CITIGROUP MORTGAGE LOAN TRUST INC.
Depositor
WELLS FARGO BANK, N.A.
Servicer
CITIBANK, N.A.
Trust Administrator
and
U.S. BANK NATIONAL ASSOCIATION
Trustee
-----------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of February 1, 2006
-----------------------------------------
Asset-Backed Pass-Through Certificates
Series 2006-WFHE1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION
PAGE
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----
<S>
<C>
<C>
ARTICLE I DEFINITIONS
6
SECTION 1.01
Defined
Terms.............................................................................6
SECTION 1.02
Allocation of Certain Interest
Shortfalls................................................51
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES
52
SECTION 2.01
Conveyance of Mortgage
Loans.............................................................52
SECTION 2.02
Acceptance of the Trust Fund by the
Trustee..............................................55
SECTION 2.03
Repurchase or Substitution of Mortgage Loans by the Sponsor or
the
Depositor............................................................................56
SECTION 2.04
[Reserved]...............................................................................60
SECTION 2.05
Representations, Warranties and Covenants of the
Servicer................................60
SECTION 2.06
Issuance of the
Certificates.............................................................62
SECTION 2.07
Conveyance of the REMIC Regular Interests; Acceptance of the
Trust REMICs by the
Trustee..............................................................62
ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
65
SECTION 3.01
Servicer to Act as
Servicer..............................................................65
SECTION 3.02
Sub-Servicing Agreements Between the Servicer and
Sub-Servicers..........................67
SECTION 3.03
Successor
Sub-Servicers..................................................................68
SECTION 3.04
Liability of the
Servicer................................................................69
SECTION 3.05
No Contractual Relationship Between Sub-Servicers and Trustee,
Trust Administrator or
Certificateholders................................................69
SECTION 3.06
Assumption or Termination of Sub-Servicing Agreements by Trust
Administrator............................................................................69
SECTION 3.07
Collection of Certain Mortgage Loan
Payments.............................................70
SECTION 3.08
Sub-Servicing
Accounts...................................................................70
SECTION 3.09
Collection of Taxes, Assessments and Similar Items; Servicing
Accounts.................................................................................71
SECTION 3.10
Collection Account and Distribution
Account..............................................72
SECTION 3.11
Withdrawals from the Collection Account and Distribution
Account..................................................................................74
SECTION 3.12
Investment of Funds in the Collection Account and the
Distribution
Account.....................................................................76
SECTION 3.13
[Reserved]...............................................................................77
SECTION 3.14
Maintenance of Hazard Insurance and Errors and Omissions and
Fidelity
Coverage........................................................................77
SECTION 3.15
Enforcement of Due-On-Sale Clauses; Assumption
Agreements................................79
SECTION 3.16
Realization Upon Defaulted Mortgage
Loans................................................80
i
<PAGE>
SECTION 3.17
Trustee to Cooperate; Release of Mortgage
Files..........................................82
SECTION 3.18
Servicing
Compensation...................................................................83
SECTION 3.19
Reports to the Trust Administrator; Collection Account
Statements...............................................................................83
SECTION 3.20
Statement as to
Compliance...............................................................84
SECTION 3.21
Assessments of Compliance and Attestation
Reports........................................85
SECTION 3.22
Access to Certain
Documentation..........................................................86
SECTION 3.23
Title, Management and Disposition of REO
Property........................................86
SECTION 3.24
Obligations of the Servicer in Respect of Prepayment Interest
Shortfalls...............................................................................90
SECTION 3.25
Obligations of the Servicer in Respect of Monthly
Payments...............................90
SECTION 3.26
Advance
Facility.........................................................................90
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS
92
SECTION 4.01
Distributions............................................................................92
SECTION 4.02
Statements to
Certificateholders.........................................................99
SECTION 4.03
Remittance Reports; P&I
Advances........................................................103
SECTION 4.04
Allocation of Extraordinary Trust Fund Expenses and Realized
Losses..................................................................................104
SECTION 4.05
Compliance with Withholding
Requirements................................................107
SECTION 4.06
Net WAC Rate Carryover Reserve
Account..................................................107
SECTION 4.07
Commission
Reporting....................................................................108
SECTION 4.08
Cap
Account.............................................................................110
ARTICLE V THE CERTIFICATES
112
SECTION 5.01
The
Certificates........................................................................112
SECTION 5.02
Registration of Transfer and Exchange of
Certificates...................................114
SECTION 5.03
Mutilated, Destroyed, Lost or Stolen
Certificates.......................................119
SECTION 5.04
Persons Deemed
Owners...................................................................120
SECTION 5.05
Certain Available
Information...........................................................120
ARTICLE VI THE DEPOSITOR AND THE SERVICER
121
SECTION 6.01
Liability of the Depositor and the
Servicer.............................................121
SECTION 6.02
Merger or Consolidation of the Depositor or the
Servicer................................121
SECTION 6.03
Limitation on Liability of the Depositor, the Servicer and
Others..................................................................................121
SECTION 6.04
Limitation on Resignation of the
Servicer...............................................122
SECTION 6.05
Rights of the Depositor in Respect of the
Servicer......................................123
SECTION 6.06
Duties of the Credit Risk
Manager.......................................................124
SECTION 6.07
Limitation Upon Liability of the Credit Risk
Manager....................................124
SECTION 6.08
Removal of the Credit Risk
Manager......................................................124
ARTICLE VII DEFAULT
125
SECTION 7.01
Servicer Events of
Default..............................................................125
ii
<PAGE>
SECTION 7.02
Trust Administrator or Trustee to Act; Appointment of
Successor.........................127
SECTION 7.03
Notification to
Certificateholders......................................................128
SECTION 7.04
Waiver of Servicer Events of
Default....................................................128
ARTICLE VIII CONCERNING THE TRUSTEE aND THE TRUST ADMINISTRATOR
130
SECTION 8.01
Duties of Trustee and Trust
Administrator...............................................130
SECTION 8.02
Certain Matters Affecting the Trustee and the Trust
Administrator...........................................................................131
SECTION 8.03
Neither the Trustee nor Trust Administrator Liable for
Certificates or Mortgage
Loans..........................................................133
SECTION 8.04
Trustee and Trust Administrator May Own
Certificates....................................133
SECTION 8.05
Trustee's, Trust Administrator's and Custodians' Fees and
Expenses................................................................................133
SECTION 8.06
Eligibility Requirements for Trustee and Trust
Administrator............................134
SECTION 8.07
Resignation and Removal of the Trustee and the Trust
Administrator...........................................................................135
SECTION 8.08
Successor Trustee or Trust
Administrator................................................136
SECTION 8.09
Merger or Consolidation of Trustee or Trust
Administrator...............................137
SECTION 8.10
Appointment of Co-Trustee or Separate
Trustee...........................................137
SECTION 8.11
[Reserved]..............................................................................138
SECTION 8.12
Appointment of Office or
Agency.........................................................138
SECTION 8.13
Representations and
Warranties..........................................................138
SECTION 8.14
[Reserved]..............................................................................139
SECTION 8.15
No Trustee or Trust Administrator Liability for Actions or
Inactions of
Custodians.................................................................139
ARTICLE IX TERMINATION
140
SECTION 9.01
Termination Upon Repurchase or Liquidation of the Mortgage
Loans...................................................................................140
SECTION 9.02
Additional Termination
Requirements.....................................................142
ARTICLE X REMIC PROVISIONS
143
SECTION 10.01
REMIC
Administration....................................................................143
SECTION 10.02
Prohibited Transactions and
Activities..................................................146
SECTION 10.03
Servicer, Trustee and Trust Administrator
Indemnification...............................146
ARTICLE XI MISCELLANEOUS PROVISIONS
147
SECTION 11.01
Amendment...............................................................................147
SECTION 11.02
Recordation of Agreement;
Counterparts..................................................148
SECTION 11.03
Limitation on Rights of
Certificateholders..............................................148
SECTION 11.04
Governing
Law...........................................................................149
SECTION 11.05
Notices.................................................................................149
iii
<PAGE>
SECTION 11.06
Severability of
Provisions..............................................................150
SECTION 11.07
Notice to Rating
Agencies...............................................................150
SECTION 11.08
Article and Section
References..........................................................151
SECTION 11.09
Grant of Security
Interest..............................................................151
SECTION 11.10
Third Party
Rights......................................................................152
SECTION 11.11
Intention of the Parties and
Interpretation.............................................152
</TABLE>
iv
<PAGE>
Exhibits
Exhibit A-1 Form
of Class A-1A Certificate
Exhibit A-2 Form
of Class A-1B Certificate
Exhibit A-3 Form
of Class A-1C Certificate
Exhibit A-4 Form
of Class A-1D Certificate
Exhibit A-5 Form
of Class M-1 Certificate
Exhibit A-6 Form
of Class M-2 Certificate
Exhibit A-7 Form
of Class M-3 Certificate
Exhibit A-8 Form
of Class M-4 Certificate
Exhibit A-9 Form
of Class M-5 Certificate
Exhibit A-10 Form of
Class M-6 Certificate
Exhibit A-11 Form of
Class M-7 Certificate
Exhibit A-12 Form of
Class M-8 Certificate
Exhibit A-13 Form of
Class M-9 Certificate
Exhibit A-14 Form of
Class M-10 Certificate
Exhibit A-15 Form of
Class M-11 Certificate
Exhibit A-16 Form of
Class CE Certificate
Exhibit A-17 Form of
Class P Certificate
Exhibit A-18 Form of
Class R Certificate
Exhibit A-19 Form of
Class R-X Certificate
Exhibit B
Form 10-D, Form 8-K and Form 10-K Reporting Responsibility
Exhibit C
Servicing Criteria to
Be Addressed in Assessment of Compliance
Exhibit D
Form of Assignment Agreements
Exhibit E
Request for Release
Exhibit F-1 Form
of Transferor Representation Letter and Form of
Transferee Representation Letter in Connection with Transfer
of the Private Certificates Pursuant to Rule 144A Under the
1933 Act
Exhibit F-2 Form
of Transfer Affidavit and Agreement and Form of
Transferor Affidavit in Connection with Transfer of Residual
Certificates
Exhibit G
Form of Certification with respect to ERISA and the Code
Exhibit H-1 Form
of Certification to be provided by the Depositor with
Form 10-K
Exhibit H-2 Form
of Certification to be provided to the Depositor by the
Trust Administrator
Exhibit H-3 Form
of Certification to be provided to the Depositor by the
Servicer
Exhibit I
Form of Cap Contract
Exhibit J
Form of Cap Administration Agreement
Schedule 1
Mortgage Loan Schedule
Schedule 2
Prepayment Charge Schedule
v
<PAGE>
This Pooling and
Servicing Agreement,
is dated and effective
as
of February 1, 2006,
among CITIGROUP
MORTGAGE LOAN TRUST INC., as Depositor,
WELLS FARGO BANK, N.A., as Servicer, CITIBANK, N.A., as Trust Administrator,
and U.S. BANK NATIONAL ASSOCIATION, as Trustee.
PRELIMINARY STATEMENT:
The
Depositor intends to sell pass-through certificates to be
issued
hereunder in multiple classes, which in the aggregate will evidence
the entire
beneficial ownership interest in each REMIC (as defined herein)
created
hereunder. The Trust Fund will consist of a pool of assets
comprised of the
Mortgage Loans and certain other related assets subject to this
Agreement.
<PAGE>
REMIC I
As provided herein, the Trust Administrator will elect to treat
the
segregated pool of assets consisting of the Mortgage Loans and
certain other
related assets (other than any Servicer Prepayment Charge Payment
Amounts, the
Net WAC Rate Carryover Reserve Account, the Cap Account and the Cap
Contract)
subject to this Agreement as a REMIC for federal income tax
purposes, and such
pool of assets will be designated as "REMIC I." The Class R-I
Interest will be
the sole class of "residual interests" in REMIC I for purposes of
the REMIC
Provisions (as defined herein). The following table irrevocably
sets forth the
designation, the REMIC I Remittance Rate, the initial
Uncertificated Balance
and, for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii),
the "latest possible maturity date" for each of the REMIC I Regular
Interests
(as defined herein). None of the REMIC I Regular Interests will be
certificated.
<TABLE>
<CAPTION>
REMIC I
Initial
Latest Possible
Designation
Remittance Rate
Uncertificated Balance
Maturity Date(1)
----------------
---------------
----------------------
----------------
<S>
<C>
<C>
<C>
I-LTAA
(2)
$ 403,276,632.02
December 2035
I-LTA1A
(2)
$
1,698,030.00
December 2035
I-LTA1B
(2)
$
559,160.00
December 2035
I-LTA1C
(2)
$
583,760.00
December 2035
I-LTA1D
(2)
$
475,790.00
December 2035
I-LTM1
(2)
$
141,970.00
December 2035
I-LTM2
(2)
$
129,620.00
December 2035
I-LTM3
(2)
$
84,360.00
December 2035
I-LTM4
(2)
$
63,790.00
December 2035
I-LTM5
(2)
$
63,780.00
December 2035
I-LTM6
(2)
$
53,500.00
December 2035
I-LTM7
(2)
$
47,320.00
December 2035
I-LTM8
(2)
$
26,750.00
December 2035
I-LTM9
(2)
$
39,090.00
December 2035
I-LTM10
(2)
$
34,980.00
December 2035
I-LTM11
(2)
$
41,150.00
December 2035
I-LTZZ
(2)
$
4,187,085.35
December 2035
I-LTP
(2)
$
100.00
December 2035
</TABLE>
------------------
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the
Distribution Date immediately following the maturity date for the
Mortgage
Loan with the latest
maturity date has been designated as the "latest
possible
maturity date" for each REMIC I Regular Interest.
(2) Calculated in accordance with the definition of "REMIC I
Remittance Rate"
herein.
2
<PAGE>
REMIC II
As provided herein, the Trust Administrator will elect to treat
the
segregated pool of assets consisting of the REMIC I Regular
Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets
will be
designated as "REMIC II." The Class R-II Interest will evidence the
sole class
of "residual interests" in REMIC II for purposes of the REMIC
Provisions under
federal income tax law. The following table irrevocably sets forth
the
designation, the Pass-Through Rate, the initial aggregate
Certificate Principal
Balance and, for purposes of satisfying Treasury regulation
Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for the
indicated
Classes of Certificates and the Class CE Interest and the Class P
Interest,
which are uncertificated.
<TABLE>
<CAPTION>
Initial Aggregate
Certificate
Latest Possible
Designation
Pass-Through Rate Principal
Balance
Maturity Date(1)
----------------
-----------------
-----------------
----------------
<S>
<C>
<C>
<C>
Class A-1A
Variable(2)
$ 169,803,000.00
December 2035
Class A-1B
Variable(2)
$
55,916,000.00
December 2035
Class A-1C
Variable(2)
$
58,376,000.00
December 2035
Class A-1D
Variable(2)
$
47,579,000.00
December 2035
Class M-1
Variable(2)
$
14,197,000.00
December 2035
Class M-2
Variable(2)
$
12,962,000.00
December 2035
Class M-3
Variable(2)
$
8,436,000.00
December 2035
Class M-4
Variable(2)
$
6,379,000.00
December 2035
Class M-5
Variable(2)
$
6,378,000.00
December
2035
Class M-6
Variable(2)
$
5,350,000.00
December 2035
Class M-7
Variable(2)
$
4,732,000.00
December 2035
Class M-8
Variable(2)
$
2,675,000.00
December 2035
Class M-9
Variable(2)
$
3,909,000.00
December 2035
Class M-10
Variable(2)
$
3,498,000.00
December 2035
Class M-11
Variable(2)
$
4,115,000.00
December 2035
Class CE Interest
Variable(3)
$
7,201,767.37
December 2035
Class P Interest
N/A(4)
$
100.00
December 2035
</TABLE>
---------------
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the
Distribution Date immediately following the maturity date for the
Mortgage
Loans with
the latest maturity date has been designated as the "latest
possible
maturity date" for each Class of Certificates.
(2) Calculated in accordance with the definition of "Pass-Through
Rate" herein.
(3) The Class CE Interest will accrue interest at their variable
Pass-Through
Rate on the
Notional Amount of the Class CE Interest outstanding from time
to
time which
shall equal the aggregate Uncertificated Balance of the REMIC I
Regular
Interests (other than REMIC I Regular Interest I-LTP). The Class
CE
Interest
will not accrue interest on their Certificate Principal
Balance.
(4) The Class P Interest will not accrue interest.
3
<PAGE>
REMIC III
As provided herein, the Trust Administrator will elect to treat
the
segregated pool of assets consisting of the Class CE Interest as a
REMIC for
federal income tax purposes, and such pool of assets will be
designated as
"REMIC III." The Class R-III Interest will evidence the sole class
of "residual
interests" in REMIC III for purposes of the REMIC Provisions under
federal
income tax law. The following table irrevocably sets forth the
designation, the
Pass-Through Rate, the initial aggregate Certificate Principal
Balance and, for
purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the
"latest possible maturity date" for the indicated Class of
Certificates.
<TABLE>
<CAPTION>
Initial Aggregate
Certificate
Latest Possible
Designation
Pass-Through Rate Principal
Balance
Maturity Date(1)
----------------
-----------------
-----------------
----------------
<S>
<C>
<C>
<C>
Class CE
Variable(2) $ 7,201,767.37
December 2035
Certificates
</TABLE>
---------------
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the
Distribution Date immediately following the maturity date for the
Mortgage
Loans with
the latest maturity date has been designated as the "latest
possible
maturity date" for the Class CE Certificates.
(2) The Class CE Certificates will receive 100% of amounts received
in respect
of the
Class CE Interest.
4
<PAGE>
REMIC IV
As provided herein, the Trust Administrator will elect to treat
the
segregated pool of assets consisting of the Class P Interest as a
REMIC for
federal income tax purposes, and such pool of assets will be
designated as
"REMIC IV." The Class R-IV Interest will evidence the sole class of
"residual
interests" in REMIC IV for purposes of the REMIC Provisions under
federal income
tax law. The following table irrevocably sets forth the
designation, the
Pass-Through Rate, the initial aggregate Certificate Principal
Balance and, for
purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the
"latest possible maturity date" for the indicated Classes of
Certificates.
<TABLE>
<CAPTION>
Initial Aggregate
Certificate
Latest Possible
Designation
Pass-Through Rate Principal
Balance
Maturity Date(1)
----------------
-----------------
-----------------
----------------
<S>
<C>
<C>
<C>
Class P Certificates
Variable(2) $
100.00
December 2035
</TABLE>
---------------
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the
Distribution Date immediately following the maturity date for the
Mortgage
Loans with
the latest maturity date has been designated as the "latest
possible
maturity date" for the Class P Certificates.
(2) The Class P Certificates will receive 100% of amounts received
in respect of
the Class
P Interest.
As of the Cut-off Date, the Mortgage Loans had an aggregate
Stated
Principal Balance equal to $411,506,867.37.
In consideration of the mutual agreements herein contained, the
Depositor, the Servicer, the Trust Administrator and the Trustee
agree as
follows:
5
<PAGE>
ARTICLE I
DEFINITIONS
SECTION 1.01 Defined
Terms.
Whenever used in this Agreement, including, without limitation,
in
the Preliminary Statement hereto, the following words and phrases,
unless the
context otherwise requires, shall have the meanings specified in
this Article.
Unless otherwise specified, all calculations described herein shall
be made on
the basis of a 360-day year consisting of twelve 30-day months.
"Adjustable-Rate Mortgage Loan": Each of the Mortgage Loans
identified on the Mortgage Loan Schedule as having a Mortgage Rate
that is
subject to adjustment.
"Adjustment Date": With respect to each Adjustable-Rate
Mortgage
Loan, the first day of the month in which the Mortgage Rate of such
Mortgage
Loan changes pursuant to the related Mortgage Note. The first
Adjustment Date
following the Cut-off Date as to each Adjustable-Rate Mortgage Loan
is set forth
in the Mortgage Loan Schedule.
"Affiliate": With respect to any specified Person, any other
Person
controlling or controlled by or under common control with such
specified Person.
For the purposes of this definition, "control" when used with
respect to any
specified Person means the power to direct the management and
policies of such
Person, directly or indirectly, whether through the ownership of
voting
securities, by contract or otherwise and the terms "controlling"
and
"controlled" have meanings correlative to the foregoing.
"Agreement":
This Pooling
and Servicing Agreement and all
amendments hereof and supplements hereto.
"Allocated Realized Loss Amount": With respect to any
Distribution
Date and any Class of Mezzanine Certificates, (x) the sum of (i)
any Realized
Losses allocated to such Class of Certificates on such Distribution
Date and
(ii) the amount of any Allocated Realized Loss Amount for such
Class of
Certificates remaining unpaid from the previous Distribution Date
minus (y) the
amount of the increase in the Certificate Principal Balance of such
Class due to
the receipt of Subsequent Recoveries as provided in Section
4.01.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient
under the laws of
the jurisdiction wherein the related Mortgaged Property is located
to reflect
the record of sale of the Mortgage.
"Assignment Agreement": Each of the agreements among the
Depositor,
the Sponsor and the Originator regarding the transfer of the
Mortgage Loans by
the Sponsor to or at the direction of the Depositor, substantially
in the form
of Exhibit D annexed hereto.
"Available Distribution Amount": With respect to any
Distribution
Date, an amount equal to the excess of (i) the sum of (a) the
aggregate of the
Monthly Payments due
6
<PAGE>
during the Due Period relating to such Distribution Date and
received by the
Servicer (or by a Sub-Servicer on their behalf) on or prior to the
related
Determination Date, after deduction of the Servicing Fee and the
Credit Risk
Manager Fee for such Distribution Date, (b) Liquidation Proceeds,
Insurance
Proceeds, Principal Prepayments, proceeds from repurchases of and
substitutions
for Mortgage Loans, Subsequent Recoveries and other unscheduled
payments of
principal and interest in respect of the Mortgage Loans or REO
Properties
received by the Servicer during the related Prepayment Period, (c)
the aggregate
of any amounts on deposit in the Distribution Account representing
Compensating
Interest Payments paid by the Servicer in respect of Prepayment
Interest
Shortfalls relating to Principal Prepayments that occurred during
the related
Prepayment Period, (d) the aggregate of any P&I Advances made
by the Servicer
for such Distribution Date and (e) Prepayment Charges received and
Servicer
Prepayment Charge Payment Amounts paid in respect of Mortgage Loans
with respect
to which a Principal Prepayment occurred during the related
Prepayment Period
and any amounts received from the Sponsor as contemplated in
Section 2.03(b) in
respect of any Principal Prepayment that occurred during or prior
to the related
Prepayment Period over (ii) the sum of (a) amounts reimbursable to
the Servicer,
the Trustee, the Trust Administrator or a Custodian pursuant to
Section 6.03 or
Section 8.05 or otherwise payable in respect of Extraordinary Trust
Fund
Expenses, (b) amounts in respect of the items set forth in clauses
(i)(a)
through (i)(d) above deposited in the Collection Account or the
Distribution
Account in respect of the items set forth in clauses (i)(a) through
(i)(d) above
in error, (c) without duplication, any amounts in respect of the
items set forth
in clauses (i)(a) and (i)(b) permitted hereunder to be retained by
the Servicer
or to be withdrawn by the Servicer from the Collection Account
pursuant to
Section 3.18.
"Balloon Mortgage Loan": A fixed-rate Mortgage Loan that
provides
for the payment of the unamortized Stated Principal Balance of such
Mortgage
Loan in a single payment at the maturity of such fixed-rate
Mortgage Loan that
is substantially greater than the preceding monthly payment.
"Balloon Payment": A payment of the unamortized Stated
Principal
Balance of a fixed-rate Mortgage Loan in a single payment at the
maturity of
such fixed-rate Mortgage Loan that is substantially greater than
the preceding
Monthly Payment.
"Bankruptcy Code": The
Bankruptcy Reform Act of 1978 (Title 11 of
the United States Code), as amended.
"Bankruptcy Loss":
With respect to any
Mortgage Loan, a Realized
Loss resulting from a Deficient Valuation or Debt Service
Reduction.
"Book-Entry Certificate": Any Certificate registered in the name
of
the Depository or its nominee. Initially, the Book-Entry
Certificates will be
the Class A Certificates and the Mezzanine Certificates.
"Book-Entry Custodian": The custodian appointed pursuant to
Section
5.01.
"Business Day": Any day other than a Saturday, a Sunday or a day
on
which banking or savings and loan institutions in the State of New
York, the
State of Texas, the State of Missouri, the State of Iowa, the State
of Maryland,
the State of California, the State of Arizona,
7
<PAGE>
or in the city in which the Corporate Trust Office of the Trustee
or the
Corporate Trust Office of the Trust Administrator is located, are
authorized or
obligated by law or executive order to be closed.
"Cap Account":
The account or accounts created and maintained
pursuant to Section 4.08. The Cap Account must be an
Eligible Account.
"Cap Administration Agreement": As defined in Section 4.01.
"Cap Administrator": Citibank, N.A..
"Cap Contract":
The cap contract between the Trustee on behalf
of the Trust and the Cap Provider in the form attached hereto as
Exhibit I.
"Cap Provider": Swiss
Re Financial Products Corporation.
"Cash-out Refinancing": A Refinanced Mortgage Loan the proceeds
of
which were in excess of the principal balance of any existing first
mortgage on
the related Mortgaged Property and related closing costs, and were
used to pay
any such existing first mortgage, related closing costs and
subordinate
mortgages on the related Mortgaged Property.
"Certificate": Any
one of the Citigroup Mortgage Loan Trust
2006-WFHE1,
Asset-Backed Pass-Through Certificates, Series 2006-WFHE1,
issued
under this Agreement.
"Certificate Factor": With respect to any Class of Certificates
as
of any Distribution Date, a fraction, expressed as a decimal
carried to six
places, the numerator of which is the aggregate Certificate
Principal Balance
(or the Notional Amount, in the case of the Class CE Certificates)
of such Class
of Certificates on such Distribution Date (after giving effect to
any
distributions of principal and allocations of Realized Losses and
Extraordinary
Trust Fund Expenses in reduction of the Certificate Principal
Balance (or the
Notional Amount, in the case of the Class CE Certificates) of such
Class of
Certificates to be made on such Distribution Date), and the
denominator of which
is the initial aggregate Certificate Principal Balance (or the
Notional Amount,
in the case of the Class CE Certificates) of such Class of
Certificates as of
the Closing Date.
"Certificate Margin": With respect to the Floating Rate
Certificates
and for purposes of the Marker Rate and the Maximum I-LTZZ
Uncertificated
Interest Deferral Amount, the specified REMIC I Regular Interest as
follows:
REMIC I Regular
Class
Interest
Certificate Margin
-----
--------
------------------
(1)(%)
(2)(%)
------
------
A-1A
I-LTA1A
0.070% 0.140%
A-1B
I-LTA1B
0.110% 0.220%
A-1C
I-LTA1C
0.170% 0.340%
A-1D
I-LTA1D
0.280% 0.560%
M-1
I-LTM1
0.350% 0.525%
M-2
I-LTM1
0.370% 0.555%
M-3
I-LTM3
0.400% 0.600%
M-4
I-LTM4
0.500% 0.750%
M-5
I-LTM5
0.520% 0.780%
8
<PAGE>
M-6
I-LTM6
0.600%
0.900%
M-7
I-LTM7
1.150% 1.725%
M-8
I-LTM8
1.300% 1.950%
M-9
I-LTM9
2.250% 3.375%
M-10
I-LTM10
3.000% 4.500%
M-11
I-LTM11
3.000% 4.500%
------------
(1)
For each
Interest Accrual Period for each Distribution Date on or
prior to
the Optional Termination Date.
(2)
For each other
Interest Accrual Period.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that
a
Disqualified Organization or a Non-United States Person shall not
be a Holder of
a Residual Certificate for any purposes hereof and, solely for the
purposes of
giving any consent pursuant to this Agreement, any Certificate
registered in the
name of the Depositor or the Servicer or any Affiliate thereof
shall be deemed
not to be outstanding and the Voting Rights to which it is entitled
shall not be
taken into account in determining whether the requisite percentage
of Voting
Rights necessary to effect any such consent has been obtained,
except as
otherwise provided in Section 11.01. The Trustee and the Trust
Administrator may
conclusively rely upon a certificate of the Depositor or the
Servicer in
determining whether a Certificate is held by an Affiliate thereof.
All
references herein to "Holders" or "Certificateholders" shall
reflect the rights
of Certificate Owners as they may indirectly exercise such rights
through the
Depository and participating members thereof, except as otherwise
specified
herein; provided, however, that the Trustee and the Trust
Administrator shall be
required to recognize as a "Holder" or "Certificateholder" only the
Person in
whose name a Certificate is registered in the Certificate
Register.
"Certificate Owner": With respect to a Book-Entry Certificate,
the
Person who is the beneficial owner of such Certificate as reflected
on the books
of the Depository or on the books of a Depository Participant or on
the books of
an indirect participating brokerage firm for which a Depository
Participant acts
as agent.
"Certificate Principal Balance": With respect to each Class A
Certificate, Mezzanine Certificate or Class P Certificate as of any
date of
determination, the Certificate Principal Balance of such
Certificate on the
Distribution Date immediately prior to such date of determination
plus any
Subsequent Recoveries added to the Certificate Principal Balance of
such
Certificate pursuant to Section 4.01, minus all distributions
allocable to
principal made thereon and, in the case of the Mezzanine
Certificates, Realized
Losses allocated thereto on such immediately prior Distribution
Date (or, in the
case of any date of determination up to and including the first
Distribution
Date, the initial Certificate Principal Balance of such
Certificate, as stated
on the face thereof). With respect to the Class CE Certificates as
of any date
of determination, an amount equal to the Percentage Interest
evidenced by such
Certificate times the excess, if any, of (A) the then aggregate
Uncertificated
Balance of the REMIC I Regular Interests over (B) the then
aggregate Certificate
Principal Balance of the Class A Certificates, the Mezzanine
Certificates and
the Class P Certificates then outstanding.
"Certificate Register" and "Certificate Registrar": The
register
maintained pursuant to Section 5.02. Citibank, N.A. will act as
Certificate
Registrar, for so long as it is Trust Administrator under this
Agreement.
9
<PAGE>
"Citibank": Citibank, N.A.
"Class": Collectively,
all of the
Certificates bearing
the same
class designation.
"Class A-1A Certificates": Any one of the Class A-1A
Certificates
executed, authenticated and delivered by the Trust Administrator,
substantially
in the form annexed hereto as Exhibit A-1 and evidencing a Regular
Interest in
REMIC II for purposes of the REMIC Provisions.
"Class A-1B Certificates": Any one of the Class A-1B
Certificates
executed, authenticated and delivered by the Trust Administrator,
substantially
in the form annexed hereto as Exhibit A-3 and evidencing a Regular
Interest in
REMIC II for purposes of the REMIC Provisions.
"Class A-1C Certificates": Any one of the Class A-1C
Certificates
executed, authenticated and delivered by the Trust Administrator,
substantially
in the form annexed hereto as Exhibit A-4 and evidencing a Regular
Interest in
REMIC II for purposes of the REMIC Provisions.
"Class A-1D Certificates": Any one of the Class A-1D
Certificates
executed, authenticated and delivered by the Trust Administrator,
substantially
in the form annexed hereto as Exhibit A-5 and evidencing a Regular
Interest in
REMIC II for purposes of the REMIC Provisions.
"Class A Certificates": Collectively, the Class A-1A
Certificates,
the Class A-1B Certificates, the Class A-1C Certificates and the
Class A-1D
Certificates.
"Class CE Certificate": Any one of the Class CE Certificates
executed, authenticated and delivered by the Trust Administrator,
substantially
in the form annexed hereto as Exhibit A-17 and evidencing a Regular
Interest in
REMIC III for purposes of the REMIC Provisions.
"Class CE Interest": An uncertificated interest in the Trust
Fund
held by the Trust Administrator on behalf of the Holders of the
Class CE
Certificates, evidencing a Regular Interest in REMIC II for
purposes of the
REMIC Provisions.
"Class M-1 Certificate": Any one of the Class M-1 Certificates
executed, authenticated and delivered by the Trust Administrator,
substantially
in the form annexed hereto as Exhibit A-6 and evidencing a Regular
Interest in
REMIC II for purposes of the REMIC Provisions.
"Class M-1 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate
Certificate
Principal Balance of the Class A Certificates immediately prior to
such
Distribution Date (after taking into account the distribution of
the Senior
Principal Distribution Amount on such Distribution Date) and (ii)
the
Certificate Principal Balance of the Class M-1 Certificates
immediately prior to
such Distribution Date over (y) the lesser of (A) the product of
(i)
approximately 68.10% and (ii) the aggregate Stated Principal
Balance of the
Mortgage Loans as of the last day of the related Due Period
(after
10
<PAGE>
giving effect to scheduled payments of principal due during the
related Due
Period, to the extent received or advanced, and unscheduled
collections of
principal received during the related Prepayment Period) and (B)
the excess, if
any, of the aggregate Stated Principal Balance of the Mortgage
Loans as of the
last day of the related Due Period (after giving effect to
scheduled payments of
principal due during the related Due Period, to the extent received
or advanced,
and unscheduled collections of principal received during the
related Prepayment
Period) over 0.50% of the aggregate Stated Principal Balance of the
Mortgage
Loans as of the Cut-off Date.
"Class M-2 Certificate": Any one of the Class M-2 Certificates
executed, authenticated and delivered by the Trust Administrator,
substantially
in the form annexed hereto as Exhibit A-7 and evidencing a Regular
Interest in
REMIC II for purposes of the REMIC Provisions.
"Class M-2 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate
Certificate
Principal Balance of the Class A Certificates immediately prior to
such
Distribution Date (after taking into account the distribution of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
Certificate
Principal Balance of the Class M-1 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-1
Principal Distribution Amount on such Distribution Date) and (iii)
the
Certificate Principal Balance of the Class M-2 Certificates
immediately prior to
such Distribution Date over (y) the lesser of (A) the product of
(i)
approximately 74.40% and (ii) the aggregate Stated Principal
Balance of the
Mortgage Loans as of the last day of the related Due Period (after
giving effect
to scheduled payments of principal due during the related Due
Period, to the
extent received or advanced, and unscheduled collections of
principal received
during the related Prepayment Period) and (B) the excess, if any,
of the
aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of
the related Due Period (after giving effect to scheduled payments
of principal
due during the related Due Period, to the extent received or
advanced, and
unscheduled collections of principal received during the related
Prepayment
Period) over 0.50% of the aggregate Stated Principal Balance of the
Mortgage
Loans as of the Cut-off Date.
"Class M-3 Certificate": Any one of the Class M-3 Certificates
executed, authenticated and delivered by the Trust Administrator,
substantially
in the form annexed hereto as Exhibit A-8 and evidencing a Regular
Interest in
REMIC II for purposes of the REMIC Provisions.
"Class M-3 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate
Certificate
Principal Balance of the Class A Certificates immediately prior to
such
Distribution Date (after taking into account the distribution of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
Certificate
Principal Balance of the Class M-1 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-1
Principal Distribution Amount on such Distribution Date), (iii) the
Certificate
Principal Balance of the Class M-2 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-2
Principal Distribution Amount on such Distribution Date) and (iv)
the
Certificate Principal Balance of the Class M-3 Certificates
immediately prior to
such Distribution Date over (y) the lesser of (A) the product of
(i)
approximately 78.50% and (ii) the aggregate Stated
11
<PAGE>
Principal Balance of the Mortgage Loans as of the last day of the
related Due
Period (after giving effect to scheduled payments of principal due
during the
related Due Period, to the extent received or advanced, and
unscheduled
collections of principal received during the related Prepayment
Period) and (B)
the excess, if any, of the aggregate Stated Principal Balance of
the Mortgage
Loans as of the last day of the related Due Period (after giving
effect to
scheduled payments of principal due during the related Due Period,
to the extent
received or advanced, and unscheduled collections of principal
received during
the related Prepayment Period) over 0.50% of the aggregate Stated
Principal
Balance of the Mortgage Loans as of the Cut-off Date.
"Class M-4 Certificate": Any one of the Class M-4 Certificates
executed, authenticated and delivered by the Trust Administrator,
substantially
in the form annexed hereto as Exhibit A-9 and evidencing a Regular
Interest in
REMIC II for purposes of the REMIC Provisions.
"Class M-4 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate
Certificate
Principal Balance of the Class A Certificates immediately prior to
such
Distribution Date (after taking into account the distribution of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
Certificate
Principal Balance of the Class M-1 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-1
Principal Distribution Amount on such Distribution Date), (iii) the
Certificate
Principal Balance of the Class M-2 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the
Certificate
Principal Balance of the Class M-3 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-3
Principal Distribution Amount on such Distribution Date) and (v)
the Certificate
Principal Balance of the Class M-4 Certificates immediately prior
to such
Distribution Date over (y) the lesser of (A) the product of (i)
approximately
81.60% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as
of the last day of the related Due Period (after giving effect to
scheduled
payments of principal due during the related Due Period, to the
extent received
or advanced, and unscheduled collections of principal received
during the
related Prepayment Period) and (B) the excess, if any, of the
aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due
Period (after giving effect to scheduled payments of principal due
during the
related Due Period, to the extent received or advanced, and
unscheduled
collections of principal received during the related Prepayment
Period) over
0.50% of the aggregate Stated Principal Balance of the Mortgage
Loans as of the
Cut-off Date.
"Class M-5 Certificate": Any one of the Class M-5 Certificates
executed, authenticated and delivered by the Trust Administrator,
substantially
in the form annexed hereto as Exhibit A-10 and evidencing a Regular
Interest in
REMIC II for purposes of the REMIC Provisions.
"Class M-5 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate
Certificate
Principal Balance of the Class A Certificates immediately prior to
such
Distribution Date (after taking into account the distribution of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
Certificate
Principal Balance of the Class M-1 Certificates immediately prior
to such
Distribution
12
<PAGE>
Date (after taking into account the distribution of the Class M-1
Principal
Distribution Amount on such Distribution Date), (iii) the
Certificate Principal
Balance of the Class M-2 Certificates immediately prior to such
Distribution
Date (after taking into account the distribution of the Class M-2
Principal
Distribution Amount on such Distribution Date), (iv) the
Certificate Principal
Balance of the Class M-3 Certificates immediately prior to such
Distribution
Date (after taking into account the distribution of the Class M-3
Principal
Distribution Amount on such Distribution Date), (v) the Certificate
Principal
Balance of the Class M-4 Certificates immediately prior to such
Distribution
Date (after taking into account the distribution of the Class M-4
Principal
Distribution Amount on such Distribution Date) and (vi) the
Certificate
Principal Balance of the Class M-5 Certificates immediately prior
to such
Distribution Date over (y) the lesser of (A) the product of (i)
approximately
84.70% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as
of the last day of the related Due Period (after giving effect to
scheduled
payments of principal due during the related Due Period, to the
extent received
or advanced, and unscheduled collections of principal received
during the
related Prepayment Period) and (B) the excess, if any, of the
aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due
Period (after giving effect to scheduled payments of principal due
during the
related Due Period, to the extent received or advanced, and
unscheduled
collections of principal received during the related Prepayment
Period) over
0.50% of the aggregate Stated Principal Balance of the Mortgage
Loans as of the
Cut-off Date.
"Class M-6 Certificate": Any one of the Class M-6 Certificates
executed, authenticated and delivered by the Trust Administrator,
substantially
in the form annexed hereto as Exhibit A-11 and evidencing a Regular
Interest in
REMIC II for purposes of the REMIC Provisions.
"Class M-6 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate
Certificate
Principal Balance of the Class A Certificates immediately prior to
such
Distribution Date (after taking into account the distributions of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
Certificate
Principal Balance of the Class M-1 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-1
Principal Distribution Amount on such Distribution Date), (iii) the
Certificate
Principal Balance of the Class M-2 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the
Certificate
Principal Balance of the Class M-3 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-3
Principal Distribution Amount on such Distribution Date), (v) the
Certificate
Principal Balance of the Class M-4 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-4
Principal Distribution Amount on such Distribution Date), (vi) the
Certificate
Principal Balance of the Class M-5 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-5
Principal Distribution Amount on such Distribution Date) and (vii)
the
Certificate Principal Balance of the Class M-6 Certificates
immediately prior to
such Distribution Date over (y) the lesser of (A) the product of
(i)
approximately 87.30% and (ii) the aggregate Stated Principal
Balance of the
Mortgage Loans as of the last day of the related Due Period (after
giving effect
to scheduled payments of principal due during the related Due
Period, to the
extent received or advanced, and unscheduled collections of
principal received
during the related Prepayment Period) and (B) the excess, if
13
<PAGE>
any, of the aggregate Stated Principal Balance of the Mortgage
Loans as of the
last day of the related Due Period (after giving effect to
scheduled payments of
principal due during the related Due Period, to the extent received
or advanced,
and unscheduled collections of principal received during the
related Prepayment
Period) over 0.50% of the aggregate Stated Principal Balance of the
Mortgage
Loans as of the Cut-off Date.
"Class M-7 Certificate": Any one of the Class M-7 Certificates
executed, authenticated and delivered by the Trust Administrator,
substantially
in the form annexed hereto as Exhibit A-12 and evidencing a Regular
Interest in
REMIC II for purposes of the REMIC Provisions.
"Class M-7 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate
Certificate
Principal Balance of the Class A Certificates immediately prior to
such
Distribution Date (after taking into account the distribution of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
Certificate
Principal Balance of the Class M-1 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-1
Principal Distribution Amount on such Distribution Date), (iii) the
Certificate
Principal Balance of the Class M-2 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the
Certificate
Principal Balance of the Class M-3 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-3
Principal Distribution Amount on such Distribution Date), (v) the
Certificate
Principal Balance of the Class M-4 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-4
Principal Distribution Amount on such Distribution Date), (vi) the
Certificate
Principal Balance of the Class M-5 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the
Certificate
Principal Balance of the Class M-6 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-6
Principal Distribution Amount on such Distribution Date) and (viii)
the
Certificate Principal Balance of the Class M-7 Certificates
immediately prior to
such Distribution Date over (y) the lesser of (A) the product of
(i)
approximately 89.60% and (ii) the aggregate Stated Principal
Balance of the
Mortgage Loans as of the last day of the related Due Period (after
giving effect
to scheduled payments of principal due during the related Due
Period, to the
extent received or advanced, and unscheduled collections of
principal received
during the related Prepayment Period) and (B) the excess, if any,
of the
aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of
the related Due Period (after giving effect to scheduled payments
of principal
due during the related Due Period, to the extent received or
advanced, and
unscheduled collections of principal received during the related
Prepayment
Period) over 0.50% of the aggregate Stated Principal Balance of the
Mortgage
Loans as of the Cut-off Date.
"Class M-8
Certificate": Any one of the Class M-8 Certificates
executed, authenticated and delivered by the Trust Administrator,
substantially
in the form annexed hereto as Exhibit A-13 and evidencing a Regular
Interest in
REMIC II for purposes of the REMIC Provisions.
14
<PAGE>
"Class M-8 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate
Certificate
Principal Balance of the Class A Certificates immediately prior to
such
Distribution Date (after taking into account the distribution of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
Certificate
Principal Balance of the Class M-1 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-1
Principal Distribution Amount on such Distribution Date), (iii) the
Certificate
Principal Balance of the Class M-2 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the
Certificate
Principal Balance of the Class M-3 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-3
Principal Distribution Amount on such Distribution Date), (v) the
Certificate
Principal Balance of the Class M-4 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-4
Principal Distribution Amount on such Distribution Date), (vi) the
Certificate
Principal Balance of the Class M-5 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the
Certificate
Principal Balance of the Class M-6 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-6
Principal Distribution Amount on such Distribution Date), (viii)
the Certificate
Principal Balance of the Class M-7 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-7
Principal Distribution Amount on such Distribution Date) and (viii)
the
Certificate Principal Balance of the Class M-8 Certificates
immediately prior to
such Distribution Date over (y) the lesser of (A) the product of
(i)
approximately 90.90% and (ii) the aggregate Stated Principal
Balance of the
Mortgage Loans as of the last day of the related Due Period (after
giving effect
to scheduled payments of principal due during the related Due
Period, to the
extent received or advanced, and unscheduled collections of
principal received
during the related Prepayment Period) and (B) the excess, if any,
of the
aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of
the related Due Period (after giving effect to scheduled payments
of principal
due during the related Due Period, to the extent received or
advanced, and
unscheduled collections of principal received during the related
Prepayment
Period) over 0.50% of the aggregate Stated Principal Balance of the
Mortgage
Loans as of the Cut-off Date.
"Class M-9 Certificate": Any one of the Class M-9 Certificates
executed, authenticated and delivered by the Trust Administrator,
substantially
in the form annexed hereto as Exhibit A-14 and evidencing a Regular
Interest in
REMIC II for purposes of the REMIC Provisions.
"Class M-9 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate
Certificate
Principal Balance of the Class A Certificates immediately prior to
such
Distribution Date (after taking into account the distribution of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
Certificate
Principal Balance of the Class M-1 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-1
Principal Distribution Amount on such Distribution Date), (iii) the
Certificate
Principal Balance of the Class M-2 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the
Certificate
15
<PAGE>
Principal Balance of the Class M-3 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-3
Principal Distribution Amount on such Distribution Date), (v) the
Certificate
Principal Balance of the Class M-4 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-4
Principal Distribution Amount on such Distribution Date), (vi) the
Certificate
Principal Balance of the Class M-5 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the
Certificate
Principal Balance of the Class M-6 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-6
Principal Distribution Amount on such Distribution Date), (viii)
the Certificate
Principal Balance of the Class M-7 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-7
Principal Distribution Amount on such Distribution Date), (ix) the
Certificate
Principal Balance of the Class M-8 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-8
Principal Distribution Amount on such Distribution Date) and (x)
the Certificate
Principal Balance of the Class M-9 Certificates immediately prior
to such
Distribution Date over (y) the lesser of (A) the product of (i)
approximately
92.80% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as
of the last day of the related Due Period (after giving effect to
scheduled
payments of principal due during the related Due Period, to the
extent received
or advanced, and unscheduled collections of principal received
during the
related Prepayment Period) and (B) the excess, if any, of the
aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due
Period (after giving effect to scheduled payments of principal due
during the
related Due Period, to the extent received or advanced, and
unscheduled
collections of principal received during the related Prepayment
Period) over
0.50% of the aggregate Stated Principal Balance of the Mortgage
Loans as of the
Cut-off Date.
"Class M-10 Certificate": Any one of the Class M-10
Certificates
executed, authenticated and delivered by the Trust Administrator,
substantially
in the form annexed hereto as Exhibit A-15 and evidencing a Regular
Interest in
REMIC II for purposes of the REMIC Provisions.
"Class M-10 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate
Certificate
Principal Balance of the Class A Certificates immediately prior to
such
Distribution Date (after taking into account the distribution of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
Certificate
Principal Balance of the Class M-1 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-1
Principal Distribution Amount on such Distribution Date), (iii) the
Certificate
Principal Balance of the Class M-2 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the
Certificate
Principal Balance of the Class M-3 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-3
Principal Distribution Amount on such Distribution Date), (v) the
Certificate
Principal Balance of the Class M-4 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-4
Principal Distribution Amount on such Distribution Date), (vi) the
Certificate
Principal Balance of the Class M-5 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-5
Principal Distribution Amount on
16
<PAGE>
such Distribution Date), (vii) the Certificate Principal Balance of
the Class
M-6 Certificates immediately prior to such Distribution Date (after
taking into
account the distribution of the Class M-6 Principal Distribution
Amount on such
Distribution Date), (viii) the Certificate Principal Balance of the
Class M-7
Certificates immediately prior to such Distribution Date (after
taking into
account the distribution of the Class M-7 Principal Distribution
Amount on such
Distribution Date), (ix) the Certificate Principal Balance of the
Class M-8
Certificates immediately prior to such Distribution Date (after
taking into
account the distribution of the Class M-8 Principal Distribution
Amount on such
Distribution Date), (x) the Certificate Principal Balance of the
Class M-9
Certificates immediately prior to such Distribution Date (after
taking into
account the distribution of the Class M-9 Principal Distribution
Amount on such
Distribution Date) and (xi) the Certificate Principal Balance of
the Class M-10
Certificates immediately prior to such Distribution Date over (y)
the lesser of
(A) the product of (i) approximately 94.50% and (ii) the aggregate
Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due
Period (after giving effect to scheduled payments of principal due
during the
related Due Period, to the extent received or advanced, and
unscheduled
collections of principal received during the related Prepayment
Period) and (B)
the excess, if any, of the aggregate Stated Principal Balance of
the Mortgage
Loans as of the last day of the related Due Period (after giving
effect to
scheduled payments of principal due during the related Due Period,
to the extent
received or advanced, and unscheduled collections of principal
received during
the related Prepayment Period) over 0.50% of the aggregate Stated
Principal
Balance of the Mortgage Loans as of the Cut-off Date.
"Class M-11 Certificate": Any one of the Class M-11
Certificates
executed, authenticated and delivered by the Trust Administrator,
substantially
in the form annexed hereto as Exhibit A-16 and evidencing a Regular
Interest in
REMIC II for purposes of the REMIC Provisions.
"Class M-11 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate
Certificate
Principal Balance of the Class A Certificates immediately prior to
such
Distribution Date (after taking into account the distribution of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
Certificate
Principal Balance of the Class M-1 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-1
Principal Distribution Amount on such Distribution Date), (iii) the
Certificate
Principal Balance of the Class M-2 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the
Certificate
Principal Balance of the Class M-3 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-3
Principal Distribution Amount on such Distribution Date), (v) the
Certificate
Principal Balance of the Class M-4 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-4
Principal Distribution Amount on such Distribution Date), (vi) the
Certificate
Principal Balance of the Class M-5 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the
Certificate
Principal Balance of the Class M-6 Certificates immediately prior
to such
Distribution Date (after taking into account the distribution of
the Class M-6
Principal Distribution Amount on such Distribution Date), (viii)
the Certificate
Principal Balance of the Class M-7 Certificates immediately prior
to such
Distribution Date
17
<PAGE>
(after taking into account the distribution of the Class M-7
Principal
Distribution Amount on such Distribution Date), (ix) the
Certificate Principal
Balance of the Class M-8 Certificates immediately prior to such
Distribution
Date (after taking into account the distribution of the Class M-8
Principal
Distribution Amount on such Distribution Date), (x) the Certificate
Principal
Balance of the Class M-9 Certificates immediately prior to such
Distribution
Date (after taking into account the distribution of the Class M-9
Principal
Distribution Amount on such Distribution Date), (xi) the
Certificate Principal
Balance of the Class M-10 Certificates immediately prior to such
Distribution
Date (after taking into account the distribution of the Class M-10
Principal
Distribution Amount on such Distribution Date) and (xii) the
Certificate
Principal Balance of the Class M-11 Certificates immediately prior
to such
Distribution Date over (y) the lesser of (A) the product of (i)
approximately
96.50% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as
of the last day of the related Due Period (after giving effect to
scheduled
payments of principal due during the related Due Period, to the
extent received
or advanced, and unscheduled collections of principal received
during the
related Prepayment Period) and (B) the excess, if any, of the
aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due
Period (after giving effect to scheduled payments of principal due
during the
related Due Period, to the extent received or advanced, and
unscheduled
collections of principal received during the related Prepayment
Period) over
0.50% of the aggregate Stated Principal Balance of the Mortgage
Loans as of the
Cut-off Date.
"Class P Certificate": Any one of the Class P Certificates
executed,
authenticated and delivered by the Trust Administrator,
substantially in the
form annexed hereto as Exhibit A-18 and evidencing a Regular
Interest in REMIC
IV for purposes of the REMIC Provisions.
"Class P Interest": An uncertificated interest in the Trust
Fund
held by the Trust Administrator on behalf of the Holders of the
Class P
Certificates, evidencing a Regular Interest in REMIC II for
purposes of the
REMIC Provisions.
"Class R Certificate": Any one of the Class R Certificates
executed,
authenticated and delivered by the Trust Administrator,
substantially in the
form annexed hereto as Exhibit A-19 and evidencing the ownership of
the Class
R-I Interest and the Class R-II Interest.
"Class R-X Certificate": Any one of the Class R-X Certificates
executed, authenticated and delivered by the Trust Administrator,
substantially
in the form annexed hereto as Exhibit A-20 and evidencing the
ownership of the
Class R-III Interest and the Class R-IV Interest.
"Class R-I Interest": The uncertificated Residual Interest in
REMIC
I.
"Class R-II Interest": The uncertificated Residual Interest in
REMIC
II.
"Class R-III Interest": The uncertificated Residual Interest in
REMIC III.
"Class R-IV Interest": The uncertificated Residual Interest in
REMIC
IV.
"Closing Date": February 28, 2006.
"Code": The Internal
Revenue Code of 1986, as amended.
18
<PAGE>
"Collection Account": The account or accounts created and
maintained
by the Servicer pursuant to Section 3.10(a), which shall be
entitled "Wells
Fargo Bank, N.A., as servicer for U.S. Bank National Association,
as Trustee, in
trust for the registered holders of Citigroup Mortgage Loan Trust
2006-WFHE1,
Asset-Backed Pass-Through Certificates, Series 2006-WFHE1," and
which must be an
Eligible Account.
"Commission": The Securities and Exchange Commission.
"Compensating Interest Payment": With respect to any
Distribution
Date and the Mortgage Loans for which a Principal Prepayment in
full or in part
was received during the related Prepayment Period, an amount equal
to the lesser
of (A) the aggregate of the Prepayment Interest Shortfalls for the
related
Distribution Date and (B) the aggregate Servicing Fee received in
the related
Due Period.
"Corresponding Certificate": With respect to each REMIC I
Regular
Interest, the Class of Regular Certificates listed below:
REMIC I Regular Interest
Class
------------------------
-----------------
I-LTA1A
Class A-1A
I-LTA1B
Class A-1B
I-LTA1C
Class A-1C
I-LTA1D
Class A-1D
I-LTM1
Class M-1
I-LTM2
Class M-2
I-LTM3
Class M-3
I-LTM4
Class M-4
I-LTM5
Class M-5
I-LTM6
Class M-6
I-LTM7
Class M-7
I-LTM8
Class M-8
I-LTM9
Class M-9
I-LTM10
Class M-10
I-LTM11
Class M-11
I-LTP
Class P
"Corporate Trust Office": The principal corporate trust office
of
the Trustee or the Trust Administrator at which at any particular
time its
corporate trust business in connection with this Agreement shall
be
administered, which office, with respect to the Trust
Administrator, at the date
of the execution of this instrument is located at 388 Greenwich,
14th Floor, New
York New York 10013, or such other address as the Trust
Administrator may
designate from time to time by notice to the Certificateholders,
the Depositor,
the Servicer and the Trustee and, with respect to the Trustee, at
the date of
the execution of this instrument is located at One Federal Street,
Boston,
Massachusetts 02110, Attention: Structured Finance/CMLTI
2006-WFHE1, or such
other address as the Trustee may designate from time to time by
notice to the
Certificateholders, the Depositor, the Servicer and the Trust
Administrator.
"Credit Risk
Manager": Clayton Fixed Income Services Inc.,
formerly known as The
Murrayhill Company,
a Colorado
corporation,
and its
successors and assigns.
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<PAGE>
"Credit Risk Management Agreement": The agreement, dated as of
the
Closing Date, between the Credit Risk Manager and the Servicer,
regarding the
loss mitigation and advisory services to be provided by the Credit
Risk Manager.
"Credit Risk Manager Fee": With respect to any Distribution Date,
an
amount equal to the Credit Risk Manager Fee Rate accrued for one
month on the
aggregate Stated Principal Balance of the Mortgage Loans as of the
first day of
the related Due Period.
"Credit Risk Manager Fee Rate": 0.015% per annum.
"Custodian": A document custodian appointed by the Trustee to
perform (or in the case of the related initial Custodian otherwise
engaged to
perform) custodial duties with respect to the Mortgage Files. The
initial
Custodian is Citibank West, FSB. A Custodian may be the Trustee,
any Affiliate
of the Trustee or an independent entity.
"Custodial Agreement": An agreement pursuant to which a
Custodian
performs custodial duties with respect to the Mortgage Files. With
respect to
the related initial Custodian, the applicable agreement pursuant to
which the
related initial Custodian performs its custodial duties with
respect to the
Mortgage Files.
"Cut-off Date": With respect to each Original Mortgage Loan,
February 1, 2006. With respect to all Qualified Substitute Mortgage
Loans, their
respective dates of substitution. References herein to the "Cut-off
Date," when
used with respect to more than one Mortgage Loan, shall be to the
respective
Cut-off Dates for such Mortgage Loans.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan
by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code,
except such a
reduction resulting from a Deficient Valuation.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent
jurisdiction
in an amount less than the then outstanding Stated Principal
Balance of the
Mortgage Loan, which valuation results from a proceeding initiated
under the
Bankruptcy Code.
"Definitive Certificates": As defined in Section 5.01(b).
"Deleted Mortgage
Loan": A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage Loan.
"Delinquency Percentage": As of the last day of the related Due
Period, the percentage equivalent of a fraction, the numerator of
which is the
aggregate Stated Principal Balance of the Mortgage Loans that, as
of the last
day of the previous calendar month, are 60 or more days delinquent,
are in
foreclosure, have been converted to REO Properties or in bankruptcy
(and
delinquent 60 days or more), and the denominator of which is the
aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties
as of the last
day of the previous calendar month.
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<PAGE>
"Depositor": Citigroup
Mortgage Loan Trust Inc., a Delaware
corporation, or its successor in interest.
"Depository": The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository,
for purposes
of registering those Certificates that are to be Book-Entry
Certificates, is
CEDE & Co. The Depository shall at all times be a "clearing
corporation" as
defined in Section 8-102(3) of the Uniform Commercial Code of the
State of New
York and a "clearing agency" registered pursuant to the provisions
of Section
17A of the Securities Exchange Act of 1934, as amended.
"Depository Institution": Any depository institution or trust
company, including the Trustee and the Trust Administrator, that
(a) is
incorporated under the laws of the United States of America or any
State
thereof, (b) is subject to supervision and examination by federal
or state
banking authorities and (c) has, or is a subsidiary of a holding
company that
has, an outstanding unsecured commercial paper or other short-term
unsecured
debt obligations that are rated in the highest rating category (P-1
by Moody's,
F-1 by Fitch and A-1 by S&P) by the Rating Agencies (or a
comparable rating if
S&P, Moody's and Fitch are not the Rating Agencies).
"Depository Participant": A broker, dealer, bank or other
financial
institution or other Person for whom from time to time a Depository
effects
book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date": With respect to each Distribution Date,
the
17th day of the calendar month in which such Distribution Date
occurs or, if
such 17th day is not a Business Day, the Business Day immediately
preceding such
17th day.
"Directly Operate": With respect to any REO Property, the
furnishing
or rendering of services to the tenants thereof, the management or
operation of
such REO Property, the holding of such REO Property primarily for
sale to
customers, the performance of any construction work thereon or any
use of such
REO Property in a trade or business conducted by REMIC I, other
than through an
Independent Contractor; provided, however, that the Trustee (or the
Servicer on
behalf of the Trustee) shall not be considered to Directly Operate
an REO
Property solely because the Trustee (or the Servicer on behalf of
the Trustee)
establishes rental terms, chooses tenants, enters into or renews
leases, deals
with taxes and insurance, or makes decisions as to repairs or
capital
expenditures with respect to such REO Property.
"Disqualified Organization": Any of the following: (i) the
United
States, any State or political subdivision thereof, any possession
of the United
States, or any agency or instrumentality of any of the foregoing
(other than an
instrumentality which is a corporation if all of its activities are
subject to
tax and, except for Freddie Mac, a majority of its board of
directors is not
selected by such governmental unit), (ii) any foreign government,
any
international organization, or any agency or instrumentality of any
of the
foregoing, (iii) any organization (other than certain farmers'
cooperatives
described in Section 521 of the Code) which is exempt from the tax
imposed by
Chapter 1 of the Code (including the tax imposed by Section 511 of
the Code on
unrelated business taxable income), (iv) rural electric and
telephone
cooperatives described in Section 1381(a)(2)(C) of the Code, (v) an
"electing
large partnership" within the
21
<PAGE>
meaning of Section 775 of the Code and (vi) any other Person so
designated by
the Trustee or Trust Administrator based upon an Opinion of Counsel
that the
holding of an Ownership Interest in a Residual Certificate by such
Person may
cause any REMIC or any Person having an Ownership Interest in any
Class of
Certificates (other than such Person) to incur a liability for any
federal tax
imposed under the Code that would not otherwise be imposed but for
the Transfer
of an Ownership Interest in a Residual Certificate to such Person.
The terms
"United States," "State" and "international organization" shall
have the
meanings set forth in Section 7701 of the Code or successor
provisions.
"Distribution Account": The trust account or accounts created
and
maintained by the Trust Administrator pursuant to Section 3.10(b)
which shall be
entitled "Citibank, N.A., as Trust Administrator for U.S. Bank
National
Association as Trustee, in trust for the registered holders of
Citigroup
Mortgage Loan Trust 2006-WFHE1, Asset-Backed Pass-Through
Certificates, Series
2006-WFHE1." The Distribution Account must be an Eligible
Account.
"Distribution Date": The 25th day of any month, or if such 25th
day
is not a Business Day, the Business Day immediately following such
25th day,
commencing in March 2006.
"DOL": The United
States Department of
Labor or any successor in
interest.
"DOL Regulations": The regulations promulgated by the DOL at 29
C.F.R.ss.2510.3-101.
"Due Date": With respect to each Distribution Date, the first day
of
the calendar month in which such Distribution Date occurs, which is
the day of
the month on which the Monthly Payment is due on a Mortgage Loan,
exclusive of
any days of grace.
"Due Period": With respect to any Distribution Date, the period
commencing on the second day of the calendar month preceding the
calendar month
in which such Distribution Date occurs and ending on the related
Due Date.
"Eligible Account": Any of (i) an account or accounts
maintained
with a Depository Institution, (ii) an account or accounts the
deposits in which
are fully insured by the FDIC, (iii) a trust account or accounts
maintained with
the corporate trust department of a federal or state chartered
depository
institution or trust company acting in its fiduciary capacity or
(iv) an account
otherwise acceptable to each Rating Agency without reduction or
withdrawal of
their then current ratings of the Certificates as evidenced by a
letter from
each Rating Agency to the Trustee and Trust Administrator. Eligible
Accounts may
bear interest.
"ERISA": The Employee
Retirement Income
Security Act of 1974, as
amended.
"Estate in Real Property": A fee simple estate in a parcel of
land.
"Excess
Overcollateralized Amount": With respect to the Class A
Certificates and the Mezzanine Certificates and any Distribution
Date, the
excess, if any, of (i) the Overcollateralized Amount for such
Distribution Date
(calculated for this purpose only after
22
<PAGE>
assuming that 100% of the Principal Remittance Amount on such
Distribution Date
has been distributed) over (ii) the Overcollateralization Target
Amount for such
Distribution Date.
"Exchange Act": The
Securities Exchange Act of 1934, as amended.
"Expense Adjusted Maximum Mortgage Rate": With respect to any
Mortgage Loan (or the related REO Property) as of any date of
determination, a
per annum rate of interest equal to the then applicable Maximum
Mortgage Rate
(or Mortgage Rate, in the case of any fixed-rate Mortgage Loan) for
such
Mortgage Loan minus the sum of the (i) the Servicing Fee Rate and
(ii) the
Credit Risk Manager Fee Rate.
"Expense Adjusted Mortgage Rate": With respect to any Mortgage
Loan
(or the related REO Property) as of any date of determination, a
per annum rate
of interest equal to the then applicable Mortgage Rate for such
Mortgage Loan
minus the sum of the (i) the Servicing Fee Rate and (ii) the Credit
Risk Manager
Fee Rate.
"Extraordinary Trust Fund Expenses": Any amounts reimbursable to
the
Servicer or the Depositor pursuant to Section 6.03, any amounts
payable from the
Distribution Account in respect of taxes pursuant to Section
10.01(g)(iii), any
amounts reimbursable to the Trustee, the Trust Administrator or a
Custodian from
the Trust Fund pursuant to Section 2.01 or Section 8.05 and any
other costs,
expenses, liabilities and losses borne by the Trust Fund (exclusive
of any cost,
expense, liability or loss that is specific to a particular
Mortgage Loan or REO
Property and is taken into account in calculating a Realized Loss
in respect
thereof) for which the Trust Fund has not and, in the reasonable
good faith
judgment of the Trust Administrator, shall not, obtain
reimbursement or
indemnification from any other Person.
"Fannie Mae": Fannie Mae, formerly known as the Federal
National
Mortgage Association, or any successor thereto.
"FDIC": Federal
Deposit Insurance Corporation or any successor
thereto.
"Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or
REO Property
purchased by the Originator, the Sponsor, the Depositor or the
Servicer pursuant
to or as contemplated by Section 2.03 or Section 9.01), a
determination made by
the Servicer that all Liquidation Proceeds have been recovered. The
Servicer
shall maintain records of each Final Recovery Determination made
thereby.
"Fitch": Fitch Ratings, or its successor in interest.
"Floating Rate
Certificates": The
Class A Certificates
and the
Mezzanine Certificates.
"Formula Rate": With respect to any Distribution Date and each
Class
of Floating Rate Certificates, the lesser of (i) One-Month LIBOR
plus the
related Certificate Margin and (ii) the Maximum Cap Rate.
23
<PAGE>
"Freddie Mac": Freddie Mac, formally known as the Federal Home
Loan
Mortgage Corporation, or any successor thereto.
"Gross Margin": With respect to each Adjustable-Rate Mortgage
Loan,
the fixed percentage set forth in the related Mortgage Note that is
added to the
Index on each Adjustment Date in accordance with the terms of the
related
Mortgage Note used to determine the Mortgage Rate for such
Adjustable-Rate
Mortgage Loan.
"Highest Priority": As of any date of determination, the Class
of
Mezzanine Certificates then outstanding with a Certificate
Principal Balance
greater than zero, with the highest priority for payments pursuant
to Section
4.01, in the following order: Class M-1, Class M-2, Class M-3,
Class M-4, Class
M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and
Class M-11
Certificates.
"Indenture": An indenture relating to the issuance of notes
secured
by the Class CE Certificates, the Class P Certificates and/or the
Residual
Certificates (or any portion thereof).
"Independent": When used with respect to any specified Person,
any
such Person who (a) is in fact independent of the Depositor, the
Servicer and
their respective Affiliates, (b) does not have any direct financial
interest in
or any material indirect financial interest in the Depositor, the
Servicer or
any Affiliate thereof, and (c) is not connected with the Depositor,
the Servicer
or any Affiliate thereof as an officer, employee, promoter,
underwriter,
trustee, partner, director or Person performing similar functions;
provided,
however, that a Person shall not fail to be Independent of the
Depositor, the
Servicer or any Affiliate thereof merely because such Person is the
beneficial
owner of 1% or less of any class of securities issued by the
Depositor or the
Servicer or any Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than the
Servicer) that would be an "independent contractor" with respect to
any REMIC
within the meaning of Section 856(d)(3) of the Code if any REMIC
were a real
estate investment trust (except that the ownership tests set forth
in that
section shall be considered to be met by any Person that owns,
directly or
indirectly, 35% or more of any Class of Certificates), so long as
any REMIC does
not receive or derive any income from such Person and provided that
the
relationship between such Person and any REMIC is at arm's length,
all within
the meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii)
any other
Person (including the Servicer) if the Trust Administrator has
received an
Opinion of Counsel for the benefit of the Trustee and the Trust
Administrator to
the effect that the taking of any action in respect of any REO
Property by such
Person, subject to any conditions therein specified, that is
otherwise herein
contemplated to be taken by an Independent Contractor will not
cause such REO
Property to cease to qualify as "foreclosure property" within the
meaning of
Section 860G(a)(8) of the Code (determined without regard to the
exception
applicable for purposes of Section 860D(a) of the Code), or cause
any income
realized in respect of such REO Property to fail to qualify as
Rents from Real
Property.
"Index": With respect to each Adjustable-Rate Mortgage Loan and
each
related Adjustment Date, the index specified in the related
Mortgage Note.
24
<PAGE>
"Insurance Proceeds": Proceeds of any title policy, hazard policy
or
other insurance policy covering a Mortgage Loan, to the extent such
proceeds are
not to be applied to the restoration of the related Mortgaged
Property or
released to the Mortgagor in accordance with the procedures that
the Servicer
would follow in servicing mortgage loans held for its own account,
subject to
the terms and conditions of the related Mortgage Note and
Mortgage.
"Interest Accrual Period": With respect to any Distribution Date
and
the Floating Rate Certificates, the period commencing on the
Distribution Date
of the month immediately preceding the month in which such
Distribution Date
occurs (or, in the case of the first Distribution Date, commencing
on the
Closing Date) and ending on the day preceding such Distribution
Date. With
respect to any Distribution Date and the Class CE Certificates and
the REMIC
Regular Interests, the one-month period ending on the last day of
the calendar
month preceding the month in which such Distribution Date
occurs.
"Interest Carry Forward Amount": With respect to any
Distribution
Date and the Class A Certificates or the Mezzanine Certificates,
the sum of (i)
the amount, if any, by which (a) the Interest Distribution Amount
for such Class
of Certificates as of the immediately preceding Distribution Date
exceeded (b)
the actual amount distributed on such Class of Certificates in
respect of
interest on such immediately preceding Distribution Date, (ii) the
amount of any
Interest Carry Forward Amount for such Class of Certificates
remaining unpaid
from the previous Distribution Date and (iii) accrued interest on
the sum of (i)
and (ii) above calculated at the related Pass-Through Rate for the
most recently
ended Interest Accrual Period.
"Interest Determination Date": With respect to the Floating
Rate
Certificates and for purposes of the definition of Marker Rate and
Maximum
I-LTZZ Uncertificated Interest Deferral Amount, REMIC I Regular
Interest
I-LTA1A, REMIC I Regular Interest I-LTA1B, REMIC I Regular Interest
I-LTA1C,
REMIC I Regular Interest I-LTA1D, REMIC I Regular Interest I-LTM1,
REMIC I
Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I
Regular
Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular
Interest
I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular Interest
I-LTM8, REMIC
I Regular Interest I-LTM9, REMIC I Regular Interest I-LTM10 and
REMIC I Regular
Interest I-LTM11, and any Interest Accrual Period therefor, the
second London
Business Day preceding the commencement of such Interest Accrual
Period.
"Interest Distribution Amount": With respect to any Floating
Rate
Certificate and the Class CE Certificates and each Distribution
Date, interest
accrued during the related Interest Accrual Period at the
Pass-Through Rate for
such Certificate for such Distribution Date on the Certificate
Principal
Balance, in the case of the Floating Rate Certificates, or on the
Notional
Amount, in the case of the Class CE Certificates, of such
Certificate
immediately prior to such Distribution Date. The Class P
Certificates are not
entitled to distributions in respect of interest and, accordingly,
shall not
accrue interest. All distributions of interest on the Floating Rate
Certificates
shall be calculated on the basis of a 360-day year and the actual
number of days
in the applicable Interest Accrual Period. All distributions of
interest on the
Class CE Certificates shall be based on a 360-day year consisting
of twelve
30-day months. The Interest Distribution Amount with respect to
each
Distribution Date, as to any Floating Rate Certificate or the Class
CE
Certificates, shall be reduced by an amount equal to the portion
allocable to
such Certificate pursuant to Section 1.02 hereof of the sum of (a)
the aggregate
Prepayment Interest Shortfall, if
25
<PAGE>
any, for such Distribution Date to the extent not covered by
payments pursuant
to Section 3.24 and (b) the aggregate amount of any Relief Act
Interest
Shortfall, if any, for such Distribution Date.
"Interest Remittance Amount": For any Distribution Date, the
Interest Remittance Amount will be (i) interest received or
advanced on the
Mortgage Loans and (ii) amounts in respect of Prepayment Interest
Shortfalls
paid by the Servicer on the Mortgage Loans (in each case, to the
extent
remaining after payment of an allocable portion of (A) the
servicing fees for
such distribution date and any unpaid servicing fees in respect of
prior periods
collected by the Servicer and (B) the credit risk manager fee for
such
distribution date).
"Late Collections": With respect to any Mortgage Loan, all
amounts
received subsequent to the Determination Date immediately following
any Due
Period, whether as late payments of Monthly Payments or as
Insurance 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.
"Liquidation Event": With respect to any Mortgage Loan, any of
the
following events: (i) such Mortgage Loan is paid in full; (ii) a
Final Recovery
Determination is made as to such Mortgage Loan; or (iii) such
Mortgage Loan is
removed from any REMIC by reason of its being purchased, sold or
replaced
pursuant to or as contemplated by Section 2.03 or Section 9.01.
With respect to
any REO Property, either of the following events: (i) a Final
Recovery
Determination is made as to such REO Property; or (ii) such REO
Property is
removed from REMIC I by reason of its being purchased pursuant to
Section 9.01.
"Liquidation Proceeds": The amount (including any Insurance
Proceeds
or amounts received in respect of the rental of any REO Property
prior to REO
Disposition) received by the Servicer in connection with (i) the
taking of all
or a part of a Mortgaged Property by exercise of the power of
eminent domain or
condemnation, (ii) the liquidation of a defaulted Mortgage Loan
through a
trustee's sale, foreclosure sale or otherwise, or (iii) the
repurchase,
substitution or sale of a Mortgage Loan or an REO Property pursuant
to or as
contemplated by Section 2.03, Section 3.23 or Section 9.01.
"Loan-to-Value Ratio": As of any date of determination, the
fraction, expressed as a percentage, the numerator of which is the
principal
balance of the related Mortgage Loan at such date and the
denominator of which
is the Value of the related Mortgaged Property.
"London Business Day": Any day on which banks in the City of
London
and New York are open and conducting transactions in United States
dollars.
"Marker Rate": With respect to the Class CE Certificates and
any
Distribution Date, a per annum rate equal to two (2) times the
weighted average
of the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTA1A, REMIC I
Regular Interest I-LTA1B, REMIC I Regular Interest I-LTA1C, REMIC I
Regular
Interest I-LTA1D, REMIC I Regular Interest I-LTM1, REMIC I Regular
Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest
I-LTM4, REMIC
I Regular Interest I-LTM5, REMIC I Regular Interest I-
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<PAGE>
LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular Interest
I-LTM8, REMIC I
Regular Interest I-LTM9, REMIC I Regular Interest I-LTM10, REMIC I
Regular
Interest I-LTM11 and REMIC I Regular Interest I-LTZZ, with the rate
on each such
REMIC I Regular Interest (other than REMIC I Regular Interest
I-LTZZ) subject to
a cap equal to the lesser of (i) One-Month LIBOR plus the related
Certificate
Margin for the related Corresponding Certificate and (ii) the Net
WAC
Pass-Through Rate for the related Corresponding Certificate for the
purpose of
this calculation for such Distribution Date and with the rate on
REMIC I Regular
Interest I-LTZZ subject to a cap of zero for the purpose of this
calculation;
provided, however, each such cap shall be multiplied by a fraction,
the
numerator of which is the actual number of days elapsed in the
related Interest
Accrual Period and the denominator of which is 30.
"Master Agreement":
Any of the Master
Mortgage Loan Purchase and
Interim Servicing Agreements between the Originator and the
Sponsor.
"Maximum Cap Rate": The Maximum Cap Rate for any Distribution
Date
and the Floating Rate Certificates is a per annum rate (adjusted
for the actual
number of days in the related Interest Accrual Period) equal to the
weighted
average of the Expense Adjusted Maximum Mortgage Rates on the then
outstanding
Mortgage Loans, weighted based on their principal balances as of
the first day
of the related Due Period, plus an amount, expressed as a per annum
rate, equal
to the product of (i) the payment made by the cap counterparty
divided by the
aggregate principal balance of the Mortgage Loans and (ii) 12.
"Maximum I-LTZZ Uncertificated Interest Deferral Amount": With
respect to any Distribution Date, the excess of (i) accrued
interest at the
REMIC I Remittance Rate applicable to REMIC I Regular Interest
I-LTZZ for such
Distribution Date on a balance equal to the Uncertificated Balance
of REMIC I
Regular Interest I-LTZZ minus the REMIC I Overcollateralized
Amount, in each
case for such Distribution Date, over (ii) Uncertificated Interest
on REMIC I
Regular Interest I-LTA1A, REMIC I Regular Interest I-LTA1B, REMIC I
Regular
Interest I-LTA1C, REMIC I Regular Interest I-LTA1D, REMIC I Regular
Interest
I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC
I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I
Regular
Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular
Interest
I-LTM8, REMIC I Regular Interest I-LTM9, REMIC I Regular Interest
I-LTM10 and
REMIC I Regular Interest I-LTM11 for such Distribution Date, with
the rate on
each such REMIC I Regular Interest subject to a cap equal to the
lesser of (i)
One-Month LIBOR plus the related Certificate Margin for the
related
Corresponding Certificate and (ii) the Net WAC Pass-Through Rate
for the related
Corresponding Certificate; provided, however, each cap shall be
multiplied by a
fraction, the numerator of which is the actual number of days
elapsed in the
related Interest Accrual Period and the denominator of which is
30.
"Maximum Mortgage Rate": With respect to each Adjustable-Rate
Mortgage Loan, the percentage set forth in the related Mortgage
Note as the
maximum Mortgage Rate thereunder.
"MERS": Mortgage
Electronic
Registration
Systems, Inc., a
corporation organized
and existing
under the laws of the
State of Delaware,
or any successor thereto.
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<PAGE>
"MERS System": The system of recording transfers of Mortgages
electronically maintained by MERS.
"Mezzanine Certificates": Collectively, the Class M-1
Certificates,
the Class M-2 Certificates, the Class M-3 Certificates, the Class
M-4
Certificates, Class M-5 Certificates, the Class M-6 Certificates,
the Class M-7
Certificates, the Class M-8 Certificates, the Class M-9
Certificates, the Class
M-10 Certificates and the Class M-11 Certificates.
"MIN": The Mortgage Identification Number for Mortgage Loans
registered with MERS on the MERS System.
"Minimum Mortgage Rate": With respect to each Adjustable-Rate
Mortgage Loan, the percentage set forth in the related Mortgage
Note as the
minimum Mortgage Rate thereunder.
"MOM Loan": With respect to any Mortgage Loans registered with
MERS
on the MERS(R) System, MERS acting as the mortgagee of such
Mortgage Loan,
solely as nominee for the originator of such Mortgage Loan and its
successors
and assigns, at the origination thereof.
"Monthly Payment": With respect to any Mortgage Loan, the
scheduled
monthly payment of principal and interest on such Mortgage Loan
which is payable
by the related Mortgagor from time to time under the related
Mortgage Note,
determined: (a) after giving effect to (i) any Deficient Valuation
and/or Debt
Service Reduction with respect to such Mortgage Loan and (ii) any
reduction in
the amount of interest collectible from the related Mortgagor
pursuant to the
Relief Act; (b) without giving effect to any extension granted or
agreed to by
the Servicer pursuant to Section 3.07; and (c) on the assumption
that all other
amounts, if any, due under such Mortgage Loan are paid when
due.
"Moody's": Moody's
Investors Service,
Inc., or its successor
in
interest.
"Mortgage": The mortgage, deed of trust or other instrument
creating
a first or second lien on, or first priority security interest in,
a Mortgaged
Property securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional
documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Loan": Each mortgage loan transferred and assigned to
the
Trustee pursuant to Section 2.01 or Section 2.03(d) of this
Agreement, as from
time to time held as a part of REMIC I, the Mortgage Loans so held
being
identified in the Mortgage Loan Schedule.
"Mortgage Loan Remittance Rate": With respect to any Mortgage
Loan
or REO Property, as of any date of determination, the then
applicable Mortgage
Rate in respect thereof net of the Servicing Fee Rate.
28
<PAGE>
"Mortgage Loan Schedule": As of any date, the list of Mortgage
Loans
included in REMIC I on such date, attached hereto as Schedule 1.
The Mortgage
Loan Schedule shall set forth the following information with
respect to each
Mortgage Loan:
(i) the Mortgage Loan identifying number;
(ii) a code indicating whether the Mortgaged Property is
owner-occupied;
(iii) the type of Residential Dwelling constituting the
Mortgaged
Property;
(iv) the original months to maturity;
(v) the original date of the mortgage;
(vi) the Loan-to-Value Ratio at origination;
(vii) the Mortgage Rate in effect immediately following the
Cut-off
Date;
(viii) the date on which the first Monthly Payment was due on
the
Mortgage
Loan;
(ix) the stated maturity date;
(x) the amount of the Monthly Payment at origination;
(xi) the amount of the Monthly Payment as of the Cut-off Date;
(xii) the last Due Date on which a Monthly Payment was actually
applied to
the unpaid Stated Principal Balance;
(xiii) the original principal amount of the Mortgage Loan;
(xiv) the Scheduled Principal Balance of the Mortgage Loan as of
the
close of
business on the Cut-off Date;
(xv) a code indicating the purpose of the Mortgage Loan (i.e.,
purchase
financing, Rate/Term Refinancing, Cash-Out Refinancing);
(xvi) a code indicating the documentation style (i.e., full,
alternative or reduced);
(xvii) the Value of the Mortgaged Property;
(xviii) the sale price of the Mortgaged Property, if
applicable;
(xix) the actual unpaid principal balance of the Mortgage Loan as
of
the
Cut-off Date;
(xx) the Servicing Fee Rate;
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<PAGE>
(xxi) the term of the Prepayment Charge , if any;
(xxii) the percentage of the principal balance covered by
lender
paid
mortgage insurance, if any; and
(xxiii) with respect to each Adjustable-Rate Mortgage Loan, the
Adjustment
Dates, the Gross Margin, the Maximum Mortgage Rate, the Minimum
Mortgage
Rate, the Periodic Rate Cap, the maximum first Adjustment Date
Mortgage
Rate adjustment, the first Adjustment Date immediately
following
the
origination date and the rounding code (i.e., nearest 0.125%,
next
highest
0.125%).
The Mortgage Loan Schedule shall set forth the following
information
with respect to the Mortgage Loans and in the aggregate as of the
Cut-off Date:
(1) the number of Mortgage Loans; (2) the current principal balance
of the
Mortgage Loans; (3) the weighted average Mortgage Rate of the
Mortgage Loans;
(4) the weighted average maturity of the Mortgage Loans; (5) the
Scheduled
Principal Balance of the Mortgage Loans as of the close of business
on the
Cut-off Date (not taking into account any Principal Prepayments
received on the
Cut-off Date); and (6) the amount of the Monthly Payment as of the
Cut-off Date.
The Mortgage Loan Schedule shall be amended from time to time by
the Depositor
in accordance with the provisions of this Agreement. With respect
to any
Qualified Substitute Mortgage Loan, Cut-off Date shall refer to the
related
Cut-off Date for such Mortgage Loan, determined in accordance with
the
definition of Cut-off Date herein.
"Mortgage Note":
The original executed note or other evidence of the
indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on
Schedule
1 from time to time, and any REO Properties acquired in respect
thereof.
"Mortgage Rate": With respect to each Mortgage Loan, the annual
rate
at which interest accrues on such Mortgage Loan from time to time
in accordance
with the provisions of the related Mortgage Note, without regard to
any
reduction thereof as a result of a Debt Service Reduction or
operation of the
Relief Act, which rate (i) with respect to each fixed-rate Mortgage
Loan shall
remain constant at the rate set forth in the Mortgage Loan Schedule
as the
Mortgage Rate in effect immediately following the Cut-off Date and
(ii) with
respect to the Adjustable-Rate Mortgage Loans, (A) as of any date
of
determination until the first Adjustment Date following the Cut-off
Date shall
be the rate set forth in the Mortgage Loan Schedule as the Mortgage
Rate in
effect immediately following the Cut-off Date and (B) as of any
date of
determination thereafter shall be the rate as adjusted on the most
recent
Adjustment Date equal to the sum, rounded as provided in the
Mortgage Note, of
the Index, as published as of a date prior to the Adjustment Date
as set forth
in the related Mortgage Note, plus the related Gross Margin;
provided that the
Mortgage Rate on such Adjustable-Rate Mortgage Loan on any
Adjustment Date shall
never be more than the lesser of (i) the sum of the Mortgage Rate
in effect
immediately prior to the Adjustment Date plus the related Periodic
Rate Cap, if
any, and (ii) the related Maximum Mortgage Rate, and shall never be
less than
the greater of (i) the Mortgage Rate in effect immediately prior to
the
Adjustment Date less the Periodic Rate Cap, if any, and (ii) the
related Minimum
Mortgage Rate. With respect to each Mortgage Loan that becomes
an
30
<PAGE>
REO Property, as of any date of determination, the annual rate
determined in
accordance with the immediately preceding sentence as of the date
such Mortgage
Loan became an REO Property.
"Mortgaged Property": The underlying property securing a
Mortgage
Loan, including any REO Property, consisting of an Estate in Real
Property
improved by a Residential Dwelling.
"Mortgagor": The
obligor on a Mortgage Note.
"Net Monthly Excess Cashflow": With respect to any Distribution
Date, the sum of (i) any Overcollateralization Reduction Amount and
(ii) the
excess of (x) the Available Distribution Amount for such
Distribution Date over
(y) the sum for such Distribution Date of (A) the Senior Interest
Distribution
Amounts distributable to the holders of the Class A Certificates
and the
Interest Distribution Amounts distributable to the holders of the
Mezzanine
Certificates and (B) the Principal Remittance Amount.
"Net WAC Pass-Through Rate": The Net WAC Pass-Through Rate for
any
distribution date and the Floating Rate Certificates is a per annum
rate
(adjusted for the actual number of days in the related Interest
Accrual Period)
equal to the weighted average of the Expense Adjusted Mortgage
Rates on the then
outstanding Mortgage Loans, weighted based on their principal
balances as of the
first day of the related Due Period.
"Net WAC Rate Carryover Reserve Account": The Net WAC Rate
Carryover
Reserve Account established and maintained pursuant to Section
4.06.
"Net WAC Rate Carryover Amount": With respect to any
Distribution
Date and any Class of Floating Rate Certificates, the sum of (A)
the positive
excess, if any, of (i) the amount of interest that would have
accrued on such
Class of Certificates for such Distribution Date if the
Pass-Through Rate for
such Class of Certificates for such Distribution Date were
calculated at the
related Formula Rate over (ii) the amount of interest accrued on
such Class of
Certificates at the Net WAC Pass-Through Rate for such Distribution
Date and (B)
the related Net WAC Rate Carryover Amount for the previous
Distribution Date not
previously distributed together with interest accrued on such
unpaid amount for
the most recently ended Interest Accrual Period at the Formula Rate
for such
Class of Certificates and such Distribution Date.
"New Lease": Any lease of REO Property entered into on behalf
of
REMIC I, including any lease renewed or extended on behalf of REMIC
I, if REMIC
I has the right to renegotiate the terms of such lease.
"Nonrecoverable Advance": Any P&I Advance or Servicing
Advance
previously made or proposed to be made in respect of a Mortgage
Loan or REO
Property that, in the good faith business judgment of the Servicer
will not or,
in the case of a proposed P&I Advance or Servicing Advance,
would not be
ultimately recoverable from related late payments, Insurance
Proceeds or
Liquidation Proceeds on such Mortgage Loan or REO Property as
provided herein.
"Non-United States
Person": Any Person other than a United
States Person.
31
<PAGE>
"Notional Amount": With respect to the Class CE Interest and
any
Distribution Date, the aggregate Uncertificated Balance of the
REMIC I Regular
Interests (other than REMIC I Regular Interest I-LTP for such
Distribution Date.
"Officers' Certificate": A certificate signed by the Chairman of
the
Board, the Vice Chairman of the Board, the President or a vice
president
(however denominated), and by the Treasurer, the Secretary, or one
of the
assistant treasurers or assistant secretaries of the Servicer, the
Sponsor or
the Depositor, as applicable.
"One-Month LIBOR": For purposes of the Marker Rate and Maximum
I-LTZZ Uncertificated Interest Deferral Amount, REMIC I Regular
Interest
I-LTA1A, REMIC I Regular Interest I-LTA1B, REMIC I Regular Interest
I-LTA1C,
REMIC I Regular Interest I-LTA1D, REMIC I Regular Interest I-LTM1,
REMIC I
Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I
Regular
Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular
Interest
I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular Interest
I-LTM8, REMIC
I Regular Interest I-LTM9, REMIC I Regular Interest I-LTM10 and
REMIC I Regular
Interest I-LTM11, and any Interest Accrual Period therefor, the
rate determined
by the Trust Administrator on the related Interest Determination
Date on the
basis of the offered rate for one-month U.S. dollar deposits, as
such rate
appears on Telerate Page 3750, Bloomberg Page BBAM or another page
of these or
any other financial reporting service in general use in the
financial services
industry, as of 11:00 a.m. (London time) on such Interest
Determination Date;
provided that if such rate does not appear on Telerate Page 3750,
the rate for
such date will be determined on the basis of the offered rates of
the Reference
Banks for one-month U.S. dollar deposits, as of 11:00 a.m. (London
time) on such
Interest Determination Date. In such event, the Trust Administrator
will request
the principal London office of each of the Reference Banks to
provide a
quotation of its rate. If on such Interest Determination Date, two
or more
Reference Banks provide such offered quotations, One-Month LIBOR
for the related
Interest Accrual Period shall be the arithmetic mean of such
offered quotations
(rounded upwards if necessary to the nearest whole multiple of
1/16%). If on
such Interest Determination Date, fewer than two Reference Banks
provide such
offered quotations, One-Month LIBOR for the related Interest
Accrual Period
shall be the higher of (i) LIBOR as determined on the previous
Interest
Determination Date and (ii) the Reserve Interest Rate.
Notwithstanding the
foregoing, if, under the priorities described above, LIBOR for an
Interest
Determination Date would be based on LIBOR for the previous
Interest
Determination Date for the third consecutive Interest Determination
Date, the
Trust Administrator, after consultation with the Depositor, shall
select an
alternative comparable index (over which the Trust Administrator
has no
control), used for determining one-month Eurodollar lending rates
that is
calculated and published (or otherwise made available) by an
independent party.
"Opinion of Counsel": A written opinion of counsel, who may,
without
limitation, be salaried counsel for the Depositor, the Servicer or
the Trust
Administrator acceptable to the Trustee, if such opinion is
delivered to the
Trustee, or reasonably acceptable to the Trust Administrator, if
such opinion is
delivered to the Trust Administrator, except that any opinion of
counsel
relating to (a) the qualification of any Trust REMIC as a REMIC or
(b)
compliance with the REMIC Provisions must be an opinion of
Independent counsel.
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<PAGE>
"Optional Termination Date": The Determination Date on which
the
aggregate Stated Principal Balance of the Mortgage Loans and each
REO Property
remaining in the Trust Fund is less than 10% of the aggregate
Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date.
"Original Mortgage
Loan": Any Mortgage Loans included in Trust
Fund as of the Closing Date.
"Originator": Wells
Fargo Bank, N.A.
"Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the excess, if any, of (a) the
Overcollateralization Target
Amount applicable to such Distribution Date over (b) the
Overcollateralized
Amount applicable to such Distribution Date (calculated for this
purpose only
after assuming that 100% of the Principal Remittance Amount on such
Distribution
Date has been distributed).
"Overcollateralization Increase Amount": With respect to any
Distribution Date, the lesser of (a) the sum of (i) the Net Monthly
Excess
Cashflow for such Distribution Date and (ii) any amounts received
under the Cap
Contract for this purpose and (b) the Overcollateralization
Deficiency Amount
for such Distribution Date (calculated for this purpose only after
assuming that
100% of the Principal Remittance Amount on such Distribution Date
has been
distributed).
"Overcollateralization Reduction Amount": With respect to any
Distribution Date, an amount equal to the lesser of (a) the
Principal Remittance
Amount for such Distribution Date and (b) the Excess
Overcollateralized Amount.
"Overcollateralization Target Amount": With respect to any
Distribution Date, (i) prior to the Stepdown Date, an amount equal
to 1.75% of
the aggregate outstanding Stated Principal Balance of the Mortgage
Loans as of
the Cut-off Date, (ii) on or after the Stepdown Date provided a
Trigger Event is
not in effect, the greater of (x) 3.50% of the then current
aggregate
outstanding Stated Principal Balance of the Mortgage Loans as of
the last day of
the related Due Period and (y) 0.50% of the aggregate principal
balance of the
mortgage loans as of the Cut-off Date, or (iii) on or after the
Stepdown Date
and if a Trigger Event is in effect, the Overcollateralization
Target Amount for
the immediately preceding Distribution Date. Notwithstanding the
foregoing, on
and after any Distribution Date following the reduction of the
aggregate
Certificate Principal Balance of the Class A Certificates and the
Mezzanine
Certificates to zero, the Overcollateralization Target Amount shall
be zero.
"Overcollateralized Amount": With respect to any Distribution
Date,
the excess, if any, of (a) the aggregate Stated Principal Balances
of the
Mortgage Loans and REO Properties as of the last day of the related
Due Period
(after giving effect to scheduled payments of principal due during
the related
Due Period, to the extent received or advanced, and unscheduled
collections of
principal received during the related Prepayment Period) over (b)
the sum of the
aggregate Certificate Principal Balance of the Class A
Certificates, the
Mezzanine Certificates and the Class P Certificates after giving
effect to
distributions to be made on such Distribution Date.
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<PAGE>
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in
such
Certificate as the Holder thereof and any other interest therein,
whether direct
or indirect, legal or beneficial, as owner or as pledgee.
"Pass-Through Rate": With respect to the Floating Rate
Certificates
and any Distribution Date, the lesser of (x) the related Formula
Rate for such
Distribution Date and (y) the related Net WAC Pass-Through Rate for
such
Distribution Date.
With respect to the Class CE Interest and any Distribution Date,
a
per annum rate equal to the percentage equivalent of a fraction,
the numerator
of which is (x) the sum of (i) 100% of the interest on REMIC I
Regular Interest
I-LTP and (ii) interest on the Uncertificated Principal Balance of
each REMIC I
Regular Interest listed in clause (y) below at a rate equal to the
related REMIC
I Remittance Rate minus the Marker Rate and the denominator of
which is (y) the
aggregate Uncertificated Balance of REMIC I Regular Interest
I-LTAA, REMIC I
Regular Interest I-LTA1A, REMIC I Regular Interest I-LTA1B, REMIC I
Regular
Interest I-LTA1C, REMIC I Regular Interest I-LTA1D, REMIC I Regular
Interest
I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC
I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I
Regular
Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular
Interest
I-LTM8, REMIC I Regular Interest I-LTM9, REMIC I Regular Interest
I-LTM10, REMIC
I Regular Interest I-LTM11 and REMIC I Regular Interest I-LTZZ.
With respect to the Class CE Certificates, 100% of the interest
distributable to the Class CE Interest, expressed as a per annum
rate.
"Percentage Interest": With respect to any Class of
Certificates
(other than the Residual Certificates), the portion of the
respective Class
evidenced by such Certificate, expressed as a percentage, the
numerator of which
is the initial Certificate Principal Balance or Notional Amount
represented by
such Certificate, and the denominator of which is the initial
aggregate
Certificate Principal Balance or Notional Amount of all of the
Certificates of
such Class. The Class A Certificates and the Mezzanine Certificates
are issuable
only in minimum Percentage Interests corresponding to minimum
initial
Certificate Principal Balances of $25,000 and integral multiples of
$1.00 in
excess thereof. The Class P Certificates are issuable only in
Percentage
Interests corresponding to initial Certificate Principal Balances
of $20 and
integral multiples thereof. The Class CE Certificates are issuable
only in
minimum Percentage Interests corresponding to minimum initial
Certificate
Principal Balances of $100,000 and integral multiples of $1.00 in
excess
thereof; provided, however, that a single Certificate of each such
Class of
Certificates may be issued having a Percentage Interest
corresponding to the
remainder of the aggregate initial Certificate Principal Balance or
Notional
Amount of such Class or to an otherwise authorized denomination for
such Class
plus such remainder. With respect to any Residual Certificate, the
undivided
percentage ownership in such Class evidenced by such Certificate,
as set forth
on the face of such Certificate. The Residual Certificates are
issuable in
Percentage Interests of 20% and multiples thereof.
"Periodic Rate Cap": With respect to each Adjustable-Rate
Mortgage
Loan and any Adjustment Date therefor, the fixed percentage set
forth in the
related Mortgage Note, which is the maximum amount by which the
Mortgage Rate
for such Mortgage Loan may increase or
34
<PAGE>
decrease (without regard to the Maximum Mortgage Rate or the
Minimum Mortgage
Rate) on such Adjustment Date from the Mortgage Rate in effect
immediately prior
to such Adjustment Date.
"Permitted Investments": Any one or more of the following
obligations or securities acquired at a purchase price of not
greater than par,
regardless of whether issued by the Depositor, the Servicer, the
Trustee, the
Trust Administrator or any of their respective Affiliates:
(i) direct obligations of, or obligations fully guaranteed as
to
timely
payment of principal and interest by, the United States or any
agency or
instrumentality thereof, provided such obligations are backed
by
the full
faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of,
or
bankers'
acceptances (which shall each have an original maturity of not
more than
90 days and, in the case of bankers' acceptances, shall in no
event have
an original maturity of more than 365 days or a remaining
maturity
of more than 30 days) denominated in United States dollars and
issued by,
any Depository Institution;
(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 the Rating Agencies
in its
highest long-term unsecured rating category 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 the Rating Agencies that rate 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
affiliated
with the Trustee, the Trust Administrator or an Affiliate of
either of
them, that have been rated "AAA" by S&P, "Aaa" by Moody's
and
"AAA" by
Fitch; and
(vii) if previously confirmed in writing to the Servicer, the
Trustee
and the Trust Administrator, any other demand, money market or
time
deposit, or any other obligation, security or investment, as may
be
acceptable
to the Rating Agencies as a permitted investment of funds
backing
securities having ratings equivalent to its highest initial
rating
of the
Class A Certificates;
provided, however, that no instrument described hereunder shall
evidence either
the right to receive (a) only interest with respect to the
obligations
underlying such instrument or (b) both principal and interest
payments derived
from obligations underlying such instrument and the interest and
principal
payments with respect to such instrument provide a yield to
maturity at par
greater than 120% of the yield to maturity at par of the underlying
obligations.
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"Permitted
Transferee": Any
Transferee of a Residual Certificate
other than a Disqualified Organization or Non-United States
Person.
"Person": Any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company,
trust,
unincorporated organization or government or any agency or
political subdivision
thereof.
"P&I Advance": As to any Mortgage Loan or REO Property, any
advance
made by the Servicer in respect of any Distribution Date pursuant
to Section
4.03.
"Plan": Any employee
benefit plan or certain other retirement plans
and arrangements, including individual retirement accounts and
annuities, Keogh
plans and bank collective investment funds and insurance company
general or
separate accounts in which such plans, accounts or arrangements are
invested,
that are subject to ERISA or Section 4975 of the Code.
"Prepayment Assumption": As defined in the Prospectus
Supplement.
"Prepayment Charge": With respect to any Prepayment Period, any
prepayment premium, penalty or charge payable by a Mortgagor in
connection with
any Principal Prepayment on a Mortgage Loan pursuant to the terms
of the related
Mortgage Note (other than any Servicer Prepayment Charge Payment
Amount).
"Prepayment Charge Schedule": As of any date, the list of
Prepayment
Charges included in the Trust Fund on such date, attached hereto as
Schedule 2
(including the prepayment charge summary attached thereto). The
Prepayment
Charge Schedule shall set forth the following information with
respect to each
Prepayment Charge:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the date on which the first Monthly Payment was due on
the
related
Mortgage Loan;
(iv) the term of the related Prepayment Charge;
(v) the original Stated Principal Balance of the related
Mortgage
Loan;
and
(vi) the Stated Principal Balance of the related Mortgage Loan as
of
the
Cut-off Date.
"Prepayment Interest Shortfall": With respect to any
Distribution
Date, for each Mortgage Loan that was during the related Prepayment
Period the
subject of a Principal Prepayment in full or in part occurring
between the first
day of the related Prepayment Period and the last day of the
calendar month
preceding the calendar month in which such Distribution Date
occurs, an amount
equal to interest at the applicable Mortgage Loan Remittance Rate
on the amount
of such Principal Prepayment for the number of days commencing on
the date on
which
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<PAGE>
the prepayment is applied and ending on the last day of the
calendar month
preceding the calendar month in which such Distribution Date
occurs. The
obligations of the Servicer in respect of any Prepayment Interest
Shortfall are
set forth in Section 3.24.
"Prepayment Period": With respect to each Distribution Date,
the
Prepayment Period is the calendar month preceding the month in
which such
Distribution Date occurs.
"Prime Rate": The lesser of (i) the per annum rate of interest,
publicly announced from time to time by Chase Manhattan Bank at its
principal
office in the City of New York, as its prime or base lending rate
(any change in
such rate of interest to be effective on the date such change is
announced by
Chase Manhattan Bank) and (ii) the maximum rate permissible under
applicable
usury or similar laws limiting interest rates.
"Principal Distribution Amount": With respect to each
Distribution
Date, the Principal Distribution Amount is equal to the sum of (i)
the principal
portion of all scheduled monthly payments due on the Mortgage Loans
during the
related Due Period, to the extent received on or prior to the
related
Determination Date or advanced prior to such distribution date;
(ii) the
principal portion of all proceeds received in respect of the
repurchase of a
Mortgage Loan (or, in the case of a substitution, certain amounts
representing a
principal adjustment) during the related Prepayment Period; (iii)
the principal
portion of all other unscheduled collections, including insurance
proceeds,
liquidation proceeds, Subsequent Recoveries and all full and
partial principal
prepayments, received on the Mortgage Loans during the related
Prepayment
Period, to the extent applied as recoveries of principal on the
mortgage loans
and (iv) any Overcollateralization Increase Amount for such
distribution date
minus (v) any Overcollateralization Reduction Amount for such
distribution date.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its
scheduled Due
Date and which is not accompanied by an amount of interest
representing the full
amount of scheduled interest due on any Due Date in any month or
months
subsequent to the month of prepayment.
"Principal Remittance Amount": With respect to any Distribution
Date, the Principal Remittance Amount will be equal to the sum of
(i) through
(iii) of the Principal Distribution Amount.
"Private Certificates": Any of the Class M-10, Class M-11, Class
CE,
Class P or Residual Certificates.
"Prospectus Supplement": The Prospectus Supplement, dated
February
15, 2006, relating to the public offering of the Class A
Certificates and the
Mezzanine Certificates (other than the Class M-10 and Class M-11
Certificates).
"Purchase Price": With respect to any Mortgage Loan or REO
Property
to be purchased by the Sponsor pursuant to or as contemplated by
Section 2.03 or
Section 9.01, and as confirmed by an Officers' Certificate from the
party
purchasing the Mortgage Loan to the Trustee and the Trust
Administrator, an
amount equal to the sum of: (i) 100% of the Stated Principal
Balance thereof as
of the date of purchase (or such other price as provided in
Section
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<PAGE>
9.01), (ii) in the case of (x) a Mortgage Loan, accrued interest on
such Stated
Principal Balance at the applicable Mortgage Loan Remittance Rate
in effect from
time to time from the Due Date as to which interest was last
covered by a
payment by the Mortgagor or an advance by the Servicer, which
payment or advance
had as of the date of purchase been distributed pursuant to Section
4.01,
through the end of the calendar month in which the purchase is to
be effected,
and (y) an REO Property, the sum of (1) accrued interest on such
Stated
Principal Balance at the applicable Mortgage Loan Remittance Rate
in effect from
time to time from the Due Date as to which interest was last
covered by a
payment by the Mortgagor or an advance by the Servicer through the
end of the
calendar month immediately preceding the calendar month in which
such REO
Property was acquired, plus (2) REO Imputed Interest for such REO
Property for
each calendar month commencing with the calendar month in which
such REO
Property was acquired and ending with the calendar month in which
such purchase
is to be effected, minus the total of all net rental income,
Insurance Proceeds,
Liquidation Proceeds and P&I Advances that as of the date of
purchase had been
distributed as or to cover REO Imputed Interest pursuant to Section
4.01; (iii)
any unreimbursed Servicing Advances and P&I Advances and any
unpaid Servicing
Fees allocable to such Mortgage Loan or REO Property; (iv) any
amounts
previously withdrawn from the Collection Account in respect of such
Mortgage
Loan or REO Property pursuant to Sections 3.11(a)(ix) and Section
3.16(b); and
(v) in the case of a Mortgage Loan required to be purchased
pursuant to Section
2.03, expenses incurred or to be incurred by the Trust Fund in
respect of the
breach or defect giving rise to the purchase obligation including
any costs and
damages incurred by the Trust Fund in connection with any violation
of any
predatory or abusive lending law with respect to the related
Mortgage Loan. With
respect to any Mortgage Loan or REO Property to be purchased by the
Originator
pursuant to or as contemplated by Section 2.03 or Section 9.01, and
as confirmed
by an Officers' Certificate from the related Originator to the
Trustee and the
Trust Administrator, an amount equal to the amount set forth
pursuant to the
terms of the related Master Agreement.
"Qualified Insurer": Any insurer which meets the requirements
of
Fannie Mae and Freddie Mac.
"Qualified Substitute Mortgage Loan": A mortgage loan
substituted
for a Deleted Mortgage Loan by the Sponsor pursuant to the terms of
this
Agreement which must, on the date of such substitution, (i) have an
outstanding
principal balance, after application of all scheduled payments of
principal and
interest due during or prior to the month of substitution, not in
excess of the
Scheduled Principal Balance of the Deleted Mortgage Loan as of the
Due Date in
the calendar month during which the substitution occurs, (ii) have
a Mortgage
Rate not less than (and not more than one percentage point in
excess of) the
Mortgage Rate of the Deleted Mortgage Loan, (iii) be covered under
a Primary
Mortgage Insurance Policy if such Qualified Substitute Mortgage
Loan has a
Loan-to-Value Ratio in excess of 80% and the Deleted Mortgage Loan
was covered
by a Primary Mortgage Insurance Policy, (iv) have a remaining term
to maturity
not greater than (and not more than one year less than) that of the
Deleted
Mortgage Loan, (v) have the same Due Date as the Due Date on the
Deleted
Mortgage Loan, (x) have a Loan-to-Value Ratio as of the date of
substitution
equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as
of such date, and (vi) conform to each representation and warranty
set forth in
the related Assignment Agreement applicable to the Deleted Mortgage
Loan. In the
event that one or more mortgage loans are substituted for one or
more Deleted
Mortgage Loans, the amounts described in clause (i) hereof shall be
determined
on the basis of
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<PAGE>
aggregate principal balances, the Mortgage Rates described in
clause (ii) hereof
shall be determined on the basis of weighted average Mortgage
Rates, the terms
described in clause (viii) shall be determined on the basis of
weighted average
remaining terms to maturity, the Loan-to-Value Ratios described in
clause (iv)
hereof shall be satisfied as to each such mortgage loan and, except
to the
extent otherwise provided in this sentence, the representations and
warranties
described in clause (vi) hereof must be satisfied as to each
Qualified
Substitute Mortgage Loan or in the aggregate, as the case may be.
With respect
to the Originator, a mortgage loan substituted for a Deleted
Mortgage Loan
pursuant to the terms of the related Master Agreement which must,
on the date of
such substitution conform to the terms set forth in the related
Master
Agreement.
"Rate/Term Refinancing": A Refinanced Mortgage Loan, the proceeds
of
which are not in excess of the existing first mortgage loan on the
related
Mortgaged Property and related closing costs, and were used
exclusively to
satisfy the then existing first mortgage loan of the Mortgagor on
the related
Mortgaged Property and to pay related closing costs.
"Rating Agencies": S&P, Moody's and Fitch or their successors.
If
such agencies or their successors are no longer in existence, the
"Rating
Agencies" shall be such nationally recognized statistical rating
agencies, or
other comparable Persons, designated by the Depositor, written
notice of which
designation shall be given to the Trustee, the Trust Administrator
and the
Servicer.
"Realized Loss": With respect to each Mortgage Loan as to which
a
Final Recovery Determination has been made, an amount (not less
than zero) equal
to (i) the unpaid principal balance of such Mortgage Loan as of the
commencement
of the calendar month in which the Final Recovery Determination was
made, plus
(ii) accrued interest from the Due Date as to which interest was
last paid by
the Mortgagor through the end of the calendar month in which such
Final Recovery
Determination was made, calculated in the case of each calendar
month during
such period (A) at an annual rate equal to the annual rate at which
interest was
then accruing on such Mortgage Loan and (B) on a principal amount
equal to the
Stated Principal Balance of such Mortgage Loan as of the close of
business on
the Distribution Date during such calendar month, plus (iii) any
amounts
previously withdrawn from the Collection Account in respect of such
Mortgage
Loan pursuant to Section 3.11(a)(ix) and Section 3.16(b), minus
(iv) the
proceeds, if any, received in respect of such Mortgage Loan prior
to the date
such Final Recovery Determination was made, net of amounts that are
payable
therefrom to the Servicer with respect to such Mortgage Loan
pursuant to Section
3.11(a)(iii).
With respect to any REO Property as to which a Final Recovery
Determination has been made an amount (not less than zero) equal to
(i) the
unpaid principal balance of the related Mortgage Loan as of the
date of
acquisition of such REO Property on behalf of any REMIC, plus (ii)
accrued
interest from the Due Date as to which interest was last paid by
the Mortgagor
in respect of the related Mortgage Loan through the end of the
calendar month
immediately preceding the calendar month in which such REO Property
was
acquired, calculated in the case of each calendar month during such
period (A)
at an annual rate equal to the annual rate at which interest was
then accruing
on the related Mortgage Loan and (B) on a principal amount equal to
the Stated
Principal Balance of the related Mortgage Loan as of the close of
business on
the Distribution Date during such calendar month, plus (iii) REO
Imputed
Interest
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<PAGE>
for such REO Property for each calendar month commencing with the
calendar month
in which such REO Property was acquired and ending with the
calendar month that
occurs during the Prepayment Period in which such Final Recovery
Determination
was made, plus (iv) any amounts previously withdrawn from the
Collection Account
in respect of the related Mortgage Loan pursuant to Section
3.11(a)(ix) and
Section 3.16(b), minus (v) the aggregate of all Servicing Advances
made by the
Servicer in respect of such REO Property or the related Mortgage
Loan (without
duplication of amounts netted out of the rental income, Insurance
Proceeds and
Liquidation Proceeds described in clause (vi) below) and any unpaid
Servicing
Fees for which the Servicer has been or, in connection with such
Final Recovery
Determination, will be reimbursed pursuant to Section 3.11(a)(iii)
or Section
3.23 out of rental income, Insurance Proceeds and Liquidation
Proceeds received
in respect of such REO Property, minus (vi) the total of all net
rental income,
Insurance Proceeds and Liquidation Proceeds received in respect of
such REO
Property that has been, or in connection with such Final Recovery
Determination,
will be transferred to the Distribution Account pursuant to Section
3.23.
With respect to each Mortgage Loan which has become the subject of
a
Deficient Valuation, the difference between the principal balance
of the
Mortgage Loan outstanding immediately prior to such Deficient
Valuation and the
principal balance of the Mortgage Loan as reduced by the Deficient
Valuation.
With respect to each Mortgage Loan which has become the subject of
a
Debt Service Reduction, the portion, if any, of the reduction in
each affected
Monthly Payment attributable to a reduction in the Mortgage Rate
imposed by a
court of competent jurisdiction. Each such Realized Loss shall be
deemed to have
been incurred on the Due Date for each affected Monthly
Payment.
"Record Date": With respect to each Distribution Date and any
Floating Rate Certificate so long as such Floating Rate
Certificates is a
Book-Entry Certificate, the Business Day immediately preceding such
Distribution
Date. With respect to each Distribution Date and any other
Certificates,
including any Definitive Certificates, the last Business Day of the
month
immediately preceding the month in which such Distribution Date
occurs.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of
which
were not used to purchase the related Mortgaged Property.
"Regular
Certificate":
Any Class A Certificate, Mezzanine
Certificate, Class CE Certificate or Class P Certificate.
"Regular Interest":
A "regular
interest" in a REMIC within the
meaning of Section 860G(a)(1) of the Code.
"Relief Act": The
Servicemembers
Civil Relief Act, or
any state
law providing for similar relief.
"Relief Act Interest Shortfall": With respect to any
Distribution
Date and any Mortgage Loan, any reduction in the amount of interest
collectible
on such Mortgage Loan for the most recently ended calendar month as
a result of
the application of the Relief Act.
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<PAGE>
"REMIC": A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"REMIC I": The
segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be
administered hereunder,
with respect to which a REMIC election is to be made, consisting
of: (i) such
Mortgage Loans and Prepayment Charges related thereto as from time
to time are
subject to this Agreement, together with the Mortgage Files
relating thereto,
and together with all collections thereon and proceeds thereof;
(ii) any REO
Property, together with all collections thereon and proceeds
thereof; (iii) the
Trustee's rights with respect to the Mortgage Loans under all
insurance policies
required to be maintained pursuant to this Agreement and any
proceeds thereof;
(iv) the Depositor's rights under the Assignment Agreements
(including any
security interest created thereby); and (v) the Collection Account
(other than
any amounts representing the Servicer Prepayment Charge Payment
Amount), the
Distribution Account (other than any amounts representing the
Servicer
Prepayment Charge Payment Amount) and any REO Account, and such
assets that are
deposited therein from time to time and any investments thereof,
together with
any and all income, proceeds and payments with respect thereto.
Notwithstanding
the foregoing, however, REMIC I specifically excludes all payments
and other
collections of principal and interest due on the Mortgage Loans on
or before the
Cut-off Date, all Prepayment Charges payable in connection with
Principal
Prepayments on the Mortgage Loans made before the Cut-off Date, the
Net WAC Rate
Carryover Reserve Account, the Cap Contract, the Cap Account and
Servicer
Prepayment Charge Payment Amounts.
"REMIC I Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the
aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties
then
outstanding and (ii) the REMIC I Remittance Rate for REMIC I
Regular Interest
I-LTAA minus the Marker Rate, divided by (b) 12.
"REMIC I Overcollateralized Amount": With respect to any date
of
determination, (i) 1.00% of the aggregate Uncertificated Balance of
the REMIC I
Regular Interests minus (ii) the aggregate Uncertificated Balance
of REMIC I
Regular Interest I-LTA1A, REMIC I Regular Interest I-LTA1B, REMIC I
Regular
Interest I-LTA1C, REMIC I Regular Interest I-LTA1D, REMIC I Regular
Interest
I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC
I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I
Regular
Interest I-LTM6, REMIC I Regular Interest I-
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<PAGE>
LTM7, REMIC I Regular Interest I-LTM8, REMIC I Regular Interest
I-LTM9, REMIC I
Regular Interest I-LTM10, REMIC I Regular Interest I-LTM11 and
REMIC I Regular
Interest I-LTP, in each case as of such date of determination.
"REMIC I Principal Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to the product of (i) the
aggregate Stated
Principal Balance of the Mortgage Loans and REO Properties then
outstanding and
(ii) 1 minus a fraction, the numerator of which is two times the
aggregate
Uncertificated Balance of REMIC I Regular Interest I-LTA1A, REMIC I
Regular
Interest I-LTA1B, REMIC I Regular Interest I-LTA1C, REMIC I Regular
Interest
I-LTA1D, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC
I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I
Regular
Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular
Interest
I-LTM7, REMIC I Regular Interest I-LTM8, REMIC I Regular Interest
I-LTM9, REMIC
I Regular Interest I-LTM10, REMIC I Regular Interest I-LTM11 and
the denominator
of which is the aggregate Uncertificated Balance of REMIC I Regular
Interest
I-LTA1A, REMIC I Regular Interest I-LTA1B, REMIC I Regular Interest
I-LTA1C,
REMIC I Regular Interest I-LTA1D, REMIC I Regular Interest I-LTM1,
REMIC I
Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I
Regular
Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular
Interest
I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I Regular Interest
I-LTM8, REMIC
I Regular Interest I-LTM9, REMIC I Regular Interest I-LTM10, REMIC
I Regular
Interest I-LTM11 and REMIC I Regular Interest I-LTZZ.
"REMIC I Regular Interest": Any of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
"regular interest" in REMIC I. Each REMIC I Regular Interest shall
accrue
interest at the related REMIC I Remittance Rate in effect from time
to time or
shall otherwise be entitled to interest as set forth herein, and
shall be
entitled to distributions of principal, subject to the terms and
conditions
hereof, in an aggregate amount equal to its initial Uncertificated
Balance as
set forth in the Preliminary Statement hereto. The REMIC I Regular
Interests are
set forth in the Preliminary Statement hereto.
"REMIC I Remittance Rate": With respect to REMIC I Regular
Interest
I-LTAA, REMIC I Regular Interest I-LTA1A, REMIC I Regular Interest
I-LTA1B,
REMIC I Regular Interest I-LTA1C, REMIC I Regular Interest I-LTA1D,
REMIC I
Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I
Regular
Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular
Interest
I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest
I-LTM7, REMIC
I Regular Interest I-LTM8, REMIC I Regular Interest I-LTM9, REMIC I
Regular
Interest I-LTM10, REMIC I Regular Interest I-LTM11, REMIC I Regular
Interest
I-LTZZ and REMIC I Regular Interest I-LTP, the weighted average of
the Expense
Adjusted Net Mortgage Rates of the Mortgage Loans.
"REMIC I Required Overcollateralized
Amount": 1.00% of the
Overcollateralization Target Amount.
"REMIC I Subordinated Balance Ratio": The ratio between the
Uncertificated Balances of each REMIC I Regular Interest ending
with the
designation "SUB," equal to the ratio between, with respect to each
such REMIC I
Regular Interest, the excess of (x) the aggregate Stated Principal
Balance of
the Mortgage Loans over (y) the current Certificate Principal
Balance of Class A
Certificates.
"REMIC II": The segregated pool of assets consisting of all of
the
REMIC I Regular Interests conveyed in trust to the Trustee, for the
benefit of
the Class A Certificates, the Mezzanine Certificates, the Class CE
Interest, the
Class P Interest and the Class R-II Interest and all amounts
deposited therein,
with respect to which a separate REMIC election is to be made.
"REMIC III": The segregated pool of assets consisting of all of
the
Class CE Interest conveyed in trust to the Trust Administrator, for
the benefit
of the Class CE Certificates, and the Class R-III Interest and all
amounts
deposited therein, with respect to which a separate REMIC election
is to be
made.
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<PAGE>
"REMIC IV": The segregated pool of assets consisting of all of
the
Class P Interest conveyed in trust to the Trust Administrator, for
the benefit
of the Class P Certificates, and the Class R-IV Interest and all
amounts
deposited therein, with respect to which a separate REMIC election
is to be
made.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear
at Section
860A through 860G of the Code, and related provisions, and
proposed, temporary
and final regulations and published rulings, notices and
announcements
promulgated thereunder, as the foregoing may be in effect from time
to time.
"REMIC Regular Interests": The REMIC I Regular Interests, the
Class
CE Interest and the Class P Interest.
"Remittance Report": A report in form and substance acceptable
to
the Trust Administrator and the Servicer in an electronic data file
or tape
prepared by the Servicer pursuant to Section 4.03 with such
additions, deletions
and modifications as agreed to by the Trust Administrator and the
Servicer.
"Rents from Real Property": With respect to any REO Property,
gross
income of the character described in Section 856(d) of the Code as
being
included in the term "rents from real property."
"REO Account": The account or accounts maintained by the Servicer
in
respect of an REO Property pursuant to Section 3.23.
"REO Disposition": The sale or other disposition of an REO
Property
on behalf of any Trust REMIC.
"REO Imputed Interest": As to any REO Property, for any
calendar
month during which such REO Property was at any time part of REMIC
I, one
month's interest at the applicable Mortgage Loan Remittance Rate on
the Stated
Principal Balance of such REO Property (or, in the case of the
first such
calendar month, of the related Mortgage Loan if appropriate) as of
the close of
business on the Distribution Date in such calendar month.
"REO Property": A Mortgaged Property acquired by the Servicer
on
behalf of the Trust Fund through foreclosure or deed-in-lieu of
foreclosure, as
described in Section 3.23.
"Request for Release": A release signed by a Servicing Officer,
in
the form of Exhibit E attached hereto.
"Residential Dwelling": Any one of the following: (i) an attached
or
detached one- family dwelling, (ii) a detached two- to four-family
dwelling,
(iii) a one-family dwelling unit in a Fannie Mae eligible
condominium project,
or (iv) a detached one-family dwelling in a planned unit
development, none of
which is a co-operative, mobile or manufactured home (as defined in
42 United
States Code, Section 5402(6)).
"Residual
Certificates": The
Class R Certificates
and the Class
R-X Certificates.
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<PAGE>
"Residual Interest":
The sole class of
"residual interests" in a
REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trust
Administrator, the President, any vice president, any assistant
vice president,
the Secretary, any assistant secretary, the Treasurer, any
assistant treasurer,
any trust officer or assistant trust officer, the Controller and
any assistant
controller or any other officer thereof customarily performing
functions similar
to those performed by any of the above designated officers and,
with respect to
a particular matter relating to this Agreement, to whom such matter
is referred
because of such officer's knowledge of and familiarity with the
particular
subject. When used with respect to the Trustee, any officer of the
Trustee with
direct responsibility for the administration of this Agreement and,
with respect
to a particular matter relating to this Agreement, to whom such
matter is
referred because of such officer's knowledge of and familiarity
with the
particular subject.
"S&P" Standard & Poor's Ratings Services, a division of
the
McGraw-Hill Companies, Inc., or its successors in interest.
"Scheduled Principal Balance": With respect to any Mortgage
Loan:
(a) as of the Cut-off Date, the outstanding principal balance of
such Mortgage
Loan as of such date, net of the principal portion of all unpaid
Monthly
Payments, if any, due on or before such date; (b) as of any Due
Date subsequent
to the Cut-off Date up to and including the Due Date in the
calendar month in
which a Liquidation Event occurs with respect to such Mortgage
Loan, the
Scheduled Principal Balance of such Mortgage Loan as of the Cut-off
Date, minus
the sum of (i) the principal portion of each Monthly Payment due on
or before
such Due Date but subsequent to the Cut-off Date, whether or not
received, (ii)
all Principal Prepayments received before such Due Date but after
the Cut-off
Date, (iii) the principal portion of all Liquidation Proceeds and
Insurance
Proceeds received before such Due Date but after the Cut-off Date,
net of any
portion thereof that represents principal due (without regard to
any
acceleration of payments under the related Mortgage and Mortgage
Note) on a Due
Date occurring on or before the date on which such proceeds were
received and
(iv) any Realized Loss incurred with respect thereto as a result of
a Deficient
Valuation occurring before such Due Date, but only to the extent
such Realized
Loss represents a reduction in the portion of principal of such
Mortgage Loan
not yet due (without regard to any acceleration of payments under
the related
Mortgage and Mortgage Note) as of the date of such Deficient
Valuation; and (c)
as of any Due Date subsequent to the occurrence of a Liquidation
Event with
respect to such Mortgage Loan, zero. With respect to any REO
Property: (a) as of
any Due Date subsequent to the date of its acquisition on behalf of
the Trust
Fund up to and including the Due Date in the calendar month in
which a
Liquidation Event occurs with respect to such REO Property, an
amount (not less
than zero) equal to the Scheduled Principal Balance of the related
Mortgage Loan
as of the Due Date in the calendar month in which such REO Property
was acquired
minus the principal portion of each Monthly Payment that would have
become due
on such related Mortgage Loan after such REO Property was acquired
if such
Mortgage Loan had not been converted to an REO Property; and (b) as
of any Due
Date subsequent to the occurrence of a Liquidation Event with
respect to such
REO Property, zero.
"Senior Enhancement Percentage": For any Distribution Date, the
Senior Enhancement Percentage is the percentage obtained by
dividing (x) the
aggregate Certificate
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Principal Balance of the Mezzanine Certificates and the Class CE
Certificates,
calculated after taking into account distribution of the Principal
Distribution
Amount to holders of the certificates then entitled to
distributions thereof on
the related distribution date by (y) the aggregate principal
balance of the
mortgage loans as of the last day of the related Due Period (after
giving effect
to scheduled payments of principal due during the related Due
Period, to the
extent received or advanced, and unscheduled collections of
principal received
during the related Prepayment Period).
"Senior Interest Distribution Amount": With respect to any
Distribution Date, the Senior Interest Distribution Amount for each
class of
Class A Certificates is equal to the sum of the Interest
Distribution Amount for
that class for that distribution date and the Interest Carry
Forward Amount, if
any, for that class for that distribution date.
"Senior Principal Distribution Amount": With respect to any
Distribution Date, an amount equal to the excess of (i) the
aggregate
Certificate Principal Balance of the Class A Certificates
immediately prior to
the related distribution date over (ii) the lesser of (A) the
product of (i)
approximately 61.20% and (ii) the aggregate principal balance of
the mortgage
loans as of the last day of the related Due Period (after giving
effect to
scheduled payments of principal due during the related Due Period,
to the extent
received or advanced, and unscheduled collections of principal
received during
the related Prepayment Period) and (B) the aggregate principal
balance of the
mortgage loans as of the last day of the related Due Period (after
giving effect
to scheduled payments of principal due during the related Due
Period, to the
extent received or advanced, and unscheduled collections of
principal received
during the related Prepayment Period) minus 0.50% of the aggregate
principal
balance of the mortgage loans as of the cut-off date.
"Servicer": Wells
Fargo Bank,
N.A. or any successor Servicer
appointed as herein provided, each in its capacity as a Servicer
hereunder.
"Servicer Event of Default": One or more of the events
described
in Section 7.01.
"Servicer Prepayment
Charge Payment Amount": The amounts payable
by the Servicer
in respect
of any waived
Prepayment
Charges pursuant to
Section 3.01.
"Servicer Remittance Date": With respect to any Distribution
Date,
the 18th day of the calendar month in which such Distribution Date
occurs or, if
such 18th day is not a Business Day, the Business Day immediately
following.
"Servicing Account": The account or accounts created and
maintained
pursuant to Section 3.09.
"Servicing Advances": The reasonable "out-of-pocket" costs and
expenses incurred by the Servicer in connection with a default,
delinquency or
other unanticipated event by the Servicer in the performance of its
servicing
obligations, including, but not limited to, the cost of (i) the
preservation,
restoration and protection of a Mortgaged Property, (ii) any
enforcement or
judicial proceedings, including foreclosures, in respect of a
particular
Mortgage Loan, including any expenses incurred in relation to any
such
proceedings that result from the
45
<PAGE>
Mortgage Loan being registered on the MERS System, (iii) the
management
(including reasonable fees in connection therewith) and liquidation
of any REO
Property, (iv) the performance of its obligations under Section
3.01, Section
3.09, Section 3.13, Section 3.14, Section 3.16 and Section 3.23.
Servicing
Advances shall also include any reasonable "out-of-pocket" costs
and expenses
(including legal fees) incurred by the 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 related Mortgagor or otherwise
payable under
this Agreement.The Servicer shall not be required to make any
Servicing Advance
in respect of a Mortgage Loan or REO Property that, in the good
faith business
judgment of the Servicer, would not be ultimately recoverable from
related
Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or
REO Property
as provided herein. The Servicer shall not be required to make any
Servicing
Advance that would be a Nonrecoverable Advance.
"Servicing Fee": With respect to each Mortgage Loan, the amount
of
the annual fee paid to the Servicer, which shall, for a period of
one full
month, be equal to one-twelfth of the product of (a) the Servicing
Fee Rate
(without regard to the words "per annum") and (b) the outstanding
principal
balance of such Mortgage Loan. Such fee shall be payable monthly,
computed on
the basis of the same principal amount and period respecting which
any related
interest payment on a Mortgage Loan is received. The obligation for
payment of
the Servicing Fee is limited to, and the Servicing Fee is payable
solely from,
the interest portion (including recoveries with respect to interest
from
Liquidation Proceeds) of such Monthly Payment collected by the
Servicer, or as
otherwise provided under Section 3.11.
"Servicing Fee Rate": With respect to each Mortgage Loan, the
rate
of 0.50% per annum.
"Servicing Officer": Any employee of the Servicer involved in,
or
responsible for, the administration and servicing of the Mortgage
Loans, whose
name appear on a list of Servicing Officers furnished by the
Servicer to the
Trustee, the Trust Administrator and the Depositor on the Closing
Date, as such
list may from time to time be amended.
"Significance Percentage": The percentage equivalent of a
fraction,
the numerator of which is (I) the present value (such calculation
of present
value using the two-year swaps rate made available at Bloomberg
Financial
Markets, L.P.) of the aggregate amount payable under the Cap
Contract (assuming
that one-month LIBOR for each remaining Calculation Period (as
defined in the
Cap Contract) beginning with the Calculation Period immediately
following the
related Distribution Date is equal to the sum of (a) the one-month
LIBOR rate
for each remaining Calculation Period made available at Bloomberg
Financial
Markets, L.P. by typing in the following keystrokes: fwcv, 27, 3
(provided that
the Depositor shall notify the Trust Administrator in writing of
any changes to
such keystrokes) and (b) the percentage equivalent of a fraction,
the numerator
of which is 3.00% and the denominator of which is the remaining
Distribution
Dates on which the Trust Administrator is entitled to receive
payments under the
Cap Contract) and the denominator of which is (II) the aggregate
Certificate
Principal Balance of the Class A Certificates and the Mezzanine
Certificates on
such Distribution Date (after giving effect to all distributions on
such
Distribution Date).
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<PAGE>
"Single Certificate": With respect to any Class of Certificates
(other than the Residual Certificates), a hypothetical Certificate
of such Class
evidencing a Percentage Interest for such Class corresponding to an
initial
Certificate Principal Balance or Notional Amount of $1,000. With
respect to the
Class P and the Residual Certificates, a hypothetical Certificate
of such Class
evidencing a 20% Percentage Interest in such Class.
"Sponsor": Citigroup
Global Markets Realty Corp. or its successor
in interest.
"Startup Day":
With
respect to any Trust REMIC, the day
designated as such pursuant to Section 10.01(b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan:
(a)
as of any date of determination up to but not including the
Distribution Date on
which the proceeds, if any, of a Liquidation Event with respect to
such Mortgage
Loan would be distributed, the Scheduled Principal Balance of such
Mortgage Loan
as of the Cut-off Date, as shown in the Mortgage Loan Schedule,
minus the sum of
(i) the principal portion of each Monthly Payment due on a Due Date
subsequent
to the Cut-off Date, to the extent received from the Mortgagor or
advanced by
the Servicer and distributed pursuant to Section 4.01 on or before
such date of
determination, (ii) all Principal Prepayments received after the
Cut-off Date,
to the extent distributed pursuant to Section 4.01 on or before
such date of
determination, (iii) all Liquidation Proceeds and Insurance
Proceeds applied by
the Servicer as recoveries of principal in accordance with the
provisions of
Section 3.16, to the extent distributed pursuant to Section 4.01 on
or before
such date of determination, and (iv) any Realized Loss incurred
with respect
thereto as a result of a Deficient Valuation made during or prior
to the
Prepayment Period for the most recent Distribution Date coinciding
with or
preceding such date of determination; and (b) as of any date of
determination
coinciding with or subsequent to the Distribution Date on which the
proceeds, if
any, of a Liquidation Event with respect to such Mortgage Loan
would be
distributed, zero. With respect to any REO Property: (a) as of any
date of
determination up to but not including the Distribution Date on
which the
proceeds, if any, of a Liquidation Event with respect to such REO
Property would
be distributed, an amount (not less than zero) equal to the Stated
Principal
Balance of the related Mortgage Loan as of the date on which such
REO Property
was acquired on behalf of the Trust Fund, minus, the principal
portion of
Monthly Payments that would have become due on such related
Mortgage Loan after
such REO Property was acquired if such Mortgage Loan had not been
converted to
an REO Property, to the extent advanced by the Servicer and
distributed pursuant
to Section 4.01 on or before such date of determination; and (b) as
of any date
of determination coinciding with or subsequent to the Distribution
Date on which
the proceeds, if any, of a Liquidation Event with respect to such
REO Property
would be distributed, zero.
"Stayed Funds": If the Servicer is the subject of a proceeding
under
the federal Bankruptcy Code and the making of any payment required
to be made
under the terms of the Certificates and this Agreement is
prohibited by Section
362 of the federal Bankruptcy Code, funds which are in the custody
of the
Servicer, a trustee in bankruptcy or a federal bankruptcy court and
should have
been the subject of such Remittance absent such prohibition.
"Stepdown Date": The earlier to occur of (i) the first
Distribution
Date on which the aggregate Certificate Principal Balance of the
Class A
Certificates has been reduced to zero and (ii) the later to occur
of (a) the
Distribution Date occurring in March 2009 and (b) the first
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<PAGE>
Distribution Date on which the Senior Enhancement Percentage
(calculated for
this purpose only after taking into account distributions of
principal on the
Mortgage Loans but prior to any distribution of the Principal
Distribution
Amount to the Certificates then entitled to distributions of
principal on such
Distribution Date) is equal to or greater than 38.80%.
"Sub-Servicer": Any Person with which any Servicer has entered
into
a Sub- Servicing Agreement and which meets the qualifications of a
Sub-Servicer
pursuant to Section 3.02.
"Sub-Servicing Account": An account established by a
Sub-Servicer
which meets the requirements set forth in Section 3.08 and is
otherwise
acceptable to the Servicer.
"Sub-Servicing Agreement": The written contract between the
Servicer
and a Sub-Servicer relating to servicing and administration of
certain Mortgage
Loans as provided in Section 3.02.
"Subsequent Recoveries": As of any Distribution Date, amounts
received by the Trust Fund (net of any related expenses permitted
to be
reimbursed to the related Sub-Servicer or the Servicer from such
amounts under
the related Sub-Servicing Agreement or hereunder) specifically
related to a
Mortgage Loan that was the subject of a liquidation or an REO
Disposition prior
to the related Prepayment Period that resulted in a Realized
Loss.
"Substitution
Shortfall Amount":
As defined in Section
2.03(d)
hereof.
"Tax Returns": The federal income tax return on Internal
Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit
Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual
Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any
successor forms,
to be filed on behalf of any Trust REMIC due to its classification
as a REMIC
under the REMIC Provisions, together with any and all other
information reports
or returns that may be required to be furnished to the
Certificateholders or
filed with the Internal Revenue Service or any other governmental
taxing
authority under any applicable provisions of federal, state or
local tax laws.
"Telerate Page 3750": The display designated as page "3750" on
the
Dow Jones Telerate Capital Markets Report (or such other page as
may replace
page 3750 on that report for the purpose of displaying London
interbank offered
rates of major banks).
"Termination Price":
As defined in Section 9.01.
"Terminator": As defined in Section 9.01.
"Transfer": Any
direct or indirect transfer, sale, pledge,
hypothecation, or
other form of
assignment of any
Ownership Interest in a
Certificate.
"Transferee":
Any Person
who is acquiring by Transfer any
Ownership Interest in a Certificate.
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<PAGE>
"Transferor": Any
Person who is
disposing by Transfer of any
Ownership Interest in a Certificate.
"Trigger Event": A
Trigger Event is in effect on any Distribution
Date on or after the Stepdown Date if:
(a) the Delinquency Percentage exceeds 40.50% of the Senior
Enhancement Percentage for the prior Distribution Date; or
(b) the aggregate amount of Realized Losses incurred since the
Cut-off Date through the last day of the related Due Period
(reduced by the
aggregate amount of Subsequent Recoveries received since the
Cut-off Date
through the last day of the related Due Period) divided by
aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date
exceeds the
applicable percentages set forth below with respect to such
Distribution Date:
DISTRIBUTION DATE OCCURRING IN
PERCENTAGE
--------------------------------
----------
March 2008 through February 2009
1.15%
March 2009 through February 2010
2.60%
March 2010 through February 2011
4.05%
March 2011 through February 2012
5.25%
March 2012 and thereafter
5.90%
"Trust": Citigroup
Mortgage Loan Trust 2006-WFHE1.
"Trust Administrator":
Citibank,
N.A., or its successor in
interest, or any successor trust administrator appointed as herein
provided.
"Trust Fund": Collectively, all of the assets of each Trust
REMIC,
the Net WAC Rate Carryover Reserve Account, the Cap Contract,
distributions made
to the Trust Administrator by the Cap Administrator under the Cap
Administration
Agreement and the Cap Account, Servicer Prepayment Charge Payment
Amounts and
the other assets conveyed by the Depositor to the Trustee pursuant
to Section
2.01.
"Trust REMIC": Any of REMIC I, REMIC II, REMIC III and REMIC
IV.
"Trustee": U.S.
Bank National
Association,
or its successor
in
interest, or any successor trustee appointed as herein
provided.
"Uncertificated Balance": The amount of any REMIC Regular
Interest
outstanding as of any date of determination. As of the Closing
Date, the
Uncertificated Balance of each REMIC Regular Interest shall equal
the amount set
forth in the Preliminary Statement hereto as its initial
Uncertificated Balance.
On each Distribution Date, the Uncertificated Balance of each REMIC
Regular
Interest shall be reduced by all distributions of principal made on
such REMIC
Regular Interest on such Distribution Date pursuant to Section 4.01
and, if and
to the extent necessary and appropriate, shall be further reduced
on such
Distribution Date by Realized Losses as provided in Section 4.04.
The
Uncertificated Balance of REMIC I Regular Interest I-LTZZ shall be
increased by
interest deferrals as provided in Section 4.01. With respect to the
Class CE
Interest as of any date of determination, an amount equal to the
excess, if any,
of (A) the then aggregate Uncertificated Principal Balance of the
REMIC 1
Regular Interests over (B)
49
<PAGE>
the then aggregate Certificate Principal Balance of the Floating
Rate
Certificates and the Class P Certificates then outstanding. The
Uncertificated
Principal Balance of each REMIC Regular Interest that has an
Uncertificated
Principal Balance shall never be less than zero.
"Uncertificated Interest": With respect to any REMIC Regular
Interest for any Distribution Date, one month's interest at the
REMIC I
Remittance Rate applicable to such REMIC Regular Interest for such
Distribution
Date, accrued on the Uncertificated Balance thereof immediately
prior to such
Distribution Date. Uncertificated Interest in respect of any REMIC
Regular
Interest shall accrue on the basis of a 360-day year consisting of
twelve 30-day
months. Uncertificated Interest with respect to each Distribution
Date, as to
any REMIC Regular Interest, shall be reduced by an amount equal to
the sum of
(a) the aggregate Prepayment Interest Shortfall, if any, for such
Distribution
Date to the extent not covered by payments pursuant to Section 3.24
and (b) the
aggregate amount of any Relief Act Interest Shortfall, if any
allocated, in each
case, to such REMIC Regular Interest pursuant to Section 1.02. In
addition,
Uncertificated Interest with respect to each Distribution Date, as
to any REMIC
Regular Interest shall be reduced by Realized Losses, if any,
allocated to such
REMIC Regular Interest pursuant to Section 1.02 and Section
4.04.
"Uninsured Cause": Any cause of damage to a Mortgaged Property
such
that the complete restoration of such property is not fully
reimbursable by the
hazard insurance policies required to be maintained pursuant to
Section 3.14.
"United States Person": A citizen or resident of the United
States,
a corporation, partnership or other entity created or organized in,
or under the
laws of, the United States, any State thereof or the District of
Columbia
(except, in the case of a partnership, to the extent provided in
regulations);
provided that, for purposes solely of the restrictions on the
transfer of the
Residual Certificates, no partnership or other entity treated as a
partnership
for United States federal income tax purposes shall be treated as a
United
States Person unless all persons that own an interest in such
partnership either
directly or through any entity that is not a corporation for United
States
federal income tax purposes are required by the applicable
operative agreement
to be United States Persons, or an estate whose income is subject
to United
States federal income tax regardless of its source, or a trust if a
court within
the United States is able to exercise primary supervision over
the
administration of the trust and one or more United States Persons
have the
authority to control all substantial decisions of the trust. To the
extent
prescribed in regulations by the Secretary of the Treasury, which
have not yet
been issued, a trust which was in existence on August 20, 1996
(other than a
trust treated as owned by the grantor under subpart E of part I of
subchapter J
of chapter 1 of the Code), and which was treated as a United States
person on
August 20, 1996 may elect to continue to be treated as a United
States person
notwithstanding the previous sentence. The term "United States"
shall have the
meaning set forth in Section 7701 of the Code.
"Value": With respect to any Mortgaged Property, the lesser of
(i)
the value thereof as determined by an appraisal made for the
originator of the
Mortgage Loan at the time of origination of the Mortgage Loan and
(ii) the
purchase price paid for the related Mortgaged Property by the
Mortgagor with the
proceeds of the Mortgage Loan, provided, however, in the case of a
Refinanced
Mortgage Loan, such value of the Mortgaged Property is based solely
upon
50
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the value determined by an appraisal made for the originator of
such Refinanced
Mortgage Loan at the time of origination of such Refinanced
Mortgage Loan by an
appraiser.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. With respect to
any date of
determination, 98% of all Voting Rights will be allocated among the
holders of
the Class A Certificates, the Mezzanine Certificates and the Class
CE
Certificates in proportion to the then outstanding Certificate
Principal
Balances of their respective Certificates, 1% of all Voting Rights
will be
allocated to the holders of the Class P Certificates and 1% of all
Voting Rights
will be allocated among the holders of the Residual Certificates.
The Voting
Rights allocated to each Class of Certificate shall be allocated
among Holders
of each such Class in accordance with their respective Percentage
Interests as
of the most recent Record Date.
SECTION 1.02 Allocation
of Certain Interest Shortfalls.
For purposes of calculating the Interest Distribution Amount for
the
Floating Rate Certificates and the Class CE Certificates for any
Distribution
Date, the aggregate amount of any Prepayment Interest Shortfalls
(to the extent
not covered by payments by the Servicer pursuant to Section 3.24)
and any Relief
Act Interest Shortfalls incurred in respect of the Mortgage Loans
for any
Distribution Date shall be allocated first, to the Class CE
Certificates based
on, and to the extent of, one month's interest at the then
applicable
Pass-Through Rate on the Notional Amount of the Class CE
Certificates and,
thereafter, among the Class A Certificates and the Mezzanine
Certificates on a
PRO RATA basis based on, and to the extent of, one month's interest
at the then
applicable respective Pass-Through Rate on the respective
Certificate Principal
Balance of each such Certificate immediately prior to such
Distribution Date.
For purposes of calculating the amount of Uncertificated
Interest
for the REMIC I Regular Interests for any Distribution Date:
(A) The aggregate amount of any Prepayment Interest Shortfalls
(to
the extent not covered by payments by the Servicer pursuant to
Section 3.24) and
any Relief Act Interest Shortfalls incurred in respect of the
Mortgage Loans for
any Distribution Date shall be allocated among REMIC I Regular
Interest I-LTAA,
REMIC I Regular Interest I-LTA1A, REMIC I Regular Interest I-LTA1B,
REMIC I
Regular Interest I-LTA1C, REMIC I Regular Interest I-LTA1D, REMIC I
Regular
Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
Interest
I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest
I-LTM5, REMIC
I Regular Interest I-LTM6, REMIC I Regular Interest I-LTM7, REMIC I
Regular
Interest I-LTM8, REMIC I Regular Interest I-LTM9, REMIC I Regular
Interest
I-LTM10, REMIC I Regular Interest I-LTM11 and REMIC I Regular
Interest I-LTZZ
PRO RATA based on, and to the extent of, one month's interest at
the then
applicable respective REMIC I Remittance Rate on the respective
Uncertificated
Balance of each such REMIC I Regular Interest.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01 Conveyance
of Mortgage Loans.
The Depositor, concurrently with the execution and delivery
hereof,
does hereby transfer, assign, set over and otherwise convey to the
Trustee
without recourse for the benefit of the Certificateholders all the
right, title
and interest of the Depositor, including any security interest
therein for the
benefit of the Depositor, in and to the Mortgage Loans identified
on the
Mortgage Loan Schedule, the rights of the Depositor under the
Assignment
Agreements, payments made to the Trust Administrator by the Cap
Administrator
under the Cap Administration Agreement and the Cap Account, and all
other assets
included or to be included in REMIC I. Such assignment includes all
interest and
principal received by the Depositor or the Servicer on or with
respect to the
Mortgage Loans (other than payments of principal and interest due
on such
Mortgage Loans on or before the Cut-off Date). The Depositor
herewith delivers
to the Trustee executed copies of the Assignment Agreements, and
the Trustee and
the Trust Administrator acknowledge receipt of the same on behalf
of the
Certificateholders.
In connection with such transfer and assignment, the Depositor
does
hereby deliver to, and deposit with, the Trustee or a Custodian on
its behalf,
the following documents or instruments (a "Mortgage File") with
respect to each
Mortgage Loan so transferred and assigned:
(i) The Mortgage Note, endorsed by manual or facsimile
signature
without
recourse by the related Originator or an Affiliate of the
related
Originator
in blank or to the Trustee showing a complete chain of
endorsements from the named payee to the Trustee or from the named
payee
to the
Affiliate of the related Originator and from such Affiliate to
the
Trustee;
(ii) The original recorded Mortgage, noting the presence of the
MIN
of the
Mortgage Loan, if applicable, and language indicating that the
Mortgage
Loan is a MOM Loan if the Mortgage Loan is a MOM Loan, with
evidence
of recording thereon or a copy of the Mortgage certified by the
public
recording office in those jurisdictions where the public
recording
office
retains the original;
(iii) Unless the Mortgage Loan is registered on the MERS(R)
System,
an
assignment from the related Originator or an Affiliate of the
related
Originator
to the Trustee in recordable form of the Mortgage which may be
included,
where permitted by local law, in a blanket assignment or
assignments of the Mortgage to the Trustee, including any
intervening
assignments and showing a complete chain of title from the
original
mortgagee
named under the Mortgage to the Person assigning the Mortgage
Loan to
the Trustee (or to MERS, noting the presence of the MIN, if the
Mortgage
Loan is registered on the MERS(R) System);
(iv) Any original assumption, modification, buydown or
conversion-to- fixed-interest-rate agreement applicable to the
Mortgage
Loan;
and
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<PAGE>
(v) The original or a copy of the title insurance policy (which
may
be a
certificate or a short form policy relating to a master policy
of
title
insurance) pertaining to the Mortgaged Property, or in the
event
such
original title policy is unavailable, a copy of the preliminary
title
report and
the lender's recording instructions, with the original to be
delivered
within 180 days of the Closing Date or an attorney's opinion of
title in
jurisdictions where such is the customary evidence of title.
In instances where an original recorded Mortgage cannot be
delivered
by the Depositor to the Trustee (or a Custodian on behalf of the
Trustee) prior
to or concurrently with the execution and delivery of this
Agreement, due to a
delay in connection with the recording of such Mortgage, the
Depositor may, (a)
in lieu of delivering such original recorded Mortgage referred to
in clause (ii)
above, deliver to the Trustee (or a Custodian on behalf of the
Trustee) a copy
thereof, provided that the Depositor certifies that the original
Mortgage has
been delivered to a title insurance company for recordation after
receipt of its
policy of title insurance or binder therefor (which may be a
certificate
relating to a master policy of title insurance), and (b) in lieu of
delivering
the completed assignment in recordable form referred to in clause
(iii) above to
the Trustee (or a Custodian on behalf of the Trustee), deliver such
assignment
to the Trustee (or a Custodian on behalf of the Trustee) completed
except for
recording information. In all such instances, the Depositor will
deliver the
original recorded Mortgage and completed assignment (if applicable)
to the
Trustee (or a Custodian on behalf of the Trustee) promptly upon
receipt of such
Mortgage. In instances where an original recorded Mortgage has been
lost or
misplaced, the Depositor or the related title insurance company may
deliver, in
lieu of such Mortgage, a copy of such Mortgage bearing recordation
information
and certified as true and correct by the office in which
recordation thereof was
made. In instances where the original or a copy of the title
insurance policy
referred to in clause (vi) above (which may be a certificate
relating to a
master policy of title insurance) pertaining to the Mortgaged
Property relating
to a Mortgage Loan cannot be delivered by the Depositor to the
Trustee (or a
Custodian on behalf of the Trustee) prior to or concurrently with
the execution
and delivery of this Agreement because such policy is not yet
available, the
Depositor may, in lieu of delivering the original or a copy of such
title
insurance referred to in clause (vi) above, deliver to the Trustee
(or a
Custodian on behalf of the Trustee) a binder with respect to such
policy (which
may be a certificate relating to a master policy of title
insurance) and deliver
the original or a copy of such policy (which may be a certificate
relating to a
master policy of title insurance) to the Trustee (or a Custodian on
behalf of
the Trustee) within 180 days of the Closing Date, in instances
where an original
assumption, modification, buydown or conversion-to-fixed-
interest-rate
agreement cannot be delivered by the Depositor to the Trustee (or a
Custodian on
behalf of the Trustee) prior to or concurrently with the execution
and delivery
of this Agreement, the Depositor may, in lieu of delivering the
original of such
agreement referred to in clause (iv) above, deliver a certified
copy thereof.
To the extent not already recorded, except with respect to any
Mortgage Loan for which MERS is identified on the Mortgage or on a
properly
recorded assignment of the Mortgage as the mortgagee of record, the
Servicer, at
the expense of the Sponsor shall promptly (and in no event later
than five
Business Days following the later of the Closing Date and the date
of receipt by
the Servicer of the recording information for a Mortgage) submit or
cause to be
submitted for recording, at no expense to any Trust REMIC, in the
appropriate
public office for real property records, each Assignment delivered
to it
pursuant to (iii) above. In the event that any such Assignment is
lost or
returned unrecorded because of a defect therein, the Servicer,
at
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the expense of the Sponsor, shall promptly prepare or cause to be
prepared a
substitute Assignment or cure or cause to be cured such defect, as
the case may
be, and thereafter cause each such Assignment to be duly
recorded.
Notwithstanding the foregoing, but without limiting the requirement
that such
Assignments be in recordable form, neither the Servicer nor the
Trustee shall be
required to submit or cause to be submitted for recording any
Assignment
delivered to it or a Custodian pursuant to (iii) above if such
recordation shall
not, as of the Closing Date, be required by the Rating Agencies, as
a condition
to their assignment on the Closing Date of their initial ratings to
the
Certificates, as evidenced by the delivery by the Rating Agencies
of their
ratings letters on the Closing Date; provided, however,
notwithstanding the
foregoing, the Servicer shall submit each Assignment for recording,
at no
expense to the Trust Fund or the Servicer, upon the earliest to
occur of: (A)
reasonable direction by Holders of Certificates entitled to at
least 25% of the
Voting Rights, (B) the occurrence of a Servicer Event of Default,
(C) the
occurrence of a bankruptcy, insolvency or foreclosure relating to
the Sponsor,
(D) the occurrence of a servicing transfer as described in Section
7.02 of this
Agreement and (E) with respect to any one Assignment the occurrence
of a
foreclosure relating to the Mortgagor under the related
Mortgage.
Notwithstanding the foregoing, if the Sponsor fails to pay the cost
of recording
the Assignments, such expense will be paid by the Servicer and the
Servicer
shall be reimbursed for such expenses by the Trust as Servicing
Advances.
In connection with the assignment of any Mortgage Loan registered
on
the MERS System, the Depositor further agrees that it will cause,
within 30
Business Days after the Closing Date, the MERS System to indicate
that such
Mortgage Loans have been assigned by the Depositor to the Trustee
in accordance
with this Agreement for the benefit of the Certificateholders by
including in
such computer files (a) the code in the field which identifies the
specific
Trustee and (b) the code in the field "Pool Field" which identifies
the series
of the Certificates issued in connection with such Mortgage Loans.
The Depositor
further agrees that it will not, and will not permit the Servicer
to, and the
Servicer agrees that it will not and will not permit a Sub-Servicer
to, alter
the codes referenced in this paragraph with respect to any Mortgage
Loan during
the term of this Agreement unless and until such Mortgage Loan is
repurchased in
accordance with the terms of this Agreement.
With respect to
a maximum of approximately 5.00% of the Original
Mortgage Loans, by outstanding principal balance of the Original
Mortgage Loans
as of the Cut-off Date, if any original Mortgage Note referred to
in (i) above
cannot be located, the obligations of the Depositor to deliver such
documents
shall be deemed to be satisfied upon delivery to the Trustee (or a
Custodian on
behalf of the Trustee) of a photocopy of such Mortgage Note, if
available, with
a lost note affidavit. If any of the original Mortgage Notes for
which a lost
note affidavit was delivered to the Trustee (or a Custodian on
behalf of the
Trustee) is subsequently located, such original Mortgage Note shall
be delivered
to the Trustee (or a Custodian on behalf of the Trustee) within
three Business
Days.
The Depositor shall deliver or cause to be delivered to the Trustee
(or a
Custodian on behalf of the Trustee) promptly upon receipt thereof
any other
original documents constituting a part of a Mortgage File received
with respect
to any Mortgage Loan, including, but not limited to, any original
documents
evidencing an assumption, modification, consolidation or extension
of any
Mortgage Loan.
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All original documents relating to the Mortgage Loans that are
not
delivered to the Trustee (or a Custodian on behalf of the Trustee)
are and shall
be held by or on behalf of the Sponsor, the Depositor or the
Servicer, as the
case may be, in trust for the benefit of the Trustee on behalf of
the
Certificateholders. In the event that any such original document is
required
pursuant to the terms of this Section to be a part of a Mortgage
File, such
document shall be delivered promptly to the Trustee (or a Custodian
on behalf of
the Trustee). Any such original document delivered to or held by
the Depositor
that is not required pursuant to the terms of this Section to be a
part of a
Mortgage File, shall be delivered promptly to the Servicer.
Wherever it is provided in this Section 2.01 that any document,
evidence or information relating to a Mortgage Loan be delivered or
supplied to
the Trustee, the Depositor shall do so by delivery thereof to the
Trustee or a
Custodian on behalf of the Trustee.
The parties hereto understand and agree that it is not intended
that
any Mortgage Loan be included in the Trust that is a high-cost home
loan as
defined by the Homeownership and Equity Protection Act of 1994 or
any other
applicable predatory or abusive lending laws.
The Depositor hereby directs the Trustee to execute, deliver
and
perform its obligations under the Cap Contract on the Closing Date
and
thereafter on behalf of the Trust and the Holders of the Floating
Rate
Certificates. The Sponsor, the Depositor, the Servicer, the Trust
Administrator
and the Holders of the Floating Rate Certificates by their
acceptance of such
Certificates acknowledge and agree that the Trustee shall execute,
deliver and
perform the Trust Fund's obligations under the Cap Contract and
shall do so
solely in its capacity as Trustee of the Trust Fund and not in its
individual
capacity. The Trustee shall not have any responsibility for the
contents,
adequacy or sufficiency of the Cap contract, including, without
limitation, any
representations and warranties contained therein.
SECTION 2.02 Acceptance
of the Trust Fund by the Trustee.
Subject to the provisions of Section 2.01 and subject to any
exceptions noted on an exception report delivered by or on behalf
of the
Trustee, the Trustee acknowledges receipt of the documents referred
to in
Section 2.01 (other than such documents described in Section
2.01(iv)) above and
all other assets included in the definition of "Trust Fund" and
declares that it
holds and will hold such documents and the other documents
delivered to it
constituting the Mortgage File, and that it holds or will hold all
such assets
and such other assets included in the definition of "Trust Fund" in
trust for
the exclusive use and benefit of all present and future
Certificateholders.
The Trustee, by execution and delivery hereof, acknowledges
receipt,
subject to the review described in the succeeding sentence, of the
documents and
other property referred to in Section 2.01 and declares that the
Trustee (or a
Custodian on behalf of the Trustee) holds and will hold such
documents and other
property, including property yet to be received in the Trust Fund,
in trust,
upon the trusts herein set forth, for the benefit of all present
and future
Certificateholders. The Trustee or the related Custodian on its
behalf shall,
for the benefit of the Trustee and the Certificateholders, review
each Mortgage
File within 90 days after execution and delivery of this Agreement,
to ascertain
that all required documents have been executed, received and
recorded, if
applicable, and that such documents relate to the Mortgage Loans.
If in the
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course of such review the Trustee or the related Custodian on its
behalf finds a
document or documents constituting a part of a Mortgage File to be
defective in
any material respect, the Trustee or the related Custodian on its
behalf shall
promptly so notify the Depositor, the Trust Administrator, the
Sponsor, the
Servicer and, if such notice is from the related Custodian on the
Trustee's
behalf, the Trustee. In addition, upon the discovery by the
Depositor, the
Servicer, the Trust Administrator or the Trustee of a breach of any
of the
representations and warranties made by the related Originator or
the Sponsor in
the related Assignment Agreement in respect of any Mortgage Loan
which
materially adversely affects such Mortgage Loan or the interests of
the related
Certificateholders in such Mortgage Loan, the party discovering
such breach
shall give prompt written notice to the other parties.
The Depositor and the Trustee intend that the assignment and
transfer herein contemplated constitute a sale of the Mortgage
Loans, the
related Mortgage Notes and the related documents, conveying good
title thereto
free and clear of any liens and encumbrances, from the Depositor to
the Trustee
in trust for the benefit of the Certificateholders and that such
property not be
part of the Depositor's estate or property of the Depositor in the
event of any
insolvency by the Depositor. In the event that such conveyance is
deemed to be,
or to be made as security for, a loan, the parties intend that the
Depositor
shall be deemed to have granted and does hereby grant to the
Trustee a first
priority perfected security interest in all of the Depositor's
right, title and
interest in and to the Mortgage Loans, the related Mortgage Notes
and the
related documents, and that this Agreement shall constitute a
security agreement
under applicable law.
The
Trustee may, concurrently with the execution and delivery
hereof
or at any time thereafter, enter into a custodial agreement with a
Custodian
pursuant to which the Trustee appoints a Custodian to hold the
Mortgage Files on
behalf of the Trustee for the benefit of the Trustee and all
present and future
Certificateholders, which may provide that the related Custodian
shall, on
behalf of the Trustee, conduct the review of each Mortgage File
required under
the first paragraph of this Section 2.02. Initially, Citibank West,
FSB is
appointed as Custodian with respect to the related Mortgage Files
of all the
related Mortgage Loans and, notwithstanding anything to the
contrary herein, it
is understood that such initial Custodian shall be responsible for
the review
contemplated in the second paragraph of this Section 2.02 and for
all other
functions relating to the receipt, review, reporting and
certification provided
for herein with respect to the Mortgage Files (other than ownership
thereof for
the benefit of the Certificateholders and related duties and
obligations set
forth herein).
SECTION 2.03 Repurchase
or Substitution of Mortgage Loans
by the Sponsor or the Depositor.
(a) Upon
discovery or receipt of notice by the Depositor, the
Servicer, the Trust Administrator or the Trustee of any materially
defective
document in, or that a document is missing from, a Mortgage File or
of the
breach by the Originator or the Sponsor of any representation,
warranty or
covenant under an Assignment Agreement in respect of any Mortgage
Loan which
materially adversely affects the value of such Mortgage Loan or the
interest
therein of the Certificateholders, the party so discovering or
receiving notice
shall promptly notify the other parties to this Agreement, and the
Trustee
thereupon shall promptly notify the related Originator and the
Sponsor of such
defect, missing document or breach and request that the related
Originator
deliver such missing document or cure such defect or that the
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related Originator or the Sponsor, as applicable, cure such breach
within 90
days from the date the related Originator or the Sponsor, as
applicable, was
notified of such missing document, defect or breach, and if the
related
Originator or Sponsor, as applicable, does not deliver such missing
document or
cure such defect or breach in all material respects during such
period, the
Trustee shall enforce the obligations of the related Originator or
Sponsor, as
applicable, under the related Assignment Agreement (i) to
repurchase such
Mortgage Loan from REMIC I at the Purchase Price within 90 days
after the date
on which the Sponsor was notified (subject to Section 2.03(e)) of
such missing
document, defect or breach, and (ii) to indemnify the Trust Fund in
respect of
such missing document, defect or breach, in the case of each of (i)
and (ii), if
and to the extent that the related Originator or Sponsor, as
applicable, is
obligated to do so under the related Assignment Agreement. The
Purchase Price
for the repurchased Mortgage Loan and any indemnification shall be
remitted by
the related Originator or the Sponsor, as applicable, to the
Servicer for
deposit into the Collection Account, and the Trust Administrator,
upon receipt
of written notice from the Servicer of such deposit, shall give
written notice
to the Trustee and the related Custodian that such deposit has
taken place and
the Trustee shall release (or cause the related Custodian to
release on its
behalf) to the related Originator or the Sponsor, as applicable,
the related
Mortgage File, and the Trustee and the Trust Administrator shall
execute and
deliver such instruments of transfer or assignment, in each case
without
recourse, as the related Originator or the Sponsor, as applicable,
shall furnish
to it and as shall be necessary to vest in the related Originator
or the
Sponsor, as applicable, any Mortgage Loan released pursuant hereto,
and the
Trustee and the Trust Administrator shall have no further
responsibility with
regard to such Mortgage File. In furtherance of the foregoing, if
the related
Originator or the Sponsor, as applicable, is not a member of MERS
and
repurchases a Mortgage Loan which is registered on the MERS System,
the related
Originator or the Sponsor, as applicable, pursuant to the related
Assignment
Agreement at its own expense and without any right of
reimbursement, shall cause
MERS to execute and deliver an assignment of the Mortgage in
recordable form to
transfer the Mortgage from MERS to the related Originator or the
Sponsor, as
applicable, and shall cause such Mortgage to be removed from
registration on the
MERS System in accordance with MERS rules and regulations. In lieu
of
repurchasing any such Mortgage Loan as provided above, if so
provided in the
related Assignment Agreement the related Originator or the Sponsor,
as
applicable, may cause such Mortgage Loan to be removed from REMIC I
(in which
case it shall become a Deleted Mortgage Loan) and substitute one or
more
Qualified Substitute Mortgage Loans in the manner and subject to
the limitations
set forth in Section 2.03(d). It is understood and agreed that the
obligation of
the related Originator or the Sponsor, as applicable, to cure or to
repurchase
(or to substitute for) any Mortgage Loan as to which a document is
missing, a
material defect in a constituent document exists or as to which
such a breach
has occurred and is continuing, and if and to the extent provided
in the related
Assignment Agreement to perform any applicable indemnification
obligations with
respect to any such omission, defect or breach, as provided in such
Assignment
Agreement, shall constitute the only remedies respecting such
omission, defect
or breach available to the Trustee or the Trust Administrator on
behalf of the
Certificateholders.
(b)
Notwithstanding anything to the contrary in this Section 2.03,
with respect to any breach by the related Originator or the
Sponsor, as
applicable, of any representation and warranty which breach
materially and
adversely affects the value of any Prepayment Charge or the
interests of the
Certificateholders therein, the Trustee shall enforce the
obligation of the
related Originator or the Sponsor, as applicable, to remedy such
breach as
provided in the related
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Assignment Agreement as follows: upon any Principal Prepayment with
respect to
the affected Mortgage Loan, the related Originator or the Sponsor,
as
applicable, shall pay or cause to be paid to the Purchaser the
excess, if any,
of (x) the amount of such Prepayment Charge calculated as set forth
in the
Mortgage Loan Schedule and (y) the amount collected from the
Mortgagor in
respect of such Prepayment Charge.
(c) Within 90
days of the earlier of discovery by the Servicer or
receipt of notice by the Depositor of the breach of any
representation, warranty
or covenant of the Servicer set forth in Section 2.05 which
materially and
adversely affects the interests of the Certificateholders in any
Mortgage Loan,
the Servicer shall cure such breach in all material respects.
(d) Any
substitution of Qualified Substitute Mortgage Loans for
Deleted Mortgage Loans made pursuant to Section 2.03(a) must be
effected prior
to the date which is two years after the Startup Day for REMIC
I.
As to any Deleted Mortgage Loan for which the related Originator
or
the Sponsor, as applicable, substitutes a Qualified Substitute
Mortgage Loan or
Loans, such substitution shall be effected by the related
Originator or the
Sponsor, as applicable, delivering to the Trustee (or to the
related Custodian
on behalf of the Trustee, as applicable), for such Qualified
Substitute Mortgage
Loan or Loans, the Mortgage Note, the Mortgage, the Assignment in
blank or to
the Trustee, and such other documents and agreements, with all
necessary
endorsements thereon, as are required by Section 2.01, together
with an
Officers' Certificate providing that each such Qualified Substitute
Mortgage
Loan satisfies the definition thereof and specifying the
Substitution Shortfall
Amount (as described below), if any, in connection with such
substitution. The
related Custodian on its behalf and on behalf of the Trustee shall,
for the
benefit of the Certificateholders, review each Mortgage File within
90 days
after execution and delivery of this Agreement, to ascertain that
all required
documents have been executed, received and recorded, if applicable,
and that
such documents relate to the Mortgage Loans. If in the course of
such review the
Trustee or the related Custodian on its behalf finds a document or
documents
constituting a part of a Mortgage File to be defective in any
material respect,
the Trustee or the related Custodian on its behalf shall promptly
so notify the
Depositor, the Trust Administrator, the related Originator, the
Sponsor and the
Servicer. Monthly Payments due with respect to Qualified Substitute
Mortgage
Loans in the month of substitution are not part of the Trust Fund
and will be
retained by the related Originator or the Sponsor, as applicable.
For the month
of substitution, distributions to Certificateholders will reflect
the Monthly
Payment due on such Deleted Mortgage Loan on or before the Due Date
in the month
of substitution, and the related Originator or the Sponsor, as
applicable, shall
thereafter be entitled to retain all amounts subsequently received
in respect of
such Deleted Mortgage Loan. The Trust Administrator shall give or
cause to be
given written notice to the Trustee and the Certificateholders that
such
substitution has taken place, and the Trust Administrator shall
amend or cause
the related Custodian to amend the Mortgage Loan Schedule to
reflect the removal
of such Deleted Mortgage Loan from the terms of this Agreement and
the
substitution of the Qualified Substitute Mortgage Loan or Loans
and, upon
receipt thereof, shall deliver a copy of such amended Mortgage Loan
Schedule to
the Servicer. Upon such substitution, such Qualified Substitute
Mortgage Loan or
Loans shall constitute part of the Mortgage Pool and shall be
subject in all
respects to the terms of this Agreement and the related Assignment
Agreement
(including all
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applicable representations and warranties thereof included in such
Assignment
Agreement), in each case as of the date of substitution.
For any month in which the related Originator or the Sponsor,
as
applicable, substitutes one or more Qualified Substitute Mortgage
Loans for one
or more Deleted Mortgage Loans, the Servicer will determine the
amount (the
"Substitution Shortfall Amount"), if any, by which the aggregate
Purchase Price
of all such Deleted Mortgage Loans exceeds the aggregate of, as to
each such
Qualified Substitute Mortgage Loan, the Scheduled Principal Balance
thereof as
of the date of substitution, together with one month's interest on
such
Scheduled Principal Balance at the applicable Mortgage Loan
Remittance Rate. On
the date of such substitution, the Trustee will monitor the
obligation of the
related Originator or the Sponsor, as applicable, to deliver or
cause to be
delivered, and shall request that such delivery be to the Servicer
for deposit
in the Collection Account, an amount equal to the Substitution
Shortfall Amount,
if any, and the Trustee (or the related Custodian on behalf of the
Trustee, as
applicable), upon receipt of the related Qualified Substitute
Mortgage Loan or
Loans and written notice given by the Servicer of such deposit,
shall release to
the related Originator or the Sponsor, as applicable, the related
Mortgage File
or Files and the Trustee and the Trust Administrator shall execute
and deliver
such instruments of transfer or assignment, in each case without
recourse, as
the related Originator or the Sponsor, as applicable, shall deliver
to it and as
shall be necessary to vest therein any Deleted Mortgage Loan
released pursuant
hereto.
In addition, the related Originator or the Sponsor, as
applicable,
shall obtain at its own expense and deliver to the Trustee and the
Trust
Administrator an Opinion of Counsel to the effect that such
substitution will
not cause (a) any federal tax to be imposed on any Trust REMIC,
including
without limitation, any federal tax imposed on "prohibited
transactions" under
Section 860F(a)(1) of the Code or on "contributions after the
startup date"
under Section 860G(d)(1) of the Code, or (b) any Trust REMIC to
fail to qualify
as a REMIC at any time that any Certificate is outstanding.
In addition, pursuant to the terms of the related Assignment
Agreement, the related Originator or the Seller, as applicable,
shall obtain at
its own expense and deliver to the Trustee and the Trust
Administrator an
Opinion of Counsel to the effect that such substitution will not
cause (a) any
federal tax to be imposed on the Trust Fund, including without
limitation, any
federal tax imposed on "prohibited transactions" under Section
860F(a)(I) of the
Code or on "contributions after the startup date" under Section
860G(d)(I) of
the Code or (b) any REMIC to fail to qualify as a REMIC at any time
that any
Certificate is outstanding. If such Opinion of Counsel can not be
delivered,
then such substitution may only be effected at such time as the
required Opinion
of Counsel can be given.
(e) Upon
discovery by the Depositor, the Servicer, the Trust
Administrator or the Trustee that any Mortgage Loan does not
constitute a
"qualified mortgage" within the meaning of Section 860G(a)(3) of
the Code, the
party discovering such fact shall within two Business Days give
written notice
thereof to the other parties to this Agreement, and the Trustee
shall give
written notice thereof to the Sponsor. In connection therewith, the
related
Originator or the Sponsor, as applicable, pursuant to the related
Assignment
Agreement or the Depositor pursuant to this Agreement shall
repurchase or,
subject to the limitations set forth in Section 2.03(d), substitute
one or more
Qualified Substitute Mortgage Loans for the affected Mortgage
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Loan within 90 days of the earlier of discovery or receipt of such
notice with
respect to such affected Mortgage Loan. Such repurchase or
substitution shall be
made by (i) the related Originator or the Sponsor, as applicable,
if the
affected Mortgage Loan's status as a non-qualified mortgage is or
results from a
breach of any representation, warranty or covenant made by the
related
Originator or the Sponsor, as applicable, under the related
Assignment Agreement
or (iii) the Depositor, if the affected Mortgage Loan's status as
a
non-qualified mortgage is a breach of no representation or
warranty. Any such
repurchase or substitution shall be made in the same manner as set
forth in
Sections 2.03(a). The Trustee shall reconvey to the Depositor, the
related
Originator or the Sponsor, as the case may be, the Mortgage Loan to
be released
pursuant hereto in the same manner, and on the same terms and
conditions, as it
would a Mortgage Loan repurchased by the Originator or the Sponsor
for breach of
a representation or warranty.
SECTION 2.04
[Reserved].
SECTION 2.05
Representations, Warranties and Covenants of the
Servicer.
(a) The Servicer
hereby represents, warrants and covenants to the
Trust Administrator and the Trustee, for the benefit of each of the
Trustee, the
Trust Administrator, the Certificateholders and to the Depositor
that as of the
Closing Date or as of such date specifically provided herein:
(i) The Servicer is a national banking association duly
formed, validly existing and in good standing under the laws of
the
United States of America and is duly authorized and qualified
to
transact any and all business contemplated by this Agreement to
be
conducted by the Servicer;
(ii) The Servicer has the full power and authority to conduct
its business as presently conducted by it and to execute,
deliver
and
perform, and to enter into and consummate, all transactions
contemplated by this Agreement. The Servicer has duly authorized
the
execution, delivery and performance of this Agreement, has duly
executed and delivered this Agreement, and this Agreement,
assuming
the due authorization, execution and delivery thereof by the
Trustee, the Depositor and the Trust Administrator, constitutes
a
legal, valid and binding obligation of the Servicer,
enforceable
against the Servicer in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy,
insolvency,
reorganization or similar laws affecting the enforcement of
creditors' rights generally, laws affecting the contract
obligations
of insured banks and by general principles of equity;
(iii) The execution and delivery of this Agreement by the
Servicer, the servicing of the Mortgage Loans by the Servicer
hereunder, the consummation by the Servicer of any other of the
transactions herein contemplated, and the fulfillment of or
compliance with the terms hereof are in the ordinary course of
business of the Servicer and will not (A) result in a breach of
any
term or provision of the charter of by-laws of the Servicer or
(B)
conflict with, result in a breach, violation or acceleration of,
or
result in a default under, the terms of any
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other material agreement or instrument to which the Servicer is
a
party or by which it may be bound, or any statute, order or
regulation applicable to the Servicer of any court, regulatory
body,
administrative agency or governmental body having jurisdiction
over
the Servicer; and the Servicer is not a party to, bound by, or
in
breach or violation of any indenture or other agreement or
instrument, or subject to or in violation of any statute, order
or
regulation of any court, regulatory body, administrative agency
or
governmental body having jurisdiction over it, which materially
and
adversely affects or, to the Servicer's knowledge, would in the
future materially and adversely affect, (x) the ability of the
Servicer to perform its obligations under this Agreement, (y)
the
business, operations, financial condition, properties or assets
of
the Servicer taken as a whole or (z) the legality, validity or
enforceability of this Agreement;
(iv) The Servicer is a HUD approved mortgagee pursuant to
Section 203 and Section 211 of the National Housing Act and is
an
approved seller/servicer for Fannie Mae or Freddie Mac in good
standing. No event has occurred, including but not limited to a
change in insurance
coverage, that would make the Servicer unable to
comply with HUD eligibility requirements or that would require
notification to HUD;
(v) The Servicer does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every
covenant
made by it and contained in this Agreement;
(vi) No litigation is pending against the Servicer that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Servicer
to
service the Mortgage Loans or to perform any of its other
obligations hereunder in accordance with the terms hereof;
(vii) There are no actions or proceedings against, or
investigations known to it of, the Servicer before any court,
administrative or other tribunal (A) that might prohibit its
entering into this Agreement, (B) seeking to prevent the
consummation of the transactions contemplated by this Agreement
or
(C) that might prohibit or materially and adversely affect the
performance by the Servicer of its obligations under, or the
validity or enforceability of, this Agreement;
(viii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution,
delivery and performance by the Servicer of, or compliance by
the
Servicer with, this Agreement or the consummation by it of the
transactions contemplated by this Agreement, except for such
consents, approvals, authorizations or orders, if any, that
have
been obtained prior to the Closing Date;
(ix) The Servicer has fully furnished and will continue to
fully
furnish,
in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information
(e.g.,
favorable
and unfavorable) on its borrower credit files to
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Equifax,
Experian and Trans Union Credit Information Company or their
successors
(the "Credit Repositories") in a timely manner; and
(x) The Servicer is a member of MERS in good standing, and will
comply in
all material respects with the rules and procedures of MERS in
connection
with the servicing of the Mortgage Loans that are registered
with
MERS.
It is understood and agreed that the representations, warranties
and
covenants set forth in this Section 2.05 shall survive delivery of
the Mortgage
Files to the Trustee or to the related Custodian on its behalf and
shall inure
to the benefit of the Trustee, the Trust Administrator, the
Depositor and the
Certificateholders. Upon discovery by any of the Depositor, the
Servicer, the
Trust Administrator or the Trustee of a breach of any of the
foregoing
representations, warranties and covenants which materially and
adversely affects
the value of any Mortgage Loan or the interests therein of the
Certificateholders, the party discovering such breach shall give
prompt written
notice (but in no event later than two Business Days following such
discovery)
to the Trustee and the Trust Administrator. Subject to Section
7.01, the
obligation of the Servicer set forth in Section 2.03(c) to cure
breaches shall
constitute the sole remedies against the Servicer available to
the
Certificateholders, the Depositor, the Trust Administrator or the
Trustee on
behalf of the Certificateholders respecting a breach of the
representations,
warranties and covenants contained in this Section 2.05.
SECTION 2.06 Issuance
of the Certificates.
The Trustee acknowledges the assignment to it of the Mortgage
Loans
and the delivery to it or to the related Custodian on its behalf of
the Mortgage
Files, subject to the provisions of Section 2.01 and Section 2.02,
together with
the assignment to it of all other assets included in REMIC I
delivered on the
date hereof, receipt of which is hereby acknowledged. Concurrently
with such
assignment and delivery of such assets delivered on the date hereof
and in
exchange therefor, the Trust Administrator, pursuant to the written
request of
the Depositor executed by an officer of the Depositor, has
executed,
authenticated and delivered, to or upon the order of the Depositor,
the
Certificates in authorized denominations. The interests evidenced
by the
Certificates (other than the Class CE Certificates, the Class P
Certificates and
the Class R-X Certificates), the Class CE Interest and the Class P
Interest
constitute the entire beneficial ownership interest in REMIC
II.
SECTION 2.07 Conveyance
of the REMIC Regular Interests;
Acceptance of the Trust REMICs by the Trustee.
(a) The
Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey
in trust to
the Trustee without recourse all the right, title and interest of
the Depositor
in and to the assets described in the definition of REMIC I for the
benefit of
the holders of the REMIC I Regular Interests (which are
uncertificated) and the
Class R Certificates (in respect of the Class R-I Interest). The
Trustee (or the
related Custodian on its behalf, as applicable) acknowledges
receipt of the
assets described in the definition of REMIC I and declares that it
holds and
will hold the same in trust for the exclusive use and benefit of
the holders of
the REMIC I Regular Interests and the Class R Certificates (in
respect of the
Class R-I Interest). The interests evidenced by the Class R-I
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Interest, together with the REMIC I Regular Interests, constitute
the entire
beneficial ownership interest in REMIC I.
(b) The
Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey
in trust to
the Trustee without recourse all the right, title and interest of
the Depositor
in and to the REMIC I Regular Interests (which are uncertificated)
for the
benefit of the Holders of the Regular Certificates (other than the
Class CE
Certificates and the Class P Certificates), the Class CE Interest,
the Class P
Interest and the Class R Certificates (in respect of the Class R-II
Interest).
The Trustee acknowledges receipt of the REMIC I Regular Interests
and declares
that it holds and will hold the same in trust for the exclusive use
and benefit
of the Holders of the Regular Certificates (other than the Class CE
Certificates
and the Class P Certificates), the Class CE Interest, the Class P
Interest and
the Class R Certificates (in respect of the Class R-II Interest).
The interests
evidenced by the Class R-II Interest, together with the Regular
Certificates,
the Class CE Interest and the Class P Interest, constitute the
entire beneficial
ownership interest in REMIC II.
(c) The Depositor, concurrently
with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey
in trust to
the Trustee without recourse all the right, title and interest of
the Depositor
in and to the Class CE Interest (which is uncertificated) for the
benefit of the
Holders of the Class CE Certificates and the Class R-X Certificates
(in respect
of the Class R-III Interest). The Trustee acknowledges receipt of
the Class CE
Interest and declares that it holds and will hold the same in trust
for the
exclusive use and benefit of the Holders of the Class CE
Certificates and the
Class R-X Certificates (in respect of the Class R-III Interest).
The interests
evidenced by the Class R-III Interest, together with the Class CE
Certificates,
constitute the entire beneficial ownership interest in REMIC
III.
(d) The
Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey
in trust to
the Trustee without recourse all the right, title and interest of
the Depositor
in and to the Class P Interest (which is uncertificated) for the
benefit of the
Holders of the Class P Certificates and the Class R-X Certificates
(in respect
of the Class R-IV Interest). The Trustee acknowledges receipt of
the Class P
Interest and declares that it holds and will hold the same in trust
for the
exclusive use and benefit of the Holders of the Class P
Certificates and the
Class R-X Certificates (in respect of the Class R-IV Interest). The
interests
evidenced by the Class R-IV Interest, together with the Class P
Certificates,
constitute the entire beneficial ownership interest in REMIC
IV.
(e) Concurrently with (i) the assignment and delivery to the
Trustee
of REMIC I and the acceptance by the Trustee thereof, pursuant to
Section 2.01,
Section 2.02 and subsection (a) hereof, (ii) the assignment and
delivery to the
Trustee of REMIC II (including the Residual Interest therein
represented by the
Class R-II Interest) and the acceptance by the Trustee thereof,
pursuant to
Section 2.01, Section 2.02 and subsection (b) hereof, (iii) the
assignment and
delivery to the Trustee of REMIC III (including the Residual
Interest therein
represented by the Class R-III Interest) and the acceptance by the
Trustee
thereof, pursuant to Section 2.01, Section 2.02 and subsection (c)
hereof and
(iv) the assignment and delivery to the Trustee of REMIC IV
(including the
Residual Interest therein represented by the Class IV Interest) and
the
acceptance by the Trustee thereof, pursuant to Section 2.01,
Section 2.02 and
subsection (d) hereof, the Trustee, pursuant to the written request
of the
Depositor executed by
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an officer of the Depositor, has executed, authenticated and
delivered to or
upon the order of the Depositor, (A) the Class R Certificates in
authorized
denominations evidencing the Class R-I Interest and the Class R-II
Interest and
(B) the Class R-X Certificates in authorized denominations
evidencing the Class
R-III Interest and the Class R-IV Interest.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01 Servicer
to Act as Servicer.
The Servicer shall service and administer the Mortgage Loans on
behalf of the Trustee and in the best interests of and for the
benefit of the
Certificateholders (as determined by the Servicer in its reasonable
judgment) 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
prudent
mortgage lenders and loan servicers administering similar mortgage
loans but
without regard to:
(i) any relationship that the Servicer, any Sub-Servicer or any
Affiliate
of the Servicer or any Sub-Servicer may have with the related
Mortgagor;
(ii) the ownership of any Certificate by the Servicer or any
Affiliate
of the Servicer;
(iii) the Servicer's obligation to make P&I Advances or
Servicing
Advances;
or
(iv) the Servicer's or any Sub-Servicer's right to receive
compensation for its services hereunder or with respect to any
particular
transaction.
To the
extent consistent with the foregoing, the Servicer (a) shall
seek
the timely and complete recovery of principal and interest on the
Mortgage Notes
and (b) shall waive (or permit a Sub-Servicer to waive) a
Prepayment Charge only
under the following circumstances: (i) such waiver is standard and
customary in
servicing similar Mortgage Loans and such waiver relates to a
default or a
reasonably foreseeable default and would, in the reasonable
judgment of the
Servicer, maximize recovery of total proceeds taking into account
the value of
such Prepayment Charge and the related Mortgage Loan, (ii) the
collection of
such Prepayment Charge would be in violation of applicable laws or
(iii) the
amount of the Prepayment Charge set forth on the Prepayment Charge
Schedule is
not consistent with the related Mortgage Note or is otherwise
unenforceable. If
a Prepayment Charge is waived as permitted by meeting the standard
described in
clauses (ii) or (iii) above, then, the Trustee shall make
commercially
reasonable efforts to attempt to enforce the obligations of the
related
Originator under the Master Agreement to pay the amount of such
waived
Prepayment Charge, for the benefit of the Holders of the Class P
Certificates;
provided, however, that the Trustee shall not be under any
obligation to take
any action pursuant to this paragraph unless directed by the
Depositor and
provided, further, the Depositor hereby agrees to assist the
Trustee in
enforcing any obligations of any Originator to repurchase or
substitute for a
Mortgage Loan which has breached a representation or warranty under
the related
Assignment Agreement. If the Trustee makes a good faith
determination as
evidenced by an officer's certificate delivered by the Trustee to
the Trust
Administrator, that the Servicer's efforts are not reasonably
expected to be
successful in enforcing such rights, it shall
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notify the Trust Administrator of such failure and the Trust
Administrator, with
the cooperation of the Servicer, shall enforce the obligation of
the related
Originator under the Master Agreement to pay to the Servicer the
amount of such
waived Prepayment Charge. If such Originator fails to pay the
amount of such
waived Prepayment Charge in accordance with its obligations under
the related
Master Agreement, the Trustee, Trust Administrator, the Servicer
and the
Depositor shall consult on further actions to be taken against such
Originator.
Notwithstanding the foregoing, to the extent that the Trustee and
the related
Originator are the same entity, the Trust Administrator shall
enforce the
obligations of the related Originator under the related Master
Agreement
pursuant to the terms of this paragraph.
To the extent consistent with the foregoing, the Servicer shall
also
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,
the Servicer
shall have full power and authority, acting alone or through
Sub-Servicers 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, the
Servicer in its
own name or in the name of a Sub-Servicer is hereby authorized and
empowered by
the Trustee when the Servicer believes it appropriate in its best
judgment in
accordance with the servicing standards set forth above, to execute
and deliver,
on behalf of the Certificateholders and the Trustee, and upon
notice to the
Trustee, 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 and Certificateholders. The
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. The Servicer shall also comply in the
performance of
this Agreement with all reasonable rules and requirements of any
standard hazard
insurance policy. Subject to Section 3.17, the Trustee shall
execute, at the
written request of the Servicer, and furnish to the Servicer and
any
Sub-Servicer such documents as are necessary or appropriate to
enable the
Servicer or any Sub-Servicer to carry out their servicing and
administrative
duties hereunder, and the Trustee hereby grants to the Servicer a
power of
attorney to carry out such duties. The Trustee shall not be liable
for the
actions of the Servicer or any Sub-Servicers under such powers of
attorney.
In accordance with the standards of the preceding paragraph,
the
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, and further as provided in Section 3.11. Any cost
incurred by the
Servicer or by Sub-Servicers in effecting the timely payment of
taxes and
assessments on a Mortgaged Property shall not, for the purpose of
calculating
distributions to Certificateholders, be added to the unpaid
principal balance of
the related Mortgage Loan, notwithstanding that the terms of such
Mortgage Loan
so permit provided, however, that (subject to Section 3.07) the
Servicer may
capitalize the amount of any Servicing Advances incurred pursuant
to this
Section 3.01 in connection with the modification of a Mortgage
Loan.
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The Servicer further is authorized and empowered by the Trustee,
on
behalf of the Certificateholders and the Trustee, in its own name
or in the name
of the Sub-Servicer, when the Servicer or the Sub-Servicer, as the
case may be,
believes it is appropriate in its best judgment to register any
Mortgage Loan on
the MERS System, or cause the removal from the registration of any
Mortgage Loan
on the MERS System, to execute and deliver, on behalf of the
Trustee and the
Certificateholders or any of them, any and all instruments of
assignment and
other comparable instruments with respect to such assignment or
re-recording of
a Mortgage in the name of MERS, solely as nominee for the Trustee
and its
successors and assigns. Any reasonable expenses (i) incurred as a
result of MERS
discontinuing or becoming unable to continue operations in
connection with the
MERS System or (ii) if the affected Mortgage Loan is in default or,
in the
judgment of the Servicer, such default is reasonably foreseeable,
incurred in
connection with the actions described in the preceding sentence,
shall be
subject to withdrawal by the Servicer from the Collection
Account.
Notwithstanding anything in this Agreement to the contrary, the
Servicer may not make any future advances with respect to a
Mortgage Loan
(except as provided in Section 4.03) and the Servicer shall not (i)
permit any
modification with respect to any Mortgage Loan (except with respect
to a
Mortgage Loan that is in default or, in the judgment of the
Servicer, such
default is reasonably foreseeable) 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
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.
The Servicer may delegate its responsibilities under this
Agreement;
provided, however, that no such delegation shall release the
Servicer from the
responsibilities or liabilities arising under this Agreement.
SECTION 3.02
Sub-Servicing Agreements Between the Servicer and
Sub-Servicers.
(a) The Servicer
may enter into Sub-Servicing Agreements (provided
that such agreements would not result in a withdrawal or a
downgrading by the
Rating Agencies of the rating on any Class of Certificates) with
Sub-Servicers,
for the servicing and administration of the Mortgage Loans;
provided, however,
such sub-servicing arrangement and the terms of the related
Sub-Subservicing
Agreement must provide for the servicing of Mortgage Loans in a
manner
consistent with the servicing arrangement contemplated
hereunder.
(b) Each
Sub-Servicer shall be (i) authorized to transact business
in the state or states in which the related Mortgaged Properties it
is to
service are situated, if and to the extent required by applicable
law to enable
the Sub-Servicer to perform its obligations hereunder and under
the
Sub-Servicing Agreement and (ii) a Freddie Mac or Fannie Mae
approved
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mortgage servicer. Each Sub-Servicing Agreement must impose on the
Sub-Servicer
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.
The Servicer will examine each Sub-Servicing Agreement and will be
familiar with
the terms thereof. The terms of any Sub-Servicing Agreement will
not be
inconsistent with any of the provisions of this Agreement. The
Servicer and the
Sub-Servicers may enter into and make amendments to the
Sub-Servicing Agreements
or enter into different forms of Sub-Servicing Agreements;
provided, however,
that any such amendments or different forms shall be consistent
with and not
violate the provisions of this Agreement, and that no such
amendment or
different form shall be made or entered into which could be
reasonably expected
to be materially adverse to the interests of the
Certificateholders, without the
consent of the Holders of Certificates entitled to at least 66% of
the Voting
Rights. Any variation without the consent of the Holders of
Certificates
entitled to at least 66% of the Voting Rights from the provisions
set forth in
Section 3.08 relating to insurance or priority requirements of
Sub-Servicing
Accounts, or credits and charges to the Sub- Servicing Accounts or
the timing
and amount of remittances by the Sub-Servicers to the Servicer, are
conclusively
deemed to be inconsistent with this Agreement and therefore
prohibited. The
Servicer shall deliver to the Trustee and the Trust Administrator
copies of all
Sub-Servicing Agreements, and any amendments or modifications
thereof, promptly
upon the Servicer's execution and delivery of such instruments.
(c) As part of
its servicing activities hereunder, the Servicer
(except as otherwise provided in the last sentence of this
paragraph), for the
benefit of the Trustee and the Certificateholders, shall enforce
the obligations
of each Sub-Servicer under the related Sub-Servicing Agreement,
including,
without limitation, any obligation to make advances in respect of
delinquent
payments as required by a Sub-Servicing Agreement. Such
enforcement, including,
without limitation, the legal prosecution of claims, termination
of
Sub-Servicing Agreements, and the pursuit of other appropriate
remedies, shall
be in such form and carried out to such an extent and at such time
as the
Servicer, in its good faith business judgment, would require were
it the owner
of the related Mortgage Loans. The 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.
SECTION 3.03 Successor
Sub-Servicers.
The Servicer shall be entitled to terminate any Sub-Servicing
Agreement and the rights and obligations of any Sub-Servicer
pursuant to any
Sub-Servicing Agreement in accordance with the terms and conditions
of such
Sub-Servicing Agreement. In the event of termination of any
Sub-Servicer, all
servicing obligations of such Sub-Servicer shall be assumed
simultaneously by
the Servicer without any act or deed on the part of such
Sub-Servicer or the
Servicer, and the Servicer either shall service directly the
related Mortgage
Loans or shall enter into a Sub-Servicing Agreement with a
successor
Sub-Servicer which qualifies under Section 3.02.
Any Sub-Servicing Agreement shall include the provision that
such
agreement may be immediately terminated by the Trustee or the
Trust
Administrator without fee, in
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accordance with the terms of this Agreement, in the event that the
Servicer
shall, for any reason, no longer be the Servicer (including
termination due to a
Servicer Event of Default).
SECTION 3.04 Liability
of the Servicer.
Notwithstanding any Sub-Servicing Agreement, any of the
provisions
of this Agreement relating to agreements or arrangements between
the Servicer
and a Sub-Servicer or reference to actions taken through a
Sub-Servicer or
otherwise, the Servicer shall remain obligated and primarily liable
to the
Trustee and the Certificateholders for the servicing and
administering of the
Mortgage Loans in accordance with the provisions of Section 3.01
without
diminution of such obligation or liability by virtue of such
Sub-Servicing
Agreements or arrangements or by virtue of indemnification from the
Sub-Servicer
and to the same extent and under the same terms and conditions as
if the
Servicer alone were servicing and administering the Mortgage Loans.
The Servicer
shall be entitled to enter into any agreement with a Sub- Servicer
for
indemnification of the Servicer by such Sub-Servicer and nothing
contained in
this Agreement shall be deemed to limit or modify such
indemnification.
SECTION 3.05 No
Contractual Relationship Between Sub-Servicers
and Trustee, Trust Administrator or
Certificateholders.
Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a
Sub-Servicer
in its capacity as such shall be deemed to be between the
Sub-Servicer and the
Servicer alone, and the Trustee, the Trust Administrator and
the
Certificateholders shall not be deemed parties thereto and shall
have no claims,
rights, obligations, duties or liabilities with respect to the
Sub-Servicer
except as set forth in Section 3.06. The Servicer shall be solely
liable for all
fees owed by it to any Sub-Servicer, irrespective of whether the
Servicer's
compensation pursuant to this Agreement is sufficient to pay such
fees.
SECTION 3.06
Assumption
or Termination of Sub-Servicing
Agreements by Trust Administrator.
In the event the Servicer shall for any reason no longer be the
servicer (including by reason of the occurrence of a Servicer Event
of Default),
the Trust Administrator or its designee shall thereupon assume all
of the rights
and obligations of the Servicer under each Sub-Servicing Agreement
that the
Servicer may have entered into, unless the Trust Administrator
elects to
terminate any Sub-Servicing Agreement in accordance with its terms
as provided
in Section 3.03. Upon such assumption, the Trust Administrator, its
designee or
the successor servicer for the Trust Administrator appointed
pursuant to Section
7.02 shall be deemed, subject to Section 3.03, to have assumed all
of the
Servicer's interest therein and to have replaced the Servicer as a
party to each
Sub-Servicing Agreement to the same extent as if each Sub-Servicing
Agreement
had been assigned to the assuming party, except that (i) the
Servicer shall not
thereby be relieved of any liability or obligations under any
Sub-Servicing
Agreement and (ii) none of the Trust Administrator, its designee or
any
successor Servicer shall be deemed to have assumed any liability or
obligation
of the Servicer that arose before it ceased to be the Servicer.
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The Servicer at its expense shall, upon request of the Trust
Administrator, deliver to the assuming party all documents and
records relating
to each Sub-Servicing Agreement and the Mortgage Loans then being
serviced and
an accounting of amounts collected and held by or on behalf of it,
and otherwise
use its best efforts to effect the orderly and efficient transfer
of the Sub-
Servicing Agreements to the assuming party.
SECTION 3.07 Collection
of Certain Mortgage Loan Payments.
The Servicer shall make reasonable efforts to collect all
payments
called for under the terms and provisions of the Mortgage Loans,
and shall, to
the extent such procedures shall be consistent with this Agreement
and the terms
and provisions of any applicable insurance policies, follow such
collection
procedures as it would follow with respect to mortgage loans
comparable to the
Mortgage Loans and held for its own account. Consistent with the
foregoing and
the servicing standards set forth in Section 3.01, the Servicer may
in its
discretion (i) waive any late payment charge or, if applicable,
penalty interest
or (ii) extend the due dates for Monthly Payments due on a Mortgage
Note for a
period of not greater than 180 days; provided that any extension
pursuant to
clause (ii) above shall not affect the amortization schedule of any
Mortgage
Loan for purposes of any computation hereunder, except as provided
below. In the
event of any such arrangement pursuant to clause (ii) above, the
Servicer shall
make timely advances on such Mortgage Loan during such extension
pursuant to
Section 4.03 and in accordance with the amortization schedule of
such Mortgage
Loan without modification thereof by reason of such
arrangements.
Notwithstanding the foregoing, in the event that any Mortgage Loan
is in default
or, in the judgment of the Servicer, such default is reasonably
foreseeable, the
Servicer, consistent with the standards set forth in Section 3.01,
may waive,
modify or vary any term of such Mortgage Loan (including
modifications that
change the Mortgage Rate, forgive the payment of principal or
interest or extend
the final maturity date of such Mortgage Loan), accept payment from
the related
Mortgagor of an amount less than the Stated Principal Balance in
final
satisfaction of such Mortgage Loan (such payment, a "Short
Pay-off") or consent
to the postponement of strict compliance with any such term or
otherwise grant
indulgence to any Mortgagor, if in the Servicer's determination
such waiver,
modification, postponement or indulgence is not materially adverse
to the
interests of the Certificateholders (taking into account any
estimated Realized
Loss that might result absent such action); provided, however, the
Servicer
shall not modify any Mortgage Loan in a manner that would
capitalize the amount
of any unpaid Monthly Payments or tax or insurance payments
advanced by the
Servicer on the Mortgagor's behalf unless the related Mortgagor
shall have
remitted an amount equal to a full Monthly Payment (or, in the case
of any
Mortgage Loan subject to a forbearance plan or bankruptcy plan, a
full modified
monthly payment under such plan) in each of the three calendar
months
immediately preceding the month of such modification.
SECTION 3.08
Sub-Servicing Accounts.
In those cases where a Sub-Servicer is servicing a Mortgage
Loan
pursuant to a Sub-Servicing Agreement, the Sub-Servicer will be
required to
establish and maintain one or more accounts (collectively, the
"Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account
and shall
comply with all requirements of this Agreement relating to the
Collection
Account. The Sub-Servicer shall deposit in the Sub-Servicing
Account, in no
event more than two Business Days after the Sub-Servicer's receipt
thereof, all
proceeds of Mortgage
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Loans received by the Sub-Servicer less its servicing compensation
to the extent
permitted by the Sub-Servicing Agreement. The Sub-Servicer shall
thereafter
remit such proceeds to the Servicer for deposit in the Collection
Account not
later than two Business Days after the deposit of such amounts in
the
Sub-Servicing Account. For purposes of this Agreement, the Servicer
shall be
deemed to have received payments on the Mortgage Loans when the
Sub-Servicer
receives such payments.
SECTION 3.09 Collection
of Taxes, Assessments and Similar
Items; Servicing Accounts.
To the extent the terms of a Mortgage provide for Escrow
Payments,
the Servicer shall establish and maintain one or more accounts (the
"Servicing
Accounts"), into which all collections from the Mortgagors (or
related advances
from Sub-Servicers) for the payment of taxes, assessments, fire,
flood, and
hazard insurance premiums, hazard insurance proceeds (to the extent
such amounts
are to be applied to the restoration or repair of the property) and
comparable
items for the account of the Mortgagors ("Escrow Payments") shall
be deposited
and retained. Servicing Accounts shall be Eligible Accounts. The
Servicer shall
deposit in the Servicing Accounts on a daily basis and in no event
later than
the second Business Day after receipt, and retain therein, all
Escrow Payments
collected on account of the Mortgage Loans, for the purpose of
effecting the
timely payment of any such items as required under the terms of
this Agreement.
Withdrawals of amounts from a Servicing Account may be made only to
(i) effect
timely payment of taxes, assessments, fire, flood, and hazard
insurance
premiums, and comparable items; (ii) reimburse the Servicer out of
related
collections for any advances made pursuant to Section 3.01 (with
respect to
taxes and assessments) and Section 3.14 (with respect to fire,
flood and hazard
insurance); (iii) refund to Mortgagors any sums as may be
determined to be
overages; (iv) pay interest, if required and as described below, to
Mortgagors
on balances in the Servicing Account; or (v) clear and terminate
the Servicing
Account at the termination of the Servicer's obligations and
responsibilities in
respect of the Mortgage Loans under this Agreement in accordance
with Article
IX. As part of its servicing duties, the Servicer shall pay to the
Mortgagors
interest on funds in Servicing Accounts, to the extent required by
law and, to
the extent that interest earned on funds in the Servicing Accounts
is
insufficient, to pay such interest from its or their own funds,
without any
reimbursement therefor. Notwithstanding the foregoing, the Servicer
shall not be
obligated to collect Escrow Payments if the related Mortgage Loan
does not
require such payments but the Servicer shall nevertheless be
obligated to make
Servicing Advances as provided in Section 3.01. In the event the
Servicer shall
deposit in the Servicing Accounts any amount not required to be
deposited
therein, it may at any time withdraw such amount from the Servicing
Accounts,
any provision to the contrary notwithstanding.
To the extent that a Mortgage does not provide for Escrow
Payments,
the Servicer (i) shall determine whether any such payments are made
by the
Mortgagor in a manner and at a time that is necessary to avoid the
loss of the
Mortgaged Property due to a tax sale or the foreclosure as a result
of a tax
lien and (ii) shall ensure that all insurance required to be
maintained on the
Mortgaged Property pursuant to this Agreement is maintained. If any
such payment
has not been made and the Servicer receives notice of a tax lien
with respect to
the Mortgage Loan being imposed, the Servicer will, to the extent
required to
avoid loss of the Mortgaged Property, advance or cause to be
advanced funds
necessary to discharge such lien on the Mortgaged Property. The
Servicer assumes
full responsibility for the payment of all such
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bills and shall effect payments of all such bills irrespective of
the
Mortgagor's faithful performance in the payment of same or the
making of the
Escrow Payments and shall make Servicing Advances from its own
funds to effect
such payments.
SECTION 3.10 Collection
Account and Distribution Account.
(a) On behalf of
the Trust Fund, the Servicer shall establish and
maintain one or more separate, segregated trust accounts (such
account or
accounts, the "Collection Account"), held in trust for the benefit
of the Trust
Administrator, the Trustee and the Certificateholders. On behalf of
the Trust
Fund, the Servicer shall deposit or cause to be deposited in the
clearing
account (which account must be an Eligible Account) in which it
customarily
deposits payments and collections on mortgage loans in connection
with its
mortgage loan servicing activities on a daily basis, and in no
event more than
two Business Days after the Servicer's receipt thereof, and shall
thereafter
deposit in the Collection Account, in no event more than one
Business Day after
the deposit of such funds into the clearing account, as and when
received or as
otherwise required hereunder, the following payments and
collections received or
made by it from and after the Cut-off Date (other than in respect
of principal
or interest on the related Mortgage Loans due on or before the
Cut-off Date), or
payments (other than Principal Prepayments) received by it on or
prior to the
Cut-off Date but allocable to a Due Period subsequent thereto:
(i) all payments on account of principal, including Principal
Prepayments (but not Prepayment Charges), on the Mortgage
Loans;
(ii) all payments on account of interest (the related Servicing
Fee)
on each
Mortgage Loan;
(iii) all Insurance Proceeds and Liquidation Proceeds (other
than
proceeds
collected in respect of any particular REO Property and amounts
paid by
the Servicer in connection with a purchase of Mortgage Loans
and
REO
Properties pursuant to Section 9.01);
(iv) any amounts required to be deposited pursuant to Section
3.12
in
connection with any losses realized on Permitted Investments
with
respect to
funds held in the Collection Account;
(v) any amounts required to be deposited by the Servicer pursuant
to
the second
paragraph of Section 3.14(a) in respect of any blanket policy
deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased
in
accordance
with Section 2.03 or Section 9.01;
(vii) all amounts required to be deposited in connection with
shortfalls
in principal amount of Qualified Substitute Mortgage Loans
pursuant
to Section 2.03; and
(viii) all Prepayment Charges collected by the Servicer and any
Servicer
Prepayment Charge Payment Amounts in connection with the
Principal
Prepayment of any of the Mortgage Loans.
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For purposes of the immediately preceding sentence, the Cut-off
Date
with respect to any Qualified Substitute Mortgage Loan shall be
deemed to be the
date of substitution.
The foregoing requirements for deposit in the Collection
Accounts
shall be exclusive, it being understood and agreed that, without
limiting the
generality of the foregoing, payments in the nature of late payment
charges or
assumption fees (other than Prepayment Charges) need not be
deposited by the
Servicer in the Collection Account. In the event the Servicer shall
deposit in
the Collection Account any amount not required to be deposited
therein, it may
at any time withdraw such amount from the Collection Account, any
provision
herein to the contrary notwithstanding.
(b) On behalf of
the Trust Fund, the Trust Administrator, as agent
for the Trustee, shall establish and maintain one or more separate,
segregated
trust accounts (such account or accounts, the "Distribution
Account"), held in
trust for the benefit of the Certificateholders. On behalf of the
Trust Fund,
the Servicer shall deliver to the Trust Administrator in
immediately available
funds for deposit in the Distribution Account on or before 4:00
p.m. New York
time (i) on the Servicer Remittance Date, that portion of the
Available
Distribution Amount (calculated without regard to the subtraction
therefrom of
the Credit Risk Manager Fee) for the related Distribution Date then
on deposit
in the Collection Account, the amount of all Prepayment Charges
collected during
the applicable Prepayment Period by the Servicer and Servicer
Prepayment Charge
Payment Amounts in connection with the Principal Prepayment of any
of the
Mortgage Loans then on deposit in the Collection Account and (ii)
on each
Business Day as of the commencement of which the balance on deposit
in the
Collection Account exceeds $75,000 following any withdrawals
pursuant to the
next succeeding sentence, the amount of such excess, but only if
the Collection
Account constitutes an Eligible Account solely pursuant to clause
(ii) of the
definition of "Eligible Account." If the balance on deposit in the
Collection
Account exceeds $75,000 as of the commencement of business on any
Business Day
and the Collection Account constitutes an Eligible Account solely
pursuant to
clause (ii) of the definition of "Eligible Account," the Servicer
shall, on or
before 4:00 p.m. New York time on such Business Day, withdraw from
the
Collection Account any and all amounts payable or reimbursable to
the Depositor,
the Servicer, the Trustee, the Trust Administrator, the Sponsor or
any
Sub-Servicer pursuant to Section 3.11 and shall pay such amounts to
the Persons
entitled thereto.
(c) Funds in the
Collection Account and the Distribution Account
may be invested in Permitted Investments in accordance with the
provisions set
forth in Section 3.12. The Servicer shall give notice to the
Trustee, the Trust
Administrator and the Depositor of the location of the Collection
Account
maintained by it when established and prior to any change thereof.
The Trust
Administrator shall give notice to the Servicer, the Trustee and
the Depositor
of the location of the Distribution Account when established and
prior to any
change thereof.
(d) Funds held
in the Collection Account at any time may be
delivered by the Servicer to the Trust Administrator for deposit in
an account
(which may be the Distribution Account and must satisfy the
standards for the
Distribution Account as set forth in the definition thereof) and
for all
purposes of this Agreement shall be deemed to be a part of the
Collection
Account; provided, however, that the Trust Administrator shall have
the sole
authority to withdraw any funds held pursuant to this subsection
(d). In the
event the Servicer shall deliver to
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the Trust Administrator for deposit in the Distribution Account any
amount not
required to be deposited therein, it may at any time request that
the Trust
Administrator withdraw such amount from the Distribution Account
and remit to it
any such amount, any provision herein to the contrary
notwithstanding. In
addition, the Servicer shall deliver to the Trust Administrator
from time to
time for deposit, and upon written notification from the Servicer,
the Trust
Administrator shall so deposit, in the Distribution Account:
(i) any P&I Advances, as required pursuant to Section 4.03;
(ii) any amounts required to be deposited pursuant to Section
3.23(d) or
(f) in connection with any REO Property;
(iii) any amounts to be paid by the Servicer in connection with
a
purchase
of Mortgage Loans and REO Properties pursuant to Section 9.01;
(iv) any amounts required to be deposited pursuant to Section
3.24
in
connection with any Prepayment Interest Shortfalls; and
(v)
any Stayed Funds, as soon as permitted by the federal
bankruptcy
court
having jurisdiction in such matters.
(e) Promptly
upon receipt of any Stayed Funds, whether from the
Servicer, a trustee in bankruptcy, or federal bankruptcy court or
other source,
the Trust Administrator shall deposit such funds in the
Distribution Account,
subject to withdrawal thereof as permitted hereunder.
(f) The Servicer
shall deposit in the Collection Account any
amounts required to be deposited pursuant to Section 3.12(b) in
connection with
losses realized on Permitted Investments with respect to funds held
in the
Collection Account.
SECTION 3.11
Withdrawals from the Collection Account and
Distribution
Account.
(a) The Servicer shall, from time to time, make withdrawals from
the
Collection Account for any of the following purposes or as
described in Section
4.03:
(i) to remit to the Trust Administrator for deposit in the
Distribution Account the amounts required to be so remitted
pursuant to
Section
3.10(b) or permitted to be so remitted pursuant to the first
sentence
of Section 3.10(d);
(ii) subject to Section 3.16(d), to reimburse the Servicer for
P&I
Advances,
but only to the extent of amounts received which represent Late
Collections (net of the related Servicing Fees) of Monthly Payments
on
Mortgage
Loans with respect to which such P&I Advances were made in
accordance with the
provisions of Section 4.03;
(iii) subject to Section 3.16(d), to pay the Servicer or any
Sub-Servicer (A) any unpaid Servicing Fees, (B) any unreimbursed
Servicing
Advances
with respect to each Mortgage Loan, but only to the extent of
any
Liquidation Proceeds, Insurance Proceeds
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or other
amounts as may be collected by the Servicer from a Mortgagor,
or
otherwise
received with respect to such Mortgage Loan and (C) without
limiting
any right of withdrawal set forth in clause (vi) below, any
Servicing
Advances made with respect to a Mortgage Loan that, following
the final
liquidation of a Mortgage Loan are Nonrecoverable Advances, but
only to
the extent that Late Collections, Liquidation Proceeds and
Insurance
Proceeds received with respect to such Mortgage Loan are
insufficient to reimburse the Servicer or any Sub-Servicer for
such
Servicing
Advances;
(iv) to pay to the Servicer as servicing compensation (in
addition
to the
Servicing Fee) on the Servicer Remittance Date any interest or
investment
income earned on funds deposited in the Collection Account;
(v) to pay to the Servicer, the Depositor or the Sponsor, as
the
case may
be, with respect to each Mortgage Loan that has previously been
purchased
or replaced pursuant to Section 2.03 all amounts received
thereon
subsequent to the date of purchase or substitution, as the case
may
be;
(vi) to reimburse the Servicer for any P&I Advance or
Servicing
Advance
previously made which the Servicer has determined to be a
Nonrecoverable Advance in accordance with the provisions of Section
4.03;
(vii) to reimburse the Servicer or the Depositor for expenses
incurred
by or reimbursable to the Servicer or the Depositor, as the
case
may be,
pursuant to Section 6.03;
(viii) to reimburse the Servicer, the Trust Administrator or
the
Trustee,
as the case may be, for expenses reasonably incurred in respect
of the
breach or defect giving rise to the purchase obligation under
Section
2.03 or Section 2.04 of this Agreement that were included in
the
Purchase
Price of the Mortgage Loan, including any expenses arising out
of
the
enforcement of the purchase obligation;
(ix) [reserved];
(x) to pay, or to reimburse the Servicer for advances in respect
of
expenses
incurred in connection with any Mortgage Loan pursuant to
Section
3.16(b);
and
(xi) to clear and terminate the Collection Account pursuant to
Section
9.01.
The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying
any
withdrawal from the Collection Account, to the extent held by or on
behalf of
it, pursuant to subclauses (ii), (iii), (iv), (v), (vi), (viii) and
(ix) above.
The Servicer shall provide written notification to the Trustee and
the Trust
Administrator, on or prior to the next succeeding Servicer
Remittance Date, upon
making any withdrawals from the Collection Account pursuant to
subclause (vii)
above.
(b) The Trust Administrator shall, from time to time, make
withdrawals from the Distribution Account, for any of the following
purposes,
without priority:
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(i) to make distributions to the Cap Account in accordance with
Section
4.08;
(ii) to make distributions to Certificateholders in accordance
with
Section
4.01;
(iii) to pay to itself any interest income earned on funds
deposited
in the
Distribution Account pursuant to Section 3.12(c);
(iv) to reimburse the Trust Administrator or the Trustee pursuant
to
Section
7.02;
(v) to pay any amounts in respect of taxes pursuant to
10.01(g)(iii);
(vi) to pay any Extraordinary Trust Fund Expenses;
(vii) to reimburse the Trust Administrator or the Trustee for
any
P&I
Advance made by it under Section 7.01 (if not reimbursed by the
Servicer)
to the same extent the Servicer would be entitled to
reimbursement under Section 3.11(a);
(viii) to pay the Credit Risk Manager the Credit Risk Manager
Fee;
and
(ix) to clear and terminate the Distribution Account pursuant
to
Section
9.01.
SECTION 3.12 Investment
of Funds in the Collection Account and
the Distribution Account.
(a) The Servicer may direct any depository institution
maintaining
the Collection Account (for purposes of this Section 3.12, an
"Investment
Account"), and the Trust Administrator may at the direction of the
Depositor
direct any depository institution maintaining the Distribution
Account (for
purposes of this Section 3.12, also an "Investment Account"), to
hold the funds
in such Investment Account uninvested or to invest the funds in
such Investment
Account in one or more Permitted Investments specified in such
instruction
bearing interest or sold at a discount, and maturing, unless
payable on demand,
(i) no later than the Business Day immediately preceding the date
on which such
funds are required to be withdrawn from such account pursuant to
this Agreement,
if a Person other than the Trust Administrator is the obligor
thereon, and (ii)
no later than the date on which such funds are required to be
withdrawn from
such account pursuant to this Agreement, if the Trust Administrator
is the
obligor thereon. All such Permitted Investments shall be held to
maturity,
unless payable on demand. Any investment of funds in an Investment
Account shall
be made in the name of the Trust Administrator (in its capacity as
such) or in
the name of a nominee of the Trust Administrator. The Trust
Administrator shall
be entitled to sole possession (except with respect to investment
direction of
funds held in the Collection Account and the Distribution Account
and any income
and gain realized thereon) over each such investment, and any
certificate or
other instrument evidencing any such investment shall be delivered
directly to
the Trust Administrator or its agent, together with any document of
transfer
necessary to transfer title to such investment to the Trust
Administrator or its
nominee. In the event amounts on deposit in an Investment Account
are at any
time invested in a Permitted Investment payable on demand, the
Trust
Administrator shall:
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(x) consistent with any notice required to be given thereunder,
demand
that payment thereon be made on the last day such Permitted
Investment
may otherwise mature hereunder in an amount equal to the lesser
of (1) all
amounts then payable thereunder and (2) the amount required to
be
withdrawn on such date; and
(y) demand payment of all amounts due thereunder promptly upon
determination by a Responsible Officer of the Trust Administrator
that
such
Permitted Investment would not constitute a Permitted Investment
in
respect of
funds thereafter on deposit in the Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Collection Account held by or on behalf of the
Servicer, shall
be for the benefit of the Servicer and shall be subject to its
withdrawal in
accordance with Section 3.11. The Servicer shall deposit in the
Collection
Account the amount of any loss of principal incurred in respect of
any such
Permitted Investment made with funds in such accounts immediately
upon
realization of such loss.
(c) All income and gain realized from the investment of funds
deposited in the Distribution Account held by or on behalf of the
Trust
Administrator, shall be for the benefit of the Trust Administrator
and shall be
subject to its withdrawal at any time. The Trust Administrator
shall deposit in
the Distribution Account the amount of any loss of principal
incurred in respect
of any such Permitted Investment made with funds in such accounts
immediately
upon realization of such loss.
(d) Except as otherwise expressly provided in this Agreement, if
any
default occurs in the making of a payment due under any Permitted
Investment, or
if a default occurs in any other performance required under any
Permitted
Investment, the Trust Administrator may and, subject to Section
8.01 and Section
8.02(a)(v), upon the request of the Holders of Certificates
representing more
than 50% of the Voting Rights allocated to any Class of
Certificates, shall take
such action as may be appropriate to enforce such payment or
performance,
including the institution and prosecution of appropriate
proceedings.
SECTION 3.13
[Reserved].
SECTION 3.14
Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage.
(a) The terms of each Mortgage Note require the related Mortgagor
to
maintain fire, flood and hazard insurance policies. To the extent
such policies
are not maintained, the Servicer shall cause to be maintained for
each Mortgaged
Property fire and hazard insurance with extended coverage as is
customary in the
area where the Mortgaged Property is located in an amount which is
at least
equal to the lesser of the current principal balance of such
Mortgage Loan and
the amount necessary to fully compensate for any damage or loss to
the
improvements which are a part of such property on a replacement
cost basis, in
each case in an amount not less than such amount as is necessary to
avoid the
application of any coinsurance clause contained in the related
hazard insurance
policy. The Servicer shall also cause to be maintained fire and
hazard insurance
on each REO Property with extended coverage as is customary in the
area
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where the Mortgaged Property is located in an amount which is at
least equal to
the lesser of (i) the maximum insurable value of the improvements
which are a
part of such property and (ii) the outstanding principal balance of
the related
Mortgage Loan at the time it became an REO Property. The Servicer
will comply in
the performance of this Agreement with all reasonable rules and
requirements of
each insurer under any such hazard policies. Any amounts to be
collected by the
Servicer under any such policies (other than amounts to be applied
to the
restoration or repair of the property subject to the related
Mortgage or amounts
to be released to the Mortgagor in accordance with the procedures
that the
Servicer would follow in servicing loans held for its own account,
subject to
the terms and conditions of the related Mortgage and Mortgage Note)
shall be
deposited in the Collection Account, subject to withdrawal pursuant
to Section
3.11, if received in respect of a Mortgage Loan, or in the REO
Account, subject
to withdrawal pursuant to Section 3.23, if received in respect of
an REO
Property. Any cost incurred by the Servicer in maintaining any such
insurance
shall not, for the purpose of calculating distributions to
Certificateholders,
be added to the unpaid principal balance of the related Mortgage
Loan,
notwithstanding that the terms of such Mortgage Loan so permit;
provided,
however, that the Servicer may capitalize the amount of any
Servicing Advances
incurred pursuant to this Section 3.14 in connection with the
modification of a
Mortgage Loan. It is understood and agreed that no earthquake or
other
additional insurance is to be required of any Mortgagor other than
pursuant to
such applicable laws and regulations as shall at any time be in
force and as
shall require such additional insurance. If the Mortgaged Property
or REO
Property is at any time in an area identified in the Federal
Register by the
Federal Emergency Management Agency as having special flood
hazards, the
Servicer will cause to be maintained a flood insurance policy in
respect
thereof. Such flood insurance shall be in an amount equal to the
lesser of (i)
the unpaid principal balance of the related Mortgage Loan and (ii)
the maximum
amount of such insurance available for the related Mortgaged
Property under the
national flood insurance program (assuming that the area in which
such Mortgaged
Property is located is participating in such program).
In the event that the Servicer shall obtain and maintain a
blanket
policy with an insurer having a General Policy Rating of B:VI or
better in
Best's Key Rating Guide insuring against hazard losses on all of
the Mortgage
Loans, it shall conclusively be deemed to have satisfied its
obligations as set
forth in the first two sentences of this Section 3.14, it being
understood and
agreed that such policy may contain a deductible clause, in which
case the
Servicer shall, in the event that there shall not have been
maintained on the
related Mortgaged Property or REO Property a policy complying with
the first two
sentences of this Section 3.14, and there shall have been one or
more losses
which would have been covered by such policy, deposit to the
Collection Account
from its own funds the amount not otherwise payable under the
blanket policy
because of such deductible clause. In connection with its
activities as
administrator and servicer of the Mortgage Loans, the Servicer
agrees to prepare
and present, on behalf of itself, the Trustee, the Trust Fund and
the
Certificateholders, claims under any such blanket policy in a
timely fashion in
accordance with the terms of such policy.
(b)
The Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and
omissions for
failure in the performance of its respective obligations under this
Agreement,
which policy or policies shall be in such form and amount that
would meet the
requirements of Fannie Mae or Freddie Mac if it were the purchaser
of the
Mortgage Loans, unless the Servicer, has obtained a waiver of such
requirements
from Fannie Mae or Freddie Mac. The Servicer shall each also
maintain a fidelity
bond in the form and amount that would meet the requirements of
Fannie Mae or
Freddie Mac, unless the Servicer, has obtained a waiver of such
requirements
from
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Fannie Mae or Freddie Mac. The Servicer shall be deemed to have
complied with
this provision if an Affiliate of the Servicer, has such errors and
omissions
and fidelity bond coverage and, by the terms of such insurance
policy or
fidelity bond, the coverage afforded thereunder extends to the
Servicer. Any
such errors and omissions policy and fidelity bond shall by its
terms not be
cancelable without thirty days' prior written notice to the Trustee
and the
Trust Administrator.
SECTION 3.15
Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
The Servicer will, to the extent it has knowledge of any
conveyance
or prospective conveyance of any Mortgaged Property by any
Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the
Mortgagor
remains or is to remain liable under the Mortgage Note and/or the
Mortgage),
exercise its rights to accelerate the maturity of such Mortgage
Loan under the
"due-on-sale" clause, if any, applicable thereto; provided,
however, that the
Servicer shall not exercise any such rights if prohibited by law
from doing so.
If the Servicer reasonably believes it is unable under applicable
law to enforce
such "due-on-sale" clause, or if any of the other conditions set
forth in the
proviso to the preceding sentence apply, the Servicer will enter
into an
assumption and modification agreement from or with the person to
whom such
property has been conveyed or is proposed to be conveyed, pursuant
to which such
person becomes liable under the Mortgage Note and, to the extent
permitted by
applicable state law, the Mortgagor remains liable thereon. The
Servicer is also
authorized to enter into a substitution of liability agreement with
such person,
pursuant to which the original Mortgagor is released from liability
and such
person is substituted as the Mortgagor and becomes liable under the
Mortgage
Note, provided that no such substitution shall be effective unless
such person
satisfies the then current underwriting criteria of the Servicer
for mortgage
loans similar to the Mortgage Loans. In connection with any
assumption or
substitution, the Servicer shall apply such underwriting standards
and follow
such practices and procedures as shall be normal and usual in its
general
mortgage servicing activities and as it applies to other mortgage
loans owned
solely by it. The Servicer shall not take or enter into any
assumption and
modification agreement, however, unless (to the extent practicable
in the
circumstances) it shall have received confirmation, in writing, of
the continued
effectiveness of any applicable hazard insurance policy. Any fee
collected by
the Servicer in respect of an assumption or substitution of
liability agreement
will be retained by the Servicer as additional servicing
compensation. In
connection with any such assumption, no material term of the
Mortgage Note
(including but not limited to the related Mortgage Rate and the
amount of the
Monthly Payment) may be amended or modified, except as otherwise
required
pursuant to the terms thereof. The Servicer shall notify the
Trustee and the
Trust Administrator that any such substitution or assumption
agreement has been
completed by forwarding to the Trust Administrator on behalf of the
Trustee the
executed original of such substitution or assumption agreement,
which document
shall be added to the related Mortgage File and shall, for all
purposes, be
considered a part of such Mortgage File to the same extent as all
other
documents and instruments constituting a part thereof.
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Notwithstanding the foregoing paragraph or any other provision
of
this Agreement, the Servicer shall not be deemed to be in default,
breach or any
other violation of its obligations hereunder by reason of any
assumption of a
Mortgage Loan by operation of law or by the terms of the Mortgage
Note or any
assumption which the Servicer may be restricted by law from
preventing, for any
reason whatever. For purposes of this Section 3.15, the term
"assumption" is
deemed to also include a sale (of the Mortgaged Property) subject
to the
Mortgage that is not accompanied by an assumption or substitution
of liability
agreement.
SECTION 3.16
Realization Upon Defaulted Mortgage Loans.
(a)
The Servicer shall, consistent with the servicing standard set
forth in Section 3.01, foreclose upon or otherwise comparably
convert the
ownership of properties securing such of the Mortgage Loans as come
into and
continue in default and as to which no satisfactory arrangements
can be made for
collection of delinquent payments pursuant to Section 3.07. The
Servicer shall
be responsible for all costs and expenses incurred by it in any
such
proceedings; provided, however, that such costs and expenses will
be recoverable
as Servicing Advances by the Servicer as contemplated in Section
3.11 and
Section 3.23. The foregoing is subject to the provision that, in
any case in
which Mortgaged Property shall have suffered damage from an
Uninsured Cause, the
Servicer shall not be required to expend its own funds toward the
restoration of
such property unless it shall determine in its discretion that such
restoration
will increase the proceeds of liquidation of the related Mortgage
Loan after
reimbursement to itself for such expenses.
(b) Notwithstanding the foregoing provisions of this Section 3.16
or
any other provision of this Agreement, with respect to any Mortgage
Loan as to
which the Servicer has received actual notice of, or has actual
knowledge of,
the presence of any toxic or hazardous substance on the related
Mortgaged
Property, the Servicer shall not, on behalf of the Trustee, either
(i) obtain
title to such Mortgaged Property as a result of or in lieu of
foreclosure or
otherwise, or (ii) otherwise acquire possession of, or take any
other action
with respect to, such Mortgaged Property, if, as a result of any
such action,
the Trustee, the Trust Fund, the Trust Administrator, the Servicer
or the
Certificateholders would be considered to hold title to, to be
a
"mortgagee-in-possession" of, or to be an "owner" or "operator" of
such
Mortgaged Property within the meaning of the Comprehensive
Environmental
Response, Compensation and Liability Act of 1980, as amended from
time to time,
or any comparable law, unless the Servicer has also previously
determined, based
on its reasonable judgment and a report prepared by a Person who
regularly
conducts environmental audits using customary industry standards,
that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best
economic
interest of the Trust Fund to take such actions as are necessary
to
bring the Mortgaged Property into compliance therewith; and
(2) there are no circumstances present at such Mortgaged
Property relating to the use, management or disposal of any
hazardous substances, hazardous materials, hazardous wastes, or
petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be
required
under any federal, state or local law or regulation, or that if
any
such
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materials are present for which such action could be required,
that
it would be in the best economic interest of the Trust Fund to
take
such actions with respect to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this
Section 3.16 shall be advanced by the Servicer, subject to the
Servicer's right
to be reimbursed therefor from the Collection Account as provided
in Section
3.11(a)(ix), such right of reimbursement being prior to the rights
of
Certificateholders to receive any amount in the Collection Account
received in
respect of the affected Mortgage Loan or other Mortgage Loans.
If the Servicer determines, as described above, that it is in
the
best economic interest of the Trust Fund to take such actions as
are necessary
to bring any such Mortgaged Property into compliance with
applicable
environmental laws, or to take such action with respect to the
containment,
clean-up or remediation of hazardous substances, hazardous
materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged
Property, then
the Servicer shall take such action as it deems to be in the best
economic
interest of the Trust Fund. The cost of any such compliance,
containment,
cleanup or remediation shall be advanced by the Servicer, subject
to the
Servicer's right to be reimbursed therefor from the Collection
Account as
provided in Section 3.11(a)(ix), such right of reimbursement being
prior to the
rights of Certificateholders to receive any amount in the
Collection Account
received in respect of the affected Mortgage Loan or other Mortgage
Loans.
(c) The Servicer shall have the right to purchase from REMIC I
any
defaulted Mortgage Loan that is 90 days or more delinquent, which
the Servicer
determines in good faith will otherwise become subject to
foreclosure
proceedings (evidence of such determination to be delivered in
writing to the
Trustee and the Trust Administrator, in form and substance
satisfactory to the
Trustee and the Trust Administrator prior to purchase), at a price
equal to the
Purchase Price. The Purchase Price for any Mortgage Loan purchased
hereunder
shall be deposited in the Collection Account, and the Trust
Administrator, upon
receipt of written certification from the Servicer of such deposit,
shall
release or cause to be released to the Servicer the related
Mortgage File and
the Trust Administrator, upon receipt of written certification from
the Servicer
of such deposit, shall execute and deliver such instruments of
transfer or
assignment, in each case without recourse, as the Servicer shall
furnish and as
shall be necessary to vest in the Servicer title to any Mortgage
Loan released
pursuant hereto.
(d)
Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial
collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any
Mortgage Loan,
will be applied in the following order of priority: first, to
reimburse the
Servicer or any Sub-Servicer for any related unreimbursed Servicing
Advances and
P&I Advances, pursuant to Section 3.11(a)(ii) or (a)(iii)(B);
second, to accrued
and unpaid interest on the Mortgage Loan, to the date of the Final
Recovery
Determination, or to the Due Date prior to the Distribution Date on
which such
amounts are to be distributed if not in connection with a Final
Recovery
Determination; and third, as a recovery of principal of the
Mortgage Loan. If
the amount of the recovery so allocated to interest is less than
the full amount
of accrued and unpaid interest due on such Mortgage Loan, the
amount of such
recovery will be allocated by the Servicer as follows: first, to
unpaid
Servicing Fees; and second, to the balance of
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the interest then due and owing. The portion of the recovery so
allocated to
unpaid Servicing Fees shall be reimbursed to the Servicer or any
Sub-Servicer
pursuant to Section 3.11(a)(iii)(A).
SECTION 3.17 Trustee to
Cooperate; Release of Mortgage Files.
(a) Upon the payment in full of any Mortgage Loan, or the receipt
by
the Servicer of a notification that payment in full shall be
escrowed in a
manner customary for such purposes, the Servicer will immediately
notify the
related Custodian, on behalf of the Trustee, by a Request for
Release in the
form of Exhibit E (which certification shall include a statement to
the effect
that all amounts received or to be received in connection with such
payment
which are required to be deposited in the Collection Account
pursuant to Section
3.10 have been or will be so deposited) of a Servicing Officer and
shall request
that the related Custodian, on behalf of the Trustee, deliver to it
the Mortgage
File. Upon receipt of such certification and request, the related
Custodian, on
behalf of the Trustee, shall promptly release the related Mortgage
File to the
Servicer, and the Servicer is authorized to cause the removal from
the
registration on the MERS(R) System of any such Mortgage, if
applicable, and to
execute and deliver, on behalf of the Trustee and the
Certificateholders or any
of them, any and all instruments of satisfaction or cancellation or
of partial
or full release. No expenses incurred in connection with any
instrument of
satisfaction or deed of reconveyance shall be chargeable to the
Collection
Account or the Distribution Account.
The Trustee (or a Custodian on its behalf) shall, at the
written
request and expense of any Certificateholder, provide a written
report to such
Certificateholder of all Mortgage Files released to the Servicer
for servicing
purposes.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose,
collection under
any insurance policy relating to the Mortgage Loans, the related
Custodian, on
behalf of the Trustee, shall, upon request of the Servicer and
delivery to the
related Custodian and the Trustee of a Request for Release in the
form of
Exhibit E, release the related Mortgage File to the Servicer, and
the related
Custodian, on behalf of the Trustee, shall, at the direction of the
Servicer,
execute such documents as shall be necessary to the prosecution of
any such
proceedings. Such Request for Release shall obligate the Servicer
to return each
and every document previously requested from the Mortgage File to
the related
Custodian when the need therefor by the Servicer no longer exists,
unless the
Mortgage Loan has been liquidated and the Liquidation Proceeds
relating to the
Mortgage Loan have been deposited in the Collection Account or the
Mortgage File
or such document has been delivered to an attorney, or to a public
trustee or
other public official as required by law, for purposes of
initiating or pursuing
legal action or other proceedings for the foreclosure of the
Mortgaged Property
either judicially or non-judicially, and the Servicer has delivered
to the
related Custodian, on behalf of the Trustee, a certificate of a
Servicing
Officer certifying as to the name and address of the Person to
which such
Mortgage File or such document was delivered and the purpose or
purposes of such
delivery. Upon receipt of a certificate of a Servicing Officer
stating that such
Mortgage Loan was liquidated and that all amounts received or to be
received in
connection with such liquidation that are required to be deposited
into the
Collection Account have been so deposited, or that such Mortgage
Loan has become
an REO Property, a copy of the Request for Release shall be
released by the
related Custodian, on behalf of the Trustee, to the Servicer.
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(c) Upon written certification of a Servicing Officer, the
Trustee
shall execute and deliver to the Servicer any court pleadings,
requests for
trustee's sale or other documents reasonably necessary to the
foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal
action brought
to obtain judgment against any Mortgagor on the Mortgage Note or
Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or
rights
provided by the Mortgage Note or Mortgage or otherwise available at
law or in
equity. Each such certification shall include a request that such
pleadings or
documents be executed by the Trustee and a statement as to the
reason such
documents or pleadings are required and that the execution and
delivery thereof
by the Trustee will not invalidate or otherwise affect the lien of
the Mortgage,
except for the termination of such a lien upon completion of the
foreclosure or
trustee's sale.
SECTION 3.18 Servicing
Compensation.
As compensation for the activities of the Servicer hereunder,
the
Servicer shall be entitled to the Servicing Fee with respect to
each Mortgage
Loan payable solely from payments of interest in respect of such
Mortgage Loan,
subject to Section 3.24. In addition, the Servicer shall be
entitled to recover
unpaid Servicing Fees out of Insurance Proceeds or Liquidation
Proceeds to the
extent permitted by Section 3.11(a)(iii)(A) and out of amounts
derived from the
operation and sale of an REO Property to the extent permitted by
Section 3.23.
The right to receive the Servicing Fee may not be transferred in
whole or in
part except in connection with the transfer of all of the
Servicer's
responsibilities and obligations under this Agreement.
Additional servicing compensation in the form of assumption
fees,
late payment charges and other similar fees and charges (other than
Prepayment
Charges) shall be retained by the Servicer (subject to Section
3.24) only to the
extent such fees or charges are received by the Servicer. The
Servicer shall
also be entitled pursuant to Section 3.11(a)(iv) to withdraw from
the Collection
Account, and pursuant to Section 3.23(b) to withdraw from any REO
Account, as
additional servicing compensation, interest or other income earned
on deposits
therein, subject to Section 3.12 and Section 3.24. The Servicer
shall be
required to pay all expenses incurred by it in connection with its
servicing
activities hereunder (including premiums for the insurance required
by Section
3.14, to the extent such premiums are not paid by the related
Mortgagors or by a
Sub-Servicer, servicing compensation of each Sub-Servicer, and to
the extent
provided herein in Section 8.05, the fees and expenses of the
Trustee and the
Trust Administrator) and shall not be entitled to reimbursement
therefor except
as specifically provided herein.
SECTION 3.19 Reports to
the Trust Administrator; Collection
Account Statements.
Not later than fifteen days after each Distribution Date, the
Servicer shall forward to the Trust Administrator, upon the request
of the Trust
Administrator, a statement prepared by the Servicer setting forth
the status of
the Collection Account as of the close of business on the last day
of the
calendar month relating to such Distribution Date and showing, for
the period
covered by such statement, the aggregate amount of deposits into
and withdrawals
from the Collection Account of each category of deposit specified
in Section
3.10(a) and each category of withdrawal specified in Section 3.11.
Such
statement may be in the form of the then current Fannie Mae Monthly
Accounting
Report for its Guaranteed Mortgage Pass-Through Program
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with appropriate additions and changes, and shall also include
information as to
the aggregate of the outstanding principal balances of all of the
Mortgage Loans
as of the last day of the calendar month immediately preceding such
Distribution
Date. Copies of such statement shall be provided by the Trust
Administrator to
any Certificateholder and to any Person identified to the Trust
Administrator as
a prospective transferee of a Certificate, upon the request and at
the expense
of the requesting party, provided such statement is delivered by
the Servicer to
the Trust Administrator.
SECTION 3.20
Statement
as to Compliance.
The Servicer shall deliver to the Trust Administrator, on or
before
March 15th of each calendar year beginning in 2007, an Officers'
Certificate (an
"Annual Statement of Compliance") stating, as to each signatory
thereof, that
(i) a review of the activities of the Servicer during the preceding
calendar
year and of performance under this Agreement has been made under
such officers'
supervision and (ii) to the best of such officers' knowledge, based
on such
review, the Servicer has fulfilled all of its obligations under
this Agreement
in all material respects throughout such year, or, if there has
been a failure
to fulfill any such obligation in any material respect, specifying
each such
failure known to such officer and the nature and status of cure
provisions
thereof. The Servicer shall deliver, or cause any Sub-Servicer to
deliver, a
similar Annual Statement of Compliance by any Sub-Servicer to which
the Servicer
has delegated any servicing responsibilites with respect to the
Mortgage Loans,
to the Trust Administrator as described above as and when required
with respect
to the Servicer.
If the Servicer cannot deliver the related Annual Statement of
Compliance by March 15th of such year, the Trust Administrator, at
its sole
option, may permit a cure period for the Servicer to deliver such
Annual
Statement of Compliance, but in no event later than March 20th of
such year.
Failure of the Servicer to timely comply with this Section
3.20,
which continues unremedied for ten (10) calendar days after the
date on which
the Annual Statement of Compliance was required to be delivered,
shall be deemed
an Event of Default, and upon the receipt of written notice from
the Trust
Administrator of such Event of Default, the Trustee may at the
direction of the
Depositor, in addition to whatever rights the Trustee may have
under this
Agreement and at law or equity or to damages, including injunctive
relief and
specific performance, upon notice immediately terminate all the
rights and
obligations of the Servicer under this Agreement and in and to the
Mortgage
Loans and the proceeds thereof without compensating the Servicer
for the same;
PROVIDED that to the extent that any provision of this Agreement
expressly
provides for the survival of certain rights or obligations
following termination
of the Servicer, such provision shall be given effect. This
paragraph shall
supercede any other provision in this Agreement or any other
agreement to the
contrary.
The Servicer shall indemnify and hold harmless the Depositor,
the
Trust Administrator and their officers, directors and Affiliates
from and
against any actual losses, damages, penalties, fines, forfeitures,
reasonable
and necessary legal fees and related costs, judgments and other
costs and
expenses that such Person may sustain based upon a breach of the
Servicer's
obligations under this Section 3.20.
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SECTION 3.21
Assessments of Compliance and Attestation Reports.
(a) The Servicer shall service and administer the Mortgage Loans
in
accordance with all applicable requirements of the Servicing
Criteria (as set
forth in Exhibit C hereto). The Servicer shall deliver to the
Trust
Administrator on or before March 1st of each calendar year
beginning in 2007,
the following:
(i) a report (an "Assessment of Compliance") regarding the
Servicer's
assessment of compliance with the Servicing Criteria during the
immediately preceding calendar year, as required under Rules 13a-18
and
15d-18 of
the Exchange Act and Item 1122 of Regulation AB. Such report
shall be
signed by an authorized officer of the Servicer, and shall
address
each of the Servicing Criteria set forth in Exhibit C hereto;
(ii) a report (an "Attestation Report") of a registered public
accounting
firm reasonably acceptable to the Depositor that attests to,
and
reports on, the assessment of compliance made by the Servicer
and
delivered
pursuant to the preceding paragraph. Such attestation shall be
in
accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X
under
the
Securities Act and the Exchange Act; and
(iii) cause each Sub-Servicer, and each subcontractor determined
by
the
Servicer to be "participating in the servicing function" within
the
meaning of
Item 1122 of Regulation AB, to deliver an Assessment of
Compliance
and Attestation Report as and when provided in paragraphs (i)
and (ii)
of this Section 3.21(a).
(iv) a statement as to which of the Servicing Criteria, if any,
are
not
applicable to the Servicer, which statement shall be based on
the
activities
it performs with respect to asset-backed securities
transactions taken as a whole involving the Servicer, that are
backed by
the same
asset type as the Mortgage Loans.
(b) The Servicer shall, or shall cause any Sub-Servicer and
each
subcontractor determined by the Servicer to be "participating in
the servicing
function" within the meaning of Item 1122 of Regulation AB to,
deliver to the
Trust Administrator and the Depositor an Assessment of Compliance
and
Attestation Report as and when provided above.
Such Assessment of Compliance, as to any Sub-Servicer, shall at
a
minimum address each of the Servicing Criteria specified on Exhibit
C hereto
which are indicated as applicable to any "primary servicer."
Notwithstanding the
foregoing, as to any subcontractor, an Assessment of Compliance is
not required
to be delivered unless it is required as part of a Form 10-K with
respect to the
Trust Fund.
If the Servicer cannot deliver any Assessment of Compliance or
Attestation Report by March 1st of such year, the Trust
Administrator, at its
sole option, may permit a cure period for the Servicer to deliver
such
Assessment of Compliance or Attestation Report, but in no event
later than March
15th of such year.
Failure of the Servicer to timely comply with this Section 3.21
shall be deemed a Servicer Event of Default, and upon the receipt
of written
notice from the Trust Administrator of such Event of Default, the
Trustee at the
direction of the Depositor may, in addition to whatever
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rights the Trustee may have under this Agreement and at law or
equity or to
damages, including injunctive relief and specific performance, upon
notice
immediately terminate all the rights and obligations of the
Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof
without
compensating the Servicer for the same; provided, however, the
Depositor shall
not be entitled to instruct the Trustee to terminate the rights and
obligations
of the Servicer pursuant to clause (iii) above if a failure of the
Servicer to
identify a subcontractor "participating in th
