EXHIBIT 4
Pooling and Servicing Agreement
<PAGE>
EXECUTION COPY
MORGAN STANLEY ABS CAPITAL I INC.,
Depositor,
HOMEQ SERVICING CORPORATION,
Servicer,
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
Servicer,
NC CAPITAL CORPORATION,
Responsible Party,
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
-----------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 2006
-----------------------------------
MORGAN STANLEY ABS CAPITAL I INC. TRUST 2006-NC1
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2006-NC1
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of
Mortgage Loans...................................
Section 2.02 Acceptance by
the Trustee of the Mortgage Loans................
Section 2.03 Representations
and Warranties; Remedies for Breaches of
Representations and Warranties with Respect to the
Mortgage Loans...............................................
Section 2.04 Execution and
Delivery of Certificates.........................
Section 2.05 REMIC
Matters..................................................
Section 2.06 Representations
and Warranties of the Depositor................
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicers to
Service Mortgage Loans............................
Section 3.02 Subservicing
Agreements between a Servicer
and Subservicers.............................................
Section 3.03 Successor
Subservicers.........................................
Section 3.04 Liability of the
Servicers.....................................
Section 3.05 No Contractual
Relationship between Subservicers
and the Trustee..............................................
Section 3.06 Assumption or
Termination of Subservicing Agreements
by Trustee...................................................
Section 3.07 Collection of
Certain Mortgage Loan Payments...................
Section 3.08 Subservicing
Accounts..........................................
Section 3.09 Collection of
Taxes, Assessments and Similar Items;
Escrow Accounts..............................................
Section 3.10 Collection
Accounts............................................
Section 3.11 Withdrawals from
the Collection Accounts.......................
Section 3.12 Investment of
Funds in the Collection Accounts and the
Distribution Account.........................................
Section 3.13 Maintenance of
Hazard Insurance and Errors and Omissions
and Fidelity Coverage........................................
Section 3.14 Enforcement of
"Due-on-Sale" Clauses; Assumption Agreements....
Section 3.15 Realization upon
Defaulted Mortgage Loans......................
Section 3.16 Release of
Mortgage Files......................................
Section 3.17 Title,
Conservation and Disposition of REO Property............
Section 3.18 Notification of
Adjustments....................................
Section 3.19 Access to
Certain Documentation and Information
Regarding the Mortgage Loans.................................
Section 3.20 Documents,
Records and Funds in Possession of the Servicers
to Be Held for the Trustee...................................
Section 3.21 Servicing
Compensation.........................................
Section 3.22 Annual Statement
as to Compliance..............................
Section 3.23 Annual Reports
on Assessment of Compliance with
Servicing Criteria; Annual Independent Public Accountants'
Attestation Report...........................................
Section 3.24 Trustee to Act
as Servicer.....................................
Section 3.25 Compensating
Interest..........................................
Section 3.26 Credit
Reporting; Gramm-Leach-Bliley Act.......................
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
Section 4.01
Advances.......................................................
Section 4.02 Priorities of
Distribution.....................................
Section 4.03 Monthly
Statements to Certificateholders.......................
Section 4.04 Certain Matters
Relating to the Determination of LIBOR.........
Section 4.05 Allocation of
Applied Realized Loss Amounts....................
Section 4.06 Swap
Account...................................................
ARTICLE V
THE CERTIFICATES
Section 5.01 The
Certificates...............................................
Section 5.02 Certificate
Register; Registration of Transfer and
Exchange of Certificates.....................................
Section 5.03 Mutilated,
Destroyed, Lost or Stolen Certificates..............
Section 5.04 Persons Deemed
Owners..........................................
Section 5.05 Access to List
of Certificateholders' Names and Addresses......
Section 5.06 Maintenance of
Office or Agency................................
ARTICLE VI
THE DEPOSITOR AND THE SERVICERS
Section 6.01 Respective
Liabilities of the Depositor and the Servicers......
Section 6.02 Merger or
Consolidation of the Depositor or a Servicer.........
Section 6.03 Limitation on
Liability of the Depositor, the
Servicers and Others.........................................
Section 6.04 Limitation on
Resignation of a Servicer........................
Section 6.05 Additional
Indemnification by the Servicers;
Third Party Claims...........................................
ARTICLE VII
DEFAULT
Section 7.01 Events of
Default..............................................
Section 7.02 Trustee to Act;
Appointment of Successor.......................
Section 7.03 Notification to
Certificateholders.............................
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the
Trustee..........................................
Section 8.02 Certain Matters
Affecting the Trustee..........................
Section 8.03 Trustee Not
Liable for Certificates or Mortgage Loans..........
Section 8.04 Trustee May Own
Certificates...................................
Section 8.05 Trustee's Fees
and Expenses....................................
Section 8.06 Eligibility
Requirements for the Trustee.......................
Section 8.07 Resignation and
Removal of the Trustee.........................
Section 8.08 Successor
Trustee..............................................
Section 8.09 Merger or
Consolidation of the Trustee.........................
Section 8.10 Appointment of
Co-Trustee or Separate Trustee..................
Section 8.11 Tax
Matters....................................................
Section 8.12 Periodic
Filings...............................................
Section 8.13 Tax Treatment of
Upper-Tier CarryForward Amounts,
Basis Risk CarryForward Amounts and Class IO Shortfalls;
Tax Classification of the Excess Reserve Fund Account,
Swap Account and the Interest Rate Swap Agreement............
ARTICLE IX
TERMINATION
Section 9.01 Termination upon
Liquidation or Purchase of the
Mortgage Loans...............................................
Section 9.02 Final
Distribution on the Certificates.........................
Section 9.03 Additional
Termination Requirements............................
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01
Amendment......................................................
Section 10.02 Recordation of
Agreement; Counterparts.........................
Section 10.03 Governing
Law..................................................
Section 10.04 Intention of
Parties...........................................
Section 10.05
Notices........................................................
Section 10.06 Severability of
Provisions.....................................
Section 10.07 Assignment; Sales;
Advance Facilities..........................
Section 10.08 Limitation on Rights
of Certificateholders.....................
Section 10.09 Inspection and Audit
Rights....................................
Section 10.10 Certificates
Nonassessable and Fully Paid......................
Section 10.11 Rule of
Construction...........................................
Section 10.12 Waiver of Jury
Trial...........................................
Section 10.13 Rights of the Swap
Provider....................................
Section 10.14 Regulation AB
Compliance; Intent of the Parties;
Reasonableness...............................................
SCHEDULES
Schedule I
Mortgage Loan Schedule
Schedule II
Representations and Warranties of HomEq, as Servicer
Schedule III Representations
and Warranties as to the Mortgage Loans
Schedule IV
Representations and Warranties of JPMorgan Chase Bank,
National Association, as Servicer
Schedule V
Representations and Warranties of Morgan Stanley ABS Capital I
Inc. as to the Mortgage Loans
Schedule VI
Representations and Warranties of JPMorgan, as Servicer
EXHIBITS
Exhibit A
Form of Class A, Class M and Class B Certificate
Exhibit B
Form of Class P Certificate
Exhibit C
Form of Class R Certificate
Exhibit D
Form of Class X Certificate
Exhibit E
Form of Initial Certification of Trustee
Exhibit F
Form of Document Certification and Exception Report of Trustee
Exhibit G
Form of Residual Transfer Affidavit
Exhibit H
Form of Transferor Certificate
Exhibit I
Form of Rule 144A Letter
Exhibit J
Form of Request for Release
Exhibit K
Form of Contents for Each Mortgage File
Exhibit L
Form of Certification to be provided with Form 10-K
Exhibit M
Form of Certification to be provided by the Trustee to be
provided to Depositor
Exhibit N
Form of Certification of the Servicer to be provided by the
applicable Servicer to
Depositor
Exhibit O
Form of Servicer Power of Attorney
Exhibit P
Servicing Criteria
Exhibit Q
Additional Form 10-D Disclosure
Exhibit R
Additional Form 10-K Disclosure
Exhibit S
Form 8-K Disclosure Information
Exhibit T
Interest Rate Swap Agreement
Exhibit U
Purchase Agreement
Exhibit V
Subservicing Agreement
<PAGE>
THIS POOLING AND SERVICING AGREEMENT, dated as of January 1,
2006,
among MORGAN STANLEY ABS CAPITAL I INC., a Delaware corporation, as
depositor
(the "Depositor"), JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a
national banking
association ("JPMorgan"), HOMEQ SERVICING CORPORATION, a New Jersey
corporation
("HomEq" and together with JPMorgan, the "Servicers"), NC CAPITAL
CORPORATION, a
California corporation, as responsible party (the "Responsible
Party"), and
DEUTSCHE BANK NATIONAL TRUST COMPANY, a national banking
association, as trustee
(the "Trustee").
W I T N E S S E T H:
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Trustee shall elect that four segregated asset pools within
the
Trust Fund (exclusive of (i) the Prepayment Premiums, (ii) the Swap
Assets,
(iii) the Excess Reserve Fund Account, and (iv) the right of the
LIBOR
Certificates to receive Upper-Tier CarryForward Amounts including,
but without
duplication, Basis Risk CarryForward Amounts and the obligation to
pay Class IO
Shortfalls) be treated for federal income tax purposes as
comprising four REMICs
(each, a "Trust REMIC" or, in the alternative, Pooling-Tier
REMIC-1,
Pooling-Tier REMIC-2, the Lower-Tier REMIC and the Upper-Tier
REMIC,
respectively). The Class X Interest, Class IO Interest and each
Class of LIBOR
Certificates (other than the right of each Class of LIBOR
Certificates to
receive Upper-Tier CarryForward Amounts including, but without
duplication,
Basis Risk CarryForward Amounts and the obligation to pay Class IO
Shortfalls)
represents ownership of a regular interest in a REMIC for purposes
of the REMIC
Provisions. The Class R Certificates represent ownership of the
sole class of
residual interest in each Trust REMIC for purposes of the REMIC
Provisions. The
Startup Day for each REMIC described herein is the Closing Date.
The latest
possible maturity date for each regular interest is the latest date
referenced
in Section 2.05. The Upper-Tier REMIC shall hold as assets the
several classes
of uncertificated Lower-Tier Regular Interests, set out below. The
Lower-Tier
REMIC shall hold as assets the several classes of uncertificated
Pooling-Tier
REMIC-2 Regular Interests. Pooling-Tier REMIC-2 shall hold as
assets the several
classes of uncertificated Pooling-Tier REMIC-1 Regular Interests.
Pooling-Tier
REMIC-1 shall hold as assets the assets of the Trust Fund
(exclusive of (i) the
Prepayment Premiums, (ii) the Swap Assets, (iii) the Excess Reserve
Fund
Account, and (iv) the right of the LIBOR Certificates to receive
Upper-Tier
CarryForward Amounts including, but without duplication, Basis Risk
CarryForward
Amounts and the obligation to pay Class IO Shortfalls).
For federal income tax purposes, each Class of LIBOR
Certificates
represents a beneficial ownership of a regular interest in the
Upper-Tier REMIC,
the right to receive Upper-Tier CarryForward Amounts (including,
but without
duplication, Basis Risk CarryForward Amounts), and the obligation
to pay Class
IO Shortfalls, the Class X Certificates represent beneficial
ownership of the
Class X Interest, the Class IO Interest, the Interest Rate Swap
Agreement, the
Swap Account, the Excess Reserve Fund Account and the right to
receive Class IO
Shortfalls, and the Class P Certificates represent beneficial
ownership of the
Prepayment Premiums, which portions of the Trust Fund shall be
treated as a
grantor trust.
Pooling-Tier REMIC-1
Pooling-Tier REMIC-1 shall issue the following interests in
Pooling-Tier REMIC-1, and each such interest, other than the Class
PT1-R
Interest is hereby designated as a regular interest in the
Pooling-Tier REMIC-1.
Pooling-Tier REMIC-1 shall also issue the Class PT1-R Interest,
which is hereby
designated as the sole class of residual interest in Pooling-Tier
REMIC-1. The
Class PT1-R Interest shall be represented by the Class R
Certificates, shall not
have a principal balance and shall have no interest rate.
Pooling-Tier REMIC-1 Initial
Pooling-Tier
Pooling-Tier REMIC-1 Interest Interest Rate
REMIC-1 Principal Amount
----------------------------- --------------------
------------------------
Class PT1-1
(1)
$
64,804,578.40
Class PT1-2A
(2)
$
23,259,632.15
Class PT1-2B
(3)
$
23,259,632.15
Class PT1-3A
(2)
$
22,521,389.45
Class PT1-3B
(3)
$
22,521,389.45
Class PT1-4A
(2)
$
21,821,041.55
Class PT1-4B
(3)
$
21,821,041.55
Class PT1-5A
(2)
$
21,155,495.15
Class PT1-5B
(3)
$
21,155,495.15
Class PT1-6A
(2)
$
20,521,697.70
Class PT1-6B
(3)
$
20,521,697.70
Class PT1-7A
(2)
$
19,916,818.10
Class PT1-7B
(3)
$
19,916,818.10
Class PT1-8A
(2)
$
19,338,073.35
Class PT1-8B
(3)
$
19,338,073.35
Class PT1-9A
(2)
$
18,782,796.45
Class PT1-9B
(3)
$
18,782,796.45
Class PT1-10A
(2)
$
18,248,443.40
Class PT1-10B
(3)
$
18,248,443.40
Class PT1-11A
(2)
$
17,732,500.35
Class PT1-11B
(3)
$
17,732,500.35
Class PT1-12A
(2)
$
17,232,554.05
Class PT1-12B
(3)
$
17,232,554.05
Class PT1-13A
(2)
$
16,746,016.30
Class PT1-13B
(3)
$
16,746,016.30
Class PT1-14A
(2)
$
16,032,171.70
Class PT1-14B
(3)
$
16,032,171.70
Class PT1-15A
(2)
$
15,347,875.05
Class PT1-15B
(3)
$
15,347,875.05
Class PT1-16A
(2)
$
14,692,984.45
Class PT1-16B
(3)
$
14,692,984.45
Class PT1-17A
(2)
$
14,066,228.65
Class PT1-17B
(3)
$
14,066,228.65
Class PT1-18A
(2)
$
13,466,391.55
Class PT1-18B
(3)
$
13,466,391.55
Class PT1-19A
(2)
$
12,892,309.90
Class PT1-19B
(3)
$
12,892,309.90
Class PT1-20A
(2)
$
12,394,501.90
Class PT1-20B
(3)
$
12,394,501.90
Class PT1-21A
(2)
$
13,185,262.25
Class PT1-21B
(3)
$
13,185,262.25
Class PT1-22A
(2)
$
181,822,781.10
Class PT1-22B
(3)
$
181,822,781.10
Class PT1-23A
(2)
$
3,103,091.90
Class PT1-23B
(3)
$
3,103,091.90
Class PT1-24A
(2)
$
2,988,827.55
Class PT1-24B
(3)
$
2,988,827.55
Class PT1-25A
(2)
$
2,878,790.75
Class PT1-25B
(3)
$
2,878,790.75
Class PT1-26A
(2)
$
2,772,823.90
Class PT1-26B
(3)
$
2,772,823.90
Class PT1-27A
(2)
$
2,670,775.60
Class PT1-27B
(3)
$
2,670,775.60
Class PT1-28A
(2)
$
2,572,507.45
Class PT1-28B
(3)
$
2,572,507.45
Class PT1-29A
(2)
$
2,478,828.15
Class PT1-29B
(3)
$
2,478,828.15
Class PT1-30A
(2)
$
2,387,598.45
Class PT1-30B
(3)
$
2,387,598.45
Class PT1-31A
(2)
$
2,299,741.10
Class PT1-31B
(3)
$
2,299,741.10
Class PT1-32A
(2)
$
2,416,568.15
Class PT1-32B
(3)
$
2,416,568.15
Class PT1-33A
(2)
$
6,381,705.40
Class PT1-33B
(3)
$
6,381,705.40
Class PT1-34A
(2)
$
4,801,008.50
Class PT1-34B
(3)
$
4,801,008.50
Class PT1-35A
(2)
$
1,656,828.60
Class PT1-35B
(3)
$
1,656,828.60
Class PT1-36A
(2)
$
1,598,497.60
Class PT1-36B
(3)
$
1,598,497.60
Class PT1-37A
(2)
$
1,542,206.55
Class PT1-37B
(3)
$
1,542,206.55
Class PT1-38A
(2)
$
1,487,884.50
Class PT1-38B
(3)
$
1,487,884.50
Class PT1-39A
(2)
$
1,435,463.15
Class PT1-39B
(3)
$
1,435,463.15
Class PT1-40A
(2)
$
1,384,901.95
Class PT1-40B
(3)
$
1,384,901.95
Class PT1-41A
(2)
$
1,336,105.55
Class PT1-41B
(3)
$
1,336,105.55
Class PT1-42A
(2)
$
1,288,994.70
Class PT1-42B
(3)
$
1,288,994.70
Class PT1-43A
(2)
$
1,243,533.75
Class PT1-43B
(3)
$
1,243,533.75
Class PT1-44A
(2)
$
1,199,665.35
Class PT1-44B
(3)
$
1,199,665.35
Class PT1-45A
(2)
$
1,157,334.15
Class PT1-45B
(3)
$
1,157,334.15
Class PT1-46A
(2)
$
1,116,490.55
Class PT1-46B
(3)
$
1,116,490.55
Class PT1-47A
(2)
$
1,077,082.65
Class PT1-47B
(3)
$
1,077,082.65
Class PT1-48A
(2)
$
1,039,047.95
Class PT1-48B
(3)
$
1,039,047.95
Class PT1-49A
(2)
$
1,002,347.25
Class PT1-49B
(3)
$
1,002,347.25
Class PT1-50A
(2)
$
966,934.00
Class PT1-50B
(3)
$
966,934.00
Class PT1-51A
(2)
$
932,763.40
Class PT1-51B
(3)
$
932,763.40
Class PT1-52A
(2)
$
899,792.00
Class PT1-52B
(3)
$
899,792.00
Class PT1-53A
(2)
$
867,978.10
Class PT1-53B
(3)
$
867,978.10
Class PT1-54A
(2)
$
837,281.35
Class PT1-54B
(3)
$
837,281.35
Class PT1-55A
(2)
$
807,662.60
Class PT1-55B
(3)
$
807,662.60
Class PT1-56A
(2)
$
21,835,471.15
Class PT1-56B
(3)
$
21,835,471.15
Class PT1-R
(4)
(4)
----------
(1) For any
Distribution Date (and the related Interest Accrual Period),
this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per
annum
rate (its
"Pooling-Tier REMIC-1 Interest Rate") equal to the Pooling-Tier
REMIC-1
WAC Rate.
(2) For any
Distribution Date (and the related Interest Accrual Period),
this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per
annum
rate (its
"Pooling-Tier REMIC-1 Interest Rate") equal to the product of
(i) 2 and
(ii) the Pooling-Tier REMIC-1 WAC Rate, subject to a maximum
rate of
9.5000%.
(3) For any
Distribution Date (and the related Interest Accrual Period),
this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per
annum
rate (its
"Pooling-Tier REMIC-1 Interest Rate") equal to the excess, if
any, of
(A) the product of (i) 2 and (ii) the Pooling-Tier REMIC-1 WAC
Rate over
(B) 9.5000%.
(4) The Class
PT1-R Interest shall not have a principal balance and shall not
bear
interest.
On each Distribution Date, the interest distributable in respect
of
the Mortgage Loans for such Distribution Date shall be deemed to be
distributed
to the Pooling-Tier REMIC-1 Regular Interests at the rates shown
above.
On each Distribution Date, Realized Losses, Subsequent
Recoveries
and payments of principal in respect of the Mortgage Loans shall be
allocated to
the outstanding Pooling-Tier REMIC-1 Regular Interest with the
lowest numerical
denomination until the Pooling-Tier REMIC-1 Principal Amount of
such interest is
reduced to zero, provided that, with respect to Pooling-Tier
REMIC-1 Regular
Interests with the same numerical denomination, such Realized
Losses, Subsequent
Recoveries and payments of principal shall be allocated pro rata
between such
Pooling-Tier REMIC-1 Regular Interests, until the Pooling-Tier
REMIC-1 Principal
Amount of such interests is reduced to zero.
Pooling-Tier REMIC-2
Pooling-Tier REMIC-2 shall issue the following interests in
Pooling-Tier REMIC-2, and each such interest, other than the Class
PT2-R
Interest, is hereby designated as a regular interest in
Pooling-Tier REMIC-2.
The Class PT2-R Interest is hereby designated as the sole class of
residual
interest in Pooling-Tier REMIC-2 and shall be represented by the
Class R
Certificates.
<TABLE>
<CAPTION>
Corresponding
Corresponding
Corresponding
Pooling-Tier
Scheduled
Pooling-Tier
Pooling-Tier REMIC-2 Pooling-Tier
REMIC-2
Pooling-Tier
REMIC-1
Crossover
REMIC-2 Interest Interest
Rate
Initial Principal Amount REMIC-2 IO Interest
Regular Interest
Distribution
Date
----------------
-------------------- ------------------------
------------------- ----------------
----------------
<S>
<C>
<C>
<C>
<C>
<C>
Class PT2-1
(1)
$
64,804,578.40
N/A
N/A
N/A
Class PT2-2A
(2)
$
23,259,632.15 Class
PT2-IO-2
N/A
N/A
Class PT2-2B
(3)
$
23,259,632.15
N/A
N/A
N/A
Class PT2-3A
(2)
$
22,521,389.45 Class
PT2-IO-3
N/A
N/A
Class PT2-3B
(3)
$
22,521,389.45
N/A
N/A
N/A
Class PT2-4A
(2)
$
21,821,041.55 Class
PT2-IO-4
N/A
N/A
Class PT2-4B
(3)
$
21,821,041.55
N/A
N/A
N/A
Class PT2-5A
(2)
$
21,155,495.15 Class
PT2-IO-5
N/A
N/A
Class PT2-5B
(3)
$
21,155,495.15
N/A
N/A
N/A
Class PT2-6A
(2)
$
20,521,697.70 Class
PT2-IO-6
N/A
N/A
Class PT2-6B
(3)
$
20,521,697.70
N/A
N/A
N/A
Class PT2-7A
(2)
$
19,916,818.10 Class
PT2-IO-7
N/A
N/A
Class PT2-7B
(3)
$
19,916,818.10
N/A
N/A
N/A
Class PT2-8A
(2)
$
19,338,073.35 Class
PT2-IO-8
N/A
N/A
Class PT2-8B
(3)
$
19,338,073.35
N/A
N/A
N/A
Class PT2-9A
(2)
$
18,782,796.45 Class
PT2-IO-9
N/A
N/A
Class PT2-9B
(3)
$
18,782,796.45
N/A
N/A
N/A
Class PT2-10A
(2)
$
18,248,443.40 Class
PT2-IO-10
N/A
N/A
Class PT2-10B
(3)
$
18,248,443.40
N/A
N/A
N/A
Class PT2-11A
(2)
$
17,732,500.35 Class
PT2-IO-11
N/A
N/A
Class PT2-11B
(3)
$
17,732,500.35
N/A
N/A
N/A
Class PT2-12A
(2)
$
17,232,554.05 Class
PT2-IO-12
N/A
N/A
Class PT2-12B
(3)
$
17,232,554.05
N/A
N/A
N/A
Class PT2-13A
(2)
$
16,746,016.30 Class
PT2-IO-13
N/A
N/A
Class PT2-13B
(3)
$
16,746,016.30
N/A
N/A
N/A
Class PT2-14A
(2)
$
16,032,171.70 Class
PT2-IO-14
N/A
N/A
Class PT2-14B
(3)
$
16,032,171.70
N/A
N/A
N/A
Class PT2-15A
(2)
$
15,347,875.05 Class
PT2-IO-15
N/A
N/A
Class PT2-15B
(3)
$
15,347,875.05
N/A
N/A
N/A
Class PT2-16A
(2)
$
14,692,984.45 Class
PT2-IO-16
N/A
N/A
Class PT2-16B
(3)
$
14,692,984.45
N/A
N/A
N/A
Class PT2-17A
(2)
$
14,066,228.65 Class
PT2-IO-17
N/A
N/A
Class PT2-17B
(3)
$
14,066,228.65
N/A
N/A
N/A
Class PT2-18A
(2)
$
13,466,391.55 Class
PT2-IO-18
N/A
N/A
Class PT2-18B
(3)
$
13,466,391.55
N/A
N/A
N/A
Class PT2-19A
(2)
$
12,892,309.90 Class
PT2-IO-19
N/A
N/A
Class PT2-19B
(3)
$
12,892,309.90
N/A
N/A
N/A
Class PT2-20A
(2)
$
12,394,501.90 Class
PT2-IO-20
N/A
N/A
Class PT2-20B
(3)
$
12,394,501.90
N/A
N/A
N/A
Class PT2-21A
(2)
$
13,185,262.25 Class
PT2-IO-21
N/A
N/A
Class PT2-21B
(3)
$
13,185,262.25
N/A
N/A
N/A
Class PT2-22A
(2)
$
181,822,781.10 Class
PT2-IO-22
N/A
N/A
Class PT2-22B
(3)
$
181,822,781.10
N/A
N/A
N/A
Class PT2-23A
(2)
$
3,103,091.90 Class
PT2-IO-23
N/A
N/A
Class PT2-23B
(3)
$
3,103,091.90
N/A
N/A
N/A
Class PT2-24A
(2)
$
2,988,827.55 Class
PT2-IO-24
N/A
N/A
Class PT2-24B
(3)
$
2,988,827.55
N/A
N/A
N/A
Class PT2-25A
(2)
$
2,878,790.75 Class
PT2-IO-25
N/A
N/A
Class PT2-25B
(3)
$
2,878,790.75
N/A
N/A
N/A
Class PT2-26A
(2)
$
2,772,823.90 Class
PT2-IO-26
N/A
N/A
Class PT2-26B
(3)
$
2,772,823.90
N/A
N/A
N/A
Class PT2-27A
(2)
$
2,670,775.60 Class
PT2-IO-27
N/A
N/A
Class PT2-27B
(3)
$
2,670,775.60
N/A
N/A
N/A
Class PT2-28A
(2)
$
2,572,507.45 Class
PT2-IO-28
N/A
N/A
Class PT2-28B
(3)
$
2,572,507.45
N/A
N/A
N/A
Class PT2-29A
(2)
$
2,478,828.15 Class
PT2-IO-29
N/A
N/A
Class PT2-29B
(3)
$
2,478,828.15
N/A
N/A
N/A
Class PT2-30A
(2)
$
2,387,598.45 Class
PT2-IO-30
N/A
N/A
Class PT2-30B
(3)
$
2,387,598.45
N/A
N/A
N/A
Class PT2-31A
(2)
$
2,299,741.10 Class
PT2-IO-31
N/A
N/A
Class PT2-31B
(3)
$
2,299,741.10
N/A
N/A
N/A
Class PT2-32A
(2)
$
2,416,568.15 Class
PT2-IO-32
N/A
N/A
Class PT2-32B
(3)
$
2,416,568.15
N/A
N/A
N/A
Class PT2-33A
(2)
$
6,381,705.40 Class
PT2-IO-33
N/A
N/A
Class PT2-33B
(3)
$
6,381,705.40
N/A
N/A
N/A
Class PT2-34A
(2)
$
4,801,008.50 Class
PT2-IO-34
N/A
N/A
Class PT2-34B
(3)
$
4,801,008.50
N/A
N/A
N/A
Class PT2-35A
(2)
$
1,656,828.60 Class
PT2-IO-35
N/A
N/A
Class PT2-35B
(3)
$
1,656,828.60
N/A
N/A
N/A
Class PT2-36A
(2)
$
1,598,497.60 Class
PT2-IO-36
N/A
N/A
Class PT2-36B
(3)
$
1,598,497.60
N/A
N/A
N/A
Class PT2-37A
(2)
$
1,542,206.55 Class
PT2-IO-37
N/A
N/A
Class PT2-37B
(3)
$
1,542,206.55
N/A
N/A
N/A
Class PT2-38A
(2)
$
1,487,884.50 Class
PT2-IO-38
N/A
N/A
Class PT2-38B
(3)
$
1,487,884.50
N/A
N/A
N/A
Class PT2-39A
(2)
$
1,435,463.15 Class
PT2-IO-39
N/A
N/A
Class PT2-39B
(3)
$
1,435,463.15
N/A
N/A
N/A
Class PT2-40A
(2)
$
1,384,901.95 Class
PT2-IO-40
N/A
N/A
Class PT2-40B
(3)
$
1,384,901.95
N/A
N/A
N/A
Class PT2-41A
(2)
$
1,336,105.55 Class
PT2-IO-41
N/A
N/A
Class PT2-41B
(3)
$
1,336,105.55
N/A
N/A
N/A
Class PT2-42A
(2)
$
1,288,994.70 Class
PT2-IO-42
N/A
N/A
Class PT2-42B
(3)
$
1,288,994.70
N/A
N/A
N/A
Class PT2-43A
(2)
$
1,243,533.75 Class
PT2-IO-43
N/A
N/A
Class PT2-43B
(3)
$
1,243,533.75
N/A
N/A
N/A
Class PT2-44A
(2)
$
1,199,665.35 Class
PT2-IO-44
N/A
N/A
Class PT2-44B
(3)
$
1,199,665.35
N/A
N/A
N/A
Class PT2-45A
(2)
$
1,157,334.15 Class
PT2-IO-45
N/A
N/A
Class PT2-45B
(3)
$
1,157,334.15
N/A
N/A
N/A
Class PT2-46A
(2)
$
1,116,490.55 Class
PT2-IO-46
N/A
N/A
Class PT2-46B
(3)
$
1,116,490.55
N/A
N/A
N/A
Class PT2-47A
(2)
$
1,077,082.65 Class
PT2-IO-47
N/A
N/A
Class PT2-47B
(3)
$
1,077,082.65
N/A
N/A
N/A
Class PT2-48A
(2)
$
1,039,047.95 Class
PT2-IO-48
N/A
N/A
Class PT2-48B
(3)
$
1,039,047.95
N/A
N/A
N/A
Class PT2-49A
(2)
$
1,002,347.25 Class
PT2-IO-49
N/A
N/A
Class PT2-49B
(3)
$
1,002,347.25
N/A
N/A
N/A
Class PT2-50A
(2)
$
966,934.00 Class
PT2-IO-50
N/A
N/A
Class PT2-50B
(3)
$
966,934.00
N/A
N/A
N/A
Class PT2-51A
(2)
$
932,763.40 Class
PT2-IO-51
N/A
N/A
Class PT2-51B
(3)
$
932,763.40
N/A
N/A
N/A
Class PT2-52A
(2)
$
899,792.00 Class
PT2-IO-52
N/A
N/A
Class PT2-52B
(3)
$
899,792.00
N/A
N/A
N/A
Class PT2-53A
(2)
$
867,978.10 Class
PT2-IO-53
N/A
N/A
Class PT2-53B
(3)
$
867,978.10
N/A
N/A
N/A
Class PT2-54A
(2)
$
837,281.35 Class
PT2-IO-54
N/A
N/A
Class PT2-54B
(3)
$
837,281.35
N/A
N/A
N/A
Class PT2-55A
(2)
$
807,662.60 Class
PT2-IO-55
N/A
N/A
Class PT2-55B
(3)
$
807,662.60
N/A
N/A
N/A
Class PT2-56A
(2)
$
21,835,471.15 Class
PT2-IO-56
N/A
N/A
Class PT2-56B
(3)
$
21,835,471.15
N/A
N/A
N/A
Class PT2-IO-2
(4)
(4)
N/A
Class PT1-2A
February 2006
Class PT2-IO-3
(4)
(4)
N/A
Class PT1-3A
March 2006
Class PT2-IO-4
(4)
(4)
N/A
Class PT1-4A
April 2006
Class PT2-IO-5
(4)
(4)
N/A
Class PT1-5A
May 2006
Class PT2-IO-6
(4)
(4)
N/A
Class PT1-6A
June 2006
Class PT2-IO-7
(4)
(4)
N/A
Class PT1-7A
July 2006
Class PT2-IO-8
(4)
(4)
N/A
Class PT1-8A
August 2006
Class PT2-IO-9
(4)
(4)
N/A
Class PT1-9A
September 2006
Class PT2-IO-10
(4)
(4)
N/A
Class PT1-10A
October 2006
Class PT2-IO-11
(4)
(4)
N/A
Class PT1-11A November
2006
Class PT2-IO-12
(4)
(4)
N/A
Class PT1-12A December
2006
Class PT2-IO-13
(4)
(4)
N/A
Class PT1-13A
January 2007
Class PT2-IO-14
(4)
(4)
N/A
Class PT1-14A February
2007
Class PT2-IO-15
(4)
(4)
N/A
Class PT1-15A
March 2007
Class PT2-IO-16
(4)
(4)
N/A
Class PT1-16A
April 2007
Class PT2-IO-17
(4)
(4)
N/A
Class PT1-17A
May 2007
Class PT2-IO-18
(4)
(4)
N/A
Class PT1-18A
June 2007
Class PT2-IO-19
(4)
(4)
N/A
Class PT1-19A
July 2007
Class PT2-IO-20
(4)
(4)
N/A
Class PT1-20A
August 2007
Class PT2-IO-21
(4)
(4)
N/A
Class PT1-21A September
2007
Class PT2-IO-22
(4)
(4)
N/A
Class PT1-22A
October 2007
Class PT2-IO-23
(4)
(4)
N/A
Class PT1-23A November
2007
Class PT2-IO-24
(4)
(4)
N/A
Class PT1-24A December
2007
Class PT2-IO-25
(4)
(4)
N/A
Class PT1-25A
January 2008
Class PT2-IO-26
(4)
(4)
N/A
Class PT1-26A February
2008
Class PT2-IO-27
(4)
(4)
N/A
Class PT1-27A
March 2008
Class PT2-IO-28
(4)
(4)
N/A
Class PT1-28A
April 2008
Class PT2-IO-29
(4)
(4)
N/A
Class PT1-29A
May 2008
Class PT2-IO-30
(4)
(4)
N/A
Class PT1-30A
June 2008
Class PT2-IO-31
(4)
(4)
N/A
Class PT1-31A July 2008
Class PT2-IO-32
(4)
(4)
N/A
Class PT1-32A
August 2008
Class PT2-IO-33
(4)
(4)
N/A
Class PT1-33A September
2008
Class PT2-IO-34
(4)
(4)
N/A
Class PT1-34A
October 2008
Class PT2-IO-35
(4)
(4)
N/A
Class PT1-35A November
2008
Class PT2-IO-36
(4)
(4)
N/A
Class PT1-36A December
2008
Class PT2-IO-37
(4)
(4)
N/A
Class PT1-37A
January 2009
Class PT2-IO-38
(4)
(4)
N/A
Class PT1-38A February
2009
Class PT2-IO-39
(4)
(4)
N/A
Class PT1-39A
March 2009
Class PT2-IO-40
(4)
(4)
N/A
Class PT1-40A
April 2009
Class PT2-IO-41
(4)
(4)
N/A
Class PT1-41A
May 2009
Class PT2-IO-42
(4)
(4)
N/A
Class PT1-42A
June 2009
Class PT2-IO-43
(4)
(4)
N/A
Class PT1-43A
July 2009
Class PT2-IO-44
(4)
(4)
N/A
Class PT1-44A
August 2009
Class PT2-IO-45
(4)
(4)
N/A
Class PT1-45A September
2009
Class PT2-IO-46
(4)
(4)
N/A
Class PT1-46A
October 2009
Class PT2-IO-47
(4)
(4)
N/A
Class PT1-47A November
2009
Class PT2-IO-48
(4)
(4)
N/A
Class PT1-48A December
2009
Class PT2-IO-49
(4)
(4)
N/A
Class PT1-49A
January 2010
Class PT2-IO-50
(4)
(4)
N/A
Class PT1-50A February
2010
Class PT2-IO-51
(4)
(4)
N/A
Class PT1-51A
March 2010
Class PT2-IO-52
(4)
(4)
N/A
Class PT1-52A
April 2010
Class PT2-IO-53
(4)
(4)
N/A
Class PT1-53A
May 2010
Class PT2-IO-54
(4)
(4)
N/A
Class PT1-54A
June 2010
Class PT2-IO-55
(4)
(4)
N/A
Class PT1-55A
July 2010
Class PT2-IO-56
(4)
(4)
N/A
Class PT1-56A
August 2010
Class PT2 R
(5)
(5)
N/A
N/A
N/A
</TABLE>
----------
(1) For any
Distribution Date (and the related Interest Accrual Period),
this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per
annum
rate (its
"Pooling-Tier REMIC-2 Interest Rate") equal to the Pooling-Tier
REMIC-1
WAC Rate.
(2) For any
Distribution Date (and the related Interest Accrual Period),
this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per
annum
rate (its
"Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of
the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1
Regular Interests having an "A" in their class designation,
provided
that, on each Distribution Date on which interest is
distributable on the Corresponding Pooling-Tier REMIC-2 IO
Interest, this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per
annum
rate equal
to Swap LIBOR subject to a maximum rate equal to the weighted
average of
the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1
Regular Interests having an "A" in their class designation.
(3) For any
Distribution Date (and the related Interest Accrual Period),
this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per
annum
rate (its
"Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of
the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1
Regular Interests having a "B" in their class designation.
(4) Each
Pooling-Tier REMIC-2 IO is an interest-only interest and does
not
have a principal
balance but has a notional balance ("Pooling-Tier REMIC-2
IO
Notional Balance") equal to the Pooling-Tier REMIC-2 Principal
Amount
of the
Corresponding Pooling-Tier REMIC-1 Regular Interest. From the
Closing
Date through and including the Corresponding Scheduled
Crossover
Distribution Date, each Pooling-Tier REMIC-2 IO Interest shall be
entitled
to receive
interest that accrues on the Corresponding Pooling-Tier REMIC-1
Regular
Interest at a rate equal to the excess, if any, of (i) the
Pooling-Tier REMIC-1 Interest Rate for the Corresponding
Pooling-Tier
REMIC-1
Regular Interest over (ii) Swap LIBOR. After the Corresponding
Scheduled
Crossover Distribution Date, the Pooling-Tier REMIC-2 IO
Interest
shall not accrue interest.
(5) The Class
PT2-R Interest shall not have a principal balance and shall not
bear
interest.
On each Distribution Date, the interest distributable in respect
of
the Mortgage Loans for such Distribution Date shall be distributed
to the
Pooling-Tier REMIC-2 Regular Interests at the Pooling-Tier REMIC-2
Interest
Rates shown above.
On each Distribution Date, Realized Losses, Subsequent
Recoveries
and payments of principal in respect of the Mortgage Loans shall be
allocated to
the then outstanding Pooling-Tier REMIC-2 Regular Interests (other
than the
Pooling-Tier REMIC-2 IO Interests) with the lowest numerical
denomination until
the Pooling-Tier REMIC-2 Principal Amount of such interest is
reduced to zero,
provided that, for Pooling-Tier REMIC-2 Regular Interests with the
same
numerical denomination, such Realized Losses, Subsequent Recoveries
and payments
of principal shall be allocated pro rata between such Pooling-Tier
REMIC-2
Regular Interests, until the Pooling-Tier REMIC-2 Principal Amount
of such
interests is reduced to zero.
Lower-Tier REMIC
The Lower-Tier REMIC shall issue the following interests, and
each
such interest, other than the Class LT-R Interest, is hereby
designated as a
regular interest in the Lower-Tier REMIC. The Class LT-R Interest
is hereby
designated as the sole class of residual interest in the Lower-Tier
REMIC and
shall be represented by the Class R Certificates.
<TABLE>
<CAPTION>
Corresponding
Lower-Tier
Lower-Tier
Upper-Tier REMIC
REMIC Interest
Interest
Rate
Initial Lower-Tier Principal Amount
Regular Interest
----------------
-------------
--------------------------------------------------------
----------------
<S>
<C>
<C>
<C>
Class LT-A-1
(1)
1/2 initial Class Certificate Balance of Corresponding
A-1
Upper-Tier Regular Interest
Class LT-A-2
(1)
1/2 initial Class Certificate Balance of Corresponding
A-2
Upper-Tier Regular Interest
Class LT-A-3
(1)
1/2 initial Class Certificate Balance of Corresponding
A-3
Upper-Tier Regular Interest
Class LT-A-4
(1)
1/2 initial Class Certificate Balance of Corresponding
A-4
Upper-Tier Regular Interest
Class LT-M-1
(1)
1/2 initial Class Certificate Balance of Corresponding
M-1
Upper-Tier Regular Interest
Class LT-M-2
(1)
1/2 initial Class Certificate Balance of Corresponding
M-2
Upper-Tier Regular Interest
Class LT-M-3
(1)
1/2 initial Class Certificate Balance of Corresponding
M-3
Upper-Tier Regular Interest
Class LT-M-4
(1)
1/2 initial Class Certificate Balance of Corresponding
M-4
Upper-Tier Regular Interest
Class LT-M-5
(1)
1/2 initial Class Certificate Balance of Corresponding
M-5
Upper-Tier Regular Interest
Class LT-M-6
(1)
1/2 initial Class Certificate Balance of Corresponding
M-6
Upper-Tier Regular Interest
Class LT-B-1
(1)
1/2 initial Class Certificate Balance of Corresponding
B-1
Upper-Tier Regular Interest
Class LT-B-2
(1)
1/2 initial Class Certificate Balance of Corresponding
B-2
Upper-Tier Regular Interest
Class LT-B-3
(1)
1/2 initial Class Certificate Balance of Corresponding
B-3
Upper-Tier Regular Interest
Class LT-Accrual (1)
1/2 Pool Stated Principal Balance plus 1/2 Subordinated
N/A
Amount
Class LT-IO
(2)
(2)
N/A
Class LT-R
(3)
(3)
N/A
</TABLE>
----------
(1) The interest
rate with respect to any Distribution Date for these
interests
is a per annum variable rate equal to the weighted average of
the
Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2
Regular
Interests (other than the Pooling-Tier REMIC-2 IO Interests).
(2) This
Lower-Tier Regular Interest is an interest-only interest and does
not
have a
Lower-Tier Principal Amount. On each Distribution Date, this
Lower-Tier
Regular Interest shall be entitled to receive all interest
distributable on the Pooling-Tier REMIC-2 IO Interests.
(3) The Class
LT-R Interest is the sole class of residual interest in the
Lower-Tier
REMIC and it does not have a principal amount or an interest
rate.
Each Lower-Tier Regular Interest is hereby designated as a
regular
interest in the Lower-Tier REMIC. The Class LT-A-1, Class LT-A-2,
Class LT-A-3,
Class LT-A-4, Class LT-M-1, Class LT-M-2, Class LT-M-3, Class
LT-M-4, Class
LT-M-5, Class LT-M-6, Class LT-B-1, Class LT-B-2 and Class LT-B-3
Interests are
hereby designated the LT-Accretion Directed Classes (the
"LT-Accretion Directed
Classes").
On each Distribution Date, 50% of the increase in the
Subordinated
Amount shall be payable as a reduction of the Lower Tier Principal
Amount of the
LT-Accretion Directed Classes (each such Class will be reduced by
an amount
equal to 50% of any increase in the Subordinated Amount that is
attributable to
a reduction in the Class Certificate Balance of its Corresponding
Class) and
shall be accrued and added to the Lower Tier Principal Amount of
the Class
LT-Accrual Interest. On each Distribution Date, the increase in the
Lower Tier
Principal Amount of the Class LT-Accrual Interest shall not exceed
interest
accruals for such Distribution Date for the Class LT-Accrual
Interest. In the
event that: (i) 50% of the increase in the Subordinated Amount
exceeds (ii)
interest accruals on the Class LT-Accrual Interest for such
Distribution Date,
the excess for such Distribution Date (accumulated with all such
excesses for
all prior Distribution Dates) will be added to any increase in the
Subordinated
Amount for purposes of determining the amount of interest accrual
on the Class
LT-Accrual Interest payable as principal on the LT-Accretion
Directed Classes on
the next Distribution Date pursuant to the first sentence of this
paragraph. All
payments of scheduled principal and prepayments of principal
generated by the
Mortgage Loans and all Subsequent Recoveries allocable to principal
shall be
allocated (i) 50% to the Class LT-Accrual Interest and (ii) 50% to
the
LT-Accretion Directed Classes (such principal payments and
Subsequent Recoveries
shall be allocated among such LT Accretion Directed Classes in an
amount equal
to 50% of the principal amounts and Subsequent Recoveries allocated
to their
respective Corresponding Classes), until paid in full.
Notwithstanding the
above, principal payments allocated to the Class X Interest that
result in the
reduction in the Subordinated Amount shall be allocated to the
Class LT-Accrual
Interest (until paid in full). Realized Losses shall be applied so
that after
all distributions have been made on each Distribution Date (i) the
Lower Tier
Principal Amount of each LT-Accretion Directed Class is equal to
50% of the
Class Certificate Balance of its Corresponding Class, and (ii) the
Class
LT-Accrual Interest is equal to 50% of the aggregate Stated
Principal Balance of
the Mortgage Loans plus 50% of the Subordinated Amount. Any
increase in the
Class Certificate Balance of a Class of Offered Certificates as a
result of a
Subsequent Recovery shall increase the Lower Tier Principal Amount
of the
Corresponding Lower Tier Regular Interest by 50% of such increase
and the
remaining 50% of such increase shall increase the Lower Tier
Principal Amount of
the Class LT-Accrual Interest.
Upper Tier REMIC
The Upper-Tier REMIC shall issue the following interests, and
each
such interest, other than the Class UT-R Interest, is hereby
designated as a
regular interest in the Upper-Tier REMIC. The Class UT-R Interest
is hereby
designated as the sole class of residual interests in the
Upper-Tier REMIC and
shall be represented by the Class R Certificates.
Upper-Tier
Upper-Tier Initial
Principal
Corresponding Class of
REMIC Interest
Interest Rate Upper-Tier Amount
Certificates
--------------
-------------
--------------------- ----------------------
Class A-1
(1)
$
512,080,000
Class A-1
Class A-2
(1)
$
156,440,000
Class A-2
Class A-3
(1)
$
217,370,000
Class A-3
Class A-4
(1)
$
136,726,000
Class A-4
Class M-1
(1)
$
44,067,000
Class M-1
Class M-2
(1)
$
40,827,000
Class M-2
Class M-3
(1)
$
23,977,000
Class M-3
Class M-4
(1)
$
20,737,000
Class M-4
Class M-5
(1)
$
20,737,000
Class M-5
Class M-6
(1)
$
18,793,000
Class M-6
Class B-1
(1)
$
18,145,000
Class B-1
Class B-2
(1)
$
16,201,000
Class B-2
Class B-3
(1)
$
13,609,000
Class B-3
Class IO
(2)
(2)
N/A
Class X
(3)
(3)
Class X
Class UT-R
(4)
(4)
Class R
----------
(1) For any
Distribution Date (and the related Interest Accrual Period)
this
interest
shall bear interest at the lesser of (i) the Pass-Through Rate
(determined without regard to the WAC Cap) for the Corresponding
Class of
Certificates and (ii) the Upper-Tier REMIC WAC Rate.
(2) This
interest is an interest-only interest and does not have a
principal
balance.
On each Distribution Date, the Class IO Interest shall be
entitled
to receive all interest distributable on the Class LT-IO
Interest.
This interest shall be beneficially owned by the holders of the
Class X
Certificates and shall be held as an asset of the Swap Account.
(3) The Class X
Interest has an initial principal balance of $56,382,575 but
will not
accrue interest on such balance but will accrue interest on a
notional
principal balance. As of any Distribution Date, the Class X
Interest
shall have a notional principal balance equal to the aggregate
of
the
Lower-Tier Principal Amounts of the Lower-Tier Regular
Interests
(other
than the Class LT-IO Interest) as of the first day of the
related
Interest
Accrual Period. With respect to any Interest Accrual Period,
the
Class X
Interest shall bear interest at a rate equal to the excess, if
any, of
the Upper-Tier REMIC WAC Rate over the product of (i) 2 and
(ii)
the
weighted average of the Lower-Tier Interest Rates of the
Lower-Tier
REMIC
Interests (other than the Class LT-IO Interest), where the
Lower-Tier
Interest Rate on each of the Class LT-Accrual Interest, is
subject to
a cap equal to zero and each LT-Accretion Directed Class is
subject to
a cap equal to the Upper-Tier Interest Rate on its
Corresponding Class of Upper-Tier Regular Interest. With respect to
any
Distribution Date, interest that so accrues on the notional
principal
balance of
the Class X Interest shall be deferred in an amount equal to
any
increase in the Subordinated Amount on such Distribution Date.
Such
deferred
interest shall not itself bear interest.
(4) The Class
UT-R Interest does not have an interest rate or a principal
balance.
On each Distribution Date, interest distributable in respect of
the
Lower-Tier Interests for such Distribution Date shall be deemed to
be
distributed on the interests in the Upper-Tier REMIC at the rates
shown above,
provided that the Class IO Interest shall be entitled to receive
interest before
any other interest in the Upper-Tier REMIC.
On each Distribution Date, all Realized Losses, Subsequent
Recoveries and all payments of principal shall be allocated to the
Upper-Tier
Interests until the outstanding principal balance of each such
interest equals
the outstanding Class Certificate Balance of the Corresponding
Class of
Certificates as of such Distribution Date.
The Certificates
Class Designation Class Pass-Through Rate
Class
Certificate Balance
----------------- -----------------------
-------------------------
Class A-1
(1)
$
512,080,000
Class A-2
(1)
$
156,440,000
Class A-3
(1)
$
217,370,000
Class A-4
(1)
$
136,726,000
Class M-1
(2)
$
44,067,000
Class M-2
(2)
$
40,827,000
Class M-3
(2)
$
23,977,000
Class M-4
(2)
$
20,737,000
Class M-5
(2)
$
20,737,000
Class M-6
(2)
$
18,793,000
Class B-1
(2)
$
18,145,000
Class B-2
(2)
$
16,201,000
Class B-3
(2)
$
13,609,000
Class X
(3)
(3)
Class R
(4)
(4)
----------
(1) The Class
A-1, Class A-2, Class A-3 and Class A-4 Interest will bear
interest
during each Interest Accrual Period at a per annum rate equal
to
(a) on or
prior to the Optional Termination Date, the least of (i) LIBOR
plus
0.0800%, 0.1400%, 0.1900% and 0.3000%, respectively, and (ii) the
WAC
Cap or (b)
after the Optional Termination Date, the least of (i) LIBOR
plus
0.1600%, 0.2800%, 0.3800% and 0.6000%, respectively, and (ii) the
WAC
Cap.
(2) The Class
M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class B-1,
Class B-2 and Class B-3 Interests will bear interest during
each
Interest Accrual Period at a per annum rate equal to (a) on or
prior
to the
Optional Termination Date, the lesser of (i) LIBOR plus
0.3800%,
0.4000%,
0.4200%, 0.5200%, 0.5500%, 0.6600%, 1.2500%, 1.4500% and
2.2000%,
respectively, and (ii) the WAC Cap or (b) after the Optional
Termination
Date, the
lesser of (i) LIBOR plus 0.5700%, 0.6000%, 0.6300%, 0.7800%,
0.8250%,
0.9900%, 1.8750%, 2.1750% and 3.3000% respectively, and (ii)
the
WAC
Cap.
(3) The Class X
Certificates will represent beneficial ownership of the Class
X
Interest, the Class IO Interest, the Interest Rate Swap Agreement,
the
right to
Class IO Shortfalls and amounts in the Excess Reserve Fund
Account
and the Swap Account, subject to the obligation to make
payments
from the
Excess Reserve Fund Account in respect of Basis Risk
CarryForward
Amounts
and amounts in the Swap Account subject to the obligation to
make
Net Swap
Payments, Swap Termination Payments and Basis Risk CarryForward
Amounts.
For federal income tax purposes, the Trustee will treat a Class
X
Certificateholder's obligation to make payments from the Excess
Reserve
Fund
Account or the Swap Account as payments made pursuant to an
interest
rate cap
contract written by the Class X Certificateholders in favor of
each Class
of LIBOR Certificates. Such rights of the Class X
Certificateholders and LIBOR Certificateholders shall be treated as
held
in a
portion of the Trust Fund that is treated as a grantor trust
under
subpart E,
Part I of subchapter J of the Code.
(4) The Class R
Certificates do not have an interest rate or a principal
balance.
The minimum denomination for each Class of Certificates, other
than
the Class P, Class R and the Class X Certificates, will be $25,000
with integral
multiples of $1 in excess thereof. The minimum denomination for the
Class P and
the Class X Certificates will each be a 1% Percentage Interest in
such Class.
The Class R Certificate will represent a 100% Percentage Interest
in such Class.
It is expected that each Class of Certificates will receive its
final distribution of principal and interest on or prior to the
Final Scheduled
Distribution Date.
Set forth below are designations of Classes of Certificates to
the
categories used herein:
Book-Entry Certificates........... All Classes of Certificates other
than the
Physical Certificates.
Class A Certificates.............. Class A-1, Class A-2, Class A-3
and Class
A-4.
Delay Certificates................ None.
ERISA-Restricted
Certificates................... Class R Certificates, Class P
Certificates
and Class X Certificates; any certificate
with a rating below the lowest applicable
permitted rating under the Underwriters'
Exemption.
Non-Delay Certificates............ Class A, Class X and
Subordinated
Certificates.
Offered Certificates.............. All Classes of Certificates other
than the
Private Certificates.
Physical Certificates............. Class P, Class X and Class R
Certificates.
Private Certificates.............. Class P, Class X and Class R
Certificates.
Rating Agencies................... Moody's, Fitch and Standard &
Poor's.
Regular Certificates.............. All Classes of Certificates other
than the
Class P and Class R Certificates.
Residual Certificates............. Class R Certificates.
Subordinated Certificates......... Class M-1, Class M-2, Class M-3,
Class M-4,
Class M-5, Class M-6, Class B-1, Class B-2
and Class B-3 Certificates.
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and
phrases,
unless the context otherwise requires, shall have the following
meanings:
Accepted Servicing Practices: With respect to any Mortgage
Loan,
those mortgage servicing practices set forth in Section 3.01(a) of
this
Agreement.
Account: Any of the Collection Accounts, the Distribution
Account,
any Escrow Account, the Excess Reserve Fund Account or the Swap
Account. Each
Account shall be an Eligible Account.
Accrued Certificate Interest Distribution Amount: With respect
to
any Distribution Date for each Class of Offered Certificates, the
amount of
interest accrued during the related Interest Accrual Period at the
applicable
Pass-Through Rate on the related Class Certificate Balance
immediately prior to
such Distribution Date, as reduced by such Class's share of Net
Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for such
Distribution
Date allocated to such Class pursuant to Section 4.02.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage
Loan.
Adjusted Net Mortgage Rate: As to each Mortgage Loan and at any
time, the per annum rate equal to the Mortgage Rate less the
Expense Fee Rate.
Adjustment Date: As to any Adjustable Rate Mortgage Loan, the
first
Due Date on which the related Mortgage Rate adjusts as set forth in
the related
Mortgage Note and each Due Date thereafter on which the Mortgage
Rate adjusts as
set forth in the related Mortgage Note.
Advance: Any P&I Advance or Servicing Advance.
Advance Facility: A financing or other facility as described in
Section 10.07.
Advancing Person: The Person to whom any Servicer's rights
under
this Agreement to be reimbursed for any P&I Advances or
Servicing Advances have
been assigned pursuant to Section 10.07.
Affiliate: With respect to any Person, any other Person
controlling,
controlled by or under common control with such first Person. For
the purposes
of this definition, "control" means the power to direct the
management and
policies of such Person, directly or indirectly, whether through
the ownership
of voting securities, by contract or otherwise; and the terms
"controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all
amendments
or supplements hereto.
Amount Held for Future Distribution: As to the Certificates on
any
Distribution Date, the aggregate amount held in each Collection
Account at the
close of business on the related Determination Date on account of
(i) Principal
Prepayments, Insurance Proceeds, Condemnation Proceeds and
Liquidation Proceeds
on the Mortgage Loans received after the end of the related
Prepayment Period
and (ii) all Scheduled Payments on the Mortgage Loans due after the
end of the
related Due Period.
Analytics Company: Intex Solutions, Inc., or any other bond
analytics service provider identified to the Trustee by the
Depositor.
Applied Realized Loss Amount: With respect to any Distribution
Date,
the amount, if any, by which the aggregate Class Certificate
Balance of the
Offered Certificates after distributions of principal on such
Distribution Date
exceeds the aggregate Stated Principal Balance of the Mortgage
Loans for such
Distribution Date.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the
value of the
Mortgaged Property.
Assignment of Mortgage: An assignment of the Mortgage, notice
of
transfer or equivalent instrument in recordable form (other than
the assignee's
name and recording information not yet returned from the recording
office),
reflecting the sale of the Mortgage to the Trustee.
Available Funds: With respect to any Distribution Date and the
Mortgage Loans to the extent received by the Trustee (x) the sum of
(i) all
scheduled installments of interest (net of the related Expense
Fees) and
principal due on the Due Date on such Mortgage Loans in the related
Due Period
and received by the Servicers on or prior to the related
Determination Date,
together with any P&I Advances in respect thereof; (ii) all
Condemnation
Proceeds, Insurance Proceeds and Liquidation Proceeds received by
the Servicers
during the related Prepayment Period (in each case, net of
unreimbursed expenses
incurred in connection with a liquidation or foreclosure and
unreimbursed
Advances, if any); (iii) all partial or full prepayments on the
Mortgage Loans
received by the Servicers during the related Prepayment Period
together with all
Compensating Interest, if applicable, thereon (excluding any
Prepayment
Charges); (iv) all Substitution Adjustment Amounts with respect to
the
substitutions of Mortgage Loans that occur with respect to such
Distribution
Date; (v) amounts received with respect to such Distribution Date
as the
Repurchase Price in respect of a Mortgage Loan repurchased by the
Responsible
Party with respect to such Distribution Date; (vi) the proceeds
received with
respect to the termination of the Trust Fund pursuant to clause (a)
of Section
9.01; and (vii) the Closing Date Deposit Amount; reduced by (y)
amounts in
reimbursement for Advances previously made with respect to the
Mortgage Loans
and other amounts as to which the Servicers, the Depositor or the
Trustee are
entitled to be paid or reimbursed pursuant to this Agreement.
Balloon Loan: Any Mortgage Loan that requires only payments of
interest until the stated maturity date of the Mortgage Loan or
Scheduled
Payments of principal which (not including the payment due on its
stated
maturity date) are based on an amortization schedule that would be
insufficient
to fully amortize the principal thereof by the stated maturity date
of the
Mortgage Loan.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the Principal Remittance
Amount for such
Distribution Date over (ii) the Excess Subordinated Amount, if any,
for such
Distribution Date.
Basis Risk CarryForward Amount: With respect to each Class of
Offered Certificates, as of any Distribution Date, the sum of (A)
if on such
Distribution Date the Pass-Through Rate for any Class of Offered
Certificates is
based upon the WAC Cap, the excess of (i) the Accrued Certificate
Interest
Distribution Amount such Class of Certificates would otherwise be
entitled to
receive on such Distribution Date had such Pass-Through Rate not
been subject to
any WAC Cap (that is, had such rate been calculated as the sum of
LIBOR and the
applicable Pass-Through Margin on such Class of Certificates for
such
Distribution Date and the resulting amount being reduced by
allocated Net
Prepayment Interest Shortfalls and Relief Act Interest Shortfalls)
over (ii) the
Accrued Certificate Interest Distribution Amount received on such
Distribution
Date such Class of Certificates at, with respect to each Class of
Offered
Certificates, the WAC Cap for such Distribution Date and (B) the
Basis Risk
CarryForward Amount for such Class of Certificates for all
previous
Distribution Dates not previously paid, together with interest
thereon at a rate
equal to the sum of LIBOR and the applicable Pass-Through Margin
for such Class
of Certificates for such Distribution Date.
Basis Risk Payment: For any Distribution Date, an amount equal
to
the lesser of (i) the aggregate of the Basis Risk CarryForward
Amounts for such
Distribution Date and (ii) the Class X Distributable Amount (prior
to any
reduction for amounts paid from the Excess Reserve Fund Account to
pay any Basis
Risk CarryForward Amount or any Swap Termination Payment).
Best's: Best's Key Rating Guide, as the same shall be amended
from
time to time.
Book-Entry Certificates: As specified in the Preliminary
Statement.
Business Day: Any day other than (i) Saturday or Sunday, or (ii)
a
day on which banking and savings and loan institutions, in (a) the
States of New
York, California, New Jersey, Texas, Arizona or Delaware, (b) a
State in which
any Servicer's servicing operations are located, or (c) the State
in which the
Trustee's operations are located, are authorized or obligated by
law or
executive order to be closed.
Certificate: Any one of the Certificates executed by the Trustee
in
substantially the forms attached hereto as exhibits.
Certificate Balance: With respect to any Class of Certificates,
other than the Class X, Class P or Class R Certificates, at any
date, the
maximum dollar amount of principal to which the Holder thereof is
then entitled
hereunder, such amount being equal to the Denomination thereof
minus all
distributions of principal previously made with respect thereto and
in the case
of any Certificates, reduced by any Applied Realized Loss Amounts
allocated to
such Class of Certificates pursuant to Section 4.05; provided,
however, that
immediately following the Distribution Date on which a Subsequent
Recovery is
distributed, the Class Certificate Balances of any Class or Classes
of
Certificates that have been previously reduced by Applied Realized
Loss Amounts
will be increased, in order of seniority, by the amount of the
Subsequent
Recovery distributed on such Distribution Date (up to the amount of
the Unpaid
Realized Loss Amount for such Class or Classes for such
Distribution Date). The
Class X, Class P and Class R Certificates have no Certificate
Balance.
Certificate Owner: With respect to a Book-Entry Certificate,
the
Person who is the beneficial owner of such Book-Entry
Certificate.
Certificate Register: The register maintained pursuant to
Section
5.02.
Certificateholder or Holder: The person in whose name a
Certificate
is registered in the Certificate Register, except that, solely for
the purpose
of giving any consent pursuant to this Agreement, any Certificate
registered in
the name of the Depositor or any Affiliate of the Depositor shall
be deemed not
to be Outstanding and the Percentage Interest evidenced thereby
shall not be
taken into account in determining whether the requisite amount of
Percentage
Interests necessary to effect such consent has been obtained;
provided, however,
that if any such Person (including the Depositor) owns 100% of the
Percentage
Interests evidenced by a Class of Certificates, such Certificates
shall be
deemed to be Outstanding for purposes of any provision hereof that
requires the
consent of the Holders of Certificates of a particular Class as a
condition to
the taking of any action hereunder. The Trustee is entitled to rely
conclusively
on a certification of the Depositor or any Affiliate of the
Depositor in
determining which Certificates are registered in the name of an
Affiliate of the
Depositor.
Class: All Certificates bearing the same class designation as
set
forth in the Preliminary Statement.
Class A Certificates: As specified in the Preliminary
Statement.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class
Certificate Balances of
the Class A Certificates immediately prior to such Distribution
Date over (ii)
the lesser of (A) 57.80% of the aggregate Stated Principal Balance
of the
Mortgage Loans for such Distribution Date and (B) the excess, if
any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution
Date over $6,480,458.
Class A-1 Certificates: All Certificates bearing the class
designation of "Class A-1".
Class A-2 Certificates: All Certificates bearing the class
designation of "Class A-2".
Class A-3 Certificates: All Certificates bearing the class
designation of "Class A-3".
Class A-4 Certificates: All Certificates bearing the class
designation of "Class A-4".
Class B Certificates: The Class B-1, Class B-2 and Class B-3
Certificates.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1".
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution
Amount for such Distribution Date), (C) the Class Certificate
Balance of the
Class M-2 Certificates (after taking into account the distribution
of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D)
the Class
Certificate Balance of the Class M-3 Certificates (after taking
into account the
distribution of the Class M-3 Principal Distribution Amount for
such
Distribution Date), (E) the Class Certificate Balance of the Class
M-4
Certificates (after taking into account the distribution of the
Class M-4
Principal Distribution Amount for such Distribution Date), (F) the
Class
Certificate Balance of the Class M-5 Certificates (after taking
into account the
distribution of the Class M-5 Principal Distribution Amount for
such
Distribution Date), (G) the Class Certificate Balance of the Class
M-6
Certificates (after taking into account the distribution of the
Class M-6
Principal Distribution Amount for such Distribution Date) and (H)
the Class
Certificate Balance of the Class B-1 Certificates immediately prior
to such
Distribution Date over (ii) the lesser of (A) 86.70% of the
aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date
and (B) the
excess, if any, of the aggregate Stated Principal Balance of the
Mortgage Loans
for such Distribution Date over $6,480,458.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-2".
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution
Amount for such Distribution Date), (C) the Class Certificate
Balance of the
Class M-2 Certificates (after taking into account the distribution
of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D)
the Class
Certificate Balance of the Class M-3 Certificates (after taking
into account the
distribution of the Class M-3 Principal Distribution Amount for
such
Distribution Date), (E) the Class Certificate Balance of the Class
M-4
Certificates (after taking into account the distribution of the
Class M-4
Principal Distribution Amount for such Distribution Date), (F) the
Class
Certificate Balance of the Class M-5 Certificates (after taking
into account the
distribution of the Class M-5 Principal Distribution Amount for
such
Distribution Date), (G) the Class Certificate Balance of the Class
M-6
Certificates (after taking into account the distribution of the
Class M-6
Principal Distribution Amount for such Distribution Date), (H) the
Class
Certificate Balance of the Class B-1 Certificates (after taking
into account the
distribution of the Class B-1 Principal Distribution Amount for
such
Distribution Date) and (I) the Class Certificate Balance of the
Class B-2
Certificates immediately prior to such Distribution Date over (ii)
the lesser of
(A) 89.20% of the aggregate Stated Principal Balance of the
Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate
Stated
Principal Balance of the Mortgage Loans for such Distribution Date
over
$6,480,458.
Class B-3 Certificates: All Certificates bearing the class
designation of "Class B-3".
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution
Amount for such Distribution Date), (C) the Class Certificate
Balance of the
Class M-2 Certificates (after taking into account the distribution
of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D)
the Class
Certificate Balance of the Class M-3 Certificates (after taking
into account the
distribution of the Class M-3 Principal Distribution Amount for
such
Distribution Date), (E) the Class Certificate Balance of the Class
M-4
Certificates (after taking into account the distribution of the
Class M-4
Principal Distribution Amount for such Distribution Date), (F) the
Class
Certificate Balance of the Class M-5 Certificates (after taking
into account the
distribution of the Class M-5 Principal Distribution Amount for
such
Distribution Date), (G) the Class Certificate Balance of the Class
M-6
Certificates (after taking into account the distribution of the
Class M-6
Principal Distribution Amount for such Distribution Date), (H) the
Class
Certificate Balance of the Class B-1 Certificates (after taking
into account the
distribution of the Class B-1 Principal Distribution Amount for
such
Distribution Date), (I) the Class Certificate Balance of the Class
B-2
Certificates (after taking into account the distribution of the
Class B-2
Principal Distribution Amount for such Distribution Date) and (J)
the Class
Certificate Balance of the Class B-3 Certificates immediately prior
to such
Distribution Date over (ii) the lesser of (A) 91.30% of the
aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date
and (B) the
excess, if any, of the aggregate Stated Principal Balance of the
Mortgage Loans
for such Distribution Date over $6,480,458.
Class Certificate Balance: With respect to any Class and as to
any
date of determination, the aggregate of the Certificate Balances of
all
Certificates of such Class as of such date.
Class IO Interest: As specified in the Preliminary Statement.
Class IO Shortfalls: As defined in Section 8.13. For the
avoidance
of doubt, the Class IO Shortfall for any Distribution Date shall
equal the
amount payable to the Class X Certificates in respect of amounts
due to the Swap
Provider on such Distribution Date (other than Defaulted Swap
Termination
Payments) in excess of the amount payable on the Class X Interest
(prior to any
reduction for Basis Risk Payments or Swap Termination Payments) on
such
Distribution Date, all as further provided in Section 8.13.
Class LT-R Interest: The residual interest in the Lower-Tier
REMIC
as described in the Preliminary Statement and the related footnote
thereto.
Class M Certificates: The Class M-1, Class M-2, Class M-3,
Class
M-4, Class M-5 and Class M-6 Certificates.
Class M-1 Enhancement Percentage: With respect to any
Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the
aggregate Class
Certificate Balances of the Class M and Class B Certificates (other
than the
Class M-1 Certificates) and (ii) the Subordinated Amount, in each
case after
taking into account the distributions of the related Principal
Distribution
Amount and any principal payments on those Classes of Certificates
from the Swap
Account on that Distribution Date, by (y) the aggregate Stated
Principal Balance
of the Mortgage Loans for that Distribution Date.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1".
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), and (B) the Class Certificate Balance of the Class M-1
Certificates
immediately prior to such Distribution Date over (ii) the lesser of
(A) 64.60%
of the aggregate Stated Principal Balance of the Mortgage Loans for
such
Distribution Date and (B) the excess, if any, of the aggregate
Stated Principal
Balance of the Mortgage Loans for such Distribution Date over
$6,480,458.
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2".
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution
Amount for such Distribution Date) and (C) the Class Certificate
Balance of the
Class M-2 Certificates immediately prior to such Distribution Date
over (ii) the
lesser of (A) 70.90% of the aggregate Stated Principal Balance of
the Mortgage
Loans for such Distribution Date and (B) the excess, if any, of the
aggregate
Stated Principal Balance of the Mortgage Loans for such
Distribution Date over
$6,480,458.
Class M-3 Certificates: All Certificates bearing the class
designation of "Class M-3".
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution
Amount for such Distribution Date), (C) the Class Certificate
Balance of the
Class M-2 Certificates (after taking into account the distribution
of the Class
M-2 Principal Distribution Amount for such Distribution Date) and
(D) the Class
Certificate Balance of the Class M-3 Certificates immediately prior
to such
Distribution Date over (ii) the lesser of (A) 74.60% of the
aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date
and (B) the
excess, if any, of the aggregate Stated Principal Balance of the
Mortgage Loans
for such Distribution Date over $6,480,458.
Class M-4 Certificates: All Certificates bearing the class
designation of "Class M-4".
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution
Amount for such Distribution Date), (C) the Class Certificate
Balance of the
Class M-2 Certificates (after taking into account the distribution
of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D)
the Class
Certificate Balance of the Class M-3 Certificates (after taking
into account the
distribution of the Class M-3 Principal Distribution Amount for
such
Distribution Date) and (E) the Class Certificate Balance of the
Class M-4
Certificates immediately prior to such Distribution Date over (ii)
the lesser of
(A) 77.80% of the aggregate Stated Principal Balance of the
Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate
Stated
Principal Balance of the Mortgage Loans for such Distribution Date
over
$6,480,458.
Class M-5 Certificates: All Certificates bearing the class
designation of "Class M-5".
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution
Amount for such Distribution Date), (C) the Class Certificate
Balance of the
Class M-2 Certificates (after taking into account the distribution
of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D)
the Class
Certificate Balance of the Class M-3 Certificates (after taking
into account the
distribution of the Class M-3 Principal Distribution Amount for
such
Distribution Date), (E) the Class Certificate Balance of the Class
M-4
Certificates (after taking into account the distribution of the
Class M-4
Principal Distribution Amount for such Distribution Date) and (F)
the Class
Certificate Balance of the Class M-5 Certificates immediately prior
to such
Distribution Date over (ii) the lesser of (A) 81.00 % of the
aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date
and (B) the
excess, if any, of the aggregate Stated Principal Balance of the
Mortgage Loans
for such Distribution Date over $6,480,458.
Class M-6 Certificates: All Certificates bearing the class
designation of "Class M-6".
Class M-6 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution
Amount for such Distribution Date), (C) the Class Certificate
Balance of the
Class M-2 Certificates (after taking into account the distribution
of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D)
the Class
Certificate Balance of the Class M-3 Certificates (after taking
into account the
distribution of the Class M-3 Principal Distribution Amount for
such
Distribution Date), (E) the Class Certificate Balance of the Class
M-4
Certificates (after taking into account the distribution of the
Class M-4
Principal Distribution Amount for such Distribution Date), (F) the
Class
Certificate Balance of the Class M-5 Certificates (after taking
into account the
distribution of the Class M-5 Principal Distribution Amount for
such
Distribution Date) and (G) the Class Certificate Balance of the
Class M-6
Certificates immediately prior to such Distribution Date over (ii)
the lesser of
(A) 83.90% of the aggregate Stated Principal Balance of the
Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate
Stated
Principal Balance of the Mortgage Loans for such Distribution Date
over
$6,480,458.
Class P Certificates: All Certificates bearing the class
designation
of "Class P".
Class PT1-R Interest: The residual interest in Pooling-Tier
REMIC-1
as described in the Preliminary Statement and the related footnote
thereto.
Class PT2-R Interest: The residual interest in Pooling-Tier
REMIC-2
as described in the Preliminary Statement and the related footnote
thereto.
Class R Certificates: All Certificates bearing the class
designation
of "Class R".
Class UT-R Interest: The residual interest in the Upper-Tier
REMIC
as described in the Preliminary Statement and the related footnote
thereto.
Class X Certificates: All Certificates bearing the class
designation
of "Class X".
Class X Distributable Amount: On any Distribution Date, the sum
of
(i) as a distribution in respect of interest, the amount of
interest that has
accrued on the Class X Interest and not applied as an Extra
Principal
Distribution Amount on such Distribution Date, plus any such
accrued interest
remaining undistributed from prior Distribution Dates, plus,
without duplication
(ii) as a distribution in respect of principal, any portion of the
principal
balance of the Class X Interest which is distributable as a
Subordination
Reduction Amount, minus (iii) any amounts paid from the Excess
Reserve Fund
Account to pay any Basis Risk CarryForward Amount or any Swap
Termination
Payment.
Class X Interest: The Upper Tier Regular Interest represented by
the
Class X Certificates as specified and described in the Preliminary
Statement and
the related footnote thereto.
Closing Date: January 27, 2006.
Closing Date Deposit Amount: $574.38 (all of which is allocable
to
principal) deposited by the Depositor into the Distribution Account
on the
Closing Date.
Code: The Internal Revenue Code of 1986, including any successor
or
amendatory provisions.
Collection Account: As defined in Section 3.10(a).
Combined Loan to Value Ratio or CLTV: As of any date and as to
any
Second Lien Mortgage Loan, the ratio, expressed as a percentage, of
the (a) sum
of (i) the outstanding principal balance of the Second Lien
Mortgage Loan and
(ii) the outstanding principal balance as of such date of any
mortgage loan or
mortgage loans that are senior or equal in priority to the Second
Lien Mortgage
Loan and which are secured by the same Mortgaged Property to (b)
the Appraised
Value as determined pursuant to the Underwriting Guidelines of the
related
Mortgaged Property as of the origination of the Second Lien
Mortgage Loan.
Commission: The United States Securities and Exchange
Commission.
Compensating Interest: For any Distribution Date, the lesser of
(a)
the amount by which such Prepayment Interest Shortfall exceeds all
Prepayment
Interest Excesses for such Distribution Date on the Mortgage Loans
serviced by
the applicable Servicer and (b) the amount of the aggregate
Servicing Fee paid
to or retained by the applicable Servicer for such Distribution
Date.
Condemnation Proceeds: All awards of settlements in respect of
a
Mortgaged Property, whether permanent or temporary, partial or
entire, by
exercise of the power of eminent domain or condemnation.
Convertible Mortgage Loan: Any individual Adjustable Rate
Mortgage
Loan which contains a provision whereby the Mortgagor is permitted
to convert
the Adjustable Rate Mortgage Loan to a Fixed Rate Mortgage Loan in
accordance
with the terms of the related Mortgage Note.
Corporate Trust Office: The designated office of the Trustee in
the
State of California at which at any particular time its corporate
trust business
with respect to this Agreement is administered, which office at the
date of the
execution of this Agreement is located at 1761 East St. Andrew
Place, Santa Ana,
California 92705, Attn: Trust Administration- MS06C1, facsimile no.
(714)
247-6329, and which is the address to which notices to and
correspondence with
the Trustee should be directed.
Corresponding Class: The class of interests in the Lower-Tier
REMIC
or Upper-Tier REMIC that corresponds to the class of interests in
the other such
REMIC or to a Class of Certificates in the manner set out
below:
Corresponding Lower-Tier Corresponding Upper-Tier
Corresponding
Class
Class
Designation
Regular Interest
of Certificates
------------------------ ------------------------
-------------------
Class LT-A-1
Class A-1
Class A-1
Class LT-A-2
Class A-2
Class A-2
Class LT-A-3
Class A-3
Class A-3
Class LT-A-4
Class A-4
Class A-4
Class LT-M-1
Class M-1
Class M-1
Class LT-M-2
Class M-2
Class M-2
Class LT-M-3
Class M-3
Class M-3
Class LT-M-4
Class M-4
Class M-4
Class LT-M-5
Class M-5
Class
M-5
Class LT-M-6
Class M-6
Class M-6
Class LT-B-1
Class B-1
Class B-1
Class LT-B-2
Class B-2
Class B-2
Class LT-B-3
Class B-3
Class B-3
N/A
Class X
Class X
Corresponding Pooling-Tier REMIC-1 Regular Interest: As described
in
the Preliminary Statement.
Corresponding Pooling-Tier REMIC-2 IO Interest: As described in
the
Preliminary Statement.
Corresponding Scheduled Crossover Distribution Date: The
Distribution Date in the month and year specified in the
Preliminary Statement
corresponding to a Pooling-Tier REMIC-2 IO Interest.
Cumulative Loss Percentage: With respect to any Distribution
Date,
the percentage equivalent of a fraction, the numerator of which is
the aggregate
amount of Realized Losses incurred from the Cut-off Date through
the last day of
the related Prepayment Period and the denominator of which is the
Cut-off Date
Pool Principal Balance of the Mortgage Loans.
Cumulative Loss Trigger Event: With respect to any Distribution
Date, a Cumulative Loss Trigger Event exists if the quotient
(expressed as a
percentage) of (x) the aggregate amount of Realized Losses incurred
since the
Cut-off Date through the last day of the related Prepayment Period,
divided by
(y) the Cut-off Date Pool Principal Balance, exceeds the applicable
cumulative
loss percentages set forth below with respect to such Distribution
Date:
Distribution Date Occurring In
Cumulative Loss Percentage
------------------------------
--------------------------
February 2008 through January 2009 1.350% for the first month,
plus an
additional 1/12th of 1.700% for each month
thereafter (e.g., 2.200% in August 2008)
February 2009 through January 2010 3.050% for the first month,
plus an
additional 1/12th of 1.750% for each month
thereafter (e.g., 3.925% in August 2009)
February 2010 through January 2011 4.800% for the first month,
plus an
additional 1/12th of 1.400% for each month
thereafter (e.g., 5.500% in August 2010)
February 2011 through January 2012 6.200% for the first month,
plus an
additional 1/12th of 0.750% for each month
thereafter (e.g., 6.575% in August 2011)
February 2012 through January 2013 6.950% for the first month,
plus an
additional 1/12th of 0.050% for each month
thereafter (e.g., 6.975% in August 2012)
February 2013 and thereafter
7.000%
Custodial File: With respect to each Mortgage Loan, the file
retained by the Trustee consisting of items (a)-(h) as listed on
Exhibit K
hereto.
Cut-off Date: January 1, 2006.
Cut-off Date Pool Principal Balance: The aggregate Stated
Principal
Balances of all Mortgage Loans as of the Cut-off Date plus the
portion of the
Closing Date Deposit Amount allocable to principal.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
Stated
Principal Balance thereof as of the close of business on the
Cut-off Date (after
giving effect to payments of principal due on that date, whether or
not
received).
Data Tape Information: The information provided by the
Responsible
Party as of the Cut-off Date to the Depositor or the Sponsor
setting forth the
following information with respect to each Mortgage Loan: (1) the
Mortgagor's
name; (2) as to each Mortgage Loan, the Scheduled Principal Balance
as of the
Cut-off Date; (3) the Mortgage Rate Cap; (4) the Index; (5) a code
indicating
whether the Mortgaged Property is owner-occupied; (6) the type of
Mortgaged
Property; (7) the first date on which the Scheduled Payment was due
on the
Mortgage Loan and, if such date is not consistent with the Due Date
currently in
effect, such Due Date; (8) the "paid through date" based on
payments received
from the related Mortgagor; (9) the original principal amount of
the Mortgage
Loan; (10) with respect to Adjustable Rate Mortgage Loans, the
Maximum Mortgage
Rate; (11) the type of Mortgage Loan (i.e., Fixed Rate or
Adjustable Rate
Mortgage Loan, First Lien Mortgage Loan or Second Lien Mortgage
Loan); (12) a
code indicating the purpose of the loan (i.e., purchase, rate and
term
refinance, equity take-out refinance); (13) a code indicating the
documentation
style (i.e., full, asset verification, income verification and
no
documentation); (14) the credit risk score (FICO score); (15) the
loan credit
grade classification (as described in the underwriting guidelines);
(16) with
respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage
Rate; (17)
the Mortgage Rate at origination; (18) with respect to each
Adjustable Rate
Mortgage Loan, the first Adjustment Date immediately following the
Cut-off Date;
(19) the value of the Mortgaged Property; (20) a code indicating
the type of
Prepayment Charges applicable to such Mortgage Loan (including any
prepayment
penalty term), if any; (21) with respect to each Adjustable Rate
Mortgage Loan,
the Periodic Mortgage Rate Cap; (22) with respect to each First
Lien Mortgage
Loan, the LTV at origination and with respect to each Second Lien
Mortgage Loan,
the CLTV at origination; and (23) if such Mortgage Loan is covered
by a primary
mortgage insurance policy or a lender-paid primary mortgage
insurance policy,
the primary mortgage insurance rate. With respect to the Mortgage
Loans in the
aggregate, the Data Tape Information shall set forth the following
information,
as of the Cut-off Date: (1) the number of Mortgage Loans; (2) the
current
aggregate outstanding principal balance of the Mortgage Loans; (3)
the weighted
average Mortgage Rate of the Mortgage Loans; and (4) the weighted
average
maturity of the Mortgage Loans.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding
under the United
States Bankruptcy Code in the Scheduled Payment for such Mortgage
Loan which
became final and non-appealable, except such a reduction resulting
from a
Deficient Valuation or any reduction that results in a permanent
forgiveness of
principal.
Defaulted Swap Termination Payment: Any Swap Termination
Payment
required to be paid by the Trust to the Swap Provider pursuant to
the Interest
Rate Swap Agreement as a result of an Event of Default (as defined
in the
Interest Rate Swap Agreement) with respect to which the Swap
Provider is the
defaulting party or a Termination Event (as defined in the Interest
Rate Swap
Agreement) (other than Illegality or a Tax Event that is not a Tax
Event Upon
Merger (each as defined in the Interest Rate Swap Agreement )) with
respect to
which the Swap Provider is the sole Affected Party (as defined in
the Interest
Rate Swap Agreement).
Deficient Valuation: With respect to any Mortgage Loan, a
valuation
of the related Mortgaged Property by a court of competent
jurisdiction in an
amount less than the then outstanding principal balance of the
Mortgage Loan,
which valuation results from a proceeding initiated under the
United States
Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a
Physical
Certificate and any Certificate issued in lieu of a Book-Entry
Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: As defined in Section 2.03.
Delinquency Trigger Event: With respect to any Distribution Date,
a
Delinquency Trigger Event exists if the quotient (expressed as a
percentage) of
(x) the rolling three month average of the aggregate Stated
Principal Balance of
60+ Day Delinquent Mortgage Loans (including Mortgage Loans in
foreclosure and
Mortgage Loans related to REO Property) and (y) (1) until the
aggregate Class
Certificate Balance of the Class A Certificates have been reduced
to zero, the
aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution
Date equals or exceeds 37.90% of the prior period's Senior
Enhancement
Percentage and (2) after the aggregate Class Certificate Balance of
the Class A
Certificates have been reduced to zero, the aggregate Stated
Principal Balance
of the Mortgage Loans for such Distribution Date equals or exceeds
45.20% of the
prior period's Class M Enhancement Percentage.
Denomination: With respect to each Certificate, the amount set
forth
on the face thereof as the "Initial Certificate Balance of this
Certificate" or
the Percentage Interest appearing on the face thereof.
Depositor: Morgan Stanley ABS Capital I Inc., a Delaware
corporation, and its successors in interest.
Depository: The initial Depository shall be The Depository
Trust
Company, the nominee of which is CEDE & Co., as the registered
Holder of the
Book-Entry Certificates. The Depository shall at all times be a
"clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform
Commercial Code of
the State of New York.
Depository Institution: Any depository institution or trust
company,
including the 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, "F1+" by Fitch and "A-1" by Standard
& Poor's (to
the extent they are Rating Agencies hereunder).
Depository Participant: A broker, dealer, bank or other
financial
institution or other Person for whom from time to time a Depository
effects
book-entry transfers and pledges of securities deposited with the
Depository.
Determination Date: With respect to each Distribution Date, the
18th
day (or if such day is not a Business Day, the immediately
preceding Business
Day) in the calendar month in which such Distribution Date
occurs.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.07(d) in the name
of the Trustee
for the benefit of the Certificateholders and designated "Deutsche
Bank National
Trust Company in trust for registered holders of Morgan Stanley ABS
Capital I
Inc. Trust 2006-NC1 Mortgage Pass-Through Certificates, Series
2006-NC1". Funds
in the Distribution Account shall be held in trust for the
Certificateholders
for the uses and purposes set forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date,
12:00 noon New York City time on the second Business Day
immediately preceding
such Distribution Date.
Distribution Date: The 25th day of each calendar month, or if
such
day is not a Business Day, the next succeeding Business Day,
commencing in
February 2006.
Document Certification and Exception Report: The report attached
to
Exhibit F hereto.
Due Date: The day of the month on which the Scheduled Payment is
due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the calendar month preceding the
month in which
such Distribution Date occurs and ending on the first day of the
calendar month
in which such Distribution Date occurs.
Eligible Account: Either (i) an account maintained with a federal
or
state chartered depository institution or trust company that
complies with the
definition of Eligible Institution, (ii) an account maintained with
the
corporate trust department of a federal depository institution
or
state-chartered depository institution subject to regulations
regarding
fiduciary funds on deposit similar to Title 12 of the U.S. Code of
Federal
Regulation Section 9.10(b), which, in either case, has corporate
trust powers
and is acting in its fiduciary capacity or (iii) any other account
acceptable to
each Rating Agency. Eligible Accounts may bear interest, and may
include, if
otherwise qualified under this definition, accounts maintained with
the Trustee.
Each Eligible Account shall be a separate account.
Eligible Institution: A federal or state-chartered depository
institution or trust company the commercial paper, short-term debt
obligations,
or other short-term deposits of which are rated "A-1+" by Standard
& Poor's if
the amounts on deposit are to be held in the account for no more
than 365 days
(or at least "A-2" by Standard & Poor's if the amounts on
deposit are to be held
in the account for no more than 30 days), or the long-term
unsecured debt
obligations of which are rated at least "AA-" by Standard &
Poor's if the
amounts on deposit are to be held in the account for no more than
365 days, and
the commercial paper, short-term debt obligations or other
short-term deposits
of which are rated at least "P-1" by Moody's and "F1+" by Fitch (or
a comparable
rating if another Rating Agency is specified by the Depositor by
written notice
to the Servicer and the Trustee) (in each case, to the extent they
are
designated as Rating Agencies in the Preliminary Statement).
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that meets the requirements of
Prohibited
Transaction Exemption ("PTE") 2002-41, 67 Fed. Reg. 54487 (2002)
(or any
successor thereto), or any substantially similar administrative
exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established
and
maintained pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b).
Event of Default: As defined in Section 7.01.
Excess Reserve Fund Account: The separate Eligible Account
created
and maintained by the Trustee pursuant to Sections 3.07(b) and
3.07(c) in the
name of the Trustee for the benefit of the Regular
Certificateholders and
designated "Deutsche Bank National Trust Company in trust for
registered Holders
of Morgan Stanley ABS Capital I Inc. Trust 2006-NC1, Mortgage
Pass-Through
Certificates, Series 2006-NC1". Funds in the Excess Reserve Fund
Account shall
be held in trust for the Regular Certificateholders for the uses
and purposes
set forth in this Agreement. Amounts on deposit in the Excess
Reserve Fund
Account shall not be invested.
Excess Subordinated Amount: With respect to any Distribution
Date,
the excess, if any, of (a) the Subordinated Amount on such
Distribution Date
over (b) the Specified Subordinated Amount for such Distribution
Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expense Fee Rate: As to each Mortgage Loan, a per annum rate
equal
to the sum of the Servicing Fee Rate, the Trustee Fee Rate and any
lender-paid
primary mortgage insurance fee rate, if applicable.
Expense Fees: As to each Mortgage Loan, the sum of the
Servicing
Fee, the Trustee Fee and any lender-paid primary mortgage insurance
fee, if
applicable.
Extra Principal Distribution Amount: As of any Distribution
Date,
the lesser of (x) the related Total Monthly Excess Spread for such
Distribution
Date and (y) the related Subordination Deficiency for such
Distribution Date.
Fannie Mae: The Federal National Mortgage Association, or any
successor thereto.
Fannie Mae Guides: The Fannie Mae Sellers' Guide and the Fannie
Mae
Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor
thereto.
Final Recovery Determination: With respect to any defaulted
Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO
Property purchased
by the Responsible Party, as contemplated by this Agreement), a
determination
made by the applicable Servicer that all Insurance Proceeds,
Condemnation
Proceeds, Liquidation Proceeds and other payments or recoveries
which the
applicable Servicer, in its reasonable good faith judgment, expects
to be
finally recoverable in respect thereof have been so recovered. Each
Servicer
shall maintain records, prepared by a Servicing Officer, of each
Final Recovery
Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled
Distribution
Date for each Class of Certificates is the Distribution Date in
December 2035.
First Lien Mortgage Loan: A Mortgage Loan secured by a first
lien
Mortgage on the related Mortgaged Property.
Fitch: Fitch, Inc., and its successors in interest. If Fitch is
designated as a Rating Agency in the Preliminary Statement, for
purposes of
Section 12.05(b) the address for notices to Fitch shall be Fitch,
Inc., One
State Street Plaza, New York, New York 10004, Attention: MBS
Monitoring - Morgan
Stanley ABS Capital I Inc. Trust 2006-NC1, or such other address as
Fitch may
hereafter furnish to the Depositor, the Trustee and the
Servicers.
Fixed Rate Mortgage Loan: A fixed rate Mortgage Loan.
Freddie Mac: The Federal Home Loan Mortgage Corporation, a
corporate
instrumentality of the United States created and existing under
Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor
thereto.
Gross Margin: With respect to each Adjustable Rate Mortgage
Loan,
the fixed percentage amount set forth in the related Mortgage Note
to be added
to the applicable Index to determine the Mortgage Rate.
HomEq: HomEq Servicing Corporation, a New Jersey corporation,
and
its successors in interest.
Index: As to each Adjustable Rate Mortgage Loan, the index from
time
to time in effect for the adjustment of the Mortgage Rate set forth
as such on
the related Mortgage Note.
Insurance Policy: With respect to any Mortgage Loan included in
the
Trust Fund, any insurance policy, including all riders and
endorsements thereto
in effect, including any replacement policy or policies for any
Insurance
Policies.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds
of
insurance policies insuring the Mortgage Loan or the related
Mortgaged Property.
Interest Accrual Period: With respect to each Class of
Non-Delay
Certificates and the Corresponding Class of Lower Tier Regular
Interests and any
Distribution Date, the period commencing on the Distribution Date
occurring in
the month preceding the month in which the current Distribution
Date occurs and
ending on the day immediately preceding the current Distribution
Date (or, in
the case of the first Distribution Date, the period from and
including the
Closing Date to but excluding such first Distribution Date). For
purposes of
computing interest accruals on each Class of Non-Delay
Certificates, each
Interest Accrual Period has the actual number of days in such month
and each
year is assumed to have 360 days.
Interest Rate Adjustment Date: With respect to each Adjustable
Rate
Mortgage Loan, the date, specified in the related Mortgage Note and
the Mortgage
Loan Schedule, on which the Mortgage Rate is adjusted.
Interest Rate Swap Agreement: The interest rate swap agreement,
dated as of the Closing Date, between Morgan Stanley Capital
Services Inc. and
the Trustee, a copy of which is attached hereto as Exhibit T.
Interest Remittance Amount: With respect to any Distribution
Date
and the Mortgage Loans, that portion of Available Funds
attributable to interest
relating to Mortgage Loans.
Investment Account: As defined in Section 3.12(a).
Investor-Based Exemption: Any of Prohibited Transaction Class
Exemption ("PTCE") 84-14 (for transactions by independent
"qualified
professional asset managers"), PTCE 90-1 (for transactions by
insurance company
pooled separate accounts), PTCE 91-38 (for transactions by bank
collective
investment funds), PTCE 95-60 (for transactions by insurance
company general
accounts) or PTCE 96-23 (for transactions effected by "in-house
asset
managers"), or any comparable exemption available under Similar
Law.
JPMorgan: JPMorgan Chase Bank, National Association, a national
banking association, and its successors in interest.
Late Collections: With respect to any Mortgage Loan and any Due
Period, all amounts received after the Determination Date
immediately following
such Due Period, whether as late payments of Scheduled Payments or
as Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds or otherwise,
which
represent late payments or collections of principal and/or interest
due (without
regard to any acceleration of payments under the related Mortgage
and Mortgage
Note) but delinquent for such Due Period and not previously
recovered.
LIBOR: With respect to any Interest Accrual Period for the
Offered
Certificates, the rate determined by the Trustee on the related
LIBOR
Determination Date on the basis of the offered rate for one-month
U.S. dollar
deposits as such rate appears on Telerate Page 3750 as of 11:00
a.m. (London
time) on such date; provided, that if such rate does not appear on
Telerate Page
3750, the rate for such date will be determined on the basis of the
rates at
which one-month U.S. dollar deposits are offered by the Reference
Banks at
approximately 11:00 a.m. (London time) on such date to prime banks
in the London
interbank market. In such event, the Trustee shall request the
principal London
office of each of the Reference Banks to provide a quotation of its
rate. If at
least two such quotations are provided, the rate for that date will
be the
arithmetic mean of the quotations (rounded upwards if necessary to
the nearest
whole multiple of 1/16%). If fewer than two quotations are provided
as
requested, the rate for that date will be the arithmetic mean of
the rates
quoted by major banks in New York City, selected by the Trustee
(after
consultation with the Depositor), at approximately 11:00 a.m. (New
York City
time) on such date for one-month U.S. dollar loans to leading
European banks.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the Offered Certificates, the second London Business Day
preceding
the commencement of such Interest Accrual Period.
Liquidated Mortgage Loan: With respect to any Distribution Date,
a
defaulted Mortgage Loan (including any REO Property) which either
(a) was
liquidated in the calendar month preceding the month of such
Distribution Date
and as to which the applicable Servicer has certified to the
Trustee that it has
received all amounts it expects to receive in connection with the
liquidation of
such Mortgage Loan including the final disposition of an REO
Property, or (b) is
a Second Lien Mortgage Loan (1) that is delinquent 180 days or
longer, (2) for
which the related first lien mortgage loan is not a Mortgage Loan,
and (3) as to
which the applicable Servicer has certified to the Trustee that it
does not
believe there is a reasonable likelihood that any further net
proceeds will be
received or recovered with respect to such Second Lien Mortgage
Loan.
Liquidation Proceeds: Cash received in connection with the
liquidation of a Liquidated Mortgage Loan, whether through a
trustee's sale,
foreclosure sale or otherwise, including any Subsequent
Recoveries.
Loan-to-Value Ratio or LTV: With respect to any First Lien
Mortgage
Loan, the ratio (expressed as a percentage) of the original
outstanding
principal amount of the First Lien Mortgage Loan as of the Cut-off
Date (unless
otherwise indicated), to the lesser of (a) the Appraised Value of
the Mortgaged
Property at origination, and (b) if the First Lien Mortgage Loan
was made to
finance the acquisition of the related Mortgaged Property, the
purchase price of
the Mortgaged Property.
London Business Day: Any day on which dealings in deposits of
United
States dollars are transacted in the London interbank market.
Lower Tier Interest Rate: As described in the Preliminary
Statement.
Lower Tier Principal Amount: As described in the Preliminary
Statement.
Lower-Tier Regular Interest: Each of the Class LT-A-1, Class
LT-A-2,
Class LT-A-3, Class LT-A-4, Class LT-M-1, Class LT-M-2, Class
LT-M-3, Class
LT-M-4, Class LT-M-5, Class LT-M-6, Class LT-B-1, Class LT-B-2,
Class LT-B-3,
Class LT-IO and Class LT-Accrual Interests as described in the
Preliminary
Statement.
Lower Tier REMIC: As described in the Preliminary Statement.
Maximum Mortgage Rate: With respect to each Adjustable Rate
Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and
in the
related Mortgage Note and (ii) is the maximum interest rate to
which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be
increased during the
lifetime of such Adjustable Rate Mortgage Loan.
Minimum Mortgage Rate: With respect to each Adjustable Rate
Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and
in the
related Mortgage Note and (ii) is the minimum interest rate to
which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be
decreased during the
lifetime of such Adjustable Rate Mortgage Loan.
Monthly Statement: The statement delivered to the
Certificateholders
pursuant to Section 4.03.
Moody's: Moody's Investors Service, Inc, and its successors in
interest. If Moody's is designated as a Rating Agency in the
Preliminary
Statement, for purposes of Section 10.05(b) the address for notices
to Moody's
shall be Moody's Investors Service, Inc., 99 Church Street, New
York, New York
10007, Attention: Residential Mortgage Pass-Through Group, or such
other address
as Moody's may hereafter furnish to the Depositor, the Trustee and
the
Servicers.
Mortgage: The mortgage, deed of trust or other instrument
identified
on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage
Loan
contained in either the Servicing File or Custodial File.
Mortgage Loan: An individual Mortgage Loan which is the subject
of
this Agreement, each Mortgage Loan originally sold and subject to
this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan
includes,
without limitation, the Mortgage File, the Scheduled Payments,
Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds,
REO Disposition proceeds, Prepayment Charges, and all other rights,
benefits,
proceeds and obligations arising from or in connection with such
Mortgage Loan,
excluding replaced or repurchased Mortgage Loans.
Mortgage Loan Schedule: A schedule of Mortgage Loans delivered
to
the Trustee and referred to on Schedule I, such schedule setting
forth the
following information with respect to each Mortgage Loan: (1) the
Mortgage Loan
number; (2) the city, state and zip code of the Mortgaged Property;
(3) the
number and type of residential units constituting the Mortgaged
Property; (4)
the current Mortgage Rate; (5) the current net Mortgage Rate; (6)
the current
Scheduled Payment; (7) with respect to each Adjustable Rate
Mortgage Loan, the
Gross Margin; (8) the original term to maturity; (9) the scheduled
maturity
date; (10) the principal balance of the Mortgage Loan as of the
Cut-off Date
after deduction of payments of principal due on or before the
Cut-off Date
whether or not collected; (11) with respect to each Adjustable Rate
Mortgage
Loan, the next Interest Rate Adjustment Date; (12) with respect to
each
Adjustable Rate Mortgage Loan, the lifetime Mortgage Interest Rate
Cap; (13)
whether the Mortgage Loan is convertible or not; (14) the Servicing
Fee; (15)
the date such Mortgage Loan was sold by the Responsible Party to
the Sponsor;
(16) whether such Mortgage Loan provides for a Prepayment Charge as
well as the
term and amount of such Prepayment Charge, if any; (17) with
respect to each
First Lien Mortgage Loan, the LTV at origination and with respect
to each Second
Lien Mortgage Loan, the CLTV at origination; (18) the applicable
Servicer's
name; and (19) the date on which servicing of the Mortgage Loan was
transferred
to the applicable Servicer.
Mortgage Note: The note or other evidence of the indebtedness of
a
Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne on a Mortgage
Note,
which shall be adjusted from time to time in the case of an
Adjustable Rate
Mortgage Loan.
Mortgage Rate Caps: With respect to an Adjustable Rate Mortgage
Loan, the Periodic Mortgage Rate Cap, the Maximum Mortgage Rate,
and the Minimum
Mortgage Rate for such Mortgage Loan.
Mortgaged Property: With respect to each Mortgage Loan, the
real
property (or leasehold estate, if applicable) identified on the
Mortgage Loan
Schedule as securing repayment of the debt evidenced by the related
Mortgage
Note.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Monthly Excess Cash Flow: For any Distribution Date, the
amount
remaining for distribution pursuant to subsection 4.02(a)(iii)
(before giving
effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution Date,
the
amount by which the sum of the Prepayment Interest Shortfalls for
such
Distribution Date exceeds the sum of (i) all Prepayment Interest
Excesses for
such Distribution Date and (ii) Compensating Interest payments made
with respect
to such Distribution Date.
Net Swap Payment: With respect to any Distribution Date, any
net
payment (other than a Swap Termination Payment) payable by the
Trust to the Swap
Provider on the related Fixed Rate Payer Payment Date (as defined
in the
Interest Rate Swap Agreement).
Net Swap Receipt: With respect to any Distribution Date, any
net
payment (other than a Swap Termination Payment) made by the Swap
Provider to the
Trust on the related Floating Rate Payer Payment Date (as defined
in the
Interest Rate Swap Agreement).
NIM Issuer: The entity established as the issuer of the NIM
Securities.
NIM Securities: Any debt securities secured or otherwise backed
by
some or all of the Class X and Class P Certificates that are rated
by one or
more Rating Agencies.
NIM Trustee: The trustee for the NIM Securities.
Non-Delay Certificates: As specified in the Preliminary
Statement.
Non-Permitted Transferee: A Person other than a Permitted
Transferee.
Nonrecoverable P&I Advance: Any P&I Advance previously made
or
proposed to be made in respect of a Mortgage Loan or REO Property
that, in the
good faith business judgment of the applicable Servicer, will not
or, in the
case of a proposed P&I Advance, would not be ultimately
recoverable from related
late payments, Insurance Proceeds, Condemnation Proceeds, or
Liquidation
Proceeds on such Mortgage Loan or REO Property as provided
herein.
Nonrecoverable Servicing Advance: Any Servicing Advances
previously
made or proposed to be made in respect of a Mortgage Loan or REO
Property,
which, in accordance with Accepted Servicing Practices, will not
or, in the case
of a proposed Servicing Advance, would not be ultimately
recoverable from
related Insurance Proceeds, Condemnation Proceeds, Liquidation
Proceeds or
otherwise.
Notice of Final Distribution: The notice to be provided pursuant
to
Section 9.02 to the effect that final distribution on any of the
Certificates
shall be made only upon presentation and surrender thereof.
Offered Certificates: As specified in the Preliminary
Statement.
Officer's Certificate: A certificate signed by an officer of
any
Servicer or Subservicer with responsibility for the servicing of
the Mortgage
Loans required to be serviced by such Servicer or Subservicer and
listed on a
list delivered to the Trustee pursuant to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for a Servicer or a Subservicer, reasonably
acceptable to the
Trustee (and/or such other Persons as may be set forth herein),
provided, that
any Opinion of Counsel relating to (a) qualification of any Trust
REMIC or (b)
compliance with the REMIC Provisions, must be (unless otherwise
stated in such
Opinion of Counsel) an opinion of counsel who (i) is in fact
independent of such
Servicer of the Mortgage Loans, (ii) does not have any material
direct or
indirect financial interest in such Servicer of the Mortgage Loans
or in an
Affiliate of either and (iii) is not connected with such Servicer
of the
Mortgage Loans as an officer, employee, director or person
performing similar
functions.
Optional Termination Date: The Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans, as of the
last day of
the related Due Period, is equal to 10% or less of the Cut-off Date
Pool
Principal Balance.
Originator: The Responsible Party.
OTS: Office of Thrift Supervision, and any successor thereto.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and
authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or delivered
to
the
Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which
other
Certificates have been executed and delivered by the Trustee
pursuant to
this
Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan
with
a Stated Principal Balance greater than zero which was not the
subject of a
Principal Prepayment in Full prior to such Due Date and which did
not become a
Liquidated Mortgage Loan prior to such Due Date.
Ownership Interest: As to any Residual Certificate, any
ownership
interest in such Certificate including any interest in such
Certificate as the
Holder thereof and any other interest therein, whether direct or
indirect, legal
or beneficial.
P&I Advance: As to any Mortgage Loan or REO Property, any
advance
made by the applicable Servicer in respect of any Remittance Date
representing
the aggregate of all payments of principal and interest, net of the
Servicing
Fee, that were due during the related Due Period on the Mortgage
Loans and that
were delinquent on the related Determination Date, plus certain
amounts
representing assumed payments not covered by any current net income
on the
Mortgaged Properties acquired by foreclosure or deed in lieu of
foreclosure as
determined pursuant to Section 4.01.
Pass-Through Margin: With respect to each Class of Regular
Certificates except as set forth in the following sentence, the
following
percentages: Class A-1 Certificates, 0.0800%; Class A-2
Certificates, 0.1400%;
Class A-3 Certificates, 0.1900%; Class A-4 Certificates, 0.3000%;
Class M-1
Certificates, 0.3800%; Class M-2 Certificates, 0.4000%; Class M-3
Certificates,
0.4200%; Class M-4 Certificates, 0.5200%; Class M-5 Certificates,
0.5500%; Class
M-6 Certificates, 0.6600%; Class B-1 Certificates, 1.2500%; Class
B-2
Certificates, 1.4500%; and Class B-3 Certificates, 2.2000%. On the
first
Distribution Date after the Optional Termination Date, the
Pass-Through Margins
shall increase to: Class A-1 Certificates, 0.1600%; Class A-2
Certificates,
0.2800%; Class A-3 Certificates, 0.3800%; Class A-4 Certificates,
0.6000%; Class
M-1 Certificates, 0.5700%; Class M-2 Certificates, 0.6000%; Class
M-3
Certificates, 0.6300%; Class M-4 Certificates, 0.7800%; Class M-5
Certificates,
0.8250%; Class M-6 Certificates, 0.9900%; Class B-1 Certificates,
1.8750%; Class
B-2 Certificates, 2.1750%; and Class B-3 Certificates, 3.3000%.
Pass-Through Rate: For each Class of Regular Certificates, each
Pooling-Tier REMIC-1 Regular Interest, each Pooling-Tier REMIC-2
Regular
Interest, each Lower-Tier Regular Interest and each Upper-Tier
Regular Interest,
the per annum rate set forth or calculated in the manner described
in the
Preliminary Statement.
PCAOB: The Public Company Accounting Oversight Board.
Percentage Interest: As to any Certificate, the percentage
interest
evidenced thereby in distributions required to be made on the
related Class,
such percentage interest being set forth on the face thereof or
equal to the
percentage obtained by dividing the Denomination of such
Certificate by the
aggregate of the Denominations of all Certificates of the same
Class.
Periodic Mortgage Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the periodic limit on each Mortgage Rate adjustment
as set forth
in the related Mortgage Note.
Permitted Investments: Any one or more of the following
obligations
or securities acquired at a purchase price of not greater than par,
regardless
of whether issued by any Servicer, the 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 and rated "P-1" by Moody's, "F1+" by
Fitch, and
"A-1+" by Standard & Poor's (to the extent they are Rating
Agencies
hereunder and are so rated by such Rating Agency);
(iii) repurchase obligations with respect to any security
described
in clause
(i) above entered into with a Depository Institution (acting as
principal);
(iv) securities bearing interest or sold at a discount that are
issued by
any corporation incorporated under the laws of the United
States
of America
or any State thereof and that are rated by each Rating Agency
that rates
such securities in its highest long-term unsecured rating
categories
at the time of such investment or contractual commitment
providing
for such investment;
(v) commercial paper (including both non-interest-bearing
discount
obligations and interest-bearing obligations payable on demand or
on a
specified
date not more than 30 days after the date of acquisition
thereof)
that is rated by each Rating Agency that rates such securities
in
its
highest short-term unsecured debt rating available at the time of
such
investment;
(vi) units of money market funds, including money market funds
advised by
the Depositor, the Trustee or an Affiliate thereof, that have
been rated
"Aaa" by Moody's, "AAAm" by Standard & Poor's and at least
"AA"
by Fitch
(to the extent they are Rating Agencies hereunder and such
funds
are so
rated by such Rating Agency); and
(vii) if previously confirmed in writing to the Trustee, any
other
demand,
money market or time deposit, or any other obligation, security
or
investment, as may be acceptable to the Rating Agencies as a
permitted
investment
of funds backing "Aaa" or "AAA" rated securities;
provided, however, that no instrument described hereunder shall
evidence either
the right to receive (a) only interest with respect to the
obligations
underlying such instrument or (b) both principal and interest
payments derived
from obligations underlying such instrument and the interest and
principal
payments with respect to such instrument provide a yield to
maturity at par
greater than 120% of the yield to maturity at par of the underlying
obligations.
Permitted Transferee: Any Person other than (i) the United
States,
any State or political subdivision thereof, or any agency or
instrumentality of
any of the foregoing, (ii) a foreign government, international
organization or
any agency or instrumentality of either of the foregoing, (iii) an
organization
(except certain farmers' cooperatives described in Section 521 of
the Code)
which is exempt from tax imposed by Chapter 1 of the Code
(including the tax
imposed by Section 511 of the Code on unrelated business taxable
income) on any
excess inclusions (as defined in Section 860E(c)(1) of the Code)
with respect to
any Residual Certificate, (iv) rural electric and telephone
cooperatives
described in Section 1381(a)(2)(C) of the Code, (v) a Person that
is not a U.S.
Person or a U.S. Person with respect to whom income from a Residual
Certificate
is attributable to a foreign permanent establishment or fixed base,
within the
meaning of an applicable income tax treaty, of such Person or any
other U.S.
Person, (vi) an "electing large partnership" within the meaning of
Section 775
of the Code and (vii) any other Person so designated by the
Depositor based upon
an Opinion of Counsel that the Transfer of an Ownership Interest in
a Residual
Certificate to such Person may cause any Trust REMIC to fail to
qualify as a
REMIC at any time that the Certificates are outstanding. The terms
"United
States", "State" and "international organization" shall have the
meanings set
forth in Section 7701 of the Code or successor provisions. A
corporation will
not be treated as an instrumentality of the United States or of any
State or
political subdivision thereof for these purposes if all of its
activities are
subject to tax and, with the exception of Freddie Mac, a majority
of its board
of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, joint
venture,
association, limited liability company, joint-stock company,
trust,
unincorporated organization or government, or any agency or
political
subdivision thereof.
Physical Certificates: As specified in the Preliminary
Statement.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans
for such
Distribution Date that were Outstanding Mortgage Loans on the Due
Date in the
related Due Period.
Pooling-Tier Interest Rate: As specified in the Preliminary
Statement.
Pooling-Tier REMIC-1: As described in the Preliminary
Statement.
Pooling-Tier REMIC-1 Interest Rate: As described in the
Preliminary
Statement.
Pooling-Tier REMIC-1 Principal Amount: As described in the
Preliminary Statement.
Pooling-Tier REMIC-1 Regular Interest: As described in the
Preliminary Statement.
Pooling-Tier REMIC-1 WAC Rate: With respect to the Mortgage Loans
as
of any Distribution Date, a per annum rate equal to the weighted
average of the
Adjusted Net Mortgage Rates for each such Mortgage Loan then in
effect on the
beginning of the related Due Period on the Mortgage Loans, adjusted
in each case
to accrue on the basis of a 360 day year and the actual number of
days in the
related Interest Accrual Period.
Pooling-Tier REMIC-2: As described in the Preliminary
Statement.
Pooling-Tier REMIC-2 Interest Rate: As described in the
Preliminary
Statement.
Pooling-Tier REMIC-2 IO Interest: Any of the Pooling Tier
REMIC-2
Regular Interests with the designation "IO" in its name.
Pooling-Tier REMIC-2
IO Notional Balance: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2 Principal Amount: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2 Regular Interest: As described in the
Preliminary Statement.
Prepayment Charge: Any prepayment premium, penalty or charge
collected by any Servicer with respect to a Mortgage Loan from a
Mortgagor in
connection with any voluntary Principal Prepayment pursuant to the
terms of the
related Mortgage Note.
Prepayment Interest Excess: With respect to any Distribution
Date,
any interest collected by the Servicer as to which a Principal
Prepayment in
Full occurs from the 1st day of the month through the 15th day of
the month in
which such Distribution Date occurs and that represents interest
that accrues
from the 1st day of such month to the date of such Principal
Prepayment in Full.
Prepayment Interest Shortfall: With respect to any Distribution
Date, the sum of, for each Mortgage Loan that was, during the
portion of the
Prepayment Period from and including the 16th day of the month
preceding the
month in which such Distribution Date occurs (or from the day
following the
Cut-off Date, in the case of the first Distribution Date) through
the last day
of such month, the subject of a Principal Prepayment which is not
accompanied by
an amount equal to one month of interest that would have been due
on such
Mortgage Loan on the Due Date in the following month and which was
applied by
the applicable Servicer to reduce the outstanding principal balance
of such
Mortgage Loan on a date preceding such Due Date an amount equal to
the product
of (a) the Mortgage Rate net of the Servicing Fee Rate for such
Mortgage Loan,
(b) the amount of the Principal Prepayment for such Mortgage Loan,
(c) 1/360 and
(d) the number of days commencing on the date on which such
Principal Prepayment
was applied and ending on the last day of the calendar month in
which the
related Prepayment Period begins.
Prepayment Period: With respect to any Distribution Date either
(i)
with respect to any voluntary Principal Prepayments in Full, the
period from and
including the 16th day of the month preceding the month in which
such
Distribution Date occurs (or, in the case of the first Distribution
Date, from
and including the Cut-off Date) to and including the 15th day of
the month in
which such Distribution Date occurs, or (ii) with respect to any
other Principal
Prepayments, the calendar month preceding the month in which such
Distribution
Date occurs.
Principal Distribution Amount: For any Distribution Date, the sum
of
(i) the Basic Principal Distribution Amount for such Distribution
Date and (ii)
the Extra Principal Distribution Amount for such Distribution
Date.
Principal Prepayment: Any full or partial payment or other
recovery
of principal on a Mortgage Loan (including upon liquidation of a
Mortgage Loan)
which is received in advance of its scheduled Due Date, excluding
any Prepayment
Charge thereon.
Principal Prepayment in Full: Any Principal Prepayment made by
a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution
Date,
the amount equal to the sum of the following amounts (without
duplication) with
respect to the related Due Period: (i) each scheduled payment of
principal on a
Mortgage Loan due during such Due Period and received by the
Servicers on or
prior to the related Determination Date or advanced by the
applicable Servicer
for the related Remittance Date, and all Principal Prepayments
received during
the related Prepayment Period; (ii) all Liquidation Proceeds,
Condemnation
Proceeds and Insurance Proceeds on the Mortgage Loans allocable to
principal
actually collected by the Servicers during the related Prepayment
Period; (iii)
the portion of the Repurchase Price allocable to principal with
respect to each
Mortgage Loan, repurchased with respect to such Distribution Date;
(iv) all
Substitution Adjustment Amounts allocable to principal received in
connection
with the substitutions of Mortgage Loans with respect to such
Distribution Date;
(v) with respect to the Distribution Date in February 2006 only,
the portion of
the Closing Date Deposit Amount allocable to principal; and (vi)
the allocable
portion of the proceeds received with respect to the termination of
the Trust
Fund pursuant to clause (a) of Section 9.01 (to the extent such
proceeds relate
to principal).
Private Certificates: As specified in the Preliminary
Statement.
Prospectus Supplement: The Prospectus Supplement, dated January
25,
2006, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
Purchase
Agreement: The Third Amended and Restated Mortgage Loan
Purchase and Warranties Agreement, dated as of December 1, 2005,
between Morgan
Stanley Capital Inc. and NC Capital Corporation.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no
longer in
existence, "Rating Agency" shall be such nationally recognized
statistical
rating organization, or other comparable Person, as is designated
by the
Depositor, notice of which designation shall be given to the
Trustee. References
herein to a given rating or rating category of a Rating Agency
shall mean such
rating category without giving effect to any modifiers. For
purposes of Section
10.05(b), the addresses for notices to each Rating Agency shall be
the address
specified therefor in the definition corresponding to the name of
such Rating
Agency, or such other address as either such Rating Agency may
hereafter furnish
to the Depositor, the Trustee and the Servicers.
Realized Losses: With respect to any date of determination and
any
Liquidated Mortgage Loan, the amount, if any, by which (a) the
unpaid principal
balance of such Liquidated Mortgage Loan together with accrued and
unpaid
interest thereon exceeds (b) the Liquidation Proceeds with respect
thereto net
of the expenses incurred by the applicable Servicer in connection
with the
liquidation of such Liquidated Mortgage Loan and net of the amount
of
unreimbursed Servicing Advances with respect to such Liquidated
Mortgage Loan.
Record Date: With respect to any Distribution Date, the close
of
business on the Business Day immediately preceding such
Distribution Date;
provided, however, that, for any Certificate issued in definitive
form, the
Record Date shall be the close of business on the last Business Day
of the month
preceding the month in which such applicable Distribution Date
occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary
Statement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be
amended from
time to time, and subject to such clarification and interpretation
as have been
provided by the Commission in the adopting release (Asset-Backed
Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan.
7, 2005)) or
by the staff of the Commission, or as may be provided by the
Commission or its
staff from time to time.
Relief Act Interest Shortfall: With respect to any Distribution
Date
and any Mortgage Loan, any reduction in the amount of interest
collectible on
such Mortgage Loan for the most recently ended Due Period as a
result of the
application of the Servicemembers Civil Relief Act or any similar
state
statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law
relating
to real estate mortgage investment conduits, which appear at
Sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions,
and regulations promulgated thereunder, as the foregoing may be in
effect from
time to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, the
second
Business Day immediately preceding such Distribution Date.
REO Disposition: The final sale by the applicable Servicer of
any
REO Property.
REO Imputed Interest: As to any REO Property, for any period,
an
amount equivalent to interest (at the Mortgage Rate net of the
Servicing Fee
Rate that would have been applicable to the related Mortgage Loan
had it been
outstanding) on the unpaid principal balance of the Mortgage Loan
as of the date
of acquisition thereof (as such balance is reduced pursuant to
Section 3.17 by
any income from the REO Property treated as a recovery of
principal).
REO Mortgage Loan: A Mortgage Loan where title to the related
Mortgaged Property has been obtained by the applicable Servicer in
the name of
the Trustee on behalf of the Certificateholders.
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection
with a
defaulted Mortgage Loan.
Replacement Swap Provider Payment: Any payments that have been
received by the Trust as a result of entering into a replacement
interest rate
swap agreement following an Additional Termination Event described
in Part
1(h)(ii) of the Interest Rate Swap Agreement.
Reportable Event: As defined in Section 8.12(g).
Repurchase Price: With respect to any Mortgage Loan repurchased
by
the Responsible Party, an amount equal to the sum of (i) the unpaid
principal
balance of such Mortgage Loan as of the date of repurchase, (ii)
interest on
such unpaid principal balance of such Mortgage Loan at the Mortgage
Rate from
the last date through which interest has been paid and distributed
to the
Trustee to the date of repurchase, (iii) all unreimbursed Servicing
Advances and
(iv) all costs and expenses incurred by the Trustee arising out of
or based upon
such breach, including without limitation, costs and expenses
relating to the
Trustee's enforcement of the Responsible Party's repurchase
obligation
hereunder.
Request for Release: The Request for Release submitted by the
applicable Servicer to the Trustee, substantially in the form of
Exhibit J.
Residual Certificates: As specified in the Preliminary
Statement.
Responsible Officer: When used with respect to the Trustee, any
managing director, any vice president, any assistant vice
president, any
assistant secretary, any assistant treasurer, any associate, or any
other
officer of the Trustee customarily performing functions similar to
those
performed by any of the above designated officers who at such time
shall be
officers to whom, with respect to a particular matter, such matter
is referred
because of such officer's knowledge of and familiarity with the
particular
subject and who shall have direct responsibility for the
administration of this
Agreement.
Responsible Party: NC Capital Corporation, a California
corporation,
and its successors in interest.
Rule 144A Letter: As defined in Section 5.02(b).
Sarbanes Certification: As defined in Section 8.12(c).
Scheduled Payment: The scheduled monthly payment on a Mortgage
Loan
due on any Due Date allocable to principal and/or interest on such
Mortgage Loan
which, unless otherwise specified herein, shall give effect to any
related Debt
Service Reduction and any Deficient Valuation that affects the
amount of the
monthly payment due on such Mortgage Loan.
Second Lien Mortgage Loan: A Mortgage Loan secured by a second
lien
Mortgage on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Senior Defaulted Swap Termination Payment: As of any date, the
lesser of (x) any Replacement Swap Provider Payment and (y) any
Swap Termination
Payment owed to the Swap Provider.
Senior Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the
aggregate Class
Certificate Balance of the Subordinated Certificates and (ii) the
Subordinated
Amount, in each case after taking into account the distribution of
the Principal
Distribution Amount and any principal payments on those Classes of
Certificates
from the Swap Account on that Distribution Date, by (y) the
aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution
Date.
Senior Specified Enhancement Percentage: As of any date of
determination, 42.20%.
Servicer: JPMorgan or HomEq, as applicable, and if a successor
servicer to either is appointed hereunder, such successor. When the
term
"Servicer" is used in this Agreement in connection with the
administration of
servicing obligations with respect to any Mortgage Loan, Mortgaged
Property, REO
Property or Mortgage File, "Servicer" shall mean the Person
identified as the
Servicer of such Mortgage Loan on the Mortgage Loan Schedule.
Servicer Remittance Report: As defined in Section 4.03(d).
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by the applicable Servicer
in the
performance of its servicing obligations in connection with a
default,
delinquency or other unanticipated event, including, but not
limited to, the
cost of (i) the preservation, restoration, inspection and
protection of a
Mortgaged Property, (ii) any enforcement, administrative or
judicial
proceedings, including foreclosures and litigation, in respect of a
particular
Mortgage Loan, (iii) the management (including reasonable fees in
connection
therewith) and liquidation of any REO Property and (iv) the
performance of its
obligations under Sections 3.01, 3.09, 3.13 and 3.15. The Servicing
Advances
shall also include any reasonable "out-of-pocket" costs and
expenses (including
legal fees) incurred by the applicable Servicer in connection with
executing and
recording instruments of satisfaction, deeds of reconveyance or
Assignments of
Mortgage in connection with any foreclosure in respect of any
Mortgage Loan to
the extent not recovered from the Mortgagor or otherwise payable
under this
Agreement. Neither Servicer shall be required to make any
Nonrecoverable
Servicing Advances.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, which as of the Closing Date are listed
on Exhibit P
hereto.
Servicing Fee: With respect to each Servicer, each Mortgage
Loan
serviced by such Servicer and for any calendar month, an amount
equal to one
month's interest (or in the event of any payment of interest which
accompanies a
Principal Prepayment in Full made by the Mortgagor during such
calendar month,
interest for the number of days covered by such payment of
interest) at the
Servicing Fee Rate on the applicable Stated Principal Balance of
such Mortgage
Loan as of the first day of such calendar month. Such fee shall be
payable
monthly, and shall be pro-rated for any portion of a month during
which the
Mortgage Loan is serviced by such Servicer under this Agreement.
The Servicing
Fee is payable solely from the interest portion (including
recoveries with
respect to interest from Liquidation Proceeds, Insurance Proceeds,
Condemnation
Proceeds and proceeds received with respect to REO Properties, to
the extent
permitted by Section 3.11) of such Scheduled Payment collected by
such Servicer,
or as otherwise provided under Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50%
per
annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the applicable Servicer consisting of originals or
copies of all
documents in the Mortgage File which are not delivered to the
Trustee in the
Custodial File and copies of the Mortgage Loan Documents set forth
in Exhibit K
hereto.
Servicing Function Participant: As defined in Section 3.23(a).
Servicing Officer: Any officer of any Servicer involved in, or
responsible for, the administration and servicing of the Mortgage
Loans whose
name and facsimile signature appear on a list of servicing officers
furnished to
the Trustee by such Servicer on the Closing Date pursuant to this
Agreement, as
such list may from time to time be amended.
Servicing Transfer Date: With respect to any Mortgage Loan, the
date
on which servicing of such Mortgage Loan was transferred to the
applicable
Servicer (as set forth on the Mortgage Loan Schedule).
Similar Law: As defined in Section 5.02(b).
60+ Day Delinquent Mortgage Loan: (i) Each Mortgage Loan with
respect to which any portion of a Scheduled Payment is, as of the
last day of
the prior Due Period, two months or more past due (without giving
effect to any
grace period), including, without limitation, such Mortgage Loans
that are
subject to bankruptcy proceedings, (ii) each Mortgage Loan in
foreclosure and
(iii) all REO Property.
Specified Subordinated Amount: Prior to the Stepdown Date, an
amount
equal to 4.35% of the Cut-off Date Pool Principal Balance. On and
after the
Stepdown Date, an amount equal to 8.70% of the aggregate Stated
Principal
Balance of the Mortgage Loans for such Distribution Date, subject,
until the
Class Certificate Balance of each Class of Offered Certificates has
been reduced
to zero, to a minimum amount equal to 0.50% of the Cut-off Date
Pool Principal
Balance; provided, however, that if, on any Distribution Date, a
Trigger Event
exists, the Specified Subordinated Amount shall not be reduced to
the applicable
percentage of the then current aggregate Stated Principal Balance
of the
Mortgage Loans until the Distribution Date on which a Trigger Event
no longer
exists. When the Class Certificate Balance of each Class of Offered
Certificates
has been reduced to zero, the Specified Subordinated Amount will
thereafter
equal zero.
Sponsor: Morgan Stanley Mortgage Capital Inc., a New York
corporation, and its successors in interest, as purchaser of the
Mortgage Loans
under each of the Purchase Agreements.
Standard & Poor's: Standard & Poor's Ratings Services, a
division of
The McGraw-Hill Companies, Inc., and its successors in interest. If
Standard &
Poor's is designated as a Rating Agency in the Preliminary
Statement, for
purposes of Section 10.05(b) the address for notices to Standard
& Poor's shall
be Standard & Poor's, 55 Water Street, New York, New York
10041, Attention:
Residential Mortgage Surveillance Group - Morgan Stanley ABS
Capital I Inc.
Trust 2006-NC1, or such other address as Standard & Poor's may
hereafter furnish
to the Depositor, the Trustee and the Servicers.
Standard & Poor's Glossary: The Standard & Poor's
LEVELS(R)
Glossary, as may be in effect from time to time.
Startup Day: The Closing Date.
Stated Principal Balance: As to each Mortgage Loan and as of
any
date of determination, (i) the principal balance of the Mortgage
Loan at the
Cut-off Date after giving effect to payments of principal due on or
before such
date (whether or not received), minus (ii) all amounts previously
remitted to
the Trustee with respect to the related Mortgage Loan representing
payments or
recoveries of principal including advances in respect of scheduled
payments of
principal. For purposes of any Distribution Date, the Stated
Principal Balance
of any Mortgage Loan will give effect to any scheduled payments of
principal
received by the related Servicer on or prior to the related
Determination Date
or advanced by the related Servicer for the related Remittance Date
and any
unscheduled principal payments and other unscheduled principal
collections
received during the related Prepayment Period, and the Stated
Principal Balance
of any Mortgage Loan that has prepaid in full or has become a
Liquidated
Mortgage Loan during the related Prepayment Period shall be
zero.
Stepdown Date: The later to occur of (i) the earlier to occur of
(a)
the Distribution Date in February 2009 and (b) the Distribution
Date following
the Distribution Date on which the aggregate Class Certificate
Balances of the
Class A Certificates have been reduced to zero and (ii) the first
Distribution
Date on which the Senior Enhancement Percentage (calculated for
this purpose
only after taking into account payments of principal on the
Mortgage Loans
applied to reduce the Stated Principal Balances of the Mortgage
Loans for the
applicable Distribution Date but prior to any allocation of the
Principal
Distribution Amount and principal payments from the Swap Account to
the
Certificates on such Distribution Date) is greater than or equal to
the Senior
Specified Enhancement Percentage.
Subcontractor: Any third-party or Affiliated vendor,
subcontractor
or other Person utilized by a Servicer, a Subservicer or the
Trustee, as
applicable, that is not responsible for the overall servicing (as
"servicing" is
commonly understood by participants in the mortgage-backed
securities market) of
Mortgage Loans but performs one or more discrete functions
identified in Item
1122(d) of Regulation AB with respect to Mortgage Loans.
Subordinated Amount: With respect to any Distribution Date, the
excess, if any, of (a) the aggregate Stated Principal Balance of
the Mortgage
Loans for such Distribution Date over (b) the aggregate of the
Class Certificate
Balances of the Offered Certificates as of such Distribution Date
(after giving
effect to the payment of the Principal Remittance Amount on such
Certificates on
such Distribution Date).
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordination Deficiency: With respect to any Distribution Date,
the
excess, if any, of (a) the Specified Subordinated Amount applicable
to such
Distribution Date over (b) the Subordinated Amount applicable to
such
Distribution Date.
Subordination Reduction Amount: With respect to any
Distribution
Date, an amount equal to the lesser of (a) the Excess Subordinated
Amount and
(b) the Net Monthly Excess Cash Flow.
Subsequent Recovery: With respect to any Mortgage Loan or
related
Mortgaged Property that became a Liquidated Mortgage Loan or was
otherwise
disposed of, all amounts received in respect of such Liquidated
Mortgage Loan
after an Applied Realized Loss Amount related to such Mortgage Loan
or Mortgaged
Property is allocated to reduce the Class Certificate Balance of
any Class of
Subordinated Certificates. Any Subsequent Recovery that is received
during a
Prepayment Period will be treated as Liquidation Proceeds and
included as part
of the Principal Remittance Amount for the related Distribution
Date.
Subservicer: Any Person that services Mortgage Loans on behalf of
a
Servicer or any Subservicer and is responsible for the performance
(whether
directly or through Subservicers or Subcontractors) of a
substantial portion of
the material servicing functions required to be performed by a
Servicer under
this Agreement, with respect to some or all of the Mortgage Loans,
that are
identified in Item 1122(d) of Regulation AB.
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan substituted by the
Responsible Party for a Deleted Mortgage Loan that satisfies the
criteria set
forth in the definition of "Qualified Substitute Mortgage Loan" in
the
applicable Purchase Agreement, which, must, on the date of such
substitution, as
confirmed in a Request for Release, substantially in the form of
Exhibit J, (i)
have a Stated Principal Balance, after deduction of the principal
portion of the
Scheduled Payment due in the month of substitution, not in excess
of, and not
more than 10% less than, the Stated Principal Balance of the
Deleted Mortgage
Loan; (ii) be accruing interest at a rate no lower than and not
more than 1% per
annum higher than, that of the Deleted Mortgage Loan; (iii) have a
Loan-to-Value
Ratio or a Combined Loan-to-Value Ratio, as applicable, no higher
than that of
the Deleted Mortgage Loan; (iv) have a remaining term to maturity
no greater
than (and not more than one year less than that of) the Deleted
Mortgage Loan;
and (v) comply with each representation and warranty set forth in
Section 2.03.
Substitution Adjustment Amount: As defined in Section 2.03.
Swap Account: As defined in Section 4.06.
Swap Assets: Collectively, the Swap Account, the Interest Rate
Swap
Agreement, the Class IO Interest and the right to receive Class IO
Shortfalls,
subject to the obligation to pay amounts specified in Section
4.06.
Swap LIBOR: With respect to any Distribution Date (and the
related
Interest Accrual Period), the product of (i) USD-LIBOR-BBA (as used
in the
Interest Swap Agreement), (ii) two, and (iii) the quotient of (a)
the actual
number of days in the Interest Accrual Period for the Offered
Certificates
divided by (b) 30.
Swap Payment Allocation: For any Class of Certificates and any
Distribution Date, that Class's pro rata share of the Net Swap
Receipts, if any,
for that Distribution Date, based on the Class Certificate Balances
of the
Classes of Certificates.
Swap Payment Rate: For any Distribution Date, a fraction, the
numerator of which is any Net Swap Payment or Swap Termination
Payment owed to
the Swap Provider for such Distribution Date and the denominator of
which is the
aggregate Stated Principal Balance of the Mortgage Loans at the
beginning of the
related Due Period, multiplied by 12.
Swap Provider: Morgan Stanley Capital Services Inc., a Delaware
corporation, and its successors in interest.
Swap Termination Payment: Any payment payable by the Trust or
the
Swap Provider upon termination of the Interest Rate Swap Agreement
as a result
of an Event of Default (as defined in the Interest Rate Swap
Agreement) or a
Termination Event (as defined in the Interest Rate Swap
Agreement).
Tax Matters Person: The Holder of the Class R Certificates
designated as "tax matters person" of each Trust REMIC in the
manner provided
under Treasury Regulations Section 1.860F-4(d) and Treasury
Regulations Section
301.6231(a)(7)-1.
Tax Service Contract: As defined in Section 3.09(a).
Telerate Page 3750: The display page currently so designated on
the
Bridge Telerate Service (or such other page as may replace that
page on that
service for displaying comparable rates or prices).
Total Monthly Excess Spread: As to any Distribution Date, an
amount
equal to the excess if any, of (i) the interest on the Mortgage
Loans received
by the Servicers on or prior to the related Determination Date
(other than
Prepayment Interest Excesses) or advanced by the Servicers for the
related
Remittance Date (net of Expense Fees) over (ii) the sum of (A) the
amounts
payable to the Certificates pursuant to Section 4.02(a)(i) on such
Distribution
Date and (B) any Net Swap Payments to the Swap Provider.
Transfer: Any direct or indirect transfer or sale of any
Ownership
Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: Either a Cumulative Loss Trigger Event or a
Delinquency Trigger Event.
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting
of
(i) the Mortgage Loans and all interest and principal with respect
thereto
received on or after the related Cut-off Date, other than such
amounts which
were due on the Mortgage Loans on or prior to the related Cut-off
Date; (ii) the
Collection Accounts, Excess Reserve Fund Account, the Distribution
Account, and
all amounts deposited therein pursuant to the applicable provisions
of this
Agreement; (iii) property that secured a Mortgage Loan and has been
acquired by
foreclosure, deed-in-lieu of foreclosure or otherwise; (iv) the
Closing Date
Deposit Amount; (v) the Swap Assets; and (vii) all proceeds of the
conversion,
voluntary or involuntary, of any of the foregoing.
Trust REMIC: Any of Pooling-Tier REMIC-1, Pooling-Tier REMIC-2,
the
Lower-Tier REMIC or the Upper-Tier REMIC, as applicable.
Trustee: Deutsche Bank National Trust Company, a national
banking
association, and its successors in interest and, if a successor
trustee is
appointed hereunder, such successor.
Trustee Fee: As to any Distribution Date, an amount equal to
the
product of (a) one-twelfth of the Trustee Fee Rate and (b) (i) the
aggregate
Stated Principal Balance of the Mortgage Loans as of the first day
of the
related Interest Accrual Period and (ii) with respect to the
Distribution Date
in February 2006 only, the portion of the Closing Date Deposit
Amount allocable
to principal.
Trustee Fee Rate: With respect to each Mortgage Loan, 0.0035%
per
annum.
Trustee Float Period: With respect to the Distribution Date and
the
related amounts in the Distribution Account, the period commencing
on the
Business Day immediately preceding such Distribution Date and
ending on such
Distribution Date.
Underwriters' Exemption: Any exemption listed under footnote 1
of,
and amended by, Prohibited Transaction Exemption 2002-41, 67 Fed.
Reg. 54487
(2002), or any successor exemption.
Underwriting Guidelines: The underwriting guidelines attached to
the
Purchase Agreement.
Unpaid Interest Amount: As of any Distribution Date and any Class
of
Certificates, the sum of (a) the portion of the Accrued Certificate
Interest
Distribution Amount from Distribution Dates prior to the current
Distribution
Date remaining unpaid immediately prior to the current Distribution
Date and (b)
interest on the amount in clause (a) above at the applicable
Pass-Through Rate
(to the extent permitted by applicable law).
Unpaid Realized Loss Amount: With respect to any Class of
Subordinated Certificates and as to any Distribution Date, is the
excess of (i)
the Applied Realized Loss Amount with respect to such Class over
(ii) the sum of
(a) all distributions in reduction of such Applied Realized Loss
Amounts on all
previous Distribution Dates, and (b) the amount by which the Class
Certificate
Balance of such Class has been increased due to the distribution of
any
Subsequent Recoveries on all previous Distribution Dates. Any
amounts
distributed to a Class of Subordinated Certificates in respect of
any Unpaid
Realized Loss Amount will not be applied to reduce the Class
Certificate Balance
of such Class.
Upper-Tier CarryForward Amount: With respect to each Class of
Offered Certificates, as of any Distribution Date, the sum of (A)
if on such
Distribution Date the Upper-Tier Interest Rate for the Class of
Corresponding
Upper-Tier REMIC Regular Interest is based upon the Upper-Tier
REMIC WAC Rate,
the excess, if any, of (i) the amount of interest such Class of
Upper-Tier
Regular Interest would otherwise be entitled to receive on such
Distribution
Date had such Upper-Tier REMIC Regular Interest not been subject to
the
Upper-Tier REMIC WAC Rate, over (ii) the amount of interest payable
on such
Class of Certificates on such Distribution Date taking into account
the
Upper-Tier REMIC WAC Rate and (B) the Upper-Tier CarryForward
Amount for such
Class of Certificates for all previous Distribution Dates not
previously paid,
together with interest thereon at a rate equal to the applicable
Upper-Tier
Interest Rate for such Class of Certificates for such Distribution
Date, without
giving effect to the Upper-Tier REMIC WAC Rate.
Upper-Tier Interest Rate: As described in the Preliminary
Statement.
Upper-Tier Regular Interest: As described in the Preliminary
Statement.
Upper-Tier REMIC: As described in the Preliminary Statement.
Upper-Tier REMIC WAC Rate: For any Distribution Date, the
weighted
average of the Lower-Tier Interest Rates on the Lower-Tier Regular
Interests
(other than the Class LT-IO Interest) as of the first day of the
related
Interest Accrual Period, weighted on the basis of the Lower-Tier
Principal
Amounts of such Lower-Tier Regular Interests as of the first day of
the related
Interest Accrual Period.
U.S. Person: (i) A citizen or resident of the United States; (ii)
a
corporation (or entity treated as a corporation for tax purposes)
created or
organized in the United States or under the laws of the United
States or of any
State thereof, including, for this purpose, the District of
Columbia; (iii) a
partnership (or entity treated as a partnership for tax purposes)
organized in
the United States or under the laws of the United States or of any
State
thereof, including, for this purpose, the District of Columbia
(unless provided
otherwise by future Treasury regulations); (iv) an estate whose
income is
includible in gross income for United States income tax purposes
regardless of
its source; or (v) a trust, if a court within the United States is
able to
exercise primary supervision over the administration of the trust
and one or
more U.S. Persons have authority to control substantial decisions
of the trust.
Notwithstanding the last clause of the preceding sentence, to the
extent
provided in Treasury regulations, certain trusts in existence on
August 20,
1996, and treated as U.S. Persons prior to such date, may elect to
continue to
be U.S. Persons.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date
of
determination, (a) 1% of all Voting Rights shall be allocated to
the Class X
Certificates, if any (such Voting Rights to be allocated among the
holders of
Certificates of each such Class in accordance with their respective
Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the
Class P
Certificates, if any, and (c) the remaining Voting Rights shall be
allocated
among Holders of the remaining Classes of Certificates in
proportion to the
Certificate Balances of their respective Certificates on such
date.
WAC Cap: With respect to the Mortgage Loans as of any
Distribution
Date, the weighted average of the Adjusted Net Mortgage Rates then
in effect on
the beginning of the related Due Period on the Mortgage Loans minus
the Swap
Payment Rate, adjusted in each case to accrue on the basis of a
360-day year and
the actual number of days in the related Interest Accrual
Period.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells,
transfers,
assigns, sets over and otherwise conveys to the Trustee for the
benefit of the
Certificateholders, without recourse, all the right, title and
interest of the
Depositor in and to the Trust Fund, and the Trustee, on behalf of
the Trust,
hereby accepts the Trust Fund.
(b) In connection with the transfer and assignment of each
Mortgage
Loan, the Depositor has delivered or caused to be delivered to the
Trustee for
the benefit of the Certificateholders the following documents or
instruments
with respect to each Mortgage Loan so assigned:
(i) the original Mortgage Note bearing all intervening
endorsements
showing a
complete chain of endorsement from the originator to the last
endorsee,
endorsed "Pay to the order of _____________, without recourse"
and signed
(which may be by facsimile signature) in the name of the last
endorsee
by an authorized officer. To the extent that there is no room
on
the face
of a Mortgage Note for endorsements, the endorsement may be
contained
on an allonge, unless the Trustee is advised in writing by the
Responsible Party, that state law does not so allow;
(ii) the original of any guaranty executed in connection with
the
Mortgage
Note;
(iii) the original Mortgage with evidence of recording thereon or
a
certified
true copy of such Mortgage submitted for recording. If, in
connection
with any Mortgage Loan, the original Mortgage cannot be
delivered
with evidence of recording thereon on or prior to the Closing
Date
because of a delay caused by the public recording office where
such
Mortgage
has been delivered for recordation or because such Mortgage has
been lost
or because such public recording office retains the original
recorded
Mortgage, the Responsible Party, shall deliver or cause to be
delivered
to the Trustee a photocopy of such Mortgage, together with (A)
in the
case of a delay caused by the public recording office, an
officer's
certificate of the Responsible Party or evidence of certification
on the
face of
such photocopy of such Mortgage or a certificate from an escrow
company, a
title company or closing attorney stating that such Mortgage
has been
dispatched to the appropriate public recording office for
recordation and that the original recorded Mortgage or a copy of
such
Mortgage
certified by such public recording office to be a true and
complete
copy of the original recorded Mortgage will be promptly
delivered
to the
Trustee upon receipt thereof by the Responsible Party; or (B)
in
the case
of a Mortgage where a public recording office retains the
original
recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such
Mortgage
certified
by such public recording office to be a true and complete copy
of the
original recorded Mortgage;
(iv) the originals of all assumption, modification, consolidation
or
extension
agreements, with evidence of recording thereon or a certified
true copy of such
agreement submitted for recording;
(v) the original Assignment of Mortgage for each Mortgage Loan
endorsed
in blank;
(vi) the originals of all intervening assignments of Mortgage
(if
any)
evidencing a complete chain of assignment from the applicable
originator
to the last endorsee with evidence of recording thereon or a
certified
true copy of such intervening assignments of Mortgage submitted
for
recording, or if any such intervening assignment has not been
returned
from the
applicable recording office or has been lost or if such public
recording
office retains the original recorded assignments of Mortgage,
the
Responsible Party, shall deliver or cause to be delivered a
photocopy
of such
intervening assignment, together with (A) in the case of a
delay
caused by
the public recording office, an officer's certificate of the
Responsible Party or evidence of certification on the face of
such
photocopy
of such intervening assignment or a certificate from an escrow
company, a
title company or a closing attorney stating that such
intervening assignment of Mortgage has been dispatched to the
appropriate
public
recording office for recordation and that such original
recorded
intervening assignment of Mortgage or a copy of such
intervening
assignment
of Mortgage certified by the appropriate public recording
office to
be a true and complete copy of the original recorded
intervening
assignment
of Mortgage will be promptly delivered to the Trustee upon
receipt
thereof by the Responsible Party; or (B) in the case of an
intervening assignment where a public recording office retains
the
original
recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public
recording
office, a
copy of such intervening assignment certified by such public
recording
office to be a true and complete copy of the original recorded
intervening assignment;
(vii) the original mortgagee title insurance policy or, in the
event
such
original title policy is unavailable, a certified true copy of
the
related
policy binder or commitment for title certified to be true and
complete
by the title insurance company; and
(viii) the original of any security agreement, chattel mortgage
or
equivalent
document executed in connection with the Mortgage (if
provided).
The Responsible Party shall cause to be delivered to the Trustee
the
applicable recorded document promptly upon receipt from the
respective recording
office but in no event later than 120 days from the Closing
Date.
From time to time, the Depositor or the applicable Servicer, as
applicable, shall forward to the Trustee, additional original
documents,
additional documents evidencing an assumption, modification,
consolidation or
extension of a Mortgage Loan, in accordance with the terms of this
Agreement
upon receipt of such documents. All such mortgage documents held by
the Trustee
as to each Mortgage Loan shall constitute the "Custodial File".
On or prior to the Closing Date, the Responsible Party shall
deliver
to the Trustee, Assignments of Mortgage, in blank, for each
Mortgage Loan. The
Responsible Party shall cause the Assignments of Mortgage and
complete recording
information to be provided to the applicable Servicer in a
reasonably acceptable
manner. No later than thirty (30) Business Days following the later
of the
Closing Date and the date of receipt by the applicable Servicer of
the complete
recording information for a Mortgage, the applicable Servicer shall
promptly
submit or cause to be submitted for recording, at the expense of
the Responsible
Party and at no expense to the Trust Fund, the Trustee, the
applicable Servicer,
or the Depositor, in the appropriate public office for real
property records,
each Assignment of Mortgage referred to in Section 2.01(b)(v).
Notwithstanding
the foregoing, however, for administrative convenience and
facilitation of
servicing and to reduce closing costs, the Assignments of Mortgage
shall not be
required to be completed and submitted for recording with respect
to any
Mortgage Loan (i) if the Trustee and each Rating Agency have
received an Opinion
of Counsel, satisfactory in form and substance to the Trustee and
each Rating
Agency to the effect that the recordation of such Assignments of
Mortgage in any
specific jurisdiction is not necessary to protect the Trustee's
interest in the
related Mortgage Note or (ii) the Rating Agencies have each
notified the
Depositor in writing that not recording any such Assignments of
Mortgage would
not cause the initial ratings on any Offered Certificates to be
downgraded or
withdrawn; provided, however, that no Servicer shall be held
responsible or
liable for any loss that occurs because an Assignment of Mortgage
was not
recorded, but only to the extent the applicable Servicer does not
have prior
knowledge of the act or omission that causes such loss. However,
with respect to
the Assignments of Mortgage referred to in clauses (i) and (ii)
above, if
foreclosure proceedings occur against a Mortgaged Property, the
Depositor shall
notify the applicable Servicer and such Servicer shall record such
Assignment of
Mortgage at the expense of the Responsible Party (at no expense to
the
applicable Servicer) as required pursuant to the Purchase
Agreement. If the
Assignment of Mortgage is to be recorded, the Mortgage shall be
assigned to
"Deutsche Bank National Trust Company, as trustee under the Pooling
and
Servicing Agreement dated as of January 1, 2006, Morgan Stanley ABS
Capital I
Inc. Trust 2006-NC1". In the event that any such Assignment of
Mortgage is lost
or returned unrecorded because of a defect therein, the Responsible
Party shall
promptly cause to be delivered a substitute Assignment of Mortgage
to cure such
defect and thereafter cause each such assignment to be duly
recorded.
In the event that such original or copy of any document
submitted
for recordation to the appropriate public recording office is not
so delivered
to the Trustee within 90 days following the Closing Date, and in
the event that
the Responsible Party does not cure such failure within 30 days of
discovery or
receipt of written notification of such failure from the Depositor,
the related
Mortgage Loan shall, upon the request of the Depositor, be
repurchased by the
Responsible Party at the price and in the manner specified in
Section 2.03. The
foregoing repurchase obligation shall not apply in the event that
the
Responsible Party cannot deliver such original or copy of any
document submitted
for recordation to the appropriate public recording office within
the specified
period due to a delay caused by the recording office in the
applicable
jurisdiction; provided, that the Responsible Party shall instead
deliver a
recording receipt of such recording office or, if such recording
receipt is not
available, an officer's certificate of an officer of the
Responsible Party,
confirming that such document has been accepted for recording.
Notwithstanding anything to the contrary contained in this
Section
2.01, in those instances where the public recording office retains
or loses the
original Mortgage or assignment after it has been recorded, the
obligations of
the Responsible Party shall be deemed to have been satisfied upon
delivery by
the Responsible Party to the Trustee, prior to the Closing Date of
a copy of
such Mortgage or assignment, as the case may be, certified (such
certification
to be an original thereof) by the public recording office to be a
true and
complete copy of the recorded original thereof.
(c) The Depositor does hereby establish, pursuant to the
further
provisions of this Agreement and the laws of the State of New York,
an express
trust (the "Trust") to be known, for convenience, as "MORGAN
STANLEY ABS CAPITAL
I INC. TRUST 2006-NC1" and Deutsche Bank National Trust Company is
hereby
appointed as Trustee in accordance with the provisions of this
Agreement. The
parties hereto acknowledge and agree that it is the policy and
intention of the
Trust to acquire only Mortgage Loans meeting the requirements set
forth in this
Agreement, including without limitation, the representation and
warranty set
forth in paragraph (46) of Schedule III. The Trust's fiscal year is
the calendar
year.
(d) The Trust shall have the capacity, power and authority, and
the
Trustee on behalf of the Trust is hereby authorized, to accept the
sale,
transfer, assignment, set over and conveyance by the Depositor to
the Trust of
all the right, title and interest of the Depositor in and to the
Trust Fund
(including, without limitation, the Mortgage Loans) pursuant to
Section 2.01(a).
The Trustee on behalf of the Trust is hereby directed to enter into
the Interest
Rate Swap Agreement.
Section 2.02 Acceptance by the Trustee of the Mortgage Loans.
The
Trustee shall acknowledge, on the Closing Date, receipt by the
Trustee, of the
documents identified in the Initial Certification in the form
annexed hereto as
Exhibit E, and declares that it holds and will hold such documents
and the other
documents delivered to it pursuant to Section 2.01, and that it
holds or will
hold such other assets as are included in the Trust Fund, in trust
for the
exclusive use and benefit of all present and future
Certificateholders. The
Trustee shall maintain possession of the related Mortgage Notes in
the State of
California unless otherwise permitted by the Rating Agencies.
In connection with the Closing Date, the Trustee shall be
required
to deliver via facsimile (with original to follow the next Business
Day) to the
Depositor and the Servicers an Initial Certification prior to the
Closing Date,
or, as the Depositor agrees to, on the Closing Date, certifying
receipt of a
Mortgage Note and Assignment of Mortgage for each applicable
Mortgage Loan. The
Trustee shall not be responsible to verify the validity,
sufficiency or
genuineness of any document in any Custodial File.
Within 90 days after the Closing Date, the Trustee shall, for
the
benefit of the Holders of the Certificates, ascertain that all
documents
identified in the Document Certification and Exception Report in
the form
attached hereto as Exhibit F are in its possession, and shall
deliver to the
Depositor and the Servicers a Document Certification and Exception
Report, in
the form annexed hereto as Exhibit F, to the effect 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 such
certification as an
exception and not covered by such certification): (i) all documents
identified
in the Document Certification and Exception Report and required to
be reviewed
by it are in its possession; (ii) such documents have been reviewed
by it and
appear regular on their face and relate to such Mortgage Loan;
(iii) based on
its examination and only as to the foregoing documents, the
information set
forth in items (1), (2), (7) and (9) of the Mortgage Loan Schedule
and items
(1), (9) and (17) of the Data Tape Information respecting such
Mortgage Loan is
correct; and (iv) each Mortgage Note has been endorsed as provided
in Section
2.01 of this Agreement. The Trustee shall not be responsible to
verify the
validity, sufficiency or genuineness of any document in any
Custodial File.
The Trustee shall retain possession and custody of each
Custodial
File in accordance with and subject to the terms and conditions set
forth
herein. The applicable Servicer shall promptly deliver to the
Trustee, upon the
execution or receipt thereof, the originals of such other documents
or
instruments constituting the Custodial File as come into the
possession of the
Servicer from time to time.
The Responsible Party shall deliver to the applicable Servicer
copies of all trailing documents required to be included in the
Custodial File
at the same time the original or certified copies thereof are
delivered to the
Trustee, including but not limited to such documents as the title
insurance
policy and any other Mortgage Loan Documents upon return from the
public
recording office. Such documents shall be delivered by the
Responsible Party at
the Responsible Party's expense to such Servicer.
Section 2.03 Representations and Warranties; Remedies for
Breaches
of Representations and Warranties with Respect to the Mortgage
Loans. (a) HomeEq
hereby makes the representations and warranties set forth in
Schedule II hereto
to the Depositor and the Trustee, as of the dates set forth in such
Schedule and
JPMorgan hereby makes the representations and warranties set forth
in Schedule
IV hereto to the Depositor and the Trustee as of the dates set
forth in such
Schedule. Upon discovery by any of the parties hereto of a breach
of any of the
foregoing representations and warranties, the party discovering
such breach
shall give prompt written notice to the other.
(b) The Responsible Party hereby makes the representations and
warranties, set forth in Schedule III and Schedule V hereto, to the
Depositor
and the Trustee as of the dates set forth in such Schedules.
(c) It is understood and agreed by the parties hereto that the
representations and warranties set forth in this Section 2.03 shall
survive the
transfer of the Mortgage Loans by the Depositor to the Trustee, and
shall inure
to the benefit of the parties to whom the representations and
warranties were
made notwithstanding any restrictive or qualified endorsement on
any Mortgage
Note or Assignment of Mortgage or the examination or failure to
examine any
Mortgage File. Upon discovery by any of the Responsible Party, the
Depositor,
the Trustee or a Servicer of a breach of any of the foregoing
representations
and warranties, the party discovering such breach shall give prompt
written
notice to the others.
(d) Within 30 days of the earlier of either discovery by or
notice
to the Responsible Party that any Mortgage Loan does not conform to
the
requirements as determined in the Trustee's review of the related
Custodial File
or within 60 days of the earlier of either discovery by or notice
to the
Responsible Party of any breach of a representation or warranty,
set forth in
Section 2.03(b), that materially and adversely affects the value of
any Mortgage
Loan or the interest of the Trustee or the Certificateholders
therein, the
Responsible Party shall use its best efforts to cause to be
remedied a material
defect in a document constituting part of a Mortgage File or
promptly to cure
such breach in all material respects and, if such defect or breach
cannot be
remedied, the Responsible Party shall, at the Depositor's option as
specified in
writing and provided to the Responsible Party and the Trustee, (i)
if such 30 or
60 day period, as applicable, expires prior to the second
anniversary of the
Closing Date, remove such Mortgage Loan (a "Deleted Mortgage Loan")
from the
Trust Fund and substitute in its place a Substitute Mortgage Loan,
in the manner
and subject to the conditions set forth in this Section 2.03; or
(ii) repurchase
such Mortgage Loan at the Repurchase Price; provided, however, that
any such
substitution pursuant to clause (i) above shall not be effected
prior to the
delivery to the Trustee of a Request for Release substantially in
the form of
Exhibit J, and the delivery of the Mortgage File to the Trustee for
any such
Substitute Mortgage Loan. Notwithstanding the foregoing, a breach
(i) which
causes a Mortgage Loan not to constitute a "qualified mortgage"
within the
meaning of Section 860G(a)(3) of the Code or (ii) by the
Responsible Party of
any of the representations and warranties set forth in clause (46),
(47), (49),
(53), (55), (56), (57), (58), (59), (60), (61), (62) or (63) of
Schedule III, in
each case, will be deemed automatically to materially and adversely
affect the
value of such Mortgage Loan and the interests of the Trustee
and
Certificateholders in such Mortgage Loan. In the event that the
Trustee receives
notice of a breach by the Responsible Party of any of the
representations and
warranties set forth in clause (46), (47), (49), (53), (55), (56),
(57), (58),
(59), (60), (61), (62) or (63) of Schedule III, the Trustee shall
give notice of
such breach to the Responsible Party and request the Responsible
Party to
repurchase the Mortgage Loan at the Repurchase Price within sixty
(60) days of
the Responsible Party receipt of such notice. The Responsible Party
shall
repurchase each such Mortgage Loan within 60 days of the earlier of
discovery or
receipt of notice with respect to each such Mortgage Loan, and in
any case such
repurchase shall occur or shall be deemed to occur on the last day
of the
applicable Prepayment Period preceding the Distribution Date on
which the
Repurchase Price is to be distributed.
(e) With respect to any Substitute Mortgage Loan or Loans, the
Responsible Party shall deliver to the Trustee for the benefit of
the
Certificateholders the Mortgage Note, the Mortgage, the related
Assignment of
Mortgage, and such other documents and agreements as are required
by Section
2.01, with the Mortgage Note endorsed and the Mortgage assigned as
required by
Section 2.01. No substitution under this Agreement is permitted to
be made in
any calendar month after the Determination Date for such month.
Scheduled
Payments due with respect to Substitute Mortgage Loans in the Due
Period of
substitution shall not be part of the Trust Fund and will be
retained by the
Responsible Party on the next succeeding Distribution Date. For the
Due Period
of substitution, distributions to Certificateholders will include
the Scheduled
Payment due on any Deleted Mortgage Loan for such Due Period and
thereafter the
Responsible Party shall be entitled to retain all amounts received
in respect of
such Deleted Mortgage Loan.
(f) The applicable Servicer, based upon information provided by
the
Responsible Party, shall amend the Mortgage Loan Schedule for the
benefit of the
Certificateholders to reflect the removal of such Deleted Mortgage
Loan and the
substitution of the Substitute Mortgage Loan or Loans and such
Servicer shall
deliver the amended Mortgage Loan Schedule to the Trustee. Upon
such
substitution, the Substitute Mortgage Loan or Loans shall be
subject to the
terms of this Agreement in all respects, and the Responsible Party
shall be
deemed to have made with respect to such Substitute Mortgage Loan
or Loans, as
of the date of substitution, the representations and warranties
made pursuant to
Section 2.03(b) with respect to such Mortgage Loan. Upon any such
substitution
and the deposit into the related Collection Account of the amount
required to be
deposited therein in connection with such substitution as described
in the
following paragraph, the Trustee shall release the Mortgage File
held for the
benefit of the Certificateholders relating to such Deleted Mortgage
Loan to the
Responsible Party and shall execute and deliver at the Responsible
Party's
direction such instruments of transfer or assignment prepared by
the Responsible
Party, in each case without recourse, as shall be necessary to vest
title in the
Responsible Party, of the Trustee's interest in any Deleted
Mortgage Loan
substituted for pursuant to this Section 2.03.
(g) For any month in which the Responsible Party substitutes one
or
more Substitute Mortgage Loans for one or more Deleted Mortgage
Loans, the
applicable Servicer will determine the amount (if any) by which the
aggregate
unpaid principal balance of all such Substitute Mortgage Loans as
of the date of
substitution is less than the aggregate unpaid principal balance of
all such
Deleted Mortgage Loans. The amount of such shortage plus an amount
equal to the
sum of (i) any accrued and unpaid interest on the Deleted Mortgage
Loans and
(ii) all unreimbursed Servicing Advances with respect to such
Deleted Mortgage
Loans (collectively, the "Substitution Adjustment Amount") shall be
remitted by
the Responsible Party to the applicable Servicer for deposit into
the related
Collection Account on or before the Distribution Account Deposit
Date for the
Distribution Date following the Prepayment Period during which the
related
Mortgage Loan became required to be purchased or replaced
hereunder.
(h) In addition to such repurchase or substitution obligation,
the
Responsible Party shall indemnify the Depositor and its Affiliates,
the
Servicers, the Sponsor, the Trustee and the Trust and hold such
parties harmless
against any losses, damages, penalties, fines, forfeitures,
reasonable and
necessary legal fees and related costs, judgments and other costs
and expenses
resulting from any claim, demand, defense or assertion based on or
grounded
upon, or resulting from, a breach by the Responsible Party of any
of its
representations and warranties or obligations contained in this
Agreement.
(i) In the event that the Responsible Party shall have repurchased
a
Mortgage Loan pursuant to this Agreement, the Repurchase Price
therefor shall be
deposited by the applicable Servicer in the applicable Collection
Account of the
related Servicer pursuant to Section 3.10 on or before the
Distribution Account
Deposit Date for the Distribution Date following the Prepayment
Period during
which the Responsible Party, as applicable, repurchased such
Mortgage Loan and
upon such deposit of the Repurchase Price and receipt of a Request
for Release
in the form of Exhibit J hereto, the Trustee shall release the
related Custodial
File held for the benefit of the Certificateholders to such Person
as directed
by the applicable Servicer, and the Trustee shall execute and
deliver at such
Person's direction such instruments of transfer or assignment
prepared by such
Person, in each case without recourse, as shall be necessary to
transfer title
from the Trustee.
It is understood and agreed by the parties hereto that the
obligation of the Responsible Party under this Agreement to cure,
repurchase or
substitute any Mortgage Loan as to which a breach of a
representation and
warranty has occurred and is continuing, together with any
related
indemnification obligations of the Responsible Party set forth in
Section
2.03(h), shall constitute the sole remedies against such Person
respecting such
breach available to Certificateholders, the Depositor (if
applicable), the
Servicer or the Trustee.
The provisions of this Section 2.03 shall survive delivery of
the
respective Custodial Files to the Trustee for the benefit of
the
Certificateholders.
Section 2.04 Execution and Delivery of Certificates. The
Trustee
acknowledges the transfer and assignment to it of the Trust Fund
and,
concurrently with such transfer and assignment, has executed and
delivered to or
upon the order of the Depositor, the Certificates in authorized
Denominations
evidencing directly or indirectly the entire ownership of the Trust
Fund. The
Trustee agrees to hold the Trust Fund and exercise the rights
referred to above
for the benefit of all present and future Holders of the
Certificates.
Section 2.05 REMIC Matters. The Preliminary Statement sets forth
the
designations for federal income tax purposes of all interests
created hereby.
The "Startup Day" for purposes of the REMIC Provisions shall be the
Closing
Date. The "latest possible maturity date" is the Distribution Date
occurring in
December 2035, which is the Distribution Date in the month
following the month
in which the latest maturity date of any Mortgage Loan occurs.
Amounts
distributable to the Class X Certificates (prior to any reduction
for any Basis
Risk Payment or Swap Termination Payment), exclusive of any amounts
received
from the Swap Provider, shall be deemed paid from the Upper-Tier
REMIC in
respect of the Class X Interest to the Holders of the Class X
Certificates prior
to distribution of any Basis Risk Payments to the Offered
Certificates. For
federal income tax purposes, any amount distributed on the Offered
Certificates
on any Distribution Date in excess of the amount distributable on
their
Corresponding Class of Upper-Tier Regular Interest on such
Distribution Date
shall be treated as having been paid from the Excess Reserve Fund
Account or the
Swap Account, as applicable, and any amount distributable on such
Corresponding
Class of Upper-Tier Regular Interest on such Distribution Date in
excess of the
amount distributable on the Corresponding Class of Offered
Certificates on such
Distribution Date shall be treated as having been paid to the
Excess Reserve
Fund Account or the Swap Account, all pursuant to and as further
provided in
Section 8.13.
Section 2.06 Representations and Warranties of the Depositor.
The
Depositor hereby represents, warrants and covenants to the Trustee
and the
Servicers that as of the date of this Agreement or as of such date
specifically
provided herein:
(a) The Depositor is a corporation duly organized, validly
existing
and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to
convey
the Mortgage Loans and to execute, deliver and perform, and to
enter into and
consummate the transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized,
executed
and delivered by the Depositor, all requisite corporate action
having been
taken, and, assuming the due authorization, execution and delivery
hereof by the
other parties hereto, constitutes or will constitute the legal,
valid and
binding agreement of the Depositor, enforceable against the
Depositor in
accordance with its terms, except as such enforcement may be
limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws
relating to or affecting the rights of creditors generally, and by
general
equity principles (regardless of whether such enforcement is
considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or
registration
or filing with, or notice to, any governmental authority or court
is required
for the execution, delivery and performance of or compliance by the
Depositor
with this Agreement or the consummation by the Depositor of any of
the
transactions contemplated hereby, except as have been made on or
prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or
the
fulfillment of or compliance with the terms and conditions of this
Agreement,
(i) conflicts or will conflict with or results or will result in a
breach of, or
constitutes or will constitute a default or results or will result
in an
acceleration under (A) the charter or bylaws of the Depositor, or
(B) of any
term, condition or provision of any material indenture, deed of
trust, contract
or other agreement or instrument to which the Depositor or any of
its
subsidiaries is a party or by which it or any of its subsidiaries
is bound; (ii)
results or will result in a violation of any law, rule, regulation,
order,
judgment or decree applicable to the Depositor of any court or
governmental
authority having jurisdiction over the Depositor or its
subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or
encumbrance which
would have a material adverse effect upon the Mortgage Loans or any
documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against
or
investigations of, the Depositor pending, or to the knowledge of
the Depositor,
threatened, before any court, administrative agency or other
tribunal, and no
notice of any such action, which, in the Depositor's reasonable
judgment, might
materially and adversely affect the performance by the Depositor of
its
obligations under this Agreement, or the validity or enforceability
of this
Agreement;
(g) The Depositor is not in default with respect to any order
or
decree of any court or any order, regulation or demand of any
federal, state,
municipal or governmental agency that may materially and adversely
affect its
performance hereunder; and
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee on the Closing Date, the Depositor had
good title to,
and was the sole owner of each Mortgage Loan, free of any interest
of any other
Person, and the Depositor has transferred all right, title and
interest in each
Mortgage Loan to the Trustee. The transfer of the Mortgage Note and
the Mortgage
as and in the manner contemplated by this Agreement is sufficient
either (i)
fully to transfer to the Trustee, for the benefit of the
Certificateholders, all
right, title, and interest of the Depositor thereto as note holder
and mortgagee
or (ii) to grant to the Trustee, for the benefit of the
Certificateholders, the
security interest referred to in Section 10.04.
It is understood and agreed that the representations, warranties
and
covenants set forth in this Section 2.06 shall survive delivery of
the
respective Custodial Files to the Trustee and shall inure to the
benefit of the
Trustee.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicers to Service Mortgage Loans. (a) For and
on
behalf of the Certificateholders, each Servicer shall service and
administer the
Mortgage Loans for which it is acting as Servicer in accordance
with the terms
of this Agreement and the respective Mortgage Loans and, to the
extent
consistent with such terms, in the same manner in which it services
and
administers similar mortgage loans for its own portfolio, giving
due
consideration to customary and usual standards of practice of
mortgage lenders
and loan servicers administering similar mortgage loans but without
regard to:
(i) any relationship that such Servicer, any Subservicer or any
Affiliate of such Servicer or any Subservicer may have with the
related
Mortgagor;
(ii) the ownership or non ownership of any Certificate by such
Servicer or any Affiliate of such Servicer;
(iii) such Servicer's obligation to make P&I Advances or
Servicing
Advances; or
(iv) such Servicer's or any Subservicer's right to receive
compensation for its services hereunder or with respect to any
particular
transaction.
To the extent consistent with the foregoing, each Servicer
shall
seek to maximize the timely and complete recovery of principal and
interest on
the Mortgage Notes. Subject only to the above described servicing
standards and
the terms of this Agreement and of the respective Mortgage Loans,
each Servicer
shall have full power and authority, acting alone or through
Subservicers as
provided in Section 3.02, to do or cause to be done any and all
things in
connection with such servicing and administration which it may deem
necessary or
desirable. Without limiting the generality of the foregoing, each
Servicer in
its own name or in the name of a Subservicer is hereby authorized
and empowered
by the Trustee when the applicable Servicer believes it appropriate
in its best
judgment in accordance with Accepted Servicing Practices, to
execute and deliver
any and all instruments of satisfaction or cancellation, or of
partial or full
release or discharge, and all other comparable instruments, with
respect to the
Mortgage Loans and the Mortgaged Properties and to institute
foreclosure
proceedings or obtain a deed in lieu of foreclosure so as to
convert the
ownership of such properties, and to hold or cause to be held title
to such
properties, on behalf of the Trustee. Each Servicer shall service
and administer
the Mortgage Loans in accordance with applicable state and federal
law and shall
provide to the Mortgagors any reports required to be provided to
them thereby.
Each Servicer covenants that its computer and other systems used in
servicing
the Mortgage Loans operate in a manner such that the Servicer can
service the
Mortgage Loans in accordance with the terms of this Pooling and
Servicing
Agreement. Each Servicer shall also comply in the performance of
this Agreement
with all reasonable rules and requirements of each insurer under
any standard
hazard insurance policy. Subject to Section 3.16, the Trustee shall
execute, at
the written request of a Servicer, and furnish to such Servicer and
any
Subservicer such documents provided to the Trustee as are necessary
or
appropriate to enable such Servicer or any Subservicer to carry out
its
servicing and administrative duties hereunder, and the Trustee
hereby grants to
each Servicer, and this Agreement shall constitute, a power of
attorney to carry
out such duties, including a power of attorney in the form of
Exhibit O hereto
to take title to Mortgaged Properties after foreclosure in the name
of and on
behalf of the Trustee. The Trustee shall execute a separate power
of attorney in
favor of each Servicer for the purposes described herein to the
extent necessary
or desirable to enable each Servicer to perform its duties
hereunder. The
Trustee shall not be liable for the actions of any Servicer or any
Subservicers
under such powers of attorney. Notwithstanding anything contained
herein to the
contrary, no Servicer or Subservicer shall without the Trustee's
consent: (i)
initiate any action, suit or proceeding solely under the Trustee's
name without
indicating such Servicer's or Subservicer's, as applicable,
representative
capacity, or (ii) take any action with the intent to, or which
actually does
cause, the Trustee to be registered to do business in any
state.
(b) Subject to Section 3.09(b), in accordance with the standards
of
the preceding paragraph, each Servicer shall advance or cause to be
advanced
funds as necessary for the purpose of effecting the timely payment
of taxes and
assessments on the Mortgaged Properties, which advances shall be
Servicing
Advances reimbursable in the first instance from related
collections from the
Mortgagors pursuant to Section 3.09(b), and further as provided in
Section 3.11.
Any cost incurred by a Servicer or by Subservicers in effecting the
timely
payment of taxes and assessments on a Mortgaged Property shall not
be added to
the unpaid principal balance of the related Mortgage Loan,
notwithstanding that
the terms of such Mortgage Loan so permit.
(c) Notwithstanding anything in this Agreement to the contrary,
a
Servicer may not make any future advances with respect to a
Mortgage Loan
(except as provided in Section 4.01) and neither Servicer shall (i)
permit any
modification with respect to any Mortgage Loan that would change
the Mortgage
Rate, reduce or increase the principal balance (except for
reductions resulting
from actual payments of principal) or change the final maturity
date on such
Mortgage Loan (except for a reduction of interest payments
resulting from the
application of the Servicemembers Civil Relief Act or any similar
state
statutes) or (ii) permit any modification, waiver or amendment of
any term of
any Mortgage Loan that would both (A) effect an exchange or
reissuance of such
Mortgage Loan under Section 1001 of the Code (or final, temporary
or proposed
Treasury regulations promulgated thereunder) and (B) cause any
Trust REMIC to
fail to qualify as a REMIC under the Code or the imposition of any
tax on
"prohibited transactions" or "contributions after the startup date"
under the
REMIC Provisions, or (iii) except as provided in Section 3.07(a),
waive any
Prepayment Charges.
(d) Each Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release
that
Servicer from the responsibilities or liabilities arising under
this Agreement.
(e) In the event that the Mortgage Loan Documents relating to
any
Mortgage Loan contain provisions requiring the related Mortgagor to
submit to
binding arbitration with respect to any disputes arising in
connection with such
Mortgage Loan, the applicable Servicer shall be entitled to waive
any such
provisions on behalf of the Trust and to send written notice of
such waiver to
the related Mortgagor, although the Mortgagor may still require
arbitration of
such disputes at its option.
Section 3.02 Subservicing Agreements between a Servicer and
Subservicers. (a) Each Servicer may enter into subservicing
agreements with
Subservicers for the servicing and administration of the Mortgage
Loans
("Subservicing Agreements"). Each Servicer represents and warrants
to the other
parties hereto that, except as otherwise set forth herein, no
Subservicing
Agreement is in effect as of the Closing Date with respect to any
Mortgage Loans
required to be serviced by it hereunder. The applicable Servicer
shall give
notice to the Depositor and the Trustee of any such Subservicer and
Subservicing
Agreement, which notice shall contain all information (including
without
limitation a copy of the Subservicing Agreement) reasonably
necessary to enable
the Trustee, pursuant to Section 8.12(g), to accurately and timely
report the
event under Item 6.02 of Form 8-K pursuant to the Exchange Act (if
such reports
under the Exchange Act are required to be filed under the Exchange
Act). No
Subservicing Agreement shall be effective until 30 days after such
written
notice is received by both the Depositor and the Trustee. The
Trustee shall not
be required to review or consent to such Subservicing Agreements
and shall have
no liability in connection therewith.
(b) Each Subservicer shall be (i) authorized to transact business
in
the state or states in which the related Mortgaged Properties it is
to service
are situated, if and to the extent required by applicable law to
enable the
Subservicer to perform its obligations hereunder and under the
Subservicing
Agreement, (ii) an institution approved as a mortgage loan
originator by the
Federal Housing Administration or an institution that has deposit
accounts
insured by the FDIC and (iii) a Freddie Mac or Fannie Mae approved
mortgage
servicer. Each Subservicing Agreement must impose on the
Subservicer
requirements conforming to the provisions set forth in Section 3.08
and provide
for servicing of the Mortgage Loans consistent with the terms of
this Agreement.
Each Servicer will examine each Subservicing Agreement to which it
is a party
and will be familiar with the terms thereof. The terms of any
Subservicing
Agreement will not be inconsistent with any of the provisions of
this Agreement.
Each Servicer and the respective Subservicers may enter into and
make amendments
to the Subservicing Agreements or enter into different forms of
Subservicing
Agreements; provided, however, that any such amendments or
different forms shall
be consistent with and not violate the provisions of this
Agreement, and that no
such amendment or different form shall be made or entered into
which could be
reasonably expected to be materially adverse to the interests of
the Trustee,
without the consent of the Trustee. Any variation without the
consent of the
Trustee from the provisions set forth in Section 3.08 relating to
insurance or
priority requirements of Subservicing Accounts, or credits and
charges to the
Subservicing Accounts or the timing and amount of remittances by
the
Subservicers to such Servicer, are conclusively deemed to be
inconsistent with
this Agreement and therefore prohibited. Each Servicer shall
deliver to the
Trustee and the Depositor copies of all Subservicing Agreements,
and any
amendments or modifications thereof, promptly upon such Servicer's
execution and
delivery of such instruments.
(c) As part of its servicing activities hereunder, each
Servicer
(except as otherwise provided in the last sentence of this
paragraph), for the
benefit of the Trustee, shall enforce the obligations of each
Subservicer under
the related Subservicing Agreement to which such Servicer is a
party, including,
without limitation, any obligation to make advances in respect of
delinquent
payments as required by a Subservicing Agreement. Such enforcement,
including,
without limitation, the legal prosecution of claims, termination of
Subservicing
Agreements, and the pursuit of other appropriate remedies, shall be
in such form
and carried out to such an extent and at such time as such
Servicer, in its good
faith business judgment, would require were it the owner of the
related Mortgage
Loans. Each Servicer shall pay the costs of such enforcement at its
own expense,
and shall be reimbursed therefor only (i) from a general recovery
resulting from
such enforcement, to the extent, if any, that such recovery exceeds
all amounts
due in respect of the related Mortgage Loans or (ii) from a
specific recovery of
costs, expenses or attorneys' fees against the party against whom
such
enforcement is directed.
(d) Each Servicer shall cause any Subservicer engaged by such
Servicer (or by any Subservicer) for the benefit of the Depositor
and the
Trustee to comply with the provisions of this Section 3.02 and with
Sections
3.22, 3.23, 6.02 and 6.05 of this Agreement to the same extent as
if such
Subservicer were such Servicer, and to provide the information
required with
respect to such Subservicer under Section 8.12(f) of this
Agreement. Such
Servicer shall be responsible for obtaining from each such
Subservicer and
delivering to applicable Persons any servicer compliance statement
required to
be delivered by such Subservicer under Section 3.22 and any
assessment of
compliance report and related accountant's attestation required to
be delivered
by such Subservicer under Section 3.23, in each case as and when
required to be
delivered.
(e) Subject to the conditions set forth in this Section
3.02(e),
each Servicer and any Subservicer engaged by such Servicer is
permitted to
utilize one or more Subcontractors to perform certain of its
obligations
hereunder. Such Servicer shall promptly upon request provide to the
Depositor a
written description (in form and substance satisfactory to the
Depositor) of the
role and function of each Subcontractor utilized by such Servicer
or any such
Subservicer, specifying, not later than the date specified for
delivery of the
annual report on assessment of compliance set forth in Section
3.23(d), (i) the
identity of each such Subcontractor, if any, that is "participating
in the
servicing function" within the meaning of Item 1122 of Regulation
AB, and (ii)
which elements of the Servicing Criteria will be addressed in
assessments of
compliance provided by each Subcontractor identified pursuant to
clause (i) of
this paragraph. As a condition to the utilization by such Servicer
or any such
Subservicer of any Subcontractor determined to be "participating in
the
servicing function" within the meaning of Item 1122 of Regulation
AB, such
Servicer shall cause any such Subcontractor used by such Servicer
(or by any
such Subservicer) for the benefit of the Depositor and the Trustee
to comply
with the provisions of Section 3.23 of this Agreement to the same
extent as if
such Subcontractor were such Servicer. Such Servicer shall be
responsible for
obtaining from each such Subcontractor and delivering to the
applicable Persons
any assessment of compliance report and related accountant's
attestation
required to be delivered by such Subcontractor under Section 3.23,
in each case
as and when required to be delivered.
Notwithstanding the foregoing, if a Servicer engages a
Subcontractor
in connection with the performance of any of its duties under this
Agreement,
such Servicer shall be responsible for determining whether such
Subcontractor is
a "servicer" within the meaning of Item 1101 of Regulation AB and
whether any
such affiliate or third-party vendor meets the criteria in Item
1108(a)(2)(i)
through (iii) of Regulation AB. If a Servicer determines, pursuant
to the
preceding sentence, that such Subcontractor is a "servicer" within
the meaning
of Item 1101 of Regulation AB and meets the criteria in Item
1108(a)(2)(i)
through (iii) of Regulation AB, then such Subcontractor shall be
deemed to be a
Subservicer for purposes of this Agreement, the engagement of such
Subservicer
shall not be effective unless and until notice is given pursuant to
Section
3.02(a) and such Servicer shall comply with Section 3.02(d) with
respect
thereto.
(f) As of the Closing Date, JPMorgan has appointed Chase Home
Finance LCC ("CHF") to act as the sole Subservicer pursuant to a
Subservicing
Agreement (a copy of which is attached hereto as Exhibit V) with
respect to
JPMorgan's servicing obligations under this Agreement. So long as
JPMorgan is
not a rated servicer by each Rating Agency, JPMorgan agrees that
prior to
replacing CHF as Subservicer, other than with an affiliate of
JPMorgan that is a
rated servicer, it will obtain confirmation from each Rating Agency
that such
replacement of CHF as Subservicer with respect to JPMorgan's
servicing
obligations related to the Mortgage Loans will not cause the then
current rating
on any Class of Certificates to be qualified, withdrawn or lowered
by any Rating
Agency and agrees that any replacement subservicer shall agree to
subservice in
accordance with the terms of this Agreement, including but not
limited to the
consideration of whether to waive a Prepayment Charge
hereunder.
Section 3.03 Successor Subservicers. Each Servicer shall be
entitled
to terminate any Subservicing Agreement to which such Servicer is a
party and
the rights and obligations of any Subservicer pursuant to any such
Subservicing
Agreement in accordance with the terms and conditions of such
Subservicing
Agreement; provided, however, that the termination, resignation or
removal of a
Subservicer shall be not be effective until 30 days after written
notice is
received by both the Depositor and the Trustee that contains all
information
reasonably necessary to enable the Trustee, pursuant to Section
8.12(g), to
accurately and timely report the event under Item 6.02 of Form 8-K
pursuant to
the Exchange Act (if such reports under the Exchange Act are
required to be
filed under the Exchange Act). In the event of termination of any
Subservicer,
all servicing obligations of such Subservicer shall be assumed
simultaneously by
the applicable Servicer party to the related Subservicing Agreement
without any
act or deed on the part of such Subservicer or such Servicer, and
such Servicer
either shall service directly the related Mortgage Loans or shall
enter into a
Subservicing Agreement with a successor Subservicer which qualifies
under
Section 3.02.
Any Subservicing Agreement shall include the provision that
such
agreement may be immediately terminated by the Depositor or the
Trustee without
fee, in accordance with the terms of this Agreement, in the event
that the
Servicer party to the related Subservicing Agreement shall, for any
reason, no
longer be a Servicer (including termination due to an Event of
Default).
Section 3.04 Liability of the Servicers. Notwithstanding any
Subservicing Agreement, any of the provisions of this Agreement
relating to
agreements or arrangements between a Servicer and a Subservicer or
reference to
actions taken through a Subservicer or otherwise, such Servicer
shall remain
obligated and primarily liable to the Trustee for the servicing
and
administering of the Mortgage Loans in accordance with the
provisions of Section
3.01 without diminution of such obligation or liability by virtue
of such
Subservicing Agreements or arrangements or by virtue of
indemnification from the
Subservicer and to the same extent and under the same terms and
conditions as if
such Servicer alone were servicing and administering such Mortgage
Loans. Each
Servicer shall be entitled to enter into any agreement with a
Subservicer for
indemnification of such Servicer by such Subservicer and nothing
contained in
this Agreement shall be deemed to limit or modify such
indemnification.
Section 3.05 No Contractual Relationship between Subservicers
and
the Trustee. Any Subservicing Agreement that may be entered into
and any
transactions or services relating to the Mortgage Loans involving a
Subservicer
in its capacity as such shall be deemed to be between the
Subservicer and the
related Servicer alone, and the Trustee (or any successor to such
servicer)
shall not be deemed a party thereto and shall have no claims,
rights,
obligations, duties or liabilities with respect to the Subservicer
except as set
forth in Section 3.06. Each Servicer shall be solely liable for all
fees owed by
it to any Subservicer, irrespective of whether such Servicer's
compensation
pursuant to this Agreement is sufficient to pay such fees.
Section 3.06 Assumption or Termination of Subservicing Agreements
by
Trustee. In the event a Servicer at any time shall for any reason
no longer be a
Servicer (including by reason of the occurrence of an Event of
Default), the
Trustee, or its designee, or the successor servicer if the
successor is not the
Trustee, shall thereupon assume all of the rights and obligations
of such
Servicer under each Subservicing Agreement that such Servicer may
have entered
into, with copies thereof provided to the Trustee, or the successor
servicer if
the successor is not the Trustee, prior to the Trustee, or the
successor
servicer if the successor is not the Trustee, assuming such rights
and
obligations, unless the Trustee elects to terminate any
Subservicing Agreement
in accordance with its terms as provided in Section 3.03.
Upon such assumption, the Trustee, its designee or the
successor
Servicer shall be deemed, subject to Section 3.03, to have assumed
all of such
Servicer's interest therein and to have replaced such Servicer as a
party to
each Subservicing Agreement to which the predecessor servicer was a
party to the
same extent as if each Subservicing Agreement had been assigned to
the assuming
party, except that (i) such Servicer shall not thereby be relieved
of any
liability or obligations under any such Subservicing Agreement that
arose before
it ceased to be a Servicer and (ii) none of the Depositor, the
Trustee, their
designees or any successor to such Servicer shall be deemed to have
assumed any
liability or obligation of such servicer that arose before it
