Certain Matters Regarding The Swap Agreement. (a) In the event that, upon the Supplemental Interest Trust entering into a replacement interest rate swap following the occurrence of an Additional Termination Event of the type described in Part 1(h)(ii) of the Swap Agreement, the Supplemental Interest Trust is entitled to receive a payment from a replacement swap provider, the Securities Administrator shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap Counterparty immediately upon receipt of such payment, regardless of whether the date of receipt thereof is a Distribution Date. To the extent that any Replacement Swap Counterparty Payment is made to an account other than the Swap Account, then, notwithstanding anything to the contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid to the Swap Counterparty immediately upon receipt of such Replacement Swap Counterparty Payment, regardless of whether the date of receipt thereof is a Distribution Date and without regard to anything to the contrary contained in this Agreement. For the avoidance of 128 doubt, the parties agree that the Swap Counterparty shall have first priority to any Replacement Swap Counterparty Payment over the payment by the Supplemental Interest Trust to Certificateholders, any Servicer, the Master Servicer, the Securities Administrator, each Custodian or any other Person. (b) The Securities Administrator shall account for the Supplemental Interest Trust as a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Supplemental Interest Trust are the Class OC Certificateholders. For federal income tax purposes, Net Swap Payments and Swap Termination Payments payable to the Swap Counterparty shall be deemed to be paid to the Swap Account from the Master REMIC, first, by the Holder of the Class OC Certificates and second, other than any Defaulted Swap Termination Payment, from the Master REMIC by the Holders of the applicable Class or Classes of Group 1 Certificates as and to the extent provided in Section 10.01 hereof. (c) Any Basis Risk Carry Forward Amounts (excluding any such Amounts attributable to the excess of the Group 1 REMIC Cap over the Net WAC Pass-Through Rate) distributed by the Securities Administrator to the Group 1 Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class OC Certificates, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive the Basis Risk Carry Forward Amounts from the Swap Account (along with Basis Risk Carry Forward Amounts payable from Net Monthly Excess Cashflow) as rights in a separate limited recourse interest rate cap contract written by the Class OC Certificateholders and the Swap Counterparty in favor of Holders of each such Class. (d) The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class OC Certificates shall be the beneficial owners of the Supplemental Interest Trust for all federal income tax purposes, and shall be taxable on all income earned thereon. (e) With respect to the failure of the Swap Counterparty to perform any of its payment obligations under the Swap Agreement, the breach by the Swap Counterparty of any of its representations and warranties made pursuant to the Swap Agreement, or the termination of the Swap Agreement, the Securities Administrator on behalf of the Supplemental Interest Trust shall send any notices and make any demands, on behalf of the Supplemental Interest Trust as are required under the Swap Agreement. To the extent that the Swap Counterparty fails to make any payment required under terms of the Swap Agreement, the Securities Administrator on behalf of the Supplemental Interest Trust shall immediately demand that Morgan Stanley, the guarantor of the Swap Counterparty's payment obxxxxxxoxx xxxxr the guarantee of Morgan Stanley relating to the Swap Agreement, make any and all payxxxxx txxx xxxuired to be made by Morgan Stanley pursuant to such guarantee. The Securities Administrxxxx xn xxxxxx of the Supplemental Interest Trust shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator on behalf of the Supplemental Interest Trust and the Depositor. 129 Notwithstanding any provision contained in this Agreement, the Securities Administrator shall not be required to make any distributions from the Swap Account except as expressly set forth in this Section 5.11 or in Section 5.10. (f) Upon a Collateralization Event or a Substitution Event, the Securities Administrator, acting at the written direction of the Depositor, shall attempt to obtain Rating Agency approval for the ISDA Credit Support Annex and following final negotiation of the ISDA Credit Support Annex the Securities Administrator shall demand payment of the Delivery Amount (as defined in the ISDA Credit Support Annex) on each Valuation Date (as defined in the ISDA Credit Support Annex) and to perform its other obligations in accordance with the ISDA Credit Support Annex. If a Delivery Amount is demanded, the Securities Administrator, acting at the written direction of the Depositor, shall set up an account in accordance with Section 5.10 to hold cash or other eligible investments pledged under such ISDA Credit Support Annex. Any cash or other eligible investments pledged under an ISDA Credit Support Annex shall not be part of the Distribution Account or the Supplemental Interest Trust unless they are applied in accordance with such ISDA Credit Support Annex to make a payment due to the Supplemental Interest Trust pursuant to the Swap Agreement. If Eligible Credit Support (as defined in the ISDA Credit Support Annex) with a value equal to the Delivery Amount is not delivered, the Securities Administrator shall notify the Swap Counterparty of such failure. (g) Upon an Event of Default (as defined in the Swap Agreement) or Termination Event (as defined in the Swap Agreement) for which the Supplemental Interest Trust has the right to designate an Early Termination Date (as defined in the Swap Agreement), the Securities Administrator will act at the written direction of the Depositor as to whether it will designate an Early Termination Date; provided, however, that the Securities Administrator shall provide written notice to each Rating Agency following the Event of Default or Termination Event. Upon the termination of the Swap Agreement under the circumstances contemplated by this Section 5.11(f), the Securities Administrator shall use its reasonable best efforts to enforce the rights of the Supplemental Interest Trust thereunder as may be permitted by the terms of the Swap Agreement and consistent with the terms hereof, and shall apply the proceeds of any such efforts to enter into a replacement swap agreement with another swap provider. To the extent such replacement swap agreement can be entered into, any termination payments received by the Supplemental Interest Trust in respect of the terminated swap agreement shall be used, to the extent necessary, by the Supplemental Interest Trust for the purpose of entering into such replacement swap agreement. (h) In the event that the Issuing Entity receives a Swap Termination Payment, and a successor Swap Counterparty (or its guarantor) cannot be obtained, then the Securities Administrator will be required to deposit any Swap Termination Payment into a reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in such reserve account), the Securities Administrator will be required to withdraw from the reserve account and deposit into the Swap Account an amount equal to the amount of any Net Swap Receipt due the Issuing Entity (calculated in accordance with the terms of the original Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap Account. The remaining amount in the reserve account will remain in that account and not treated as a Swap Termination Payment for purposes of determining the distributions from the Swap Account until the final Swap Termination Date. (i) The Swap Counterparty shall be an express third party beneficiary of this Agreement for the purpose of enforcing the provisions hereof to the extent of the Swap Counterparty's rights explicitly specified herein as if a party hereto. (j) Notwithstanding any contrary provision of this Agreement, no amendment shall adversely affect in any material respect the Swap Counterparty without at least ten Business Days' prior notice to the Swap Counterparty and without the prior written consent of the Swap Counterparty, which consent shall not be unreasonably withheld. The Depositor shall provide the Swap Counterparty with prior written notice of any proposed material amendment of this Agreement
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Mortgage Loan Trust 2006-8ar)
Certain Matters Regarding The Swap Agreement. (a) In the event that, upon the Supplemental Interest Trust entering into a replacement interest rate swap following the occurrence of an Additional Termination Event of the type described in Part 1(h)(ii) of the Swap Agreement, the Supplemental Interest Trust is entitled to receive a payment from a replacement swap provider, the Securities Administrator shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap Counterparty immediately upon receipt of such payment, regardless of whether the date of receipt thereof is a Distribution Date. To the extent that any Replacement Swap Counterparty Payment is made to an account other than the Swap Account, then, notwithstanding anything to the contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid to the Swap Counterparty immediately upon receipt of such Replacement Swap Counterparty Payment, regardless of whether the date of receipt thereof is a Distribution Date and without regard to anything to the contrary contained in this Agreement. For the avoidance of 128 doubt, the parties agree that the Swap Counterparty shall have first priority to any Replacement Swap Counterparty Payment over the payment by the Supplemental Interest Trust to Certificateholders, any Servicer, the Master Servicer, the Securities Administrator, each Custodian or any other Person.
(b) The Securities Administrator shall account for the Supplemental Interest Trust Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Supplemental Interest Trust Swap Account are the Class OC Certificateholders. For federal income tax purposes, Net Swap Payments and Swap Termination Payments payable to the Swap Counterparty shall be deemed to be paid to the Swap Account from the Master REMIC, first, by the Holder of the Class OC Certificates and second, other than any Defaulted Swap Termination Payment, from the Master REMIC by the Holders of the applicable Class or Classes of Group 1 Certificates as and to the extent provided in Section 10.01 hereof.
(c) Any Basis Risk Carry Forward Amounts (excluding any such Amounts attributable to the excess of the Group 1 REMIC Cap over the Net WAC Pass-Through Rate) distributed by the Securities Administrator to the Group 1 Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class OC Certificates, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive the Basis Risk Carry Forward Amounts from the Swap Account (along with Basis Risk Carry Forward Amounts payable from Net Monthly Excess Cashflow) as rights in a separate limited recourse interest rate cap contract written by the Class OC Certificateholders and the Swap Counterparty in favor of Holders of each such Class.
(d) The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class OC Certificates shall be the beneficial owners of the Supplemental Interest Trust Swap Account for all federal income tax purposes, and shall be taxable on all income earned thereon.
(e) With respect to the failure of the Swap Counterparty to perform any of its payment obligations under the Swap Agreement, the breach by the Swap Counterparty of any of its representations and warranties made pursuant to the Swap Agreement, or the termination of the Swap Agreement, the Securities Administrator on behalf of the Supplemental Interest Trust Fund shall send any notices and make any demands, on behalf of the Supplemental Interest Trust as are required under the Swap Agreement. To the extent that the Swap Counterparty fails to make any payment required under terms of the Swap Agreement, the Securities Administrator on behalf of the Supplemental Interest Trust shall immediately demand that Morgan Stanley, the guarantor of the Swap Counterparty's payment obxxxxxxoxx xxxxr the guarantee of Morgan Stanley relating to the Swap Agreement, make any and all payxxxxx txxx xxxuired to be made by Morgan Stanley pursuant to such guarantee. The Securities Administrxxxx xn xxxxxx of the Supplemental Interest Trust shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator on behalf of the Supplemental Interest Trust and the Depositor. 129 Notwithstanding any provision contained in this Agreement, the Securities Administrator shall not be required to make any distributions from the Swap Account except as expressly set forth in this Section 5.11 or in Section 5.10.
(f) Upon a Collateralization Event or a Substitution Event, the Securities Administrator, acting at the written direction of the Depositor, shall attempt to obtain Rating Agency approval for the ISDA Credit Support Annex and following final negotiation of the ISDA Credit Support Annex the Securities Administrator shall demand payment of the Delivery Amount (as defined in the ISDA Credit Support Annex) on each Valuation Date (as defined in the ISDA Credit Support Annex) and to perform its other obligations in accordance with the ISDA Credit Support Annex. If a Delivery Amount is demanded, the Securities Administrator, acting at the written direction of the Depositor, shall set up an account in accordance with Section 5.10 to hold cash or other eligible investments pledged under such ISDA Credit Support Annex. Any cash or other eligible investments pledged under an ISDA Credit Support Annex shall not be part of the Distribution Account or the Supplemental Interest Trust unless they are applied in accordance with such ISDA Credit Support Annex to make a payment due to the Supplemental Interest Trust pursuant to the Swap Agreement. If Eligible Credit Support (as defined in the ISDA Credit Support Annex) with a value equal to the Delivery Amount is not delivered, the Securities Administrator shall notify the Swap Counterparty of such failure.
(g) Upon an Event of Default (as defined in the Swap Agreement) or Termination Event (as defined in the Swap Agreement) for which the Supplemental Interest Trust has the right to designate an Early Termination Date (as defined in the Swap Agreement), the Securities Administrator will act at the written direction of the Depositor as to whether it will designate an Early Termination Date; provided, however, that the Securities Administrator shall provide written notice to each Rating Agency following the Event of Default or Termination Event. Upon the termination of the Swap Agreement under the circumstances contemplated by this Section 5.11(f), the Securities Administrator shall use its reasonable best efforts to enforce the rights of the Supplemental Interest Trust thereunder as may be permitted by the terms of the Swap Agreement and consistent with the terms hereof, and shall apply the proceeds of any such efforts to enter into a replacement swap agreement with another swap provider. To the extent such replacement swap agreement can be entered into, any termination payments received by the Supplemental Interest Trust in respect of the terminated swap agreement shall be used, to the extent necessary, by the Supplemental Interest Trust for the purpose of entering into such replacement swap agreement.
(h) In the event that the Issuing Entity receives a Swap Termination Payment, and a successor Swap Counterparty (or its guarantor) cannot be obtained, then the Securities Administrator will be required to deposit any Swap Termination Payment into a reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in such reserve account), the Securities Administrator will be required to withdraw from the reserve account and deposit into the Swap Account an amount equal to the amount of any Net Swap Receipt due the Issuing Entity (calculated in accordance with the terms of the original Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap Account. The remaining amount in the reserve account will remain in that account and not treated as a Swap Termination Payment for purposes of determining the distributions from the Swap Account until the final Swap Termination Date.
(i) The Swap Counterparty shall be an express third party beneficiary of this Agreement for the purpose of enforcing the provisions hereof to the extent of the Swap Counterparty's rights explicitly specified herein as if a party hereto.
(j) Notwithstanding any contrary provision of this Agreement, no amendment shall adversely affect in any material respect the Swap Counterparty without at least ten Business Days' prior notice to the Swap Counterparty and without the prior written consent of the Swap Counterparty, which consent shall not be unreasonably withheld. The Depositor shall provide the Swap Counterparty with prior written notice of any proposed material amendment of this Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Mortgage Loan Trust 2006-6ar)
Certain Matters Regarding The Swap Agreement. (a) In the event that, upon the Supplemental Interest Trust entering into a replacement interest rate swap following the occurrence of an Additional Termination Event of the type described in Part 1(h)(ii) of the Swap Agreement, the Supplemental Interest Trust is entitled to receive a payment from a replacement swap provider, the Securities Administrator shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap Counterparty immediately upon receipt of such payment, regardless of whether the date of receipt thereof is a Distribution Date. To the extent that any Replacement Swap Counterparty Payment is made to an account other than the Swap Account, then, notwithstanding anything to the contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid to the Swap Counterparty immediately upon receipt of such Replacement Swap Counterparty Payment, regardless of whether the date of receipt thereof is a Distribution Date and without regard to anything to the contrary contained in this Agreement. For the avoidance of 128 doubt, the parties agree that the Swap Counterparty shall have first priority to any Replacement Swap Counterparty Payment over the payment by the Supplemental Interest Trust to Certificateholders, any Servicer, the Master Servicer, the Securities Administrator, each Custodian or any other Person.
(b) The Securities Administrator shall account for the Supplemental Interest Trust as a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Supplemental Interest Trust are the Class OC Certificateholders. For federal income tax purposes, Net Swap Payments and Swap Termination Payments payable to the Swap Counterparty shall be deemed to be paid to the Swap Account from the Master REMIC, first, by the Holder of the Class OC Certificates and second, other than any Defaulted Swap Termination Payment, from the Master REMIC by the Holders of the applicable Class or Classes of Group 1 Certificates as and to the extent provided in Section 10.01 hereof.
(c) Any Basis Risk Carry Forward Amounts (excluding any such Amounts attributable to the excess of the Group 1 REMIC Cap over the Net WAC Pass-Through Rate) distributed by the Securities Administrator to the Group 1 Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class OC Certificates, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive the Basis Risk Carry Forward Amounts from the Swap Account (along with Basis Risk Carry Forward Amounts payable from Net Monthly Excess Cashflow) as rights in a separate limited recourse interest rate cap contract written by the Class OC Certificateholders and the Swap Counterparty in favor of Holders of each such Class.
(d) The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class OC Certificates shall be the beneficial owners of the Supplemental Interest Trust for all federal income tax purposes, and shall be taxable on all income earned thereon.
(e) With respect to the failure of the Swap Counterparty to perform any of its payment obligations under the Swap Agreement, the breach by the Swap Counterparty of any of its representations and warranties made pursuant to the Swap Agreement, or the termination of the Swap Agreement, the Securities Administrator on behalf of the Supplemental Interest Trust shall send any notices and make any demands, on behalf of the Supplemental Interest Trust as are required under the Swap Agreement. To the extent that the Swap Counterparty fails to make any payment required under terms of the Swap Agreement, the Securities Administrator on behalf of the Supplemental Interest Trust shall immediately demand that Morgan Stanley, the guarantor of the Swap Counterparty's payment obxxxxxxoxx xxxxr the guarantee obligatioxx xxxex xxx xuarantee of Morgan Stanley relating to the Swap Agreement, make any and all payxxxxx txxx xxxuired paxxxxxx xxxx xxquired to be made by Morgan Stanley pursuant to such guarantee. In addition, in the evexx x "Dxxxxxxx Amount" (as defined in the Swap Agreement) was due but was not delivered by the Swap Counterparty as required by the Swap Agreement, the Securities Administrator on behalf of the Supplemental Interest Trust shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of the Swap Agreement. The Securities Administrxxxx xn xxxxxx Administrator on behalf of the Supplemental Interest Trust shall cause any replacement swap provider Swap Counterparty to provide a copy of the related replacement interest rate swap agreement Swap Agreement to the Securities Administrator on behalf of the Supplemental Interest Trust and the Depositor. 129 Notwithstanding any provision contained in this Agreement, the Securities Administrator shall not be required to make any distributions from the Swap Account except as expressly set forth in this Section 5.11 or in Section 5.10.
(f) Upon a Collateralization Event or a Substitution Event, the Securities Administrator, acting at the written direction of the Depositor, shall attempt to obtain Rating Agency approval for the ISDA Credit Support Annex and following final negotiation of the ISDA Credit Support Annex the Securities Administrator shall demand payment of the Delivery Amount (as defined in the ISDA Credit Support Annex) on each Valuation Date (as defined in the ISDA Credit Support Annex) and to perform its other obligations in accordance with the ISDA Credit Support Annex. If a Delivery Amount is demanded, the Securities Administrator, acting at the written direction of the Depositor, shall set up an account in accordance with Section 5.10 to hold cash or other eligible investments pledged under such ISDA Credit Support Annex. Any cash or other eligible investments pledged under an ISDA Credit Support Annex shall not be part of the Distribution Account or the Supplemental Interest Trust unless they are applied in accordance with such ISDA Credit Support Annex to make a payment due to the Supplemental Interest Trust pursuant to the Swap Agreement. If Eligible Credit Support (as defined in the ISDA Credit Support Annex) with a value equal to the Delivery Amount is not delivered, the Securities Administrator shall notify the Swap Counterparty of such failure.
(g) Upon an Event of Default (as defined in the Swap Agreement) or Termination Event (as defined in the Swap Agreement) for which the Supplemental Interest Trust has the right to designate an Early Termination Date (as defined in the Swap Agreement), the Securities Administrator will act at the written direction of the Depositor as to whether it will designate an Early Termination Date; provided, however, that the Securities Administrator shall provide written notice to each Rating Agency following the Event of Default or Termination Event. Upon the termination of the Swap Agreement under the circumstances contemplated by this Section 5.11(f), the Securities Administrator shall use its reasonable best efforts to enforce the rights of the Supplemental Interest Trust thereunder as may be permitted by the terms of the Swap Agreement and consistent with the terms hereof, and shall apply the proceeds of any such efforts to enter into a replacement swap agreement with another swap provider. To the extent such replacement swap agreement can be entered into, any termination payments received by the Supplemental Interest Trust in respect of the terminated swap agreement shall be used, to the extent necessary, by the Supplemental Interest Trust for the purpose of entering into such replacement swap agreement.
(h) In the event that the Issuing Entity receives a Swap Termination Payment, and a successor Swap Counterparty (or its guarantor) cannot be obtained, then the Securities Administrator will be required to deposit any Swap Termination Payment into a reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in such reserve account), the Securities Administrator will be required to withdraw from the reserve account and deposit into the Swap Account an amount equal to the amount of any Net Swap Receipt due the Issuing Entity (calculated in accordance with the terms of the original Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap Account. The remaining amount in the reserve account will remain in that account and not treated as a Swap Termination Payment for purposes of determining the distributions from the Swap Account until the final Swap Termination Date.
(i) The Swap Counterparty shall be an express third party beneficiary of this Agreement for the purpose of enforcing the provisions hereof to the extent of the Swap Counterparty's rights explicitly specified herein as if a party hereto.
(j) Notwithstanding any contrary provision of this Agreement, no amendment shall adversely affect in any material respect the Swap Counterparty without at least ten Business Days' prior notice to the Swap Counterparty and without the prior written consent of the Swap Counterparty, which consent shall not be unreasonably withheld. The Depositor shall provide the Swap Counterparty with prior written notice of any proposed material amendment of this Agreement
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Mortgage Loan Trust 2006-13arx)
Certain Matters Regarding The Swap Agreement. (a) In the event that, upon the Supplemental Interest Trust entering into a replacement interest rate swap following the occurrence of an Additional Termination Event of the type described in Part 1(h)(ii) of the Swap Agreement, the Supplemental Interest Trust is entitled to receive a payment from a replacement swap provider, the Securities Administrator shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap Counterparty immediately upon receipt of such payment, regardless of whether the date of receipt thereof is a Distribution Date. To the extent that any Replacement Swap Counterparty Payment is made to an account other than the Swap Account, then, notwithstanding anything to the contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid to the Swap Counterparty immediately upon receipt of such Replacement Swap Counterparty Payment, regardless of whether the date of receipt thereof is a Distribution Date and without regard to anything to the contrary contained in this Agreement. For the avoidance of 128 doubt, the parties agree that the Swap Counterparty shall have first priority to any Replacement Swap Counterparty Payment over the payment by the Supplemental Interest Trust to Certificateholders, any Servicer, the Master Servicer, the Securities Administrator, each Custodian or any other Person.
(b) The Securities Administrator shall account for the Supplemental Interest Trust as a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Supplemental Interest Trust are the Class OC Certificateholders. For federal income tax purposes, Net Swap Payments and Swap Termination Payments payable to the Swap Counterparty shall be deemed to be paid to the Swap Account from the Master REMIC, first, by the Holder of the Class OC Certificates and second, other than any Defaulted Swap Termination Payment, from the Master REMIC by the Holders of the applicable Class or Classes of Group 1 Certificates as and to the extent provided in Section 10.01 hereof.
(c) Any Basis Risk Carry Forward Amounts (excluding any such Amounts attributable to the excess of the Group 1 REMIC Cap over the Net WAC Pass-Through Rate) distributed by the Securities Administrator to the Group 1 Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class OC Certificates, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive the Basis Risk Carry Forward Amounts from the Swap Account (along with Basis Risk Carry Forward Amounts payable from Net Monthly Excess Cashflow) as rights in a separate limited recourse interest rate cap contract written by the Class OC Certificateholders and the Swap Counterparty in favor of Holders of each such Class.
(d) The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class OC Certificates shall be the beneficial owners of the Supplemental Interest Trust for all federal income tax purposes, and shall be taxable on all income earned thereon.
(e) With respect to the failure of the Swap Counterparty to perform any of its payment obligations under the Swap Agreement, the breach by the Swap Counterparty of any of its representations and warranties made pursuant to the Swap Agreement, or the termination of the Swap Agreement, the Securities Administrator on behalf of the Supplemental Interest Trust shall send any notices and make any demands, on behalf of the Supplemental Interest Trust as are required under the Swap Agreement. To the extent that the Swap Counterparty fails to make any payment required under terms of the Swap Agreement, the Securities Administrator on behalf of the Supplemental Interest Trust shall immediately demand that Morgan Stanley, the guarantor of the Swap Counterparty's payment obxxxxxxoxx xxxxr oxxxxxxixxx xxxer the guarantee of Morgan Stanley relating to the Swap Agreement, make any and all payxxxxx txxx xxxuired paxxxxxx xxxx xxquired to be made by Morgan Stanley pursuant to such guarantee. The Securities Administrxxxx xn xxxxxx Administxxxxx ox xxxxxf of the Supplemental Interest Trust shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator on behalf of the Supplemental Interest Trust and the Depositor. 129 Notwithstanding any provision contained in this Agreement, the Securities Administrator shall not be required to make any distributions from the Swap Account except as expressly set forth in this Section 5.11 or in Section 5.10.
(f) Upon a Collateralization Event or a Substitution Event, the Securities Administrator, acting at the written direction of the Depositor, shall attempt to obtain Rating Agency approval for the ISDA Credit Support Annex and following final negotiation of the ISDA Credit Support Annex the Securities Administrator shall demand payment of the Delivery Amount (as defined in the ISDA Credit Support Annex) on each Valuation Date (as defined in the ISDA Credit Support Annex) and to perform its other obligations in accordance with the ISDA Credit Support Annex. If a Delivery Amount is demanded, the Securities Administrator, acting at the written direction of the Depositor, shall set up an account in accordance with Section 5.10 to hold cash or other eligible investments pledged under such ISDA Credit Support Annex. Any cash or other eligible investments pledged under an ISDA Credit Support Annex shall not be part of the Distribution Account or the Supplemental Interest Trust unless they are applied in accordance with such ISDA Credit Support Annex to make a payment due to the Supplemental Interest Trust pursuant to the Swap Agreement. If Eligible Credit Support (as defined in the ISDA Credit Support Annex) with a value equal to the Delivery Amount is not delivered, the Securities Administrator shall notify the Swap Counterparty of such failure.
(g) Upon an Event of Default (as defined in the Swap Agreement) or Termination Event (as defined in the Swap Agreement) for which the Supplemental Interest Trust has the right to designate an Early Termination Date (as defined in the Swap Agreement), the Securities Administrator will act at the written direction of the Depositor as to whether it will designate an Early Termination Date; provided, however, that the Securities Administrator shall provide written notice to each Rating Agency following the Event of Default or Termination Event. Upon the termination of the Swap Agreement under the circumstances contemplated by this Section 5.11(f), the Securities Administrator shall use its reasonable best efforts to enforce the rights of the Supplemental Interest Trust thereunder as may be permitted by the terms of the Swap Agreement and consistent with the terms hereof, and shall apply the proceeds of any such efforts to enter into a replacement swap agreement with another swap provider. To the extent such replacement swap agreement can be entered into, any termination payments received by the Supplemental Interest Trust in respect of the terminated swap agreement shall be used, to the extent necessary, by the Supplemental Interest Trust for the purpose of entering into such replacement swap agreement.
(h) In the event that the Issuing Entity receives a Swap Termination Payment, and a successor Swap Counterparty (or its guarantor) cannot be obtained, then the Securities Administrator will be required to deposit any Swap Termination Payment into a reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in such reserve account), the Securities Administrator will be required to withdraw from the reserve account and deposit into the Swap Account an amount equal to the amount of any Net Swap Receipt due the Issuing Entity (calculated in accordance with the terms of the original Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap Account. The remaining amount in the reserve account will remain in that account and not treated as a Swap Termination Payment for purposes of determining the distributions from the Swap Account until the final Swap Termination Date.
(i) The Swap Counterparty shall be an express third party beneficiary of this Agreement for the purpose of enforcing the provisions hereof to the extent of the Swap Counterparty's rights explicitly specified herein as if a party hereto.
(j) Notwithstanding any contrary provision of this Agreement, no amendment shall adversely affect in any material respect the Swap Counterparty without at least ten Business Days' prior notice to the Swap Counterparty and without the prior written consent of the Swap Counterparty, which consent shall not be unreasonably withheld. The Depositor shall provide the Swap Counterparty with prior written notice of any proposed material amendment of this Agreement
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Mortgage Loan Trust 2006-9ar)
Certain Matters Regarding The Swap Agreement. (a) In the event that, upon the Supplemental Interest Trust entering into a replacement interest rate swap following the occurrence of an Additional Termination Event of the type described in Part 1(h)(ii) of the Swap Agreement, the Supplemental Interest Trust is entitled to receive a payment from a replacement swap provider, the Securities Administrator shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap Counterparty immediately upon receipt of such payment, regardless of whether the date of receipt thereof is a Distribution Date. To the extent that any Replacement Swap Counterparty Payment is made to an account other than the Swap Account, then, notwithstanding anything to the contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid to the Swap Counterparty immediately upon receipt of such Replacement Swap Counterparty Payment, regardless of whether the date of receipt thereof is a Distribution Date and without regard to anything to the contrary contained in this Agreement. For the avoidance of 128 doubt, the parties agree that the Swap Counterparty shall have first priority to any Replacement Swap Counterparty Payment over the payment by the Supplemental Interest Trust to Certificateholders, any Servicer, the Master Servicer, the Securities Administrator, each Custodian or any other Person.
(b) The Securities Administrator shall account for the Supplemental Interest Trust as a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Supplemental Interest Trust are the Class I-OC Certificateholders. For federal income tax purposes, Net Swap Payments and Swap Termination Payments payable to the Swap Counterparty shall be deemed to be paid to the Swap Account from the Master REMICAccount, first, by the Holder of the Class I-OC Certificates and second, other than any Defaulted Swap Termination Payment, from the Master REMIC by the Holders of the applicable Class or Classes of Group 1 Certificates as and to the extent provided in Section 10.01 hereof.
(c) Any Basis Risk Carry Forward Amounts (excluding any such Amounts attributable to the excess of the Group 1 REMIC Cap over the related Net WAC Pass-Through Rate) distributed by the Securities Administrator to the Group 1 Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of 110 the Class I-OC Certificates, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive the Basis Risk Carry Forward Amounts from the Swap Account (along with Basis Risk Carry Forward Amounts payable from Aggregate Group I Net Monthly Excess Cashflow) as rights in a separate limited recourse interest rate cap contract written by the Class I-OC Certificateholders and the Swap Counterparty in favor of Holders of each such Class.
(d) The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class I-OC Certificates shall be the beneficial owners of the Supplemental Interest Trust for all federal income tax purposes, and shall be taxable on all income earned thereon.
(e) With respect to the failure of the Swap Counterparty to perform any of its payment obligations under the Swap Agreement, the breach by the Swap Counterparty of any of its representations and warranties made pursuant to the Swap Agreement, or the termination of the Swap Agreement, the Securities Administrator on behalf of the Supplemental Interest Trust shall send any notices and make any demands, on behalf of the Supplemental Interest Trust as are required under the Swap Agreement. To the extent that the Swap Counterparty fails to make any payment required under terms of the Swap Agreement, the Securities Administrator on behalf of the Supplemental Interest Trust shall immediately demand that Morgan Stanley, the guarantor of the Swap Counterparty's payment obxxxxxxoxx obligationx xxxxr the guarantee xxx xxarantee of Morgan Stanley relating to the Swap Agreement, make any and all payxxxxx txxx xxxuired to be made by Morgan Stanley pursuant to such guarantee. In addition, in the evenx x "Xexxxxxx Amount" (as defined in the Swap Agreement) was due but was not delivered by the Swap Counterparty as required by the Swap Agreement, the Securities Administrator on behalf of the Supplemental Interest Trust shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of the Swap Agreement. The Securities Administrxxxx xn xxxxxx Administrator on behalf of the Supplemental Interest Trust shall cause any replacement swap provider Swap Counterparty to provide a copy of the related replacement interest rate swap agreement Swap Agreement to the Securities Administrator on behalf of the Supplemental Interest Trust and the Depositor. 129 Notwithstanding any provision contained in this Agreement, the Securities Administrator shall not be required to make any distributions from the Swap Account except as expressly set forth in this Section 5.11 or in Section 5.10.
(f) Upon a Collateralization Event or a Substitution Event, the Securities Administrator, acting at the written direction of the Depositor, shall attempt to obtain Rating Agency approval for the ISDA Credit Support Annex and following final negotiation of the ISDA Credit Support Annex the Securities Administrator shall demand payment of the Delivery Amount (as defined in the ISDA Credit Support Annex) on each Valuation Date (as defined in the ISDA Credit Support Annex) and to perform its other obligations in accordance with the ISDA Credit Support Annex. If a Delivery Amount is demanded, the Securities Administrator, acting at the written direction of the Depositor, shall set up an account in accordance with Section 5.10 to hold cash or other eligible investments pledged under such ISDA Credit Support Annex. Any cash or other eligible investments pledged under an ISDA Credit Support Annex shall not be part of the Distribution Account or the Supplemental Interest Trust unless they are applied in accordance with such ISDA Credit Support Annex to make a payment due to the Supplemental Interest Trust pursuant to the Swap Agreement. If Eligible Credit Support (as defined in the ISDA Credit Support Annex) with a value equal to the Delivery Amount is not delivered, the Securities Administrator shall notify the Swap Counterparty of such failure.
(g) Upon an Event of Default (as defined in the Swap Agreement) or Termination Event (as defined in the Swap Agreement) for which the Supplemental Interest Trust has the right to designate an Early Termination Date (as defined in the Swap Agreement), the Securities Administrator will act at the written direction of the Depositor as to whether it will designate an Early Termination Date; provided, however, that the Securities Administrator shall provide written notice to each Rating Agency following the Event of Default or Termination Event. Upon the termination of the Swap Agreement under the circumstances contemplated by this Section 5.11(f), the Securities Administrator shall use its reasonable best efforts to enforce the rights of the Supplemental Interest Trust thereunder as may be permitted by the terms of the Swap Agreement and consistent with the terms hereof, and shall apply the proceeds of any such efforts to enter into a replacement swap agreement with another swap provider. To the extent such replacement swap agreement can be entered into, any termination payments received by the Supplemental Interest Trust in respect of the terminated swap agreement shall be used, to the extent necessary, by the Supplemental Interest Trust for the purpose of entering into such replacement swap agreement.
(h) In the event that the Issuing Entity receives a Swap Termination Payment, and a successor Swap Counterparty (or its guarantor) cannot be obtained, then the Securities Administrator will be required to deposit any Swap Termination Payment into a reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in such reserve account), the Securities Administrator will be required to withdraw from the reserve account and deposit into the Swap Account an amount equal to the amount of any Net Swap Receipt due the Issuing Entity (calculated in accordance with the terms of the original Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap Account. The remaining amount in the reserve account will remain in that account and not treated as a Swap Termination Payment for purposes of determining the distributions from the Swap Account until the final Swap Termination Date.
(i) The Swap Counterparty shall be an express third party beneficiary of this Agreement for the purpose of enforcing the provisions hereof to the extent of the Swap Counterparty's rights explicitly specified herein as if a party hereto.
(j) Notwithstanding any contrary provision of this Agreement, no amendment shall adversely affect in any material respect the Swap Counterparty without at least ten Business Days' prior notice to the Swap Counterparty and without the prior written consent of the Swap Counterparty, which consent shall not be unreasonably withheld. The Depositor shall provide the Swap Counterparty with prior written notice of any proposed material amendment of this Agreement.
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Samples: Pooling and Servicing Agreement (Morgan Stanley Mortgage Loan Trust 2006-16ax)