EXHIBIT 4
MORGAN STANLEY CAPITAL I INC.,
Depositor,
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
Servicer,
WMC MORTGAGE CORP.,
Responsible Party,
DECISION ONE MORTGAGE COMPANY, LLC,
Responsible Party,
WELLS FARGO BANK, NATIONAL ASSOCIATION,
Trustee
and
LASALLE BANK NATIONAL ASSOCIATION,
Custodian
-------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of February 1, 2006
-------------------------------
MORGAN STANLEY CAPITAL I INC. TRUST 2006-HE1
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2006-HE1
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01
Conveyance of Mortgage Loans.................................
Section 2.02
Acceptance by the Trustee of the Mortgage Loans..............
Section 2.03
Representations and Warranties; Remedies for Breaches of
Representations and Warranties with Respect to the Mortgage
Loans........................................................
Section 2.04
Execution and Delivery of Certificates.......................
Section 2.05
REMIC Matters................................................
Section 2.06
Representations and Warranties of the Depositor..............
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01
Servicer to Service Mortgage Loans...........................
Section 3.02
Subservicing Agreements between the Servicer and
Subservicers.................................................
Section 3.03
Successor Subservicers.......................................
Section 3.04
Liability of the Servicer....................................
Section 3.05 No
Contractual Relationship between Subservicers and the
Trustee......................................................
Section 3.06
Assumption or Termination of Subservicing Agreements
by Trustee...................................................
Section 3.07
Collection of Certain Mortgage Loan Payments.................
Section 3.08
Subservicing Accounts........................................
Section 3.09
Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.....................................................
Section 3.10
Collection Account...........................................
Section 3.11
Withdrawals from the Collection Account......................
Section 3.12
Investment of Funds in the Collection Account and the
Distribution Account.........................................
Section 3.13
Maintenance of Hazard Insurance and Errors and Omissions and
Fidelity Coverage............................................
Section 3.14
Enforcement of Due-on-Sale Clauses; Assumption Agreements....
Section 3.15
Realization upon Defaulted Mortgage Loans....................
Section 3.16
Release of Mortgage Files....................................
Section 3.17
Title, Conservation and Disposition of REO Property..........
Section 3.18
Notification of Adjustments..................................
Section 3.19
Access to Certain Documentation and Information Regarding
the Mortgage Loans...........................................
Section 3.20
Documents, Records and Funds in Possession of the Servicer
to Be Held for the Trustee...................................
Section 3.21
Servicing Compensation.......................................
Section 3.22
Annual Statement as to Compliance............................
Section 3.23
Annual Reports on Assessment of Compliance with Servicing
Criteria; Annual Independent Public Accountants' Attestation
Report.......................................................
Section 3.24
Trustee to Act as Servicer...................................
Section 3.25
Compensating Interest........................................
Section 3.26
Credit Reporting; Gramm-Leach-Bliley Act.....................
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01
Advances.....................................................
Section 4.02
Priorities of Distribution...................................
Section 4.03
Monthly Statements to Certificateholders.....................
Section 4.04
Certain Matters Relating to the Determination of LIBOR.......
Section 4.05
Allocation of Applied Realized Loss Amounts..................
Section 4.06
Swap Account.................................................
ARTICLE V
THE CERTIFICATES
Section 5.01 The
Certificates.............................................
Section 5.02
Certificate Register; Registration of Transfer and Exchange
of Certificates..............................................
Section 5.03
Mutilated, Destroyed, Lost or Stolen Certificates............
Section 5.04
Persons Deemed Owners........................................
Section 5.05
Access to List of Certificateholders' Names and Addresses....
Section 5.06
Maintenance of Office or Agency..............................
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01
Respective Liabilities of the Depositor and the Servicer.....
Section 6.02
Merger or Consolidation of the Depositor or the Servicer.....
Section 6.03
Limitation on Liability of the Depositor, the Servicer and
Others.......................................................
Section 6.04
Limitation on Resignation of the Servicer....................
Section 6.05
Additional Indemnification by the Servicer;
Third-Party Claims...........................................
ARTICLE VII
DEFAULT
Section 7.01
Events of Default............................................
Section 7.02
Trustee to Act; Appointment of Successor.....................
Section 7.03
Notification to Certificateholders...........................
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01
Duties of the Trustee........................................
Section 8.02
Certain Matters Affecting the Trustee and the Custodian......
Section 8.03
Trustee Not Liable for Certificates or Mortgage Loans........
Section 8.04
Trustee May Own Certificates.................................
Section 8.05
Trustee's Fees and Expenses..................................
Section 8.06
Eligibility Requirements for the Trustee.....................
Section 8.07
Resignation and Removal of the Trustee.......................
Section 8.08
Successor Trustee............................................
Section 8.09
Merger or Consolidation of the Trustee.......................
Section 8.10
Appointment of Co-Trustee or Separate Trustee................
Section 8.11 Tax
Matters..................................................
Section 8.12
Periodic Filings.............................................
Section 8.13 Tax
Treatment of Upper-Tier CarryForward Amounts, Basis Risk
CarryForward Amounts and Class IO Shortfalls; Tax
Classification of the Excess Reserve Fund Account, Swap
Account and the Interest Rate Swap Agreement.................
Section 8.14
Custodial Responsibilities...................................
ARTICLE IX
TERMINATION
Section 9.01
Termination upon Liquidation or Purchase of the
Mortgage Loans...............................................
Section 9.02
Final Distribution on the Certificates.......................
Section 9.03
Additional Termination Requirements..........................
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01
Amendment....................................................
Section 10.02
Recordation of Agreement; Counterparts.......................
Section 10.03
Governing Law................................................
Section 10.04
Intention of Parties.........................................
Section 10.05
Notices......................................................
Section 10.06
Severability of Provisions...................................
Section 10.07
Assignment; Sales; Advance Facilities........................
Section 10.08
Limitation on Rights of Certificateholders...................
Section 10.09
Inspection and Audit Rights..................................
Section 10.10
Certificates Nonassessable and Fully Paid....................
Section 10.11 Rule of
Construction.........................................
Section 10.12 Waiver
of Jury Trial.........................................
Section 10.13 Opinions
of Internal Counsel of WMC..........................
Section 10.14 Rights
of the Swap Provider..................................
Section 10.15
Regulation AB Compliance; Intent of the Parties;
Reasonableness...............................................
SCHEDULES
Schedule I
Mortgage Loan Schedule
Schedule II
Representations and Warranties of JPMorgan Chase Bank,
National Association, as Servicer
Schedule III
Representations and Warranties of WMC as to the WMC Mortgage
Loans
Schedule IV
Representations and Warranties of WMC as to WMC
Schedule V
Representations and Warranties of Morgan Stanley Capital I
Inc. as to the Mortgage Loans
Schedule VI
Representations and Warranties of Decision One as to the
Decision One Mortgage Loans
Schedule VII
Representations and Warranties of LaSalle, as Custodian
EXHIBITS
Exhibit A Form of
Class A, Class M and Class B Certificate
Exhibit B Form of
Class P Certificate
Exhibit C Form of
Class R Certificate
Exhibit D Form of
Class X Certificate
Exhibit E Form of
Initial Certification of Trustee and Custodian
Exhibit F Form of
Document Certification and Exception Report of Trustee
and Custodian
Exhibit G Form of
Residual Transfer Affidavit
Exhibit H Form of
Transferor Certificate
Exhibit I Form of
Rule 144A Letter
Exhibit J Form of
Request for Release
Exhibit K Form of Contents
for Each Mortgage File
Exhibit L Form of
Certification to be provided with Form 10-K
Exhibit M Form of
Certification to be provided by the Trustee to Depositor
Exhibit N Form of
Certification to be provided by the Servicer to Depositor
Exhibit O WMC
Purchase Agreement
Exhibit P Decision
One Purchase Agreement
Exhibit Q Form of
Servicer Power of Attorney
Exhibit R Servicing
Criteria
Exhibit S Additional
Form 10-D Disclosure
Exhibit T Additional
Form 10-K Disclosure
Exhibit U Form 8-K
Disclosure Information
Exhibit V Interest
Rate Swap Agreement
Exhibit W JPMorgan
Subservicing Agreement
Exhibit X Form of
Servicer Reports
<PAGE>
THIS POOLING AND SERVICING AGREEMENT, dated as of February 1,
2006,
among MORGAN STANLEY CAPITAL I INC., a Delaware corporation (the
"Depositor"),
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national banking
association, as
servicer (the "Servicer"),WMC MORTGAGE CORP., a California
corporation, as
responsible party ("WMC"), DECISION ONE MORTGAGE COMPANY, LLC, as
responsible
party ("Decision One"), WELLS FARGO BANK, NATIONAL ASSOCIATION, a
national
banking association, as trustee (the "Trustee") and LASALLE BANK
NATIONAL
ASSOCIATION, as custodian (the "Custodian").
W I T N E S S E T H:
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Trustee shall elect that four segregated asset pools within
the
Trust Fund (exclusive of (i) the Prepayment Premiums, (ii) the Swap
Assets,
(iii) the Excess Reserve Fund Account, and (iv) the right of the
LIBOR
Certificates to receive Upper-Tier CarryForward Amounts including,
but without
duplication, Basis Risk CarryForward Amounts and the obligation to
pay Class IO
Shortfalls) be treated for federal income tax purposes as
comprising four REMICs
(each, a "Trust REMIC" or, in the alternative, Pooling-Tier
REMIC-1,
Pooling-Tier REMIC-2, the Lower-Tier REMIC and the Upper-Tier
REMIC,
respectively). The Class X Interest, Class IO Interest and each
Class of LIBOR
Certificates (other than the right of each Class of Offered
Certificates to
receive Upper-Tier CarryForward Amounts including, but without
duplication,
Basis Risk CarryForward Amounts and the obligation to pay Class IO
Shortfalls)
represents ownership of a regular interest in a REMIC for purposes
of the REMIC
Provisions. The Class R Certificates represent ownership of the
sole class of
residual interest in each Trust REMIC for purposes of the REMIC
Provisions. The
Startup Day for each Trust REMIC described herein is the Closing
Date. The
latest possible maturity date for each regular interest is the
latest date
referenced in Section 2.05. The Upper-Tier REMIC shall hold as
assets the
several classes of uncertificated Lower-Tier Regular Interests, set
out below.
The Lower-Tier REMIC shall hold as assets the several classes of
uncertificated
Pooling-Tier REMIC-2 Regular Interests. Pooling-Tier REMIC-2 shall
hold as
assets the several classes of uncertificated Pooling-Tier REMIC-1
Regular
Interests. Pooling-Tier REMIC-1 shall hold as assets the assets of
the Trust
Fund (exclusive of (i) the Prepayment Premiums, (ii) the Swap
Assets, (iii) the
Excess Reserve Fund Account, and (iv) the right of the LIBOR
Certificates to
receive Upper-Tier CarryForward Amounts including, but without
duplication,
Basis Risk CarryForward Amounts and the obligation to pay Class IO
Shortfalls).
For federal income tax purposes, each Class of LIBOR
Certificates
represents a beneficial ownership of a regular interest in the
Upper-Tier REMIC,
the right to receive Upper-Tier CarryForward Amounts (including,
but without
duplication, Basis Risk CarryForward Amounts), and the obligation
to pay Class
IO Shortfalls, the Class X Certificates represent beneficial
ownership of the
Class X Interest, the Class IO Interest, the Interest Rate Swap
Agreement, the
Swap Account, the Excess Reserve Fund Account and the right to
receive Class IO
Shortfalls, and the Class P Certificates represent beneficial
ownership of the
Prepayment Premiums, which portions of the Trust Fund shall be
treated as a
grantor trust.
Pooling-Tier REMIC-1
Pooling-Tier REMIC-1 shall issue the following interests in
Pooling-Tier REMIC-1, and each such interest, other than the Class
PT1-R
Interest is hereby designated as a regular interest in the
Pooling-Tier REMIC-1.
Pooling-Tier REMIC-1 shall also issue the Class PT1-R Interest,
which is hereby
designated as the sole class of residual interest in Pooling-Tier
REMIC-1. The
Class PT1-R Interest shall be represented by the Class R
Certificates, shall not
have a principal balance and shall have no interest rate.
Initial
Pooling-Tier
Pooling-Tier REMIC-1 Pooling-Tier REMIC-1
REMIC-1
Principal
Interest
Interest
Rate
Amount
----------------------------------------------------------------
Class PT1-1
(1)
$58,641,729.50
Class PT1-2A
(2)
$32,946,207.90
Class PT1-2B
(3)
$32,946,207.90
Class PT1-3A
(2)
$21,622,806.60
Class PT1-3B
(3)
$21,622,806.60
Class PT1-4A
(2)
$21,303,249.85
Class PT1-4B
(3)
$21,303,249.85
Class PT1-5A
(2)
$20,097,826.60
Class PT1-5B
(3)
$20,097,826.60
Class PT1-6A
(2)
$19,400,293.65
Class PT1-6B
(3)
$19,400,293.65
Class PT1-7A
(2)
$18,735,235.55
Class PT1-7B
(3)
$18,735,235.55
Class PT1-8A
(2)
$18,100,241.30
Class PT1-8B
(3)
$18,100,241.30
Class PT1-9A
(2)
$17,492,995.25
Class PT1-9B
(3)
$17,492,995.25
Class PT1-10A
(2)
$16,911,280.30
Class PT1-10B
(3)
$16,911,280.30
Class PT1-11A
(2)
$16,352,926.45
Class PT1-11B
(3)
$16,352,926.45
Class PT1-12A
(2)
$15,815,423.25
Class PT1-12B
(3)
$15,815,423.25
Class PT1-13A
(2)
$15,292,427.80
Class PT1-13B
(3)
$15,292,427.80
Class PT1-14A
(2)
$14,768,331.75
Class PT1-14B
(3)
$14,768,331.75
Class PT1-15A
(2)
$14,129,686.80
Class PT1-15B
(3)
$14,129,686.80
Class PT1-16A
(2)
$13,518,805.10
Class PT1-16B
(3)
$13,518,805.10
Class PT1-17A
(2)
$12,934,475.90
Class PT1-17B
(3)
$12,934,475.90
Class PT1-18A
(2)
$12,375,536.80
Class PT1-18B
(3)
$12,375,536.80
Class PT1-19A
(2)
$11,840,881.15
Class PT1-19B
(3)
$11,840,881.15
Class PT1-20A
(2)
$12,255,640.40
Class PT1-20B
(3)
$12,255,640.40
Class PT1-21A
(2)
$33,181,934.65
Class PT1-21B
(3)
$33,181,934.65
Class PT1-22A
(2)
$167,148,590.55
Class PT1-22B
(3)
$167,148,590.55
Class PT1-23A
(2)
$1,835,892.50
Class PT1-23B
(3)
$1,835,892.50
Class PT1-24A
(2)
$1,770,419.15
Class PT1-24B
(3)
$1,770,419.15
Class PT1-25A
(2)
$1,707,281.70
Class PT1-25B
(3)
$1,707,281.70
Class PT1-26A
(2)
$1,646,396.85
Class PT1-26B
(3)
$1,646,396.85
Class PT1-27A
(2)
$1,587,686.15
Class PT1-27B
(3)
$1,587,686.15
Class PT1-28A
(2)
$1,531,117.95
Class PT1-28B
(3)
$1,531,117.95
Class PT1-29A
(2)
$1,476,826.90
Class PT1-29B
(3)
$1,476,826.90
Class PT1-30A
(2)
$1,424,144.45
Class PT1-30B
(3)
$1,424,144.45
Class PT1-31A
(2)
$1,373,341.65
Class PT1-31B
(3)
$1,373,341.65
Class PT1-32A
(2)
$1,353,148.40
Class PT1-32B
(3)
$1,353,148.40
Class PT1-33A
(2)
$2,336,536.40
Class PT1-33B
(3)
$2,336,536.40
Class PT1-34A
(2)
$4,436,661.95
Class PT1-34B
(3)
$4,436,661.95
Class PT1-35A
(2)
$ 994,456.85
Class PT1-35B
(3)
$ 994,456.85
Class PT1-36A
(2)
$ 960,765.25
Class PT1-36B
(3)
$ 960,765.25
Class PT1-37A
(2)
$ 928,195.85
Class PT1-37B
(3)
$ 928,195.85
Class PT1-38A
(2)
$ 896,711.90
Class PT1-38B
(3)
$ 896,711.90
Class PT1-39A
(2)
$ 866,278.30
Class PT1-39B
(3)
$ 866,278.30
Class PT1-40A
(2)
$ 836,862.60
Class PT1-40B
(3)
$ 836,862.60
Class PT1-41A
(2)
$ 808,434.70
Class PT1-41B
(3)
$ 808,434.70
Class PT1-42A
(2)
$ 780,949.15
Class PT1-42B
(3)
$ 780,949.15
Class PT1-43A
(2)
$ 754,383.05
Class PT1-43B
(3)
$ 754,383.05
Class PT1-44A
(2)
$ 728,706.30
Class PT1-44B
(3)
$ 728,706.30
Class PT1-45A
(2)
$ 703,889.70
Class PT1-45B
(3)
$ 703,889.70
Class PT1-46A
(2)
$ 679,905.45
Class PT1-46B
(3)
$ 679,905.45
Class PT1-47A
(2)
$ 656,725.50
Class PT1-47B
(3)
$ 656,725.50
Class PT1-48A
(2)
$ 634,323.35
Class PT1-48B
(3)
$ 634,323.35
Class PT1-49A
(2)
$ 612,673.70
Class PT1-49B
(3)
$ 612,673.70
Class PT1-50A
(2)
$ 591,751.70
Class PT1-50B
(3)
$ 591,751.70
Class PT1-51A
(2)
$ 571,533.40
Class PT1-51B
(3)
$ 571,533.40
Class PT1-52A
(2)
$ 551,995.60
Class PT1-52B
(3)
$ 551,995.60
Class PT1-53A
(2)
$ 533,115.75
Class PT1-53B
(3)
$ 533,115.75
Class PT1-54A
(2)
$ 514,872.15
Class PT1-54B
(3)
$ 514,872.15
Class PT1-55A
(2)
$14,325,609.85
Class PT1-55B
(3)
$14,325,609.85
Class PT1-R
(4)
(4)
----------------------
(1) For any
Distribution Date (and the related Interest Accrual Period),
this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per
annum
rate (its
"Pooling-Tier REMIC-1 Interest Rate") equal to the Pooling-Tier
REMIC-1
WAC Rate.
(2) For any
Distribution Date (and the related Interest Accrual Period),
this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per
annum
rate (its
"Pooling-Tier REMIC-1 Interest Rate") equal to the product of
(i) 2 and
(ii) the Pooling-Tier REMIC-1 WAC Rate, subject to a maximum
rate of
9.9%.
(3) For any
Distribution Date (and the related Interest Accrual Period),
this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per
annum
rate (its
"Pooling-Tier REMIC-1 Interest Rate") equal to the excess, if
any, of
(A) the product of (i) 2 and (ii) the Pooling-Tier REMIC-1 WAC
Rate over
(B) 9.9%.
(4) The Class
PT1-R Interest shall not have a principal balance and shall not
bear
interest.
On each Distribution Date, the interest distributable in respect
of
the Mortgage Loans for such Distribution Date shall be deemed to be
distributed
to the Pooling-Tier REMIC-1 Regular Interests at the rates shown
above.
On each Distribution Date, Realized Losses, Subsequent
Recoveries
and payments of principal in respect of the Mortgage Loans shall be
allocated to
the outstanding Pooling-Tier REMIC-1 Regular Interest with the
lowest numerical
denomination until the Pooling-Tier REMIC-1 Principal Amount of
such interest is
reduced to zero, provided that, with respect to Pooling-Tier
REMIC-1 Regular
Interests with the same numerical denomination, such Realized
Losses, Subsequent
Recoveries and payments of principal shall be allocated pro rata
between such
Pooling-Tier REMIC-1 Regular Interests, until the Pooling-Tier
REMIC-1 Principal
Amount of such interests is reduced to zero.
Pooling-Tier REMIC-2
Pooling-Tier REMIC-2 shall issue the following interests in
Pooling-Tier REMIC-2, and each such interest, other than the Class
PT2-R
Interest, is hereby designated as a regular interest in
Pooling-Tier REMIC-2.
The Class PT2-R Interest is hereby designated as the sole class of
residual
interest in Pooling-Tier REMIC-2 and shall be represented by the
Class R
Certificates.
<TABLE>
<CAPTION>
Corresponding
Corresponding
Pooling-Tier
Pooling-Tier
Corresponding
Pooling-Tier
Scheduled
Pooling-Tier
REMIC-2 REMIC-2
Initial
Pooling-Tier
REMIC-1 Regular
Crossover
REMIC-2 Interest
Interest Rate
Principal Amount
REMIC-2 IO Interest Interest
Distribution Date
---------------------------------------------------------------------------------------------------------------
<S>
<C>
<C>
<C>
<C>
<C>
Class PT2-1
(1)
$58,641,729.50
N/A
N/A
N/A
Class PT2-2A
(2)
$32,946,207.90 Class PT2-IO-2
N/A
N/A
Class PT2-2B
(3)
$32,946,207.90
N/A
N/A
N/A
Class PT2-3A
(2)
$21,622,806.60 Class PT2-IO-3
N/A
N/A
Class PT2-3B
(3)
$21,622,806.60
N/A
N/A
N/A
Class PT2-4A
(2)
$21,303,249.85 Class PT2-IO-4
N/A
N/A
Class PT2-4B
(3)
$21,303,249.85
N/A
N/A
N/A
Class PT2-5A
(2)
$20,097,826.60 Class PT2-IO-5
N/A
N/A
Class PT2-5B
(3)
$20,097,826.60
N/A
N/A
N/A
Class PT2-6A
(2)
$19,400,293.65 Class PT2-IO-6
N/A
N/A
Class PT2-6B
(3)
$19,400,293.65
N/A
N/A
N/A
Class PT2-7A
(2)
$18,735,235.55 Class PT2-IO-7
N/A
N/A
Class PT2-7B
(3)
$18,735,235.55
N/A
N/A
N/A
Class PT2-8A
(2)
$18,100,241.30 Class PT2-IO-8
N/A
N/A
Class PT2-8B
(3)
$18,100,241.30
N/A
N/A
N/A
Class PT2-9A
(2)
$17,492,995.25 Class PT2-IO-9
N/A
N/A
Class PT2-9B
(3)
$17,492,995.25
N/A
N/A
N/A
Class PT2-10A
(2)
$16,911,280.30 Class PT2-IO-10
N/A
N/A
Class PT2-10B
(3)
$16,911,280.30
N/A
N/A
N/A
Class PT2-11A
(2)
$16,352,926.45 Class PT2-IO-11
N/A
N/A
Class PT2-11B
(3)
$16,352,926.45
N/A
N/A
N/A
Class PT2-12A
(2)
$15,815,423.25 Class PT2-IO-12
N/A
N/A
Class PT2-12B
(3)
$15,815,423.25
N/A
N/A
N/A
Class PT2-13A
(2)
$15,292,427.80 Class PT2-IO-13
N/A
N/A
Class PT2-13B
(3)
$15,292,427.80
N/A
N/A
N/A
Class PT2-14A
(2)
$14,768,331.75 Class PT2-IO-14
N/A
N/A
Class PT2-14B
(3)
$14,768,331.75
N/A
N/A
N/A
Class PT2-15A
(2)
$14,129,686.80 Class PT2-IO-15
N/A
N/A
Class PT2-15B
(3)
$14,129,686.80
N/A
N/A
N/A
Class PT2-16A
(2)
$13,518,805.10 Class PT2-IO-16
N/A
N/A
Class PT2-16B
(3)
$13,518,805.10
N/A
N/A
N/A
Class PT2-17A
(2)
$12,934,475.90 Class PT2-IO-17
N/A
N/A
Class PT2-17B
(3)
$12,934,475.90
N/A
N/A
N/A
Class PT2-18A
(2)
$12,375,536.80
Class
PT2-IO-18
N/A
N/A
Class PT2-18B
(3)
$12,375,536.80
N/A
N/A
N/A
Class PT2-19A
(2)
$11,840,881.15 Class PT2-IO-19
N/A
N/A
Class PT2-19B
(3)
$11,840,881.15
N/A
N/A
N/A
Class PT2-20A
(2)
$12,255,640.40 Class PT2-IO-20
N/A
N/A
Class PT2-20B
(3)
$12,255,640.40
N/A
N/A
N/A
Class PT2-21A
(2)
$33,181,934.65 Class PT2-IO-21
N/A
N/A
Class PT2-21B
(3)
$33,181,934.65
N/A
N/A
N/A
Class PT2-22A
(2)
$167,148,590.55 Class PT2-IO-22
N/A
N/A
Class PT2-22B
(3)
$167,148,590.55
N/A
N/A
N/A
Class PT2-23A
(2)
$1,835,892.50 Class PT2-IO-23
N/A
N/A
Class PT2-23B
(3)
$1,835,892.50
N/A
N/A
N/A
Class PT2-24A
(2)
$1,770,419.15 Class PT2-IO-24
N/A
N/A
Class PT2-24B
(3)
$1,770,419.15
N/A
N/A
N/A
Class PT2-25A
(2)
$1,707,281.70 Class PT2-IO-25
N/A
N/A
Class PT2-25B
(3)
$1,707,281.70
N/A
N/A
N/A
Class PT2-26A
(2)
$1,646,396.85 Class PT2-IO-26
N/A
N/A
Class PT2-26B
(3)
$1,646,396.85
N/A
N/A
N/A
Class PT2-27A
(2)
$1,587,686.15 Class PT2-IO-27
N/A
N/A
Class PT2-27B
(3)
$1,587,686.15
N/A
N/A
N/A
Class PT2-28A
(2)
$1,531,117.95 Class PT2-IO-28
N/A
N/A
Class PT2-28B
(3)
$1,531,117.95
N/A
N/A
N/A
Class PT2-29A
(2)
$1,476,826.90 Class PT2-IO-29
N/A
N/A
Class PT2-29B
(3)
$1,476,826.90
N/A
N/A
N/A
Class PT2-30A
(2)
$1,424,144.45 Class PT2-IO-30
N/A
N/A
Class PT2-30B
(3)
$1,424,144.45
N/A
N/A
N/A
Class PT2-31A
(2)
$1,373,341.65 Class PT2-IO-31
N/A
N/A
Class PT2-31B
(3)
$1,373,341.65
N/A
N/A
N/A
Class PT2-32A
(2)
$1,353,148.40 Class PT2-IO-32
N/A
N/A
Class PT2-32B
(3)
$1,353,148.40
N/A
N/A
N/A
Class PT2-33A
(2)
$2,336,536.40 Class PT2-IO-33
N/A
N/A
Class PT2-33B
(3)
$2,336,536.40
N/A
N/A
N/A
Class PT2-34A
(2)
$4,436,661.95 Class PT2-IO-34
N/A
N/A
Class PT2-34B
(3)
$4,436,661.95
N/A
N/A
N/A
Class PT2-35A
(2)
$994,456.85 Class PT2-IO-35
N/A
N/A
Class PT2-35B
(3)
$994,456.85
N/A
N/A
N/A
Class PT2-36A
(2)
$960,765.25 Class PT2-IO-36
N/A
N/A
Class PT2-36B
(3)
$960,765.25
N/A
N/A
N/A
Class PT2-37A
(2)
$928,195.85 Class PT2-IO-37
N/A
N/A
Class PT2-37B
(3)
$928,195.85
N/A
N/A
N/A
Class PT2-38A
(2)
$896,711.90 Class PT2-IO-38
N/A
N/A
Class PT2-38B
(3)
$896,711.90
N/A
N/A
N/A
Class PT2-39A
(2)
$866,278.30 Class PT2-IO-39
N/A
N/A
Class PT2-39B
(3)
$866,278.30
N/A
N/A
N/A
Class PT2-40A
(2)
$836,862.60 Class PT2-IO-40
N/A
N/A
Class PT2-40B
(3)
$836,862.60
N/A
N/A
N/A
Class PT2-41A
(2)
$808,434.70 Class PT2-IO-41
N/A
N/A
Class PT2-41B
(3)
$808,434.70
N/A
N/A
N/A
Class PT2-42A
(2)
$780,949.15 Class PT2-IO-42
N/A
N/A
Class PT2-42B
(3)
$780,949.15
N/A
N/A
N/A
Class PT2-43A
(2)
$754,383.05 Class PT2-IO-43
N/A
N/A
Class PT2-43B
(3)
$754,383.05
N/A
N/A
N/A
Class PT2-44A
(2)
$728,706.30 Class PT2-IO-44
N/A
N/A
Class PT2-44B
(3)
$728,706.30
N/A
N/A
N/A
Class PT2-45A
(2)
$703,889.70 Class PT2-IO-45
N/A
N/A
Class PT2-45B
(3)
$703,889.70
N/A
N/A
N/A
Class PT2-46A
(2)
$679,905.45 Class PT2-IO-46
N/A
N/A
Class PT2-46B
(3)
$679,905.45
N/A
N/A
N/A
Class PT2-47A
(2)
$656,725.50 Class PT2-IO-47
N/A
N/A
Class PT2-47B
(3)
$656,725.50
N/A
N/A
N/A
Class PT2-48A
(2)
$634,323.35 Class PT2-IO-48
N/A
N/A
Class PT2-48B
(3)
$634,323.35
N/A
N/A
N/A
Class PT2-49A
(2)
$612,673.70 Class PT2-IO-49
N/A
N/A
Class PT2-49B
(3)
$612,673.70
N/A
N/A
N/A
Class PT2-50A
(2)
$591,751.70 Class PT2-IO-50
N/A
N/A
Class PT2-50B
(3)
$591,751.70
N/A
N/A
N/A
Class PT2-51A
(2)
$571,533.40 Class PT2-IO-51
N/A
N/A
Class PT2-51B
(3)
$571,533.40
N/A
N/A
N/A
Class PT2-52A
(2)
$551,995.60 Class PT2-IO-52
N/A
N/A
Class PT2-52B
(3)
$551,995.60
N/A
N/A
N/A
Class PT2-53A
(2)
$533,115.75 Class PT2-IO-53
N/A
N/A
Class PT2-53B
(3)
$533,115.75
N/A
N/A
N/A
Class PT2-54A
(2)
$514,872.15 Class PT2-IO-54
N/A
N/A
Class PT2-54B
(3)
$514,872.15
N/A
N/A
N/A
Class PT2-55A
(2)
$14,325,609.85 Class PT2-IO-55
N/A
N/A
Class PT2-55B
(3)
$14,325,609.85
N/A
N/A
N/A
Class PT2-IO-2
(4)
(4)
N/A
Class PT1-2A
March 2006
Class PT2-IO-3
(4)
(4)
N/A
Class PT1-3A
April 2006
Class PT2-IO-4
(4)
(4)
N/A
Class PT1-4A
May 2006
Class PT2-IO-5
(4)
(4)
N/A
Class PT1-5A
June 2006
Class PT2-IO-6
(4)
(4)
N/A
Class PT1-6A
July 2006
Class PT2-IO-7
(4)
(4)
N/A
Class PT1-7A
August 2006
Class PT2-IO-8
(4)
(4)
N/A
Class PT1-8A September
2006
Class PT2-IO-9
(4)
(4)
N/A
Class PT1-9A
October 2006
Class PT2-IO-10
(4)
(4)
N/A
Class PT1-10A November
2006
Class PT2-IO-11
(4)
(4)
N/A
Class PT1-11A December
2006
Class PT2-IO-12
(4)
(4)
N/A
Class PT1-12A January
2007
Class PT2-IO-13
(4)
(4)
N/A
Class PT1-13A
February
2007
Class PT2-IO-14
(4)
(4)
N/A
Class PT1-14A
March 2007
Class PT2-IO-15
(4)
(4)
N/A
Class PT1-15A
April 2007
Class PT2-IO-16
(4)
(4)
N/A
Class PT1-16A
May 2007
Class PT2-IO-17
(4)
(4)
N/A
Class PT1-17A
June 2007
Class PT2-IO-18
(4)
(4)
N/A
Class PT1-18A
July 2007
Class PT2-IO-19
(4)
(4)
N/A
Class PT1-19A
August 2007
Class PT2-IO-20
(4)
(4)
N/A
Class PT1-20A September
2007
Class PT2-IO-21
(4)
(4)
N/A
Class PT1-21A October
2007
Class PT2-IO-22
(4)
(4)
N/A
Class PT1-22A November
2007
Class PT2-IO-23
(4)
(4)
N/A
Class PT1-23A December
2007
Class PT2-IO-24
(4)
(4)
N/A
Class PT1-24A January
2008
Class PT2-IO-25
(4)
(4)
N/A
Class PT1-25A February
2008
Class PT2-IO-26
(4)
(4)
N/A
Class PT1-26A
March 2008
Class PT2-IO-27
(4)
(4)
N/A
Class PT1-27A
April 2008
Class PT2-IO-28
(4)
(4)
N/A
Class PT1-28A
May 2008
Class PT2-IO-29
(4)
(4)
N/A
Class PT1-29A
June 2008
Class PT2-IO-30
(4)
(4)
N/A
Class PT1-30A
July 2008
Class PT2-IO-31
(4)
(4)
N/A
Class PT1-31A
August 2008
Class PT2-IO-32
(4)
(4)
N/A
Class PT1-32A September
2008
Class PT2-IO-33
(4)
(4)
N/A
Class PT1-33A October
2008
Class PT2-IO-34
(4)
(4)
N/A
Class PT1-34A November
2008
Class PT2-IO-35
(4)
(4)
N/A
Class PT1-35A December
2008
Class PT2-IO-36
(4)
(4)
N/A
Class PT1-36A January
2009
Class PT2-IO-37
(4)
(4)
N/A
Class PT1-37A February
2009
Class PT2-IO-38
(4)
(4)
N/A
Class PT1-38A
March 2009
Class PT2-IO-39
(4)
(4)
N/A
Class PT1-39A
April 2009
Class PT2-IO-40
(4)
(4)
N/A
Class PT1-40A
May 2009
Class PT2-IO-41
(4)
(4)
N/A
Class PT1-41A
June 2009
Class PT2-IO-42
(4)
(4)
N/A
Class PT1-42A
July 2009
Class PT2-IO-43
(4)
(4)
N/A
Class PT1-43A
August 2009
Class PT2-IO-44
(4)
(4)
N/A
Class PT1-44A September
2009
Class PT2-IO-45
(4)
(4)
N/A
Class PT1-45A October
2009
Class PT2-IO-46
(4)
(4)
N/A
Class PT1-46A November
2009
Class PT2-IO-47
(4)
(4)
N/A
Class PT1-47A December
2009
Class PT2-IO-48
(4)
(4)
N/A
Class PT1-48A January
2010
Class PT2-IO-49
(4)
(4)
N/A
Class PT1-49A February
2010
Class PT2-IO-50
(4)
(4)
N/A
Class PT1-50A
March 2010
Class PT2-IO-51
(4)
(4)
N/A
Class PT1-51A
April 2010
Class PT2-IO-52
(4)
(4)
N/A
Class PT1-52A
May 2010
Class PT2-IO-53
(4)
(4)
N/A
Class PT1-53A June 2010
Class PT2-IO-54
(4)
(4)
N/A
Class PT1-54A
July 2010
Class PT2-IO-55
(4)
(4)
N/A
Class PT1-55A
August 2010
Class PT2-R
(5)
(5)
N/A
N/A
N/A
</TABLE>
----------------------
(1) For any
Distribution Date (and the related Interest Accrual Period),
this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per
annum
rate (its
"Pooling-Tier REMIC-2 Interest Rate") equal to the Pooling-Tier
REMIC-1
WAC Rate.
(2) For any
Distribution Date (and the related Interest Accrual Period),
this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per
annum
rate (its
"Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of
the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1
Regular Interests and having an "A" in their class designation,
provided
that, on each Distribution Date on which interest is
distributable on the Corresponding Pooling-Tier REMIC-2 IO
Interest, this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per
annum
rate equal
to Swap LIBOR subject to a maximum rate equal to the weighted
average of
the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1
Regular Interests and having an "A" in their class designation.
(3) For any
Distribution Date (and the related Interest Accrual Period),
this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per
annum
rate (its
"Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of
the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1
Regular Interests and having a "B" in their class designation.
(4) Each
Pooling-Tier REMIC-2 IO is an interest-only interest and does
not
have a
principal balance but has a notional balance ("Pooling-Tier
REMIC-2
IO
Notional Balance") equal to the Pooling-Tier REMIC-2 Principal
Amount
of the
Corresponding Pooling-Tier REMIC-1 Regular Interest. From the
Closing
Date through and including the Corresponding Actual Crossover
Distribution Date, each Pooling-Tier REMIC-2 IO Interest shall be
entitled
to receive
interest that accrues on the Corresponding Pooling-Tier REMIC-1
Regular
Interest at a rate equal to the excess, if any, of (i) the
Pooling-Tier REMIC-1 Interest Rate for the Corresponding
Pooling-Tier
REMIC-1
Regular Interest over (ii) Swap LIBOR. After the Corresponding
Actual
Crossover Distribution Date, the Pooling-Tier REMIC-2 IO
Interest
shall not
accrue interest.
(5) The Class
PT2-R Interest shall not have a principal balance and shall not
bear
interest.
On each Distribution Date, the interest distributable in respect
of
the Mortgage Loans for such Distribution Date shall be distributed
to the
Pooling-Tier REMIC-2 Regular Interests at the Pooling-Tier REMIC-2
Interest
Rates shown above.
On each Distribution Date, Realized Losses, Subsequent
Recoveries
and payments of principal in respect of the Mortgage Loans shall be
allocated to
the then outstanding Pooling-Tier REMIC-2 Regular Interests (other
than the
Pooling-Tier REMIC-2 IO Interests) with the lowest numerical
denomination until
the Pooling-Tier REMIC-2 Principal Amount of such interest is
reduced to zero,
provided that, for Pooling-Tier REMIC-2 Regular Interests Mortgage
Loans with
the same numerical denomination, such Realized Losses, Subsequent
Recoveries and
payments of principal shall be allocated pro rata between such
Pooling-Tier
REMIC-2 Regular Interests, until the Pooling-Tier REMIC-2 Principal
Amount of
such interests is reduced to zero.
Lower-Tier REMIC
The Lower-Tier REMIC shall issue the following interests, and
each
such interest, other than the Class LT-R Interest, is hereby
designated as a
regular interest in the Lower-Tier REMIC. The Class LT-R Interest
is hereby
designated as the sole class of residual interest in the Lower-Tier
REMIC and
shall be represented by the Class R Certificates.
Corresponding
Upper-Tier
Lower-Tier REMIC
Lower-Tier
Initial Lower-Tier Principal REMIC Regular
Interest
Interest Rate
Amount
Interest
--------------------------------------------------------------------------------
Class LT-A-1
(1) 1/2
initial Class Certificate
A-1
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-A-2
(1) 1/2
initial Class Certificate
A-2
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-A-3
(1) 1/2
initial Class Certificate
A-3
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-A-4
(1) 1/2
initial Class Certificate
A-4
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-1
(1) 1/2
initial Class Certificate
M-1
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-2
(1) 1/2
initial Class Certificate
M-2
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-3
(1)
1/2
initial Class Certificate
M-3
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-4
(1) 1/2
initial Class Certificate
M-4
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-5
(1) 1/2
initial Class Certificate
M-5
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-6
(1) 1/2
initial Class Certificate
M-6
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-B-1
(1) 1/2
initial Class Certificate
B-1
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-B-2
(1) 1/2
initial Class Certificate
B-2
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-B-3
(1) 1/2
initial Class Certificate
B-3
Balance of
Corresponding
Upper-Tier Regular Interest
Class LT-Accrual
(1) 1/2
Pool Stated Principal
N/A
Balance plus 1/2 Subordinated
Amount
Class LT-IO
(5) (5)
N/A
Class LT-R
(6) (6)
N/A
----------------------
(1) The interest
rate with respect to any Distribution Date for these
interests
is a per annum variable rate equal to the weighted average of
the
Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2
Regular
Interests (other than the Pooling-Tier REMIC-2 IO Interests).
(2) This
Lower-Tier Regular Interest is an interest-only interest and does
not
have a
Lower-Tier Principal Amount. On each Distribution Date, this
Lower-Tier
Regular Interest shall be entitled to receive all interest
distributable on the Pooling-Tier REMIC-2 IO Interests.
(3) The Class
LT-R Interest is the sole class of residual interest in the
Lower-Tier
REMIC and it does not have a principal amount or an interest
rate.
Each Lower-Tier Regular Interest is hereby designated as a
regular
interest in the Lower-Tier REMIC. The Class LT-A-1, Class LT-A-2,
Class LT-A-3,
Class LT-A-4, Class LT-M-1, Class LT-M-2, Class LT-M-3, Class
LT-M-4, Class
LT-M-5, Class LT-M-6, Class LT-B-1, Class LT-B-2 and Class LT-B-3
Interests are
hereby designated the LT-Accretion Directed Classes (the
"LT-Accretion Directed
Classes").
On each Distribution Date, 50% of the increase in the
Subordinated
Amount shall be payable as a reduction of the Lower-Tier Principal
Amount of the
LT-Accretion Directed Classes (each such Class will be reduced by
an amount
equal to 50% of any increase in the Subordinated Amount that is
attributable to
a reduction in the Class Certificate Balance of its Corresponding
Class) and
shall be accrued and added to the Lower-Tier Principal Amount of
the Class
LT-Accrual Interest. On each Distribution Date, the increase in the
Lower-Tier
Principal Amount of the Class LT-Accrual Interest shall not exceed
interest
accruals for such Distribution Date for the Class LT-Accrual
Interest. In the
event that: (i) 50% of the increase in the Subordinated Amount
exceeds (ii)
interest accruals on the Class LT-Accrual Interest for such
Distribution Date,
the excess for such Distribution Date (accumulated with all such
excesses for
all prior Distribution Dates) will be added to any increase in the
Subordinated
Amount for purposes of determining the amount of interest accrual
on the Class
LT-Accrual Interest payable as principal on the LT-Accretion
Directed Classes on
the next Distribution Date pursuant to the first sentence of this
paragraph. All
payments of scheduled principal and prepayments of principal
generated by the
Mortgage Loans and all Subsequent Recoveries allocable to principal
shall be
allocated (i) 50% to the Class LT-Accrual Interest and (ii) 50% to
the
LT-Accretion Directed Classes (such principal payments and
Subsequent Recoveries
shall be allocated among such LT-Accretion Directed Classes in an
amount equal
to 50% of the principal amounts and Subsequent Recoveries allocated
to their
respective Corresponding Classes), until paid in full.
Notwithstanding the
above, principal payments allocated to the Class X Interest that
result in the
reduction in the Subordinated Amount shall be allocated to the
Class LT-Accrual
Interest (until paid in full). Realized Losses shall be applied so
that after
all distributions have been made on each Distribution Date (i) the
Lower-Tier
Principal Amount of each LT-Accretion Directed Class is equal to
50% of the
Class Certificate Balance of its Corresponding Class, and (ii) the
Class
LT-Accrual Interest is equal to 50% of the aggregate Stated
Principal Balance of
the Mortgage Loans plus 50% of the Subordinated Amount. Any
increase in the
Class Certificate Balance of a Class of Offered Certificates as a
result of a
Subsequent Recovery shall increase the Lower-Tier Principal Amount
of the
Corresponding Lower-Tier Regular Interest by 50% of such increase,
and the
remaining 50% of such increase shall increase the Lower-Tier
Principal Amount of
the Class LT-Accrual Interest.
Upper-Tier REMIC
The Upper-Tier REMIC shall issue the following interests, and
each
such interest, other than the Class UT-R Interest, is hereby
designated as a
regular interest in the Upper-Tier REMIC. The Class UT-R Interest
is hereby
designated as the sole class of residual interests in the
Upper-Tier REMIC and
shall be represented by the Class R Certificates.
Corresponding
Upper-Tier REMIC
Upper-Tier
Initial Principal
Class of
Interest
Interest Rate Upper-Tier
Amount Certificates
-----------------------------------------------------------------------------
Class A-1
(1)
$ 490,920,000
Class A-1
Class A-2
(2)
$ 135,080,000
Class A-2
Class A-3
(2)
$ 207,750,000
Class A-3
Class A-4
(2)
$ 123,421,000
Class A-4
Class M-1
(3)
$ 42,487,000
Class M-1
Class M-2
(3)
$ 40,059,000
Class M-2
Class M-3
(3)
$ 23,064,000
Class M-3
Class M-4
(3)
$ 20,637,000
Class M-4
Class M-5
(3)
$ 20,030,000
Class M-5
Class M-6
(3)
$ 17,602,000
Class M-6
Class B-1
(3)
$ 17,601,000
Class B-1
Class B-2
(3)
$ 16,388,000
Class B-2
Class B-3
(3)
$ 12,139,000
Class B-3
Class IO
(4)
(2)
N/A
Class X
(5)
(3)
Class X
Class UT-R
(6)
(6)
Class R
----------------------
(1) For any
Distribution Date (and the related Interest Accrual Period)
this
interest
shall bear interest at the lesser of (i) the Pass-Through Rate
(determined without regard to the WAC Cap) for the Corresponding
Class of
Certificates and (ii) the Upper-Tier REMIC WAC Rate.
(2) This
interest is an interest-only interest and does not have a
principal
balance.
On each Distribution Date, the Class IO Interest shall be
entitled
to receive all interest distributable on the Class LT-IO
Interest.
This interest shall be beneficially owned by the holders of the
Class X
Certificates and shall be held as an asset of the Swap Account.
(3) The Class X
Interest has an initial principal balance of $46,736,513 but
will not
accrue interest on such balance but will accrue interest on a
notional
principal balance. As of any Distribution Date, the Class X
Interest
shall have a notional principal balance equal to the aggregate
of
the
Lower-Tier Principal Amounts of the Lower-Tier Regular
Interests
(other
than the Class LT-IO Interest) as of the first day of the
related
Interest
Accrual Period. With respect to any Interest Accrual Period,
the
Class X
Interest shall bear interest at a rate equal to the excess, if
any, of
the Upper-Tier REMIC WAC Rate over the product of (i) 2 and
(ii)
the
weighted average of the Lower-Tier Interest Rates of the
Lower-Tier
REMIC
Interests (other than the Class LT-IO Interest), where the
Lower-Tier
Interest Rate on each of the Class LT-Accrual Interest is
subject to
a cap equal to zero and each LT-Accretion Directed Class is
subject to
a cap equal to the Upper-Tier Interest Rate on its
Corresponding Class of Upper-Tier Regular Interest. With respect to
any
Distribution Date, interest that so accrues on the notional
principal
balance of
the Class X Interest shall be deferred in an amount equal to
any
increase in the Subordinated Amount on such Distribution Date.
Such
deferred
interest shall not itself bear interest.
(4) The Class
UT-R Interest does not have an interest rate or a principal
balance.
On each Distribution Date, interest distributable in respect of
the
Lower-Tier Interests for such Distribution Date shall be deemed to
be
distributed on the interests in the Upper-Tier REMIC at the rates
shown above,
provided that the Class IO Interest shall be entitled to receive
interest before
any other interest in the Upper-Tier REMIC.
On each Distribution Date, all Realized Losses, Subsequent
Recoveries and all payments of principal shall be allocated to the
Upper-Tier
Interests until the outstanding principal balance of each such
interest equals
the outstanding Class Certificate Balance of the Corresponding
Class of
Certificates as of such Distribution Date.
The Certificates
Class
Class Certificate
Class Designation
Pass-Through Rate
Balance
----------------------------------------------------------------
Class A-1
(1)
$ 490,920,000
Class A-2
(1)
$ 135,080,000
Class A-3
(1)
$ 207,750,000
Class A-4
(1)
$ 123,421,000
Class M-1
(2)
$ 42,487,000
Class M-2
(2)
$ 40,059,000
Class M-3
(2)
$ 23,064,000
Class M-4
(2)
$ 20,637,000
Class M-5
(2)
$ 20,030,000
Class M-6
(2)
$ 17,602,000
Class B-1
(2)
$ 17,601,000
Class B-2
(2)
$ 16,388,000
Class B-3
(2)
$ 12,139,000
Class X
(3)
$
0(3)
Class R
(4)
$
0(4)
----------------------
(1) The Class
A-1, Class A-2, Class A-3, Class A-4 Interest will bear
interest
during
each Interest Accrual Period at a per annum rate equal to (a) on
or
prior to
the Optional Termination Date, the least of (i) LIBOR plus the
applicable
Pass-Through Margin, (ii) the WAC Cap or (b) after the Optional
Termination Date, the least of (i) LIBOR plus the applicable
Pass-Through
Margin and
(iii) the WAC Cap.
(2) The Class
M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class B-1,
Class B-2 and Class B-3 Interests will bear interest during
each
Interest Accrual Period at a per annum rate equal to (a) on or
prior
to the
Optional Termination Date, the lesser of (i) LIBOR plus the
applicable
Pass-Through Margin, and (ii) the WAC Cap or (b) after the
Optional
Termination Date, the lesser of (i) LIBOR plus the applicable
Pass-Through Margin, and (ii) the WAC Cap.
(3) The Class X
Certificates will represent beneficial ownership of the Class
X
Interest, the Class IO Interest, the Interest Rate Swap Agreement,
the
right to
Class IO Shortfalls and amounts in the Excess Reserve Fund
Account
and the Swap Account, subject to the obligation to make
payments
from the
Excess Reserve Fund Account in respect of Basis Risk
CarryForward
Amounts
and amounts in the Swap Account subject to the obligation to
make
Net Swap
Payments, Swap Termination Payments and Basis Risk CarryForward
Amounts.
For federal income tax purposes, the Trustee will treat a Class
X
Certificateholder's obligation to make payments from the Excess
Reserve
Fund
Account or the Swap Account as payments made pursuant to an
interest
rate cap
contract written by the Class X Certificateholders in favor of
each Class
of LIBOR Certificates. Such rights of the Class X
Certificateholders and LIBOR Certificateholders shall be treated as
held
in a
portion of the Trust Fund that is treated as a grantor trust
under
subpart E,
Part I of subchapter J of the Code.
(4) The Class R
Certificates do not have an interest rate or a principal
balance.
The minimum denomination for each Class of Certificates, other
than
the Class P, Class R and the Class X Certificates, will be $25,000
with integral
multiples of $1 in excess thereof. The minimum denomination for the
Class P and
the Class X Certificates will each be a 1% Percentage Interest in
such Class.
The Class R Certificate will represent a 100% Percentage Interest
in such Class.
It is expected that each Class of Certificates will receive its
final distribution of principal and interest on or prior to the
Final Scheduled
Distribution Date.
Set forth below are designations of Classes of Certificates to
the
categories used herein:
Book-Entry Certificates........... All Classes of Certificates
other than the
Physical Certificates.
Class A Certificates.............. Class A-1, Class A-2, Class
A-3 and
Class A-4 Certificates.
Delay Certificates................ None.
ERISA-Restricted Certificates..... Class R Certificates, Class
P Certificates
and Class X Certificates; any certificate
with a rating below the lowest applicable
permitted rating under the Underwriters'
Exemption.
Non-Delay Certificates............ Class A, Class X and
Subordinated
Certificates.
Offered Certificates.............. All Classes of Certificates
other than the
Private Certificates.
Physical Certificates............. Class P, Class X and Class R
Certificates.
Private Certificates.............. Class P, Class X and Class R
Certificates.
Rating Agencies................... Fitch, Moody's and Standard
& Poor's.
Regular Certificates.............. All Classes of Certificates
other than the
Class P and Class R Certificates.
Residual Certificates............. Class R Certificates.
Subordinated Certificates......... Class M-1, Class M-2, Class
M-3,
Class M-4, Class M-5, Class M-6, Class B-1,
Class B-2 and Class B-3 Certificates.
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and
phrases,
unless the context otherwise requires, shall have the following
meanings:
Accepted Servicing Practices: With respect to any Mortgage
Loan,
those mortgage servicing practices set forth in Section 3.01(a) of
this
Agreement.
Account: Any of the Collection Account, the Distribution
Account,
any Escrow Account, the Excess Reserve Fund Account or the Swap
Account. Each
Account shall be an Eligible Account.
Accrued Certificate Interest Distribution Amount: With respect
to
any Distribution Date for each Class of Offered Certificates, the
amount of
interest accrued during the related Interest Accrual Period at the
applicable
Pass-Through Rate on the related Class Certificate Balance
immediately prior to
such Distribution Date, as reduced by such Class's share of Net
Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for such
Distribution
Date allocated to such Class pursuant to Section 4.02.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage
Loan.
Adjusted Net Mortgage Rate: As to each Mortgage Loan and at any
time, the per annum rate equal to the Mortgage Rate less the
Expense Fee Rate.
Adjustment Date: As to any Adjustable Rate Mortgage Loan, the
first
Due Date on which the related Mortgage Rate adjusts as set forth in
the related
Mortgage Note and each Due Date thereafter on which the Mortgage
Rate adjusts as
set forth in the related Mortgage Note.
Advance: Any P&I Advance or Servicing Advance.
Advance Facility: A
financing or other facility as described in
Section 10.07.
Advancing Person: The Person to whom the Servicer's rights
under
this Agreement to be reimbursed for any P&I Advances or
Servicing Advances have
been assigned pursuant to Section 10.07.
Affiliate: With respect to any Person, any other Person
controlling,
controlled by or under common control with such first Person. For
the purposes
of this definition, "control" means the power to direct the
management and
policies of such Person, directly or indirectly, whether through
the ownership
of voting securities, by contract or otherwise; and the terms
"controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all
amendments
or supplements hereto.
Amount Held for Future Distribution: As to the Certificates on
any
Distribution Date, the aggregate amount held in each Collection
Account at the
close of business on the related Determination Date on account of
(i) Principal
Prepayments, Insurance Proceeds, Condemnation Proceeds and
Liquidation Proceeds
on the Mortgage Loans received after the end of the related
Prepayment Period
and (ii) all Scheduled Payments on the Mortgage Loans due after the
end of the
related Due Period.
Analytics Company: Intex Solutions, Inc., or any other bond
analytics service provider identified to the Trustee by the
Depositor.
Applied Realized Loss Amount: With respect to any Distribution
Date,
the amount, if any, by which the aggregate Class Certificate
Balance of the
Offered Certificates after distributions of principal on such
Distribution Date
exceeds the aggregate Stated Principal Balance of the Mortgage
Loans for such
Distribution Date.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the
value of the
Mortgaged Property.
Assignment of Mortgage: An assignment of the Mortgage, notice
of
transfer or equivalent instrument in recordable form (other than
the assignee's
name and recording information not yet returned from the recording
office),
reflecting the sale of the Mortgage to the Trustee.
Available Funds: With respect to any Distribution Date and the
Mortgage Loans to the extent received by the Trustee (x) the sum of
(i) all
scheduled installments of interest (net of the related Expense
Fees) and
principal due on the Due Date on such Mortgage Loans in the related
Due Period
and received by the Servicer on or prior to the related
Determination Date,
together with any P&I Advances in respect thereof; (ii) all
Condemnation
Proceeds, Insurance Proceeds and Liquidation Proceeds received by
the Servicer
during the related Prepayment Period (in each case, net of
unreimbursed expenses
incurred in connection with a liquidation or foreclosure and
unreimbursed
Advances, if any); (iii) all partial or full prepayments on the
Mortgage Loans
received by the Servicer during the related Prepayment Period
together with all
Compensating Interest, if applicable, thereon (excluding any
Prepayment
Charges); (iv) all Substitution Adjustment Amounts with respect to
the
substitutions of Mortgage Loans that occur with respect to such
Distribution
Date; (v) amounts received with respect to such Distribution Date
as the
Repurchase Price in respect of a Mortgage Loan repurchased by the
Depositor or
the Responsible Party, as applicable, with respect to such
Distribution Date;
(vi) the proceeds received with respect to the termination of the
Trust Fund
pursuant to clause (a) of Section 9.01; and (vii) the Closing Date
Deposit
Amount; reduced by (y) amounts in reimbursement for Advances
previously made
with respect to the Mortgage Loans and other amounts as to which
the Servicer,
the Depositor or the Trustee are entitled to be paid or reimbursed
pursuant to
this Agreement.
Balloon Loan: Any Mortgage Loan that requires only payments of
interest until the stated maturity date of the Mortgage Loan or
Scheduled
Payments of principal which (not including the payment due on its
stated
maturity date) are based on an amortization schedule that would be
insufficient
to fully amortize the principal thereof by the stated maturity date
of the
Mortgage Loan.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the Principal Remittance
Amount for such
Distribution Date over (ii) the Excess Subordinated Amount, if any,
for such
Distribution Date.
Basis Risk CarryForward Amount: With respect to each Class of
Offered Certificates, as of any Distribution Date, the sum of (A)
if on such
Distribution Date the Pass-Through Rate for any Class of Offered
Certificates is
based upon the WAC Cap, the excess of (i) the Accrued Certificate
Interest
Distribution Amount such Class of Certificates would otherwise be
entitled to
receive on such Distribution Date had such Pass-Through Rate not
been subject to
any WAC Cap (that is, had such rate been calculated as the sum of
LIBOR and the
applicable Pass-Through Margin on such Class of Certificates for
such
Distribution Date and the resulting amount being reduced by
allocated Net
Prepayment Interest Shortfalls and Relief Act Interest Shortfalls)
over (ii) the
Accrued Certificate Interest Distribution Amount received on such
Distribution
Date such Class of Certificates at, with respect to each Class of
Offered
Certificates, the WAC Cap for such Distribution Date and (B) the
Basis Risk
CarryForward Amount for such Class of Certificates for all previous
Distribution
Dates not previously paid, together with interest thereon at a rate
equal to the
sum of LIBOR and the applicable Pass-Through Margin for such Class
of
Certificates for such Distribution Date.
Basis Risk
Payment: For any Distribution Date, an amount equal to
the lesser of (i) the aggregate of the Basis Risk CarryForward
Amounts for such
Distribution Date and (ii) the Class X Distributable Amount (prior
to any
reduction for amounts paid from the Excess Reserve Fund Account to
pay any Basis
Risk CarryForward Amount or any Swap Termination Payment).
Best's: Best's Key Rating Guide, as the same shall be amended
from
time to time.
Book-Entry Certificates: As specified in the Preliminary
Statement.
Business Day: Any day other than (i) Saturday or Sunday, or (ii)
a
day on which banking and savings and loan institutions, in (a) the
States of
Arizona, New York, California, Texas, Maryland, Minnesota or
Delaware, (b) a
State in which the Servicer's servicing operations are located, or
(c) the State
in which the Trustee's operations are located, are authorized or
obligated by
law or executive order to be closed.
Certificate: Any one of the Certificates executed by the Trustee
in
substantially the forms attached hereto as exhibits.
Certificate Balance: With respect to any Class of Certificates,
other than the Class X, Class P or Class R Certificates, at any
date, the
maximum dollar amount of principal to which the Holder thereof is
then entitled
hereunder, such amount being equal to the Denomination thereof
minus all
distributions of principal previously made with respect thereto and
in the case
of any Certificates, reduced by any Applied Realized Loss Amounts
allocated to
such Class of Certificates pursuant to Section 4.05; provided,
however, that
immediately following the Distribution Date on which a Subsequent
Recovery is
distributed, the Class Certificate Balances of any Class or Classes
of
Certificates that have been previously reduced by Applied Realized
Loss Amounts
will be increased, in order of seniority, by the amount of the
Subsequent
Recovery distributed on such Distribution Date (up to the amount of
the Unpaid
Realized Loss Amount for such Class or Classes for such
Distribution Date). The
Class X, Class P and Class R Certificates have no Certificate
Balance.
Certificate Owner: With respect to a Book-Entry Certificate,
the
Person who is the beneficial owner of such Book-Entry
Certificate.
Certificate Register: The register maintained pursuant to
Section
5.02.
Certificateholder or Holder: The person in whose name a
Certificate
is registered in the Certificate Register, except that, solely for
the purpose
of giving any consent pursuant to this Agreement, any Certificate
registered in
the name of the Depositor or any Affiliate of the Depositor shall
be deemed not
to be Outstanding and the Percentage Interest evidenced thereby
shall not be
taken into account in determining whether the requisite amount of
Percentage
Interests necessary to effect such consent has been obtained;
provided, however,
that if any such Person (including the Depositor) owns 100% of the
Percentage
Interests evidenced by a Class of Certificates, such Certificates
shall be
deemed to be Outstanding for purposes of any provision hereof that
requires the
consent of the Holders of Certificates of a particular Class as a
condition to
the taking of any action hereunder. The Trustee is entitled to rely
conclusively
on a certification of the Depositor or any Affiliate of the
Depositor in
determining which Certificates are registered in the name of an
Affiliate of the
Depositor.
Class: All Certificates bearing the same class designation as
set
forth in the Preliminary Statement.
Class A Certificates: As specified in the Preliminary
Statement.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class
Certificate Balances of
the Class A Certificates immediately prior to such Distribution
Date over (ii)
the lesser of (A) 57.70% of the aggregate Stated Principal Balance
of the
Mortgage Loans for such Distribution Date and (B) the excess, if
any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution
Date over $6,069,573.
Class A-1 Certificates: All Certificates bearing the class
designation of "Class A-1".
Class A-2 Certificates: All Certificates bearing the class
designation of "Class A-2".
Class A-3 Certificates: All Certificates bearing the class
designation of "Class A-3".
Class A-4 Certificates: All Certificates bearing the class
designation of "Class A-4".
Class B
Certificates: The Class B-1, Class B-2 and Class B-3
Certificates.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1".
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution
Amount for such Distribution Date), (C) the Class Certificate
Balance of the
Class M-2 Certificates (after taking into account the distribution
of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D)
the Class
Certificate Balance of the Class M-3 Certificates (after taking
into account the
distribution of the Class M-3 Principal Distribution Amount for
such
Distribution Date), (E) the Class Certificate Balance of the Class
M-4
Certificates (after taking into account the distribution of the
Class M-4
Principal Distribution Amount for such Distribution Date), (F) the
Class
Certificate Balance of the Class M-5 Certificates (after taking
into account the
distribution of the Class M-5 Principal Distribution Amount for
such
Distribution Date), (G) the Class Certificate Balance of the Class
M-6
Certificates (after taking into account the distribution of the
Class M-6
Principal Distribution Amount for such Distribution Date) and (H)
the Class
Certificate Balance of the Class B-1 Certificates immediately prior
to such
Distribution Date over (ii) the lesser of (A) 87.60% of the
aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date
and (B) the
excess, if any, of the aggregate Stated Principal Balance of the
Mortgage Loans
for such Distribution Date over $6,069,573.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-2".
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution
Amount for such Distribution Date), (C) the Class Certificate
Balance of the
Class M-2 Certificates (after taking into account the distribution
of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D)
the Class
Certificate Balance of the Class M-3 Certificates (after taking
into account the
distribution of the Class M-3 Principal Distribution Amount for
such
Distribution Date), (E) the Class Certificate Balance of the Class
M-4
Certificates (after taking into account the distribution of the
Class M-4
Principal Distribution Amount for such Distribution Date), (F) the
Class
Certificate Balance of the Class M-5 Certificates (after taking
into account the
distribution of the Class M-5 Principal Distribution Amount for
such
Distribution Date), (G) the Class Certificate Balance of the Class
M-6
Certificates (after taking into account the distribution of the
Class M-6
Principal Distribution Amount for such Distribution Date), (H) the
Class
Certificate Balance of the Class B-1 Certificates (after taking
into account the
distribution of the Class B-1 Principal Distribution Amount for
such
Distribution Date), and (I) the Class Certificate Balance of the
Class B-2
Certificates immediately prior to such Distribution Date over (ii)
the lesser of
(A) 90.30% of the aggregate Stated Principal Balance of the
Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate
Stated
Principal Balance of the Mortgage Loans for such Distribution Date
over
$6,069,573.
Class B-3 Certificates: All Certificates bearing the class
designation of "Class B-3".
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution
Amount for such Distribution Date), (C) the Class Certificate
Balance of the
Class M-2 Certificates (after taking into account the distribution
of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D)
the Class
Certificate Balance of the Class M-3 Certificates (after taking
into account the
distribution of the Class M-3 Principal Distribution Amount for
such
Distribution Date), (E) the Class Certificate Balance of the Class
M-4
Certificates (after taking into account the distribution of the
Class M-4
Principal Distribution Amount for such Distribution Date), (F) the
Class
Certificate Balance of the Class M-5 Certificates (after taking
into account the
distribution of the Class M-5 Principal Distribution Amount for
such
Distribution Date), (G) the Class Certificate Balance of the Class
M-6
Certificates (after taking into account the distribution of the
Class M-6
Principal Distribution Amount for such Distribution Date), (H) the
Class
Certificate Balance of the Class B-1 Certificates (after taking
into account the
distribution of the Class B-1 Principal Distribution Amount for
such
Distribution Date), (I) the Class Certificate Balance of the Class
B-2
Certificates (after taking into account the distribution of the
Class B-2
Principal Distribution Amount for such Distribution Date) and (J)
the Class
Certificate Balance of the Class B-3 Certificates immediately prior
to such
Distribution Date over (ii) the lesser of (A) 92.30% of the
aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date
and (B) the
excess, if any, of the aggregate Stated Principal Balance of the
Mortgage Loans
for such Distribution Date over $6,069,573.
Class Certificate Balance: With respect to any Class and as to
any
date of determination, the aggregate of the Certificate Balances of
all
Certificates of such Class as of such date.
Class IO Interest: As specified in the Preliminary Statement.
Class IO Shortfalls: As defined in Section 8.13. For the
avoidance
of doubt, the Class IO Shortfall for any Distribution Date shall
equal the
amount payable to the Class X Certificates in respect of amounts
due to the Swap
Provider on such Distribution Date (other than Defaulted Swap
Termination
Payments) in excess of the amount payable on the Class X Interest
(prior to any
reduction for Basis Risk Payments or Swap Termination Payments) on
such
Distribution Date, all as further provided in Section 8.13.
Class LT-R Interest: The residual interest in the Lower-Tier
REMIC
as described in the Preliminary Statement and the related footnote
thereto.
Class M Certificates: The Class M-1, Class M-2, Class M-3,
Class
M-4, Class M-5 and Class M-6 Certificates.
Class M-1 Enhancement Percentage: With respect to any
Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the
aggregate Class
Certificate Balances of the Class M and Class B Certificates (other
than the
Class M-1 Certificates) and (ii) the Subordinated Amount, in each
case after
taking into account the distributions of the related Principal
Distribution
Amount and any principal payments on those Classes of Certificates
from the Swap
Account on that Distribution Date, by (y) the aggregate Stated
Principal Balance
of the Mortgage Loans for that Distribution Date.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1".
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), and (B) the Class Certificate Balance of the Class M-1
Certificates
immediately prior to such Distribution Date over (ii) the lesser of
(A) 64.70%
of the aggregate Stated Principal Balance of the Mortgage Loans for
such
Distribution Date and (B) the excess, if any, of the aggregate
Stated Principal
Balance of the Mortgage Loans for such Distribution Date over
$6,069,573.
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2".
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution
Amount for such Distribution Date) and (C) the Class Certificate
Balance of the
Class M-2 Certificates immediately prior to such Distribution Date
over (ii) the
lesser of (A) 71.30% of the aggregate Stated Principal Balance of
the Mortgage
Loans for such Distribution Date and (B) the excess, if any, of the
aggregate
Stated Principal Balance of the Mortgage Loans for such
Distribution Date over
$6,069,573.
Class M-3 Certificates: All Certificates bearing the class
designation of "Class M-3".
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution
Amount for such Distribution Date), (C) the Class Certificate
Balance of the
Class M-2 Certificates (after taking into account the distribution
of the Class
M-2 Principal Distribution Amount for such Distribution Date) and
(D) the Class
Certificate Balance of the Class M-3 Certificates immediately prior
to such
Distribution Date over (ii) the lesser of (A) 75.10% of the
aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date
and (B) the
excess, if any, of the aggregate Stated Principal Balance of the
Mortgage Loans
for such Distribution Date over $6,069,573.
Class M-4 Certificates: All Certificates bearing the class
designation of "Class M-4".
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution
Amount for such Distribution Date), (C) the Class Certificate
Balance of the
Class M-2 Certificates (after taking into account the distribution
of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D)
the Class
Certificate Balance of the Class M-3 Certificates (after taking
into account the
distribution of the Class M-3 Principal Distribution Amount for
such
Distribution Date), and (E) the Class Certificate Balance of the
Class M-4
Certificates immediately prior to such Distribution Date over (ii)
the lesser of
(A) 78.50% of the aggregate Stated Principal Balance of the
Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate
Stated
Principal Balance of the Mortgage Loans for such Distribution Date
over
$6,069,573.
Class M-5 Certificates: All Certificates bearing the class
designation of "Class M-5".
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution
Amount for such Distribution Date), (C) the Class Certificate
Balance of the
Class M-2 Certificates (after taking into account the distribution
of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D)
the Class
Certificate Balance of the Class M-3 Certificates (after taking
into account the
distribution of the Class M-3 Principal Distribution Amount for
such
Distribution Date), (E) the Class Certificate Balance of the Class
M-4
Certificates (after taking into account the distribution of the
Class M-4
Principal Distribution Amount for such Distribution Date) and (F)
the Class
Certificate Balance of the Class M-5 Certificates immediately prior
to such
Distribution Date over (ii) the lesser of (A) 81.80% of the
aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date
and (B) the
excess, if any, of the aggregate Stated Principal Balance of the
Mortgage Loans
for such Distribution Date over $6,069,573.
Class M-6 Certificates: All Certificates bearing the class
designation of "Class M-6".
Class M-6 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution
Amount for such Distribution Date), (C) the Class Certificate
Balance of the
Class M-2 Certificates (after taking into account the distribution
of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D)
the Class
Certificate Balance of the Class M-3 Certificates (after taking
into account the
distribution of the Class M-3 Principal Distribution Amount for
such
Distribution Date), (E) the Class Certificate Balance of the Class
M-4
Certificates (after taking into account the distribution of the
Class M-4
Principal Distribution Amount for such Distribution Date), (F) the
Class
Certificate Balance of the Class M-5 Certificates (after taking
into account the
distribution of the Class M-5 Principal Distribution Amount for
such
Distribution Date) and (G) the Class Certificate Balance of the
Class M-6
Certificates immediately prior to such Distribution Date over (ii)
the lesser of
(A) 84.70% of the aggregate Stated Principal Balance of the
Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate
Stated
Principal Balance of the Mortgage Loans for such Distribution Date
over
$6,069,573.
Class P Certificates: All Certificates bearing the class
designation
of "Class P".
Class PT1-R Interest: The residual interest in Pooling-Tier
REMIC-1
as described in the Preliminary Statement and the related footnote
thereto.
Class PT2-R Interest: The residual interest in Pooling-Tier
REMIC-2
as described in the Preliminary Statement and the related footnote
thereto.
Class R
Certificates: All Certificates bearing the class designation
of "Class R".
Class UT-R Interest: The residual interest in the Upper-Tier
REMIC
as described in the Preliminary Statement and the related footnote
thereto.
Class X Certificates: All Certificates bearing the class
designation
of "Class X".
Class X Distributable Amount: On any Distribution Date, the sum
of
(i) as a distribution in respect of interest, the amount of
interest that has
accrued on the Class X Interest and not applied as an Extra
Principal
Distribution Amount on such Distribution Date, plus any such
accrued interest
remaining undistributed from prior Distribution Dates, plus,
without
duplication, (ii) as a distribution in respect of principal, any
portion of the
principal balance of the Class X Interest which is distributable as
a
Subordination Reduction Amount, minus (iii) any amounts paid from
the Excess
Reserve Fund Account to pay any Basis Risk CarryForward Amount or
any Swap
Termination Payment.
Class X Interest: The Upper-Tier Regular Interest represented by
the
Class X Certificates as specified and described in the Preliminary
Statement and
the related footnote thereto.
Closing Date: February 28, 2006.
Closing Date Deposit Amount: $303.10 (all of which is allocable
to
principal) deposited by the Depositor into the Distribution Account
on the
Closing Date.
Code: The Internal Revenue Code of 1986, including any successor
or
amendatory provisions.
Collection Account: As defined in Section 3.10(a).
Combined Loan to Value Ratio or CLTV: As of any date and as to
any
Second Lien Mortgage Loan, the ratio, expressed as a percentage, of
the (a) sum
of (i) the outstanding principal balance of the Second Lien
Mortgage Loan and
(ii) the outstanding principal balance as of such date of any
mortgage loan or
mortgage loans that are senior or equal in priority to the Second
Lien Mortgage
Loan and which are secured by the same Mortgaged Property to (b)
the Appraised
Value as determined pursuant to the Underwriting Guidelines of the
related
Mortgaged Property as of the origination of the Second Lien
Mortgage Loan.
Commission: The United States Securities and Exchange
Commission.
Compensating Interest: For any Distribution Date, the lesser of
(a)
the amount by which such Prepayment Interest Shortfall exceeds all
Prepayment
Interest Excesses for such Distribution Date on the Mortgage Loans
and (b) the
amount of the aggregate Servicing Fee paid to or retained by the
Servicer for
such Distribution Date.
Condemnation Proceeds: All awards or settlements in respect of
a
Mortgaged Property, whether permanent or temporary, partial or
entire, by
exercise of the power of eminent domain or condemnation.
Convertible Mortgage Loan: Any individual Adjustable Rate
Mortgage
Loan which contains a provision whereby the Mortgagor is permitted
to convert
the Adjustable Rate Mortgage Loan to a Fixed Rate Mortgage Loan in
accordance
with the terms of the related Mortgage Note.
Corporate Trust Office: The designated office of the Trustee in
the
State of Maryland at which at any particular time its corporate
trust business
with respect to this Agreement is administered, which office at the
date of the
execution of this Agreement is located (i) for purposes of
Certificate
transfers, at Wells Fargo Center, Sixth Street and Marquette
Avenue,
Minneapolis, Minnesota 55479 and (ii) for all other purposes, at
9062 Old
Annapolis Road, Columbia, Maryland 21045, Attention: Client
Manager--MSAC
2006-HE1, facsimile no. (410) 715- 2380, and which is the address
to which
notices to and correspondence with the Trustee should be
directed.
Corresponding Class: The class of interests in the Lower-Tier
REMIC
or Upper-Tier REMIC that corresponds to the class of interests in
the other such
REMIC or to a Class of Certificates in the manner set out
below:
Corresponding
Corresponding Corresponding
Lower-Tier Class
Upper-Tier Regular Class of
Designation
Interest
Certificates
Class LT-A-1
Class A-1
Class A-1
Class LT-A-2
Class A-2
Class A-2
Class LT-A-3
Class A-3
Class A-3
Class LT-A-4
Class A-4
Class A-4
Class LT-M-1
Class M-1
Class M-1
Class LT-M-2
Class M-2
Class M-2
Class LT-M-3
Class M-3
Class M-3
Class LT-M-4
Class M-4
Class M-4
Class LT-M-5
Class M-5
Class M-5
Class LT-M-6
Class M-6
Class M-6
Class LT-B-1
Class B-1
Class B-1
Class LT-B-2
Class B-2
Class B-2
Class LT-B-3
Class B-3
Class B-3
N/A
Class X
Class X
Corresponding Pooling-Tier REMIC-1 Regular Interest: As described
in
the Preliminary Statement.
Corresponding Pooling-Tier REMIC-2 IO Interest: As described in
the
Preliminary Statement.
Corresponding Scheduled Crossover Distribution Date: The
Distribution Date in the month and year specified in the
Preliminary Statement
corresponding to a Pooling-Tier REMIC-2 IO Interest.
Cumulative Loss Percentage: With respect to any Distribution
Date,
the percentage equivalent of a fraction, the numerator of which is
the aggregate
amount of Realized Losses incurred from the Cut-off Date through
the last day of
the related Prepayment Period and the denominator of which is the
Cut-off Date
Pool Principal Balance of the Mortgage Loans.
Cumulative Loss Trigger Event: With respect to any Distribution
Date, a Cumulative Loss Trigger Event exists if the quotient
(expressed as a
percentage) of (x) the aggregate amount of Realized Losses incurred
since the
Cut-off Date through the last day of the related Prepayment Period
divided by
(y) the Cut-off Date Pool Principal Balance exceeds the applicable
cumulative
loss percentages set forth below with respect to such Distribution
Date:
Distribution Date Occurring In
Cumulative Loss Percentage
--------------------------------------------------------------------------------
March 2008 through February 2009 1.400% for the
first month, plus an
additional 1/12th of 1.700% for each month
thereafter (e.g., 2.250% in September 2008)
March 2009 through February 2010 3.100% for the
first month, plus an
additional 1/12th of 1.750% for each month
thereafter (e.g., 3.975% in September 2009)
March 2010 through February 2011 4.850% for the
first month, plus an
additional 1/12th of 1.400% for each month
thereafter (e.g., 5.550% in September 2010)
March 2011 through February 2012 6.250% for the
first month, plus an
additional 1/12th of 0.750% for each month
thereafter (e.g., 6.625% in September 2011)
March 2012 and thereafter
7.000%
Custodial File: With respect to each Mortgage Loan, the file
retained by the Trustee or the Custodian, as applicable, consisting
of items (i)
- (viii) as listed on Exhibit K hereto.
Custodian: With respect to the Decision One Mortgage Loans,
LaSalle.
Custodian Fee: With respect to each Distribution Date, the
aggregate
amount of fees and expenses that the Custodian is entitled to
receive, pursuant
to the fee schedule related to the Decision One Mortgage Loans to
which the
Depositor and the Custodian have previously agreed, for custodial
services
rendered with respect to the Decision One Mortgage Loans, during
the related Due
Period. The Custodian shall inform the Trustee of the Custodian Fee
on or prior
to the related Determination Date pursuant to Section 3.07(h).
Custodian Fee Rate: As to any Distribution Date, the applicable
Custodian Fee for such Distribution Date, converted to a per annum
rate on (i)
the aggregate Stated Principal Balance of the Mortgage Loans as of
the first day
of the related Interest Accrual Period and (ii) with respect to
the
Determination Date in March 2006 only, the portion of the Closing
Date Deposit
Amount allocable to principal (calculated on an actual/360
basis).
Cut-off Date: February 1, 2006.
Cut-off Date Pool Principal Balance: The aggregate Stated
Principal
Balances of all Mortgage Loans as of the Cut-off Date plus the
portion of the
Closing Date Deposit Amount allocable to principal.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
Stated
Principal Balance thereof as of the close of business on the
Cut-off Date (after
giving effect to payments of principal due on that date, whether or
not
received).
Data Tape Information: The information provided by the
Responsible
Parties as of the Cut-off Date to the Depositor or the Sponsor
setting forth the
following information with respect to each Mortgage Loan: (1) the
Mortgagor's
name; (2) as to each Mortgage Loan, the Scheduled Principal Balance
as of the
Cut-off Date; (3) the Mortgage Rate Cap; (4) the Index; (5) a code
indicating
whether the Mortgaged Property is owner occupied; (6) the type of
Mortgaged
Property; (7) the first date on which the Scheduled Payment was due
on the
Mortgage Loan and, if such date is not consistent with the Due Date
currently in
effect, such Due Date; (8) the "paid through date" based on
payments received
from the related Mortgagor; (9) the original principal amount of
the Mortgage
Loan; (10) with respect to Adjustable Rate Mortgage Loans, the
Maximum Mortgage
Rate; (11) the type of Mortgage Loan (i.e., Fixed Rate or
Adjustable Rate
Mortgage Loan, First Lien Mortgage Loan or Second Lien Mortgage
Loan); (12) a
code indicating the purpose of the loan (i.e., purchase, rate and
term
refinance, equity take out refinance); (13) a code indicating the
documentation
style (i.e., full, asset verification, income verification and
no
documentation); (14) the credit risk score (FICO score); (15) the
loan credit
grade classification (as described in the underwriting guidelines);
(16) with
respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage
Rate; (17)
the Mortgage Rate at origination; (18) with respect to each
Adjustable Rate
Mortgage Loan, the first Adjustment Date immediately following the
Cut-off Date;
(19) the value of the Mortgaged Property; (20) a code indicating
the type of
Prepayment Charges applicable to such Mortgage Loan (including any
prepayment
penalty term), if any; (21) with respect to each Adjustable Rate
Mortgage Loan,
the Periodic Mortgage Rate Cap; (22) the applicable Responsible
Party with
respect to such Mortgage Loan; (23) with respect to each First Lien
Mortgage
Loan, the LTV at origination, and with respect to each Second Lien
Mortgage
Loan, the CLTV at origination; and (24) if such Mortgage Loan is
covered by a
primary mortgage insurance policy or a lender-paid primary mortgage
insurance
policy, the primary mortgage insurance rate. With respect to the
Mortgage Loans
in the aggregate, the Data Tape Information shall set forth the
following
information, as of the Cut-off Date: (1) the number of Mortgage
Loans; (2) the
current aggregate outstanding principal balance of the Mortgage
Loans; (3) the
weighted average Mortgage Rate of the Mortgage Loans; and (4) the
weighted
average maturity of the Mortgage Loans.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding
under the United
States Bankruptcy Code in the Scheduled Payment for such Mortgage
Loan which
became final and non-appealable, except such a reduction resulting
from a
Deficient Valuation or any reduction that results in a permanent
forgiveness of
principal.
Decision One: Decision One Mortgage Company, LLC, a California
limited liability company, and its successors in interest.
Decision One Mortgage Loans: The Mortgage Loans purchased by
the
Sponsor pursuant to the Decision One Purchase Agreement for which
Decision One
is identified as Responsible Party on the Mortgage Loan
Schedule.
Decision One Purchase Agreement: The Second Amended and
Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of
November 1, 2005,
by and between Decision One and the Sponsor, a copy of which is
attached hereto
as Exhibit P.
Defaulted Swap Termination Payment: Any Swap Termination
Payment
required to be paid by the Trust to the Swap Provider pursuant to
the Interest
Rate Swap Agreement as a result of an Event of Default (as defined
in the
Interest Rate Swap Agreement) with respect to which the Swap
Provider is the
defaulting party or a Termination Event (as defined in the Interest
Rate Swap
Agreement) (other than Illegality or a Tax Event that is not a Tax
Event Upon
Merger (each as defined in the Interest Rate Swap Agreement )) with
respect to
which the Swap Provider is the sole Affected Party (as defined in
the Interest
Rate Swap Agreement).
Deficient Valuation: With respect to any Mortgage Loan, a
valuation
of the related Mortgaged Property by a court of competent
jurisdiction in an
amount less than the then outstanding principal balance of the
Mortgage Loan,
which valuation results from a proceeding initiated under the
United States
Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a
Physical
Certificate and any Certificate issued in lieu of a Book-Entry
Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: As defined in Section 2.03.
Delinquency Trigger Event: With respect to any Distribution Date,
a
Delinquency Trigger Event exists if the quotient (expressed as a
percentage) of
(x) the rolling three month average of the aggregate Stated
Principal Balance of
60+ Day Delinquent Mortgage Loans (including Mortgage Loans in
foreclosure and
Mortgage Loans related to REO Property) and (y) (1) until the
aggregate Class
Certificate Balance of the Class A Certificates have been reduced
to zero, the
aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution
Date equals or exceeds 37.82% of the prior period's Senior
Enhancement
Percentage and (2) after the aggregate Class Certificate Balance of
the Class A
Certificates have been reduced to zero, the aggregate Stated
Principal Balance
of the Mortgage Loans for such Distribution Date equals or exceeds
45.32% of the
prior period's Class M Enhancement Percentage.
Denomination: With respect to each Certificate, the amount set
forth
on the face thereof as the "Initial Certificate Balance of this
Certificate" or
the Percentage Interest appearing on the face thereof.
Depositor: Morgan Stanley Capital I Inc., a Delaware
corporation,
and its successors in interest.
Depository: The initial Depository shall be The Depository
Trust
Company, the nominee of which is CEDE & Co., as the registered
Holder of the
Book-Entry Certificates. The Depository shall at all times be a
"clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform
Commercial Code of
the State of New York.
Depository Institution: Any depository institution or trust
company,
including the Trustee, that (a) is incorporated under the laws of
the United
States of America or any State thereof, (b) is subject to
supervision and
examination by federal or state banking authorities and (c) has
outstanding
unsecured commercial paper or other short-term unsecured debt
obligations that
are rated "P-1" by Moody's, "F1+" by Fitch and "A-1" by Standard
& Poor's (to
the extent they are Rating Agencies hereunder).
Depository Participant: A broker, dealer, bank or other
financial
institution or other Person for whom from time to time a Depository
effects
book-entry transfers and pledges of securities deposited with the
Depository.
Determination Date: With respect to each Distribution Date, the
18th
day (or if such day is not a Business Day, the immediately
preceding Business
Day) in the calendar month in which such Distribution Date
occurs.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.07(d) in the name
of the Trustee
for the benefit of the Certificateholders and designated "Wells
Fargo Bank,
National Association in trust for registered Holders of Morgan
Stanley Capital I
Inc. Trust 2006-HE1 Mortgage Pass-Through Certificates, Series
2006-HE1." Funds
in the Distribution Account shall be held in trust for the
Certificateholders
for the uses and purposes set forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date,
12:00 noon New York City time on the second Business Day
immediately preceding
such Distribution Date.
Distribution Date: The 25th day of each calendar month, or if
such
day is not a Business Day, the next succeeding Business Day,
commencing in March
2006.
Document Certification and Exception Report: The report attached
to
Exhibit F hereto.
Due Date: The day of the month on which the Scheduled Payment is
due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the calendar month preceding the
month in which
such Distribution Date occurs and ending on the first day of the
calendar month
in which such Distribution Date occurs.
Eligible Account: Either (i) an account maintained with a federal
or
state-chartered depository institution or trust company that
complies with the
definition of Eligible Institution, (ii) an account maintained with
the
corporate trust department of a federal depository institution
or
state-chartered depository institution subject to regulations
regarding
fiduciary funds on deposit similar to Title 12 of the U.S. Code of
Federal
Regulation Section 9.10(b), which, in either case, has corporate
trust powers
and is acting in its fiduciary capacity or (iii) any other account
acceptable to
each Rating Agency. Eligible Accounts may bear interest, and may
include, if
otherwise qualified under this definition, accounts maintained with
the Trustee.
Each Eligible Account shall be a separate account.
Eligible Institution: A federal or state-chartered depository
institution or trust company the commercial paper, short-term debt
obligations,
or other short-term deposits of which are rated "A-1+" by Standard
& Poor's if
the amounts on deposit are to be held in the account for no more
than 365 days
(or at least "A-2" by Standard & Poor's if the amounts on
deposit are to be held
in the account for no more than 30 days), or the long-term
unsecured debt
obligations of which are rated at least "AA-" by Standard &
Poor's if the
amounts on deposit are to be held in the account for no more than
365 days, and
the commercial paper, short-term debt obligations or other
short-term deposits
of which are rated at least "P-1" by Moody's and "F1+" by Fitch (or
a comparable
rating if another Rating Agency is specified by the Depositor by
written notice
to the Servicer and the Trustee) (in each case, to the extent they
are
designated as Rating Agencies in the Preliminary Statement).
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that meets the requirements of
Prohibited
Transaction Exemption ("PTE") 2002-41, 67 Fed. Reg. 54487 (2002)
(or any
successor thereto), or any substantially similar administrative
exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established
and
maintained pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b).
Event of Default: As defined in Section 7.01.
Excess Reserve Fund Account: The separate Eligible Account
created
and maintained by the Trustee pursuant to Sections 3.07(b) and
3.07(c) in the
name of the Trustee for the benefit of the Regular
Certificateholders and
designated "Wells Fargo Bank, National Association in trust for
registered
Holders of Morgan Stanley Capital I Inc. Trust 2006-HE1, Mortgage
Pass-Through
Certificates, Series 2006-HE1." Funds in the Excess Reserve Fund
Account shall
be held in trust for the Regular Certificateholders for the uses
and purposes
set forth in this Agreement. Amounts on deposit in the Excess
Reserve Fund
Account shall not be invested.
Excess Subordinated Amount: With respect to any Distribution
Date,
the excess, if any, of (a) the Subordinated Amount on such
Distribution Date
over (b) the Specified Subordinated Amount for such Distribution
Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expense Fee Rate: As to each Mortgage Loan, a per-annum rate
equal
to the sum of the Servicing Fee Rate, the Trustee Fee Rate, the
Custodian Fee
Rate and any lender-paid primary mortgage insurance fee rate, if
applicable.
Expense Fees: As to each Mortgage Loan, the sum of the
Servicing
Fee, the Trustee Fee, the Custodian Fee and any lender-paid primary
mortgage
insurance fee, if applicable.
Extra Principal Distribution Amount: As of any Distribution
Date,
the lesser of (x) the related Total Monthly Excess Spread for such
Distribution
Date and (y) the related Subordination Deficiency for such
Distribution Date.
Fannie Mae: The Federal National Mortgage Association, or any
successor thereto.
Fannie Mae Guides: The Fannie Mae Sellers' Guide and the Fannie
Mae
Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor
thereto.
Final Recovery Determination: With respect to any defaulted
Mortgage
Loan or any REO Property (other than any Mortgage Loan or REO
Property purchased
by the Responsible Party or the Depositor as contemplated by this
Agreement), a
determination made by the Servicer that all Insurance Proceeds,
Condemnation
Proceeds, Liquidation Proceeds and other payments or recoveries
which the
Servicer, in its reasonable good faith judgment, expects to be
finally
recoverable in respect thereof have been so recovered. The Servicer
shall
maintain records, prepared by a Servicing Officer, of each Final
Recovery
Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled
Distribution
Date for each Class of Certificates is the Distribution Date in
January 2036.
First Lien Mortgage Loan: A Mortgage Loan secured by a first
lien
Mortgage on the related Mortgaged Property.
Fitch: Fitch, Inc., and its successors in interest. If Fitch is
designated as a Rating Agency in the Preliminary Statement, for
purposes of
Section 10.05(e) the address for notices to Fitch shall be Fitch,
Inc., One
State Street Plaza, New York, New York 10004, Attention: MBS
Monitoring - Morgan
Stanley Capital I Inc. Trust 2006-HE1, or such other address as
Fitch may
hereafter furnish to the Depositor, the Trustee and the
Servicer.
Fixed Rate Mortgage Loan: A fixed rate Mortgage Loan.
Freddie Mac: The Federal Home Loan Mortgage Corporation, a
corporate
instrumentality of the United States created and existing under
Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor
thereto.
Gross Margin: With respect to each Adjustable Rate Mortgage
Loan,
the fixed percentage amount set forth in the related Mortgage Note
to be added
to the applicable Index to determine the Mortgage Rate.
Index: As to each Adjustable Rate Mortgage Loan, the index from
time
to time in effect for the adjustment of the Mortgage Rate set forth
as such on
the related Mortgage Note.
Insurance Policy: With respect to any Mortgage Loan included in
the
Trust Fund, any insurance policy, including all riders and
endorsements thereto
in effect, including any replacement policy or policies for any
Insurance
Policies.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds
of
insurance policies insuring the Mortgage Loan or the related
Mortgaged Property.
Interest Accrual Period: With respect to each Class of
Non-Delay
Certificates and the Corresponding Class of Lower-Tier Regular
Interests and any
Distribution Date, the period commencing on the Distribution Date
occurring in
the month preceding the month in which the current Distribution
Date occurs and
ending on the day immediately preceding the current Distribution
Date (or, in
the case of the first Distribution Date, the period from and
including the
Closing Date to but excluding such first Distribution Date). For
purposes of
computing interest accruals on each Class of Non-Delay
Certificates, each
Interest Accrual Period has the actual number of days in such month
and each
year is assumed to have 360 days.
Interest Rate Adjustment Date: With respect to each Adjustable
Rate
Mortgage Loan, the date, specified in the related Mortgage Note and
the Mortgage
Loan Schedule, on which the Mortgage Rate is adjusted.
Interest Rate Swap Agreement: The interest rate swap agreement,
dated as of the Closing Date, between Morgan Stanley Capital
Services Inc. and
the Trustee (a copy of which is attached hereto as Exhibit V).
Interest Remittance Amount: With respect to any Distribution
Date
and the Mortgage Loans, that portion of Available Funds
attributable to interest
relating to the Mortgage Loans.
Investment Account: As defined in Section 3.12(a).
Investor: With respect to each MERS Designated Mortgage Loan,
the
Person named on the MERS System as the investor pursuant to the
MERS Procedures
Manual.
Investor-Based Exemption: Any of Prohibited Transaction Class
Exemption ("PTCE") 84-14 (for transactions by independent
"qualified
professional asset managers"), PTCE 90-1 (for transactions by
insurance company
pooled separate accounts), PTCE 91-38 (for transactions by bank
collective
investment funds), PTCE 95-60 (for transactions by insurance
company general
accounts) or PTCE 96-23 (for transactions effected by "in-house
asset
managers"), or any comparable exemption available under Similar
Law.
JPMorgan: JPMorgan Chase Bank, National Association, a national
banking association, and its successors in interest.
LaSalle: LaSalle Bank National Association, a national banking
association, and its successors in interest.
Late Collections: With respect to any Mortgage Loan and any Due
Period, all amounts received after the Determination Date
immediately following
such Due Period, whether as late payments of Scheduled Payments or
as Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds or otherwise,
which
represent late payments or collections of principal and/or interest
due (without
regard to any acceleration of payments under the related Mortgage
and Mortgage
Note) but delinquent for such Due Period and not previously
recovered.
LIBOR: With respect to any Interest Accrual Period for the
Offered
Certificates, the rate determined by the Trustee on the related
LIBOR
Determination Date on the basis of the offered rate for one-month
U.S. dollar
deposits as such rate appears on Telerate Page 3750 as of 11:00
a.m. (London
time) on such date; provided that if such rate does not appear on
Telerate Page
3750, the rate for such date will be determined on the basis of the
rates at
which one-month U.S. dollar deposits are offered by the Reference
Banks at
approximately 11:00 a.m. (London time) on such date to prime banks
in the London
interbank market. In such event, the Trustee shall request the
principal London
office of each of the Reference Banks to provide a quotation of its
rate. If at
least two such quotations are provided, the rate for that date will
be the
arithmetic mean of the quotations (rounded upwards if necessary to
the nearest
whole multiple of 1/16%). If fewer than two quotations are provided
as
requested, the rate for that date will be the arithmetic mean of
the rates
quoted by major banks in New York City, selected by the Trustee
(after
consultation with the Depositor), at approximately 11:00 a.m. (New
York City
time) on such date for one-month U.S. dollar loans to leading
European banks.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the Offered Certificates, the second London Business Day
preceding
the commencement of such Interest Accrual Period.
Liquidated Mortgage Loan: With respect to any Distribution Date,
a
defaulted Mortgage Loan (including any REO Property) which either
(a) was
liquidated in the calendar month preceding the month of such
Distribution Date
and as to which the Servicer has certified to the Trustee that it
has received
all amounts it expects to receive in connection with the
liquidation of such
Mortgage Loan including the final disposition of an REO Property,
or (b) is a
Second Lien Mortgage Loan (1) that is delinquent 180 days or
longer, (2) for
which the related first lien mortgage loan is not a Mortgage Loan,
and (3) as to
which the Servicer has certified to the Trustee that it does not
believe there
is a reasonable likelihood that any further net proceeds will be
received or
recovered with respect to such Second Lien Mortgage Loan.
Liquidation Proceeds: Cash received in connection with the
liquidation of a Liquidated Mortgage Loan, whether through a
trustee's sale,
foreclosure sale or otherwise, including any Subsequent
Recoveries.
Loan-to-Value Ratio or LTV: With respect to any First Lien
Mortgage
Loan, the ratio (expressed as a percentage) of the original
outstanding
principal amount of the First Lien Mortgage Loan as of the Cut-off
Date (unless
otherwise indicated), to the lesser of (a) the Appraised Value of
the Mortgaged
Property at origination, and (b) if the First Lien Mortgage Loan
was made to
finance the acquisition of the related Mortgaged Property, the
purchase price of
the Mortgaged Property.
London Business Day: Any day on which dealings in deposits of
United
States dollars are transacted in the London interbank market.
Lower-Tier Interest Rate: As described in the Preliminary
Statement.
Lower-Tier Principal Amount: As described in the Preliminary
Statement.
Lower-Tier Regular Interest: Each of the Class LT-A-1, Class
LT-A-2,
Class LT-A-3, Class LT-A-4, Class LT-M-1, Class LT-M-2, Class
LT-M-3, Class
LT-M-4, Class LT-M-5, Class LT-M-6, Class LT-B-1, Class LT-B-2,
Class LT-B-3,
Class LT-IO and Class LT-Accrual Interests as described in the
Preliminary
Statement.
Lower-Tier REMIC: As described in the Preliminary Statement.
Maximum Mortgage Rate: With respect to each Adjustable Rate
Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and
in the
related Mortgage Note and (ii) is the maximum interest rate to
which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be
increased during the
lifetime of such Adjustable Rate Mortgage Loan.
MERS: Mortgage Electronic Registration System, Inc.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Responsible Parties have designated or will designate MERS as, and
has taken or
will take such action as is necessary to cause MERS to be, the
mortgagee of
record, as nominee for the Responsible Parties, in accordance with
MERS
Procedure Manual and (b) the Responsible Parties have designated or
will
designate the Trustee as the Investor on the MERS System.
MERS Procedures Manual: The MERS Procedures Manual, as it may
be
amended, supplemented or otherwise modified from time to time.
MERS(R) System: MERS mortgage electronic registry system, as
more
particularly described in the MERS Procedures Manual.
Minimum Mortgage Rate: With respect to each Adjustable Rate
Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and
in the
related Mortgage Note and (ii) is the minimum interest rate to
which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be
decreased during the
lifetime of such Adjustable Rate Mortgage Loan.
Monthly Statement: The statement delivered to the
Certificateholders
pursuant to Section 4.03.
Moody's: Moody's Investors Service, Inc., and its successors in
interest. If Moody's is designated as a Rating Agency in the
Preliminary
Statement, for purposes of Section 10.05(b), the address for
notices to Moody's
shall be Moody's Investors Service, Inc., 99 Church Street, New
York, New York
10007, Attention: Residential Mortgage Pass-Through Group, or such
other address
as Moody's may hereafter furnish to the Depositor, the Trustee and
the Servicer.
Mortgage: The mortgage, deed of trust or other instrument
identified
on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage
Loan
contained in either the Servicing File or Custodial File.
Mortgage Loan: An individual Mortgage Loan which is the subject
of
this Agreement, each Mortgage Loan originally sold and subject to
this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan
includes,
without limitation, the Mortgage File, the Scheduled Payments,
Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds,
REO Disposition proceeds, Prepayment Charges, and all other rights,
benefits,
proceeds and obligations arising from or in connection with such
Mortgage Loan,
excluding replaced or repurchased Mortgage Loans.
Mortgage Loan Schedule: A schedule of Mortgage Loans delivered
to
the Trustee and referred to on Schedule I, such schedule setting
forth the
following information with respect to each Mortgage Loan: (1) the
Mortgage Loan
number; (2) the city, state and zip code of the Mortgaged Property;
(3) the
number and type of residential units constituting the Mortgaged
Property; (4)
the current Mortgage Rate; (5) the current net Mortgage Rate; (6)
the current
Scheduled Payment; (7) with respect to each Adjustable Rate
Mortgage Loan, the
Gross Margin; (8) the original term to maturity; (9) the scheduled
maturity
date; (10) the principal balance of the Mortgage Loan as of the
Cut-off Date
after deduction of payments of principal due on or before the
Cut-off Date
whether or not collected; (11) with respect to each Adjustable Rate
Mortgage
Loan, the next Interest Rate Adjustment Date; (12) with respect to
each
Adjustable Rate Mortgage Loan, the lifetime Mortgage Interest Rate
Cap; (13)
whether the Mortgage Loan is convertible or not; (14) the Servicing
Fee; (15)
the identity of the Responsible Party and the date such Mortgage
Loan was sold
by the applicable Responsible Party to the Sponsor, (16) whether
such Mortgage
Loan provides for a Prepayment Charge as well as the term and
amount of such
Prepayment Charge, if any; (17) with respect to each First Lien
Mortgage Loan,
the LTV at origination, and with respect to each Second Lien
Mortgage Loan, the
CLTV at origination; and (18) the date on which servicing of the
Mortgage Loan
was transferred to the Servicer.
Mortgage Note: The note or other evidence of the indebtedness of
a
Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne on a Mortgage
Note,
which shall be adjusted from time to time in the case of an
Adjustable Rate
Mortgage Loan.
Mortgage Rate Caps: With respect to an Adjustable Rate Mortgage
Loan, the Periodic Mortgage Rate Cap, the Maximum Mortgage Rate,
and the Minimum
Mortgage Rate for such Mortgage Loan.
Mortgaged Property: With respect to each Mortgage Loan, the
real
property (or leasehold estate, if applicable) identified on the
Mortgage Loan
Schedule as securing repayment of the debt evidenced by the related
Mortgage
Note.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Monthly Excess Cash Flow: For any Distribution Date the
amount
remaining for distribution pursuant to subsection 4.02(a)(iii)
(before giving
effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution Date,
the
amount by which the sum of the Prepayment Interest Shortfalls for
such
Distribution Date exceeds the sum of (i) all Prepayment Interest
Excesses for
such Distribution Date and (ii) Compensating Interest payments made
with respect
to such Distribution Date.
Net Swap Payment: With respect to any Distribution Date, any
net
payment (other than a Swap Termination Payment) payable by the
Trust to the Swap
Provider on the related Fixed Rate Payer Payment Date (as defined
in the
Interest Rate Swap Agreement).
Net Swap Receipt: With respect to any Distribution Date, any
net
payment (other than a Swap Termination Payment) made by the Swap
Provider to the
Trust on the related Floating Rate Payer Payment Date (as defined
in the
Interest Rate Swap Agreement).
NIM Issuer: The entity established as the issuer of the NIM
Securities.
NIM Securities: Any debt securities secured or otherwise backed
by
some or all of the Class X and Class P Certificates that are rated
by one or
more Rating Agencies.
NIM Trustee: The trustee for the NIM Securities.
Non-Delay Certificates: As specified in the Preliminary
Statement.
Non-Permitted
Transferee: A Person other than a Permitted
Transferee.
Nonrecoverable P&I Advance: Any P&I Advance previously made
or
proposed to be made in respect of a Mortgage Loan or REO Property
that, in the
good faith business judgment of the Servicer, will not or, in the
case of a
proposed P&I Advance, would not be ultimately recoverable from
related late
payments, Insurance Proceeds, Condemnation Proceeds, or Liquidation
Proceeds on
such Mortgage Loan or REO Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advances
previously
made or proposed to be made in respect of a Mortgage Loan or REO
Property,
which, in accordance with Accepted Servicing Practices, will not
or, in the case
of a proposed Servicing Advance, would not be ultimately
recoverable from
related Insurance Proceeds, Condemnation Proceeds, Liquidation
Proceeds or
otherwise.
Notice of Final Distribution: The notice to be provided pursuant
to
Section 9.02 to the effect that final distribution on any of the
Certificates
shall be made only upon presentation and surrender thereof.
Offered Certificates: As specified in the Preliminary
Statement.
Officer's Certificate: A certificate signed by an officer of
the
Servicer or Subservicer with responsibility for the servicing of
the Mortgage
Loans required to be serviced by the Servicer or Subservicer and
listed on a
list delivered to the Trustee pursuant to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for the Servicer or the Subservicer, reasonably
acceptable to
the Trustee (and/or such other Persons as may be set forth herein),
provided
that any Opinion of Counsel relating to (a) qualification of any
Trust REMIC or
(b) compliance with the REMIC Provisions, must be (unless otherwise
stated in
such Opinion of Counsel) an opinion of counsel who (i) is in fact
independent of
the Servicer of the Mortgage Loans, (ii) does not have any material
direct or
indirect financial interest in the Servicer of the Mortgage Loans
or in an
Affiliate of either and (iii) is not connected with the Servicer of
the Mortgage
Loans as an officer, employee, director or person performing
similar functions.
Optional Termination Date: The Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans, as of the
last day of
the related Due Period, is equal to 10% or less of the Cut-off Date
Pool
Principal Balance.
OTS: Office of Thrift Supervision, and any successor thereto.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and
authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or delivered
to
the
Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which
other
Certificates have been executed and delivered by the Trustee
pursuant to
this
Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan
with
a Stated Principal Balance greater than zero which was not the
subject of a
Principal Prepayment in Full prior to such Due Date and which did
not become a
Liquidated Mortgage Loan prior to such Due Date.
Ownership Interest: As to any Residual Certificate, any
ownership
interest in such Certificate including any interest in such
Certificate as the
Holder thereof and any other interest therein, whether direct or
indirect, legal
or beneficial.
P&I Advance: As to any Mortgage Loan or REO Property, any
advance
made by the Servicer in respect of any Remittance Date representing
the
aggregate of all payments of principal and interest, net of the
Servicing Fee,
that were due during the related Due Period on the Mortgage Loans
and that were
delinquent on the related Determination Date, plus certain amounts
representing
assumed payments not covered by any current net income on the
Mortgaged
Properties acquired by foreclosure or deed in lieu of foreclosure
as determined
pursuant to Section 4.01.
Pass-Through Margin: With respect to each Class of Regular
Certificates (except as set forth in the following sentence), the
following
percentages: Class A-1 Certificates, 0.0800%; Class A-2
Certificates, 0.1200%;
Class A-3 Certificates, 0.1800%; Class A-4 Certificates, 0.2900%;
Class M-1
Certificates, 0.3700%; Class M-2 Certificates, 0.3900%; Class M-3
Certificates,
0.4100%; Class M-4 Certificates, 0.5300%; Class M-5 Certificates,
0.5600%; Class
M-6 Certificates, 0.6600%; Class B-1 Certificates, 1.2000%; Class
B-2
Certificates, 1.4000%; and Class B-3 Certificates, 2.1500%. On the
first
Distribution Date after the Optional Termination Date, the
Pass-Through Margins
shall increase to: Class A-1 Certificates, 0.1600%; Class A-2
Certificates,
0.2400%; Class A-3 Certificates, 0.3600%; Class A-4 Certificates,
0.5800%; Class
M-1 Certificates, 0.5550%; Class M-2 Certificates, 0.5850%; Class
M-3
Certificates, 0.6150%; Class M-4 Certificates, 0.7950%; Class M-5
Certificates,
0.8400%; Class M-6 Certificates, 0.9900%; Class B-1 Certificates,
1.8000%; Class
B-2 Certificates, 2.1000%; and Class B-3 Certificates, 3.2250%.
Pass-Through Rate: For each Class of Regular Certificates, each
Pooling-Tier REMIC-1 Regular Interest, each Pooling-Tier REMIC-2
Regular
Interest, each Lower-Tier Regular Interest and each Upper-Tier
Regular Interest,
the per annum rate set forth or calculated in the manner described
in the
Preliminary Statement.
PCAOB: The Public Company Accounting Oversight Board.
Percentage Interest: As to any Certificate, the percentage
interest
evidenced thereby in distributions required to be made on the
related Class,
such percentage interest being set forth on the face thereof or
equal to the
percentage obtained by dividing the Denomination of such
Certificate by the
aggregate of the Denominations of all Certificates of the same
Class.
Periodic Mortgage Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the periodic limit on each Mortgage Rate adjustment
as set forth
in the related Mortgage Note.
Permitted Investments: Any one or more of the following
obligations
or securities acquired at a purchase price of not greater than par,
regardless
of whether issued by the Servicer, the Trustee or any of their
respective
Affiliates:
(i) direct obligations of, or obligations fully guaranteed as
to
timely
payment of principal and interest by, the United States or any
agency or
instrumentality thereof, provided such obligations are backed
by
the full
faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of,
or
bankers'
acceptances (which shall each have an original maturity of not
more than
90 days and, in the case of bankers' acceptances, shall in no
event have
an original maturity of more than 365 days or a remaining
maturity
of more than 30 days) denominated in United States dollars and
issued by,
any Depository Institution and rated "P-1" by Moody's, "F1+" by
Fitch and
"A-1+" by Standard & Poor's (to the extent they are Rating
Agencies
hereunder and are so rated by such Rating Agency);
(iii) repurchase obligations with respect to any security
described
in clause
(i) above entered into with a Depository Institution (acting as
principal);
(iv) securities bearing interest or sold at a discount that are
issued by
any corporation incorporated under the laws of the United
States
of America
or any State thereof and that are rated by each Rating Agency
that rates
such securities in its highest long-term unsecured rating
categories
at the time of such investment or contractual commitment
providing
for such investment;
(v) commercial paper (including both non-interest-bearing
discount
obligations and interest-bearing obligations payable on demand or
on a
specified
date not more than 30 days after the date of acquisition
thereof)
that is rated by each Rating Agency that rates such securities
in
its
highest short-term unsecured debt rating available at the time of
such
investment;
(vi) units of money market funds, including money market funds
advised by
the Depositor, the Trustee or an Affiliate thereof, that have
been rated
"Aaa" by Moody's, "AAAm" by Standard & Poor's and at least
"AA"
by Fitch
(to the extent they are Rating Agencies hereunder and such
funds
are so
rated by such Rating Agency); and
(vii) if previously confirmed in writing to the Trustee, any
other
demand,
money market or time deposit, or any other obligation, security
or
investment, as may be acceptable to the Rating Agencies as a
permitted
investment
of funds backing "Aaa" or "AAA" rated securities;
provided, however, that no instrument described hereunder shall
evidence either
the right to receive (a) only interest with respect to the
obligations
underlying such instrument or (b) both principal and interest
payments derived
from obligations underlying such instrument and the interest and
principal
payments with respect to such instrument provide a yield to
maturity at par
greater than 120% of the yield to maturity at par of the underlying
obligations.
Permitted Transferee: Any Person other than (i) the United
States,
any State or political subdivision thereof, or any agency or
instrumentality of
any of the foregoing, (ii) a foreign government, international
organization or
any agency or instrumentality of either of the foregoing, (iii) an
organization
(except certain farmers' cooperatives described in Section 521 of
the Code)
which is exempt from tax imposed by Chapter 1 of the Code
(including the tax
imposed by Section 511 of the Code on unrelated business taxable
income) on any
excess inclusions (as defined in Section 860E(c)(1) of the Code)
with respect to
any Residual Certificate, (iv) rural electric and telephone
cooperatives
described in Section 1381(a)(2)(C) of the Code, (v) a Person that
is not a U.S.
Person or a U.S. Person with respect to whom income from a Residual
Certificate
is attributable to a foreign permanent establishment or fixed base,
within the
meaning of an applicable income tax treaty of such Person or any
other U.S.
Person, (vi) an "electing large partnership" within the meaning of
Section 775
of the Code and (vii) any other Person so designated by the
Depositor based upon
an Opinion of Counsel that the Transfer of an Ownership Interest in
a Residual
Certificate to such Person may cause any Trust REMIC to fail to
qualify as a
REMIC at any time that the Certificates are outstanding. The terms
"United
States", "State" and "international organization" shall have the
meanings set
forth in Section 7701 of the Code or successor provisions. A
corporation will
not be treated as an instrumentality of the United States or of any
State or
political subdivision thereof for these purposes if all of its
activities are
subject to tax and, with the exception of Freddie Mac, a majority
of its board
of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, joint
venture,
association, limited liability company, joint-stock company,
trust,
unincorporated organization or government, or any agency or
political
subdivision thereof.
Physical Certificates: As specified in the Preliminary
Statement.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans
for such
Distribution Date that were Outstanding Mortgage Loans on the Due
Date in the
related Due Period.
Pooling-Tier Interest Rate: As specified in the Preliminary
Statement.
Pooling-Tier REMIC-1: As described in the Preliminary
Statement.
Pooling-Tier REMIC-1 Interest Rate: As described in the
Preliminary
Statement.
Pooling-Tier REMIC-1 Principal Amount: As described in the
Preliminary Statement.
Pooling-Tier REMIC-1 Regular Interest: As described in the
Preliminary Statement.
Pooling-Tier REMIC-1 WAC Rate: With respect to the Mortgage Loans
as
of any Distribution Date, a per annum rate equal to the weighted
average of the
Adjusted Net Mortgage Rates for each such Mortgage Loan then in
effect on the
beginning of the related Due Period on the Mortgage Loans, adjusted
in each case
to accrue on the basis of a 360-day year and the actual number of
days in the
related Interest Accrual Period.
Pooling-Tier REMIC-2: As described in the Preliminary
Statement.
Pooling-Tier REMIC-2 Interest Rate: As described in the
Preliminary
Statement.
Pooling-Tier
REMIC-2 IO Interest: Any of the Pooling-Tier REMIC-2
Regular Interests with the designation "IO" in its name.
Pooling-Tier REMIC-2 IO Notional Balance: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2 Principal Amount: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2 Regular Interest: As described in the
Preliminary Statement.
Prepayment Charge: Any prepayment premium, penalty or charge
collected by the Servicer with respect to a Mortgage Loan from a
Mortgagor in
connection with any voluntary Principal Prepayment pursuant to the
terms of the
related Mortgage Note.
Prepayment Interest Excess: With respect to any Distribution
Date,
any interest collected by the Servicer as to which a Principal
Prepayment in
Full occurs from the 1st day of the month through the 15th day of
the month in
which such Distribution Date occurs and that represents interest
that accrues
from the 1st day of such month to the date of such Principal
Prepayment in Full.
Prepayment Interest Shortfall: With respect to any Distribution
Date, the sum of, for each Mortgage Loan that was during the
portion of the
Prepayment Period from and including the 16th day of the month
preceding the
month in which such Distribution Date occurs (or from the day
following the
Cut-off Date, in the case of the first Distribution Date) through
the last day
of such month, the subject of a Principal Prepayment which is not
accompanied by
an amount equal to one month of interest that would have been due
on such
Mortgage Loan on the Due Date in the following month and which was
applied by
the Servicer to reduce the outstanding principal balance of such
Mortgage Loan
on a date preceding such Due Date an amount equal to the product of
(a) the
Mortgage Rate net of the Servicing Fee Rate for such Mortgage Loan,
(b) the
amount of the Principal Prepayment for such Mortgage Loan, (c)
1/360 and (d) the
number of days commencing on the date on which such Principal
Prepayment was
applied and ending on the last day of the calendar month in which
the related
Prepayment Period begins.
Prepayment Period: With respect to any Distribution Date, either
(i)
with respect to any voluntary Principal Prepayments in Full, the
period from and
including the 16th day of the month preceding the month in which
such
Distribution Date occurs (or, in the case of the first Distribution
Date, from
and including the Cut-off Date) to and including the 15th day of
the month in
which such Distribution Date occurs, or (ii) with respect to any
other Principal
Prepayments, the calendar month preceding the month in which such
Distribution
Date occurs.
Principal Distribution Amount: For any Distribution Date, the sum
of
(i) the Basic Principal Distribution Amount for such Distribution
Date and (ii)
the Extra Principal Distribution Amount for such Distribution
Date.
Principal Prepayment: Any full or partial payment or other
recovery
of principal on a Mortgage Loan (including upon liquidation of a
Mortgage Loan)
which is received in advance of its scheduled Due Date, excluding
any Prepayment
Charge thereon.
Principal Prepayment in Full: Any Principal Prepayment made by
a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution
Date,
the amount equal to the sum of the following amounts (without
duplication) with
respect to the related Due Period: (i) each scheduled payment of
principal on a
Mortgage Loan due during such Due Period and received by the
Servicer on or
prior to the related Determination Date or advanced by the Servicer
for the
related Remittance Date, and all Principal Prepayments received
during the
related Prepayment Period; (ii) all Liquidation Proceeds,
Condemnation Proceeds
and Insurance Proceeds on the Mortgage Loans allocable to principal
actually
collected by the Servicer during the related Prepayment Period;
(iii) the
portion of the Repurchase Price allocable to principal with respect
to each
Mortgage Loan repurchased with respect to such Distribution Date;
(iv) all
Substitution Adjustment Amounts allocable to principal received in
connection
with the substitutions of Mortgage Loans with respect to such
Distribution Date;
(v) with respect to the Distribution Date in March 2006 only, the
portion of the
Closing Date Deposit Amount allocable to principal; and (vi) the
allocable
portion of the proceeds received with respect to the termination of
the Trust
Fund pursuant to clause (a) of Section 9.01 (to the extent such
proceeds relate
to principal).
Private Certificates: As specified in the Preliminary
Statement.
Prospectus Supplement: The Prospectus Supplement, dated February
23,
2006, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
Purchase Agreements: Collectively, the WMC Purchase Agreement
and
the Decision One Purchase Agreement.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no
longer in
existence, "Rating Agency" shall be such nationally recognized
statistical
rating organization, or other comparable Person, as is designated
by the
Depositor, notice of which designation shall be given to the
Trustee. References
herein to a given rating or rating category of a Rating Agency
shall mean such
rating category without giving effect to any modifiers. For
purposes of Section
10.05(b), the addresses for notices to each Rating Agency shall be
the address
specified therefor in the definition corresponding to the name of
such Rating
Agency, or such other address as either such Rating Agency may
hereafter furnish
to the Depositor, the Trustee and the Servicer.
Realized Losses: With respect to any date of determination and
any
Liquidated Mortgage Loan, the amount, if any, by which (a) the
unpaid principal
balance of such Liquidated Mortgage Loan together with accrued and
unpaid
interest thereon exceeds (b) the Liquidation Proceeds with respect
thereto net
of the expenses incurred by the Servicer in connection with the
liquidation of
such Liquidated Mortgage Loan and net of the amount of unreimbursed
Servicing
Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the close
of
business on the Business Day immediately preceding such
Distribution Date;
provided, however, that for any Certificate issued in definitive
form, the
Record Date shall be the close of business on the last Business Day
of the month
preceding the month in which such applicable Distribution Date
occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary
Statement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be
amended from
time to time, and subject to such clarification and interpretation
as have been
provided by the Commission in the adopting release (Asset-Backed
Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(January 7, 2005))
or by the staff of the Commission, or as may be provided by the
Commission or
its staff from time to time.
Relief Act Interest Shortfall: With respect to any Distribution
Date
and any Mortgage Loan, any reduction in the amount of interest
collectible on
such Mortgage Loan for the most recently ended Due Period as a
result of the
application of the Servicemembers Civil Relief Act or any similar
state
statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law
relating
to real estate mortgage investment conduits, which appear at
Sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions,
and regulations promulgated thereunder, as the foregoing may be in
effect from
time to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, the
second
Business Day immediately preceding such Distribution Date.
REO Disposition: The final sale by the Servicer of any REO
Property.
REO Imputed Interest: As to any REO Property, for any period,
an
amount equivalent to interest (at the Mortgage Rate net of the
Servicing Fee
Rate that would have been applicable to the related Mortgage Loan
had it been
outstanding) on the unpaid principal balance of the Mortgage Loan
as of the date
of acquisition thereof (as such balance is reduced pursuant to
Section 3.17 by
any income from the REO Property treated as a recovery of
principal).
REO Mortgage Loan: A Mortgage Loan where title to the related
Mortgaged Property has been obtained by the Servicer in the name of
the Trustee
on behalf of the Certificateholders.
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection
with a
defaulted Mortgage Loan.
Replacement Swap Provider Payment: Any payments that have been
received by the Trust as a result of entering into a replacement
interest rate
swap agreement following an Additional Termination Event described
in Part
1(h)(ii) of the Interest Rate Swap Agreement.
Reportable Event: As defined in Section 8.12(g).
Repurchase Price: With respect to any Mortgage Loan for which a
breach of a representation and warranty made by the Depositor or a
Responsible
Party hereunder exists, an amount equal to the sum of (i) the
unpaid principal
balance of such Mortgage Loan as of the date of repurchase, (ii)
interest on
such unpaid principal balance of such Mortgage Loan at the Mortgage
Rate from
the last date through which interest has been paid and distributed
to the
Trustee to the date of repurchase, (iii) all unreimbursed Servicing
Advances and
(iv) all costs and expenses incurred by the Trustee arising out of
or based upon
such breach, including without limitation, costs and expenses
relating to the
Trustee's enforcement of the repurchase obligation of the Depositor
or a
Responsible Party hereunder. In addition to the Repurchase Price,
the applicable
Responsible Party is obligated to make certain payments for
material breaches of
representations and warranties as further set forth in Section
2.03(j) in this
Agreement.
Request for Release: The Request for Release submitted by the
Servicer to the Trustee or the Custodian, as applicable,
substantially in the
form of Exhibit J.
Residual Certificates: As specified in the Preliminary
Statement.
Responsible Officer: When used with respect to the Trustee, any
managing director, any vice president, any assistant vice
president, any
assistant secretary, any assistant treasurer, any associate, or any
other
officer of the Trustee, customarily performing functions similar to
those
performed by any of the above designated officers who at such time
shall be
officers to whom, with respect to a particular matter, such matter
is referred
because of such officer's knowledge of and familiarity with the
particular
subject and who shall have direct responsibility for the
administration of this
Agreement.
Responsible Parties: WMC and Decision One.
Rule 144A Letter: As defined in Section 5.02(b).
Sarbanes Certification: As defined in Section 8.12(c).
Scheduled Payment: The scheduled monthly payment on a Mortgage
Loan
due on any Due Date allocable to principal and/or interest on such
Mortgage Loan
which, unless otherwise specified herein, shall give effect to any
related Debt
Service Reduction and any Deficient Valuation that affects the
amount of the
monthly payment due on such Mortgage Loan.
Second Lien Mortgage Loan: A Mortgage Loan secured by a second
lien
Mortgage on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Senior Defaulted Swap Termination Payment: As of any date, the
lesser of (x) any Replacement Swap Provider Payment and (y) any
Swap Termination
Payment owed to the Swap Provider.
Senior Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the
aggregate Class
Certificate Balance of the Subordinated Certificates and (ii) the
Subordinated
Amount, in each case after taking into account the distribution of
the Principal
Distribution Amount and any principal payments on those Classes of
Certificates
from the Swap Account on that Distribution Date, by (y) the
aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution
Date.
Senior Specified Enhancement Percentage: As of any date of
determination, 42.30%.
Servicer: JPMorgan, and if a successor servicer is appointed
hereunder, such successor.
Servicer Remittance Report: As defined in Section 4.03(d).
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by the Servicer in the
performance of
its servicing obligations in connection with a default, delinquency
or other
unanticipated event, including, but not limited to, the cost of (i)
the
preservation, restoration, inspection and protection of a Mortgaged
Property,
(ii) any enforcement, administrative or judicial proceedings,
including
foreclosures and litigation, in respect of a particular Mortgage
Loan, (iii) the
management (including reasonable fees in connection therewith) and
liquidation
of any REO Property and (iv) the performance of its obligations
under Sections
3.01, 3.09, 3.13 and 3.15. The Servicing Advances shall also
include any
reasonable "out-of-pocket" costs and expenses (including legal
fees) incurred by
the Servicer in connection with executing and recording instruments
of
satisfaction, deeds of reconveyance or Assignments of Mortgage in
connection
with any foreclosure in respect of any Mortgage Loan to the extent
not recovered
from the Mortgagor or otherwise payable under this Agreement. The
Servicer shall
not be required to make any Nonrecoverable Servicing Advances.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, which as of the Closing Date are listed
on Exhibit R
hereto.
Servicing Fee: With respect to each Mortgage Loan and for any
calendar month, an amount equal to one month's interest (or in the
event of any
payment of interest which accompanies a Principal Prepayment in
Full made by the
Mortgagor during such calendar month, interest for the number of
days covered by
such payment of interest) at the Servicing Fee Rate on the
applicable Stated
Principal Balance of such Mortgage Loan as of the first day of such
calendar
month. Such fee shall be payable monthly, and shall be pro rated
for any portion
of a month during which the Mortgage Loan is serviced by the
Servicer under this
Agreement. The Servicing Fee is payable solely from the interest
portion
(including recoveries with respect to interest from Liquidation
Proceeds,
Insurance Proceeds, Condemnation Proceeds and proceeds received
with respect to
REO Properties, to the extent permitted by Section 3.11) of such
Scheduled
Payment collected by the Servicer, or as otherwise provided under
Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50%
per
annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals or copies of all
documents in
the Mortgage File which are not delivered to the Trustee or the
Custodian, as
applicable, in the Custodial File and copies of the Mortgage Loan
Documents set
forth in Exhibit K hereto.
Servicing Function Participant: As defined in Section 3.23(a).
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage
Loans whose
name and facsimile signature appear on a list of servicing officers
furnished to
the Trustee by the Servicer on the Closing Date pursuant to this
Agreement, as
such list may from time to time be amended.
Servicing Transfer Date: With respect to any Mortgage Loan, the
date
on which servicing of such Mortgage Loan was transferred to the
Servicer (as set
forth on the Mortgage Loan Schedule).
Similar Law: As defined in Section 5.02(b).
60+ Day Delinquent Mortgage Loan: (i) Each Mortgage Loan with
respect to which any portion of a Scheduled Payment is, as of the
last day of
the prior Due Period, two months or more past due (without giving
effect to any
grace period), including, without limitation, such Mortgage Loans
that are
subject to bankruptcy proceedings, (ii) each Mortgage Loan in
foreclosure and
(iii) all REO Property.
Specified Subordinated Amount: Prior to the Stepdown Date, an
amount
equal to 3.85% of the Cut-off Date Pool Principal Balance. On and
after the
Stepdown Date, an amount equal to 7.70% of the aggregate Stated
Principal
Balance of the Mortgage Loans for such Distribution Date, subject,
until the
Class Certificate Balance of each Class of Offered Certificates has
been reduced
to zero, to a minimum amount equal to 0.50% of the Cut-off Date
Pool Principal
Balance; provided, however, that if, on any Distribution Date, a
Trigger Event
exists, the Specified Subordinated Amount shall not be reduced to
the applicable
percentage of the then current aggregate Stated Principal Balance
of the
Mortgage Loans until the Distribution Date on which a Trigger Event
no longer
exists. When the Class Certificate Balance of each Class of Offered
Certificates
has been reduced to zero, the Specified Subordinated Amount will
thereafter
equal zero.
Sponsor: Morgan Stanley Mortgage Capital Inc., a New York
corporation, and its successors in interest, as purchaser of the
Mortgage Loans
under each of the Purchase Agreements.
Standard & Poor's: Standard & Poor's Ratings Services, a
division of
The McGraw-Hill Companies, Inc., and its successors in interest. If
Standard &
Poor's is designated as a Rating Agency in the Preliminary
Statement, for
purposes of Section 10.05(b) the address for notices to Standard
& Poor's shall
be Standard & Poor's, 55 Water Street, New York, New York
10041, Attention:
Residential Mortgage Surveillance Group - Morgan Stanley Capital I
Inc. Trust
2006-HE1, or such other address as Standard & Poor's may
hereafter furnish to
the Depositor, the Trustee and the Servicer.
Standard & Poor's Glossary: The Standard & Poor's
LEVELS(R)
Glossary, as may be in effect from time to time.
Startup Day: The Closing Date.
Stated Principal Balance: As to each Mortgage Loan and as of
any
date of determination, (i) the principal balance of the Mortgage
Loan at the
Cut-off Date after giving effect to payments of principal due on or
before such
date (whether or not received), minus (ii) all amounts previously
remitted to
the Trustee with respect to the related Mortgage Loan representing
payments or
recoveries of principal including advances in respect of scheduled
payments of
principal. For purposes of any Distribution Date, the Stated
Principal Balance
of any Mortgage Loan will give effect to any scheduled payments of
principal
received by the Servicer on or prior to the related Determination
Date or
advanced by the Servicer for the related Remittance Date and any
unscheduled
principal payments and other unscheduled principal collections
received during
the related Prepayment Period, and the Stated Principal Balance of
any Mortgage
Loan that has prepaid in full or has become a Liquidated Mortgage
Loan during
the related Prepayment Period shall be zero.
Stepdown Date: The later to occur of (i) the earlier to occur of
(a)
the Distribution Date in March 2009 and (b) the Distribution Date
following the
Distribution Date on which the aggregate Class Certificate Balances
of the Class
A Certificates have been reduced to zero and (ii) the first
Distribution Date on
which the Senior Enhancement Percentage (calculated for this
purpose only after
taking into account payments of principal on the Mortgage Loans
applied to
reduce the Stated Principal Balances of the Mortgage Loans for the
applicable
Distribution Date but prior to any allocation of the Principal
Distribution
Amount and principal payments from the Swap Account to the
Certificates on such
Distribution Date) is greater than or equal to the Senior Specified
Enhancement
Percentage.
Subcontractor: Any third-party or Affiliated vendor,
subcontractor
or other Person utilized by the Servicer, a Subservicer, the
Trustee or the
Custodian, as applicable, that is not responsible for the overall
servicing (as
"servicing" is commonly understood by participants in the
mortgage-backed
securities market) of Mortgage Loans but performs one or more
discrete functions
identified in Item 1122(d) of Regulation AB with respect to
Mortgage Loans.
Subordinated Amount: With respect to any Distribution Date, the
excess, if any, of (a) the aggregate Stated Principal Balance of
the Mortgage
Loans for such Distribution Date over (b) the aggregate of the
Class Certificate
Balances of the Offered Certificates as of such Distribution Date
(after giving
effect to the payment of the Principal Remittance Amount on such
Certificates on
such Distribution Date).
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordination Deficiency: With respect to any Distribution Date,
the
excess, if any, of (a) the Specified Subordinated Amount applicable
to such
Distribution Date over (b) the Subordinated Amount applicable to
such
Distribution Date.
Subordination Reduction Amount: With respect to any
Distribution
Date, an amount equal to the lesser of (a) the Excess Subordinated
Amount and
(b) the Net Monthly Excess Cash Flow.
Subsequent Recovery: With respect to any Mortgage Loan or
related
Mortgaged Property that became a Liquidated Mortgage Loan or was
otherwise
disposed of, all amounts received in respect of such Liquidated
Mortgage Loan
after an Applied Realized Loss Amount related to such Mortgage Loan
or Mortgaged
Property is allocated to reduce the Class Certificate Balance of
any Class of
Subordinated Certificates. Any Subsequent Recovery that is received
during a
Prepayment Period will be treated as Liquidation Proceeds and
included as part
of the Principal Remittance Amount for the related Distribution
Date.
Subservicer: Any Person that services Mortgage Loans on behalf
of
the Servicer or any Subservicer and is responsible for the
performance (whether
directly or through Subservicers or Subcontractors) of a
substantial portion of
the material servicing functions required to be performed by the
Servicer under
this Agreement, with respect to some or all of the Mortgage Loans,
that are
identified in Item 1122(d) of Regulation AB.
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan (i) substituted by
the
Depositor or the applicable Responsible Party for a Deleted
Mortgage Loan that
satisfies the criteria set forth in the definition of "Qualified
Substitute
Mortgage Loan" in the applicable Purchase Agreement or (ii)
substituted by the
Depositor for a Deleted Mortgage Loan, which, if substituted by the
Depositor,
must, on the date of such substitution, as confirmed in a Request
for Release,
substantially in the form of Exhibit J, (a) have a Stated Principal
Balance,
after deduction of the principal portion of the Scheduled Payment
due in the
month of substitution, not in excess of, and not more than 10% less
than, the
Stated Principal Balance of the Deleted Mortgage Loan; (b) be
accruing interest
at a rate no lower than and not more than 1% per annum higher than,
that of the
Deleted Mortgage Loan; (c) have a Loan-to-Value Ratio or a
Combined
Loan-to-Value Ratio, as applicable, no higher than that of the
Deleted Mortgage
Loan; (d) have a remaining term to maturity no greater than (and
not more than
one year less than that of) the Deleted Mortgage Loan; and (e)
comply with each
representation and warranty set forth in Section 2.03.
Substitution Adjustment Amount: As defined in Section 2.03.
Swap Account: As defined in Section 4.06.
Swap Assets: Collectively, the Swap Account, the Interest Rate
Swap
Agreement, the Class IO Interest and the right to receive Class IO
Shortfalls,
subject to the obligation to pay amounts specified in Section
4.06.
Swap LIBOR: With respect to any Distribution Date (and the
related
Interest Accrual Period), the product of (i) USD-LIBOR-BBA (as used
in the
Interest Swap Agreement), (ii) two, and (iii) the quotient of (a)
the actual
number of days in the Interest Accrual Period for the Offered
Certificates
divided by (b) 30.
Swap Payment Allocation: For any Class of Certificates and any
Distribution Date, that Class's pro rata share of the Net Swap
Receipts, if any,
for that Distribution Date, based on the Class Certificate Balances
of the
Classes of Certificates.
Swap Payment Rate: For any Distribution Date, a fraction, the
numerator of which is any Net Swap Payment or Swap Termination
Payment owed to
the Swap Provider for such Distribution Date and the denominator of
which is the
aggregate Stated Principal Balance of the Mortgage Loans at the
beginning of the
related Due Period, multiplied by 12.
Swap Provider: Morgan Stanley Capital Services Inc., a Delaware
corporation, and its successors in interest.
Swap Termination Payment: Any payment payable by the Trust or
the
Swap Provider upon termination of the Interest Rate Swap Agreement
as a result
of an Event of Default (as defined in the Interest Rate Swap
Agreement) or a
Termination Event (as defined in the Interest Rate Swap
Agreement).
Tax Matters Person: The Holder of the Class R Certificates
designated as "tax matters person" of each Trust REMIC in the
manner provided
under Treasury Regulations Section 1.860F-4(d) and Treasury
Regulations Section
301.6231(a)(7)-1.
Tax Service Contract: As defined in Section 3.09(a).
Telerate Page 3750: The display page currently so designated on
the
Bridge Telerate Service (or such other page as may replace that
page on that
service for displaying comparable rates or prices).
Total Monthly Excess Spread: As to any Distribution Date, an
amount
equal to the excess if any, of (i) the interest on the Mortgage
Loans received
by the Servicer on or prior to the related Determination Date
(other than
Prepayment Interest Excesses) or advanced by the Servicer for the
related
Remittance Date (net of Expense Fees) over (ii) the sum of (A) the
amounts
payable to the Certificates pursuant to Section 4.02(a)(i) on such
Distribution
Date and (B) any Net Swap Payments to the Swap Provider.
Transfer: Any direct or indirect transfer or sale of any
Ownership
Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: Either a Cumulative Loss Trigger Event or a
Delinquency Trigger Event.
Trust: The
express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting
of
(i) the Mortgage Loans and all interest and principal with respect
thereto
received on or after the related Cut-off Date, other than such
amounts which
were due on the Mortgage Loans on or prior to the related Cut-off
Date; (ii) the
Collection Account, Excess Reserve Fund Account, the Distribution
Account, and
all amounts deposited therein pursuant to the applicable provisions
of this
Agreement; (iii) property that secured a Mortgage Loan and has been
acquired by
foreclosure, deed-in-lieu of foreclosure or otherwise; (iv) the
Closing Date
Deposit Amount; (v) the Interest Rate Swap Agreement; (vi) the Swap
Assets; and
(vii) all proceeds of the conversion, voluntary or involuntary, of
any of the
foregoing.
Trust REMIC: Any of Pooling-Tier REMIC-1, Pooling-Tier REMIC-2,
the
Lower-Tier REMIC or the Upper-Tier REMIC, as applicable.
Trustee: Wells Fargo Bank, National Association, a national
banking
association, and its successors in interest and, if a successor
trustee is
appointed hereunder, such successor.
Trustee Fee: As to any Distribution Date, an amount equal to
the
product of (a) one-twelfth of the Trustee Fee Rate and (b) (i) the
aggregate
Stated Principal Balance of the Mortgage Loans as of the first day
of the
related Interest Accrual Period and (ii) with respect to the
Distribution Date
in March 2006 only, the portion of the Closing Date Deposit Amount
allocable to
principal.
Trustee Fee Rate: With respect to each Mortgage Loan, 0.0025%
per
annum.
Trustee Float Period: With respect to the Distribution Date and
the
related amounts in the Distribution Account, the period commencing
on the
Business Day immediately preceding such Distribution Date and
ending on such
Distribution Date.
Underwriters' Exemption: Any exemption listed under footnote 1
of,
and amended by, Prohibited Transaction Exemption 2002-41, 67 Fed.
Reg. 54487
(2002), or any successor exemption.
Underwriting Guidelines: The underwriting guidelines attached to
the
Purchase Agreements.
Unpaid Interest Amount: As of any Distribution Date and any Class
of
Certificates, the sum of (a) the portion of the Accrued Certificate
Interest
Distribution Amount from Distribution Dates prior to the current
Distribution
Date remaining unpaid immediately prior to the current Distribution
Date and (b)
interest on the amount in clause (a) above at the applicable
Pass-Through Rate
(to the extent permitted by applicable law).
Unpaid Realized Loss Amount: With respect to any Class of
Subordinated Certificates and as to any Distribution Date, is the
excess of (i)
the Applied Realized Loss Amounts with respect to such Class over
(ii) the sum
of (a) all distributions in reduction of such Applied Realized Loss
Amounts on
all previous Distribution Dates, and (b) the amount by which the
Class
Certificate Balance of such Class has been increased due to the
distribution of
any Subsequent Recoveries on all previous Distribution Dates. Any
amounts
distributed to a Class of Subordinated Certificates in respect of
any Unpaid
Realized Loss Amount will not be applied to reduce the Class
Certificate Balance
of such Class.
Upper-Tier CarryForward Amount: With respect to each Class of
Offered Certificates, as of any Distribution Date, the sum of (A)
if on such
Distribution Date the Upper-Tier Interest Rate for the Class of
Corresponding
Upper-Tier REMIC Regular Interest is based upon the Upper-Tier
REMIC WAC Rate,
the excess, if any, of (i) the amount of interest such Class of
Upper-Tier
Regular Interest would otherwise be entitled to receive on such
Distribution
Date had such Upper-Tier REMIC Regular Interest not been subject to
the
Upper-Tier REMIC WAC Rate, over (ii) the amount of interest payable
on such
Class of Certificates on such Distribution Date taking into account
the
Upper-Tier REMIC WAC Rate and (B) the Upper-Tier CarryForward
Amount for such
Class of Certificates for all previous Distribution Dates not
previously paid,
together with interest thereon at a rate equal to the applicable
Upper-Tier
Interest Rate for such Class of Certificates for such Distribution
Date, without
giving effect to the Upper-Tier REMIC WAC Rate.
Upper-Tier Interest Rate: As described in the Preliminary
Statement.
Upper-Tier Regular Interest: As described in the Preliminary
Statement.
Upper-Tier REMIC: As described in the Preliminary Statement.
Upper-Tier REMIC WAC Rate: For any Distribution Date, the
weighted
average of the Lower-Tier Interest Rates on the Lower-Tier Regular
Interests
(other than the Class LT-IO Interest) as of the first day of the
related
Interest Accrual Period, weighted on the basis of the Lower-Tier
Principal
Amounts of such Lower-Tier Regular Interests as of the first day of
the related
Interest Accrual Period.
U.S. Person: (i) A citizen or resident of the United States; (ii)
a
corporation (or entity treated as a corporation for tax purposes)
created or
organized in the United States or under the laws of the United
States or of any
State thereof, including, for this purpose, the District of
Columbia; (iii) a
partnership (or entity treated as a partnership for tax purposes)
organized in
the United States or under the laws of the United States or of any
State
thereof, including, for this purpose, the District of Columbia
(unless provided
otherwise by future Treasury regulations); (iv) an estate whose
income is
includible in gross income for United States income tax purposes
regardless of
its source; or (v) a trust, if a court within the United States is
able to
exercise primary supervision over the administration of the trust
and one or
more U.S. Persons have authority to control substantial decisions
of the trust.
Notwithstanding the last clause of the preceding sentence, to the
extent
provided in Treasury regulations, certain trusts in existence on
August 20,
1996, and treated as U.S. Persons prior to such date, may elect to
continue to
be U.S. Persons.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date
of
determination, (a) 1% of all Voting Rights shall be allocated to
the Class X
Certificates, if any (such Voting Rights to be allocated among the
holders of
Certificates of each such Class in accordance with their respective
Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the
Class P
Certificates, if any, and (c) the remaining Voting Rights shall be
allocated
among Holders of the remaining Classes of Certificates in
proportion to the
Certificate Balances of their respective Certificates on such
date.
WAC Cap: With respect to the Mortgage Loans as of any
Distribution
Date, the weighted average of the Adjusted Net Mortgage Rates then
in effect on
the beginning of the related Due Period on the Mortgage Loans minus
the Swap
Payment Rate, adjusted in each case to accrue on the basis of a
360-day year and
the actual number of days in the related Interest Accrual
Period.
WMC: WMC Mortgage Corp., a California corporation, and its
successors in interest.
WMC Mortgage Loans: The Mortgage Loans purchased by the Sponsor
pursuant to the WMC Purchase Agreement for which WMC is identified
as
Responsible Party on the Mortgage Loan Schedule.
WMC Purchase Agreement: The Second Amended and Restated
Mortgage
Loan Purchase and Warranties Agreement, dated as of October 1,
2005, by and
between WMC and the Sponsor, a copy of which is attached hereto as
Exhibit P.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells,
transfers,
assigns, sets over and otherwise conveys to the Trustee for the
benefit of the
Certificateholders, without recourse, all the right, title and
interest of the
Depositor in and to the Trust Fund, and the Trustee, on behalf of
the Trust,
hereby accepts the Trust Fund.
(b) In connection with the transfer and assignment of each
Mortgage
Loan, the Depositor has delivered or caused to be delivered to the
Custodian
with respect to the Decision One Mortgage Loans, and to the Trustee
with respect
to the remaining Mortgage Loans, for the benefit of the
Certificateholders the
following documents or instruments with respect to each Mortgage
Loan so
assigned:
(i) the original Mortgage Note bearing all intervening
endorsements,
endorsed
"Pay to the order of _____________, without recourse" and
signed
(which may
be by facsimile signature) in the name of the last endorsee by
an
authorized officer. To the extent that there is no room on the face
of
the
Mortgage Note for endorsements, the endorsement may be contained on
an
allonge,
unless the Trustee is advised in writing by the applicable
Responsible Party (pursuant to the applicable Purchase Agreement)
that
state law
does not so allow;
(ii) the original of any guaranty executed in connection with
the
Mortgage
Note;
(iii) the original Mortgage with evidence of recording thereon or
a
certified
true copy of such Mortgage submitted for recording. If, in
connection
with any Mortgage Loan, the original Mortgage cannot be
delivered with
evidence of recording thereon on or prior to the Closing
Date
because of a delay caused by the public recording office where
such
Mortgage
has been delivered for recordation or because such Mortgage has
been lost
or because such public recording office retains the original
recorded
Mortgage, the applicable Responsible Party shall deliver or
cause
to be
delivered to the Custodian or Trustee, as applicable, a photocopy
of
such
Mortgage certified by the applicable Responsible Party to be a
true
and
complete copy of such Mortgage and shall forward to the Custodian
or
Trustee,
as applicable, such original recorded Mortgage within 14 days
following
the applicable Responsible Party's receipt of such Mortgage
from
the
applicable public recording office; or in the case of a Mortgage
where
a public
recording office retains the original recorded Mortgage or in
the
case where
a Mortgage is lost after recordation in a public recording
office, a
copy of such Mortgage certified by such public recording office
to be a
true and complete copy of the original recorded Mortgage;
(iv) the originals of all assumption, modification, consolidation
or
extension
agreements, with evidence of recording thereon or a certified
true copy
of such agreement submitted for recording;
(v) the original Assignment of Mortgage for each Mortgage Loan
endorsed
in blank (except with respect to MERS Designated Mortgage
Loans);
(vi) the originals of all intervening assignments of Mortgage
(if
any)
evidencing a complete chain of assignment from the applicable
originator
(or MERS with respect to each MERS Designated Mortgage Loan) to
the last
endorsee with evidence of recording thereon or a certified true
copy of
such intervening assignments of Mortgage submitted for
recording,
or if any
such intervening assignment has not been returned from the
applicable
recording office or has been lost or if such public recording
office
retains the original recorded assignments of Mortgage, the
applicable
Responsible Party shall deliver or cause to be delivered a
photocopy
of such intervening assignment, certified by the applicable
Responsible Party to be a true and complete copy of such
intervening
assignment
and shall forward to the Custodian or Trustee, as applicable,
such
original recorded intervening assignment within 14 days following
the
applicable
Responsible Party's receipt of such from the applicable public
recording
office; or in the case of an intervening assignment where a
public
recording office retains the original recorded intervening
assignment
or in the case where an intervening assignment is lost after
recordation in a public recording office, a copy of such
intervening
assignment
certified by such public recording office to be a true and
complete
copy of the original recorded intervening assignment;
(vii) the original mortgagee title insurance policy or, in the
event
such
original title policy is unavailable, a certified true copy of
the
related
policy binder or commitment for title certified to be true and
complete
by the title insurance company; and
(viii) the original of any security agreement, chattel mortgage
or
equivalent
document executed in connection with the Mortgage (if
provided).
The applicable Responsible Party shall cause to be delivered to
the
Custodian or Trustee, as applicable, the applicable recorded
document promptly
upon receipt from the respective recording office but, solely with
respect to
the WMC Mortgage Loans, in no event later than one year from the
date such
Mortgage Loan was sold by WMC to the Sponsor.
If any Mortgage has been recorded in the name of Mortgage
Electronic
Registration System, Inc. ("MERS") or its designee, no Assignment
of Mortgage in
favor of the Trustee will be required to be prepared or delivered
and instead,
the Servicer shall take all reasonable actions as are necessary at
the expense
of the applicable Responsible Party to cause the Trust to be shown
as the owner
of the related Mortgage Loan on the records of MERS for the purpose
of the
system of recording transfers of beneficial ownership of mortgages
maintained by
MERS.
From time to time, the Depositor or the Servicer, as
applicable,
shall forward to the Custodian or Trustee, as applicable,
additional original
documents, additional documents evidencing an assumption,
modification,
consolidation or extension of a Mortgage Loan in accordance with
the terms of
this Agreement upon receipt of such documents. All such mortgage
documents held
by the Custodian or Trustee, as applicable, as to each Mortgage
Loan shall
constitute the "Custodial File".
On or prior to the Closing Date, each Responsible Party shall
deliver to the Custodian or Trustee, as applicable, Assignments of
Mortgages, in
blank, for each Mortgage Loan. The Responsible Parties shall cause
the
Assignments of Mortgages and complete recording information to be
provided to
the Servicer in a reasonably acceptable manner. No later than
thirty (30)
Business Days following the later of the Closing Date and the date
of receipt by
the Servicer of the complete recording information for a Mortgage,
the Servicer
shall promptly submit or cause to be submitted for recording, at
the expense of
the applicable Responsible Party as required pursuant to the
related Purchase
Agreement and at no expense to the Trust Fund, the Trustee, the
Servicer, or the
Depositor, in the appropriate public office for real property
records, each
Assignment of Mortgage referred to in Section 2.01(b)(v).
Notwithstanding the
foregoing, however, for administrative convenience and facilitation
of servicing
and to reduce closing costs, the Assignments of Mortgage shall not
be required
to be completed and submitted for recording with respect to any
Mortgage Loan
(i) if the Trustee, the Custodian and each Rating Agency have
received an
Opinion of Counsel, satisfactory in form and substance to the
Trustee and each
Rating Agency to the effect that the recordation of such
Assignments of Mortgage
in any specific jurisdiction is not necessary to protect the
Trustee's interest
in the related Mortgage Note, (ii) if such Mortgage Loan is a MERS
Designated
Mortgage Loan or (iii) if the Rating Agencies have each notified
the Depositor
in writing that not recording any such Assignments of Mortgage
would not cause
the initial ratings on any Offered Certificates to be downgraded or
withdrawn;
provided, however, that the Servicer shall not be held responsible
or liable for
any loss that occurs because an Assignment of Mortgage was not
recorded, but
only to the extent the Servicer does not have prior knowledge of
the act or
omission that causes such loss. However, with respect to the
Assignments of
Mortgage referred to in clauses (i) and (ii) above, if foreclosure
proceedings
occur against a Mortgaged Property, the Servicer shall record such
Assignment of
Mortgage at the expense of the applicable Responsible Party (and at
no expense
to the Servicer) as required pursuant to the related Purchase
Agreement. If the
Assignment of Mortgage is to be recorded, the Mortgage shall be
assigned to
"Wells Fargo Bank, National Association, as trustee under the
Pooling and
Servicing Agreement dated as of February 1, 2006, Morgan Stanley
Capital I Inc.
Trust 2006-HE1." In the event that any such Assignment of Mortgage
is lost or
returned unrecorded because of a defect therein, the applicable
Responsible
Party shall promptly cause to be delivered a substitute Assignment
of Mortgage
to cure such defect and thereafter cause each such assignment to be
duly
recorded.
In the event that such original or copy of any document
submitted
for recordation to the appropriate public recording office is not
so delivered
to the Custodian or Trustee, as applicable, within one year
following the date
such Mortgage Loan was sold by such Responsible Party to the
Sponsor, and in the
event that such Responsible Party does not cure such failure within
30 days of
discovery or receipt of written notification of such failure from
the Depositor,
the related Mortgage Loan shall, upon the request of the Depositor,
be
repurchased by such Responsible Party at the price and in the
manner specified
in Section 2.03. The foregoing repurchase obligation shall not
apply in the
event that the applicable Responsible Party cannot deliver such
original or copy
of any document submitted for recordation to the appropriate public
recording
office within the specified period due to a delay caused by the
recording office
in the applicable jurisdiction; provided, that such Responsible
Party shall
instead deliver a recording receipt of such recording office or, if
such
recording receipt is not available, an officer's certificate of an
officer of
such Responsible Party, confirming that such document has been
accepted for
recording.
Notwithstanding anything to the contrary contained in this
Section
2.01, in those instances where the public recording office retains
or loses the
original Mortgage or assignment after it has been recorded, the
obligations of
the applicable Responsible Party shall be deemed to have been
satisfied upon
delivery by the applicable Responsible Party to the Custodian or
Trustee, as
applicable, prior to the Closing Date of a copy of such Mortgage or
assignment,
as the case may be, certified (such certification to be an original
thereof) by
the public recording office to be a true and complete copy of the
recorded
original thereof.
On or prior to the Closing Date, the Depositor shall deliver to
the
Custodian or Trustee, as applicable, a copy of the Data Tape
Information in an
electronic, machine readable medium in a form acceptable to the
Depositor and
the Trustee.
(c) The Depositor does hereby establish, pursuant to the
further
provisions of this Agreement and the laws of the State of New York,
an express
trust (the "Trust") to be known, for convenience, as "MORGAN
STANLEY CAPITAL I
INC. TRUST 2006-HE1" and Wells Fargo Bank, National Association is
hereby
appointed as Trustee in accordance with the provisions of this
Agreement. The
parties hereto acknowledge and agree that it is the policy and
intention of the
Trust to acquire only Mortgage Loans meeting the requirements set
forth in this
Agreement, including without limitation, the representations and
warranties set
forth in paragraph (43) of Schedule III and paragraph (yy) of
Schedule V to this
Agreement. The Trust's fiscal year is the calendar year.
(d) The Trust shall have the capacity, power and authority, and
the
Trustee on behalf of the Trust is hereby authorized, to accept the
sale,
transfer, assignment, set over and conveyance by the Depositor to
the Trust of
all the right, title and interest of the Depositor in and to the
Trust Fund
(including, without limitation, the Mortgage Loans) pursuant to
Section 2.01(a).
The Trustee on behalf of the Trust is hereby directed to enter into
the Interest
Rate Swap Agreement.
Section 2.02 Acceptance by the Trustee of the Mortgage Loans.
The
Trustee and the Custodian shall acknowledge, on the Closing Date,
receipt by the
Trustee or the Custodian, as applicable, of the documents
identified in the
Initial Certification in the form annexed hereto as Exhibit E, and
declares that
it holds and will hold such documents and the other documents
delivered to it
pursuant to Section 2.01, and that it holds or will hold such other
assets as
are included in the Trust Fund, in trust for the exclusive use and
benefit of
all present and future Certificateholders. The Trustee and the
Custodian shall
maintain possession of the related Mortgage Notes in the States of
California,
Minnesota or Utah unless otherwise permitted by the Rating
Agencies.
In connection with the Closing Date, the Trustee and the
Custodian
shall be required to deliver via facsimile (with original to follow
the next
Business Day) to the Depositor and the Servicer an Initial
Certification prior
to the Closing Date, or, with the Depositor's consent, on the
Closing Date,
certifying receipt of a Mortgage Note and Assignment of Mortgage
for each
applicable Mortgage Loan. Neither the Trustee nor the Custodian
shall be
responsible to verify the validity, sufficiency or genuineness of
any document
in any Custodial File.
Within 90 days after the Closing Date, the Trustee and the
Custodian
shall, for the benefit of the Holders of the Certificates,
ascertain that all
documents identified in the Document Certification and Exception
Report in the
form attached hereto as Exhibit F are in its possession, and shall
deliver to
the Depositor and the Servicer and to the Trustee, if delivered by
the
Custodian, a Document Certification and Exception Report, in the
form annexed
hereto as Exhibit F, to the effect that, as to each applicable
Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full
or any Mortgage Loan specifically identified in such certification
as an
exception and not covered by such certification): (i) all documents
identified
in the Document Certification and Exception Report and required to
be reviewed
by it are in its possession; (ii) such documents have been reviewed
by it and
appear regular on their face and relate to such Mortgage Loan;
(iii) based on
its examination and only as to the foregoing documents, the
information set
forth in items (1), (2) and (7) of the Mortgage Loan Schedule and
items (1), (9)
and (17) of the Data Tape Information respecting such Mortgage Loan
accurately
reflects the information set forth in the Custodial File; and (iv)
each Mortgage
Note has been endorsed as provided in Section 2.01 of this
Agreement. Neither
the Trustee nor the Custodian shall be responsible to verify the
validity,
sufficiency or genuineness of any document in any Custodial
File.
Within 90 days after the Closing Date, the Servicer (for the
benefit
of the Holders of the Certificates, based solely on the list of
MERS Designated
Mortgage Loans and screen printouts from the MERS System provided
to the
Servicer by each applicable Responsible Party no later than 45 days
after the
Closing Date) shall confirm, on behalf of the Trust, that the
Trustee is shown
as the Investor with respect to each MERS Designated Mortgage Loan
on such
screen printouts. If the Trustee is not shown as the Investor with
respect to
any MERS Designated Mortgage Loans on such screen printouts, the
Servicer shall
promptly notify the applicable Responsible Party of such fact, and
such Person
shall then either cure such defect or repurchase such Mortgage Loan
in
accordance with Section 2.03.
The Trustee and the Custodian shall retain possession and custody
of
each applicable Custodial File in accordance with and subject to
the terms and
conditions set forth herein. The Servicer shall promptly deliver to
the Trustee
or to the Custodian, as applicable, upon the execution or receipt
thereof, the
originals of such other documents or instruments constituting the
Custodial File
as come into the possession of the Servicer from time to time.
Each Responsible Party shall deliver to the Servicer copies of
all
trailing documents required to be included in the Custodial File at
the same
time the original or certified copies thereof are delivered to the
Trustee or to
the Custodian, as applicable, including but not limited to such
documents as the
title insurance policy and any other Mortgage Loan Documents upon
return from
the public recording office. Such documents shall be delivered by
the applicable
Responsible Party at such Responsible Party's expense to the
Servicer.
Section 2.03 Representations and Warranties; Remedies for
Breaches
of Representations and Warranties with Respect to the Mortgage
Loans. (a) The
Servicer hereby makes the representations and warranties set forth
in Schedule
II hereto to the Depositor and the Trustee as of the dates set
forth in such
Schedule.
(b) WMC hereby makes the representations and warranties, set
forth
in Schedule III and Schedule IV hereto, to the Depositor, the
Servicer and the
Trustee as of the dates set forth in such Schedules. Decision One
hereby makes
the representations and warranties, set forth in Schedule VI
hereto, to the
Depositor, the Servicer and the Trustee as of the dates set forth
in such
Schedule.
(c) LaSalle hereby makes the representations and warranties set
forth in Schedule VII hereto to the Trustee as of the dates set
forth in such
Schedule.
(d) The Depositor hereby makes the representations and
warranties
set forth in Schedules V hereto to the Trustee as of the dates set
forth in such
Schedule.
(e) It is understood and agreed by the parties hereto that the
representations and warranties set forth in this Section 2.03 shall
survive the
transfer of the Mortgage Loans by the Depositor to the Trustee, and
shall inure
to the benefit of the parties to whom the representations and
warranties were
made notwithstanding any restrictive or qualified endorsement on
any Mortgage
Note or Assignment of Mortgage or the examination or failure to
examine any
Mortgage File. Upon discovery by any of the Responsible Parties,
the Depositor,
the Trustee, the Custodian or the Servicer of a breach of any of
the foregoing
representations and warranties that materially and adversely affect
the value of
any Mortgage Loan or the interest of the Trustee or the
Certificateholders
therein, the party discovering such breach shall give prompt
written notice to
the other parties.
(f) Upon discovery by any of the parties hereto of a breach of
a
representation or warranty made by a Responsible Party under this
Agreement,
that materially and adversely affects the value of any Mortgage
Loan or the
interests of the Trustee or the Certificateholders therein, the
party
discovering such breach shall give prompt written notice thereof to
the other
parties. Upon receiving written notice of a breach of a
representation and
warranty or written notice that a Mortgage Loan does not constitute
a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code, the
Trustee
shall in turn notify the applicable Responsible Party in writing to
correct or
cure, in accordance with this Agreement, any such breach of a
representation or
warranty made by the applicable Responsible Party under this
Agreement within
sixty (60) days from the date of notice from the Trustee or the
discovery by the
applicable Responsible Party of the breach, and if the applicable
Responsible
Party fails or is unable to correct or cure the defect or breach
within such
period, the Trustee shall notify the Depositor of such failure to
correct or
cure. Unless otherwise directed by the Depositor within five (5)
Business Days
after notifying the Depositor of such failure by the applicable
Responsible
Party to correct or cure, the Trustee shall notify the applicable
Responsible
Party to repurchase the Mortgage Loan (a "Deleted Mortgage Loan")
at the
Repurchase Price or, if permitted hereunder, substitute a
Substitute Mortgage
Loan for such Mortgage Loan, in each case, pursuant to this
Agreement.
Notwithstanding the foregoing, in the event that the Trustee
receives notice of
a breach by (i) WMC of any of the representations and warranties
set forth in
paragraphs (43), (44), (46), (48), (50), (52), (53), (54), (55),
(56), (57),
(58), (59) and (69) of Schedule III or (ii) Decision One of any
representations
and warranties set forth in paragraphs (xx), (yy), (zz), (aaa),
(ggg), (hhh),
(iii), (jjj), (kkk), (lll), (mmm) and (nnn) of Schedule VI, the
Trustee shall
notify the applicable Responsible Party to repurchase the Mortgage
Loan at the
Repurchase Price within sixty (60) days of the applicable
Responsible Party's
receipt of such notice. If, within ten (10) Business Days of
receipt of such
notice by the applicable Responsible Party such Responsible Party
fails to
repurchase such Mortgage Loan, the Trustee shall notify the
Depositor of such
failure. The Trustee shall pursue all legal remedies available to
the Trustee
against the applicable Responsible Party under this Agreement, if
the Trustee
has received written notice from the Depositor directing the
Trustee to pursue
such remedies.
(g) In the event any Mortgage Loan does not conform to the
requirements as determined in the Trustee's or the Custodian's
review of the
related Custodial File, the Trustee or the Custodian, as
applicable, shall
notify the applicable Responsible Party, the Servicer or the
Trustee (if
applicable) and the Depositor in writing, and request that such
Responsible
Party correct or cure such defect as required under this Agreement,
and if such
Responsible Party fails or is unable to correct or cure the defect
within the
period set forth in this Agreement, the Trustee or the Custodian,
as applicable,
shall notify the Depositor of such failure to correct or cure.
Unless otherwise
directed by the Depositor within five (5) Business Days after
notifying the
Depositor of such failure by the applicable Responsible Party to
correct or
cure, the Trustee or the Custodian, as applicable, shall notify the
applicable
Responsible Party to repurchase the Mortgage Loan at the Repurchase
Price or, if
permitted hereunder, substitute a Substitute Mortgage Loan for such
Mortgage
Loan, in each case, pursuant to the terms of this Agreement, as
applicable. If,
within ten (10) Business Days of receipt of such notice by the
applicable
Responsible Party, such Responsible Party fails to repurchase such
Mortgage
Loan, the Trustee shall notify the Depositor of such failure. The
Trustee shall
pursue all legal remedies available to the Trustee against the
applicable
Responsible Party under this Agreement, if the Trustee has received
written
notice from the Depositor directing the Trustee to pursue such
remedies.
(h) Within 90 days of the earlier of either discovery by or
notice
to the applicable Responsible Party of any breach of a
representation or
warranty set forth on Schedule III or Schedule VI, as applicable,
that
materially and adversely affects the value of any Mortgage Loan or
the interest
of the Trustee or the Certificateholders therein, the applicable
Responsible
Party shall use its best efforts to promptly cure such breach in
all material
respects and, if such defect or breach cannot be remedied, the
applicable
Responsible Party shall, at the Depositor's option, purchase such
Mortgage Loan
at the Repurchase Price or, if permitted hereunder, substitute a
Substitute
Mortgage Loan for such Mortgage Loan, if applicable.
(i) Any substitution of a Substitute Mortgage Loan by a
Responsible
Party shall be made in accordance with the substitution procedures
set forth in
the applicable Purchase Agreement, which provisions shall be as set
forth in
such agreements as if they were set forth herein. With respect to
any Substitute
Mortgage Loan or Loans substituted by the Depositor or any
Responsible Party,
the Depositor or such Responsible Party, as applicable, shall
deliver to the
Trustee or the Custodian, as applicable, for the benefit of the
Certificateholders the Mortgage Note, the Mortgage, the related
Assignment of
Mortgage, and such other documents and agreements as are required
by Section
2.01, with the Mortgage Note endorsed and the Mortgage assigned as
required by
Section 2.01. Notwithstanding anything to the contrary set forth in
this
Agreement, no substitution under this Agreement is permitted to be
made (a) in
any calendar month after the Determination Date for such month or
(b) if the
substitution were to be made on or after the second anniversary of
the Closing
Date. Scheduled Payments due with respect to Substitute Mortgage
Loans in the
Due Period of substitution shall not be part of the Trust Fund and
will be
retained by the Depositor or the applicable Responsible Party, as
applicable, on
the next succeeding Distribution Date. For the Due Period of
substitution,
distributions to Certificateholders will include the Scheduled
Payment due on
any Deleted Mortgage Loan for such Due Period and thereafter the
Depositor or
the applicable Responsible Party, as applicable, shall be entitled
to retain all
amounts received in respect of such Deleted Mortgage Loan.
(j) The Servicer, based upon information provided by the
Depositor
or the applicable Responsible Party, as applicable, shall amend the
Mortgage
Loan Schedule for the benefit of the Certificateholders to reflect
the removal
of such Deleted Mortgage Loan and the substitution of the
Substitute Mortgage
Loan or Loans and the Servicer shall deliver the amended Mortgage
Loan Schedule
to the Trustee or Custodian, as applicable. Upon such substitution,
the
Substitute Mortgage Loan or Loans shall be subject to the terms of
this
Agreement in all respects, and, if the substitution is made by the
Depositor,
the Depositor shall be deemed to have made with respect to such
Substitute
Mortgage Loan or Loans, as of the date of substitution, the
representations and
warranties made pursuant to Section 2.03(b) with respect to such
Substitute
Mortgage Loan. Upon any such substitution and the deposit into the
Collection
Account of the amount required to be deposited therein in
connection with such
substitution as described in Section 2.03(k), the Trustee or the
Custodian, as
applicable, shall release the Mortgage File held for the benefit of
the
Certificateholders relating to such Deleted Mortgage Loan to the
applicable
Responsible Party and the Trustee shall execute and deliver at the
direction of
the Depositor or the applicable Responsible Party, as applicable,
such
instruments of transfer or assignment prepared by the Depositor or
the
applicable Responsible Party, as applicable, in each case without
recourse, as
shall be necessary to vest title in the Depositor or the applicable
Responsible
Party, as applicable, of the Trustee's interest in any Deleted
Mortgage Loan
substituted for pursuant to this Section 2.03.
(k) For any month in which the Depositor or any Responsible
Party
substitutes one or more Substitute Mortgage Loans for one or more
Deleted
Mortgage Loans, the Servicer will determine the amount (if any) by
which the
aggregate unpaid principal balance of all such Substitute Mortgage
Loans as of
the date of substitution is less than the aggregate unpaid
principal balance of
all such Deleted Mortgage Loans. The amount of such shortage, plus
an amount
equal to the sum of (i) any accrued and unpaid interest on the
Deleted Mortgage
Loans and (ii) all unreimbursed Servicing Advances with respect to
such Deleted
Mortgage Loans, or the amount of any similar shortage with respect
to a
Substitute Mortgage Loan substituted by a Responsible Party under
this Agreement
(collectively, the "Substitution Adjustment Amount"), shall be
deposited into
the Collection Account by the Depositor or the Responsible Party,
as applicable,
on or before the Distribution Account Deposit Date for the
Distribution Date
following the Prepayment Period during which the related Mortgage
Loan became
required to be purchased or replaced hereunder.
(l) Any Mortgage Loan repurchased pursuant to this Section 2.03
will
be removed from the Trust Fund. The Servicer shall amend the
Mortgage Loan
Schedule for the benefit of the Certificateholders to reflect the
removal of any
Mortgage Loan repurchased and the Servicer shall deliver the
amended Mortgage
Loan Schedule to the Trustee or Custodian, as applicable. For
purposes of
determining the applicable Repurchase Price, any such repurchase
shall occur or
shall be deemed to occur as of the last day of the applicable
Prepayment Period.
(m) In the event that the Depositor or any Responsible Party
shall
have repurchased a Mortgage Loan pursuant to this Agreement, the
Repurchase
Price therefor shall be deposited by the Servicer in the Collection
Account
pursuant to Section 3.10 on or before the Distribution Account
Deposit Date for
the Distribution Date following the Prepayment Period during which
the Depositor
or such Responsible Party, as applicable, repurchased such Mortgage
Loan and
upon such deposit of the Repurchase Price and receipt of a Request
for Release
in the form of Exhibit J hereto, the Trustee or Custodian, as
applicable, shall
release the related Custodial File held for the benefit of the
Certificateholders to such Person as directed by the Servicer, and
the Trustee
shall execute and deliver at such Person's direction such
instruments of
transfer or assignment prepared by such Person, in each case
without recourse,
representation or warranty, as shall be necessary to transfer title
from the
Trustee.
(n) In addition to any repurchase or substitution obligation by
any
Responsible Party under this Agreement, each Responsible Party
shall indemnify
the Depositor and its Affiliates, the Servicer, the Sponsor, the
Trustee, the
Custodian and the Trust for any breach of any representation and
warranty of
such Responsible Party set forth in this Agreement, in accordance
with the
indemnification provisions relating to breaches of representations
and
warranties (including without limitation, the representations and
warranties set
forth in paragraph (43) of Schedule III and paragraph (yy) of
Schedule VI, as
applicable, to this Agreement) and defective Mortgage Loans set
forth in the WMC
Purchase Agreement or the Decision One Purchase Agreement, as
applicable, as if
such indemnification provisions were set forth herein for the
benefit of the
Depositor and its Affiliates, the Servicer, the Sponsor, the
Trustee and the
Trust. This indemnity shall survive the termination of this
Agreement.
(o) It is understood and agreed by the parties hereto that the
obligation of the Depositor under this Agreement or any Responsible
Party under
this Agreement to cure, repurchase or substitute any Mortgage Loan
as to which a
breach of a representation and warranty has occurred and is
continuing, together
with any related indemnification obligations set forth herein,
shall constitute
the sole remedies against such Persons respecting such breach
available to
Certificateholders, the Depositor (if applicable), or the Trustee
on their
behalf.
The provisions of this Section 2.03 shall survive delivery of
the
respective Custodial Files to the Trustee or the Custodian for the
benefit of
the Certificateholders.
Section 2.04 Execution and Delivery of Certificates. The
Trustee
acknowledges the transfer and assignment to it of the Trust Fund
and,
concurrently with such transfer and assignment, has executed and
delivered to or
upon the order of the Depositor, the Certificates in authorized
Denominations
evidencing directly or indirectly the entire ownership of the Trust
Fund. The
Trustee agrees to hold the Trust Fund and exercise the rights
referred to above
for the benefit of all present and future Holders of the
Certificates.
Section 2.05 REMIC Matters. The Preliminary Statement sets forth
the
designations for federal income tax purposes of all interests
created hereby.
The "Startup Day" for purposes of the REMIC Provisions shall be the
Closing
Date. The "latest possible maturity date" is the Distribution Date
occurring in
December 2035, which is the Distribution Date in the month
following the month
in which the latest maturity date of any Mortgage Loan occurs.
Amounts
distributable to the Class X Certificates (prior to any reduction
for any Basis
Risk Payment or Swap Termination Payment), exclusive of any amounts
received
from the Swap Provider, shall be deemed paid from the Upper-Tier
REMIC in
respect of the Class X Interest to the Holders of the Class X
Certificates prior
to distribution of any Basis Risk Payments to the Offered
Certificates. For
federal income tax purposes, any amount distributed on the Offered
Certificates
on any Distribution Date in excess of the amount distributable on
their
Corresponding Class of Upper-Tier Regular Interest on such
Distribution Date
shall be treated as having been paid from the Excess Reserve Fund
Account or the
Swap Account, as applicable, and any amount distributable on such
Corresponding
Class of Upper-Tier Regular Interest on such Distribution Date in
excess of the
amount distributable on the Corresponding Class of Offered
Certificates on such
Distribution Date shall be treated as having been paid to the
Excess Reserve
Fund Account or the Swap Account, all pursuant to and as further
provided in
Section 8.13.
Section 2.06 Representations and Warranties of the Depositor.
The
Depositor hereby represents, warrants and covenants to the Trustee
and the
Servicer that as of the date of this Agreement or as of such date
specifically
provided herein:
(a) The Depositor is a corporation duly organized, validly
existing
and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to
convey
the Mortgage Loans and to execute, deliver and perform, and to
enter into and
consummate the transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized,
executed
and delivered by the Depositor, all requisite corporate action
having been
taken, and, assuming the due authorization, execution and delivery
hereof by the
other parties hereto, constitutes or will constitute the legal,
valid and
binding agreement of the Depositor, enforceable against the
Depositor in
accordance with its terms, except as such enforcement may be
limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws
relating to or affecting the rights of creditors generally, and by
general
equity principles (regardless of whether such enforcement is
considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or
registration
or filing with, or notice to, any governmental authority or court
is required
for the execution, delivery and performance of or compliance by the
Depositor
with this Agreement or the consummation by the Depositor of any of
the
transactions contemplated hereby, except as have been made on or
prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or
the
fulfillment of or compliance with the terms and conditions of this
Agreement,
(i) conflicts or will conflict with or results or will result in a
breach of, or
constitutes or will constitute a default or results or will result
in an
acceleration under (A) the charter or bylaws of the Depositor, or
(B) of any
term, condition or provision of any material indenture, deed of
trust, contract
or other agreement or instrument to which the Depositor or any of
its
subsidiaries is a party or by which it or any of its subsidiaries
is bound; (ii)
results or will result in a violation of any law, rule, regulation,
order,
judgment or decree applicable to the Depositor of any court or
governmental
authority having jurisdiction over the Depositor or its
subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or
encumbrance which
would have a material adverse effect upon the Mortgage Loans or any
documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against
or
investigations of, the Depositor pending, or to the knowledge of
the Depositor,
threatened, before any court, administrative agency or other
tribunal, and no
notice of any such action, which, in the Depositor's reasonable
judgment, might
materially and adversely affect the performance by the Depositor of
its
obligations under this Agreement, or the validity or enforceability
of this
Agreement;
(g) The Depositor is not in default with respect to any order
or
decree of any court or any order, regulation or demand of any
federal, state,
municipal or governmental agency that may materially and adversely
affect its
performance hereunder; and
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee on the Closing Date, the Depositor had
good title to,
and was the sole owner of each Mortgage Loan, free of any interest
of any other
Person, and the Depositor has transferred all right, title and
interest in each
Mortgage Loan to the Trustee. The transfer of the Mortgage Note and
the Mortgage
as and in the manner contemplated by this Agreement is sufficient
either (i)
fully to transfer to the Trustee, for the benefit of the
Certificateholders, all
right, title, and interest of the Depositor thereto as note holder
and mortgagee
or (ii) to grant to the Trustee, for the benefit of the
Certificateholders, the
security interest referred to in Section 10.04.
It is understood and agreed that the representations, warranties
and
covenants set forth in this Section 2.06 shall survive delivery of
the
respective Custodial Files to the Trustee or the Custodian, as the
case may be,
and shall inure to the benefit of the Trustee.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans. (a) For and on
behalf of the Certificateholders, the Servicer shall service and
administer the
Mortgage Loans in accordance with the terms of this Agreement and
the respective
Mortgage Loans and, to the extent consistent with such terms, in
the same manner
in which it services and administers similar mortgage loans for its
own
portfolio, giving due consideration to customary and usual
standards of practice
of mortgage lenders and loan servicers administering similar
mortgage loans but
without regard to:
(i) any relationship that the Servicer, any Subservicer or any
Affiliate
of the Servicer or any Subservicer may have with the related
Mortgagor;
(ii) the ownership or non-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 Subservicer'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 shall
seek
to maximize the timely and complete recovery of principal and
interest on the
Mortgage Notes. Subject only to the above-described servicing
standards and the
terms of this Agreement and of the respective Mortgage Loans, the
Servicer shall
have full power and authority, acting alone or through Subservicers
as provided
in Section 3.02, to do or cause to be done any and all things in
connection with
such servicing and administration which it may deem necessary or
desirable.
Without limiting the generality of the foregoing, the Servicer in
its own name
or in the name of a Subservicer is hereby authorized and empowered
by the
Trustee when the Servicer believes it appropriate in its best
judgment in
accordance with Accepted Servicing Practices, to execute and
deliver any and all
instruments of satisfaction or cancellation, or of partial or full
release or
discharge, and all other comparable instruments, with respect to
the Mortgage
Loans and the Mortgaged Properties and to institute foreclosure
proceedings or
obtain a deed-in-lieu of foreclosure so as to convert the ownership
of such
properties, and to hold or cause to be held title to such
properties, on behalf
of the Trustee. 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
covenants that its computer and other systems used in servicing the
Mortgage
Loans operate in a manner such that the Servicer can service the
Mortgage Loans
in accordance with the terms of this Pooling and Servicing
Agreement. The
Servicer shall also comply in the performance of this Agreement
with all
reasonable rules and requirements of each insurer under any
standard hazard
insurance policy. Subject to Section 3.16, the Trustee or the
Custodian, as
applicable, shall execute, at the written request of the Servicer,
and furnish
to the Servicer and any Subservicer such documents provided to the
Trustee or
the Custodian, as applicable, as are necessary or appropriate to
enable the
Servicer or any Subservicer to carry out its servicing and
administrative duties
hereunder, and the Trustee hereby grants to the Servicer, and this
Agreement
shall constitute, a power of attorney to carry out such duties,
including a
power of attorney in the form of Exhibit P hereto to take title to
Mortgaged
Properties after foreclosure in the name of and on behalf of the
Trustee. The
Trustee shall execute a separate power of attorney in favor of the
Servicer for
the purposes described herein to the extent necessary or desirable
to enable the
Servicer to perform its duties hereunder. The Trustee shall not be
liable for
the actions of the Servicer or any Subservicers under such powers
of attorney.
Notwithstanding anything contained herein to the contrary, neither
the Servicer
nor any Subservicer shall without the Trustee's consent: (i)
initiate any
action, suit or proceeding solely under the Trustee's name without
indicating
the Servicer's or Subservicer's, as applicable, representative
capacity, or (ii)
take any action with the intent to, or which actually does cause,
the Trustee to
be registered to do business in any state.
(b) Subject to Section 3.09(b), in accordance with the standards
of
the preceding paragraph, 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(b), and further as provided in
Section 3.11.
Any cost incurred by the Servicer or by Subservicers in effecting
the timely
payment of taxes and assessments on a Mortgaged Property shall not
be added to
the unpaid principal balance of the related Mortgage Loan,
notwithstanding that
the terms of such Mortgage Loan so permit.
(c) Notwithstanding anything in this Agreement to the contrary,
the
Servicer may not make any future advances with respect to a
Mortgage Loan
(except as provided in Section 4.01) and the Servicer shall not (i)
permit any
modification with respect to any Mortgage Loan that would change
the Mortgage
Rate, reduce or increase the principal balance (except for
reductions resulting
from actual payments of principal) or change the final maturity
date on such
Mortgage Loan (except for a reduction of interest payments
resulting from the
application of the Servicemembers Civil Relief Act or any similar
state
statutes) or (ii) permit any modification, waiver or amendment of
any term of
any Mortgage Loan that would both (A) effect an exchange or
reissuance of such
Mortgage Loan under Section 1001 of the Code (or final, temporary
or proposed
Treasury regulations promulgated thereunder) and (B) cause any
Trust REMIC to
fail to qualify as a REMIC under the Code or the imposition of any
tax on
"prohibited transactions" or "contributions after the startup date"
under the
REMIC Provisions, or (iii) except as provided in Section 3.07(a),
waive any
Prepayment Charges.
(d) 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.
(e) In the event that the Mortgage Loan Documents relating to
any
Mortgage Loan contain provisions requiring the related Mortgagor to
submit to
binding arbitration any disputes arising in connection with such
Mortgage Loan,
the Servicer shall be entitled to waive any such provisions on
behalf of the
Trust and to send written notice of such waiver to the related
Mortgagor,
although the Mortgagor may still require arbitration of such
disputes at its
option.
Section 3.02 Subservicing Agreements between the Servicer and
Subservicers. (a) The Servicer may enter into subservicing
agreements with
Subservicers for the servicing and administration of the Mortgage
Loans
("Subservicing Agreements"). The Servicer represents and warrants
to the other
parties hereto that, except as otherwise set forth herein, no
Subservicing
Agreement is in effect as of the Closing Date with respect to any
Mortgage Loans
required to be serviced by it hereunder. The Servicer shall give
notice to the
Depositor and the Trustee of any such Subservicer and Subservicing
Agreement,
which notice shall contain all information (including without
limitation a copy
of the Subservicing Agreement) reasonably necessary to enable the
Trustee,
pursuant to Section 8.12(g), to accurately and timely report the
event under
Item 6.02 of Form 8-K pursuant to the Exchange Act (if such reports
under the
Exchange Act are required to be filed under the Exchange Act). No
Subservicing
Agreement shall be effective until 30 days after such written
notice is received
by both the Depositor and the Trustee. The Trustee shall not be
required to
review or consent to such Subservicing Agreements and shall have no
liability in
connection therewith.
(b) Each Subservicer shall be (i) authorized to transact business
in
the state or states in which the related Mortgaged Properties it is
to service
are situated, if and to the extent required by applicable law to
enable the
Subservicer to perform its obligations hereunder and under the
Subservicing
Agreement, (ii) an institution approved as a mortgage loan
originator by the
Federal Housing Administration or an institution that has deposit
accounts
insured by the FDIC and (iii) a Freddie Mac or Fannie Mae approved
mortgage
servicer. Each Subservicing Agreement must impose on the
Subservicer
requirements conforming to the provisions set forth in Section 3.08
and provide
for servicing of the Mortgage Loans consistent with the terms of
this Agreement.
The Servicer will examine each Subservicing Agreement and will be
familiar with
the terms thereof. The terms of any Subservicing Agreement will not
be
inconsistent with any of the provisions of this Agreement. The
Servicer and the
Subservicers may enter into and make amendments to the Subservicing
Agreements
or enter into different forms of Subservicing Agreements; provided,
however,
that any such amendments or different forms shall be consistent
with and not
violate the provisions of this Agreement, and that no such
amendment or
different form shall be made or entered into which could be
reasonably expected
to be materially adverse to the interests of the Trustee, without
the consent of
the Trustee. Any variation without the consent of the Trustee from
the
provisions set forth in Section 3.08 relating to insurance or
priority
requirements of Subservicing Accounts, or credits and charges to
the
Subservicing Accounts or the timing and amount of remittances by
the
Subservicers to the Servicer, are conclusively deemed to be
inconsistent with
this Agreement and therefore prohibited. The Servicer shall deliver
to the
Trustee and the Depositor copies of all Subservicing 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, shall enforce the obligations of each
Subservicer under
the related Subservicing Agreement including, without limitation,
any obligation
to make advances in respect of delinquent payments as required by a
Subservicing
Agreement. Such enforcement, including, without limitation, the
legal
prosecution of claims, termination of Subservicing Agreements, and
the pursuit
of other appropriate remedies, shall be in such form and carried
out to such an
extent and at such time as 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.
(d) The Servicer shall cause any Subservicer engaged by the
Servicer
(or by any Subservicer) for the benefit of the Depositor and the
Trustee to
comply with the provisions of this Section 3.02 and with Sections
3.22, 3.23,
6.02 and 6.05 of this Agreement to the same extent as if such
Subservicer were
the Servicer, and to provide the information required with respect
to such
Subservicer under Section 8.12 of this Agreement. The Servicer
shall be
responsible for obtaining from each such Subservicer and delivering
to
applicable Persons any servicer compliance statement required to be
delivered by
such Subservicer under Section 3.22 and any assessment of
compliance report and
related accountant's attestation required to be delivered by such
Subservicer
under Section 3.23, in each case as and when required to be
delivered.
(e) Subject to the conditions set forth in this Section 3.02(e),
the
Servicer and any Subservicer engaged by the Servicer is permitted
to utilize one
or more Subcontractors to perform certain of its obligations
hereunder. The
Servicer shall promptly upon request provide to the Depositor a
written
description (in form and substance satisfactory to the Depositor)
of the role
and function of each Subcontractor utilized by the Servicer or any
such
Subservicer, specifying no later than the date specified for
delivery of the
annual report on assessment of compliance set forth in Section
3.23(d) (i) the
identity of each such Subcontractor, if any, that is "participating
in the
servicing function" within the meaning of Item 1122 of Regulation
AB, and (ii)
which elements of the Servicing Criteria will be addressed in
assessments of
compliance provided by each Subcontractor identified pursuant to
clause (i) of
this paragraph. As a condition to the utilization by the Servicer
or any such
Subservicer of any Subcontractor determined to be "participating in
the
servicing function" within the meaning of Item 1122 of Regulation
AB, the
Servicer shall cause any such Subcontractor used by the Servicer
(or by any such
Subservicer) for the benefit of the Depositor and the Trustee to
comply with the
provisions of Section 3.23 of this Agreement to the same extent as
if such
Subcontractor were the Servicer. The Servicer shall be responsible
for obtaining
from each such Subcontractor and delivering to the applicable
Persons any
assessment of compliance report and related accountant's
attestation required to
be delivered by such Subcontractor under Section 3.23, in each case
as and when
required to be delivered.
Notwithstanding the foregoing, if the Servicer engages a
Subcontractor in connection with the performance of any of its
duties under this
Agreement, the Servicer shall be responsible for determining
whether such
Subcontractor is a "servicer" within the meaning of Item 1101 of
Regulation AB
and whether any such affiliate or third-party vendor meets the
criteria in Item
1108(a)(2)(i) through (iii) of Regulation AB. If the Servicer
determines,
pursuant to the preceding sentence, that such Subcontractor is a
"servicer"
within the meaning of Item 1101 of Regulation AB and meets the
criteria in Item
1108(a)(2)(i) through (iii) of Regulation AB, then such
Subcontractor shall be
deemed to be a Subservicer for purposes of this Agreement, the
engagement of
such Subservicer shall not be effective unless and until notice is
given
pursuant to Section 3.02(a) and the Servicer shall comply with
Section 3.02(d)
with respect thereto.
(f) As of the Closing Date, JPMorgan has appointed Chase Home
Finance LCC ("CHF") to act as the sole Subservicer pursuant to a
Subservicing
Agreement (a copy of which is attached hereto as Exhibit W) with
respect to
JPMorgan's servicing obligations under this Agreement. So long as
JPMorgan is
not a rated servicer by each Rating Agency, JPMorgan agrees that
prior to
replacing CHF as Subservicer, other than with an affiliate of
JPMorgan that is a
rated servicer, it will obtain confirmation from each Rating Agency
that such
replacement of CHF as Subservicer with respect to JPMorgan's
servicing
obligations related to the Mortgage Loans will not cause the then
current rating
on any Class of Certificates to be qualified, withdrawn or lowered
by any Rating
Agency and agrees that any replacement subservicer shall agree to
subservice in
accordance with the terms of this Agreement, including but not
limited to the
consideration of whether to waive a Prepayment Charge
hereunder.
Section 3.03 Successor Subservicers. The Servicer shall be
entitled
to terminate any Subservicing Agreement to which the Servicer is a
party and the
rights and obligations of any Subservicer pursuant to any such
Subservicing
Agreement in accordance with the terms and conditions of such
Subservicing
Agreement; provided, however, that the termination, resignation or
removal of a
Subservicer shall not be effective until 30 days after written
notice is
received by both the Depositor and the Trustee that contains all
information
reasonably necessary to enable the Trustee, pursuant to Section
8.12(g), to
accurately and timely report the event under Item 6.02 of Form 8-K
pursuant to
the Exchange Act (if such reports under the Exchange Act are
required to be
filed under the Exchange Act). In the event of termination of any
Subservicer,
all servicing obligations of such Subservicer shall be assumed
simultaneously by
the Servicer without any act or deed on the part of such
Subservicer or the
Servicer, and the Servicer either shall service directly the
related Mortgage
Loans or shall enter into a Subservicing Agreement with a successor
Subservicer
which qualifies under Section 3.02.
Any Subservicing Agreement shall include the provision that
such
agreement may be immediately terminated by the Depositor or the
Trustee without
fee, in accordance with the terms of this Agreement, in the event
that the
Servicer shall, for any reason, no longer be the Servicer
(including termination
due to an Event of Default).
Section 3.04 Liability of the Servicer. Notwithstanding any
Subservicing Agreement, any of the provisions of this Agreement
relating to
agreements or arrangements between the Servicer and a Subservicer
or reference
to actions taken through a Subservicer or otherwise, the Servicer
shall remain
obligated and primarily liable to the Trustee for the servicing
and
administering of the Mortgage Loans in accordance with the
provisions of Section
3.01 without diminution of such obligation or liability by virtue
of such
Subservicing Agreements or arrangements or by virtue of
indemnification from the
Subservicer and to the same extent and under the same terms and
conditions as if
the Servicer alone were servicing and administering the Mortgage
Loans. The
Servicer shall be entitled to enter into any agreement with a
Subservicer for
indemnification of the Servicer by such Subservicer and nothing
contained in
this Agreement shall be deemed to limit or modify such
indemnification.
Section 3.05 No Contractual Relationship between Subservicers
and
the Trustee. Any Subservicing Agreement that may be entered into
and any
transactions or services relating to the Mortgage Loans involving a
Subservicer
in its capacity as such shall be deemed to be between the
Subservicer and the
Servicer alone, and the Trustee (or any successor to the Servicer)
shall not be
deemed a party thereto and shall have no claims, rights,
obligations, duties or
liabilities with respect to the Subservicer except as set forth in
Section 3.06.
The Servicer shall be solely liable for all fees owed by it to any
Subservicer,
irrespective of whether the Servicer's compensation pursuant to
this Agreement
is sufficient to pay such fees.
Section 3.06 Assumption or Termination of Subservicing Agreements
by
Trustee. In the event the Servicer at any time shall for any reason
no longer be
the Servicer (including by reason of the occurrence of an Event of
Default), the
Trustee, or its designee, or the successor servicer if the
successor is not the
Trustee, shall thereupon assume all of the rights and obligations
of the
Servicer under each Subservicing Agreement that the Servicer may
have entered
into, with copies thereof provided to the Trustee, or the successor
servicer if
the successor is not the Trustee, prior to the Trustee, or the
successor
servicer if the successor is not the Trustee, assuming such rights
and
obligations, unless the Trustee elects to terminate any
Subservicing Agreement
in accordance with its terms as provided in Section 3.03.
Upon such assumption, the Trustee, its designee or the
successor
servicer shall be deemed, subject to Section 3.03, to have assumed
all of the
Servicer's interest therein and to have replaced the Servicer as a
party to each
Subservicing Agreement to the same extent as if each Subservicing
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 such
Subservicing
Agreement that arose before it ceased to be the Servicer and (ii)
none of the
Depositor, the Trustee, their designees or any successor to the
Servicer shall
be deemed to have assumed any liability or obligation of the
Servicer that arose
before it ceased to be the Servicer.
The Servicer at its expense shall, upon request of the Trustee,
its
designee or the successor servicer deliver to the assuming party
all documents
and records relating to each Subservicing Agreement 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 Subservicing Agreements to the assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments. (a)
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
Accepted Servicing
Practices, the Servicer may (i) waive any late payment charge or,
if applicable,
any penalty interest, or (ii) extend the Due Dates for the
Scheduled Payments
due on a Mortgage Note for a period of not greater than 180 days;
provided that
any extension pursuant to clause (ii) above shall not affect the
amortization
schedule of any Mortgage Loan for purposes of any computation
hereunder, except
as provided below. In the event of any such arrangement pursuant to
clause (ii)
above, the Servicer shall make timely advances on such Mortgage
Loan during such
extension pursuant to Section 4.01 and in accordance with the
amortization
schedule of such Mortgage Loan without modification thereof by
reason of such
arrangements, subject to Section 4.01(d) pursuant to which the
Servicer shall
not be required to make any such advances that are Nonrecoverable
P&I Advances.
Notwithstanding the foregoing, the Servicer may waive, or permit a
Subservicer
to waive, in whole or in part, a Prepayment Charge only under the
following
circumstances: (i) such waiver relates to a default or a reasonably
foreseeable
default and would, in the reasonable judgment of the Servicer,
maximize recovery
of total proceeds taking into account the value of such Prepayment
Charge and
the related Mortgage Loan, (ii) such Prepayment Charge is not
permitted to be
collected by applicable federal, state or local law or regulation
or (iii) the
collection of such Prepayment Charge would be considered
"predatory" pursuant to
written guidance published or issued by any applicable federal,
state or local
regulatory authority acting in its official capacity and having
jurisdiction
over such matters. If a Prepayment Charge is waived other than as
permitted by
the prior sentence, then the Servicer is required to pay the amount
of such
waived Prepayment Charge, for the benefit of the Holders of the
Class P
Certificates, by depositing such amount into the Collection Account
together
with and at the time that the amount prepaid on the related
Mortgage Loan is
required to be deposited into the Collection Account; provided,
however, that
the Servicer shall not have an obligation to pay the amount of any
uncollected
Prepayment Charge if the failure to collect such amount is the
direct result of
inaccurate or incomplete information on the Mortgage Loan Schedule
in effect at
such time.
(b)
(i) The Trustee shall establish and maintain the Excess Reserve
Fund Account, on behalf of the Class X Certificateholders, to
receive any Basis
Risk Payment and to secure their limited recourse obligation to pay
to the
Offered Certificateholders Basis Risk CarryForward Amounts (prior
to using any
Net Swap Receipts). For the avoidance of doubt, any Basis Risk
CarryForward
Amounts shall be paid to the Offered Certificates first from the
Excess Reserve
Fund Account and then from the Swap Account.
(ii) On each Distribution Date, the Trustee shall deposit the
amount
of any
Basis Risk Payment for such date into the Excess Reserve Fund
Account.
(c) (i) On each Distribution Date on which there exists a Basis
Risk
CarryForward Amount on any Class of Certificates, the Trustee shall
(1) withdraw
from the Distribution Account and deposit in the Excess Reserve
Fund Account, as
set forth in Section 4.02(a)(iii)(S), the lesser of (x) the Class
X
Distributable Amount (without regard to the reduction in clause
(iii) in the
definition thereof) (to the extent remaining after the
distributions specified
in Sections 4.02(a)(iii)(A)-(R)) and (y) the aggregate Basis Risk
CarryForward
Amounts for such Distribution Date and (2) withdraw from the Excess
Reserve Fund
Account amounts necessary to pay to such Class or Classes of
Certificates the
Basis Risk CarryForward Amount. Such payments, along with payments
from the Swap
Account, shall be allocated to those Classes on a pro rata basis
based upon the
amount of Basis Risk CarryForward Amount owed to each such Class
and shall be
paid in the priority set forth in Section 4.02(a)(iii)(T).
(ii) The Trustee shall account for the Excess Reserve Fund
Account
as an
asset of a grantor trust under subpart E, Part I of the subchapter
J
of the
Code and not an asset of any Trust REMIC. The beneficial owners
of
the Excess
Reserve Fund Account are the Class X Certificateholders. For
all
federal tax purposes, amounts transferred by the Upper-Tier REMIC
to
the Excess
Reserve Fund Account shall be treated as distributions by the
Trustee to
the Class X Certificateholders.
(iii) Any Basis Risk CarryForward Amounts paid by the Trustee to
the
Offered
Certificateholders shall be accounted for by the Trustee as
amounts
paid first to the Holders of the Class X Certificates and then
to
the
respective Class or Classes of Offered Certificates. In addition,
the
Trustee
shall account for the Offered Certificateholders' rights to
receive
payments of Basis Risk CarryForward Amounts (along with
payments
of Basis
Risk CarryForward Amounts and Upper-Tier CarryForward Amounts
from the
Swap Account) as rights in a limited recourse interest rate cap
contract
written by the Class X Certificateholders in favor of the
Offered
Certificateholders.
(iv) Notwithstanding any provision contained in this Agreement,
the
Trustee
shall not be required to make any payments from the Excess
Reserve
Fund
Account except as expressly set forth in this Section 3.07(c)
and
Sections
4.02(a)(iii)(T) and (V).
(d) The Trustee shall establish and maintain the Distribution
Account on behalf of the Certificateholders. The Depositor shall
cause to be
deposited into the Distribution Account on the Closing Date the
Closing Date
Deposit Amount. The Trustee shall, promptly upon receipt, deposit
in the
Distribution Account and retain therein the following:
(i)
the aggregate amount remitted by the Servicer to the Trustee
pursuant
to Section 3.11;
(ii) any amount deposited by the Servicer pursuant to Section
3.12(b) in
connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required to
be
deposited
in the Distribution Account.
In the event that the Servicer shall remit any amount not
required
to be remitted, it may at any time direct the Trustee in writing to
withdraw
such amount from the Distribution Account, any provision herein to
the contrary
notwithstanding. Such direction may be accomplished by delivering
notice to the
Trustee which describes the amounts deposited in error in the
Distribution
Account. All funds deposited in the Distribution Account shall be
held by the
Trustee in trust for the Certificateholders until disbursed in
accordance with
this Agreement or withdrawn in accordance with Section 4.02.
(e) The Trustee may invest the funds in the Distribution Account,
in
one or more Permitted Investments, in accordance with Section 3.12.
The Servicer
shall direct the Trustee to withdraw from the Distribution Account
and to remit
to the Servicer no less than monthly, all income and gain realized
from the
investment of the portion of funds deposited in the Distribution
Account by the
Servicer (except during the Trustee Float Period). The Trustee may
withdraw from
the Distribution Account any income or gain earned from the
investment of funds
deposited therein during the Trustee Float Period for its own
benefit.
(f) The Servicer shall give notice to the Trustee, each Rating
Agency and the Depositor of any proposed change of the location of
the
Collection Account within a reasonable period of time prior to any
change
thereof.
(g) In order to comply with its duties under the USA Patriot Act
of
2001, the Trustee shall obtain and verify certain information and
documentation
from the other parties to this Agreement including, but not limited
to, each
such party's name, address and other identifying information.
Section 3.08 Subservicing Accounts. In those cases where a
Subservicer is servicing a Mortgage Loan pursuant to a Subservicing
Agreement,
the Subservicer will be required to establish and maintain one or
more
segregated accounts (collectively, the "Subservicing Account"). The
Subservicing
Account shall be an Eligible Account and shall otherwise be
acceptable to the
Servicer. The Subservicer shall deposit in the clearing account
(which account
must be an Eligible Account) in which it customarily deposits
payments and
collections on mortgage loans in connection with its mortgage loan
servicing
activities on a daily basis, and in no event more than one Business
Day after
the Subservicer's receipt thereof, all proceeds of Mortgage Loans
received by
the Subservicer less its servicing compensation to the extent
permitted by the
Subservicing Agreement, and shall thereafter deposit such amounts
in the
Subservicing Account, in no event more than two Business Days after
the deposit
of such funds into the clearing account. The Subservicer shall
thereafter
deposit such proceeds in the Collection Account or 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 Subservicing Account. For
purposes of
this Agreement, the Servicer shall be deemed to have received
payments on the
Mortgage Loans when the Subservicer receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar
Items;
Escrow Accounts. (a) The Servicer shall enforce the obligations
under each
paid-in-full, life-of-the-loan tax service contract in effect with
respect to
each First Lien Mortgage Loan (each, a "Tax Service Contract").
Each Tax Service
Contract shall be assigned to the Trustee, or a successor servicer
at the
Servicer's expense in the event that the Servicer is terminated as
Servicer of
the related Mortgage Loan.
(b) To the extent that the services described in this paragraph
(b)
are not otherwise provided pursuant to the Tax Service Contracts
described in
paragraph (a) above, the Servicer undertakes to perform such
functions. To the
extent the related Mortgage provides for Escrow Payments, the
Servicer shall
establish and maintain, or cause to be established and maintained,
one or more
segregated accounts (the "Escrow Accounts"), which shall be
Eligible Accounts.
The Servicer shall deposit in the clearing account (which account
must be an
Eligible Account) in which it customarily deposits payments and
collections on
mortgage loans in connection with its mortgage loan servicing
activities on a
daily basis, and in no event more than one Business Day after the
Servicer's
receipt thereof, all collections from the Mortgagors (or related
advances from
Subservicers) for the payment of taxes, assessments, hazard
insurance premiums
and comparable items for the account of the Mortgagors ("Escrow
Payments")
collected on account of the Mortgage Loans and shall thereafter
deposit such
Escrow Payments in the Escrow Accounts, in no event more than two
Business Days
after the deposit of such funds in the clearing account, for the
purpose of
effecting the payment of any such items as required under the terms
of this
Agreement. Withdrawals of amounts from an Escrow Account may be
made only to (i)
effect payment of taxes, assessments, hazard insurance premiums,
and comparable
items; (ii) reimburse the Servicer (or a Subservicer to the extent
provided in
the related Subservicing Agreement) out of related collections for
any advances
made pursuant to Section 3.01 (with respect to taxes and
assessments) and
Section 3.13 (with respect to hazard insurance); (iii) refund to
Mortgagors any
sums as may be determined to be overages; (iv) pay interest, if
required and as
described below, to Mortgagors on balances in the Escrow Account;
(v) clear and
terminate the Escrow Account at the termination of the Servicer's
obligations
and responsibilities in respect of the Mortgage Loans under this
Agreement; (vi)
to transfer such funds to a replacement Escrow Account that meets
the
requirements hereof; (vii) recover amounts deposited in error. As
part of its
servicing duties, the Servicer or Subservicers shall pay to the
Mortgagors
interest on funds in Escrow Accounts, to the extent required by law
and, to the
extent that interest earned on funds in the Escrow Accounts is
insufficient, to
pay such interest from its or their own funds, without any
reimbursement
therefor. To the extent that a Mortgage does not provide for Escrow
Payments,
the Servicer shall determine whether any such payments are made by
the Mortgagor
in a manner and at a time that avoids the loss of the Mortgaged
Property due to
a tax sale or the foreclosure of a tax lien. The Servicer assumes
full
responsibility for the payment of all such bills within such time
and shall
effect payments of all such bills irrespective of the Mortgagor's
faithful
performance in the payment of same or the making of the Escrow
Payments and
shall make advances from its own funds to effect such payments;
provided,
however, that such advances are deemed to be Servicing
Advances.
Section 3.10 Collection Account. (a) On behalf of the Trustee,
the
Servicer shall establish and maintain, or cause to be established
and
maintained, one or more separate Eligible Accounts (such account or
accounts,
the "Collection Account"), held in trust for the benefit of the
Trustee. On
behalf of the Trustee, 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 one Business Day after the Servicer's receipt thereof,
and shall
thereafter deposit in the Collection Account, in no event more than
two Business
Days after the deposit of such funds into the clearing account, as
and when
received or as otherwise required hereunder, the following payments
and
collections received or made by it subsequent to the Cut-off Date
(other than in
respect of principal or interest on the related Mortgage Loans due
on or before
the Cut-off Date), or payments (other than Principal Prepayments)
received by it
on or prior to the Cut-off Date but allocable to a Due Period
subsequent
thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing
Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Condemnation Proceeds to the
extent
such
Insurance Proceeds and Condemnation Proceeds are not to be applied
to
the
restoration of the related Mortgaged Property or released to
the
related
Mortgagor in accordance with the express requirements of law or
in
accordance
with Accepted Servicing Practices and Liquidation Proceeds;
(iv) any amounts required to be deposited pursuant to Section
3.12
in
connection with any losses realized on Permitted Investments
with
respect to
funds held in the Collection Account;
(v) any amounts required to be deposited by the Servicer pursuant
to
the second
paragraph of Section 3.13(a) in respect of any blanket policy
deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased
in
accordance
with this Agreement; and
(vii) all Prepayment Charges collected or paid (pursuant to
Section
3.07(a))
by the Servicer.
The foregoing requirements for deposit in the Collection
Account
shall be exclusive, it being understood and agreed that, without
limiting the
generality of the foregoing, payments in the nature of late payment
charges, NSF
fees, reconveyance fees, assumption fees and other similar fees and
charges need
not be deposited by the Servicer in the Collection Account and
shall, upon
collection, belong to the Servicer as additional compensation for
its servicing
activities. 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) Funds in the Collection 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 of the location of the
Collection
