 25, 2036

I-28-B

 

Variable(2)

 

$

6,454,323.76

 

February 25, 2036

I-29-A

 

Variable(2)

 

$

6,157,838.45

 

February 25, 2036

I-29-B

 

Variable(2)

 

$

6,157,838.45

 

February 25, 2036

I-30-A

 

Variable(2)

 

$

5,874,040.90

 

February 25, 2036

I-30-B

 

Variable(2)

 

$

5,874,040.90

 

February 25, 2036

I-31-A

 

Variable(2)

 

$

5,605,588.05

 

February 25, 2036

I-31-B

 

Variable(2)

 

$

5,605,588.05

 

February 25, 2036

I-32-A

 

Variable(2)

 

$

5,349,801.77

 

February 25, 2036

 

 



 

 

I-32-B

 

Variable(2)

 

$

5,349,801.77

 

February 25, 2036

I-33-A

 

Variable(2)

 

$

5,105,878.15

 

February 25, 2036

I-33-B

 

Variable(2)

 

$

5,105,878.15

 

February 25, 2036

I-34-A

 

Variable(2)

 

$

4,873,337.13

 

February 25, 2036

I-34-B

 

Variable(2)

 

$

4,873,337.13

 

February 25, 2036

I-35-A

 

Variable(2)

 

$

4,648,458.78

 

February 25, 2036

I-35-B

 

Variable(2)

 

$

4,648,458.78

 

February 25, 2036

I-36-A

 

Variable(2)

 

$

4,436,569.66

 

February 25, 2036

I-36-B

 

Variable(2)

 

$

4,436,569.66

 

February 25, 2036

I-37-A

 

Variable(2)

 

$

4,235,357.90

 

February 25, 2036

I-37-B

 

Variable(2)

 

$

4,235,357.90

 

February 25, 2036

I-38-A

 

Variable(2)

 

$

4,043,492.92

 

February 25, 2036

I-38-B

 

Variable(2)

 

$

4,043,492.92

 

February 25, 2036

I-39-A

 

Variable(2)

 

$

3,860,539.46

 

February 25, 2036

I-39-B

 

Variable(2)

 

$

3,860,539.46

 

February 25, 2036

I-40-A

 

Variable(2)

 

$

3,686,082.85

 

February 25, 2036

I-40-B

 

Variable(2)

 

$

3,686,082.85

 

February 25, 2036

I-41-A

 

Variable(2)

 

$

3,519,430.55

 

February 25, 2036

I-41-B

 

Variable(2)

 

$

3,519,430.55

 

February 25, 2036

I-42-A

 

Variable(2)

 

$

3,360,580.15

 

February 25, 2036

I-42-B

 

Variable(2)

 

$

3,360,580.15

 

February 25, 2036

I-43-A

 

Variable(2)

 

$

3,209,311.29

 

February 25, 2036

I-43-B

 

Variable(2)

 

$

3,209,311.29

 

February 25, 2036

I-44-A

 

Variable(2)

 

$

3,065,036.78

 

February 25, 2036

I-44-B

 

Variable(2)

 

$

3,065,036.78

 

February 25, 2036

I-45-A

 

Variable(2)

 

$

2,927,421.24

 

February 25, 2036

I-45-B

 

Variable(2)

 

$

2,927,421.24

 

February 25, 2036

I-46-A

 

Variable(2)

 

$

2,796,161.38

 

February 25, 2036

I-46-B

 

Variable(2)

 

$

2,796,161.38

 

February 25, 2036

I-47-A

 

Variable(2)

 

$

2,670,931.53

 

February 25, 2036

I-47-B

 

Variable(2)

 

$

2,670,931.53

 

February 25, 2036

I-48-A

 

Variable(2)

 

$

2,551,491.96

 

February 25, 2036

I-48-B

 

Variable(2)

 

$

2,551,491.96

 

February 25, 2036

I-49-A

 

Variable(2)

 

$

56,770,425.16

 

February 25, 2036

I-49-B

 

Variable(2)

 

$

56,770,425.16

 

February 25, 2036

II

 

Variable(2)

 

$

820.38

 

February 25, 2036

II-1-A

 

Variable(2)

 

$

6,264,195.41

 

February 25, 2036

II-1-B

 

Variable(2)

 

$

6,264,195.41

 

February 25, 2036

II-2-A

 

Variable(2)

 

$

7,846,126.88

 

February 25, 2036

II-2-B

 

Variable(2)

 

$

7,846,126.88

 

February 25, 2036

II-3-A

 

Variable(2)

 

$

9,419,553.62

 

February 25, 2036

II-3-B

 

Variable(2)

 

$

9,419,553.62

 

February 25, 2036

II-4-A

 

Variable(2)

 

$

10,972,286.17

 

February 25, 2036

II-4-B

 

Variable(2)

 

$

10,972,286.17

 

February 25, 2036

II-5-A

 

Variable(2)

 

$

12,491,697.98

 

February 25, 2036

II-5-B

 

Variable(2)

 

$

12,491,697.98

 

February 25, 2036

 

 



 

 

II-6-A

 

Variable(2)

 

$

13,964,385.72

 

February 25, 2036

II-6-B

 

Variable(2)

 

$

13,964,385.72

 

February 25, 2036

II-7-A

 

Variable(2)

 

$

15,377,410.85

 

February 25, 2036

II-7-B

 

Variable(2)

 

$

15,377,410.85

 

February 25, 2036

II-8-A

 

Variable(2)

 

$

16,710,769.58

 

February 25, 2036

II-8-B

 

Variable(2)

 

$

16,710,769.58

 

February 25, 2036

II-9-A

 

Variable(2)

 

$

17,809,535.21

 

February 25, 2036

II-9-B

 

Variable(2)

 

$

17,809,535.21

 

February 25, 2036

II-10-A

 

Variable(2)

 

$

18,721,993.77

 

February 25, 2036

II-10-B

 

Variable(2)

 

$

18,721,993.77

 

February 25, 2036

II-11-A

 

Variable(2)

 

$

18,763,453.07

 

February 25, 2036

II-11-B

 

Variable(2)

 

$

18,763,453.07

 

February 25, 2036

II-12-A

 

Variable(2)

 

$

17,986,359.64

 

February 25, 2036

II-12-B

 

Variable(2)

 

$

17,986,359.64

 

February 25, 2036

II-13-A

 

Variable(2)

 

$

17,241,301.54

 

February 25, 2036

II-13-B

 

Variable(2)

 

$

17,241,301.54

 

February 25, 2036

II-14-A

 

Variable(2)

 

$

16,527,326.00

 

February 25, 2036

II-14-B

 

Variable(2)

 

$

16,527,326.00

 

February 25, 2036

II-15-A

 

Variable(2)

 

$

15,843,132.12

 

February 25, 2036

II-15-B

 

Variable(2)

 

$

15,843,132.12

 

February 25, 2036

II-16-A

 

Variable(2)

 

$

15,187,467.37

 

February 25, 2036

II-16-B

 

Variable(2)

 

$

15,187,467.37

 

February 25, 2036

II-17-A

 

Variable(2)

 

$

14,559,139.83

 

February 25, 2036

II-17-B

 

Variable(2)

 

$

14,559,139.83

 

February 25, 2036

II-18-A

 

Variable(2)

 

$

13,964,983.95

 

February 25, 2036

II-18-B

 

Variable(2)

 

$

13,964,983.95

 

February 25, 2036

II-19-A

 

Variable(2)

 

$

13,447,386.02

 

February 25, 2036

II-19-B

 

Variable(2)

 

$

13,447,386.02

 

February 25, 2036

II-20-A

 

Variable(2)

 

$

13,161,699.49

 

February 25, 2036

II-20-B

 

Variable(2)

 

$

13,161,699.49

 

February 25, 2036

II-21-A

 

Variable(2)

 

$

12,606,967.14

 

February 25, 2036

II-21-B

 

Variable(2)

 

$

12,606,967.14

 

February 25, 2036

II-22-A

 

Variable(2)

 

$

24,136,983.87

 

February 25, 2036

II-22-B

 

Variable(2)

 

$

24,136,983.87

 

February 25, 2036

II-23-A

 

Variable(2)

 

$

33,521,681.23

 

February 25, 2036

II-23-B

 

Variable(2)

 

$

33,521,681.23

 

February 25, 2036

II-24-A

 

Variable(2)

 

$

28,618,025.10

 

February 25, 2036

II-24-B

 

Variable(2)

 

$

28,618,025.10

 

February 25, 2036

II-25-A

 

Variable(2)

 

$

24,562,461.62

 

February 25, 2036

II-25-B

 

Variable(2)

 

$

24,562,461.62

 

February 25, 2036

II-26-A

 

Variable(2)

 

$

15,084,907.91

 

February 25, 2036

II-26-B

 

Variable(2)

 

$

15,084,907.91

 

February 25, 2036

II-27-A

 

Variable(2)

 

$

7,207,115.73

 

February 25, 2036

II-27-B

 

Variable(2)

 

$

7,207,115.73

 

February 25, 2036

II-28-A

 

Variable(2)

 

$

6,873,099.99

 

February 25, 2036

II-28-B

 

Variable(2)

 

$

6,873,099.99

 

February 25, 2036

 

 



 

 

II-29-A

 

Variable(2)

 

$

6,557,377.80

 

February 25, 2036

II-29-B

 

Variable(2)

 

$

6,557,377.80

 

February 25, 2036

II-30-A

 

Variable(2)

 

$

6,255,166.60

 

February 25, 2036

II-30-B

 

Variable(2)

 

$

6,255,166.60

 

February 25, 2036

II-31-A

 

Variable(2)

 

$

5,969,295.70

 

February 25, 2036

II-31-B

 

Variable(2)

 

$

5,969,295.70

 

February 25, 2036

II-32-A

 

Variable(2)

 

$

5,696,913.23

 

February 25, 2036

II-32-B

 

Variable(2)

 

$

5,696,913.23

 

February 25, 2036

II-33-A

 

Variable(2)

 

$

5,437,163.10

 

February 25, 2036

II-33-B

 

Variable(2)

 

$

5,437,163.10

 

February 25, 2036

II-34-A

 

Variable(2)

 

$

5,189,534.12

 

February 25, 2036

II-34-B

 

Variable(2)

 

$

5,189,534.12

 

February 25, 2036

II-35-A

 

Variable(2)

 

$

4,950,064.97

 

February 25, 2036

II-35-B

 

Variable(2)

 

$

4,950,064.97

 

February 25, 2036

II-36-A

 

Variable(2)

 

$

4,724,427.84

 

February 25, 2036

II-36-B

 

Variable(2)

 

$

4,724,427.84

 

February 25, 2036

II-37-A

 

Variable(2)

 

$

4,510,160.85

 

February 25, 2036

II-37-B

 

Variable(2)

 

$

4,510,160.85

 

February 25, 2036

II-38-A

 

Variable(2)

 

$

4,305,847.08

 

February 25, 2036

II-38-B

 

Variable(2)

 

$

4,305,847.08

 

February 25, 2036

II-39-A

 

Variable(2)

 

$

4,111,023.04

 

February 25, 2036

II-39-B

 

Variable(2)

 

$

4,111,023.04

 

February 25, 2036

II-40-A

 

Variable(2)

 

$

3,925,247.15

 

February 25, 2036

II-40-B

 

Variable(2)

 

$

3,925,247.15

 

February 25, 2036

II-41-A

 

Variable(2)

 

$

3,747,781.95

 

February 25, 2036

II-41-B

 

Variable(2)

 

$

3,747,781.95

 

February 25, 2036

II-42-A

 

Variable(2)

 

$

3,578,624.85

 

February 25, 2036

II-42-B

 

Variable(2)

 

$

3,578,624.85

 

February 25, 2036

II-43-A

 

Variable(2)

 

$

3,417,541.21

 

February 25, 2036

II-43-B

 

Variable(2)

 

$

3,417,541.21

 

February 25, 2036

II-44-A

 

Variable(2)

 

$

3,263,905.72

 

February 25, 2036

II-44-B

 

Variable(2)

 

$

3,263,905.72

 

February 25, 2036

II-45-A

 

Variable(2)

 

$

3,117,361.26

 

February 25, 2036

II-45-B

 

Variable(2)

 

$

3,117,361.26

 

February 25, 2036

II-46-A

 

Variable(2)

 

$

2,977,584.87

 

February 25, 2036

II-46-B

 

Variable(2)

 

$

2,977,584.87

 

February 25, 2036

II-47-A

 

Variable(2)

 

$

2,844,229.72

 

February 25, 2036

II-47-B

 

Variable(2)

 

$

2,844,229.72

 

February 25, 2036

II-48-A

 

Variable(2)

 

$

2,717,040.54

 

February 25, 2036

II-48-B

 

Variable(2)

 

$

2,717,040.54

 

February 25, 2036

II-49-A

 

Variable(2)

 

$

60,453,863.59

 

February 25, 2036

II-49-B

 

Variable(2)

 

$

60,453,863.59

 

February 25, 2036

P

 

Variable(2)

 

$

100.00

 

February 25, 2036

________________

 

1)

For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution Date immediately following the maturity date for the Mortgage Loan with the latest maturity date has been designated as the “latest possible maturity date” for each REMIC I Regular Interest.

 

 



 

 

(2)

Calculated in accordance with the definition of “REMIC I Remittance Rate” herein.

 

 

REMIC II

As provided herein, the Trustee shall elect to treat the segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC for federal income tax purposes, and such segregated pool of assets shall be designated as “REMIC II.” The Class R-II Interest shall evidence the sole class of “residual interests” in REMIC II for purposes of the REMIC Provisions. The following table irrevocably sets forth the designation, the REMIC II Remittance Rate, the initial Uncertificated Balance and, for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for each of the REMIC II Regular Interests (as defined herein). None of the REMIC II Regular Interests shall be certificated.  

 


Designation

 

REMIC II
Remittance Rate

 

Initial Uncertificated
Balance

 

Latest Possible
Maturity Date(1)

 

II-LTAA

 

Variable(2)

 

$

1,114,751,220.48

 

February 25, 2036

 

II-LTA1

 

Variable(2)

 

$

4,261,050.00

 

February 25, 2036

 

II-LTA2A

 

Variable(2)

 

$

2,239,695.00

 

February 25, 2036

 

II-LTA2B

 

Variable(2)

 

$

983,945.00

 

February 25, 2036

 

II-LTA2C

 

Variable(2)

 

$

795,900.00

 

February 25, 2036

 

II-LTA2D

 

Variable(2)

 

$

517,980.00

 

February 25, 2036

 

II-LTM1

 

Variable(2)

 

$

449,315.00

 

February 25, 2036

 

II-LTM2

 

Variable(2)

 

$

403,810.00

 

February 25, 2036

 

II-LTM3

 

Variable(2)

 

$

238,875.00

 

February 25, 2036

 

II-LTM4

 

Variable(2)

 

$

204,750.00

 

February 25, 2036

 

II-LTM5

 

Variable(2)

 

$

199,065.00

 

February 25, 2036

 

II-LTM6

 

Variable(2)

 

$

193,375.00

 

February 25, 2036

 

II-LTM7

 

Variable(2)

 

$

170,625.00

 

February 25, 2036

 

II-LTM8

 

Variable(2)

 

$

159,250.00

 

February 25, 2036

 

II-LTM9

 

Variable(2)

 

$

113,750.00

 

February 25, 2036

 

II-LTM10

 

Variable(2)

 

$

113,750.00

 

February 25, 2036

 

II-LTZZ

 

Variable(2)

 

$

11,704,889.91

 

February 25, 2036

 

II-LTP

 

Variable(2)

 

$

100.00

 

February 25, 2036

 

II-LT1SUB

 

Variable(2)

 

$

24,954.85

 

February 25, 2036

 

II-LT1GRP

 

Variable(2)

 

$

110,175.86

 

February 25, 2036

 

II-LT2SUB

 

Variable(2)

 

$

26,574.00

 

February 25, 2036

 

II-LT2GRP

 

Variable(2)

 

$

117,324.40

 

February 25, 2036

 

II-XX

 

Variable(2)

 

$

1,137,222,216.28

 

February 25, 2036

 

II-IO

 

Variable(2)

 

 

(3)

 

February 25, 2036

 

________________

 

1)

For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution Date immediately following the maturity date for the Mortgage Loan with the latest maturity date has been designated as the “latest possible maturity date” for each REMIC I Regular Interest.

   

(2)

Calculated in accordance with the definition of “REMIC II Remittance Rate” herein.

   

(3)

REMIC II Regular Interest II-IO will not have an Uncertificated Balance, but will accrue interest on its Uncertificated Notional Amount.

 

 

REMIC III

 



 

As provided herein, the Trustee shall elect to treat the segregated pool of assets consisting of the REMIC II Regular Interests as a REMIC for federal income tax purposes, and such segregated pool of assets shall be designated as “REMIC III.” The Class R-III Interest shall evidence the sole class of “residual interests” in REMIC III for purposes of the REMIC Provisions. The following table irrevocably sets forth the designation, the Pass-Through Rate, the initial aggregate Certificate Principal Balance and, for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for the indicated classes of Certificates and interests.

Each Certificate, other than the Class P Certificate, the Class CE Certificate and the Class R Certificates, represents ownership of a Regular Interest in REMIC III and also represents (i) the right to receive payments with respect to the Net WAC Rate Carryover Amount (as defined herein) and (ii) the obligation to pay Class IO Distribution Amounts (as defined herein). The entitlement to principal of the Regular Interest which corresponds to each Certificate shall be equal in amount and timing to the entitlement to principal of such Certificate.

 

Designation

 

Pass-Through
Rate

 

Initial Aggregate
Certificate Principal
Balance

 

Latest Possible
Maturity Date(1)

 

Class A-1

 

Variable(2)

 

$

852,210,000.00

 

February 25, 2036

 

Class A-2A

 

Variable(2)

 

$

447,939,000.00

 

February 25, 2036

 

Class A-2B

 

Variable(2)

 

$

196,789,000.00

 

February 25, 2036

 

Class A-2C

 

Variable(2)

 

$

159,180,000.00

 

February 25, 2036

 

Class A-2D

 

Variable(2)

 

$

103,596,000.00

 

February 25, 2036

 

Class M-1

 

Variable(2)

 

$

89,863,000.00

 

February 25, 2036

 

Class M-2

 

Variable(2)

 

$

80,762,000.00

 

February 25, 2036

 

Class M-3

 

Variable(2)

 

$

47,775,000.00

 

February 25, 2036

 

Class M-4

 

Variable(2)

 

$

40,950,000.00

 

February 25, 2036

 

Class M-5

 

Variable(2)

 

$

39,813,000.00

 

February 25, 2036

 

Class M-6

 

Variable(2)

 

$

38,675,000.00

 

February 25, 2036

 

Class M-7

 

Variable(2)

 

$

34,125,000.00

 

February 25, 2036

 

Class M-8

 

Variable(2)

 

$

31,850,000.00

 

February 25, 2036

 

Class M-9

 

Variable(2)

 

$

22,750,000.00

 

February 25, 2036

 

Class M-10

 

Variable(2)

 

$

22,750,000.00

 

February 25, 2036

 

Class CE Interest

 

Variable(2)(3)

 

$

65,975,490.78

 

February 25, 2036

 

Class P Interest

 

Variable(2)(4)

 

$

                 100.00

 

February 25, 2036

 

Class SWAP-IO Interest

 

N/A(5)

 

 

N/A(5)

 

February 25, 2036

 

________________

 

(1)

For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution Date immediately following the maturity date for the Mortgage Loan with the latest maturity date has been designated as the “latest possible maturity date” for each Class of Certificates and interests.

   

(2)

Calculated in accordance with the definition of “Pass-Through Rate” herein.

   

(3)

The Class CE Interest shall accrue interest at their variable Pass-Through Rate on the Notional Amount of the Class CE Interest outstanding from time to time which shall equal the aggregate Uncertificated Balance of the REMIC II Regular Interests, other than REMIC II Regular Interest II-LTP. The Class CE Interest shall not accrue interest on its Certificate Principal Balance.

   

(4)

The Class P Interest will be entitled to 100% of amounts distributed in respect of REMIC II Regular Interest LTP.

   

(5)

The Class SWAP-IO Interest will not have a Pass-Through Rate or a Certificate Principal Balance, but will be entitled to 100% of amounts distributed on REMIC II Regular Interest II-IO.

 

 

REMIC IV

 



 

As provided herein, the Trustee shall elect to treat the segregated pool of assets consisting of the Class CE Interest as a REMIC for federal income tax purposes, and such segregated pool of assets shall be designated as “REMIC IV.” The Class R-IV Interest shall evidence the sole class of “residual interests” in REMIC IV for purposes of the REMIC Provisions under federal income tax law. The following table irrevocably sets forth the designation, the Pass-Through Rate, the initial aggregate Certificate Principal Balance and, for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for the indicated Class of Certificates.

 

Designation

 

Pass-Through
Rate

 

Initial Aggregate
Certificate Principal Balance

 

Latest Possible
Maturity Date(1)

 

Class CE Certificates

 

Variable(2)

 

$

65,975,490.78

 

February 25, 2036

 

________________

1)

For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution Date immediately following the maturity date for the Mortgage Loan with the latest maturity date has been designated as the “latest possible maturity date” for the Class CE Certificates.

(2)

The Class CE Certificates shall receive 100% of amounts received in respect of the Class CE Interest.

 

 



 

REMIC V

As provided herein, the Trustee shall make an election to treat the segregated pool of assets consisting of the Class P Interest as a REMIC for federal income tax purposes, and such segregated pool of assets shall be designated as “REMIC V.” The Class R-V Interest represents the sole class of “residual interests” in REMIC V for purposes of the REMIC Provisions. The following table irrevocably sets forth the designation, the Pass-Through Rate, the initial aggregate Certificate Principal Balance and, for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for the indicated Class of Certificates.

 

Designation

 

Pass-Through
Rate

 

Initial Aggregate
Certificate Principal
Balance

 

Latest Possible
Maturity Date(1)

 

Class P Certificates

 

Variable(2)

 

$

100.00

 

February 25, 2036

 

________________

1)

For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution Date immediately following the maturity date for the Mortgage Loan with the latest maturity date has been designated as the “latest possible maturity date” for the Class P Certificates.

(2)

The Class P Certificates shall receive 100% of amounts received in respect of the Class P Interest.

 

REMIC VI

As provided herein, the Trustee shall make an election to treat the segregated pool of assets consisting of the Class SWAP-IO Interest as a REMIC for federal income tax purposes, and such segregated pool of assets shall be designated as “REMIC VI.” The Class R-VI Interest represents the sole class of “residual interests” in REMIC VI for purposes of the REMIC Provisions. The following table irrevocably sets forth the designation, the Pass-Through Rate, the initial aggregate Certificate Principal Balance and, for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for the indicated REMIC VII Regular Interest, which will be uncertificated.

 

Designation

 

Pass-Through
Rate

 

Initial Aggregate
Certificate Principal
Balance

 

Latest Possible
Maturity Date(1)

 

SWAP-IO

 

Variable(2)

 

N/A

 

February 25, 2036

 

________________

1)

For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution Date immediately following the maturity date for the Mortgage Loan with the latest maturity date has been designated as the “latest possible maturity date” for REMIC VI Regular Interest SWAP-IO.

(2)

REMIC VI Regular Interest SWAP-IO shall receive 100% of amounts received in respect of the Class SWAP-IO Interest.

 

As of the Cut-off Date, the Group I Mortgage Loans had an aggregate Scheduled Principal Balance equal to $1,101,758,566.38 and the Group II Mortgage Loans had an aggregate Scheduled Principal Balance equal to $1,173,244,024.40.

In consideration of the mutual agreements herein contained, the Depositor, the Master Servicer and the Trustee agree as follows:

 



 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.01.

Defined Terms.

Whenever used in this Agreement, including, without limitation, in the Preliminary Statement hereto, the following words and phrases, unless the context otherwise requires, shall have the meanings specified in this Article. Unless otherwise specified, all calculations described herein shall be made on the basis of a 360-day year consisting of twelve 30-day months and all calculations on each Regular Interest shall be made on the basis of a 360-day year and the actual number of days in the month.

“Accrued Certificate Interest”: With respect to any Class of Certificates (other than the Class P Certificates and the Residual Certificates) and each Distribution Date, interest accrued during the related Interest Accrual Period at the Pass-Through Rate for such Certificate for such Distribution Date on the Certificate Principal Balance, in the case of the Adjustable-Rate Certificates and the Fixed-Rate Certificates, or on the Notional Amount, in the case of the Class CE Certificates, of such Certificate immediately prior to such Distribution Date. The Class P Certificates are not entitled to distributions in respect of interest and, accordingly, shall not accrue interest. All distributions of interest on the Adjustable-Rate Certificates shall be calculated on the basis of a 360-day year and the actual number of days in the applicable Interest Accrual Period. All distributions of interest on the Fixed-Rate Certificates and the Class CE Certificates shall be based on a 360-day year consisting of twelve 30-day months. Accrued Certificate Interest with respect to each Distribution Date, as to any Class A Certificate or Mezzanine Certificate, shall be reduced by an amount equal to the portion allocable to such Certificate pursuant to Section 1.02 hereof of the sum of (a) the aggregate Prepayment Interest Shortfall, if any, for such Distribution Date to the extent not covered by payments pursuant to Section 4.03(e) or allocated to the Class CE Certificates pursuant to Section 1.02 and (b) the aggregate amount of any Relief Act Interest Shortfall, if any, for such Distribution Date not allocated to the Class CE Certificates pursuant to Section 1.02. Accrued Certificate Interest with respect to each Distribution Date and any Class CE Certificate shall be reduced by (a) Prepayment Interest Shortfalls, if any, allocated to such Class of Certificates pursuant to Section 1.02 hereof, (b) Relief Act Interest Shortfalls, if any, allocated to such Class of Certificates pursuant to Section 1.02 hereof and (c) an amount equal to the portion of Realized Losses, if any, allocable to interest on the Class CE Certificate pursuant to Section 4.04 hereof.

“Adjustable-Rate Certificates”: The Class A Certificates and the Mezzanine Certificates.

“Adjustable-Rate Mortgage Loan”: Each of the Mortgage Loans identified on the Mortgage Loan Schedule as having a Mortgage Rate that is subject to adjustment.

“Adjustment Date”: With respect to each Adjustable-Rate Mortgage Loan, the first day of the month in which the Mortgage Rate of such Mortgage Loan changes pursuant to the related Mortgage Note. The first Adjustment Date following the Cut-off Date as to each Adjustable-Rate Mortgage Loan is set forth in the Mortgage Loan Schedule.

 



 

“Advance”: As to any Mortgage Loan or REO Property, any advance made by the Master Servicer or a successor Master Servicer in respect of any Distribution 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 4.03.

“Affiliate”: With respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, “control,” when used with respect to any specified Person, 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 hereof and supplements hereto.

“Allocated Realized Loss Amount”: With respect to any Distribution Date and any Class of Mezzanine Certificates, the sum of (i) the Realized Losses allocated to such Class of Certificates on such Distribution Date and (ii) the amount of any Allocated Realized Loss Amount for such Class of Certificates remaining undistributed from the previous Distribution Date, reduced by the amount of the increase in the Certificate Principal Balance of such Class of Certificates due to the receipt of Subsequent Recoveries as provided in Section 4.01.

“Applicable Regulations”: As to any Mortgage Loan, all federal, state and local laws, statutes, rules and regulations applicable thereto.

“Assessment of Compliance”: As defined in Section 3.20.

“Assignment”: An assignment of Mortgage, notice of transfer or equivalent instrument, in recordable form (excepting therefrom if applicable, the mortgage recordation information which has not been returned by the applicable recorder’s office and/or the assignee’s name), which is sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect of record the sale of the Mortgage.

“Attestation Report”: As defined in Section 3.20.

“Available Funds”: With respect to any Distribution Date, an amount equal to (1) the sum of (a) the aggregate of the amounts on deposit in the Collection Account and Distribution Account as of the close of business on the related Determination Date, including any Subsequent Recoveries, (b) the aggregate of any amounts received in respect of an REO Property withdrawn from any REO Account and deposited in the Distribution Account for such Distribution Date pursuant to Section 3.13, (c) Compensating Interest, if any, deposited in the Distribution Account by the Master Servicer in respect of Prepayment Interest Shortfalls for such Distribution Date pursuant to Section 4.03(e), (d) the aggregate of any Advances made by the Master Servicer for such Distribution Date pursuant to Section 4.03 and (e) the aggregate of any Advances made by the successor Master Servicer or the Trustee for such Distribution Date

 



pursuant to Section 7.02(b), reduced (to not less than zero) by (2) the sum of (x) the portion of the amount described in clause (1)(a) above that represents (i) Monthly Payments on the Mortgage Loans received from a Mortgagor on or prior to the Determination Date but due during any Due Period subsequent to the related Due Period, (ii) Principal Prepayments on the Mortgage Loans received after the related Prepayment Period (together with any interest payments received with such Principal Prepayments to the extent they represent the payment of interest accrued on the Mortgage Loans during a period subsequent to the related Prepayment Period), (iii) Liquidation Proceeds, Insurance Proceeds and Subsequent Recoveries received in respect of the Mortgage Loans after the related Prepayment Period, (iv) amounts reimbursable or payable to the Depositor, the Master Servicer, the Trustee, the Seller or any Sub-Servicer pursuant to Section 3.05 or Section 3.06 or otherwise payable in respect of Extraordinary Trust Fund Expenses, (v) Stayed Funds, (vi) the Trustee Fee payable from the Distribution Account pursuant to Section 8.05, (vii) amounts deposited in the Collection Account or the Distribution Account in error and (viii) the amount of any Prepayment Charges collected by the Master Servicer and the amount of any Master Servicer Prepayment Charge Payment Amounts, (y) amounts reimbursable to the Trustee for an advance made pursuant to Section 7.02(b) which advance the Trustee has determined to be nonrecoverable from the Stayed Funds in respect of which it was made and (z) any Net Swap Payment or any Swap Termination Payments owed to the Interest Rate Swap Provider other than due to a Swap Provider Trigger Event (after taking into account any upfront payment received by the Interest Rate Swap Provider from the counterparty to a replacement similar agreement).

“Bankruptcy Code”: The Bankruptcy Reform Act of 1978 (Title 11 of the United States Code), as amended.

“Bankruptcy Loss”: With respect to any Mortgage Loan, a Realized Loss resulting from a Deficient Valuation or Debt Service Reduction.

“Book-Entry Certificate”: Any Certificate registered in the name of the Depository or its nominee. Initially, the Book-Entry Certificates shall be the Class A Certificates and the Mezzanine Certificates.

“Book-Entry Custodian”: The custodian appointed pursuant to Section 5.01.

“Business Day”: Any day other than a Saturday, a Sunday or a day on which banking or savings and loan institutions in the State of California, the State of New York, or in the city in which the Corporate Trust Office of the Trustee is located, are authorized or obligated by law or executive order to be closed.

“Certificate”: Any one of the Depositor’s Asset-Backed Pass-Through Certificates, Series 2006-W1, Class A-1, Class A-2A, Class A-2B, Class A-2C, Class A-2D, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10, Class CE, Class P, Class R and Class R-X, issued under this Agreement.

“Certificate Factor”: With respect to any Class of Regular Certificates as of any Distribution Date, a fraction, expressed as a decimal carried to six places, the numerator of which is the Certificate Principal Balance (or the Notional Amount, in the case of the Class CE Certificates) of such Class of Certificates on such Distribution Date (after giving effect to any

 



distributions of principal and allocations of Realized Losses in reduction of the Certificate Principal Balance (or the Notional Amount, in the case of the Class CE Certificates) of such Class of Certificates to be made on such Distribution Date), and the denominator of which is the initial aggregate Certificate Principal Balance (or the Notional Amount, in the case of the Class CE Certificates) of such Class of Certificates as of the Closing Date.

“Certificateholder” or “Holder”: The Person in whose name a Certificate is registered in the Certificate Register, except that a Disqualified Organization or a Non-United States Person shall not be a Holder of a Residual Certificate for any purposes hereof and, solely for the purposes of giving any consent pursuant to this Agreement, any Certificate registered in the name of the Depositor or the Master Servicer or any Affiliate thereof shall be deemed not to be outstanding and the Voting Rights to which it is entitled shall not be taken into account in determining whether the requisite percentage of Voting Rights necessary to effect any such consent has been obtained, except as otherwise provided in Section 11.01. The Trustee and the NIMS Insurer may conclusively rely upon a certificate of the Depositor or the Master Servicer in determining whether a Certificate is held by an Affiliate thereof. All references herein to “Holders” or “Certificateholders” shall reflect the rights of Certificate Owners as they may indirectly exercise such rights through the Depository and participating members thereof, except as otherwise specified herein; provided, however, that the Trustee and the NIMS Insurer shall be required to recognize as a “Holder” or “Certificateholder” only the Person in whose name a Certificate is registered in the Certificate Register.

“Certificate Margin”: With respect to each Class of Adjustable-Rate Certificates and, for purposes of the Marker Rate and the Maximum II-LTZZ Uncertificated Interest Deferral Amount, the specified REMIC II Regular Interest, as follows:

Class

REMIC II Regular Interest

Certificate Margin

(1) (%)

(2) (%)

A-1

REMIC II Regular Interest II-LTA1

0.205

0.410

A-2A

REMIC II Regular Interest II-LTA2A

0.080

0.160

A-2B

REMIC II Regular Interest II-LTA2B

0.160

0.320

A-2C

REMIC II Regular Interest II-LTA2C

0.190

0.380

A-2D

REMIC II Regular Interest II-LTA2D

0.300

0.600

M-1

REMIC II Regular Interest II-LTM1

0.410

0.615

M-2

REMIC II Regular Interest II-LTM2

0.430

0.645

M-3

REMIC II Regular Interest II-LTM3

0.460

0.690

M-4

REMIC II Regular Interest II-LTM4

0.590

0.885

M-5

REMIC II Regular Interest II-LTM5

0.620

0.930

M-6

REMIC II Regular Interest II-LTM6

0.710

1.065

M-7

REMIC II Regular Interest II-LTM7

1.280

1.920

M-8

REMIC II Regular Interest II-LTM8

1.500

2.250

M-9

REMIC II Regular Interest II-LTM9

2.500

3.750

M-10

REMIC II Regular Interest II-LTM10

2.500

3.750

__________

 

(1)

For the Interest Accrual Period for each Distribution Date on or prior to the Optional Termination Date.

 

(2)

For the Interest Accrual Period for each Distribution Date after the Optional Termination Date.

 

 

“Certificate Owner”: With respect to a Book-Entry Certificate, the Person who is the beneficial owner of such Certificate as reflected on the books of the Depository or on the books of a Depository Participant or on the books of an indirect participating brokerage firm for which a Depository Participant acts as agent.

 



 

“Certificate Principal Balance”: With respect to each Class A Certificate, Mezzanine Certificate or Class P Certificate as of any date of determination, the Certificate Principal Balance of such Certificate on the Distribution Date immediately prior to such date of determination plus, with respect to each Mezzanine Certificate, any increase in the Certificate Principal Balance of such Certificate pursuant to Section 4.01 due to the receipt of Subsequent Recoveries, minus all distributions allocable to principal made thereon on such Distribution Date and, in the case of a Mezzanine Certificate, Realized Losses allocated thereto on such immediately prior Distribution Date (or, in the case of any date of determination up to and including the first Distribution Date, the initial Certificate Principal Balance of such Certificate, as stated on the face thereof). With respect to each Class CE Certificate as of any date of determination, an amount equal to the Percentage Interest evidenced by such Certificate times the excess, if any, of (A) the then aggregate Uncertificated Balance of the REMIC II Regular Interests over (B) the then aggregate Certificate Principal Balance of the Class A Certificates, the Mezzanine Certificates and the Class P Certificates then outstanding.

“Certificate Register” and “Certificate Registrar”: The register maintained and the registrar appointed pursuant to Section 5.02.

“Class”: Collectively, all of the Certificates bearing the same class designation.

“Class A Certificate”: Any one of the Class A-1, Class A-2A, Class A-2B, Class A-2C and Class A-2D Certificates.

“Class A Principal Distribution Amount”: With respect to any Distribution Date, an amount equal to the sum of (i) the Senior Group I Principal Distribution Amount and (ii) the Senior Group II Principal Distribution Amount.

“Class A-1 Certificate”: Any one of the Class A-1 Certificates executed by the Trustee, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-1 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.

“Class A-2A Certificate”: Any one of the Class A-2A Certificates executed by the Trustee, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-2A and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.

“Class A-2B Certificate”: Any one of the Class A-2B Certificates executed by the Trustee, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-2B and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.

“Class A-2C Certificate”: Any one of the Class A-2C Certificates executed by the Trustee, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-2C and evidencing (i) a Regular Interest in REMIC III, (ii) the

 



right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.

“Class A-2D Certificate”: Any one of the Class A-2D Certificates executed by the Trustee, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-2D and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.

“Class CE Certificate”: Any one of the Class CE Certificates executed by the Trustee, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-CE and evidencing (i) a Regular Interest in REMIC IV, (ii) the obligation to pay Net WAC Rate Carryover Amounts and Swap Termination Payments and (iii) the right to receive the Class IO Distribution Amount.

“Class CE Interest”: An uncertificated interest in the Trust Fund held by the Trustee on behalf of the Holders of the Class CE Certificates, evidencing a Regular Interest in REMIC III for purposes of the REMIC Provisions.

“Class IO Distribution Amount”: As defined in Section 3.20 hereof. For purposes of clarity, the Class IO Distribution Amount for any Distribution Date shall equal the amount payable to the Swap Administrator on such Distribution Date in excess of the amount payable on the Class SWAP-IO Interest on such Distribution Date, all as further provided in Section 3.20 hereof.

“Class SWAP-IO Interest”: An uncertificated interest in the Trust Fund evidencing a Regular Interest in REMIC III.

“Class M-1 Certificate”: Any one of the Class M-1 Certificates executed by the Trustee, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-M-1 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.

“Class M-1 Principal Distribution Amount”: With respect to any Distribution Date, an amount, not less than zero, equal to the lesser of (I) the Certificate Principal Balance of the Class M-1 Certificates immediately prior to such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the payment of the Class A Principal Distribution Amount on such Distribution Date) and (ii) the Certificate Principal Balance of the Class M-1 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 62.60% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus $11,375,012.95.

 



 

“Class M-2 Certificate”: Any one of the Class M-2 Certificates executed by the Trustee, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-M-2 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.

“Class M-2 Principal Distribution Amount”: With respect to any Distribution Date, an amount, not less than zero, equal to the lesser of (I) the Certificate Principal Balance of the Class M-2 Certificates immediately prior to such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the payment of the Class A Principal Distribution Amount on such Distribution Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount on such Distribution Date) and (iii) the Certificate Principal Balance of the Class M-2 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 69.70% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus $11,375,012.95.

“Class M-3 Certificate”: Any one of the Class M-3 Certificates executed by the Trustee, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-M-3 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.

“Class M-3 Principal Distribution Amount”: With respect to any Distribution Date, an amount, not less than zero, equal to the lesser of (I) the Certificate Principal Balance of the Class M-3 Certificates immediately prior to such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the payment of the Class A Principal Distribution Amount on such Distribution Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount on such Distribution Date) and (iv) the Certificate Principal Balance of the Class M-3 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 73.90% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus $11,375,012.95.

 



 

“Class M-4 Certificate”: Any one of the Class M-4 Certificates executed by the Trustee, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-M-4 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.

“Class M-4 Principal Distribution Amount”: With respect to any Distribution Date, an amount, not less than zero, equal to the lesser of (I) the Certificate Principal Balance of the Class M-4 Certificates immediately prior to such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the payment of the Class A Principal Distribution Amount on such Distribution Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates (after taking into account the payment of the Class M-3 Principal Distribution Amount on such Distribution Date) and (v) the Certificate Principal Balance of the Class M-4 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 77.50% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus $11,375,012.95.

“Class M-5 Certificate”: Any one of the Class M-5 Certificates executed by the Trustee, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-M-5 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.

“Class M-5 Principal Distribution Amount”: With respect to any Distribution Date, an amount, not less than zero, equal to the lesser of (I) the Certificate Principal Balance of the Class M-5 Certificates immediately prior to such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the payment of the Class A Principal Distribution Amount on such Distribution Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates (after taking into account the payment of the Class M-3 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the payment of the Class M-4 Principal Distribution Amount on such Distribution Date) and (vi) the Certificate Principal Balance of the Class M-5 Certificates immediately prior to such Distribution Date over

 



(y) the lesser of (A) the product of (i) 81.00% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus $11,375,012.95.

“Class M-6 Certificate”: Any one of the Class M-6 Certificates executed by the Trustee, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-M-6 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.

“Class M-6 Principal Distribution Amount”: With respect to any Distribution Date, an amount, not less than zero, equal to the lesser of (I) the Certificate Principal Balance of the Class M-6 Certificates immediately prior to such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the payment of the Class A Principal Distribution Amount on such Distribution Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates (after taking into account the payment of the Class M-3 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the payment of the Class M-4 Principal Distribution Amount on such Distribution Date), (vi) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the payment of the Class M-5 Principal Distribution Amount on such Distribution Date) and (vii) the Certificate Principal Balance of the Class M-6 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 84.40% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus $11,375,012.95.

“Class M-7 Certificate”: Any one of the Class M-7 Certificates executed by the Trustee, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-M-7 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.

 



 

“Class M-7 Principal Distribution Amount”: With respect to any Distribution Date, an amount, not less than zero, equal to the lesser of (I) the Certificate Principal Balance of the Class M-7 Certificates immediately prior to such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the payment of the Class A Principal Distribution Amount on such Distribution Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates (after taking into account the payment of the Class M-3 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the payment of the Class M-4 Principal Distribution Amount on such Distribution Date), (vi) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the payment of the Class M-5 Principal Distribution Amount on such Distribution Date), (vii) the Certificate Principal Balance of the Class M-6 Certificates (after taking into account the payment of the Class M-6 Principal Distribution Amount on such Distribution Date) and (viii) the Certificate Principal Balance of the Class M-7 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 87.40% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus $11,375,012.95.

“Class M-8 Certificate”: Any one of the Class M-8 Certificates executed by the Trustee, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-M-8 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.

“Class M-8 Principal Distribution Amount”: With respect to any Distribution Date, an amount, not less than zero, equal to the lesser of (I) the Certificate Principal Balance of the Class M-8 Certificates immediately prior to such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the payment of the Class A Principal Distribution Amount on such Distribution Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates (after taking into account the payment of the Class M-3 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the payment of the Class M-4 Principal Distribution Amount on such Distribution Date), (vi) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the payment of the

 



Class M-5 Principal Distribution Amount on such Distribution Date), (vii) the Certificate Principal Balance of the Class M-6 Certificates (after taking into account the payment of the Class M-6 Principal Distribution Amount on such Distribution Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates (after taking into account the payment of the Class M-7 Principal Distribution Amount on such Distribution Date) and (ix) the Certificate Principal Balance of the Class M-8 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 90.20% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus $11,375,012.95.

“Class M-9 Certificate”: Any one of the Class M-9 Certificates executed by the Trustee, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-M-9 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.

“Class M-9 Principal Distribution Amount”: With respect to any Distribution Date, an amount, not less than zero, equal to the lesser of (I) the Certificate Principal Balance of the Class M-9 Certificates immediately prior to such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the payment of the Class A Principal Distribution Amount on such Distribution Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates (after taking into account the payment of the Class M-3 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the payment of the Class M-4 Principal Distribution Amount on such Distribution Date), (vi) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the payment of the Class M-5 Principal Distribution Amount on such Distribution Date), (vii) the Certificate Principal Balance of the Class M-6 Certificates (after taking into account the payment of the Class M-6 Principal Distribution Amount on such Distribution Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates (after taking into account the payment of the Class M-7 Principal Distribution Amount on such Distribution Date), (ix) the Certificate Principal Balance of the Class M-8 Certificates (after taking into account the payment of the Class M-8 Principal Distribution Amount on such Distribution Date) and (x) the Certificate Principal Balance of the Class M-9 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 92.20% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the

 



aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus $11,375,012.95.

“Class M-10 Certificate”: Any one of the Class M-10 Certificates executed by the Trustee, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-M-10 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.

“Class M-10 Principal Distribution Amount”: With respect to any Distribution Date, an amount, not less than zero, equal to the lesser of (I) the Certificate Principal Balance of the Class M-10 Certificates immediately prior to such Distribution Date and (II) the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the payment of the Class A Principal Distribution Amount on such Distribution Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates (after taking into account the payment of the Class M-3 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the payment of the Class M-4 Principal Distribution Amount on such Distribution Date), (vi) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the payment of the Class M-5 Principal Distribution Amount on such Distribution Date), (vii) the Certificate Principal Balance of the Class M-6 Certificates (after taking into account the payment of the Class M-6 Principal Distribution Amount on such Distribution Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates (after taking into account the payment of the Class M-7 Principal Distribution Amount on such Distribution Date), (ix) the Certificate Principal Balance of the Class M-8 Certificates (after taking into account the payment of the Class M-8 Principal Distribution Amount on such Distribution Date), (x) the Certificate Principal Balance of the Class M-9 Certificates (after taking into account the payment of the Class M-9 Principal Distribution Amount on such Distribution Date) and (xi) the Certificate Principal Balance of the Class M-10 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 94.20% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus $11,375,012.95.

“Class P Certificate”: Any one of the Class P Certificates executed by the Trustee, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed

 



hereto as Exhibit A-P, representing the right to distributions as set forth herein and therein and evidencing a Regular Interest in REMIC V for purposes of the REMIC Provisions.

“Class P Interest”: An uncertificated interest in the Trust Fund held by the Trustee on behalf of the Holders of the Class P Certificates, evidencing a Regular Interest in REMIC III for purposes of the REMIC Provisions.

“Class R Certificate”: Any one of the Class R Certificates executed, authenticated and delivered by the Trustee, substantially in the form annexed hereto as Exhibit A-R and evidencing the ownership of the Class R-I Interest, the Class R-II Interest and the Class R-III Interest.

“Class R-I Interest”: The uncertificated Residual Interest in REMIC I.

“Class R-II Interest”: The uncertificated Residual Interest in REMIC II.

“Class R-III Interest”: The uncertificated Residual Interest in REMIC III.

“Class R-IV Interest”: The uncertificated Residual Interest in REMIC IV.

“Class R-V Interest”: The uncertificated Residual Interest in REMIC V.

“Class R-VI Interest”: The uncertificated Residual Interest in REMIC VI.

“Class R-X Certificate”: Any one of the Class R-X Certificates executed by the Trustee and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit A-R-X and evidencing the ownership of the Class R-IV Interest, the Class R-V Interest and the Class R-VI Interest.

“Closing Date”: February 7, 2006.

“Code”: The Internal Revenue Code of 1986, as amended.

“Collection Account”: The account or accounts created and maintained by the Master Servicer pursuant to Section 3.04(a), which shall be entitled “Ameriquest Mortgage Company, as Master Servicer for Deutsche Bank National Trust Company, as Trustee, in trust for the registered holders of Argent Securities Inc., Asset-Backed Pass-Through Certificates, Series 2006-W1.” The Collection Account must be an Eligible Account.

“Combined Loan-to-Value Ratio”: As of any date of determination, and with respect to second lien Mortgage Loans, the fraction, expressed as a percentage, the numerator of which is (i) the sum of (a) the outstanding principal balance of the related first-lien mortgage loan plus (b) the Stated Principal Balance of the related second-lien mortgage loan and the denominator of which is (ii) the Value of the related Mortgaged Property.

“Commission”: The Securities and Exchange Commission.

“Compensating Interest”: As defined in Section 4.03(e) hereof.

 



 

“Corporate Trust Office”: The principal corporate trust office of the Trustee at which at any particular time its corporate trust business in connection with this Agreement shall be administered, which office at the date of the execution of this instrument is located at 1761 East St. Andrew Place, Santa Ana, California 92705-4934, or at such other address as the Trustee may designate from time to time by notice to the Certificateholders, the Depositor and the Master Servicer.

“Corresponding Certificate”: With respect to each REMIC II Regular Interest as follows:

REMIC II Regular Interest

Class

REMIC II Regular Interest II-LTA1

A-1

REMIC II Regular Interest II-LTA2A

A-2A

REMIC II Regular Interest II-LTA2B

A-2B

REMIC II Regular Interest II-LTA2C

A-2C

REMIC II Regular Interest II-LTA2D

A-2D

REMIC II Regular Interest II-LTM1

M-1

REMIC II Regular Interest II-LTM2

M-2

REMIC II Regular Interest II-LTM3

M-3

REMIC II Regular Interest II-LTM4

M-4

REMIC II Regular Interest II-LTM5

M-5

REMIC II Regular Interest II-LTM6

M-6

REMIC II Regular Interest II-LTM7

M-7

REMIC II Regular Interest II-LTM8

M-8

REMIC II Regular Interest II-LTM9

M-9

REMIC II Regular Interest II-LTM10

M-10

REMIC II Regular Interest II-LTP

P

 

“Credit Enhancement Percentage”: For any Distribution Date and the Class A Certificates and any Class of Mezzanine Certificates, the percentage equivalent of a fraction, calculated after taking into account distribution of the Group I Principal Distribution Amount and the Group II Principal Distribution Amount to the Certificates then entitled to distributions of principal on such Distribution Date, the numerator of which is the sum of the aggregate Certificate Principal Balance of the Classes of Certificates with a lower distribution priority than such Class, and the denominator of which is the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period).

“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 to the last day of the preceding calendar month (reduced by the aggregate amount of Subsequent Recoveries received from the Cut-off Date through the last day of the related Due Period) and the denominator of which is the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

“Custodian”: A Custodian, which shall initially be Deutsche Bank National Trust Company.

 



 

“Cut-off Date”: With respect to any Mortgage Loan, the close of business on January 1, 2006. With respect to all Qualified Substitute Mortgage Loans, their respective dates of substitution. References herein to the “Cut-off Date,” when used with respect to more than one Mortgage Loan, shall be to the respective Cut-off Dates for such Mortgage Loans.

“Debt Service Reduction”: With respect to any Mortgage Loan, a reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of competent jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction resulting from a Deficient Valuation.

“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 Stated Principal Balance of the Mortgage Loan, which valuation results from a proceeding initiated under the Bankruptcy Code.

“Definitive Certificates”: As defined in Section 5.01(b).

“Deleted Mortgage Loan”: A Mortgage Loan replaced or to be replaced by a Qualified Substitute Mortgage Loan.

“Delinquency Percentage”: With respect to any Distribution Date, the percentage equivalent of a fraction, the numerator of which is the aggregate Stated Principal Balance of all Mortgage Loans as of the last day of the previous calendar month that, as of such last day of the previous calendar month, are 60 or more days delinquent (measured under the OTS delinquency calculation methodology and with respect to modifications, measured as set forth below), are in foreclosure, have been converted to REO Properties or have been discharged by reason of bankruptcy, and the denominator of which is the aggregate Stated Principal Balance of the Mortgage Loans and REO Properties as of the last day of the previous calendar month; provided, however, that any Mortgage Loan purchased by the Master Servicer or the NIMS Insurer pursuant to Section 3.16 shall not be included in either the numerator or the denominator for purposes of calculating the Delinquency Percentage.

“Depositor”: Argent Securities Inc., a Delaware corporation, or its successor in interest.

“Depository”: The Depository Trust Company, or any successor Depository hereafter named. The nominee of the initial Depository, for purposes of registering those Certificates that are to be Book-Entry Certificates, is Cede & Co. The Depository shall at all times be a “clearing corporation” as defined in Section 8-102(3) of the Uniform Commercial Code of the State of New York and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act.

“Depository Institution”: Any depository institution or trust company, including the Trustee, 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 Moody’s, “F-1” by Fitch and “A-1” by S&P (or comparable ratings if Moody’s, Fitch and S&P are not the Rating Agencies).

 



 

“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 10th day of the calendar month in which such Distribution Date occurs or, if such 10th day is not a Business Day, the Business Day immediately preceding such 10th day.

“Directly Operate”: With respect to any REO Property, the furnishing or rendering of services to the tenants thereof, the management or operation of such REO Property, the holding of such REO Property primarily for sale to customers, the performance of any construction work thereon or any use of such REO Property in a trade or business conducted by REMIC I other than through an Independent Contractor; provided, however, that the Trustee (or the Master Servicer on behalf of the Trustee) shall not be considered to Directly Operate an REO Property solely because the Trustee (or the Master Servicer on behalf of the Trustee) establishes rental terms, chooses tenants, enters into or renews leases, deals with taxes and insurance, or makes decisions as to repairs or capital expenditures with respect to such REO Property.

“Disqualified Organization”: Any of the following: (i) the United States, any State or political subdivision thereof, any possession of the United States, or any agency or instrumentality of any of the foregoing (other than an instrumentality which is a corporation if all of its activities are subject to tax and, except for Freddie Mac, a majority of its board of directors is not selected by such governmental unit), (ii) any foreign government, any international organization, or any agency or instrumentality of any of the foregoing, (iii) any organization (other than certain farmers’ cooperatives described in Section 521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on unrelated business taxable income), (iv) rural electric and telephone cooperatives described in Section 1381(a)(2)(C) of the Code, (v) an “electing large partnership” and (vi) any other Person so designated by the Trustee based upon an Opinion of Counsel that the holding of an Ownership Interest in a Residual Certificate by such Person may cause any Trust REMIC or any Person having an Ownership Interest in any Class of Certificates (other than such Person) to incur a liability for any federal tax imposed under the Code that would not otherwise be imposed but for the Transfer of an Ownership Interest in a Residual Certificate to such Person. The terms “United States,” “State” and “international organization” shall have the meanings set forth in Section 7701 of the Code or successor provisions.

“Distribution Account”: The trust account or accounts created and maintained by the Trustee pursuant to Section 3.04(e), which shall be entitled “Deutsche Bank National Trust Company, as Trustee, in trust for the registered Holders of Argent Securities Inc., Asset-Backed Pass-Through Certificates, Series 2006-W1.” The Distribution Account must be an Eligible Account.

“Distribution Date”: The 25th day of any month, or if such 25th day is not a Business Day, the next succeeding Business Day, commencing in February 2006.

“Due Date”: With respect to each Distribution Date, the first day of the calendar month in which such Distribution Date occurs, which is the day of the month on which the Monthly 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 month immediately preceding the month in which such Distribution Date occurs and ending on the related Due Date.

“Eligible Account”: Any of (i) an account or accounts maintained with a Depository Institution or trust company the short-term unsecured debt obligations of which are rated “F-1” by Fitch, “P-1” by Moody’s and “A-1+” by S&P (or comparable ratings if Fitch, Moody’s and S&P are not the Rating Agencies) at the time any amounts are held on deposit therein, (ii) an account or accounts the deposits in which are fully insured by the FDIC or (iii) a trust account or accounts maintained with the corporate trust department of a federal or state chartered depository institution or trust company acting in its fiduciary capacity. Eligible Accounts may bear interest.

“ERISA”: The Employee Retirement Income Security Act of 1974, as amended.

“Escrow Account”: The account or accounts created and maintained pursuant to Section 3.04(c).

“Escrow Payments”: The amounts constituting taxes, and/or fire and hazard insurance premiums escrowed by the Mortgagor with the mortgagee pursuant to a voluntary escrow agreement related to any Mortgage Loan.

“Estate in Real Property”: A fee simple estate or leasehold estate in a parcel of land.

“Excess Overcollateralized Amount”: With respect to the Class A Certificates and the Mezzanine Certificates and any Distribution Date, the excess, if any, of (i) the Overcollateralized Amount for such Distribution Date (calculated for this purpose only after assuming that 100% of the Principal Remittance Amount on such Distribution Date has been distributed) over (ii) the Overcollateralization Target Amount for such Distribution Date.

“Exchange Act”: The Securities Exchange Act of 1934, as amended.

“Expense Adjusted Net Maximum Mortgage Rate”: With respect to any Mortgage Loan (or the related REO Property), as of any date of determination, a per annum rate of interest equal to the applicable Maximum Mortgage Rate (or the Mortgage Rate for such Mortgage Loan in the case of any Fixed-Rate Mortgage Loan) as of the first day of the month preceding the month in which the Distribution Date occurs minus the sum of (i) the Trustee Fee Rate and (ii) the Servicing Fee Rate.

“Expense Adjusted Net Mortgage Rate”: With respect to any Mortgage Loan (or the related REO Property), as of any date of determination, a per annum rate of interest equal to the applicable Mortgage Rate thereon as of the first day of the month preceding the month in which the Distribution Date occurs minus the sum of (i) the Trustee Fee Rate and (ii) the Servicing Fee Rate.

“Extraordinary Trust Fund Expense”: Any amounts reimbursable to the Trustee, or any director, officer, employee or agent of the Trustee, from the Trust Fund pursuant to

 



Section 8.05, any amounts payable from the Distribution Account in respect of taxes pursuant to Section 10.01(g)(iii) and any amounts payable by the Trustee for the recording of the Assignments pursuant to Section 2.01.

“Fannie Mae”: Fannie Mae, formally known as the Federal National Mortgage Association, or any successor thereto.

“FDIC”: Federal Deposit Insurance Corporation or any successor thereto.

“Final Recovery Determination”: With respect to any defaulted Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property purchased by the Seller, the Depositor or the Master Servicer pursuant to or as contemplated by Section 2.03, Section 3.16(a) or Section 9.01), a determination made by the Master Servicer that all Insurance Proceeds, Liquidation Proceeds and other payments or recoveries which the Master Servicer, in its reasonable good faith judgment, expects to be finally recoverable in respect thereof have been so recovered. The Master Servicer shall maintain records, prepared by a Servicing Officer, of each Final Recovery Determination made thereby.

“Final Stated Maturity Date”: The Distribution Date occurring in March 2036.

“Fitch”: Fitch Ratings, or its successor in interest.

“Fixed-Rate Certificates”: None.

“Fixed-Rate Mortgage Loan”: Each of the Mortgage Loans identified on the Mortgage Loan Schedule as having a fixed Mortgage Rate.

“Fixed Swap Payment”: With respect to any Distribution Date, an amount equal to the Fixed Rate Payer Payment Amount, as defined in the Interest Rate Swap Agreement.

“Floating Swap Payment”: With respect to any Swap Payment Date, a floating amount equal to the product of (i) LIBOR (as determined pursuant to the Interest Rate Swap Agreement for such Swap Payment Date), (ii) the related Base Calculation Amount (as defined in the Interest Rate Swap Agreement), (iii) 250 and (iv) a fraction, the numerator of which is the actual number of days elapsed from and including the previous Swap Payment Date to but excluding the current Swap Payment Date (or, for the first Swap Payment Date, the actual number of days elapsed from the Closing Date to but excluding the first Swap Payment Date), and the denominator of which is 360.

“Formula Rate”: For any Distribution Date and each Class of Adjustable-Rate Certificates, the lesser of (i) One-Month LIBOR plus the related Certificate Margin and (ii) the related Maximum Cap Rate.

“Freddie Mac”: Freddie Mac, formally known as the Federal Home Loan Mortgage Corporation, or any successor thereto.

“Gross Margin”: With respect to each Adjustable-Rate Mortgage Loan, the fixed percentage set forth in the related Mortgage Note that is added to the Index on each Adjustment

 



Date in accordance with the terms of the related Mortgage Note to determine the Mortgage Rate for such Adjustable-Rate Mortgage Loan.

“Group I Allocation Percentage”: With respect to the Group I Certificates and any Distribution Date, the percentage equivalent of a fraction, the numerator of which is (x) the Group I Principal Remittance Amount for such Distribution Date and the denominator of which is (y) the Principal Remittance Amount for such Distribution Date.

“Group I Certificates”: The Class A-1 Certificates.

“Group I Interest Remittance Amount”: With respect to any Distribution Date, that portion of the Available Funds for such Distribution Date that represents interest received or advanced on the Group I Mortgage Loans, minus an amount equal to the Group I Net WAC Allocation Percentage of any Net Swap Payment or Swap Termination Payment (other than termination payments resulting from a Swap Provider Trigger Event) paid to the Interest Rate Swap Provider.

“Group I Mortgage Loan”: A Mortgage Loan assigned to Loan Group I. All Group I Mortgage Loans have a principal balance at origination that conforms to Freddie Mac loan limits.

“Group I Net WAC Allocation Percentage” for any Distribution Date will be the percentage equivalent of a fraction, the numerator of which will be (x) the aggregate principal balance of the Group I Mortgage Loans as of the first day of the related Due Period and the denominator of which will be (y) the aggregate principal balance of the Mortgage Loans as of the first day of the related Due Period.

“Group I Principal Distribution Amount”: With respect to any Distribution Date, the sum of (i) the principal portion of each Monthly Payment on the Group I Mortgage Loans due during the related Due Period, to the extent received on or prior to the related Determination Date or advanced prior to such Distribution Date; (ii) the Stated Principal Balance of any Group I Mortgage Loan that was purchased during the related Prepayment Period pursuant to or as contemplated by Section 2.03, Section 3.16(a) or Section 9.01 and the amount of any shortfall deposited in the Collection Account in connection with the substitution of a Deleted Mortgage Loan in Loan Group I pursuant to Section 2.03 during the related Prepayment Period; (iii) the principal portion of all other unscheduled collections (including, without limitation, Principal Prepayments, Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries and REO Principal Amortization) received during the related Prepayment Period on the Group I Mortgage Loans, net of any portion thereof that represents a recovery of principal for which an Advance was made by the Master Servicer pursuant to Section 4.03 in respect of a preceding Distribution Date; and (iv) the Group I Allocation Percentage of the amount of any Overcollateralization Increase Amount for such Distribution Date; minus (v) the Group I Allocation Percentage of the amount of any Overcollateralization Reduction Amount for such Distribution Date. In no event shall the Group I Principal Distribution Amount with respect to any Distribution Date be (x) less than zero or (y) greater than the then outstanding aggregate Certificate Principal Balance of the Class A and Mezzanine Certificates.

 



 

“Group I Principal Remittance Amount”: With respect to any Distribution Date, the sum of the amounts described in clauses (i) through (iii) of the definition of Group I Principal Distribution Amount.

“Group II Allocation Percentage”: With respect to the Group II Certificates and any Distribution Date, the percentage equivalent of a fraction, the numerator of which is (x) the Group II Principal Remittance Amount for such Distribution Date and the denominator of which is (y) the Principal Remittance Amount for such Distribution Date.

“Group II Certificates”: The Class A-2A, Class A-2B, Class A-2C and Class A-2D Certificates.

“Group II Interest Remittance Amount”: With respect to any Distribution Date, that portion of the Available Funds for such Distribution Date that represents interest received or advanced on the Group II Mortgage Loans, minus an amount equal to the Group II Net WAC Allocation Percentage of any Net Swap Payment or Swap Termination Payment (other than termination payments resulting from a Swap Provider Trigger Event) paid to the Interest Rate Swap Provider.

“Group II Mortgage Loan”: A Mortgage Loan assigned to Loan Group II, all with a principal balance at origination that may or may not conform to Fannie Mae or Freddie Mac loan limits.

“Group II Net WAC Allocation Percentage” for any Distribution Date will be the percentage equivalent of a fraction, the numerator of which will be (x) the aggregate principal balance of the Group II Mortgage Loans as of the first day of the related Due Period and the denominator of which will be (y) the aggregate principal balance of the Mortgage Loans as of the first day of the related Due Period.

“Group II Principal Distribution Amount”: With respect to any Distribution Date, the sum of (i) the principal portion of each Monthly Payment on the Group II Mortgage Loans due during the related Due Period, to the extent received on or prior to the related Determination Date or advanced prior to such Distribution Date; (ii) the Stated Principal Balance of any Group II Mortgage Loan that was purchased during the related Prepayment Period pursuant to or as contemplated by Section 2.03, Section 3.16(a) or Section 9.01 and the amount of any shortfall deposited in the Collection Account in connection with the substitution of a Deleted Mortgage Loan in Loan Group II pursuant to Section 2.03 during the related Prepayment Period; (iii) the principal portion of all other unscheduled collections (including, without limitation, Principal Prepayments, Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries and REO Principal Amortization) received during the related Prepayment Period on the Group II Mortgage Loans, net of any portion thereof that represents a recovery of principal for which an Advance was made by the Master Servicer pursuant to Section 4.03 in respect of a preceding Distribution Date and (iv) the Group II Allocation Percentage of the amount of any Overcollateralization Increase Amount for such Distribution Date; minus (v) the Group II Allocation Percentage of the amount of any Overcollateralization Reduction Amount for such Distribution Date. In no event shall the Group II Principal Distribution Amount with respect to any Distribution Date be (x) less than zero or (y) greater than the then outstanding aggregate Certificate Principal Balance of the Class A and Mezzanine Certificates.

 



 

“Group II Principal Remittance Amount”: With respect to any Distribution Date, the sum of the amounts described in clauses (i) through (iii) of the definition of Group II Principal Distribution Amount.

“Highest Priority”: As of any date of determination, the Class of Mezzanine Certificates then outstanding with a Certificate Principal Balance greater than zero, with the highest priority for payments pursuant to Section 4.01, in the following order of decreasing priority: the Class M-1 Certificates, the Class M-2 Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the Class M-5 Certificates, the Class M-6 Certificates, the Class M-7 Certificates, the Class M-8 Certificates, the Class M-9 Certificates and the Class M-10 Certificates.

“HOEPA”: The Home Ownership and Equity Protection Act of 1994.

Indenture: An indenture relating to the issuance of notes secured by all or a portion of the Class CE Certificates, the Class P Certificates and/or the Residual Certificates, which may or may not be guaranteed by the NIMS Insurer.

“Independent”: When used with respect to any specified Person, any such Person who (a) is in fact independent of the Depositor, the Master Servicer, the Seller and their respective Affiliates, (b) does not have any direct financial interest in or any material indirect financial interest in the Depositor, the Seller, the Master Servicer or any Affiliate thereof, and (c) is not connected with the Depositor, the Seller, the Master Servicer or any Affiliate thereof as an officer, employee, promoter, underwriter, trustee, partner, director or Person performing similar functions; provided, however, that a Person shall not fail to be Independent of the Depositor, the Seller, the Master Servicer or any Affiliate thereof merely because such Person is the beneficial owner of 1% or less of any class of securities issued by the Depositor or the Master Servicer or any Affiliate thereof, as the case may be.

“Independent Contractor”: Either (i) any Person (other than the Master Servicer) that would be an “independent contractor” with respect to REMIC I within the meaning of Section 856(d)(3) of the Code if such REMIC were a real estate investment trust (except that the ownership tests set forth in that section shall be considered to be met by any Person that owns, directly or indirectly, 35% or more of any Class of Certificates), so long as such REMIC does not receive or derive any income from such Person and provided that the relationship between such Person and such REMIC is at arm’s length, all within the meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any other Person (including the Master Servicer) if the Trustee has received an Opinion of Counsel to the effect that the taking of any action in respect of any REO Property by such Person, subject to any conditions therein specified, that is otherwise herein contemplated to be taken by an Independent Contractor shall not cause such REO Property to cease to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code (determined without regard to the exception applicable for purposes of Section 860D(a) of the Code), or cause any income realized in respect of such REO Property to fail to qualify as Rents from Real Property.

“Index”: With respect to each Adjustable-Rate Mortgage Loan and each related Adjustment Date, the average of the interbank offered rates for six-month United States dollar deposits in the London market as published in The Wall Street Journal and as most recently

 



available as of the first business day 45 days or more prior to such Adjustment Date, as specified in the related Mortgage Note.

“Insurance Proceeds”: Proceeds of any title policy, hazard policy or other insurance policy covering a Mortgage Loan to the extent such proceeds are not to be applied to the restoration of the related Mortgaged Property or released to the Mortgagor in accordance with the procedures that the Master Servicer would follow in servicing mortgage loans held for its own account, subject to the terms and conditions of the related Mortgage Note and Mortgage.

“Interest Accrual Period”: With respect to any Distribution Date and the Adjustable-Rate Certificates, the period commencing on the Distribution Date in the month immediately preceding the month in which such Distribution Date occurs (or, in the case of the first Distribution Date, commencing on the Closing Date) and ending on the day preceding such Distribution Date. With respect to any Distribution Date and the Class CE Certificates and the REMIC II Regular Interests, the one-month period ending on the last day of the calendar month preceding the month in which such Distribution Date occurs.

“Interest Carry Forward Amount”: With respect to any Distribution Date and any Class of Class A Certificates or Mezzanine Certificates, the sum of (i) the amount, if any, by which (a) the Interest Distribution Amount for such Class of Certificates as of the immediately preceding Distribution Date exceeded (b) the actual amount distributed on such Class of Certificates in respect of interest on such immediately preceding Distribution Date and (ii) the amount of any Interest Carry Forward Amount for such Class of Certificates remaining undistributed from the previous Distribution Date, plus accrued interest thereon calculated at the related Pass-Through Rate for the most recently ended Interest Accrual Period.

“Interest Determination Date”: With respect to the Adjustable-Rate Certificates, and solely for purposes of calculating the Marker Rate, REMIC II Regular Interest II-LTA1, REMIC II Regular Interest II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II Regular Interest II-LTA2C, REMIC II Regular Interest II-LTA2D, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9 and REMIC II Regular Interest II-LTM10 and any Interest Accrual Period therefor (other than the first Interest Accrual Period), the second LIBOR Business Day preceding the commencement of such Interest Accrual Period.

“Interest Distribution Amount”: With respect to any Distribution Date and any Class of Class A Certificates or Mezzanine Certificates and the Class CE Certificates, the aggregate Accrued Certificate Interest on the Certificates of such Class for such Distribution Date.

“Interest Rate Swap Agreement”: The 1992 ISDA Master Agreement (Multicurrency-Cross Border) dated as of February 7, 2006 (together with the schedule thereto, the Master Agreement) between the Interest Rate Swap Provider and the Trustee, an ISDA Credit Support Annex (Bilateral Form-New York Law) as of the same date, which supplements, forms part of, and is subject to the Master Agreement, and a confirmation of the same date, which supplements and forms part of the Master Agreement, reference #1054514B.

 



 

“Interest Rate Swap Provider”: Barclays Bank PLC or any successor under the Interest Rate Swap Agreement.

“Late Collections”: With respect to any Mortgage Loan and any Due Period, all amounts received subsequent to the Determination Date immediately following such Due Period, whether as late payments of Monthly Payments or as Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries 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 Business Day”: Any day on which banks in the City of London and the City of New York are open and conducting transactions in United States dollars.

“Liquidation Event”: With respect to any Mortgage Loan, any of the following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is removed from REMIC I by reason of its being purchased, sold or replaced pursuant to or as contemplated by Section 2.03, Section 3.16(a) or Section 9.01. With respect to any REO Property, either of the following events: (i) a Final Recovery Determination is made as to such REO Property; or (ii) such REO Property is removed from REMIC I by reason of its being purchased pursuant to Section 9.01.

“Liquidation Proceeds”: The amount (other than Insurance Proceeds or amounts received in respect of the rental of any REO Property prior to REO Disposition) received by the Master Servicer in connection with (i) the taking of all or a part of a Mortgaged Property by exercise of the power of eminent domain or condemnation, (ii) the liquidation of a defaulted Mortgage Loan through a trustee’s sale, foreclosure sale or otherwise or (iii) the repurchase, substitution or sale of a Mortgage Loan or an REO Property pursuant to or as contemplated by Section 2.03, Section 3.13, Section 3.16(a) or Section 9.01.

“Loan Group”: Loan Group I or Loan Group II, as the context requires.

“Loan Group I”: The group of Mortgage Loans identified in the Mortgage Loan Schedule as having been assigned to Loan Group I.

“Loan Group II”: The group of Mortgage Loans identified in the Mortgage Loan Schedule as having been assigned to Loan Group II.

“Loan-to-Value Ratio”: As of any date of determination, the fraction, expressed as a percentage, the numerator of which is the Stated Principal Balance of the related Mortgage Loan at such date and the denominator of which is the Value of the related Mortgaged Property.

“Loss Mitigation Action Plan”: The policies and procedures set forth in Exhibit I hereto relating to the realization on delinquent Mortgage Loans, which are incorporated by reference into this Agreement and shall be deemed a part hereof.

“Lost Note Affidavit”: With respect to any Mortgage Loan as to which the original Mortgage Note has been permanently lost, misplaced or destroyed and has not been replaced, an affidavit from the Seller certifying that the original Mortgage Note has been lost,

 



misplaced or destroyed (together with a copy of the related Mortgage Note) and indemnifying the Trust Fund against any loss, cost or liability resulting from the failure to deliver the original Mortgage Note, in the form of Exhibit B hereto.

“Marker Rate”: With respect to the Class CE Interest and any Distribution Date, a per annum rate equal to two (2) times the weighted average of the REMIC II Remittance Rate for REMIC II Regular Interest II-LTA1, REMIC II Regular Interest II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II Regular Interest II-LTA2C, REMIC II Regular Interest II-LTA2D, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9, REMIC II Regular Interest II-LTM10, and REMIC II Regular Interest II-LTZZ, with the rate on each such REMIC II Regular Interest (other than REMIC II Regular Interest II-LTZZ) subject to the lesser of (i) LIBOR plus the related Certificate Margin and (ii) the related Net WAC Pass-Through Rate for the purpose of this calculation for such Distribution Date and with the rate on REMIC II Regular Interest II-LTZZ subject to a cap of zero for the purpose of this calculation; provided, however, that solely for this purpose, calculations of the REMIC II Remittance Rate and the related caps with respect to REMIC II Regular Interest II-LTA1, REMIC II Regular Interest II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II Regular Interest II-LTA2C, REMIC II Regular Interest II-LTA2D, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9 and REMIC II Regular Interest II-LTM10 shall be multiplied by a fraction, the numerator of which is the actual number of days in the Interest Accrual Period and the denominator of which is 30.

“Master Servicer”: Ameriquest Mortgage Company or any successor master servicer appointed as herein provided, in its capacity as Master Servicer hereunder.

“Master Servicer Event of Default”: One or more of the events described in Section 7.01.

“Master Servicer Prepayment Charge Payment Amount”: The amounts payable by the Master Servicer pursuant to Section 2.03(b) in respect of any waived (or, with respect to subsequent changes of law, any unenforceable) Prepayment Charges.

“Master Servicer Remittance Date”: With respect to any Distribution Date, 3:00 p.m. New York time on the last Business Day preceding such Distribution Date.

“Master Servicer Reporting Date”: With respect to any Distribution Date, 3:00 p.m. New York time on the 18th day of the calendar month in which such Distribution Date occurs or, if such 18th day is not a Business Day, the Business Day immediately succeeding such 18th day.

“Master Servicer Termination Test”: With respect to any Distribution Date, the Master Servicer Termination Test shall be failed if the Cumulative Loss Percentage exceeds the level specified below for the applicable period:

 

 



 

 

Months (following the Closing Date)

Cumulative Loss (%)

37-48

4.75

49-60

6.25

61-72

7.50

73 and thereafter

8.00

 

“Maximum Cap Rate”: For any Distribution Date with respect to the Group I Certificates, a per annum rate equal to the sum of (i) the product of (x) the weighted average of the Expense Adjusted Net Maximum Mortgage Rates of the Group I Mortgage Loans minus an amount, expressed as a percentage, equal to the Net Swap Payment and Swap Termination Payment, if any (other than termination payments resulting from a Swap Provider Trigger Event), due from the Trust for such Distribution Date, multiplied by 12, weighted on the basis of the outstanding Stated Principal Balances of the Group I Mortgage Loans as of the first day of the month preceding the month of such Distribution Date (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (y) a fraction, the numerator of which is 30 and the denominator of which is the actual number of days elapsed in the related Interest Accrual Period and (ii) an amount, expressed as a percentage, equal to a fraction, the numerator of which is equal to the Net Swap Payment made by the Interest Rate Swap Provider and the denominator of which is equal to the aggregate Stated Principal Balance of the Mortgage Loans, multiplied by 12.

For any Distribution Date with respect to the Group II Certificates, a per annum rate equal to the sum of (i) the product of (x) the weighted average of the Expense Adjusted Net Maximum Mortgage Rates of the Group II Mortgage Loans minus an amount, expressed as a percentage, equal to the Net Swap Payment and Swap Termination Payment, if any (other than termination payments resulting from a Swap Provider Trigger Event), due from the Trust for such Distribution Date, multiplied by 12, weighted on the basis of the outstanding Stated Principal Balances of the Group II Mortgage Loans as of the first day of the month preceding the month of such Distribution Date (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (y) a fraction, the numerator of which is 30 and the denominator of which is the actual number of days elapsed in the related Interest Accrual Period and (ii) an amount, expressed as a percentage, equal to a fraction, the numerator of which is equal to the Net Swap Payment made by the Interest Rate Swap Provider and the denominator of which is equal to the aggregate Stated Principal Balance of the Mortgage Loans, multiplied by 12.

For any Distribution Date with respect to the Mezzanine Certificates, a per annum rate equal to the sum of (i) the product of (x) the weighted average (weighted on the basis of the results of subtracting from the aggregate Stated Principal Balance of the applicable Loan Group, the current Certificate Principal Balance of the related Class A Certificates) of the weighted average of the Expense Adjusted Net Maximum Mortgage Rates of the Group I Mortgage Loans and the Group II Mortgage Loans, in each case, weighted on the basis of the outstanding Stated Principal Balances of the related Mortgage Loans as of the first day of the month preceding the

 



month of such Distribution Date (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (y) a fraction, the numerator of which is 30 and the denominator of which is the actual number of days elapsed in the related Interest Accrual Period and (ii) an amount, expressed as a percentage, equal to a fraction, the numerator of which is equal to the Net Swap Payment made by the Interest Rate Swap Provider and the denominator of which is equal to the aggregate Stated Principal Balance of the Mortgage Loans, multiplied by 12.

“Maximum II-LTZZ Uncertificated Interest Deferral Amount”: With respect to any Distribution Date, the excess of (i) accrued interest at the REMIC II Remittance Rate applicable to REMIC II Regular Interest II-LTZZ for such Distribution Date on a balance equal to the Uncertificated Balance of REMIC II Regular Interest II-LTZZ minus the REMIC II Overcollateralization Amount, in each case for such Distribution Date, over (ii) the Uncertificated Interest on REMIC II Regular Interest II-LTA1, REMIC II Regular Interest II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II Regular Interest II-LTA2C, REMIC II Regular Interest II-LTA2D, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9 and REMIC II Regular Interest II-LTM10 for such Distribution Date, with the rate on each such REMIC II Regular Interest subject to a cap equal to the lesser of (i) LIBOR plus the related Certificate Margin and (ii) the related Net WAC Pass-Through Rate; provided, however, that solely for this purpose, calculations of the REMIC II Remittance Rate and the related caps with respect to REMIC II Regular Interest II-LTA1, REMIC II Regular Interest II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II Regular Interest II-LTA2C, REMIC II Regular Interest II-LTA2D, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9 and REMIC II Regular Interest II-LTM10 shall be multiplied by a fraction, the numerator of which is the actual number of days in the Interest Accrual Period and the denominator of which is 30.

“Maximum Mortgage Rate”: With respect to each Adjustable-Rate Mortgage Loan, the percentage set forth in the related Mortgage Note as the maximum Mortgage Rate thereunder.

“Mezzanine Certificate”: Any one of the Class M-1 Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4 Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7 Certificates, Class M-8 Certificates, Class M-9 Certificates and Class M-10 Certificates.

“Minimum Mortgage Rate”: With respect to each Adjustable-Rate Mortgage Loan, the percentage set forth in the related Mortgage Note as the minimum Mortgage Rate thereunder.

 



 

“Monthly Payment”: With respect to any Mortgage Loan, the scheduled monthly payment of principal and interest on such Mortgage Loan which is payable by the related Mortgagor from time to time under the related Mortgage Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction in the amount of interest collectible from the related Mortgagor pursuant to the Relief Act; (b) without giving effect to any extension granted or agreed to by the Master Servicer pursuant to Section 3.02; and (c) on the assumption that all other amounts, if any, due under such Mortgage Loan are paid when due.

“Monthly Statement”: As defined in Section 4.02.

“Moody’s”: Moody’s Investors Service, Inc., or its successor in interest.

“Mortgage”: The mortgage, deed of trust or other instrument creating a first lien or second lien on a Mortgaged Property securing a Mortgage Note.

“Mortgage File”: The mortgage documents listed in Section 2.01 pertaining to a particular Mortgage Loan and any additional documents required to be added to the Mortgage File pursuant to this Agreement.

“Mortgage Loan”: Each mortgage loan transferred and assigned to the Trustee pursuant to Section 2.01 or Section 2.03(d) of this Agreement, as held from time to time as a part of REMIC I, the Mortgage Loans so held being identified in the Mortgage Loan Schedule.

“Mortgage Loan Purchase Agreement”: The agreement between the Seller and the Depositor, regarding the transfer of the Mortgage Loans by the Seller to or at the direction of the Depositor, substantially in the form of Exhibit D annexed hereto.

“Mortgage Loan Schedule”: As of any date, the list of Mortgage Loans included in REMIC I on such date, separately identifying the Group I Mortgage Loans and the Group II Mortgage Loans, attached hereto as Schedule 1. The Mortgage Loan Schedule shall set forth the following information with respect to each Mortgage Loan:

(1)

the Seller’s Mortgage Loan identifying number;

(2)

[reserved];

(3)

the state and zip code of the Mortgaged Property;

(4)

a code indicating whether the Mortgaged Property is owner-occupied;

(5)

the type of Residential Dwelling constituting the Mortgaged Property;

(6)

the original months to maturity;

(7)

the Loan-to-Value Ratio or Combined Loan-to-Value Ratio at origination;

(8)

the Mortgage Rate in effect immediately following the Cut-off Date;

 

 



 

 

(9)

the date on which the first Monthly Payment was due on the Mortgage Loan;

(10)

the stated maturity date;

(11)

the amount of the Monthly Payment due on the first Due Date after the Cut-off Date;

(12)

the last Due Date on which a Monthly Payment was actually applied to the unpaid Stated Principal Balance;

(13)

the original principal amount of the Mortgage Loan;

(14)

the Scheduled Principal Balance of the Mortgage Loan as of the close of business on the Cut-off Date;

(15)

with respect to the Adjustable-Rate Mortgage Loans, the Gross Margin;

(16)

a code indicating the purpose of the Mortgage Loan (i.e., purchase, refinance debt consolidation cashout, or refinance debt consolidation no cashout);

(17)

with respect to the Adjustable-Rate Mortgage Loans, the Maximum Mortgage Rate;

(18)

with respect to the Adjustable-Rate Mortgage Loans, the Minimum Mortgage Rate;

(19)

the Mortgage Rate at origination;

(20)

with respect to the Adjustable-Rate Mortgage Loans, the Periodic Rate Cap and the maximum first Adjustment Date Mortgage Rate adjustment;

(21)

a code indicating the documentation program (i.e., Full Documentation, Limited Documentation or Stated Income);

(22)

with respect to the Adjustable-Rate Mortgage Loans, the first Adjustment Date immediately following the Cut-off Date;

(23)

the risk grade;

(24)

the Value of the Mortgaged Property;

(25)

the sale price of the Mortgaged Property, if applicable;

(26)

the FICO score of the primary Mortgagor; and

 

 



 

 

(27)

[reserved].

The Mortgage Loan Schedule shall set forth the following information with respect to the Mortgage Loans by Loan Group and in the aggregate as of the Cut-off Date: (1) the number of Mortgage Loans; (2) the current Stated 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. The Mortgage Loan Schedule shall be amended from time to time by the Depositor in accordance with the provisions of this Agreement. With respect to any Qualified Substitute Mortgage Loan, the Cut-off Date shall refer to the related Cut-off Date for such Mortgage Loan, determined in accordance with the definition of Cut-off Date herein.

“Mortgage Note”: The original executed note or other evidence of the indebtedness of a Mortgagor under a Mortgage Loan.

“Mortgage Pool”: The pool of Mortgage Loans, identified on Schedule 1 from time to time, and any REO Properties acquired in respect thereof.

“Mortgage Rate”: With respect to each Mortgage Loan, the annual rate at which interest accrues on such Mortgage Loan from time to time in accordance with the provisions of the related Mortgage Note, which rate (i) with respect to each Fixed-Rate Mortgage Loan shall remain constant at the rate set forth in the Mortgage Loan Schedule as the Mortgage Rate in effect immediately following the Cut-off Date and (ii) with respect to each Adjustable-Rate Mortgage Loan, (A) as of any date of determination until the first Adjustment Date following the Cut-off Date shall be the rate set forth in the Mortgage Loan Schedule as the Mortgage Rate in effect immediately following the Cut-off Date and (B) as of any date of determination thereafter shall be the rate as adjusted on the most recent Adjustment Date equal to the sum, rounded to the nearest 0.125% as provided in the Mortgage Note, of the Index, as most recently available as of a date prior to the Adjustment Date as set forth in the related Mortgage Note, plus the related Gross Margin; provided that the Mortgage Rate on such Adjustable-Rate Mortgage Loan on any Adjustment Date shall never be more than the lesser of (i) the sum of the Mortgage Rate in effect immediately prior to the Adjustment Date plus the related Periodic Rate Cap, if any, and (ii) the related Maximum Mortgage Rate, and shall never be less than the greater of (i) the Mortgage Rate in effect immediately prior to the Adjustment Date less the Periodic Rate Cap, if any, and (ii) the related Minimum Mortgage Rate. With respect to each Mortgage Loan that becomes an REO Property, as of any date of determination, the annual rate determined in accordance with the immediately preceding sentence as of the date such Mortgage Loan became an REO Property.

“Mortgaged Property”: The underlying property identified in the related Mortgage as securing a Mortgage Loan, including any REO Property, consisting of an Estate in Real Property improved by a Residential Dwelling (excluding for purposes of construing the representations or warranties made in the Mortgage Loan Purchase Agreement, any improvements thereupon not considered by the appraiser in determining the Value of such Mortgaged Property).

“Mortgagor”: The obligor on a Mortgage Note.

 



 

“Net Monthly Excess Cashflow”: With respect to any Distribution Date, the sum of (i) any Overcollateralization Reduction Amount for such Distribution Date and (ii) the excess of (x) the Available Funds for such Distribution Date over (y) the sum for such Distribution Date of (A) the Senior Interest Distribution Amount, (B) the Interest Distribution Amounts payable to the Mezzanine Certificates and (C) the Principal Remittance Amount.

“Net Mortgage Rate”: With respect to any Mortgage Loan (or the related REO Property) as of any date of determination, a per annum rate of interest equal to the then applicable Mortgage Rate for such Mortgage Loan minus the Servicing Fee Rate.

“Net Swap Payment”: In the case of payments made by the Trust, the excess, if any, of (x) the Fixed Swap Payment over (y) the Floating Swap Payment, and in the case of payments made by the Interest Rate Swap Provider, the excess, if any, of (x) the Floating Swap Payment over (y) the Fixed Swap Payment. In each case, the Net Swap Payment shall not be less than zero.

“Net WAC Pass-Through Rate”: For any Distribution Date with respect to the Group I Certificates, a per annum rate equal to the product of (x) the weighted average of the Expense Adjusted Net Mortgage Rates of the Group I Mortgage Loans, weighted on the basis of the outstanding Stated Principal Balances of the Group I Mortgage Loans as of the first day of the month preceding the month of such Distribution Date (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (y) a fraction, the numerator of which is 30 and the denominator of which is the actual number of days elapsed in the related Interest Accrual Period minus an amount, expressed as a percentage, equal to the Net Swap Payment and Swap Termination Payment, if any (other than termination payments resulting from a Swap Provider Trigger Event), due from the Trust for such Distribution Date, divided by the aggregate Stated Principal Balance of the Mortgage Loans, multiplied by 12. For federal income tax purposes, for any Distribution Date with respect to the REMIC III Regular Interests the ownership of which is represented by the Group I Certificates, the economic equivalent of such rate shall be expressed as the weighted average (adjusted for the actual number of days elapsed in the related Interest Accrual Period) of the REMIC II Remittance Rate on REMIC II Regular Interest II-LT1GRP, weighted on the basis of the Uncertificated Balance of such REMIC II Regular Interest.

For any Distribution Date with respect to the Group II Certificates, a per annum rate equal to the product of (x) the weighted average of the Expense Adjusted Net Mortgage Rates of the Group II Mortgage Loans, weighted on the basis of the outstanding Stated Principal Balances of the Group II Mortgage Loans as of the first day of the month preceding the month of such Distribution Date (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (y) a fraction, the numerator of which is 30 and the denominator of which is the actual number of days elapsed in the related Interest Accrual Period minus an amount, expressed as a percentage, equal to the Net Swap Payment and Swap Termination Payment, if any (other than termination payments resulting from a Swap Provider Trigger Event), due from the Trust for such Distribution Date, divided by the aggregate Stated Principal Balance of the Mortgage Loans, multiplied by 12. For federal income tax purposes, for

 



any Distribution Date with respect to the REMIC III Regular Interests the ownership of which is represented by the Group II Certificates, the economic equivalent of such rate shall be expressed as the weighted average (adjusted for the actual number of days elapsed in the related Interest Accrual Period) of the REMIC II Remittance Rate on REMIC II Regular Interest II-LT2GRP, weighted on the basis of the Uncertificated Balance of such REMIC II Regular Interest.

For any Distribution Date with respect to the Mezzanine Certificates, a per annum rate equal to the product of (x) the weighted average (weighted on the basis of the results of subtracting from the aggregate Stated Principal Balance of each Loan Group the current aggregate Certificate Principal Balance of the related Class A Certificates) of the Net WAC Pass-Through Rate for the Group I Certificates and the Net WAC Pass-Through Rate for the Group II Certificates and (y) a fraction, the numerator of which is 30 and the denominator of which is the actual number of days elapsed in the related Interest Accrual Period. For federal income tax purposes, for any Distribution Date with respect to the REMIC III Regular Interests the ownership of which is represented by the Mezzanine Certificates, the economic equivalent of such rate shall be expressed as the weighted average (adjusted for the actual number of days elapsed in the related Interest Accrual Period) of the REMIC II Remittance Rates on (a) REMIC II Regular Interest II-LT1SUB, subject to a cap and a floor equal to the weighted average of the Expense Adjusted Net Mortgage Rates of the Group I Mortgage Loans and (b) REMIC II Regular Interest II-LT2SUB, subject to a cap and a floor equal to the weighted average of the Expense Adjusted Net Mortgage Rates of the Group II Mortgage Loans.

“Net WAC Rate Carryover Amount”: With respect to any Class of Class A Certificates and the Mezzanine Certificates and any Distribution Date, the sum of (A) the excess, if any, of (i) the amount of interest such Certificates would have accrued for such Distribution Date had the applicable Pass-Through Rate been calculated at the related Formula Rate, over (ii) the amount of interest accrued on such Certificates at the related Net WAC Pass-Through Rate for such Distribution Date and (B) the related Net WAC Rate Carryover Amount for the previous Distribution Date not previously paid, together with interest thereon at a rate equal to the related Formula Rate applicable for such Class in each case for the Interest Accrual Period for the current Distribution Date.

“Net WAC Rate Carryover Reserve Account”: The Net WAC Rate Carryover Reserve Account established and maintained pursuant to Section 4.11.

“New Lease”: Any lease of REO Property entered into on behalf of REMIC I, including any lease renewed or extended on behalf of REMIC I, if REMIC I has the right to renegotiate the terms of such lease.

“NIMS Insurer”: Any insurer that is guaranteeing certain payments under notes secured by collateral which includes, among other things, all or a portion of the Class CE Certificates, the Class P Certificates and/or the Residual Certificates.

“Nonrecoverable Advance”: Any 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 Master Servicer, will not or, in the case of a proposed Advance, would not be ultimately recoverable from related Late Collections, Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property as provided herein.

 



 

“Nonrecoverable Servicing Advance”: Any Servicing 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 Master Servicer, shall not or, in the case of a proposed Servicing Advance, would not be ultimately recoverable from related Late Collections, Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property as provided herein.

“Non-United States Person”: Any Person other than a United States Person.

“Notional Amount”: With respect to the Class CE Interest and any Distribution Date, the aggregate Uncertificated Balance of the REMIC II Regular Interests (other than REMIC II Regular Interest II-IO and REMIC II Regular Interest II-LTP), immediately prior to such Distribution Date. For federal income tax purposes, the Class CE Certificates will not have a Notional Amount, but will be entitled to 100% of amounts distributed in respect of the Class CE Interest.

“Offered Certificate”: Any one of the Class A Certificates and the Mezzanine Certificates (other than the Private Mezzanine Certificates) issued under this Agreement.

“Officers’ Certificate”: With respect to the Depositor, a certificate signed by the Chairman of the Board, the Vice Chairman of the Board, the President or a vice president (however denominated), and by the Treasurer, the Secretary, or one of the assistant treasurers or assistant secretaries. With respect to the Master Servicer, any officer who is authorized to act for the Master Servicer in matters relating to this Agreement, and whose action is binding upon the Master Servicer, initially including those individuals whose names appear on the list of authorized officers delivered at the closing.

“One-Month LIBOR”: With respect to the Adjustable-Rate Certificates, REMIC II Regular Interest II-LTA1, REMIC II Regular Interest II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II Regular Interest II-LTA2C, REMIC II Regular Interest II-LTA2D, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9 and REMIC II Regular Interest II-LTM10 and any Interest Accrual Period therefor, the rate determined by the Trustee on the related Interest 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 Interest Determination Date; provided that if such rate does not appear on Telerate Page 3750, the rate for such date shall be determined on the basis of the offered rates of the Reference Banks for one-month U.S. dollar deposits, as of 11:00 a.m. (London time) on such Interest Determination Date. In such event, the Trustee shall request the principal London office of each of the Reference Banks to provide a quotation of its rate. If on such Interest Determination Date, two or more Reference Banks provide such offered quotations, One-Month LIBOR for the related Interest Accrual Period shall be the arithmetic mean of such offered quotations (rounded upwards, if necessary, to the nearest whole multiple of 1/16%). If on such Interest Determination Date, fewer than two Reference Banks provide such offered quotations, One-Month LIBOR for the related Interest Accrual Period shall be the higher of (i) LIBOR as determined on the previous Interest Determination Date and (ii) the Reserve Interest Rate. Notwithstanding the

 



foregoing, if, under the priorities described above, LIBOR for an Interest Determination Date would be based on LIBOR for the previous Interest Determination Date for the third consecutive Interest Determination Date, the Trustee shall select, after consultation with the Depositor and the NIMS Insurer, an alternative comparable index (over which the Trustee has no control), used for determining one-month Eurodollar lending rates that is calculated and published (or otherwise made available) by an independent party.

“Opinion of Counsel”: A written opinion of counsel, who may, without limitation, be salaried counsel for the Depositor or the Master Servicer acceptable to the Trustee, if such opinion is delivered to the Trustee, acceptable to the NIMs Insurer, if such opinion is delivered to the NIMs Insurer, except that any opinion of counsel relating to (a) the qualification of any Trust REMIC as a REMIC or (b) compliance with the REMIC Provisions must be an opinion of Independent counsel.

“Optional Termination Date”: The first Distribution Date on which the aggregate Stated Principal Balance of the Mortgage Loans (and properties acquired in respect thereof) remaining in the Trust Fund is reduced to an amount less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

“Originator”: Argent Mortgage Company, L.L.C.

“Overcollateralization Deficiency Amount”: With respect to any Distribution Date, the excess, if any, of (a) the Overcollateralization Target Amount applicable to such Distribution Date over (b) the Overcollateralized Amount applicable to such Distribution Date (calculated for this purpose only, after assuming that 100% of the Principal Remittance Amount on such Distribution Date has been distributed).

“Overcollateralization Increase Amount”: With respect to any Distribution Date, the lesser of (a) the Overcollateralization Deficiency Amount as of such Distribution Date and (b) the Net Monthly Excess Cashflow for such Distribution Date.

“Overcollateralization Reduction Amount”: With respect to any Distribution Date, an amount equal to the lesser of (a) the Excess Overcollateralized Amount and (b) the Principal Remittance Amount.

“Overcollateralization Target Amount”: With respect to any Distribution Date (i) prior to the Stepdown Date, 2.90% of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, (ii) on or after the Stepdown Date provided a Trigger Event is not in effect, the greater of (x) 5.80% of the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced and unscheduled collections of principal received during the related Prepayment Period) and (y) $11,375,012.95, or (iii) on or after the Stepdown Date and if a Trigger Event is in effect, the Overcollateralization Target Amount for the immediately preceding Distribution Date. Notwithstanding the foregoing, on and after any Distribution Date following the reduction of the aggregate Certificate Principal Balance of the Class A Certificates and the Mezzanine Certificates to zero, the Overcollateralization Target Amount shall be zero.

 



 

“Overcollateralized Amount”: With respect to any Distribution Date, the excess, if any, of (a) the aggregate Stated Principal Balances of the Mortgage Loans and REO Properties immediately following such Distribution Date (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period), over (b) the sum of the aggregate Certificate Principal Balances of the Class A Certificates, the Mezzanine Certificates and the Class P Certificates as of such Distribution Date (after giving effect to distributions to be made on such Distribution Date).

“Ownership Interest”: As to any Certificate, any ownership or security interest in such Certificate, including any interest in such Certificate as the Holder thereof and any other interest therein, whether direct or indirect, legal or beneficial, as owner or as pledgee.

“Pass-Through Rate”: With respect to any Class A or Mezzanine Certificates and any Distribution Date, the lesser of (x) the related Formula Rate for such Distribution Date and (y) the related Net WAC Pass-Through Rate for such Distribution Date.

With respect to the Class CE Interest and any Distribution Date, a rate per annum equal to the percentage equivalent of a fraction, the numerator of which is (x) the sum of (i) 100% of the interest on REMIC II Regular Interest II-LTP and (ii) interest on the Uncertificated Balance of each REMIC II Regular Interest listed in clause (y) at a rate equal to the related REMIC II Remittance Rate minus the Marker Rate and the denominator of which is (y) the aggregate Uncertificated Balance of REMIC II Regular Interest II-LTAA, REMIC II Regular Interest II-LTA1, REMIC II Regular Interest II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II Regular Interest II-LTA2C, REMIC II Regular Interest II-LTA2D, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9, REMIC II Regular Interest II-LTM10 and REMIC III Regular Interest LTZZ.

With respect to the Class SWAP-IO Interest, the Class SWAP-IO Interest shall not have a Pass-Through Rate, but interest for such Regular Interest and each Distribution Date shall be an amount equal to 100% of the amounts distributable to REMIC II Regular Interest II-IO for such Distribution Date.

With respect to the Class CE Certificates, 100% of the interest distributable to the Class CE Interest, expressed as a per annum rate.

“Percentage Interest”: With respect to any Class of Certificates (other than the Residual Certificates), the undivided percentage ownership in such Class evidenced by such Certificate, expressed as a percentage, the numerator of which is the initial Certificate Principal Balance or Notional Amount represented by such Certificate and the denominator of which is the aggregate initial Certificate Principal Balance or Notional Amount of all of the Certificates of such Class. The Group I Certificates are issuable only in minimum Percentage Interests corresponding to minimum initial Certificate Principal Balances of $100,000 and integral multiples of $1.00 in excess thereof. The Group II Certificates and the Mezzanine Certificates (other than the Private Mezzanine Certificates) are issuable only in minimum Percentage

 



Interests corresponding to minimum initial Certificate Principal Balances of $100,000 and integral multiples of $1.00 in excess thereof. The Private Mezzanine Certificates are issuable only in minimum Percentage Interests corresponding to minimum initial Certificate Principal Balances of $100,000 and integral multiples of $1.00 in excess thereof. The Class P Certificates are issuable only in minimum Percentage Interests corresponding to minimum initial Certificate Principal Balances of $20 and integral multiples thereof. The Class CE Certificates are issuable only in minimum Percentage Interests corresponding to minimum initial Notional Amount of $10,000 and integral multiples of $1.00 in excess thereof; provided, however, that a single Certificate of such Class of Certificates may be issued having a Percentage Interest corresponding to the remainder of the aggregate initial Certificate Principal Balance or Notional Amount of such Class or to an otherwise authorized denomination for such Class plus such remainder. With respect to any Residual Certificate, the undivided percentage ownership in such Class evidenced by such Certificate, as set forth on the face of such Certificate. The Residual Certificates are issuable in Percentage Interests of 20% and multiples thereof.

“Periodic Rate Cap”: With respect to each Adjustable-Rate Mortgage Loan and any Adjustment Date therefor, the fixed percentage set forth in the related Mortgage Note, which is the maximum amount by which the Mortgage Rate for such Mortgage Loan may increase or decrease (without regard to the Maximum Mortgage Rate or the Minimum Mortgage Rate) on such Adjustment Date from the Mortgage Rate in effect immediately prior to such Adjustment Date.

“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 the Depositor, the Master Servicer, the NIMS Insurer, the Trustee 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;

(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 Trustee or an Affiliate thereof, that have been rated “Aaa” by Moody’s, “AAA” by Fitch and “AAAm” by S&P; and

(vii)       if previously confirmed in writing to the Trustee and consented to by the NIMS Insurer, 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 securities having ratings equivalent to its highest initial rating of the Class A Certificates;

provided, however, that no instrument described hereunder shall evidence either the right to receive (a) only interest with respect to the obligations underlying such instrument or (b) both principal and interest payments derived from obligations underlying such instrument and the interest and principal payments with respect to such instrument provide a yield to maturity at par greater than 120% of the yield to maturity at par of the underlying obligations.

“Permitted Transferee”: Any Transferee of a Residual Certificate other than a Disqualified Organization or Non-United States Person.

“Person”: Any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

“Plan”: Any employee benefit plan or certain other retirement plans and arrangements, including individual retirement accounts and annuities, Keogh plans and bank collective investment funds and insurance company general or separate accounts in which such plans, accounts or arrangements are invested, that are subject to Section 406 of ERISA or Section 4975 of the Code.

“Prepayment Assumption”: As defined in the Prospectus Supplement.

“Prepayment Charge”: With respect to any Prepayment Period, any prepayment premium, fee or charge payable by a Mortgagor in connection with any Principal Prepayment pursuant to the terms of the related Mortgage Note as from time to time held as a part of the Trust Fund, the Prepayment Charges so held being identified in the Prepayment Charge Schedule (other than any Master Servicer Prepayment Charge Payment Amount).

“Prepayment Charge Schedule”: As of any date, the list of Prepayment Charges included in the Trust Fund on such date, attached hereto as Schedule 2 (including the prepayment charge summary attached thereto). The Prepayment Charge Schedule shall set forth the following information with respect to each Prepayment Charge:

(i)

the Master Servicer’s Mortgage Loan identifying number;

 

 



 

 

(ii)

a code indicating the type of Prepayment Charge;

(iii)

the date on which the first Monthly Payment was due on the related Mortgage Loan;

(iv)

the term of the related Prepayment Charge;

(v)

the original Stated Principal Balance of the related Mortgage Loan; and

(vi)

the Stated Principal Balance of the related Mortgage Loan as of the Cut-off Date.

The Prepayment Charge Schedule shall be amended from time to time by the Master Servicer in accordance with the provisions of this Agreement and a copy of such amended Prepayment Charge Schedule shall be furnished by the Master Servicer to the NIMS Insurer, if any.

“Prepayment Interest Excess”: With respect to any Distribution Date, for each Mortgage Loan that was the subject of a Principal Prepayment in full during the portion of the related Prepayment Period occurring between the first day of the calendar month in which such Distribution Date occurs and the Determination Date of the calendar month in which such Distribution Date occurs, an amount equal to interest (to the extent received) at the applicable Net Mortgage Rate on the amount of such Principal Prepayment for the number of days commencing on the first day of the calendar month in which such Distribution Date occurs and ending on the last date through which interest is collected from the related Mortgagor. The Master Servicer may withdraw such Prepayment Interest Excess from the Collection Account in accordance with Section 3.05(a)(iv).

“Prepayment Interest Shortfall”: With respect to any Distribution Date, for each Mortgage Loan that was the subject of a Principal Prepayment in full during the portion of the related Prepayment Period occurring between the first day of the related Prepayment Period and the last day of the calendar month preceding the month in which such Distribution Date occurs, an amount equal to interest at the applicable Net Mortgage Rate on the amount of such Principal Prepayment for the number of days commencing on the day after the last date on which interest is collected from the related Mortgagor and ending on the last day of the calendar month preceding such Distribution Date. The obligations of the Master Servicer in respect of any Prepayment Interest Shortfall are set forth in Section 4.03(e).

“Prepayment Period”: With respect to any Distribution Date, the period commencing on the day after the Determination Date in the calendar month preceding the calendar month in which such Distribution Date occurs (or, in the case of the first Distribution Date, commencing on January 1, 2006) and ending on the Determination Date of the calendar month in which such Distribution Date occurs.

“Principal Prepayment”: Any payment of principal made by the Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due Date and which is not

 



accompanied by an amount of interest representing the full amount of scheduled interest due on any Due Date in any month or months subsequent to the month of prepayment.

“Principal Remittance Amount”: With respect to any Distribution Date, the sum of the (i) the Group I Principal Remittance Amount and (ii) the Group II Principal Remittance Amount.

“Private Mezzanine Certificates”: None.

“Prospectus Supplement”: The Prospectus Supplement, dated January 27, 2006, relating to the public offering of the Offered Certificates.

“PTCE”: A Prohibited Transaction Class Exemption.

“Purchase Price”: With respect to any Mortgage Loan or REO Property to be purchased pursuant to or as contemplated by Section 2.03, Section 3.16(a) or Section 9.01, and as confirmed by an Officers’ Certificate from the Master Servicer to the Trustee, an amount equal to the sum of (i) 100% of the Stated Principal Balance thereof as of the date of purchase (or such other price as provided in Section 9.01), (ii) in the case of (x) a Mortgage Loan, accrued interest on such Stated Principal Balance at the applicable Net Mortgage Rate in effect from time to time from the Due Date as to which interest was last covered by a payment by the Mortgagor or an Advance by the Master Servicer, which payment or Advance had as of the date of purchase been distributed pursuant to Section 4.01, through the end of the calendar month in which the purchase is to be effected and (y) an REO Property, the sum of (1) accrued interest on such Stated Principal Balance at the applicable Net Mortgage Rate in effect from time to time from the Due Date as to which interest was last covered by a payment by the Mortgagor or an advance by the Master Servicer through the end of the calendar month immediately preceding the calendar month in which such REO Property was acquired plus (2) REO Imputed Interest for such REO Property for each calendar month commencing with the calendar month in which such REO Property was acquired and ending with the calendar month in which such purchase is to be effected, net of the total of all net rental income, Insurance Proceeds, Liquidation Proceeds and Advances that as of the date of purchase had been distributed as or to cover REO Imputed Interest pursuant to Section 4.01, (iii) any unreimbursed Servicing Advances and Advances and any unpaid Servicing Fees allocable to such Mortgage Loan or REO Property, (iv) any amounts previously withdrawn from the Collection Account in respect of such Mortgage Loan or REO Property pursuant to Sections 3.05(a)(v) and 3.16(a) and (v) in the case of a Mortgage Loan required to be purchased pursuant to Section 2.03, expenses reasonably incurred or to be incurred by the Master Servicer, the NIMS Insurer or the Trustee in respect of the breach or defect giving rise to the purchase obligation, as well as any costs and damages incurred by the Trust Fund in connection with any violation by such loan of any predatory or abusive lending law.

“Qualified Substitute Mortgage Loan”: A mortgage loan substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement which must, on the date of such substitution, (i) have an outstanding Stated Principal Balance, after application of all scheduled payments of principal and interest due during or prior to the month of substitution, not in excess of the Scheduled Principal Balance of the Deleted Mortgage Loan as of the Due Date in the calendar month during which the substitution occurs, (ii) have a Mortgage Rate not less than (and not more than one percentage point in excess of) the Mortgage Rate of the Deleted

 



Mortgage Loan, (iii) with respect to any Adjustable-Rate Mortgage Loan, have a Maximum Mortgage Rate not less than the Maximum Mortgage Rate on the Deleted Mortgage Loan, (iv) with respect to any Adjustable-Rate Mortgage Loan, have a Minimum Mortgage Rate not less than the Minimum Mortgage Rate of the Deleted Mortgage Loan, (v) with respect to Adjustable-Rate Mortgage Loan, have a Gross Margin equal to the Gross Margin of the Deleted Mortgage Loan, (vi) with respect to any Adjustable-Rate Mortgage Loan, have a next Adjustment Date not more than two months later than the next Adjustment Date on the Deleted Mortgage Loan, (vii) have a remaining term to maturity not greater than (and not more than one year less than) that of the Deleted Mortgage Loan, (viii) have the same Due Date as the Due Date on the Deleted Mortgage Loan, (ix) have a Loan-to-Value Ratio or Combined Loan-to-Value Ratio as of the date of substitution equal to or lower than the Loan-to-Value Ratio or Combined Loan-to-Value Ratio of the Deleted Mortgage Loan as of such date, (x) have a risk grading determined by the Seller at least equal to the risk grading assigned on the Deleted Mortgage Loan, (xi) have been underwritten or reunderwritten by the Seller or an Affiliate of the Seller in accordance with the same underwriting criteria and guidelines as the Deleted Mortgage Loan, (xii) have a Prepayment Charge provision at least equal to the Prepayment Charge provision of the Deleted Mortgage Loan, (xiii) not be more than 59 or more days delinquent or any additional days delinquent than the Deleted Mortgage Loan and (xiv) conform to each representation and warranty set forth in Section 6 of the Mortgage Loan Purchase Agreement applicable to the Deleted Mortgage Loan. In the event that one or more mortgage loans are substituted for one or more Deleted Mortgage Loans, the amounts described in clause (i) hereof shall be determined on the basis of aggregate Stated Principal Balances, the Mortgage Rates described in clause (ii) hereof shall be determined on the basis of weighted average Mortgage Rates, the terms described in clause (vii) hereof shall be determined on the basis of weighted average remaining terms to maturity, the Loan-to-Value Ratios or Combined Loan-to-Value Ratios described in clause (ix) hereof shall be satisfied as to each such mortgage loan, the risk gradings described in clause (x) hereof shall be satisfied as to each such mortgage loan and, except to the extent otherwise provided in this sentence, the representations and warranties described in clause (xiv) hereof must be satisfied as to each Qualified Substitute Mortgage Loan or in the aggregate, as the case may be.

“Rating Agency” or “Rating Agencies”: Moody’s, Fitch and S&P or their successors. If such agencies or their successors are no longer in existence, “Rating Agencies” shall be such nationally recognized statistical rating agencies, or other comparable Persons, designated by the Depositor, notice of which designation shall be given to the Trustee and the Master Servicer.

“Realized Loss”: With respect to each Mortgage Loan as to which a Final Recovery Determination has been made, an amount (not less than zero) equal to (i) the unpaid Stated Principal Balance of such Mortgage Loan as of the commencement of the calendar month in which the Final Recovery Determination was made, plus (ii) accrued interest from the Due Date as to which interest was last paid by the Mortgagor through the end of the calendar month in which such Final Recovery Determination was made, calculated in the case of each calendar month during such period (A) at an annual rate equal to the annual rate at which interest was then accruing on such Mortgage Loan and (B) on a principal amount equal to the Stated Principal Balance of such Mortgage Loan as of the close of business on the Distribution Date during such calendar month, plus (iii) any amounts previously withdrawn from the Collection Account in

 



respect of such Mortgage Loan pursuant to Section 3.05(a)(v) and Section 3.12(c), minus (iv) the proceeds, if any, received in respect of such Mortgage Loan during the calendar month in which such Final Recovery Determination was made, net of amounts that are payable therefrom to the Master Servicer with respect to such Mortgage Loan pursuant to Section 3.05(a)(ii). If the Master Servicer receives Subsequent Recoveries with respect to any Mortgage Loan, the amount of Realized Losses with respect to that Mortgage Loan shall be reduced to the extent such recoveries are applied to principal distributions on any Distribution Date.

With respect to any REO Property as to which a Final Recovery Determination has been made, an amount (not less than zero) equal to (i) the unpaid Stated Principal Balance of the related Mortgage Loan as of the date of acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued interest from the Due Date as to which interest was last paid by the Mortgagor in respect of the related Mortgage Loan through the end of the calendar month immediately preceding the calendar month in which such REO Property was acquired, calculated in the case of each calendar month during such period (A) at an annual rate equal to the annual rate at which interest was then accruing on the related Mortgage Loan and (B) on a principal amount equal to the Stated Principal Balance of the related Mortgage Loan as of the close of business on the Distribution Date during such calendar month, plus (iii) REO Imputed Interest for such REO Property for each calendar month commencing with the calendar month in which such REO Property was acquired and ending with the calendar month in which such Final Recovery Determination was made, plus (iv) any amounts previously withdrawn from the Collection Account in respect of the related Mortgage Loan pursuant to Section 3.05(a)(v) and Section 3.12(c), minus (v) the aggregate of all Advances made by the Master Servicer in respect of such REO Property or the related Mortgage Loan for which the Master Servicer has been or, in connection with such Final Recovery Determination, shall be reimbursed pursuant to Section 3.13 out of rental income, Insurance Proceeds and Liquidation Proceeds received in respect of such REO Property, minus (vi) the total of all net rental income, Insurance Proceeds and Liquidation Proceeds received in respect of such REO Property that has been, or in connection with such Final Recovery Determination, shall be transferred to the Distribution Account pursuant to Section 3.13.

With respect to each Mortgage Loan which has become the subject of a Deficient Valuation, the difference between the Stated Principal Balance of the Mortgage Loan outstanding immediately prior to such Deficient Valuation and the Stated Principal Balance of the Mortgage Loan as reduced by the Deficient Valuation.

With respect to each Mortgage Loan which has become the subject of a Debt Service Reduction, the portion, if any, of the reduction in each affected Monthly Payment attributable to a reduction in the Mortgage Rate imposed by a court of competent jurisdiction. Each such Realized Loss shall be deemed to have been incurred on the Due Date for each affected Monthly Payment.

If the Master Servicer receives Subsequent Recoveries with respect to any Mortgage Loan, the amount of the Realized Loss with respect to that Mortgage Loan shall be reduced to the extent such recoveries are applied to principal distributions on any Distribution Date.

 



 

“Record Date”: With respect to each Distribution Date and any Adjustable-Rate Certificate that is a Book-Entry Certificate, the Business Day immediately preceding such Distribution Date. With respect to each Distribution Date and any other Class of Certificates, including any Definitive Certificates, the last Business Day of the month immediately preceding the month in which such Distribution Date occurs.

“Reference Banks”: Deutsche Bank, Barclays Bank PLC, The Tokyo Mitsubishi Bank and National Westminster Bank PLC and their successors in interest; provided, however, that if any of the foregoing banks are not suitable to serve as a Reference Bank, then any leading banks selected by the Trustee (after consultation with the Depositor and the NIMS Insurer, if any) which are engaged in transactions in Eurodollar deposits in the international Eurocurrency market (i) with an established place of business in London, (ii) not controlling, under the control of or under common control with the Depositor or any Affiliate thereof and (iii) which have been designated as such by the Trustee.

“Refinanced Mortgage Loan”: A Mortgage Loan the proceeds of which were not used to purchase the related Mortgaged Property.

“Regular Certificate”: Any Class A Certificate, Mezzanine Certificate, Class P Certificate or Class CE Certificate.

“Regular Interest”: A “regular interest” in a REMIC within the meaning of Section 860G(a)(1) of the Code.

“Relief Act”: The Servicemembers Civil Relief Act or any applicable state law providing similar relief.

“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 calendar month as a result of the application of the Relief Act.

“REMIC”: A “real estate mortgage investment conduit” within the meaning of Section 860D of the Code.

“REMIC I”: The segregated pool of assets subject hereto, constituting the primary trust created hereby and to be administered hereunder, with respect to which a REMIC election is to be made, consisting of: (i) such Mortgage Loans and Prepayment Charges as from time to time are subject to this Agreement, together with the Mortgage Files relating thereto, and together with all collections thereon and proceeds thereof, (ii) any REO Property, together with all collections thereon and proceeds thereof, (iii) the Trustee’s rights with respect to the Mortgage Loans under all insurance policies required to be maintained pursuant to this Agreement and any proceeds thereof, (iv) the Depositor’s rights under the Mortgage Loan Purchase Agreement (including any security interest created thereby) to the extent conveyed pursuant to Section 2.01 and (v) the Collection Account (other than any amounts representing any Master Servicer Prepayment Charge Payment Amounts), the Distribution Account (other than any amounts representing any Master Servicer Prepayment Charge Payment Amounts) and any REO Account and such assets that are deposited therein from time to time and any investments thereof, together with any and all income, proceeds and payments with respect

 



thereto. Notwithstanding the foregoing, however, REMIC I specifically excludes any Master Servicer Prepayment Charge Payment Amounts, the Net WAC Rate Carryover Reserve Account, the Interest Rate Swap Agreement, the Swap Account, all payments and other collections of principal and interest due on the Mortgage Loans on or before the Cut-off Date and all Prepayment Charges payable in connection with Principal Prepayments made before the Cut-off Date.

“REMIC I Group I Regular Interests”: REMIC I Regular Interest I and REMIC I Regular Interest I-1-A through REMIC I Regular Interest I-49-B as designated in the Preliminary Statement hereto.

“REMIC I Group II Regular Interests”: REMIC I Regular Interest II and REMIC I Regular Interest II-1-A through REMIC II Regular Interest I-49-B as designated in the Preliminary Statement hereto.

“REMIC I Regular Interest”: Any of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a Regular Interest in REMIC I. Each REMIC I Regular Interest shall accrue interest at the related REMIC I Remittance Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Balance as set forth in the Preliminary Statement hereto. The designations for the respective REMIC I Regular Interests are set forth in the Preliminary Statement hereto. The REMIC I Regular Interests consist of the REMIC I Group I Regular Interests, the REMIC I Group II Regular Interests and REMIC I Regular Interest P.

“REMIC I Remittance Rate”: With respect to REMIC I Regular Interest I and REMIC I Regular Interest P, a per annum rate equal to the weighted average of the Expense Adjusted Net Mortgage Rates of the Group I Mortgage Loans. With respect to each REMIC I Group I Regular Interest ending with the designation “A”, a per annum rate equal to the weighted average of the Expense Adjusted Net Mortgage Rates of the Group I Mortgage Loans multiplied by 2, subject to a maximum rate of 9.4184%. With respect to each REMIC I Group I Regular Interest ending with the designation “B”, the greater of (x) a per annum rate equal to the excess, if any, of (i) 2 multiplied by the weighted average of the Expense Adjusted Net Mortgage Rates of the Group I Mortgage Loans over (ii) 9.4184% and (y) 0.00%. With respect to REMIC I Regular Interest II, a per annum rate equal to the weighted average of the Expense Adjusted Net Mortgage Rates of the Group II Mortgage Loans With respect to each REMIC I Group II Regular Interest ending with the designation “A”, a per annum rate equal to the weighted average of the Expense Adjusted Net Mortgage Rates of the Group II Mortgage Loans multiplied by 2, subject to a maximum rate of 9.4184%. With respect to each REMIC I Group II Regular Interest ending with the designation “B”, the greater of (x) a per annum rate equal to the excess, if any, of (i) 2 multiplied by the weighted average of the Expense Adjusted Net Mortgage Rates of the Group II Mortgage Loans over (ii) 9.4184% and (y) 0.00%.

“REMIC II”: The segregated pool of assets described in the Preliminary Statement.

“REMIC II Interest Loss Allocation Amount”: With respect to any Distribution Date, an amount (subject to adjustment based on the actual number of days elapsed in the

 



respective Interest Accrual Periods for the indicated Regular Interests for such Distribution Date) equal to (a) the product of (i) 50% of the aggregate Stated Principal Balance of the Mortgage Loans and REO Properties then outstanding and (ii) the REMIC II Remittance Rate for REMIC II Regular Interest II-LTAA minus the Marker Rate, divided by (b) 12.

“REMIC II Marker Allocation Percentage”: 50% of any amount payable or loss attributable from the Mortgage Loans, which shall be allocated to REMIC II Regular Interest II-LTAA, REMIC II Regular Interest II-LTA1, REMIC II Regular Interest II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II Regular Interest II-LTA2C, REMIC II Regular Interest II-LTA2D, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9, REMIC II Regular Interest II-LTM10, REMIC II Regular Interest II-LTZZ and REMIC II Regular Interest II-LTP.

“REMIC II Overcollateralization Target Amount”: 0.50% of the Overcollateralization Target Amount.

“REMIC II Overcollateralized Amount”: With respect to any date of determination, (i) 0.50% of the aggregate Uncertificated Balance of the REMIC II Regular Interests minus (ii) the aggregate Uncertificated Balance of REMIC II Regular Interest II-LTA1, REMIC II Regular Interest II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II Regular Interest II-LTA2C, REMIC II Regular Interest II-LTA2D, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9, REMIC II Regular Interest II-LTM10 and REMIC II Regular Interest II-LTP in each case as of such date of determination.

“REMIC II Principal Loss Allocation Amount”: With respect to any Distribution Date, an amount equal to the product of (i) 50% of the aggregate Stated Principal Balance of the Mortgage Loans and REO Properties then outstanding and (ii) one minus a fraction, the numerator of which is two times the aggregate Uncertificated Balance of REMIC II Regular Interest II-LTA1, REMIC II Regular Interest II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II Regular Interest II-LTA2C, REMIC II Regular Interest II-LTA2D, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9 and REMIC II Regular Interest II-LTM10 and the denominator of which is the aggregate Uncertificated Balance of REMIC II Regular Interest II-LTA1, REMIC II Regular Interest II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II Regular Interest II-LTA2C, REMIC II Regular Interest II-LTA2D, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9, REMIC II Regular Interest II-LTM10 and REMIC II Regular Interest II-LTZZ.

 



 

“REMIC II Regular Interest”: Any of the separate non-certificated beneficial ownership interests in REMIC II issued hereunder and designated as a “regular interest” in REMIC II. Each REMIC II Regular Interest shall accrue interest at the related REMIC II Remittance Rate in effect from time to time, and shall be entitled to distributions of principal (other than REMIC II Regular Interest II-IO), subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Balance as set forth in the Preliminary Statement hereto. The following is a list of each of the REMIC II Regular Interests: REMIC II Regular Interest II-LTAA, REMIC II Regular Interest II-LTA1, REMIC II Regular Interest II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II Regular Interest II-LTA2C, REMIC II Regular Interest II-LTA2D, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9, REMIC II Regular Interest II-LTM10, REMIC II Regular Interest II-LTZZ, REMIC II Regular Interest II-LTXX, REMIC II Regular Interest II-LTP, REMIC II Regular Interest II-LT1SUB, REMIC II Regular Interest II-LT1GRP, REMIC II Regular Interest II-LT2SUB, REMIC II Regular Interest II-LT2GRP and REMIC II Regular Interest II-IO.

“REMIC II Remittance Rate”: With respect to REMIC II Regular Interest II-LTAA, REMIC II Regular Interest II-LTA1, REMIC II Regular Interest II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II Regular Interest II-LTA2C, REMIC II Regular Interest II-LTA2D, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9, REMIC II Regular Interest II-LTM10, REMIC II Regular Interest II-LTZZ, REMIC II Regular Interest II-LT1SUB, REMIC II Regular Interest II-LT2SUB and REMIC II Regular Interest II-LTXX, a per annum rate (but not less than zero) equal to the weighted average of: (x) with respect to REMIC I Regular Interest I, REMIC I Regular Interest II and each REMIC I Regular Interest ending with the designation “B”, the weighted average of the REMIC I Remittance Rates for such REMIC I Regular Interests, weighted on the basis of the Uncertificated Balances of such REMIC I Regular Interests for each such Distribution Date and (y) with respect to REMIC I Regular Interests ending with the designation “A”, for each Distribution Date listed below, the weighted average of the rates listed below for each such REMIC I Regular Interest listed below, weighted on the basis of the Uncertificated Balances of each such REMIC I Regular Interest for each such Distribution Date:

 

Distribution
Date

REMIC I Regular Interest

Rate

1

I-1-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

2

I-2-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-2-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate REMIC I Remittance Rate

 

I-1-A

REMIC I Remittance Rate

 

II-1-A

REMIC I Remittance Rate

 

 



 

 

3

I-3-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-3-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A and I-2-A

REMIC I Remittance Rate

 

II-1-A and II-2-A

REMIC I Remittance Rate

4

I-4-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-4-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-3-A

REMIC I Remittance Rate

 

II-1-A through II-3-A

REMIC I Remittance Rate

5

I-5-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-5-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-4-A

REMIC I Remittance Rate

 

II-1-A through II-4-A

REMIC I Remittance Rate

6

I-6-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-6-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-5-A

REMIC I Remittance Rate

 

II-1-A through II-5-A

REMIC I Remittance Rate

7

I-7-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-7-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-6-A

REMIC I Remittance Rate

 

II-1-A through II-6-A

REMIC I Remittance Rate

8

I-8-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-8-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-7-A

REMIC I Remittance Rate

 

II-1-A through II-7-A

REMIC I Remittance Rate

9

I-9-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-9-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-8-A

REMIC I Remittance Rate

 

II-1-A through II-8-A

REMIC I Remittance Rate

10

I-10-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-10-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-9-A

REMIC I Remittance Rate

 

II-1-A through II-9-A

REMIC I Remittance Rate

11

I-11-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-11-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-10-A

REMIC I Remittance Rate

 

II-1-A through II-10-A

REMIC I Remittance Rate

12

I-12-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-12-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-11-A

REMIC I Remittance Rate

 

II-1-A through II-11-A

REMIC I Remittance Rate

13

I-13-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-13-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-12-A

REMIC I Remittance Rate

 

II-1-A through II-12-A

REMIC I Remittance Rate

14

I-14-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

 



 

 

 

II-14-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-13-A

REMIC I Remittance Rate

 

II-1-A through II-13-A

REMIC I Remittance Rate

15

I-15-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-15-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-14-A

REMIC I Remittance Rate

 

II-1-A through II-14-A

REMIC I Remittance Rate

16

I-16-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-16-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-15-A

REMIC I Remittance Rate

 

II-1-A through II-15-A

REMIC I Remittance Rate

17

I-17-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-17-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-16-A

REMIC I Remittance Rate

 

II-1-A through II-16-A

REMIC I Remittance Rate

18

I-18-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-18-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-17-A

REMIC I Remittance Rate

 

II-1-A through II-17-A

REMIC I Remittance Rate

19

I-19-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-19-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-18-A

REMIC I Remittance Rate

 

II-1-A through II-18-A

REMIC I Remittance Rate

20

I-20-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-20-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-19-A

REMIC I Remittance Rate

 

II-1-A through II-19-A

REMIC I Remittance Rate

21

I-21-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-21-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-20-A

REMIC I Remittance Rate

 

II-1-A through II-20-A

REMIC I Remittance Rate

22

I-22-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-22-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-21-A

REMIC I Remittance Rate

 

II-1-A through II-21-A

REMIC I Remittance Rate

23

I-23-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-23-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-22-A

REMIC I Remittance Rate

 

II-1-A through II-22-A

REMIC I Remittance Rate

24

I-24-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-24-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-23-A

REMIC I Remittance Rate

 

II-1-A through II-23-A

REMIC I Remittance Rate

25

I-25-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

 



 

 

 

II-25-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-24-A

REMIC I Remittance Rate

 

II-1-A through II-24-A

REMIC I Remittance Rate

26

I-26-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-26-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-25-A

REMIC I Remittance Rate

 

II-1-A through II-25-A

REMIC I Remittance Rate

27

I-27-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-27-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-26-A

REMIC I Remittance Rate

 

II-1-A through II-26-A

REMIC I Remittance Rate

28

I-28-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-28-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-27-A

REMIC I Remittance Rate

 

II-1-A through II-27-A

REMIC I Remittance Rate

29

I-29-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-29-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-28-A

REMIC I Remittance Rate

 

II-1-A through II-28-A

REMIC I Remittance Rate

30

I-30-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-30-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-29-A

REMIC I Remittance Rate

 

II-1-A through II-29-A

REMIC I Remittance Rate

31

I-31-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-31-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-30-A

REMIC I Remittance Rate

 

II-1-A through II-30-A

REMIC I Remittance Rate

32

I-32-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-32-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-31-A

REMIC I Remittance Rate

 

II-1-A through II-31-A

REMIC I Remittance Rate

33

I-33-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-33-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-32-A

REMIC I Remittance Rate

 

II-1-A through II-32-A

REMIC I Remittance Rate

34

I-34-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-34-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-33-A

REMIC I Remittance Rate

 

II-1-A through II-33-A

REMIC I Remittance Rate

35

I-35-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-35-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-34-A

REMIC I Remittance Rate

 

II-1-A through II-34-A

REMIC I Remittance Rate

36

I-36-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-36-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-35-A

REMIC I Remittance Rate

 

 



 

 

 

II-1-A through II-35-A

REMIC I Remittance Rate

37

I-37-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-37-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-36-A

REMIC I Remittance Rate

 

II-1-A through II-36-A

REMIC I Remittance Rate

38

I-38-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-38-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-37-A

REMIC I Remittance Rate

 

II-1-A through II-37-A

REMIC I Remittance Rate

39

I-39-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-39-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-38-A

REMIC I Remittance Rate

 

II-1-A through II-38-A

REMIC I Remittance Rate

40

I-40-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-40-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-39-A

REMIC I Remittance Rate

 

II-1-A through II-39-A

REMIC I Remittance Rate

41

I-41-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-41-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-40-A

REMIC I Remittance Rate

 

II-1-A through II-40-A

REMIC I Remittance Rate

42

I-42-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-42-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-41-A

REMIC I Remittance Rate

 

II-1-A through II-41-A

REMIC I Remittance Rate

43

I-43-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-43-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-42-A

REMIC I Remittance Rate

 

II-1-A through II-42-A

REMIC I Remittance Rate

44

I-44-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-44-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-43-A

REMIC I Remittance Rate

 

II-1-A through II-43-A

REMIC I Remittance Rate

45

I-45-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-41-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-44-A

REMIC I Remittance Rate

 

II-1-A through II-39-A

REMIC I Remittance Rate

46

I-46-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-46-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-45-A

REMIC I Remittance Rate

 

II-1-A through II-45-A

REMIC I Remittance Rate

47

I-47-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-47-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-46-A

REMIC I Remittance Rate

 

II-1-A through II-46-A

REMIC I Remittance Rate

 

 



 

 

48

I-48-A and I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-48-A and II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-47-A

REMIC I Remittance Rate

 

II-1-A through II-47-A

REMIC I Remittance Rate

49

I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-49-A

REMIC I Remittance Rate

 

II-1-A through II-49-A

REMIC I Remittance Rate

thereafter

I-1-A through I-49-A

REMIC I Remittance Rate

 

II-1-A through II-49-A

REMIC I Remittance Rate

 

With respect to REMIC II Regular Interest II-LT1GRP, a per annum rate (but not less than zero) equal to the weighted average of (x) with respect to REMIC I Regular Interest I and each REMIC I Group I Regular Interests ending with the designation “B”, the weighted average of the REMIC I Remittance Rates for such REMIC I Regular Interests, weighted on the basis of the Uncertificated Balances of each such REMIC I Regular Interest for each such Distribution Date and (y) with respect to REMIC I Group I Regular Interests ending with the designation “A”, for each Distribution Date listed below, the weighted average of the rates listed below for such REMIC I Regular Interests listed below, weighted on the basis of the Uncertificated Balances of each such REMIC I Regular Interest for each such Distribution Date:

 

Distribution
Date

REMIC I Regular Interest

Rate

1

I-1-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

 

 

2

I-2-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A

REMIC I Remittance Rate

 

 

 

3

I-3-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A and I-2-A

REMIC I Remittance Rate

 

 

 

4

I-4-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-3-A

REMIC I Remittance Rate

 

 

 

5

I-5-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-4-A

REMIC I Remittance Rate

 

 

 

6

I-6-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-5-A

REMIC I Remittance Rate

 

 

 

7

I-7-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-6-A

REMIC I Remittance Rate

 

 

 

8

I-8-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-7-A

REMIC I Remittance Rate

 

 

 

9

I-9-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

 



 

 

 

I-1-A through I-8-A

REMIC I Remittance Rate

 

 

 

10

I-10-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-9-A

REMIC I Remittance Rate

 

 

 

11

I-11-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-10-A

REMIC I Remittance Rate

 

 

 

12

I-12-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-11-A

REMIC I Remittance Rate

 

 

 

13

I-13-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-12-A

REMIC I Remittance Rate

 

 

 

14

I-14-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-13-A

REMIC I Remittance Rate

 

 

 

15

I-15-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-14-A

REMIC I Remittance Rate

 

 

 

16

I-16-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-15-A

REMIC I Remittance Rate

 

 

 

17

I-17-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-16-A

REMIC I Remittance Rate

 

 

 

18

I-18-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-17-A

REMIC I Remittance Rate

 

 

 

19

I-19-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-18-A

REMIC I Remittance Rate

 

 

 

20

I-20-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-19-A

REMIC I Remittance Rate

 

 

 

21

I-21-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-20-A

REMIC I Remittance Rate

 

 

 

22

I-22-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-21-A

REMIC I Remittance Rate

 

 

 

23

I-23-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-22-A

REMIC I Remittance Rate

 

 

 

24

I-24-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-23-A

REMIC I Remittance Rate

 

 

 

25

I-25-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-24-A

REMIC I Remittance Rate

 

 

 

 

 



 

 

26

I-26-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-25-A

REMIC I Remittance Rate

 

 

 

27

I-27-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-26-A

REMIC I Remittance Rate

 

 

 

28

I-28-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-27-A

REMIC I Remittance Rate

 

 

 

29

I-29-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-28-A

REMIC I Remittance Rate

 

 

 

30

I-30-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-29-A

REMIC I Remittance Rate

 

 

 

31

I-31-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-30-A

REMIC I Remittance Rate

 

 

 

32

I-32-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-31-A

REMIC I Remittance Rate

 

 

 

33

I-33-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-32-A

REMIC I Remittance Rate

 

 

 

34

I-34-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-33-A

REMIC I Remittance Rate

 

 

 

35

I-35-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-34-A

REMIC I Remittance Rate

 

 

 

36

I-36-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-35-A

REMIC I Remittance Rate

 

 

 

37

I-37-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-36-A

REMIC I Remittance Rate

 

 

 

38

I-38-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-37-A

REMIC I Remittance Rate

 

 

 

39

I-39-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-38-A

REMIC I Remittance Rate

 

 

 

40

I-40-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-39-A

REMIC I Remittance Rate

 

 

 

41

I-41-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-40-A

REMIC I Remittance Rate

 

 

 

42

I-42-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-41-A

REMIC I Remittance Rate

 

 

 

 

 



 

 

43

I-43-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-42-A

REMIC I Remittance Rate

 

 

 

44

I-44-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-43-A

REMIC I Remittance Rate

 

 

 

45

I-45-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-44-A

REMIC I Remittance Rate

 

 

 

46

I-46-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-45-A

REMIC I Remittance Rate

 

 

 

47

I-47-A through I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-46-A

REMIC I Remittance Rate

 

 

 

48

I-48-A and I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-47-A

REMIC I Remittance Rate

 

 

 

49

I-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

I-1-A through I-48-A

REMIC I Remittance Rate

 

 

 

thereafter

I-1-A through I-49-A

REMIC I Remittance Rate

 

With respect to REMIC II Regular Interest II-LT2GRP, a per annum rate (but not less than zero) equal to the weighted average of (x) with respect to REMIC I Regular Interest II and each REMIC I Group II Regular Interests ending with the designation “B”, the weighted average of the REMIC I Remittance Rates for such REMIC I Regular Interests, weighted on the basis of the Uncertificated Balances of each such REMIC I Regular Interest for each such Distribution Date and (y) with respect to REMIC I Group II Regular Interests ending with the designation “A”, for each Distribution Date listed below, the weighted average of the rates listed below for such REMIC I Regular Interests listed below, weighted on the basis of the Uncertificated Balances of each such REMIC I Regular Interest for each such Distribution Date:

 

Distribution
Date

REMIC I Regular Interest

Rate

1

II-1-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

 

 

2

II-2-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A

REMIC I Remittance Rate

 

 

 

3

II-3-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A and II-2-A

REMIC I Remittance Rate

 

 

 

4

II-4-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-3-A

REMIC I Remittance Rate

 

 

 

5

II-5-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-4-A

REMIC I Remittance Rate

 

 



 

 

 

 

 

6

II-6-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-5-A

REMIC I Remittance Rate

 

 

 

7

II-7-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-6-A

REMIC I Remittance Rate

 

 

 

8

II-8-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-7-A

REMIC I Remittance Rate

 

 

 

9

II-9-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-8-A

REMIC I Remittance Rate

 

 

 

10

II-10-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-9-A

REMIC I Remittance Rate

 

 

 

11

II-11-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-10-A

REMIC I Remittance Rate

 

 

 

12

II-12-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-11-A

REMIC I Remittance Rate

 

 

 

13

II-13-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-12-A

REMIC I Remittance Rate

 

 

 

14

II-14-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-13-A

REMIC I Remittance Rate

 

 

 

15

II-15-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-14-A

REMIC I Remittance Rate

 

 

 

16

II-16-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-15-A

REMIC I Remittance Rate

 

 

 

17

II-17-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-16-A

REMIC I Remittance Rate

 

 

 

18

II-18-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-17-A

REMIC I Remittance Rate

 

 

 

19

II-19-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-18-A

REMIC I Remittance Rate

 

 

 

20

II-20-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-19-A

REMIC I Remittance Rate

 

 

 

21

II-21-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-20-A

REMIC I Remittance Rate

 

 

 

22

II-22-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

 



 

 

 

II-1-A through II-21-A

REMIC I Remittance Rate

 

 

 

23

II-23-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-22-A

REMIC I Remittance Rate

 

 

 

24

II-24-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-23-A

REMIC I Remittance Rate

 

 

 

25

II-25-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-24-A

REMIC I Remittance Rate

 

 

 

26

II-26-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-25-A

REMIC I Remittance Rate

 

 

 

27

II-27-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-26-A

REMIC I Remittance Rate

 

 

 

28

II-28-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-27-A

REMIC I Remittance Rate

 

 

 

29

II-29-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-28-A

REMIC I Remittance Rate

 

 

 

30

II-30-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-29-A

REMIC I Remittance Rate

 

 

 

31

II-31-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-30-A

REMIC I Remittance Rate

 

 

 

32

II-32-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-31-A

REMIC I Remittance Rate

 

 

 

33

II-33-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-32-A

REMIC I Remittance Rate

 

 

 

34

II-34-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-33-A

REMIC I Remittance Rate

 

 

 

35

II-35-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-34-A

REMIC I Remittance Rate

 

 

 

36

II-36-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-35-A

REMIC I Remittance Rate

 

 

 

37

II-37-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-36-A

REMIC I Remittance Rate

 

 

 

38

II-38-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-37-A

REMIC I Remittance Rate

 

 

 

 

 



 

 

39

II-39-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-38-A

REMIC I Remittance Rate

 

 

 

40

II-40-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-39-A

REMIC I Remittance Rate

 

 

 

41

II-41-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-40-A

REMIC I Remittance Rate

 

 

 

42

II-42-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-41-A

REMIC I Remittance Rate

 

 

 

43

II-43-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-42-A

REMIC I Remittance Rate

 

 

 

44

II-44-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-43-A

REMIC I Remittance Rate

 

 

 

45

II-45-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-44-A

REMIC I Remittance Rate

 

 

 

46

II-46-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-45-A

REMIC I Remittance Rate

 

 

 

47

II-47-A through II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-46-A

REMIC I Remittance Rate

 

 

 

48

II-48-A and II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-47-A

REMIC I Remittance Rate

 

 

 

49

II-49-A

2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC I Remittance Rate

 

II-1-A through II-48-A

REMIC I Remittance Rate

 

 

 

thereafter

II-1-A through II-49-A

REMIC I Remittance Rate

 

With respect to REMIC II Regular Interest II-IO, and (i) the first Distribution Date through the 49th Distribution Date, the excess of (x) the weighted average of the Uncertificated REMIC I Pass-Through Rates for REMIC I Regular Interests including the designation “A”, over (y) 2 multiplied by Swap LIBOR and (ii) thereafter, 0.00%. With respect to REMIC II Regular Interest II-LTP, a per annum rate equal to the weighted average of the Expense Adjusted Net Mortgage Rates of the Group I Mortgage Loans.

“REMIC II Sub WAC Allocation Percentage”: 50% of any amount payable from or loss attributable to the Mortgage Loans, which shall be allocated to REMIC II Regular Interest II-LT1SUB, REMIC II Regular Interest II-LT1GRP, REMIC II Regular Interest II-LT2SUB, REMIC II Regular Interest II-LT2GRP and REMIC II Regular Interest II-LTXX.

“REMIC II Subordinated Balance Ratio”: The ratio among the Uncertificated Balances of each REMIC II Regular Interest ending with the designation “SUB,” equal to the ratio between, with respect to each such REMIC II Regular Interest, the excess of (x) the

 



aggregate Stated Principal Balance of the Mortgage Loans in the related Loan Group over (y) the current Certificate Principal Balance of Class A Certificates in the related Loan Group.

“REMIC III”: The segregated pool of assets consisting of all of the REMIC II Regular Interests conveyed in trust to the Trustee, for the benefit of the Holders of the Regular Certificates (other than the Class CE Certificates and Class P Certificates), the Class CE Interest, Class P Interest, the Class SWAP-IO Interest and the Class R Certificate (in respect of the Class R-III Interest), pursuant to Article II hereunder, and all amounts deposited therein, with respect to which a separate REMIC election is to be made.

“REMIC III Certificate”: Any Regular Certificate (other than the Class CE Certificates and Class P Certificates) or Class R Certificate.

“REMIC III Regular Interest”: Any of the Regular Interests in REMIC III the ownership of which is represented by the Certificates (other than the Class CE Certificates and Class P Certificates), the Class CE Interest, Class P Interest and the Class SWAP-IO Interest.

“REMIC IV”: The segregated pool of assets consisting of the Class CE Interest conveyed in trust to the Trustee, for the benefit of the Holders of the Class CE Certificates and the Class R-X Certificate (in respect of the Class R-IV Interest), pursuant to Article II hereunder, and all amounts deposited therein, with respect to which a separate REMIC election is to be made.

“REMIC V”: The segregated pool of assets consisting of the Class P Interest conveyed in trust to the Trustee, for the benefit of the Holders of the Class P Certificates and the Class R-X Certificate (in respect of the Class R-V Interest), pursuant to Article II hereunder, and all amounts deposited therein, with respect to which a separate REMIC election is to be made.

“REMIC VI”: The segregated pool of assets consisting of the Class SWAP-IO Interest conveyed in trust to the Trustee, for the benefit of the Holders of REMIC VI Regular Interest SWAP-IO and the Class R-X Certificate (in respect of the Class R-VI Interest), pursuant to Article II hereunder, and all amounts deposited therein, with respect to which a separate REMIC election is to be made.

“REMIC Provisions”: Provisions of the federal income tax law relating to real estate mortgage investment conduits, which appear at Section 860A through 860G of the Code and related provisions, and proposed, temporary and final regulations and published rulings, notices and announcements promulgated thereunder, as the foregoing may be in effect from time to time.

“REMIC Regular Interest”: Any REMIC I Regular Interest, REMIC II Regular Interest, Class CE Interest, Class P Interest or SWAP-IO Interest.

“REMIC Remittance Rate”: The REMIC I Remittance Rate or the REMIC II Remittance Rate.

“Remittance Report”: A report in form and substance that is acceptable to the Trustee and the NIMS Insurer on a magnetic disk or tape prepared by the Master Servicer

 



pursuant to Section 4.03 with such additions, deletions and modifications as agreed to by the Trustee and the Master Servicer.

“Rents from Real Property”: With respect to any REO Property, gross income of the character described in Section 856(d) of the Code as being included in the term “rents from real property.”

“REO Account”: Each of the accounts maintained by the Master Servicer in respect of an REO Property pursuant to Section 3.13, which account may be the Collection Account subject to Section 3.13.

“REO Disposition”: The sale or other disposition of an REO Property on behalf of REMIC I.

“REO Imputed Interest”: As to any REO Property, for any calendar month during which such REO Property was at any time part of REMIC I, one month’s interest at the applicable Net Mortgage Rate on the Stated Principal Balance of such REO Property (or, in the case of the first such calendar month, of the related Mortgage Loan, if appropriate) as of the close of business on the Distribution Date in such calendar month.

“REO Principal Amortization”: With respect to any REO Property, for any calendar month, the excess, if any, of (a) the aggregate of all amounts received in respect of such REO Property during such calendar month, whether in the form of rental income, sale proceeds (including, without limitation, that portion of the Termination Price paid in connection with a purchase of all of the Mortgage Loans and REO Properties pursuant to Section 9.01 that is allocable to such REO Property) or otherwise, net of any portion of such amounts (i) payable pursuant to Section 3.13(c) in respect of the proper operation, management and maintenance of such REO Property or (ii) payable or reimbursable to the Master Servicer pursuant to Section 3.13(d) for unpaid Servicing Fees in respect of the related Mortgage Loan and unreimbursed Servicing Advances and Advances in respect of such REO Property or the related Mortgage Loan, over (b) the REO Imputed Interest in respect of such REO Property for such calendar month.

“REO Property”: A Mortgaged Property acquired by the Master Servicer on behalf of REMIC I through foreclosure or deed-in-lieu of foreclosure, as described in Section 3.13.

“Request for Release”: A release signed by a Servicing Officer, in the form of Exhibit E attached hereto.

“Reserve Interest Rate”: With respect to any Interest Determination Date, the rate per annum that the Trustee determines to be either (i) the arithmetic mean (rounded upwards if necessary to the nearest whole multiple of 1/16%) of the one-month U.S. dollar lending rates which New York City banks selected by the Trustee are quoting on the relevant Interest Determination Date to the principal London offices of leading banks in the London interbank market or (ii) in the event that the Trustee can determine no such arithmetic mean, the lowest one-month U.S. dollar lending rate which New York City banks selected by the Trustee are quoting on such Interest Determination Date to leading European banks.

 



 

“Residential Dwelling”: Any one of the following: (i) an attached or detached one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a one-family dwelling unit in a condominium project or (iv) a detached or attached one-family dwelling in a planned unit development, none of which is a co-operative, mobile or manufactured home (unless such mobile or manufactured home is defined as real property under applicable state law).

“Residual Certificate”: Any one of the Class R or Class R-X Certificates.

“Residual Interest”: The sole class of “residual interests” in a REMIC within the meaning of Section 860G(a)(2) of the Code.

“Responsible Officer”: When used with respect to the Trustee, any director, any vice president, any assistant vice president, any associate, any assistant secretary, any trust officer or any other officer of the Trustee, customarily performing functions similar to those performed by any of the above designated officers and, with respect to a particular matter, to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

“Scheduled Principal Balance”: With respect to any Mortgage Loan: (a) as of the Cut-off Date, the outstanding Stated Principal Balance of such Mortgage Loan as of such date, net of the principal portion of all unpaid Monthly Payments, if any, due on or before such date; (b) as of any Due Date subsequent to the Cut-off Date up to and including the Due Date in the calendar month in which a Liquidation Event occurs with respect to such Mortgage Loan, the Scheduled Principal Balance of such Mortgage Loan as of the Cut-off Date, minus the sum of (i) the principal portion of each Monthly Payment due on or before such Due Date but subsequent to the Cut-off Date, whether or not received, (ii) all Principal Prepayments received before such Due Date but after the Cut-off Date, (iii) the principal portion of all Liquidation Proceeds and Insurance Proceeds received before such Due Date but after the Cut-off Date, net of any portion thereof that represents principal due (without regard to any acceleration of payments under the related Mortgage and Mortgage Note) on a Due Date occurring on or before the date on which such proceeds were received and (iv) any Realized Loss incurred with respect thereto as a result of a Deficient Valuation occurring before such Due Date, but only to the extent such Realized Loss represents a reduction in the portion of principal of such Mortgage Loan not yet due (without regard to any acceleration of payments under the related Mortgage and Mortgage Note) as of the date of such Deficient Valuation; and (c) as of any Due Date subsequent to the occurrence of a Liquidation Event with respect to such Mortgage Loan, zero. With respect to any REO Property: (a) as of any Due Date subsequent to the date of its acquisition on behalf of the Trust Fund up to and including the Due Date in the calendar month in which a Liquidation Event occurs with respect to such REO Property, an amount (not less than zero) equal to the Scheduled Principal Balance of the related Mortgage Loan as of the Due Date in the calendar month in which such REO Property was acquired, minus the aggregate amount of REO Principal Amortization, if any, in respect of such REO Property for all previously ended calendar months; and (b) as of any Due Date subsequent to the occurrence of a Liquidation Event with respect to such REO Property, zero.

“Seller”: Ameriquest Mortgage Company, or its successor in interest, in its capacity as seller under the Mortgage Loan Purchase Agreement.

 



 

“Senior Group I Principal Distribution Amount”: With respect to any Distribution Date, an amount, not less than zero, equal to the excess of (x) the aggregate Certificate Principal Balance of the Group I Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 54.70% and (ii) the aggregate Stated Principal Balance of the Group I Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the aggregate Stated Principal Balance of the Group I Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus $5,508,792.83.

“Senior Group II Principal Distribution Amount”: With respect to any Distribution Date, an amount, not less than zero, equal to the excess of (x) the aggregate Certificate Principal Balance of the Group II Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 54.70% and (ii) the aggregate Stated Principal Balance of the Group II Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the aggregate Stated Principal Balance of the Group II Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus $5,866,220.12.

“Senior Interest Distribution Amount”: With respect to any Distribution Date and any Class A Certificate, an amount equal to the sum of (i) the Interest Distribution Amount for such Distribution Date for such Class A Certificate, (ii) the Interest Carry Forward Amount, if any, for such Class A Certificate and (iii) the Swap Interest Shortfall Amount.

“Servicing Advances”: The reasonable “out-of-pocket” costs and expenses incurred by the Master Servicer in connection with a default, delinquency or other unanticipated event by the Master Servicer in the performance of its servicing obligations, including, but not limited to, the cost of (i) the preservation, restoration and protection of a Mortgaged Property, (ii) any enforcement or judicial proceedings, including foreclosures, 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 Section 3.01, Section 3.04(d), Section 3.08, Section 3.12 and Section 3.13. The Master Servicer shall not be required to make any Servicing Advance in respect of a Mortgage Loan or REO Property that, in the good faith business judgment of the Master Servicer, would not be ultimately recoverable from related Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property as provided herein.

“Servicing Criteria”: As set forth in Exhibit M hereto.

“Servicing Fee”: With respect to each Mortgage Loan and for any calendar month, an amount equal to one month’s interest (or in the event of any payment of interest which accompanies a Principal Prepayment in full made by the Mortgagor during such calendar month,

 



interest for the number of days covered by such payment of interest) at the applicable Servicing Fee Rate on the same principal amount on which interest on such Mortgage Loan accrues for such calendar month. A portion of such Servicing Fee may be retained by any Sub-Servicer as its servicing compensation.

“Servicing Fee Rate”: 0.50% per annum.

“Servicing Officer”: Any employee of the Master Servicer involved in, or responsible for, the administration and servicing of the Mortgage Loans, whose name and specimen signature appear on a list of Servicing Officers furnished by the Master Servicer to the Trustee and the Depositor on the Closing Date, as such list may from time to time be amended.

“Servicing Standard”: The standards set forth in the first paragraph of Section 3.01.

“Single Certificate”: With respect to any Class of Certificates (other than the Class P Certificates and the Residual Certificates), a hypothetical Certificate of such Class evidencing a Percentage Interest for such Class corresponding to an initial Certificate Principal Balance or Notional Amount of $1,000. With respect to the Class P Certificates and the Residual Certificates, a hypothetical Certificate of such Class evidencing a 20% Percentage Interest in such Class.

“S&P”: Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., or its successor in interest.

“Startup Day”: With respect to each Trust REMIC, the day designated as such pursuant to Section 10.01(b) hereof.

“Stated Principal Balance”: With respect to any Mortgage Loan: (a) as of any date of determination up to but not including the Distribution Date on which the proceeds, if any, of a Liquidation Event with respect to such Mortgage Loan would be distributed, the outstanding principal balance of such Mortgage Loan as of the Cut-off Date, as shown in the Mortgage Loan Schedule, minus the sum of (i) the principal portion of each Monthly Payment due on a Due Date subsequent to the Cut-off Date, to the extent received from the Mortgagor or advanced by the Master Servicer and distributed pursuant to Section 4.01 on or before such date of determination, (ii) all Principal Prepayments received after the Cut-off Date, to the extent distributed pursuant to Section 4.01 on or before such date of determination, (iii) all Liquidation Proceeds and Insurance Proceeds applied by the Master Servicer as recoveries of principal in accordance with the provisions of Section 3.12, to the extent distributed pursuant to Section 4.01 on or before such date of determination and (iv) any Realized Loss incurred with respect thereto as a result of a Deficient Valuation made during or prior to the Prepayment Period for the most recent Distribution Date coinciding with or preceding such date of determination; and (b) as of any date of determination coinciding with or subsequent to the Distribution Date on which the proceeds, if any, of a Liquidation Event with respect to such Mortgage Loan would be distributed, zero. With respect to any REO Property: (a) as of any date of determination up to but not including the Distribution Date on which the proceeds, if any, of a Liquidation Event with respect to such REO Property would be distributed, an amount (not less than zero) equal to the Stated Principal Balance of the related Mortgage Loan as of the date on which such REO Property was acquired

 



on behalf of REMIC I, minus the sum of (i) if such REO Property was acquired before the Distribution Date in any calendar month, the principal portion of the Monthly Payment due on the Due Date in the calendar month of acquisition, to the extent advanced by the Master Servicer and distributed pursuant to Section 4.01 on or before such date of determination, and (ii) the aggregate amount of REO Principal Amortization in respect of such REO Property for all previously ended calendar months, to the extent distributed pursuant to Section 4.01 on or before such date of determination; and (b) as of any date of determination coinciding with or subsequent to the Distribution Date on which the proceeds, if any, of a Liquidation Event with respect to such REO Property would be distributed, zero.

“Stayed Funds”: If the Master Servicer is the subject of a proceeding under the Bankruptcy Code and the making of a Remittance (as defined in Section 7.02(b)) is prohibited by Section 362 of the Bankruptcy Code, funds that are in the custody of the Master Servicer, a trustee in bankruptcy or a federal bankruptcy court and should have been the subject of such Remittance absent such prohibition.

“Stepdown Date”: The earlier to occur of (i) the first Distribution Date on which the aggregate Certificate Principal Balance of the Class A Certificates has been reduced to zero and (ii) the later to occur of (a) the Distribution Date occurring in February 2009 and (b) the first Distribution Date on which the Credit Enhancement Percentage for the Class A Certificates (calculated for this purpose only after taking into account distributions of principal on the Mortgage Loans but prior to any distribution of the Group I Principal Distribution Amount and the Group II Principal Distribution Amount to the Certificates then entitled to distributions of principal on such Distribution Date) is equal to or greater than 45.30%.

“Sub-Servicer”: Any Person with which the Master Servicer has entered into a Sub-Servicing Agreement and which meets the qualifications of a Sub-Servicer pursuant to Section 6.06.

“Sub-Servicing Account”: An account established by a Sub-Servicer which meets the requirements set forth in Section 6.11 and is otherwise acceptable to the Master Servicer.

“Sub-Servicing Agreement”: The written contract between the Master Servicer and a Sub-Servicer relating to servicing and administration of certain Mortgage Loans as provided in Section 6.06.

“Subsequent Recoveries”: As of any Distribution Date, unexpected amounts received by the Master Servicer (net of any related expenses permitted to be reimbursed pursuant to Section 3.04) specifically related to a Mortgage Loan that was the subject of a liquidation or an REO Disposition prior to the related Prepayment Period that resulted in a Realized Loss.

“Substitution Shortfall Amount”: As defined in Section 2.03(d).

“Swap Administration Agreement”: As defined in Section 4.10(b).

“Swap Account”: The account or accounts created and maintained pursuant to Section 4.10. The Swap Account must be an Eligible Account.

 



 

“Swap Administrator”: Deutsche Bank National Trust Company, a national banking association, or its successor in interest, or any successor Swap Administrator appointed pursuant to the Swap Administration Agreement.

“Swap Interest Shortfall Amount”: Any shortfall of interest with respect to any Class of Certificates resulting from the application of the Net WAC Pass-Through Rate due to a discrepancy between the Uncertificated Notional Amount of the Class SWAP-IO Interest and the scheduled notional amount pursuant to the Swap Administration Agreement.

“Swap LIBOR”: A per annum rate equal to the floating rate payable by the Interest Rate Swap Provider under the Interest Rate Swap Agreement.

“Swap Payment Date”: A Payment Date as defined in the Interest Rate Swap Agreement.

“Swap Provider Trigger Event”: A Swap Termination Payment that is triggered upon: (i) an Event of Default under the Interest Rate Swap Agreement with respect to which the Interest Rate Swap Provider is a Defaulting Party (as defined in the Interest Rate Swap Agreement), (ii) a Termination Event under the related Swap Agreement with respect to which the Interest Rate Swap Provider is the sole Affected Party (as defined in the Interest Swap Agreement) or (iii) an Additional Termination Event under the related Swap Agreement with respect to which the Interest Rate Swap Provider is the sole Affected Party.

“Swap Termination Payment”: The payment due under the Interest Rate Swap Agreement upon the early termination of the Interest Rate Swap Agreement.

“Tax Returns”: The federal income tax return on Internal Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed on behalf of each REMIC in the Trust Fund due to its classification as a REMIC under the REMIC Provisions, together with any and all other information reports or returns that may be required to be furnished to the Certificateholders or filed with the Internal Revenue Service or any other governmental taxing authority under any applicable provisions of federal, state or local tax laws.

“Telerate Page 3750”: The display designated as page “3750” on the Moneyline Telerate (or such other page as may replace page 3750 on that report for the purpose of displaying London interbank offered rates of major banks).

“Termination Price”: As defined in Section 9.01.

“Terminator”: As defined in Section 9.01.

“Transfer”: Any direct or indirect transfer, sale, pledge, hypothecation, or other form of assignment of any Ownership Interest in a Certificate.

“Transferee”: Any Person who is acquiring by Transfer any Ownership Interest in a Certificate.

 



 

“Transferor”: Any Person who is disposing by Transfer of any Ownership Interest in a Certificate.

“Trigger Event”: A Trigger Event is in effect with respect to a Distribution Date on and after the Stepdown Date if:

(a)          the Delinquency Percentage for the Mortgage Loans exceeds the applicable percentages of the Credit Enhancement Percentage for the prior Distribution Date as set forth below for the most senior Class of Certificates then outstanding:

Class

Percentage

A

35.50%

M-1

43.00%

M-2

53.07%

M-3

61.61%

M-4

71.47%

M-5

84.64%

M-6

103.09%

M-7

127.63%

M-8

164.10%

M-9

206.17%

M-10

277.27%

or

(b)          the Cumulative Loss Percentage exceeds the applicable percentages set forth below with respect to such Distribution Date:

Distribution Date Occurring In

Percentage

February 2008 through January 2009

1.55% for the first month plus an additional 1/12th of 1.70% for each month thereafter

February 2009 through January 2010

3.25% for the first month plus an additional 1/12th of 1.70% for each month thereafter

February 2010 through January 2011

4.95% for the first month plus an additional 1/12th of 1.35% for each month thereafter

February 2011 through January 2012

6.30% for the first month plus an additional 1/12th of 1.05% for each month thereafter

February 2012 and thereafter

7.35%

 

“Trust Fund”: Collectively, all of the assets of each Trust REMIC, any Master Servicer Prepayment Charge Payment Amounts, the Net WAC Rate Carryover Reserve Account, distributions made to the Trustee by the Swap Administrator under the Swap Administration Agreement and the Swap Account.

“Trust REMIC”: Each of REMIC I, REMIC II, REMIC III, REMIC IV, REMIC V and REMIC VI.

“Trustee”: Deutsche Bank National Trust Company, a national banking association, or its successor in interest, or any successor Trustee appointed as herein provided.

“Trustee Fee”: The amount payable to the Trustee on each Distribution Date pursuant to Section 8.05 as compensation for all services rendered by it and in the exercise and performance of any of the powers and duties of the Trustee hereunder, which amount shall equal the Trustee Fee Rate accrued for one month multiplied by the aggregate Scheduled Principal Balance of the Mortgage Loans and any REO Properties as of the Due Date in the prior month

 



(or, in the case of the initial Distribution Date, as of the Cut-off Date), calculated on the basis of a 360-day year consisting of twelve 30-day months.

“Trustee Fee Rate”: 0.009% per annum.

“Uncertificated Balance”: The amount of any REMIC Regular Interest (other than REMIC II Regular Interest II-IO) outstanding as of any date of determination. As of the Closing Date, the Uncertificated Balance of each REMIC Regular Interest (other than REMIC II Regular Interest II-IO) shall equal the amount set forth in the Preliminary Statement hereto as its initial uncertificated balance. On each Distribution Date, the Uncertificated Balance of each REMIC Regular Interest (other than REMIC II Regular Interest II-IO) shall be reduced by all distributions of principal made on such REMIC Regular Interest on such Distribution Date pursuant to Section 4.01 and, if and to the extent necessary and appropriate, shall be further reduced on such Distribution Date by Realized Losses as provided in Section 4.04. The Uncertificated Balance of REMIC II Regular Interest II-LTZZ shall be increased by interest deferrals as provided in Section 4.01(a)(1). The Uncertificated Balance of each REMIC Regular Interest shall never be less than zero.

“Uncertificated Interest”: With respect to any REMIC Regular Interest for any Distribution Date, one month’s interest at the REMIC Remittance Rate applicable to such REMIC Regular Interest for such Distribution Date, accrued on the Uncertificated Balance or Uncertificated Notional Amount thereof immediately prior to such Distribution Date. Uncertificated Interest in respect of any REMIC Regular Interest shall accrue on the basis of a 360-day year consisting of twelve 30-day months. Uncertificated Interest with respect to each Distribution Date, as to any REMIC Regular Interest, shall be reduced by an amount equal to the sum of (a) the aggregate Prepayment Interest Shortfall, if any, for such Distribution Date to the extent not covered by payments pursuant to Section 4.03(e) and (b) the aggregate amount of any Relief Act Interest Shortfall, if any, allocated, in each case, to such REMIC Regular Interest pursuant to Section 1.02. In addition, Uncertificated Interest with respect to each Distribution Date, as to any REMIC Regular Interest shall be reduced by Realized Losses, if any, allocated to such REMIC Regular Interest pursuant to Section 1.02 and Section 4.04.

“Uncertificated Notional Amount”: With respect to REMIC II Regular Interest II-IO and each Distribution Date listed below, the aggregate Uncertificated Principal Balance of the REMIC I Regular Interests ending with the designation “A” listed below:

Distribution Date

REMIC I Regular Interests

1

I-1-A through I-49-A and II-1-A through II-49-A

2

I-2-A through I-49-A and II-2-A through II-49-A

3

I-3-A through I-49-A and II-3-A through II-49-A

4

I-4-A through I-49-A and II-4-A through II-49-A

5

I-5-A through I-49-A and II-5-A through II-49-A

6

I-6-A through I-49-A and II-6-A through II-49-A

7

I-7-A through I-49-A and II-7-A through II-49-A

8

I-8-A through I-49-A and II-8-A through II-49-A

9

I-9-A through I-49-A and II-9-A through II-49-A

10

I-10-A through I-49-A and II-10-A through II-49-A

11

I-11-A through I-49-A and II-11-A through II-49-A

12

I-12-A through I-49-A and II-12-A through II-49-A

13

I-13-A through I-49-A and II-13-A through II-49-A

 

 



 

 

14

I-14-A through I-49-A and II-14-A through II-49-A

15

I-15-A through I-49-A and II-15-A through II-49-A

16

I-16-A through I-49-A and II-16-A through II-49-A

17

I-17-A through I-49-A and II-17-A through II-49-A

18

I-18-A through I-49-A and II-18-A through II-49-A

19

I-19-A through I-49-A and II-19-A through II-49-A

20

I-20-A through I-49-A and II-20-A through II-49-A

21

I-21-A through I-49-A and II-21-A through II-49-A

22

I-22-A through I-49-A and II-22-A through II-49-A

23

I-23-A through I-49-A and II-23-A through II-49-A

24

I-24-A through I-49-A and II-24-A through II-49-A

25

I-25-A through I-49-A and II-25-A through II-49-A

26

I-26-A through I-49-A and II-26-A through II-49-A

27

I-27-A through I-49-A and II-27-A through II-49-A

28

I-28-A through I-49-A and II-28-A through II-49-A

29

I-29-A through I-49-A and II-29-A through II-49-A

30

I-30-A through I-49-A and II-30-A through II-49-A

31

I-31-A through I-49-A and II-31-A through II-49-A

32

I-32-A through I-49-A and II-32-A through II-49-A

33

I-33-A through I-49-A and II-33-A through II-49-A

34

I-34-A through I-49-A and II-34-A through II-49-A

35

I-35-A through I-49-A and II-35-A through II-49-A

36

I-36-A through I-49-A and II-36-A through II-49-A

37

I-37-A through I-49-A and II-37-A through II-49-A

38

I-38-A through I-49-A and II-38-A through II-49-A

39

I-39-A through I-49-A and II-39-A through II-49-A

40

I-40-A through I-49-A and II-40-A through II-49-A

41

I-41-A through I-49-A and II-41-A through II-49-A

42

I-42-A through I-49-A and II-42-A through II-49-A

43

I-43-A through I-49-A and II-43-A through II-49-A

44

I-44-A through I-49-A and II-44-A through II-49-A

45

I-45-A through I-49-A and II-45-A through II-49-A

46

I-46-A through I-49-A and II-46-A through II-49-A

47

I-47-A through I-49-A and II-47-A through II-49-A

48

I-48-A through I-49-A and II-48-A through II-49-A

49

I-49-A and II-49-A

thereafter

$0.00

 

With respect to the Class SWAP-IO Interest and any Distribution Date, an amount equal to the Uncertificated Notional Amount of the REMIC II Regular Interest II-IO.

“Underwriters”: Each of Citigroup Global Markets Inc. and BNP Paribas Securities Corp.

“Underwriters’ Exemption”: As defined in the Prospectus Supplement.

“Uninsured Cause”: Any cause of damage to a Mortgaged Property such that the complete restoration of such property is not fully reimbursable by the hazard insurance policies required to be maintained pursuant to Section 3.08.

“United States Person”: A citizen or resident of the United States, a corporation, partnership or other entity created or organized in, or under the laws of, the United States, any state thereof or the District of Columbia (except, in the case of a partnership, to the extent provided in regulations); provided that, solely for purposes of the restrictions on the transfer of Residual Certificates, no partnership or other entity treated as a partnership for United States

 



federal income tax purposes shall be treated as a United States Person unless all persons that own an interest in such partnership either directly or through any entity that is not a corporation for United States federal income tax purposes are required by the applicable operative agreement to be United States Persons, or an estate whose income is subject to United States federal income tax regardless of its source, or a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust. To the extent prescribed in regulations by the Secretary of the Treasury, a trust which was in existence on August 20, 1996 (other than a trust treated as owned by the grantor under subpart E of part I of subchapter J of chapter 1 of the Code), and which was treated as a United States person on August 20, 1996 may elect to continue to be treated as a United States person notwithstanding the previous sentence. The term “United States” shall have the meaning set forth in Section 7701 of the Code.

“Value”: With respect to any Mortgaged Property, the lesser of (i) the value thereof as determined by an appraisal made for the originator of the Mortgage Loan at the time of origination of the Mortgage Loan by an appraiser who met the minimum requirements of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, and (ii) the purchase price paid for the related Mortgaged Property by the Mortgagor with the proceeds of the Mortgage Loan, provided, however, in the case of a Refinanced Mortgage Loan, such value of the Mortgaged Property is based solely upon the value determined by an appraisal made for the originator of such Refinanced Mortgage Loan at the time of origination of such Refinanced Mortgage Loan by an appraiser who met the minimum requirements of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 or, subject to the Originator’s underwriting guidelines, an insured automated valuation model.

“Voting Rights”: The portion of the voting rights of all of the Certificates which is allocated to any Certificate. With respect to any date of determination, 98% of all Voting Rights shall be allocated among the Holders of the Class A Certificates, the Mezzanine Certificates and the Class CE Certificates in proportion to the then outstanding Certificate Principal Balances of their respective Certificates, 1% of all Voting Rights shall be allocated to the Holders of the Class P Certificates and 1% of all Voting Rights shall be allocated among the Holders of the Residual Certificates. The Voting Rights allocated to each Class of Certificate shall be allocated among Holders of each such Class in accordance with their respective Percentage Interests as of the most recent Record Date.

 

SECTION 1.02.

Allocation of Certain Interest Shortfalls.

For purposes of calculating the amount of Accrued Certificate Interest and the amount of the Interest Distribution Amount for the Class A Certificates, the Mezzanine Certificates and the Class CE Certificates for any Distribution Date, the aggregate amount of any Prepayment Interest Shortfalls (to the extent not covered by payments by the Master Servicer pursuant to Section 4.03(e)) and any Relief Act Interest Shortfalls incurred in respect of the Mortgage Loans for any Distribution Date shall be allocated first, to reduce the interest accrued on the Class CE Certificates, based on, and to the extent of, one month’s interest at the applicable Pass-Through Rate on the Notional Amount of such Certificates, and thereafter, among the Class A Certificates and the Mezzanine Certificates on a pro rata basis based on, and to the extent of,

 



one month’s interest at the then applicable respective Pass-Through Rates on the respective Certificate Principal Balances of each such Certificate.

For purposes of calculating the amount of Uncertificated Interest for the REMIC I Group I Regular Interests for any Distribution Date, the aggregate amount of any Prepayment Interest Shortfalls (to the extent not covered by payments by the Master Servicer pursuant to Section 4.03(e)) and any Relief Act Interest Shortfalls incurred in respect of Loan Group I shall be allocated first, to REMIC I Regular Interest I and to the REMIC I Group I Regular Interests ending with the designation “B”, pro rata based on, and to the extent of, one month’s interest at the then applicable respective REMIC I Remittance Rates on the respective Uncertificated Principal Balances of each such REMIC I Regular Interest , and then, to REMIC I Group I Regular Interests ending with the designation “A”, pro rata based on, and to the extent of, one month’s interest at the then applicable respective REMIC I Remittance Rates on the respective Uncertificated Principal Balances of each such REMIC I Regular Interest. For purposes of calculating the amount of Uncertificated Interest for the REMIC I Group II Regular Interests for any Distribution Date, the aggregate amount of any Prepayment Interest Shortfalls (to the extent not covered by payments by the Master Servicer pursuant to Section 4.03(e)) and any Relief Act Interest Shortfalls incurred in respect of Loan Group II shall be allocated first, to REMIC I Regular Interest II and to the REMIC I Group II Regular Interests ending with the designation “B”, pro rata based on, and to the extent of, one month’s interest at the then applicable respective REMIC I Remittance Rates on the respective Uncertificated Principal Balances of each such REMIC I Regular Interest , and then, to REMIC I Group II Regular Interests ending with the designation “A”, pro rata based on, and to the extent of, one month’s interest at the then applicable respective REMIC I Remittance Rates on the respective Uncertificated Principal Balances of each such REMIC I Regular Interest.

For purposes of calculating the amount of Uncertificated Interest for the REMIC II Regular Interests for any Distribution Date:

(i)           The REMIC II Marker Allocation Percentage of the aggregate amount of any Prepayment Interest Shortfalls (to the extent not covered by payments by the Master Servicer pursuant to Section 4.03(e)) and the REMIC II Marker Allocation Percentage of any Relief Act Interest Shortfalls incurred in respect of the Mortgage Loans for any Distribution Date shall be allocated among REMIC II Regular Interest II-LTA1, II Regular Interest II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II Regular Interest II-LTA2C, REMIC II Regular Interest II-LTA2D, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9, REMIC II Regular Interest II-LTM10 and REMIC II Regular Interest II-LTZZ, on a pro rata basis, based on, and to the extent of, one month’s interest at the then applicable respective REMIC II Remittance Rates on the respective Uncertificated Balances of each such REMIC II Regular Interest; and

(ii)          The REMIC II Sub WAC Allocation Percentage of the aggregate amount of any Prepayment Interest Shortfalls (to the extent not covered by payments by the

 



Master Servicer pursuant to Section 4.03(e)) and the REMIC II Sub WAC Allocation Percentage of any Relief Act Interest Shortfalls incurred in respect of the Mortgage Loans for any Distribution Date shall be allocated to Uncertificated Interest payable to REMIC II Regular Interest II-LT1SUB, REMIC II Regular Interest II-LT1GRP, REMIC II Regular Interest II-LT2SUB, REMIC II Regular Interest II-LT2GRP and REMIC II Regular Interest II-LTXX, on a pro rata basis, based on, and to the extent of, one month’s interest at the then applicable respective REMIC II Remittance Rates on the respective Uncertificated Balances of each such REMIC II Regular Interest.

 

SECTION 1.03.

Rights of the NIMS Insurer.

Each of the rights of the NIMS Insurer set forth in this Agreement shall exist so long as (i) the NIMS Insurer has undertaken to guarantee certain payments of notes issued pursuant to an Indenture and (ii) any series of notes issued pursuant to one or more Indentures remain outstanding or the NIMS Insurer is owed amounts in respect of its guarantee of payment on such notes; provided, however, the NIMS Insurer shall not have any rights hereunder (except pursuant to Section 11.01 in the case of clause (ii) below) during the period of time, if any, that (i) the NIMS Insurer has not undertaken to guarantee certain payments of notes issued pursuant to the Indenture or (ii) any default has occurred and is continuing under the insurance policy issued by the NIMS Insurer with respect to such notes.

 



 

ARTICLE II

 

CONVEYANCE OF MORTGAGE LOANS;

ORIGINAL ISSUANCE OF CERTIFICATES

 

SECTION 2.01.

Conveyance of Mortgage Loans.

The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey to the Trustee without recourse for the benefit of the Certificateholders all the right, title and interest of the Depositor, including any security interest therein for the benefit of the Depositor, in and to the Mortgage Loans identified on the Mortgage Loan Schedule, the rights of the Depositor under the Mortgage Loan Purchase Agreement, all other assets included or to be included in REMIC I, payments made to the Trustee by the Swap Administrator under the Swap Administration Agreement and the Swap Account. Such assignment includes all interest and principal received by the Depositor or the Master Servicer on or with respect to the Mortgage Loans (other than payments of principal and interest due on such Mortgage Loans on or before the Cut-off Date). The Depositor herewith delivers to the Trustee an executed copy of the Mortgage Loan Purchase Agreement, and the Trustee, on behalf of the Certificateholders, acknowledges receipt of the same.

In connection with such transfer and assignment, the Depositor does hereby deliver to, and deposit with, the Trustee the following documents or instruments with respect to each Mortgage Loan so transferred and assigned, and the Depositor shall deliver or cause to be delivered to the Custodian the following documents or instruments (a “Mortgage File”):

(i)           the original Mortgage Note, endorsed in blank, without recourse, or in the following form: “Pay to the order of Deutsche Bank National Trust Company, as Trustee under the applicable agreement, without recourse,” with all prior and intervening endorsements showing a complete chain of endorsement from the originator to the Person so endorsing to the Trustee, or with respect to any lost Mortgage Note, an original Lost Note Affidavit; provided however, that such substitutions of Lost Note Affidavits for original Mortgage Notes may occur only with respect to Mortgage Loans, the aggregate Cut-off Date Principal Balance of which is less than or equal to 2.00% of the Pool Balance as of the Cut-off Date;

(ii)          the original Mortgage, with evidence of recording thereon, and a copy, certified by the appropriate recording office, of the recorded power of attorney, if the Mortgage was executed pursuant to a power of attorney, with evidence of recording thereon;

 

(iii)

an original Assignment assigned in blank, without recourse;

(iv)         the original recorded intervening Assignment or Assignments showing a complete chain of assignment from the originator to the Person assigning the Mortgage to the Trustee as contemplated by the immediately preceding clause (iii) or the original unrecorded intervening Assignments;

 



 

(v)          the original or copies of each assumption, modification, written assurance or substitution agreement, if any; and

(vi)         the original lender’s title insurance policy or an attorney’s opinion of title or similar guarantee of title acceptable to mortgage lenders generally in the jurisdiction where the Mortgaged Property is located, together with all endorsements or riders which were issued with or subsequent to the issuance of such policy, or in the event such original title policy is unavailable, a written commitment or uniform binder or preliminary report of title issued by the title insurance or escrow company.

If any of the documents referred to in Sections 2.01(ii), (iii) or (iv) above has as of the Closing Date been submitted for recording but either (x) has not been returned from the applicable public recording office or (y) has been lost or such public recording office has retained the original of such document, the obligations of the Depositor to deliver such documents shall be deemed to be satisfied upon (1) delivery to the Trustee, or to the appropriate Custodian on behalf of the Trustee, of a copy of each such document certified by the Originator in the case of (x) above or the applicable public recording office in the case of (y) above to be a true and complete copy of the original that was submitted for recording and (2) if such copy is certified by the Originator, delivery to the Trustee, or to the appropriate Custodian on behalf of the Trustee, promptly upon receipt thereof of either the original or a copy of such document certified by the applicable public recording office to be a true and complete copy of the original. If the original lender’s title insurance policy was not delivered pursuant to Section 2.01(vi) above, the Depositor shall deliver or cause to be delivered to the Trustee, or to the appropriate Custodian on behalf of the Trustee, promptly after receipt thereof, the original lender’s title insurance policy. The Depositor shall deliver or cause to be delivered to the Trustee, or to the appropriate Custodian on behalf of the Trustee, promptly upon receipt thereof any other original documents constituting a part of a Mortgage File received with respect to any Mortgage Loan, including, but not limited to, any original documents evidencing an assumption or modification of any Mortgage Loan.

The Master Servicer (in its capacity as Seller) shall promptly (and in no event later than thirty (30) Business Days, subject to extension upon a mutual agreement between the Master Servicer and the Trustee, following the later of (i) the Closing Date, (ii) the date on which the Seller receives the Assignment from the Custodian and (iii) the date of receipt by the Master Servicer of the recording information for a Mortgage) submit or cause to be submitted for recording, at no expense to the Trust Fund or the Trustee, in the appropriate public office for real property records, each Assignment referred to in Sections 2.01(iii) and (iv) above and shall execute each original Assignment referred to in Section 2.01(iii) above in the following form: “Deutsche Bank National Trust Company, as Trustee under the applicable agreement.” In the event that any such Assignment is lost or returned unrecorded because of a defect therein, the Master Servicer (in its capacity as Seller) shall promptly prepare or cause to be prepared a substitute Assignment or cure or cause to be cured such defect, as the case may be, and thereafter cause each such Assignment to be duly recorded.

Notwithstanding the foregoing, however, for administrative convenience and facilitation of servicing and to reduce closing costs, the Assignments shall not be required to be submitted for recording (except with respect to any Mortgage Loan located in Maryland) unless

 



such failure to record would result in a withdrawal or a downgrading by any Rating Agency of the rating on any Class of Certificates; provided further, however, each Assignment shall be submitted for recording by the Seller in the manner described above, at no expense to the Trust Fund or the Trustee, upon the earliest to occur of: (i) reasonable direction by Holders of Certificates entitled to at least 25% of the Voting Rights or the NIMS Insurer, (ii) failure of the Master Servicer Termination Test, (iii) the occurrence of a bankruptcy or insolvency relating to the Seller, (iv) the occurrence of a servicing transfer as described in Section 7.02 hereof and (v) if the Seller is not the Master Servicer and with respect to any one Assignment or Mortgage, the occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor under the related Mortgage. Notwithstanding the foregoing, if the Master Servicer is unable to pay the cost of recording the Assignments, such expense shall be paid by the Trustee and shall be reimbursable to the Trustee as an Extraordinary Trust Fund Expense.

All original documents relating to the Mortgage Loans that are not delivered to the Trustee, or to the appropriate Custodian on behalf of the Trustee, are and shall be held by or on behalf of the Seller, the Depositor or the Master Servicer, as the case may be, in trust for the benefit of the Trustee on behalf of the Certificateholders. In the event that any such original document is required pursuant to the terms of this Section to be a part of a Mortgage File, such document shall be delivered promptly to the Trustee, or to the appropriate Custodian on behalf of the Trustee. Any such original document delivered to or held by the Depositor that is not required pursuant to the terms of this Section to be a part of a Mortgage File, shall be delivered promptly to the Master Servicer.

The parties hereto understand and agree that it is not intended that any mortgage loan be included in the Trust that is a “High-Cost Home Loan” as defined by HOEPA or any other applicable predatory or abusive lending laws.

 

SECTION 2.02.

Acceptance of REMIC I by the Trustee.

Subject to the provisions of Section 2.01 and subject to any exceptions noted on the exception report described in the next paragraph below, the Trustee acknowledges receipt (or, with respect to Mortgage Loans subject to a Custodial Agreement, receipt by the respective Custodian as the duly appointed agent of the Trustee) of the documents referred to in Section 2.01 (other than such documents described in Section 2.01(v)) above and all interests and all other assets included in the definition of “REMIC I” under clauses (i), (iii), (iv) and (v) (to the extent of amounts deposited into the Distribution Account) and declares that it, or such Custodian as its agent, holds and shall hold such documents and the other documents delivered to it constituting a Mortgage File, and that it holds or shall hold all such assets and such other assets included in the definition of “REMIC I” in trust for the exclusive use and benefit of all present and future Certificateholders.

On or prior to the Closing Date, the Trustee agrees, for the benefit of the Certificateholders, to execute and deliver (or cause the Custodian to execute and deliver) to the Depositor and the NIMS Insurer an acknowledgment of receipt of the Mortgage Note (with any exceptions noted), substantially in the form attached as Exhibit C-3 hereto.

The Trustee agrees, for the benefit of the Certificateholders, to review (or cause a Custodian on its behalf to review) each Mortgage Note within 45 days of the Closing Date and to

 



certify in substantially the form attached hereto as Exhibit C-1 (or cause the Custodian to certify in the form of the Initial Certification attached to the Custodial Agreement) that, as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan specifically identified in the exception report annexed thereto as not being covered by such certification), (i) all documents constituting part of such Mortgage File (other than such documents described in Section 2.01(v)) required to be delivered to it pursuant to this Agreement are in its possession, (ii) such documents have been reviewed by it or such Custodian and are not mutilated, torn or defaced unless initialed by the related borrower and relate to such Mortgage Loan, (iii) based on its or the Custodian’s examination and only as to the foregoing, the information set forth in the Mortgage Loan Schedule that corresponds to items (1) through (3), (6), (9), (10), (13), (15) and (19) of the definition of “Mortgage Loan Schedule” accurately reflects information set forth in the Mortgage File. It is herein acknowledged that, in conducting such review, the Trustee or such Custodian was under no duty or obligation (i) to inspect, review or examine any such documents, instruments, certificates or other papers to determine whether they are genuine, enforceable, or appropriate for the represented purpose or whether they have actually been recorded or that they are other than what they purport to be on their face or (ii) to determine whether any Mortgage File should include any of the documents specified in clause (v) of Section 2.01.

Prior to the first anniversary date of this Agreement the Trustee shall deliver to the Depositor, the Master Servicer and the NIMS Insurer a final certification in the form annexed hereto as Exhibit C-2 (or shall cause the Custodian to deliver to the Trustee, the Depositor, the Master Servicer and the NIMS Insurer a final certification in the form attached to the Custodial Agreement) evidencing the completeness of the Mortgage Files, with any applicable exceptions noted thereon, with respect to all of the Mortgage Loans. Upon the request of the Master Servicer, any exception report related to the final certification shall be provided in an electronic computer readable format as mutually agreed upon by the Master Servicer and the Trustee.

If in the process of reviewing the Mortgage Files and making or preparing, as the case may be, the certifications referred to above, the Trustee or any Custodian finds any document or documents constituting a part of a Mortgage File to be missing, mutilated, torn or defaced or does not conform to the requirements identified above, at the conclusion of its review the Trustee (or a Custodian on behalf of the Trustee) shall so notify the Depositor, the NIMS Insurer and the Master Servicer. In addition, upon the discovery by the Depositor, the NIMS Insurer, the Master Servicer or the Trustee of a breach of any of the representations and warranties made by the Seller in the Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which materially adversely affects such Mortgage Loan or the interests of the related Certificateholders in such Mortgage Loan, the party discovering such breach shall give prompt written notice to the other parties.

The Trustee (or a Custodian on behalf of the Trustee) shall, at the written request and expense of any Certificateholder, Certificate Owner, provide a written report to such Certificateholder, Certificate Owner, of all Mortgage Files released to the Master Servicer for servicing purposes.

 



 

 

SECTION 2.03.

Repurchase or Substitution of Mortgage Loans by the Seller or the Depositor; Payment of Prepayment Charge Payment Amounts.

(a)          Upon discovery or receipt of notice (including notice under Section 2.02) of any materially defective document in, or that a document is missing from, the Mortgage File or of the breach by the Seller of any representation, warranty or covenant under the Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which materially adversely affects the value of such Mortgage Loan or the interest therein of the Certificateholders, the Trustee shall promptly notify the Seller, the NIMS Insurer and the Master Servicer of such defect, missing document or breach and request that the Seller deliver such missing document or cure such defect or breach within 90 days from the date the Seller had knowledge or was notified of such missing document, defect or breach, and if the Seller does not deliver such missing document or cure such defect or breach in all material respects during such period, the Master Servicer (or, in accordance with Section 6.06(b), the Trustee) shall enforce the obligations of the Seller under the Mortgage Loan Purchase Agreement to repurchase such Mortgage Loan from REMIC I at the Purchase Price within 90 days after the date on which the Seller was notified (subject to Section 2.03(d)) of such missing document, defect or breach, if and to the extent that the Seller is obligated to do so under the Mortgage Loan Purchase Agreement. The Purchase Price for the repurchased Mortgage Loan shall be deposited in the Collection Account, and the Trustee, upon receipt of written certification from the Master Servicer of such deposit, shall release to the Seller the related Mortgage File and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as the Seller shall furnish to it and as shall be necessary to vest in the Seller any Mortgage Loan released pursuant hereto, and the Trustee shall not have any further responsibility with regard to such Mortgage File. In lieu of repurchasing any such Mortgage Loan as provided above, if so provided in the Mortgage Loan Purchase Agreement, the Seller may cause such Mortgage Loan to be removed from REMIC I (in which case it shall become a Deleted Mortgage Loan) and substitute one or more Qualified Substitute Mortgage Loans in the manner and subject to the limitations set forth in Section 2.03(c). It is understood and agreed that the obligation of the Seller to cure or to repurchase (or to substitute for) any Mortgage Loan as to which a document is missing, a material defect in a document exists or as to which such a breach has occurred and is continuing shall constitute the sole remedy respecting such omission, defect or breach available to the Trustee on behalf of the Certificateholders.

(b)          (i)          Promptly upon the earlier of discovery by the Master Servicer or receipt of notice by the Master Servicer of the breach of any representation, warranty or covenant of the Master Servicer set forth in Section 2.05, which materially and adversely affects the interests of the Certificateholders in any Mortgage Loan, the Master Servicer shall cure such breach in all material respects.

 

(ii)

Notwithstanding the provisions of Section 2.03(b)(i) above,

(A)         on the later of (x) the Master Servicer Remittance Date next following the earlier of discovery by the Master Servicer or receipt of notice by the Master Servicer of the breach of the representation made by the Master Servicer in Section 2.05(vii), which breach materially and adversely affects the interests of the Holders of the Class P

 



Certificates to any Prepayment Charge and (y) the Master Servicer Remittance Date next following the Prepayment Period relating to such a breach, the Master Servicer shall deposit into the Collection Account the amount of the scheduled Prepayment Charge, less any amount collected and deposited by the Master Servicer into the Collection Account in respect of such Prepayment Charge; and

(B)         on the later of (x) the Master Servicer Remittance Date next following the earlier of discovery by the Master Servicer or receipt of notice by the Master Servicer of the breach of the covenant made by the Master Servicer in Section 2.05(viii), which breach materially and adversely affects the interests of the Holders of the Class P Certificates to any Prepayment Charge and (y) the Master Servicer Remittance Date next following the Prepayment Period relating to such a breach, the Master Servicer shall deposit into the Collection Account, as a Master Servicer Prepayment Charge Payment Amount, the amount of the waived Prepayment Charge, but only to the extent required under Section 2.03(b)(iii) below.

 

(iii)

If with respect to any Prepayment Period,

(A)         the dollar amount of Prepayment Charges that are the subject of breaches by the Master Servicer of the covenant made by the Master Servicer in Section 2.05(viii), which breaches materially and adversely affect the interests of the Holders of the Class P Certificates to such Prepayment Charges, exceeds

(B)         5% of the total dollar amount of Prepayment Charges payable by Mortgagors in connection with Principal Prepayments on the related Mortgage Loans that occurred during such Prepayment Period,

then the amount required to be paid by the Master Servicer pursuant to Section 2.03(b)(ii)(B) above shall be limited to an amount, that when added to the amount of Prepayment Charges actually collected by the Master Servicer in respect of Prepayment Charges relating to Principal Prepayments on the related Mortgage Loans that occurred during such Prepayment Period, shall yield a sum equal to 95% of the total dollar amount of Prepayment Charges (exclusive of (A) Prepayment Charges not enforced or collected upon because (i) the enforceability thereof shall have been limited by bankruptcy, insolvency, moratorium, receivership and other similar laws relating to creditors’ rights generally or (ii) the collectability thereof shall have been limited due to acceleration in connection with a foreclosure or other involuntary payment and (B) Prepayment Charges waived by the Master Servicer when such waiver does not breach the covenant set forth in Section 2.05(viii)) payable by Mortgagors in connection with Principal Prepayments on the related Mortgage Loans that occurred during such Prepayment Period.

(c)          Any substitution of Qualified Substitute Mortgage Loans for Deleted Mortgage Loans made pursuant to Section 2.03(a), in the case of the Seller, or Section 2.03(b), in the case of the Depositor, must be effected prior to the date which is two years after the Startup Day for REMIC I.

As to any Deleted Mortgage Loan for which the Seller or the Depositor substitutes a Qualified Substitute Mortgage Loan or Loans, such substitution shall be effected by the Seller or the Depositor, as the case may be, delivering to the Trustee (or a Custodian on

 



behalf of the Trustee), for such Qualified Substitute Mortgage Loan or Loans, the Mortgage Note, the Mortgage, the Assignment to the Trustee, and such other documents and agreements, with all necessary endorsements thereon, as are required by Section 2.01, together with an Officers’ Certificate providing that each such Qualified Substitute Mortgage Loan satisfies the definition thereof and specifying the Substitution Shortfall Amount (as described below), if any, in connection with such substitution. The Trustee (or a Custodian on behalf of the Trustee) shall acknowledge receipt for such Qualified Substitute Mortgage Loan or Loans and, within ten Business Days thereafter, review such documents as specified in Section 2.02 and deliver to the Depositor, the NIMS Insurer, the Trustee and the Master Servicer, with respect to such Qualified Substitute Mortgage Loan or Loans, a certification substantially in the form attached hereto as Exhibit C-1, with any applicable exceptions noted thereon. Within one year of the date of substitution, the Trustee shall deliver to the Depositor, the NIMS Insurer and the Master Servicer a certification substantially in the form of Exhibit C-2 hereto with respect to such Qualified Substitute Mortgage Loan or Loans, with any applicable exceptions noted thereon. Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the month of substitution are not part of REMIC I and shall be retained by the Depositor or the Seller, as the case may be. For the month of substitution, distributions to Certificateholders shall reflect the Monthly Payment due on such Deleted Mortgage Loan on or before the Due Date in the month of substitution, and the Depositor or the Seller, as the case may be, shall thereafter be entitled to retain all amounts subsequently received in respect of such Deleted Mortgage Loan. The Depositor shall give or cause to be given written notice to the Certificateholders, the NIMS Insurer that such substitution has taken place, shall amend the Mortgage Loan Schedule and, if applicable, the Prepayment Charge Schedule, to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the substitution of the Qualified Substitute Mortgage Loan or Loans and shall deliver a copy of such amended Mortgage Loan Schedule to the Trustee and the NIMS Insurer. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall constitute part of the Mortgage Pool and shall be subject in all respects to the terms of this Agreement and, in the case of a substitution effected by the Seller, the Mortgage Loan Purchase Agreement, including all applicable representations and warranties thereof.

For any month in which the Depositor or the Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer shall determine the amount (the “Substitution Shortfall Amount”), if any, by which the aggregate Purchase Price of all such Deleted Mortgage Loans exceeds the aggregate of, as to each such Qualified Substitute Mortgage Loan, the Scheduled Principal Balance thereof as of the date of substitution, together with one month’s interest on such Scheduled Principal Balance at the applicable Net Mortgage Rate. On the date of such substitution, the Depositor or the Seller, as the case may be, shall deliver or cause to be delivered to the Master Servicer for deposit in the Collection Account an amount equal to the Substitution Shortfall Amount, if any, and the Trustee, upon receipt of the related Qualified Substitute Mortgage Loan or Loans and certification by the Master Servicer of such deposit, shall release to the Depositor or the Seller, as the case may be, the related Mortgage File or Files and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as the Depositor or the Seller, as the case may be, shall deliver to it and as shall be necessary to vest therein any Deleted Mortgage Loan released pursuant hereto.

 



 

In addition, the Depositor or the Seller, as the case may be, shall obtain at its own expense and deliver to the Trustee and the NIMS Insurer an Opinion of Counsel to the effect that such substitution shall not cause (a) any federal tax to be imposed on any Trust REMIC, including without limitation, any federal tax imposed on “prohibited transactions” under Section 860F(a)(1) of the Code or on “contributions after the startup date” under Section 860G(d)(1) of the Code, or (b) any Trust REMIC to fail to qualify as a REMIC at any time that any Certificate is outstanding.

(d)          Upon discovery by the Depositor, the NIMS Insurer, the Seller, the Master Servicer or the Trustee that any Mortgage Loan does not constitute a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code, the party discovering such fact shall within two Business Days give written notice thereof to the other parties. In connection therewith, the Seller or the Depositor shall repurchase or, subject to the limitations set forth in Section 2.03(c), substitute one or more Qualified Substitute Mortgage Loans for the affected Mortgage Loan within 90 days of the earlier of discovery or receipt of such notice with respect to such affected Mortgage Loan. Such repurchase or substitution shall be made by the Seller. Any such repurchase or substitution shall be made in the same manner as set forth in Section 2.03(a). The Trustee shall reconvey to the Depositor or the Seller, as the case may be, the Mortgage Loan to be released pursuant hereto in the same manner, and on the same terms and conditions, as it would a Mortgage Loan repurchased for breach of a representation or warranty.

 

SECTION 2.04.

[Reserved].

 

SECTION 2.05.

Representations, Warranties and Covenants of the Master Servicer.

The Master Servicer hereby represents, warrants and covenants to the Trustee, for the benefit of each of the Trustee and the Certificateholders and to the Depositor that as of the Closing Date or as of such date specifically provided herein:

(i)           The Master Servicer is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and is duly authorized and qualified to transact any and all business contemplated by this Agreement to be conducted by the Master Servicer in any state in which a Mortgaged Property is located or is otherwise not required under applicable law to effect such qualification and, in any event, is in compliance with the doing business laws of any such State, to the extent necessary to ensure its ability to enforce each Mortgage Loan and to service the Mortgage Loans in accordance with the terms of this Agreement;

(ii)          The Master Servicer has the full corporate 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 corporate action on the part of the Master Servicer the execution, delivery and performance of this Agreement; and this Agreement, assuming the due authorization, execution and delivery thereof by the Depositor and the Trustee, constitutes a legal, valid and binding obligation of the Master Servicer, enforceable against the Master Servicer 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;

(iii)        The execution and delivery of this Agreement by the Master Servicer, the servicing of the Mortgage Loans by the Master Servicer hereunder, the consummation of any other of the transactions herein contemplated, and the fulfillment of or compliance with the terms hereof are in the ordinary course of business of the Master Servicer and will not (A) result in a breach of any term or provision of the charter or by-laws of the Master Servicer or (B) conflict with, result in a breach, violation or acceleration of, or result in a default under, the terms of any other material agreement or instrument to which the Master Servicer is a party or by which it may be bound, or any statute, order or regulation applicable to the Master Servicer of any court, regulatory body, administrative agency or governmental body having jurisdiction over the Master Servicer; and the Master Servicer is not a party to, bound by, or in breach or violation of any indenture or other agreement or instrument, or subject to or in violation of any statute, order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over it, which materially and adversely affects or, to the Master Servicer’s knowledge, would in the future materially and adversely affect, (x) the ability of the Master Servicer to perform its obligations under this Agreement or (y) the business, operations, financial condition, properties or assets of the Master Servicer taken as a whole;

(iv)         The Master Servicer is an approved seller/servicer for Fannie Mae or Freddie Mac in good standing and is a HUD approved mortgagee pursuant to Section 203 and Section 211 of the National Housing Act;

(v)          Except as disclosed in the Prospectus Supplement, no litigation is pending against the Master Servicer that would materially and adversely affect the execution, delivery or enforceability of this Agreement or the ability of the Master Servicer to service the Mortgage Loans or to perform any of its other obligations hereunder in accordance with the terms hereof;

(vi)         No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Master Servicer of, or compliance by the Master Servicer with, this Agreement or the consummation 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;

(vii)       The information set forth in the Prepayment Charge Schedule attached hereto as Schedule 2 (including the prepayment charge summary attached thereto) is complete, true and correct in all material respects at the date or dates respecting which such information is furnished and each Prepayment Charge is permissible and enforceable in accordance with its terms (except to the extent 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 collectability thereof may

 



be limited due to acceleration in connection with a foreclosure or other involuntary payment;

(viii)      The Master Servicer shall not waive any Prepayment Charge or part of a Prepayment Charge unless, (i) the enforceability thereof shall have been limited by bankruptcy, insolvency, moratorium, receivership and other similar laws relating to creditors’ rights generally or (ii) the collectability thereof shall have been limited due to acceleration in connection with a foreclosure or other involuntary payment or (iii) in the Master Servicer’s reasonable judgment as described in Section 3.01 hereof, (x) such waiver relates to a default or a reasonably foreseeable default, (y) such waiver would maximize recovery of total proceeds taking into account the value of such Prepayment Charge and related Mortgage Loan and (z) doing so is standard and customary in servicing similar Mortgage Loans (including any waiver of a Prepayment Charge in connection with a refinancing of a Mortgage Loan that is related to a default or a reasonably foreseeable default). In no event shall the Master Servicer waive a Prepayment Charge in connection with a refinancing of a Mortgage Loan that is not related to a default or a reasonably foreseeable default;

(ix)         The information set forth in the “monthly tape” provided to the Trustee or any of its affiliates is true and correct in all material respects;

(x)          With respect to each Mortgage Loan, the Assignment is in recordable form; (except that the name of the assignee and the recording information with respect to such Mortgage Loan is blank) and each Mortgage Loan was originated in the name of the Master Servicer or an affiliate thereof;

(xi)         The Master Servicer has fully furnished and shall continue 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 Trans Union Credit Information Company or their successors on a monthly basis; and

(xii)       The Master Servicer shall transmit full-file credit reporting data for each Mortgage Loan pursuant to Fannie Mae Guide Announcement 95-19 and for each Mortgage Loan, the Master Servicer shall report one of the following statuses each month as follows: new origination, current, delinquent (30-, 60-, 90-days, etc.), foreclosed, or charged-off.

It is understood and agreed that the representations, warranties and covenants set forth in this Section 2.05 shall survive delivery of the Mortgage Files to the Trustee or to a Custodian, as the case may be, and shall inure to the benefit of the Trustee, the Depositor and the Certificateholders. Upon discovery by any of the Depositor, the NIMS Insurer, the Master Servicer or the Trustee of a breach of any of the foregoing representations, warranties and covenants which materially and adversely affects the value of any Mortgage Loan, Prepayment Charge or the interests therein of the Certificateholders, the party discovering such breach shall give prompt written notice (but in no event later than two Business Days following such discovery) to the NIMS Insurer and the Trustee. Subject to Section 7.01, the obligation of the Master Servicer set forth in Section 2.03(b) to cure breaches (or in the case of the

 



representations, warranties and covenants set forth in Section 2.05(vii) and Section 2.05(viii) above, to otherwise remedy such breaches pursuant to Section 2.03(b)) shall constitute the sole remedies against the Master Servicer available to the Certificateholders, the Depositor or the Trustee on behalf of the Certificateholders respecting a breach of the representations, warranties and covenants contained in this Section 2.05. The preceding sentence shall not, however, limit any remedies available to the Certificateholders, the Depositor or the Trustee on behalf of the Certificateholders (other than in the case of the representations, warranties and covenants set forth in Section 2.05(vii) and Section 2.05(viii) above) pursuant to the Mortgage Loan Purchase Agreement signed by the Master Servicer in its capacity as Seller, respecting a breach of the representations, warranties and covenants of the Master Servicer in its capacity as Seller contained in the Mortgage Loan Purchase Agreement.

 

SECTION 2.06.

Issuance of the REMIC I Regular Interests and the Class R-I Interest.

The Trustee acknowledges the assignment to it of the Mortgage Loans and the delivery to it of the Mortgage Files, subject to the provisions of Section 2.01 and Section 2.02, together with the assignment to it of all other assets included in REMIC I, the receipt of which is hereby acknowledged. Concurrently with such assignment and delivery and in exchange therefor, the Trustee, pursuant to the written request of the Depositor executed by an officer of the Depositor, has executed, authenticated and delivered to or upon the order of the Depositor, the Class R-I Interest in authorized denominations. The interests evidenced by the Class R-I Interest, together with the REMIC I Regular Interests, constitute the entire beneficial ownership interest in REMIC I. The rights of the Class R Certificateholders and REMIC II (as holder of the REMIC I Regular Interests) to receive distributions from the proceeds of REMIC I in respect of the Class R-I Interest and the REMIC I Regular Interests, respectively, and all ownership interests evidenced or constituted by the Class R-I Interest and the REMIC I Regular Interests, shall be as set forth in this Agreement.

 

SECTION 2.07.

Conveyance of the REMIC I Regular Interests; Acceptance of REMIC II and REMIC III by the Trustee.

(a)          The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey in trust to the Trustee without recourse all the right, title and interest of the Depositor in and to the assets described in the definition of REMIC I for the benefit of the Holders of the REMIC I Regular Interests (which are uncertificated) and the Class R Certificates (in respect of the Class R-I Interest). The Trustee acknowledges receipt of the assets described in the definition of REMIC I and declares that it holds and shall hold the same in trust for the exclusive use and benefit of the Holders of the REMIC I Regular Interests and the Class R Certificates (in respect of the Class R-I Interest). The interests evidenced by the Class R-I Interest, together with the REMIC I Regular Interests, constitute the entire beneficial ownership interest in REMIC I.

(b)          The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey in trust to the Trustee without recourse all the right, title and interest of the Depositor in and to the REMIC I Regular Interests (which are uncertificated) for the benefit of the Holders of the REMIC II Regular Interests and the Class R

 



Certificates (in respect of the Class R-II Interest). The Trustee acknowledges receipt of the REMIC I Regular Interests and declares that it holds and shall hold the same in trust for the exclusive use and benefit of the Holders of the REMIC II Regular Interests and the Class R Certificates (in respect of the Class R-II Interest). The interests evidenced by the Class R-II Interest, together with the REMIC II Regular Interests, constitute the entire beneficial ownership interest in REMIC II.

(c)          The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey in trust to the Trustee without recourse all the right, title and interest of the Depositor in and to the REMIC II Regular Interests (which are uncertificated) for the benefit of the Holders of the REMIC III Regular Interests and the Class R Certificates (in respect of the Class R-III Interest). The Trustee acknowledges receipt of the REMIC III Regular Interests and declares that it holds and shall hold the same in trust for the exclusive use and benefit of the Holders of the REMIC III Regular Interests and the Class R Certificates (in respect of the Class R-III Interest). The interests evidenced by the Class R-III Interest, together with the Regular Certificates (other than the Class CE Certificates and Class P Certificates), the Class CE Interest, Class P Interest and Class SWAP-IO Interest, constitute the entire beneficial ownership interest in REMIC III.

(d)          The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey in trust to the Trustee without recourse all the right, title and interest of the Depositor in and to the Class CE Interest (which is uncertificated) for the benefit of the Holders of the Class CE Certificates and the Class R Certificates (in respect of the Class R-IV Interest). The Trustee acknowledges receipt of the Class CE Interest and declares that it holds and shall hold the same in trust for the exclusive use and benefit of the Holders of the Class CE Certificates and the Class R Certificates (in respect of the Class R-IV Interest). The interests evidenced by the Class R-IV Interest, together with the Class CE Certificates, constitute the entire beneficial ownership interest in REMIC IV.

(e)          The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey in trust to the Trustee without recourse all the right, title and interest of the Depositor in and to the Class P Interest (which is uncertificated) for the benefit of the Holders of the Class P Certificates and the Class R Certificates (in respect of the Class R-V Interest). The Trustee acknowledges receipt of the Class P Interest and declares that it holds and shall hold the same in trust for the exclusive use and benefit of the Holders of the Class P Certificates and the Class R Certificates (in respect of the Class R-V Interest). The interests evidenced by the Class R-V Interest, together with the Class P Certificates, constitute the entire beneficial ownership interest in REMIC V.

(f)           The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey in trust to the Trustee without recourse all the right, title and interest of the Depositor in and to the SWAP-IO Interest (which is uncertificated) for the benefit of the Holders of REMIC VI Regular Interest SWAP-IO and the Class R Certificates (in respect of the Class R-VI Interest). The Trustee acknowledges receipt of the SWAP-IO Interest and declares that it holds and shall hold the same in trust for the exclusive use and benefit of the Holders of the REMIC VI Regular Interest SWAP-IO and the Class R Certificates (in respect of the Class R-VI Interest). The interests evidenced by the Class R-VI

 



Interest, together with REMIC VI Regular Interest SWAP-IO, constitute the entire beneficial ownership interest in REMIC VI.

 

SECTION 2.08.

Issuance of Class R Certificates and Class R-X Certificates.

(a)          The Trustee acknowledges the assignment to it of the REMIC I Regular Interests and, concurrently therewith and in exchange therefor, pursuant to the written request of the Depositor executed by an officer of the Depositor, the Trustee has executed, authenticated and delivered to or upon the order of the Depositor, the Class R Certificates in authorized denominations. The interests evidenced by the Class R Certificates, together with the REMIC I Regular Interests, the REMIC II Regular Interests, the Regular Certificates (other than the Class CE Certificates and the Class P Certificates) the Class CE Interest, the Class P Interest and the SWAP-IO Interest constitute the entire beneficial ownership interest in REMIC I, REMIC II and REMIC III.

(b)         The Trustee acknowledges the assignment to it of the Class CE Interest, the Class P Interest and the SWAP-IO Interest and, concurrently therewith and in exchange therefor, pursuant to the written request of the Depositor executed by an officer of the Depositor, the Trustee has executed, authenticated and delivered to or upon the order of the Depositor, the Class R-X Certificates in authorized denominations. The interests evidenced by the Class R-X Certificates, together with the Class CE Certificates and the Class P Certificates constitute the entire beneficial ownership interest in REMIC IV, REMIC V and REMIC VI.

 



 

ARTICLE III

 

ADMINISTRATION AND SERVICING

OF THE MORTGAGE LOANS

 

SECTION 3.01.

Master Servicer to Act as Master Servicer.

The Master Servicer shall service and administer the Mortgage Loans on behalf of the Trustee and in the best interests of and for the benefit of the Certificateholders (as determined by the Master Servicer in its reasonable judgment) in accordance with (i) the terms of the respective Mortgage Loans and any insurance policies related thereto, (ii) all Applicable Regulations, (iii) the terms of this Agreement, (iv) the Loss Mitigation Action Plan, if applicable, and (v) to the extent consistent with the preceding requirements, 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 prudent mortgage lenders and loan servicers administering similar mortgage loans but without regard to:

(i)           any relationship that the Master Servicer, any Sub-Servicer or any Affiliate of the Master Servicer or any Sub-Servicer may have with the related Mortgagor;

(ii)          the ownership of any Certificate by the Master Servicer or any Affiliate of the Master Servicer;

(iii)        the Master Servicer’s obligation to make Advances or Servicing Advances; or

(iv)         the Master Servicer’s or any Sub-Servicer’s right to receive compensation for its services hereunder or with respect to any particular transaction (the “Servicing Standard”).

Subject only to the above-described servicing standards and the terms of this Agreement and of the respective Mortgage Loans, the Master Servicer shall have full power and authority, acting alone or through Sub-Servicers as provided in Section 6.06, 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, the Master Servicer in its own name or in the name of a Sub-Servicer is hereby authorized and empowered by the Trustee, in accordance with the servicing standards set forth above, (i) to execute and deliver, on behalf of the Certificateholders and the Trustee, any and all instruments of satisfaction or cancellation, or of partial or full release or discharge, or of forbearance, or of modification and all other comparable instruments, with respect to the Mortgage Loans and the Mortgaged Properties, (ii) to institute foreclosure proceedings or obtain a deed-in-lieu of foreclosure to convert the ownership of such properties, and to hold or cause to be held title to such properties, in the name of the Trust Fund, on behalf of the Trustee and the Certificateholders, (iii) to market, sell and transfer title of REO Properties held in the name of the Trust Fund to third party purchasers upon terms and conditions the Master Servicer deems reasonable under the Servicing Standard, (iv) to bring or respond to civil actions or complaints (in its own name or that of the Trust Fund or the Trustee on behalf of the Trust Fund) related to any Mortgage Loan, Mortgaged Property or REO

 



Property held by the Trust Fund and (v) to execute any other document necessary or appropriate to enable the Master Servicer to carry out its servicing and administrative duties hereunder consistent with the Servicing Standard.

At the written request of the Master Servicer, the Trustee shall execute and furnish to the Master Servicer such documents as are necessary or appropriate to enable the Master Servicer to carry out its servicing and administrative duties hereunder. By execution of this Agreement, the Trustee, on behalf of the Trust Fund, hereby grants to the Master Servicer a power of attorney to execute any and all documents necessary to carry out any and all servicing duties described in this Agreement (including the taking of and transferring title of REO Properties to third parties held in the name of the Trustee for the benefit of the Trust) and expressly confirms that this paragraph along with the face page and a copy of the signature page (duly executed) to this Agreement shall constitute the power of attorney for evidentiary and/or recording purposes. The Trustee shall not be liable for the actions of the Master Servicer or any Sub-Servicers under such powers of attorney.

Subject to Section 3.04(d) hereof, in accordance with the Servicing Standard, the Master Servicer shall advance or cause to be advanced funds as necessary for the purpose of effecting the timely payment of taxes on the Mortgaged Properties, which advances shall be Servicing Advances reimbursable in the first instance from related collections from the Mortgagors pursuant to Section 3.04(d), and further as provided in Section 3.05(a). Any cost incurred by the Master Servicer or by Sub-Servicers in effecting the timely payment of taxes on a Mortgaged Property shall not, for the purpose of calculating distributions to Certificateholders, be added to the unpaid Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.

Consistent with the terms of this Agreement, the Master Servicer may waive, modify or vary any term of any Mortgage Loan or consent to the postponement of strict compliance with any such term or in any manner grant indulgence to any Mortgagor if such waiver, modification, postponement or indulgence is in conformity with the Servicing Standard; provided, however, that:

(A)         the Master Servicer shall not make future advances (except as provided in Section 4.03);

(B)         the Master Servicer shall not permit any modification with respect to any Mortgage Loan that would change the Mortgage Rate, defer or forgive the payment of any principal or interest payments, reduce the outstanding Stated Principal Balance (except for reductions resulting from actual payments of principal) or extend the final maturity date on such Mortgage Loan (unless as provided in Section 3.02, (i) the Mortgagor is in default with respect to the Mortgage Loan or (ii) such default is, in the judgment of the Master Servicer, reasonably foreseeable); and

(C)         the Master Servicer shall not consent to (i) partial releases of Mortgages, (ii) alterations, (iii) removal, demolition or division of properties subject to Mortgages, (iv) modification or (v) second mortgage subordination agreements with respect to any Mortgage Loan that would: (i) affect adversely the status of any Trust REMIC as a REMIC, (ii) cause any Trust REMIC to be subject to a tax on “prohibited transactions” or

 



“contributions” pursuant to the REMIC Provisions, or (iii) both (x) effect an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code (or Treasury regulations promulgated thereunder) and (y) cause any Trust REMIC constituting part of the Trust Fund to fail to qualify as a REMIC under the Code or the imposition of any tax on “prohibited transactions” or “contributions” after the Startup Day under the REMIC Provisions.

To the extent consistent with the terms of this Agreement, including Section 2.03 and Section 2.05, the Master Servicer may waive (or permit a Sub-Servicer to waive) a Prepayment Charge only under the following circumstances: (i) such waiver is standard and customary in servicing similar Mortgage Loans and (ii) such waiver relates to a default or a reasonably foreseeable default and would, in the reasonable judgment of the Master Servicer, maximize recovery of total proceeds taking into account the value of such Prepayment Charge and the related Mortgage Loan.

The Master Servicer may delegate its responsibilities under this Agreement; provided, however, that no such delegation shall release the Master Servicer from the responsibilities or liabilities arising under this Agreement. All references to Master Servicer in this Agreement shall be deemed to include any Sub-Servicer duly appointed by the Master Servicer pursuant to this Agreement.

 

SECTION 3.02.

Collection of Certain Mortgage Loan Payments.

The Master 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, the Master Servicer may in its discretion (i) waive any late payment charge or, if applicable, penalty interest, (ii) waive any provision of any Mortgage Loan requiring the related Mortgagor to submit to mandatory arbitration with respect to disputes arising thereunder or (iii) extend the due dates for the Monthly Payments due on a Mortgage Note for a period of not greater than 180 days; provided that any extension pursuant to clause (iii) above shall not affect the amortization schedule of any Mortgage Loan for purposes of any computation hereunder. The NIMS Insurer’s prior written consent shall be required for any modification, waiver or amendment if the aggregate number of outstanding Mortgage Loans which have been modified, waived or amended exceeds 5% of the number of Mortgage Loans as of the Cut-off Date. In the event of any such arrangement pursuant to clause (iii) above, the Master Servicer shall make timely advances on such Mortgage Loan during such extension pursuant to Section 4.03 and in accordance with the amortization schedule of such Mortgage Loan without modification thereof by reason of such arrangements.

Notwithstanding the foregoing, in the event that any Mortgage Loan is in default or, in the judgment of the Master Servicer, such default is reasonably foreseeable, the Master Servicer, consistent with the Servicing Standard, may also waive, modify or vary any term of such Mortgage Loan (including modifications that would change the Mortgage Rate, forgive the payment of principal or interest or extend the final maturity date of such Mortgage Loan), accept

 



payment from the related Mortgagor of an amount less than the Stated Principal Balance in final satisfaction of such Mortgage Loan, or consent to the postponement of strict compliance with any such term or otherwise grant indulgence to any Mortgagor (any and all such waivers, modifications, variances, forgiveness of principal or interest, postponements, or indulgences collectively referred to herein as “forbearance”), provided, however, that in determining which course of action permitted by this sentence it shall pursue, the Master Servicer shall adhere to the Loss Mitigation Action Plan. The Master Servicer’s analysis supporting any forbearance and the conclusion that any forbearance meets the standards of Section 3.01 and the Loss Mitigation Action Plan shall be reflected in writing in the Mortgage File.

In the event that a shortfall in any collection on or liability with respect to any Mortgage Loan results from or is attributable to adjustments to Mortgage Rates, Monthly Payments or Stated Principal Balances that were made by the Master Servicer in a manner not consistent with the terms of the related Mortgage Note and this Agreement, the Master Servicer, upon discovery or receipt of notice thereof, immediately shall deliver to the Trustee for deposit in the Distribution Account from its own funds the amount of any such shortfall and shall indemnify and hold harmless the Trust Fund, the Trustee, the Depositor and any successor master servicer in respect of any such liability. Such indemnities shall survive the termination or discharge of this Agreement.

 

SECTION 3.03.

[Reserved].

 

SECTION 3.04.

Collection Account, Escrow Account and Distribution Account.

(a)          Collection Account. On behalf of the Trust Fund, the Master Servicer shall segregate and hold all funds collected and received pursuant to each Mortgage Loan separate and apart from any of its own funds and general assets and shall establish and maintain in the name of the Trustee one or more accounts (such account or accounts, the “Collection Account”) in accordance with this Section 3.04, held in trust for the benefit of the Trustee and the Certificateholders.

(b)          Deposits to the Collection Account. On behalf of the Trust Fund, the Master 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 the Master Servicer’s receipt thereof, and shall thereafter deposit in the 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, and retain therein, the following payments and collections received or made by it subsequent to the Cut-off Date with respect to the Mortgage Loans, 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 and REO Properties;

 



 

(ii)          all payments on account of interest on the Mortgage Loans and REO Properties adjusted to the Net Mortgage Rate;

(iii)         all Insurance Proceeds and Liquidation Proceeds (other than proceeds to be held in the Escrow Account and applied to the restoration or repair of the Mortgaged Property or released to the Mortgagor in accordance with the Servicing Standard), Subsequent Recoveries and any amounts received in respect of the rental of any REO Property prior to REO Disposition;

(iv)         all proceeds related to the purchase, substitution or repurchase of any Mortgage Loan or REO Property in accordance with Section 2.03;

(v)          any amounts required to be deposited by the Master Servicer pursuant to Section 3.09 in connection with the deductible clause in any blanket hazard insurance policy, such deposit being made from the Master Servicer’s own funds, without reimbursement therefor;

(vi)         any amounts required to be deposited by the Master Servicer pursuant to Section 3.06 in connection with any losses realized on Permitted Investments with respect to funds held in the Collection Account;

(vii)       all amounts required to be deposited in connection with shortfalls in principal amount of Qualified Substitute Mortgage Loans pursuant to Section 2.03 (for purposes of this clause (vii), the Cut-off Date with respect to any Qualified Substitute Mortgage Loan shall be deemed to be the date of substitution);

(viii)      any amounts required to be deposited by the Master Servicer pursuant to Section 4.03(b); and

(ix)         all Prepayment Charges collected by the Master Servicer, all Prepayment Charges payable by the Master Servicer pursuant to Section 2.03(b)(ii)(A) and all Master Servicer Prepayment Charge Payment Amounts payable by the Master Servicer pursuant to Section 2.03(b)(ii)(B) as limited by Section 2.03(b)(iii).

The foregoing requirements for deposit to the Collection Account shall be exclusive, it being understood and agreed that, without limiting the generality of the foregoing, payments in the nature of late payment charges, assumption fees, insufficient funds charges, modification fees and other ancillary fees (but not Prepayment Charges) need not be deposited by the Master Servicer in the Collection Account and shall upon collection, belong to the Master Servicer as additional compensation for its servicing activities. In the event the Master Servicer shall deposit in the Collection Account any amount not required to be deposited therein, it may at any time withdraw such amount from the Collection Account, any provision herein to the contrary notwithstanding.

(c)          Escrow Account. The Master Servicer shall segregate and hold all funds collected and received pursuant to each Mortgage Loan which constitute Escrow Payments separate and apart from any of its own funds and general assets and shall establish and maintain

 



in the name of the Trustee one or more accounts (such account or accounts, the “Escrow Account”) held in trust for the benefit of the Certificateholders and the Trustee.

(d)          Deposits to the Escrow Account. The Master 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 the Master Servicer’s receipt thereof, and shall thereafter deposit in the Escrow 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, and retain therein:

(i)           all Escrow Payments collected on account of the Mortgage Loans, for the purpose of effecting timely payment of any such items as required under the terms of this Agreement; and

(ii)          all Insurance Proceeds which are to be applied to the restoration or repair of any Mortgaged Property.

(e)          Distribution Account. On behalf of the Trust Fund, the Trustee shall segregate and hold all funds collected and received pursuant to this Agreement separate and apart from any of its own funds and general assets and shall establish and maintain in the name of the Trust Fund one or more segregated accounts (such account or accounts, the “Distribution Account”), held in trust for the benefit of the Certificateholders.

(f)           Trustee Deposits to the Distribution Account. Upon receipt, the Trustee shall deposit or cause to be deposited into the Distribution Account all payments of any nature received from the Master Servicer in accordance with this Agreement. The Trustee shall deposit in the Distribution Account any amounts required to be deposited pursuant to Section 3.06 in connection with losses realized on Permitted Investments with respect to funds held in the Distribution Account. Furthermore, promptly upon receipt of any Stayed Funds, whether from the Master Servicer, a trustee in bankruptcy, or federal bankruptcy court or other source, the Trustee shall deposit such funds in the Distribution Account, subject to withdrawal thereof pursuant to Section 7.02(b) or as otherwise permitted hereunder.

(g)          Master Servicer Transfer of Funds to the Distribution Account. On behalf of the Trust Fund, the Master Servicer shall deliver to the Trustee in immediately available funds for deposit in the Distribution Account by 3:00 p.m. (New York time) on the Master Servicer Remittance Date, (i) that portion of Available Funds (calculated without regard to the references in clause (2) of the definition thereof to amounts that may be withdrawn from the Distribution Account) for the related Distribution Date then on deposit in the Collection Account, (ii) without duplication, the amount of all Prepayment Charges collected by the Master Servicer, all Prepayment Charges payable by the Master Servicer pursuant to Section 2.03(b)(ii)(A) and all Master Servicer Prepayment Charge Payment Amounts payable by the Master Servicer pursuant to Section 2.03(b)(ii)(B), subject to Section 2.03(b)(iii) (in each case to the extent not related to Principal Prepayments occurring after the related Prepayment Period) and (iii) any amounts reimbursable to an Advancing Person pursuant to Section 3.23 and the terms of the related Advance Facility.

 



 

In addition, the Master Servicer shall deliver to the Trustee from time to time as required by this Agreement, for deposit and the Trustee shall so deposit, in the Distribution Account:

 

(i)

any Advances, as required pursuant to Section 4.03;

(ii)          any amounts required to be deposited pursuant to Section 3.13 in connection with any REO Property;

(iii)         any amounts to be paid in connection with a purchase of Mortgage Loans and REO Properties pursuant to Section 3.16 and Section 9.01;

 

(iv)

any Compensating Interest as required pursuant to Section 4.03(e);

(v)          any Stayed Funds, as soon as permitted by the federal bankruptcy court having jurisdiction in such matters;

(vi)         any amounts required to be paid by the Master Servicer pursuant to Section 3.06 in connection with any losses realized on Permitted Investments with respect to funds held in the Collection Account; and

(vii)       any amounts required to be paid to the Trustee from the assets of the Trust Fund on deposit in the Collection Account pursuant to this Agreement, including but not limited to amounts required to be paid to the Trustee pursuant to Section 7.02 and Section 8.05.

Funds held in the Collection Account pursuant to Section 3.04(b) may at any time be delivered by the Master Servicer to the Trustee for deposit into the Distribution Account and for all purposes of this Agreement shall be deemed to be a part of the Collection Account until the Business Day prior to the Distribution Date; provided, however, that the Trustee shall have the sole authority to withdraw any funds held pursuant to this paragraph. In the event the Master Servicer shall deliver to the Trustee for deposit in the Distribution Account any amount not required to be deposited therein, it may at any time request that the Trustee withdraw such amount from the Distribution Account and remit to it any such amount, any provision herein to the contrary notwithstanding.

(h)          Investment of Account Funds. Funds on deposit in the Collection Account, the Distribution Account, any REO Account and any Escrow Account may be invested in Permitted Investments in accordance with the provisions set forth in Section 3.06. Any investment earnings or interest paid on funds deposited in the Collection Account, any REO Account and any Escrow Account (subject to Section 3.05(b)) shall accrue to the benefit of the Master Servicer and the Master Servicer shall be entitled to retain and withdraw such interest from each such account on a daily basis. Any investment earnings or interest paid on funds deposited in the Distribution Account, shall accrue to the benefit of the Trustee and the Trustee shall be entitled to retain and withdraw such interest from each such account on a daily basis.

(i)           Creation, Location and Subsequent Transfers of Accounts. Each account created pursuant to this Agreement must be an Eligible Account. On or prior to the Closing Date,

 



the Master Servicer and the Trustee shall give notice, to each other, the NIMS Insurer and the Depositor of the location of any account created by it pursuant to this Agreement. From time to time, the Master Servicer and the Trustee may each transfer any account created by it to a different depository institution provided that upon such transfer the written notice is provided to all other parties listed in the preceding sentence.

(j)           To help fight the funding of terrorism and money laundering activities, the Trustee will obtain, verify, and record information that identifies individuals or entities that establish a relationship or open an account with the Trustee. The Trustee will ask for the name, address, tax identification number and other information that will allow the Trustee to identify the individual or entity who is establishing the relationship or opening the account. The Trustee may also ask for formation documents such as articles of incorporation, an offering memorandum, or other identifying documents to be provided.

 

SECTION 3.05.

Permitted Withdrawals From the Collection Account, Escrow Account and Distribution Account.

(a)          Collection Account. The Master Servicer may, from time to time, withdraw from the Collection Account for the following purposes or as described in Section 4.03:

(i)           to remit to the Trustee for deposit in the Distribution Account the amounts required to be so remitted pursuant to Section 3.04(g) or permitted to be so remitted pursuant to the last paragraph of Section 3.04(g);

(ii)          subject to Section 3.12(c), to reimburse itself for (a) any unpaid Servicing Fees, (b) any unreimbursed Servicing Advances and (c) any unreimbursed Advances, the Master Servicer’s right to reimburse itself pursuant to this subclause (ii) being limited to any Late Collections, Liquidation Proceeds, Subsequent Recoveries and Insurance Proceeds received on the related Mortgage Loan and any amounts received in respect of the rental of the related REO Property prior to an REO Disposition that represent payments of principal and/or interest respecting which any such advance was made;

(iii)        to reimburse itself for (a) any unpaid Servicing Fees to the extent not recoverable under Section 3.05(a)(ii) and (b) any unpaid Advances or Servicing Advances that have been deemed Nonrecoverable Advances or Nonrecoverable Servicing Advances;

 

(iv)

to pay to itself any Prepayment Interest Excess;

(v)          to reimburse itself for any amounts paid pursuant to Section 3.12(b) (and not otherwise previously reimbursed);

(vi)         to pay to itself as servicing compensation any interest earned on funds in the Collection Account;

(vii)       subject to Section 4.03(b), to reimburse the Master Servicer in respect of any unreimbursed Advances to the extent of funds held in the Collection Account for

 



future distribution that were not included in Available Funds for the preceding Distribution Date;

(viii)      to reimburse the Master Servicer or the Depositor for expenses incurred by or reimbursable to the Master Servicer or the Depositor, as the case may be, pursuant to Section 6.03;

(ix)         to remit to the Trustee any amounts that the Trustee is permitted to be paid or reimbursed from the assets of the Trust Fund pursuant to the terms of this Agreement, including the terms of Section 7.02(a) and Section 8.05 of this Agreement;

(x)          to reimburse the NIMS Insurer, the Master Servicer (if the Master Servicer is not an Affiliate of the Seller) or the Trustee, as the case may be, for enforcement expenses reasonably incurred in respect of the breach or defect giving rise to the purchase obligation under Section 2.03 of this Agreement that were included in the Purchase Price of the Mortgage Loan, including any expenses arising out of the enforcement of the purchase obligation;

(xi)         to pay to the Master Servicer, the Depositor or the Seller, as the case may be, with respect to each Mortgage Loan that has previously been purchased or replaced pursuant to Section 2.03 or Section 3.16(a) all amounts received thereon subsequent to the date of purchase or substitution, as the case may be;

(xii)       to transfer funds in the Collection Account maintained at a particular depository to the Collection Account maintained at a different depository, pursuant to Section 3.04(i); and

(xiii)      to clear and terminate the Collection Account upon the termination of this Agreement.

On each Business Day as of the commencement of which the balance on deposit in the Collection Account exceeds $75,000 following any withdrawals pursuant to the next succeeding sentence, the amount of such excess shall be remitted to the Trustee, but only if the Collection Account constitutes an Eligible Account solely pursuant to clause (ii) of the definition of “Eligible Account.” If the balance on deposit in the Collection Account exceeds $75,000 as of the commencement of business on any Business Day and the Collection Account constitutes an Eligible Account solely pursuant to clause (ii) of the definition of “Eligible Account,” the Master Servicer shall, on or before 3:00 p.m. New York time on such Business Day, withdraw from the Collection Account any and all amounts payable or reimbursable to the Depositor, the Master Servicer, the Trustee or any Sub-Servicer pursuant to Section 3.05 and shall pay such amounts to the Persons entitled thereto.

The foregoing requirements for withdrawal from the Collection Account shall be exclusive. In the event the Master Servicer shall deposit in the Collection Account any amount not required to be deposited therein, it may at any time withdraw such amount from the Collection Account, any provision herein to the contrary notwithstanding.

 



 

The Master Servicer shall keep and maintain separate accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from the Collection Account, to the extent held by or on behalf of it, pursuant to subclauses (ii), (iii), (iv), (v), (vi), (vii), (viii) and (xi) above. The Master Servicer shall provide written notification to the Trustee and the NIMS Insurer on orction prior to the next succeeding Master Servicer Reporting Date, upon making any withdrawals from the ColleAccount pursuant to subclause (viii) above.

(b)          Escrow Account. The Master Servicer may, from time to time, withdraw from the Escrow Account for the following purposes:

(i)           to effect payments of ground rents, taxes, hazard insurance premiums and comparable items;

(ii)          to reimburse the Master Servicer for any Servicing Advance made by the Master Servicer with respect to a related Mortgage Loan but only from amounts received on the related Mortgage Loan which represent late payments or Late Collections of Escrow Payments thereunder;

(iii)        to refund to the Mortgagor any funds as may be determined to be overages;

(iv)         for transfer to the Collection Account in accordance with the terms of this Agreement;

 

(v)

for application to restoration or repair of the Mortgaged Property;

(vi)         to pay to the Master Servicer, or to the Mortgagor to the extent required by the related Mortgage Loan or Applicable Regulations, any interest paid on the funds deposited in the Escrow Account;

(vii)       to clear and terminate the Escrow Account on the termination of this Agreement; and

 

(viii)

to transfer to the Collection Account any Insurance Proceeds.

In the event the Master Servicer shall deposit in an Escrow Account any amount not required to be deposited therein, it may at any time withdraw such amount from such Escrow Account, any provision herein to the contrary notwithstanding. As part of its servicing duties, the Master Servicer shall pay to the Mortgagor interest on funds in the Escrow Account, to the extent required by the related Mortgage Loan or Applicable Regulations, and to the extent that interest earned on funds in the Escrow Account is insufficient, shall pay such interest from its own funds, without any reimbursement therefor. The Master Servicer may pay to itself any excess interest on funds in the Escrow Account, to the extent such action is in conformity with the Servicing Standard, is permitted by law and such amounts are not required to be paid to Mortgagors or used for any of the other purposes set forth above.

(c)          Distribution Account. The Trustee shall, from time to time, make withdrawals from the Distribution Account, for any of the following purposes:

 



 

(i)           to make distributions to the Swap Account in accordance with Section 4.10;

(ii)          to make distributions to Certificateholders in accordance with Section 4.01;

 

(iii)

to pay to itself amounts to which it is entitled pursuant to Section 8.05;

(iv)         to pay itself any interest income earned on funds deposited in the Distribution Account pursuant to Section 3.06;

 

(v)

to reimburse itself pursuant to Section 7.01 and Section 7.02(b);

 

 

(vi)

to pay any amounts in respect of taxes pursuant to Section 10.01(g)(iii);

(vii)       to reimburse the NIMS Insurer for Net Swap Payments paid by the NIMS Insurer to the Interest Rate Swap Provider pursuant to Section 4.10 (only to the extent the Trustee’s failure to make distributions in accordance with Section 3.05(c)(i) is not due to insufficient funds in the Distribution Account); and

 

(viii)

to clear and terminate the Distribution Account pursuant to Section 9.01.

 

SECTION 3.06.

Investment of Funds in the Collection Account, the Escrow Account, the REO Account and the Distribution Account.

(a)          The Master Servicer may direct any depository institution maintaining the Collection Account, the Escrow Account (subject to Section 3.05(b)), and the REO Account and the Trustee may direct any depository institution maintaining the Distribution Account (for purposes of this Section 3.06, each an “Investment Account”), to invest the funds in such Investment Account in one or more Permitted Investments bearing interest or sold at a discount, and maturing, unless payable on demand, (i) no later than the Business Day immediately preceding the date on which such funds are required to be withdrawn from such account pursuant to this Agreement, if a Person other than the Trustee is the obligor thereon, and (ii) no later than the date on which such funds are required to be withdrawn from such Investment Account pursuant to this Agreement, if the Trustee is the obligor thereon. All such Permitted Investments shall be held to maturity, unless payable on demand. Any investment of funds in an Investment Account shall be made in the name of the Trustee (in its capacity as such) or in the name of a nominee of the Trustee. The Trustee shall be entitled to sole possession (except with respect to investment direction of funds held in the Collection Account, the Escrow Account, and the REO Account) over each such investment and (except with respect to the income on funds held in the Collection Account, the Escrow Account and the REO Account) the income thereon, and any certificate or other instrument evidencing any such investment shall be delivered directly to the Trustee or its agent, together with any document of transfer necessary to transfer title to such investment to the Trustee or its nominee. In the event amounts on deposit in an Investment Account are at any time invested in a Permitted Investment payable on demand, the Trustee shall:

 



 

(i)           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

(ii)          demand payment of all amounts due thereunder promptly upon determination by a Responsible Officer of the Trustee that such Permitted Investment would not constitute a Permitted Investment in respect of funds thereafter on deposit in the Investment Account.

(b)          All income in the nature of interest from the investment of funds in the Collection Account, the Escrow Account (subject to Section 3.05(b)) and the REO Account shall be for the benefit of the Master Servicer as compensation for the Master Servicer’s services pursuant to this Agreement. The Master Servicer shall deposit in the Collection Account, the Escrow Account, and the REO Account , as applicable, from its own funds the amount of any loss incurred in respect of any such Permitted Investment made with funds in such account immediately upon realization of such loss.

(c)          All income in the nature of interest or earnings from the investment of funds in the Distribution Account shall be for the benefit of the Trustee as compensation for the Trustee’s services pursuant to this Agreement. The Trustee shall deposit in the Distribution Account from its own funds the amount of any loss incurred on Permitted Investments in the Distribution Account.

(d)          Funds on deposit in the Net WAC Rate Carryover Reserve Account may be invested in Permitted Investments in accordance with Section 4.11 and any investment earnings or interest paid shall accrue to the benefit of the party designated in such section and the party so designated shall deposit in the related account from its own funds the amount of any loss incurred on Permitted Investments in such account.

(e)          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 Trustee may and, subject to Section 8.01 and Section 8.02(a)(v), upon the request of the NIMS Insurer or the Holders of Certificates representing more than 50% of the Voting Rights allocated to any Class of Certificates, shall take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate proceedings.

(f)           The Trustee or its Affiliates are permitted to receive compensation that could be deemed to be in the Trustee’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 Section 3.05.

 



 

 

SECTION 3.07.

Payment of Taxes, Insurance and Other Charges.

With respect to each Mortgage Loan, the Master Servicer shall maintain accurate records reflecting the status of ground rents, taxes and other charges which are or may become a lien upon the Mortgaged Property and the status of fire and hazard insurance coverage and, as to those Mortgage Loans subject to a voluntary escrow agreement, shall obtain, from time to time, all bills for the payment of such charges (including renewal premiums) and shall effect payment thereof prior to the applicable penalty or termination date and at a time appropriate for securing maximum discounts allowable, employing for such purpose deposits of the Mortgagor in the Escrow Account which shall have been estimated and accumulated by the Master Servicer in amounts sufficient for such purposes, as allowed under the terms of the Mortgage or Applicable Regulations. The Master Servicer assumes full responsibility for the timely payment of all such bills and shall effect timely payments of all such bills irrespective of the Mortgagor’s faithful performance in the payment of same or the making of the Escrow Payments and shall make Servicing Advances from its own funds to effect such payments. To the extent that the Mortgage does not provide for Escrow Payments, the Master Servicer shall use reasonable efforts consistent with the Servicing Standard to determine that any such payments are made by the Mortgagor at the time they first become due and shall ensure that the Mortgaged Property is not lost to a tax lien as a result of nonpayment and that such Mortgaged Property is not left uninsured.

 

SECTION 3.08.

Maintenance of Hazard Insurance.

The Master Servicer shall cause to be maintained for each Mortgage Loan fire insurance with extended coverage on the related Mortgaged Property in an amount which is at least equal to the least of (i) the current Stated 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. The Master Servicer shall also cause to be maintained fire insurance with extended coverage on each REO Property 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 Stated Principal Balance of the related Mortgage Loan, plus accrued interest at the Mortgage Rate and related Servicing Advances (each measured at the time it became an REO Property). The Master Servicer shall 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 the Master 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 the Master 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 Collection Account, subject to withdrawal pursuant to Section 3.05, if received in respect of a Mortgage Loan, or in the REO Account, subject to withdrawal pursuant to Section 3.13, if received in respect of an REO Property. Any cost incurred by the Master Servicer in maintaining any such insurance shall not, for the purpose of calculating distributions to Certificateholders, be added to the unpaid Stated 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 such 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, the Master Servicer shall 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 unpaid Stated Principal Balance of the related Mortgage Loan; (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); and (iii) the maximum insurable value of the improvements which are part of the related Mortgaged Property.

 

SECTION 3.09.

Maintenance of Mortgage Blanket Insurance.

In the event that the Master Servicer shall obtain and maintain a blanket policy with an insurer having a General Policy Rating of “A:V” or better in Best’s Key Rating Guide (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 Section 3.08, it being understood and agreed that such policy may contain a deductible clause, in which case the Master 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 Section 3.08, and there shall have been one or more losses which would have been covered by such policy, deposit to the 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, the Master Servicer agrees to prepare and present, on behalf of itself, the Trustee and the Certificateholders, claims under any such blanket policy in a timely fashion in accordance with the terms of such policy.

 

SECTION 3.10.

Fidelity Bond; Errors and Omissions Insurance.

The Master 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 the Master Servicer’s obligations under this Agreement, which policy or policies shall be in such form and amount that would meet the requirements of Fannie Mae or Freddie Mac if it were the purchaser of the Mortgage Loans, unless the Master Servicer has obtained a waiver of such requirements from Fannie Mae or Freddie Mac. The Master Servicer shall also maintain a fidelity bond in the form and amount that would meet the requirements of Fannie Mae or Freddie Mac, unless the Master Servicer has obtained a waiver of such requirements from Fannie Mae or Freddie Mac. The Master Servicer shall provide the Trustee and the NIMS Insurer (upon reasonable request) with copies of any such insurance policies and fidelity bond. The Master Servicer shall be deemed to have complied with this provision if an Affiliate of the Master 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 the Master 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. The Master Servicer shall also

 



cause each Sub-Servicer to maintain a policy of insurance covering errors and omissions and a fidelity bond which would meet such requirements.

 

SECTION 3.11.

Enforcement of Due-On-Sale Clauses; Assumption Agreements.

The Master Servicer shall, 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 the Master Servicer shall not exercise any such rights if prohibited by law from doing so. If the Master 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, the Master Servicer is authorized to 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. The Master 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 the Master Servicer. In connection with any assumption or substitution, the Master 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. The Master Servicer shall not 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 the Master Servicer in respect of an assumption or substitution of liability agreement shall be retained by the Master 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 Monthly Payment) may be amended or modified, except as otherwise required pursuant to the terms thereof or otherwise permitted under Section 3.01. The Master Servicer shall notify the Trustee and any respective Custodian that any such substitution or assumption agreement has been completed by forwarding to the Trustee or to such Custodian, as the case may be, 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, the Master 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 the Master Servicer may be restricted by law from preventing, for any reason whatever. For purposes of this Section 3.11, 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 3.12.

Realization Upon Defaulted Mortgage Loans.

(a)          The Master Servicer shall, consistent with the Servicing Standard and the Loss Mitigation Action Plan, foreclose upon or otherwise comparably convert 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 3.02. The Master Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings; provided, however, that such costs and expenses shall be recoverable as Servicing Advances by the Master Servicer as contemplated in Section 3.05 and Section 3.13. The foregoing is subject to the provision that: (i) in any case in which Mortgaged Property shall have suffered damage from an Uninsured Cause, the Master Servicer shall not be required to expend its own funds toward the restoration of such property unless it shall determine in its discretion that such restoration shall increase the proceeds of liquidation of the related Mortgage Loan after reimbursement to itself for such expenses and (ii) with respect to any second lien Mortgage Loan, if, after such Mortgage Loan becomes 180 days or more delinquent and the Master Servicer, after making a Final Recovery Determination, determines that a net recovery that would eliminate or reduce a Realized Loss by more than an immaterial amount is not possible through foreclosure, such Mortgage Loan may be charged off and such Mortgage Loan shall be treated as a Liquidated Mortgage Loan giving rise to a Realized Loss.

(b)          Notwithstanding the foregoing provisions of this Section 3.12 or any other provision of this Agreement, with respect to any Mortgage Loan as to which the Master Servicer has received actual notice of, or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property, the Master Servicer shall not, on behalf of the Trustee, either (i) obtain title to such Mortgaged Property as a result of or in lieu of foreclosure or otherwise or (ii) otherwise acquire possession of, or take any other action with respect to, such Mortgaged Property, if, as a result of any such action, the Trustee, the Trust Fund or the Certificateholders would be considered to hold title to, to be a “mortgagee-in-possession” of, or to be an “owner” or “operator” of such Mortgaged Property within the meaning of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, or any comparable law, unless the Master Servicer has also previously determined, based on its reasonable judgment and a report prepared by a Person who regularly conducts environmental audits using customary industry standards, that:

(i)           such Mortgaged Property is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Trust Fund to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and

(ii)          there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous substances, hazardous materials, hazardous wastes, or petroleum-based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or regulation, or that if any such materials are present for which such

 



action could be required, that it would be in the best economic interest of the Trust Fund to take such actions with respect to the affected Mortgaged Property.

Notwithstanding the foregoing, if such environmental audit reveals, or if the Master Servicer has actual knowledge or notice, that such Mortgaged Property contains such toxic or hazardous wastes or substances, the Master Servicer shall not foreclose or accept a deed in lieu of foreclosure without the prior written consent of the NIMS Insurer.

The cost of the environmental audit report contemplated by this Section 3.12 shall be advanced by the Master Servicer, subject to the Master Servicer’s right to be reimbursed therefor from the Collection Account as provided in Section 3.05(a)(v), such right of reimbursement being prior to the rights of Certificateholders to receive any amount in the Collection Account received in respect of the affected Mortgage Loan or other Mortgage Loans.

If the Master Servicer determines, as described above, that it is in the best economic interest of the Trust Fund to take such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, or to take such action with respect to the containment, clean-up or remediation of hazardous substances, hazardous materials, hazardous wastes or petroleum-based materials affecting any such Mortgaged Property, then the Master Servicer shall take such action as it deems to be in the best economic interest of the Trust Fund; provided, however, that the Master Servicer shall not proceed with foreclosure or acceptance of a deed in lieu of foreclosure if the estimated costs of the environmental clean up, as estimated in the environmental audit report, together with the Advances made by the Master Servicer and the estimated costs of foreclosure or acceptance of a deed in lieu of foreclosure exceeds the estimated value of the Mortgaged Property. The cost of any such compliance, containment, cleanup or remediation shall be advanced by the Master Servicer, subject to the Master Servicer’s right to be reimbursed therefor from the Collection Account as provided in Section 3.05(a)(v), such right of reimbursement being prior to the rights of Certificateholders to receive any amount in the Collection Account received in respect of the affected Mortgage Loan or other Mortgage Loans.

(c)          Proceeds received in connection with any Final Recovery Determination, as well as any recovery resulting from a partial collection of Insurance Proceeds, Subsequent Recoveries or Liquidation Proceeds, in respect of any Mortgage Loan, shall be applied in the following order of priority: first, to reimburse the Master Servicer or any Sub-Servicer for any related unreimbursed Servicing Advances and Advances, pursuant to Section 3.05(a)(ii); second, to accrued and unpaid interest on the Mortgage Loan, to the date of the Final Recovery Determination, or to the Due Date prior to the Distribution Date on which such amounts are to be distributed if not in connection with a Final Recovery Determination; and third, as a recovery of principal of the Mortgage Loan. If the amount of the recovery so allocated to interest is less than the full amount of accrued and unpaid interest due on such Mortgage Loan, the amount of such recovery shall be allocated by the Master Servicer as follows: first, to unpaid Servicing Fees; and second, to the balance of the interest then due and owing. The portion of the recovery so allocated to unpaid Servicing Fees shall be reimbursed to the Master Servicer or any Sub-Servicer pursuant to Section 3.05(a)(ii).

 



 

 

SECTION 3.13.

Title, Management and Disposition of REO Property.

(a)          The deed or certificate of sale of any REO Property shall be taken in the name of the Trustee, or its nominee, in trust for the benefit of the Certificateholders. Pursuant to the power of attorney granted in Section 3.01, the Master Servicer is hereby authorized to transfer the title of any REO Property taken in the name of the Trustee to a third party purchaser pursuant to this Section 3.13 without further documentation of its authority as attorney-in-fact for the Trustee on behalf of the Trust. The Master Servicer, on behalf of the Trust Fund (and on behalf of the Trustee for the benefit of the Certificateholders), shall either sell any REO Property before the close of the third taxable year after the year the Trust Fund acquires ownership of such REO Property for purposes of Section 860G(a)(8) of the Code or request from the Internal Revenue Service, no later than 60 days before the day on which the three-year grace period would otherwise expire, an extension of the three-year grace period, unless the Master Servicer shall have delivered to the Trustee, the NIMS Insurer and the Depositor an Opinion of Counsel, addressed to the Trustee, the NIMS Insurer and the Depositor, to the effect that the holding by the Trust Fund of such REO Property subsequent to three years after its acquisition shall not result in the imposition on any Trust REMIC of taxes on “prohibited transactions” thereof, as defined in Section 860F of the Code, or cause any Trust REMIC to fail to qualify as a REMIC under Federal law at any time that any Certificates are outstanding. The Master Servicer shall manage, conserve, protect and operate each REO Property for the benefit of the Certificateholders and solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code or result in the receipt by any Trust REMIC of any “income from non-permitted assets” within the meaning of Section 860F(a)(2)(B) of the Code, or any “net income from foreclosure property” which is subject to taxation under the REMIC Provisions.

(b)          The Master 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 establish and maintain with respect to REO Properties an account held in trust for the Trustee for the benefit of the Certificateholders (the “REO Account”), which shall be an Eligible Account. The Master Servicer shall be permitted to allow the Collection Account to serve as the REO Account, subject to separate ledgers for each REO Property. The Master Servicer shall be entitled to retain or withdraw any interest income paid on funds deposited in the REO Account.

(c)          The Master Servicer shall have full power and authority, subject only to the specific requirements and prohibitions of this Agreement (including the Loss Mitigation Action Plan), to do any and all things in connection with any REO Property as are consistent with the manner in which the Master Servicer manages and operates similar property owned by the Master Servicer or any of its Affiliates, all on such terms and for such period as the Master Servicer deems to be in the best interests of Certificateholders and appropriate to effect the prompt disposition and sale of the REO Property. In connection therewith, the Master 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 the Master Servicer’s receipt thereof, and shall thereafter deposit in the

 



REO Account, in no event more than two Business Days after the deposit of such funds into the clearing account, all revenues received by it with respect to an REO Property and shall withdraw therefrom funds necessary for the proper operation, management and maintenance of such REO Property including, without limitation:

 

(i)

all insurance premiums due and payable in respect of such REO Property;

(ii)          all real estate taxes and assessments in respect of such REO Property that may result in the imposition of a lien thereon; and

 

(iii)

all costs and expenses necessary to maintain such REO Property.

To the extent that amounts on deposit in the REO Account with respect to an REO Property are insufficient for the purposes set forth in clauses (i) through (iii) above with respect to such REO Property, the Master Servicer shall advance from its own funds such amount as is necessary for such purposes if, but only if, the Master Servicer would make such advances if the Master Servicer owned the REO Property and if in the Master Servicer’s judgment, the payment of such amounts shall be recoverable from the rental or sale of the REO Property.

Notwithstanding the Master Servicer’s obligation to the Certificateholders to manage and operate (including the collection of rents from existing tenants and management of any leases acquired with the REO property to the extent applicable) the REO Property from the date of acquisition until the date of sale, neither the Master Servicer nor the Trustee shall knowingly:

(i)           authorize the Trust Fund to enter into, renew or extend any New Lease with respect to any REO Property, if the New Lease by its terms shall give rise to any income that does not constitute Rents from Real Property;

(ii)          authorize any amount to be received or accrued under any New Lease other than amounts that shall constitute Rents from Real Property;

(iii)         authorize any construction on any REO Property, other than the completion of a building or other improvement thereon, and then only if more than ten percent of the construction of such building or other improvement was completed before default on the related Mortgage Loan became imminent, all within the meaning of Section 856(e)(4)(B) of the Code; or

(iv)         authorize any Person to Directly Operate any REO Property on any date more than 90 days after its date of acquisition by the Trust Fund;

unless, in any such case, the Master Servicer has obtained an Opinion of Counsel, provided to the Trustee and the NIMS Insurer, to the effect that such action shall not cause such REO Property to fail to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code at any time that it is held by the Trust Fund, and (B) the Master Servicer has received written notice from the Trustee that it has received written consent from the NIMS Insurer (which consent shall not be unreasonably withheld) that the specific action may be taken.

 



 

The Master Servicer may contract with any Independent Contractor for the operation and management of any REO Property, provided that:

(i)           the terms and conditions of any such contract shall not be inconsistent herewith;

(ii)          any such contract shall require, or shall be administered to require, that the Independent Contractor pay all costs and expenses incurred in connection with the operation and management of such REO Property, including those listed above and remit all related revenues (net of such costs and expenses) to the Master Servicer as soon as practicable, but in no event later than thirty days following the receipt thereof by such Independent Contractor;

(iii)        none of the provisions of this Section 3.13(c) relating to any such contract or to actions taken through any such Independent Contractor shall be deemed to relieve the Master Servicer of any of its duties and obligations to the Trustee on behalf of the Certificateholders with respect to the operation and management of any such REO Property; and

(iv)         the Master Servicer shall be obligated with respect thereto to the same extent as if it alone were performing all duties and obligations in connection with the operation and management of such REO Property.

The Master Servicer shall be entitled to enter into any agreement with any Independent Contractor performing services for it related to its duties and obligations hereunder for indemnification of the Master Servicer by such Independent Contractor, and nothing in this Agreement shall be deemed to limit or modify such indemnification. The Master Servicer shall be solely liable for all fees owed by it to any such Independent Contractor, irrespective of whether the Master Servicer’s compensation pursuant to Section 3.18 is sufficient to pay such fees. The Master Servicer shall not engage an Independent Contractor to engage in any activities that the Master Servicer would not be permitted to engage in itself in accordance with the other provisions of this Agreement (including the Loss Mitigation Action Plan).

(d)          In addition to the withdrawals permitted under Section 3.13(c), the Master Servicer may from time to time make withdrawals from the REO Account for any REO Property: (i) to pay itself or any Sub-Servicer unpaid Servicing Fees in respect of the related Mortgage Loan; and (ii) to reimburse itself or any Sub-Servicer for unreimbursed Servicing Advances and Advances made in respect of such REO Property or the related Mortgage Loan. On the Master Servicer Remittance Date, the Master Servicer shall withdraw from each REO Account maintained by it and deposit into the Distribution Account in accordance with Section 3.04(g)(ii), for distribution on the related Distribution Date in accordance with Section 4.01, the income from the related REO Property received during the prior calendar month, net of any withdrawals made pursuant to Section 3.13(c) or this Section 3.13(d).

(e)          Subject to the time constraints set forth in Section 3.13(a) (including the constraint that the Master Servicer hold and manage each REO Property “solely for the purpose of its prompt disposition”) each REO disposition shall be carried out by the Master Servicer at such price and upon such terms and conditions as shall be in conformity with the requirements of

 



the Loss Mitigation Action Plan and as shall be normal and usual in its general servicing activities for similar properties.

(f)           The proceeds from the REO Disposition, net of any amount required by law to be remitted to the Mortgagor under the related Mortgage Loan and net of any payment or reimbursement to the Master Servicer or any Sub-Servicer as provided above, shall be deposited in the Distribution Account in accordance with Section 3.04(g)(ii) on the Master Servicer Remittance Date in the month following the receipt thereof for distribution on the related Distribution Date in accordance with Section 4.01. Any REO Disposition shall be for cash only (unless changes in the REMIC Provisions made subsequent to the Startup Day allow a sale for other consideration).

 

SECTION 3.14.

[Reserved].

 

SECTION 3.15.

Reports of Foreclosure and Abandonment of Mortgaged Properties.

The Master Servicer shall file information returns with respect to the receipt of mortgage interest received in a trade or business, reports of foreclosures and abandonments of any Mortgaged Property and cancellation of indebtedness income with respect to any Mortgaged Property as required by Sections 6050H, 6050J and 6050P of the Code, respectively. Such reports shall be in form and substance sufficient to meet the reporting requirements imposed by such Sections 6050H, 6050J and 6050P of the Code.

 

SECTION 3.16.

Optional Purchase of Defaulted Mortgage Loans.

(a)            (i) The NIMS Insurer may, at its option, purchase a Mortgage Loan which has become 90 or more days delinquent or for which the Master Servicer has accepted a deed in lieu of foreclosure. Prior to purchase pursuant to this Section 3.16(a)(i), the Master Servicer shall be required to continue to make Advances pursuant to Section 4.03. The NIMS Insurer shall not use any procedure in selecting Mortgage Loans to be repurchased which is materially adverse to the interests of the Certificateholders. The NIMS Insurer shall purchase such delinquent Mortgage Loan at a price equal to the Purchase Price of such Mortgage Loan. Any such purchase of a Mortgage Loan pursuant to this Section 3.16(a)(i) shall be accomplished by remittance to the Master Servicer for deposit in the Collection Account of the amount of the Purchase Price. The Trustee shall effectuate the conveyance of such delinquent Mortgage Loan to the NIMS Insurer to the extent necessary, as requested, and the Trustee shall promptly deliver all documentation to the NIMS Insurer.

(i)           During the first full calendar month (but excluding the last Business Day thereof) following a Mortgage Loan or related REO Property becoming 90 days or more delinquent, the Master Servicer shall have the option, but not the obligation to purchase from the Trust Fund any such Mortgage Loan or related REO Property that is then still 90 days or more delinquent, which the Master Servicer determines in good faith shall otherwise become subject to foreclosure proceedings (evidence of such determination to be delivered in writing to the Trustee prior to purchase), at a price equal to the Purchase Price. The Purchase Price for any Mortgage Loan or related REO Property purchased

 



hereunder shall be deposited in the Collection Account, and the Trustee, upon written certification of such deposit, shall release or cause to be released to the Master Servicer the related Mortgage File and the Trustee shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as the Master Servicer shall furnish and as shall be necessary to vest in the Master Servicer title to any Mortgage Loan or related REO Property released pursuant hereto.

(b)          If with respect to any delinquent Mortgage Loan or related REO Property, the option of the Master Servicer set forth in the preceding paragraph shall have arisen but the Master Servicer shall have failed to exercise such option on or before the Business Day preceding the last Business Day of the calendar month following the calendar month during which such Mortgage Loan or related REO Property first became 90 days or more delinquent, then such option shall automatically expire; provided, however, that if any such Mortgage Loan or related REO Property shall cease to be 90 days or more delinquent but then subsequently shall again become 90 days or more delinquent, then the Master Servicer shall be entitled to another repurchase option with respect to such Mortgage Loan or REO Property as provided in the preceding paragraph.

 

SECTION 3.17.

Trustee to Cooperate; Release of Mortgage Files.

(a)          Upon the payment in full of any Mortgage Loan, or the receipt by the Master Servicer of a notification that payment in full shall be escrowed in a manner customary for such purposes, the Master Servicer shall promptly notify the Trustee and any related Custodian by a certification in the form of Exhibit E or such other form supplied by the Master Servicer provided that it does not differ from the substantive content of Exhibit E (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 Collection Account pursuant to Section 3.04(b) have been or shall be so deposited) of a Servicing Officer and shall request delivery to it of the Mortgage File. Upon receipt of such certification and request, the Trustee or such Custodian, as the case may be, shall promptly release (and in no event more than three (3) Business Days thereafter) the related Mortgage File to the Master Servicer. No expenses incurred in connection with any instrument of satisfaction or deed of reconveyance shall be chargeable to the Collection Account or the Distribution Account.

(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 Trustee and any related Custodian shall, upon request of the Master Servicer and delivery to the Trustee or such Custodian, as the case may be, of a Request for Release in the form of Exhibit E or such other form supplied by the Master Servicer provided that it does not differ from the substantive content of Exhibit E, release the related Mortgage File to the Master Servicer, and the Trustee shall, at the direction of the Master Servicer, execute such documents as shall be necessary to the prosecution of any such proceedings and the Master Servicer shall retain such Mortgage File in trust for the benefit of the Certificateholders. Such Request for Release shall obligate the Master Servicer to return each and every document previously requested from the Mortgage File to the Trustee or to such Custodian when the need therefor by the Master Servicer no longer exists, unless the Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been deposited in the

 



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 the Master Servicer has delivered to the Trustee 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 liquidated and that all amounts received or to be received in connection with such liquidation that are required to be deposited into the Collection Account have been so deposited, or that such Mortgage Loan has become an REO Property, upon request, a copy of the Request for Release shall be released by the Trustee or such Custodian to the Master Servicer.

(c)          Upon written certification of a Servicing Officer, the Trustee shall execute and deliver to the Master Servicer 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. 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 shall 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.

(d)          The Trustee and the Master Servicer may mutually agree on policies and procedures (commercially reasonable in nature) to allow the submission of any and all requests for the release of a Mortgage File electronically with a digital signature or other identifier to designate the Servicing Officer of the Master Servicer requesting such collateral.

 

SECTION 3.18.

Servicing Compensation.

As compensation for the activities of the Master Servicer hereunder, the Master Servicer shall be entitled to the Servicing Fee with respect to each Mortgage Loan payable solely from payments of interest in respect of such Mortgage Loan, subject to Section 4.03(e). In addition, the Master Servicer shall be entitled to recover unpaid Servicing Fees out of Insurance Proceeds, Subsequent Recoveries or Liquidation Proceeds to the extent permitted by Section 3.05(a)(ii), out of general funds in the Collection Account to the extent permitted by Section 3.05(a) and out of amounts derived from the operation and sale of an REO Property to the extent permitted by Section 3.13. 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 the Master Servicer’s responsibilities and obligations under this Agreement.

Additional servicing compensation in the form of assumption fees, late payment charges, insufficient funds fees, reconveyance fees and other similar fees and charges (other than Prepayment Charges) shall be retained by the Master Servicer only to the extent such amounts, fees or charges are received by the Master Servicer. The Master Servicer shall also be entitled pursuant to Section 3.05(a)(vi) to withdraw from the Collection Account, pursuant to Section

 



3.04(h) to withdraw from any Escrow Account and pursuant to Section 3.13(b) to withdraw from any REO Account, as additional servicing compensation, interest or other income earned on deposits therein, subject to Section 3.06. The Master Servicer shall be required to pay all expenses incurred by it in connection with its servicing activities hereunder (including premiums for the insurance required by Section 3.08, Section 3.09 and Section 3.10, to the extent such premiums are not paid by the related Mortgagors or by a Sub-Servicer, servicing compensation of each Sub-Servicer, and to the extent provided in Section 8.05, the fees and expenses of the Trustee) and shall not be entitled to reimbursement therefor except as specifically provided herein.

 

SECTION 3.19.

[Reserved]

 

SECTION 3.20.

Assessments of Compliance and Attestation Reports.

The Master Servicer shall service and administer the Mortgage Loans in accordance with all applicable requirements of the Servicing Criteria (as set forth in Exhibit M hereto). Pursuant to Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB, the Master Servicer shall deliver to the Trustee on or before March 20th of each calendar year beginning in 2007, a report regarding the Master Servicer’s assessment of compliance (an “Assessment of Compliance”) with the Servicing Criteria during the preceding calendar year. The Assessment of Compliance shall contain the following:

(a)          A statement by such officer of its responsibility for assessing compliance with the Servicing Criteria applicable to the Master Servicer;

(b)          A statement by such officer that such officer used the Servicing Criteria, and which will also be attached to the Assessment of Compliance, to assess compliance with the Servicing Criteria applicable to the Master Servicer;

(c)          An assessment by such officer of the Master Servicer’s compliance with the applicable Servicing Criteria for the period consisting of the preceding calendar year, including disclosure of any material instance of noncompliance with respect thereto during such period, which assessment shall be based on the activities it performs with respect to asset-backed securities transactions taken as a whole involving the Master Servicer, that are backed by the same asset type as the Mortgage Loans;

(d)          A statement that a registered public accounting firm has issued an Attestation Report on the Master Servicer’s Assessment of Compliance for the period consisting of the preceding calendar year; and

(e)          A statement as to which of the Servicing Criteria, if any, are not applicable to the Master Servicer, which statement shall be based on the activities it performs with respect to asset-backed securities transactions taken as a whole involving the Master Servicer, that are backed by the same asset type as the Mortgage Loans.

Such report at a minimum shall address each of the Servicing Criteria specified on Exhibit M hereto which are indicated as applicable to the Master Servicer.

 



 

On or before March 15th of each calendar year beginning in 2007, the Master Servicer shall furnish to the Trustee a report (an “Attestation Report”) by a registered public accounting firm that attests to, and reports on, the Assessment of Compliance made by the Master Servicer, as required by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122(b) of Regulation AB, which Attestation Report must be made in accordance with standards for attestation reports issued or adopted by the Public Company Accounting Oversight Board.

The Master Servicer shall cause any Sub-Servicer, and each subcontractor determined by the Master Servicer to be “participating in the servicing function” within the meaning of Item 1122 of Regulation AB, to deliver to the Trustee and the Depositor an Assessment of Compliance and Attestation Report as and when provided above.

Such Assessment of Compliance, as to any Sub-Servicer, shall at a minimum address each of the Servicing Criteria specified on Exhibit M hereto which are indicated as applicable to any “primary servicer.” Notwithstanding the foregoing, as to any subcontractor, an Assessment of Compliance is not required to be delivered unless it is required as part of a Form 10-K with respect to the Trust Fund.

The Master Servicer shall deliver any Assessment of Compliance or Attestation Report by March 20th of such year.

Failure of the Master Servicer to timely comply with this Section 3.20 shall be deemed a Master Servicer Event of Termination, and the Trustee may, in addition to whatever rights the Trustee may have under this Agreement and at law or equity or to damages, including injunctive relief and specific performance, upon notice immediately terminate all the rights and obligations of the Master Servicer under this Agreement and in and to the Mortgage Loans and the proceeds thereof without compensating the Master Servicer for the same. This paragraph shall supersede any other provision in this Agreement or any other agreement to the contrary.

The Trustee shall also provide an Assessment of Compliance and Attestation Report, as and when provided above, which shall address each of the Servicing Criteria specified on Exhibit M hereto which are indicated as applicable to the “trustee”.

 

SECTION 3.21.

Access to Certain Documentation.

The Master Servicer shall provide to the Office of Thrift Supervision, the FDIC, and any other federal or state banking or insurance regulatory authority that may exercise authority over any Certificateholder or Certificate Owner, access to the documentation regarding the Mortgage Loans required by applicable laws and regulations. Such access shall be afforded without charge, but only upon reasonable request and during normal business hours at the offices of the Master Servicer designated by it. In addition, access to the documentation regarding the Mortgage Loans shall be provided to any Certificateholder or Certificate Owner, the Trustee, the NIMS Insurer and to any Person identified to the Master Servicer as a prospective transferee of a Certificate, upon reasonable request during normal business hours at the offices of the Master Servicer designated by it at the expense of the Person requesting such access. In each case, access to any documentation regarding the Mortgage Loans may be conditioned upon the requesting party’s acknowledgment in writing of a confidentiality agreement regarding any information that is required to remain confidential under the Gramm-Leach-Bliley Act of 1999.

 



 

 

SECTION 3.22.

[Reserved].

 

SECTION 3.23.

Advance Facility.

(a)          The Master Servicer and/or the Trustee on behalf of the Trust Fund, in either case, with the consent of the NIMS Insurer and the Master Servicer in the case of the Trustee, is hereby authorized to enter into a facility (an “Advance Facility”) with any Person (an “Advancing Person”) (1) under which the Master Servicer sells, assigns or pledges to the Advancing person the Master Servicer’s rights under this Agreement to be reimbursed for any Advances and/or Servicing Advances or (2) which provides that the Advancing Person may fund Advances and/or Servicing Advances to the Trust Fund under this Agreement, although no such facility shall reduce or otherwise affect the Master Servicer’s obligation to fund such Advances and/or Servicing Advances. If the Master Servicer enters into such an Advance Facility pursuant to this Section 3.23, upon reasonable request of the Advancing Person, the Trustee shall execute a letter of acknowledgment, confirming its receipt of notice of the existence of such Advance Facility. To the extent that an Advancing Person funds any Advance or any Servicing Advance or is assigned the right to be reimbursed for any Advance or Servicing Advance and provides the Trustee with notice acknowledged by the Master Servicer that such Advancing Person is entitled to reimbursement directly from the Trustee pursuant to the terms of the Advance Facility, such Advancing Person shall be entitled to receive reimbursement pursuant to this Agreement for such amount to the extent provided in Section 3.23(b). Such notice from the Advancing Person must specify the amount of the reimbursement, the Section of this Agreement that permits the applicable Advance or Servicing Advance to be reimbursed and the section(s) of the Advance Facility that entitle the Advancing Person to request reimbursement from the Trustee, rather than the Master Servicer, and include the Master Servicer’s acknowledgment thereto or proof of an Event of Default under the Advance Facility. The Trustee shall have no duty or liability with respect to any calculation of any reimbursement to be paid to an Advancing Person and shall be entitled to rely without independent investigation on the Advancing Person’s notice provided pursuant to this Section 3.23. An Advancing Person whose obligations hereunder are limited to the funding of Advances and/or Servicing Advances shall not be required to meet the qualifications of a Master Servicer or a Sub-Servicer pursuant to Section 6.06 hereof and shall not be deemed to be a Sub-Servicer under this Agreement. If the terms of a facility proposed to be entered into with an Advancing Person by the Trust Fund would not materially and adversely affect the interests of any Certificateholder, then the NIMS Insurer shall not withhold its consent to the Trust Fund’s entering such facility.

(b)          If, pursuant to the terms of the Advance Facility, an Advancing Person is entitled to reimbursement directly from the Trustee, then the Master Servicer shall not reimburse itself therefor under Section 3.05(a)(ii), Section 3.05(a)(iii) or Section 3.05(a)(v) prior to the remittance to the Trust Fund, but instead the Master Servicer shall include such amounts in the applicable remittance to the Trustee made pursuant to Section 3.04(g) to the extent of amounts on deposit in the Collection Account on the related Master Servicer Remittance Date. The Trustee is hereby authorized to pay to the Advancing Person reimbursements for Advances and Servicing Advances from the Distribution Account, to the extent permitted under the terms of the Advance Facility, to the same extent the Master Servicer would have been permitted to reimburse itself for such Advances and/or Servicing Advances in accordance with Section 3.05(a)(ii), Section 3.05(a)(iii) or Section 3.05(a)(v), as the case may be, had the Master Servicer

 



itself funded such Advance or Servicing Advance. The Trustee is hereby authorized to pay directly to the Advancing Person such portion of the Servicing Fee as the parties to any Advance Facility agree to in writing delivered to the Trustee. An Advance Facility may provide that the Master Servicer will otherwise cause the remittance of Advance and/or Servicing Advance reimbursement amounts to the Advancing Person, in which case the foregoing sentences in this Section 3.23(b) shall not apply.

(c)          All Advances and Servicing Advances made pursuant to the terms of this Agreement shall be deemed made and shall be reimbursed on a “first in first out” (FIFO) basis.

(d)          In the event the Master Servicer is terminated pursuant to Section 7.01, the Advancing Person shall succeed to the terminated Master Servicer’s right of reimbursement set forth in Section 7.02(c) to the extent of such Advancing Person’s financing of or receipt of assignment or pledge of the right to be reimbursed for Advances or Servicing Advances hereunder then remaining unreimbursed.

(e)          None of the Trust Fund, any party to this Agreement or any other Person shall have any right or claim (including without limitation any right of offset or recoupment) to any amounts allocable under this Agreement to the reimbursement of Advances or Servicing Advances that have been assigned, conveyed or pledged to an Advancing Person, or that relate to Advances or Servicing Advances that were funded by an Advancing Person.

(f)           Any amendment to this Section 3.23 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 3.23, including amendments to add provisions relating to a successor master servicer, may be entered into by the Trustee and the Master Servicer without the consent of any Certificateholder but with the consent of the NIMS Insurer and written confirmation from each Rating Agency that the amendment shall not result in the reduction or withdrawal of the then-current ratings of any outstanding Class of Certificates or any other notes secured by collateral which includes all or a portion of the Class CE Certificates, the Class P Certificates and/or the Residual Certificates, notwithstanding anything to the contrary in this Agreement.

 



 

ARTICLE IV

 

PAYMENTS TO CERTIFICATEHOLDERS

 

SECTION 4.01.

Distributions.

(a)          On each Distribution Date, the following amounts, in the following order of priority, shall be distributed by REMIC I to REMIC II on account of the REMIC I Regular Interests and distributed to the holders of the Class R Certificates (in respect of the Class R-I Interest), as the case may be:

With respect to the Group I Mortgage Loans:

(1)          to Holders of REMIC I Regular Interest I, and each of REMIC I Regular Interest I-1-A through I-49-B, pro rata, in an amount equal to (A) Uncertificated Interest for such REMIC I Regular Interests for such Distribution Date, plus (B) any amounts payable in respect thereof remaining unpaid from previous Distribution Dates.

(2)          to the extent of amounts remaining after the distributions made pursuant to clause (i) above, payments of principal shall be allocated as follows: first, to REMIC I Regular interests I-1-A through I-49-B starting with the lowest numerical denomination until the Uncertificated Balance of each such REMIC I Regular Interest is reduced to zero, provided that, for REMIC I Regular Interests with the same numerical denomination, such payments of principal shall be allocated pro rata between such REMIC I Regular Interests, and second, to the extent of the product of (a) any Overcollateralization Reduction Amounts multiplied by (b) a fraction, the numerator of which is the aggregate Scheduled Principal Balance of the Group I Mortgage Loans and the denominator of which is the aggregate Scheduled Principal Balance of the Mortgage Loans, to REMIC I Regular Interest I until the Uncertificated Balance of such REMIC I Regular Interest is reduced to zero; and

(3)          to the Holders of REMIC I Regular Interest P, (A) all amounts representing Prepayment Charges in respect of the Group I Mortgage Loans received during the related Prepayment Period and (B) on the Distribution Date immediately following the expiration of the latest Prepayment Charge as identified on the Prepayment Charge Schedule or any Distribution Date thereafter until $100 has been distributed pursuant to this clause.

With respect to the Group II Mortgage Loans:

(1)          to Holders of REMIC I Regular Interest II and each of REMIC I Regular Interest II-1-A through II-49-B, pro rata, in an amount equal to (A) Uncertificated Interest for such REMIC I Regular Interests for such Distribution Date, plus (B) any amounts payable in respect thereof remaining unpaid from previous Distribution Dates.

to the extent of amounts remaining after the distributions made pursuant to clause (i) above, payments of principal shall be allocated as follows: first, to REMIC I Regular

 



Interest II-1-A through II-49-B starting with the lowest numerical denomination until the Uncertificated Balance of each such REMIC I Regular Interest is reduced to zero, provided that, for REMIC I Regular Interests with the same numerical denomination, such payments of principal shall be allocated pro rata between such REMIC I Regular Interests, and second, to the extent of the product of (a) any Overcollateralization Reduction Amounts multiplied by (b) a fraction, the numerator of which is the aggregate Scheduled Principal Balance of the Group I Mortgage Loans and the denominator of which is the aggregate Scheduled Principal Balance of the Mortgage Loans, to REMIC I Regular Interest I until the Uncertificated Balance of such REMIC I Regular Interest is reduced to zero.

On each Distribution Date, all amounts representing Prepayment Charges in respect of the Mortgage Loans received during the related Prepayment Period shall be distributed by REMIC I to the Holders of REMIC I Regular Interest P. The payment of the foregoing amounts to the Holders of REMIC I Regular Interest P shall not reduce the Uncertificated Balance thereof.

(b)          On each Distribution Date, the following amounts, in the following order of priority, shall be distributed by REMIC I to REMIC II on account of the REMIC II Regular Interests and distributed to the Holders of the Class R Certificates (in respect of the Class R-II Interest), as the case may be:

(ii)          first, to the Holders of REMIC II Regular Interest II-IO, in an amount equal to (A) Uncertificated Interest for such REMIC II Regular Interest for such Distribution Date, plus (B) any amounts in respect thereof remaining unpaid from previous Distribution Dates and second, to the extent of the REMIC II Marker Allocation Percentage of the Available Funds remaining after the distributions pursuant to clause (i), to the Holders of REMIC II Regular Interest II-LTAA, REMIC II Regular Interest II-LTA1, REMIC II Regular Interest II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II Regular Interest II-LTA2C, REMIC II Regular Interest II-LTA2D, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9, REMIC II Regular Interest II-LTM10, REMIC II Regular Interest II-LTZZ, pro rata, in an amount equal to (A) the Uncertificated Interest for such Distribution Date, plus (B) any amounts in respect thereof remaining unpaid from previous Distribution Dates. Amounts payable as Uncertificated Interest in respect of REMIC II Regular Interest II-LTZZ shall be reduced and deferred when the REMIC II Overcollateralized Amount is less than the REMIC II Overcollateralization Target Amount, by the lesser of (x) the amount of such difference and (y) the Maximum II-LTZZ Uncertificated Interest Deferral Amount and such amount shall be payable to the Holders of REMIC II Regular Interest II-LTA1, REMIC II Regular Interest II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II Regular Interest II-LTA2C, REMIC II Regular Interest II-LTA2D, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II

 



Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9 and REMIC II Regular Interest II-LTM10 in the same proportion as the Overcollateralization Increase Amount is allocated to the Corresponding Certificates and the Uncertificated Principal Balance of the REMIC II Regular Interest II-LTZZ shall be increased by such amount;

(iii)        to the extent of the REMIC II Sub WAC Allocation Percentage of the Interest Funds remaining after the distribution pursuant to clause (i)(A) and (B), to the Holders of REMIC II Regular Interest II-LT1SUB, REMIC II Regular Interest II-LT1GRP, REMIC II Regular Interest II-LT2SUB, REMIC II Regular Interest II-LT2GRP and REMIC II Regular Interest II-LTXX, pro rata, in an amount equal to (A) the Uncertificated Interest for such Distribution Date, plus (B) any amounts in respect thereof remaining unpaid from previous Distribution Dates;

(iv)         to the Holders of REMIC II Regular Interests, in an amount equal to the remainder of the REMIC II Marker Allocation Percentage of the Available Funds for such Distribution Date after the distributions made pursuant to clause (i) and (ii) above, allocated as follows:

(a)          98.00% of such remainder (other than amounts payable under clause (c) below), to the Holders of REMIC II Regular Interest II-LTAA and REMIC II Regular Interest II-LTP, until the Uncertificated Balance of such REMIC II Regular Interest is reduced to zero, provided, however, that REMIC II Regular Interest II-LTP shall not be reduced until the Distribution Date immediately following the expiration of the latest Prepayment Charge as identified on the Prepayment Charge Schedule or any Distribution Date thereafter, at which point such amount shall be distributed to REMIC II Regular Interest II-LTP, until $100 has been distributed pursuant to this clause;

(b)          2.00% of such remainder (other than amounts payable under clause (c) below) first, to the Holders of REMIC II Regular Interest II-LTA1, REMIC II Regular Interest II-LTA2A, REMIC II Regular Interest II-LTA2B, REMIC II Regular Interest II-LTA2C, REMIC II Regular Interest II-LTA2D, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9 and REMIC II Regular Interest II-LTM10, 1.00% and in the same proportion as principal payments are allocated to the Corresponding Certificates, until the Uncertificated Balances of such REMIC II Regular Interests are reduced to zero and second, to the Holders of REMIC II Regular Interest II-LTZZ, until the Uncertificated Balance of such REMIC II Regular Interest is reduced to zero; and

(c)          any remaining amount to the Holders of the Class R Certificates (in respect of the Class R-III Interest);

provided, however, that (i) 98.00% and (ii) 2.00% of any principal payments that are attributable to an Overcollateralization Reduction Amount shall be allocated to the Holders of (i) REMIC II

 



Regular Interest II-LTAA and REMIC II Regular Interest II-LTP, in that order and (ii) REMIC II Regular Interest II-LTZZ, respectively; provided that REMIC II Regular Interest II-LTP shall not be reduced until the Distribution Date immediately following the expiration of the latest Prepayment Charge as identified on the Prepayment Charge Schedule or any Distribution Date thereafter, at which point such amount shall be distributed to REMIC II Regular Interest II-LTP, until $100 has been distributed pursuant to this clause; and

 

(v)          to the Holders of REMIC II Regular Interests, in an amount equal to the remainder of the REMIC II Sub WAC Allocation Percentage of the REMIC Available Funds for such Distribution Date after the distributions made pursuant to clause (i) and (ii) above such that distributions of interest are deemed to be made to REMIC II Regular Interest II-LT1SUB, REMIC II Regular Interest II-LT1GRP, REMIC II Regular Interest II-LT2SUB, REMIC II Regular Interest II-LT2GRP and REMIC II Regular Interest II-LTXX, pro rata, in an amount equal to (A) the Uncertificated Interest for each such REMIC II Regular Interest for such Distribution Date, plus (B) any amounts in respect thereof remaining unpaid from previous Distribution Dates and such that distributions of principal shall be deemed to be made to the REMIC II Regular Interests first, so as to keep the Uncertificated Balance of each REMIC II Regular Interest ending with the designation “GRP” equal to 0.01% of the aggregate Stated Principal Balance of the Mortgage Loans in the related Loan Group; second, to each REMIC II Regular Interest ending with the designation “SUB,” so that the Uncertificated Balance of each such REMIC II Regular Interest is equal to 0.01% of the excess of (x) the aggregate Stated Principal Balance of the Mortgage Loans in the related Loan Group over (y) the current Certificate Principal Balance of the Class A Certificate in the related Loan Group (except that if any such excess is a larger number than in the preceding distribution period, the least amount of principal shall be distributed to such REMIC II Regular Interests such that the REMIC II Subordinated Balance Ratio is maintained); and third, any remaining principal to REMIC II Regular Interest II-LTXX.

Notwithstanding the priorities and amounts of distribution of funds pursuant to this Section 4.01(a)(1), actual distributions of Available Funds shall be made only in accordance with Section 4.01(a)(2), (3) and (4).

On each Distribution Date, 100% of the amounts distributed on REMIC II Regular Interest II-IO shall be deemed distributed by REMIC II to REMIC III in respect of the Class SWAP-IO Interest. On each Distribution Date, 100% of the amounts distributed on the Class SWAP-IO Interest shall be deemed distributed by REMIC III to REMIC VI in respect of REMIC VI Regular Interest Swap IO. Such amounts shall be deemed distributed by REMIC III to the Swap Administrator for deposit into the Swap Account.

(2)(I)     On each Distribution Date, the Trustee shall withdraw from the Distribution Account an amount equal to the Group I Interest Remittance Amount and distribute to the Certificateholders the following amounts, in the following order of priority:

(i)           to the Holders of the Group I Certificates, the Senior Interest Distribution Amount related to such Certificates; and

 



 

(ii)          concurrently, to the Holders of each Class of Group II Certificates, on a pro rata basis based on the entitlement of each such Class, the Senior Interest Distribution Amount for each such Class remaining undistributed after the distribution of the Group II Interest Remittance Amount as set forth in Section 4.01(a)(2)(II)(i) below.

(II)                        On each Distribution Date, the Trustee shall withdraw from the Distribution Account an amount equal to the Group II Interest Remittance Amount and distribute to the Certificateholders the following amounts, in the following order of priority:

(i)           concurrently, to the Holders of each Class of Group II Certificates, on a pro rata basis based on the entitlement of each such Class, the Senior Interest Distribution Amount related to such Certificates; and

(ii)          to the Holders of the Group I Certificates, the Senior Interest Distribution Amount for such Class remaining undistributed after the distribution of the Group I Interest Remittance Amount as set forth in Section 4.01(a)(2)(I)(i) above.

(III)                      On each Distribution Date, following the distributions made pursuant to Section 4.01(a)(2)(I) and (II) above, the Trustee shall withdraw from the Distribution Account an amount equal to any remaining Group I Interest Remittance Amount and Group II Interest Remittance Amount and distribute such amount sequentially to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates, in that order, in an amount equal to the Interest Distribution Amount for each such Class.

(3) (I)    On each Distribution Date (a) prior to the Stepdown Date or (b) on which a Trigger Event is in effect, the Group I Principal Distribution Amount shall be distributed in the following order of priority:

(i)           to the Holders of the Group I Certificates, until the Certificate Principal Balance of such Class has been reduced to zero; and

(ii)          to the Holders of the Group II Certificates (allocated among the Classes of Group II Certificates in the priority described in Section 4.01(a)(5) below), after taking into account the distribution of the Group II Principal Distribution Amount as described in Section 4.01(a)(3)(II) below, until the Certificate Principal Balances of such Classes have been reduced to zero.

(II)         On each Distribution Date (a) prior to the Stepdown Date or (b) on which a Trigger Event is in effect, the Group II Principal Distribution Amount shall be distributed in the following order of priority:

(i)           to the Holders of the Group II Certificates (allocated among the Classes of Group II Certificates in the priority described in Section 4.01(a)(5) below), until the Certificate Principal Balances of such Classes have been reduced to zero; and

(ii)          to the Holders of the Group I Certificates, after taking into account the distribution of the Group I Principal Distribution Amount as described in Section

 



4.01(a)(3)(I) above, until the Certificate Principal Balance of such Class has been reduced to zero.

(III)                      On each Distribution Date (a) prior to the Stepdown Date or (b) on which a Trigger Event is in effect, the Trustee shall withdraw from the Distribution Account an amount equal to the sum of the Group I Principal Distribution Amount and the Group II Principal Distribution Amount remaining undistributed for such Distribution Date and shall distribute such amount sequentially to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates, in that order, in each case, until the Certificate Principal Balance of such Class has been reduced to zero.

(IV)                      On each Distribution Date (a) on or after the Stepdown Date and (b) on which a Trigger Event is not in effect, the Group I Principal Distribution Amount shall be distributed in the following order of priority:

(i)           to the Holders of the Group I Certificates, the Senior Group I Principal Distribution Amount, until the Certificate Principal Balance of such Class has been reduced to zero; and

(ii)          to the Holders of the Group II Certificates (allocated among the Classes of Group II Certificates in the priority described in Section 4.01(a)(5) below), after taking into account the distribution of the Group II Principal Distribution Amount as described in Section 4.01(a)(3)(V)(i) below, up to an amount equal to the Senior Group II Principal Distribution Amount remaining undistributed, until the Certificate Principal Balances of such Classes have been reduced to zero.

(V)                       On each Distribution Date (a) on or after the Stepdown Date and (b) on which a Trigger Event is not in effect, the Group II Principal Distribution Amount shall be distributed in the following order of priority:

(i)           to the Holders of the Group II Certificates (allocated among the Classes of Group II Certificates in the priority described in Section 4.01(a)(5) below), the Senior Group II Principal Distribution Amount, until the Certificate Principal Balances of such Classes have been reduced to zero; and

(ii)          to the Holders of the Group I Certificates, after taking into account the distribution of the Group I Principal Distribution Amount as described in Section 4.01(a)(3)(IV)(i) above, up to an amount equal to the Senior Group I Principal Distribution Amount remaining undistributed, until the Certificate Principal Balance of such Class has been reduced to zero.

(VI)                      On each Distribution Date (a) on or after the Stepdown Date and (b) on which a Trigger Event is not in effect, the sum of the Group I Principal Distribution Amount and the Group II Principal Distribution Amount remaining undistributed for such Distribution Date shall be distributed in the following order of priority:

 



 

(i)           to the Holders of the Class M-1 Certificates, the Class M-1 Principal Distribution Amount, until the Certificate Principal Balance thereof has been reduced to zero;

(ii)          to the Holders of the Class M-2 Certificates, the Class M-2 Principal Distribution Amount, until the Certificate Principal Balance thereof has been reduced to zero;

(iii)        to the Holders of the Class M-3 Certificates, the Class M-3 Principal Distribution Amount, until the Certificate Principal Balance thereof has been reduced to zero;

(iv)         to the Holders of the Class M-4 Certificates, the Class M-4 Principal Distribution Amount, until the Certificate Principal Balance thereof has been reduced to zero;

(v)          to the Holders of the Class M-5 Certificates, the Class M-5 Principal Distribution Amount, until the Certificate Principal Balance thereof has been reduced to zero;

(vi)         to the Holders of the Class M-6 Certificates, the Class M-6 Principal Distribution Amount, until the Certificate Principal Balance thereof has been reduced to zero;

(vii)       to the Holders of the Class M-7 Certificates, the Class M-7 Principal Distribution Amount, until the Certificate Principal Balance thereof has been reduced to zero;

(viii)      to the Holders of the Class M-8 Certificates, the Class M-8 Principal Distribution Amount, until the Certificate Principal Balance thereof has been reduced to zero;

(ix)         to the Holders of the Class M-9 Certificates, the Class M-9 Principal Distribution Amount, until the Certificate Principal Balance thereof has been reduced to zero; and

(x)          to the Holders of the Class M-10 Certificates, the Class M-10 Principal Distribution Amount, until the Certificate Principal Balance thereof has been reduced to zero.

(4)          On each Distribution Date, the Net Monthly Excess Cashflow shall be distributed as follows:

(i)           to the Holders of the Class or Classes of Certificates then entitled to receive distributions in respect of principal, in an amount equal to the Overcollateralization Increase Amount, applied as part of the Group I Principal Distribution Amount or the Group II Principal Distribution Amount, as applicable, to

 



reduce the Certificate Principal Balance of such Certificates until the aggregate Certificate Principal Balance of such Certificates is reduced to zero;

(ii)          sequentially, to the Holders of the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates, in that order, in each case up to the Interest Carry Forward Amount for each such Class of Mezzanine Certificates for such Distribution Date;

(iii)        sequentially, to the Holders of the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates, in that order, in each case up to the Allocated Realized Loss Amount for each such Class of Mezzanine Certificates for such Distribution Date;

(iv)         to the Net WAC Rate Carryover Reserve Account, the amount required by Section 4.11(b), without taking into account amounts received under the Interest Rate Swap Agreement;

(v)          to the Interest Rate Swap Provider, any Swap Termination Payment due to a Interest Rate Swap Provider Trigger Event, owed to the Interest Rate Swap Provider pursuant to the Interest Rate Swap Agreement

(vi)         to the Holders of the Class CE Certificates, (a) the Interest Distribution Amount and any Overcollateralization Reduction Amount for such Distribution Date and (b) on any Distribution Date on which the Certificate Principal Balances of the Class A Certificates and the Mezzanine Certificates have been reduced to zero, any remaining amounts in reduction of the Certificate Principal Balance of the Class CE Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and

(vii)       to the Holders of the Class R Certificates, any remaining amounts; provided that if such Distribution Date is the Distribution Date immediately following the expiration of the latest Prepayment Charge term as identified on the Mortgage Loan Schedule or any Distribution Date thereafter, then any such remaining amounts shall be distributed first, to the Holders of the Class P Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and second, to the Holders of the Class R Certificates.

(5)          With respect to the Group II Certificates, all principal distributions will be distributed sequentially, to the Class A-2A, Class A-2B, Class A-2C and Class A-2D Certificates, in that order, until their respective Certificate Principal Balances have been reduced to zero.

Notwithstanding the foregoing, if the aggregate Certificate Principal Balance of the Group II Certificates exceeds the aggregate Stated Principal Balance of the Group II Mortgage Loans, principal distributions to the Classes of Group II Certificates will be allocated concurrently, on a pro rata basis.

On each Distribution Date, following the foregoing distributions, an amount equal to the amount of Subsequent Recoveries deposited into the Collection Account pursuant to

 



Section 3.05 and included in the Available Funds for such Distribution Date shall be applied to increase the Certificate Principal Balance of the Class of Certificates with the Highest Priority up to the extent of such Realized Losses previously allocated to that Class of Certificates pursuant to Section 4.04. An amount equal to the amount of any remaining Subsequent Recoveries shall be applied to increase the Certificate Principal Balance of the Class of Certificates with the next Highest Priority, up to the amount of such Realized Losses previously allocated to that Class of Certificates pursuant to Section 4.04, and so on. Holders of such Certificates shall not be entitled to any distribution in respect of interest on the amount of such increases for any Interest Accrual Period preceding the Distribution Date on which such increase occurs. Any such increases shall be applied to the Certificate Principal Balance of each Certificate of such Class in accordance with its respective Percentage Interest.

(c)          On each Distribution Date, after making the distributions of the Available Funds as set forth above, the Trustee shall first, withdraw from the Net WAC Rate Carryover Reserve Account all net income from the investment of funds in the Net WAC Rate Carryover Reserve Account and distribute such amount to the Holders of the Class CE Certificates, and second, withdraw from the Net WAC Rate Carryover Reserve Account, to the extent of amounts remaining on deposit therein, the amount of any Net WAC Rate Carryover Amount for such Distribution Date and distribute such amount as follows:

first, concurrently, to each Class of Class A Certificates, the related Net WAC Rate Carryover Amount, on a pro rata basis based on such respective Net WAC Rate Carryover Amounts; and

second, sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates, in that order, the related Net WAC Rate Carryover Amount.

On each Distribution Date, the Trustee shall withdraw any amounts then on deposit in the Distribution Account that represent Prepayment Charges collected by the Master Servicer, Prepayment Charges payable by the Master Servicer pursuant to Section 2.03(b)(ii)(A) and Master Servicer Prepayment Charge Payment Amounts payable by the Master Servicer pursuant to Section 2.03(b)(ii)(B), subject to Section 2.03(b)(iii), in each case to the extent not related to Principal Prepayments occurring after the related Prepayment Period, and the Trustee shall distribute such amounts to the Holders of the Class P Certificates. Such distributions shall not be applied to reduce the Certificate Principal Balance of the Class P Certificates.

(d)          All distributions made with respect to each Class of Certificates on each Distribution Date shall be allocated pro rata among the outstanding Certificates in such Class based on their respective Percentage Interests. Payments in respect of each Class of Certificates on each Distribution Date shall be made to the Holders of the respective Class of record on the related Record Date (except as otherwise provided in Section 4.01(g) or Section 9.01 respecting the final distribution on such Class), based on the aggregate Percentage Interest represented by their respective Certificates, and shall be made by wire transfer of immediately available funds to the account of any such Holder at a bank or other entity having appropriate facilities therefor, if such Holder shall have so notified the Trustee in writing at least five Business Days prior to the Record Date immediately prior to such Distribution Date, or otherwise by check mailed by first

 



class mail to the address of such Holder appearing in the Certificate Register. The final distribution on each Certificate shall be made in like manner, but only upon presentment and surrender of such Certificate at the office of the Trustee maintained for such purpose pursuant to Section 8.12 or such other location specified in the notice to Certificateholders of such final distribution.

Each distribution with respect to a Book-Entry Certificate shall be paid to the Depository, as Holder thereof, and the Depository shall be responsible for crediting the amount of such distribution to the accounts of its Depository Participants in accordance with its normal procedures. Each Depository Participant shall be responsible for disbursing such distribution to the Certificate Owners that it represents and to each indirect participating brokerage firm (a “brokerage firm” or “indirect participating firm”) for which it acts as agent. Each brokerage firm shall be responsible for disbursing funds to the Certificate Owners that it represents. None of the Trustee, the Certificate Registrar, the Depositor or the Master Servicer shall have any responsibility therefor except as otherwise provided by this Agreement or applicable law.

(e)          The rights of the Certificateholders to receive distributions in respect of the Certificates, and all interests of the Certificateholders in such distributions, shall be as set forth in this Agreement. Neither the Holders of any Class of Certificates nor the Trustee nor the Master Servicer shall in any way be responsible or liable to the Holders of any other Class of Certificates in respect of amounts properly previously distributed on the Certificates.

(f)           On each Distribution Date, after making the distributions of the Available Funds, Net Monthly Excess Cashflow and amounts on deposit in the Net WAC Rate Carryover Reserve Account as set forth above, the Trustee shall distribute the amount on deposit in the Swap Account as follows:

first, to the Interest Rate Swap Provider, any Net Swap Payment owed to the Interest Rate Swap Provider pursuant to the Interest Rate Swap Agreement for such Distribution Date;

second, to the Interest Rate Swap Provider, any Swap Termination Payment owed to the Interest Rate Swap Provider not due to a Swap Provider Trigger Event pursuant to the Interest Rate Swap Agreement;

third, concurrently, to each Class of Class A Certificates, the related Senior Interest Distribution Amount remaining undistributed after the distributions of the Group I Interest Remittance Amount and the Group II Interest Remittance Amount, on a pro rata basis based on such respective remaining Senior Interest Distribution Amount;

fourth, sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates, in that order, the related Interest Distribution Amount and Interest Carry Forward Amount, to the extent remaining undistributed after the distributions of the Group I Interest Remittance Amount, the Group II Interest Remittance Amount and the Net Monthly Excess Cashflow;

fifth, concurrently, to each Class of Class A Certificates, the related Net WAC Rate Carryover Amount remaining unpaid after distributions from the Net WAC Rate Carryover

 



Reserve Account, on a pro rata basis based on such respective remaining Net WAC Rate Carryover Amounts;

sixth, sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates, in that order, the related Net WAC Rate Carryover Amount remaining unpaid after distributions from the Net WAC Rate Carryover Reserve Account;

seventh, to the Holders of the Class or Classes of Certificates then entitled to receive distributions in respect of principal, in an amount necessary to maintain the applicable Overcollateralization Target Amount equal to the difference between (x) the Overcollateralization Increase Amount (for the purpose of this section only, without giving effect to clause (B) of the definition of “Overcollateralization Increase Amount”) and (y) the amount distributed pursuant to Section 4.01(a)(4)(i) of this Agreement; and

eighth, sequentially to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates, in that order, in each case up to the related Allocated Realized Loss Amount related to such Certificates for such Distribution Date remaining undistributed after distribution of the Net Monthly Excess Cashflow.

(g)          Except as otherwise provided in Section 9.01, whenever the Trustee expects that the final distribution with respect to any Class of Certificates shall be made on the next Distribution Date, the Trustee shall, no later than five (5) days after the related Determination Date, mail to each Holder on such date of such Class of Certificates a notice to the effect that:

(i)           the Trustee expects that the final distribution with respect to such Class of Certificates shall be made on such Distribution Date, but only upon presentation and surrender of such Certificates at the office of the Trustee therein specified or its agent; and

(ii)          no interest shall accrue on such Certificates from and after the end of the related Interest Accrual Period.

Any funds not distributed to any Holder or Holders of Certificates of such Class on such Distribution Date because of the failure of such Holder or Holders to tender their Certificates shall, on such date, be set aside and held in trust by the Trustee and credited to the account of the appropriate non-tendering Holder or Holders. If any Certificates as to which notice has been given pursuant to this Section 4.01(g) shall not have been surrendered for cancellation within six months after the time specified in such notice, the Trustee shall mail a second notice to the remaining non-tendering Certificateholders to surrender their Certificates for cancellation in order to receive the final distribution with respect thereto. If within one year after the second notice all such Certificates shall not have been surrendered for cancellation, the Trustee shall, directly or through an agent, mail a final notice to remaining non-tendering Certificateholders concerning surrender of their Certificates but shall continue to hold any remaining funds for the benefit of non-tendering Certificateholders. The costs and expenses of maintaining the funds in trust and of contacting such Certificateholders shall be paid out of the

 



assets remaining in such trust fund. If within one year after the final notice any such Certificates shall not have been surrendered for cancellation, the Trustee shall pay to the Underwriters all remaining amounts, and all rights of non-tendering Certificateholders in or to such amounts shall thereupon cease. No interest shall accrue or be payable to any Certificateholder on any amount held in trust by the Trustee as a result of such Certificateholder’s failure to surrender its Certificate(s) for final payment thereof in accordance with this Section 4.01(g).

(h)          Notwithstanding anything to the contrary herein, (i) in no event shall the Certificate Principal Balance of a Class A Certificate or a Mezzanine Certificate be reduced more than once in respect of any particular amount both (a) allocated to such Certificate in respect of Realized Losses pursuant to Section 4.04 and (b) distributed to the Holder of such Certificate in reduction of the Certificate Principal Balance thereof pursuant to this Section 4.01 from Net Monthly Excess Cashflow and (ii) in no event shall the Uncertificated Balance of a REMIC Regular Interest be reduced more than once in respect of any particular amount both (a) allocated to such REMIC Regular Interest in respect of Realized Losses pursuant to Section 4.04 and (b) distributed on such REMIC Regular Interest in reduction of the Uncertificated Balance thereof pursuant to this Section 4.01.

(i)           It is the intention of all of the parties hereto that the Class CE Certificates receive all principal and interest received by the Trust on the Mortgage Loans that is not otherwise distributable to any other Class of Regular Certificates or REMIC Regular Interests. If the Trustee determines that the Residual Certificates are entitled to any distributions, the Trustee, prior to any such distribution to any Residual Certificate, shall notify the Depositor of such impending distribution. Upon such notification, the Depositor will request an amendment to the Pooling and Servicing Agreement to revise such mistake in the distribution provisions. The Residual Certificate Holders, by their acceptance of their Certificates, and the Master Servicer hereby agree and no further consent shall be necessary (other than the consent of the NIMS Insurer), notwithstanding anything to the contrary in Section 11.01 of the Pooling and Servicing Agreement.

 

SECTION 4.02.

Statements to Certificateholders.

On each Distribution Date, the Trustee shall prepare and make available to each Holder of the Regular Certificates, the Interest Rate Swap Provider and the NIMS Insurer, a statement (the “Monthly Statement”) as to the distributions made on such Distribution Date setting forth:

(i)           the amount of the distribution made on such Distribution Date to the Holders of the Certificates of each Class allocable to principal, and the amount of distribution made on such Distribution Date to the Holders of the Class P Certificates allocable to Prepayment Charges or Master Servicer Prepayment Charge Payment Amounts;

(ii)          the amount of the distribution made on such Distribution Date to the Holders of the Certificates of each Class allocable to interest;

(iii)        the aggregate Servicing Fee received by the Master Servicer during the related Due Period, the Trustee Fee paid to the Trustee on such Distribution Date and

 



such other customary information as the Trustee deems necessary or desirable, or which a Certificateholder reasonably requests, to enable Certificateholders to prepare their tax returns;

(iv)         the aggregate amount of Advances for such Distribution Date (including the general purpose of such Advance, in the aggregate, so long as such information is provided to the Trustee by the Master Servicer) and the aggregate amount of unreimbursed Advances and the aggregate amount of Advances reimbursed to the Master Servicer from amounts on deposit in the Collection Account;

(v)          the aggregate Stated Principal Balance of the Mortgage Loans and any REO Properties as of the close of business on such Distribution Date;

(vi)         the number, aggregate Stated Principal Balance, weighted average remaining term to maturity and weighted average Mortgage Rate of the Mortgage Loans as of the related Due Date;

(vii)       the number and aggregate unpaid Stated Principal Balance of Mortgage Loans (a) delinquent 30-59 days, (b) delinquent 60-89 days, (c) delinquent 90 or more days, in each case, as of the last day of the preceding calendar month, (d) as to which foreclosure proceedings have been commenced and (e) with respect to which the related Mortgagor has filed for protection under applicable bankruptcy laws, with respect to whom bankruptcy proceedings are pending or with respect to whom bankruptcy protection is in force;

(viii)      with respect to any Mortgage Loan that became an REO Property during the preceding calendar month, the loan number of such Mortgage Loan, the unpaid Stated Principal Balance and the Stated Principal Balance of such Mortgage Loan as of the date it became an REO Property;

(ix)         the book value and the Stated Principal Balance of any REO Property as of the close of business on the last Business Day of the calendar month preceding the Distribution Date;

(x)          the aggregate amount of Principal Prepayments made during the related Prepayment Period;

(xi)         the aggregate amount of Realized Losses incurred during the related Prepayment Period (or, in the case of Bankruptcy Losses allocable to interest, during the related Due Period), separately identifying whether such Realized Losses constituted Bankruptcy Losses and the aggregate amount of Realized Losses incurred since the Closing Date and the aggregate amount of Subsequent Recoveries received during the related Prepayment Period and the aggregate amount of Subsequent Recoveries received since the Closing Date;

(xii)       the aggregate amount of Extraordinary Trust Fund Expenses withdrawn from the Collection Account or the Distribution Account for such Distribution Date and

 



the reason for such expense as identified to the Trustee, identifying to whom such amount was paid;

(xiii)      the aggregate Certificate Principal Balance of each Class of Certificates, after giving effect to the distributions, and allocations of Realized Losses, made on such Distribution Date, separately identifying any reduction thereof due to allocations of Realized Losses;

(xiv)      the Certificate Factor for each such Class of Certificates applicable to such Distribution Date;

(xv)        the Interest Distribution Amount in respect of the Class A Certificates, the Mezzanine Certificates and the Class CE Certificates for such Distribution Date and the Interest Carry Forward Amount, if any, with respect to the Class A Certificates and the Mezzanine Certificates on such Distribution Date, and in the case of the Adjustable-Rate Certificates and the Class CE Certificates, separately identifying any reduction thereof due to allocations of Realized Losses, Prepayment Interest Shortfalls and Relief Act Interest Shortfalls;

(xvi)      the aggregate amount of any Prepayment Interest Shortfall for such Distribution Date, to the extent not covered by payments by the Master Servicer pursuant to Section 4.03(e) or allocated to the Class CE Certificates;

(xvii)     the aggregate amount of Relief Act Interest Shortfalls for such Distribution Date;

(xviii)    the Net Monthly Excess Cashflow, the Overcollateralized Amount, Overcollateralization Target Amount and the Credit Enhancement Percentage for such Distribution Date;

(xix)      the Overcollateralization Increase Amount, if any, for such Distribution Date;

(xx)        the Overcollateralization Reduction Amount, if any, for such Distribution Date;

(xxi)      with respect to any Mortgage Loan as to which foreclosure proceedings have been concluded, the loan number and unpaid Stated Principal Balance of such Mortgage Loan as of the date of such conclusion of foreclosure proceedings;

(xxii)     with respect to Mortgage Loans as to which a Final Liquidation has occurred, the number of Mortgage Loans, the unpaid Stated Principal Balance of such Mortgage Loans as of the date of such Final Liquidation and the amount of proceeds (including Liquidation Proceeds and Insurance Proceeds) collected in respect of such Mortgage Loans;

(xxiii)    the respective Pass-Through Rates applicable to the Class A Certificates, the Mezzanine Certificates and the Class CE Certificates for such Distribution Date and

 



the Pass-Through Rate applicable to the Adjustable-Rate Certificates for the immediately succeeding Distribution Date;

(xxiv)    the amount on deposit in the Net WAC Rate Carryover Reserve Account as of the Determination Date;

 

(xxv)

whether a Trigger Event is in effect;

(xxvi)    the Net WAC Rate Carryover Amount for the Class A Certificates and the Mezzanine Certificates, if any, for such Distribution Date, the amount remaining unpaid after reimbursements therefor on such Distribution Date;

 

(xxvii)

the amount of any Net Swap Payments or Swap Termination Payments;

(xxviii) all amounts received on the Mortgage Loans during the related Due Period and the related Prepayment Period and any amounts received from any other source used to make distributions on the Certificates, separately identifying the source thereof;

(xxix)    the amount on deposit in the Collection Account as of the end of the related Due Period, the amount on deposit in the Distribution Account and any other account maintained for the benefit of the certificateholders as of the last Business Day of the immediately preceding calendar month, and any material account activity during such preceding month (which has not been otherwise reported); and

(xxx)     the aggregate principal balance of each Class of Certificates issued by the Trust Fund as of such Distribution Date after giving effect to all distributions and allocations made on such Distribution Date, separately identifying any reduction in the Certificate Principal Balance due to the allocation of any Realized Loss;

 

With respect to the items described in (v), (vi), (vii), (viii), (x), (xi) and (xxii) above, the Trustee shall set forth such information with respect to each Loan Group and with respect to the Mortgage Pool.

The Trustee shall make such Monthly Statement (and, at its option, any additional files containing the same information in an alternative format) available each month to the Certificateholders, the NIMS Insurer, the Master Servicer and the Rating Agencies via the Trustee’s internet website. The Trustee’s internet website shall initially be located at https://www.tss.db.com/invr. Assistance in using the website can be obtained by calling the Trustee’s investor relations desk at (800) 735-7777. Parties that are unable to use the above distribution options are entitled to have a paper copy mailed to them via first class mail by calling the investor relations desk and indicating such. The Trustee shall have the right to change the way such Monthly Statements are distributed in order to make such distribution more convenient and/or more accessible to the above parties and the Trustee shall provide timely and adequate notification to all above parties regarding any such changes.

In the case of information furnished pursuant to subclauses (i) through (iii) above, the amounts shall be expressed as a dollar amount per Single Certificate of the relevant Class.

 



 

Within a reasonable period of time after the end of each calendar year, the Trustee shall furnish to the NIMS Insurer and each Person who at any time during the calendar year was a Holder of a Regular Certificate a statement containing the information set forth in subclauses (i) through (iii) above, aggregated for such calendar year or applicable portion thereof during which such person was a Certificateholder. Such obligation of the Trustee shall be deemed to have been satisfied to the extent that substantially comparable information shall be provided by the Trustee pursuant to any requirements of the Code as from time to time are in force.

Within a reasonable period of time after the end of each calendar year, the Trustee shall furnish to the NIMS Insurer and each Person who at any time during the calendar year was a Holder of a Residual Certificate a statement setting forth the amount, if any, actually distributed with respect to the Residual Certificates, as appropriate, aggregated for such calendar year or applicable portion thereof during which such Person was a Certificateholder. Such obligation of the Trustee shall be deemed to have been satisfied to the extent that substantially comparable information shall be prepared by the Trustee and furnished to such Holders pursuant to the rules and regulations of the Code as are in force from time to time.

The Trustee shall, upon request, furnish to each Certificateholder or Certificate Owner and the NIMS Insurer, during the term of this Agreement, such periodic, special, or other reports or information, whether or not provided for herein, as shall be reasonable with respect to the Certificateholder or Certificate Owner, or otherwise with respect to the purposes of this Agreement, all such reports or information to be provided at the expense of the Certificateholder or Certificate Owner in accordance with such reasonable and explicit instructions and directions as the Certificateholder or Certificate Owner may provide. For purposes of this Section 4.02, the Trustee’s duties are limited to the extent that the Trustee receives timely reports as required from the Master Servicer.

On each Distribution Date the Trustee shall provide Bloomberg Financial Markets, L.P. (“Bloomberg”) CUSIP level factors for each Class of Certificates as of such Distribution Date, using a format and media mutually acceptable to the Trustee and Bloomberg.

 

SECTION 4.03.

Remittance Reports and Other Reports to the Trustee; Advances; Payments in Respect of Prepayment Interest Shortfalls.

(a)          On the Master Servicer Reporting Date, the Master Servicer shall deliver to the Trustee and the NIMS Insurer by telecopy (or by such other means as the Master Servicer, the Trustee and the NIMS Insurer may agree from time to time) a Remittance Report with respect to the related Distribution Date. Such Remittance Report shall include (i) the amount of Advances to be made by the Master Servicer in respect of the related Distribution Date, the aggregate amount of Advances outstanding after giving effect to such Advances, and the aggregate amount of Nonrecoverable Advances in respect of such Distribution Date and (ii) such other information with respect to the Mortgage Loans as the Trustee may reasonably require to perform the calculations necessary to make the distributions contemplated by Section 4.01 and to prepare the Monthly Statements to Certificateholders contemplated by Section 4.02. The Trustee shall not be responsible to recompute, recalculate or verify any information provided to it by the Master Servicer.

 



 

Not later than fifteen days after each Distribution Date, the Master Servicer shall forward to the Trustee, the NIMS Insurer and the Depositor a statement prepared by the Master Servicer setting forth the status of the Collection Account as of the close of business on such Distribution Date and showing, for the period covered by such statement, the aggregate amount of deposits into and withdrawals from the Collection Account of each category of deposit specified in Section 3.04(b) and each category of withdrawal specified in Section 3.05. Such statement may be in the form of the then current Fannie Mae Monthly Accounting Report for its Guaranteed Mortgage Pass-Through Program with appropriate additions and changes, and shall also include information as to the aggregate of the outstanding Stated Principal Balances of all of the Mortgage Loans as of the last day of the calendar month immediately preceding such Distribution Date. Copies of such statement shall be provided by the Trustee to any Certificateholder and to any Person identified to the Trustee as a prospective transferee of a Certificate, upon request at the expense of the requesting party, provided such statement is delivered by the Master Servicer to the Trustee.

(b)          The amount of Advances to be made by the Master Servicer for any Distribution Date shall equal, subject to Section 4.03(d), the sum of (i) the aggregate amount of Monthly Payments (with each interest portion thereof net of the related Servicing Fee), due on the related Due Date in respect of the Mortgage Loans, which Monthly Payments were delinquent as of the close of business on the related Determination Date and (ii) with respect to each REO Property, which REO Property was acquired during or prior to the related 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 Monthly 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 Distribution Account pursuant to Section 3.13 for distribution on such Distribution Date.

On or before 3:00 p.m. New York time on the Master Servicer Remittance Date, the Master Servicer shall remit in immediately available funds to the Trustee for deposit in the Distribution Account an amount equal to the aggregate amount of Advances, if any, to be made in respect of the Mortgage Loans and REO Properties for the related Distribution Date either (i) from its own funds or (ii) from the Collection Account, to the extent of funds held therein for future distribution (in which case, it shall cause to be made an appropriate entry in the records of the Collection Account that amounts held for future distribution have been, as permitted by this Section 4.03, used by the Master Servicer in discharge of any such Advance) or (iii) in the form of any combination of (i) and (ii) aggregating the total amount of Advances to be made by the Master Servicer with respect to the Mortgage Loans and REO Properties. Any amounts held for future distribution used by the Master Servicer to make an Advance as permitted in the preceding sentence or withdrawn by the Master Servicer as permitted in Section 3.05(a)(vii) in reimbursement of Advances previously made shall be appropriately reflected in the Master Servicer’s records and replaced by the Master Servicer by deposit in the Collection Account on or before any future Master Servicer Remittance Date to the extent that the Available Funds for the related Distribution Date (determined without regard to Advances to be made on the Master Servicer Remittance Date) shall be less than the total amount that would be distributed to the Classes of Certificateholders pursuant to Section 4.01 on such Distribution Date if such amounts held for future distributions had not been so used to make Advances. The Trustee shall provide

 



notice to the Master Servicer and the NIMS Insurer by telecopy by the close of business on any Master Servicer Remittance Date in the event that the amount remitted by the Master Servicer to the Trustee on such date is less than the Advances required to be made by the Master Servicer for the related Distribution Date.

(c)          The obligation of the Master Servicer to make such Advances is mandatory, notwithstanding any other provision of this Agreement but subject to (d) below, and, with respect to any Mortgage Loan or REO Property, shall continue until a Final Recovery Determination in connection therewith or the removal thereof from REMIC I pursuant to any applicable provision of this Agreement, except as otherwise provided in this Section.

(d)          Notwithstanding anything herein to the contrary, no Advance or Servicing Advance shall be required to be made hereunder by the Master Servicer if such Advance or Servicing Advance would, if made, constitute a Nonrecoverable Advance or Nonrecoverable Servicing Advance. The determination by the Master Servicer that it has made a Nonrecoverable Advance or a Nonrecoverable Servicing Advance or that any proposed Advance or Servicing Advance, if made, would constitute a Nonrecoverable Advance or Nonrecoverable Servicing Advance, respectively, shall be evidenced by an Officers’ Certificate of the Master Servicer delivered to the Trustee and the NIMS Insurer.

(e)          The Master Servicer shall deliver to the Trustee for deposit into the Distribution Account on or before 3:00 p.m. New York time on the Master Servicer Remittance Date from its own funds an amount (“Compensating Interest”) equal to the lesser of (i) the aggregate of the Prepayment Interest Shortfalls for the related Distribution Date resulting solely from Principal Prepayments during the related Prepayment Period and (ii) the amount of its aggregate Servicing Fee for the most recently ended calendar month. The Master Servicer shall not have the right to reimbursement for any amounts remitted to the Trustee in respect of Prepayment Interest Shortfalls. Such amounts so remitted shall be included in the Available Funds and distributed therewith on the next Distribution Date. The Master Servicer shall not be obligated to pay any amounts with respect to Relief Act Interest Shortfalls.

(f)           At the request of a Holder of a Class CE, Class P or Residual Certificate, the Master Servicer shall forward to such Holder any statements or reports provided to the Trustee by the Master Servicer pursuant to this Section 4.03 and other loan level information relating to the Mortgage Loans as reasonably requested by such Holder, provided, that such requesting Holder (i) enters into an agreement with the Master Servicer, at the satisfaction of the Master Servicer, regarding certain procedures with respect to the release of such information and (ii) agrees to cover all expenses in connection with such request.

 

SECTION 4.04.

Allocation of Realized Losses.

(a)          On or before each Determination Date, the Master Servicer shall determine as to each Mortgage Loan and REO Property: (i) the total amount of Realized Losses, if any, incurred in connection with any Final Recovery Determinations made during the related Prepayment Period; (ii) whether and the extent to which such Realized Losses constituted Bankruptcy Losses; and (iii) the respective portions of such Realized Losses allocable to interest and allocable to principal. On or before each Determination Date, the Master Servicer shall also determine as to each Mortgage Loan: (A) the total amount of Realized Losses, if any, incurred

 



in connection with any Deficient Valuations made during the related Prepayment Period; and (B) the total amount of Realized Losses, if any, incurred in connection with Debt Service Reductions in respect of Monthly Payments due during the related Due Period. The information described in the two preceding sentences that is to be supplied by the Master Servicer shall be evidenced by an Officers’ Certificate delivered to the Trustee by the Master Servicer on the Master Servicer Reporting Date immediately following the end of (x) in the case of Bankruptcy Losses allocable to interest, the Due Period during which any such Realized Loss was incurred, and (y) in the case of all other Realized Losses, the Prepayment Period during which any such Realized Loss was incurred.

(b)          All Realized Losses on the Mortgage Loans shall be allocated by the Trustee on each Distribution Date as follows: first, in reduction of interest accrued on and otherwise distributable to the Class CE Certificates to the extent of Net Monthly Excess Cashflow used to pay principal on the Class A Certificates and the Mezzanine Certificates under clause (i) of Section 4.01 hereof; second, in reduction of interest accrued on and otherwise distributable to the Class CE Certificates to the extent of Net Monthly Excess Cashflow available for distribution pursuant to clauses (ii) through (vi) of Section 4.01(a)(4) hereof; and third, in reduction of the Certificate Principal Balance of the Class CE Certificates (determined after taking into account all distributions made on the Certificates on such Distribution Date), until the Certificate Principal Balance thereof has been reduced to zero. If on any Distribution Date, after all distributions are made by the Trustee pursuant to Section 4.01 hereof, the aggregate Certificate Principal Balance of the Class A Certificates, the Mezzanine Certificates and the Class P Certificates exceeds the sum of the Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after taking into account prepayments during the related Prepayment Period), the amount of such excess shall be allocated: first, to the Class M-10 Certificates, until the Certificate Principal Balance thereof has been reduced to zero, second, to the Class M-9 Certificates, until the Certificate Principal Balance thereof has been reduced to zero, third, to the Class M-8 Certificates, until the Certificate Principal Balance thereof has been reduced to zero, fourth, to the Class M-7 Certificates, until the Certificate Principal Balance thereof has been reduced to zero, fifth, to the Class M-6 Certificates, until the Certificate Principal Balance thereof has been reduced to zero, sixth, to the Class M-5 Certificates, until the Certificate Principal Balance thereof has been reduced to zero, seventh, to the Class M-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero, eighth, to the Class M-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero, ninth, to the Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero, and tenth, to the Class M-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero. All Realized Losses to be allocated to the Certificate Principal Balances of all Classes on any Distribution Date shall be so allocated after the actual distributions to be made on such date as provided above.

Any such allocation to a Class of Mezzanine Certificates on any Distribution Date shall be made by reducing the Certificate Principal Balance thereof (after the actual distributions to be made on such Distribution Date pursuant to Section 4.01 hereof) by the amount so allocated; any allocation of Realized Losses to a Class CE Certificate shall be made by reducing the amount otherwise payable in respect thereof pursuant to Section 4.01(a)(4)(v). No allocations of any Realized Losses shall be made to the Certificate Principal Balances of the Class A Certificates or the Class P Certificates.

 



 

As used herein, an allocation of a Realized Loss on a pro rata basis” among two or more specified Classes of Certificates means an allocation on a pro rata basis, among the various Classes so specified, to each such Class of Certificates on the basis of their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date. All Realized Losses and all other losses allocated to a Class of Certificates hereunder shall be allocated among the Certificates of such Class in proportion to the Percentage Interests evidenced thereby.

(c)(i)      All Realized Losses on the Group I Loans shall be allocated on each Distribution Date first, to REMIC I Regular Interest I until the Uncertificated Balance of such REMIC I Regular Interest has been reduced to zero and second, to REMIC I Regular Interest I-1-A through REMIC I Regular Interest I-49-B, starting with the lowest numerical denomination until such REMIC I Regular Interest has been reduced to zero, provided that, for REMIC I Regular Interests with the same numerical denomination, such Realized Losses shall be allocated pro rata between such REMIC I Regular Interests. All Realized Losses on the Group II Loans shall be allocated on each Distribution Date first, to REMIC I Regular Interest II until the Uncertificated Balance of such REMIC I Regular Interest has been reduced to zero and second, to REMIC I Regular Interest II-1-A through REMIC I Regular Interest II-49-B, starting with the lowest numerical denomination until such REMIC I Regular Interest has been reduced to zero, provided that, for REMIC I Regular Interests with the same numerical denomination, such Realized Losses shall be allocated pro rata between such REMIC I Regular Interests.

(c)(ii)    The REMIC II Marker Allocation Percentage of all Realized Losses on the Mortgage Loans shall be allocated by the Trustee on each Distribution Date to the following REMIC II Regular Interests in the specified percentages, as follows: first, to Uncertificated Interest payable to the REMIC II Regular Interest II-LTAA and REMIC II Regular Interest II-LTZZ up to an aggregate amount equal to the REMIC II Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the Uncertificated Balances of the REMIC II Regular Interest II-LTAA and REMIC II Regular Interest II-LTZZ up to an aggregate amount equal to the REMIC II Principal Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated Balances of REMIC II Regular Interest II-LTAA, REMIC II Regular Interest II-LTM10 and REMIC II Regular Interest II-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance of REMIC II Regular Interest II-LTM10 has been reduced to zero; fourth, to the Uncertificated Balances of REMIC II Regular Interest II-LTAA, REMIC II Regular Interest II-LTM9 and REMIC II Regular Interest II-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance of REMIC II Regular Interest II-LTM9 has been reduced to zero; fifth, to the Uncertificated Balances of REMIC II Regular Interest II-LTAA, REMIC II Regular Interest II-LTM8 and REMIC II Regular Interest II-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance of REMIC II Regular Interest II-LTM8 has been reduced to zero; sixth, to the Uncertificated Balances of REMIC II Regular Interest II-LTAA, REMIC II Regular Interest II-LTM7 and REMIC II Regular Interest II-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance of REMIC II Regular Interest II-LTM7 has been reduced to zero; seventh, to the Uncertificated Balances of REMIC II Regular Interest II-LTAA, REMIC II Regular Interest II-LTM6 and REMIC II Regular Interest II-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance of REMIC II Regular Interest II-LTM6 has been reduced to zero; eighth, to the Uncertificated Balances of REMIC II Regular Interest II-LTAA, REMIC II Regular Interest II-LTM5 and REMIC II Regular Interest II-LTZZ, 98%, 1% and 1%,

 



respectively, until the Uncertificated Balance of REMIC II Regular Interest II-LTM5 has been reduced to zero; ninth, to the Uncertificated Balances of REMIC II Regular Interest II-LTAA, REMIC II Regular Interest II-LTM4 and REMIC II Regular Interest II-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance of REMIC II Regular Interest II-LTM4 has been reduced to zero; tenth, to the Uncertificated Balances of REMIC II Regular Interest II-LTAA, REMIC II Regular Interest II-LTM3 and REMIC II Regular Interest II-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance of REMIC II Regular Interest II-LTM3 has been reduced to zero; eleventh, to the Uncertificated Balances of REMIC II Regular Interest II-LTAA, REMIC II Regular Interest II-LTM2 and REMIC II Regular Interest II-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance of REMIC II Regular Interest II-LTM2 has been reduced to zero; and twelfth, to the Uncertificated Balances of REMIC II Regular Interest II-LTAA, REMIC II Regular Interest II-LTM1 and REMIC II Regular Interest II-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance of REMIC II Regular Interest II-LTM1 has been reduced to zero.

The REMIC II Sub WAC Allocation Percentage of all Realized Losses shall be applied after all distributions have been made on each Distribution Date first, so as to keep the Uncertificated Balance of each REMIC II Regular Interest ending with the designation “GRP” equal to 0.01% of the aggregate Stated Principal Balance of the Mortgage Loans in the related Loan Group; second, to each REMIC II Regular Interest ending with the designation “SUB,” so that the Uncertificated Balance of each such REMIC II Regular Interest is equal to 0.01% of the excess of (x) the aggregate Stated Principal Balance of the Mortgage Loans in the related Loan Group over (y) the current Certificate Principal Balance of the Class A Certificate in the related Loan Group (except that if any such excess is a larger number than in the preceding distribution period, the least amount of Realized Losses shall be applied to such REMIC II Regular Interests such that the REMIC II Subordinated Balance Ratio is maintained); and third, any remaining Realized Losses shall be allocated to REMIC II Regular Interest II-LTXX.

All Realized Losses shall be allocated on each Distribution Date in the same manner and priority as such Realized Losses are allocated to the Corresponding Certificates.

 

SECTION 4.05.

Compliance with Withholding Requirements.

Notwithstanding any other provision of this Agreement, the Trustee shall comply with all federal withholding requirements respecting payments to Certificateholders of interest or original issue discount that the Trustee reasonably believes are applicable under the Code. The consent of Certificateholders shall not be required for such withholding. In the event the Trustee does withhold any amount from interest or original issue discount payments or advances thereof to any Certificateholder pursuant to federal withholding requirements, the Trustee shall indicate the amount withheld to such Certificateholders.

 

SECTION 4.06.

Commission Reporting.

(a)          (i)          The Trustee and the Master Servicer shall reasonably cooperate with the Depositor in connection with the Trust Fund’s satisfying the reporting requirements under the Exchange Act.

 



 

(ii)          Within 15 days after each Distribution Date, the Trustee shall, pursuant to Rule 13a-17 or Rule 15d-17 of the Exchange Act, file with the Commission via the Electronic Data Gathering and Retrieval System (“EDGAR”), a report on Form 10-D (“Distribution Report”), signed by the Depositor, that includes a copy of the Monthly Statement to be furnished by the Trustee to the Certificateholders for such Distribution Date pursuant to Section 4.02 and such other information required to be reported by the Trust on Form 10-D, provided, however, that such information is provided to the Trustee (with a copy to the Depositor) on or prior to the related Distribution Date prior to the applicable filing deadline. The Trustee will compile the information provided by the Depositor, Master Servicer and any other parties in the Form 10-D and provide such completed Form 10-D to the Depositor to review and verify the completed Form 10-D. The Depositor shall sign the completed Form 10-D and deliver such signed Form 10-D to the Trustee by no later than two Business Days prior to the applicable filing date. The Trustee shall not be responsible for determining what information is required to be filed on Form 10-D (unless such information is specific to the Trustee, in which case the Trustee will be responsible for making such determination). The Trustee shall have no liability for any loss, expense, damage or claim arising out of or with respect to any failure to properly prepare or timely file such Form 10-D, where such failure results from the Trustee's failure to receive, on a timely basis as required by this paragraph, any required information from any other party hereto needed to prepare, arrange for execution or file such Form 10-D. Any disclosure in addition to the Monthly Statement that i s required to be included on Form 10-D shall be approved by the Depositor and provided to the Trustee as described in clause (a)(v) below.

(iii)         For so long as the Trust is subject to the Exchange Act reporting requirements, no later than 12:00 noon on the second Business Day after the occurrence of an event requiring disclosure on Form 8-K (each such event, a “Reportable Event”) (i) the parties set forth in Exhibit N shall be required pursuant to Section 4.06(a)(v) below to provide to the Trustee and the Depositor, to the extent known, in EDGAR-compatible form, or in such other form as otherwise agreed upon by the Trustee and the Depositor and such party, the form and substance of 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”), if applicable, and (ii) the Depositor will approve, as to form and substance, or disa pprove, as the case may be, the inclusion of the Form 8-K Disclosure Information on Form 8-K. The Depositor will be responsible for any reasonable fees and expenses assessed or incurred by the Trustee in connection with including any Form 8-K Disclosure Information on Form 8-K pursuant to this Section 4.06(a)(iii). Within four (4) Business Days after the occurrence of a Reportable Event, the Depositor shall prepare and the Trustee shall 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 Form 8-K Disclosure Information shall be approved by the Depositor.

No later than the end of business New York City time on the third Business Day after the Reportable Event, a senior officer of the Depositor shall sign the Form 8-K and deliver an electronic or fax copy of such signed Form 8-K in EDGAR-compatible form (with an original executed hard copy to follow by overnight mail) to the Trustee. The Trustee shall not be responsible for determining what information is required to be filed on a Form 8-K in connection with the transactions contemplated by this Agreement (unless such information is specific to

 



the Trustee, in which case the Trustee will be responsible for making such a determination) or what events shall cause a Form 8-K to be required to be filed (unless such event is specific to the Trustee, in which case the Trustee will be responsible for causing such Form 8-K to be filed). The Trustee shall have no liability for any loss, expense, damage, claim arising out of or with respect to any failure to properly prepare or timely file such Form 8-K, where such failure results from the Trustee’s failure to receive, on a timely basis as required by this paragraph, any Form 8-K from the Depositor.

(iv)         Prior to January 30 of the first year in which the Trustee is able to do so in accordance with applicable law, the Trustee shall, pursuant to Rule 12h-3 of the Exchange Act, file a Form 15 Suspension Notice with respect to the Trust Fund, if applicable. Prior to (x) March 15, 2007 and (y) unless and until a Form 15 Suspension Notice shall have been filed, prior to March 20th of each year thereafter, the Master Servicer shall provide the Trustee with the Assessment of Compliance and Attestation Report to be delivered by the Master Servicer pursuant to Section 3.20 (including with respect to any Sub-Servicer or subcontractor, if required to be filed). Prior to (x) March 31, 2007 and (y) unless and until a Form 15 Suspension Notice shall have been filed, March 31st of each ye ar thereafter, the Trustee shall, subject to subsection (d) below, file a Form 10-K, in substance as required by applicable law or applicable Commission staff’s interpretations and conforming to industry standards, with respect to the Trust Fund. Such Form 10-K shall include the Assessment of Compliance, the Attestation Report and other documentation provided by the Master Servicer pursuant to Section 3.20 (including with respect to any Sub-Servicer or subcontractor, if required to be filed) and the Assessment of Compliance and the Attestation Report with respect to the Trustee, and the Form 10-K certification in the form attached hereto as Exhibit J-1 (the “Certification”) signed by the senior officer of the Depositor in charge of securitization; provided that the Trustee shall have received no later than March 1st (other than the Assessment of Compliance, the Attention Report and the Certification, no later than March 20th) of each calendar year prior to the filing deadline for t he Form 10-K all information, data and exhibits required to be provided or filed with such Form 10-K and required to be provided to the Trustee as described in clause (c)(v) below. If they are not so timely delivered, the Trustee shall file an amended Form 10-K including such documents as exhibits reasonably promptly after they are delivered to the Trustee. The Trustee will compile the information provided by the Depositor and the Master Servicer in the Form 10-K and provide such completed Form 10-K to the Depositor to review and verify the completed Form 10-K. The Depositor shall sign the Form 10-K and deliver the signed Form 10-K, together with the Certification, to the Trustee by no later than March 20th (or if such day is not a Business Day, the preceding Business Day). The Trustee shall not be responsible for determining what information is required to be filed on a Form 10-K in connection with the transactions contemplated by this Agreement (other than any items specifically set for th in this Agreement or unless such information is specific to the Trustee, in which case the Trustee will be responsible for making such determination). The Trustee shall have no liability for any loss, expense, damage or claim arising out of or with respect to any failure to properly prepare or timely file such Form 10-K, where such failure results from the Trustee’s failure to receive, on a timely basis as required by this paragraph, any information from any other party hereto needed to prepare, arrange for execution or file such Form 10-K.

 



 

(v)          As to each item of information required to be included in any Form 10-D, Form 8-K or Form 10-K, the Trustee’s obligation to include or provide the information in the applicable report is subject to receipt from the entity that is indicated in Exhibit N as the responsible party for providing that information, if other than the Trustee, as and when required as described above. Each of the Master Servicer, the Depositor and the Trustee hereby agree to notify and provide to the other parties all information that is required to be included in any Form 10-D, Form 8-K or Form 10-K, with respect to which that entity is indicated in Exhibit N as the responsible party for providing that information by no later than the times set forth in (iv) above. The Master Servicer shall be responsible for determining the pool concentration applicable to any Sub-Servicer or originator at any time, for purposes of disclosure as required by Items 1117 and 1119 of Regulation AB. The Trustee will provide electronic or paper copies of all Form 10-D, 8-K and 10-K filings free of charge to any Certificateholder upon request.

(vi)         The Trustee shall sign a certification (in the form attached hereto as Exhibit J-2) for the benefit of the Depositor and its officers, directors and Affiliates regarding certain aspects in respect of items 1 through 3 of the Certification (provided, however, that the Trustee shall not undertake an analysis of the Attestation Report attached as an exhibit to the Form 10-K). The Trustee's certification shall be delivered to the Depositor by no later than March 18th of each year (or if such day is not a Business Day, the immediately preceding Business Day) and the Depositor shall deliver the Certification to the Trustee for filing no later than March 20th of each year (or if such day is not a Business Day, the immediately preceding Business Day).

In addition, the Trustee shall indemnify and hold harmless the Depositor and the Master Servicer and its officers, directors and Affiliates from and against any losses, damages, penalties, fines, forfeitures, reasonable and necessary legal fees and related costs, judgments and other costs and expenses arising out of or based upon the Trustee’s failure to properly prepare and/or timely file any Form 10-D, Form 8-K or Form 10-K as required by this Agreement and/or any untrue statement of a material fact or omission to state a material fact required to be stated or necessary to make the statements made not misleading contained in any information provided by the Trustee (other than the Attestation Report for the Trustee). The Master Servicer shall indemnify and hold harmless the Trustee and its officers, directors and Affiliates from and against any losses, damages, penalties, fines, forfeitures, reasonable and necessary legal f ees and related costs, judgments and other costs and expenses arising out of or based upon the Depositor’s or the Master Servicer’s failure to timely deliver any information required hereunder and/or any untrue statement of a material fact or omission to state a material fact required to be stated or necessary to make the statements made not misleading contained in any information provided by the Depositor or the Master Servicer. If the indemnification provided for herein is unavailable or insufficient to hold harmless the Master Servicer or the Depositor on the one hand or the Trustee on the other, then the other party, in connection with its respective obligations to indemnify hereunder, agrees that it shall contribute to the amount paid or payable by the other party as a result of the losses, claims, damages or liabilities of the other party in such proportion as is appropriate to reflect the relative fault of the Master Servicer or the Depositor on the one hand and the Trustee on the other.

 

 



 

Upon any filing with the Securities and Exchange Commission, the Trustee shall promptly deliver to the Depositor a copy of any such executed report, statement or information.

 

SECTION 4.07.

[Reserved].

 

SECTION 4.08.

[Reserved].

 

SECTION 4.09.

[Reserved].

 

SECTION 4.10.

Swap Account

(a)          No later than the Closing Date, the Trustee shall establish and maintain with itself, as agent for the Trustee, a separate, segregated trust account titled, “Swap Account, Deutsche Bank National Trust Company, as Trustee, in trust for the Interest Rate Swap Provider and the registered holders of Argent Securities Inc., Asset-Backed Pass-Through Certificates, Series 2006-W1.” Such account shall be an Eligible Account and amounts therein shall be held uninvested.

(b)          On each Distribution Date, prior to any distribution to any Certificate, the Trustee shall deposit into the Swap Account pursuant to 3.05(c)(i): (i) the amount of any Net Swap Payment or Swap Termination Payment owed to the Interest Rate Swap Provider (after taking into account any upfront payment received by the Interest Rate Swap Provider from the counterparty to a replacement similar agreement) from funds collected and received with respect to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trustee from the Swap Administrator, for distribution in accordance with subsection (e) below, pursuant to the Swap Administration Agreement, dated as of the Closing Date (the “Swap Administration Agreement”), among Deutsche Bank National Trust Company in its capacity as Trustee, Deutsche Bank National Trust Company in its capacity as Swap Administrator and Ameriquest Mortgage Company. For federal income tax purposes, any amounts paid to the Interest Rate Swap Provider on each Distribution Date shall first be deemed paid to the Interest Rate Swap Provider in respect of the Class SWAP-IO Interest to the extent of the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount shall be deemed paid to the Interest Rate Swap Provider in respect of a Class IO Distribution Amount (as defined below).

If the Trustee fails to pay any Net Swap Payment owed to the Interest Rate Swap Provider and such failure to pay is not related to insufficient funds in the Distribution Account and such failure to pay would, pursuant to the terms of the Interest Rate Swap Agreement, cause a Swap Termination Payment to be owed to the Interest Rate Swap Provider, the NIMS Insurer may, on behalf of the Trustee and after consultation with the Trustee, pay such Net Swap Payment owed to the Interest Rate Swap Provider. The NIMS Insurer shall be reimbursed by the Trustee pursuant to Section 3.05(c).

(c)          For federal income tax purposes, the Swap Account shall be owned by the majority Holder of the Class CE Certificates.

(d)          The Trustee shall treat the Holders of Certificates (other than the Class P, Class CE, Class R and Class R-X Certificates) as having entered into a notional principal

 



contract with respect to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of Certificates (other than the Class P, Class CE, Class R and Class R-X Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the REMIC III Regular Interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the amount of interest otherwise payable to such Certificates, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to the Holders of the Certificates (other than the Class CE, Class P, Class R and Class R-X Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a Regular Interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in REMIC III and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P Certificates, Class R Certificates and Class R-X Certificates) shall be treated as representing not only ownership of Regular Interests in REMIC III, but also ownership of an interest in, and obligations with respect to, a notional principal contract.

(e)          It is the intention of the parties hereto that, for federal and state income and state and local franchise tax purposes, the Net WAC Rate Carryover Reserve Account and the Swap Account be disregarded as entities separate from the Holder of the Class CE Certificates unless and until the date when either (a) there is more than one Class CE Certificateholder or (b) any Class of Certificates in addition to the Class CE Certificates is recharacterized as an equity interest in the Net WAC Rate Carryover Reserve Account or the Swap Account for federal income tax purposes, in which case it is the intention of the parties hereto that, for federal and state income and state and local franchise tax purposes, the Net WAC Rate Carryover Reserve Account and the Swap Account be treated as assets of a grantor trust.

 

SECTION 4.11.

Tax Treatment of Swap Payments and Swap Termination Payments.

For federal income tax purposes, each holder of a Class A or Mezzanine Certificate is deemed to own an undivided beneficial ownership interest in a REMIC regular interest and the right to receive payments from either the Net WAC Rate Carryover Reserve Account or the Swap Account in respect of the Net WAC Rate Carryover Amount or the obligation to make payments to the Swap Account. For federal income tax purposes, the Trustee will account for payments to each Class A and Mezzanine Certificates as follows: each Class A and Class M Certificate will be treated as receiving their entire payment from REMIC III (regardless of any Swap Termination Payment or obligation under the Interest Rate Swap Agreement) and subsequently paying their portion of any Swap Termination Payment in respect of each such Class’ obligation under the Interest Rate Swap Agreement. In the event that any such Class is resecuritized in a REMIC, the obligation under the Interest Rate Swap Agreement to pay any such Swap Termination Payment (or any shortfall in Net Swap Payment), will be made by one or more of the REMIC Regular Interests issued by the resecuritization REMIC subsequent to such REMIC Regular Interest receiving its full payment from any such Class A or Mezzanine Certificate. Resecuritization of any Class A or Mezzanine Certificate in a REMIC will be permissible only if the Trustee hereunder is the trustee in such resecuritization.

The REMIC regular interest corresponding to a Class A or Mezzanine Certificate will be entitled to receive interest and principal payments at the times and in the amounts equal

 



to those made on the certificate to which it corresponds, except that (i) the maximum interest rate of that REMIC regular interest will equal the Net WAC Pass-Through Rate computed for this purpose by limiting the Base Calculation Amount of the Interest Rate Swap Agreement to the aggregate principal balance of the Mortgage Loans and (ii) any Swap Termination Payment will be treated as being payable solely from Net Monthly Excess Cashflow. As a result of the foregoing, the amount of distributions and taxable income on the REMIC regular interest corresponding to a Class A or Mezzanine Certificate may exceed the actual amount of distributions on the Class A or Mezzanine Certificate.

 

SECTION 4.12.

Net WAC Rate Carryover Reserve Account.

(a)          No later than the Closing Date, the Trustee shall establish and maintain with itself, as agent for the Trustee, a separate, segregated trust account titled, “Net WAC Rate Carryover Reserve Account, Deutsche Bank National Trust Company, as Trustee, in trust for the registered Holders of Argent Securities Inc., Asset-Backed Pass-Through Certificates, Series 2006-W1.” The Trustee shall deposit into the Net WAC Rate Carryover Reserve Account any payments received by it pursuant to Section 4.01(a)(4)(iv).

(b)          On each Distribution Date as to which there is a Net WAC Rate Carryover Amount payable to the Class A Certificates or the Mezzanine Certificates, the Trustee has been directed by the Class CE Certificateholders to, and therefore shall, deposit into the Net WAC Rate Carryover Reserve Account the amount of such Net WAC Rate Carryover Amount rather than distributing such amounts to the Class CE Certificateholders. On each such Distribution Date, the Trustee shall hold all such amounts for the benefit of the Holders of the Class A Certificates and the Mezzanine Certificates, and shall distribute such amounts to the Holders of the Class A Certificates and the Mezzanine Certificates in the amounts and priorities set forth in Section 4.01(a).

(c)          For federal and state income tax purposes, the Class CE Certificateholders shall be deemed to be the owners of the Net WAC Rate Carryover Reserve Account and all amounts deposited into the Net WAC Rate Carryover Reserve Account shall be treated as amounts distributed by REMIC IV to the Holders of the Class CE Interest and from the Class CE Interest to the Class CE Certificates. Upon the termination of the Trust, or the payment in full of the Class A Certificates and the Mezzanine Certificates, all amounts remaining on deposit in the Net WAC Rate Carryover Reserve Account shall be released by the Trust and distributed to the Class CE Certificateholders or their designees. The Net WAC Rate Carryover Reserve Account shall be part of the Trust but not part of any REMIC and any payments to the Holders of the Class A Certificates or the Mezzanine Certificates of Net WAC Rate Carryover Amounts shall not be payments with respect to a “regular interest” in a REMIC within the meaning of Code Section 860(G)(a)(1).

(d)          By accepting a Class CE Certificate, each Class CE Certificateholder hereby agrees to direct the Trustee, and the Trustee hereby is directed, to deposit into the Net WAC Rate Carryover Reserve Account the amounts described above on each Distribution Date as to which there is any Net WAC Rate Carryover Amount rather than distributing such amounts to the Class CE Certificateholders. By accepting a Class CE Certificate, each Class CE

 



Certificateholder further agrees that such direction is given for good and valuable consideration, the receipt and sufficiency of which is acknowledged by such acceptance.

(e)          At the written direction of the Holders of a majority in Percentage Interest in the Class CE Certificates, the Trustee shall direct any depository institution maintaining the Net WAC Rate Carryover Reserve Account to invest the funds in such account in one or more Permitted Investments bearing interest or sold at a discount, and maturing, unless payable on demand, (i) no later than the Business Day immediately preceding the date on which such funds are required to be withdrawn from such account pursuant to this Agreement, if a Person other than the Trustee or an Affiliate manages or advises such investment, and (ii) no later than the date on which such funds are required to be withdrawn from such account pursuant to this Agreement, if the Trustee or an Affiliate manages or advises such investment. If no investment direction of the Holders of a majority in Percentage Interest in the Class CE Certificates with respect to the Net WAC Rate Carryover Reserve Account is received by the Trustee, the Trustee shall invest the funds in the Deutsche Bank Institutional Cash Management Fund 541 so long as it is a Permitted Investment. Interest earned on such investment shall be deposited into the Net WAC Rate Carryover Reserve Account.

 



 

ARTICLE V

 

THE CERTIFICATES

 

SECTION 5.01.

The Certificates.

(a)          The Certificates in the aggregate shall represent the entire beneficial ownership interest in the Mortgage Loans and all other assets included in REMIC I. At the Closing Date, the aggregate Certificate Principal Balance of the Certificates shall equal the aggregate Stated Principal Balance of the Mortgage Loans.

The Certificates shall be substantially in the forms annexed hereto as Exhibits A-1 through A-R-X. The Certificates of each Class shall be issuable in registered form only, in denominations of authorized Percentage Interests as described in the definition thereof. Each Certificate shall share ratably in all rights of the related Class.

Upon original issue, the Certificates shall be executed and delivered by the Trustee and the Trustee shall cause the Certificates to be authenticated by the Certificate Registrar to or upon the order of the Depositor. The Certificates shall be executed and attested by manual or facsimile signature on behalf of the Trustee by an authorized signatory. Certificates bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Trustee shall bind the Trustee notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Certificates or did not hold such offices at the date of such Certificates. No Certificate shall be entitled to any benefit under this Agreement or be valid for any purpose, unless there appears on such Certificate a certificate of authentication substantially in the form provided herein executed by the Certificate Registrar by manual signature, and such certificate of authentication shall be conclusive evidence, and the only evidence, that such Certificate has been duly authenticated and delivered hereunder. All Certificates shall be dated the date of their authentication.

(b)          The Class A Certificates and the Mezzanine Certificates shall initially be issued as one or more Certificates held by the Book-Entry Custodian or, if appointed to hold such Certificates as provided below, the Depository, and registered in the name of the Depository or its nominee and, except as provided below, registration of such Certificates may not be transferred by the Trustee except to another Depository that agrees to hold such Certificates for the respective Certificate Owners with Ownership Interests therein. The Certificate Owners shall hold their respective Ownership Interests in and to such Certificates through the book-entry facilities of the Depository and, except as provided below, shall not be entitled to definitive, fully registered Certificates (“Definitive Certificates”) in respect of such Ownership Interests. All transfers by Certificate Owners of their respective Ownership Interests in the 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 the Ownership Interests in the 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. The Trustee is hereby initially appointed as the Book-Entry Custodian and hereby agrees to act as such in accordance herewith and in accordance with the agreement that it has with the Depository authorizing it to act as such. The Book-Entry Custodian may, and if it is

 



no longer qualified to act as such, the Book-Entry Custodian shall, appoint, by a written instrument delivered to the Depositor, the Master Servicer, the Trustee (if the Trustee is not the Book-Entry Custodian) and any other transfer agent (including the Depository or any successor Depository), to act as Book-Entry Custodian under such conditions as the predecessor Book-Entry Custodian and the Depository or any successor Depository may prescribe, provided that the predecessor Book-Entry Custodian shall not be relieved of any of its duties or responsibilities by reason of any such appointment of other than the Depository. If the Trustee resigns or is removed in accordance with the terms hereof, if it so elects, the Depository shall immediately succeed to its predecessor’s duties as Book-Entry Custodian. The Depositor shall have the right to inspect, and to obtain copies of, any Certificates held as Book-Entry Certificates by the Book-Entry Custodian.

The Trustee, the Master Servicer and the Depositor may for all purposes (including the making of payments due on the Book-Entry Certificates) deal with the Depository as the authorized representative of the Certificate Owners with respect to the Book-Entry Certificates for the purposes of exercising the rights of Certificateholders hereunder. The rights of Certificate Owners with respect to the Book-Entry Certificates shall be limited to those established by law and agreements between such Certificate Owners and the Depository Participants and brokerage firms representing such Certificate Owners. Multiple requests and directions from, and votes of, the Depository as Holder of the Book-Entry Certificates with respect to any particular matter shall not be deemed inconsistent if they are made with respect to different Certificate Owners. The Trustee may establish a reasonable record date in connection with solicitations of consents from or voting by Certificateholders and shall give notice to the Depository of such record date.

If (i)(A) the Depositor advises the Trustee in writing that the Depository is no longer willing or able to properly discharge its responsibilities as Depository, and (B) the Depositor is unable to locate a qualified successor or (ii) after the occurrence of a Master Servicer Event of Default, Certificate Owners representing in the aggregate not less than 51% of the Ownership Interests of the Book-Entry Certificates advise the Trustee through the Depository, in writing, that the continuation of a book-entry system through the Depository is no longer in the best interests of the Certificate Owners, the Trustee shall notify all Certificate Owners, through the Depository, of the occurrence of any such event and of the availability of Definitive Certificates to Certificate Owners requesting the same. Upon surrender to the Trustee of the Book-Entry Certificates by the Book-Entry Custodian or the Depository, as applicable, accompanied by registration instructions from the Depository for registration of transfer, the Trustee shall issue the Definitive Certificates. Such Definitive Certificates shall be issued in minimum denominations of $100,000 in the case of the Class A and Mezzanine Certificates, except that any beneficial ownership that was represented by a Book-Entry Certificate in an amount less than $100,000 immediately prior to the issuance of a Definitive Certificate shall be issued in a minimum denomination equal to the amount represented by such Book-Entry Certificate. None of the Depositor, the Master Servicer or the Trustee shall be liable for any delay in the delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. 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 Trustee, to the extent applicable with respect to such Definitive

 



Certificates, and the Trustee shall recognize the Holders of the Definitive Certificates as Certificateholders hereunder.

 

SECTION 5.02.

Registration of Transfer and Exchange of Certificates.

(a)          The Trustee shall cause to be kept at one of the offices or agencies to be appointed by the Trustee in accordance with the provisions of Section 8.12 a Certificate Register for the Certificates in which, subject to such reasonable regulations as it may prescribe, the Trustee shall provide for the registration of Certificates and of transfers and exchanges of Certificates as herein provided. The Trustee shall initially serve as Certificate Registrar for the purpose of registering Certificates and transfers and exchanges of Certificates as herein provided. The Certificate Registrar may appoint, by a written instrument delivered to the Master Servicer and the Depositor, any other bank or trust company to act as Certificate Registrar under such conditions as the predecessor Certificate Registrar may prescribe, provided that the predecessor Certificate Registrar shall not be relieved of any of its duties or responsibilities hereunder by reason of such appointment. If the Trustee shall at any time not be the Certificate Registrar, the Trustee shall have and maintain the right to inspect the Certificate Register or to obtain a copy thereof at all reasonable times, and to rely conclusively upon a certificate of the Certificate Registrar as to the information set forth in the Certificate Register.

(b)          No transfer of any Private Mezzanine Certificate, Class CE Certificate, Class P Certificate or Residual Certificate shall be made unless that transfer is made pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “1933 Act”), and an effective registration or qualification under applicable state securities laws, or is made in a transaction that does not require such registration or qualification. In the event that such a transfer of a Private Mezzanine Certificate, Class CE Certificate, Class P Certificate or Residual Certificate is to be made without registration or qualification (other than in connection with (i) the initial transfer of any such Certificate by the Depositor to an affiliate of the Depositor, (ii) the transfer of any such Class CE, Class P or Residual Certificate to the issuer under the Indenture or the indenture trustee under the Indenture or (iii) a transfer of any such Certificate from the issuer under the Indenture or the indenture trustee under the Indenture to the Depositor or an Affiliate of the Depositor), the Trustee and the Certificate Registrar shall each require receipt of: (i) if such transfer is purportedly being made in reliance upon Rule 144A under the 1933 Act, written certifications from the Certificateholder desiring to effect the transfer and from such Certificateholder’s prospective transferee, substantially in the forms attached hereto as Exhibit F-1; and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such transfer may be made without such registration (which Opinion of Counsel shall not be an expense of the Depositor, the Trustee, the Master Servicer, in its capacity as such, or the Trust Fund), together with copies of the written certification(s) of the Certificateholder desiring to effect the transfer and/or such Certificateholder’s prospective transferee upon which such Opinion of Counsel is based, if any. None of the Depositor, the Certificate Registrar or the Trustee is obligated to register or qualify the Private Mezzanine Certificates, the Class CE Certificates, the Class P Certificates or the Residual Certificates under the 1933 Act or any other securities laws or to take any action not otherwise required under this Agreement to permit the transfer of such Certificates without registration or qualification. If a transfer of an Ownership Interest in the Private Mezzanine Certificates is to be made without registration under the 1933 Act (other than in connection with the initial transfer of any such Certificate by the Depositor to

 



an affiliate of the Depositor), then the Certificate Registrar shall refuse to register such transfer unless it receives (and upon receipt, may conclusively rely upon) a certificate from the Certificateholder desiring to effect such transfer and a certificate from such Certificateholder’s prospective transferee (which in the case of the Book-Entry Certificates, the Certificateholder and the Certificateholder’s prospective transferee shall be deemed to have represented such certification), to the effect that, among other things, the transfer is being made to a qualified institutional buyer as defined in Rule 144A under the Securities Act in accordance with Rule 144A. Any Certificateholder desiring to effect the transfer of a Private Mezzanine Certificate, Class CE Certificate, Class P Certificate or Residual Certificate shall, and does hereby agree to, indemnify the Trustee, the Depositor, the Certificate Registrar and the Master 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.

Notwithstanding the foregoing, no certification or Opinion of Counsel described in this Section 5.02(b) shall be required in connection with the transfer, on the Closing Date, of any Class R Certificate by the Depositor to an “accredited investor” within the meaning of Rule 501(d) of the 1933 Act.

(c)          No transfer of a Certificate or any interest therein shall be made to any Plan, any Person acting, directly or indirectly, on behalf of a Plan or any Person acquiring such Certificates with “Plan Assets” of a Plan within the meaning of the Department of Labor regulation promulgated at 29 C.F.R. § 2510.3-101 (“Plan Assets”), as certified by such transferee in the form of Exhibit G (or, in the case of a Book-Entry Certificate, such transferee shall be deemed to represent that it is not a Plan or acquiring with Plan Assets), unless the Trustee is provided with an Opinion of Counsel for the benefit of the Trust Fund, the Depositor, the Trustee, the NIMS Insurer and the Master Servicer and on which they may rely, which shall be to the effect that the purchase and holding of such Certificates is permissible under applicable law, shall not constitute or result in any non-exempt prohibited transaction under ERISA or Section 4975 of the Code and shall not subject the Depositor, the Master Servicer, the NIMS Insurer, the Trustee or the Trust Fund to any obligation or liability (including obligations or liabilities under ERISA or Section 4975 of the Code) in addition to those undertaken in this Agreement, which Opinion of Counsel shall not be an expense of the Depositor, the Master Servicer, the NIMS Insurer, the Trustee or the Trust Fund. Neither an Opinion of Counsel nor any certification shall be required in connection with (i) the initial transfer of any such Certificate by the Depositor to an affiliate of the Depositor, (ii) the transfer of any such Certificate to the issuer under the Indenture or the indenture trustee under the Indenture or (iii) a transfer of any such Certificate from the issuer under the Indenture or the indenture trustee under the Indenture to the Depositor or an Affiliate of the Depositor (in which case such transferee shall be deemed to have represented that it is not purchasing with Plan Assets) and the Trustee shall be entitled to conclusively rely upon a representation (which, upon the request of the Trustee, shall be a written representation) from the Depositor of the status of such transferee as an affiliate of the Depositor.

If any Certificate or any interest therein is acquired or held in violation of the provisions of the preceding paragraphs, the next preceding permitted beneficial owner shall be treated as the beneficial owner of that Certificate retroactive to the date of transfer to the purported beneficial owner. Any purported beneficial owner whose acquisition or holding of any

 



such Certificate or interest therein was effected in violation of the provisions of the preceding paragraph shall indemnify and hold harmless the Depositor, the Master Servicer, the Trustee, the NIMS Insurer, and the Trust Fund from and against any and all liabilities, claims, costs or expenses incurred by those parties as a result of that acquisition or holding.

(d)           (i) Each Person who has or who acquires any Ownership Interest in a Residual Certificate shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the following provisions and to have irrevocably authorized the Certificate Registrar or its designee under clause (iii)(A) below to deliver payments to a Person other than such Person and to negotiate the terms of any mandatory sale under clause (iii)(B) below and to execute all instruments of Transfer and to do all other things necessary in connection with any such sale. The rights of each Person acquiring any Ownership Interest in a Residual Certificate are expressly subject to the following provisions:

(A)         Each Person holding or acquiring any Ownership Interest in a Residual Certificate shall be a Permitted Transferee and shall promptly notify the Certificate Registrar of any change or impending change in its status as a Permitted Transferee.

(B)         In connection with any proposed Transfer of any Ownership Interest in a Residual Certificate, the Certificate Registrar shall require delivery to it and shall not register the Transfer of any Residual Certificate until its receipt of an affidavit and agreement (a “Transfer Affidavit and Agreement”), in the form attached hereto as Exhibit F-2 from the proposed Transferee, in form and substance satisfactory to the Certificate Registrar, representing and warranting, among other things, that such Transferee is a Permitted Transferee, that it is not acquiring its Ownership Interest in the Residual Certificate that is the subject of the proposed Transfer as a nominee, trustee or agent for any Person that is not a Permitted Transferee, that for so long as it retains its Ownership Interest in a Residual Certificate, it shall endeavor to remain a Permitted Transferee, and that it has reviewed the provisions of this Section 5.02(d) and agrees to be bound by them.

(C)         Notwithstanding the delivery of a Transfer Affidavit and Agreement by a proposed Transferee under clause (B) above, if a Responsible Officer of the Certificate Registrar who is assigned to this transaction has actual knowledge that the proposed Transferee is not a Permitted Transferee, no Transfer of an Ownership Interest in a Residual Certificate to such proposed Transferee shall be effected.

(D)         Each Person holding or acquiring any Ownership Interest in a Residual Certificate shall agree (x) to require a Transfer Affidavit and Agreement from any other Person to whom such Person attempts to transfer its Ownership Interest in a Residual Certificate and (y) not to transfer its Ownership Interest unless it provides a Transferor Affidavit (in the form attached hereto as Exhibit F-2), to the Certificate Registrar stating that, among other things, it has no actual knowledge that such other Person is not a Permitted Transferee.

(E)         Each Person holding or acquiring an Ownership Interest in a Residual Certificate, by purchasing an Ownership Interest in such Certificate, agrees to give the Certificate Registrar written notice that it is a “pass-through interest holder” within the

 



meaning of temporary Treasury regulation Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring an Ownership Interest in a Residual Certificate, if it is, or is holding an Ownership Interest in a Residual Certificate on behalf of, a “pass-through interest holder.”

(ii)          The Certificate Registrar shall register the Transfer of any Residual Certificate only if it shall have received the Transfer Affidavit and Agreement and all of such other documents as shall have been reasonably required by the Certificate Registrar as a condition to such registration. In addition, no Transfer of a Residual Certificate shall be made unless the Certificate Registrar shall have received a representation letter from the Transferee of such Certificate to the effect that such Transferee is a Permitted Transferee.

(iii)(A)  If any purported Transferee shall become a Holder of a Residual Certificate in violation of the provisions of this Section 5.02(d), then the last preceding Permitted Transferee shall be restored, to the extent permitted by law, to all rights as Holder thereof retroactive to the date of registration of such Transfer of such Residual Certificate. The Certificate Registrar shall be under no liability to any Person for any registration of Transfer of a Residual Certificate that is in fact not permitted by this Section 5.02(d) or for making any payments due on such Certificate to the Holder thereof or for taking any other action with respect to such Holder under the provisions of this Agreement.

(B)         If any purported Transferee shall become a Holder of a Residual Certificate in violation of the restrictions in this Section 5.02(d) and to the extent that the retroactive restoration of the rights of the Holder of such Residual Certificate as described in clause (iii)(A) above shall be invalid, illegal or unenforceable, then the Certificate Registrar shall have the right, without notice to the Holder or any prior Holder of such Residual Certificate, to sell such Residual Certificate to a purchaser selected by the Certificate Registrar on such terms as the Certificate Registrar may choose. Such purported Transferee shall promptly endorse and deliver each Residual Certificate in accordance with the instructions of the Certificate Registrar. Such purchaser may be the Certificate Registrar itself or any Affiliate of the Certificate Registrar. The proceeds of such sale, net of the commissions (which may include commissions payable to the Certificate Registrar or its Affiliates), expenses and taxes due, if any, shall be remitted by the Certificate Registrar to such purported Transferee. The terms and conditions of any sale under this clause (iii)(B) shall be determined in the sole discretion of the Certificate Registrar, and the Certificate Registrar shall not be liable to any Person having an Ownership Interest in a Residual Certificate as a result of its exercise of such discretion.

(iv)         The Trustee shall make available to the Internal Revenue Service and those Persons specified by the REMIC Provisions all information necessary to compute any tax imposed (A) as a result of the Transfer of an Ownership Interest in a Residual Certificate to any Person who is a Disqualified Organization, including the information described in Treasury regulations sections 1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to the “excess inclusions” of such Residual Certificate and (B) as a result of any regulated investment company, real estate investment trust, common trust fund, partnership, trust, estate or organization described in Section 1381 of the Code that holds an Ownership Interest in a Residual Certificate having as

 



among its record Holders at any time any Person which is a Disqualified Organization. Reasonable compensation for providing such information may be accepted by the Trustee.

(v)          The provisions of this Section 5.02(d) set forth prior to this subsection (v) may be modified, added to or eliminated, provided that there shall have been delivered to the Trustee at the expense of the party seeking to modify, add to or eliminate any such provision the following:

(A)         written notification from each Rating Agency to the effect that the modification, addition to or elimination of such provisions shall not cause such Rating Agency to downgrade its then-current ratings of any Class of Certificates; and

(B)         an Opinion of Counsel, in form and substance satisfactory to the Trustee, to the effect that such modification of, addition to or elimination of such provisions shall not cause any Trust REMIC to cease to qualify as a REMIC and shall not cause any Trust REMIC, as the case may be, to be subject to an entity-level tax caused by the Transfer of any Residual Certificate to a Person that is not a Permitted Transferee or (y) a Person other than the prospective transferee to be subject to a REMIC-tax caused by the Transfer of a Residual Certificate to a Person that is not a Permitted Transferee.

The Trustee shall forward to the NIMS Insurer a copy of the items delivered to it pursuant to (A) and (B) above.

(e)          Subject to the preceding subsections, upon surrender for registration of transfer of any Certificate at any office or agency of the Trustee maintained for such purpose pursuant to Section 8.12, the Trustee shall execute and the Certificate Registrar shall authenticate and deliver, in the name of the designated Transferee or Transferees, one or more new Certificates of the same Class of a like aggregate Percentage Interest.

(f)           At the option of the Holder thereof, any Certificate may be exchanged for other Certificates of the same Class with authorized denominations and a like aggregate Percentage Interest, upon surrender of such Certificate to be exchanged at any office or agency of the Trustee maintained for such purpose pursuant to Section 8.12. Whenever any Certificates are so surrendered for exchange the Trustee, shall execute and cause the Certificate Registrar to authenticate and deliver the Certificates which the Certificateholder making the exchange is entitled to receive. Every Certificate presented or surrendered for transfer or exchange shall (if so required by the Trustee) be duly endorsed by, or be accompanied by a written instrument of transfer in the form satisfactory to the Trustee and the Certificate Registrar duly executed by, the Holder thereof or his attorney duly authorized in writing. In addition, (i) with respect to each Class R Certificate, the Holder thereof may exchange, in the manner described above, the Class R Certificate for four separate Certificates, each representing such Holder’s respective Percentage Interest in the Class R-I Interest, the Class R-II Interest, the Class R-III Interest and the Class R-IV Interest, respectively, in each case that was evidenced by the Class R Certificate being exchanged and (ii) with respect to each Class R-X Certificate, the Holder thereof may exchange, in the manner described above, the Class R-X Certificate for four separate Certificates, each representing such Holder’s respective Percentage Interest in the Class R-IV Interest, the Class R-V Interest and the Class R-VI Interest, respectively, in each case that was evidenced by the Class R-X Certificate being exchanged.

 



 

(g)          No service charge to the Certificateholders shall be made for any transfer or exchange of Certificates, but the Trustee may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Certificates.

(h)          All Certificates surrendered for transfer and exchange shall be canceled and destroyed by the Certificate Registrar in accordance with its customary procedures.

(i)           The Trustee shall cause the Certificate Registrar (unless the Trustee is acting as Certificate Registrar) to provide notice to the Trustee of each transfer of a Certificate and to provide the Trustee with an updated copy of the Certificate Register on the first Business Day in March and August of each year, commencing in March 2006.

(j)           Any attempted or purported transfer of any Certificate in violation of the provisions of Section 5.02(c) hereof shall be void ab initio and such Certificate shall be considered to have been held continuously by the prior permitted Holder.

 

SECTION 5.03.

Mutilated, Destroyed, Lost or Stolen Certificates.

If (i) any mutilated Certificate is surrendered to the Trustee or the Certificate Registrar, or the Trustee and the Certificate Registrar receive evidence to their satisfaction of the destruction, loss or theft of any Certificate, and (ii) there is delivered to the Trustee, the NIMS Insurer and the Certificate Registrar such security or indemnity as may be required by them to save each of them harmless, then, in the absence of actual knowledge by the Trustee or the Certificate Registrar that such Certificate has been acquired by a bona fide purchaser or the Trustee shall execute and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of the same Class and of like denomination and Percentage Interest. Upon the issuance of any new Certificate under this Section, the Trustee 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 Certificate Registrar) connected therewith. Any replacement Certificate issued pursuant to this Section shall constitute complete and indefeasible evidence of ownership in the applicable REMIC created hereunder, 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 Depositor, the Master Servicer, the Trustee, the NIMS Insurer, the Certificate Registrar and any agent of any of them may treat the Person in whose name any Certificate is registered as the owner of such Certificate for the purpose of receiving distributions pursuant to Section 4.01 and for all other purposes whatsoever, and none of the Depositor, the Master Servicer, the Trustee, the Certificate Registrar, the NIMS Insurer or any agent of any of them shall be affected by notice to the contrary.

 

SECTION 5.05.

Certain Available Information.

On or prior to the date of the first sale of any Private Mezzanine Certificate, Class CE Certificate, Class P Certificate or Residual Certificate to an Independent third party, the

 



Depositor shall provide to the Trustee ten copies of any private placement memorandum or other disclosure document used by the Depositor in connection with the offer and sale of the Private Mezzanine Certificates, the Class CE Certificates, the Class P Certificates or the Residual Certificates. In addition, if any such private placement memorandum or disclosure document is revised, amended or supplemented at any time following the delivery thereof to the Trustee, the Depositor promptly shall inform the Trustee of such event and shall deliver to the Trustee ten copies of the private placement memorandum or disclosure document, as revised, amended or supplemented. The Trustee shall maintain at its Corporate Trust Office and shall make available free of charge during normal business hours for review by any Holder of a Certificate and/or Certificate Owner or any Person identified to the Trustee as a prospective transferee of a Certificate, originals or copies of the following items: (i) in the case of a Holder, Certificate Owner or prospective transferee of a Private Mezzanine Certificate, a Class CE Certificate, a Class P Certificate or a Residual Certificate, the private placement memorandum or other disclosure document relating to such Certificate, if any, in the form most recently provided to the Trustee; and (ii) in all cases, (A) this Agreement and any amendments hereof entered into pursuant to Section 11.01, (B) all monthly statements required to be delivered to Certificateholders of the relevant Class pursuant to Section 4.02 since the Closing Date, and all other notices, reports, statements and written communications delivered to the Certificateholders of the relevant Class pursuant to this Agreement since the Closing Date, (C) all certifications delivered by a Responsible Officer of the Trustee since the Closing Date pursuant to Section 10.01(h), (D) any and all Officers’ Certificates delivered to the Trustee by the Master Servicer since the Closing Date to evidence the Master Servicer’s determination that any Advance or Servicing Advance was, or if made, would be a Nonrecoverable Advance or Nonrecoverable Servicing Advance, respectively, and (E) any and all Officers’ Certificates delivered to the Trustee by the Master Servicer since the Closing Date pursuant to Section 4.04(a). Copies and mailing of any and all of the foregoing items shall be available from the Trustee upon request at the expense of the person requesting the same.

 



 

ARTICLE VI

 

THE DEPOSITOR AND THE MASTER SERVICER

 

SECTION 6.01.

Liability of the Depositor and the Master Servicer.

The Depositor and the Master Servicer each shall be liable in accordance herewith only to the extent of the obligations specifically imposed by this Agreement and undertaken hereunder by the Depositor and the Master Servicer herein.

 

SECTION 6.02.

Merger or Consolidation of the Depositor or the Master Servicer.

Subject to the following paragraph, the Depositor shall keep in full effect its existence, rights and franchises as a corporation under the laws of the jurisdiction of its incorporation. Subject to the following paragraph, the Master Servicer shall keep in full effect its existence, rights and franchises as a corporation under the laws of the jurisdiction of its incorporation and its qualification as an approved conventional seller/servicer for Fannie Mae or Freddie Mac in good standing. The Depositor and the Master Servicer each shall obtain and preserve its qualification to do business as a foreign corporation in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Agreement, the Certificates or any of the Mortgage Loans and to perform its respective duties under this Agreement.

The Depositor or the Master Servicer may be merged or consolidated with or into any Person, or transfer all or substantially all of its assets to any Person, in which case any Person resulting from any merger or consolidation to which the Depositor or the Master Servicer shall be a party, or any Person succeeding to the business of the Depositor or the Master Servicer, shall be the successor of the Depositor or the Master Servicer, 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 the Master Servicer shall be qualified to service mortgage loans on behalf of Fannie Mae or Freddie Mac; and provided further that the Rating Agencies’ ratings of the Class A Certificates and the Mezzanine Certificates in effect immediately prior to such merger or consolidation shall not be qualified, reduced or withdrawn as a result thereof (as evidenced by a letter to such effect from the Rating Agencies).

 

SECTION 6.03.

Limitation on Liability of the Depositor, the Master Servicer and Others.

None of the Depositor, the NIMS Insurer, the Master Servicer or any of the directors, officers, employees or agents of the Depositor or the Master Servicer shall be under any liability to the Trust Fund or the Certificateholders for any action taken or for refraining from the taking of any action in good faith pursuant to this Agreement, or for errors in judgment; provided, however, that this provision shall not protect the Depositor, the NIMS Insurer, the Master Servicer or any such person against any breach of warranties, representations or covenants made herein, or against any specific liability imposed on the Master Servicer pursuant hereto, or against any liability which would otherwise be imposed by reason of willful

 



misfeasance, bad faith or negligence in the performance of duties or by reason of reckless disregard of obligations and duties hereunder. The Depositor, the NIMS Insurer, the Master Servicer or the Trustee and any director, officer, employee or agent of the Depositor, the NIMS Insurer, the Master Servicer or the Trustee may rely in good faith on any document of any kind which, prima facie, is properly executed and submitted by any Person respecting any matters arising hereunder.

The Depositor, the NIMS Insurer, the Master Servicer and any director, officer, employee or agent of the Depositor, the NIMS Insurer, or the Master Servicer shall be indemnified and held harmless by the Trust Fund against any loss, liability or expense incurred in connection with any legal action relating to this Agreement or the Certificates, other than any loss, liability or expense relating to any specific Mortgage Loan or Mortgage Loans (except as any such loss, liability or expense shall be otherwise reimbursable pursuant to this Agreement) or, in the case of the Depositor and the Master Servicer, any loss, liability or expense incurred by reason of willful misfeasance, bad faith or negligence in the performance of duties hereunder or by reason of reckless disregard of obligations and duties hereunder. None of the Depositor, the NIMS Insurer or the Master Servicer shall be under any obligation to appear in, prosecute or defend any legal action unless such action is related to its respective duties under this Agreement and, in its opinion, does not involve it in any expense or liability; provided, however, that each of the Depositor, the NIMS Insurer and the Master Servicer may in its discretion undertake any such action which it may deem necessary or desirable with respect to this Agreement and the rights and duties of the parties hereto and the interests of the Certificateholders hereunder. In such event, unless the Depositor or the Master Servicer acts without the consent of the Holders of Certificates entitled to at least 51% of the Voting Rights (which consent shall not be necessary in the case of litigation or other legal action by either to enforce their respective rights or defend themselves hereunder), the legal expenses and costs of such action and any liability resulting therefrom (except any loss, liability or expense incurred by reason of willful misfeasance, bad faith or negligence in the performance of duties hereunder or by reason of reckless disregard of obligations and duties hereunder) shall be expenses, costs and liabilities of the Trust Fund, and the Depositor, the NIMS Insurer and the Master Servicer shall be entitled to be reimbursed therefor from the Collection Account as and to the extent provided in Section 3.05, any such right of reimbursement being prior to the rights of the Certificateholders to receive any amount in the Collection Account.

 

SECTION 6.04.

Limitation on Resignation of the Master Servicer.

The Master Servicer shall not resign from the obligations and duties hereby imposed on it except (i) upon determination that its duties hereunder are no longer permissible under applicable law or (ii) with the written consent of the Trustee, the NIMS Insurer and written confirmation from each Rating Agency (which confirmation shall be furnished to the Depositor, the NIMS Insurer and the Trustee) that such resignation shall not cause such Rating Agency to reduce the then current rating of the Class A Certificates or the Mezzanine Certificates. Any such determination pursuant to clause (i) of the preceding sentence, permitting the resignation of the Master Servicer, shall be evidenced by an Opinion of Counsel to such effect obtained at the expense of the Master Servicer and delivered to the Trustee and the NIMS Insurer. No resignation of the Master Servicer shall become effective until the Trustee or a successor servicer acceptable to the NIMS Insurer shall have assumed the Master Servicer’s responsibilities, duties,

 



liabilities (other than those liabilities arising prior to the appointment of such successor) and obligations under this Agreement.

Except as expressly provided herein, the Master Servicer shall not assign or transfer any of its rights, benefits or privileges hereunder to any other Person, nor delegate to or subcontract with, nor authorize or appoint any other Person to perform any of the duties, covenants or obligations to be performed by the Master Servicer hereunder. If, pursuant to any provision hereof, the duties of the Master Servicer are transferred to a successor master servicer, the entire amount of the Servicing Fee and other compensation payable to the Master Servicer pursuant hereto shall thereafter be payable to such successor master servicer.

 

SECTION 6.05.

Rights of the Depositor in Respect of the Master Servicer.

The Master Servicer shall afford (and any Sub-Servicing Agreement shall provide that each Sub-Servicer shall afford) the Depositor, the NIMS Insurer and the Trustee, upon reasonable notice, during normal business hours, access to all records maintained by the Master Servicer (and any such Sub-Servicer) in respect of the Master Servicer’s rights and obligations hereunder and access to officers of the Master Servicer (and those of any such Sub-Servicer) responsible for such obligations. Upon request, the Master Servicer shall furnish to the Depositor, the NIMS Insurer and the Trustee its (and any such Sub-Servicer’s) most recent financial statements and such other information relating to the Master Servicer’s capacity to perform its obligations under this Agreement that it possesses. To the extent such information is not otherwise available to the public, the Depositor, the NIMS Insurer and the Trustee shall not disseminate any information obtained pursuant to the preceding two sentences without the Master Servicer’s (or any such Sub-Servicer’s) written consent, except as required pursuant to this Agreement or to the extent that it is appropriate to do so (i) in working with legal counsel, auditors, taxing authorities or other governmental agencies, rating agencies or reinsurers or (ii) pursuant to any law, rule, regulation, order, judgment, writ, injunction or decree of any court or governmental authority having jurisdiction over the Depositor, the Trustee or the Trust Fund, and in either case, the Depositor, the NIMS Insurer or the Trustee, as the case may be, shall use its best efforts to assure the confidentiality of any such disseminated non-public information. The Depositor may, but is not obligated to, enforce the obligations of the Master Servicer under this Agreement and may, but is not obligated to, perform, or cause a designee to perform, any defaulted obligation of the Master Servicer under this Agreement or exercise the rights of the Master Servicer under this Agreement; provided that the Master Servicer shall not be relieved of any of its obligations under this Agreement by virtue of such performance by the Depositor or its designee. The Depositor shall not have any responsibility or liability for any action or failure to act by the Master Servicer and is not obligated to supervise the performance of the Master Servicer under this Agreement or otherwise.

 

SECTION 6.06.

Sub-Servicing Agreements Between the Master Servicer and Sub-Servicers.

(a)          The Master Servicer may enter into Sub-Servicing Agreements (provided that such agreements would not result in a withdrawal or a downgrade by any Rating Agency of the ratings on any Class of Certificates and the NIMS Insurer shall have consented to such Sub-

 



Servicing Agreement) with Sub-Servicers, for the servicing and administration of the Mortgage Loans.

Each Sub-Servicer 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 Sub-Servicer to perform its obligations hereunder and under the Sub-Servicing Agreement, (ii) an institution approved as a mortgage loan originator by the Federal Housing Administration or an institution the deposit accounts in which are insured by the FDIC and (iii) a Freddie Mac or Fannie Mae approved mortgage servicer. Each Sub-Servicing Agreement must impose on the Sub-Servicer requirements conforming to the provisions set forth in Section 6.11 and provide for servicing of the Mortgage Loans consistent with the terms of this Agreement. The Master Servicer shall examine each Sub-Servicing Agreement and shall be familiar with the terms thereof. The terms of any Sub-Servicing Agreement shall not be inconsistent with any of the provisions of this Agreement. The Master Servicer and the Sub-Servicers may enter into and make amendments to the Sub-Servicing Agreements or enter into different forms of Sub-Servicing 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 Certificateholders, without the consent of the Holders of Certificates entitled to at least 66% of the Voting Rights. Any variation without the consent of the Holders of Certificates entitled to at least 66% of the Voting Rights from the provisions set forth in Section 6.11, provisions relating to insurance in Section 3.10 or priority requirements of Sub-Servicing Accounts, or credits and charges to the Sub-Servicing Accounts or the timing and amount of remittances by the Sub-Servicers to the Master Servicer, are conclusively deemed to be inconsistent with this Agreement and therefore prohibited. The Master Servicer shall deliver to the Trustee and the NIMS Insurer copies of all Sub-Servicing Agreements, and any amendments or modifications thereof, promptly upon the Master Servicer’s execution and delivery of such instruments.

(b)          As part of its servicing activities hereunder, the Master Servicer (except as otherwise provided in the last sentence of this paragraph), for the benefit of the Trustee and the Certificateholders, shall enforce the obligations of each Sub-Servicer under the related Sub-Servicing Agreement and of the Seller under the Mortgage Loan Purchase Agreement, including, without limitation, any obligation to make advances in respect of delinquent payments as required by a Sub-Servicing Agreement, or to purchase a Mortgage Loan on account of missing or defective documentation or on account of a breach of a representation, warranty or covenant, as described in Section 2.03(a). Such enforcement, including, without limitation, the legal prosecution of claims, termination of Sub-Servicing Agreements, and the pursuit of other appropriate remedies, shall be in such form and carried out to such an extent and at such time as the Master Servicer, in its good faith business judgment, would require were it the owner of the related Mortgage Loans. The Master Servicer shall pay the costs of such enforcement at its own expense, 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. Enforcement of the Mortgage Loan Purchase Agreement against the Seller shall be effected by the Master Servicer to the extent it is

 



not the Seller, and otherwise by the Trustee, in accordance with the foregoing provisions of this paragraph.

 

SECTION 6.07.

Successor Sub-Servicers.

The Master Servicer, with the consent of the NIMS Insurer, shall be entitled to terminate any Sub-Servicing Agreement and the rights and obligations of any Sub-Servicer pursuant to any Sub-Servicing Agreement in accordance with the terms and conditions of such Sub-Servicing Agreement. In the event of termination of any Sub-Servicer, all servicing obligations of such Sub-Servicer shall be assumed simultaneously by the Master Servicer without any act or deed on the part of such Sub-Servicer or the Master Servicer, and the Master Servicer either shall service directly the related Mortgage Loans or shall enter into a Sub-Servicing Agreement with a successor Sub-Servicer which qualifies under Section 6.06.

Any Sub-Servicing Agreement shall include the provision that such agreement may be immediately terminated by the Trustee without fee, in accordance with the terms of this Agreement, in the event that the Master Servicer shall, for any reason, no longer be the Master Servicer (including termination due to a Master Servicer Event of Default).

 

SECTION 6.08.

Liability of the Master Servicer.

Notwithstanding any Sub-Servicing Agreement, any of the provisions of this Agreement relating to agreements or arrangements between the Master Servicer and a Sub-Servicer or reference to actions taken through a Sub-Servicer or otherwise, the Master Servicer shall remain obligated and primarily liable to the Trustee and the Certificateholders 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 Sub-Servicing Agreements or arrangements or by virtue of indemnification from the Sub-Servicer and to the same extent and under the same terms and conditions as if the Master Servicer alone were servicing and administering the Mortgage Loans. The Master Servicer shall be entitled to enter into any agreement with a Sub-Servicer for indemnification of the Master Servicer by such Sub-Servicer and nothing contained in this Agreement shall be deemed to limit or modify such indemnification.

 

SECTION 6.09.

No Contractual Relationship Between Sub-Servicers and the NIMS Insurer, the Trustee or Certificateholders.

Any Sub-Servicing Agreement that may be entered into and any transactions or services relating to the Mortgage Loans involving a Sub-Servicer in its capacity as such shall be deemed to be between the Sub-Servicer and the Master Servicer alone, and the NIMS Insurer, the Trustee and Certificateholders shall not be deemed parties thereto and shall have no claims, rights, obligations, duties or liabilities with respect to the Sub-Servicer except as set forth in Section 6.10. The Master Servicer shall be solely liable for all fees owed by it to any Sub-Servicer, irrespective of whether the Master Servicer’s compensation pursuant to this Agreement is sufficient to pay such fees.

 



 

 

SECTION 6.10.

Assumption or Termination of Sub-Servicing Agreements by Trustee.

In the event the Master Servicer shall for any reason no longer be the master servicer (including termination due to a Master Servicer Event of Default), the Trustee or its designee shall thereupon assume (or cause its designee or the successor master servicer for the Trustee appointed pursuant to Section 7.02 to assume) all of the rights and obligations of the Master Servicer under each Sub-Servicing Agreement that the Master Servicer may have entered into, unless the Trustee elects to terminate any Sub-Servicing Agreement in accordance with its terms as provided in Section 6.07. Upon such assumption, the Trustee, its designee or the successor servicer for the Trustee appointed pursuant to Section 7.02 shall be deemed, subject to Section 6.07, to have assumed all of the Master Servicer’s interest therein and to have replaced the Master Servicer as a party to each Sub-Servicing Agreement to the same extent as if each Sub-Servicing Agreement had been assigned to the assuming party, except that (i) the Master Servicer shall not thereby be relieved of any liability or obligations under any Sub-Servicing Agreement and (ii) none of the Trustee, its designee or any successor Master Servicer shall be deemed to have assumed any liability or obligation of the Master Servicer that arose before it ceased to be the Master Servicer.

The Master Servicer at its expense shall, upon request of the Trustee, deliver to the assuming party all documents and records relating to each Sub-Servicing Agreement and the Mortgage Loans then being serviced 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 Sub-Servicing Agreements to the assuming party.

 

SECTION 6.11.

Sub-Servicing Accounts.

In those cases where a Sub-Servicer is servicing a Mortgage Loan pursuant to a Sub-Servicing Agreement, the Sub-Servicer shall be required to establish and maintain one or more accounts (collectively, the “Sub-Servicing Account”). The Sub-Servicing Account shall be an Eligible Account. The Sub-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 the Sub-Servicer’s receipt thereof, all proceeds of Mortgage Loans received by the Sub-Servicer less its servicing compensation to the extent permitted by the Sub-Servicing Agreement, and shall thereafter deposit such amounts in the Sub-Servicing Account, in no event more than two Business Days after the deposit of such funds into the clearing account. The Sub-Servicer shall thereafter deposit such proceeds in the Collection Account or remit such proceeds to the Master Servicer for deposit in the Collection Account not later than two Business Days after the deposit of such amounts in the Sub-Servicing Account. For purposes of this Agreement, the Master Servicer shall be deemed to have received payments on the Mortgage Loans when the Sub-Servicer receives such payments.

 



 

ARTICLE VII

 

DEFAULT

 

SECTION 7.01.

Master Servicer Events of Default.

“Master Servicer Event of Default,” wherever used herein, means any one of the following events:

(i)           any failure by the Master Servicer to remit to the Trustee for distribution to the Certificateholders any payment (other than an Advance required to be made from its own funds on any Master Servicer Remittance Date pursuant to Section 4.03) required to be made under the terms of the Certificates and this Agreement which continues unremedied for a period of one Business Day after the date upon which written notice of such failure, requiring the same to be remedied, shall have been given to the Master Servicer by the Depositor or the Trustee (in which case notice shall be provided by telecopy), or to the Master Servicer, the Depositor and the Trustee by the NIMS Insurer or the Holders of Certificates entitled to at least 25% of the Voting Rights; or

(ii)          any failure on the part of the Master Servicer duly to observe or perform in any material respect any of the covenants or agreements on the part of the Master Servicer contained in the Certificates or in this Agreement (or, if the Master Servicer is the Seller, the failure of the Seller to repurchase a Mortgage Loan as to which a breach has been established that requires a repurchase pursuant to the terms of Section 7 of the Mortgage Loan Purchase Agreement) which continues unremedied for a period of 45 days 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 the Master Servicer by the Depositor or the Trustee, or to the Master Servicer, the Depositor and the Trustee by the NIMS Insurer or the Holders of Certificates entitled to at least 25% of the Voting Rights and (ii) actual knowledge of such failure by a Servicing Officer of the Master Servicer; or

(iii)         a decree or order of a court or agency or supervisory authority having jurisdiction in the premises in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law or the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceeding, or for the winding-up or liquidation of its affairs, shall have been entered against the Master Servicer and if such proceeding is being contested by the Master Servicer in good faith, such decree or order shall have remained in force undischarged or unstayed for a period of 60 days or results in the entry of an order for relief or any such adjudication or appointment; or

(iv)         the Master Servicer shall consent to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings of or relating to the Master Servicer or of or relating to all or substantially all of its property; or

(v)          the Master Servicer shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of any applicable

 



insolvency or reorganization statute, make an assignment for the benefit of its creditors, or voluntarily suspend payment of its obligations; or

(vi)         any failure by the Master Servicer of the Master Servicer Termination Test; or

(vii)       any failure of the Master Servicer to make any Advance on any Master Servicer Remittance Date required to be made from its own funds pursuant to Section 4.03 which continues unremedied until 3:00 p.m. New York time on the Business Day immediately following the Master Servicer Remittance Date.

If a Master Servicer Event of Default described in clauses (i) through (vi) of this Section shall occur, then, and in each and every such case, so long as such Master Servicer Event of Default shall not have been remedied, the Depositor, the NIMS Insurer or the Trustee may, at the written direction of the Holders of Certificates entitled to at least 51% of Voting Rights, or at the direction of the NIMS Insurer, the Trustee shall, by notice in writing to the Master Servicer and the Depositor, terminate all of the rights and obligations of the Master Servicer in its capacity as Master Servicer under this Agreement, to the extent permitted by law, and in and to the Mortgage Loans and the proceeds thereof. If a Master Servicer Event of Default described in clause (vii) hereof shall occur, the Trustee shall, by notice in writing to the Master Servicer and the Depositor, terminate all of the rights and obligations of the Master Servicer in its capacity as Master Servicer under this Agreement and in and to the Mortgage Loans and the proceeds thereof and the Trustee as successor Master Servicer or a successor Master Servicer appointed in accordance with Section 7.02, shall immediately make such Advance(which Advance shall be part of Available Funds for such Distribution Date) and assume, pursuant to Section 7.02, the duties of a successor Master Servicer. On or after the receipt by the Master Servicer of such written notice, all authority and power of the Master Servicer under this Agreement, whether with respect to the Certificates (other than as a Holder of any Certificate) or the Mortgage Loans or otherwise, shall pass to and be vested in the Trustee pursuant to and under this Section and, without limitation, the Trustee is hereby authorized and empowered, as attorney-in-fact or otherwise, to execute and deliver on behalf of and at the expense of the Master Servicer, any and all documents and other instruments and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and endorsement or assignment of the Mortgage Loans and related documents, or otherwise. The Master Servicer agrees, at its sole cost and expense, promptly (and in any event no later than ten Business Days subsequent to such notice) to provide the Trustee with all documents and records requested by it to enable it to assume the Master Servicer’s functions under this Agreement, and to cooperate with the Trustee in effecting the termination of the Master Servicer’s responsibilities and rights under this Agreement, including, without limitation, the transfer within one Business Day to the Trustee for administration by it of all cash amounts which at the time shall be or should have been credited by the Master Servicer to the Collection Account held by or on behalf of the Master Servicer, the Distribution Account or any REO Account or Escrow Account held by or on behalf of the Master Servicer or thereafter be received with respect to the Mortgage Loans or any REO Property serviced by the Master Servicer (provided, however, that the Master Servicer shall continue to be entitled to receive all amounts accrued or owing to it under this Agreement on or prior to the date of such termination, whether in respect of Advances or otherwise, and shall continue to be entitled to the benefits of Section 6.03, notwithstanding

 



any such termination, with respect to events occurring prior to such termination). For purposes of this Section 7.01, the Trustee shall not be deemed to have knowledge of a Master Servicer Event of Default unless a Responsible Officer of the Trustee assigned to and working in the Trustee’s Corporate Trust Office has actual knowledge thereof or unless written notice is received by the Trustee of any such event and such notice references the Certificates, REMIC I or this Agreement.

The Trustee shall be entitled to be reimbursed by the Master Servicer (or by the Trust Fund if the Master Servicer is unable to fulfill its obligations hereunder) for all costs associated with the transfer of servicing from the predecessor servicer, including without limitation, any costs or expenses associated with the complete transfer of all servicing data and the completion, correction or manipulation of such servicing data as may be required by the Trustee to correct any errors or insufficiencies in the servicing data or otherwise to enable the Trustee to service the Mortgage Loans properly and effectively.

<

 

SECTION 7.02.