Exhibit 4.1
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XXXXX FARGO ASSET SECURITIES CORPORATION
(Depositor)
and
XXXXX FARGO BANK, N.A.
(Master Servicer)
and
U.S. BANK NATIONAL ASSOCIATION
(Trustee)
POOLING AND SERVICING AGREEMENT
Dated as of February 27, 2006
$602,408,867.71
Mortgage Pass-Through Certificates
Series 2006-AR3
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.....................................................
Section 1.02 Acts of Holders.................................................
Section 1.03 Effect of Headings and Table of Contents........................
Section 1.04 Benefits of Agreement...........................................
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF THE CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans....................................
Section 2.02 Acceptance by Custodian.........................................
Section 2.03 Representations and Warranties of the Master Servicer and
the Depositor.................................................
Section 2.04 Execution and Delivery of Certificates..........................
Section 2.05 Designation of Certificates; Designation of Startup Day
and Latest Possible Maturity Date.............................
ARTICLE III
ADMINISTRATION OF THE TRUST ESTATE; SERVICING
OF THE MORTGAGE LOANS
Section 3.01 Certificate Account.............................................
Section 3.02 Permitted Withdrawals from the Certificate Account..............
Section 3.03 Advances by Master Servicer and Trustee.........................
Section 3.04 Custodian to Cooperate;
Release of Owner Mortgage Loan Files and Retained
Mortgage Loan Files...........................................
Section 3.05 Annual Compliance Statements....................................
Section 3.06 Title, Management and Disposition of Any REO Mortgage Loan......
Section 3.07 Amendments to Servicing Agreements,
Modification of Standard Provisions...........................
Section 3.08 Oversight of Servicing..........................................
Section 3.09 Termination and Substitution of Servicing Agreements............
Section 3.10 Application of Net Liquidation Proceeds.........................
Section 3.11 Assessment of Servicing Compliance; Registered Public
Accounting Firm Attestation Reports...........................
Section 3.12 Exchange Act Reports............................................
ARTICLE IV
DISTRIBUTIONS IN RESPECT OF CERTIFICATES;
PAYMENTS TO CERTIFICATEHOLDERS;
STATEMENTS AND REPORTS
Section 4.01 Distributions...................................................
Section 4.02 Allocation of Realized Losses...................................
Section 4.03 Paying Agent....................................................
Section 4.04 Statements to Certificateholders; Reports to the Trustee
and the Depositor.............................................
Section 4.05 Reports to Mortgagors and the Internal Revenue Service..........
Section 4.06 Calculation of Amounts; Binding Effect of Interpretations
and Actions of Master Servicer................................
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates................................................
Section 5.02 Registration 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.................................
Section 5.07 Definitive Certificates.........................................
Section 5.08 Notices to Clearing Agency......................................
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
Section 6.01 Liability of the Depositor and the Master Servicer..............
Section 6.02 Merger or Consolidation of the Depositor or the Master
Servicer......................................................
Section 6.03 Limitation on Liability of the Depositor, the Master
Servicer and Others...........................................
Section 6.04 Resignation of the Master Servicer..............................
Section 6.05 Compensation to the Master Servicer.............................
Section 6.06 Assignment or Delegation of Duties by Master Servicer...........
Section 6.07 Indemnification of Trustee and Depositor by Master
Servicer......................................................
Section 6.08 Master Servicer Errors and Omissions Policy.....................
ARTICLE VII
DEFAULT
Section 7.01 Events of Default...............................................
Section 7.02 Other Remedies of Trustee.......................................
Section 7.03 Directions by Certificateholders and
Duties of Trustee During Event of Default.....................
Section 7.04 Action upon Certain Failures of the
Master Servicer and upon Event of Default.....................
Section 7.05 Trustee to Act; Appointment of Successor........................
Section 7.06 Notification to Certificateholders..............................
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of Trustee...............................................
Section 8.02 Certain Matters Affecting the Trustee...........................
Section 8.03 Trustee Not Required to Make Investigation......................
Section 8.04 Trustee Not Liable for Certificates or Mortgage Loans...........
Section 8.05 Trustee May Own Certificates....................................
Section 8.06 The Master Servicer to Pay Fees and Expenses; Limitation
on Liability..................................................
Section 8.07 Eligibility Requirements........................................
Section 8.08 Resignation and Removal.........................................
Section 8.09 Successor.......................................................
Section 8.10 Merger or Consolidation.........................................
Section 8.11 Authenticating Agent............................................
Section 8.12 Separate Trustees and Co-Trustees...............................
Section 8.13 Tax Matters; Compliance with REMIC Provisions...................
Section 8.14 Monthly Advances................................................
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Purchase by the
Depositor or Liquidation of All Mortgage Loans................
Section 9.02 Additional Termination Requirements.............................
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment.......................................................
Section 10.02 Recordation of Agreement........................................
Section 10.03 Limitation on Rights of Certificateholders......................
Section 10.04 Governing Law; Jurisdiction.....................................
Section 10.05 Notices.........................................................
Section 10.06 Severability of Provisions......................................
Section 10.07 Special Notices to Rating Agencies..............................
Section 10.08 Covenant of Depositor...........................................
Section 10.09 Recharacterization..............................................
Section 10.10 Regulation AB Compliance; Intent of Parties;
Reasonableness................................................
ARTICLE XI
TERMS FOR CERTIFICATES
Section 11.01 Cut-Off Date....................................................
Section 11.02 Cut-Off Date Aggregate Principal Balance........................
Section 11.03 Original Class A Percentage.....................................
Section 11.04 Original Principal Balances of the Classes of Class A
Certificates..................................................
Section 11.05 Original Subordinated Percentage................................
Section 11.06 Original Class B Principal Balance..............................
Section 11.07 Original Principal Balances of the Classes of Class B
Certificates..................................................
Section 11.08 Original Class B-1 Fractional Interest..........................
Section 11.09 Original Class B-2 Fractional Interest..........................
Section 11.10 Original Class B-3 Fractional Interest..........................
Section 11.11 Original Class B-4 Fractional Interest..........................
Section 11.12 Original Class B-5 Fractional Interest..........................
Section 11.13 Original Class B-1 Percentage...................................
Section 11.14 Original Class B-2 Percentage...................................
Section 11.15 Original Class B-3 Percentage...................................
Section 11.16 Original Class B-4 Percentage...................................
Section 11.17 Original Class B-5 Percentage...................................
Section 11.18 Original Class B-6 Percentage...................................
Section 11.19 Closing Date....................................................
Section 11.20 Right to Purchase...............................................
Section 11.21 Wire Transfer Eligibility.......................................
Section 11.22 Single Certificate..............................................
Section 11.23 Servicing Fee Rate..............................................
Section 11.24 Master Servicing Fee Rate.......................................
SCHEDULE I Applicable Unscheduled Principal Receipt Period
EXHIBITS
EXHIBIT A-1 - Form of Face of Class A-1 Certificate
EXHIBIT A-2 - Form of Face of Class A-2 Certificate
EXHIBIT A-3 - Form of Face of Class A-3 Certificate
EXHIBIT A-4 - Form of Face of Class A-4 Certificate
EXHIBIT A-5 - Form of Face of Class A-5 Certificate
EXHIBIT A-R - Form of Face of Class A-R Certificate
EXHIBIT B-1 - Form of Face of Class B-1 Certificate
EXHIBIT B-2 - Form of Face of Class B-2 Certificate
EXHIBIT B-3 - Form of Face of Class B-3 Certificate
EXHIBIT B-4 - Form of Face of Class B-4 Certificate
EXHIBIT B-5 - Form of Face of Class B-5 Certificate
EXHIBIT B-6 - Form of Face of Class B-6 Certificate
EXHIBIT C - Form of Reverse of Series 2006-AR3 Certificates
EXHIBIT D - Reserved
EXHIBIT E - Custodial Agreement
EXHIBIT F - Addresses for Requesting Mortgage Loan Schedule
EXHIBIT G - Request for Release
EXHIBIT H - Affidavit Pursuant to Section 860E(e)(4) of the Internal
Revenue Code of 1986, as amended, and for Non-ERISA
Investors
EXHIBIT I - Letter from Transferor of Residual Certificate
EXHIBIT J - Transferee's Letter (Class [B-4] [B-5] [B-6] Certificates)
EXHIBIT K - List of Recordation States
EXHIBIT L - Servicing Agreements
EXHIBIT M - Form of Special Servicing Agreement
EXHIBIT N - Form of Initial Certification of the Custodian
EXHIBIT O - Form of Final Certification of the Custodian
EXHIBIT P - Form of Sarbanes Oxley Certification
EXHIBIT Q - Schedule of Pledged Asset Mortgage Loans
EXHIBIT R - Servicing Criteria to be Addressed in Assessment of Compliance
EXHIBIT S - Additional Form 10-D Disclosure
EXHIBIT T - Additional Form 10-K Disclosure
EXHIBIT U - Form 8-K Disclosure Information
EXHIBIT V - Additional Disclosure Notification
This Pooling and Servicing Agreement, dated as of February 27,
2006 executed by XXXXX FARGO ASSET SECURITIES CORPORATION, as Depositor, XXXXX
FARGO BANK, N.A., as Master Servicer and U.S. BANK NATIONAL ASSOCIATION, as
Trustee.
W I T N E S S E T H T H A T:
- - - - - - - - - - - - - -
In consideration of the mutual agreements herein contained,
the Depositor, the Master Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
Whenever used herein, the following words and phrases, unless
the context otherwise requires, shall have the meanings specified in this
Article.
1933 Act: The Securities Act of 1933, as amended.
Accepted Master Servicing Practices: Accepted Master Servicing
Practices shall consist of the customary and usual master servicing practices of
prudent master servicing institutions which master service mortgage loans of the
same type as the Mortgage Loans in the jurisdictions in which the related
Mortgaged Properties are located, regardless of the date upon which the related
Mortgage Loans were originated.
Additional Form 10-D Disclosure: As defined in Section
3.12(a).
Additional Form 10-K Disclosure: As defined in Section
3.12(b).
Additional Master Servicer: As defined in Section 6.06.
Adjusted Pool Amount: With respect to any Distribution Date,
the Cut-Off Date Aggregate Principal Balance of the Mortgage Loans minus the sum
of (i) all amounts in respect of principal received in respect of the Mortgage
Loans (including, without limitation, amounts received as Monthly Payments,
Periodic Advances, Unscheduled Principal Receipts and Substitution Principal
Amounts) and distributed to Holders of the Certificates on such Distribution
Date and all prior Distribution Dates, (ii) the principal portion of all
Liquidated Loan Losses incurred on such Mortgage Loans for which the Liquidation
Proceeds were received from the Cut-Off Date through the end of the Applicable
Unscheduled Principal Receipt Period with respect to Full Unscheduled Principal
Receipts for such Distribution Date and (iii) the principal portion of all
Bankruptcy Losses (other than Debt Service Reductions) incurred on the Mortgage
Loans from the Cut-Off Date through the end of the period corresponding to the
Applicable Unscheduled Principal Receipt Period with respect to Full Unscheduled
Principal Receipts for such Distribution Date.
Adjusted Principal Balance: As to any Distribution Date and
any Class of Class B Certificates, the greater of (A) zero and (B) (i) the
Principal Balance of such Class with respect to such Distribution Date minus
(ii) the Adjustment Amount for such Distribution Date less the Principal
Balances for any Classes of Class B Certificates with higher numerical
designations.
Adjustment Amount: For any Distribution Date, the difference
between (A) the sum of the Class A Principal Balance and the Class B Principal
Balance as of the related Determination Date and (B) the sum of (i) the sum of
the Class A Principal Balance and the Class B Principal Balance as of the
Determination Date succeeding such Distribution Date and (ii) the aggregate
amount that would have been distributed to all Classes as principal in
accordance with Section 4.01(a) for such Distribution Date without regard to the
provisos in the definitions of Class B-1 Optimal Principal Amount, Class B-2
Optimal Principal Amount, Class B-3 Optimal Principal Amount, Class B-4 Optimal
Principal Amount, Class B-5 Optimal Principal Amount and Class B-6 Optimal
Principal Amount.
Adjustment Date: As to each Mortgage Loan, the Due Date on
which date an adjustment to the Mortgage Interest Rate of such Mortgage Loan
becomes effective under the related Mortgage Note, which Due Date is the date
set forth in the Mortgage Loan Schedule as the first Adjustment Date and each
subsequent anniversary thereof.
Aggregate Class A Distribution Amount: As to any Distribution
Date, the aggregate amount distributable to the Classes of Class A Certificates
pursuant to Paragraphs first, second and third of Section 4.01(a) on such
Distribution Date.
Aggregate Class A Unpaid Interest Shortfall: As to any
Distribution Date, an amount equal to the sum of the Class A Unpaid Interest
Shortfalls for the Class A Certificates.
Aggregate Principal Balance: As of any Determination Date, the
sum of the Class A Principal Balance and the Class B Principal Balance as of
such date.
Agreement: This Pooling and Servicing Agreement and all
amendments and supplements hereto.
Applicable Unscheduled Principal Receipt Period: With respect
to the Mortgage Loans serviced by each Servicer and each of the Full Unscheduled
Principal Receipts and Partial Unscheduled Principal Receipts, the Unscheduled
Principal Receipt Period specified on Schedule I hereto, as amended by the
Master Servicer pursuant to Section 10.01(b) hereof.
Authenticating Agent: Any authenticating agent appointed by
the Trustee pursuant to Section 8.11. Initially, the Master Servicer shall be
the Authenticating Agent for the Certificates.
Available Master Servicer Compensation: With respect to any
Distribution Date, the sum of (a) the Master Servicing Fee for such Distribution
Date, (b) interest earned through the business day preceding the applicable
Distribution Date on any Prepayments in Full remitted to the Master Servicer and
(c) the aggregate amount of Month End Interest remitted by the Servicers to the
Master Servicer pursuant to the related Servicing Agreements.
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Bankruptcy Loss: With respect to any Mortgage Loan, a
Deficient Valuation or Debt Service Reduction; provided, however, that a
Bankruptcy Loss shall not be deemed a Bankruptcy Loss hereunder so long as the
applicable Servicer has notified the Master Servicer and the Trustee in writing
that such Servicer is diligently pursuing any remedies that may exist in
connection with the representations and warranties made regarding the related
Mortgage Loan and either (A) the related Mortgage Loan is not in default with
regard to payments due thereunder or (B) delinquent payments of principal and
interest under the related Mortgage Loan and any premiums on any applicable
primary hazard insurance policy and any related escrow payments in respect of
such Mortgage Loan are being advanced on a current basis by such Servicer
without giving effect to any Debt Service Reduction.
Beneficial Owner: With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Book-Entry Certificate, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly or as an indirect
participant, in accordance with the rules of such Clearing Agency), as the case
may be.
Book-Entry Certificate: Any one of the Class A-1 Certificates,
Class A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates, Class
A-5 Certificates, Class B-1 Certificates, Class B-2 Certificates and Class B-3
Certificates, beneficial ownership and transfers of which shall be evidenced by,
and made through, book entries by the Clearing Agency as described in Section
5.01(b).
Business Day: Any day other than (i) a Saturday or a Sunday,
or (ii) a legal holiday in the City of New York, State of Iowa, State of
Maryland, State of Minnesota or State of North Carolina or (iii) a day on which
banking institutions in the City of New York, or the State of Iowa, State of
Maryland, State of Minnesota or State of North Carolina are authorized or
obligated by law or executive order to be closed.
Certificate: Any one of the Class A Certificates or Class B
Certificates.
Certificate Account: The separate trust account established
and maintained by the Master Servicer in the name of the Master Servicer on
behalf of the Trustee pursuant to Section 3.01. The Certificate Account shall be
an Eligible Account.
Certificate Custodian: Initially, Xxxxx Fargo Bank; thereafter
any other Certificate Custodian acceptable to The Depository Trust Company and
selected by the Trustee.
Certificate Register and Certificate Registrar: Respectively,
the register maintained pursuant to and the registrar provided for in Section
5.02. Initially the Certificate Registrar shall be the Master Servicer.
Certificateholder or Holder: The Person in whose name a
Certificate is registered in the Certificate Register, except that, solely for
the purposes of the taking of any action under Articles VII or VIII, any
Certificate registered in the name of the Master Servicer, a Servicer or any
affiliate thereof shall be deemed not to be outstanding and the Voting Interest
evidenced thereby shall not be taken into account in determining whether the
requisite percentage of Certificates necessary to effect any such action has
been obtained.
Class: All certificates whose form is identical except for
variations in the Percentage Interest evidenced thereby.
Class A Certificate: Any of the Class A-1, Class X-0, Xxxxx
X-0, Class A-4, Class A-5 Certificates or the Class A-R Certificate.
Class A Certificateholder: The registered holder of a Class A
Certificate.
Class A Distribution Amount: As to any Distribution Date and
any Class of Class A Certificates, the amount distributable to such Class of
Class A Certificates pursuant to Paragraphs first, second and third of Section
4.01(a).
Class A Interest Accrual Amount: As to any Distribution Date,
the sum of the Interest Accrual Amounts for the Class A Certificates with
respect to such Distribution Date.
Class A Interest Percentage: As to any Distribution Date and
any Class of Class A Certificates, the percentage calculated by dividing the
Interest Accrual Amount of such Class (determined without regard to clause (ii)
of the definition thereof) by the Class A Interest Accrual Amount (determined
without regard to clause (ii) of the definition of each Interest Accrual
Amount).
Class A Interest Shortfall Amount: As to any Distribution Date
and any Class of Class A Certificates, any amount by which the Interest Accrual
Amount of such Class with respect to such Distribution Date exceeds the amount
distributed in respect of such Class on such Distribution Date pursuant to
Paragraph first of Section 4.01(a).
Class A Loss Denominator: As to any Determination Date, an
amount equal to the Class A Principal Balance.
Class A Loss Percentage: As to any Determination Date and any
Class of Class A Certificates, the percentage calculated by dividing the
Principal Balance of such Class by the Class A Loss Denominator (determined
without regard to any such Principal Balance of any Class of Class A
Certificates not then outstanding), in each case determined as of the preceding
Determination Date.
Class A Optimal Principal Amount: As to any Distribution Date
and each Outstanding Mortgage Loan, an amount equal to the sum of
(I) the sum of:
(i) the Class A Percentage of the principal portion of the
Monthly Payment due on the Due Date occurring in the month of such
Distribution Date on such Mortgage Loan;
(ii) the Class A Prepayment Percentage of all Unscheduled
Principal Receipts (other than Recoveries) that were received by a
Servicer with respect to such Mortgage Loan during the Applicable
Unscheduled Principal Receipt Period relating to such Distribution Date
for each applicable type of Unscheduled Principal Receipt;
(iii) the Class A Prepayment Percentage of the Scheduled
Principal Balance of such Mortgage Loan which, during the one month
period ending on the day preceding the Determination Date for such
Distribution Date, was repurchased by the Depositor pursuant to Section
2.02, 2.03 or 3.08; and
(iv) the Class A Percentage of the Substitution Principal
Amount with respect to each Mortgage Loan for which a Mortgage Loan was
substituted during the one month period ending on the day preceding the
Determination Date for such Distribution Date, less the amount
allocable to the principal portion of any unreimbursed Periodic
Advances previously made by the applicable Servicer, the Master
Servicer or the Trustee in respect of such Mortgage Loan for which a
Mortgage Loan was substituted; and
(II) the Class A Prepayment Percentage of the Recovery for such Distribution
Date.
Class A Pass-Through Rate: As to any Distribution Date, the
Class A Pass-Through Rate will be a per annum rate equal to the Net WAC for such
Distribution Date.
Class A Percentage: As to any Distribution Date occurring on
or prior to the Subordination Depletion Date, the lesser of (i) 100% and (ii)
the percentage obtained by dividing the Class A Principal Balance (determined as
of the Determination Date preceding such Distribution Date) by the Pool Balance.
As to any Distribution Date occurring subsequent to the Subordination Depletion
Date, 100% or such lesser percentage which will cause the Class A Principal
Balance to decline to zero following the distribution made on such Distribution
Date.
Class A Prepayment Percentage: As to any Distribution Date to
and including the Distribution Date in February 2013, 100%. As to any
Distribution Date subsequent to February 2013 to and including the Distribution
Date in February 2014, the Class A Percentage as of such Distribution Date plus
70% of the Subordinated Percentage as of such Distribution Date. As to any
Distribution Date subsequent to February 2014 to and including the Distribution
Date in February 2015, the Class A Percentage as of such Distribution Date plus
60% of the Subordinated Percentage as of such Distribution Date. As to any
Distribution Date subsequent to February 2015 to and including the Distribution
Date in February 2016, the Class A Percentage as of such Distribution Date plus
40% of the Subordinated Percentage as of such Distribution Date. As to any
Distribution Date subsequent to February 2016 to and including the Distribution
Date in February 2017, the Class A Percentage as of such Distribution Date plus
20% of the Subordinated Percentage as of such Distribution Date. As to any
Distribution Date subsequent to February 2017, the Class A Percentage as of such
Distribution Date. The foregoing is subject to the following: (i) if the
aggregate distribution to the Class A Certificates on any Distribution Date of
the Class A Prepayment Percentage provided above of Unscheduled Principal
Receipts distributable on such Distribution Date would reduce the Class A
Principal Balance below zero, the Class A Prepayment Percentage for such
Distribution Date shall be the percentage necessary to bring the Class A
Principal Balance to zero and thereafter the Class A Prepayment Percentage shall
be zero and (ii) if the Class A Percentage as of any Distribution Date is
greater than the Original Class A Percentage, the Class A Prepayment Percentage
for such Distribution Date shall be 100%. Notwithstanding the foregoing, with
respect to any Distribution Date on which the following criteria are not met,
the reduction of the Class A Prepayment Percentage described in the second
through sixth sentences of this definition of Class A Prepayment Percentage
shall not be applicable with respect to such Distribution Date. In such event,
the Class A Prepayment Percentage for such Distribution Date will be determined
in accordance with the applicable provision, as set forth in the first through
fifth sentences above, which was actually used to determine the Class A
Prepayment Percentage for the Distribution Date occurring in the February
preceding such Distribution Date (it being understood that for the purposes of
the determination of the Class A Prepayment Percentage for the current
Distribution Date, the current Class A Percentage and Subordinated Percentage
shall be utilized). In addition, if on any Distribution Date, prior to giving
effect to any distributions on such Distribution Date, (i) the Subordinated
Percentage is equal to or greater than twice the Subordinated Percentage as of
the Cut-Off Date, (ii) the average outstanding principal balance on such
Distribution Date and for the preceding five Distribution Dates of the Mortgage
Loans that were delinquent 60 days or more (including for this purpose any
Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust Estate) does not
exceed 50% of the Class B Principal Balance and (iii)(A) prior to the
Distribution Date in March 2009, cumulative Realized Losses on the Mortgage
Loans do not exceed 20% of the Original Class B Principal Balance, then the
Class A Prepayment Percentage for such Distribution Date will equal the Class A
Percentage for such Distribution Date plus 50% of the Subordinated Percentage
for such Distribution Date or (B) on or after the Distribution Date in March
2009, cumulative Realized Losses on the Mortgage Loans do not exceed 30% of the
Original Class B Principal Balance, then the Class A Prepayment Percentage for
such Distribution Date will equal the Class A Percentage for such Distribution
Date. No reduction in the Class A Prepayment Percentage referred to in the
second through sixth sentences hereof shall be applicable, with respect to any
Distribution Date if (a) the average outstanding principal balance on such
Distribution Date and for the preceding five Distribution Dates on the Mortgage
Loans that were delinquent 60 days or more (including for this purpose any
payments due with respect to Mortgage Loans in foreclosure and REO Mortgage
Loans) were greater than or equal to 50% of the current Class B Principal
Balance or (b) cumulative Realized Losses on the Mortgage Loans exceed (1) 30%
of the Original Class B Principal Balance if such Distribution Date occurs
between and including March 2013 and February 2014, (2) 35% of the Original
Class B Principal Balance if such Distribution Date occurs between and including
March 2014 and February 2015, (3) 40% of the Original Class B Principal Balance
if such Distribution Date occurs between and including March 2015 and February
2016, (4) 45% of the Original Class B Principal Balance if such Distribution
Date occurs between and including March 2016 and February 2017, and (5) 50% of
the Original Class B Principal Balance, if such Distribution Date occurs during
or after March 2017. With respect to any Distribution Date on which the Class A
Prepayment Percentage is reduced below the Class A Prepayment Percentage for the
prior Distribution Date, the Master Servicer shall certify to the Trustee, based
upon information provided by each Servicer as to the Mortgage Loans serviced by
it that the criteria set forth in the preceding sentence are met.
Class A Principal Balance: As of any date, an amount equal to
the sum of the Principal Balances for the Class A-1, Class X-0, Xxxxx X-0, Class
A-4, Class A-5 Certificates and Class A-R Certificate.
Class A Principal Distribution Amount: As to any Distribution
Date, the aggregate amount distributed in respect of the Class A Certificates
pursuant to Paragraph third of Section 4.01(a).
Class A Unpaid Interest Shortfall: As to any Distribution Date
and any Class of Class A Certificates, the amount, if any, by which the
aggregate of the Class A Interest Shortfall Amounts for such Class for prior
Distribution Dates is in excess of the amounts distributed in respect of such
Class on prior Distribution Dates pursuant to Paragraph second of Section
4.01(a).
Class A-1 Certificate: Any one of the Certificates executed by
the Paying Agent and countersigned by the Authenticating Agent in substantially
the form set forth in Exhibit A-1 and Exhibit C hereto.
Class A-1 Certificateholder: The registered holder of a Class
A-1 Certificate.
Class A-1 Loss Amount: With respect to any Determination Date
after the Subordination Depletion Date, the amount, if any, by which the
Principal Balance of the Class A-1 Certificates would be reduced as a result of
the application of the third sentence of the definition of Principal Balance.
Class A-2 Certificate: Any one of the Certificates executed by
the Paying Agent and countersigned by the Authenticating Agent in substantially
the form set forth in Exhibit A-2 and Exhibit C hereto.
Class A-2 Certificateholder: The registered holder of a Class
A-2 Certificate.
Class A-2 Loss Amount: With respect to any Determination Date
after the Subordination Depletion Date, the amount, if any, by which the
Principal Balance of the Class A-2 Certificates would be reduced as a result of
the application of the third sentence of the definition of Principal Balance.
Class A-3 Certificate: Any one of the Certificates executed by
the Paying Agent and countersigned by the Authenticating Agent in substantially
the form set forth in Exhibit A-3 and Exhibit C hereto.
Class A-3 Certificateholder: The registered holder of a Class
A-3 Certificate.
Class A-4 Certificate: Any one of the Certificates executed by
the Paying Agent and countersigned by the Authenticating Agent in substantially
the form set forth in Exhibit A-4 and Exhibit C hereto.
Class A-4 Certificateholder: The registered holder of a Class
A-4 Certificate.
Class A-4 Loss Amount: With respect to any Determination Date
after the Subordination Depletion Date, the amount, if any, by which the
Principal Balance of the Class A-4 Certificates would be reduced as a result of
the application of the third sentence of the definition of Principal Balance.
Class A-5 Certificate: Any one of the Certificates executed by
the Paying Agent and countersigned by the Authenticating Agent in substantially
the form set forth in Exhibit A-5 and Exhibit C hereto.
Class A-5 Certificateholder: The registered holder of a Class
A-5 Certificate.
Class A-5 Loss Allocation Amount: With respect to any
Determination Date after the Subordination Depletion Date the lesser of (a) the
Principal Balance of the Class A-5 Certificates with respect to such
Determination Date prior to any reduction for the Class A-5 Loss Allocation
Amount and (b) the sum of the Class A-1 Loss Amount, Class A-2 Loss Amount and
Class A-4 Loss Amount.
Class A-R Certificate: The Certificate executed by the Paying
Agent and countersigned by the Authenticating Agent in substantially the form
set forth in Exhibit A-R and Exhibit C hereto.
Class A-R Certificateholder: The registered holder of the
Class A-R Certificate.
Class B Certificate: Any one of the Class B-1 Certificates,
Class B-2 Certificates, Class B-3 Certificates, Class B-4 Certificates, Class
B-5 Certificates or Class B-6 Certificates.
Class B Certificateholder: The registered holder of a Class B
Certificate.
Class B Distribution Amount: Any of the Class B-1 Distribution
Amount, Class B-2 Distribution Amount, Class B-3 Distribution Amount, Class B-4
Distribution Amount, Class B-5 Distribution Amount or Class B-6 Distribution
Amount.
Class B Interest Accrual Amount: With respect to any
Distribution Date, the sum of the Interest Accrual Amounts for the Classes of
Class B Certificates with respect to such Distribution Date.
Class B Interest Percentage: With respect to any Distribution
Date and any Class of Class B Certificates, the percentage calculated by
dividing the Interest Accrual Amount of such Class (determined without regard to
clause (ii) of the definition thereof) by the Class B Interest Accrual Amount
(determined without regard to clause (ii) of the definition of each Interest
Accrual Amount).
Class B Interest Shortfall Amount: Any of the Class B-1
Interest Shortfall Amount, Class B-2 Interest Shortfall Amount, Class B-3
Interest Shortfall Amount, Class B-4 Interest Shortfall Amount, Class B-5
Interest Shortfall Amount or Class B-6 Interest Shortfall Amount.
Class B Loss Percentage: With respect to any Determination
Date and any Class of Class B Certificates then outstanding, the percentage
calculated by dividing the Principal Balance of such Class by the Class B
Principal Balance (determined without regard to any Principal Balance of any
Class of Class B Certificates not then outstanding), in each case determined as
of the preceding Determination Date.
Class B Optimal Principal Amount: Any of the Class B-1 Optimal
Principal Amount, Class B-2 Optimal Principal Amount, Class B-3 Optimal
Principal Amount, Class B-4 Optimal Principal Amount, Class B-5 Optimal
Principal Amount or Class B-6 Optimal Principal Amount.
Class B Pass-Through Rate: As to any Distribution Date, the
Class B Pass-Through Rate will be a per annum rate equal to the Net WAC for such
Distribution Date.
Class B Percentage: Any one of the Class B-1 Percentage, Class
B-2 Percentage, Class B-3 Percentage, Class B-4 Percentage, Class B-5 Percentage
or Class B-6 Percentage.
Class B Prepayment Percentage: Any of the Class B-1 Prepayment
Percentage, Class B-2 Prepayment Percentage, Class B-3 Prepayment Percentage,
Class B-4 Prepayment Percentage, Class B-5 Prepayment Percentage or Class B-6
Prepayment Percentage.
Class B Principal Balance: As of any date, an amount equal to
the sum of the Class B-1 Principal Balance, Class B-2 Principal Balance, Class
B-3 Principal Balance, Class B-4 Principal Balance, Class B-5 Principal Balance
and Class B-6 Principal Balance.
Class B Unpaid Interest Shortfall: Any of the Class B-1 Unpaid
Interest Shortfall, Class B-2 Unpaid Interest Shortfall, Class B-3 Unpaid
Interest Shortfall, Class B-4 Unpaid Interest Shortfall, Class B-5 Unpaid
Interest Shortfall or Class B-6 Unpaid Interest Shortfall.
Class B-1 Certificate: Any one of the Certificates executed by
the Paying Agent and countersigned by the Authenticating Agent in substantially
the form set forth in Exhibit B-1 and Exhibit C hereto.
Class B-1 Certificateholder: The registered holder of a Class
B-1 Certificate.
Class B-1 Distribution Amount: As to any Distribution Date,
any amount distributable to the Holders of the Class B-1 Certificates pursuant
to Paragraphs fourth, fifth and sixth of Section 4.01(a).
Class B-1 Interest Shortfall Amount: As to any Distribution
Date, any amount by which the Interest Accrual Amount of the Class B-1
Certificates with respect to such Distribution Date exceeds the amount
distributed in respect of the Class B-1 Certificates on such Distribution Date
pursuant to Paragraph fourth of Section 4.01(a).
Class B-1 Optimal Principal Amount: As to any Distribution
Date and each Outstanding Mortgage Loan, an amount equal to the sum of
(I) the sum of:
(i) the Class B-1 Percentage of the principal portion of the
Monthly Payment due on the Due Date occurring in the month of such
Distribution Date on such Mortgage Loan;
(ii) the Class B-1 Prepayment Percentage of all Unscheduled
Principal Receipts (other than Recoveries) that were received by a
Servicer with respect to such Mortgage Loan during the Applicable
Unscheduled Principal Receipt Period relating to such Distribution Date
for each applicable type of Unscheduled Principal Receipt;
(iii) the Class B-1 Prepayment Percentage of the Scheduled
Principal Balance of such Mortgage Loan which, during the one month
period ending on the day preceding the Determination Date for such
Distribution Date, was repurchased by the Depositor pursuant to Section
2.02, 2.03 or 3.08; and
(iv) the Class B-1 Percentage of the Substitution Principal
Amount with respect to each Mortgage Loan for which a Mortgage Loan was
substituted during the one month period ending on the day preceding the
Determination Date for such Distribution Date, less the amount
allocable to the principal portion of any unreimbursed Periodic
Advances previously made by the applicable Servicer, the Master
Servicer or the Trustee in respect of such Mortgage Loan for which a
Mortgage Loan was substituted; and
(II) the Class B-1 Prepayment Percentage of the Recovery for such Distribution
Date;
provided, however, that if an Optimal Adjustment Event occurs with respect to
such Class and such Distribution Date, the Class B-1 Optimal Principal Amount
will equal the lesser of (A) the Class B-1 Optimal Principal Amount calculated
as described in the preceding provisions and (B) the Adjusted Principal Balance
for the Class B-1 Certificates.
Class B-1 Percentage: As to any Distribution Date, the
percentage calculated by multiplying the Subordinated Percentage by a fraction,
the numerator of which is the Class B-1 Principal Balance (determined as of the
Determination Date preceding such Distribution Date) and the denominator of
which is the Class B Principal Balance.
Class B-1 Prepayment Percentage: As to any Distribution Date,
the percentage calculated by multiplying the Subordinated Prepayment Percentage
by either (a) for the purpose of allocating Liquidation Proceeds (other than
Partial Liquidation Proceeds), a fraction, the numerator of which is the Class
B-1 Principal Balance (determined as of the Determination Date preceding such
Distribution Date) and the denominator of which is the Class B Principal Balance
or (b) for the purpose of allocating all other unscheduled principal
distributions (i) if any Class B Certificates (other than the Class B-1
Certificates) are eligible to receive such unscheduled principal distributions
for such Distribution Date in accordance with Section 4.01(d), a fraction, the
numerator of which is the Class B-1 Principal Balance (determined as of the
Determination Date preceding such Distribution Date) and the denominator of
which is the sum of the Principal Balances of the Classes of Class B
Certificates eligible to receive such unscheduled principal distributions for
such Distribution Date in accordance with the provisions of Section 4.01(d) or
(ii) except as set forth in Section 4.01(d)(ii), in the event that the Class B
Certificates (other than the Class B-1 Certificates) are not eligible to receive
such unscheduled principal distributions in accordance with Section 4.01(d)(i),
one.
Class B-1 Principal Balance: As to the first Determination
Date, the Original Class B-1 Principal Balance. As of any subsequent
Determination Date, the Original Class B-1 Principal Balance less the sum of all
amounts previously distributed in respect of the Class B-1 Certificates on prior
Distribution Dates (A) pursuant to Paragraph sixth of Section 4.01(a) and (B) as
a result of a Principal Adjustment; provided, however, if the Class B-1
Certificates are the most subordinate Certificates outstanding, the Class B-1
Principal Balance will equal the difference, if any, between the Adjusted Pool
Amount as of the preceding Distribution Date less the Class A Principal Balance
as of such Determination Date.
Class B-1 Unpaid Interest Shortfall: As to any Distribution
Date, the amount, if any, by which the aggregate of the Class B-1 Interest
Shortfall Amounts for prior Distribution Dates is in excess of the amounts
distributed in respect of the Class B-1 Certificates on prior Distribution Dates
pursuant to Paragraph fifth of Section 4.01(a).
Class B-2 Certificate: Any one of the Certificates executed by
the Paying Agent and countersigned by the Authenticating Agent in substantially
the form set forth in Exhibit B-2 and Exhibit C hereto.
Class B-2 Certificateholder: The registered holder of a Class
B-2 Certificate.
Class B-2 Distribution Amount: As to any Distribution Date,
any amount distributable to the Holders of the Class B-2 Certificates pursuant
to Paragraphs seventh, eighth and ninth of Section 4.01(a).
Class B-2 Interest Shortfall Amount: As to any Distribution
Date, any amount by which the Interest Accrual Amount of the Class B-2
Certificates with respect to such Distribution Date exceeds the amount
distributed in respect of the Class B-2 Certificates on such Distribution Date
pursuant to Paragraph seventh of Section 4.01(a).
Class B-2 Optimal Principal Amount: As to any Distribution
Date and each Outstanding Mortgage Loan, an amount equal to the sum of
(I) the sum of:
(i) the Class B-2 Percentage of the principal portion of the
Monthly Payment due on the Due Date occurring in the month of such
Distribution Date on such Mortgage Loan;
(ii) the Class B-2 Prepayment Percentage of all Unscheduled
Principal Receipts (other than Recoveries) that were received by a
Servicer with respect to such Mortgage Loan during the Applicable
Unscheduled Principal Receipt Period relating to such Distribution Date
for each applicable type of Unscheduled Principal Receipt;
(iii) the Class B-2 Prepayment Percentage of the Scheduled
Principal Balance of such Mortgage Loan which, during the one month
period ending on the day preceding the Determination Date for such
Distribution Date, was repurchased by the Depositor pursuant to Section
2.02, 2.03 or 3.08; and
(iv) the Class B-2 Percentage of the Substitution Principal
Amount with respect to each Mortgage Loan for which a Mortgage Loan was
substituted during the one month period ending on the day preceding the
Determination Date for such Distribution Date, less the amount
allocable to the principal portion of any unreimbursed Periodic
Advances previously made by the applicable Servicer, the Master
Servicer or the Trustee in respect of such Mortgage Loan for which a
Mortgage Loan was substituted; and
(II) the Class B-2 Prepayment Percentage of the Recovery for such Distribution
Date;
provided, however, that if an Optimal Adjustment Event occurs with respect to
such Class and such Distribution Date, the Class B-2 Optimal Principal Amount
will equal the lesser of (A) the Class B-2 Optimal Principal Amount calculated
as described in the preceding provisions and (B) the Adjusted Principal Balance
for the Class B-2 Certificates.
Class B-2 Percentage: As to any Distribution Date, except as
set forth in the next sentence, the percentage calculated by multiplying (i) the
Subordinated Percentage by (ii) a fraction, the numerator of which is the Class
B-2 Principal Balance (determined as of the Determination Date preceding such
Distribution Date) and the denominator of which is the Class B Principal
Balance.
Class B-2 Prepayment Percentage: As to any Distribution Date,
except as set forth in the next sentence, the percentage calculated by
multiplying (i) the Subordinated Prepayment Percentage by (ii) a fraction, the
numerator of which is the Class B-2 Principal Balance (determined as of the
Determination Date preceding such Distribution Date) and the denominator of
which is (a) for the purpose of allocating Liquidation Proceeds (other than
Partial Liquidation Proceeds) the Class B Principal Balance and (b) for the
purpose of allocating all other unscheduled principal distributions, the sum of
the Principal Balances of the Classes of Class B Certificates eligible to
receive such unscheduled principal distributions for such Distribution Date in
accordance with the provisions of Section 4.01(d). Except as set forth in
Section 4.01(d)(ii), in the event that the Class B-2 Certificates are not
eligible to receive such unscheduled principal distributions in accordance with
Section 4.01(d)(i), the Class B-2 Prepayment Percentage for such unscheduled
principal distributions for such Distribution Date will be zero.
Class B-2 Principal Balance: As to the first Determination
Date, the Original Class B-2 Principal Balance. As of any subsequent
Determination Date, the Original Class B-2 Principal Balance less the sum of all
amounts previously distributed in respect of the Class B-2 Certificates on prior
Distribution Dates (A) pursuant to Paragraph ninth of Section 4.01(a) and (B) as
a result of a Principal Adjustment; provided, however, if the Class B-2
Certificates are the most subordinate Certificates outstanding, the Class B-2
Principal Balance will equal the difference, if any, between the Adjusted Pool
Amount as of the preceding Distribution Date less the sum of the Class A
Principal Balance and the Class B-1 Principal Balance as of such Determination
Date.
Class B-2 Unpaid Interest Shortfall: As to any Distribution
Date, the amount, if any, by which the aggregate of the Class B-2 Interest
Shortfall Amounts for prior Distribution Dates is in excess of the amounts
distributed in respect of the Class B-2 Certificates on prior Distribution Dates
pursuant to Paragraph eighth of Section 4.01(a).
Class B-3 Certificate: Any one of the Certificates executed by
the Paying Agent and countersigned by the Authenticating Agent in substantially
the form set forth in Exhibit B-3 and Exhibit C hereto.
Class B-3 Certificateholder: The registered holder of a Class
B-3 Certificate.
Class B-3 Distribution Amount: As to any Distribution Date,
any amount distributable to the Holders of the Class B-3 Certificates pursuant
to Paragraphs tenth, eleventh and twelfth of Section 4.01(a).
Class B-3 Interest Shortfall Amount: As to any Distribution
Date, any amount by which the Interest Accrual Amount of the Class B-3
Certificates with respect to such Distribution Date exceeds the amount
distributed in respect of the Class B-3 Certificates on such Distribution Date
pursuant to Paragraph tenth of Section 4.01(a).
Class B-3 Optimal Principal Amount: As to any Distribution
Date and each Outstanding Mortgage Loan, an amount equal to the sum of
(I) the sum of:
(i) the Class B-3 Percentage of the principal portion of the
Monthly Payment due on the Due Date occurring in the month of such
Distribution Date on such Mortgage Loan;
(ii) the Class B-3 Prepayment Percentage of all Unscheduled
Principal Receipts (other than Recoveries) that were received by a
Servicer with respect to such Mortgage Loan during the Applicable
Unscheduled Principal Receipt Period relating to such Distribution Date
for each applicable type of Unscheduled Principal Receipt;
(iii) the Class B-3 Prepayment Percentage of the Scheduled
Principal Balance of such Mortgage Loan which, during the one month
period ending on the day preceding the Determination Date for such
Distribution Date, was repurchased by the Depositor pursuant to Section
2.02, 2.03 or 3.08; and
(iv) the Class B-3 Percentage of the Substitution Principal
Amount with respect to each Mortgage Loan for which a Mortgage Loan was
substituted during the one month period ending on the day preceding the
Determination Date for such Distribution Date, less the amount
allocable to the principal portion of any unreimbursed Periodic
Advances previously made by the applicable Servicer, the Master
Servicer or the Trustee in respect of such Mortgage Loan for which a
Mortgage Loan was substituted; and
(II) the Class B-3 Prepayment Percentage of the Recovery for such Distribution
Date;
provided, however, that if an Optimal Adjustment Event occurs with respect to
such Class and such Distribution Date, the Class B-3 Optimal Principal Amount
will equal the lesser of (A) the Class B-3 Optimal Principal Amount calculated
as described in the preceding provisions and (B) the Adjusted Principal Balance
for the Class B-3 Certificates.
Class B-3 Percentage: As to any Distribution Date, except as
set forth in the next sentence, the percentage calculated by multiplying (i) the
Subordinated Percentage by (ii) a fraction, the numerator of which is the Class
B-3 Principal Balance (determined as of the Determination Date preceding such
Distribution Date) and the denominator of which is the Class B Principal
Balance.
Class B-3 Prepayment Percentage: As to any Distribution Date,
except as set forth in the next sentence, the percentage calculated by
multiplying (i) the Subordinated Prepayment Percentage by (ii) a fraction, the
numerator of which is the Class B-3 Principal Balance (determined as of the
Determination Date preceding such Distribution Date) and the denominator of
which is (a) for the purpose of allocating Liquidation Proceeds (other than
Partial Liquidation Proceeds) the Class B Principal Balance and (b) for the
purpose of allocating all other unscheduled principal distributions, the sum of
the Principal Balances of the Classes of Class B Certificates eligible to
receive such unscheduled principal distributions for such Distribution Date in
accordance with the provisions of Section 4.01(d). Except as set forth in
Section 4.01(d)(ii), in the event that the Class B-3 Certificates are not
eligible to receive such unscheduled principal in accordance with Section
4.01(d)(i), the Class B-3 Prepayment Percentage for such unscheduled principal
distributions for such Distribution Date will be zero.
Class B-3 Principal Balance: As to the first Determination
Date, the Original Class B-3 Principal Balance. As of any subsequent
Determination Date, the Original Class B-3 Principal Balance less the sum of all
amounts previously distributed in respect of the Class B-3 Certificates on prior
Distribution Dates (A) pursuant to Paragraph twelfth of Section 4.01(a) and (B)
as a result of a Principal Adjustment; provided, however, if the Class B-3
Certificates are the most subordinate Certificates outstanding, the Class B-3
Principal Balance will equal the difference, if any, between the Adjusted Pool
Amount as of the preceding Distribution Date less the sum of the Class A
Principal Balance, the Class B-1 Principal Balance and the Class B-2 Principal
Balance as of such Determination Date.
Class B-3 Unpaid Interest Shortfall: As to any Distribution
Date, the amount, if any, by which the aggregate of the Class B-3 Interest
Shortfall Amounts for prior Distribution Dates is in excess of the amounts
distributed in respect of the Class B-3 Certificates on prior Distribution Dates
pursuant to Paragraph eleventh of Section 4.01(a).
Class B-4 Certificate: Any one of the Certificates executed by
the Paying Agent and countersigned by the Authenticating Agent in substantially
the form set forth in Exhibit B-4 and Exhibit C hereto.
Class B-4 Certificateholder: The registered holder of a Class
B-4 Certificate.
Class B-4 Distribution Amount: As to any Distribution Date,
any amount distributable to the Holders of the Class B-4 Certificates pursuant
to Paragraphs thirteenth, fourteenth and fifteenth of Section 4.01(a).
Class B-4 Interest Shortfall Amount: As to any Distribution
Date, any amount by which the Interest Accrual Amount of the Class B-4
Certificates with respect to such Distribution Date exceeds the amount
distributed in respect of the Class B-4 Certificates on such Distribution Date
pursuant to Paragraph thirteenth of Section 4.01(a).
Class B-4 Optimal Principal Amount: As to any Distribution
Date and each Outstanding Mortgage Loan, an amount equal to the sum of
(I) the sum of:
(i) the Class B-4 Percentage of the principal portion of the
Monthly Payment due on the Due Date occurring in the month of such
Distribution Date on such Mortgage Loan;
(ii) the Class B-4 Prepayment Percentage of all Unscheduled
Principal Receipts (other than Recoveries) that were received by a
Servicer with respect to such Mortgage Loan during the Applicable
Unscheduled Principal Receipt Period relating to such Distribution Date
for each applicable type of Unscheduled Principal Receipt;
(iii) the Class B-4 Prepayment Percentage of the Scheduled
Principal Balance of such Mortgage Loan which, during the one month
period ending on the day preceding the Determination Date for such
Distribution Date, was repurchased by the Depositor pursuant to Section
2.02, 2.03 or 3.08; and
(iv) the Class B-4 Percentage of the Substitution Principal
Amount with respect to each Mortgage Loan for which a Mortgage Loan was
substituted during the one month period ending on the day preceding the
Determination Date for such Distribution Date, less the amount
allocable to the principal portion of any unreimbursed Periodic
Advances previously made by the applicable Servicer, the Master
Servicer or the Trustee in respect of such Mortgage Loan for which a
Mortgage Loan was substituted; and
(II) the Class B-4 Prepayment Percentage of the Recovery for such Distribution
Date;
provided, however, that if an Optimal Adjustment Event occurs with respect to
such Class and such Distribution Date, the Class B-4 Optimal Principal Amount
will equal the lesser of (A) the Class B-4 Optimal Principal Amount calculated
as described in the preceding provisions and (B) the Adjusted Principal Balance
for the Class B-4 Certificates.
Class B-4 Percentage: As to any Distribution Date, except as
set forth in the next sentence, the percentage calculated by multiplying (i) the
Subordinated Percentage by (ii) a fraction, the numerator of which is the Class
B-4 Principal Balance (determined as of the Determination Date preceding such
Distribution Date) and the denominator of which is the Class B Principal
Balance.
Class B-4 Prepayment Percentage: As to any Distribution Date,
except as set forth in the next sentence, the percentage calculated by
multiplying (i) the Subordinated Prepayment Percentage by (ii) a fraction, the
numerator of which is the Class B-4 Principal Balance (determined as of the
Determination Date preceding such Distribution Date) and the denominator of
which is (a) for the purpose of allocating Liquidation Proceeds (other than
Partial Liquidation Proceeds) the Class B Principal Balance and (b) for the
purpose of allocating all other unscheduled principal distributions, the sum of
the Principal Balances of the Classes of Class B Certificates eligible to
receive such unscheduled principal distributions for such Distribution Date in
accordance with the provisions of Section 4.01(d). Except as set forth in
Section 4.01(d)(ii), in the event that the Class B-4 Certificates are not
eligible to receive such unscheduled principal in accordance with Section
4.01(d)(i), the Class B-4 Prepayment Percentage for such unscheduled principal
distributions for such Distribution Date will be zero.
Class B-4 Principal Balance: As to the first Determination
Date, the Original Class B-4 Principal Balance. As of any subsequent
Determination Date, the Original Class B-4 Principal Balance less the sum of all
amounts previously distributed in respect of the Class B-4 Certificates on prior
Distribution Dates (A) pursuant to Paragraph fifteenth of Section 4.01(a) and
(B) as a result of a Principal Adjustment; provided, however, if the Class B-4
Certificates are the most subordinate Certificates outstanding, the Class B-4
Principal Balance will equal the difference, if any, between the Adjusted Pool
Amount as of the preceding Distribution Date less the sum of the Class A
Principal Balance, the Class B-1 Principal Balance, the Class B-2 Principal
Balance and the Class B-3 Principal Balance as of such Determination Date.
Class B-4 Unpaid Interest Shortfall: As to any Distribution
Date, the amount, if any, by which the aggregate of the Class B-4 Interest
Shortfall Amounts for prior Distribution Dates is in excess of the amounts
distributed in respect of the Class B-4 Certificates on prior Distribution Dates
pursuant to Paragraph fourteenth of Section 4.01(a).
Class B-5 Certificate: Any one of the Certificates executed by
the Paying Agent and countersigned by the Authenticating Agent in substantially
the form set forth in Exhibit B-5 and Exhibit C hereto.
Class B-5 Certificateholder: The registered holder of a Class
B-5 Certificate.
Class B-5 Distribution Amount: As to any Distribution Date,
any amount distributable to the Holders of the Class B-5 Certificates pursuant
to Paragraphs sixteenth, seventeenth and eighteenth of Section 4.01(a).
Class B-5 Interest Shortfall Amount: As to any Distribution
Date, any amount by which the Interest Accrual Amount of the Class B-5
Certificates with respect to such Distribution Date exceeds the amount
distributed in respect of the Class B-5 Certificates on such Distribution Date
pursuant to Paragraph sixteenth of Section 4.01(a).
Class B-5 Optimal Principal Amount: As to any Distribution
Date and each Outstanding Mortgage Loan, an amount equal to the sum of
(I) the sum of:
(i) the Class B-5 Percentage of the principal portion of the
Monthly Payment due on the Due Date occurring in the month of such
Distribution Date on such Mortgage Loan;
(ii) the Class B-5 Prepayment Percentage of all Unscheduled
Principal Receipts (other than Recoveries) that were received by a
Servicer with respect to such Mortgage Loan during the Applicable
Unscheduled Principal Receipt Period relating to such Distribution Date
for each applicable type of Unscheduled Principal Receipt;
(iii) the Class B-5 Prepayment Percentage of the Scheduled
Principal Balance of such Mortgage Loan which, during the one month
period ending on the day preceding the Determination Date for such
Distribution Date, was repurchased by the Depositor pursuant to Section
2.02, 2.03 or 3.08; and
(iv) the Class B-5 Percentage of the Substitution Principal
Amount with respect to each Mortgage Loan for which a Mortgage Loan was
substituted during the one month period ending on the day preceding the
Determination Date for such Distribution Date, less the amount
allocable to the principal portion of any unreimbursed Periodic
Advances previously made by the applicable Servicer, the Master
Servicer or the Trustee in respect of such Mortgage Loan for which a
Mortgage Loan was substituted; and
(II) the Class B-5 Prepayment Percentage of the Recovery for such Distribution
Date;
provided, however, that if an Optimal Adjustment Event occurs with respect to
such Class and such Distribution Date, the Class B-5 Optimal Principal Amount
will equal the lesser of (A) the Class B-5 Optimal Principal Amount calculated
as described in the preceding provisions and (B) the Adjusted Principal Balance
for the Class B-5 Certificates.
Class B-5 Percentage: As to any Distribution Date, except as
set forth in the next sentence, the percentage calculated by multiplying (i) the
Subordinated Percentage by (ii) a fraction, the numerator of which is the Class
B-5 Principal Balance (determined as of the Determination Date preceding such
Distribution Date) and the denominator of which is the Class B Principal
Balance.
Class B-5 Prepayment Percentage: As to any Distribution Date,
except as set forth in the next sentence, the percentage calculated by
multiplying (i) the Subordinated Prepayment Percentage by (ii) a fraction, the
numerator of which is the Class B-5 Principal Balance (determined as of the
Determination Date preceding such Distribution Date) and the denominator of
which is (a) for the purpose of allocating Liquidation Proceeds (other than
Partial Liquidation Proceeds) the Class B Principal Balance and (b) for the
purpose of allocating all other unscheduled principal distributions, the sum of
the Principal Balances of the Classes of Class B Certificates eligible to
receive such unscheduled principal distributions for such Distribution Date in
accordance with the provisions of Section 4.01(d). Except as set forth in
Section 4.01(d)(ii), in the event that the Class B-5 Certificates are not
eligible to receive unscheduled principal distributions in accordance with
Section 4.01(d)(i), the Class B-5 Prepayment Percentage for such unscheduled
principal distributions for such Distribution Date will be zero.
Class B-5 Principal Balance: As to the first Determination
Date, the Original Class B-5 Principal Balance. As of any subsequent
Determination Date, the Original Class B-5 Principal Balance less the sum of all
amounts previously distributed in respect of the Class B-5 Certificates on prior
Distribution Dates (A) pursuant to Paragraph eighteenth of Section 4.01(a) and
(B) as a result of a Principal Adjustment; provided, however, if the Class B-5
Certificates are the most subordinate Certificates outstanding, the Class B-5
Principal Balance will equal the difference, if any, between the Adjusted Pool
Amount as of the preceding Distribution Date less the sum of the Class A
Principal Balance, the Class B-1 Principal Balance, the Class B-2 Principal
Balance, the Class B-3 Principal Balance and the Class B-4 Principal Balance as
of such Determination Date.
Class B-5 Unpaid Interest Shortfall: As to any Distribution
Date, the amount, if any, by which the aggregate of the Class B-5 Interest
Shortfall Amounts for prior Distribution Dates is in excess of the amounts
distributed in respect of the Class B-5 Certificates on prior Distribution Dates
pursuant to Paragraph seventeenth of Section 4.01(a).
Class B-6 Certificate: Any one of the Certificates executed by
the Paying Agent and countersigned by the Authenticating Agent in substantially
the form set forth in Exhibit B-6 and Exhibit C hereto.
Class B-6 Certificateholder: The registered holder of a Class
B-6 Certificate.
Class B-6 Distribution Amount: As to any Distribution Date,
any amount distributable to the Holders of the Class B-6 Certificates pursuant
to Paragraphs nineteenth, twentieth and twenty-first of Section 4.01(a).
Class B-6 Interest Shortfall Amount: As to any Distribution
Date, any amount by which the Interest Accrual Amount of the Class B-6
Certificates with respect to such Distribution Date exceeds the amount
distributed in respect of the Class B-6 Certificates on such Distribution Date
pursuant to Paragraph nineteenth of Section 4.01(a).
Class B-6 Optimal Principal Amount: As to any Distribution
Date and each Outstanding Mortgage Loan, an amount equal to the sum of
(I) the sum of:
(i) the Class B-6 Percentage of the principal portion of the
Monthly Payment due on the Due Date occurring in the month of such
Distribution Date on such Mortgage Loan;
(ii) the Class B-6 Prepayment Percentage of all Unscheduled
Principal Receipts (other than Recoveries) that were received by a
Servicer with respect to such Mortgage Loan during the Applicable
Unscheduled Principal Receipt Period relating to such Distribution Date
for each applicable type of Unscheduled Principal Receipt;
(iii) the Class B-6 Prepayment Percentage of the Scheduled
Principal Balance of such Mortgage Loan which, during the one month
period ending on the day preceding the Determination Date for such
Distribution Date, was repurchased by the Depositor pursuant to Section
2.02, 2.03 or 3.08; and
(iv) the Class B-6 Percentage of the Substitution Principal
Amount with respect to each Mortgage Loan for which a Mortgage Loan was
substituted during the one month period ending on the day preceding the
Determination Date for such Distribution Date, less the amount
allocable to the principal portion of any unreimbursed Periodic
Advances previously made by the applicable Servicer, the Master
Servicer or the Trustee in respect of such Mortgage Loan for which a
Mortgage Loan was substituted; and
(II) the Class B-6 Prepayment Percentage of the Recovery for such Distribution
Date;
provided, however, that if an Optimal Adjustment Event occurs with respect to
such Class and such Distribution Date, the Class B-6 Optimal Principal Amount
will equal the lesser of (A) the Class B-6 Optimal Principal Amount calculated
as described in the preceding provisions and (B) the Adjusted Principal Balance
for the Class B-6 Certificates.
Class B-6 Percentage: As to any Distribution Date, except as
set forth in the next sentence, the percentage calculated by multiplying (i) the
Subordinated Percentage by (ii) a fraction, the numerator of which is the Class
B-6 Principal Balance (determined as of the Determination Date preceding such
Distribution Date) and the denominator of which is the Class B Principal
Balance.
Class B-6 Prepayment Percentage: As to any Distribution Date,
except as set forth in the next sentence, the percentage calculated by
multiplying (i) the Subordinated Prepayment Percentage by (ii) a fraction, the
numerator of which is the Class B-6 Principal Balance (determined as of the
Determination Date preceding such Distribution Date) and the denominator of
which is (a) for the purpose of allocating Liquidation Proceeds (other than
Partial Liquidation Proceeds) the Class B Principal Balance and (b) for the
purpose of allocating all other unscheduled principal distributions, the sum of
the Principal Balances of the Classes of Class B Certificates eligible to
receive such unscheduled principal distributions for such Distribution Date in
accordance with the provisions of Section 4.01(d). Except as set forth in
Section 4.01(d)(ii), in the event that the Class B-6 Certificates are not
eligible to receive such unscheduled principal in accordance with Section
4.01(d)(i), the Class B-6 Prepayment Percentage for such unscheduled principal
distributions for such Distribution Date will be zero.
Class B-6 Principal Balance: As to the first Determination
Date, the Original Class B-6 Principal Balance. As of any subsequent
Determination Date, the Original Class B-6 Principal Balance less the sum of all
amounts previously distributed in respect of the Class B-6 Certificates on prior
Distribution Dates pursuant to Paragraph twenty-first of Section 4.01(a);
provided, however, if the Class B-6 Certificates are outstanding, the Class B-6
Principal Balance will equal the difference, if any, between the Adjusted Pool
Amount as of the preceding Distribution Date less the sum of the Class A
Principal Balance, the Class B-1 Principal Balance, the Class B-2 Principal
Balance, the Class B-3 Principal Balance, the Class B-4 Principal Balance and
the Class B-5 Principal Balance as of such Determination Date.
Class B-6 Unpaid Interest Shortfall: As to any Distribution
Date, the amount, if any, by which the aggregate of the Class B-6 Interest
Shortfall Amounts for prior Distribution Dates is in excess of the amounts
distributed in respect of the Class B-6 Certificates on prior Distribution Dates
pursuant to Paragraph twentieth of Section 4.01(a).
Clearing Agency: An organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act. The initial Clearing Agency
shall be The Depository Trust Company.
Clearing Agency Participant: A broker, dealer, bank, financial
institution or other Person for whom a Clearing Agency effects book-entry
transfers of securities deposited with the Clearing Agency.
Closing Date: The date of initial issuance of the
Certificates, as set forth in Section 11.19.
Code: The Internal Revenue Code of 1986, as it may be amended
from time to time, any successor statutes thereto, and applicable U.S.
Department of the Treasury temporary or final regulations promulgated
thereunder.
Commission: The United States Securities and Exchange
Commission.
Compensating Interest: With respect to any Distribution Date,
the least of (a) the aggregate Prepayment Interest Shortfall on the Mortgage
Loans for such Distribution Date, (b) the product of (i) 1/12th of 0.20% and
(ii) the Pool Scheduled Principal Balance for such Distribution Date and (c) the
Available Master Servicing Compensation for such Distribution Date.
Co-op Shares: Shares issued by private non-profit housing
corporations.
Corporate Trust Office: With respect to (a) the Trustee, the
office of the Trustee at which at any particular time its duties under this
Agreement shall be administered, which office, at the date of the execution of
this instrument, is located at 000 Xxxxx XxXxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000-0000 and (b) the Paying Agent, Certificate Registrar and
Authenticating Agent, for Certificate transfer purposes at Xxxxx Fargo Center,
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000 Attn: Corporate
Trust Services--WFMBS 2006-AR3, and for all other purposes at 0000 Xxx Xxxxxxxxx
Xxxx., Xxxxxxxx, Xxxxxxxx 00000 Attn: Corporate Trust Services--WFMBS 2006-AR3.
Current Class A Interest Distribution Amount: As to any
Distribution Date, the amount distributed in respect of the Classes of Class A
Certificates pursuant to Paragraph first of Section 4.01(a) on such Distribution
Date.
Current Class B Interest Distribution Amount: As to any
Distribution Date, the amount distributed in respect of the Classes of Class B
Certificates pursuant to Paragraphs fourth, seventh, tenth, thirteenth,
sixteenth and nineteenth of Section 4.01(a) on such Distribution Date.
Current Class B-1 Fractional Interest: As to any Distribution
Date subsequent to the first Distribution Date, the percentage obtained by
dividing the sum of the Principal Balances of the Class B-2, Class B-3, Class
B-4, Class B-5 and Class B-6 Certificates by the Aggregate Principal Balance. As
to the first Distribution Date, the Original Class B-1 Fractional Interest.
Current Class B-2 Fractional Interest: As to any Distribution
Date subsequent to the first Distribution Date, the percentage obtained by
dividing the sum of the Principal Balances of the Class B-3, Class B-4, Class
B-5 and Class B-6 Certificates by the Aggregate Principal Balance. As to the
first Distribution Date, the Original Class B-2 Fractional Interest.
Current Class B-3 Fractional Interest: As to any Distribution
Date subsequent to the first Distribution Date, the percentage obtained by
dividing the sum of the Principal Balances of the Class B-4, Class B-5 and Class
B-6 Certificates by the Aggregate Principal Balance. As to the first
Distribution Date, the Original Class B-3 Fractional Interest.
Current Class B-4 Fractional Interest: As to any Distribution
Date subsequent to the first Distribution Date, the percentage obtained by
dividing the sum of the Principal Balances of the Class B-5 and Class B-6
Certificates by the Aggregate Principal Balance. As to the first Distribution
Date, the Original Class B-4 Fractional Interest.
Current Class B-5 Fractional Interest: As to any Distribution
Date subsequent to the first Distribution Date, the percentage obtained by
dividing the Principal Balance of the Class B-6 Certificates by the Aggregate
Principal Balance. As to the first Distribution Date, the Original Class B-5
Fractional Interest.
Curtailment: Any Principal Prepayment made by a Mortgagor
which is not a Prepayment in Full.
Curtailment Interest Shortfall: On any Distribution Date with
respect to a Mortgage Loan which was the subject of a Curtailment:
(A) in the case where the Applicable Unscheduled Principal
Receipt Period is the Mid-Month Receipt Period and such
Curtailment is received by the Servicer on or after the
Determination Date in the month preceding the month of
such Distribution Date but prior to the first day of the
month of such Distribution Date, the amount of interest
that would have accrued at the Net Mortgage Interest
Rate on the amount of such Curtailment from the day of
its receipt or, if earlier, its application by the
Servicer through the last day of the month preceding the
month of such Distribution Date; and
(B) in the case where the Applicable Unscheduled Principal
Receipt Period is the Prior Month Receipt Period and
such Curtailment is received by the Servicer during the
month preceding the month of such Distribution Date, the
amount of interest that would have accrued at the Net
Mortgage Interest Rate on the amount of such Curtailment
from the day of its receipt or, if earlier, its
application by the Servicer through the last day of the
month in which such Curtailment is received.
Custodial Agreement: The Custodial Agreement, dated as of
February 27, 2006, among the Custodian, the Depositor, the Master Servicer and
the Trustee, which agreement is attached hereto as Exhibit E, as the same may be
amended or modified from time to time in accordance with the terms thereof.
Custodial P&I Account: The Custodial P&I Account, as defined
in each of the Servicing Agreements, with respect to the Mortgage Loans. In
determining whether the Custodial P&I Account under any Servicing Agreement is
"acceptable" to the Master Servicer (as may be required by the definition of
"Eligible Account" contained in the Servicing Agreements), the Master Servicer
shall require that any such account shall be acceptable to each of the Rating
Agencies.
Custodian: Xxxxx Fargo Bank, or its successor in interest
under the Custodial Agreement. Initially, the custodial functions shall be
performed by the Corporate Trust Services division of Xxxxx Fargo Bank.
Cut-Off Date: The first day of the month of initial issuance
of the Certificates as set forth in Section 11.01.
Cut-Off Date Aggregate Principal Balance: The aggregate of the
Cut-Off Date Principal Balances of the Mortgage Loans as set forth in Section
11.02.
Cut-Off Date Principal Balance: As to each Mortgage Loan, its
unpaid principal balance as of the close of business on the Cut-Off Date (but
without giving effect to any Unscheduled Principal Receipts received or applied
on the Cut-Off Date), reduced by all payments of principal due on or before the
Cut-Off Date and not paid, and increased by scheduled monthly payments of
principal due after the Cut-Off Date but received by the related Servicer on or
before the Cut-Off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction constituting a Deficient Valuation.
Deficient Valuation: With respect to any Mortgage Loan, a
valuation by a court of competent jurisdiction of the Mortgaged Property in an
amount less than the then-outstanding indebtedness under the Mortgage Loan, or
any reduction in the amount of principal to be paid in connection with any
scheduled Monthly Payment that results in a permanent forgiveness of principal,
which valuation or reduction results from a proceeding under the Bankruptcy
Code.
Definitive Certificates: As defined in Section 5.01(b).
Denomination: The amount, if any, specified on the face of
each Certificate representing the principal portion of the Cut-Off Date
Aggregate Principal Balance evidenced by such Certificate.
Depositor: Xxxxx Fargo Asset Securities Corporation, or its
successor in interest.
Determination Date: The 17th day of the month in which the
related Distribution Date occurs, or if such 17th day is not a Business Day, the
Business Day preceding such 17th day.
Distribution Date: The 25th day of any month, beginning in the
month following the month of initial issuance of the Certificates, or if such
25th day is not a Business Day, the Business Day following such 25th day.
Distribution Date Statement: As defined in Section 4.04(a).
Document Transfer Date: The 60th day following the occurrence
of a Document Transfer Event.
Document Transfer Event: The occurrence of either of the
following: (i) Xxxxx Fargo Bank is no longer the Servicer of any of the Mortgage
Loans or (ii) the senior, unsecured long-term debt rating of Xxxxx Fargo &
Company is less than "BBB-" by Fitch.
Due Date: With respect to any Mortgage Loan, the day of the
month in which the Monthly Payment on such Mortgage Loan is scheduled to be
paid.
Eligible Account: One or more accounts (i) that are maintained
with a depository institution (which may be the Master Servicer) whose long-term
debt obligations (or, in the case of a depository institution which is part of a
holding company structure, the long-term debt obligations of such parent holding
company) at the time of deposit therein are rated at least "AA" (or the
equivalent) by each Rating Agency, (ii) the deposits in which are fully insured
by the FDIC through either the Bank Insurance Fund or the Savings Association
Insurance Fund, (iii) the deposits in which are insured by the FDIC through
either the Bank Insurance Fund or the Savings Association Insurance Fund (to the
limit established by the FDIC) and the uninsured deposits in which accounts are
otherwise secured, as evidenced by an Opinion of Counsel delivered to the
Trustee, such that the Trustee, on behalf of the Certificateholders has a claim
with respect to the funds in such accounts or a perfected first security
interest against any collateral securing such funds that is superior to claims
of any other depositors or creditors of the depository institution with which
such accounts are maintained, (iv) that are trust accounts maintained with the
trust department of a federal or state chartered depository institution or trust
company acting in its fiduciary capacity or (v) such other account that is
acceptable to each of the Rating Agencies and would not cause the Trust Estate
to fail to qualify as a REMIC or result in the imposition of any federal tax on
the REMIC.
Eligible Investments: At any time, any one or more of the
following obligations and securities which shall mature not later than the
Business Day preceding the Distribution Date next succeeding the date of such
investment, provided that such investments continue to qualify as "cash flow
investments" as defined in Code Section 860G(a)(6):
(i) obligations of the United States of America or any agency
thereof, provided such obligations are backed by the full faith and
credit of the United States of America;
(ii) general obligations of or obligations guaranteed by any
state of the United States of America or the District of Columbia
receiving the highest short-term or highest long-term rating of each
Rating Agency, or such lower rating as would not result in the
downgrading or withdrawal of the rating then assigned to any of the
Certificates by either Rating Agency or result in any of such rated
Certificates being placed on credit review status (other than for
possible upgrading) by either Rating Agency;
(iii) commercial or finance company paper which is then rated
in the highest long-term commercial or finance company paper rating
category of each Rating Agency or the highest short-term rating
category of each Rating Agency, or such lower rating category as would
not result in the downgrading or withdrawal of the rating then assigned
to any of the Certificates by either Rating Agency or result in any of
such rated Certificates being placed on credit review status (other
than for possible upgrading) by either Rating Agency;
(iv) certificates of deposit, demand or time deposits, federal
funds or banker's acceptances issued by any depository institution or
trust company incorporated under the laws of the United States or of
any state thereof and subject to supervision and examination by federal
and/or state banking authorities, provided that the commercial paper
and/or debt obligations of such depository institution or trust company
(or in the case of the principal depository institution in a holding
company system, the commercial paper or debt obligations of such
holding company) are then rated in the highest short-term or the
highest long-term rating category for such securities of each of the
Rating Agencies, or such lower rating categories as would not result in
the downgrading or withdrawal of the rating then assigned to any of the
Certificates by either Rating Agency or result in any of such rated
Certificates being placed on credit review status (other than for
possible upgrading) by either Rating Agency;
(v) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation acceptable to each Rating Agency
at the time of the issuance of such agreements;
(vi) repurchase agreements on obligations with respect to any
security described in clauses (i) or (ii) above or any other security
issued or guaranteed by an agency or instrumentality of the United
States of America, in either case entered into with a depository
institution or trust company (acting as principal) described in (iv)
above;
(vii) securities (other than stripped bonds or stripped coupon
securities) bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America
or any state thereof which, at the time of such investment or
contractual commitment providing for such investment, are then rated in
the highest short-term or the highest long-term rating category by each
Rating Agency, or in such lower rating category as would not result in
the downgrading or withdrawal of the rating then assigned to any of the
Certificates by either Rating Agency or result in any of such rated
Certificates being placed on credit review status (other than for
possible upgrading) by either Rating Agency;
(viii) such other investments acceptable to each Rating Agency
as would not result in the downgrading of the rating then assigned to
the Certificates by either Rating Agency or result in any of such rated
Certificates being placed on credit review status (other than for
possible upgrading) by either Rating Agency; and
(ix) any mutual fund, money market fund, common trust fund or
other pooled investment vehicle, the assets of which are limited to
instruments that otherwise would constitute Eligible Investments
hereunder, including any such fund that is managed by the Trustee or
Master Servicer or any affiliate of the Trustee or Master Servicer or
for which the Trustee or Master Servicer or any of its affiliates acts
as an adviser as long as such fund is rated in at least the highest
rating category by each Rating Agency.
In no event shall an instrument be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) 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 the date of investment of greater than
120% of the yield to maturity at par of such underlying obligations.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Prohibited Holder: As defined in Section 5.02(d).
Errors and Omissions Policy: As defined in each of the
Servicing Agreements.
Event of Default: Any of the events specified in Section 7.01.
Exchange Act: The Securities Exchange Act of 1934, as amended.
FDIC: The Federal Deposit Insurance Corporation or any
successor thereto.
Fidelity Bond: As defined in each of the Servicing Agreements.
Final Distribution Date: The Distribution Date on which the
final distribution in respect of the Certificates is made pursuant to Section
9.01.
Final Scheduled Maturity Date: The Final Scheduled Maturity
Date for each Class of Certificates is March 25, 2036, which corresponds to the
"latest possible maturity date" for purposes of Section 860G(a)(1) of the
Internal Revenue Code of 1986, as amended.
Fitch: Fitch Ratings, or its successor in interest.
Form 8-K: A Current Report on Form 8-K under the Exchange Act.
Form 8-K Disclosure Information: As defined in Section
3.12(c).
Form 10-D: An Asset-Backed Issuer Distribution Report on Form
10-D under the Exchange Act.
Form 10-K: An Annual Report on Form 10-K under the Exchange
Act.
Form 15: A Form 15 Suspension Notification under the Exchange
Act.
Full Unscheduled Principal Receipt: Any Unscheduled Principal
Receipt with respect to a Mortgage Loan (i) in the amount of the outstanding
principal balance of such Mortgage Loan and resulting in the full satisfaction
of such Mortgage Loan or (ii) representing Liquidation Proceeds other than
Partial Liquidation Proceeds.
Gross Margin: As to each Mortgage Loan, the fixed percentage
set forth in the related Mortgage Note and indicated in the Mortgage Loan
Schedule as the "Gross Margin," which percentage is added to the Index on each
Adjustment Date to determine (subject to rounding, the Periodic Cap and the Rate
Ceiling) the Mortgage Interest Rate on such Mortgage Loan until the next
Adjustment Date.
Holder: See "Certificateholder."
Independent: When used with respect to any specified Person,
such Person who (i) is in fact independent of the Depositor, the Master Servicer
and any Servicer, (ii) does not have any direct financial interest or any
material indirect financial interest in the Depositor or the Master Servicer or
any Servicer or in an affiliate of either and (iii) is not connected with the
Depositor, the Master Servicer or any Servicer as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions.
Index: As to any Mortgage Loan and Adjustment Date, a rate per
annum that is defined to be the weekly average yield on United States Treasury
Securities adjusted to a constant maturity of one year, as made available by the
Federal Reserve Board, published in Federal Reserve Statistical Release H.15
(519) and most recently available as of the date 45 days before the applicable
Adjustment Date. In the event that such Index is no longer available, the
applicable Servicer will select a substitute Index in accordance with the terms
of the related Mortgage Note and in compliance with federal and state law.
Insurance Policy: Any insurance or performance bond relating
to a Mortgage Loan or the Mortgage Loans, including any hazard insurance,
special hazard insurance, flood insurance, primary mortgage insurance, mortgagor
bankruptcy bond or title insurance.
Insurance Proceeds: Proceeds paid by any insurer pursuant to
any Insurance Policy covering a Mortgage Loan.
Insured Expenses: Expenses covered by any Insurance Policy
covering a Mortgage Loan.
Interest Accrual Amount: As to any Distribution Date and any
Class of Class A Certificates, (i) the product of (a) 1/12th of the Class A
Pass-Through Rate for such Class and (b) the Principal Balance of such Class as
of the Determination Date immediately preceding such Distribution Date minus
(ii) the Class A Interest Percentage of such Class of (a) any Non-Supported
Interest Shortfall allocated to the Class A Certificates with respect to such
Distribution Date, (b) any Relief Act Shortfall allocated to such Class and (c)
the interest portion of any Realized Losses allocated to the Class A
Certificates on or after the Subordination Depletion Date pursuant to Section
4.02(c).
As to any Distribution Date and any Class of Class B
Certificates, an amount equal to (i) the product of 1/12th of the Class B
Pass-Through Rate and the Principal Balance of such Class as of the
Determination Date preceding such Distribution Date minus (ii) the Class B
Interest Percentage of such Class of the sum of any Non-Supported Interest
Shortfall and any Relief Act Shortfall allocated to the Class B Certificates
with respect to such Distribution Date.
Letter of Credit: As defined in the Xxxxx Fargo Bank Servicing
Agreement.
Liquidated Loan: A Mortgage Loan with respect to which the
related Mortgaged Property has been acquired, liquidated or foreclosed and with
respect to which the applicable Servicer determines that all Liquidation
Proceeds which it expects to recover have been recovered.
Liquidated Loan Loss: With respect to any Distribution Date,
the aggregate of the amount of losses with respect to each Mortgage Loan which
became a Liquidated Loan during the Applicable Unscheduled Principal Receipt
Period with respect to Full Unscheduled Principal Receipts for such Distribution
Date, equal to the excess of (i) the unpaid principal balance of each such
Liquidated Loan, plus accrued interest thereon in accordance with the
amortization schedule at the time applicable thereto at the applicable Net
Mortgage Interest Rate from the Due Date as to which interest was last paid with
respect thereto through the last day of the month preceding the month in which
such Distribution Date occurs, over (ii) Net Liquidation Proceeds with respect
to such Liquidated Loan.
Liquidation Expenses: Expenses incurred by a Servicer in
connection with the liquidation of any defaulted Mortgage Loan or property
acquired in respect thereof (including, without limitation, legal fees and
expenses, committee or referee fees, and, if applicable, brokerage commissions
and conveyance taxes), any unreimbursed advances (including Periodic Advances)
expended by such Servicer pursuant to its Servicing Agreement or the Master
Servicer or Trustee pursuant hereto respecting the related Mortgage Loan,
including any unreimbursed advances for real property taxes or for property
restoration or preservation of the related Mortgaged Property. Liquidation
Expenses shall not include any previously incurred expenses in respect of an REO
Mortgage Loan which have been netted against related REO Proceeds.
Liquidation Proceeds: Amounts received by a Servicer
(including Insurance Proceeds) or PMI Advances made by a Servicer in connection
with the liquidation of defaulted Mortgage Loans or property acquired in respect
thereof, whether through foreclosure, sale or otherwise, including payments in
connection with such Mortgage Loans received from the Mortgagor, other than
amounts required to be paid to the Mortgagor pursuant to the terms of the
applicable Mortgage or to be applied otherwise pursuant to law.
Liquidation Profits: As to any Distribution Date and any
Mortgage Loan that became a Liquidated Loan during the Applicable Unscheduled
Principal Receipt Period with respect to Full Unscheduled Principal Receipts for
such Distribution Date, the excess, if any, of (i) Net Liquidation Proceeds in
respect of such Liquidated Loan over (ii) the unpaid principal balance of such
Liquidated Loan plus accrued interest thereon in accordance with the
amortization schedule at the time applicable thereto at the applicable Net
Mortgage Interest Rate from the Due Date to which interest was last paid with
respect thereto through the last day of the month preceding the month in which
such Distribution Date occurs.
Loan-to-Value Ratio: The ratio, expressed as a percentage, the
numerator of which is the principal balance of a particular Mortgage Loan at
origination and the denominator of which is the lesser of (x) the appraised
value of the related Mortgaged Property determined in the appraisal used by the
originator at the time of origination of such Mortgage Loan, and (y) if the
Mortgage is originated in connection with a sale of the Mortgaged Property, the
sale price for such Mortgaged Property.
Master Servicer: Xxxxx Fargo Bank, or its successor in
interest. Initially, the Master Servicer functions shall be performed by the
Corporate Trust Services division of Xxxxx Fargo Bank.
Master Servicer Errors and Omissions Policy: An insurance
policy covering losses caused by errors or omissions of the Master Servicer and
its personnel.
Master Servicing Fee: With respect to any Mortgage Loan and
any Distribution Date, the fee payable monthly to the Master Servicer pursuant
to Section 6.05 equal to a fixed percentage (expressed as a per annum rate) of
the unpaid principal balance of such Mortgage Loan.
Master Servicing Fee Rate: As set forth in Section 11.24.
Master Servicing Officer: Any officer of the Master Servicer
involved in, or responsible for, the administration and master servicing of the
Mortgage Loans.
MERS: The Mortgage Electronic Registration Systems, Inc.
MERS Mortgage Loan: Any MOM Mortgage Loan or any other
Mortgage Loan as to which MERS is (or is intended to be) the mortgagee of record
and as to which a MIN has been assigned.
Mid-Month Receipt Period: With respect to each Distribution
Date, the one month period beginning on the Determination Date (or, in the case
of the first Distribution Date, from and including the Cut-Off Date) occurring
in the calendar month preceding the month in which such Distribution Date occurs
and ending on the day preceding the Determination Date immediately preceding
such Distribution Date.
MIN: A MERS Mortgage Identification Number assigned to a
Mortgage Loan registered under MERS.
MOM: A Mortgage Loan where the related Mortgage names MERS as
the original mortgagee thereof, as to which a MIN has been assigned, and which
Mortgage has not been assigned to any other person.
Month End Interest: As defined in each Servicing Agreement.
Monthly Payment: As to any Mortgage Loan (including any REO
Mortgage Loan) and any Due Date, the payment of principal and interest due
thereon in accordance with the amortization schedule at the time applicable
thereto (after adjustment for any Curtailments and Deficient Valuations
occurring prior to such Due Date but before any adjustment to such amortization
schedule, other than for Deficient Valuations, by reason of any bankruptcy or
similar proceeding or any moratorium or similar waiver or grace period).
Mortgage: The mortgage, deed of trust or other instrument
creating a first lien on Mortgaged Property securing a Mortgage Note together
with any Mortgage Loan Rider, if applicable.
Mortgage Interest Rate: As to any Mortgage Loan, the per annum
rate at which interest accrues on the unpaid principal balance thereof as set
forth in the related Mortgage Note, which rate is as indicated on the Mortgage
Loan Schedule.
Mortgage Loan Purchase Agreement: The mortgage loan purchase
agreement dated as of February 27, 2006 between Xxxxx Fargo Bank, as seller, and
the Depositor, as purchaser.
Mortgage Loan Rider: The standard Xxxxxx Mae/Xxxxxxx Mac
riders to the Mortgage Note and/or Mortgage riders required when the Mortgaged
Property is a condominium unit or a unit in a planned unit development.
Mortgage Loan Schedule: The list delivered by the Depositor to
the Trustee, the Master Servicer and the Custodian of the Mortgage Loans
transferred to the Trustee on the Closing Date as part of the Trust Estate,
which list may be amended following the Closing Date upon conveyance of a
Substitute Mortgage Loan pursuant to Section 2.02 or 2.03 and which list shall
set forth at a minimum the following information as of the close of business on
the Cut-Off Date (or, with respect to Substitute Mortgage Loans, as of the close
of business on the day of substitution) as to each Mortgage Loan:
(i) the Mortgage Loan identifying number;
(ii) the city, state and zip code of the Mortgaged Property;
(iii) the type of property;
(iv) the Mortgage Interest Rate;
(v) the Net Mortgage Interest Rate;
(vi) the Monthly Payment;
(vii) the original number of months to maturity;
(viii) the scheduled maturity date;
(ix) the Cut-Off Date Principal Balance;
(x) the Loan-to-Value Ratio at origination;
(xi) whether such Mortgage Loan is a Subsidy Loan;
(xii) whether such Mortgage Loan is covered by primary
mortgage insurance;
(xiii) the applicable Servicing Fee Rate;
(xiv) the Master Servicing Fee Rate;
(xv) the Index;
(xvi) the Gross Margin;
(xvii) the Periodic Cap;
(xviii) the first Adjustment Date;
(xix) the Rate Ceiling;
(xx) in the case of any Mortgage Loan initially serviced by
Xxxxx Fargo Bank, whether such Mortgage Loan is a Type 1 Mortgage Loan or a Type
2 Mortgage Loan; and
(xxi) the name of the Servicer.
Such schedule may consist of multiple reports that
collectively set forth all of the information required.
Mortgage Loans: Each of the mortgage loans transferred and
assigned to the Trustee on the Closing Date pursuant to Section 2.01(a) and any
mortgage loans substituted therefor pursuant to Section 2.02 or 2.03, in each
case as from time to time are included in the Trust Estate as identified in the
Mortgage Loan Schedule.
Mortgage Note: The note or other evidence of indebtedness
evidencing the indebtedness of a Mortgagor under a Mortgage Loan together with
any related Mortgage Loan Riders, if applicable.
Mortgaged Property: The property subject to a Mortgage, which
may include Co-op Shares or residential long-term leases.
Mortgagor: The obligor on a Mortgage Note.
Net Liquidation Proceeds: As to any defaulted Mortgage Loan,
Liquidation Proceeds net of Liquidation Expenses.
Net Mortgage Interest Rate: With respect to each Mortgage
Loan, a rate equal to (i) the Mortgage Interest Rate on such Mortgage Loan minus
(ii) the sum of (a) the applicable Servicing Fee Rate, as set forth in Section
11.23 with respect to such Mortgage Loan and (b) the Master Servicing Fee Rate,
as set forth in Section 11.24 with respect to such Mortgage Loan. Any regular
monthly computation of interest at such rate shall be based upon annual interest
at such rate on the applicable amount divided by twelve.
Net REO Proceeds: As to any REO Mortgage Loan, REO Proceeds
net of any related expenses of the Servicer.
Net WAC: As to any Distribution Date, a per annum rate equal
to the weighted average of the Net Mortgage Interest Rates of the Mortgage Loans
(based on the Scheduled Principal Balances of the Mortgage Loans on the first
day of the month preceding the month in which such Distribution Date occurs).
Non-permitted Foreign Holder: As defined in Section 5.02(d).
Nonrecoverable Advance: Any portion of a Periodic Advance
previously made or proposed to be made in respect of a Mortgage Loan which has
not been previously reimbursed to the Servicer, the Master Servicer or the
Trustee, as the case may be, and which the Servicer, the Master Servicer or the
Trustee determines will not, or in the case of a proposed Periodic Advance would
not, be ultimately recoverable from Liquidation Proceeds or other recoveries in
respect of the related Mortgage Loan. The determination by the Servicer, the
Master Servicer or the Trustee (i) that it has made a Nonrecoverable Advance or
(ii) that any proposed Periodic Advance, if made, would constitute a
Nonrecoverable Advance, shall be evidenced by an Officer's Certificate of the
Servicer delivered to the Master Servicer for redelivery to the Trustee or, in
the case of a Master Servicer determination, an Officer's Certificate of the
Master Servicer delivered to the Trustee, in each case detailing the reasons for
such determination.
Non-Supported Interest Shortfall: With respect to any
Distribution Date, the sum of (i) the excess, if any, of the aggregate
Prepayment Interest Shortfall on the Mortgage Loans over the aggregate
Compensating Interest with respect to such Distribution Date and (ii)
Curtailment Interest Shortfalls with respect to such Distribution Date. With
respect to each Distribution Date occurring on or after the Subordination
Depletion Date, the Non-Supported Interest Shortfall determined pursuant to the
preceding sentence will be increased by the amount of any Subordination
Depletion Date Interest Shortfall for such Distribution Date. Any Non-Supported
Interest Shortfall will be allocated to (a) the Class A Certificates according
to the percentage obtained by dividing the Class A Principal Balance by the
Aggregate Principal Balance and (b) the Class B Certificates according to the
percentage obtained by dividing the Class B Principal Balance by the Aggregate
Principal Balance.
Non-U.S. Person: As defined in Section 4.01(f).
NYCEMA: A New York Consolidation, Extension and Modification
Agreement.
Officer's Certificate: With respect to any Person, a
certificate signed by the Chairman of the Board, the President or a Vice
President, and by the Treasurer, the Secretary or one of the Assistant
Treasurers, Assistant Secretaries or any other duly authorized officer of such
Person (or, in the case of a Person which is not a corporation, signed by the
person or persons having like responsibilities).
Opinion of Counsel: A written opinion of counsel, who may be
outside or salaried counsel for the Depositor, a Servicer or the Master
Servicer, or any affiliate of the Depositor, a Servicer or the Master Servicer,
acceptable to the Trustee if such opinion is to be delivered to the Trustee;
provided, however, that with respect to REMIC matters, matters relating to the
determination of Eligible Accounts or matters relating to transfers of
Certificates, such counsel shall be Independent.
Optimal Adjustment Event: With respect to any Class of Class B
Certificates and any Distribution Date, an Optimal Adjustment Event will occur
with respect to such Class if: (i) the Principal Balance of such Class on the
Determination Date succeeding such Distribution Date would have been reduced to
zero (regardless of whether such Principal Balance was reduced to zero as a
result of principal distribution or the allocation of Realized Losses) and (ii)
(a) the Principal Balance of any Class of Class A Certificates would be subject
to further reduction as a result of the third sentence of the definition of
Principal Balance or (b) the Principal Balance of a Class of Class B
Certificates with a lower numerical designation would be reduced with respect to
such Distribution Date as a result of the application of the proviso in the
definition of Class B-1 Principal Balance, Class B-2 Principal Balance, Class
B-3 Principal Balance, Class B-4 Principal Balance, Class B-5 Principal Balance
or Class B-6 Principal Balance.
Original Class A Percentage: The Class A Percentage as of the
Cut-Off Date, as set forth in Section 11.03.
Original Class A Principal Balance: The sum of the Original
Principal Balances of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5
and Class A-R Certificates, as set forth in Section 11.04.
Original Class B Principal Balance: The sum of the Original
Class B-1 Principal Balance, Original Class B-2 Principal Balance, Original
Class B-3 Principal Balance, Original Class B-4 Principal Balance, Original
Class B-5 Principal Balance and Original Class B-6 Principal Balance, as set
forth in Section 11.06.
Original Class B-1 Fractional Interest: As to the first
Distribution Date, the percentage obtained by dividing the sum of the Original
Class B-2 Principal Balance, the Original Class B-3 Principal Balance, the
Original Class B-4 Principal Balance, the Original Class B-5 Principal Balance
and the Original Class B-6 Principal Balance by the Cut-Off Date Aggregate
Principal Balance. The Original Class B-1 Fractional Interest is specified in
Section 11.08.
Original Class B-2 Fractional Interest: As to the first
Distribution Date, the percentage obtained by dividing the sum of the Original
Class B-3 Principal Balance, the Original Class B-4 Principal Balance, the
Original Class B-5 Principal Balance and the Original Class B-6 Principal
Balance by the Cut-Off Date Aggregate Principal Balance. The Original Class B-2
Fractional Interest is specified in Section 11.09.
Original Class B-3 Fractional Interest: As to the first
Distribution Date, the percentage obtained by dividing the sum of the Original
Class B-4 Principal Balance, the Original Class B-5 Principal Balance and the
Original Class B-6 Principal Balance by the Cut-Off Date Aggregate Principal
Balance. The Original Class B-3 Fractional Interest is specified in Section
11.10.
Original Class B-4 Fractional Interest: As to the first
Distribution Date, the percentage obtained by dividing the sum of the Original
Class B-5 Principal Balance and the Original Class B-6 Principal Balance by the
Cut-Off Date Aggregate Principal Balance. The Original Class B-4 Fractional
Interest is specified in Section 11.11.
Original Class B-5 Fractional Interest: As to the first
Distribution Date, the percentage obtained by dividing the Original Class B-6
Principal Balance by the Cut-Off Date Aggregate Principal Balance. The Original
Class B-5 Fractional Interest is specified in Section 11.12.
Original Class B-1 Percentage: The Class B-1 Percentage as of
the Cut-Off Date, as set forth in Section 11.13.
Original Class B-2 Percentage: The Class B-2 Percentage as of
the Cut-Off Date, as set forth in Section 11.14.
Original Class B-3 Percentage: The Class B-3 Percentage as of
the Cut-Off Date, as set forth in Section 11.15.
Original Class B-4 Percentage: The Class B-4 Percentage as of
the Cut-Off Date, as set forth in Section 11.16.
Original Class B-5 Percentage: The Class B-5 Percentage as of
the Cut-Off Date, as set forth in Section 11.17.
Original Class B-6 Percentage: The Class B-6 Percentage as of
the Cut-Off Date, as set forth in Section 11.18.
Original Class B-1 Principal Balance: The Class B-1 Principal
Balance as of the Cut-Off Date, as set forth in Section 11.07.
Original Class B-2 Principal Balance: The Class B-2 Principal
Balance as of the Cut-Off Date, as set forth in Section 11.07.
Original Class B-3 Principal Balance: The Class B-3 Principal
Balance as of the Cut-Off Date, as set forth in Section 11.07.
Original Class B-4 Principal Balance: The Class B-4 Principal
Balance as of the Cut-Off Date, as set forth in Section 11.07.
Original Class B-5 Principal Balance: The Class B-5 Principal
Balance as of the Cut-Off Date, as set forth in Section 11.07.
Original Class B-6 Principal Balance: The Class B-6 Principal
Balance as of the Cut-Off Date, as set forth in Section 11.07.
Original Principal Balance: Any of the Original Principal
Balances of the Classes of Class A Certificates as set forth in Section 11.04;
the Original Class B-1 Principal Balance, Original Class B-2 Principal Balance,
Original Class B-3 Principal Balance, Original Class B-4 Principal Balance,
Original Class B-5 Principal Balance or Original Class B-6 Principal Balance as
set forth in Section 11.07.
Original Subordinated Percentage: The Subordinated Percentage
as of the Cut-Off Date, as set forth in Section 11.05.
Other Servicer: Any of the Servicers other than Xxxxx Fargo
Bank.
Other Servicer Mortgage Loan: Any of the Mortgage Loans, if
any, identified on the Mortgage Loan Schedule as serviced by an Other Servicer,
as such Mortgage Loan Schedule may be amended from time to time in connection
with a substitution pursuant to Section 2.02 or 2.03, which Mortgage Loan is
serviced under an Other Servicing Agreement.
Other Servicing Agreements: The Servicing Agreements other
than the Xxxxx Fargo Bank Servicing Agreement.
Outstanding Mortgage Loan: As to any Due Date, a Mortgage Loan
(including an REO Mortgage Loan) which was not the subject of a Full Unscheduled
Principal Receipt prior to such Due Date and which was not repurchased by the
Depositor prior to such Due Date pursuant to Section 2.02, 2.03 or 3.08.
Owner Mortgage Loan File: A file maintained by the Custodian
for each Mortgage Loan that contains the documents specified in Section 2.01(a)
and any additional documents required to be added to the Owner Mortgage Loan
File pursuant to this Agreement.
Partial Liquidation Proceeds: Liquidation Proceeds received by
a Servicer prior to the Unscheduled Principal Receipt Period in which the
related Mortgage Loan became a Liquidated Loan.
Partial Unscheduled Principal Receipt: An Unscheduled
Principal Receipt which is not a Full Unscheduled Principal Receipt.
Paying Agent: The Person authorized to make distributions to
Certificateholders with respect to the Certificates and to forward to
Certificateholders the periodic and annual statements required by Section 4.04.
The Paying Agent may be the Trustee. The initial Paying Agent is appointed in
Section 4.03(b).
Paying Agent Agreement: As defined in Section 4.03(b).
Payment Account: The account maintained pursuant to Section
4.03(a).
Percentage Interest: With respect to a Class A Certificate,
the undivided percentage interest obtained by dividing the original principal
balance of such Certificate by the Original Principal Balance of such Class of
Class A Certificates. With respect to a Class B Certificate of a Class, the
undivided percentage interest obtained by dividing the original principal
balance of such Certificate by the Original Principal Balance of such Class of
Class B Certificates.
Periodic Advance: The aggregate of the advances required to be
made by a Servicer on any Remittance Date pursuant to its Servicing Agreement or
by the Master Servicer or the Trustee hereunder on any Distribution Date, the
amount of any such advances being equal to the total of all Monthly Payments
(adjusted, in each case (i) in respect of interest, to the applicable Mortgage
Interest Rate less the applicable Servicing Fee in the case of Periodic Advances
made by a Servicer and to the applicable Net Mortgage Interest Rate in the case
of Periodic Advances made by the Master Servicer or Trustee and (ii) by the
amount of any related Debt Service Reductions or reductions in the amount of
interest collectable from the Mortgagor pursuant to the Servicemembers Civil
Relief Act, as it may be amended from time to time, or similar legislation or
regulations then in effect) on the Mortgage Loans, that (x) were delinquent as
of the close of business on the related Determination Date, (y) were not the
subject of a previous Periodic Advance by such Servicer or of a Periodic Advance
by the Master Servicer or the Trustee, as the case may be and (z) have not been
determined by the Master Servicer, such Servicer or Trustee to be Nonrecoverable
Advances.
Periodic Cap: For each Mortgage Loan, the applicable limit on
adjustment of the Mortgage Interest Rate for each Adjustment Date specified in
the applicable Mortgage Note and designated as such in the Mortgage Loan
Schedule.
Person: Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Plan: As defined in Section 5.02(c).
Pledge Holder: As defined in the Xxxxx Fargo Bank Servicing
Agreement.
Pledged Asset Mortgage Loans: The Mortgage Loans listed on
Exhibit Q for which Letters of Credit have been issued.
PMI Advance: As defined in the related Servicing Agreement, if
applicable.
Pool Balance: As of any Distribution Date, the sum of the
amounts for each Mortgage Loan that is an Outstanding Mortgage Loan of the
Scheduled Principal Balance of such Mortgage Loan.
Pool Distribution Amount: As of any Distribution Date, the
funds eligible for distribution to the Class A Certificates and Class B
Certificates on such Distribution Date, which shall be the sum of (i) all
previously undistributed payments or other receipts on account of principal and
interest on or in respect of the Mortgage Loans (including, without limitation,
the proceeds of any repurchase of a Mortgage Loan by the Depositor and any
Substitution Principal Amount) received by the Master Servicer with respect to
the applicable Remittance Date in the month of such Distribution Date and any
Unscheduled Principal Receipts received by the Master Servicer on or prior to
the Business Day preceding such Distribution Date, (ii) all Periodic Advances
made by a Servicer pursuant to the related Servicing Agreement or Periodic
Advances made by the Master Servicer or the Trustee pursuant to Section 3.03,
(iii) any remaining Reimbursement Amount as provided in Section 4.01(a) and (iv)
all other amounts (including any Insurance Proceeds and Compensating Interest)
required to be placed in the Certificate Account by the Servicer on or before
the applicable Remittance Date or by the Master Servicer or the Trustee on or
prior to the Distribution Date, but excluding the following:
(a) amounts received as late payments of principal or interest
and respecting which the Master Servicer or the Trustee has made one or
more unreimbursed Periodic Advances;
(b) the portion of Liquidation Proceeds used to reimburse any
unreimbursed Periodic Advances by the Master Servicer or the Trustee;
(c) that portion of each payment of interest on a particular
Mortgage Loan which represents (i) the Servicing Fee and (ii) the
Master Servicing Fee;
(d) all amounts representing scheduled payments of principal
and interest due after the Due Date occurring in the month in which
such Distribution Date occurs;
(e) all Unscheduled Principal Receipts received by the
Servicers after the Applicable Unscheduled Principal Receipt Period
relating to the Distribution Date for the applicable type of
Unscheduled Principal Receipt, and all related payments of interest on
such amounts;
(f) all repurchase proceeds with respect to Mortgage Loans
repurchased by the Depositor pursuant to Section 2.02, 2.03 or 3.08 on
or following the Determination Date in the month in which such
Distribution Date occurs and the Substitution Principal Amounts with
respect to any Mortgage Loans for which Mortgage Loans were substituted
on or following the Determination Date in the month in which such
Distribution Date occurs;
(g) that portion of Liquidation Proceeds and REO Proceeds
which represents any unpaid Servicing Fee or Master Servicing Fee;
(h) all income from Eligible Investments that is held in the
Certificate Account for the account of the Master Servicer;
(i) Liquidation Profits;
(j) Month End Interest;
(k) all amounts reimbursable to a Servicer for PMI Advances;
and
(l) all other amounts permitted to be withdrawn from the
Certificate Account, to the extent not covered by clauses (a) through
(k) above, or not required to be deposited in the Certificate Account
under this Agreement.
Pool Scheduled Principal Balance: As to any Distribution Date,
the aggregate Scheduled Principal Balance of all Mortgage Loans that were
Outstanding Mortgage Loans on the Due Date in the month preceding the month of
such Distribution Date.
Prepayment In Full: With respect to any Mortgage Loan, a
Mortgagor payment consisting of a Principal Prepayment in the amount of the
outstanding principal balance of such loan and resulting in the full
satisfaction of such obligation.
Prepayment Interest Shortfall: On any Distribution Date, the
amount of interest, if any, that would have accrued on any Mortgage Loan which
was the subject of a Prepayment in Full at the Net Mortgage Interest Rate for
such Mortgage Loan from the date of its Prepayment in Full (but in the case of a
Prepayment in Full where the Applicable Unscheduled Principal Receipt Period is
the Mid-Month Receipt Period, only if the date of the Prepayment in Full is on
or after the Determination Date in the month prior to the month of such
Distribution Date and prior to the first day of the month of such Distribution
Date) through the last day of the month prior to the month of such Distribution
Date.
Principal Adjustment: In the event that the Class B-1 Optimal
Principal Amount, Class B-2 Optimal Principal Amount, Class B-3 Optimal
Principal Amount, Class B-4 Optimal Principal Amount, Class B-5 Optimal
Principal Amount or Class B-6 Optimal Principal Amount is calculated in
accordance with the proviso in such definition with respect to any Distribution
Date, the Principal Adjustment for such Class of Class B Certificates shall
equal the difference between (i) the amount that would have been distributed to
such Class as principal in accordance with Section 4.01(a) for such Distribution
Date, calculated without regard to such proviso and assuming there are no
Principal Adjustments for such Distribution Date and (ii) the Adjusted Principal
Balance for such Class.
Principal Balance: As of the first Determination Date and as
to any Class of Class A Certificates, the Original Principal Balance of such
Class. As of any subsequent Determination Date prior to the Subordination
Depletion Date and as to any Class of Class A Certificates, the Original
Principal Balance of such Class less the sum of all amounts previously
distributed in respect of such Class on prior Distribution Dates (i) pursuant to
Paragraph third of Section 4.01(a) and (ii) as a result of a Principal
Adjustment. After the Subordination Depletion Date, each such Principal Balance
of a Class of Class A Certificates will also be reduced (if clause (a) is
greater than clause (b)) or increased (if clause (a) is less than clause (b)) on
each Determination Date by an amount equal to the product of the Class A Loss
Percentage of such Class and the difference, if any, between (a) the Class A
Principal Balance as of such Determination Date without regard to this sentence
and (b) the Adjusted Pool Amount for the preceding Distribution Date; provided,
however, that the amount of any such reduction for the Class A-1, Class A-2 and
Class A-4 Certificates will be decreased by the Class A-5 Loss Allocation
Amount. After the Subordination Depletion Date, the Principal Balance of the
Class A-5 Certificates will additionally be reduced by the Class A-5 Loss
Allocation Amount. In addition, any increase allocated to the Class A-1, Class
A-2 and Class A-4 Certificates pursuant to the third sentence above will instead
increase the Principal Balance of the Class A-5 Certificates. Notwithstanding
the foregoing, on any Distribution Date in which the sum of the Class A-1, Class
A-2 and Class A-4 Certificates Loss Amounts exceeds the Principal Balance of the
Class A-5 Certificates prior to any reduction for the Class A-5 Loss Allocation
Amount, such excess will be allocated, pro rata, based on the Class A-1, Class
A-2 and Class A-4 Loss Amounts, in reduction of the Principal Balances of the
Class A-1, Class A-2 and Class A-4 Certificates.
As to the Class B Certificates, the Class B-1 Principal
Balance, Class B-2 Principal Balance, Class B-3 Principal Balance, Class B-4
Principal Balance, Class B-5 Principal Balance and Class B-6 Principal Balance,
respectively.
Notwithstanding the foregoing, no Principal Balance of a Class
will be increased on any Determination Date such that the Principal Balance of
such Class exceeds its Original Principal Balance less all amounts previously
distributed in respect of such Class on prior Distribution Dates pursuant to
Paragraph third of Section 4.01(a) or Paragraphs sixth, ninth, twelfth,
fifteenth, eighteenth or twenty-first of Section 4.01(a).
Principal Prepayment: Any Mortgagor payment on a Mortgage Loan
which is received in advance of its Due Date and is not accompanied by an amount
representing scheduled interest for any period subsequent to the date of
prepayment.
Prior Month Receipt Period: With respect to each Distribution
Date, the calendar month preceding the month in which such Distribution Date
occurs.
Prohibited Transaction Tax: Any tax imposed under Section 860F
of the Code.
Prospectus: The prospectus dated February 21, 2006 as
supplemented by the prospectus supplement dated February 23, 2006, relating to
the Class A, Class B-1, Class B-2 and Class B-3 Certificates.
Prudent Servicing Practices: The standard of care set forth in
each Servicing Agreement.
Rate Ceiling: The maximum per annum Mortgage Interest Rate
permitted under the related Mortgage Note.
Rating Agency: Any nationally recognized statistical credit
rating agency, or its successor, that rated one or more Classes of the
Certificates at the request of the Depositor at the time of the initial issuance
of the Certificates. The Rating Agencies for the Class A Certificates are S&P
and Fitch. The Rating Agency for the Class B-1, Class B-2, Class B-3, Class B-4
and Class B-5 Certificates is Fitch. If any such agency or a successor is no
longer in existence, "Rating Agency" shall be such statistical credit rating
agency, or other comparable Person, designated by the Depositor, notice of which
designation shall be given to the Trustee and the Master Servicer. References
herein to the highest short-term rating category of a Rating Agency shall mean
A-1 in the case of S&P, F-1+ in the case of Fitch, and in the case of any other
Rating Agency shall mean its equivalent of such ratings. References herein to
the highest long-term rating categories of a Rating Agency shall mean AAA in the
case of S&P and Fitch, and in the case of any other Rating Agency shall mean its
equivalent of such ratings without any plus or minus.
Realized Losses: With respect to any Distribution Date, (i)
Liquidated Loan Losses incurred on Liquidated Loans for which the Liquidation
Proceeds were received during the Applicable Unscheduled Principal Receipt
Period with respect to Full Unscheduled Principal Receipts with respect to such
Distribution Date and (ii) Bankruptcy Losses incurred during the period
corresponding to the Applicable Unscheduled Principal Receipt Period with
respect to Full Unscheduled Principal Receipts for such Distribution Date.
Record Date: The last Business Day of the month preceding the
month of the related Distribution Date.
Recovery: Any amount received (net of any reimbursable
expenses) on a Mortgage Loan subsequent to such Mortgage Loan being determined
to be a Liquidated Loan.
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
publicly provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan.
7, 2005)) or by the staff of the Commission, or as may be provided by the
Commission or its staff from time to time.
Reimbursement Amount: As defined in Section 2.03(c).
Relevant Servicing Criteria: The Servicing Criteria applicable
to the Master Servicer, the Trustee, the Custodian or the Servicers, as set
forth on Exhibit R attached hereto and the Servicing Criteria applicable to any
Special Servicer as set forth in the applicable Special Servicing Agreement. For
clarification purposes, multiple parties can have responsibility for the same
Relevant Servicing Criteria. With respect to a Servicing Function Participant
engaged by the Master Servicer, the Trustee, the Custodian, the Special Servicer
(if applicable) or a Servicer, the term "Relevant Servicing Criteria" refers to
the portion of the Relevant Servicing Criteria applicable to the party engaging
such Servicing Function Participant insofar as the functions required to be
performed by such party are to be performed by the Servicing Function
Participant.
Relief Act Shortfall: Any interest shortfalls arising as a
result of the reduction in the amount of monthly interest payments on any
Mortgage Loans as a result of the application of the Servicemembers Civil Relief
Act, as it may be amended from time to time, or comparable state legislation.
Any Relief Act Shortfall will be allocated to (a) the Class A Certificates
according to the percentage obtained by dividing the Class A Principal Balance
by the Aggregate Principal Balance and (b) the Class B Certificates according to
the percentage obtained by dividing the Class B Principal Balance by the
Aggregate Principal Balance.
REMIC: A "real estate mortgage investment conduit" as defined
in Code Section 860D. "The REMIC" means the REMIC constituted by the Trust
Estate.
REMIC Provisions: Provisions of the federal income tax law
relating to REMICs, which appear at Sections 860A through 860G of Part IV of
Subchapter M of Chapter 1 of Subtitle A of the Code, and related provisions, and
U.S. Department of the Treasury temporary, proposed or final regulations
promulgated thereunder, as the foregoing are in effect (or with respect to
proposed regulations, are proposed to be in effect) from time to time.
Remittance Date: As defined in each of the Servicing
Agreements.
REO Mortgage Loan: Any Mortgage Loan which is not a Liquidated
Loan and as to which the indebtedness evidenced by the related Mortgage Note is
discharged and the related Mortgaged Property is held as part of the Trust
Estate.
REO Proceeds: Proceeds received in respect of any REO Mortgage
Loan (including, without limitation, proceeds from the rental of the related
Mortgaged Property).
Reportable Event: As defined in Section 3.12(c).
Repurchase Price: With respect to any Mortgage Loan
repurchased pursuant to Section 2.02, 2.03 or 3.08 hereof, the sum of (a) 100%
of the unpaid principal balance of such Mortgage Loan plus (b) accrued interest
at the Mortgage Interest Rate, through the last day of the month in which such
repurchase takes place.
Request for Release: A request for release (which may be in
electronic form) in substantially the form attached as Exhibit G hereto.
Responsible Officer: When used with respect to the Trustee,
the Master Servicer, the Custodian, the Paying Agent or the Authenticating
Agent, any officer of the Corporate Trust Department of the Trustee, the Master
Servicer, the Custodian, the Paying Agent or the Authenticating Agent having
direct responsibility for the administration of this Agreement, including any
Senior Vice President, any Vice President, any Assistant Vice President, any
Assistant Secretary, any Trust Officer or Assistant Trust Officer, or any other
employee of the Trustee, the Master Servicer, the Custodian, the Paying Agent or
the Authenticating Agent customarily performing functions similar to those
performed by any of the above designated officers. When used with respect to a
Servicer, a Servicing Officer.
Retained Mortgage Loan File: A file maintained by Xxxxx Fargo
Bank prior to any Document Transfer Date for each Mortgage Loan that contains
the documents specified in Section 2.01(b) and any additional documents required
to be added to the Retained Mortgage Loan File pursuant to this Agreement.
Rule 144A: Rule 144A promulgated under the 1933 Act.
Xxxxxxxx-Xxxxx Certification: As defined in Section 3.12(b).
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, Inc., or its successor in interest.
Scheduled Principal Balance: As to any Mortgage Loan and
Distribution Date, the principal balance of such Mortgage Loan as of the Due
Date in the month preceding the month of such Distribution Date as specified in
the amortization schedule at the time relating thereto (before any adjustment to
such amortization schedule by reason of any bankruptcy (other than Deficient
Valuations) or similar proceeding or any moratorium or similar waiver or grace
period) after giving effect to (A) Unscheduled Principal Receipts received or
applied by the applicable Servicer during the related Unscheduled Principal
Receipt Period for each applicable type of Unscheduled Principal Receipt related
to the Distribution Date occurring in the month preceding such Distribution
Date, (B) Deficient Valuations incurred prior to such Due Date and (C) the
payment of principal due on such Due Date and irrespective of any delinquency in
payment by the related Mortgagor. Accordingly, the Scheduled Principal Balance
of a Mortgage Loan which becomes a Liquidated Loan at any time through the last
day of such related Unscheduled Principal Receipt Period shall be zero.
Servicer Mortgage Loan File: As defined in each of the
Servicing Agreements.
Servicers: Xxxxx Fargo Bank, as a Servicer under the related
Servicing Agreement. Initially the servicing functions performed by Xxxxx Fargo
Bank shall be performed by the Xxxxx Fargo Home Mortgage division of Xxxxx Fargo
Bank.
Servicing Agreements: Each of the Servicing Agreements
executed with respect to a portion of the Mortgage Loans by one of the
Servicers, which agreements are attached hereto, collectively, as Exhibit L.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as such may be amended from time to time.
Servicing Fee: With respect to any Servicer, as defined in its
Servicing Agreement.
Servicing Fee Rate: With respect to a Mortgage Loan, as set
forth in Section 11.23.
Servicing Function Participant: Any Subservicer, Subcontractor
or any other Person, other than the Master Servicer, the Trustee, the Custodian,
the Special Servicer (if applicable) and the Servicers, that is performing
activities addressed by the Servicing Criteria.
Servicing Officer: Any officer of a Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans.
Similar Law: As defined in Section 5.02(c).
Special Servicer: As defined in Section 3.08.
Special Servicing Agreement: As defined in Section 3.08.
Single Certificate: A Certificate of any Class that evidences
the smallest permissible Denomination for such Class, as set forth in Section
11.22.
Startup Day: As defined in Section 2.05.
Subcontractor: Any vendor, subcontractor or other Person that
is not responsible for the overall servicing of Mortgage Loans but performs one
or more discrete functions identified in Item 1122(d) of Regulation AB with
respect to Mortgage Loans under the direction or authority of any Servicer (or a
Subservicer of any Servicer), the Master Servicer, the Trustee or the Custodian.
Subordinated Percentage: As to any Distribution Date, the
percentage which is the difference between 100% and the Class A Percentage for
such date.
Subordinated Prepayment Percentage: As to any Distribution
Date, the percentage which is the difference between 100% and the Class A
Prepayment Percentage for such date.
Subordination Depletion Date: The Distribution Date preceding
the first Distribution Date on which the Class A Percentage (determined pursuant
to clause (ii) of the definition thereof) equals or exceeds 100%.
Subordination Depletion Date Interest Shortfall: With respect
to any Distribution Date that occurs on or after the Subordination Depletion
Date with respect to any Unscheduled Principal Receipt (other than a Prepayment
in Full or Curtailment):
(A) in the case where the Applicable Unscheduled Principal
Receipt Period is the Mid-Month Receipt Period and such
Unscheduled Principal Receipt is received by the
Servicer on or after the Determination Date in the month
preceding the month of such Distribution Date but prior
to the first day of the month of such Distribution Date,
the amount of interest that would have accrued at the
Net Mortgage Interest Rate on the amount of such
Unscheduled Principal Receipt from the day of its
receipt or, if earlier, its application by the Servicer
through the last day of the month preceding the month of
such Distribution Date; and
(B) in the case where the Applicable Unscheduled Principal
Receipt Period is the Prior Month Receipt Period and
such Unscheduled Principal Receipt is received by the
Servicer during the month preceding the month of such
Distribution Date, the amount of interest that would
have accrued at the Net Mortgage Interest Rate on the
amount of such Unscheduled Principal Receipt from the
day of its receipt or, if earlier, its application by
the Servicer through the last day of the month in which
such Unscheduled Principal Receipt is received.
Subservicer: Any Person that (i) services Mortgage Loans on
behalf of any Servicer, and (ii) 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 under this
Agreement, any related Servicing Agreement or any
sub-servicing agreement that are identified in Item
1122(d) of Regulation AB.
Subsidy Account: If the Trust Estate contains any Subsidy
Loans, the deposit account or accounts created and maintained by the Servicer
for deposit of Subsidy Funds and amounts payable under interest subsidy
agreements relating to mortgage loans other than the Mortgage Loans.
Subsidy Funds: If the Trust Estate contains any Subsidy Loans,
funds contributed by the employer of a Mortgagor in order to reduce the payments
required from the Mortgagor for a specified period in specified amounts.
Subsidy Loan: Any Mortgage Loan subject to a temporary
interest subsidy agreement pursuant to which the monthly interest payments made
by the related Mortgagor will be less than the scheduled monthly interest
payments on such Mortgage Loan, with the resulting difference in interest
payments being provided by the employer of the Mortgagor.
Substitute Mortgage Loan: As defined in Section 2.02.
Substitution Principal Amount: With respect to any Mortgage
Loan substituted in accordance with Section 2.02 or pursuant to Section 2.03,
the excess of (x) the unpaid principal balance of the Mortgage Loan which is
substituted for over (y) the unpaid principal balance of the Substitute Mortgage
Loan, each balance being determined as of the date of substitution.
Trust: The New York common law trust created by this
Agreement.
Trust Estate: The corpus of the Trust, consisting of the
Mortgage Loans, such amounts as may be held from time to time in the Certificate
Account, the rights of the Trustee to receive the proceeds of all insurance
policies and performance bonds, if any, required to be maintained hereunder or
under the related Servicing Agreement, property which secured a Mortgage Loan
and which has been acquired by foreclosure or deed in lieu of foreclosure and
all other property and rights described in the first paragraph of Section
2.01(a).
Trustee: U.S. Bank National Association, a national banking
association, or any successor trustee appointed as herein provided.
Type 1 Mortgage Loan: The Mortgage Loans, if any, identified
as such in the Mortgage Loan Schedule as such Mortgage Loan Schedule may be
amended from time to time in connection with a substitution pursuant to Section
2.02 or 2.03, serviced under the Xxxxx Fargo Bank Servicing Agreement and having
a Mid-Month Receipt Period with respect to all types of Unscheduled Principal
Receipts.
Type 2 Mortgage Loan: The Mortgage Loans, if any, identified
as such in the Mortgage Loan Schedule as such Mortgage Loan Schedule may be
amended from time to time in connection with a substitution pursuant to Section
2.02 or 2.03, serviced under the Xxxxx Fargo Bank Servicing Agreement and having
a Prior Month Receipt Period with respect to all types of Unscheduled Principal
Receipts.
Unpaid Interest Shortfalls: Each of the Class A Unpaid
Interest Shortfalls, the Class B-1 Unpaid Interest Shortfall, the Class B-2
Unpaid Interest Shortfall, the Class B-3 Unpaid Interest Shortfall, the Class
B-4 Unpaid Interest Shortfall, the Class B-5 Unpaid Interest Shortfall and the
Class B-6 Unpaid Interest Shortfall.
Unscheduled Principal Receipt: Any Principal Prepayment or
other recovery of principal on a Mortgage Loan, including, without limitation,
Liquidation Proceeds, Net REO Proceeds, Recoveries and proceeds received from
any condemnation award or proceeds in lieu of condemnation other than that
portion of such proceeds released to the Mortgagor in accordance with the terms
of the Mortgage or Prudent Servicing Practices, but excluding any Liquidation
Profits and proceeds of a repurchase of a Mortgage Loan by the Depositor and any
Substitution Principal Amounts.
Unscheduled Principal Receipt Period: Either a Mid-Month
Receipt Period or a Prior Month Receipt Period.
U.S. Person: As defined in Section 4.01(f).
Voting Interest: With respect to any provisions hereof
providing for the action, consent or approval of the Holders of all Certificates
evidencing specified Voting Interests in the Trust Estate, each Class of
Certificates will be entitled to a pro rata portion of the Voting Interest equal
to the ratio obtained by dividing the Principal Balance of such Class by the
Aggregate Principal Balance. Each Certificateholder of a Class will have a
Voting Interest equal to the product of the Voting Interest to which such Class
is collectively entitled and the Percentage Interest in such Class represented
by such Holder's Certificates. With respect to any provisions hereof providing
for action, consent or approval of each Class of Certificates or specified
Classes of Certificates, each Certificateholder of a Class will have a Voting
Interest in such Class equal to such Holder's Percentage Interest in such Class.
Xxxxx Fargo Bank: Xxxxx Fargo Bank, N.A., or its successor in
interest.
Xxxxx Fargo Bank Correspondents: The entities identified on a
list provided by Xxxxx Fargo Bank to the Master Servicer, from which Xxxxx Fargo
Bank purchased the Mortgage Loans.
Xxxxx Fargo Bank Servicing Agreement: The Servicing Agreement
providing for the servicing of those Mortgage Loans that are initially serviced
by Xxxxx Fargo Bank.
Section 1.02 Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing. Except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are delivered to the
Trustee. Proof of execution of any such instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Agreement and
conclusive in favor of the Trustee, if made in the manner provided in this
Section 1.02. The Trustee shall promptly notify the Master Servicer in writing
of the receipt of any such instrument or writing.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. When such
execution is by a signer acting in a capacity other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his or her authority. The fact and date of the execution of any such
instrument or writing, or the authority of the individual executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (whether or not such
Certificates shall be overdue and notwithstanding any notation of ownership or
other writing thereon made by anyone other than the Trustee and the
Authenticating Agent) shall be proved by the Certificate Register, and none of
the Trustee, the Depositor or the Master Servicer shall be affected by any
notice to the contrary.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action of the Holder of any Certificate shall bind
every future Holder of the same Certificate and the Holder of every Certificate
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, omitted or suffered to be done by the
Trustee, the Depositor or the Master Servicer in reliance thereon, whether or
not notation of such action is made upon such Certificate.
Section 1.03 Effect of Headings and Table of Contents.
The Article and Section headings in this Agreement and the
Table of Contents are for convenience of reference only and shall not affect the
interpretation or construction of this Agreement.
Section 1.04 Benefits of Agreement.
Nothing in this Agreement or in the Certificates, express or
implied, shall give to any Person, other than the parties to this Agreement and
their successors hereunder and the Holders of the Certificates any benefit or
any legal or equitable right, power, remedy or claim under this Agreement.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF THE CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and
delivery hereof, does hereby assign to the Trustee, without recourse all the
right, title and interest of the Depositor in and to (a) the Trust Estate,
including all interest and principal received by the Depositor on or with
respect to the Mortgage Loans after the Cut-Off Date (and including scheduled
payments of principal and interest due after the Cut-Off Date but received by
the Depositor on or before the Cut-Off Date and Unscheduled Principal Receipts
received or applied on the Cut-Off Date, but not including payments of principal
and interest due on the Mortgage Loans on or before the Cut-Off Date), (b) the
Insurance Policies, (c) the obligations of the Servicers under the Servicing
Agreements with respect to the Mortgage Loans, (d) the right to receive amounts,
if any, payable on behalf of any Mortgagor from the Subsidy Account relating to
any Subsidy Loan, (e) all of the Depositor's right, title and interest in and to
the proceeds of the Letters of Credit and (f) proceeds of all the foregoing. It
is agreed and understood by the Depositor and the Trustee that it is not
intended that any mortgage loan be included in the Trust Estate that is a
"High-Cost Home Loan" as defined in any of (i) the New Jersey Home Ownership
Act, effective November 27, 2003, (ii) the New Mexico Home Loan Protection Act,
effective January 1, 2004, (iii) the Massachusetts Predatory Home Loan Practices
Act, effective November 7, 2004 or (iv) the Indiana Home Loan Practices Act,
effective January 1, 2005.
In connection with such assignment, the Depositor shall, with
respect to each Mortgage Loan, deliver, or cause to be delivered, to the
Custodian, on or before the Closing Date the following documents or instruments
with respect to each Mortgage Loan:
(i) The original Mortgage Note either (A) endorsed in blank or
(B) endorsed as provided in Section 2.01(d), with all prior and
intervening endorsements as may be necessary to show a complete chain
of endorsements or with respect to any Mortgage Loan as to which the
original Mortgage Note has been permanently lost or destroyed and has
not been replaced, a lost note affidavit with a copy of the Mortgage
Note and, in the case of any Mortgage Loan originated in the State of
New York documented by a NYCEMA, the NYCEMA, the new Mortgage Note, if
applicable, the consolidated Mortgage Note and the consolidated
Mortgage;
(ii) A recorded original assignment of the related Mortgage
from Xxxxx Fargo Bank assigning the related Mortgage to the Trustee
(which may be assigned in blank), certified by the recording office,
or, if such assignment is in the process of being recorded, a copy of
the related Mortgage transmitted for recordation certified by an
officer of Xxxxx Fargo Bank or applicable Xxxxx Fargo Bank
Correspondent to be a true and correct copy of such assignment
submitted for recordation; provided, however, if recordation is not
required as described below, an assignment in recordable form (which
may be assigned in blank) with respect to the related Mortgage;
(iii) The original of each assumption agreement, modification,
written assurance or substitution agreement pertaining to such Mortgage
Note, if any;
(iv) For each Mortgage Loan secured by Co-op Shares, the
originals of the following documents or instruments:
(a) The loan security agreement;
(b) The stock certificate;
(c) The stock power, executed in blank;
(d) The executed proprietary lease;
(e) The executed recognition agreement;
(f) The executed UCC-1 financing statement with
evidence of recording thereon; and
(g) The executed UCC-3 financing statements or other
appropriate UCC financing statements required by
state law, evidencing a complete and unbroken
chain from the mortgagee to the Trustee with
evidence of recording thereon (or in a form
suitable for recordation); and
(v) For each Letter of Credit, the original advice of such
Letter of Credit endorsed by the Pledge Holder and Xxxxx Fargo
Bank's notice of transfer (Exhibit A to the Letter of Credit)
of beneficiary of such Letter of Credit to the Trustee.
(b) The Master Servicer shall promptly notify the Depositor,
the Trustee and the Custodian of the occurrence of any Document Transfer Event
of which the Master Servicer had knowledge. Following the receipt of such
notice, the Depositor shall, with respect to each Mortgage Loan, deliver, or
cause to be delivered, to the Custodian, no later than the Document Transfer
Date, copies (which may be in electronic form mutually agreed upon by the
Depositor and the Custodian) of the following additional documents or
instruments with respect to each Mortgage Loan; provided, however, that
originals of such documents or instruments shall be delivered to the Custodian
if originals are required under the law in which the related Mortgaged Property
is located in order to exercise all remedies available to the Trust under
applicable law following default by the related Mortgagor:
(i) The original recorded Mortgage with evidence of
recordation noted thereon or attached thereto, together with any
addenda or riders thereto, or a copy of such recorded Mortgage with
such evidence of recordation certified to be true and correct by the
appropriate governmental recording office; or a copy of such recorded
Mortgage with such evidence of recordation, or if the original Mortgage
has been submitted for recordation but has not been returned from the
applicable public recording office, a copy of the Mortgage certified by
an officer of Xxxxx Fargo Bank or the applicable Xxxxx Fargo Bank
Correspondent to be a true and correct copy of the original Mortgage
submitted for recordation;
(ii) The original of each assumption agreement, modification,
written assurance or substitution agreement pertaining to such
Mortgage, if any, or, if such document is in the process of being
recorded, a copy of such document, certified by an officer of Xxxxx
Fargo Bank or the applicable Xxxxx Fargo Bank Correspondent of such
Mortgage Loan or by the applicable title insurance company, closing
agent, settlement agent, escrow agent or closing attorney to be a true
and correct copy of such document transmitted for recordation, if any;
(iii) For each MERS Mortgage Loan that is not a MOM Mortgage
Loan, the original assignment showing MERS as the assignee of the
Mortgage, with evidence of recording thereon or copies thereof
certified by an officer of Xxxxx Fargo Bank or the applicable Xxxxx
Fargo Bank Correspondent to have been submitted for recordation;
(iv) Each original recorded intervening assignment of the
Mortgage as may be necessary to show a complete chain of title from the
Mortgage Loan originator to Xxxxx Fargo Bank or Xxxxx Fargo Home
Mortgage, Inc., with evidence of recordation noted thereon or attached
thereto, or a copy of such assignment with such evidence of recordation
to be true and correct by the appropriate governmental recording
office, or, if any such assignment has been submitted for recordation
but has not been returned from the applicable public recording office
or is not otherwise available, a copy of such assignment certified by
an officer of Xxxxx Fargo Bank or the applicable Xxxxx Fargo Bank
Correspondent to be a true and correct copy of the recorded assignment
submitted for recordation; and
(v) The original policy of the title insurance or certificate
of title insurance or a written commitment to issue such a title
insurance policy or certificate of title insurance, or a copy of such
title insurance certified as true and correct by the applicable insurer
or any attorney's certificate of title with an Officer's Certificate of
Xxxxx Fargo Bank or the applicable Xxxxx Fargo Bank Correspondent that
such attorney's certificate of title is customarily used in lieu of a
title insurance policy in the jurisdiction in which the related
mortgage property is located.
(c) If any assignment of a Mortgage to the Trustee is in the
process of being recorded on the Closing Date, the Depositor shall use its best
efforts to cause each such original recorded document or certified copy thereof
to be delivered to the Custodian promptly following its recordation, but in no
event later than one (1) year following the Closing Date. If any Mortgage has
been recorded in the name of MERS or its designee, no assignment of Mortgage in
favor of the Trustee will be required to be prepared or delivered and instead,
the Master Servicer shall enforce any obligation of the Servicers under the
Servicing Agreements to take all actions as are necessary to cause the Trust
Estate 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. The Depositor shall also cause to be
delivered to the Custodian any other original mortgage loan document included in
the Owner Mortgage Loan File if a copy thereof has been delivered. The Depositor
shall pay from its own funds, without any right of reimbursement therefor, the
amount of any costs, liabilities and expenses incurred by the Trust Estate by
reason of the failure of the Depositor to cause to be delivered to the Custodian
within one (1) year following the Closing Date any assignment of a Mortgage
(except with respect to any Mortgage recorded in the name of MERS) not delivered
to the Custodian on the Closing Date.
In lieu of recording an assignment of any Mortgage the
Depositor may, deliver or cause to be delivered to the Custodian the assignment
of the Mortgage Loan to the Trustee in a form suitable for recordation, if (i)
with respect to a particular state the Trustee has received an Opinion of
Counsel acceptable to it that such recording is not required to make the
assignment effective against the parties to the Mortgage or subsequent
purchasers or encumbrances of the Mortgaged Property or (ii) the Depositor has
been advised by each Rating Agency that non-recordation in a state will not
result in a reduction of the rating assigned by that Rating Agency at the time
of initial issuance of the Certificates. Set forth on Exhibit K attached hereto
is a list of all states where recordation is required by either Rating Agency to
obtain the initial ratings of the Certificates. The Custodian may rely and shall
be protected in relying upon the information contained in such Exhibit K. In the
event that the Custodian receives notice that recording is required to protect
the right, title and interest of the Trustee in and to any such Mortgage Loan
for which recordation of an assignment has not previously been required, the
Custodian shall promptly notify the Trustee and the Custodian shall, within five
Business Days (or such other reasonable period of time mutually agreed upon by
the Custodian and the Trustee) of its receipt of such notice, deliver each
previously unrecorded assignment to the related Servicer for recordation.
(d) Except for Mortgage Notes endorsed in blank, endorsements
shall comply with the following format:
WITHOUT RECOURSE
PAY TO THE ORDER OF:
U.S. BANK NATIONAL ASSOCIATION, AS
TRUSTEE under the pooling and servicing
agreement dated as of [date];
and its successors and assigns,
[Xxxxx Fargo Bank, N.A.] or [Xxxxx Fargo Home Mortgage, Inc.]
[Signature of Officer]
[Officer's Name and Title]
Except where assignments in blank are authorized or in the
case of any Mortgage registered in the name of MERS, assignments of any Mortgage
shall comply with the following:
U.S. BANK NATIONAL ASSOCIATION, AS
TRUSTEE
and its successors and assigns
(e) Concurrently with the execution and delivery of this
Agreement, the Depositor shall deliver the Mortgage Loan Schedule to the
Trustee, the Master Servicer and the Custodian. The Depositor and the Master
Servicer shall provide a copy of the Mortgage Loan Schedule to any
Certificateholders upon written request made to it at the addresses set forth on
Exhibit F, as the same may be amended from time to time by written notice from
such party to the other parties hereto.
Section 2.02 Acceptance by Custodian.
Subject to the provisions of the following paragraph, pursuant
to the Custodial Agreement, the Custodian, on behalf of the Trustee, will
declare that it holds and will hold the documents delivered to it pursuant to
Section 2.01(a) above and the other documents constituting a part of the Owner
Mortgage Loan Files or Retained Mortgage Loan Files (after the occurrence of a
Document Transfer Event) delivered to it in trust, upon the trusts herein set
forth, for the use and benefit of all present and future Certificateholders.
Upon execution of this Agreement, the Custodian will deliver to the Depositor
and the Trustee an initial certification in the form of Exhibit N hereto, to the
effect that, except as may be specified in a list of exceptions attached
thereto, it has received the original Mortgage Notes relating to each Mortgage
Loan on the Mortgage Loan Schedule.
The Custodian will review each Owner Mortgage Loan File within
45 days after execution of this Agreement. The Custodian will deliver no later
than 30 days after completion of such review to the Depositor and the Trustee a
final certification in the form of Exhibit O hereto to the effect that, except
as may be specified in a list of exceptions attached thereto, all required
documents set forth in Section 2.01(a) have been executed and received and
appear regular on their face, and that such documents relate to the Mortgage
Loans identified in the Mortgage Loan Schedule based on a comparison of the
Mortgage Loan identifying number, Mortgagor name and street address, and in so
doing the Custodian may rely on the purported due execution and genuineness of
any such document and on the purported genuineness of any signature thereon.
If within such 45 day period the Custodian finds any document
constituting a part of an Owner Mortgage Loan File not to have been executed or
received or to be unrelated to the Mortgage Loans identified in the Mortgage
Loan Schedule or not to appear regular on its face, the Custodian shall promptly
(and in no event more than 30 days after completion of the review) notify the
Trustee and the Trustee shall notify the Depositor. The Depositor shall have a
period of 60 days after the date of such notice within which to correct or cure
any such defect. The Depositor hereby covenants and agrees that, if any material
defect is not so corrected or cured, the Depositor will, not later than 60 days
after the Trustee's notice to it referred to above respecting such defect,
either (i) repurchase the related Mortgage Loan or any property acquired in
respect thereof from the Trust Estate at a price equal to the Repurchase Price
or (ii) if within two years of the Startup Day, or such other period permitted
by the REMIC Provisions, substitute for any Mortgage Loan to which such material
defect relates, a new mortgage loan (a "Substitute Mortgage Loan") having such
characteristics so that the representations and warranties of the Depositor set
forth in Section 2.03(b) hereof (other than Section 2.03(b)(i)) would not have
been incorrect had such Substitute Mortgage Loan originally been a Mortgage
Loan. In no event shall any Substitute Mortgage Loan have an unpaid principal
balance, as of the date of substitution, greater than the Scheduled Principal
Balance (reduced by the scheduled payment of principal due on the Due Date in
the month of substitution) of the Mortgage Loan for which it is substituted. In
addition, such Substitute Mortgage Loan (i) shall have a Loan-to-Value Ratio
less than or equal to and a Net Mortgage Interest Rate equal to that of the
Mortgage Loan for which it is substituted, (ii) shall have the same Gross Margin
and Index as that of the Mortgage Loan for which it is substituted and (iii)
shall have the same frequency of mortgage rate adjustment as that of the
Mortgage Loan for which it is substituted.
In the case of a repurchased Mortgage Loan or property, the
Repurchase Price shall be deposited by the Depositor in the Certificate Account
maintained by the Master Servicer pursuant to Section 3.01. In the case of a
Substitute Mortgage Loan, the Owner Mortgage Loan File (and Retained Mortgage
Loan File, if required pursuant to Section 2.01(b) hereof) relating thereto
shall be delivered to the Custodian and the Substitution Principal Amount (if
any), together with (i) interest on such Substitution Principal Amount at the
applicable Net Mortgage Interest Rate to the following Due Date of such Mortgage
Loan which is being substituted for and (ii) an amount equal to the aggregate
amount of unreimbursed Periodic Advances in respect of interest previously made
by the Servicer, the Master Servicer or the Trustee with respect to such
Mortgage Loan, shall be deposited in the Certificate Account. The Monthly
Payment on the Substitute Mortgage Loan for the Due Date in the month of
substitution shall not be part of the Trust Estate. Upon receipt by the
Custodian of a Request for Release signed by an officer of the Depositor, the
Custodian shall release to the Depositor the Owner Mortgage Loan File (and
Retained Mortgage Loan File, if applicable) of the Mortgage Loan being removed.
The Trustee shall execute and deliver such instrument of transfer or assignment
(or, in the case of a Mortgage Loan registered in the name of MERS or its
designee, the Master Servicer shall enforce the obligation of the applicable
Servicer under the related Servicing Agreement to take all necessary action to
reflect such assignment on the records of MERS), in each case without recourse,
as shall be necessary to vest in the Depositor legal and beneficial ownership of
such substituted or repurchased Mortgage Loan or property. It is understood and
agreed that the obligation of the Depositor to substitute a new Mortgage Loan
for or repurchase any Mortgage Loan or property as to which such a material
defect in a constituent document exists shall constitute the sole remedy
respecting such defect available to the Certificateholders or the Trustee on
behalf of the Certificateholders. The failure of the Custodian to give the final
certification or the Trustee to give any notice within the required time periods
shall not affect or relieve the Depositor's obligation to repurchase any
Mortgage Loan pursuant to this Section 2.02.
The Trustee shall be responsible for enforcing the Depositor's
obligations under this Section 2.02. If the Trustee receives written notice from
the Custodian or the Master Servicer that the defect is not cured by the
Depositor within 60 days after the Trustee's notice, the Trustee shall enforce
the Depositor's obligation to repurchase such Mortgage Loan or substitute for
such Mortgage Loan in accordance with the provisions of this Section 2.02. In
connection with any substitution permitted by this Section 2.02, the Master
Servicer shall verify that the unpaid principal balance and the Loan-to-Value
Ratio of the Substitute Mortgage Loan satisfy the requirements of this Section
2.02.
Section 2.03 Representations and Warranties of the Master
Servicer and the Depositor.
(a) The Master Servicer hereby represents and warrants to the
Trustee for the benefit of the Certificateholders that, as of the date of
execution of this Agreement:
(i) The Master Servicer is a national banking association duly
chartered and validly existing in good standing under the laws of the
United States;
(ii) The execution and delivery of this Agreement by the
Master Servicer and its performance and compliance with the terms of
this Agreement will not violate the Master Servicer's corporate charter
or by-laws or constitute a default (or an event which, with notice or
lapse of time, or both, would constitute a default) under, or result in
the breach of, any material contract, agreement or other instrument to
which the Master Servicer is a party or which may be applicable to the
Master Servicer or any of its assets;
(iii) This Agreement, assuming due authorization, execution
and delivery by the Trustee and the Depositor, constitutes a valid,
legal and binding obligation of the Master Servicer, enforceable
against it in accordance with the terms hereof subject to applicable
bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the enforcement of creditors' rights generally and to general
principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law;
(iv) The Master Servicer 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, which default might
have consequences that would materially and adversely affect the
condition (financial or other) or operations of the Master Servicer or
its properties or might have consequences that would materially affect
its performance hereunder;
(v) Except as otherwise disclosed in the Prospectus, no legal
or governmental proceedings are pending (or known to be contemplated) against
the Master Servicer that would be material to Certificateholders;
(vi) Except as otherwise disclosed in the Prospectus, the
Master Servicer is not aware and has not received notice that any default, early
amortization or other performance triggering event has occurred as to any other
securitization due to any act or failure to act of the Master Servicer under
such securitization;
(vii) Except as otherwise disclosed in the Prospectus, the
Master Servicer has not been terminated as master servicer in a residential
mortgage loan securitization, either due to a master servicing default or to
application of a master servicing performance test or trigger;
(viii) Except as otherwise disclosed in the Prospectus, no
material noncompliance with the applicable servicing criteria with respect to
other securitizations of residential mortgage loans involving the Master
Servicer as a master servicer has been disclosed or reported by the Master
Servicer within the past three (3) years;
(ix) Except as otherwise disclosed in the Prospectus, no
material changes to the Master Servicer's policies or procedures with respect to
the master servicing function it will perform under this Agreement for mortgage
loans of a type similar to the Mortgage Loans have occurred during the
three-year period immediately preceding the date of this Agreement;
(x) Except as otherwise disclosed in the Prospectus, there is
no material risk that the Master Servicer's financial condition could affect one
or more aspects of the performance by the Master Servicer of its master
servicing obligations under this Agreement in a manner that could have a
material impact on the performance of the Mortgage Loans or the Certificates;
and
(xi) Except as disclosed in the Prospectus, there are no
affiliations, relationships or transactions relating to the Master Servicer and
any party identified in Item 1119 of Regulation AB of the type described
therein.
It is understood and agreed that the representations and
warranties set forth in this Section 2.03(a) shall survive delivery of the
respective Owner Mortgage Loan Files to the Trustee or the Custodian. Upon
discovery by any of the Depositor, the Master Servicer or the Trustee of a
breach of any of the representations and warranties set forth in this Section
2.03(a), the party discovering such breach shall give prompt written notice,
which shall not exceed two days, to the other parties. The Master Servicer shall
consult with the Depositor to determine if any such breach is material and any
breach determined by the Depositor to be material shall be included by the
Master Servicer on the next Distribution Date Statement prepared pursuant to
Section 4.04.
(b) The Depositor hereby represents and warrants to the
Trustee for the benefit of Certificateholders that, as of the date of execution
of this Agreement, with respect to the Mortgage Loans, or each Mortgage Loan, as
the case may be:
(i) The information set forth in the Mortgage Loan Schedule
was true and correct in all material respects at the date or dates
respecting which such information is furnished as specified in the
Mortgage Loan Schedule;
(ii) Immediately prior to the transfer and assignment
contemplated herein, the Depositor was the sole owner and holder of the
Mortgage Loan free and clear of any and all liens, pledges, charges or
security interests of any nature and has full right and authority to
sell and assign the same;
(iii) The Mortgage is a valid, subsisting and enforceable
first lien on the property therein described, and the Mortgaged
Property is free and clear of all encumbrances and liens having
priority over the first lien of the Mortgage except for liens for real
estate taxes and special assessments not yet due and payable and liens
or interests arising under or as a result of any federal, state or
local law, regulation or ordinance relating to hazardous wastes or
hazardous substances, and, if the related Mortgaged Property is a
condominium unit, any lien for common charges permitted by statute or
homeowners association fees; and if the Mortgaged Property consists of
shares of a cooperative housing corporation, any lien for amounts due
to the cooperative housing corporation for unpaid assessments or
charges or any lien of any assignment of rents or maintenance expenses
secured by the real property owned by the cooperative housing
corporation; and any security agreement, chattel mortgage or equivalent
document related to, and delivered to the Trustee or to the Custodian
with, any Mortgage establishes in the Depositor a valid and subsisting
first lien on the property described therein and the Depositor has full
right to sell and assign the same to the Trustee;
(iv) Neither the Depositor nor any prior holder of the
Mortgage or the related Mortgage Note has modified the Mortgage or the
related Mortgage Note in any material respect, satisfied, canceled or
subordinated the Mortgage in whole or in part, released the Mortgaged
Property in whole or in part from the lien of the Mortgage, or executed
any instrument of release, cancellation, modification or satisfaction,
except in each case as is reflected in an agreement delivered to the
Trustee or the Custodian pursuant to Section 2.01(a);
(v) All taxes, governmental assessments, insurance premiums,
and water, sewer and municipal charges, which previously became due and
owing have been paid, or an escrow of funds has been established, to
the extent permitted by law, in an amount sufficient to pay for every
such item which remains unpaid; and the Depositor has not advanced
funds, or received any advance of funds by a party other than the
Mortgagor, directly or indirectly (except pursuant to any Subsidy Loan
arrangement) for the payment of any amount required by the Mortgage,
except for interest accruing from the date of the Mortgage Note or date
of disbursement of the Mortgage Loan proceeds, whichever is later, to
the day which precedes by thirty days the first Due Date under the
related Mortgage Note;
(vi) The Mortgaged Property is undamaged by water, fire,
earthquake, earth movement other than earthquake, windstorm, flood,
tornado or similar casualty (excluding casualty from the presence of
hazardous wastes or hazardous substances, as to which the Depositor
makes no representations), in a manner which would adversely affect the
value of the Mortgaged Property as security for the Mortgage Loan or
the use for which the premises were intended and to the best of the
Depositor's knowledge, there is no proceeding pending or threatened for
the total or partial condemnation of the Mortgaged Property;
(vii) The Mortgaged Property is free and clear of all
mechanics' and materialmen's liens or liens in the nature thereof;
provided, however, that this warranty shall be deemed not to have been
made at the time of the initial issuance of the Certificates if a title
policy affording, in substance, the same protection afforded by this
warranty is furnished to the Trustee by the Depositor;
(viii) Except for Mortgage Loans secured by Co-op Shares and
Mortgage Loans secured by residential long-term leases, the Mortgaged
Property consists of a fee simple estate in real property; all of the
improvements which are included for the purpose of determining the
appraised value of the Mortgaged Property lie wholly within the
boundaries and building restriction lines of such property and no
improvements on adjoining properties encroach upon the Mortgaged
Property (unless insured against under the related title insurance
policy); and to the best of the Depositor's knowledge, the Mortgaged
Property and all improvements thereon comply with all requirements of
any applicable zoning and subdivision laws and ordinances;
(ix) The Mortgage Loan meets, or is exempt from, applicable
state, federal or local laws, regulations and other requirements,
pertaining to usury, and the Mortgage Loan is not usurious;
(x) To the best of the Depositor's knowledge, all inspections,
licenses and certificates required to be made or issued with respect to
all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including, but not limited to,
certificates of occupancy and fire underwriting certificates, have been
made or obtained from the appropriate authorities;
(xi) All payments required to be made up to the Due Date
immediately preceding the Cut-Off Date for such Mortgage Loan under the
terms of the related Mortgage Note have been made and no Mortgage Loan
had more than one delinquency in the 12 months preceding the Cut-Off
Date;
(xii) The Mortgage Note, the related Mortgage and other
agreements executed in connection therewith are genuine, and each is
the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally
and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law); and, to
the best of the Depositor's knowledge, all parties to the Mortgage Note
and the Mortgage had legal capacity to execute the Mortgage Note and
the Mortgage and each Mortgage Note and Mortgage has been duly and
properly executed by the Mortgagor;
(xiii) Each Mortgage Loan at the time it was originated
complied in all material respects with applicable federal, state and
local laws including, without limitation, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit
opportunity, predatory and abusive lending laws and disclosure laws;
(xiv) The proceeds of the Mortgage Loans have been fully
disbursed, there is no requirement for future advances thereunder and
any and all requirements as to completion of any on-site or off-site
improvements and as to disbursements of any escrow funds therefor have
been complied with (except for escrow funds for exterior items which
could not be completed due to weather and escrow funds for the
completion of swimming pools); and all costs, fees and expenses
incurred in making, closing or recording the Mortgage Loan have been
paid, except recording fees with respect to Mortgages not recorded as
of the Closing Date;
(xv) The Mortgage Loan (except any Mortgage Loan secured by a
Mortgaged Property located in any jurisdiction, as to which an opinion
of counsel of the type customarily rendered in such jurisdiction in
lieu of title insurance is instead received) is covered by an American
Land Title Association mortgagee title insurance policy or other
generally acceptable form of policy or insurance acceptable to Xxxxxx
Mae or Xxxxxxx Mac, issued by a title insurer acceptable to Xxxxxx Mae
or Xxxxxxx Mac insuring the originator, its successors and assigns, as
to the first priority lien of the Mortgage in the original principal
amount of the Mortgage Loan and subject only to (A) the lien of current
real property taxes and assessments not yet due and payable, (B)
covenants, conditions and restrictions, rights of way, easements and
other matters of public record as of the date of recording of such
Mortgage acceptable to mortgage lending institutions in the area in
which the Mortgaged Property is located or specifically referred to in
the appraisal performed in connection with the origination of the
related Mortgage Loan, (C) liens created pursuant to any federal, state
or local law, regulation or ordinance affording liens for the costs of
clean-up of hazardous substances or hazardous wastes or for other
environmental protection purposes and (D) such other matters to which
like properties are commonly subject which do not individually, or in
the aggregate, materially interfere with the benefits of the security
intended to be provided by the Mortgage; the Depositor is the sole
insured of such mortgagee title insurance policy, the assignment to the
Trustee of the Depositor's interest in such mortgagee title insurance
policy does not require any consent of or notification to the insurer
which has not been obtained or made, such mortgagee title insurance
policy is in full force and effect and will be in full force and effect
and inure to the benefit of the Trustee, no claims have been made under
such mortgagee title insurance policy, and no prior holder of the
related Mortgage, including the Depositor, has done, by act or
omission, anything which would impair the coverage of such mortgagee
title insurance policy;
(xvi) The Mortgaged Property securing each Mortgage Loan is
insured by an insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac against
loss by fire and such hazards as are covered under a standard extended
coverage endorsement, in an amount which is not less than the lesser of
100% of the insurable value of the Mortgaged Property and the
outstanding principal balance of the Mortgage Loan, but in no event
less than the minimum amount necessary to fully compensate for any
damage or loss on a replacement cost basis; if the Mortgaged Property
is a condominium unit, it is included under the coverage afforded by a
blanket policy for the project; if upon origination of the Mortgage
Loan, the improvements on the Mortgaged Property were in an area
identified in the Federal Register by the Federal Emergency Management
Agency as having special flood hazards, a flood insurance policy
meeting the requirements of the current guidelines of the Federal
Insurance Administration is in effect with a generally acceptable
insurance carrier, in an amount representing coverage not less than the
least of (A) the outstanding principal balance of the Mortgage Loan,
(B) the full insurable value of the Mortgaged Property and (C) the
maximum amount of insurance which was available under the National
Flood Insurance Act of 1968, as amended; and each Mortgage obligates
the Mortgagor thereunder to maintain all such insurance at the
Mortgagor's cost and expense;
(xvii) To the best of the Depositor's knowledge, there is no
default, breach, violation or event of acceleration existing under the
Mortgage or the related Mortgage Note and no event which, with the
passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of
acceleration; the Depositor has not waived any default, breach,
violation or event of acceleration; and no foreclosure action is
currently threatened or has been commenced with respect to the Mortgage
Loan;
(xviii) No Mortgage Note or Mortgage is subject to any right
of rescission, set-off, counterclaim or defense, including the defense
of usury, nor will the operation of any of the terms of the Mortgage
Note or Mortgage, or the exercise of any right thereunder, render the
Mortgage Note or Mortgage unenforceable, in whole or in part, or
subject it to any right of rescission, set-off, counterclaim or
defense, including the defense of usury, and no such right of
rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(xix) Each Mortgage Note is payable in monthly payments,
resulting in complete amortization of the Mortgage Loan over a term of
not more than 360 months;
(xx) Each Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of
the benefits of the security, including realization by judicial
foreclosure (subject to any limitation arising from any bankruptcy,
insolvency or other law for the relief of debtors), and there is no
homestead or other exemption available to the Mortgagor which would
interfere with such right of foreclosure;
(xxi) To the best of the Depositor's knowledge, no Mortgagor
is a debtor in any state or federal bankruptcy or insolvency
proceeding;
(xxii) Each Mortgaged Property is located in the United States
and consists of a one- to four-unit residential property, which may
include a detached home, townhouse, condominium unit or a unit in a
planned unit development or, in the case of Mortgage Loans secured by
Co-op Shares, leases or occupancy agreements;
(xxiii) The Mortgage Loan is a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code;
(xxiv) With respect to each Mortgage where a lost note
affidavit has been delivered to the Custodian in place of the related
Mortgage Note, the related Mortgage Note is no longer in existence;
(xxv) In the event that the Mortgagor is an inter vivos
"living" trust, (i) such trust is in compliance with Xxxxxx Xxx or
Xxxxxxx Mac standards for inter vivos trusts and (ii) holding title to
the Mortgaged Property in such trust will not diminish any rights as a
creditor including the right to full title to the Mortgaged Property in
the event foreclosure proceedings are initiated;
(xxvi) If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple
interest in the land; (2) the terms of such lease expressly permit the
mortgaging of the leasehold estate, the assignment of the lease without
the lessor's consent and the acquisition by the holder of the Mortgage
of the rights of the lessee upon foreclosure or assignment in lieu of
foreclosure or provide the holder of the Mortgage with substantially
similar protections; (3) the terms of such lease do not (a) allow the
termination thereof upon the lessee's default without the holder of the
Mortgage being entitled to receive written notice of, and opportunity
to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence,
(c) prohibit the holder of the Mortgage from being insured (or
receiving proceeds of insurance) under the hazard insurance policy or
policies relating to the Mortgaged Property or (d) permit any increase
in rent other than pre-established increases set forth in the lease;
(4) the original term of such lease is not less than 15 years; (5) the
term of such lease does not terminate earlier than five years after the
maturity date of the Mortgage Note; and (6) the Mortgaged Property is
located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted
practice;
(xxvii) No Mortgage Loan is a "high cost" loan as defined
under any federal, state or local law applicable to such Mortgage Loan
at the time of its origination;
(xxviii) No Mortgage Loan is serviced by the Trustee or an
affiliate of the Trustee;
(xxix) No Mortgage Loan is subject to the Home Ownership and
Equity Protection Act of 1994, as amended; and
(xxx) No Mortgage Loan (other than a Mortgage Loan that is a
New Jersey covered purchase loan) is a High Cost Loan or Covered Loan,
as applicable (as such terms are defined in the then-current S&P's
LEVELS(R) Glossary which is now Version 5.6(c), Appendix E) and no
Mortgage Loan originated on or after October 1, 2002 through March 6,
2003 is governed by the Georgia Fair Lending Act.
Notwithstanding the foregoing, no representations or
warranties are made by the Depositor as to the environmental condition of any
Mortgaged Property; the absence, presence or effect of hazardous wastes or
hazardous substances on any Mortgaged Property; any casualty resulting from the
presence or effect of hazardous wastes or hazardous substances on, near or
emanating from any Mortgaged Property; the impact on Certificateholders of any
environmental condition or presence of any hazardous substance on or near any
Mortgaged Property; or the compliance of any Mortgaged Property with any
environmental laws, nor is any agent, person or entity otherwise affiliated with
the Depositor authorized or able to make any such representation, warranty or
assumption of liability relative to any Mortgaged Property. In addition, no
representations or warranties are made by the Depositor with respect to the
absence or effect of fraud in the origination of any Mortgage Loan.
It is understood and agreed that the representations and
warranties set forth in this Section 2.03(b) shall survive delivery of the
respective Owner Mortgage Loan Files (and Retained Mortgage Loan Files, if
applicable) to the Custodian and shall inure to the benefit of the Trustee
notwithstanding any restrictive or qualified endorsement or assignment.
(c) Upon discovery by any of the Depositor, the Master
Servicer, the Trustee or the Custodian that any of the representations and
warranties made in subsection (b) above is not accurate (referred to herein as a
"breach") and, except for a breach of the representation and warranty set forth
in subsection (b)(i), where such breach is a result of the Cut-Off Date
Principal Balance of a Mortgage Loan being greater, by $5,000 or greater, than
the Cut-Off Date Principal Balance of such Mortgage Loan indicated on the
Mortgage Loan Schedule, that such breach materially and adversely affects the
interests of the Certificateholders in the related Mortgage Loan, the party
discovering such breach shall give prompt written notice (not to exceed two days
after discovery) to the other parties to this Agreement and the Custodian (any
Custodian being so obligated under a Custodial Agreement). Within 60 days of the
earlier of its discovery or its receipt of notice of any such breach, the
Depositor shall cure such breach in all material respects or shall either (i)
repurchase the Mortgage Loan or any property acquired in respect thereof from
the Trust Estate at a price equal to the Repurchase Price or (ii) if within two
years of the Startup Day, or such other period permitted by the REMIC
Provisions, substitute for such Mortgage Loan in the manner described in Section
2.02. In addition to the foregoing, if a breach of the representation set forth
in clause (b)(xiii) or (xxx) of this Section 2.03 occurs as a result of a
violation of an applicable predatory or abusive lending law, the Depositor shall
reimburse the Trust for all costs and damages including, but not limited to,
reasonable attorneys' fees and costs, incurred by the Trust as a result of the
violation of such law (such amount, the "Reimbursement Amount"). The Repurchase
Price, the Substitution Principal Amount, if any, plus accrued interest thereon
and the other amounts referred to in Section 2.02, and any Reimbursement Amount
shall be deposited in the Certificate Account. It is understood and agreed,
except with respect to the second preceding sentence, that the obligation of the
Depositor to repurchase or substitute for any Mortgage Loan or property as to
which such a breach has occurred and is continuing shall constitute the sole
remedy respecting such breach available to Certificateholders or the Trustee on
behalf of Certificateholders, and such obligation shall survive until
termination of the Trust Estate hereunder.
The Trustee shall be responsible for enforcing the Depositor's
obligations under this Section 2.03. If the Trustee receives written notice from
the Master Servicer or the Custodian that such breach is not cured by the
Depositor within 60 days after the Trustee's notice, the Trustee shall enforce
the Depositor's obligation to repurchase such Mortgage Loan or substitute for
such Mortgage Loan in accordance with the provisions of this Section 2.03. In
connection with any substitution permitted by this Section 2.03, the Master
Servicer shall verify that the unpaid principal balance and the Loan-to-Value
Ratio of the Substitute Mortgage Loan satisfy the requirements of this Section
2.03.
Section 2.04 Execution and Delivery of Certificates.
The Trustee acknowledges the assignment to it of the Mortgage
Loans and acknowledges the delivery of the Owner Mortgage Loan Files to the
Custodian, on behalf of the Trustee. The Paying Agent, concurrently with such
delivery, has executed and delivered to or upon the order of the Depositor, in
exchange for the Mortgage Loans, together with all other assets included in the
definition of "Trust Estate," receipt of which is hereby acknowledged,
Certificates in authorized denominations which evidence ownership of the entire
Trust Estate.
Section 2.05 Designation of Certificates; Designation of
Startup Day and Latest Possible Maturity
Date.
The Depositor hereby designates the Classes of Class A
Certificates (other than the Class A-R Certificate) and the Classes of Class B
Certificates as classes of "regular interests" and the Class A-R Certificate as
the single class of "residual interest" in the REMIC for the purposes of Code
Sections 860G(a)(1) and 860G(a)(2), respectively. The Closing Date is hereby
designated as the "Startup Day" of the REMIC within the meaning of Code Section
860G(a)(9). The "latest possible maturity date" of the regular interests in the
REMIC is March 25, 2036 for purposes of Code Section 860G(a)(1).
ARTICLE III
ADMINISTRATION OF THE TRUST ESTATE; SERVICING
OF THE MORTGAGE LOANS
Section 3.01 Certificate Account.
(a) The Master Servicer shall establish and maintain a
Certificate Account for the deposit of funds received by the Master Servicer
with respect to the Mortgage Loans serviced by each Servicer pursuant to each of
the Servicing Agreements. Such account shall be maintained as an Eligible
Account. The Master Servicer shall give notice to each Servicer and the
Depositor of the location of the Certificate Account and of any change in the
location thereof.
(b) The Master Servicer shall deposit into the Certificate
Account on the day of receipt thereof all amounts received by it from any
Servicer pursuant to any of the Servicing Agreements and amounts received from
draws on any Letters of Credit and shall, in addition, deposit into the
Certificate Account the following amounts, in the case of amounts specified in
clauses (i) and (iii), not later than the Business Day preceding the
Distribution Date on which such amounts are required to be distributed to
Certificateholders and, in the case of the amounts specified in clause (ii), not
later than the Business Day next following the day of receipt and posting by the
Master Servicer:
(i) Periodic Advances pursuant to Section 3.03(a) made by the
Master Servicer or the Trustee, if any, and any amounts deemed received
by the Master Servicer pursuant to Section 3.01(d);
(ii) in the case of any Mortgage Loan that is repurchased by
the Depositor pursuant to Section 2.02, 2.03, 3.08 or 9.01 or that is
auctioned by the Master Servicer pursuant to Section 3.08, the purchase
price therefor or, where applicable, any Substitution Principal Amount
and any amounts received in respect of the interest portion of
unreimbursed Periodic Advances; and
(iii) any Compensating Interest for such Distribution Date.
(c) The Master Servicer may cause the funds in the Certificate
Account to be invested in Eligible Investments. No such Eligible Investments
will be sold or disposed of at a gain prior to maturity unless the Master
Servicer has received an Opinion of Counsel or other evidence satisfactory to it
that such sale or disposition will not cause the Trust Estate to be subject to
Prohibited Transactions Tax, otherwise subject the Trust Estate to tax, or cause
the Trust Estate to fail to qualify as a REMIC while any Certificates are
outstanding. Any amounts deposited in the Certificate Account prior to the
Distribution Date may be invested for the account of the Master Servicer and any
investment income thereon shall be additional compensation to the Master
Servicer for services rendered under this Agreement. The amount of any losses
incurred in respect of any such investments shall be deposited in the
Certificate Account by the Master Servicer out of its own funds immediately as
realized, without any right of reimbursement therefor from the Trust Estate.
(d) For purposes of this Agreement, the Master Servicer will
be deemed to have received from a Servicer on the applicable Remittance Date for
such funds all amounts deposited by such Servicer into the Custodial P&I Account
maintained in accordance with the applicable Servicing Agreement, if such
Custodial P&I Account is not an Eligible Account as defined in this Agreement,
to the extent such amounts are not actually received by the Master Servicer on
such Remittance Date as a result of the bankruptcy, insolvency, receivership or
other financial distress of the depository institution in which such Custodial
P&I Account is being held. To the extent that amounts so deemed to have been
received by the Master Servicer are subsequently remitted to the Master
Servicer, the Master Servicer shall be entitled to retain such amounts.
Section 3.02 Permitted Withdrawals from the Certificate
Account.
(a) The Master Servicer may, from time to time, make
withdrawals from the Certificate Account for the following purposes (limited, in
the case of Servicer reimbursements, to cases where funds in the respective
Custodial P&I Account are not sufficient therefor):
(i) to reimburse the Master Servicer, the Trustee or any
Servicer for Periodic Advances made by the Master Servicer or the
Trustee pursuant to Section 3.03(a) or any Servicer pursuant to any
Servicing Agreement with respect to previous Distribution Dates, such
right to reimbursement pursuant to this subclause (i) being limited to
amounts received on or in respect of particular Mortgage Loans
(including, for this purpose, Liquidation Proceeds, REO Proceeds and
proceeds from the purchase, sale, repurchase or substitution of
Mortgage Loans pursuant to Section 2.02, 2.03, 3.08 or 9.01) respecting
which any such Periodic Advance was made;
(ii) to reimburse any Servicer, the Master Servicer or the
Trustee for any Periodic Advances determined in good faith to have
become Nonrecoverable Advances;
(iii) to reimburse the Master Servicer or any Servicer from
Liquidation Proceeds for Liquidation Expenses and for amounts expended
by the Master Servicer or any Servicer pursuant hereto or to any
Servicing Agreement, respectively, in good faith in connection with the
restoration of damaged property or for foreclosure expenses;
(iv) from any Mortgagor payment on account of interest or
other recovery (including Net REO Proceeds) with respect to a
particular Mortgage Loan, to pay the Master Servicing Fee with respect
to such Mortgage Loan to the Master Servicer;
(v) to reimburse the Master Servicer, any Servicer or the
Trustee (or, in certain cases, the Depositor) for expenses incurred by
it (including taxes paid on behalf of the Trust Estate) and recoverable
by or reimbursable to it pursuant to Section 3.03(c), 6.03, the second
or third paragraphs of Section 8.06 or the third sentence of Section
8.13(a) or pursuant to such Servicer's Servicing Agreement, provided
such expenses are "unanticipated" within the meaning of the REMIC
Provisions;
(vi) to pay to the Depositor or other purchaser with respect
to each Mortgage Loan or property acquired in respect thereof that has
been repurchased or replaced pursuant to Section 2.02, 2.03, 3.08 or
9.01 or auctioned pursuant to Section 3.08, all amounts received
thereon and not required to be distributed as of the date on which the
related repurchase or purchase price or Scheduled Principal Balance was
determined;
(vii) to remit funds to the Paying Agent in the amounts and in
the manner provided for herein;
(viii) to pay to the Master Servicer any interest earned on or
investment income with respect to funds in the Certificate Account;
(ix) to pay to the Master Servicer or any Servicer out of
Liquidation Proceeds allocable to interest the amount of any unpaid
Master Servicing Fee or Servicing Fee (as adjusted pursuant to the
related Servicing Agreement) and any unpaid assumption fees, late
payment charges or other Mortgagor charges on the related Mortgage
Loan;
(x) to pay to the Master Servicer as additional master
servicing compensation any Liquidation Profits which a Servicer is not
entitled to pursuant to the applicable Servicing Agreement;
(xi) to withdraw from the Certificate Account any amount
deposited in the Certificate Account that was not required to be
deposited therein; and
(xii) to clear and terminate the Certificate Account pursuant
to Section 9.01.
(b) The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any payment to and withdrawal from the Certificate Account. The
Master Servicer shall notify the Depositor and the Trustee of the amount,
purpose and party paid pursuant to Section 3.02(a)(v).
Section 3.03 Advances by Master Servicer and Trustee.
(a) In the event an Other Servicer fails to make any required
Periodic Advances of principal and interest on a Mortgage Loan as required by
the related Other Servicing Agreement prior to the Business Day preceding the
Distribution Date occurring in the month during which such Periodic Advance is
due, the Master Servicer shall make Periodic Advances to the extent provided
hereby. In the event Xxxxx Fargo Bank in its capacity as Servicer fails to make
any required Periodic Advances of principal and interest on a Mortgage Loan as
required by the Xxxxx Fargo Bank Servicing Agreement prior to the Business Day
preceding the Distribution Date occurring in the month during which such
Periodic Advance is due, the Trustee shall, to the extent required by Section
8.14, make such Periodic Advance to the extent provided hereby, provided that
the Trustee has previously received the certificate of the Master Servicer
described in the following sentence and then, so long as such failure to advance
shall not have been remedied by 5:00 PM New York time on the Business Day
following notice provided by the Trustee to Xxxxx Fargo Bank, the Trustee may
terminate the rights and obligations of Xxxxx Fargo Bank in accordance with the
provisions of the Xxxxx Fargo Bank Servicing Agreement. The Master Servicer
shall certify to the Trustee with respect to any such Distribution Date (i) the
amount of Periodic Advances required of Xxxxx Fargo Bank in its capacity as
Servicer or such Other Servicer, as the case may be, (ii) the amount actually
advanced by Xxxxx Fargo Bank in its capacity as Servicer or such Other Servicer,
(iii) the amount that the Trustee or Master Servicer is required to advance
hereunder and (iv) whether the Master Servicer has determined that it reasonably
believes that such Periodic Advance is a Nonrecoverable Advance. Amounts
advanced by the Trustee or Master Servicer shall be deposited in the Certificate
Account on the Business Day preceding the related Distribution Date.
Notwithstanding the foregoing, neither the Master Servicer nor the Trustee will
be obligated to make a Periodic Advance that it reasonably believes to be a
Nonrecoverable Advance. The Trustee may conclusively rely for any determination
to be made by it hereunder upon the determination of the Master Servicer as set
forth in its certificate.
(b) To the extent an Other Servicer fails to make an advance
on account of the taxes or insurance premiums with respect to a Mortgage Loan
required pursuant to the related Other Servicing Agreement, the Master Servicer
shall, if the Master Servicer has actual knowledge of such failure of the
Servicer, advance such funds and take such steps as are necessary to pay such
taxes or insurance premiums. To the extent Xxxxx Fargo Bank in its capacity as
Servicer fails to make an advance on account of the taxes or insurance premiums
with respect to a Mortgage Loan required pursuant to the Xxxxx Fargo Bank
Servicing Agreement, the Master Servicer shall, if the Master Servicer knows of
such failure of Xxxxx Fargo Bank in its capacity as Servicer, certify to the
Trustee that such failure has occurred. Upon receipt of such certification, the
Trustee shall advance such funds and take such steps as are necessary to pay
such taxes or insurance premiums.
(c) The Master Servicer and the Trustee shall each be entitled
to be reimbursed from the Certificate Account for any Periodic Advance made by
it under Section 3.03(a) to the extent described in Section 3.02(a)(i) and
(a)(ii). The Master Servicer and the Trustee shall be entitled to be reimbursed
pursuant to Section 3.02(a)(v) for any advance by it pursuant to Section
3.03(b). The Master Servicer shall diligently pursue restoration of such amount
to the Certificate Account from the related Servicer. The Master Servicer shall,
to the extent it has not already done so, upon the request of the Trustee,
withdraw from the Certificate Account and remit to the Trustee any amounts to
which the Trustee is entitled as reimbursement pursuant to Section 3.02 (a)(i),
(ii) and (v).
(d) Except as provided in Section 3.03(a) and (b), neither the
Master Servicer nor the Trustee shall be required to pay or advance any amount
which any Servicer was required, but failed, to deposit in the Certificate
Account.
Section 3.04 Custodian to Cooperate;
Release of Owner Mortgage Loan Files and
Retained Mortgage Loan Files.
In connection with the deposit by a Servicer into the
Certificate Account of the proceeds from a Liquidated Loan or of a Prepayment in
Full, the Master Servicer or applicable Servicer shall confirm that all amounts
required to be remitted to the Certificate Account in connection with such
Mortgage Loan have been so deposited, and the Master Servicer or applicable
Servicer shall deliver two copies of any related Request for Release to the
Custodian. The Custodian shall, within five Business Days of its receipt of such
a Request for Release, release the related Owner Mortgage Loan File (and
Retained Mortgage Loan File, if applicable) to the Master Servicer or such
Servicer, as requested by the Master Servicer or such Servicer. No expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Certificate Account.
From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including but not limited to, collection under
any insurance policies, or to effect a partial release of any Mortgaged Property
from the lien of the Mortgage, the Servicer of such Mortgage Loan shall deliver
to the Master Servicer or Custodian two copies of a Request for Release. Upon
the Master Servicer's receipt of any such Request for Release, the Master
Servicer shall promptly forward such request in hard copy or in electronic
format acceptable to the Custodian. The Custodian shall, within five Business
Days, release the related Owner Mortgage Loan File (and Retained Mortgage Loan
File, if applicable) to the Master Servicer or such Servicer. Any such Request
for Release shall obligate the Master Servicer or such Servicer, as the case may
be, to return the Owner Mortgage Loan File (and Retained Mortgage Loan File, if
applicable) to the Custodian by the sixtieth day following the release thereof,
unless (i) the Mortgage Loan has been liquidated and the Liquidation Proceeds
relating to the Mortgage Loan have been deposited in the Certificate Account or
(ii) the Owner Mortgage Loan File (and Retained Mortgage Loan File, if
applicable) or such document has been delivered to an attorney, or to a public
trustee or other public official as required by law, for purposes of initiating
or pursuing legal action or other proceedings for the foreclosure of the
Mortgaged Property either judicially or non-judicially. Upon receipt of two
copies of a Request for Release stating that such Mortgage Loan was liquidated
and that all amounts received or to be received in connection with such
liquidation which are required to be deposited into the Certificate Account have
been so deposited, or that such Mortgage Loan has become an REO Mortgage Loan,
the Custodian shall amend its records.
Upon the occurrence of the event specified in clause (ii) of
the preceding paragraph, the Trustee shall execute and deliver to the Master
Servicer or such Servicer, as directed by the Master Servicer, court pleadings,
requests for trustee's sale or other documents necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity. Each such certification shall include a request that such pleadings or
documents be executed by the Trustee and a statement as to the reason such
documents or pleadings are required and that the execution and delivery thereof
by the Trustee will not invalidate or otherwise affect the lien of the Mortgage,
except for the termination of such a lien upon completion of the foreclosure
proceeding or trustee's sale.
Section 3.05 Annual Compliance Statements.
The Master Servicer shall deliver in electronic form, or
otherwise make available to the Depositor, and the Master Servicer shall cause
each Additional Master Servicer engaged by it and each Servicer to deliver, in
electronic form, or otherwise make available, to the Master Servicer, the
Trustee and each Rating Agency on or before March 5 of each year or if such day
is not a Business Day, the next Business Day (with a 10 calendar day cure
period, but in no event later than March 15), commencing in March 2007, a copy
of a certificate (followed by a hard copy to the party or parties receiving such
certificate within 10 calendar days) in the form required by Item 1123 of
Regulation AB, to the effect that (i) an authorized officer of the Master
Servicer, the Additional Master Servicer or the Servicer, as the case may be,
has reviewed (or a review has been made under his or her supervision of) such
party's activities under this Agreement or the applicable Servicing Agreement,
in the case of a Servicer, or such other applicable agreement in the case of an
Additional Master Servicer, during the prior calendar year or portion thereof
and (ii) to the best of such officer's knowledge, based on such review, such
party has fulfilled all of its obligations under this Agreement or the
applicable Servicing Agreement, in the case of a Servicer, or such other
applicable agreement in the case of an Additional Master Servicer, in all
material respects throughout the prior calendar year or portion thereof or, if
there has been a failure to fulfill any such obligation in any material respect,
specifying each such failure known to such officer and the nature and status
thereof. If any of the certificates delivered pursuant to this Section 3.05
disclose that there has been a failure to fulfill any obligation in any material
respect then the Master Servicer shall promptly notify the Depositor and forward
a copy of such certificate to the Depositor, and the Depositor shall review such
certificate and, if applicable, consult with the Master Servicer as to the
nature of any failure to fulfill any obligation under this Agreement or the
applicable Servicing Agreement, in the case of a Servicer, or such other
applicable agreement in the case of an Additional Master Servicer, in any
material respect.
Section 3.06 Title, Management and Disposition of Any REO
Mortgage Loan.
The Master Servicer shall enforce the obligations of the
applicable Servicer to administer each REO Mortgage Loan at all times so that
each REO Mortgage Loan qualifies as "foreclosure property" under the REMIC
Provisions and that it does not earn any "net income from foreclosure property"
which is subject to tax under the REMIC Provisions. In the event that a Servicer
is unable to dispose of any REO Mortgage Loan within the period mandated by each
of the Servicing Agreements, the Master Servicer shall monitor such Servicer to
verify that such REO Mortgage Loan is auctioned to the highest bidder within the
period so specified. In the event of any such sale of a REO Mortgage Loan, the
Custodian shall, at the written request of the Master Servicer and upon being
supported with appropriate forms therefor, within five Business Days of the
deposit by the Master Servicer of the proceeds of such sale or auction into the
Certificate Account, release or cause to be released to the entity identified by
the Master Servicer the related Owner Mortgage Loan File, Retained Mortgage Loan
File, if applicable, and Servicer Mortgage Loan File and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as shall be necessary to vest in the auction purchaser title to the
REO Mortgage Loan and the Custodian shall have no further responsibility with
regard to such Owner Mortgage Loan File, Retained Mortgage Loan File, if
applicable, or Servicer Mortgage Loan File. Neither the Trustee, the Master
Servicer nor any Servicer, acting on behalf of the Trust Estate, shall provide
financing from the Trust Estate to any purchaser of an REO Mortgage Loan.
Section 3.07 Amendments to Servicing Agreements,
Modification of Standard Provisions.
(a) Subject to the prior written consent of the Trustee
pursuant to Section 3.07(b) and the prior written consent of the Depositor, the
Master Servicer may, from time to time, to the extent permitted by the
applicable Servicing Agreement, make such modifications and amendments to such
Servicing Agreement as the Master Servicer deems necessary or appropriate to
confirm or carry out more fully the intent and purpose of such Servicing
Agreement and the duties, responsibilities and obligations to be performed by
the Servicer thereunder. Such modifications may only be made if they are
consistent with the REMIC Provisions, as evidenced by an Opinion of Counsel.
Prior to the issuance of any modification or amendment, the Master Servicer
shall deliver to the Trustee and the Depositor such Opinion of Counsel and an
Officer's Certificate setting forth (i) the provision that is to be modified or
amended, (ii) the modification or amendment that the Master Servicer desires to
issue and (iii) the reason or reasons for such proposed amendment or
modification.
(b) The Trustee shall consent to any amendment or supplement
to a Servicing Agreement proposed by the Master Servicer pursuant to Section
3.07(a), which consent and amendment shall not require the consent of any
Certificateholder if it is (i) for the purpose of curing any mistake or
ambiguity, to further effect or protect the rights of the Certificateholders or
(ii) for any other purpose, provided such amendment or supplement for such other
purpose cannot reasonably be expected to adversely affect Certificateholders.
The lack of reasonable expectation of an adverse effect on Certificateholders
may be established through the delivery to the Trustee of (i) an Opinion of
Counsel to such effect or (ii) written notification from each Rating Agency to
the effect that such amendment or supplement will not result in reduction of the
current rating assigned by that Rating Agency to the Certificates.
Notwithstanding the two immediately preceding sentences, the Trustee may, in its
discretion, decline to enter into or consent to any such supplement or amendment
if its own rights, duties or immunities shall be adversely affected.
(c)(i) Notwithstanding anything to the contrary in this
Section 3.07, the Master Servicer from time to time may, without the consent of
any Certificateholder or the Trustee, enter into an amendment (A) to an Other
Servicing Agreement for the purpose of (i) eliminating or reducing Month End
Interest and (ii) providing for the remittance of Full Unscheduled Principal
Receipts by the applicable Servicer to the Master Servicer not later than the
24th day of each month (or if such day is not a Business Day, on the previous
Business Day), (B) to the Xxxxx Fargo Bank Servicing Agreement for the purpose
of changing the applicable Remittance Date to the 18th day of each month (or if
such day is not a Business Day, on the previous Business Day) or (C) to a
Servicing Agreement for the purpose of effecting or facilitating compliance by
the Servicer with Regulation AB or to conform a Servicing Agreement to industry
practices relating to Regulation AB.
(ii) The Master Servicer may direct Xxxxx Fargo Bank in its
capacity as Servicer to enter into an amendment to the Xxxxx Fargo Bank
Servicing Agreement for the purposes described in Section 3.07(c)(i)(B) or (C).
Section 3.08 Oversight of Servicing.
The Master Servicer shall supervise, monitor and oversee the
servicing of the Mortgage Loans by each Servicer and the performance by each
Servicer of all services, duties, responsibilities and obligations (including
the obligation to maintain an Errors and Omissions Policy and Fidelity Bond)
that are to be observed or performed by the Servicer under its respective
Servicing Agreement. In performing its obligations hereunder, the Master
Servicer shall act in a manner consistent with Accepted Master Servicing
Practices and in a manner consistent with the terms and provisions of any
insurance policy required to be maintained by the Master Servicer or any
Servicer pursuant to this Agreement or any Servicing Agreement. The Master
Servicer acknowledges that prior to taking certain actions required to service
the Mortgage Loans, each Servicing Agreement provides that the Servicer
thereunder must notify, consult with, obtain the consent of, waiver from, or
otherwise follow the instructions of the Master Servicer. In the case of any
request for waiver from a Servicer, the Master Servicer shall promptly instruct
such Servicer or otherwise respond to such Servicer's request. The Master
Servicer shall not waive compliance by a Servicer with those provisions of its
Servicing Agreement which are required to enable the Depositor and the Master
Servicer to satisfy the Trust's ongoing reporting obligations under the Exchange
Act. In addition, in no event will the Master Servicer instruct such Servicer to
take any action, give any consent to action by such Servicer or waive compliance
by such Servicer with any provision of such Servicer's Servicing Agreement if
any resulting action or failure to act would be inconsistent with the
requirements of the Rating Agencies that rated the Certificates, would be
inconsistent with the requirements of Regulation AB or would otherwise have an
adverse effect on the Certificateholders. Any such action or failure to act
shall be deemed to have an adverse effect on the Certificateholders if such
action or failure to act either results in (i) the downgrading of the rating
assigned by either Rating Agency to the Certificates, (ii) the loss by the Trust
Estate of REMIC status for federal income tax purposes or (iii) the imposition
of any Prohibited Transaction Tax or any federal taxes on either the REMIC or
the Trust Estate. The Master Servicer shall have full power and authority in its
sole discretion to take any action with respect to the Trust Estate as may be
necessary or advisable to avoid the circumstances specified including clause
(ii) or (iii) of the preceding sentence.
For the purposes of determining whether any modification of a
Mortgage Loan shall be permitted by the Master Servicer, such modification shall
be construed as a substitution of the modified Mortgage Loan for the Mortgage
Loan originally deposited in the Trust Estate if it would be a "significant
modification" within the meaning of Section 1.860G-2(b) of the regulations of
the U.S. Department of the Treasury. No modification shall be approved unless
(i) the modified Mortgage Loan would qualify as a Substitute Mortgage Loan under
Section 2.02 and (ii) with respect to any modification that occurs more than
three months after the Closing Date and is not the result of a default or a
reasonably foreseeable default under the Mortgage Loan, there is delivered to
the Trustee an Opinion of Counsel (at the expense of the party seeking to modify
the Mortgage Loan) to the effect that such modification would not be treated as
giving rise to a new debt instrument for federal income tax purposes as
described in the preceding sentence; provided, however, that no such Opinion of
Counsel need be delivered if the sole purpose of the modification is to reduce
the Monthly Payment on a Mortgage Loan as a result of a Curtailment such that
the Mortgage Loan is fully amortized by its original maturity date.
During the term of this Agreement, the Master Servicer shall
consult fully with each Servicer as may be necessary from time to time to
perform and carry out the Master Servicer's obligations hereunder and otherwise
exercise reasonable efforts to cause such Servicer to perform and observe the
covenants, obligations and conditions to be performed or observed by it under
its Servicing Agreement.
The relationship of the Master Servicer to the Trustee under
this Agreement is intended by the parties to be that of an independent
contractor and not that of a joint venturer, partner or agent.
The Master Servicer shall administer the Trust Estate on
behalf of the Trustee and shall have full power and authority, acting alone or
(subject to the requirements of Section 6.06) through one or more
Subcontractors, to do any and all things in connection with such administration
which it may deem necessary or desirable. Upon the execution and delivery of
this Agreement, and from time to time as may be required thereafter, the Trustee
shall furnish the Master Servicer or its Subcontractors with any powers of
attorney and such other documents as may be necessary or appropriate to enable
the Master Servicer to carry out its administrative duties hereunder.
The Depositor shall have a limited option to repurchase any
defaulted Mortgage Loan or REO Mortgage Loan during the following time periods:
(i) beginning on the first day of the second month following the month in which
the Master Servicer has reported that a Servicer has initiated foreclosure
proceedings with respect to such a defaulted Mortgage Loan, with such repurchase
option expiring on the last day of such second following month; (ii) beginning
on the first day of the second month following the month in which the Master
Servicer has reported that such defaulted Mortgage Loan has become an REO
Mortgage Loan, with such repurchase option expiring on the last day of such
second following month; and (iii) beginning on the day on which a Servicer
accepts a contractual commitment by a third party to purchase the Mortgaged
Property related to the defaulted Mortgage Loan or REO Mortgage Loan, with such
repurchase option expiring on the earlier of the last day of the month in which
such contractual commitment was accepted by the Servicer or the day immediately
prior to the day on which the closing occurs with respect to such third party
purchase of the Mortgaged Property related to the defaulted Mortgage Loan or REO
Mortgage Loan. The Depositor shall be entitled to repurchase at its option any
Mortgage Loan in the Trust Estate which, pursuant to paragraph 5(b) of the
Mortgage Loan Purchase Agreement, Xxxxx Fargo Bank requests the Depositor to
repurchase and to sell to Xxxxx Fargo Bank to facilitate the exercise of Xxxxx
Fargo Bank's rights against the originator or a prior holder of such Mortgage
Loan. The purchase price for any Mortgage Loan repurchased pursuant to this
paragraph shall be the Repurchase Price. Upon the receipt of such Repurchase
Price, the Master Servicer shall provide to the Trustee the certification
required by Section 3.04 and the Trustee and the Custodian, if any, shall
promptly release to the Depositor the Owner Mortgage Loan File and Retained
Mortgage Loan File, if applicable, relating to the Mortgage Loan being
repurchased.
In the event that (i) the Master Servicer determines at any
time that, notwithstanding the representations and warranties set forth in
Section 2.03(b), any Mortgage Loan is not a "qualified mortgage" within the
meaning of Section 860G of the Code and (ii) the Trustee is unable to enforce
the obligation of the Depositor to purchase such Mortgage Loan pursuant to
Section 2.02 within two months of such determination, the Master Servicer shall
cause such Mortgage Loan to be auctioned to the highest bidder and sold out of
the Trust Estate no later than the date 90 days after such determination. In the
event of any such sale of a Mortgage Loan, the Custodian shall, at the written
request of the Master Servicer and upon being supported with appropriate forms
therefor, within five Business Days of the deposit by the Master Servicer of the
proceeds of such auction into the Certificate Account, release or cause to be
released to the entity identified by the Master Servicer the related Owner
Mortgage Loan File, Retained Mortgage Loan File, if applicable, and Servicer
Mortgage Loan File and shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, as shall be necessary to vest in the
auction purchaser title to the Mortgage Loan and the Custodian shall have no
further responsibility with regard to such Owner Mortgage Loan File, Retained
Mortgage Loan File, if applicable, or Servicer Mortgage Loan File. None of the
Trustee, the Custodian, the Master Servicer or any Servicer, acting on behalf of
the Trustee, shall provide financing from the Trust Estate to any purchaser of a
Mortgage Loan.
The Master Servicer, on behalf of the Trustee, shall, pursuant
to the Servicing Agreements, object to the foreclosure upon, or other related
conversion of the ownership of, any Mortgaged Property by the related Servicer
if (i) the Master Servicer believes such Mortgaged Property may be contaminated
with or affected by hazardous wastes or hazardous substances or (ii) such
Servicer does not agree to administer such Mortgaged Property, once the related
Mortgage Loan becomes an REO Mortgage Loan, in a manner which would not result
in a federal tax being imposed upon the Trust Estate or the REMIC.
At the direction of the Depositor, the Master Servicer may
enter into a special servicing agreement with an unaffiliated holder of 100%
Percentage Interest of a Class of Class B Certificates or a holder of a class of
securities representing interests in the Class B Certificates and/or other
subordinated mortgage pass-through certificates (such entity, a "Special
Servicer"), such agreement (a "Special Servicing Agreement") to be substantially
in the form of Exhibit M hereto or subject to each Rating Agency's
acknowledgment that the ratings of the Certificates in effect immediately prior
to the entering into of such agreement would not be qualified, downgraded or
withdrawn and the Certificates would not be placed on credit review status
(except for possible upgrading) as a result of such agreement. Any such
agreement may contain provisions whereby such holder may (a) purchase any
Mortgage Loans that are more than 180 days delinquent and (b) instruct the
Master Servicer to instruct a Servicer to the extent provided in the applicable
Servicing Agreement to commence or delay foreclosure proceedings with respect to
delinquent Mortgage Loans and will contain provisions for the deposit of cash by
the holder that would be available for distribution to Certificateholders if
Liquidation Proceeds are less than they otherwise may have been had the Servicer
acted in accordance with its normal procedures.
The Master Servicer shall monitor the rating of Xxxxx Fargo &
Company and upon the occurrence of a Document Transfer Event relating to such
rating, shall promptly notify the Depositor, Trustee and Custodian of the
occurrence of such Document Transfer Event.
Section 3.09 Termination and Substitution of Servicing
Agreements.
Upon the occurrence of any event for which a Servicer may be
terminated pursuant to its Servicing Agreement, the Master Servicer shall
promptly deliver to the Depositor and the Trustee an Officer's Certificate
certifying that an event has occurred which may justify termination of such
Servicing Agreement, describing the circumstances surrounding such event and
recommending what action should be taken by the Trustee with respect to such
Servicer. If the Master Servicer recommends that such Servicing Agreement be
terminated, the Master Servicer's certification must state that the breach is
material and not merely technical in nature. Based upon such certification, the
Master Servicer, or if provided by the applicable Other Servicing Agreement and
upon written direction of the Master Servicer, the Trustee, shall promptly
terminate such Other Servicing Agreement. The Trustee shall terminate the Xxxxx
Fargo Bank Servicing Agreement in accordance with the provisions of Article 19
thereof. The Master Servicer shall indemnify the Trustee and hold it harmless
from and against any and all claims, liabilities, costs and expenses (including,
without limitation, reasonable attorneys' fees) arising out of, or assessed
against the Trustee in connection with termination of a Servicing Agreement at
the direction of the Master Servicer except to the extent that such claims,
liabilities, costs and expenses are incurred as a result of the bad faith,
willful misfeasance or gross negligence of the Trustee in the performance of its
obligations hereunder. To the extent that the costs and expenses (including any
amounts paid by the Master Servicer pursuant to the immediately preceding
sentence) of the Master Servicer related to any termination of a Servicer,
appointment of a successor Servicer or the transfer and assumption of servicing
by the Master Servicer with respect to any Servicing Agreement (including,
without limitation, (i) all legal costs and expenses and all due diligence costs
and expenses associated with an evaluation of the potential termination of the
Servicer as a result of an event of default by such Servicer, (ii) all costs and
expenses associated with the complete transfer of servicing, including all
servicing files and all servicing data and the completion, correction or
manipulation of such servicing data as may be required by the successor servicer
to correct any errors or insufficiencies in the servicing data or otherwise to
enable the successor servicer to service the Mortgage Loans in accordance with
the related Servicing Agreement and (iii) any costs incurred by the Trustee in
connection with a servicing transfer) are not fully and timely reimbursed by the
terminated Servicer, the Master Servicer shall be entitled to reimbursement of
such costs and expenses from the Certificate Account. If the Master Servicer or
Trustee terminates an Other Servicing Agreement, the Trustee may enter into a
substitute Servicing Agreement with the Master Servicer or, at the Master
Servicer's nomination, with another mortgage loan service company acceptable to
the Trustee, the Master Servicer and each Rating Agency under which the Master
Servicer or such substitute servicer, as the case may be, shall assume, satisfy,
perform and carry out all liabilities, duties, responsibilities and obligations
that are to be, or otherwise were to have been, satisfied, performed and carried
out by such Servicer under such terminated Servicing Agreement. If the Trustee
terminates the Xxxxx Fargo Bank Servicing Agreement, the Trustee shall enter
into a substitute Servicing Agreement with another mortgage loan service company
acceptable to the Trustee and each Rating Agency under which such substitute
servicer shall assume, satisfy, perform and carry out all liabilities, duties,
responsibilities and obligations that are to be, or otherwise were to have been,
satisfied, performed and carried out by Xxxxx Fargo Bank, in its capacity as
Servicer, under such terminated Servicing Agreement. It is understood and
acknowledged by the parties hereto that there will be a period of transition not
to exceed ninety (90) days before the servicing functions can be transferred to
such substitute servicer. Until such time as the Trustee enters into a
substitute servicing agreement with respect to the Mortgage Loans previously
serviced by an Other Servicer and the transition period relating to the transfer
of such servicing expires, the Master Servicer shall assume, satisfy, perform
and carry out all obligations which otherwise were to have been satisfied,
performed and carried out by an Other Servicer under its terminated Servicing
Agreement. However, in no event shall the Master Servicer be deemed to have
assumed the obligations of a Servicer to advance payments of principal and
interest on a delinquent Mortgage Loan in excess of the Master Servicer's
independent Periodic Advance obligation under Section 3.03 of this Agreement. As
compensation for the Master Servicer of any servicing obligations fulfilled or
assumed by the Master Servicer, the Master Servicer shall be entitled to any
servicing compensation to which a Servicer would have been entitled if the
Servicing Agreement with such Servicer had not been terminated.
Section 3.10 Application of Net Liquidation Proceeds.
For all purposes under this agreement, Net Liquidation
Proceeds received from a Servicer shall be allocated first to accrued and unpaid
interest on the related Mortgage Loan and then to the unpaid principal balance
thereof.
Section 3.11 Assessment of Servicing Compliance;
Registered Public Accounting Firm
Attestation Reports.
(a) The Master Servicer, at its own expense, shall furnish to
the Depositor, and the Trustee, any Special Servicer (if applicable) and the
Custodian, at their own expense, shall furnish, or otherwise make available, and
shall cause any Servicing Function Participant engaged by any such party to
furnish, and the Master Servicer shall use reasonable effort to cause each
Servicer to furnish with respect to such Servicer and each Servicing Function
Participant engaged by such Servicer and identified to the Master Servicer, at
such party's expense, to the Master Servicer, not later than March 5 of each
year, or if such day is not a Business Day, the next Business Day (with a 10 day
cure period, but in no event later than March 15), commencing in March 2007, a
copy of a report, followed by a hard copy to the Master Servicer within 10
calendar days, signed by an authorized officer of the Master Servicer, the
Trustee, the Custodian, the Servicing Function Participant, the Special Servicer
(if applicable) or the Servicer, as applicable, on assessment of compliance
with, at a minimum, the Relevant Servicing Criteria that contains:
(i) a statement by such party of its responsibility for
assessing compliance with the Servicing Criteria applicable to it;
(ii) a statement that such party used the Servicing Criteria
applicable to it to assess compliance with the Servicing Criteria;
(iii) such party's assessment of compliance with the Servicing
Criteria applicable to it as of and for the preceding fiscal year,
including, if there had been any material instance of noncompliance
with the Servicing Criteria applicable to it, identifying each such
failure and the nature and status thereof; and
(iv) a statement that a registered public accounting firm has
issued an attestation report on such party's assessment of compliance
with the Servicing Criteria applicable to it as of and for the
preceding fiscal year.
No later than 30 days following the end of each fiscal year,
the Master Servicer shall forward to the Depositor the name of each Servicing
Function Participant engaged by it and what Relevant Servicing Criteria will be
addressed in the report on assessment of compliance prepared by such Servicing
Function Participant. When the Master Servicer submits its assessments to the
Depositor, it will also at such time include the assessment (and attestation
pursuant to Section 3.11(b)) of each Servicing Function Participant engaged by
it.
No later than 30 days following the end of each fiscal year,
each of the Trustee, any Special Servicer (if applicable) and the Custodian (so
long as the Custodian is not the Master Servicer) shall forward to the Master
Servicer the name of each Servicing Function Participant engaged by it and what
Relevant Servicing Criteria will be addressed in the report on assessment of
compliance prepared by such Servicing Function Participant. When the Trustee,
any Special Servicer (if applicable) and the Custodian (so long as the Custodian
is not the Master Servicer) submit their assessments to the Master Servicer,
each such party will also at such time include the assessment (and attestation
pursuant to Section 3.11(b)) of each Servicing Function Participant engaged by
it.
The Master Servicer shall confirm that the assessments address
the Relevant Servicing Criteria for each party as set forth on Exhibit R or in
the applicable Servicing Agreement or the applicable Special Servicing Agreement
and shall notify the Depositor of any exceptions and deliver the assessment of
compliance containing such exceptions. Promptly after receipt of each such
report on assessment of compliance, the Depositor shall review each such report
and, if applicable, consult with the Master Servicer, the Trustee, the
Custodian, any Special Servicer (if applicable) and any Servicing Function
Participant as to the nature of any material instance of noncompliance with the
Relevant Servicing Criteria by the Master Servicer, the Trustee, the Custodian,
any Servicer, any Special Servicer (if applicable), or any Servicing Function
Participant engaged by such parties.
(b) The Master Servicer, at its own expense, shall cause a
registered public accounting firm which is a member of the Institute of
Certified Public Accountants to furnish to the Depositor, and each of the
Trustee, the Custodian and any Special Servicer (if applicable) at their own
expense, shall cause, and shall cause any Servicing Function Participant engaged
by any such party, at such party's expense, to cause, and the Master Servicer
shall use reasonable efforts to cause each Servicer, at such Servicer's expense,
with respect to such Servicer and each Servicing Function Participant engaged by
such Servicer and identified to the Master Servicer, to cause a registered
public accounting firm which is a member of the Institute of Certified Public
Accountants to furnish to the Master Servicer, not later than March 5 of each
year, or if such day is not a Business Day, the next Business Day (with a 10
calendar day cure period, but in no event later than March 15), commencing in
March 2007, an electronic report (with a hard copy to follow within 10 calendar
days) to the effect that (i) it has obtained a representation regarding certain
matters from the management of such party, which includes an assertion that such
party has complied with the Relevant Servicing Criteria, and (ii) on the basis
of an examination conducted by such firm in accordance with standards for
attestation engagements issued or adopted by the Public Company Accounting
Oversight Board, it is expressing an opinion as to whether such party's
assessment of compliance with the Relevant Servicing Criteria was fairly stated
in all material respects, or it cannot express an overall opinion regarding such
party's assessment of compliance with the Relevant Servicing Criteria. In the
event that an overall opinion cannot be expressed, such registered public
accounting firm shall state in such report why it was unable to express such an
opinion. Such report must be available for general use and not contain
restricted use language. If requested by the Master Servicer or the Depositor,
such report shall contain or be accompanied by a consent of such accounting firm
to inclusion or incorporation of such report in the Depositor's Registration
Statement on Form S-3 relating to the Certificates and the Trust's Form 10-K.
Promptly after receipt of such report from the Master
Servicer, the Depositor shall review the report and, if applicable, consult with
the Master Servicer if any such report (i) states that the party's assessment of
compliance was not fairly stated in a material respect or (ii) is unable to
state an overall opinion.
Promptly after receipt of such report from the Trustee, the
Custodian, the Servicer, the Special Servicer (if applicable), or any Servicing
Function Participant engaged by such parties, the Master Servicer shall review
the report and shall promptly notify the Depositor if any such report (i) states
that the party's assessment of compliance was not fairly stated in a material
respect or (ii) is unable to state an overall opinion and the Depositor shall
promptly review each such report and the Depositor and the Master Servicer shall
consult with the parties to which such report relates.
The Master Servicer shall make available any report from the
Master Servicer, the Trustee, the Custodian, the Servicer, the Special Servicer
(if applicable), or any Servicing Function Participant furnished pursuant to
Section 3.05 and this Section 3.11, as well as any documents incorporated by
reference into the Prospectus (to the extent such documents are either in its
possession or have been filed with the Commission), to any Certificateholder
requesting such information.
Section 3.12 Exchange Act Reports.
(a) Within 15 days after each Distribution Date, the Master
Servicer shall prepare, an authorized officer of the Master Servicer shall sign,
and the Master Servicer shall file with the Commission, on behalf of the Trust,
any Form 10-D required by the Exchange Act, in form and substance as required by
the Exchange Act. The Master Servicer shall file each Form 10-D with a copy of
the related Distribution Date Statement attached thereto. Any disclosure in
addition to the Distribution Date Statement that is required to be included on
Form 10-D ("Additional Form 10-D Disclosure") shall be reported by the parties
set forth on Exhibit S and directed and approved by the Depositor, and the
Master Servicer will have no duty or liability for any failure hereunder to
determine or prepare any Additional Form 10-D Disclosure (other than with
respect to itself) absent such reporting, direction and approval. If a Form 10-D
cannot be filed on time or if a previously filed Form 10-D needs to be amended,
the Master Servicer will follow the procedures set forth in Section 3.12(d).
Promptly (but no later than 1 Business Day) after filing with the Commission,
the Master Servicer will make available on its internet website a final executed
copy of each Form 10-D.
For so long as the Trust is subject to the Exchange Act
reporting requirements, within five (5) calendar days after the related
Distribution Date, the parties identified on Exhibit S shall (i) provide to the
Master Servicer and the Depositor, to the extent known by a Responsible Officer,
in XXXXX-compatible format, or in such other format as otherwise agreed upon by
the Master Servicer and such party, the form and substance of any Additional
Form 10-D Disclosure, if applicable and (ii) include with such Additional Form
10-D Disclosure, an Additional Disclosure Notification in the form attached
hereto as Exhibit V, and the Depositor will approve, as to form and substance,
or disapprove, as the case may be, the inclusion of the Additional Form 10-D
Disclosure on Form 10-D. The Master Servicer has no duty under this Agreement to
monitor or enforce the performance by the parties listed on Exhibit S of their
duties under this paragraph or proactively solicit or procure from such parties
any Additional Form 10-D Disclosure; except that the Master Servicer shall
enforce the obligations of the Servicers under the Servicing Agreements. After
preparing the Form 10-D, if the Form 10-D contains any Additional Form 10-D
Disclosure, the Master Servicer shall forward electronically a draft copy of the
Form 10-D to the Depositor for review. Each party to this Agreement acknowledges
that the performance by the Master Servicer of its duties under this Section
3.12(a) relating to the timely preparation and filing of Form 10-D is contingent
upon such parties strictly observing all applicable deadlines in the performance
of their duties under this Section 3.12(a). The Master Servicer shall have no
liability for any loss, expense, damage, claim arising out of or with respect to
any failure to properly prepare and/or timely file such Form 10-D, where such
failure results from the Master Servicer's inability or failure to receive, on a
timely basis, any information from any other party hereto, any Servicer, the
Custodian or any Special Servicer (if applicable) needed to prepare, arrange for
execution or file such Form 10-D, not resulting from its own negligence, bad
faith or willful misconduct. The Depositor will be responsible for any
reasonable fees assessed and expenses incurred by the Master Servicer in
connection with including any Additional Form 10-D Disclosure on Form 10-D
pursuant to this paragraph.
(b) Within 90 days after the end of each fiscal year of the
Trust or such earlier date as may be required by the Exchange Act (it being
understood that the fiscal year for the Trust ends on December 31st of each
year), commencing in March 2007, the Master Servicer shall prepare, a senior
officer of the Master Servicer in charge of the master servicing function shall
sign, and the Master Servicer shall file with the Commission, on behalf of the
Trust, a Form 10-K, in form and substance as required by the Exchange Act. Each
such Form 10-K shall include the following items, in each case to the extent
they have been delivered to the Master Servicer within the applicable timeframes
set forth in this Agreement, the related Servicing Agreements, the Custodial
Agreement or, if applicable, the Special Servicing Agreement:
(i) an annual compliance statement for the Master Servicer,
any Additional Master Servicer and each Servicer, as described under
Section 3.05;
(ii) (A) the annual reports on assessment of compliance with
servicing criteria for the Master Servicer, the Trustee, each Servicer,
the Custodian, any Special Servicer (if applicable), and each Servicing
Function Participant, as described under Section 3.11(a), and (B) if
any party's report on assessment of compliance with Servicing Criteria
described under Section 3.11(a) identifies any material instance of
noncompliance, disclosure identifying such instance of noncompliance,
or if any party's report on assessment of compliance with servicing
criteria described under Section 3.11(a) is not included as an exhibit
to such Form 10-K, disclosure that such report is not included and an
explanation of why such report is not included;
(iii) (A) the registered public accounting firm attestation
report for each of the Master Servicer, the Trustee, each Servicer, the
Custodian, any Special Servicer (if applicable), and each Servicing
Function Participant, as described under Section 3.11(b), and (B) if
any registered public accounting firm attestation report described
under Section 3.11(b) identifies any material instance of
noncompliance, disclosure identifying such instance of noncompliance,
or if any such registered public accounting firm attestation report is
not included as an exhibit to such Form 10-K, disclosure that such
report is not included and an explanation of why such report is not
included; and
(iv) a certification, signed by a senior officer of the Master
Servicer in charge of the master servicing function, in the form
attached hereto as Exhibit P or in such other form as may be required
by Rules 13a-14 and 15d-14 under the Exchange Act, as applicable, and
any directives or interpretations thereof by the Commission (the
"Xxxxxxxx-Xxxxx Certification").
Any disclosure or information in addition to (i) through (iv)
above that is required to be included on Form 10-K ("Additional Form 10-K
Disclosure") shall, pursuant to the paragraph immediately below, be reported by
the parties set forth on Exhibit T and directed and approved by the Depositor,
and the Master Servicer will have no duty or liability for any failure hereunder
to determine or prepare any Additional Form 10-K Disclosure (other than with
respect to itself) absent such reporting, direction and approval. If a Form 10-K
cannot be filed on time or if a previously filed Form 10-K needs to be amended,
the Master Servicer will follow the procedures set forth in Section 3.12(d).
Promptly (but no later than 1 Business Day) after filing with the Commission,
the Master Servicer will make available on its internet website a final executed
copy of each Form 10-K.
No later than March 5 (with a 10 calendar day cure period, but
in no event later than March 15) of each year that the Trust is subject to the
Exchange Act reporting requirements, commencing in March 2007, (i) the parties
identified on Exhibit T shall provide to the Master Servicer and the Depositor,
to the extent known by a Responsible Officer, in XXXXX-compatible format, or in
such other format as otherwise agreed upon by the Master Servicer and such
party, the form and substance of any Additional Form 10-K Disclosure, if
applicable, and (ii) the parties identified on Exhibit T shall include with such
Additional Form 10-K Disclosure, an Additional Disclosure Notification in the
form attached hereto as Exhibit V, and the Depositor will approve, as to form
and substance, or disapprove, as the case may be, the inclusion of the
Additional Form 10-K Disclosure on Form 10-K. The Master Servicer has no duty
under this Agreement to monitor or enforce the performance by the parties listed
on Exhibit T of their duties under this paragraph or proactively solicit or
procure from such parties any Additional Form 10-K Disclosure information;
except that the Master Servicer shall enforce the obligations of the Servicers
under the Servicing Agreements. The Depositor will be responsible for any
reasonable fees and expenses assessed or incurred by the Master Servicer in
connection with including any Additional Form 10-K Disclosure on Form 10-K
pursuant to this paragraph.
After preparing the Form 10-K, if the Form 10-K contains any
Additional Form 10-K Disclosure, the Master Servicer shall forward
electronically a draft copy of the Form 10-K to the Depositor for review. Each
party to this Agreement acknowledges that the performance by the Master Servicer
of its duties under this Section 3.12(b) relating to the timely preparation and
filing of Form 10-K is contingent upon such parties strictly observing all
applicable timeframes in the performance of their duties under Sections 3.05,
3.11 or this Section 3.12(b). The Master Servicer shall have no liability for
any loss, expense, damage, claim arising out of or with respect to any failure
to properly prepare and/or timely file such Form 10-K, where such failure
results from the Master Servicer's inability or failure to obtain or receive, on
a timely basis, any information from any other party hereto, any Servicer, any
Special Servicer (if applicable) or the Custodian needed to prepare, arrange for
execution or file such Form 10-K, not resulting from its own negligence, bad
faith or willful misconduct.
(c) Within four (4) Business Days after the occurrence of an
event requiring disclosure on Form 8-K (each such event, a "Reportable Event"),
and if directed by the Depositor, the Master Servicer shall prepare, an
authorized officer of the Master Servicer shall sign, and the Master Servicer
shall file with the Commission, on behalf of the Trust, any Form 8-K, as
required by the Exchange Act, provided that the Depositor shall prepare and file
the initial Form 8-K in connection with the issuance of the Certificates. Any
disclosure or information related to a Reportable Event or that is otherwise
required to be included on Form 8-K ("Form 8-K Disclosure Information") shall,
pursuant to the paragraph immediately below, be reported by the parties set
forth on Exhibit U and directed and approved by the Depositor, and the Master
Servicer will have no duty or liability for any failure hereunder to determine
or prepare any Form 8-K Disclosure Information (other than with respect to
itself) absent such reporting, direction and approval. If a Form 8-K cannot be
filed on time or if a previously filed Form 8-K needs to be amended, the Master
Servicer will follow the procedures set forth in Section 3.12(d). Promptly (but
no later than 1 Business Day) after filing with the Commission, the Master
Servicer will, make available on its internet website a final executed copy of
each Form 8-K.
For so long as the Trust is subject to the Exchange Act
reporting requirements, no later than the end of business on the second Business
Day after the occurrence of a Reportable Event (i) the parties identified on
Exhibit U shall provide to the Master Servicer and the Depositor, to the extent
known by a Responsible Officer, in XXXXX-compatible form, or in such other form
as otherwise agreed upon by the Master Servicer and such party, the form and
substance of any Form 8-K Disclosure Information, if applicable, and (ii) the
parties identified on Exhibit U shall include with such Additional Form 8-K
Disclosure, an Additional Disclosure Notification in the form attached hereto as
Exhibit V and the Depositor will approve, as to form and substance, or
disapprove, as the case may be, the inclusion of the Form 8-K Disclosure
Information on Form 8-K. The Master Servicer has no duty under this Agreement to
monitor or enforce the performance by the parties listed on Exhibit U of their
duties under this paragraph or proactively solicit or procure from such parties
any Form 8-K Disclosure Information; except that the Master Servicer shall
enforce the obligations of the Servicers under the Servicing Agreements. The
Depositor will be responsible for any reasonable fees and expenses assessed or
incurred by the Master Servicer in connection with including any Form 8-K
Disclosure Information on Form 8-K pursuant to this paragraph.
After preparing the Form 8-K, the Master Servicer shall
forward electronically a draft copy of the Form 8-K to the Depositor for review.
Each party to this Agreement acknowledges that the performance by the Master
Servicer of its duties under this Section 3.12(c) relating to the timely
preparation and filing of Form 8-K is contingent upon such party strictly
observing all applicable timeframes in the performance of its duties under this
Section 3.12(c). The Master Servicer shall have no liability for any loss,
expense, damage, claim arising out of or with respect to any failure to properly
prepare and/or timely file such Form 8-K, where such failure results from the
Master Servicer's inability or failure to obtain or receive, on a timely basis,
any information from any other party hereto, any Servicer, the Custodian or any
Special Servicer (if applicable) needed to prepare, arrange for execution or
file such Form 8-K, not resulting from its own negligence, bad faith or willful
misconduct.
(d) In the event that the Master Servicer is unable to timely
file with the Commission all or any required portion of any Form 8-K, 10-D or
10-K required to be filed by this Agreement because required disclosure
information was either not delivered to it or delivered to it after the delivery
deadlines set forth in this Agreement or for any other reason, the Master
Servicer will promptly notify the Depositor and, in the case of Form 10-D or
10-K, the Master Servicer will prepare, sign and file a Form 12b-25 pursuant to
Rule 12b-25 of the Exchange Act not later than the Business Day following the
due date of the applicable report. Within five days following the due date of
any Form 10-D as to which it has filed a Form 12b-25, the Master Servicer shall
prepare, sign and file the related Form 10-D. Within 15 days following the due
date of any Form 10-K as to which it has filed a Form 12b-25, the Master
Servicer shall prepare, sign and file the related Form 10-K. In the case of Form
8-K, the Master Servicer will, upon receipt of all required Form 8-K Disclosure
Information and at the direction of the Depositor, include such disclosure
information on the next Form 10-D. In the event that any previously filed Form
8-K, 10-D or 10-K needs to be amended, the Master Servicer will notify the
Depositor and each party whose cooperation is required in connection with the
preparation of such amendment; provided however that such notice shall not be
required in connection with an amendment to Form 10-D due to a revision made to
any Distribution Date Statement. The parties to this Agreement acknowledge that
the performance by the Master Servicer of its duties under this Section 3.12(d)
related to the timely preparation and filing of a Form 12b-25 or any amendment
to Form 8-K, 10-D or 10-K is contingent upon each such party performing its
duties under this Section. The Master Servicer shall have no liability for any
loss, expense, damage, claim arising out of or with respect to any failure to
properly prepare and/or timely file any such Form 12b-25 or any amendments to
Forms 8-K, 10-D or 10-K, where such failure results from the Master Servicer's
inability or failure to obtain or receive, on a timely basis, any information
from any other party hereto, any Servicer, the Custodian or any Special Servicer
(if applicable) needed to prepare, arrange for execution or file such Form
12b-25 or any amendments to Forms 8-K, 10-D or 10-K, not resulting from its own
negligence, bad faith or willful misconduct.
(e) On or prior to January 30 of the first year in which the
Master Servicer is able to do so under applicable law, the Master Servicer shall
prepare, an authorized officer of the Master Servicer shall sign, and the Master
Servicer shall file with the Commission, on behalf of the Trust, a Form 15
relating to the automatic suspension of reporting in respect of the Trust under
the Exchange Act. At the beginning of any year after the filing of a Form 15, if
the number of Certificateholders of record exceeds the number set forth in
Section 15(d) of the Exchange Act or the regulations promulgated pursuant
thereto which would cause the Trust to again become subject to the reporting
requirements of the Exchange Act, the Master Servicer shall recommence preparing
and filing reports on Form 10-D, 10-K and 8-K as required pursuant to this
Section and the parties hereto, the Servicers, the Trustee, the Custodian and
any Special Servicer (if applicable) will again have the obligations set forth
in paragraphs (a) through (d) of this Section.
(f) To the extent the Master Servicer is obligated to give any
notice to the Depositor pursuant to this Section 3.12, such notice may,
notwithstanding the provisions of Section 10.05 in this Agreement, be delivered
via facsimile to 000-000-0000 or via electronic mail to
Xxxxxxxxxxxxxxxxx-xxxxxxxxx@xxxxxxxxxx.xxx.
ARTICLE IV
DISTRIBUTIONS IN RESPECT OF CERTIFICATES;
PAYMENTS TO CERTIFICATEHOLDERS;
STATEMENTS AND REPORTS
Section 4.01 Distributions.
(a) On each Distribution Date, the Pool Distribution Amount
will be applied in the following amounts, to the extent the Pool Distribution
Amount is sufficient therefor, in the manner and in the order of priority as
follows:
first, to the Classes of Class A Certificates, pro rata, based
upon their respective Interest Accrual Amounts, in an aggregate amount up to the
Class A Interest Accrual Amount with respect to such Distribution Date;
second, to the Classes of Class A Certificates, pro rata,
based upon their respective Class A Unpaid Interest Shortfalls, in an aggregate
amount up to the Aggregate Class A Unpaid Interest Shortfall;
third, to the Classes of Class A Certificates, in an aggregate
amount up to the Class A Optimal Principal Amount, such distribution to be
allocated among such Classes in accordance with Section 4.01(b) or Section
4.01(c), as applicable;
fourth, to the Class B-1 Certificates, in an amount up to the
Interest Accrual Amount for the Class B-1 Certificates with respect to such
Distribution Date;
fifth, to the Class B-1 Certificates in an amount up to the
Class B-1 Unpaid Interest Shortfall;
sixth, to the Class B-1 Certificates in an amount up to the
Class B-1 Optimal Principal Amount;
seventh, to the Class B-2 Certificates, in an amount up to the
Interest Accrual Amount for the Class B-2 Certificates with respect to such
Distribution Date;
eighth, to the Class B-2 Certificates in an amount up to the
Class B-2 Unpaid Interest Shortfall;
ninth, to the Class B-2 Certificates in an amount up to the
Class B-2 Optimal Principal Amount;
tenth, to the Class B-3 Certificates, in an amount up to the
Interest Accrual Amount for the Class B-3 Certificates with respect to such
Distribution Date;
eleventh, to the Class B-3 Certificates in an amount up to the
Class B-3 Unpaid Interest Shortfall;
twelfth, to the Class B-3 Certificates in an amount up to the
Class B-3 Optimal Principal Amount;
thirteenth, to the Class B-4 Certificates in an amount up to
the Interest Accrual Amount for the Class B-4 Certificates with respect to such
Distribution Date;
fourteenth, to the Class B-4 Certificates in an amount up to
the Class B-4 Unpaid Interest Shortfall;
fifteenth, to the Class B-4 Certificates in an amount up to
the Class B-4 Optimal Principal Amount;
sixteenth, to the Class B-5 Certificates in an amount up to
the Interest Accrual Amount for the Class B-5 Certificates with respect to such
Distribution Date;
seventeenth, to the Class B-5 Certificates in an amount up to
the Class B-5 Unpaid Interest Shortfall;
eighteenth, to the Class B-5 Certificates in an amount up to
the Class B-5 Optimal Principal Amount;
nineteenth, to the Class B-6 Certificates in an amount up to
the Interest Accrual Amount for the Class B-6 Certificates with respect to such
Distribution Date;
twentieth, to the Class B-6 Certificates in an amount up to
the Class B-6 Unpaid Interest Shortfall;
twenty-first, to the Class B-6 Certificates in an amount up to
the Class B-6 Optimal Principal Amount; and
twenty-second, to the Holder of the Class A-R Certificate, any
amounts remaining in the Payment Account.
Notwithstanding the foregoing, after the Principal Balance of
any Class has been reduced to zero, such Class will be entitled to no further
distributions of principal or interest (including, without limitation, any
Unpaid Interest Shortfalls).
On each Distribution Date, any Reimbursement Amount shall be
distributed sequentially to the Classes of Certificates then outstanding which
bore the loss to which such Reimbursement Amount relates beginning with the most
senior of such Class of Certificates, up to, with respect to each Class, the
amount of loss borne by such Class. Any Reimbursement Amount remaining after the
application described in the preceding sentence shall be included in the Pool
Distribution Amount.
With respect to any Distribution Date, the amount of the
Principal Adjustment, if any, attributable to any Class B Certificates will be
allocated to the Classes of Class A Certificates and any Class of Class B
Certificates with a lower numerical designation pro rata based on their
outstanding Principal Balances.
(b) On each Distribution Date occurring prior to the
Subordination Depletion Date, the Class A Principal Distribution Amount will be
allocated among and distributed in reduction of the Principal Balances of the
Class A Certificates, sequentially, as follows:
first, to the Class A-R Certificate; and
second, concurrently, as follows:
(i) 50.2690589163%, concurrently, to the Class A-3, Class A-4
and Class A-5 Certificates, pro rata; and
(ii) 49.7309410837%, sequentially, to the Class A-1 and Class
A-2 Certificates.
(c) Notwithstanding the foregoing, on each Distribution Date
occurring on or subsequent to the Subordination Depletion Date, the Class A
Principal Distribution Amount shall be distributed among the Classes of Class A
Certificates pro rata in accordance with their outstanding Principal Balances
without regard to either the proportions or the priorities set forth in Section
4.01(b).
(d)(i) For purposes of determining whether the Classes of
Class B Certificates are eligible to receive unscheduled principal distributions
(other than Liquidation Proceeds that are not Partial Liquidation Proceeds) with
respect to any Distribution Date, the following tests shall apply:
(A) if the Current Class B-1 Fractional Interest is less than
the Original Class B-1 Fractional Interest and the Class B-1 Principal
Balance is greater than zero, the Class B-2, Class B-3, Class B-4,
Class B-5 and Class B-6 Certificates shall not be eligible to receive
distributions of such unscheduled principal; or
(B) if the Current Class B-2 Fractional Interest is less than
the Original Class B-2 Fractional Interest and the Class B-2 Principal
Balance is greater than zero, the Class B-3, Class B-4, Class B-5 and
Class B-6 Certificates shall not be eligible to receive distributions
of such unscheduled principal; or
(C) if the Current Class B-3 Fractional Interest is less than
the Original Class B-3 Fractional Interest and the Class B-3 Principal
Balance is greater than zero, the Class B-4, Class B-5 and Class B-6
Certificates shall not be eligible to receive distributions of such
unscheduled principal; or
(D) if the Current Class B-4 Fractional Interest is less than
the Original Class B-4 Fractional Interest and the Class B-4 Principal
Balance is greater than zero, the Class B-5 and Class B-6 Certificates
shall not be eligible to receive distributions of such unscheduled
principal; or
(E) if the Current Class B-5 Fractional Interest is less than
the Original Class B-5 Fractional Interest and the Class B-5 Principal
Balance is greater than zero, the Class B-6 Certificates shall not be
eligible to receive distributions of such unscheduled principal.
(ii) Notwithstanding the foregoing, if on any Distribution
Date the aggregate principal distributions to Holders of the Classes of
Class B Certificates would reduce the Principal Balances of the Classes
of Class B Certificates below zero, first the Class B Prepayment
Percentage of any affected Class of Class B Certificates for such
Distribution Date beginning with the affected Class with the lowest
numerical Class designation and then, if necessary, the Class B
Percentage of such Class of the Class B Certificates for such
Distribution Date shall be reduced to the respective percentages
necessary to bring the Principal Balance of such Class of Class B
Certificates to zero. The Class B Prepayment Percentages and the Class
B Percentages of the remaining Classes of Class B Certificates will be
recomputed substituting for the Subordinated Prepayment Percentage and
Subordinated Percentage in such computations the difference between (A)
the Subordinated Prepayment Percentage or Subordinated Percentage as
the case may be, and (B) the percentages determined in accordance with
the preceding sentence necessary to bring the Principal Balances of the
affected Classes of Class B Certificates to zero; provided, however,
that if the Principal Balances of all the Classes of Class B
Certificates eligible to receive distributions of unscheduled principal
pursuant to clause (i) shall be reduced to zero on such Distribution
Date, the Class B Prepayment Percentage of the Class of Class B
Certificates with the lowest numerical Class designation which would
otherwise be ineligible to receive such distributions of unscheduled
principal in accordance with this Section shall equal the remainder of
the Subordinated Prepayment Percentage for such Distribution Date minus
the sum of the Class B Prepayment Percentages of the Classes of Class B
Certificates having lower numerical Class designations, if any. Any
entitlement of any Class of Class B Certificates to principal payments
solely pursuant to this clause (ii) shall not cause such Class to be
regarded as being eligible to receive such unscheduled principal
distributions for the purpose of applying the definition of its Class B
Prepayment Percentage.
(e) On each Distribution Date other than the Final
Distribution Date (if such Final Distribution Date is in connection with a
purchase of the assets of the Trust Estate by the Depositor), the Paying Agent
shall from funds remitted to it by the Master Servicer, distribute to each
Certificateholder of record on the preceding Record Date (other than as provided
in Section 9.01 respecting the final distribution to Certificateholders or in
the last paragraph of this Section 4.01(e) respecting the final distribution in
respect of any Class) either in immediately available funds by wire transfer to
the account of such Certificateholder at a bank or other entity having
appropriate facilities therefor, if such Certificateholder holds Certificates
having a Denomination at least equal to that specified in Section 11.22, and has
so notified the Paying Agent at least seven Business Days prior to the
Distribution Date or, if such Holder holds Certificates having, in the
aggregate, a Denomination less than the requisite minimum Denomination or if
such Holder holds the Class A-R Certificate or has not so notified the Paying
Agent, by check mailed to such Holder at the address of such Holder appearing in
the Certificate Register, such Holder's share of the Class A Distribution Amount
with respect to each Class of Class A Certificates and the Class B Distribution
Amount with respect to each Class of Class B Certificates.
In the event that, on any Distribution Date prior to the Final
Distribution Date, the Principal Balance of any Class of Class A Certificates
(other than the Class A-R Certificate) or the Principal Balance of any Class of
Class B Certificates would be reduced to zero, the Master Servicer shall, as
soon as practicable after the Determination Date relating to such Distribution
Date, send notice to the Paying Agent. The Paying Agent shall then send a notice
to each Certificateholder of such Class with a copy to the Certificate
Registrar, specifying that the final distribution with respect to such Class
will be made on such Distribution Date only upon the presentation and surrender
of such Certificateholder's Certificates at the office or agency of the
Certificate Registrar therein specified; provided, however, that the failure to
give such notice will not entitle a Certificateholder to any interest beyond the
interest payable with respect to such Distribution Date in accordance with
Section 4.01(a).
(f) The Paying Agent shall withhold or cause to be withheld
such amounts as may be required by the Code (giving full effect to any
exemptions from withholding and related certifications required to be furnished
by Certificateholders and any reductions to withholding by virtue of any
bilateral tax treaties and any applicable certification required to be furnished
by Certificateholders with respect thereto) from distributions to be made to
Persons other than U.S. Persons ("Non-U.S. Persons"). Amounts withheld pursuant
to this Section 4.01(f) shall be treated as having been distributed to the
related Certificateholder for all purposes of this Agreement. For the purposes
of this paragraph, a "U.S. Person" is a citizen or resident of the United
States, a corporation or partnership (unless, in the case of a partnership,
Treasury regulations are adopted that provide otherwise) created or organized in
or under the laws of the United States, any state thereof or the District of
Columbia, including an entity treated as a corporation or partnership for
federal income tax purposes, an estate whose income is subject to United States
federal income tax regardless of its source, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
such trust, and one or more such U.S. Persons have the authority to control all
substantial decisions of such trust (or, to the extent provided in applicable
Treasury regulations, certain trusts in existence on August 20, 1996 which are
eligible to elect to be treated as U.S. Persons).
Section 4.02 Allocation of Realized Losses.
(a) With respect to any Distribution Date, the principal
portion of Realized Losses (other than Debt Service Reductions) will be
allocated as follows:
first, to the Class B-6 Certificates until the Class B-6
Principal Balance has been reduced to zero;
second, to the Class B-5 Certificates until the Class B-5
Principal Balance has been reduced to zero;
third, to the Class B-4 Certificates until the Class B-4
Principal Balance has been reduced to zero;
fourth, to the Class B-3 Certificates until the Class B-3
Principal Balance has been reduced to zero;
fifth, to the Class B-2 Certificates until the Class B-2
Principal Balance has been reduced to zero;
sixth, to the Class B-1 Certificates until the Class B-1
Principal Balance has been reduced to zero; and
seventh, to the Class A Certificates.
This allocation of Realized Losses will be effected through
the reduction of the applicable Class's Principal Balance through the operation
of the definition of Principal Balance and the provisos in the definitions of
Class B-1 Principal Balance, Class B-2 Principal Balance, Class B-3 Principal
Balance, Class B-4 Principal Balance, Class B-5 Principal Balance and Class B-6
Principal Balance.
(b) Any Realized Losses allocated to a Class of Class A
Certificates or Class B Certificates pursuant to Section 4.02(a) shall be
allocated among the Certificates of such Class based on their Percentage
Interests.
(c) With respect to any Distribution Date, the interest
portion of Realized Losses will be allocated after the Subordination Depletion
Date among the outstanding Classes of Class A Certificates based on their Class
A Interest Percentages.
(d) Realized Losses allocated in accordance with this Section
4.02 will be allocated as follows: (i) Liquidated Loan Losses on Liquidated
Loans for which the Liquidation Proceeds were received during, and Bankruptcy
Losses incurred in a period corresponding to, an Unscheduled Principal Receipt
Period for Full Unscheduled Principal Receipts that is a Mid-Month Receipt
Period will be allocated on the Determination Date in the month following the
month in which such Mid-Month Receipt Period ended and (ii) Liquidated Loan
Losses on Liquidated Loans for which the Liquidation Proceeds were received
during, and Bankruptcy Losses incurred in a period corresponding to, an
Unscheduled Principal Receipt Period for Full Unscheduled Principal Receipts
that is a Prior Month Receipt Period will be allocated on the Determination Date
in the second month following the month which is such Prior Month Receipt
Period.
Section 4.03 Paying Agent.
(a) The Paying Agent shall establish and maintain a Payment
Account, which shall be a separate trust account (unless the Master Servicer is
the Paying Agent, in which case, the Certificate Account may be the Payment
Account) and an Eligible Account, in which the Master Servicer shall cause to be
deposited from funds in the Certificate Account or, to the extent required
hereunder, from its own funds (i) at or before 10:00 a.m., New York time, on the
Business Day preceding each Distribution Date, by wire transfer of immediately
available funds, any Periodic Advance for such Distribution Date, pursuant to
Section 3.03 and (ii) at or before 10:00 a.m., New York time, on the Business
Day preceding each Distribution Date, by wire transfer of immediately available
funds, an amount equal to the Pool Distribution Amount. The Master Servicer may
cause the Paying Agent to invest the funds in the Payment Account. Any such
investment shall be in Eligible Investments, which shall mature not later than
the Business Day preceding the related Distribution Date (unless the Eligible
Investments are obligations of the institution that maintains such account, in
which case such Eligible Investments shall mature not later than the
Distribution Date), and shall not be sold or disposed of prior to maturity. All
income and gain realized from any such investment shall be for the benefit of
the Master Servicer and shall be subject to its withdrawal or order from time to
time. The amount of any losses incurred in respect of any such investments shall
be deposited in the Payment Account by the Master Servicer out of its own funds
immediately as realized. The Paying Agent may withdraw from the Payment Account
any amount deposited in the Payment Account that was not required to be
deposited therein and may clear and terminate the Payment Account pursuant to
Section 9.01.
(b) Xxxxx Fargo Bank is hereby appointed as initial Paying
Agent to make distributions to Certificateholders and to make available to
Certificateholders the Distribution Date Statements and the annual statements
required by Section 4.04. The Trustee may, at any time, remove or replace the
Paying Agent, other than Xxxxx Fargo Bank for so long as Xxxxx Fargo Bank is
acting as the Master Servicer. If Xxxxx Fargo Bank is no longer acting as Master
Servicer, the Master Servicer shall pay, from its own funds, the reasonable
compensation of any Paying Agent other than Xxxxx Fargo Bank.
The Trustee shall cause any Paying Agent that is not U.S. Bank
National Association or Xxxxx Fargo Bank to execute and deliver to the Trustee
an instrument (a "Paying Agent Agreement") in which such Paying Agent agrees
with the Trustee that such Paying Agent shall:
(i) hold all amounts remitted to it by the Master Servicer for
distribution to Certificateholders in trust for the benefit of
Certificateholders until such amounts are distributed to
Certificateholders or otherwise disposed of as herein provided;
(ii) give the Trustee notice of any default by the Master
Servicer in remitting any required amount;
(iii) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all amounts held in trust by such Paying Agent; and
(iv) provide to the Master Servicer the assessment of
compliance and accountants report provided for in Section 3.11 with
respect to the Servicing Criteria set forth in Item 1122(d) of
Regulation AB applicable to the duties of the Paying Agent.
Section 4.04 Statements to Certificateholders; Reports to the
Trustee and the Depositor.
(a) On each Distribution Date, the Master Servicer shall make
available in accordance with subsection (b) of this Section 4.04 to each Holder
of a Certificate, the Trustee, the Paying Agent and the Depositor a statement
(the "Distribution Date Statement") setting forth:
(i) the applicable Determination Date, the applicable Record
Date and the actual Distribution Date;
(ii) the amount of such distribution to Holders of each Class
of Class A Certificates allocable to principal, separately identifying
the aggregate amount of any Unscheduled Principal Receipts and
Liquidation Proceeds included therein and the Principal Balance of each
Class of Class A Certificates;
(iii) (A) the amount of such distribution to Holders of each
Class of Class A Certificates allocable to interest, (B) the amount of
the Current Class A Interest Distribution Amount allocated to each
Class of Class A Certificates, (C) any Class A Interest Shortfall
Amounts arising with respect to such Distribution Date and any
remaining Class A Unpaid Interest Shortfall with respect to each Class
after giving effect to such distribution, (D) the amount of any
Non-Supported Interest Shortfall allocated to each Class of Class A
Certificates for such Distribution Date and (E) the amount of any
Relief Act Shortfall allocated to each Class of Class A Certificates
for such Distribution Date;
(iv) the amount of such distribution to Holders of each Class
of Class B Certificates allocable to principal, separately identifying
the aggregate amount of any Unscheduled Principal Receipts and
Liquidation Proceeds included therein and the Principal Balance of each
Class of Class B Certificates;
(v) (A) the amount of such distribution to Holders of each
Class of Class B Certificates allocable to interest, (B) the amount of
the Current Class B Interest Distribution Amount allocated to each
Class of Class B Certificates (C) any Class B Interest Shortfall
Amounts arising with respect to such Distribution Date and any
remaining Class B Unpaid Interest Shortfall with respect to each Class
of Class B Certificates after giving effect to such distribution, (D)
the amount of any Non-Supported Interest Shortfall allocated to each
Class of Class B Certificates for such Distribution Date and (E) the
amount of any Relief Act Shortfall allocated to each Class of Class B
Certificates for such Distribution Date;
(vi) the amount of any Periodic Advance by or reimbursed to
any Servicer, the Master Servicer or the Trustee pursuant to the
Servicing Agreements or this Agreement;
(vii) the number and aggregate principal balance of Mortgage
Loans outstanding, the weighted average Mortgage Interest Rate and
weighted average remaining term to maturity of the Mortgage Loans
outstanding and the cumulative prepayment amounts, in each case, as of
the preceding Determination Date;
(viii) the number and aggregate principal balances of the
Mortgage Loans by range of current Mortgage Interest Rates;
(ix) the pool factors for such Distribution Date;
(x) the beginning and ending balance of the Certificate
Account;
(xi) the Class A Principal Balance, the Principal Balance of
each Class of Class A Certificates, the Class B Principal Balance and
the Principal Balance of each Class of Class B Certificates prior to
and after giving effect to the distributions of principal made, and the
principal portion of Realized Losses, if any, allocated with respect to
such Distribution Date;
(xii) the Adjusted Pool Amount and the Pool Scheduled
Principal Balance of the Mortgage Loans for such Distribution Date;
(xiii) the aggregate Scheduled Principal Balances of the
Mortgage Loans serviced by Xxxxx Fargo Bank in its capacity as Servicer
and, collectively, by the Other Servicers as of such Distribution Date;
(xiv) the Class A Percentage for such Distribution Date;
(xv) the Class A Prepayment Percentage for such Distribution
Date;
(xvi) the Class B-1, Class B-2, Class B-3, Class B-4, Class
B-5 and Class B-6 Percentages for such Distribution Date;
(xvii) the Class B-1, Class B-2, Class B-3, Class B-4, Class
B-5 and Class B-6 Prepayment Percentages for such Distribution Date;
(xviii) the number and aggregate principal balances of
Mortgage Loans (A) delinquent (exclusive of Mortgage Loans in
foreclosure or bankruptcy), grouping such delinquent Mortgage Loans in
30 day increments up to 180 days delinquent (determined in accordance
with the Mortgage Bankers' Association delinquency methodology), (B) in
foreclosure, as of the close of business on the last day of the
calendar month preceding the Distribution Date and (C) in bankruptcy as
of the close of business on the last day of the calendar month
preceding the Distribution Date;
(xix) the number and aggregate principal balances of the
Mortgage Loans that are REO Mortgage Loans as of the Determination Date
immediately preceding such Distribution Date;
(xx) the aggregate amount of Realized Losses incurred during
the preceding calendar month;
(xxi) any expenses or indemnification amounts paid by the
Trust, the specific purpose of each payment and the parties to whom the
payments were made;
(xxii) the amount by which the Principal Balance of each Class
of Class B Certificates has been reduced as a result of Realized Losses
allocated as of such Distribution Date;
(xxiii) the amount of the aggregate Servicing Fees and Master
Servicing Fees paid (and not previously reported) with respect to the
related Distribution Date and the amount by which the aggregate
Available Master Servicer Compensation has been reduced by the
Prepayment Interest Shortfall for the related Distribution Date;
(xxiv) the amount of PMI Advances made by a Servicer, if any;
(xxv) the Class A Pass-Through Rate for each Class of Class A
Certificates and the Class B Pass-Through Rate for each Class of Class
B Certificates;
(xxvi) any material modifications, extensions or waivers to
Mortgage Loan terms, fees, penalties or payments since the previous
Distribution Date;
(xxvii) any material breaches of representations and
warranties relating to the Mortgage Loans or material breaches of
transaction covenants or representations and warranties;
(xxviii) if any of the Mortgage Loans have prepayment
penalties, the aggregate amount of any prepayment penalties paid; and
(xxix) any other customary information as is required to
enable Certificateholders to prepare their tax returns.
In the case of information furnished with respect to a Class
of Class A Certificates pursuant to clauses (ii) and (iii) above and with
respect to a Class of Class B Certificates pursuant to clauses (iv) and (v)
above, the amounts shall be expressed as a dollar amount per Class A or Class B
Certificate (other than the Class A-R Certificate) with a $1,000 Denomination,
and as a dollar amount per Class A-R Certificate with a $100 Denomination.
Within a reasonable period of time after the end of each
calendar year, the Paying Agent shall, upon request, furnish or cause to be
furnished to each Person who at any time during the calendar year was the Holder
of a Certificate a statement containing the information set forth in clauses
(ii) and (iii)(A) above in the case of a Class A Certificateholder and the
information set forth in clauses (iv) and (v)(A) above in the case of a Class B
Certificateholder aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of the
Paying Agent shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Master Servicer or
the Trustee pursuant to any requirements of the Code from time to time in force.
Unless the Master Servicer is acting as the Paying Agent,
prior to the close of business on the second Business Day preceding each
Distribution Date, the Master Servicer shall furnish a statement to any Paying
Agent (the information in such statement to be made available to
Certificateholders by the Paying Agent on written request) setting forth the
Class A Distribution Amount with respect to each Class of Class A Certificates
and the Class B Distribution Amount with respect to each Class of Class B
Certificates. The determination by the Master Servicer of such amounts shall, in
the absence of obvious error, be presumptively deemed to be correct for all
purposes hereunder and the Trustee and the Paying Agent shall be protected in
relying upon the same without any independent check or verification.
In addition to the Distribution Date Statements and the annual
statements required pursuant to this Section 4.04(a), the Paying Agent shall
make available upon request to each Holder and each proposed transferee of a
Class B-4, Class B-5 or Class B-6 Certificate such additional information, if
any, as may be required to permit the proposed transfer to be effected pursuant
to Rule 144A, which information shall be provided on a timely basis to the
Paying Agent by the Master Servicer.
(b) The Master Servicer's responsibility for disbursing the
information set forth in subsection (a) of this Section 4.04 to each Holder of a
Certificate, the Depositor and other interested parties is limited to the
availability, timeliness and the accuracy of the information provided by each
Servicer. The Master Servicer will make a copy of each Distribution Date
Statement provided pursuant to this Section 4.04 (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders and other interested parties, and
other parties to this Agreement via the Master Servicer's internet website,
which in the case of Xxxxx Fargo Bank, is located at "xxx.xxxxxxx.xxx." In
addition, the Paying Agent shall provide copies of the Distribution Date
Statement and the annual statements required pursuant to Section 4.04(a) to
Persons making written requests therefor at its Corporate Trust Office.
Assistance in using the internet website can be obtained by calling the Master
Servicer's customer service desk, which in the case of Xxxxx Fargo Bank, is at
(000) 000-0000. Parties that are unable to use the above distribution method are
entitled to have a paper copy mailed to them via first class mail by calling the
customer service desk and indicating such. The Master Servicer shall have the
right to change the way the Distribution Date Statement is distributed in order
to make such distribution more convenient and/or more accessible and the Master
Servicer shall provide timely and adequate notification to the
Certificateholders and the parties to this Agreement regarding any such changes.
The Master Servicer shall also be entitled to rely on but
shall not be responsible for the content or accuracy of any information provided
by third parties for purposes of preparing the Distribution Date Statement and
may affix thereto any disclaimer it deems appropriate in its reasonable
discretion (without suggesting liability on the part of any other party hereto).
Section 4.05 Reports to Mortgagors and the Internal
Revenue Service.
The Master Servicer shall, in each year beginning after the
Cut-Off Date, cause the applicable Servicers to make the reports of foreclosures
and abandonments of any Mortgaged Property as required by Code Section 6050J. In
order to facilitate this reporting process, the Master Servicer shall request
that each Servicer, on or before January 15th of each year, shall provide to the
Internal Revenue Service, with copies to the Master Servicer, reports relating
to each instance occurring during the previous calendar year in which such
Servicer (i) on behalf of the Trustee acquires an interest in a Mortgaged
Property through foreclosure or other comparable conversion in full or partial
satisfaction of a Mortgage Loan serviced by such Servicer, or (ii) knows or has
reason to know that a Mortgaged Property has been abandoned. Reports from the
Servicers shall be in form and substance sufficient to meet the reporting
requirements imposed by Code Section 6050J. In addition, each Servicer shall
provide the Master Servicer with sufficient information to allow the Master
Servicer to, for each year ending after the Cut-Off Date, provide, or cause to
be provided, to the Internal Revenue Service and the Mortgagors such information
as is required under Code Sections 6050H (regarding payment of interest) and
6050P (regarding cancellation of indebtedness).
Section 4.06 Calculation of Amounts; Binding Effect of
Interpretations and Actions of Master
Servicer.
The Master Servicer will compute the amount of all
distributions to be made on the Certificates and all losses to be allocated to
the Certificates. In the event that the Master Servicer concludes that any
ambiguity or uncertainty exists in any provisions of this Agreement relating to
distributions to be made on the Certificates, the allocation of losses to the
Certificates or otherwise, the interpretation of such provisions and any actions
taken by the Master Servicer in good faith to implement such interpretation
shall be binding upon Certificateholders.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
(a) The Class A and Class B Certificates shall be issued only
in minimum Denominations of a Single Certificate and, except for the Class A-R
Certificate, integral multiples of $1,000 in excess thereof (except, if
necessary, for one Certificate of each Class (other than the Class A-R
Certificate) that evidences one Single Certificate plus such additional
principal portion as is required in order for all Certificates of such Class to
equal the aggregate Original Principal Balance of such Class), and shall be
substantially in the respective forms set forth as Exhibits X-0, X-0, X-0, X-0,
X-0, X-X, X-0, X-0, X-0, X-0, X-0, X-0 and C (reverse side of Certificates)
hereto. On original issue the Certificates shall be executed and delivered by
the Paying Agent to or upon the order of the Depositor upon receipt by the
Trustee or the Custodian of the documents specified in Section 2.01(a). The
aggregate principal portion evidenced by the Class A and Class B Certificates
shall be the sum of the amounts specifically set forth in the respective
Certificates. The Certificates shall be executed by manual or facsimile
signature on behalf of the Paying Agent by any Responsible Officer thereof.
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Paying Agent shall bind the Paying Agent
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the countersigning of such Certificates and delivery of such
Certificates or did not hold such offices at the date of such Certificates. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless manually countersigned by a Responsible Officer of the
Authenticating Agent, or unless there appears on such Certificate a certificate
of authentication executed by the Authenticating Agent by manual signature, and
such countersignature or certificate upon a Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication.
Until such time as Definitive Certificates are issued pursuant
to Section 5.07, each Book-Entry Certificate shall bear the following legend:
"Unless this certificate is presented by an authorized
representative of [the Clearing Agency] to the Depositor or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of [the Clearing Agency] or such other name as requested
by an authorized representative of [the Clearing Agency] and any payment is made
to [the Clearing Agency], any transfer, pledge or other use hereof for value or
otherwise by or to any person is wrongful since the registered owner hereof,
[the Clearing Agency], has an interest herein."
(b) Upon original issuance, the Book-Entry Certificates shall
be issued in the form of one or more typewritten certificates, to be delivered
to The Depository Trust Company, the initial Clearing Agency, by, or on behalf
of, the Depositor or to, and deposited with the Certificate Custodian, on behalf
of The Depository Trust Company, if directed to do so pursuant instructions from
The Depository Trust Company. Such Certificates shall initially be registered in
the Certificate Register in the name of the nominee of the initial Clearing
Agency, and no Beneficial Owner will receive a definitive certificate
representing such Beneficial Owner's interest in the Book-Entry Certificates,
except as provided in Section 5.07. Unless and until definitive, fully
registered certificates ("Definitive Certificates") have been issued to
Beneficial Owners pursuant to Section 5.07:
(i) the provisions of this Section 5.01(b) shall be in full
force and effect;
(ii) the Depositor, the Master Servicer, the Certificate
Registrar, the Paying Agent and the Trustee may deal with the Clearing
Agency for all purposes (including the making of distributions on the
Book-Entry Certificates and the taking of actions by the Holders of
Book-Entry Certificates) as the authorized representative of the
Beneficial Owners;
(iii) to the extent that the provisions of this Section
5.01(b) conflict with any other provisions of this Agreement, the
provisions of this Section 5.01(b) shall control;
(iv) the rights of Beneficial Owners shall be exercised only
through the Clearing Agency and shall be limited to those established
by law, the rules, regulations and procedures of the Clearing Agency
and agreements between such Beneficial Owners and the Clearing Agency
and/or the Clearing Agency Participants, and all references in this
Agreement to actions by Certificateholders shall, with respect to the
Book-Entry Certificates, refer to actions taken by the Clearing Agency
upon instructions from the Clearing Agency Participants, and all
references in this Agreement to distributions, notices, reports and
statements to Certificateholders shall, with respect to the Book-Entry
Certificates, refer to distributions, notices, reports and statements
to the Clearing Agency or its nominee, as registered holder of the
Book-Entry Certificates, as the case may be, for distribution to
Beneficial Owners in accordance with the procedures of the Clearing
Agency; and
(v) the initial Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and transmit
distributions of principal and interest on the Certificates to the
Clearing Agency Participants, for distribution by such Clearing Agency
Participants to the Beneficial Owners or their nominees.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Holders of
Book-Entry Certificates evidencing specified Voting Interests, such direction or
consent shall be given by Beneficial Owners having the requisite Voting
Interests, acting through the Clearing Agency.
Unless and until Definitive Certificates have been issued to
Beneficial Owners pursuant to Section 5.07, copies of the Distribution Date
Statements shall be available to Beneficial Owners upon written request to the
Paying Agent at its Corporate Trust Office.
Section 5.02 Registration of Certificates.
(a) The Certificate Registrar shall cause to be kept at one of
the offices or agencies to be maintained in accordance with the provisions of
Section 5.06 a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as
herein provided. The Master Servicer shall act as, or shall appoint, a
Certificate Registrar for the purpose of registering Certificates and transfers
and exchanges of Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate
at any office or agency maintained for such purpose pursuant to Section 5.06
(and subject to the provisions of this Section 5.02) the Paying Agent shall
execute, and shall date, countersign (or cause the Authenticating Agent to
countersign) and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of a like aggregate principal portion
or Percentage Interest and of the same Class.
At the option of the Certificateholders, Certificates may be
exchanged for other Certificates of authorized Denominations of a like aggregate
principal portion or Percentage Interest and of the same Class upon surrender of
the Certificates to be exchanged at any such office or agency. Whenever any
Certificates are so surrendered for exchange, the Paying Agent shall execute,
and shall date, countersign (or cause the Authenticating Agent to countersign)
and deliver, the Certificates which the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for transfer or
exchange shall (if so required by the Certificate Registrar or the Paying Agent)
be duly endorsed by, or be accompanied by a written instrument of transfer in
form satisfactory to the Certificate Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any transfer or exchange
of Certificates, but the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
All Certificates surrendered for transfer and exchange shall
be canceled by the Certificate Registrar, the Paying Agent or the Authenticating
Agent in accordance with their standard procedures.
(b) No transfer of a Class B-4, Class B-5 or Class B-6
Certificate shall be made unless the registration requirements of the 1933 Act
and any applicable State securities laws are complied with, or such transfer is
exempt from the registration requirements under said Act and laws. In the event
that a transfer is to be made in reliance upon an exemption from said Act or
laws, (i) unless such transfer is made in reliance on Rule 144A, the Master
Servicer or the Depositor may, if such transfer is to be made within three years
after the later of (a) the date of the initial sale of Certificates or (b) the
last date on which the Depositor or any affiliate thereof was a Holder of the
Certificates proposed to be transferred, require a Class B-4, Class B-5 or Class
B-6 Certificateholder to deliver a written Opinion of Counsel acceptable to and
in form and substance satisfactory to the Master Servicer and the Depositor, to
the effect that such transfer may be made pursuant to an exemption, describing
the applicable exemption and the basis therefor, from said Act and laws or is
being made pursuant to said Act and laws, which Opinion of Counsel shall not be
an expense of the Depositor or the Master Servicer, and (ii) the Master Servicer
shall require the transferee (other than an affiliate of the Depositor on the
Closing Date) to execute an investment letter in the form of Exhibit J hereto
certifying to the Depositor and the Master Servicer the facts surrounding such
transfer, which investment letter shall not be an expense of the Depositor or
the Master Servicer. The Holder of a Class B-4, Class B-5 or Class B-6
Certificate desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee, the Depositor, the Master Servicer and any Paying Agent
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws. Neither the Depositor nor
the Master Servicer is under an obligation to register the Class B-4, Class B-5
or Class B-6 Certificates under said Act or any other securities law.
(c) No transfer of a Class B-4, Class B-5 or Class B-6
Certificate shall be made unless the Master Servicer and the Depositor shall
have received (i) a representation letter from the transferee in the form of
Exhibit J hereto, to the effect that either (a) such transferee is not an
employee benefit plan or other retirement arrangement subject to Title I of
ERISA or Code Section 4975, or a governmental plan, as defined in Section 3(32)
of ERISA, subject to any federal, state or local law ("Similar Law") which is to
a material extent similar to the foregoing provisions of ERISA or the Code
(collectively, a "Plan") and is not a person acting on behalf of or using the
assets of any such Plan, which representation letter shall not be an expense of
the Depositor or the Master Servicer or (b) if such transferee is an insurance
company, (A) the source of funds used to purchase the Class B-4, Class B-5 or
Class B-6 Certificate is an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTE
95-60"), 60 Fed. Reg. 35925 (July 12, 1995)), (B) there is no Plan with respect
to which the amount of such general account's reserves and liabilities for the
contract(s) held by or on behalf of such Plan and all other Plans maintained by
the same employer (or affiliate thereof as defined in Section V(a)(1) of PTE
95-60) or by the same employee organization exceeds 10% of the total of all
reserves and liabilities of such general account (as such amounts are determined
under Section I(a) of PTE 95-60) at the date of acquisition and (C) the purchase
and holding of such Class B-4, Class B-5 or Class B-6 Certificate is covered by
Sections I and III of PTE 95-60 or (ii) in the case of any such Class B-4, Class
B-5 or Class B-6 Certificate presented for registration in the name of a Plan,
or a trustee of any such Plan, (A) an Opinion of Counsel satisfactory to the
Master Servicer and the Depositor to the effect that the purchase or holding of
such Class B-4, Class B-5 or Class B-6 Certificate will not constitute or result
in a non-exempt prohibited transaction within the meaning of ERISA, Section 4975
of the Code or Similar Law and will not subject the Depositor or the Master
Servicer to any obligation in addition to those undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Depositor or the Master
Servicer and (B) such other opinions of counsel, Officer's Certificates and
agreements as the Depositor or the Master Servicer may require in connection
with such transfer, which opinions of counsel, Officer's Certificates and
agreements shall not be an expense of the Depositor or the Master Servicer. The
Class B-4, Class B-5 and Class B-6 Certificates shall bear a legend referring to
the foregoing restrictions contained in this paragraph.
(d) No legal or beneficial interest in all or any portion of
the Class A-R Certificate may be transferred directly or indirectly to a
"disqualified organization" within the meaning of Code Section 860E(e)(5) or an
agent of a disqualified organization (including a broker, nominee, or
middleman), to a Plan or a Person acting on behalf of or investing the assets of
a Plan (such Plan or Person, an "ERISA Prohibited Holder") or to an individual,
corporation, partnership or other person unless such transferee (i) is not a
Non-U.S. Person or (ii) is a Non-U.S. Person that holds the Class A-R
Certificate in connection with the conduct of a trade or business within the
United States and has furnished the transferor and the Master Servicer with an
effective Internal Revenue Service Form W-8ECI or (iii) is a Non-U.S. Person
that has delivered to both the transferor and the Master Servicer an opinion of
a nationally recognized tax counsel to the effect that the transfer of the Class
A-R Certificate to it is in accordance with the requirements of the Code and the
regulations promulgated thereunder and that such transfer of the Class A-R
Certificate will not be disregarded for federal income tax purposes (any such
person who is not covered by clauses (i), (ii) or (iii) above being referred to
herein as a "Non-permitted Foreign Holder"), and any such purported transfer
shall be void and have no effect. The Paying Agent shall not execute, and shall
not countersign (or cause the Authenticating Agent to countersign) and deliver,
a new Class A-R Certificate in connection with any such transfer to a
disqualified organization or agent thereof (including a broker, nominee or
middleman), an ERISA Prohibited Holder or a Non-permitted Foreign Holder, and
neither the Certificate Registrar nor the Paying Agent shall accept a surrender
for transfer or registration of transfer, or register the transfer of, the Class
A-R Certificate, unless the transferor shall have provided to the Master
Servicer an affidavit, substantially in the form attached as Exhibit H hereto,
signed by the transferee, to the effect that the transferee is not such a
disqualified organization, an agent (including a broker, nominee, or middleman)
for any entity as to which the transferee has not received a substantially
similar affidavit, an ERISA Prohibited Holder or a Non-permitted Foreign Holder,
which affidavit shall contain the consent of the transferee to any such
amendments of this Agreement as may be required to further effectuate the
foregoing restrictions on transfer of the Class A-R Certificate to disqualified
organizations, ERISA Prohibited Holders or Non-permitted Foreign Holders. Such
affidavit shall also contain the statement of the transferee that (i) the
transferee has historically paid its debts as they have come due and intends to
do so in the future, (ii) the transferee understands that it may incur
liabilities in excess of cash flows generated by the residual interest, (iii)
the transferee intends to pay taxes associated with holding the residual
interest as they become due (iv) the transferee will not cause income from the
Class A-R Certificate to be attributable to a foreign permanent establishment or
fixed base, within the meaning of an applicable income tax treaty, of such
transferee or any other Person, and (v) the transferee will not transfer the
Class A-R Certificate to any Person who does not provide an affidavit
substantially in the form attached as Exhibit H hereto.
The affidavit described in the preceding paragraph, if not
executed in connection with the initial issuance of the Class A-R Certificate,
shall be accompanied by a written statement in the form attached as Exhibit I
hereto, signed by the transferor, to the effect that as of the time of the
transfer, the transferor has no actual knowledge that the transferee is a
disqualified organization, ERISA Prohibited Holder or Non-permitted Foreign
Holder, and has no knowledge or reason to know that the statements made by the
transferee with respect to clauses (i) and (iii) of the last sentence of the
preceding paragraph are not true. The Class A-R Certificate shall bear a legend
referring to the foregoing restrictions contained in this paragraph and the
preceding paragraph.
Upon actual knowledge of a Master Servicing Officer or a
Responsible Officer of the Paying Agent that any legal or beneficial interest in
any portion of the Class A-R Certificate has been transferred, directly or
indirectly, to a disqualified organization or agent thereof (including a broker,
nominee, or middleman) in contravention of the foregoing restrictions, (i) such
transferee shall be deemed to hold the Class A-R Certificate in constructive
trust for the last transferor who was not a disqualified organization or agent
thereof, and such transferor shall be restored as the owner of such Class A-R
Certificate as completely as if such transfer had never occurred, provided that
the Master Servicer may, but is not required to, recover any distributions made
to such transferee with respect to the Class A-R Certificate, and (ii) the
Master Servicer agrees to furnish to the Internal Revenue Service and to any
transferor of the Class A-R Certificate or such agent (within 60 days of the
request therefor by the transferor or agent) such information necessary to the
application of Code Section 860E(e) as may be required by the Code, including
but not limited to the present value of the total anticipated excess inclusions
with respect to the Class A-R Certificate (or portion thereof) for periods after
such transfer. At the election of the Master Servicer, the cost to the Master
Servicer of computing and furnishing such information may be charged to the
transferor or such agent referred to above; however, the Master Servicer shall
in no event be excused from furnishing such information.
Section 5.03 Mutilated, Destroyed, Lost or Stolen
Certificates.
If (i) any mutilated Certificate is surrendered to the Paying
Agent, the Certificate Registrar or the Authenticating Agent, or the Paying
Agent, the Certificate Registrar or the Authenticating Agent receives evidence
to its satisfaction of the destruction, loss or theft of any Certificate, and
(ii) there is delivered to the Paying Agent, the Certificate Registrar or the
Authenticating Agent such security or indemnity as may be required by them to
hold each of them harmless, then, in the absence of notice to the Paying Agent,
the Certificate Registrar or the Authenticating Agent that such Certificate has
been acquired by a bona fide purchaser, the Paying Agent shall execute and
countersign (or cause the Authenticating Agent to countersign) and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor and principal portion or Percentage
Interest and of the same Class. Upon the issuance of any new Certificate under
this Section, the Paying Agent or the Certificate Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expense (including the fees and
expenses of the Paying Agent or the Authenticating Agent) in connection
therewith. Any duplicate Certificate issued pursuant to this Section shall
constitute complete and indefeasible evidence of ownership in the Trust Estate,
as if originally issued, whether or not the lost, stolen, or destroyed
Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners.
Prior to the due presentation of a Certificate for
registration of transfer, the Depositor, the Master Servicer, the Trustee, the
Paying Agent, the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Trustee, the Paying Agent or the Certificate Registrar may
treat the Person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions pursuant to Section
4.01, and for all other purposes whatsoever, and neither the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar, the Paying Agent nor
any agent of the Depositor, the Master Servicer, the Trustee, the Certificate
Registrar or the Paying Agent shall be affected by notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names
and Addresses.
(a) If the Paying Agent is not acting as Certificate
Registrar, the Certificate Registrar shall furnish or cause to be furnished to
the Paying Agent, within 15 days after receipt by the Certificate Registrar of a
request by the Paying Agent in writing, a list, in such form as the Paying Agent
may reasonably require, of the names and addresses of the Certificateholders of
each Class as of the most recent Record Date.
(b) If five or more Certificateholders (hereinafter referred
to as "applicants") apply in writing to the Certificate Registrar, and such
application states that the applicants desire to communicate with other
Certificateholders with respect to their rights under this Agreement or under
the Certificates and is accompanied by a copy of the communication which such
applicants propose to transmit, then the Certificate Registrar shall, within
five Business Days following the receipt of such application, afford such
applicants access during normal business hours to the most recent list of
Certificateholders held by the Certificate Registrar.
(c) Every Certificateholder, by receiving and holding a
Certificate, agrees with the Depositor, the Master Servicer, the Certificate
Registrar, the Paying Agent and the Trustee that neither the Depositor, the
Master Servicer, the Certificate Registrar, the Paying Agent nor the Trustee
shall be held accountable by reason of the disclosure of any such information as
to the names, addresses and Percentage Interests of the Certificateholders
hereunder, regardless of the source from which such information was delivered.
Section 5.06 Maintenance of Office or Agency.
The Certificate Registrar will maintain, at its expense, an
office or agency where Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Certificate
Registrar in respect of the Certificates and this Agreement may be served. The
Certificate Registrar initially designates the Corporate Trust Office of the
Certificate Registrar, if any, as its offices and agencies for said purposes.
Section 5.07 Definitive Certificates.
If (A) the Clearing Agency advises the Paying Agent in writing
that the Clearing Agency is no longer willing or able properly to discharge its
responsibilities as depository with respect to the Book-Entry Certificates, and
(B) the Depositor is unable to locate a qualified successor, the Paying Agent
shall notify the Beneficial Owners, through the Clearing Agency, of the
occurrence of any such event and of the availability of Definitive Certificates
to Beneficial Owners requesting the same. Upon surrender to the Paying Agent by
the Clearing Agency of the Certificates held of record by its nominee,
accompanied by reregistration instructions and directions to execute and
authenticate new Certificates from the Depositor, the Paying Agent shall execute
and cause the Authenticating Agent to countersign Definitive Certificates for
delivery at its Corporate Trust Office. The Depositor shall arrange for, and
will bear all costs of, the printing and issuance of such Definitive
Certificates. Except with the consent of the Depositor, the Paying Agent shall
not execute or cause the Authenticating Agent to countersign Definitive
Certificates in exchange for Book-Entry Certificates except as set forth above.
Neither the Depositor, the Master Servicer nor the Paying Agent shall be liable
for any delay in delivery of such instructions by the Clearing Agency and may
conclusively rely on, and shall be protected in relying on, such instructions.
Section 5.08 Notices to Clearing Agency.
Whenever notice or other communication to the Holders of
Book-Entry Certificates is required under this Agreement, unless and until
Definitive Certificates shall have been issued to Beneficial Owners pursuant to
Section 5.07, the Paying Agent shall give all such notices and communications
specified herein to be given to Holders of Book-Entry Certificates to the
Clearing Agency.
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
Section 6.01 Liability of the Depositor and the Master
Servicer.
The Depositor and the Master Servicer shall each be liable in
accordance herewith only to the extent of the obligations specifically imposed
by this Agreement and undertaken hereunder by the Depositor and the Master
Servicer.
Section 6.02 Merger or Consolidation of the Depositor or
the Master Servicer.
Subject to the following paragraph (a) the Depositor will keep
in full effect its existence, rights and franchises as a corporation under the
laws of the jurisdiction of its incorporation, and will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement and (b) the Master
Servicer will keep in full effect its power and authority as a national banking
association under the laws of the jurisdiction of its organization, and will
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement.
The Depositor or the Master Servicer may be merged or
consolidated with or into any Person, or transfer all or substantially all of
its assets to any Person, in which case any Person resulting from any merger or
consolidation to which the Depositor or Master Servicer shall be a party, or any
Person succeeding to the business of the Depositor or Master Servicer, shall be
the successor of the Depositor or Master Servicer hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided,
however, that, (a) in the case of the Master Servicer, any such successor or
resulting Person shall have a net worth of not less than $15,000,000 and be
qualified to service mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac and (b) the
Master Servicer and such successor or surviving Person shall notify the
Depositor and the Trustee of any such merger, conversion or consolidation at
least two Business Days prior to the effective date thereof (unless giving such
prior notice would be prohibited by applicable law or by a confidentiality
agreement, in which case notice shall be given by 12 noon eastern time one
Business Day after such merger or consolidation).
Section 6.03 Limitation on Liability of the Depositor,
the Master Servicer and Others.
Neither the Depositor nor the Master Servicer nor any
subcontractor nor any of the directors, officers, employees or agents of any of
them shall be under any liability to the Trust Estate or the Certificateholders
and all such Persons shall be held harmless for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect any such Person against any breach of warranties or
representations made herein or against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Depositor, the Master Servicer, any subcontractor, and any
director, officer, employee or agent of any of them shall be entitled to
indemnification by the Trust Estate and will be held harmless against any loss,
liability or expense incurred in connection with the performance of their duties
and obligations, the exercise of their rights or any legal action (including but
not limited to, costs and expenses of litigation, and of investigation,
attorney's fees, damages, judgments and amounts paid in settlement) under this
Agreement, the Certificates or the Mortgage Loans (except for amounts due by the
Depositor in connection with the breach of a representation or warranty covering
the Mortgage Loans), including, in the case of the Master Servicer, any
indemnity amounts paid by the Master Servicer to a Servicer pursuant to the
applicable Servicing Agreement, other than any loss, liability or expense
(including without limitation, expenses payable by the Master Servicer under
Section 8.06) incurred by reason of willful misfeasance, bad faith or gross
negligence in the performance of his or its duties hereunder or by reason of
reckless disregard of his or its obligations and duties hereunder. The
Depositor, the Master Servicer and any of the directors, officers, employees or
agents of either may rely in good faith on any document of any kind which, prima
facie, is properly executed and submitted by any Person respecting any matters
arising hereunder. Neither the Depositor nor the Master Servicer shall be under
any obligation to appear in, prosecute or defend any legal action unless such
action is related to its respective duties under this Agreement and, in its
opinion, does not involve it in any expense or liability; provided, however,
that the Depositor or the Master Servicer may in its discretion undertake any
such action which it may deem necessary or desirable with respect to this
Agreement and the rights and duties of the parties hereto and the interests of
the Certificateholders hereunder if the Certificateholders offer to the
Depositor or the Master Servicer, as the case may be, reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby. In such event, the legal expenses and costs of such action
and any liability resulting therefrom shall be expenses, costs and liabilities
of the Trust Estate, and the Depositor or the Master Servicer shall be entitled
to be reimbursed therefor out of the Certificate Account, and such amounts
shall, on the following Distribution Date or Distribution Dates, be allocated in
reduction of distributions on the Class A Certificates and Class B Certificates
in the same manner as Realized Losses are allocated pursuant to Section 4.02(a).
Section 6.04 Resignation of the Master Servicer.
The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (a) upon appointment of a successor master
servicer and receipt by the Trustee of a letter from each Rating Agency that
such a resignation and appointment will not result in a downgrading of the
rating of any of the Certificates, (b) upon determination that its duties
hereunder are no longer permissible under applicable law, or (c) pursuant to
Section 6.06. Any such determination under clause (b) permitting the resignation
of the Master Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee. No such resignation shall become effective
until the Trustee or a successor master servicer shall have assumed the Master
Servicer's responsibilities, duties, liabilities and obligations hereunder.
Section 6.05 Compensation to the Master Servicer.
The Master Servicer shall be entitled to receive a monthly fee
equal to the Master Servicing Fee, as compensation for services rendered by the
Master Servicer under this Agreement. The Master Servicer also will be entitled
to any late reporting fees paid by a Servicer pursuant to its Servicing
Agreement, any investment income on funds on deposit in the Certificate Account
invested in accordance with Section 3.01(c), any investment income on funds on
deposit in the Payment Account invested in accordance with Section 4.03(a) and
any Liquidation Profits to which a Servicer is not entitled under its Servicing
Agreement.
Section 6.06 Assignment or Delegation of Duties by Master
Servicer.
(a) The Master Servicer shall not assign or transfer any of
its rights, benefits or privileges under this Agreement to any other Person, or
delegate to or subcontract with, or authorize or appoint any other Person to
perform any of the duties, covenants or obligations to be performed by the
Master Servicer without the prior written consent of the Trustee, and any
agreement, instrument or act purporting to effect any such assignment, transfer,
delegation or appointment shall be void. Notwithstanding the foregoing, subject
to Section 6.06(b), the Master Servicer shall have the right without the prior
written consent of the Trustee (i) to assign its rights and delegate its duties
and obligations hereunder; provided, however, that (a) the purchaser or
transferee accepting such assignment or delegation is qualified to service
mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac, and executes and delivers to the
Trustee an agreement, in form and substance reasonably satisfactory to the
Trustee, which contains an assumption by such purchaser or transferee of the due
and punctual performance and observance of each covenant and condition to be
performed or observed by the Master Servicer hereunder from and after the date
of such agreement; and (b) each applicable Rating Agency's rating of any
Certificates in effect immediately prior to such assignment, sale or transfer is
not reasonably likely to be qualified, downgraded or withdrawn as a result of
such assignment, sale or transfer and the Certificates are not reasonably likely
to be placed on credit review status by any such Rating Agency; and (ii) to
delegate to, subcontract with, authorize, or appoint an affiliate of the Master
Servicer to perform and carry out any duties, covenants or obligations to be
performed and carried out by the Master Servicer under this Agreement and hereby
agrees so to delegate, subcontract, authorize or appoint to an affiliate of the
Master Servicer any duties, covenants or obligations to be performed and carried
out by the Master Servicer to the extent that such duties, covenants or
obligations are to be performed in any state or states in which the Master
Servicer is not authorized to do business as a foreign corporation but in which
the affiliate is so authorized. In no case, however, shall any permitted
assignment and delegation relieve the Master Servicer of any liability to the
Trustee or the Depositor under this Agreement, incurred by it prior to the time
that the conditions contained in clause (i) above are met.
(b) Notwithstanding anything contained herein to the contrary,
to the extent the Master Servicer engages any affiliate or third party vendor,
in connection with the performance of any of its duties under this Agreement,
the Master Servicer shall immediately notify the Depositor in writing of such
engagement (to the extent it has not already notified the Depositor pursuant to
clause (a) above); provided however, that prior to engaging any affiliate or
third party vendor in connection with the performance of any of its duties under
this Agreement, the Master Servicer shall determine (i) if such affiliates or
third party vendors would be a Servicing Function Participant and (ii) if such
affiliate or third party vendor would be a "servicer" within the meaning of Item
1101 of Regulation AB (an "Additional Master Servicer") and meets the criteria
in Item 1108(a)(2)(i), (ii) or (iii) of Regulation AB. If the Master Servicer
has determined that such affiliates or third party vendors are a Servicing
Function Participant, the Master Servicer shall cause such Servicing Function
Participant to prepare and deliver to the Master Servicer a separate assessment
and attestation report, as contemplated by Section 3.11 of this Agreement. In
addition, if the Master Servicer has determined that any such affiliate or third
party vendor would be an Additional Master Servicer and meets the criteria in
Item 1108(a)(2)(i), (ii) or (iii) of Regulation AB, the Master Servicer shall
cause such Additional Master Servicer to prepare and deliver to the Master
Servicer a separate compliance statement as contemplated by Section 3.05 of this
Agreement. In addition, if the Master Servicer determines any such affiliate or
third party vendor would be a "servicer" within the meaning of Item 1101 of
Regulation AB, the Master Servicer shall not engage such affiliate or third
party vendor unless it provides the Master Servicer and the Depositor the
information required by Section 1108(b) and 1108(c) of Regulation AB prior to
such engagement.
(c) In the event of any assignment of rights or delegation of
duties of the Master Servicer, the Master Servicer shall report such event on
Form 8-K within four Business Days after the effective date thereof.
Section 6.07 Indemnification of Trustee and Depositor by
Master Servicer.
The Master Servicer shall indemnify and hold harmless the
Trustee and the Depositor and any director, officer or agent thereof against any
loss, liability or expense, including reasonable attorney's fees, arising out
of, in connection with or incurred by reason of (a) willful misfeasance, bad
faith or negligence in the performance of duties of the Master Servicer under
this Agreement or by reason of reckless disregard of its obligations and duties
under this Agreement, including, but not limited to the Master Servicer's
obligation to deliver any information, report, certification, accountants'
letter or other material required to comply with Regulation AB or (b) any
material breach by the Master Servicer of any of the representations and
warranties contained in Section 2.03(a). Any payment pursuant to this Section
made by the Master Servicer to the Trustee or the Depositor shall be from such
entity's own funds, without reimbursement therefor. The provisions of this
Section 6.07 shall survive the termination of this Agreement.
Section 6.08 Master Servicer Errors and Omissions Policy.
The Master Servicer shall maintain, at all times and at its
own expense, a Master Servicer Errors and Omissions Policy, which policy shall
have such terms and coverage amounts as are comparable to those of errors and
omissions policies maintained by master servicers of mortgage loans generally.
The Master Servicer Errors and Omissions Policy shall insure
the Master Servicer, its successors and assigns, against any losses resulting
from negligence, errors or omissions on the part of officers, employees or other
persons acting on behalf of the Master Servicer in the performance of its duties
as Master Servicer pursuant to this Agreement.
The Master Servicer shall maintain in effect the Master
Servicer Errors and Omissions Policy at all times and the Master Servicer Errors
and Omissions Policy may not be canceled, permitted to lapse or otherwise
terminated without the acquisition of comparable coverage by the Master
Servicer.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default.
In case one or more of the following Events of Default by the
Master Servicer shall occur and be continuing, that is to say:
(i) any failure by the Master Servicer to remit any funds to
the Paying Agent as required by Section 4.03 continues unremedied for a
period of three business days after the date upon which written notice
of such failure, requiring the same to be remedied, shall have been
given to the Master Servicer by the Trustee or to the Master Servicer
and the Trustee by the holders of Certificates evidencing in the
aggregate not less than 25% of the aggregate Voting Interest
represented by all Certificates;
(ii) any failure on the part of the Master Servicer to observe
or perform in any material respect any of its covenants or agreements
under Sections 3.05, 3.11 or 3.12 hereof, subject to any cure period
set forth in such sections;
(iii) any failure on the part of the Master Servicer duly to
observe or perform in any material respect any other of the covenants
or agreements on the part of the Master Servicer in the Certificates or
in this Agreement, which continues unremedied for a period of 60 days
after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Master Servicer by
the Trustee or the Depositor, or to the Master Servicer and the Trustee
by the holders of Certificates evidencing in the aggregate not less
than 25% of the aggregate Voting Interest represented by all
Certificates;
(iv) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
trustee, conservator, receiver or liquidator in any bankruptcy,
insolvency, readjustment of debt, marshaling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Master Servicer and such
decree or order shall have remained in force undischarged and unstayed
for a period of 60 days;
(v) the Master Servicer shall consent to the appointment of a
trustee, conservator, receiver or liquidator or liquidating committee
in any bankruptcy, insolvency, readjustment of debt, marshaling of
assets and liabilities, voluntary liquidation or similar proceedings of
or relating to the Master Servicer, or of or relating to all or
substantially all of its property;
(vi) the Master Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency, bankruptcy or reorganization
statute, make an assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations;
(vii) the Master Servicer shall be dissolved, or shall dispose
of all or substantially all of its assets; or consolidate with or merge
into another entity or shall permit another entity to consolidate or
merge into it, such that the resulting entity does not meet the
criteria for a successor servicer, as specified in Section 6.02 hereof;
or
(viii) the Master Servicer and any Subservicer appointed by it
becomes ineligible to service for both Xxxxxx Xxx and Xxxxxxx Mac,
which ineligibility continues unremedied for a period of 90 days;
then, and in each and every such case, subject to applicable law, so long as an
Event of Default shall not have been remedied, either the Trustee or the holders
of Certificates evidencing in the aggregate not less than 66 2/3% of the
aggregate Voting Interest represented by all Certificates, by notice in writing
to the Master Servicer (and to the Trustee if given by the Certificateholders)
may terminate all of the rights and obligations of the Master Servicer under
this Agreement and in and to the Mortgage Loans, but without prejudice to any
rights which the Master Servicer may have to the aggregate Master Servicing Fees
due prior to the date of transfer of the Master Servicer's responsibilities
hereunder, reimbursement of expenses to the extent permitted by this Agreement,
Periodic Advances and other advances of its own funds. Upon receipt by the
Master Servicer of such written notice, all authority and power of the Master
Servicer under this Agreement, whether with respect to the Certificates or the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee pursuant
to and under this Section, subject to the provisions of Section 7.05; and,
without limitation, the Trustee is hereby authorized and empowered to execute
and deliver, on behalf of the Master Servicer, as attorney-in-fact or otherwise,
any and all documents and other instruments, and to do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents or otherwise. The Master Servicer
agrees to cooperate with the Trustee in effecting the termination of the Master
Servicer's responsibilities and rights hereunder and shall promptly provide the
Trustee all documents and records reasonably requested by it to enable it to
assume the Master Servicer's functions hereunder and shall promptly also
transfer to the Trustee all amounts which then have been or should have been
deposited in the Certificate Account by the Master Servicer or which are
thereafter received by the Master Servicer with respect to the Mortgage Loans.
Section 7.02 Other Remedies of Trustee.
During the continuance of any Event of Default, so long as
such Event of Default shall not have been remedied, the Trustee, in addition to
the rights specified in Section 7.01, shall have the right, in its own name as
trustee of an express trust, to take all actions now or hereafter existing at
law, in equity or by statute to enforce its rights and remedies and to protect
the interests, and enforce the rights and remedies, of the Certificateholders
(including the institution and prosecution of all judicial, administrative and
other proceedings and the filing of proofs of claim and debt in connection
therewith). Except as otherwise expressly provided in this Agreement, no remedy
provided for by this Agreement shall be exclusive of any other remedy, and each
and every remedy shall be cumulative and in addition to any other remedy and no
delay or omission to exercise any right or remedy shall impair any such right or
remedy or shall be deemed to be a waiver of any Event of Default.
Section 7.03 Directions by Certificateholders and
Duties of Trustee During Event of Default.
During the continuance of any Event of Default, Holders of
Certificates evidencing in the aggregate not less than 25% of the aggregate
Voting Interest represented by all Certificates may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Agreement;
provided, however, that the Trustee shall be under no obligation to pursue any
such remedy, or to exercise any of the rights or powers vested in it by this
agreement (including, without limitation, (i) the conducting or defending of any
administrative action or litigation hereunder or in relation hereto and (ii) the
terminating of the Master Servicer from its rights and duties as servicer
hereunder) at the request, order or direction of any of the Certificateholders,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the cost, expenses and liabilities which may be
incurred therein or thereby and, provided further, that, subject to the
provisions of Section 8.01, the Trustee shall have the right to decline to
follow any such direction if the Trustee, in accordance with an Opinion of
Counsel, determines that the action or proceeding so directed may not lawfully
be taken or if the Trustee in good faith determines that the action or
proceeding so directed would involve it in personal liability or be unjustly
prejudicial to the nonassenting Certificateholders.
Section 7.04 Action upon Certain Failures of the
Master Servicer and upon Event of Default.
In the event that the Trustee shall have knowledge of any
failure of the Master Servicer specified in Section 7.01(i), (ii) or (iii) which
would become an Event of Default upon the Master Servicer's failure to remedy
the same after notice, the Trustee may, but need not if the Trustee deems it not
in the Certificateholders' best interest, give notice thereof to the Master
Servicer; provided however that, without limiting any remedy as a result of such
failure, the Trustee shall be required to give notice thereof to the Master
Servicer in the case of the failure by the Master Servicer to observe or perform
any of its covenants under Sections 3.05, 3.11, 3.12, 6.02 or 6.06(b) of this
Agreement. For all purposes of this Agreement, in the absence of actual
knowledge by a Responsible Officer of the Trustee, the Trustee shall not be
deemed to have knowledge of any failure of the Master Servicer as specified in
Section 7.01(i), (ii) and (iii) or any Event of Default unless notified thereof
in writing by the Master Servicer or by a Certificateholder.
Section 7.05 Trustee to Act; Appointment of Successor.
When the Master Servicer receives notice of termination
pursuant to Section 7.01 or the Trustee receives the resignation of the Master
Servicer evidenced by an Opinion of Counsel pursuant to Section 6.04, the
Trustee shall be the successor in all respects to the Master Servicer in its
capacity as master servicer under this Agreement and the transactions set forth
or provided for herein and shall have the rights and powers and be subject to
all the responsibilities, duties and liabilities relating thereto placed on the
Master Servicer by the terms and provisions hereof and in its capacity as such
successor shall have the same limitation of liability herein granted to the
Master Servicer. In the event that the Trustee is succeeding to the Master
Servicer as the Master Servicer, as compensation therefor, the Trustee shall be
entitled to receive monthly such portion of the Master Servicing Fee, together
with such other master servicing compensation as is agreed to at such time by
the Trustee and the Master Servicer, but in no event more than 25% thereof until
the date of final cessation of the Master Servicer's master servicing activities
hereunder. Notwithstanding the above, the Trustee may, if it shall be unwilling
to so act, or shall, if it is unable to so act or to obtain a qualifying bid as
described below, appoint, or petition a court of competent jurisdiction to
appoint, any housing and home finance institution, bank or mortgage servicing
institution having a net worth of not less than $10,000,000 and meeting such
other standards for a successor master servicer as are set forth herein, as the
successor to the Master Servicer hereunder in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master Servicer hereunder;
provided, however, that until such a successor master servicer is appointed and
has assumed the responsibilities, duties and liabilities of the Master Servicer
hereunder, the Trustee shall continue as the successor to the Master Servicer as
provided above. Upon cessation of the Master Servicer's master servicing
activities hereunder, the Trustee or any other successor master servicer shall
be entitled to compensation not exceed the compensation specified in Section
6.05 hereof, which amount shall include compensation for acting as paying agent.
In the event the Trustee is required to solicit bids as provided above, the
Trustee shall solicit, by public announcement, bids from housing and home
finance institutions, banks and mortgage servicing institutions meeting the
qualifications set forth in the preceding sentence for the purchase of the
master servicing functions. Such public announcement shall specify that the
successor master servicer shall be entitled to the full amount of the Master
Servicing Fee as compensation together with the other master servicing
compensation in the form of late reporting fees or otherwise as provided in
Section 6.05, which amount shall include compensation for acting as paying
agent. Within 30 days after any such public announcement, the Trustee shall
negotiate and effect the sale, transfer and assignment of the master servicing
rights and responsibilities hereunder to the qualified party submitting the
highest qualifying bid. The Trustee shall deduct all costs and expenses of any
public announcement and of any sale, transfer and assignment of the master
servicing rights and responsibilities hereunder from any sum received by the
Trustee from the successor to the Master Servicer in respect of such sale,
transfer and assignment. After such deductions, the remainder of such sum shall
be paid by the Trustee to the Master Servicer at the time of such sale, transfer
and assignment to the Master Servicer's successor. The Trustee and such
successor shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession. The Master Servicer agrees to
cooperate with the Trustee and any successor master servicer in effecting the
termination of the Master Servicer's servicing responsibilities and rights
hereunder and shall promptly provide the Trustee or such successor master
servicer, as applicable, all documents and records reasonably requested by it to
enable it to assume the Master Servicer's function hereunder and shall promptly
also transfer to the Trustee or such successor master servicer, as applicable,
all amounts which then have been or should have been deposited in the
Certificate Account by the Master Servicer or which are thereafter received by
the Master Servicer with respect to the Mortgage Loans. Neither the Trustee nor
any other successor master servicer shall be deemed to be in default hereunder
by reason of any failure to make, or any delay in making, any distribution
hereunder or any portion thereof caused by (i) the failure of the Master
Servicer to deliver, or any delay in delivering, cash, documents or records to
it, or (ii) restrictions imposed by any regulatory authority having jurisdiction
over the Master Servicer. Notwithstanding anything to the contrary contained in
Section 7.01 above or this Section 7.05, the Master Servicer shall retain all of
its rights and responsibilities hereunder, and no successor (including the
Trustee) shall succeed thereto, if the assumption thereof by such successor
would cause the rating assigned to any Certificates to be revoked, downgraded or
placed on credit review status (other than for possible upgrading) by either
Rating Agency and the retention thereof by the Master Servicer would avert such
revocation, downgrading or review.
All costs associated with the appointment of a successor
master servicer, to the extent not deducted from any sum received by the Trustee
from the successor master servicer, shall be paid to the Person that incurred
them by the predecessor master servicer. Without limiting the predecessor master
servicer's obligation, if the predecessor master servicer fails to pay such
costs, such costs shall be reimbursed by the Trust.
The predecessor Master Servicer and successor Master Servicer
shall notify the Depositor and Trustee of any such appointment at least two
Business Days prior to the effective date thereof and shall provide the
Depositor and the Trustee with all information required by the Depositor to
comply with its reporting obligation under Item 6.02 of Form 8-K not later than
the effective date of such appointment and the successor Master Servicer shall
report such event on Form 8-K within four business days of the occurrence of
such event.
Section 7.06 Notification to Certificateholders.
Upon any termination of the Master Servicer or appointment of
a successor master servicer, in each case as provided herein, the Trustee shall
give prompt written notice thereof to Certificateholders at their respective
addresses appearing in the Certificate Register. The Trustee shall also, within
45 days after the occurrence of any Event of Default known to the Trustee, give
written notice thereof to Certificateholders at their respective addresses
appearing in the Certificate Register, unless such Event of Default shall have
been cured or waived within said 45 day period.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default
and after the curing of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default has occurred (which has not
been cured), the Trustee, subject to the provisions of Sections 7.01, 7.03, 7.04
and 7.05, shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in its exercise as a
prudent investor would exercise or use under the circumstances in the conduct of
such investor's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee, which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they are in
the form required by this Agreement; provided, however, that the Trustee shall
not be responsible for the accuracy or content of any certificate, statement,
instrument, report, notice or other document furnished by the Master Servicer or
the Servicers pursuant to Articles III, IV and IX.
No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default and after
the curing of all such Events of Default which may have occurred, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and,
in the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee, and conforming to the requirements
of this Agreement;
(ii) The Trustee shall not be personally liable with respect
to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of holders of Certificates which
evidence in the aggregate not less than 25% of the Voting Interest
represented by all Certificates relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this
Agreement; and
(iii) The Trustee shall not be liable for any error of
judgment made in good faith by any of its Responsible Officers, unless
it shall be proved that the Trustee or such Responsible Officer, as the
case may be, was negligent in ascertaining the pertinent facts.
None of the provisions contained in this Agreement shall
require the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers if there is reasonable ground for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
Section 8.02 Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(i) The Trustee may request and rely and shall be protected in
acting or refraining from acting upon any resolution, Officer's
Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties and the manner of obtaining consents and evidencing the
authorization of the execution thereof shall be subject to such
reasonable regulations as the Trustee may prescribe;
(ii) The Trustee may consult with counsel, and any written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance
with such advice or Opinion of Counsel;
(iii) The Trustee shall not be personally liable for any
action taken, suffered or omitted by it in good faith and believed by
it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(iv) Subject to Section 7.04, the Trustee shall not be
accountable, shall have no liability and makes no representation as to
any acts or omissions hereunder of the Master Servicer until such time
as the Trustee may be required to act as Master Servicer pursuant to
Section 7.05 and thereupon only for the acts or omissions of the
Trustee as successor Master Servicer; and
(v) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys.
Section 8.03 Trustee Not Required to Make Investigation.
Prior to the occurrence of an Event of Default hereunder and
after the curing of all Events of Default which may have occurred, the Trustee
shall not be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond, Mortgage, Mortgage Note or other paper
or document (provided the same appears regular on its face), unless requested in
writing to do so by holders of Certificates evidencing in the aggregate not less
than 51% of the Voting Interest represented by all Certificates; provided,
however, that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Agreement, the
Trustee may require reasonable indemnity against such expense or liability as a
condition to so proceeding. The reasonable expense of every such investigation
shall be paid by the Master Servicer or, if paid by the Trustee shall be repaid
by the Master Servicer upon demand.
Section 8.04 Trustee Not Liable for Certificates or
Mortgage Loans.
The recitals contained herein and in the Certificates shall be
taken as the statements of the Depositor, and the Trustee assumes no
responsibility as to the correctness of the same. The Trustee makes no
representation for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Agreement or of the
Certificates or of any Mortgage Loan or related document. Subject to Section
2.04, the Trustee shall not be accountable for the use or application by the
Depositor of any of the Certificates or of the proceeds of such Certificates, or
for the use or application of any funds paid to the Master Servicer in respect
of the Mortgage Loans deposited into the Certificate Account by the Master
Servicer or, in its capacity as trustee, for investment of any such amounts.
Section 8.05 Trustee May Own Certificates.
The Trustee, and any agent thereof, in its individual or any
other capacity, may become the owner or pledgee of Certificates with the same
rights it would have if it were not Trustee or such agent and may transact
banking and/or trust business with the Depositor, the Master Servicer or their
Affiliates.
Section 8.06 The Master Servicer to Pay Fees and
Expenses; Limitation on Liability.
The Master Servicer covenants and agrees to pay to the Trustee
from time to time, from its own funds, and the Trustee shall be entitled to
receive, reasonable compensation (which shall not be limited by any provision of
law in regard to the compensation of a trustee of an express trust) for all
services rendered by it in the execution of the trusts hereby created and in the
exercise and performance of any of the powers and duties hereunder of the
Trustee.
In addition, except as otherwise agreed upon in writing by the
Master Servicer and the Trustee, the Trust shall reimburse the Trustee for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any of the provisions of this Agreement to the extent
permitted by Treasury Regulations Section 1.860G-1(b)(3), except for (i) any
such expense, disbursement or advance arising from the Trustee's gross
negligence, bad faith or willful misconduct and (ii) any routine ongoing
expenses incurred by the Trustee in the ordinary course of its duties as Trustee
hereunder or for any other expenses.
The Trustee and any director, officer, employee or agent of
the Trustee shall be entitled to indemnification by the Trust Estate and held
harmless against any loss, liability or expense (including reasonable attorney's
fees) (a) incurred in connection with any claim or legal action relating to (i)
this Agreement, (ii) the Certificates, or (iii) the performance of any of the
Trustee's duties under this Agreement, unless the loss, liability or expense was
incurred by reason of willful misfeasance, bad faith or gross negligence in the
performance of any of the Trustee's duties under this Agreement and (b)
resulting from any tax or information return which was prepared by, or should
have been prepared by, the applicable Servicer or Master Servicer.
Section 8.07 Eligibility Requirements.
The Trustee hereunder shall at all times (i) be a corporation
or association having its principal office in a state and city acceptable to the
Depositor, organized and doing business under the laws of such state or the
United States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, or shall
be a member of a bank holding system, the aggregate combined capital and surplus
of which is at least $50,000,000, provided that its separate capital and surplus
shall at all times be at least the amount specified in Section 310(a)(2) of the
Trust Indenture Act of 1939, (ii) be subject to supervision or examination by
federal or state authority and (iii) have a credit rating or be otherwise
acceptable to the Rating Agencies such that neither of the Rating Agencies would
reduce their respective then current ratings of the Certificates (or have
provided such security from time to time as is sufficient to avoid such
reduction) as evidenced in writing by each Rating Agency. If such corporation or
association publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 8.08.
Section 8.08 Resignation and Removal.
The Trustee may at any time resign and be discharged from the
trust hereby created by giving written notice of resignation to the Master
Servicer, such resignation to be effective upon the appointment of a successor
trustee. Upon receiving such notice of resignation, the Master Servicer shall
promptly appoint a successor trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning entity and one copy
to its successor. If no successor trustee shall have been appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.07 and shall fail to resign after
written request for its resignation by the Master Servicer, or if at any time
the Trustee shall become incapable of acting, or an order for relief shall have
been entered in any bankruptcy or insolvency proceeding with respect to such
entity, or a receiver of such entity or of its property shall be appointed, or
any public officer shall take charge or control of the Trustee or of the
property or affairs of the Trustee for the purpose of rehabilitation, conversion
or liquidation, or the Master Servicer shall deem it necessary in order to
change the situs of the Trust Estate for state tax reasons, then the Master
Servicer shall remove the Trustee and appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee.
In addition, if (a) the Trustee fails to comply with its
obligations to deliver any assessment of servicing compliance or registered
public accounting firm attestation reports required pursuant to Section 3.11 or
(b) any Servicing Function Participant engaged by the Trustee fails to comply
with its obligations to deliver any assessment of servicing compliance or
registered public accounting firm attestation reports, the Master Servicer, may,
after consultation with the Depositor, remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee.
The Holders of Certificates evidencing in the aggregate not
less than 51% of the Voting Interests represented by all Certificates (except
that any Certificate registered in the name of the Depositor, the Master
Servicer or any affiliate thereof will not be taken into account in determining
whether the requisite Voting Interests has been obtained) may at any time remove
the Trustee and appoint a successor by written instrument or instruments, in
triplicate, signed by such holders or their attorneys-in-fact duly authorized,
one complete set of which instruments shall be delivered to the Master Servicer,
one complete set of which shall be delivered to the entity or entities so
removed and one complete set of which shall be delivered to the successor so
appointed.
Any resignation or removal of the Trustee and appointment of a
successor pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor as provided in Section
8.09.
Section 8.09 Successor.
Any successor trustee appointed as provided in Section 8.08
shall execute, acknowledge and deliver to the Master Servicer and to its
predecessor trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee shall become
effective, and such successor, without any further act, deed or reconveyance,
shall become fully vested with all the rights, powers, duties and obligations of
its predecessor hereunder, with like effect as if originally named as trustee
herein. The predecessor trustee shall deliver to its successor all documents and
statements held by it hereunder, and the Depositor, the Master Servicer and the
predecessor entity shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in the successor trustee all such rights, powers, duties and
obligations.
All costs associated with the appointment of a successor
trustee shall be paid to the Person that incurred them by the predecessor
trustee. Without limiting the predecessor trustee's obligation, if the
predecessor trustee fails to pay such costs, such costs shall be reimbursed by
the Trust; provided however, that if the predecessor trustee has been terminated
pursuant to the third paragraph of Section 8.08, all reasonable expenses
incurred in complying with this Section 8.09 shall be reimbursed by the Trust to
the Person that incurred them.
No successor shall accept appointment as provided in this
Section unless at the time of such acceptance such successor shall be eligible
under the provisions of Section 8.07.
Upon acceptance of appointment by a successor as provided in
this Section, the successor trustee shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates at their addresses as shown in
the Certificate Register.
Section 8.10 Merger or Consolidation.
Any Person into which the Trustee may be merged or converted
or with which it may be consolidated, to which it may sell or transfer its
corporate trust business and assets as a whole or substantially as a whole or
any Person resulting from any merger, sale, transfer, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
the business of such entity, shall be the successor of the Trustee hereunder;
provided, however, that (i) such Person shall be eligible under the provisions
of Section 8.07, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding, (ii) the Trustee shall deliver an Opinion of Counsel to the
Depositor and the Master Servicer to the effect that such merger, consolidation,
sale or transfer will not subject the REMIC to federal, state or local tax or
cause the Trust Estate to fail to qualify as a REMIC, which Opinion of Counsel
shall be at the sole expense of the Trustee and (iii) the Trustee and such
successor or surviving Person shall notify the Depositor and the Master Servicer
of any such merger, conversion or consolidation at least two Business Days prior
to the effective date thereof and shall provide the Depositor and the Master
Servicer with all information required by the Depositor to comply with its
reporting obligations under Item 6.02 of Form 8-K not later than the effective
date of such merger, conversion or consolidation and the Master Servicer shall
report such event on Form 8-K within four business days of the occurrence of
such event.
Section 8.11 Authenticating Agent.
The Trustee may appoint an Authenticating Agent, which shall
be authorized to act on behalf of the Trustee in authenticating Certificates.
Wherever reference is made in this Agreement to the authentication of
Certificates by the Trustee or the Trustee's countersignature, such reference
shall be deemed to include authentication on behalf of the Trustee by the
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by the Authenticating Agent. The Authenticating Agent must be
acceptable to the Depositor and the Master Servicer and must be a corporation
organized and doing business under the laws of the United States of America or
of any state, having a principal office and place of business in a state and
city acceptable to the Depositor and the Master Servicer, having a combined
capital and surplus of at least $15,000,000, authorized under such laws to do a
trust business and subject to supervision or examination by federal or state
authorities.
Any corporation into which the Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency business of the Authenticating Agent, shall be the
Authenticating Agent without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
The Authenticating Agent may at any time resign by giving at
least 30 days' advance written notice of resignation to the Trustee, the
Depositor and the Master Servicer. Except with respect to Xxxxx Fargo Bank, for
so long as Xxxxx Fargo Bank is acting as the Master Servicer, the Trustee may at
any time terminate the agency of the Authenticating Agent by giving written
notice thereof to the Authenticating Agent, the Depositor and the Master
Servicer. Upon receiving a notice of resignation or upon such a termination, or
in case at any time the Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 8.11, the Trustee promptly shall
appoint a successor Authenticating Agent, which shall be acceptable to the
Master Servicer, and shall give written notice of such appointment to the
Depositor, and shall mail notice of such appointment to all Certificateholders.
Any successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers, duties and responsibilities of
its predecessor hereunder, with like effect as if originally named as
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section 8.11.
The Authenticating Agent shall have no responsibility or
liability for any action taken by it as such at the direction of the Trustee.
Any reasonable compensation paid to the Authenticating Agent shall be payable by
the Master Servicer.
Section 8.12 Separate Trustees and Co-Trustees.
The Trustee shall have the power from time to time to appoint
one or more persons or corporations to act either as co-trustees jointly with
the Trustee, or as separate trustees, for the purpose of holding title to,
foreclosing or otherwise taking action with respect to any Mortgage Loan outside
the state where the Trustee has its principal place of business, where such
separate trustee or co-trustee is necessary or advisable (or the Trustee is
advised by the Master Servicer that such separate trustee or co-trustee is
necessary or advisable) under the laws of any state in which a Mortgaged
Property is located or for the purpose of otherwise conforming to any legal
requirement, restriction or condition in any state in which a Mortgaged Property
is located or in any state in which any portion of the Trust Estate is located.
The Master Servicer shall advise the Trustee when, in its good faith opinion, a
separate trustee or co-trustee is necessary or advisable as aforesaid. The
separate trustees or co-trustees so appointed shall be trustees for the benefit
of all of the Certificateholders and shall have such powers, rights and remedies
as shall be specified in the instrument of appointment; provided, however, that
no such appointment shall, or shall be deemed to, constitute the appointee an
agent of the Trustee. The Depositor and the Master Servicer shall join in any
such appointment, but such joining shall not be necessary for the effectiveness
of such appointment.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all powers, duties, obligations and rights conferred upon
the Trustee, in respect of the receipt, custody and payment of moneys
shall be exercised solely by the Trustee;
(ii) all other rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed
upon and exercised or performed by the Trustee and such separate
trustee or co-trustee jointly, except to the extent that under any law
of any jurisdiction in which any particular act or acts are to be
performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder) the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Trust Estate or
any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee;
(iii) no separate trustee or co-trustee hereunder shall be
personally liable by reason of any act or omission of any other
separate trustee or co-trustee hereunder; and
(iv) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee so appointed by it, if such
resignation or removal does not violate the other terms of this
Agreement.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee, co-trustee, or custodian shall refer to this
Agreement and the conditions of this Article. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee, or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be furnished
to the Trustee.
Any separate trustee, co-trustee, or custodian may, at any
time, constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee to the extent permitted by law, without the appointment
of a new or successor trustee.
No separate trustee or co-trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 8.07
hereunder and no notice to Certificateholders of the appointment thereof shall
be required under Section 8.09 hereof.
The Trustee agrees to instruct its co-trustees, if any, to the
extent necessary to fulfill such entity's obligations hereunder.
The fees of any co-trustee whose appointment is necessary or
advisable for (i) conforming to any legal requirement, restriction or condition
in any state in which any Mortgaged Property or any portion of the Trust Estate
is located, will be paid by the Master Servicer, without reimbursement from the
Trust and (ii) any reason other than contemplated by clause (i), will be paid by
the Trustee, without reimbursement from the Trust. Expenses will be reimbursable
to the co-trustees to the extent, and in accordance with the standards,
specified in Section 8.06 hereof.
Section 8.13 Tax Matters; Compliance with REMIC
Provisions.
(a) Each of the Trustee and the Master Servicer covenants and
agrees that it shall perform its duties hereunder in a manner consistent with
the REMIC Provisions and shall not knowingly take any action or fail to take any
other action that would (i) affect the determination of the Trust Estate's
status as a REMIC; or (ii) cause the imposition of any federal, state or local
income, prohibited transaction, contribution or other tax on either the REMIC or
the Trust Estate. The Master Servicer, or, in the case of any action required by
law to be performed directly by the Trustee, the Trustee, shall (i) prepare or
cause to be prepared, timely cause to be signed by the Trustee and file or cause
to be filed annual federal and applicable state and local income tax returns for
the REMIC using a calendar year as the taxable year and the accrual method of
accounting; (ii) in the first such federal tax return, make, or cause to be
made, elections satisfying the requirements of the REMIC Provisions, on behalf
of the Trust Estate, to treat the Trust Estate as a REMIC; (iii) prepare,
execute and forward, or cause to be prepared, executed and forwarded, to the
Certificateholders all information reports or tax returns required with respect
to the REMIC, as and when required to be provided to the Certificateholders, and
to the Internal Revenue Service and any other relevant governmental taxing
authority in accordance with the REMIC Provisions and any other applicable
federal, state or local laws, including without limitation information reports
relating to "original issue discount" and "market discount" as defined in the
Code based upon the issue prices, prepayment assumption and cash flows provided
by the Depositor to the Master Servicer and calculated on a monthly basis by
using the issue prices of the Certificates; (iv) make available information
necessary for the application of any tax imposed on transferors of residual
interests to "disqualified organizations" (as defined in the REMIC Provisions);
(v) file Form 8811 and apply for an Employee Identification Number with a Form
SS-4 or any other permissible method and respond to inquiries by
Certificateholders or their nominees concerning information returns, reports or
tax returns; (vi) maintain (or cause to be maintained by the Servicers) such
records relating to the REMIC, including but not limited to the income,
expenses, individual Mortgage Loans (including REO Mortgage Loans) other assets
and liabilities of the REMIC, and the fair market value and adjusted basis of
the property of the REMIC determined at such intervals as may be required by the
Code, as may be necessary to prepare the foregoing returns or information
reports; (vii) exercise reasonable care not to allow the creation of any
"interests" in the REMIC within the meaning of Code Section 860D(a)(2) other
than the interests in the REMIC represented by the Class A-1, Class A-2, Class
A-3, Class A-4, Class A-5, Class A-R, Class B-1, Class B-2, Class B-3, Class
B-4, Class B-5 and Class B-6 Certificates; (viii) exercise reasonable care not
to allow the occurrence of any "prohibited transactions" within the meaning of
Code Section 860F(a), unless the Master Servicer shall have provided an Opinion
of Counsel to the Trustee that such occurrence would not (a) result in a taxable
gain, (b) otherwise subject either the REMIC or the Trust Estate to tax or (c)
cause the Trust Estate to fail to qualify as a REMIC; (ix) exercise reasonable
care not to allow the REMIC to receive income from the performance of services
or from assets not permitted under the REMIC Provisions to be held by a REMIC
and (x) pay (on behalf of the REMIC) the amount of any federal income tax,
including, without limitation, prohibited transaction taxes, taxes on net income
from foreclosure property, and taxes on certain contributions to a REMIC after
the Startup Day, imposed on the REMIC when and as the same shall be due and
payable (but such obligation shall not prevent the Master Servicer or any other
appropriate Person from contesting any such tax in appropriate proceedings and
shall not prevent the Master Servicer from withholding or depositing payment of
such tax, if permitted by law, pending the outcome of such proceedings). The
Master Servicer shall be entitled to be reimbursed pursuant to Section 3.02 for
any taxes paid by it pursuant to clause (x) of the preceding sentence, except to
the extent that such taxes are imposed as a result of the bad faith, willful
misfeasance or gross negligence of the Master Servicer in the performance of its
obligations hereunder.
In order to enable the Master Servicer or the Trustee, as the
case may be, to perform its duties as set forth above, the Depositor shall
provide, or cause to be provided, to the Master Servicer within ten days after
the Closing Date all information or data that the Master Servicer determines to
be relevant for tax purposes to the valuations and offering prices of the
Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flows of each Class of Certificates and the
Mortgage Loans in the aggregate. Thereafter, the Depositor shall provide to the
Master Servicer or the Trustee, as the case may be, promptly upon request
therefor, any such additional information or data that the Master Servicer or
the Trustee, as the case may be, may from time to time request in order to
enable the Master Servicer to perform its duties as set forth above. The
Depositor hereby indemnifies the Master Servicer or the Trustee, as the case may
be, for any losses, liabilities, damages, claims or expenses of the Master
Servicer or the Trustee arising from any errors or miscalculations by the Master
Servicer or the Trustee pursuant to this Section that result from any failure of
the Depositor to provide, or to cause to be provided, accurate information or
data to the Master Servicer or the Trustee, as the case may be, on a timely
basis. The Master Servicer hereby indemnifies the Depositor and the Trustee for
any losses, liabilities, damages, claims or expenses of the Depositor or the
Trustee arising from the Master Servicer's willful misfeasance, bad faith or
gross negligence in preparing any of the federal, state and local tax returns of
the REMIC as described above. In the event that the Trustee prepares any of the
federal, state and local tax returns of the REMIC as described above, the
Trustee hereby indemnifies the Depositor and the Master Servicer for any losses,
liabilities, damages, claims or expenses of the Depositor or the Master Servicer
arising from the Trustee's willful misfeasance, bad faith or negligence in
connection with such preparation.
(b) Notwithstanding anything in this Agreement to the
contrary, each of the Master Servicer and the Trustee shall pay from its own
funds, without any right of reimbursement therefor, the amount of any costs,
liabilities and expenses incurred by the Trust Estate (including, without
limitation, any and all federal, state or local taxes, including taxes imposed
on "prohibited transactions" within the meaning of the REMIC Provisions) if and
to the extent that such costs, liabilities and expenses arise from a failure of
the Master Servicer or the Trustee, respectively, to perform its obligations
under this Section 8.13.
The Holder of the Class A-R Certificate is hereby designated
as the "tax matters person" for the REMIC within the meaning of Treasury
Regulations Section 1.860F-4(d). The "tax matters person" shall have the same
duties with respect to the REMIC as those of a "tax matters partner" under
Subchapter C of Chapter 63 of Subtitle F of the Code. By its acceptance of the
Class A-R Certificate, such Holder irrevocably appoints the Master Servicer (and
the Master Servicer hereby agrees to act) as agent to perform all of the duties
of the "tax matters person."
Section 8.14 Monthly Advances.
In the event that Xxxxx Fargo Bank in its capacity as Servicer
fails to make a Periodic Advance required to be made pursuant to the Xxxxx Fargo
Bank Servicing Agreement on or before the Distribution Date, the Trustee shall
make a Periodic Advance as required by Section 3.03 hereof; provided, however,
the Trustee shall not be required to make such Periodic Advances if prohibited
by law or if it determines that such Periodic Advance would be a Nonrecoverable
Advance. With respect to those Periodic Advances which should have been made by
Xxxxx Fargo Bank, the Trustee shall be entitled, pursuant to Section 3.02(a)(i),
(ii) or (v) hereof, to be reimbursed from the Certificate Account for Periodic
Advances and Nonrecoverable Advances made by it.
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Purchase by the
Depositor or Liquidation of All Mortgage
Loans.
Subject to Section 9.02, the respective obligations and
responsibilities of the parties to this Agreement created hereby (other than the
obligation of the Paying Agent to make certain payments after the Final
Distribution Date to Certificateholders and the obligation of the Master
Servicer to send certain notices as hereinafter set forth and the tax reporting
obligations under Sections 4.05 and 8.13 hereof) shall terminate upon the last
action required to be taken by the Paying Agent on the Final Distribution Date
pursuant to this Article IX following the earlier of (i) the purchase by the
Depositor of all Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining in the Trust Estate at a price equal to the sum of (x)
100% of the unpaid principal balance of each Mortgage Loan (other than any REO
Mortgage Loan) as of the Final Distribution Date, (y) the fair market value of
the Mortgaged Property related to any REO Mortgage Loan, plus with respect to
clauses (x) and (y) any accrued and unpaid interest through the last day of the
month preceding the month of such purchase at the applicable Mortgage Interest
Rate and (z) any Reimbursement Amount owed to the Trust pursuant to Section 2.03
and (ii) the final payment or other liquidation (or any advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Estate (including for
this purpose the discharge of any Mortgagor under a defaulted Mortgage Loan on
which a Servicer is not obligated to foreclose due to environmental impairment)
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan; provided, however, that in no event shall the
trust created hereby continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the Court of St. Xxxxx, living on the date
hereof.
The right of the Depositor to purchase all the assets of the
Trust Estate pursuant to clause (i) of the preceding paragraph is subject to
Section 9.02 and conditioned upon (A) the Pool Scheduled Principal Balance of
the Mortgage Loans as of the Final Distribution Date being less than the amount
set forth in Section 11.20 and (B) the sum of clause (i)(x) and (y) of the
preceding paragraph being less than or equal to the aggregate fair market value
of the Mortgage Loans (other than any REO Mortgage Loans) and the Mortgaged
Properties related to the REO Mortgage Loans; provided, however, that this
clause (B) shall not apply to any purchase by the Depositor if, at the time of
the purchase, the Depositor is no longer subject to regulation by the Office of
the Comptroller of the Currency, the FDIC, the Federal Reserve or the Office of
Thrift Supervision. Fair market value for purposes of this paragraph and the
preceding paragraph will be determined by the Master Servicer as of the close of
business on the third Business Day next preceding the date upon which notice of
any termination is furnished to Certificateholders pursuant to the third
paragraph of this Section 9.01. In the case of any purchase by the Depositor
pursuant to said clause (i) of the preceding paragraph, the Depositor shall give
the Trustee, the Paying Agent and Master Servicer notice of its intent to
purchase the assets of the Trust by the fifth day of the month of the Final
Distribution Date or such later date as shall be acceptable to the Trustee and
Master Servicer. The Depositor or Master Servicer shall in such case provide to
the Trustee the confirmation of deposit of the purchase price required by
Section 3.04 and the Trustee or the Custodian shall, promptly following payment
of the purchase price and upon receipt from the Master Servicer of a Request for
Release, release to the Depositor the Owner Mortgage Loan Files and Retained
Mortgage Loan Files, if applicable, pertaining to the Mortgage Loans being
purchased.
Notice of any termination, specifying the Final Distribution
Date (which shall be a date that would otherwise be a Distribution Date) upon
which the Certificateholders may surrender their Certificates to the Paying
Agent for payment of the final distribution and cancellation, shall be given
promptly by the Paying Agent by letter to Certificateholders mailed not earlier
than the 15th day of the month preceding the month of such final distribution
and not later than the twentieth day of the month of such final distribution
specifying (A) the Final Distribution Date upon which final payment of the
Certificates will be made upon presentation and surrender of Certificates at the
Corporate Trust Office of the Paying Agent therein designated, (B) the amount of
any such final payment and (C) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made (except in the case of
any Class A Certificate surrendered on a prior Distribution Date) pursuant to
Section 4.01 only upon presentation and surrender of the Certificates at the
Corporate Trust Office of the Paying Agent therein specified. If the Depositor
is exercising its right to purchase, the Depositor shall deposit in the
Certificate Account on or before the Final Distribution Date in immediately
available funds an amount equal to the purchase price for the assets of the
Trust Estate computed as above provided. Failure to give notice of termination
as described herein shall not entitle a Certificateholder to any interest beyond
the interest payable on the Final Distribution Date.
Upon presentation and surrender of the Certificates, the
Paying Agent shall distribute to Certificateholders on the Final Distribution
Date in proportion to their respective Percentage Interests an amount equal to
(i) as to the Classes of Class A Certificates, the respective Principal Balance
together with any related Class A Unpaid Interest Shortfall and one month's
interest in an amount equal to the respective Interest Accrual Amount, (ii) as
to the Classes of Class B Certificates, the respective Principal Balance
together with any related Class B Unpaid Interest Shortfall and one month's
interest in an amount equal to the respective Interest Accrual Amount and (iii)
as to the Class A-R Certificate, the amounts, if any, which remain on deposit in
the Certificate Account (other than amounts retained to meet claims) after
application pursuant to clauses (i) and (ii) above and payment to the Master
Servicer of any amounts it is entitled as reimbursement or otherwise hereunder.
Notwithstanding the foregoing, if the price paid pursuant to clause (i) of the
first paragraph of this Section 9.01, after reimbursement to the Servicers, the
Master Servicer and the Trustee of any Periodic Advances, is insufficient to pay
in full the amounts set forth in clauses (i) and (ii) of this paragraph, then
any shortfall in the amount available for distribution to Certificateholders
shall be allocated in reduction of the amounts otherwise distributable on the
Final Distribution Date in the same manner as Realized Losses are allocated
pursuant to Section 4.02(a) hereof. Such distribution on the Final Distribution
Date shall be in lieu of the distribution otherwise required to be made on such
Distribution Date in respect of each Class of Certificates.
In the event that all of the Certificateholders shall not
surrender their Certificates for final payment and cancellation within three
months following the Final Distribution Date, the Paying Agent shall on such
date cause all funds, if any, in the Payment Account not distributed in final
distribution to Certificateholders to be withdrawn therefrom and credited to the
remaining Certificateholders by depositing such funds in a separate escrow
account for the benefit of such Certificateholders. The Paying Agent shall give
a second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within three months after the second notice all the Certificates
shall not have been surrendered for cancellation, the Paying Agent may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds on deposit in such escrow
account.
Section 9.02 Additional Termination Requirements.
In the event of a termination of the Trust Estate upon the
exercise by the Depositor of its purchase option as provided in Section 9.01,
the Trust Estate shall be terminated in accordance with the following additional
requirements, unless the Trustee and the Master Servicer have received an
Opinion of Counsel to the effect that any other manner of termination (i) will
constitute a "qualified liquidation" of the Trust Estate within the meaning of
Code Section 860F(a)(4)(A) and (ii) will not subject the REMIC to federal tax or
cause the Trust Estate to fail to qualify as a REMIC at any time that any
Certificates are outstanding:
(i) The notice given by the Paying Agent under Section 9.01
shall provide that such notice constitutes the adoption of a plan of
complete liquidation of the REMIC as of the date of such notice (or, if
earlier, the date on which the first such notice is mailed to
Certificateholders). The Master Servicer shall also specify such date
in a statement attached to the final tax return of the REMIC; and
(ii) At or after the time of adoption of such a plan of
complete liquidation and at or prior to the Final Distribution Date,
the Trustee, shall sell all of the assets of the Trust Estate to the
Depositor for cash at the purchase price specified in Section 9.01 and
the Paying Agent shall distribute such cash within 90 days of such
adoption in the manner specified in Section 9.01.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment.
(a) This Agreement or the Custodial Agreement may be amended
from time to time by the Depositor, the Master Servicer and the Trustee without
the consent of any of the Certificateholders, (i) to cure any ambiguity or
mistake, (ii) to correct or supplement any provisions herein or therein which
may be inconsistent with any other provisions herein or therein or in the
related Prospectus, (iii) to modify, eliminate or add to any of its provisions
to such extent as shall be necessary to maintain the qualification of the Trust
Estate as a REMIC at all times that any Certificates are outstanding or to avoid
or minimize the risk of the imposition of any federal tax on the Trust Estate or
the REMIC pursuant to the Code that would be a claim against the Trust Estate,
provided that (a) the Trustee has received an Opinion of Counsel to the effect
that such action is necessary or desirable to maintain such qualification or to
avoid or minimize the risk of the imposition of any such tax and (b) such action
shall not, as evidenced by such Opinion of Counsel, adversely affect in any
material respect the interests of any Certificateholder, (iv) to conform the
obligations of the parties under this Agreement, or to add obligations of the
parties to this Agreement, if necessary, to comply with the requirements of
Regulation AB, (v) to change the timing and/or nature of deposits into the
Certificate Account provided that such change shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any Certificateholder, (vi) to modify, eliminate or add to the provisions of
Section 5.02 or any other provisions hereof restricting transfer of the
Certificates, provided that the Depositor for purposes of Section 5.02 has
determined in its sole discretion that any such modifications to this Agreement
will neither adversely affect the rating on the Certificates nor give rise to a
risk that the REMIC or any of the Certificateholders will be subject to a tax
caused by a transfer to a non-permitted transferee, (vii) to make certain
provisions with respect to the denominations of, and the manner of payments on,
certain Classes of Certificates initially retained by the Depositor or an
affiliate of the Depositor and (viii) to make any other provisions with respect
to matters or questions arising under this Agreement or such Custodial Agreement
which shall not be materially inconsistent with the provisions of this
Agreement, provided that such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder. Notwithstanding the foregoing, any amendment pursuant to
clause (v) or (viii) shall not be deemed to adversely affect in any material
respect the interest of Certificateholders and no Opinion of Counsel to that
effect shall be required if the person requesting the amendment instead obtains
a letter from each Rating Agency stating that the amendment would not result in
the downgrading or withdrawal of the respective ratings then assigned to the
Certificates.
This Agreement or the Custodial Agreement may also be amended
from time to time by the Depositor, the Master Servicer and the Trustee with the
consent of the Holders of Certificates evidencing in the aggregate not less than
66-2/3% of the aggregate Voting Interests of each Class of Certificates affected
thereby, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or such Custodial
Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interest of the Holders of Certificates of any Class in a
manner other than as described in clause (i) hereof without the consent of
Holders of Certificates of such Class evidencing, as to such Class, Voting
Interests aggregating not less than 66-2/3% or (iii) reduce the aforesaid
percentage of Certificates of any Class the Holders of which are required to
consent to any such amendment, without the consent of the Holders of all
Certificates of such Class then outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel to the effect that such amendment will
not subject the REMIC to tax or cause the Trust Estate to fail to qualify as a
REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any amendment requiring the
consent of Certificateholders, the Trustee shall furnish written notification of
the substance of such amendment to each Certificateholder.
It shall not be necessary for the consent of
Certificateholders under this Section 10.01(a) to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
(b) Notwithstanding any contrary provision of this Agreement,
if any of the Mortgage Loans are Type 2 Mortgage Loans, as indicated on the
Mortgage Loan Schedule, the Master Servicer may, from time to time, amend
Schedule I hereto without the consent of any Certificateholder or the Trustee;
provided, however, (i) that such amendment does not conflict with any provisions
of the related Servicing Agreement, (ii) that the related Servicing Agreement
provides for the remittance of each type of Unscheduled Principal Receipts
received by such Servicer during the Applicable Unscheduled Principal Receipt
Period (as so amended) related to each Distribution Date to the Master Servicer
no later than the 24th day of the month in which such Distribution Date occurs
and (iii) that such amendment is for the purpose of changing the Applicable
Unscheduled Principal Receipt Period for Type 2 Mortgage Loans to a Mid-Month
Receipt Period with respect to all Unscheduled Principal Receipts.
Section 10.02 Recordation of Agreement.
This Agreement (or an abstract hereof, if acceptable to the
applicable recording office) is subject to recordation in all appropriate public
offices for real property records in all the towns or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated, and
in any other appropriate public office or elsewhere, such recordation to be
effected by the Master Servicer and at its expense on direction by the Trustee,
but only upon direction accompanied by an Opinion of Counsel to the effect that
such recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
Section 10.03 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Estate, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or
take any action or proceeding in any court for a partition or winding up of the
Trust Estate, nor otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
Except as otherwise expressly provided herein, no
Certificateholder, solely by virtue of its status as a Certificateholder, shall
have any right to vote or in any manner otherwise control the operation and
management of the Trust Estate, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association, nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless the Holders
of Certificates evidencing not less than 25% of the Voting Interest represented
by all Certificates shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the cost, expenses and liabilities to be incurred therein or
thereby, and the Trustee, for 60 days after its receipt of such notice, request
and offer of indemnity, shall have neglected or refused to institute any such
action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the benefit
of all Certificateholders. For the protection and enforcement of the provisions
of this Section, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
Section 10.04 Governing Law; Jurisdiction.
This Agreement shall be construed in accordance with the laws
of the State of New York (without regard to conflicts of laws principles), and
the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
Section 10.05 Notices.
Unless otherwise provided in this Agreement, all demands,
notices and communications hereunder shall be in writing and shall be deemed to
have been duly given if personally delivered at or mailed by certified or
registered mail, return receipt requested or by facsimile (i) in the case of the
Depositor, to Xxxxx Fargo Asset Securities Corporation, 0000 Xxx Xxxxxxxxxx Xxx,
Xxxxxxxxx, Xxxxxxxx 00000, Attention: Vice President, Structured Finance or such
other address as may hereafter be furnished to the Master Servicer and the
Trustee in writing by the Depositor, (ii) in the case of the Master Servicer, to
Xxxxx Fargo Bank, N.A., 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000-0000,
Attention: Corporate Trust Services-WFMBS 2006-AR3; facsimile: (000) 000-0000 or
such other address as may hereafter be furnished to the Depositor and the
Trustee in writing by the Master Servicer and (iii) in the case of the Trustee
or the Paying Agent, to the Corporate Trust Office, or such other address as may
hereafter be furnished to the Depositor and the Master Servicer in writing by
the Trustee or the Paying Agent. Any notice required or permitted to be mailed
to a Certificateholder shall be given by first class mail, postage prepaid, at
the address of such Holder as shown in the Certificate Register. Any notice
mailed or transmitted within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the addressee
receives such notice; provided, however, that any demand, notice or
communication to or upon the Depositor, the Master Servicer or the Trustee shall
not be effective until received.
For all purposes of this Agreement, in the absence of actual
knowledge by an officer of the Master Servicer, the Master Servicer shall not be
deemed to have knowledge of any act or failure to act of any Servicer unless
notified thereof in writing by the Trustee, the Servicer or a Certificateholder.
Section 10.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
Section 10.07 Special Notices to Rating Agencies.
(a) The Trustee shall give prompt notice to each Rating Agency
of the occurrence of any of the following events of which a Responsible Officer
has notice:
(i) any amendment to this Agreement pursuant to Section
10.01(a);
(ii) any assignment by the Master Servicer of its rights and
delegation of its duties pursuant to Section 6.06;
(iii) any resignation of the Master Servicer pursuant to
Section 6.04;
(iv) the occurrence of any of the Events of Default described
in Section 7.01;
(v) any notice of termination given to the Master Servicer
pursuant to Section 7.01; or
(vi) the appointment of any successor to the Master Servicer
pursuant to Section 7.05.
(b) The Paying Agent shall give prompt notice to each Rating
Agency of any sale or transfer of the Class B Certificates pursuant to Section
5.02 to an affiliate of the Depositor.
(c) The Paying Agent shall give prompt notice to each Rating
Agency of the making of a final payment pursuant to Section 9.01.
(d) The Master Servicer shall give prompt notice to each
Rating Agency of the occurrence of any of the following events:
(i) the resignation of the Custodian or the appointment of a
successor Custodian pursuant to the Custodial Agreement;
(ii) the resignation or removal of the Trustee pursuant to
Section 8.08;
(iii) the appointment of a successor trustee pursuant to
Section 8.09; or
(iv) the sale, transfer or other disposition in a single
transaction of 50% or more of the equity interests in the Master
Servicer.
(e) The Master Servicer shall deliver to each Rating Agency or
otherwise make available to each Rating Agency in a format acceptable to each
Rating Agency:
(i) reports prepared pursuant to Section 3.05 and 3.11; and
(ii) the Distribution Date Statements.
Section 10.08 Covenant of Depositor.
The Depositor shall not amend Article Third of its Certificate
of Incorporation without the prior written consent of each Rating Agency rating
the Certificates.
Section 10.09 Recharacterization.
The Parties intend the conveyance by the Depositor to the
Trustee of all of its right, title and interest in and to the Trust Estate
pursuant to this Agreement to constitute a purchase and sale and not a loan.
Notwithstanding the foregoing, to the extent that such conveyance is held not to
constitute a sale under applicable law, it is intended that this Agreement shall
constitute a security agreement under applicable law and that the Depositor
shall be deemed to have granted to the Trustee a first priority security
interest in all of the Depositor's right, title and interest in and to the Trust
Estate. The Master Servicer shall take all actions, including, without
limitation, filing any Uniform Commercial Code continuation statements, as shall
be necessary to perfect or maintain the perfection of such security interest.
Section 10.10 Regulation AB Compliance; Intent of Parties;
Reasonableness.
The parties hereto acknowledge that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise, and
agree to comply with requests made by the Depositor or the Master Servicer in
good faith for delivery of information under these provisions on the basis of
evolving interpretations of Regulation AB. In connection with the Trust, the
parties hereto shall cooperate fully with the Master Servicer and the Depositor
to deliver to the Master Servicer and/or the Depositor, any and all statements,
reports, certifications, records and any other information available to such
party and reasonably necessary in the good faith determination of the Depositor
or the Master Servicer to permit the Depositor or the Master Servicer to comply
with the provisions of Regulation AB, together with such disclosures reasonably
believed by the Depositor or the Master Servicer to be necessary in order to
effect such compliance.
ARTICLE XI
TERMS FOR CERTIFICATES
Section 11.01 Cut-Off Date.
The Cut-Off Date for the Certificates is February 1, 2006.
Section 11.02 Cut-Off Date Aggregate Principal Balance.
The Cut-Off Date Aggregate Principal Balance is
$602,408,867.71.
Section 11.03 Original Class A Percentage.
The Original Class A Percentage is 95.99993144%.
Section 11.04 Original Principal Balances of the Classes
of Class A Certificates.
As to the following Classes of Class A Certificates, the
Principal Balance of such Class as of the Cut-Off Date, as follows:
Original
Class Principal Balance
----- -----------------
Class A-1 $222,926,000.00
Class A-2 $64,674,000.00
Class A-3 $50,000,000.00
Class A-4 $219,579,000.00
Class A-5 $21,133,000.00
Class A-R $100.00
Section 11.05 Original Subordinated Percentage.
The Original Subordinated Percentage is 4.00006856%.
Section 11.06 Original Class B Principal Balance.
The Original Class B Principal Balance is $24,096,767.71.
Section 11.07 Original Principal Balances of the Classes
of Class B Certificates.
As to the following Classes of Class B Certificate, the
Principal Balance of such Class as of the Cut-Off Date, is as follows:
Original
Class Principal Balance
----- -----------------
Class B-1 $14,458,000.00
Class B-2 $3,614,000.00
Class B-3 $2,109,000.00
Class B-4 $1,506,000.00
Class B-5 $903,000.00
Class B-6 $1,506,767.71
Section 11.08 Original Class B-1 Fractional Interest.
The Original Class B-1 Fractional Interest is 1.60003748%.
Section 11.09 Original Class B-2 Fractional Interest.
The Original Class B-2 Fractional Interest is 1.00011271%.
Section 11.10 Original Class B-3 Fractional Interest.
The Original Class B-3 Fractional Interest is 0.65001827%.
Section 11.11 Original Class B-4 Fractional Interest.
The Original Class B-4 Fractional Interest is 0.40002195%.
Section 11.12 Original Class B-5 Fractional Interest.
The Original Class B-5 Fractional Interest is 0.25012375%.
Section 11.13 Original Class B-1 Percentage.
The Original Class B-1 Percentage is 2.40003107%.
Section 11.14 Original Class B-2 Percentage.
The Original Class B-2 Percentage is 0.59992477%.
Section 11.15 Original Class B-3 Percentage.
The Original Class B-3 Percentage is 0.35009445%.
Section 11.16 Original Class B-4 Percentage.
The Original Class B-4 Percentage is 0.24999632%.
Section 11.17 Original Class B-5 Percentage.
The Original Class B-5 Percentage is 0.14989819%.
Section 11.18 Original Class B-6 Percentage.
The Original Class B-6 Percentage is 0.25012376%.
Section 11.19 Closing Date.
The Closing Date is February 27, 2006.
Section 11.20 Right to Purchase.
The right of the Depositor to purchase all of the Mortgage
Loans pursuant to Section 9.01 hereof shall be conditioned upon the Pool
Scheduled Principal Balance of the Mortgage Loans being less than $60,240,886.77
(10% of the Cut-Off Date Aggregate Principal Balance) at the time of any such
purchase.
Section 11.21 Wire Transfer Eligibility.
With respect to the Class X-0, Xxxxx X-0, Class A-3, Class
A-4, Class A-5, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class
B-6 Certificates, the minimum Denomination eligible for wire transfer on each
Distribution Date is $100,000. The Class A-R Certificate is not eligible for
wire transfer.
Section 11.22 Single Certificate.
A Single Certificate for the Class A-1, Class A-2, Class A-3
and Class A-4 Certificates represents a $25,000 Denomination. A Single
Certificate for the Class A-5, Class B-1, Class B-2 and Class B-3 Certificates
represents a $100,000 Denomination. A Single Certificate for the Class B-4,
Class B-5 and Class B-6 Certificates represents a $250,000 Denomination. A
Single Certificate for the Class A-R Certificate represents a $100 Denomination.
Section 11.23 Servicing Fee Rate.
The rate used to calculate the Servicing Fee is equal to such
rate as is set forth on the Mortgage Loan Schedule with respect to a Mortgage
Loan.
Section 11.24 Master Servicing Fee Rate.
The rate used to calculate the Master Servicing Fee for each
Mortgage Loan shall be 0.010% per annum.
IN WITNESS WHEREOF, the Depositor, the Master Servicer and the
Trustee have caused their names to be signed hereto by their respective officers
thereunto duly authorized, all as of the day and year first above written.
XXXXX FARGO ASSET SECURITIES CORPORATION
as Depositor
By: /s/ Xxxxx Xxxxxx
----------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
XXXXX FARGO BANK, N.A.
as Master Servicer
By: /s/ Xxxxxxxx X. Xxxxxxxxxx
----------------------------------
Name: Xxxxxxxx X. Xxxxxxxxxx
Title: Assistant Vice President
U.S. BANK NATIONAL
ASSOCIATION as
Trustee
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
STATE OF MARYLAND )
ss.:
COUNTY OF FREDERICK )
On this 27th day of February, 2006, before me, a notary public
in and for the State of Maryland, personally appeared Xxxxx Xxxxxx, known to me
who, being by me duly sworn, did depose and say that she resides at Potomac,
Maryland; that she is a Vice President of Xxxxx Fargo Asset Securities
Corporation, a Delaware corporation, one of the parties that executed the
foregoing instrument; and that she signed her name thereto by order of the Board
of Directors of said corporation.
-------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF MARYLAND )
ss.:
COUNTY OF XXXX ARUNDEL )
On this 27th day of February, 2006, before me, a notary public
in and for the State of Maryland, personally appeared Xxxxxxxx X. Xxxxxxxxxx,
known to me who, being by me duly sworn, did depose and say that she resides in
Riva, Maryland; that she is an Assistant Vice President of Xxxxx Fargo Bank,
N.A., a national banking association, one of the parties that executed the
foregoing instrument; and that she signed her name thereto by order of the Board
of Directors of said association.
-------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF ILLINOIS )
ss.:
COUNTY OF XXXX )
On this 27th day of February, 2006, before me, a notary public
in and for the State of Illinois, personally appeared Xxxxxxx X. Xxxxx, known to
me who, being by me duly sworn, did depose and say that she resides in Chicago,
Illinois; that she is a Vice President of U.S. Bank National Association, a
national banking association, one of the parties that executed the foregoing
instrument; and that she signed her name thereto by order of the Board of
Directors of said association.
-------------------------
Notary Public
[NOTARIAL SEAL]
SCHEDULE I
Xxxxx Fargo Asset Securities Corporation,
Mortgage Pass-Through Certificates, Series 2006-AR3
Applicable Unscheduled Principal Receipt Period
Full Unscheduled Partial Unscheduled
Servicer Principal Receipts Principal Receipts
---------------------- -------------------- --------------------
Xxxxx Fargo Bank Mid-Month Mid-Month
EXHIBIT A-1
[FORM OF FACE OF CLASS A-1 CERTIFICATE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2006-AR3, CLASS A-1
evidencing an interest in a pool of adjustable
interest rate, monthly pay,
fully amortizing, first lien, one- to
four-family residential mortgage loans sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
(Not an interest in or obligation of the Depositor)
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN
INTEREST IN, THE DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES, AND IS NOT INSURED OR GUARANTEED BY THE DEPOSITOR, THE MASTER
SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES, OR BY ANY GOVERNMENT AGENCY OR
PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE MADE IN THE MANNER DESCRIBED IN THE AGREEMENT. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS
THAN THE INITIAL PRINCIPAL BALANCE REPRESENTED HEREBY.
Certificate No. Cut-Off Date: February 1, 2006
CUSIP No.: 94983G AA 6 First Distribution Date: March 27, 2006
ISIN No.: US94983GAA67 Denomination: $
Percentage Interest evidenced Final Scheduled Maturity Date: March 25, 2036
by this Certificate: %
THIS CERTIFIES THAT ___________________________ is the
registered owner of the Percentage Interest evidenced by this Certificate in
monthly distributions to the Holders of the Class A-1 Certificates with respect
to a Trust Estate consisting of a pool of adjustable interest rate, monthly pay,
fully amortizing, first lien, one- to four-family residential mortgage loans
(the "Mortgage Loans"), formed by Xxxxx Fargo Asset Securities Corporation
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement referred to below). The Trust Estate was created pursuant to
a Pooling and Servicing Agreement dated as of February 27, 2006 (the
"Agreement") among the Depositor, Xxxxx Fargo Bank, N.A., as master servicer
(the "Master Servicer") and U.S. Bank National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereinafter. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to such terms in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the Record Date, in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the Class A Distribution Amount for the Class A-1 Certificates
required to be distributed to Holders of the Class A-1 Certificates on such
Distribution Date, subject to adjustment in certain events as specified in the
Agreement. Distributions in reduction of the Principal Balance of certain
Classes of Class A Certificates may not commence on the first Distribution Date
specified above. Distributions of principal will be allocated among the Classes
of Class A Certificates in accordance with the provisions of the Agreement. The
pass-through rate on the Class A-1 Certificates applicable to each Distribution
Date will be a per annum rate equal to the Net WAC. The amount of interest which
accrues on this Certificate in any month will be subject to reduction with
respect to any Non-Supported Interest Shortfall, any Relief Act Shortfall and
the interest portion of certain Realized Losses allocated to the Class A-1
Certificates, as described in the Agreement.
Distributions on this Certificate will be made by the Paying
Agent by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register, unless such Person is
entitled to receive payments by wire transfer in immediately available funds in
accordance with the Agreement and such Person has notified the Paying Agent
pursuant to the Agreement that such payments are to be made by wire transfer of
immediately available funds. Notwithstanding the above, the final distribution
in reduction of the Principal Balance of this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency of the Paying Agent
specified for that purpose in the notice of final distribution.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate constitutes a "regular interest" in a "real
estate mortgage investment conduit" as those terms are defined in Section
860G(a)(1) and Section 860D, respectively, of the Internal Revenue Code of 1986,
as amended.
Unless this Certificate has been countersigned by an
authorized officer of the Authenticating Agent, by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement or be valid
for any purpose.
IN WITNESS WHEREOF, the Paying Agent has caused this
Certificate to be duly executed as of the date set forth below.
Dated:
Xxxxx Fargo Bank, N.A.,
Paying Agent
By____________________________
Authorized Officer
Countersigned:
Xxxxx Fargo Bank, N.A.,
Authenticating Agent
By ________________________
Authorized Officer
EXHIBIT A-2
[FORM OF FACE OF CLASS A-2 CERTIFICATE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2006-AR3, CLASS A-2
evidencing an interest in a pool of adjustable
interest rate, monthly pay,
fully amortizing, first lien, one- to
four-family residential mortgage loans sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
(Not an interest in or obligation of the Depositor)
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN
INTEREST IN, THE DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES, AND IS NOT INSURED OR GUARANTEED BY THE DEPOSITOR, THE MASTER
SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES, OR BY ANY GOVERNMENT AGENCY OR
PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE MADE IN THE MANNER DESCRIBED IN THE AGREEMENT. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS
THAN THE INITIAL PRINCIPAL BALANCE REPRESENTED HEREBY.
Certificate No. Cut-Off Date: February 1, 2006
CUSIP No.: 94983G AB 4 First Distribution Date: March 27, 2006
ISIN No.: US94983GAB41 Denomination: $
Percentage Interest evidenced Final Scheduled Maturity Date: March 25, 2036
by this Certificate: %
THIS CERTIFIES THAT ___________________________ is the
registered owner of the Percentage Interest evidenced by this Certificate in
monthly distributions to the Holders of the Class A-2 Certificates with respect
to a Trust Estate consisting of a pool of adjustable interest rate, monthly pay,
fully amortizing, first lien, one- to four-family residential mortgage loans
(the "Mortgage Loans"), formed by Xxxxx Fargo Asset Securities Corporation
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement referred to below). The Trust Estate was created pursuant to
a Pooling and Servicing Agreement dated as of February 27, 2006 (the
"Agreement") among the Depositor, Xxxxx Fargo Bank, N.A., as master servicer
(the "Master Servicer") and U.S. Bank National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereinafter. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to such terms in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the Record Date, in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the Class A Distribution Amount for the Class A-2 Certificates
required to be distributed to Holders of the Class A-2 Certificates on such
Distribution Date, subject to adjustment in certain events as specified in the
Agreement. Distributions in reduction of the Principal Balance of certain
Classes of Class A Certificates may not commence on the first Distribution Date
specified above. Distributions of principal will be allocated among the Classes
of Class A Certificates in accordance with the provisions of the Agreement. The
pass-through rate on the Class A-2 Certificates applicable to each Distribution
Date will be a per annum rate equal to the Net WAC. The amount of interest which
accrues on this Certificate in any month will be subject to reduction with
respect to any Non-Supported Interest Shortfall, any Relief Act Shortfall and
the interest portion of certain Realized Losses allocated to the Class A-2
Certificates, as described in the Agreement.
Distributions on this Certificate will be made by the Paying
Agent by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register, unless such Person is
entitled to receive payments by wire transfer in immediately available funds in
accordance with the Agreement and such Person has notified the Paying Agent
pursuant to the Agreement that such payments are to be made by wire transfer of
immediately available funds. Notwithstanding the above, the final distribution
in reduction of the Principal Balance of this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency of the Paying Agent
specified for that purpose in the notice of final distribution.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate constitutes a "regular interest" in a "real
estate mortgage investment conduit" as those terms are defined in Section
860G(a)(1) and Section 860D, respectively, of the Internal Revenue Code of 1986,
as amended.
Unless this Certificate has been countersigned by an
authorized officer of the Authenticating Agent, by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement or be valid
for any purpose.
IN WITNESS WHEREOF, the Paying Agent has caused this
Certificate to be duly executed as of the date set forth below.
Dated:
Xxxxx Fargo Bank, N.A.,
Paying Agent
By____________________________
Authorized Officer
Countersigned:
Xxxxx Fargo Bank, N.A.,
Authenticating Agent
By ________________________
Authorized Officer
EXHIBIT A-3
[FORM OF FACE OF CLASS A-3 CERTIFICATE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2006-AR3, CLASS A-3
evidencing an interest in a pool of adjustable
interest rate, monthly pay,
fully amortizing, first lien, one- to
four-family residential mortgage loans sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
(Not an interest in or obligation of the Depositor)
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN
INTEREST IN, THE DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES, AND IS NOT INSURED OR GUARANTEED BY THE DEPOSITOR, THE MASTER
SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES, OR BY ANY GOVERNMENT AGENCY OR
PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE MADE IN THE MANNER DESCRIBED IN THE AGREEMENT. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS
THAN THE INITIAL PRINCIPAL BALANCE REPRESENTED HEREBY.
Certificate No. Cut-Off Date: February 1, 2006
CUSIP No.: 94983G AC 2 First Distribution Date: March 27, 2006
ISIN No.: US94983GAC24 Denomination: $
Percentage Interest evidenced Final Scheduled Maturity Date: March 25, 2036
by this Certificate: %
THIS CERTIFIES THAT ___________________________ is the
registered owner of the Percentage Interest evidenced by this Certificate in
monthly distributions to the Holders of the Class A-3 Certificates with respect
to a Trust Estate consisting of a pool of adjustable interest rate, monthly pay,
fully amortizing, first lien, one- to four-family residential mortgage loans
(the "Mortgage Loans"), formed by Xxxxx Fargo Asset Securities Corporation
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement referred to below). The Trust Estate was created pursuant to
a Pooling and Servicing Agreement dated as of February 27, 2006 (the
"Agreement") among the Depositor, Xxxxx Fargo Bank, N.A., as master servicer
(the "Master Servicer") and U.S. Bank National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereinafter. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to such terms in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the Record Date, in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the Class A Distribution Amount for the Class A-3 Certificates
required to be distributed to Holders of the Class A-3 Certificates on such
Distribution Date, subject to adjustment in certain events as specified in the
Agreement. Distributions in reduction of the Principal Balance of certain
Classes of Class A Certificates may not commence on the first Distribution Date
specified above. Distributions of principal will be allocated among the Classes
of Class A Certificates in accordance with the provisions of the Agreement. The
pass-through rate on the Class A-3 Certificates applicable to each Distribution
Date will be a per annum rate equal to the Net WAC. The amount of interest which
accrues on this Certificate in any month will be subject to reduction with
respect to any Non-Supported Interest Shortfall, any Relief Act Shortfall and
the interest portion of certain Realized Losses allocated to the Class A-3
Certificates, as described in the Agreement.
Distributions on this Certificate will be made by the Paying
Agent by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register, unless such Person is
entitled to receive payments by wire transfer in immediately available funds in
accordance with the Agreement and such Person has notified the Paying Agent
pursuant to the Agreement that such payments are to be made by wire transfer of
immediately available funds. Notwithstanding the above, the final distribution
in reduction of the Principal Balance of this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency of the Paying Agent
specified for that purpose in the notice of final distribution.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate constitutes a "regular interest" in a "real
estate mortgage investment conduit" as those terms are defined in Section
860G(a)(1) and Section 860D, respectively, of the Internal Revenue Code of 1986,
as amended.
Unless this Certificate has been countersigned by an
authorized officer of the Authenticating Agent, by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement or be valid
for any purpose.
IN WITNESS WHEREOF, the Paying Agent has caused this
Certificate to be duly executed as of the date set forth below.
Dated:
Xxxxx Fargo Bank, N.A.,
Paying Agent
By____________________________
Authorized Officer
Countersigned:
Xxxxx Fargo Bank, N.A.,
Authenticating Agent
By ________________________
Authorized Officer
EXHIBIT A-4
[FORM OF FACE OF CLASS A-4 CERTIFICATE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2006-AR3, CLASS A-4
evidencing an interest in a pool of adjustable
interest rate, monthly pay,
fully amortizing, first lien, one- to
four-family residential mortgage loans sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
(Not an interest in or obligation of the Depositor)
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN
INTEREST IN, THE DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES, AND IS NOT INSURED OR GUARANTEED BY THE DEPOSITOR, THE MASTER
SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES, OR BY ANY GOVERNMENT AGENCY OR
PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE MADE IN THE MANNER DESCRIBED IN THE AGREEMENT. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS
THAN THE INITIAL PRINCIPAL BALANCE REPRESENTED HEREBY.
Certificate No. Cut-Off Date: February 1, 2006
CUSIP No.: 94983G AD 0 First Distribution Date: March 27, 2006
ISIN No.: US94983GAD07 Denomination: $
Percentage Interest evidenced Final Scheduled Maturity Date: March 25, 2036
by this Certificate: %
THIS CERTIFIES THAT ___________________________ is the
registered owner of the Percentage Interest evidenced by this Certificate in
monthly distributions to the Holders of the Class A-4 Certificates with respect
to a Trust Estate consisting of a pool of adjustable interest rate, monthly pay,
fully amortizing, first lien, one- to four-family residential mortgage loans
(the "Mortgage Loans"), formed by Xxxxx Fargo Asset Securities Corporation
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement referred to below). The Trust Estate was created pursuant to
a Pooling and Servicing Agreement dated as of February 27, 2006 (the
"Agreement") among the Depositor, Xxxxx Fargo Bank, N.A., as master servicer
(the "Master Servicer") and U.S. Bank National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereinafter. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to such terms in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the Record Date, in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the Class A Distribution Amount for the Class A-4 Certificates
required to be distributed to Holders of the Class A-4 Certificates on such
Distribution Date, subject to adjustment in certain events as specified in the
Agreement. Distributions in reduction of the Principal Balance of certain
Classes of Class A Certificates may not commence on the first Distribution Date
specified above. Distributions of principal will be allocated among the Classes
of Class A Certificates in accordance with the provisions of the Agreement. The
pass-through rate on the Class A-4 Certificates applicable to each Distribution
Date will be a per annum rate equal to the Net WAC. The amount of interest which
accrues on this Certificate in any month will be subject to reduction with
respect to any Non-Supported Interest Shortfall, any Relief Act Shortfall and
the interest portion of certain Realized Losses allocated to the Class A-4
Certificates, as described in the Agreement.
Distributions on this Certificate will be made by the Paying
Agent by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register, unless such Person is
entitled to receive payments by wire transfer in immediately available funds in
accordance with the Agreement and such Person has notified the Paying Agent
pursuant to the Agreement that such payments are to be made by wire transfer of
immediately available funds. Notwithstanding the above, the final distribution
in reduction of the Principal Balance of this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency of the Paying Agent
specified for that purpose in the notice of final distribution.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate constitutes a "regular interest" in a "real
estate mortgage investment conduit" as those terms are defined in Section
860G(a)(1) and Section 860D, respectively, of the Internal Revenue Code of 1986,
as amended.
Unless this Certificate has been countersigned by an
authorized officer of the Authenticating Agent, by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement or be valid
for any purpose.
IN WITNESS WHEREOF, the Paying Agent has caused this
Certificate to be duly executed as of the date set forth below.
Dated:
Xxxxx Fargo Bank, N.A.,
Paying Agent
By____________________________
Authorized Officer
Countersigned:
Xxxxx Fargo Bank, N.A.,
Authenticating Agent
By ________________________
Authorized Officer
EXHIBIT A-5
[FORM OF FACE OF CLASS A-5 CERTIFICATE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2006-AR3, CLASS A-5
evidencing an interest in a pool of adjustable
interest rate, monthly pay,
fully amortizing, first lien, one- to
four-family residential mortgage loans sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
(Not an interest in or obligation of the Depositor)
AFTER THE SUBORDINATION DEPLETION DATE, THE PRINCIPAL PORTION
OF REALIZED LOSSES ALLOCATED TO THE CLASS A-1, CLASS A-2 AND CLASS A-4
CERTIFICATES WILL BE BORNE BY THE CLASS A-5 CERTIFICATES AS DESCRIBED IN THE
AGREEMENT (AS DEFINED HEREIN).
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN
INTEREST IN, THE DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES, AND IS NOT INSURED OR GUARANTEED BY THE DEPOSITOR, THE MASTER
SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES, OR BY ANY GOVERNMENT AGENCY OR
PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE MADE IN THE MANNER DESCRIBED IN THE AGREEMENT. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS
THAN THE INITIAL PRINCIPAL BALANCE REPRESENTED HEREBY.
Certificate No. Cut-Off Date: February 1, 2006
CUSIP No.: 94983G AE 8 First Distribution Date: March 27, 2006
ISIN No.: US94983GAE89 Denomination: $
Percentage Interest evidenced Final Scheduled Maturity Date: March 25, 2036
by this Certificate: %
THIS CERTIFIES THAT ___________________________ is the
registered owner of the Percentage Interest evidenced by this Certificate in
monthly distributions to the Holders of the Class A-5 Certificates with respect
to a Trust Estate consisting of a pool of adjustable interest rate, monthly pay,
fully amortizing, first lien, one- to four-family residential mortgage loans
(the "Mortgage Loans"), formed by Xxxxx Fargo Asset Securities Corporation
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement referred to below). The Trust Estate was created pursuant to
a Pooling and Servicing Agreement dated as of February 27, 2006 (the
"Agreement") among the Depositor, Xxxxx Fargo Bank, N.A., as master servicer
(the "Master Servicer") and U.S. Bank National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereinafter. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to such terms in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the Record Date, in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the Class A Distribution Amount for the Class A-5 Certificates
required to be distributed to Holders of the Class A-5 Certificates on such
Distribution Date, subject to adjustment in certain events as specified in the
Agreement. Distributions in reduction of the Principal Balance of certain
Classes of Class A Certificates may not commence on the first Distribution Date
specified above. Distributions of principal will be allocated among the Classes
of Class A Certificates in accordance with the provisions of the Agreement. The
pass-through rate on the Class A-5 Certificates applicable to each Distribution
Date will be a per annum rate equal to the Net WAC. The amount of interest which
accrues on this Certificate in any month will be subject to reduction with
respect to any Non-Supported Interest Shortfall, any Relief Act Shortfall and
the interest portion of certain Realized Losses allocated to the Class A-5
Certificates, as described in the Agreement.
Distributions on this Certificate will be made by the Paying
Agent by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register, unless such Person is
entitled to receive payments by wire transfer in immediately available funds in
accordance with the Agreement and such Person has notified the Paying Agent
pursuant to the Agreement that such payments are to be made by wire transfer of
immediately available funds. Notwithstanding the above, the final distribution
in reduction of the Principal Balance of this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency of the Paying Agent
specified for that purpose in the notice of final distribution.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate constitutes a "regular interest" in a "real
estate mortgage investment conduit" as those terms are defined in Section
860G(a)(1) and Section 860D, respectively, of the Internal Revenue Code of 1986,
as amended.
Unless this Certificate has been countersigned by an
authorized officer of the Authenticating Agent, by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement or be valid
for any purpose.
IN WITNESS WHEREOF, the Paying Agent has caused this
Certificate to be duly executed as of the date set forth below.
Dated:
Xxxxx Fargo Bank, N.A.,
Paying Agent
By____________________________
Authorized Officer
Countersigned:
Xxxxx Fargo Bank, N.A.,
Authenticating Agent
By ________________________
Authorized Officer
EXHIBIT A-R
[FORM OF FACE OF CLASS A-R CERTIFICATE]
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G(a)(2) AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"). A TRANSFEREE OF THIS CERTIFICATE, BY ACCEPTANCE
HEREOF, IS DEEMED TO HAVE ACCEPTED THIS CERTIFICATE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFERABILITY, AS SET FORTH IN SECTION 5.02(d) OF THE
AGREEMENT, AND SHALL BE REQUIRED TO FURNISH AN AFFIDAVIT TO THE TRANSFEROR AND
THE MASTER SERVICER TO THE EFFECT THAT, AMONG OTHER THINGS, IT IS NOT A
DISQUALIFIED ORGANIZATION, AS SUCH TERM IS DEFINED IN CODE SECTION 860E(e)(5),
AN AGENT (INCLUDING A BROKER, NOMINEE OR OTHER MIDDLEMAN) FOR A DISQUALIFIED
ORGANIZATION OR A NON-PERMITTED FOREIGN HOLDER, AS DEFINED IN SECTION 5.02(d) OF
THE AGREEMENT AND TO HAVE AGREED TO SUCH AMENDMENTS TO THE AGREEMENT AS MAY BE
REQUIRED TO FURTHER EFFECTUATE THE RESTRICTIONS ON TRANSFERS TO DISQUALIFIED
ORGANIZATIONS, AGENTS THEREOF OR NON-PERMITTED FOREIGN HOLDERS.
THE HOLDER OF THIS CLASS A-R CERTIFICATE, BY ACCEPTANCE HEREOF, IS DEEMED TO
HAVE AGREED TO THE DESIGNATION OF THE MASTER SERVICER AS ITS AGENT TO ACT AS
"TAX MATTERS PERSON" OF THE REMIC TO PERFORM THE FUNCTIONS OF A "TAX MATTERS
PARTNER" FOR PURPOSES OF SUBCHAPTER C OF CHAPTER 63 OF SUBTITLE F OF THE CODE,
OR, IF SO REQUESTED BY THE MASTER SERVICER, TO ACT AS TAX MATTERS PERSON OF THE
REMIC.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON WHICH IS
AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE CODE OR A GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF
ERISA SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT,
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, A
"PLAN"), OR ANY PERSON ACTING ON BEHALF OF OR INVESTING THE ASSETS OF A PLAN.
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2006-AR3, CLASS A-R
evidencing an interest in a pool of adjustable
interest rate, monthly pay,
fully amortizing, first lien, one- to
four-family residential mortgage loans sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
(Not an interest in or obligation of the Depositor)
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN
INTEREST IN, THE DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES, AND IS NOT INSURED OR GUARANTEED BY THE DEPOSITOR, THE MASTER
SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES, OR BY ANY GOVERNMENT AGENCY OR
PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE MADE IN THE MANNER DESCRIBED IN THE AGREEMENT. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS
THAN THE INITIAL PRINCIPAL BALANCE REPRESENTED HEREBY.
Certificate No. Cut-Off Date: February 1, 2006
CUSIP No.: 94983G AF 5 First Distribution Date: March 27, 2006
ISIN No.: US94983GAF54 Denomination: $
Percentage Interest evidenced Final Scheduled Maturity Date: March 25, 2036
by this Certificate: %
THIS CERTIFIES THAT __________________________ is the
registered owner of the Percentage Interest evidenced by this Certificate in
monthly distributions to the Holder of the Class A-R Certificate with respect to
a Trust Estate consisting of a pool of adjustable interest rate, monthly pay,
fully amortizing, first lien, one- to four-family residential mortgage loans
(the "Mortgage Loans"), formed by Xxxxx Fargo Asset Securities Corporation
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement referred to below). The Trust Estate was created pursuant to
a Pooling and Servicing Agreement dated as of February 27, 2006 (the
"Agreement") among the Depositor, Xxxxx Fargo Bank, N.A., as master servicer
(the "Master Servicer") and U.S. Bank National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereinafter. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to such terms in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the Record Date, in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the Class A Distribution Amount for the Class A-R Certificate
required to be distributed to the Holder of the Class A-R Certificate on such
Distribution Date, subject to adjustment in certain events as specified in the
Agreement. Distributions in reduction of the Principal Balance of certain
Classes of Class A Certificates may not commence on the first Distribution Date
specified above. Distributions of principal will be allocated among the Classes
of Class A Certificates in accordance with the provisions of the Agreement. The
pass-through rate on the Class A-R Certificate applicable to each Distribution
Date will be a per annum rate equal to the Net WAC. The amount of interest which
accrues on this Certificate in any month will be subject to reduction with
respect to any Non-Supported Interest Shortfall, any Relief Act Shortfall and
the interest portion of certain Realized Losses allocated to the Class A-R
Certificate, as described in the Agreement.
Distributions on this Certificate will be made by the Paying
Agent by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register. Notwithstanding the
above, the final distribution on this Certificate will be made after due notice
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency of the Paying Agent specified for that
purpose in the notice of final distribution.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless this Certificate has been countersigned by an
authorized officer of the Authenticating Agent, by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement or be valid
for any purpose.
IN WITNESS WHEREOF, the Paying Agent has caused this
Certificate to be duly executed as of the date set forth below.
Dated:
Xxxxx Fargo Bank, N.A.,
Paying Agent
By____________________________
Authorized Officer
Countersigned:
Xxxxx Fargo Bank, N.A.,
Authenticating Agent
By ________________________
Authorized Officer
EXHIBIT B-1
[FORM OF FACE OF CLASS B-1 CERTIFICATE]
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A CERTIFICATES
AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2006-AR3, CLASS B-1
evidencing an interest in a pool of adjustable interest rate, monthly pay, fully
amortizing, first lien, one- to four-family residential mortgage loans sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
(Not an interest in or obligation of the Depositor)
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN
INTEREST IN, THE DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES, AND IS NOT INSURED OR GUARANTEED BY THE DEPOSITOR, THE MASTER
SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES, OR BY ANY GOVERNMENT AGENCY OR
PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE MADE IN THE MANNER DESCRIBED IN THE AGREEMENT. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS
THAN THE INITIAL PRINCIPAL BALANCE REPRESENTED HEREBY.
Certificate No. Cut-Off Date: February 1, 2006
CUSIP No.: 94983G AG 3 First Distribution Date: March 27, 2006
ISIN No.: US94983GAG38 Denomination: $
Percentage Interest evidenced Final Scheduled Maturity Date: March 25, 2036
by this Certificate: %
THIS CERTIFIES THAT ____________________________ is the
registered owner of the Percentage Interest evidenced by this Certificate in
monthly distributions to the Holders of the Class B-1 Certificates with respect
to a Trust Estate consisting of a pool of adjustable interest rate, monthly pay,
fully amortizing, first lien, one- to four-family residential mortgage loans
(the "Mortgage Loans") formed by Xxxxx Fargo Asset Securities Corporation
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement referred to below). The Trust Estate was created pursuant to
a Pooling and Servicing Agreement dated as of February 27, 2006 (the
"Agreement") among the Depositor, Xxxxx Fargo Bank, N.A., as master servicer
(the "Master Servicer") and U.S. Bank National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereinafter. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to such terms in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the Record Date, in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and, subject to the prior rights of the Class A Certificates as
specified in the Agreement, any Class B-1 Distribution Amount required to be
distributed to Holders of the Class B-1 Certificates on such Distribution Date,
subject to adjustment, in certain events, as specified in the Agreement. The
pass-through rate on the Class B-1 Certificates applicable to each Distribution
Date will be a per annum rate equal to the Net WAC. The amount of interest which
accrues on this Certificate in any month will be subject to reduction with
respect to any Non-Supported Interest Shortfall and any Relief Act Shortfall
allocated to the Class B-1 Certificates, as described in the Agreement.
Distributions on this Certificate will be made by the Paying
Agent by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register, unless such Person is
entitled to receive payments by wire transfer in immediately available funds in
accordance with the Agreement and such Person has notified the Paying Agent
pursuant to the Agreement that such payments are to be made by wire transfer of
immediately available funds. Notwithstanding the above, the final distribution
in reduction of the Principal Balance of this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency of the Paying Agent
specified for that purpose in the notice of final distribution.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate constitutes a "regular interest" in a "real
estate mortgage investment conduit" as those terms are defined in Section
860G(a)(1) and Section 860D, respectively, of the Internal Revenue Code of 1986,
as amended.
Unless this Certificate has been countersigned by an
authorized officer of the Authenticating Agent, by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement or be valid
for any purpose.
IN WITNESS WHEREOF, the Paying Agent has caused this
Certificate to be duly executed as of the date set forth below.
Dated:
Xxxxx Fargo Bank, N.A.,
Paying Agent
By____________________________
Authorized Officer
Countersigned:
Xxxxx Fargo Bank, N.A.,
Authenticating Agent
By ________________________
Authorized Officer
EXHIBIT B-2
[FORM OF FACE OF CLASS B-2 CERTIFICATE]
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A CERTIFICATES
AND THE CLASS B-1 CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2006-AR3, CLASS B-2
evidencing an interest in a pool of adjustable interest rate, monthly pay, fully
amortizing, first lien, one- to four-family residential mortgage loans sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
(Not an interest in or obligation of the Depositor)
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN
INTEREST IN, THE DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES, AND IS NOT INSURED OR GUARANTEED BY THE DEPOSITOR, THE MASTER
SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES, OR BY ANY GOVERNMENT AGENCY OR
PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE MADE IN THE MANNER DESCRIBED IN THE AGREEMENT. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS
THAN THE INITIAL PRINCIPAL BALANCE REPRESENTED HEREBY.
Certificate No. Cut-Off Date: February 1, 2006
CUSIP No.: 94983G AH 1 First Distribution Date: March 27, 2006
ISIN No.: US94983GAH11 Denomination: $
Percentage Interest evidenced Final Scheduled Maturity Date: March 25, 2036
by this Certificate: %
THIS CERTIFIES THAT ____________________________ is the
registered owner of the Percentage Interest evidenced by this Certificate in
monthly distributions to the Holders of the Class B-2 Certificates with respect
to a Trust Estate consisting of a pool of adjustable interest rate, monthly pay,
fully amortizing, first lien, one- to four-family residential mortgage loans
(the "Mortgage Loans") formed by Xxxxx Fargo Asset Securities Corporation
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement referred to below). The Trust Estate was created pursuant to
a Pooling and Servicing Agreement dated as of February 27, 2006 (the
"Agreement") among the Depositor, Xxxxx Fargo Bank, N.A., as master servicer
(the "Master Servicer") and U.S. Bank National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereinafter. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to such terms in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the Record Date, in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and, subject to the prior rights of the Class A Certificates and
each Class of Class B Certificates bearing a lower numerical designation as
specified in the Agreement, any Class B-2 Distribution Amount required to be
distributed to Holders of the Class B-2 Certificates on such Distribution Date,
subject to adjustment, in certain events, as specified in the Agreement. The
pass-through rate on the Class B-2 Certificates applicable to each Distribution
Date will be a per annum rate equal to the Net WAC. The amount of interest which
accrues on this Certificate in any month will be subject to reduction with
respect to any Non-Supported Interest Shortfall and any Relief Act Shortfall
allocated to the Class B-2 Certificates, as described in the Agreement.
Distributions on this Certificate will be made by the Paying
Agent by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register, unless such Person is
entitled to receive payments by wire transfer in immediately available funds in
accordance with the Agreement and such Person has notified the Paying Agent
pursuant to the Agreement that such payments are to be made by wire transfer of
immediately available funds. Notwithstanding the above, the final distribution
in reduction of the Principal Balance of this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency of the Paying Agent
specified for that purpose in the notice of final distribution.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate constitutes a "regular interest" in a "real
estate mortgage investment conduit" as those terms are defined in Section
860G(a)(1) and Section 860D, respectively, of the Internal Revenue Code of 1986,
as amended.
Unless this Certificate has been countersigned by an
authorized officer of the Authenticating Agent, by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement or be valid
for any purpose.
IN WITNESS WHEREOF, the Paying Agent has caused this
Certificate to be duly executed as of the date set forth below.
Dated:
Xxxxx Fargo Bank, N.A.,
Paying Agent
By____________________________
Authorized Officer
Countersigned:
Xxxxx Fargo Bank, N.A.,
Authenticating Agent
By ________________________
Authorized Officer
EXHIBIT B-3
[FORM OF FACE OF CLASS B-3 CERTIFICATE]
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS B-1 CERTIFICATES AND THE CLASS B-2 CERTIFICATES AS
DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2006-AR3, CLASS B-3
evidencing an interest in a pool of adjustable interest rate, monthly pay, fully
amortizing, first lien, one- to four-family residential mortgage loans sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
(Not an interest in or obligation of the Depositor)
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN
INTEREST IN, THE DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES, AND IS NOT INSURED OR GUARANTEED BY THE DEPOSITOR, THE MASTER
SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES, OR BY ANY GOVERNMENT AGENCY OR
PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE MADE IN THE MANNER DESCRIBED IN THE AGREEMENT. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS
THAN THE INITIAL PRINCIPAL BALANCE REPRESENTED HEREBY.
Certificate No. Cut-Off Date: February 1, 2006
CUSIP No.: 94983G AJ 7 First Distribution Date: March 27, 2006
ISIN No.: US94983GAJ76 Denomination: $
Percentage Interest evidenced Final Scheduled Maturity Date: March 25, 2036
by this Certificate: %
THIS CERTIFIES THAT _______________________________ is the
registered owner of the Percentage Interest evidenced by this Certificate in
monthly distributions to the Holders of the Class B-3 Certificates with respect
to a Trust Estate consisting of a pool of adjustable interest rate, monthly pay,
fully amortizing, first lien, one- to four-family residential mortgage loans
(the "Mortgage Loans") formed by Xxxxx Fargo Asset Securities Corporation
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement referred to below). The Trust Estate was created pursuant to
a Pooling and Servicing Agreement dated as of February 27, 2006 (the
"Agreement") among the Depositor, Xxxxx Fargo Bank, N.A., as master servicer
(the "Master Servicer") and U.S. Bank National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereinafter. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to such terms in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the Record Date, in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and, subject to the prior rights of the Class A Certificates and
each Class of Class B Certificates bearing a lower numerical designation as
specified in the Agreement, any Class B-3 Distribution Amount required to be
distributed to Holders of the Class B-3 Certificates on such Distribution Date,
subject to adjustment, in certain events, as specified in the Agreement. The
pass-through rate on the Class B-3 Certificates applicable to each Distribution
Date will be a per annum rate equal to the Net WAC. The amount of interest which
accrues on this Certificate in any month will be subject to reduction with
respect to any Non-Supported Interest Shortfall and any Relief Act Shortfall
allocated to the Class B-3 Certificates, as described in the Agreement.
Distributions on this Certificate will be made by the Paying
Agent by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register, unless such Person is
entitled to receive payments by wire transfer in immediately available funds in
accordance with the Agreement and such Person has notified the Paying Agent
pursuant to the Agreement that such payments are to be made by wire transfer of
immediately available funds. Notwithstanding the above, the final distribution
in reduction of the Principal Balance of this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency of the Paying Agent
specified for that purpose in the notice of final distribution.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate constitutes a "regular interest" in a "real
estate mortgage investment conduit" as those terms are defined in Section
860G(a)(1) and Section 860D, respectively, of the Internal Revenue Code of 1986,
as amended.
Unless this Certificate has been countersigned by an
authorized officer of the Authenticating Agent, by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement or be valid
for any purpose.
IN WITNESS WHEREOF, the Paying Agent has caused this
Certificate to be duly executed as of the date set forth below.
Dated:
Xxxxx Fargo Bank, N.A.,
Paying Agent
By____________________________
Authorized Officer
Countersigned:
Xxxxx Fargo Bank, N.A.,
Authenticating Agent
By ________________________
Authorized Officer
EXHIBIT B-4
[FORM OF FACE OF CLASS B-4 CERTIFICATE]
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS B-1 CERTIFICATES, THE CLASS B-2 CERTIFICATES AND THE
CLASS B-3 CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR
IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.
EXCEPT AS PROVIDED IN SECTION 5.02(C) OF THE AGREEMENT REFERRED TO HEREIN, THIS
CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT HAS NOT
DELIVERED A REPRESENTATION LETTER STATING EITHER (A) THAT THE TRANSFEREE IS NOT
AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL,
STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON
BEHALF OF OR INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO CERTAIN CONDITIONS
SET FORTH IN THE AGREEMENT, THAT THE SOURCE OF FUNDS USED TO PURCHASE THIS
CERTIFICATE IS AN "INSURANCE COMPANY GENERAL ACCOUNT."
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2006-AR3, CLASS B-4
evidencing an interest in a pool of adjustable interest rate, monthly pay, fully
amortizing, first lien, one- to four-family residential mortgage loans sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
(Not an interest in or obligation of the Depositor)
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN
INTEREST IN, THE DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES, AND IS NOT INSURED OR GUARANTEED BY THE DEPOSITOR, THE MASTER
SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES, OR BY ANY GOVERNMENT AGENCY OR
PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE MADE IN THE MANNER DESCRIBED IN THE AGREEMENT. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS
THAN THE INITIAL PRINCIPAL BALANCE REPRESENTED HEREBY.
Certificate No. Cut-Off Date: February 1, 2006
CUSIP No.: 94983G AK 4 First Distribution Date: March 27, 2006
ISIN No.: US94983GAK40 Denomination: $
Percentage Interest evidenced Final Scheduled Maturity Date: March 25, 2036
by this Certificate: %
THIS CERTIFIES THAT ____________________________ is the
registered owner of the Percentage Interest evidenced by this Certificate in
monthly distributions to the Holders of the Class B-4 Certificates with respect
to a Trust Estate consisting of a pool of adjustable interest rate, monthly pay,
fully amortizing, first lien, one- to four-family residential mortgage loans
(the "Mortgage Loans") formed by Xxxxx Fargo Asset Securities Corporation
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement referred to below). The Trust Estate was created pursuant to
a Pooling and Servicing Agreement dated as of February 27, 2006 (the
"Agreement") among the Depositor, Xxxxx Fargo Bank, N.A., as master servicer
(the "Master Servicer") and U.S. Bank National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereinafter. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to such terms in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the Record Date, in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and, subject to the prior rights of the Class A Certificates and
each Class of Class B Certificates bearing a lower numerical designation as
specified in the Agreement, any Class B-4 Distribution Amount required to be
distributed to Holders of the Class B-4 Certificates on such Distribution Date,
subject to adjustment, in certain events, as specified in the Agreement. The
pass-through rate on the Class B-4 Certificates applicable to each Distribution
Date will be a per annum rate equal to the Net WAC. The amount of interest which
accrues on this Certificate in any month will be subject to reduction with
respect to any Non-Supported Interest Shortfall and any Relief Act Shortfall
allocated to the Class B-4 Certificates, as described in the Agreement.
Distributions on this Certificate will be made by the Paying
Agent by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register, unless such Person is
entitled to receive payments by wire transfer in immediately available funds in
accordance with the Agreement and such Person has notified the Paying Agent
pursuant to the Agreement that such payments are to be made by wire transfer of
immediately available funds. Notwithstanding the above, the final distribution
in reduction of the Principal Balance of this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency of the Paying Agent
specified for that purpose in the notice of final distribution.
No transfer of a Class B-4 Certificate will be made unless
such transfer is exempt from the registration requirements of the Securities Act
of 1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. In the event that such a transfer is desired
to be made by the Holder hereof, (i) the transferee will be required to execute
an investment letter in the form described in the Agreement and (ii) if such
transfer is to be made within three years from the later of (a) the date of
initial issuance of the Certificates or (b) the last date on which the Depositor
or any affiliate thereof was a Holder of the Certificates proposed to be
transferred, and unless such transfer is made in reliance on Rule 144A of the
Securities Act of 1933, as amended, the Master Servicer or the Depositor may
require the Holder to deliver an opinion of counsel acceptable to and in form
and substance satisfactory to the Master Servicer and the Depositor that such
transfer is exempt (describing the applicable exemption and the basis therefor)
from or is being made pursuant to the registration requirements of the
Securities Act of 1933, as amended, and of any applicable statute of any state.
The Holder hereof desiring to effect such transfer shall, and does hereby agree
to, indemnify the Trustee, the Depositor, the Master Servicer, and any Paying
Agent against any liability that may result if the transfer is not so exempt or
is not made in accordance with such Federal and state laws. In connection with
any such transfer, the Master Servicer will also require (i) a representation
letter, in the form as described in the Agreement, stating either (a) that the
transferee is not a Plan and is not acting on behalf of a Plan or using the
assets of a Plan to effect such purchase or (b) subject to certain conditions
described in the Agreement, that the source of funds used to purchase this
Certificate is an "insurance company general account," or (ii) if such
transferee is a Plan, (a) an opinion of counsel acceptable to and in form and
substance satisfactory to the Master Servicer and the Depositor with respect to
certain matters and (b) such other documentation as the Depositor or the Master
Servicer may require, as described in the Agreement.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate constitutes a "regular interest" in a "real
estate mortgage investment conduit" as those terms are defined in Section
860G(a)(1) and Section 860D, respectively, of the Internal Revenue Code of 1986,
as amended.
Unless this Certificate has been countersigned by an
authorized officer of the Authenticating Agent, by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement or be valid
for any purpose.
IN WITNESS WHEREOF, the Paying Agent has caused this
Certificate to be duly executed as of the date set forth below.
Dated:
Xxxxx Fargo Bank, N.A.,
Paying Agent
By____________________________
Authorized Officer
Countersigned:
Xxxxx Fargo Bank, N.A.,
Authenticating Agent
By ________________________
Authorized Officer
EXHIBIT B-5
[FORM OF FACE OF CLASS B-5 CERTIFICATE]
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS B-1 CERTIFICATES, THE CLASS B-2 CERTIFICATES, THE CLASS
B-3 CERTIFICATES AND THE CLASS B-4 CERTIFICATES AS DESCRIBED IN THE AGREEMENT
REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR
IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.
EXCEPT AS PROVIDED IN SECTION 5.02(C) OF THE AGREEMENT REFERRED TO HEREIN, THIS
CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT HAS NOT
DELIVERED A REPRESENTATION LETTER STATING EITHER (A) THAT THE TRANSFEREE IS NOT
AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL,
STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON
BEHALF OF OR INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO CERTAIN CONDITIONS
SET FORTH IN THE AGREEMENT, THAT THE SOURCE OF FUNDS USED TO PURCHASE THIS
CERTIFICATE IS AN "INSURANCE COMPANY GENERAL ACCOUNT."
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2006-AR3, CLASS B-5
evidencing an interest in a pool of adjustable interest rate, monthly pay, fully
amortizing, first lien, one- to four-family residential mortgage loans sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
(Not an interest in or obligation of the Depositor)
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN
INTEREST IN, THE DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES, AND IS NOT INSURED OR GUARANTEED BY THE DEPOSITOR, THE MASTER
SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES, OR BY ANY GOVERNMENT AGENCY OR
PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE MADE IN THE MANNER DESCRIBED IN THE AGREEMENT. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS
THAN THE INITIAL PRINCIPAL BALANCE REPRESENTED HEREBY.
Certificate No. Cut-Off Date: February 1, 2006
CUSIP No.: 94983G AL 2 First Distribution Date: March 27, 2006
ISIN No.: US94983GAL23 Denomination: $
Percentage Interest evidenced Final Scheduled Maturity Date: March 25, 2036
by this Certificate: %
THIS CERTIFIES THAT ____________________________ is the
registered owner of the Percentage Interest evidenced by this Certificate in
monthly distributions to the Holders of the Class B-5 Certificates with respect
to a Trust Estate consisting of a pool of adjustable interest rate, monthly pay,
fully amortizing, first lien, one- to four-family residential mortgage loans
(the "Mortgage Loans") formed by Xxxxx Fargo Asset Securities Corporation
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement referred to below). The Trust Estate was created pursuant to
a Pooling and Servicing Agreement dated as of February 27, 2006 (the
"Agreement") among the Depositor, Xxxxx Fargo Bank, N.A., as master servicer
(the "Master Servicer") and U.S. Bank National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereinafter. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to such terms in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the Record Date, in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and, subject to the prior rights of the Class A Certificates and
each Class of Class B Certificates bearing a lower numerical designation as
specified in the Agreement, any Class B-5 Distribution Amount required to be
distributed to Holders of the Class B-5 Certificates on such Distribution Date,
subject to adjustment, in certain events, as specified in the Agreement. The
pass-through rate on the Class B-5 Certificates applicable to each Distribution
Date will be a per annum rate equal to the Net WAC. The amount of interest which
accrues on this Certificate in any month will be subject to reduction with
respect to any Non-Supported Interest Shortfall and any Relief Act Shortfall
allocated to the Class B-5 Certificates, as described in the Agreement.
Distributions on this Certificate will be made by the Paying
Agent by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register, unless such Person is
entitled to receive payments by wire transfer in immediately available funds in
accordance with the Agreement and such Person has notified the Paying Agent
pursuant to the Agreement that such payments are to be made by wire transfer of
immediately available funds. Notwithstanding the above, the final distribution
in reduction of the Principal Balance of this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency of the Paying Agent
specified for that purpose in the notice of final distribution.
No transfer of a Class B-5 Certificate will be made unless
such transfer is exempt from the registration requirements of the Securities Act
of 1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. In the event that such a transfer is desired
to be made by the Holder hereof, (i) the transferee will be required to execute
an investment letter in the form described in the Agreement and (ii) if such
transfer is to be made within three years from the later of (a) the date of
initial issuance of the Certificates or (b) the last date on which the Depositor
or any affiliate thereof was a Holder of the Certificates proposed to be
transferred, and unless such transfer is made in reliance on Rule 144A of the
Securities Act of 1933, as amended, the Master Servicer or the Depositor may
require the Holder to deliver an opinion of counsel acceptable to and in form
and substance satisfactory to the Master Servicer and the Depositor that such
transfer is exempt (describing the applicable exemption and the basis therefor)
from or is being made pursuant to the registration requirements of the
Securities Act of 1933, as amended, and of any applicable statute of any state.
The Holder hereof desiring to effect such transfer shall, and does hereby agree
to, indemnify the Trustee, the Depositor, the Master Servicer, and any Paying
Agent against any liability that may result if the transfer is not so exempt or
is not made in accordance with such Federal and state laws. In connection with
any such transfer, the Master Servicer will also require (i) a representation
letter, in the form as described in the Agreement, stating either (a) that the
transferee is not a Plan and is not acting on behalf of a Plan or using the
assets of a Plan to effect such purchase or (b) subject to certain conditions
described in the Agreement, that the source of funds used to purchase this
Certificate is an "insurance company general account," or (ii) if such
transferee is a Plan, (a) an opinion of counsel acceptable to and in form and
substance satisfactory to the Master Servicer and the Depositor with respect to
certain matters and (b) such other documentation as the Depositor or the Master
Servicer may require, as described in the Agreement.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate constitutes a "regular interest" in a "real
estate mortgage investment conduit" as those terms are defined in Section
860G(a)(1) and Section 860D, respectively, of the Internal Revenue Code of 1986,
as amended.
Unless this Certificate has been countersigned by an
authorized officer of the Authenticating Agent, by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement or be valid
for any purpose.
IN WITNESS WHEREOF, the Paying Agent has caused this
Certificate to be duly executed as of the date set forth below.
Dated:
Xxxxx Fargo Bank, N.A.,
Paying Agent
By____________________________
Authorized Officer
Countersigned:
Xxxxx Fargo Bank, N.A.,
Authenticating Agent
By ________________________
Authorized Officer
EXHIBIT B-6
[FORM OF FACE OF CLASS B-6 CERTIFICATE]
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS B-1 CERTIFICATES, THE CLASS B-2 CERTIFICATES, THE CLASS
B-3 CERTIFICATES, THE CLASS B-4 CERTIFICATES AND THE CLASS B-5 CERTIFICATES AS
DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR
IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.
EXCEPT AS PROVIDED IN SECTION 5.02(C) OF THE AGREEMENT REFERRED TO HEREIN, THIS
CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT HAS NOT
DELIVERED A REPRESENTATION LETTER STATING EITHER (A) THAT THE TRANSFEREE IS NOT
AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A
GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL,
STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON
BEHALF OF OR INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO CERTAIN CONDITIONS
SET FORTH IN THE AGREEMENT, THAT THE SOURCE OF FUNDS USED TO PURCHASE THIS
CERTIFICATE IS AN "INSURANCE COMPANY GENERAL ACCOUNT."
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2006-AR3, CLASS B-6
evidencing an interest in a pool of adjustable interest rate, monthly pay, fully
amortizing, first lien, one- to four-family residential mortgage loans sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
(Not an interest in or obligation of the Depositor)
THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN
INTEREST IN, THE DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES, AND IS NOT INSURED OR GUARANTEED BY THE DEPOSITOR, THE MASTER
SERVICER, THE TRUSTEE OR ANY OF THEIR AFFILIATES, OR BY ANY GOVERNMENT AGENCY OR
PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE MADE IN THE MANNER DESCRIBED IN THE AGREEMENT. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE AT ANY TIME MAY BE LESS
THAN THE INITIAL PRINCIPAL BALANCE REPRESENTED HEREBY.
Certificate No. Cut-Off Date: February 1, 2006
CUSIP No.: 94983G AM 0 First Distribution Date: March 27, 2006
ISIN No.: US94983GAM06 Denomination: $
Percentage Interest evidenced Final Scheduled Maturity Date: March 25, 2036
by this Certificate: %
THIS CERTIFIES THAT ____________________________ is the
registered owner of the Percentage Interest evidenced by this Certificate in
monthly distributions to the Holders of the Class B-6 Certificates with respect
to a Trust Estate consisting of a pool of adjustable interest rate, monthly pay,
fully amortizing, first lien, one- to four-family residential mortgage loans
(the "Mortgage Loans") formed by Xxxxx Fargo Asset Securities Corporation
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement referred to below). The Trust Estate was created pursuant to
a Pooling and Servicing Agreement dated as of February 27, 2006 (the
"Agreement") among the Depositor, Xxxxx Fargo Bank, N.A., as master servicer
(the "Master Servicer") and U.S. Bank National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereinafter. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to such terms in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the Record Date, in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and, subject to the prior rights of the Class A Certificates and
each Class of Class B Certificates bearing a lower numerical designation as
specified in the Agreement, any Class B-6 Distribution Amount required to be
distributed to Holders of the Class B-6 Certificates on such Distribution Date,
subject to adjustment, in certain events, as specified in the Agreement. The
pass-through rate on the Class B-6 Certificates applicable to each Distribution
Date will be a per annum rate equal to the Net WAC. The amount of interest which
accrues on this Certificate in any month will be subject to reduction with
respect to any Non-Supported Interest Shortfall and any Relief Act Shortfall
allocated to the Class B-6 Certificates, as described in the Agreement.
Distributions on this Certificate will be made by the Paying
Agent by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register, unless such Person is
entitled to receive payments by wire transfer in immediately available funds in
accordance with the Agreement and such Person has notified the Paying Agent
pursuant to the Agreement that such payments are to be made by wire transfer of
immediately available funds. Notwithstanding the above, the final distribution
in reduction of the Principal Balance of this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency of the Paying Agent
specified for that purpose in the notice of final distribution.
No transfer of a Class B-6 Certificate will be made unless
such transfer is exempt from the registration requirements of the Securities Act
of 1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. In the event that such a transfer is desired
to be made by the Holder hereof, (i) the transferee will be required to execute
an investment letter in the form described in the Agreement and (ii) if such
transfer is to be made within three years from the later of (a) the date of
initial issuance of the Certificates or (b) the last date on which the Depositor
or any affiliate thereof was a Holder of the Certificates proposed to be
transferred, and unless such transfer is made in reliance on Rule 144A of the
Securities Act of 1933, as amended, the Master Servicer or the Depositor may
require the Holder to deliver an opinion of counsel acceptable to and in form
and substance satisfactory to the Master Servicer and the Depositor that such
transfer is exempt (describing the applicable exemption and the basis therefor)
from or is being made pursuant to the registration requirements of the
Securities Act of 1933, as amended, and of any applicable statute of any state.
The Holder hereof desiring to effect such transfer shall, and does hereby agree
to, indemnify the Trustee, the Depositor, the Master Servicer, and any Paying
Agent against any liability that may result if the transfer is not so exempt or
is not made in accordance with such Federal and state laws. In connection with
any such transfer, the Master Servicer will also require (i) a representation
letter, in the form as described in the Agreement, stating either (a) that the
transferee is not a Plan and is not acting on behalf of a Plan or using the
assets of a Plan to effect such purchase or (b) subject to certain conditions
described in the Agreement, that the source of funds used to purchase this
Certificate is an "insurance company general account," or (ii) if such
transferee is a Plan, (a) an opinion of counsel acceptable to and in form and
substance satisfactory to the Master Servicer and the Depositor with respect to
certain matters and (b) such other documentation as the Depositor or the Master
Servicer may require, as described in the Agreement.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate constitutes a "regular interest" in a "real
estate mortgage investment conduit" as those terms are defined in Section
860G(a)(1) and Section 860D, respectively, of the Internal Revenue Code of 1986,
as amended.
Unless this Certificate has been countersigned by an
authorized officer of the Authenticating Agent, by manual signature, this
Certificate shall not be entitled to any benefit under the Agreement or be valid
for any purpose.
IN WITNESS WHEREOF, the Paying Agent has caused this
Certificate to be duly executed as of the date set forth below.
Dated:
Xxxxx Fargo Bank, N.A.,
Paying Agent
By____________________________
Authorized Officer
Countersigned:
Xxxxx Fargo Bank, N.A.,
Authenticating Agent
By ________________________
Authorized Officer
EXHIBIT C
[Form of Reverse of Series 2006-AR3 Certificates]
XXXXX FARGO ASSET SECURITIES CORPORATION
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2006-AR3
This Certificate is one of a duly authorized issue of
Certificates issued in several Classes designated as Mortgage Pass-Through
Certificates of the Series specified hereon (herein collectively called the
"Certificates").
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. In the event funds are
advanced with respect to any Mortgage Loan by a Servicer, the Master Servicer or
the Trustee, such advances are reimbursable to such Servicer, the Master
Servicer or the Trustee to the extent provided in the Agreement, from related
recoveries on such Mortgage Loan or from other cash that would have been
distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Certificate
Account created for the benefit of Certificateholders may be made by the Master
Servicer from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement to a Servicer, the
Master Servicer or the Trustee, as applicable, of advances made by such
Servicer, the Master Servicer or the Trustee.
The Agreement permits, with certain exceptions therein
provided, the amendment of the Agreement and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66 2/3% of the Voting Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the office or agency maintained by the Certificate Registrar,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Certificate
Registrar, duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
Denominations evidencing the same Class and aggregate Percentage Interest will
be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in Classes and Denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized Denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Certificate Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Master Servicer, the Trustee, the Paying
Agent and the Certificate Registrar, and any agent of the Depositor, the Master
Servicer, the Trustee, the Paying Agent or the Certificate Registrar, may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Master Servicer, the Trustee, the
Certificate Registrar nor any such agent shall be affected by notice to the
contrary.
The obligations created by the Agreement in respect of the
Certificates and the Trust Estate created thereby shall terminate upon the last
action required to be taken by the Paying Agent on the Final Distribution Date
pursuant to the Agreement following the earlier of (i) the payment or other
liquidation (or advance with respect thereto) of the last Mortgage Loan subject
thereto or the disposition of all property acquired upon foreclosure or deed in
lieu of foreclosure of any Mortgage Loan, and (ii) the purchase by the Depositor
from the Trust Estate of all remaining Mortgage Loans and all property acquired
in respect of such Mortgage Loans; provided, however, that the Trust Estate will
in no event continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late ambassador of
the United States to the Court of St. Xxxxx, living on the date of the
Agreement. The Agreement permits, but does not require, the Depositor to
purchase all remaining Mortgage Loans and all property acquired in respect of
any Mortgage Loan at a price determined as provided in the Agreement. The
exercise of such option will effect early retirement of the Certificates, the
Depositor's right to exercise such option being subject to the Pool Scheduled
Principal Balance of the Mortgage Loans as of the Distribution Date upon which
the proceeds of such repurchase are distributed being less than ten percent of
the Cut-Off Date Aggregate Principal Balance.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the beneficial interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorizes the transfer of registration of such interest
to assignee on the Certificate Register of the Trust Estate.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like Denomination or Percentage Interest and Class, to the
above named assignee and deliver such Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
Social Security or other Identifying Number of Assignee:
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, if the assignee is eligible to
receive distributions in immediately available funds, by wire transfer or
otherwise, in immediately available funds to ___________________________________
______________________________ for the account of ______________________________
account number _____________, or, if mailed by check, to ______________________.
Applicable statements should be mailed to ______________________________________
_________________________________.
This information is provided by ______________________, the
assignee named above, or ___________________________________, as its agent.
EXHIBIT D
RESERVED
EXHIBIT E
CUSTODIAL AGREEMENT
-------------------
THIS CUSTODIAL AGREEMENT (as amended and supplemented from
time to time, the "Agreement"), dated as of February 27, 2006, by and among U.S.
BANK NATIONAL ASSOCIATION, not individually, but solely as Trustee (including
its successors under the Pooling and Servicing Agreement defined below, the
"Trustee"), XXXXX FARGO ASSET SECURITIES CORPORATION (together with any
successor in interest, the "Depositor"), XXXXX FARGO BANK, N.A. (together with
any successor in interest or successor under the Pooling and Servicing Agreement
referred to below, the "Master Servicer") and XXXXX FARGO BANK, N.A. (together
with any successor in interest or any successor appointed hereunder, the
"Custodian").
W I T N E S S E T H T H A T
- - - - - - - - - - - - - -
WHEREAS, the Depositor, the Master Servicer, and the Trustee,
have entered into a Pooling and Servicing Agreement dated as of February 27,
2006 relating to the issuance of Mortgage Pass-Through Certificates, Series
2006-AR3 (as amended and supplemented from time to time, the "Pooling and
Servicing Agreement"); and
WHEREAS, the Custodian has agreed to act as agent for the
Trustee for the purposes of receiving and holding certain documents and other
instruments delivered by the Depositor under the Pooling and Servicing
Agreement, all upon the terms and conditions and subject to the limitations
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements hereinafter set forth, the Trustee, the
Depositor, the Master Servicer and the Custodian hereby agree as follows:
ARTICLE I
Definitions
Capitalized terms used in this Agreement and not defined
herein shall have the meanings assigned in the Pooling and Servicing Agreement,
unless otherwise required by the context herein.
ARTICLE II
Custody of Mortgage Documents
Section 2.1. Custodian to Act as Agent; Acceptance of
Custodial Files. Subject to Section 2.3 hereof, the Custodian, as the duly
appointed agent of the Trustee for these purposes, declares that it holds and
will hold the documents delivered to it pursuant to Section 2.01 of the Pooling
and Servicing Agreement and any other documents constituting part of the Owner
Mortgage Loan File or Retained Mortgage Loan File received on or subsequent to
the date hereof (the "Custodial Files") as agent for the Trustee, in trust, for
the use and benefit of all present and future Certificateholders. The Depositor
shall give written notice to the Custodian within 10 business days of the
occurrence of a Document Transfer Event.
Section 2.2. Recordation of Assignments. Unless an assignment
of a Mortgage is not required to be recorded in accordance with Section 2.01 of
the Pooling and Servicing Agreement, if any Custodial File includes one or more
assignments to the Trustee of Mortgage Notes that have not been recorded, each
such assignment shall be delivered by the Custodian to the Depositor for the
purpose of recording it in the appropriate public office for real property
records, and the Depositor, at no expense to the Custodian, shall promptly cause
to be recorded in the appropriate public office for real property records each
such assignment and, upon receipt thereof from such public office, shall return
each such assignment to the Custodian.
Section 2.3. Review of Custodial Files. The Custodian agrees,
for the benefit of Certificateholders, to review, in accordance with the
provisions of Section 2.02 of the Pooling and Servicing Agreement, each
Custodial File and to provide the initial and final certifications in the forms
of Exhibits N and O to the Pooling and Servicing Agreement in accordance with
the provisions thereof. If in performing the review required by this Section 2.3
the Custodian finds any document or documents constituting a part of a Custodial
File to be missing or defective, the Custodian shall follow the procedures
specified in the Pooling and Servicing Agreement.
Section 2.4. Notification of Breaches of Representations and
Warranties. Upon discovery by the Custodian of a breach of any representation or
warranty made by the Depositor or the Master Servicer as set forth in the
Pooling and Servicing Agreement, the Custodian shall follow the procedures
specified in the Pooling and Servicing Agreement.
Section 2.5. Custodian to Cooperate; Release of Custodial
Files. Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Master Servicer or applicable Servicer
shall immediately deliver to the Custodian two copies of a Request for Release
or such request in an electronic format acceptable to the Custodian and shall
request delivery to it of the Custodial File. The Custodian agrees, within five
business days of receipt of such Request for Release, to release the related
Custodial File to the Master Servicer or applicable Servicer.
From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan, the Master Servicer or applicable Servicer
shall deliver to the Custodian two copies of a Request for Release of a
Servicing Officer requesting that possession of the Custodial File be released
to the Servicer or Master Servicer and certifying as to the reason for such
release. Upon receipt of the foregoing, the Custodian shall deliver the
Custodial File to the Master Servicer or applicable Servicer. The Master
Servicer or applicable Servicer shall cause each Custodial File therein so
released to be returned to the Custodian when the need therefor by the Master
Servicer or applicable Servicer no longer exists, unless (i) the Mortgage Loan
has been liquidated and the Liquidation Proceeds relating to the Mortgage Loan
have been deposited in the Certificate Account to the extent required by the
Pooling and Servicing Agreement or (ii) the Custodial File or such document has
been delivered to an attorney, or to a public trustee or other public official
as required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially. In the event of the liquidation of a Mortgage Loan, the Master
Servicer or applicable Servicer shall deliver two copies of a Request for
Release with respect thereto to the Custodian upon deposit of the related
Liquidation Proceeds in the Certificate Account to the extent required by the
Pooling and Servicing Agreement.
The Custodian shall maintain records (i) identifying all
requests made by Servicers or the Master Servicer (other than requests relating
to Custodial Files already released by the Custodian) for the release by the
Custodian of Custodial Files with respect to the Mortgage Loans and (ii) all
Custodial Files released by the Custodian.
Section 2.6. Assumption Agreements. In the event that any
assumption agreement or substitution of liability agreement is entered into with
respect to any Mortgage Loan subject to this Agreement in accordance with the
terms and provisions of the Pooling and Servicing Agreement, the Master Servicer
shall notify the Custodian that such assumption or substitution agreement has
been completed by forwarding to the Custodian the original of such assumption or
substitution agreement, which copy shall be added to the related Custodial File
and, for all purposes, shall be considered a part of such Custodial File to the
same extent as all other documents and instruments constituting parts thereof.
ARTICLE III
Concerning the Custodian
Section 3.1. Custodian a Bailee and Agent of the Trustee. With
respect to each Mortgage Note, Mortgage and other documents constituting each
Custodial File which are delivered to the Custodian, the Custodian is
exclusively the bailee and agent of the Trustee, holds such documents for the
benefit of Certificateholders and undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement and in the Pooling
and Servicing Agreement. All provisions of the Pooling and Servicing Agreement
setting forth duties of the Custodian in more detail are hereby incorporated by
reference into this Agreement. Except upon compliance with the provisions of
Section 2.5 of this Agreement and the provisions of the Pooling and Servicing
Agreement, no Mortgage Note or other document constituting a part of a Custodial
File shall be delivered by the Custodian to the Depositor or the Master Servicer
or otherwise released from the possession of the Custodian.
Section 3.2. Indemnification. The Depositor hereby agrees to
indemnify and hold the Custodian harmless from and against all claims,
liabilities, losses, actions, suits or proceedings at law or in equity, or any
other expenses, fees or charges of any character or nature, which the Custodian
may incur or with which the Custodian may be threatened by reasons of its acting
as custodian under this Agreement, including indemnification of the Custodian
against any and all expenses, including attorney's fees if counsel for the
Custodian has been approved by the Depositor, and the cost of defending any
action, suit or proceedings or resisting any claim. Notwithstanding the
foregoing, it is specifically understood and agreed that in the event any such
claim, liability, loss, action, suit or proceeding or other expense, fees, or
charge shall have been caused by reason of any negligent act, negligent failure
to act, or willful misconduct on the part of the Custodian, or which shall
constitute a willful breach of its duties hereunder, the indemnification
provisions of this Agreement shall not apply.
Section 3.3. Custodian May Own Certificates. The Custodian in
its individual or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not Custodian.
Section 3.4. Master Servicer to Pay Custodian's Fees and
Expenses. The Master Servicer covenants and agrees to pay to the Custodian from
time to time, and the Custodian shall be entitled to, reasonable compensation
for all services rendered by it in the exercise and performance of any of the
powers and duties hereunder of the Custodian, and the Master Servicer will pay
or reimburse the Custodian upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Custodian in accordance with
any of the provisions of this Agreement (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ), except any such expense, disbursement or advance as
may arise from its negligence or bad faith.
Section 3.5. Custodian May Resign; Trustee May Remove
Custodian. The Custodian may resign from the obligations and duties hereby
imposed upon it as such obligations and duties relate to its acting as Custodian
of the Mortgage Loans. Upon receiving such notice of resignation, the Trustee
shall either take custody of the Custodial Files itself and give prompt notice
thereof to the Depositor, the Master Servicer and the Custodian or promptly
appoint a successor Custodian by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning Custodian and one copy to
the successor Custodian. If the Trustee shall not have taken custody of the
Custodial Files and no successor Custodian shall have been so appointed and have
accepted resignation, the resigning Custodian may petition any court of
competent jurisdiction for the appointment of a successor Custodian.
The Trustee, upon 60 days written notice, may remove the
Custodian. In such event, the Trustee shall appoint, or petition a court of
competent jurisdiction to appoint, a successor Custodian hereunder. Any
successor Custodian shall be a depository institution subject to supervision or
examination by federal or state authority and shall be able to satisfy the other
requirements contained in Section 3.7.
Any resignation or removal of the Custodian and appointment of
a successor Custodian pursuant to any of the provisions of this Section 3.5
shall become effective upon acceptance of appointment by the successor
Custodian. The Trustee shall give prompt notice to the Depositor and the Master
Servicer of the appointment of any successor Custodian. No successor Custodian
shall have been appointed and accepted appointment by the Trustee without the
prior approval of the Depositor and the Master Servicer.
Section 3.6. Merger or Consolidation of Custodian. Any Person
into which the Custodian may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Custodian shall be a party, or any Person succeeding
to the business of the Custodian, shall be the successor of the Custodian
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
The Custodian and such successor or surviving Person shall
notify the Depositor, the Master Servicer and the Trustee of any such merger,
conversion or consolidation at least two Business Days prior to the effective
date thereof and shall provide the Depositor and the Master Servicer with all
information required by the Depositor to comply with its reporting obligations
not later than the effective date of such merger, conversion or consolidation
(unless giving prior notice would be prohibited by applicable law or by a
confidentiality agreement, in which case notice shall be given by 12 noon
eastern time one Business Day after such merger or consolidation).
Section 3.7. Representations of the Custodian. The Custodian
hereby represents that it is a depository institution subject to supervision or
examination by a federal or state authority, has a combined capital and surplus
of at least $10,000,000 and is qualified to do business in the jurisdiction in
which it will hold any Custodial File.
ARTICLE IV
Documents and Notices Required to be Delivered by Custodian
Section 4.1 Assessment of Servicing Compliance; Registered
Public Accounting Firm Attestation Reports; Exchange Act Reporting. (a) The
Custodian shall furnish, or cause to be furnished in the case of clause (iii),
to the Master Servicer, no later than March 5 of each year or if such day is not
a Business Day, the next Business Day (with a 10 calendar day cure period, but
in no event later than March 15), commencing in March 2007, the following:
(i) a report (in form and substance reasonably satisfactory to
the Master Servicer and the Depositor) regarding the Custodian's
assessment of compliance with the Servicing Criteria applicable to it
during the immediately preceding calendar year, as required under Rules
13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB.
Such report shall be addressed to the Master Servicer and signed by an
authorized officer of the Custodian, and shall address, at a minimum,
each of the Servicing Criteria applicable to the Custodian, as
specified in the table in Exhibit R to the Pooling and Servicing
Agreement;
(ii) a report of a registered public accounting firm
reasonably acceptable to the Master Servicer and the Depositor that
attests to, and reports on, the assessment of compliance made by the
Custodian and delivered pursuant to the preceding paragraph. Such
attestation shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of
Regulation S-X under the Securities Act and the Exchange Act. If
requested by the Master Servicer or the Depositor, such report shall
contain or be accompanied by a consent of such accounting firm to
inclusion or incorporation of such report in the Depositor's
Registration Statement on Form S-3 relating to the Certificates and the
Trust's Form 10-K; and
(iii) an assessment of compliance and accountants' attestation
as described in paragraphs (i) and (ii) of this Section 4.1(a) with
respect to each Subcontractor determined by the Custodian pursuant to
Section 4.2 to be "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB.
An assessment of compliance provided by a Subcontractor
pursuant to Section 4.1(a)(iii) need not address any elements of the Servicing
Criteria applicable to it other than those specified by the Custodian pursuant
to Section 4.2.
No later than 30 days following the end of each fiscal year
for the Trust for which a Form 10-K is required to be filed, the Custodian shall
forward to the Master Servicer the name of each Subcontractor engaged by it and
what Relevant Servicing Criteria will be addressed in the report on assessment
of compliance prepared by such Subcontractor. When the Custodian submits its
assessment to the Master Servicer, it will also at such time include the
assessment (and attestation pursuant to Section 4.1(a) (ii) hereof) of each
Subcontractor engaged by it.
(b) Within five (5) calendar days after a Distribution Date,
the Custodian shall provide to the Master Servicer, to the extent known, in
XXXXX-compatible format, or in such other form as otherwise agreed upon by the
Master Servicer and the Custodian, the form and substance of any Additional Form
10-D Disclosure applicable to the Custodian, as indicated in the table in
Exhibit S to the Pooling and Servicing Agreement. The Custodian acknowledges
that the performance by the Master Servicer of its duties under Section 3.12(a)
of the Pooling and Servicing Agreement relating to the timely preparation and
filing of Form 10-D is contingent upon the Custodian strictly observing all
applicable deadlines in the performance of its duties under this Section 4.1(b).
(c) No later than March 5 (with a 10 calendar day cure period,
but in no event later than March 15) of each year that the Trust is subject to
the Exchange Act reporting requirements, commencing in March 2007, the Custodian
shall provide to the Master Servicer, to the extent known, in XXXXX-compatible
format, or in such other form as otherwise agreed upon by the Master Servicer
and the Custodian, the form and substance of any Additional Form 10-K Disclosure
applicable to the Custodian, as indicated in the table in Exhibit T to the
Pooling and Servicing Agreement. The Custodian acknowledges that the performance
by the Master Servicer of its duties under Section 3.12(b) of the Pooling and
Servicing Agreement relating to the timely preparation and filing of Form 10-K
is contingent upon the Custodian strictly observing all applicable deadlines in
the performance of its duties under this Section 4.1(c).
(d) For so long as the Trust is subject to the Exchange Act
reporting requirements, no later than the end of business on the second Business
Day after the occurrence of a Reportable Event applicable to the Custodian, the
Custodian shall provide to the Master Servicer, to the extent known, in
XXXXX-compatible format, or in such other form as otherwise agreed upon by the
Master Servicer and the Custodian, the form and substance of any Form 8-K
Disclosure Information applicable to the Custodian, as indicated in the table in
Exhibit U to the Pooling and Servicing Agreement. The Custodian acknowledges
that the performance by the Master Servicer of its duties under Section 3.12(c)
of the Pooling and Servicing Agreement relating to the timely preparation and
filing of Form 8-K is contingent upon the Custodian strictly observing all
applicable deadlines in the performance of its duties under this Section 4.1(d).
(e) The Custodian shall indemnify the Master Servicer, each
affiliate of the Master Servicer, the Trust, each broker dealer acting as
underwriter or initial purchaser of the Certificates, each Person who controls
any of such parties and the Depositor (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act); and the respective present
and former directors, officers, employees and agents of each of the foregoing
and of the Depositor (each such entity, an "Indemnified Party"), and shall hold
each of them harmless from and against any losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and any other
costs, fees and expenses that any of them may sustain arising out of or based
upon:
(i) (A) any untrue statement of a material fact
contained or alleged to be contained in any information,
report, certification, accountants' letter or other material
provided in written or electronic form under this Section 4.1
or Section 4.2 hereof by or on behalf of the Custodian, or
provided under Sections 4.1 or 4.2 by or on behalf of any
Subcontractor (collectively, the "Custodian Information"), or
(B) the omission or alleged omission to state in the Custodian
Information a material fact required to be stated in the
Custodian Information or necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; provided, by way of
clarification, that clause (B) of this paragraph shall be
construed solely by reference to the Custodian Information and
not to any other information communicated in connection with a
sale or purchase of securities, without regard to whether the
Custodian Information or any portion thereof is presented
together with or separately from such other information; or
(ii) any failure by the Custodian or any
Subcontractor engaged by the Custodian to deliver any
information, report, certification, accountants' letter or
other material when and as required under Sections 4.1 or 4.2,
including any failure by the Custodian to identify pursuant to
Section 4.2 any Subcontractor "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB.
In the case of any failure of performance described in clause
(ii) of this Section, the Custodian shall promptly reimburse the Master Servicer
and the Depositor, as applicable, for all costs reasonably incurred by each such
party in order to obtain the information, report, certification, accountants'
letter or other material not delivered as required by the Custodian or any
Subcontractor. If the indemnification provided for herein is unavailable to hold
harmless any Indemnified Party, then the Custodian agrees that it shall
contribute to the amount paid or payable by such Indemnified Party as a result
of the losses, claims, damages or liabilities of such Indemnified Party in such
proportion as is appropriate to reflect the relative fault of such Indemnified
Party on the one hand and the Custodian on the other in connection with a breach
of the Custodian's obligations under this Section 4.1 or the Custodian's
negligence, bad faith or willful misconduct in connection therewith.
4.2 Engagement of Affiliates or Third-Parties. The Custodian
shall not hire or otherwise utilize the services of any Subcontractor to fulfill
any of the obligations of the Custodian as servicer under this Agreement unless
the Custodian complies with the provisions of this Section.
It shall not be necessary for the Custodian to seek the
consent of the Master Servicer or the Depositor to the utilization of any
Subcontractor. The Custodian shall promptly upon request provide to the Master
Servicer (or any designee of Master Servicer) a written description (in form and
substance satisfactory to the Master Servicer and the Depositor) of the role and
function of each Subcontractor utilized by the Custodian, specifying (i) the
identity of each such Subcontractor, (ii) which (if any) of such Subcontractors
are "participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, and (iii) which elements of the Servicing Criteria will be
addressed in assessments of compliance provided by each Subcontractor identified
pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor
determined to be "participating in the servicing function" within the meaning of
Item 1122 of Regulation AB, the Custodian shall cause any such Subcontractor
used by the Custodian, for the benefit of the Master Servicer and the Depositor
to comply with the provisions of Section 4.1 of this Agreement to the same
extent as if such Subcontractor were the Custodian. The Custodian shall be
responsible for obtaining from each Subcontractor and delivering to the Master
Servicer any assessment of compliance and attestation required to be delivered
by such Subcontractor under Section 4.1, in each case as and when required to be
delivered.
4.3 Errors and Omissions Policy. The Custodian shall maintain,
at all times and at its own expense, an insurance policy covering losses caused
by errors or omissions of the Custodian and its personnel (such policy, an
"Errors and Omissions Policy"), which policy shall have such terms and coverage
amounts as are comparable to those of errors and omissions policies maintained
by custodians of mortgage loans generally.
The Errors and Omissions Policy shall insure the Custodian,
its successors and assigns, against any losses resulting from negligence, errors
or omissions on the part of officers, employees or other persons acting on
behalf of the Custodian in the performance of its duties as Custodian pursuant
to this Agreement.
The Custodian shall maintain in effect the Errors and
Omissions Policy at all times and the Errors and Omissions Policy may not be
canceled, permitted to lapse or otherwise terminated without the acquisition of
comparable coverage by the Custodian.
4.4 Compliance with Article IV. If (a) the Custodian fails to
comply with its obligations to deliver any assessment of servicing compliance or
registered public accounting firm attestation reports required pursuant to this
Article IV or (b) any Subcontractor engaged by the Custodian fails to comply
with its obligations to deliver any assessment of servicing compliance or
registered public accounting firm attestation reports, the Master Servicer, may,
after consultation with the Depositor, remove the Custodian and appoint a
successor custodian by written instrument, in duplicate, one copy of which
instrument shall be delivered to the Custodian so removed and one copy to the
successor custodian.
ARTICLE V
Miscellaneous Provisions
Section 5.1. Notices. All notices, requests, consents and
demands and other communications required under this Agreement, or pursuant to
any other instrument or document delivered hereunder shall be in writing and,
unless otherwise specifically provided, may be delivered personally, by telegram
or telex, or by registered or certified mail, postage prepaid, return receipt
requested, at the addresses specified on the signature page hereof (unless
changed by the particular party whose address is stated herein by similar notice
in writing), in which case the notice will be deemed delivered when received.
Section 5.2. Amendments. No modification or amendment of or
supplement to this Agreement shall be valid or effective unless the same is in
writing and signed by all parties hereto, and neither the Depositor, the Master
Servicer nor the Trustee shall enter into any amendment hereof except as
permitted by the Pooling and Servicing Agreement. The Trustee shall give prompt
written notice to the Custodian of any amendment or supplement to the Pooling
and Servicing Agreement and furnish the Custodian with written copies thereof.
Section 5.3. Governing Law. This Agreement shall be deemed a
contract made under the laws of the State of New York and shall be construed and
enforced in accordance with and governed by the laws of the State of New York.
Section 5.4. Recordation of Agreement. To the extent permitted
by applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Master Servicer and at its expense on
direction by the Trustee, but only upon direction accompanied by an Opinion of
Counsel to the effect that such recordation materially and beneficially affects
the interests of the Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
Section 5.5. Severability of Provisions. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
Section 5.6. Regulation AB Compliance; Intent of Parties;
Reasonableness. The parties hereto acknowledge that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise, and
agree to comply with requests made by the Depositor or the Master Servicer in
good faith for delivery of information under these provisions on the basis of
evolving interpretations of Regulation AB. In connection with the Trust, the
parties hereto shall cooperate fully with the Master Servicer and the Depositor
to deliver to the Master Servicer and/or the Depositor (including its assignees
or designees), any and all statements, reports, certifications, records and any
other information available to such party and reasonably necessary in the good
faith determination of the Depositor or the Master Servicer to permit the
Depositor or the Master Servicer to comply with the provisions of Regulation AB,
together with such disclosures reasonably believed by the Depositor or the
Master Servicer to be necessary in order to effect such compliance.
IN WITNESS WHEREOF, this Agreement is executed as of the date
first above written.
Address: U.S. BANK NATIONAL ASSOCIATION,
as Trustee
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000 By:___________________________________________
Name: Xxxxxxx X. Xxxxx
Title: Vice President
Address: XXXXX FARGO ASSET SECURITIES CORPORATION,
as Depositor
0000 Xxx Xxxxxxxxxx Xxx By:___________________________________________
Xxxxxxxxx, Xxxxxxxx 00000 Name: Xxxxx Xxxxxx
Title: Vice President
Address: XXXXX FARGO BANK, N.A.,
as Master Servicer
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000 By:___________________________________________
Name: Xxxxxxxx X. Xxxxxxxxxx
Title: Assistant Vice President
Address: XXXXX FARGO BANK, N.A.,
as Custodian
0000 00xx Xxxxxx Xxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000 By: _________________________________________
Name: Xxxxx X. Xxxxxx
Title: Assistant Vice President
STATE OF MARYLAND )
ss.:
COUNTY OF XXXXXXXXX )
On this 27th day of February 2006, before me, a notary public
in and for the State of Maryland, personally appeared Xxxxx Xxxxxx, known to me
who, being by me duly sworn, did depose and say that she resides in Potomac,
Maryland; that she is a Vice President of Xxxxx Fargo Asset Securities
Corporation, a Delaware corporation, one of the parties that executed the
foregoing instrument; and that she signed her name thereto by order of the Board
of Directors of said corporation.
_________________________
Notary Public
[NOTARIAL SEAL]
STATE OF MARYLAND )
ss.:
COUNTY OF XXXX ARUNDEL )
On this 27th day of February 2006, before me, a notary public
in and for the State of Maryland, personally appeared Xxxxxxxx X. Xxxxxxxxxx,
known to me who, being by me duly sworn, did depose and say that she resides at
Riva, Maryland; that she is an Assistant Vice President of Xxxxx Fargo Bank,
N.A., a national banking association, one of the parties that executed the
foregoing instrument; and that she signed her name thereto by order of the Board
of Directors of said association.
_________________________
Notary Public
[NOTARIAL SEAL]
STATE OF ILLINOIS )
ss.:
COUNTY OF XXXX )
On this 27th day of February 2006, before me, a notary public
in and for the State of Illinois, personally appeared Xxxxxxx X. Xxxxx, known to
me who, being by me duly sworn, did depose and say that she resides at Chicago,
Illinois; that she is a Vice President of U.S. Bank National Association, a
national banking association, one of the parties that executed the foregoing
instrument; and that she signed her name thereto by order of the Board of
Directors of said association.
_________________________
Notary Public
[NOTARIAL SEAL]
STATE OF MINNESOTA )
ss.:
COUNTY OF HENNEPIN )
On this 27th day of February 2006, before me, a notary public
in and for the State of Minnesota, personally appeared Xxxxx X. Xxxxxx, known to
me who, being by me duly sworn, did depose and say that he resides at
Minneapolis, Minnesota; that he is an Assistant Vice President of Xxxxx Fargo
Bank, N.A., a national banking association, one of the parties that executed the
foregoing instrument; and that he signed his name thereto by order of the Board
of Directors of said association.
_________________________
Notary Public
[NOTARIAL SEAL]
EXHIBIT F
Addresses for Requesting Mortgage Loan Schedule
In the case of the Depositor:
Xxxxx Fargo Asset Securities Corporation
0000 Xxx Xxxxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Vice President - Structured Finance
In the case of the Master Servicer:
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Services - WFMBS 2006-AR3
EXHIBIT G
REQUEST FOR RELEASE OF DOCUMENTS
To: Xxxxx Fargo Bank, N.A.
0000 00xx Xxxxxx X.X.
Xxxxxxxxxxx., XX 00000
Attn: ________________
Re: Custodial Agreement, dated as of February 27, 2006, among U.S.
Bank National Association, as Trustee, Xxxxx Fargo Asset
Securities Corporation, as Depositor, Xxxxx Fargo Bank, N.A.,
as Master Servicer, and Xxxxx Fargo Bank, N.A., as Custodian,
relating to the Xxxxx Fargo Asset Securities Corporation;
Mortgage Pass-Through Certificates, Series 2006-AR3.
In connection with the administration of the Mortgage Loans
held by you as Custodian for the Trust Estate pursuant to the above-captioned
Custodial Agreement, we request the release, and hereby acknowledge receipt, of
the Custodian's Owner Mortgage Loan File for the Mortgage Loan described below,
for the reason indicated.
Mortgage Loan Number:
---------------------
Mortgagor Name, Address & Zip Code:
-----------------------------------
Reason for Requesting Documents (check one):
_________ 1. Mortgage Paid in Full
_________ 2. Foreclosure
_________ 3. Substitution
_________ 4. Other Liquidation (Repurchases, etc.)
_________ 5. Nonliquidation
Reason: __________________________________
By:_______________________________________
(authorized signer)
Issuer:_____________________________________
Address:___________________________________
___________________________________
Date:__________________________________________
Custodian
---------
Xxxxx Fargo Bank, N.A.
Please acknowledge the execution of the above request by your
signature and date below:
____________________________________ _________________
Signature Date
Documents returned to Custodian:
____________________________________ _________________
Custodian Date
EXHIBIT H
AFFIDAVIT PURSUANT TO SECTION
860E(e)(4) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, AND FOR
NON-ERISA INVESTORS
STATE OF )
) ss.:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Purchaser]
(the "Purchaser"), a [description of type of entity] duly organized and existing
under the laws of the [State of _____] [United States], on behalf of which he
makes this affidavit.
2. That the Purchaser's Taxpayer Identification Number
is [ ].
3. That the Purchaser is not a "disqualified
organization" within the meaning of Section 860E(e)(5),of the Internal Revenue
Code of 1986, as amended (the "Code"), or an ERISA Prohibited Holder, and will
not be a "disqualified organization" or an ERISA Prohibited Holder, as of [date
of transfer], and that the Purchaser is not acquiring Xxxxx Fargo Asset
Securities Corporation Mortgage Pass-Through Certificates, Series 2006-AR3,
Class A-R Certificate (the "Class A-R Certificate") for the account of, or as
agent (including a broker, nominee, or other middleman) for, any person or
entity from which it has not received an affidavit substantially in the form of
this affidavit. For these purposes, a "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (other than an instrumentality if all of its activities are
subject to tax and a majority of its board of directors is not selected by such
governmental entity), any cooperative organization furnishing electric energy or
providing telephone service to persons in rural areas as described in Code
Section 1381(a)(2)(C), or any organization (other than a farmers' cooperative
described in Code Section 521) that is exempt from taxation under the Code
unless such organization is subject to the tax on unrelated business income
imposed by Code Section 511. For these purposes, an "ERISA Prohibited Holder"
means an employee benefit plan or other retirement arrangement subject to Title
I of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
or Code Section 4975 or a governmental plan, as defined in Section 3(32) of
ERISA, subject to any federal, state or local law which is, to a material
extent, similar to the foregoing provisions of ERISA or the Code (collectively,
a "Plan") or a Person acting on behalf of or investing the assets of such a
Plan.
4. That the Purchaser historically has paid its debts as
they have come due and intends to pay its debts as they come due in the future
and the Purchaser intends to pay taxes associated with holding the Class A-R
Certificate as they become due.
5. That the Purchaser understands that it may incur tax
liabilities with respect to the Class A-R Certificate in excess of cash flows
generated by the Class A-R Certificate.
6. That the Purchaser will not transfer the Class A-R
Certificate to any person or entity from which the Purchaser has not received an
affidavit substantially in the form of this affidavit and as to which the
Purchaser has actual knowledge that the requirements set forth in paragraph 3, 4
or 10 hereof are not satisfied or that the Purchaser has reason to know does not
satisfy the requirements set forth in paragraph 4 hereof.
7. That the Purchaser is aware that the Class A-R
Certificate may be a "noneconomic residual interest" within the meaning of
Treasury regulations promulgated pursuant to the Code and that the transferor of
a noneconomic residual interest will remain liable for any taxes due with
respect to the income on such residual interest, unless no significant purpose
of the transfer was to impede the assessment or collection of tax.
8. That the Purchaser will not cause income from the
Class A-R Certificate to be attributable to a foreign permanent establishment or
fixed base, within the meaning of an applicable income tax treaty, of the
Purchaser or any other person.
9. That, if the Purchaser is purchasing the Class A-R
Certificate in a transfer intended to meet the safe harbor provisions of
Treasury Regulations Sections 1.860E-1(c), the Purchaser has executed and
attached Attachment A hereto.
10. That the Purchaser (i) is a U.S. Person or (ii) is a
person other than a U.S. Person (a "Non-U.S. Person") that holds the Class A-R
Certificate in connection with the conduct of a trade or business within the
United States and has furnished the transferor and the Trustee with an effective
Internal Revenue Service Form W-8ECI or successor form at the time and in the
manner required by the Code or (iii) is a Non-U.S. Person that has delivered to
both the transferor and the Trustee an opinion of a nationally recognized tax
counsel to the effect that the transfer of the Class A-R Certificate to it is in
accordance with the requirements of the Code and the regulations promulgated
thereunder and that such transfer of the Class A-R Certificate will not be
disregarded for federal income tax purposes. "U.S. Person" means a citizen or
resident of the United States, a corporation or partnership (unless, in the case
of a partnership, Treasury regulations are adopted that provide otherwise)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, including an entity treated as a
corporation or partnership for federal income tax purposes, an estate whose
income is subject to United States federal income tax regardless of its source,
or a trust if a court within the United States is able to exercise primary
supervision over the administration of such trust, and one or more such U.S.
Persons have the authority to control all substantial decisions of such trust
(or, to the extent provided in applicable Treasury regulations, certain trusts
in existence on August 20, 1996 which are eligible to elect to be treated as
U.S. Persons).
11. That the Purchaser agrees to such amendments of the
Pooling and Servicing Agreement as may be required to further effectuate the
restrictions on transfer of the Class A-R Certificate to such a "disqualified
organization," an agent thereof, an ERISA Prohibited Holder or a person that
does not satisfy the requirements of paragraph 4, paragraph 5 and paragraph 10
hereof.
12. That the Purchaser consents to the designation of the
Master Servicer as its agent to act as "tax matters person" of the REMIC
pursuant to Section 8.13 of the Pooling and Servicing Agreement, and if such
designation is not permitted by the Code and applicable law, to act as tax
matters person if requested to do so.
IN WITNESS WHEREOF, the Purchaser has caused this instrument
to be executed on its behalf, pursuant to authority of its Board of Directors,
by its [Title of Officer] this ___ day of , 20__.
[NAME OF PURCHASER]
By: ____________________________________
[Name of Officer]
[Title of Officer]
Personally appeared before me the above-named [Name of
Officer], known or proved to me to be the same person who executed the foregoing
instrument and to be the [Title of Officer], of the Purchaser, and acknowledged
to me that he [she] executed the same as his [her] free act and deed and the
free act and deed of the Purchaser.
Subscribed and sworn before me this __ day of _________, 20__.
Notary Public
COUNTY OF____________________
STATE OF_____________________
My commission expires the __ day of __________, 20__.
ATTACHMENT A
to
AFFIDAVIT PURSUANT TO SECTION 860E(e)(4) OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED, AND FOR NON-ERISA INVESTORS
Check the appropriate box:
[ ] The consideration paid to the Purchaser to acquire the Class A-R
Certificate equals or exceeds the excess of (a) the present value of
the anticipated tax liabilities over (b) the present value of the
anticipated savings associated with holding such Certificate, in each
case calculated in accordance with U.S. Treasury Regulations Sections
1.860E-1(c)(7) and (8), computing present values using a discount rate
equal to the short-term Federal rate prescribed by Section 1274(d) of
the Code and the compounding period used by the Purchaser.
OR
--
[ ] The transfer of the Class A-R Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly:
(i) the Purchaser is an "eligible corporation," as defined in U.S.
Treasury Regulations Section 1.860E-1(c)(6)(i), as to which
income from Class A-R Certificate will only be taxed in the
United States;
(ii) at the time of the transfer, and at the close of the
Purchaser's two fiscal years preceding the year of the
transfer, the Purchaser had gross assets for financial
reporting purposes (excluding any obligation of a person
related to the Purchaser within the meaning of U.S. Treasury
Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100
million and net assets in excess of $10 million;
(iii) the Purchaser will transfer the Class A-R Certificate only to
another "eligible corporation," as defined in U.S. Treasury
Regulations Section 1.860E-1(c)(6)(i), in a transaction that
satisfies the requirements of Sections 1.860E-1(c)(4)(i), (ii)
and (iii) and Section 1.860E-1(c)(5) of the U.S. Treasury
Regulations;
(iv) the Purchaser has determined the consideration paid to it to
acquire the Class A-R Certificate based on reasonable market
assumptions (including, but not limited to, borrowing and
investment rates, prepayment and loss assumptions, expense and
reinvestment assumptions, tax rates and other factors specific
to the Purchaser) that it has determined in good faith; and
(v) in the event of any transfer of the Class A-R Certificate by
the Purchaser, the Purchaser will require its transferee to
complete a representation in the form of this Attachment A as
a condition of the transferee's purchase of the Class A-R
Certificate.
EXHIBIT I
Letter from Transferor of Residual Certificate
[Date]
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attn: Corporate Trust Services WFMBS 2006-AR3
Re: Xxxxx Fargo Asset Securities Corporation,
Series 2006-AR3, Class A-R
Ladies and Gentlemen:
[Transferor] has reviewed the attached affidavit of
[Transferee], and has no actual knowledge that such affidavit is not true and
has no reason to know that the information contained in paragraph 4 thereof is
not true.
Very truly yours,
[Transferor]
______________________
EXHIBIT J
XXXXX FARGO ASSET SECURITIES CORPORATION
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2006-AR3
CLASS [B-4][B-5][B-6] CERTIFICATES
TRANSFEREE'S LETTER
_________________ __, ____
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attn: Corporate Trust Services WFMBS 2006-AR3
Xxxxx Fargo Asset Securities Corporation
0000 Xxx Xxxxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxx 00000
The undersigned (the "Purchaser") proposes to purchase Xxxxx
Fargo Asset Securities Corporation Mortgage Pass-Through Certificates, Series
2006-AR3, Class [B-4][B-5][B-6] Certificates (the "Class [B-4][B-5][B-6]
Certificates") in the principal amount of $___________. In doing so, the
Purchaser hereby acknowledges and agrees as follows:
Section 1. Definitions. Each capitalized term used herein and
not otherwise defined herein shall have the meaning ascribed to it in the
Pooling and Servicing Agreement, dated as of February 27, 2006 (the "Pooling and
Servicing Agreement") among Xxxxx Fargo Asset Securities Corporation, as
depositor (the "Depositor"), Xxxxx Fargo Bank, N.A., as master servicer (the
"Master Servicer") and U.S. Bank National Association, as trustee (the
"Trustee"), of Xxxxx Fargo Asset Securities Corporation Mortgage Pass-Through
Certificates, Series 2006-AR3.
Section 2. Representations and Warranties of the Purchaser. In
connection with the proposed transfer, the Purchaser represents and warrants to
the Depositor, the Master Servicer and the Trustee that:
(a) The Purchaser is duly organized, validly existing and in
good standing under the laws of the jurisdiction in which the Purchaser is
organized, is authorized to invest in the Class [B-4][B-5][B-6] Certificates,
and to enter into this Agreement, and duly executed and delivered this
Agreement.
(b) The Purchaser is acquiring the Class [B-4][B-5][B-6]
Certificates for its own account as principal and not with a view to the
distribution thereof, in whole or in part.
[(c) The Purchaser has knowledge of financial and business
matters and is capable of evaluating the merits and risks of an investment in
the Class [B-4][B-5][B-6] Certificates; the Purchaser has sought such
accounting, legal and tax advice as it has considered necessary to make an
informed investment decision; and the Purchaser is able to bear the economic
risk of an investment in the Class [B-4][B-5][B-6] Certificates and can afford a
complete loss of such investment.]
[(c) The Purchaser is a "Qualified Institutional Buyer"
within the meaning of Rule 144A of the Act.]
(d) The Purchaser confirms that (a) it has received and
reviewed a copy of the Private Placement Memorandum dated February 23, 2006,
relating to the Class [B-4][B-5][B-6] Certificates and reviewed, to the extent
it deemed appropriate, the documents attached thereto or incorporated by
reference therein, (b) it has had the opportunity to ask questions of, and
receive answers from the Depositor concerning the Class [B-4][B-5][B-6]
Certificates and all matters relating thereto, and obtain any additional
information (including documents) relevant to its decision to purchase the Class
[B-4][B-5][B-6] Certificates that the Depositor possesses or can possess without
unreasonable effort or expense and (c) it has undertaken its own independent
analysis of the investment in the Class [B-4][B-5][B-6] Certificates. The
Purchaser will not use or disclose any information it receives in connection
with its purchase of the Class [B-4][B-5][B-6] Certificates other than in
connection with a subsequent sale of Class [B-4][B-5][B-6] Certificates.
(e) Either (i) the Purchaser is not an employee benefit plan
or other retirement arrangement subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended, ("ERISA"), or Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code"), or a governmental plan,
as defined in Section 3(32) of ERISA subject to any federal, state or local law
("Similar Law") which is, to a material extent, similar to the foregoing
provisions of ERISA or the Code (collectively, a "Plan"), an agent acting on
behalf of a Plan, or a person utilizing the assets of a Plan or (ii) if the
Purchaser is an insurance company, (A) the source of funds used to purchase the
Class [B-4][B-5][B-6] Certificate is an "insurance company general account" (as
such term is defined in Section V(e) of Prohibited Transaction Class Exemption
95-60 ("PTE 95-60"), 60 Fed. Reg. 35925 (July 12, 1995), (B) there is no Plan
with respect to which the amount of such general account's reserves and
liabilities for the contract(s) held by or on behalf of such Plan and all other
Plans maintained by the same employer (or affiliate thereof as defined in
Section V(a)(1) of PTE 95-60) or by the same employee organization exceeds 10%
of the total of all reserves and liabilities of such general account (as such
amounts are determined under Section I(a) of PTE 95-60) at the date of
acquisition and (C) the purchase and holding of such Class [B-4][B-5][B-6]
Certificates are covered by Sections I and III of PTE 95-60 or (iii) the
Purchaser has provided (a) a "Benefit Plan Opinion" satisfactory to the
Depositor and the Master Servicer of the Trust Estate and (b) such other
opinions of counsel, officers' certificates and agreements as the Depositor or
the Master Servicer may have required. A Benefit Plan Opinion is an opinion of
counsel to the effect that the proposed transfer will not constitute or result
in a non-exempt prohibited transaction within the meaning of ERISA, Section 4975
of the Code or Similar Law and will not subject the Depositor or the Master
Servicer to any obligation in addition to those undertaken in the Pooling and
Servicing Agreement (including any liability for civil penalties or excise taxes
imposed pursuant to ERISA, Section 4975 of the Code or Similar Law).
(f) If the Purchaser is a depository institution subject to
the jurisdiction of the Office of the Comptroller of the Currency ("OCC"), the
Board of Governors of the Federal Reserve System ("FRB"), the Federal Deposit
Insurance Corporation ("FDIC"), the Office of Thrift Supervision ("OTS") or the
National Credit Union Administration ("NCUA"), the Purchaser has reviewed the
"Supervisory Policy Statement on Securities Activities" dated January 28, 1992
of the Federal Financial Institutions Examination Council and the April 15, 1994
Interim Revision thereto as adopted by the OCC, FRB, FDIC, OTS and NCUA (with
modifications as applicable), as appropriate, other applicable investment
authority, rules, supervisory policies and guidelines of these agencies and, to
the extent appropriate, state banking authorities and has concluded that its
purchase of the Class [B-4][B-5][B-6] Certificates is in compliance therewith.
Section 3. Transfer of Class [B-4][B-5][B-6] Certificates.
(a) The Purchaser understands that the Class [B-4][B-5][B-6]
Certificates have not been registered under the Securities Act of 1933 (the
"Act") or any state securities laws and that no transfer may be made unless the
Class [B-4][B-5][B-6] Certificates are registered under the Act and applicable
state law or unless an exemption from registration is available. The Purchaser
further understands that neither the Depositor nor the Master Servicer is under
any obligation to register the Class [B-4][B-5][B-6] Certificates or make an
exemption available. In the event that such a transfer is to be made in reliance
upon an exemption from the Act or applicable state securities laws, (i) the
Master Servicer shall require, in order to assure compliance with such laws,
that the Certificateholder's prospective transferee certify to the Depositor and
the Master Servicer as to the factual basis for the registration or
qualification exemption relied upon, and (ii) unless the transferee is a
"Qualified Institutional Buyer" within the meaning of Rule 144A of the Act, the
Master Servicer or the Depositor may, if such transfer is made within three
years from the later of (a) the Closing Date or (b) the last date on which the
Depositor or any affiliate thereof was a holder of the Certificates proposed to
be transferred, require an Opinion of Counsel that such transfer may be made
pursuant to an exemption from the Act and state securities laws, which Opinion
of Counsel shall not be an expense of the Master Servicer or the Depositor. Any
such Certificateholder desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee, the Master Servicer, any Paying Agent and the
Depositor against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.
(b) No transfer of a Class [B-4][B-5][B-6] Certificate shall
be made unless the transferee provides the Depositor and the Master Servicer
with a Transferee's Letter, substantially in the form of this Agreement.
(c) The Purchaser acknowledges that its Class [B-4][B-5][B-6]
Certificates bear a legend setting forth the applicable restrictions on
transfer.
IN WITNESS WHEREOF, the undersigned has caused this Agreement
to be validly executed by its duly authorized representative as of the day and
the year first above written.
[PURCHASER]
By: ______________________________
Its: ______________________________
EXHIBIT K
LIST OF RECORDATION STATES
Florida
Maryland
EXHIBIT L
SERVICING AGREEMENTS
Xxxxx Fargo Bank Servicing Agreement
[Included as Exhibit 10.1 to the Current Report on Form 8-K pursuant to which
this Pooling and Servicing Agreement is filed]
EXHIBIT M
[FORM OF SPECIAL SERVICING AGREEMENT]
SPECIAL SERVICING AND COLLATERAL FUND AGREEMENT
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This SPECIAL SERVICING AND COLLATERAL FUND AGREEMENT (the "Agreement")
is made and entered into as of [ ], between Xxxxx Fargo Bank, N.A. (the
"Company" or the "Master Servicer") and [ ] (the "Purchaser").
PRELIMINARY STATEMENT
The Purchaser is the holder of the entire interest in Xxxxx Fargo Asset
Securities Corporation Mortgage Pass-Through Certificates, Series [ ], Class [ ]
(the "Class B Certificates"), which are the Lowest Priority Certificates (as
defined below) outstanding with respect to such Series. The Class B Certificates
were issued pursuant to a Pooling and Servicing Agreement dated as of [ ] among
Xxxxx Fargo Asset Securities Corporation, as seller (the "Seller"), Xxxxx Fargo
Bank, N.A., as Master Servicer and U.S. Bank National Association, as Trustee.
In connection with the ownership by the Purchaser of the Lowest
Priority Certificates, the Purchaser and the Company have agreed that (i) the
Purchaser, for so long as it owns 100% of the Lowest Priority Certificates, will
have the unilateral right to control foreclosure decisions with respect to
delinquent mortgage loans and (ii) the Company will provide to the Purchaser
certain information with respect to the Mortgage Loans;
The parties hereto have agreed that the Company will cause, to the
extent that the Company as Master Servicer is granted such authority in the
related Servicing Agreements, the related servicers (each a related "Servicer"),
which service the Mortgage Loans which comprise the Trust Estate related to the
above referenced series under the related servicing agreements (each a related
"Servicing Agreement"), to engage in certain special servicing procedures
relating to foreclosures for the benefit of the Purchaser, and that the
Purchaser will deposit funds in a collateral fund to cover any losses
attributable to such procedures as well as all advances and costs in connection
therewith, as set forth herein.
In consideration of the mutual agreements herein contained, the receipt
and sufficiency of which are hereby acknowledged, the Company and the Purchaser
agree that the following provisions shall become effective and shall be binding
on and enforceable by the Company and the Purchaser:
ARTICLE I
DEFINITIONS
Section 1.02. Defined Terms.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which banking institutions in the State of New York are required or
authorized by law or executive order to be closed.
Collateral Fund: The fund established and maintained pursuant to
Section 3.01 hereof.
Collateral Fund Permitted Investments: Either (i) obligations of, or
obligations fully guaranteed as to 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) a money market fund
rated in the highest rating category by a nationally recognized rating agency
selected by the Company, (iii) cash, (iv) mortgage pass-through certificates
issued or guaranteed by Government National Mortgage Association, FNMA or FHLMC,
(v) commercial paper (including both non-interest-bearing discount obligations
and interest-bearing obligations payable on demand or on a specified date), the
issuer of which may be an affiliate of the Company, having at the time of such
investment a rating of at least P-1 by Xxxxx'x Investors Service, Inc.
("Moody's") or at least F-1 by Fitch Ratings ("Fitch") or (vi) demand and time
deposits in, certificates of deposit of, any depository institution or trust
company (which may be an affiliate of the Company) incorporated under the laws
of the United States of America or any state thereof and subject to supervision
and examination by federal and/or state banking authorities, so long as at the
time of such investment either (x) the long-term debt obligations of such
depository institution or trust company have a rating of at least AA by Fitch or
Aa2 by Moody's, (y) the certificate of deposit or other unsecured short-term
debt obligations of such depository institution or trust company have a rating
of at least F-1 by Fitch or P-1 by Moody's or (z) the depository institution or
trust company is one that is acceptable to either Fitch or Moody's and, for each
of the preceding clauses (i), (iv), (v) and (vi), the maturity thereof shall be
not later than the earlier to occur of (A) 30 days from the date of the related
investment and (B) the next succeeding Distribution Date as defined in the
related Pooling and Servicing Agreement.
Commencement of Foreclosure: The first official action required under
local law in order to commence foreclosure proceedings or to schedule a
trustee's sale under a deed of trust, including (i) in the case of a mortgage,
any filing or service of process necessary to commence an action to foreclose,
or (ii) in the case of a deed of trust, posting, the publishing, filing or
delivery of a notice of sale, but not including in either case (x) any notice of
default, notice of intent to foreclose or sell or any other action prerequisite
to the actions specified in (i) or (ii) above, (y) the acceptance of a
deed-in-lieu of foreclosure (whether in connection with a sale of the related
property or otherwise) or (z) initiation and completion of a short pay-off.
Current Appraisal: With respect to any Mortgage Loan as to which the
Purchaser has made an Election to Delay Foreclosure, an appraisal of the related
Mortgaged Property obtained by the Purchaser at its own expense from an
independent appraiser (which shall not be an affiliate of the Purchaser)
acceptable to the Company as nearly contemporaneously as practicable to the time
of the Purchaser's election, prepared based on the Company's customary
requirements for such appraisals.
Election to Delay Foreclosure: Any election by the Purchaser to delay
the Commencement of Foreclosure, made in accordance with Section 2.02(b).
Election to Foreclose: Any election by the Purchaser to proceed with
the Commencement of Foreclosure, made in accordance with Section 2.03(a).
Lowest Priority Certificates: The most subordinate class of
certificates issued under the Pooling and Servicing Agreement that is
outstanding from time to time. If the Lowest Priority Certificates are reduced
to zero as a result of losses or otherwise, and if the Purchaser at that time
owns 100% of the most subordinate class of certificates issued under the Pooling
and Servicing Agreement then remaining outstanding, then such most subordinate
class remaining outstanding shall thereafter be deemed to be the Lowest Priority
Certificates for all purposes of this Agreement.
Monthly Advances: Principal and interest advances and servicing
advances including costs and expenses of foreclosure.
Required Collateral Fund Balance: As of any date of determination, an
amount equal to the aggregate of all amounts previously required to be deposited
in the Collateral Fund pursuant to Section 2.02(d) (after adjustment for all
withdrawals and deposits pursuant to Section 2.02(e)) and Section 2.03(b) (after
adjustment for all withdrawals and deposits pursuant to Section 2.03(c)) and
Section 3.02 to be reduced by all withdrawals therefrom pursuant to Section
2.02(g) and Section 2.03(d).
Section 1.03. Definitions Incorporated by Reference.
All capitalized terms not otherwise defined in this Agreement shall
have the meanings assigned in the Pooling and Servicing Agreement.
ARTICLE II
SPECIAL SERVICING PROCEDURES
Section 2.01. Reports and Notices.
(a) In connection with the performance of its duties under the
Pooling and Servicing Agreement relating to the realization upon defaulted
Mortgage Loans, the Company as Master Servicer shall provide to the Purchaser
the following notices and reports:
Within five Business Days after each Distribution Date (or included in
or with the monthly statements to Certificateholders pursuant to the
Pooling and Servicing Agreement), the Company shall provide to the
Purchaser a report identifying all loans delinquent 30 days or more
(including all loans in foreclosure, bankruptcy or "real estate owned"
status) (each, a "Delinquency Report"). The Delinquency Report shall
use the same methodology and calculations employed in the Company's
standard servicing reports, indicating the number of Mortgage Loans
that are (i) thirty days delinquent, (ii) sixty days delinquent, (iii)
ninety days or more delinquent, (iv) in foreclosure, (v) in bankruptcy
or (vi) real estate owned, and indicating for each such Mortgage Loan
the loan number, the property address and the outstanding principal
balance.
(b) If requested by the Purchaser, the Company shall cause the
Servicer (to the extent that the Company as Master Servicer is granted such
authority in the related Servicing Agreement) to make its servicing personnel
available (during their normal business hours) to respond to reasonable
inquiries, by phone or in writing by facsimile, electronic, or overnight mail
transmission, by the Purchaser in connection with any Mortgage Loan (i)
identified in a report under Section 2.01 (a) (ii), (a) (iii), (a) (iv), (a) (v)
or (a) (vi); provided, that (1) the related Servicer shall only be required to
provide information that is readily accessible to its servicing personnel and
(2) the related Servicer shall respond within five Business Days orally or in
writing by facsimile transmission.
(c) In addition to the foregoing, the Company shall cause the
Servicer (to the extent that the Company as Master Servicer is granted such
authority in the related Servicing Agreement) to provide to the Company (for
prompt transmission to the Purchaser) such information as the Purchaser may
reasonably request provided, however, that such information is consistent with
normal reporting practices, concerning each Mortgage Loan that is at least
ninety days delinquent and each Mortgage Loan which has become real estate
owned, through the final liquidation thereof; provided, that the related
Servicer shall only be required to provide information that is readily
accessible to its servicing personnel; provided, however, that the Purchaser
will reimburse the Company and the related Servicer for any out of pocket
expenses.
Section 2.02. Purchaser's Election to Delay Foreclosure
Proceedings.
(a) The Purchaser shall be deemed to direct the Company to
direct (to the extent that the Company as Master Servicer is granted such
authority in the related Servicing Agreement) the related Servicer that in the
event that the Company does not receive written notice of the Purchaser's
election pursuant to subsection (b) below within 48 hours (exclusive of any
intervening non-Business Days) of transmission of the Delinquency Report
provided by the Company under Section 2.01 (a) (subject to extension as set
forth in Section 2.02(b), the related Servicer may proceed with the Commencement
of Foreclosure in respect of each Mortgage Loan reported under Section 2.01
(a)(ii) or 2.01 (a)(iii) in accordance with its normal foreclosure policies
without further notice to the Purchaser. Any foreclosure that has been initiated
may be discontinued (i) without notice to the Purchaser if the Mortgage Loan has
been brought current or if a refinancing or prepayment occurs with respect to
the Mortgage Loan (including by means of a short payoff approved by the related
Servicer) or (ii) if the related Servicer has reached the terms of a forbearance
agreement with the borrower.
(b) In connection with any Mortgage Loan reported in a
Delinquency Report under Section 2.01(a)(ii) or 2.01 (a)(iii), the Purchaser may
elect to instruct the Company to cause, to the extent that the Company as Master
Servicer is granted such authority in the related Servicing Agreement, the
related Servicer to delay the Commencement of Foreclosure until such time as the
Purchaser determines that the related Servicer may proceed with the Commencement
of Foreclosure. Such election must be evidenced by written notice received
within 48 hours (exclusive of any intervening non-Business Days) of transmission
of the Delinquency Report provided by the Company under Section 2.01(a). Such 48
hour period shall be extended for no longer than an additional four Business
Days after the receipt of the information if the Purchaser requests additional
information related to such foreclosure; provided, however, that the Purchaser
will have at least one Business Day to respond to any requested additional
information. Any such additional information shall be provided only to the
extent it is obtainable by the related Servicer from existing reports,
certificates or statements or is otherwise readily accessible to its servicing
personnel. The Purchaser agrees that it has no right to deal with the mortgagor
during such period. However, if such servicing activities include acceptance of
a deed-in-lieu of foreclosure or short payoff, the Purchaser will be notified
and given two Business Days to respond.
(c) With respect to any Mortgage Loan as to which the
Purchaser has made an Election to Delay Foreclosure, the Purchaser shall obtain
a Current Appraisal as soon as practicable, but in no event more than 15
Business Days thereafter, and shall provide the Company with a copy of such
Current Appraisal.
(d) Within two Business Days of making any Election to Delay
Foreclosure, the Purchaser shall remit by wire transfer to the Company, for
deposit in the Collateral Fund, an amount, as calculated by the Company, equal
to the sum of (i) 125% of the greater of the unpaid principal balance of the
Mortgage Loan and the value shown in the Current Appraisal referred to in
subsection (c) above (or, if such Current Appraisal has not yet been obtained,
the Company's estimate thereof, in which case the required deposit under this
subsection shall be adjusted upon obtaining such Current Appraisal), and (ii)
three months' interest on the Mortgage Loan at the applicable Mortgage Interest
Rate. If any Election to Delay Foreclosure extends for a period in excess of
three months (such excess period being referred to herein as the "Excess
Period"), within two Business Days the Purchaser shall remit by wire transfer in
advance to the Company for deposit in the Collateral Fund the amount of each
additional month's interest, as calculated by the Company, equal to interest on
the Mortgage Loan at the applicable Mortgage Interest Rate for the Excess
Period. The terms of this Agreement will no longer apply to the servicing of any
Mortgage Loan upon the failure of the Purchaser to deposit any of the above
amounts relating to the Mortgage Loan within two Business Days of the Election
to Delay Foreclosure or within two Business Days of the commencement of the
Excess Period subject to Section 3.01.
(e) With respect to any Mortgage Loan as to which the
Purchaser has made an Election to Delay Foreclosure, the Company may withdraw
from the Collateral Fund from time to time amounts necessary to reimburse the
related Servicer for all related Monthly Advances and Liquidation Expenses
thereafter made by such Servicer in accordance with the Pooling and Servicing
Agreement and the related Servicing Agreement. To the extent that the amount of
any such Liquidation Expenses is determined by the Company based on estimated
costs, and the actual costs are subsequently determined to be higher, the
Company may withdraw the additional amount from the Collateral Fund. In the
event that the Mortgage Loan is brought current by the mortgagor and the
foreclosure action is discontinued, the amounts so withdrawn from the Collateral
Fund shall be redeposited if and to the extent that reimbursement therefor from
amounts paid by the mortgagor is not prohibited pursuant to the Pooling and
Servicing Agreement or the related Servicing Agreement, applicable law or the
related mortgage note. Except as provided in the preceding sentence, amounts
withdrawn from the Collateral Fund to cover Monthly Advances and Liquidation
Expenses shall not be redeposited therein or otherwise reimbursed to the
Purchaser. If and when any such Mortgage Loan is brought current by the
mortgagor, all amounts remaining in the Collateral Fund in respect of such
Mortgage Loan (after adjustment for all permitted withdrawals and deposits
pursuant to this subsection) shall be released to the Purchaser.
(f) With respect to any Mortgage Loan as to which the
Purchaser has made an Election to Delay Foreclosure, the related Servicer shall
continue to service the Mortgage Loan in accordance with its customary
procedures (other than the delay in Commencement of Foreclosure as provided
herein). If and when the Purchaser shall notify the Company that it believes
that it is appropriate to do so, the related Servicer may proceed with the
Commencement of Foreclosure. In any event, if the Mortgage Loan is not brought
current by the mortgagor by the time the loan becomes 6 months delinquent, the
Purchaser's election shall no longer be effective and at the Purchaser's option,
either (i) the Purchaser shall purchase the Mortgage Loan from the related Trust
Estate at a purchase price equal to the sum of (x) accrued and unpaid interest
on the Mortgage Loan at the applicable Mortgage Interest Rate through the last
day of the month of repurchase, (y) 100% of the unpaid principal balance of the
Mortgage Loan as of such purchase date and (z) any additional amount needed to
reimburse any unreimbursed related Periodic Advance or other servicing advances
made in respect of such Mortgage Loan, to be paid by (A) applying any balance in
the Collateral Fund to such purchase price, and (B) to the extent of any
deficiency, by wire transfer of immediately available funds from the Purchaser
to the Company for deposit in the related Certificate Account; or (ii) the
related Servicer shall proceed with the Commencement of Foreclosure. In the
event that the Purchaser purchases any such Mortgage Loan, the Servicer shall
continue to service the Mortgage Loan for the Purchaser pursuant to the
applicable Servicing Agreement.
(g) Upon the occurrence of a liquidation with respect to any
Mortgage Loan as to which the Purchaser made an Election to Delay Foreclosure
and as to which the related Servicer proceeded with the Commencement of
Foreclosure in accordance with subsection (f) above, the Company shall calculate
the amount, if any, by which the value shown on the Current Appraisal obtained
under subsection (c) exceeds the actual sales price obtained for the related
Mortgaged Property (net of Liquidation Expenses and accrued interest related to
the extended foreclosure period), and the Company shall withdraw the amount of
such excess from the Collateral Fund, shall remit the same to the Trust Estate
and in its capacity as Master Servicer shall apply such amount as additional
Liquidation Proceeds pursuant to the Pooling and Servicing Agreement. After
making such withdrawal, all amounts remaining in the Collateral Fund in respect
of such Mortgage Loan (after adjustment for all permitted withdrawals and
deposits pursuant to this Agreement) shall be released to the Purchaser.
Section 2.03. Purchaser's Election to Commence Foreclosure
Proceedings.
(a) In connection with any Mortgage Loan identified in a
Delinquency Report under Section 2.01(a)(ii), the Purchaser, for so long as the
Purchaser owns 100% of the Lowest Priority Certificates, may elect to instruct
the Company to cause, to the extent that the Company as Master Servicer is
granted such authority in the related Servicing Agreement, the related Servicer
to proceed with the Commencement of Foreclosure as soon as practicable. Such
election must be evidenced by written notice received by the Company by 5:00
p.m., New York City time, on the third Business Day following the delivery of
such Delinquency Report.
(b) Within two Business Days of making any Election to
Foreclose, the Purchaser shall remit to the Company, for deposit in the
Collateral Fund, an amount, as calculated by the Company, equal to 125% of the
current unpaid principal balance of the Mortgage Loan and three months interest
on the Mortgage Loan at the applicable Mortgage Interest Rate. If and when any
such Mortgage Loan is brought current by the mortgagor, all amounts in the
Collateral Fund in respect of such Mortgage Loan (after adjustment for all
permitted withdrawals and deposits pursuant to this Agreement) shall be released
to the Purchaser if and to the extent that reimbursement therefor from amounts
paid by the mortgagor is not prohibited pursuant to the Pooling and Servicing
Agreement or the related Servicing Agreement, applicable law or the related
mortgage note. The terms of this Agreement will no longer apply to the servicing
of any Mortgage Loan upon the failure of the Purchaser to deposit the above
amounts relating to the Mortgage Loan within two Business Days of the Election
to Foreclose subject to Section 3.01.
(c) With respect to any Mortgage Loan as to which the
Purchaser has made an Election to Foreclose, the related Servicer shall continue
to service the Mortgage Loan in accordance with its customary procedures (other
than Commencement of Foreclosure as provided herein). In connection therewith,
the Company shall have the same rights to make withdrawals for Monthly Advances
and Liquidations Expenses from the Collateral Fund as are provided under Section
2.02(e), and the Company shall make reimbursements thereto to the limited extent
provided under such subsection in accordance with its customary procedures. The
Company shall not be required to cause, to the extent that the Company as Master
Servicer is granted such authority in the related Servicing Agreement, the
related Servicer to proceed with the Commencement of Foreclosure if (i) the same
is stayed as a result of the mortgagor's bankruptcy or is otherwise barred by
applicable law, or to the extent that all legal conditions precedent thereto
have not yet been complied with, or (ii) the Company believes there is a breach
of representations or warranties by the Company, a Servicer, or a Seller, which
may result in a repurchase or substitution of such Mortgage Loan, or (iii) the
Company or related Servicer reasonably believes the Mortgaged Property may be
contaminated with or affected by hazardous wastes or hazardous substances (and,
without limiting the related Servicer's right not to proceed with the
Commencement of Foreclosure, the Company supplies the Purchaser with information
supporting such belief). Any foreclosure that has been initiated may be
discontinued (x) without notice to the Purchaser if the Mortgage Loan has been
brought current or if a refinancing or prepayment occurs with respect to the
Mortgage Loan (including by means of a short payoff) or (y) if the related
Servicer has reached the terms of a forbearance agreement.
(d) Upon the occurrence of a liquidation with respect to any
Mortgage Loan as to which the Purchaser made an Election to Foreclose and as to
which the related Servicer proceeded with the Commencement of Foreclosure in
accordance with subsection (c) above, the Company shall calculate the amount, if
any, by which the unpaid principal balance of the Mortgage Loan at the time of
liquidation (plus all unreimbursed interest and servicing advances and
Liquidation Expenses in connection therewith other than those paid from the
Collateral Fund) exceeds the actual sales price obtained for the related
Mortgaged Property, and the Company shall withdraw the amount of such excess
from the Collateral Fund, shall remit the same to the Trust Estate and in its
capacity as Master Servicer shall apply such amount as additional Liquidation
Proceeds pursuant to the Pooling and Servicing Agreement. After making such
withdrawal, all amounts remaining in the Collateral Fund (after adjustment for
all withdrawals and deposits pursuant to subsection (c) in respect of such
Mortgage Loan shall be released to the Purchaser.
Section 2.04. Termination.
(a) With respect to all Mortgage Loans included in the Trust
Estate, the Purchaser's right to make any Election to Delay Foreclosure or any
Election to Foreclose and the Company's obligations under Section 2.01 shall
terminate (i) at such time as the Principal Balance of the Class B Certificates
has been reduced to zero, (ii) if the greater of (x) 43% (or such lower or
higher percentage that represents the related Servicer's actual historical loss
experience with respect to the Mortgage Loans in the related pool as determined
by the Company) of the aggregate principal balance of all Mortgage Loans that
are in foreclosure or are more than 90 days delinquent on a contractual basis
and REO properties or (y) the aggregate amount that the Company estimates
through the normal servicing practices of the related Servicer will be required
to be withdrawn from the Collateral Fund with respect to Mortgage Loans as to
which the Purchaser has made an Election to Delay Foreclosure or an Election to
Foreclosure, exceeds (z) the then-current principal balance of the Class B
Certificates, (iii) upon any transfer by the Purchaser of any interest (other
than the minority interest therein, but only if the transferee provides written
acknowledgment to the Company of the Purchaser's right hereunder and that such
transferee will have no rights hereunder) in the Class B Certificates (whether
or not such transfer is registered under the Pooling and Servicing Agreement),
including any such transfer in connection with a termination of the Trust Estate
or (iv) upon any breach of the terms of this Agreement by the Purchaser.
(b) Except as set forth in 2.04(a), this Agreement and the
respective rights, obligations and responsibilities of the Purchaser and the
Company hereunder shall terminate upon the later to occur of (i) the final
liquidation of the last Mortgage Loan as to which the Purchaser made any
Election to Delay Foreclosure or any Election to Foreclose and the withdrawal of
all remaining amounts in the Collateral Fund as provided herein and (ii) ten
Business Days' notice. The Purchaser's right to make an election pursuant to
Section 2.02 or Section 2.03 hereof with respect to a particular Mortgage Loan
shall terminate if the Purchaser fails to make any deposit required pursuant to
Section 2.02(d) or 2.03(b) or if the Purchaser fails to make any other deposit
to the Collateral Fund pursuant to this Agreement.
ARTICLE III
COLLATERAL FUND; SECURITY INTEREST
Section 3.01. Collateral Fund.
Upon receipt from the Purchaser of the initial amount required to be
deposited in the Collateral Fund pursuant to Article II, the Company shall
establish and maintain with [ ] as a segregated account on its books and records
an account (the "Collateral Fund"), entitled "Xxxxx Fargo Bank, N.A., as Master
Servicer, for the benefit of registered holders of Xxxxx Fargo Asset Securities
Corporation Mortgage Pass-Through Certificates, Series [ ]." Amounts held in the
Collateral Fund shall continue to be the property of the Purchaser, subject to
the first priority security interest granted hereunder for the benefit of the
Certificateholders, until withdrawn from the Collateral Fund pursuant to Section
2.02 or 2.03 hereof. The Collateral Fund shall be an "outside reserve fund"
within the meaning of the REMIC Provisions, beneficially owned by the Purchaser
for federal income tax purposes. All income, gain, deduction or loss with
respect to the Collateral Fund shall be that of the Purchaser. All distributions
from the Trust Fund to the Collateral Fund shall be treated as distributed to
the Purchaser as the beneficial owner thereof.
Upon the termination of this Agreement and the liquidation of all
Mortgage Loans as to which the Purchaser has made any Election to Delay
Foreclosure or any Election to Foreclose pursuant to Section 2.04 hereof, the
Company shall distribute or cause to be distributed to the Purchaser all amounts
remaining in the Collateral Fund (after adjustment for all deposits and
permitted withdrawals pursuant to this Agreement) together with any investment
earnings thereon. In the event the Purchaser has made any Election to Delay
Foreclosure or any Election to Foreclose, prior to any distribution to the
Purchaser of all amounts remaining in the Collateral Fund, funds in the
Collateral Fund shall be applied consistent with the terms of this Agreement.
Section 3.02. Collateral Fund Permitted Investments.
The Company shall, at the written direction of the Purchaser, invest
the funds in the Collateral Fund in Collateral Fund Permitted Investments. Such
direction shall not be changed more frequently than quarterly. In the absence of
any direction, the Company shall select such investments in accordance with the
definition of Collateral Fund Permitted Investments in its discretion. All
income and gain realized from any investment as well as any interest earned on
deposits in the Collateral Fund (net of any losses on such investments) and any
payments of principal made in respect of any Collateral Fund Permitted
Investment shall be deposited in the Collateral Fund upon receipt. All costs and
realized losses associated with the purchase and sale of Collateral Fund
Permitted Investments shall be borne by the Purchaser and the amount of net
realized losses shall be deposited by the Purchaser in the Collateral Fund
promptly upon realization. The Company shall periodically (but not more
frequently than monthly) distribute to the Purchaser upon request an amount of
cash, to the extent cash is available therefore in the Collateral Fund, equal to
the amount by which the balance of the Collateral Fund, after giving effect to
all other distributions to be made from the Collateral Fund on such date,
exceeds the Required Collateral Fund Balance. Any amounts so distributed shall
be released from the lien and security interest of this Agreement.
Section 3.03. Grant of Security Interest.
The Purchaser hereby grants to the Company for the benefit of the
Certificateholders under the Pooling and Servicing Agreement a security interest
in and lien on all of the Purchaser's right, title and interest, whether now
owned or hereafter acquired, in and to: (1) the Collateral Fund, (2) all amounts
deposited in the Collateral Fund and Collateral Fund Permitted Investments in
which such amounts are invested (and the distributions and proceeds of such
investments) and (3) all cash and non-cash proceeds of any of the foregoing,
including proceeds of the voluntary conversion thereof (all of the foregoing
collectively, the "Collateral").
The Purchaser acknowledges the lien on and the security interest in the
Collateral for the benefit of the Certificateholders. The Purchaser shall take
all actions requested by the Company as may be reasonably necessary to perfect
the security interest created under this Agreement in the Collateral and cause
it to be prior to all other security interests and liens, including the
execution and delivery to the Company for filing of appropriate financing
statements in accordance with applicable law. The Company shall file appropriate
continuation statements, or appoint an agent on its behalf to file such
statements, in accordance with applicable law.
Section 3.04. Collateral Shortfalls.
In the event that amounts on deposit in the Collateral Fund at any time
are insufficient to cover any withdrawals therefrom that the Company is then
entitled to make hereunder, the Purchaser shall be obligated to pay such amounts
to the Company immediately upon demand. Such obligation shall constitute a
general corporate obligation of the Purchaser. The failure to pay such amounts
within two Business Days of such demand (except for amounts to cover interest on
a Mortgage Loan pursuant to Sections 2.02(d) and 2.03 (b)), shall cause an
immediate termination of the Purchaser's right to make any Election to Delay
Foreclosure or Election to Foreclose and the Company's obligations under this
Agreement with respect to all Mortgage Loans to which such insufficiencies
relate, without the necessity of any further notice or demand on the part of the
Company.
ARTICLE IV
Section 4.01. Assessment of Servicing Compliance;
Registered Public Accounting Firm
Attestation Reports; Exchange Act Reporting.
(a) The Purchaser shall furnish, or cause to be furnished in
the case of clause (iii), to the Master Servicer, no later than March 5 of each
year or if such day is not a Business Day, the next Business Day (with a 10
calendar day cure period, but in no event later than March 15), commencing in
March 20 , the following:
(i) a report (in form and substance reasonably satisfactory to
the Master Servicer and the Depositor) regarding the Purchaser's
assessment of compliance with the Servicing Criteria applicable to it
during the immediately preceding calendar year, as required under Rules
13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB.
Such report shall be addressed to the Master Servicer and signed by an
authorized officer of the Purchaser, and shall address, at a minimum,
each of the Servicing Criteria applicable to the Purchaser;
(ii) a report of a registered public accounting firm
reasonably acceptable to the Master Servicer and the Depositor that
attests to, and reports on, the assessment of compliance made by the
Purchaser and delivered pursuant to the preceding paragraph. Such
attestation shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of
Regulation S-X under the Securities Act and the Exchange Act. If
requested by the Master Servicer or the Depositor, such report shall
contain or be accompanied by a consent of such accounting firm to
inclusion or incorporation of such report in the Depositor's
Registration Statement on Form S-3 relating to the Certificates and the
Trust's Form 10-K; and
(iii) an assessment of compliance and accountants' attestation
as described in paragraphs (i) and (ii) of this Section 4.01(a) with
respect to each Subcontractor determined by the Purchaser pursuant to
Section 4.02 to be "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB.
An assessment of compliance provided by a Subcontractor
pursuant to Section 4.01(a)(iii) need not address any elements of the Servicing
Criteria applicable to it other than those specified by the Purchaser pursuant
to Section 4.02.
No later than 30 days following the end of each fiscal year
for the Trust for which a Form 10-K is required to be filed, the Purchaser shall
forward to the Master Servicer the name of each Subcontractor engaged by it and
what Servicing Criteria will be addressed in the report on assessment of
compliance prepared by such Subcontractor. When the Purchaser submits its
assessment to the Master Servicer, it will also at such time include the
assessment (and attestation pursuant to Section 4.01(a)(ii) hereof) of each
Subcontractor engaged by it.
(b) Within five (5) calendar days after a Distribution Date,
the Purchaser shall provide to the Master Servicer, to the extent known, in
XXXXX-compatible format, or in such other form as otherwise agreed upon by the
Master Servicer and the Purchaser, the form and substance of any Additional Form
10-D Disclosure applicable to the Purchaser, as indicated in the table in
Exhibit S to the Pooling and Servicing Agreement. The Purchaser acknowledges
that the performance by the Master Servicer of its duties under Section 3.12(a)
of the Pooling and Servicing Agreement relating to the timely preparation and
filing of Form 10-D is contingent upon the Purchaser strictly observing all
applicable deadlines in the performance of its duties under this Section
4.01(b).
(c) No later than March 5 (with a 10 calendar day cure period,
but in no event later than March 15) of each year that the Trust is subject to
the Exchange Act reporting requirements, commencing in March 20 , the Purchaser
shall provide to the Master Servicer, to the extent known, in XXXXX-compatible
format, or in such other form as otherwise agreed upon by the Master Servicer
and the Purchaser, the form and substance of any Additional Form 10-K Disclosure
applicable to the Purchaser, as indicated in the table in Exhibit T to the
Pooling and Servicing Agreement. The Purchaser acknowledges that the performance
by the Master Servicer of its duties under Section 3.12(b) of the Pooling and
Servicing Agreement relating to the timely preparation and filing of Form 10-K
is contingent upon the Purchaser strictly observing all applicable deadlines in
the performance of its duties under this Section 4.01(c).
(d) For so long as the Trust is subject to the Exchange Act
reporting requirements, no later than the end of business on the second Business
Day after the occurrence of a Reportable Event applicable to the Purchaser, the
Purchaser shall provide to the Master Servicer, to the extent known, in
XXXXX-compatible format, or in such other form as otherwise agreed upon by the
Master Servicer and the Purchaser, the form and substance of any Form 8-K
Disclosure Information applicable to the Purchaser, as indicated in the table in
Exhibit U to the Pooling and Servicing Agreement. The Purchaser acknowledges
that the performance by the Master Servicer of its duties under Section 3.12(c)
of the Pooling and Servicing Agreement relating to the timely preparation and
filing of Form 8-K is contingent upon the Purchaser strictly observing all
applicable deadlines in the performance of its duties under this Section
4.01(d).
(e) The Purchaser shall provide such information regarding
itself as the Master Servicer or the Depositor request for the purpose of
complying with Item 1108 of Regulation AB, including at a minimum, the
information set forth in Exhibit A
(f) The Purchaser shall indemnify the Master Servicer, each
affiliate of the Master Servicer, the Trust, each broker dealer acting as
underwriter or initial purchaser of the Certificates, each Person who controls
any of such parties and the Depositor (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act); and the respective present
and former directors, officers, employees and agents of each of the foregoing
and of the Depositor (each such entity, an "Indemnified Party"), and shall hold
each of them harmless from and against any losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and any other
costs, fees and expenses that any of them may sustain arising out of or based
upon:
(i) (A) any untrue statement of a material fact
contained or alleged to be contained in any information,
report, certification, accountants' letter or other material
provided in written or electronic form under this Section 4.01
or Section 4.02 hereof by or on behalf of the Purchaser, or
provided under Sections 4.01 or 4.02 by or on behalf of any
Subcontractor (collectively, the "Purchaser Information"), or
(B) the omission or alleged omission to state in the Purchaser
Information a material fact required to be stated in the
Purchaser Information or necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; provided, by way of
clarification, that clause (B) of this paragraph shall be
construed solely by reference to the Purchaser Information and
not to any other information communicated in connection with a
sale or purchase of securities, without regard to whether the
Purchaser Information or any portion thereof is presented
together with or separately from such other information; or
(ii) any failure by the Purchaser or any
Subcontractor engaged by the Purchaser to deliver any
information, report, certification, accountants' letter or
other material when and as required under Sections 4.01 or
4.02, including any failure by the Purchaser to identify
pursuant to Section 4.02 any Subcontractor "participating in
the servicing function" within the meaning of Item 1122 of
Regulation AB.
In the case of any failure of performance described in clause (ii) of
this Section, the Purchaser shall promptly reimburse the Master Servicer and the
Depositor, as applicable, for all costs reasonably incurred by each such party
in order to obtain the information, report, certification, accountants' letter
or other material not delivered as required by the Purchaser or any
Subcontractor. If the indemnification provided for herein is unavailable to hold
harmless any Indemnified Party, then the Purchaser agrees that it shall
contribute to the amount paid or payable by such Indemnified Party as a result
of the losses, claims, damages or liabilities of such Indemnified Party in such
proportion as is appropriate to reflect the relative fault of such Indemnified
Party on the one hand and the Purchaser on the other in connection with a breach
of the Purchaser's obligations under this Section 4.1 or the Purchaser's
negligence, bad faith or willful misconduct in connection therewith.
Section 4.02. Engagement of Affiliates or Third-Parties.
The Purchaser shall not hire any Subservicer without the
consent of the Master Servicer and the Depositor. The Purchaser shall not hire
or otherwise utilize the services of any Subcontractor to fulfill any of the
obligations of the Purchaser as servicer under this Agreement unless the
Purchaser complies with the provisions of this Section.
It shall not be necessary for the Purchaser to seek the
consent of the Master Servicer or the Depositor to the utilization of any
Subcontractor. The Purchaser shall promptly upon request provide to the Master
Servicer (or any designee of Master Servicer) a written description (in form and
substance satisfactory to the Master Servicer and the Depositor) of the role and
function of each Subcontractor utilized by the Purchaser, specifying (i) the
identity of each such Subcontractor, (ii) which (if any) of such Subcontractors
are "participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, and (iii) which elements of the Servicing Criteria will be
addressed in assessments of compliance provided by each Subcontractor identified
pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor
determined to be "participating in the servicing function" within the meaning of
Item 1122 of Regulation AB, the Purchaser shall cause any such Subcontractor
used by the Purchaser, for the benefit of the Master Servicer and the Depositor
to comply with the provisions of Section 4.01 of this Agreement to the same
extent as if such Subcontractor were the Purchaser. The Purchaser shall be
responsible for obtaining from each Subcontractor and delivering to the Master
Servicer any assessment of compliance and attestation required to be delivered
by such Subcontractor under Section 4.01, in each case as and when required to
be delivered.
Section 4.03. Notification of Merger.
The Purchaser and such successor or surviving Person shall
notify the Depositor, the Master Servicer and the Trustee of any such merger,
conversion or consolidation at least two Business Days prior to the effective
date thereof and shall provide the Depositor and the Master Servicer with all
information required by the Depositor to comply with its reporting obligations
not later than the effective date of such merger, conversion or consolidation
(unless giving prior notice would be prohibited by applicable law or by a
confidentiality agreement, in which case notice shall be given by 12 noon
eastern time one Business Day after such merger or consolidation).
Section 4.04. Compliance with Article IV.
If (a) the Purchaser fails to comply with its obligations to
deliver any assessment of servicing compliance or registered public accounting
firm attestation reports required pursuant to this Article IV or (b) any
Subcontractor engaged by the Purchaser fails to comply with its obligations to
deliver any assessment of servicing compliance or registered public accounting
firm attestation reports, the Master Servicer, may, after consultation with the
Depositor, terminate this Agreement pursuant to Section 2.04(a)(iv).
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01. Amendment.
This Agreement may be amended from time to time by the Company and the
Purchaser by written agreement signed by the Company and the Purchaser, subject
to the acknowledgement of the Rating Agencies as contemplated in Section 3.08 of
the Pooling and Servicing Agreement with respect to such amendment.
Section 5.02. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.
Section 5.03. Governing Law.
This Agreement shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
Section 5.04. Notices.
All demands, notices and direction hereunder shall be in writing or by
telecopy and shall be deemed effective upon receipt to:
(a) in the case of the Company,
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Vice President, Master Servicing
Phone: 000-000-0000
Fax: 000-000-0000
(b) in the case of the Purchaser,
Section 5.05. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever, including regulatory, held
invalid, then such covenants, agreements, provisions or terms of this Agreement
and shall in no way affect the validity or enforceability of the other
provisions of this Agreement.
Section 5.06. Successors and Assigns.
The provisions of this Agreement shall be binding upon and inure to the benefit
of the respective successors and assigns of the parties hereto, and all such
provisions shall inure to the benefit of the Certificateholders; provided,
however, that the rights under this Agreement cannot be assigned by the
Purchaser without the consent of the Company.
Section 5.07. Article and Section Headings.
The article and section headings herein are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
Section 5.08. Confidentiality.
The Purchaser agrees that all information supplied by or on behalf of
the Company pursuant to Sections 2.01 or 2.02, including individual account
information, is the property of the Company and the Purchaser agrees to hold
such information confidential and not to disclose such information.
Each party hereto agrees that neither it, nor any officer, director,
employee, affiliate or independent contractor acting at such party's direction
will disclose the terms of Section 5.09 of this Agreement to any person or
entity other than such party's legal counsel except pursuant to a final,
non-appealable order of court, the pendency of such order the other party will
have received notice of at least five business days prior to the date thereof,
or pursuant to the other party's prior express written consent.
Section 5.09. Indemnification.
The Purchaser agrees to indemnify and hold harmless the Company, the
Seller, and each Servicer and each person who controls the Company, the Seller,
or a Servicer and each of their respective officers, directors, affiliates and
agents acting at the Company's, the Seller's, or a Servicer's direction (the
"Indemnified Parties") against any and all losses, claims, damages or
liabilities to which they may be subject, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of, or are
based upon, actions taken by, or actions not taken by, the Company, the Seller,
or a Servicer, or on their behalf, in accordance with the provisions of this
Agreement and (i) which actions conflict with the Company's, the Seller's, or a
Servicer's obligations under the Pooling and Servicing Agreement or the related
Servicing Agreement, or (ii) give rise to securities law liability under federal
or state securities laws with respect to the Certificates. The Purchaser hereby
agrees to reimburse the Indemnified Parties for the reasonable legal or other
expenses incurred by them in connection with investigating or defending any such
loss, claim, damage, liability or action. The indemnification obligations of the
Purchaser hereunder shall survive the termination or expiration of this
Agreement.
Section 5.10 Regulation AB Compliance; Intent of Parties;
Reasonableness.
The parties hereto acknowledge that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise, and
agree to comply with requests made by the Depositor or the Master Servicer in
good faith for delivery of information under these provisions on the basis of
evolving interpretations of Regulation AB. In connection with the Trust, the
parties hereto shall cooperate fully with the Master Servicer and the Depositor
to deliver to the Master Servicer and/or the Depositor (including its assignees
or designees), any and all statements, reports, certifications, records and any
other information available to such party and reasonably necessary in the good
faith determination of the Depositor or the Master Servicer to permit the
Depositor or the Master Servicer to comply with the provisions of Regulation AB,
together with such disclosures reasonably believed by the Depositor or the
Master Servicer to be necessary in order to effect such compliance.
IN WITNESS WHEREOF, the Company and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
XXXXX FARGO BANK, N.A.
By: ___________________________________
Name:
Title:
[NAME OF PURCHASER]
By: ___________________________________
Name:
Title:
EXHIBIT A
PURCHASER INFORMATION
(A) the Purchaser's form of organization;
(B) a description of how long the Purchaser has been servicing
residential mortgage loans; a general discussion of the Purchaser's experience
in servicing assets of any type as well as a more detailed discussion of the
Purchaser's experience in, and procedures for, the servicing function it will
perform under the Agreement; information regarding the size, composition and
growth of the Purchaser's portfolio of residential mortgage loans of a type
similar to the Mortgage Loans and information on factors related to the
Purchaser that may be material, in the good faith judgment of the Master
Servicer or the Depositor, to any analysis of the servicing of the Mortgage
Loans or the related asset-backed securities, as applicable, including, without
limitation:
(1) whether any prior securitizations of mortgage loans of a
type similar to the Mortgage Loans involving the Purchaser have
defaulted or experienced an early amortization or other performance
triggering event because of servicing during the three-year period
immediately preceding the date of engagement of the Purchaser;
(2) the extent of outsourcing the Purchaser utilizes;
(3) whether there has been previous disclosure of material
noncompliance with the applicable servicing criteria with respect to
securitizations of residential mortgage loans involving the Purchaser
as a servicer during the three-year period immediately preceding the
date of engagement of the Purchaser;
(4) whether the Purchaser has been terminated as servicer in a
residential mortgage loan securitization, either due to a servicing
default or to application of a servicing performance test or trigger;
and
(5) such other information as the Master Servicer or the
Depositor may reasonably request for the purpose of compliance with
Item 1108(b)(2) of Regulation AB;
(C) a description of any material changes during the three-year period
immediately preceding the date of engagement of the Purchaser to the Purchaser's
policies or procedures with respect to the servicing function it will perform
under the Agreement for mortgage loans of a type similar to the Mortgage Loans;
(D) information regarding the Purchaser's financial condition, to the
extent that there is a material risk that an adverse financial event or
circumstance involving the Purchaser could have a material adverse effect on the
performance by the Purchaser of its servicing obligations under the Agreement;
(E) information regarding advances made by the Purchaser on the
Mortgage Loans and the Purchaser's overall servicing portfolio of residential
mortgage loans for the three-year period immediately preceding the date of
engagement of the Purchaser, which may be limited to a statement by an
authorized officer of the Purchaser to the effect that the Purchaser has made
all advances required to be made on residential mortgage loans serviced by it
during such period, or, if such statement would not be accurate, information
regarding the percentage and type of advances not made as required, and the
reasons for such failure to advance;
(F) a description of the Purchaser's processes and procedures designed
to address any special or unique factors involved in servicing loans of a
similar type as the Mortgage Loans;
(G) a description of the Purchaser's processes for handling
delinquencies, losses, bankruptcies and recoveries, such as through liquidation
of mortgaged properties, sale of defaulted mortgage loans or workouts; and
(H) information as to how the Purchaser defines or determines
delinquencies and charge-offs, including the effect of any grace period,
re-aging, restructuring, partial payments considered current or other practices
with respect to delinquency and loss experience.
EXHIBIT N
FORM OF INITIAL CERTIFICATION OF THE CUSTODIAN
[_]
Xxxxx Fargo Asset Securities Corporation
0000 Xxx Xxxxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxx 00000
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attn: Corporate Trust Services WFMBS 2006-AR3
Re: The Pooling and Servicing Agreement, dated February 27, 2006,
among Xxxxx Fargo Asset Securities Corporation, as Depositor,
Xxxxx Fargo Bank, N.A., as Master Servicer, and U.S. Bank
National Association, as Trustee, relating to the Xxxxx Fargo
Asset Securities Corporation; Mortgage Pass-Through
Certificates, Series 2006-AR3
Ladies and Gentlemen:
In accordance with the provisions of Section 2.02 of the
above-referenced Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), the undersigned, as Custodian on behalf of the Trustee, hereby
certifies that, except as specified in any list of exceptions attached hereto,
it has received the original Mortgage Note relating to each of the Mortgage
Loans listed on the Mortgage Loan Schedule.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement in connection with this initial certification.
The Custodian makes no representations as to: (i) the validity, legality,
sufficiency, enforceability, recordability or genuineness of any of the
documents contained in each Mortgage File or any of the Mortgage Loans
identified in the Mortgage Loan Schedule or (ii) the collectibility,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Pooling and Servicing Agreement.
XXXXX FARGO BANK, N.A.,
as Custodian on behalf of the Trustee
By:__________________________________
Name::_______________________________
Title::______________________________
EXHIBIT O
FORM OF FINAL CERTIFICATION OF THE CUSTODIAN
[_________ __, __]
Xxxxx Fargo Asset Securities Corporation
0000 Xxx Xxxxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxx 00000
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attn: Corporate Trust Services WFMBS 2006-AR3
Re: The Pooling and Servicing Agreement, dated February 27, 2006,
among Xxxxx Fargo Asset Securities Corporation, as Depositor,
Xxxxx Fargo Bank, N.A., as Master Servicer, and U.S. Bank
National Association, as Trustee, relating to the Xxxxx Fargo
Asset Securities Corporation; Mortgage Pass-Through
Certificates, Series 2006-AR3.
Ladies and Gentlemen:
In accordance with the provisions of Section 2.02 of the
above-referenced Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), the undersigned, as Custodian on behalf of the Trustee, hereby
certifies that, as to each Mortgage Loan listed in the Mortgage Loan Schedule,
except as may be specified in any list of exceptions attached hereto, such
Mortgage File contains all of the items required to be delivered pursuant to
Section 2.01 of the Pooling and Servicing Agreement.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement in connection with this final certification. The
Custodian makes no representations as to: (i) the validity, legality,
sufficiency, enforceability, recordability or genuineness of any of the
documents contained in each Mortgage File or any of the Mortgage Loans
identified in the Mortgage Loan Schedule or (ii) the collectibility,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Pooling and Servicing Agreement.
XXXXX FARGO BANK, N.A.,
as Custodian on behalf of the Trustee
By:__________________________________
Name::_______________________________
Title::______________________________
EXHIBIT P
FORM OF XXXXXXXX-XXXXX CERTIFICATION
Xxxxx Fargo Asset Securities Corporation
Mortgage Pass-Through Certificates,
Series 2006-AR3
I, [________], certify that:
1. I have reviewed this report on Form 10-K and all reports on Form 10-D
required to be filed in respect of the period covered by this report on
Form 10-K of the Xxxxx Fargo Asset Securities Corporation, Mortgage
Pass-Through Certificates, Series 2006-AR3 Trust (the "Exchange Act
Periodic Reports");
2. Based on my knowledge, the Exchange Act Periodic Reports, taken as a
whole, do not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, all of the distribution, servicing and other
information required to be provided under Form 10-D for the period
covered by this report is included in the Exchange Act Periodic
Reports;
4. I am responsible for reviewing the activities performed by the Master
Servicer and based upon my knowledge and the compliance review
conducted in preparing the servicer compliance statement required in
this report under Item 1123 of Regulation AB, and except as disclosed
in the Exchange Act Periodic Reports, the Master Servicer has fulfilled
its obligations under the pooling and servicing agreement, dated
February 27, 2006, among Xxxxx Fargo Asset Securities Corporation, as
depositor, Xxxxx Fargo Bank, N.A., as master servicer, and U.S. Bank
National Association, as trustee; and
5. All of the reports on assessment of compliance with the servicing
criteria for asset-backed securities and their related attestation
reports on assessment of compliance with servicing criteria for
asset-backed securities required to be included in this report in
accordance with Item 1122 of Regulation AB and Exchange Act Rules
13a-18 and 15d-18 have been included as an exhibit to this report,
except as otherwise disclosed in this report. Any material instances of
noncompliance described in such reports have been disclosed in this
report on Form 10-K.
[The following is included only for a transaction where there are Servicers
other than Xxxxx Fargo Bank: In giving the certifications above, I have
reasonably relied on information provided to me by the following
unaffiliated parties: [Name of Servicers other than Xxxxx Fargo Bank], as
Servicer.]
Date: [_____]
By:_________________________________
Name:
Title:
EXHIBIT Q
Schedule of Pledged Asset Mortgage Loans
WFMBS
WFMBS 2006-AR03 EXHIBIT Q
7/1 ARM RELOCATION & NON RELOCATION
(i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi)
----- ------- ----- ----- -------- -------- -------- -------- -------- --------- ---------- ------ ---------
CURRENT
CURRENT NET CUT-OFF
MORTGAGE MORTGAGE MORTGAGE CURRENT ORIGINAL SCHEDULED DATE MORTGAGE
LOAN ZIP PROPERTY INTEREST INTEREST MONTHLY TERM TO MATURITY PRINCIPAL INSURANCE
NUMBER CITY STATE CODE TYPE RATE RATE PAYMENT MATURITY DATE BALANCE LTV CODE
-------- ------- ----- ------ -------- -------- -------- -------- -------- --------- ---------- ------ ---------
0149552838 XXXXXXX XX 00000 SFD 6.125 5.865 $1,296.44 360 1-Jan-36 $253,996.46 100.00
$253,996.46
(i) (xii) (xiii) (xiv) (xv) (xvi) (xvii) (xviii)
----- ---------- -------- ---------- -------- ------ ---------- ------
MORTGAGE MASTER NEXT
LOAN SERVICE SERVICE GROSS PERIODIC ADJUSTMENT LIFE
NUMBER FEE FEE INDEX MARGIN CAP DATE CAP
-------- ---------- -------- ---------- -------- -------- ---------- ------
0149552838 0.250 0.010 1CM 2.750 2.000 1-Jan-13 11.125
COUNT: 1
WAC: 6.125
WALTV: 100
WAM: 238
EXHIBIT R
Servicing Criteria to be Addressed in Assessment of Compliance
-------------------------------------------------------------------------------------- ---------------------------------------------
SERVICING CRITERIA APPLICABLE SERVICING CRITERIA
-------------------------------------------------------------------------------------- ---------------------------------------------
Master
Reference Criteria Servicer Trustee Servicer Custodian
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
General Servicing Considerations
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Policies and procedures are instituted to monitor any performance X X
or other triggers and events of default in accordance with the
1122(d)(1)(i) transaction agreements.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
If any material servicing activities are outsourced to third X X
parties, policies and procedures are instituted to monitor the
third party's performance and compliance with such servicing
1122(d)(1)(ii) activities.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Any requirements in the transaction agreements to maintain
1122(d)(1)(iii) a back-up servicer for the mortgage loans are maintained.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
A fidelity bond and errors and omissions policy is in effect on the X X X
party participating in the servicing function throughout the
reporting period in the amount of coverage required by and
otherwise in accordance with the terms of the transaction
1122(d)(1)(iv) agreements.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Cash Collection and Administration
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Payments on mortgage loans are deposited into the appropriate X X
custodial bank accounts and related bank clearing accounts no more
than two business days following receipt, or such other number of
1122(d)(2)(i) days specified in the transaction agreements.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Disbursements made via wire transfer on behalf of an obligor or to X X
1122(d)(2)(ii) an investor are made only by authorized personnel.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Advances of funds or guarantees regarding collections, cash flows X X(1) X
or distributions, and any interest or other fees charged for such
advances, are made, reviewed and approved as specified in the
1122(d)(2)(iii) transaction agreements.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
The related accounts for the transaction, such as cash reserve
accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with X X
respect to commingling of cash) as set forth in the transaction
1122(d)(2)(iv) agreements.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Each custodial account is maintained at a federally insured X X
depository institution as set forth in the transaction agreements.
For purposes of this criterion, "federally insured depository
institution" with respect to a foreign financial institution means
a foreign financial institution that meets the requirements of Rule
1122(d)(2)(v) 13k-1(b)(1) of the Securities Exchange Act.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Unissued checks are safeguarded so as to prevent unauthorized X X
1122(d)(2)(vi) access.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Reconciliations are prepared on a monthly basis for all X X
asset-backed securities related bank accounts, including custodial
accounts and related bank clearing accounts. These reconciliations
are (A) mathematically accurate; (B) prepared within 30 calendar
days after the bank statement cutoff date, or such other number of
days specified in the transaction agreements; (C) reviewed and
approved by someone other than the person who prepared the
reconciliation; and (D) contain explanations for reconciling items.
These reconciling items are resolved within 90 calendar days of
their original identification, or such other number of days
1122(d)(2)(vii) specified in the transaction agreements.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Investor Remittances and Reporting
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Reports to investors, including those to be filed with the X X
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements. Specifically,
such reports (A) are prepared in accordance with timeframes and
other terms set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms specified in
the transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with
investors' or the trustee's records as to the total unpaid
principal balance and number of mortgage loans serviced by the
1122(d)(3)(i) Servicer.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Amounts due to investors are allocated and remitted in accordance X X
with timeframes, distribution priority and other terms set forth in
1122(d)(3)(ii) the transaction agreements.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Disbursements made to an investor are posted within two business
days to the Servicer's investor records, or such other number of X X
1122(d)(3)(iii) days specified in the transaction agreements.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Amounts remitted to investors per the investor reports agree with
cancelled checks, or other form of payment, or custodial bank X X
1122(d)(3)(iv) statements.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Pool Asset Administration
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Collateral or security on mortgage loans is maintained as required X X X
1122(d)(4)(i) by the transaction agreements or related mortgage loan documents.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Mortgage loan and related documents are safeguarded as required by X X
1122(d)(4)(ii) the transaction agreements
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Any additions, removals or substitutions to the asset pool are X X
made, reviewed and approved in accordance with any conditions or
1122(d)(4)(iii) requirements in the transaction agreements.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Payments on mortgage loans, including any payoffs, made in X
accordance with the related mortgage loan documents are posted to
the Servicer's obligor records maintained no more than two business
days after receipt, or such other number of days specified in the
transaction agreements, and allocated to principal, interest or
other items (e.g., escrow) in accordance with the related mortgage
1122(d)(4)(iv) loan documents.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
The Servicer's records regarding the mortgage loans agree with the X
Servicer's records with respect to an obligor's unpaid principal
1122(d)(4)(v) balance.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Changes with respect to the terms or status of an obligor's X X
mortgage loans (e.g., loan modifications or re-agings) are made,
reviewed and approved by authorized personnel in accordance with
1122(d)(4)(vi) the transaction agreements and related pool asset documents.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Loss mitigation or recovery actions (e.g., forbearance plans, X X
modifications and deeds in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and
concluded in accordance with the timeframes or other requirements
1122(d)(4)(vii) established by the transaction agreements.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Records documenting collection efforts are maintained during the X
period a mortgage loan is delinquent in accordance with the
transaction agreements. Such records are maintained on at least a
monthly basis, or such other period specified in the transaction
agreements, and describe the entity's activities in monitoring
delinquent mortgage loans including, for example, phone calls,
letters and payment rescheduling plans in cases where delinquency
1122(d)(4)(viii) is deemed temporary (e.g., illness or unemployment).
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Adjustments to interest rates or rates of return for mortgage loans X
with variable rates are computed based on the related mortgage loan
1122(d)(4)(ix) documents.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Regarding any funds held in trust for an obligor (such as escrow X
accounts): (A) such funds are analyzed, in accordance with the
obligor's mortgage loan documents, on at least an annual basis, or
such other period specified in the transaction agreements; (B)
interest on such funds is paid, or credited, to obligors in
accordance with applicable mortgage loan documents and state laws;
and (C) such funds are returned to the obligor within 30 calendar
days of full repayment of the related mortgage loans, or such other
1122(d)(4)(x) number of days specified in the transaction agreements.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Payments made on behalf of an obligor (such as tax or insurance X
payments) are made on or before the related penalty or expiration
dates, as indicated on the appropriate bills or notices for such
payments, provided that such support has been received by the
servicer at least 30 calendar days prior to these dates, or such
1122(d)(4)(xi) other number of days specified in the transaction agreements.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Any late payment penalties in connection with any payment to be X
made on behalf of an obligor are paid from the Servicer's funds and
not charged to the obligor, unless the late payment was due to the
1122(d)(4)(xii) obligor's error or omission.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Disbursements made on behalf of an obligor are posted
within two business days to the obligor's records
maintained by the Servicer, or such other number of days
1122(d)(4)(xiii) specified in the transaction agreements. X
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Delinquencies, charge-offs and uncollectible accounts are X X
recognized and recorded in accordance with the transaction
1122(d)(4)(xiv) agreements.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
Any external enhancement or other support, identified in X(2)
Item 1114(a)(1) through (3) or Item 1115 of Regulation AB,
1122(d)(4)(xv) is maintained as set forth in the transaction agreements.
---------------- --------------------------------------------------------------------- ---------- ---------- ----------- -----------
[_______________________]
Date: _______________________
By:_____________________________
Name:
Title:
(1) This Servicing Criterion applies to the Trustee if the Trustee was required
during the preceding calendar year to make an Advance in accordance with
Section 8.14 of the Pooling and Servicing Agreement.
(2) This Servicing Criterion applies to the Master Servicer only for
transactions that contain any external credit enhancement or other support
identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB.
EXHIBIT S
Additional Form 10-D Disclosure
---------------------------------------------------------- --------------------------------------------------------
Item on Form 10-D Party Responsible
---------------------------------------------------------- --------------------------------------------------------
Item 1: Distribution and Pool Performance Information Master Servicer
Any information required by 1121 which is NOT
included on the Distribution Date Statement
---------------------------------------------------------- --------------------------------------------------------
Item 2: Legal Proceedings per Item 1117 of Reg AB (i) All parties to the Pooling and Servicing
Agreement, the Custodian, each Servicer and, if
applicable the Special Servicer (as to
themselves), (ii) the Master Servicer as to the
issuing entity, (iii) the Depositor as to the
sponsor, any 1110(b) originator, any 1100(d)(1)
party
---------------------------------------------------------- --------------------------------------------------------
Item 3: Sale of Securities and Use of Proceeds Depositor
---------------------------------------------------------- --------------------------------------------------------
Item 4: Defaults Upon Senior Securities Master Servicer
---------------------------------------------------------- --------------------------------------------------------
Item 5: Submission of Matters to a Vote of Security Master Servicer, Trustee
Holders
---------------------------------------------------------- --------------------------------------------------------
Item 6: Significant Obligors of Pool Assets Depositor, if applicable
---------------------------------------------------------- --------------------------------------------------------
Item 7: Significant Enhancement Provider Information Depositor, if applicable
---------------------------------------------------------- --------------------------------------------------------
Item 8: Other Information Any party responsible for disclosure items on
Form 8-K
---------------------------------------------------------- --------------------------------------------------------
Item 9: Exhibits Depositor, Master Servicer
---------------------------------------------------------- --------------------------------------------------------
EXHIBIT T
Additional Form 10-K Disclosure
---------------------------------------------------------- --------------------------------------------------------
Item on Form 10-K Party Responsible
---------------------------------------------------------- --------------------------------------------------------
Item 1B: Unresolved Staff Comments Depositor
---------------------------------------------------------- --------------------------------------------------------
Item 9B: Other Information Any party responsible for disclosure items on
Form 8-K
---------------------------------------------------------- --------------------------------------------------------
Item 15: Exhibits, Financial Statement Schedules Master Servicer
Depositor
---------------------------------------------------------- --------------------------------------------------------
Additional Item: (i) All parties to the Pooling and Servicing
Disclosure per Item 1117 of Reg AB Agreement, the Custodian, each Servicer and, if
applicable the Special Servicer (as to
themselves), (ii) the Master Servicer as to the
issuing entity, (iii) the Depositor as to the
sponsor, any 1110(b) originator, any 1100(d)(1)
party
---------------------------------------------------------- --------------------------------------------------------
Additional Item: (i) All parties to the Pooling and Servicing
Disclosure per Item 1119 of Reg AB Agreement, the Custodian, each Servicer and, if
applicable the Special Servicer (as to
themselves), (ii) the Master Servicer as to the
issuing entity, (iii) the Depositor as to the
sponsor, any 1110(b) originator, any 1100(d)(1)
party, any significant obligor, any credit
enhancement provider or derivative counterparty
---------------------------------------------------------- --------------------------------------------------------
Additional Item: Depositor, if applicable
Disclosure per Item 1112(b) of Reg AB
---------------------------------------------------------- --------------------------------------------------------
Additional Item: Depositor, if applicable
Disclosure per Items 1114(b) and 1115(b) of Reg AB
---------------------------------------------------------- --------------------------------------------------------
EXHIBIT U
Form 8-K Disclosure Information
---------------------------------------------------------- ----------------------------------------------------------
Item on Form 8-K Party Responsible
---------------------------------------------------------- ----------------------------------------------------------
Item 1.01- Entry into a Material Definitive Agreement All parties to the Pooling and Servicing
Agreement, each Servicer, the Custodian and, if
applicable, the Special Servicer, as to each
agreement to which it is a party
---------------------------------------------------------- ----------------------------------------------------------
Item 1.02- Termination of a Material Definitive Agreement All parties to the Pooling and Servicing Agreement,
each Servicer, the Custodian and, if applicable,
the Special Servicer, as to each agreement to
which it is a party
---------------------------------------------------------- ----------------------------------------------------------
Item 1.03- Bankruptcy or Receivership (i) Depositor, as to itself, the sponsor, any
1100(d)(1) party, any significant obligor, any
credit enhancement provider or derivative
counterparty and any other transaction party,
to the extent known to the Depositor, (ii)
Trustee, as to itself, (iii) each Servicer as
to itself, (iv) Master Servicer, as to itself
and any other transaction party, to the extent
known to the Master Servicer
---------------------------------------------------------- ----------------------------------------------------------
Item 2.04- Triggering Events that Accelerate or Increase Master Servicer
a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet
Arrangement
---------------------------------------------------------- ----------------------------------------------------------
Item 3.03- Material Modification to Rights of Security Master Servicer
Holders
---------------------------------------------------------- ----------------------------------------------------------
Item 5.03- Amendments of Articles of Incorporation or Master Servicer
Bylaws; Change of Fiscal Year
---------------------------------------------------------- ----------------------------------------------------------
Item 6.01- ABS Informational and Computational Material Depositor
---------------------------------------------------------- ----------------------------------------------------------
Item 6.02- Change of Servicer or Master Servicer Servicer, Master Servicer
---------------------------------------------------------- ----------------------------------------------------------
Item 6.03- Change in Credit Enhancement or External Depositor/Master Servicer
Support
---------------------------------------------------------- ----------------------------------------------------------
Item 6.04- Failure to Make a Required Distribution Master Servicer
---------------------------------------------------------- ----------------------------------------------------------
Item 6.05- Securities Act Updating Disclosure Depositor
---------------------------------------------------------- ----------------------------------------------------------
Item 7.01- Reg FD Disclosure Depositor
---------------------------------------------------------- ----------------------------------------------------------
Item 8.01- Other Events Depositor, Master Servicer
---------------------------------------------------------- ----------------------------------------------------------
Item 9.01 Depositor, Master Servicer
---------------------------------------------------------- ----------------------------------------------------------
EXHIBIT V
Additional Disclosure Notification
**SEND VIA FAX TO 000-000-0000 AND VIA EMAIL TO
XXX.XXX.XXXXXXXXXXXXX@XXXXXXXXXX.XXX AND VIA OVERNIGHT MAIL TO THE ADDRESS
IMMEDIATELY BELOW**
Xxxxx Fargo Bank, N.A., as Master Servicer
Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Corporate Trust Services- WFMBS 2006-AR3--SEC REPORT PROCESSING
RE:**[Additional Form [10-D][10-K] Disclosure][Form 8-K Disclosure
Information]** Required
Ladies and Gentlemen:
In accordance with Section [ ] of the Pooling and Servicing
Agreement, dated as of February 27, 2006, among Xxxxx Fargo Asset Securities
Corporation, as depositor, Xxxxx Fargo Bank, N.A., as master servicer, and U.S.
Bank National Association, as trustee, the undersigned, as [ ], hereby notifies
you that certain events have come to our attention that [will] [may] need to be
disclosed on Form [10-D][10-K][8-K].
Description of [Additional Form [10-D][10-K] Disclosure][Form 8-K Disclosure
Information]:
List of any Attachments hereto to be included in the Additional Form
[10-D][10-K] Disclosure][Form 8-K Disclosure Information]:
Any inquiries related to this notification should be directed
to [ ], phone number: [ ]; email address: [ ].
[NAME OF PARTY],
as [role]
By: ____________________________________
Name:
Title:
