Swap Account. (a) No later than the Closing Date, the Trust Administrator shall establish and maintain with itself, as agent for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—Swap Account” (the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvested. The Swap Account shall be an asset of the Supplemental Interest Trust, but shall not be an asset of any REMIC. (b) On each Distribution Date, prior to any distribution to any Certificate, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account any upfront payment received from the counterparty to a replacement swap agreement) from funds collected and received with respect to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution in accordance with subsection (d) below, pursuant to the Swap Administration Agreement. For federal income tax purposes, any amounts paid to the Swap Provider on each Distribution Date shall first be deemed paid in respect of the Class SWAP-IO Interest to the extent of the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount shall be deemed paid in respect of a Class IO Distribution Amount (as defined below). (c) For federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates. (d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to the Holders of the Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing Date.
Appears in 3 contracts
Samples: Pooling and Servicing Agreement (MASTR Second Lien Trust 2006-1), Pooling and Servicing Agreement (MASTR Second Lien Trust 2006-1), Pooling and Servicing Agreement (MASTR Second Lien Trust 2006-1)
Swap Account. (a) On the Closing Date, there is hereby established a separate trust (the “Supplemental Interest Trust”), into which the Depositor shall deposit: (i) the Interest Rate Swap Agreement and (ii) the Swap Administration Agreement. The Supplemental Interest Trust shall be maintained by the Supplemental Interest Trust Trustee. No later than the Closing Date, the Supplemental Interest Trust Administrator Trustee shall establish and maintain with itself, as agent for the Trustee, itself a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Supplemental Interest Trust Trustee, in trust for the registered holders of MASTR Second Lien Asset Backed Securities Trust 2006-1WMC1, Mortgage Pass-Through Certificates, Series 2006-1WMC1—Swap Account.” (the “Swap Account”). Such account shall be an Eligible Account and amounts funds on deposit therein shall be held separate and apart from, and shall not be commingled with, any other moneys, including, without limitation, other moneys of the Supplemental Interest Trust Trustee held pursuant to this Agreement. Amounts therein shall be held uninvested. The Swap Account shall be an asset of the Supplemental Interest Trust, but shall not be an asset of any REMIC.
(b) On each Distribution Date, prior to any distribution to any Certificate, the Supplemental Interest Trust Administrator Trustee shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account any upfront payment received from the counterparty to a replacement interest rate swap agreement) from funds collected and received with respect to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Supplemental Interest Trust Administrator Trustee from the Swap AdministratorProvider, for distribution in accordance with subsection (d) below, pursuant to the Swap Administration Agreement. For , dated as of the Closing Date (the “Swap Administration Agreement”), among Xxxxx Fargo Bank, N.A. in its capacity as Supplemental Interest Trust Trustee, Xxxxx Fargo Bank, N.A. in its capacity as Swap Administrator, Xxxxx Fargo Bank, N.A. in its capacity as Trust Administrator and the Seller.
(c) It is the intention of the parties hereto that, for federal and state income and state and local franchise tax purposes, the Supplemental Interest Trust be disregarded as an entity separate from the Holder of the Class CE Certificates unless and until the date when either (a) there is more than one Class CE Certificateholder or (b) any Class of Certificates in addition to the Class CE Certificates is recharacterized as an equity interest in the Supplemental Interest Trust for federal income tax purposes, any amounts paid to in which case it is the Swap Provider on each Distribution Date shall first be deemed paid in respect intention of the Class SWAP-IO Interest to the extent of the amount distributable on such Class SWAP-IO Interest on such Distribution Dateparties hereto that, for federal and any remaining amount shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For federal state income and state and local franchise tax purposes, the Swap Account shall Supplemental Interest Trust be owned by the beneficial owners of the Class CE Certificatestreated as a grantor trust.
(d) For federal income tax purposesTo the extent that the Supplemental Interest Trust is determined to be a separate legal entity from the Supplemental Interest Trust Trustee, any obligation of the Supplemental Interest Trust Trustee under the Interest Rate Swap Agreement shall be deemed to be an obligation of the Supplemental Interest Trust.
(e) The Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest REMIC III Regular Interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Pass-Through Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to the Holders of the Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest Regular Interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC III and as having been paid by such Holders to the Swap Trust Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests Regular Interests in the Master REMICREMIC III or REMIC IV, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing Date.
Appears in 3 contracts
Samples: Pooling and Servicing Agreement (MASTR Asset Backed Securities Trust 2006-Wmc1), Pooling and Servicing Agreement (MASTR Asset Backed Securities Trust 2006-Wmc1), Pooling and Servicing Agreement (MASTR Asset Backed Securities Trust 2006-Wmc1)
Swap Account. (a) No later than On the Closing Date, the Trust Securities Administrator shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of any REMIC.
(b) the Securities Administrator held pursuant to this Agreement. On the Business Day immediately preceding each Distribution Date, Swap Termination Payments, Net Swap Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any distribution remaining unpaid Basis Risk CarryForward Amount, and, without duplication, Upper Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trust Securities Administrator shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor Swap Provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Securities Administrator shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Securities Administrator shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap Account. In no event shall the Securities Administrator be responsible for the selection of any successor or replacement swap provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the 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 Interest Rate Swap Agreement, the 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 (other than any shall be made from the Swap Termination Payment resulting from a Swap Provider Trigger Event) owed Account to the Swap Provider (after taking into 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 Provider Payment is made to an account any upfront payment received from other than the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Account, then, notwithstanding anything to the Mortgage Loans prior contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid to the determination Swap Provider immediately upon receipt of Available Funds such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust to Certificateholders, the Securities Administrator, any Servicer, any Custodian, any Responsible Party, the Trustee or any other Person. The Securities Administrator from shall account for the Swap AdministratorAccount as an asset of a grantor trust under subpart E, for distribution in accordance with subsection (d) below, 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 Swap Administration AgreementAccount are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Securities Administrator to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Securities Administrator, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk CarryForward Amounts) from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders beneficial owners of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Securities Administrator shall send any notices and make any demands, on behalf of the Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Interest Rate Swap Agreement, the Securities Administrator shall treat such notional principal contract as having a value of $10,000 as immediately demand that Morgan Stanley, the guarantor of the Closing DateSwap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. The Securities Administrator xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the Depositor.
Appears in 3 contracts
Samples: Pooling and Servicing Agreement (Morgan Stanley Capital I Inc. Trust 2006-He2), Pooling and Servicing Agreement (Morgan Stanley Capital I Inc. Trust 2006-He2), Pooling and Servicing Agreement (Morgan Stanley Capital I Inc. Trust 2006-He2)
Swap Account. (a) No later than the Closing Date, the Trust Administrator Trustee shall establish and maintain with itself, as agent for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. U.S. Bank National Association as Trustee, in trust for the registered holders of MASTR Second Lien Trust 2006-1First Franklin Mortgage Loan Trust, Mortgage PassLoan Asset-Through Backed Certificates, Series 20062005-1FF7—Swap Account.” (the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvested. The Swap Account shall be an asset of the Supplemental Interest Trust, but shall not be an asset of any REMIC.
(b) On each Distribution Date, prior to any distribution to any Certificate, the Trust Administrator Trustee shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account any upfront payment received from the counterparty to a replacement swap agreement) from funds collected and received with respect to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator Trustee from the Swap Administrator, for distribution in accordance with subsection (d) below, pursuant to the Swap Administration Agreement, dated as of the Closing Date (the “Swap Administration Agreement”), among U.S. Bank National Association in its capacity as Trustee, U.S. Bank National Association in its capacity as Swap Administrator and the Seller. For federal income tax purposes, any amounts paid to the Swap Provider on each Distribution Date shall first be deemed paid to the Swap Provider in respect of the Class SWAPREMIC IV Regular Interest Swap-IO Interest to the extent of the amount distributable on such Class SWAPREMIC IV Regular Interest Swap-IO Interest on such Distribution Date, and any remaining amount shall be deemed paid to the Swap Provider in respect of a Class IO Distribution Amount (as defined below).
(c) For federal income tax purposes, the Swap Account shall be owned by the beneficial owners majority Holder of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator The Trustee shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest REMIC III Regular Interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Pass-Through Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to the Holders of the Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest Regular Interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC IV and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests Regular Interests in the Master REMICREMIC IV, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing Date.
Appears in 2 contracts
Samples: Pooling and Servicing Agreement (First Franklin Mortgage Loan Trust, Series 2005-Ff7), Pooling and Servicing Agreement (First Franklin Mortgage Loan Trust, Series 2005-Ff7)
Swap Account. (a) On the Closing Date, there is hereby established a separate trust (the "Supplemental Interest Trust"), into which the Depositor shall deposit: (i) the Interest Rate Swap Agreement and (ii) the Swap Administration Agreement. The Supplemental Interest Trust shall be maintained by the Supplemental Interest Trust Trustee, who initially, shall be the Trustee. No later than the Closing Date, the Supplemental Interest Trust Administrator Trustee shall establish and maintain with itself, as agent for the Trusteemaintain, a separate, segregated trust account to be held in the Supplemental Interest Trust titled, “Xxxxx Fargo Bank"[_______________], N.A. as Supplemental Interest Trust Trustee, in trust for the registered holders of MASTR Second Lien Trust 2006New Century Home Equity Loan Trust, Series 2005-1D, Mortgage Asset Backed Pass-Through Certificates, Series 2006-1—--Swap Account” (the “Swap Account”). ." Such account shall be an Eligible Account and amounts funds on deposit therein shall be held separate and apart from, and shall not be commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. Amounts therein shall be held uninvested. The Swap Account shall be an asset of the Supplemental Interest Trust, but shall not be an asset of any REMIC.
(b) On each Distribution Date, prior to any distribution to any Certificate, the Supplemental Interest Trust Administrator Trustee shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account any upfront payment received from the counterparty to a replacement interest rate swap agreement) from funds collected and received with respect to the Mortgage Loans prior to the determination of Available Funds Distribution Amounts and (ii) amounts received by the Supplemental Interest Trust Administrator Trustee from the Swap Administrator, for distribution in accordance with subsection (d) below, pursuant to the Swap Administration Agreement, dated as of the Closing Date (the "Swap Administration Agreement"), among [_______________], in its capacity as Supplemental Interest Trust Trustee, [_______________], in its capacity as Swap Administrator, [_______________], in its capacity as Indenture Trustee and the Seller. For federal income tax purposes, any amounts paid to the Swap Provider on each Distribution Date shall first be deemed paid to the Swap Provider in respect of the Class SWAPREMIC VI Regular Interest Swap-IO Interest to the extent of the amount distributable on such Class SWAPREMIC VI Regular Interest Swap-IO Interest on such Distribution Date, and any remaining amount shall be deemed paid to the Swap Provider in respect of a Class IO Distribution Amount (as defined below). Any Swap Termination Payment triggered by a Swap Provider Trigger Event owed to the Swap Provider pursuant to the Swap Agreement will be subordinated to distributions to the Holders of the Offered Certificates and shall be paid as set forth under Section 4.01(a)(4)(vi).
(c) For federal income tax purposes, the Swap Account shall be owned by the beneficial owners majority Holder of the Class CE CE-1 Certificates.
(d) For federal income tax purposesTo the extent that the Supplemental Interest Trust is determined to be a separate legal entity from the Supplemental Interest Trust Trustee, any obligation of the Supplemental Interest Trust Administrator Trustee under the Interest Rate Swap Agreement shall be deemed to be an obligation of the Supplemental Interest Trust.
(e) The Trustee shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Residual Certificates) as having entered into a notional principal contract with respect to the Holders of the Class CE CE-1 Certificates. Pursuant to each such notional principal contract, all Holders of Certificates (other than the Class P, Class CE and Class R Residual Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE CE-1 Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest REMIC III Regular Interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “"Class IO Distribution Amount”"). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata PRO RATA among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Pass-Through Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE CE-1 Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to the Holders of the Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest Regular Interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Residual Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC III and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Residual Certificates) shall be treated as representing not only ownership of regular interests Regular Interests in the Master REMICREMIC III, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing Date.
Appears in 2 contracts
Samples: Pooling and Servicing Agreement (New Century Mortgage Securities LLC), Pooling and Servicing Agreement (New Century Mortgage Securities Inc)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of any REMIC.
(b) the Trustee held pursuant to this Agreement. On the Business Day immediately preceding each Distribution Date, prior to any distribution to any CertificateSwap Termination Payments, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the LIBOR Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to maintain the Subordinated Amount at the Specified Subordinated Amount, after taking giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the LIBOR Certificates, any remaining unpaid Basis Risk CarryForward Amount, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay any Unpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the Trust entering into account any upfront a replacement interest rate swap following the occurrence of an Additional Termination Event of the type described in Part 1(h)(ii) of the Interest Rate Swap Agreement, the Trust is entitled to receive a payment received from the counterparty to a replacement swap agreement) from funds collected and received with respect provider, the Trustee shall direct the replacement swap provider to make such payment to the Mortgage Loans prior Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the determination Swap Provider immediately upon receipt of Available Funds such payment, regardless of whether the date of receipt thereof is a Distribution Date. To the extent that any Replacement Swap Provider 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 Provider immediately upon receipt of such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust Administrator from to Certificateholders, the Servicer, any Responsible Party, the Trustee or any other Person. The Trustee shall account for the Swap AdministratorAccount as an asset of a grantor trust under subpart E, for distribution in accordance with subsection (d) below, 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 Swap Administration AgreementAccount are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the LIBOR Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceLIBOR Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of LIBOR Certificates to such notional principal contractreceive payments of Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk CarryForward Amounts) from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders beneficial owners of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Closing DateInterest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. The Trustee shall cause any xxxxxxexxxx xxap provider to provide a copy of the related replacement interest rate swap agreement to the Trustee and the Depositor.
Appears in 2 contracts
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2006-Wmc1), Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2006-Wmc1)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, Swap Termination Payments, Net Swap Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any distribution remaining unpaid Basis Risk CarryForward Amount, and, without duplication, Upper Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trustee shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor Swap Provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust Administrator receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Trustee shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Trustee shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap Account. In no event shall the Trustee be responsible for the selection of any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the 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 Interest Rate Swap Agreement, the Trust is entitled to receive a payment from a replacement swap provider, the Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment (other than any shall be made from the Swap Termination Payment resulting from a Swap Provider Trigger Event) owed Account to the Swap Provider (after taking into 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 Provider Payment is made to an account any upfront payment received from other than the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Account, then, notwithstanding anything to the Mortgage Loans prior contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid to the determination Swap Provider immediately upon receipt of Available Funds such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust Administrator from to Certificateholders, any Servicer, any Custodian, any Responsible Party, the Trustee or any other Person. The Trustee shall account for the Swap Administrator, for distribution in accordance with subsection (d) below, Account as an asset of the Grantor Trust and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Administration AgreementAccount are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk CarryForward Amounts) from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders beneficial owners of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Closing DateInterest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. The Trustee shall cause any xxxxxxexxxx xxap provider to provide a copy of the related replacement interest rate swap agreement to the Trustee and the Depositor.
Appears in 2 contracts
Samples: Pooling and Servicing Agreement (MSAC Trust 2006-He3), Pooling and Servicing Agreement (MSAC Trust 2006-He3)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, prior to any distribution to any CertificateSwap Termination Payments, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the LIBOR Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to maintain the Subordinated Amount at the Specified Subordinated Amount, after taking giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the LIBOR Certificates, any remaining unpaid Basis Risk CarryForward Amount, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay any Unpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the Trust entering into account any upfront a replacement interest rate swap following the occurrence of an Additional Termination Event of the type described in Part 1(h)(ii) of the Interest Rate Swap Agreement, the Trust is entitled to receive a payment received from the counterparty to a replacement swap agreement) from funds collected and received with respect provider, the Trustee shall direct the replacement swap provider to make such payment to the Mortgage Loans prior Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the determination Swap Provider immediately upon receipt of Available Funds such payment, regardless of whether the date of receipt thereof is a Distribution Date. To the extent that any Replacement Swap Provider 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 Provider immediately upon receipt of such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust Administrator from to Certificateholders, the Servicer, the Custodian, any Responsible Party, the Trustee or any other Person. The Trustee shall account for the Swap AdministratorAccount as an asset of a grantor trust under subpart E, for distribution in accordance with subsection (d) below, 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 Swap Administration AgreementAccount are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the LIBOR Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceLIBOR Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of LIBOR Certificates to such notional principal contractreceive payments of Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk CarryForward Amounts) from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders beneficial owners of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Closing DateInterest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. The Trustee shall cause any xxxxxxexxxx xxap provider to provide a copy of the related replacement interest rate swap agreement to the Trustee and the Depositor.
Appears in 2 contracts
Samples: Pooling and Servicing Agreement (Morgan Stanley Home Equity Loan Trust 2006-1), Pooling and Servicing Agreement (Morgan Stanley Home Equity Loan Trust 2006-1)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, prior to any distribution to any CertificateSwap Termination Payments, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(after taking into account any upfront payment received from the counterparty to a replacement swap agreementi) from funds collected and received with respect to the Mortgage Loans prior Swap Provider, all Net Swap Payments, if any, owed to the determination of Available Funds and Swap Provider for that Distribution Date;
(ii) amounts received by the Trust Administrator from to the Swap AdministratorProvider, any Swap Termination Payment, other than a Defaulted Swap Termination Payment, if any, owed to the Swap Provider for distribution that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in accordance with subsection Section 4.02(a)(i), to the extent unpaid from Available Funds;
(div) belowsequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Clasx X-0, Xxxxx X-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to maintain the Subordinated Amount at the Specified Subordinated Amount, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Upper-Tier CarryForward Amounts including, without duplication, Basis Risk CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Clasx X-0, Xxxxx X-2 and Class B-3 Certificates, to pay Upper-Tier CarryForward Amounts including, without duplication, Basis Risk CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any remaining unpaid Upper-Tier CarryForward Amounts including, without duplication, Basis Risk CarryForward Amount, pro rata, based on their respective remaining amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Clasx X-0, Xxxxx X-2 and Class B-3 Certificates, to pay any Unpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. The Trustee shall account for the Swap Administration 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 Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal X Interest and then to the excess, if any, respective Class or Classes of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Upper-Tier CarryForward Amounts (including, but without duplication, Basis Risk CarryForward Amounts) from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders beneficial owners of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as failure of the Closing DateSwap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust, as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xuxxxxxxx of Morgan Stanley relating to the Swap Agreement, make any and all paymenxx xxxn xxxxxxed to be made by Morgan Stanley pursuant to such guarantee.
Appears in 2 contracts
Samples: Pooling and Servicing Agreement (Morgan Stanley Abs Capital I Inc), Pooling and Servicing Agreement (Morgan Stanley Home Equity Loan Trust Series 2005-3)
Swap Account. (a) No later than On the Closing Date, the Trust Securities Administrator shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the LIBOR Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Securities Administrator held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, prior Swap Termination Payments, Net Swap Payments owed to any distribution the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to any Certificatethe Swap Provider, the sum of (x) all Net Swap Payments and (y) any Swap Termination Payment, other than a Defaulted Swap Termination Payment, to the Swap Provider, if any, owed for that Distribution Date;
(ii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iii) sequentially, to the Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Cerxxxxxxxxx, xx that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and (iii), to the extent unpaid from Available Funds;
(iv) to the LIBOR Certificates, to pay Basis Risk Carry Forward Amounts as described in Section 4.02(a)(iii)(N)-(O), to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(v) sequentially, to the Class A, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates, in that order, to pay principal as described in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount at the Specified Subordinated Amount as a result of current or prior Realized Losses not previously reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) sequentially, to the Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Cerxxxxxxxxx, xx that order, to pay any Unpaid Interest Amounts as described in Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(vii) to the Swap Provider, any Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(viii) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Securities Administrator shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Securities Administrator shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account any upfront payment received from the counterparty to a replacement swap agreement) from funds collected and received with respect to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by Receipt due the Trust Administrator (calculated in accordance with the terms of the original Interest Rate Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap AdministratorAccount. Upon termination of the Trust, for distribution any amounts remaining in accordance with subsection (d) below, the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. The Securities Administrator shall account for the Swap Administration 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 Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, Class X Interest) and second, other than any Defaulted Swap Termination Payment, by the Holders of the applicable Class or Classes of LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk Carry Forward Amounts and, without duplication, Upper Tier Carry Forward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Securities Administrator to the LIBOR Certificateholders from the Excess Reserve Fund Account or the Swap Account shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Securities Administrator, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE X Certificates (in respect of the Class X Interest or the Class IO Interest, respectively) and then to the respective Class or Classes of LIBOR Certificates. Pursuant In addition, the Securities Administrator shall account for the rights of Holders of each Class of LIBOR Certificates to receive payments of Basis Risk Carry Forward Amounts and, without duplication, Upper Tier Carry Forward Amounts from the Swap Account (along with Basis Risk Carry Forward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class X Certificateholders in favor of Holders of each such notional principal contractClass. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, all the Holders of Certificates (other than the Class PX Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, Class CE and Class R Certificates) shall be taxable on all income earned thereon, and any amounts reimbursed from the Upper Tier REMIC to the Swap Account shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts been distributed to the Holders of the Certificates Class X Certificates. In the event the Swap Provider does not deliver the Delivery Amount (other than as defined in the Class CE, Class P and Class R CertificatesInterest Rate Swap Agreement) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract Securities Administrator, the Securities Administrator shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders provide notice of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders failure to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership Provider within one Business Day of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing Datefailure.
Appears in 2 contracts
Samples: Pooling and Servicing Agreement (Securitized Asset Backed Receivables LLC Trust 2006-Nc1), Pooling and Servicing Agreement (Securitized Asset Backed Receivables LLC Trust 2006-Nc1)
Swap Account. (a) No later than the Closing Date, the Trust Administrator Trustee shall establish and maintain with itself, as agent for the Trustee, a separate, segregated trust account titled, “Xxxxx "Swap Account, Wells Fargo Bank, N.A. N.A., as TrusteeXxxxxee, in trust for the Swap Provider and the registered holders of MASTR Second Lien Trust 2006Park Place Securities, Inc., Asset-1, Mortgage Backed Pass-Through Certificates, Series 20062004-1—Swap Account” (the “Swap Account”). WHQ2." Such account shall be an Eligible Account and amounts therein shall be held uninvested. The Swap Account shall be an asset of the Supplemental Interest Trust, but shall not be an asset of any REMIC.
(b) On each Distribution Date, prior to any distribution to any Certificate, the Trust Administrator Trustee shall deposit into the Swap Account: Account pursuant to 3.05(c)(i): (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account any upfront payment received from the counterparty to a replacement swap agreement) from funds collected and received with respect to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator Trustee from the Swap Administrator, for distribution in accordance with subsection (d) below, Administrator pursuant to the swap administration agreement, dated as of the Closing Date, among the Wells Fargo Bank, N.A. in ixx xxpacity as Trustee, Wells Fargo Bank, N.A. in ixx xxpacity as Swap Administrator and Ameriquest Mortgage Company (the "Swap Administration Agreement. For federal income tax purposes, any amounts paid to the Swap Provider on each Distribution Date shall first be deemed paid in respect of the Class SWAP-IO Interest to the extent of the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount shall be deemed paid in respect of a Class IO Distribution Amount (as defined below").
(c) For federal income tax purposes, the Swap Administration Account shall be owned by the beneficial owners majority Holder of the Class CE Certificates.
(d) For . Notwithstanding the foregoing, for federal income tax purposes, the Trust Administrator shall treat the Holders calculations of Certificates (other than Uncertificated Interest accrued on the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of Certificates (other than the Class P, Class CE and Class R Certificates) SWAP-IO Interest shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable deemed to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to the Holders of the Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having have been paid by such Holders to the Swap Administrator pursuant Account regardless of any reduction in the actual amounts paid to the notional principal contract. Thus, each Certificate (other than Swap Account resulting from the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as calculation of the Closing DateNet Swap Payment.
Appears in 2 contracts
Samples: Pooling and Servicing Agreement (Park Place Securities, Inc., Asset-Backed Pass-Through Certificates, Series 2004-Whq2), Pooling and Servicing Agreement (Park Place Securities, Inc., Asset-Backed Pass-Through Certificates, Series 2004-Whq2)
Swap Account. (a) No later than the Closing Date, the Trust Administrator shall establish and maintain with itself, as agent for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—Swap Account” (the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvested. The Swap Account shall be an asset of the Supplemental Interest Trust, but shall not be an asset of any REMIC.
(b) On each Distribution Date, prior following all distributions and deposits made pursuant to any distribution to any Certificatesubsections (a) through (d) above, the Trust Administrator shall deposit into Trustee will withdraw all funds available in the Swap Account: Account (the “Swap Distribution Amount”) to make the following payments in the following order of priority:
(i) first, to the amount of Swap Counterparty, any Net Swap Payment or owed to the Swap Termination Payment Counterparty pursuant to the Swap Agreement for such Distribution Date;
(other than ii) second, to the Swap Counterparty, any Swap Termination Payment owed to the Swap Counterparty not resulting from a Swap Provider Counterparty Trigger Event) owed Event pursuant to the Swap Provider Agreement;
(iii) third, concurrently, to the Class A-1, Class A-2 and Class A-3 Certificates, pro rata, any remaining applicable Interest Distribution Amount for that Distribution Date;
(iv) fourth, concurrently, to the Class A-1, Class A-2 and Class A-3 Certificates, pro rata, any remaining Class Unpaid Interest Amounts for the classes of Senior Certificates;
(v) fifth, to the Class M-1 Certificates, any remaining Interest Distribution Amount for that Distribution Date;
(vi) sixth, to the Class M-1 Certificates, any remaining Class Unpaid Interest Amount for the Class M-1 Certificates;
(vii) seventh, to the Class M-2 Certificates, any remaining Interest Distribution Amount for that Distribution Date;
(viii) eighth, to the Class M-2 Certificates, any remaining Class Unpaid Interest Amount for the Class M-2 Certificates;
(ix) ninth, to the Class M-3 Certificates, any remaining Interest Distribution Amount for that Distribution Date;
(x) tenth, to the Class M-3 Certificates, any remaining Class Unpaid Interest Amount for the Class M-3 Certificates;
(xi) eleventh, to the Class M-4 Certificates, any remaining Interest Distribution Amount for that Distribution Date;
(xii) twelfth, to the Class M-4 Certificates, any remaining Class Unpaid Interest Amount for the Class M-4 Certificates;
(xiii) thirteenth, to the Class M-5 Certificates, any remaining Interest Distribution Amount for that Distribution Date;
(xiv) fourteenth, to the Class M-5 Certificates, any remaining Class Unpaid Interest Amount for the Class M-5 Certificates;
(xv) fifteenth, to the Class M-6 Certificates, any remaining Interest Distribution Amount for that Distribution Date;
(xvi) sixteenth, to the Class M-6 Certificates, any remaining Class Unpaid Interest Amount for the Class M-6 Certificates;
(xvii) seventeenth, to the Class B-1 Certificates, any remaining Interest Distribution Amount for that Distribution Date;
(xviii) eighteenth, to the Class B-1 Certificates, any remaining Class Unpaid Interest Amount for the Class B-1 Certificates;
(xix) nineteenth, to the Class B-2 Certificates, any remaining Interest Distribution Amount for that Distribution Date;
(xx) twentieth, to the Class B-2 Certificates, any remaining Class Unpaid Interest Amount for the Class B-2 Certificates;
(xxi) twenty-first, to the Class B-3 Certificates, any remaining Interest Distribution Amount for that Distribution Date;
(xxii) twenty-second, to the Class B-3 Certificates, any remaining Class Unpaid Interest Amount for the Class B-3 Certificates;
(xxiii) twenty-third, to fund the Swap Extra Principal Distribution Amount for that Distribution Date in accordance with the priorities set forth under subsections (b) and (c) above;
(xxiv) twenty-fourth, to pay to each Class of Offered Certificates, any remaining Net WAC Cap Carryover for that Class, after taking into account any upfront payment received from amounts deposited into the counterparty to a replacement swap agreement) from funds collected and received Net WAC Cap Account with respect to the Mortgage Loans prior that Class of Offered Certificate pursuant to the determination clause (xxxi) of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution in accordance with subsection (d) below, pursuant above (with distributions of Net WAC Cap Carryover to the Swap Administration Agreement. For federal income tax purposesOffered Certificates to be made on a pro rata basis based on the related unpaid Net WAC Cap Carryover);
(xxv) twenty-fifth, any amounts paid to fund the Swap Provider on each Distribution Date shall first be deemed paid in respect of the Class SWAP-IO Interest to the extent of the amount distributable on such Class SWAP-IO Interest on such M-1 Realized Loss Amortization Amount for that Distribution Date, and any remaining amount shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).;
(cxxvi) For federal income tax purposestwenty-sixth, to fund the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.M-2 Realized Loss Amortization Amount for that Distribution Date;
(dxxvii) For federal income tax purposestwenty-seventh, to fund the Trust Administrator shall treat the Holders of Certificates (other than the Swap Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each M-3 Realized Loss Amortization Amount for that Distribution Date;
(xxviii) twenty-eighth, to fund the Swap Class M-4 Realized Loss Amortization Amount for that Distribution Date;
(xxix) twenty-ninth, to fund the Swap Class M-5 Realized Loss Amortization Amount for that Distribution Date;
(xxx) thirtieth, to fund the Swap Class M-6 Realized Loss Amortization Amount for that Distribution Date;
(xxxi) thirty-first, to fund the Swap Class B-1 Realized Loss Amortization Amount for that Distribution Date;
(xxxii) thirty-second, to fund the Swap Class B-2 Realized Loss Amortization Amount for that Distribution Date;
(xxxiii) thirty-third, to fund the Swap Class B-3 Realized Loss Amortization Amount for that Distribution Date; and
(xxxiv) thirty-fourth, to the Holder of the Class CE Certificates an aggregate amount equal to the excessX Certificates, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO any remaining Swap Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to the Holders of the Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing Date.
Appears in 2 contracts
Samples: Pooling and Servicing Agreement (Popular ABS Mortgage Pass-Through Trust 2006-D), Pooling and Servicing Agreement (Popular ABS Mortgage Pass-Through Trust 2006-E)
Swap Account. (a) No later than On the Closing Date, the Trust Securities Administrator shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of any REMIC.
(b) the Securities Administrator held pursuant to this Agreement. On the Business Day immediately preceding each Distribution Date, Swap Termination Payments (including, without duplication, Replacement Swap Provider Payments), Net Swap Payments owed to the Swap Provider, Net Swap Receipts and, without duplication, amounts distributable on the Class IO Interest for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, other than a Defaulted Swap Termination Payment, owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-0, Xxxxx X-0 xnd Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the LIBOR Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses that have not yet been reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-0, Xxxxx X-0 xnd Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the LIBOR Certificates, any distribution remaining unpaid Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amounts or, without duplication, Upper-Tier CarryForward Amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-0, Xxxxx X-0 xnd Class B-3 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trust Securities Administrator shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor swap provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust receives a Swap Termination Payment and a successor swap provider cannot be obtained, then the Securities Administrator shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Securities Administrator shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment or Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate 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 will not be treated as a Swap Termination Payment for purposes of determining the distributions from the Swap Account until the final Distribution Date. In no event shall the Securities Administrator be responsible for the selection of any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that the Trust enters into a replacement interest rate swap agreement and the Trust is entitled to receive a Replacement Swap Provider Payment from a replacement swap provider, the Securities Administrator shall direct the replacement swap provider (or its guarantor) to make such Replacement Swap Provider Payment to the Swap Account. Notwithstanding the foregoing, any Replacement Swap Provider Payment shall be made from the Swap Account to the Swap Provider 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 Provider Payment is made to an account other than the Swap Account, then, notwithstanding anything to the contrary contained in this Agreement, any Replacement Swap Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider Payment by the Trust, 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 doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust to Certificateholders, any Servicer, the Master Servicer, the Securities Administrator, the Trustee or any other Person. However, to the extent any Replacement Swap Provider Payment received from a replacement swap provider and paid to the Swap Provider being replaced is less than the full amount of a Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account Provider, any upfront payment received from remaining amount of the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Termination Payment shall be paid to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution Provider on subsequent Distribution Dates in accordance with subsection this Section 4.02 and Section 4.06 (d) below, pursuant unless the Replacement Swap Provider Payment is paid to the Swap Administration Provider on a Distribution Date, in which case such remaining amounts will be paid on such Distribution Date). The Securities Administrator shall account for the Swap Account as an asset of the Grantor Trust and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (without duplication of previously paid Replacement Swap Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Class X REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Securities Administrator to the LIBOR Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Securities Administrator, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceLIBOR Certificates. In addition, pursuant the Securities Administrator shall account for the rights of Holders of each Class of LIBOR Certificates to such receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts from the Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account), subject to the obligation to pay Class IO Shortfalls, as rights and obligations under a separate limited recourse notional principal contract, the Holder of contract between the Class CE Certificates X Certificateholders and Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Schedule to the Interest Rate Swap Agreement, the Securities Administrator shall send any notices and make any demands, on behalf of the Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under the terms of the Schedule to the Interest Rate Swap Agreement, the Securities Administrator shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. In addition, in the event a "Xxxxxexx Xxxxnt" (other than as defined in the Class CEInterest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, Class P and Class R Certificates) the Securities Administrator shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of this the Schedule to the Interest Rate Swap Agreement. Any payments The Securities Administrator shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates from amounts deemed received Securities Administrator and the Depositor. If a Responsible Officer of the Securities Administrator receives written notice that the Swap Provider or its guarantor has been downgraded below the levels set forth in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R CertificatesPart 5(f) of a Class IO Distribution Amount the Interest Rate Swap Agreement and the posting of collateral is required in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement, the Securities Administrator shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to demand that the Swap Administrator pursuant to Provider or its guarantor post collateral in accordance with the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificatesterms of Part 5(f) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateInterest Rate Swap Agreement.
Appears in 2 contracts
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2007-Nc2), Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2007-Nc2)
Swap Account. (a) On the Closing Date, there is hereby established a separate trust (the “Supplemental Interest Trust”), into which the Depositor shall deposit the Interest Rate Swap Agreement. The Supplemental Interest Trust shall be maintained by the Supplemental Interest Trust Trustee, who initially, shall be the Trustee. No later than the Closing Date, the Supplemental Interest Trust Administrator Trustee shall establish and maintain with itself, as agent for the Trustee, a separate, segregated non-interest bearing trust account to be held in the Supplemental Interest Trust, titled, “Xxxxx Fargo BankSwap Account, N.A. Deutsche Bank National Trust Company, as Supplemental Interest Trust Trustee, in trust for the registered holders Certificateholders of MASTR Second Lien Fremont Home Loan Trust 2006-13, Mortgage PassAsset-Through Backed Certificates, Series 2006-1—Swap Account3.” (the “Swap Account”). Such account shall be an Eligible Account and amounts funds on deposit therein shall be held separate and apart from, and shall not be commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. Amounts therein shall be held uninvested. The Swap Account shall be an asset of the Supplemental Interest Trust, but shall not be an asset of any REMIC.
(b) On each Distribution Date, prior to any distribution to any Certificate, the Supplemental Interest Trust Administrator Trustee shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account any upfront payment received from the counterparty to a replacement interest rate swap agreement) from funds collected and received with respect to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Supplemental Interest Trust Administrator Trustee from the Swap AdministratorProvider, for distribution in accordance with subsection (dSection 4.01(e) below, pursuant to the Swap Administration Agreementhereof. For federal income tax purposes, any amounts paid to the Swap Provider on each Distribution Date shall first be deemed paid to the Swap Provider in respect of the Class SWAP-REMIC 7 Regular Interest SWAP IO Interest to the extent of the amount distributable on such Class SWAP-REMIC 7 Regular Interest SWAP IO Interest on such Distribution Date, and any remaining amount shall be deemed paid to the Swap Provider in respect of a Class IO Distribution Amount (as defined below).
(c) For It is the intention of the parties hereto that, for federal and state income and state and local franchise tax purposes, the Supplemental Interest Trust be disregarded as an entity separate from the Holder of the Class C Certificates unless and until the date when either (a) there is more than one Class C Certificateholder or (b) any Class of Certificates in addition to the Class C Certificates is recharacterized as an equity interest in the Supplemental Interest Trust for federal income tax purposes, in which case it is the Swap Account shall be owned by the beneficial owners intention of the Class CE Certificates.parties hereto that, for federal and state income and state and local franchise tax purposes, the Supplemental Interest Trust be treated as a partnership. The Supplemental Interest Trust will be an “outside reserve fund” within the meaning of Treasury Regulation Section 1.860G-2(h)..
(d) For federal income tax purposesTo the extent that the Supplemental Interest Trust is determined to be a separate legal entity from the Supplemental Interest Trust Trustee, any obligation of the Supplemental Interest Trust Administrator Trustee under the Interest Rate Swap Agreement shall be deemed to be an obligation of the Supplemental Interest Trust.
(e) The Trustee shall treat the Holders of Certificates (other than the Class P, Class CE C, Class R and Class R R-X Certificates) as having entered into a notional principal contract with respect to the Holders of the Class CE C Certificates. Pursuant to each such notional principal contract, all Holders of Certificates (other than the Class P, Class CE C, Class R and Class R R-X Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE C Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest REMIC 4 Regular Interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE C Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to the Holders of the Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest Regular Interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P P, Class R and Class R R-X Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC 4 and as having been paid by such Holders to the Swap Administrator Supplemental Interest Trust Trustee pursuant to the notional principal contract. Thus, each Certificate (other than the Class P P, Class R and Class R R-X Certificates) shall be treated as representing not only ownership of regular interests Regular Interests in the Master REMICREMIC 4, but also ownership of an interest in, and obligations with respect to, a notional principal contract. .
(f) For federal income tax purposesreturn and information reporting, the right of the Holders of the Floating Rate Certificates to receive payments from the Supplemental Interest Trust Administrator shall treat such notional principal contract as having may have more than a de minimis value. The value of $10,000 as of such amount, if any, may be obtained from the Closing DateTrustee upon request, provided that the Trustee has received such information from the Underwriters.
Appears in 2 contracts
Samples: Pooling and Servicing Agreement (Fremont Home Loan Trust 2006-3), Pooling and Servicing Agreement (Fremont Home Loan Trust 2006-3)
Swap Account. (a) No later than On the Closing Date, the Trust Securities Administrator shall establish and maintain with itself, as agent for in the name of the Trustee, on behalf of the Supplement Interest Trust, a separate, segregated trust separate account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for the registered holders benefit of MASTR Second Lien Trust 2006the Holders of the Class A-1-1, Mortgage Pass-Through Certificates, Series 2006-1—Swap Account” 1 Certificates and Class CE Certificates (the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvested. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other monies, including, without limitation, other monies of any REMICthe Trustee or of the Securities Administrator held pursuant to this Agreement.
(b) On each Distribution Date, prior to any distribution to any Certificate, the Trust Securities Administrator shall deposit into withdraw all amounts which were deposited in the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to Account as specifically described in this Agreement and the Swap Provider (after taking into account any upfront payment received from the counterparty to a replacement swap agreement) from funds collected Agreement and received with respect to the Mortgage Loans prior to the determination of Available Funds and (ii) distribute such amounts received by the Trust Administrator from the Swap Administrator, for distribution in accordance with subsection (dthe provisions of Section 4.1(a)(vii) below, pursuant to the Swap Administration of this Agreement. For federal income tax purposes, any amounts paid to the Swap Provider on each Distribution Date shall first be deemed paid in respect of the Class SWAP-IO Interest to the extent of the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) The Swap Account constitutes an “outside reserve fund” within the meaning of Treasury Regulation § 1.860G-2(h) and is not an asset of any REMIC. The Holders of the Class CE Certificates shall be the beneficial owner of the Swap Account, subject to the power of the Securities Administrator to transfer amounts under this Agreement. The Securities Administrator shall keep records that accurately reflect the funds on deposit in the Swap Account. The Securities Administrator shall, at the written direction of the majority of the Class CE Certificateholders, invest amounts on deposit in the Swap Account in Eligible Investments. In the absence of written direction to the Securities Administrator from the Majority Class CE Certificateholder, all funds in the Swap Account shall remain uninvested. On each Distribution Date, the Securities Administrator shall distribute, not in respect of any REMIC, any interest earned on the Swap Account in the prior month to the Holders of the Class CE Certificates. For federal income tax purposes, the Swap Account shall will be owned by the beneficial owners of the Class CE Certificatesa disregarded entity.
(d) For federal income tax purposes[Reserved]
(e) [Reserved]
(f) [Reserved]
(g) In the event that the Swap Agreement is terminated prior to the Termination Date (as defined in the Swap Agreement), the Trustee on behalf of the Supplemental Interest Trust, at the direction of the Depositor, shall use reasonable efforts to appoint a successor swap provider using any Swap Termination Payments paid by the Swap Provider. To the extent the Supplemental Interest Trust Administrator shall treat is required to pay a Swap Termination Payment to the Holders Swap Provider, all or a portion of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered such amount received from a replacement swap provider upon entering into a notional principal contract with respect replacement interest rate swap agreement or similar agreement will be applied to the Holders Swap Termination Payment owing to the Swap Provider. If the Trustee on behalf of the Class CE Certificates. Pursuant Supplemental Interest Trust is unable to each locate a qualified successor swap provider, any such notional principal contract, all Holders of Certificates (other than Swap Termination Payments will be deposited in the Class P, Class CE Swap Account and Class R Certificates) shall be treated as having agreed to paythe Securities Administrator, on each Distribution Date, to the Holder of the Class CE Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such subsequent Distribution Date (such excessuntil the termination date of the Swap Agreement or the appointment of a successor swap provider), a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) will withdraw the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal any Net Swap Payment due to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to the Holders of the Certificates Supplemental Interest Trust (other than the Class CE, Class P and Class R Certificates) calculated in accordance with the terms of this the Swap Agreement. Any payments ) and distribute such Net Swap Payment to the holders of the Certificates from amounts deemed received in respect of this notional principal contract shall not accordance with Section 4.1.
(h) Two Business Days prior to each Distribution Date on which any amount will be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment distributed from the Certificates (other than Swap Account to the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such A-1-1 Certificates in respect accordance with Section 4.1(a)(vii), the Securities Administrator shall determine the amount of their interests in the Master REMIC any Class A-1-1 Amount for that Distribution Date and as having been paid by report such Holders Class A-1-1 Amount to the Swap Provider on that same day in accordance with the notice provisions contained in Section 11.5 hereof; provided, however, that the Securities Administrator pursuant shall be under no obligation to report such Class A-1-1 Amount to the notional principal contract. Thus, each Certificate (other than Swap Provider unless it has first received the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat Cap Contract Report for such notional principal contract as having a value of $10,000 as of the Closing Distribution Date.
Appears in 2 contracts
Samples: Pooling and Servicing Agreement (Deutsche Alt-a Securities Mortgage Loan Trust, Series 2006-Ar2), Pooling and Servicing Agreement (Deutsche Alt-a Securities Mortgage Loan Trust, Series 2006-Ar2)
Swap Account. (a) No later than the Closing Date, the Trust Administrator Trustee shall establish and maintain with itself, as agent for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank"Swap Account, N.A. Deutsche Bank National Trust Company, as Trustee, in trust for the Swap Provider and the registered holders of MASTR Second Lien Trust 2006Ameriquest Mortgage Securities Inc., Asset-1, Mortgage Backed Pass-Through Certificates, Series 20062005-1—Swap Account” (the “Swap Account”). R3." Such account shall be an Eligible Account and amounts therein shall be held uninvested. The Swap Account shall be an asset of the Supplemental Interest Trust, but shall not be an asset of any REMIC.
(b) On each Distribution Date, prior to any distribution to any Certificate, the Trust Administrator Trustee shall deposit into the Swap Account: Account pursuant to 3.05(c)(i): (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account any upfront payment received from the counterparty to a replacement swap agreement) from funds collected and received with respect to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator Trustee from the Swap Administrator, for distribution in accordance with subsection (d) below, pursuant to the Swap Administration Agreement, dated as of the Closing Date (the "Swap Administration Agreement"), among Deutsche Bank National Trust Company in its capacity as Trustee, Deutsche Bank National Trust Company in its capacity as Swap Administrator and Ameriquest Mortgage Company. For federal income tax purposes, any amounts paid to the Swap Provider on each Distribution Date shall first be deemed paid to the Swap Provider in respect of the Class SWAP-IO Interest to the extent of the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount shall be deemed paid to the Swap Provider in respect of a Class IO Distribution Amount (as defined below).
(c) For federal income tax purposes, the Swap Account shall be owned by the beneficial owners majority Holder of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator The Trustee shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest REMIC III Regular Interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “"Class IO Distribution Amount”"). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata PRO RATA among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC RateCertificates, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to the Holders of the Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest Regular Interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC III and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests Regular Interests in the Master REMICREMIC III, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing Date.
Appears in 2 contracts
Samples: Pooling and Servicing Agreement (Ameriquest Mortgage Securities Inc. Series 2005-R3), Pooling and Servicing Agreement (Ameriquest Mortgage Securities Inc. Series 2005-R3)
Swap Account. (a) No later than On the Closing Date, the Trust Securities Administrator shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of any REMIC.
(b) the Securities Administrator held pursuant to this Agreement. On the Business Day immediately preceding each Distribution Date, Swap Termination Payments (including, without duplication, Replacement Swap Provider Payments), Net Swap Payments owed to the Swap Provider, Net Swap Receipts and, without duplication, amounts distributable on the Class IO Interest for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, other than a Defaulted Swap Termination Payment, owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2, Class B-3 and Class B-4 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the LIBOR Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses that have not yet been reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2, Class B-3 and Class B-4 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the LIBOR Certificates, any distribution remaining unpaid Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amounts or, without duplication, Upper-Tier CarryForward Amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2, Class B-3 and Class B-4 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trust Securities Administrator shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor swap provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust receives a Swap Termination Payment and a successor swap provider cannot be obtained, then the Securities Administrator shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Securities Administrator shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment or Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate 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 will not be treated as a Swap Termination Payment for purposes of determining the distributions from the Swap Account until the final Distribution Date. In no event shall the Securities Administrator be responsible for the selection of any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that the Trust enters into a replacement interest rate swap agreement and the Trust is entitled to receive a Replacement Swap Provider Payment from a replacement swap provider, the Securities Administrator shall direct the replacement swap provider (or its guarantor) to make such Replacement Swap Provider Payment to the Swap Account. Notwithstanding the foregoing, any Replacement Swap Provider Payment shall be made from the Swap Account to the Swap Provider 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 Provider Payment is made to an account other than the Swap Account, then, notwithstanding anything to the contrary contained in this Agreement, any Replacement Swap Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider Payment by the Trust, 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 doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust to Certificateholders, any Servicer, the Master Servicer, the Securities Administrator, the Trustee or any other Person. However, to the extent any Replacement Swap Provider Payment received from a replacement swap provider and paid to the Swap Provider being replaced is less than the full amount of a Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account Provider, any upfront payment received from remaining amount of the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Termination Payment shall be paid to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution Provider on subsequent Distribution Dates in accordance with subsection this Section 4.02 and Section 4.06 (d) below, pursuant unless the Replacement Swap Provider Payment is paid to the Swap Administration Provider on a Distribution Date, in which case such remaining amounts will be paid on such Distribution Date). The Securities Administrator shall account for the Swap Account as an asset of the Grantor Trust and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (without duplication of previously paid Replacement Swap Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Class X REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Securities Administrator to the LIBOR Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Securities Administrator, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceLIBOR Certificates. In addition, pursuant the Securities Administrator shall account for the rights of Holders of each Class of LIBOR Certificates to such receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts from the Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account), subject to the obligation to pay Class IO Shortfalls, as rights and obligations under a separate limited recourse notional principal contract, the Holder of contract between the Class CE Certificates X Certificateholders and Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Schedule to the Interest Rate Swap Agreement, the Securities Administrator shall send any notices and make any demands, on behalf of the Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under the terms of the Schedule to the Interest Rate Swap Agreement, the Securities Administrator shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. In addition, in the event a "Xxxxxexx Xxxxnt" (other than as defined in the Class CEInterest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, Class P and Class R Certificates) the Securities Administrator shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of this the Schedule to the Interest Rate Swap Agreement. Any payments The Securities Administrator shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates from amounts deemed received Securities Administrator and the Depositor. If a Responsible Officer of the Securities Administrator receives written notice that the Swap Provider or its guarantor has been downgraded below the levels set forth in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R CertificatesPart 5(f) of a Class IO Distribution Amount the Interest Rate Swap Agreement and the posting of collateral is required in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement, the Securities Administrator shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to demand that the Swap Administrator pursuant to Provider or its guarantor post collateral in accordance with the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificatesterms of Part 5(f) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateInterest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2007-Nc3)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, Swap Termination Payments, Net Swap Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses that have not yet been reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any distribution remaining unpaid Basis Risk CarryForward Amount, and, without duplication, Upper Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount or Upper-Tier CarryForward Amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trustee shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor Swap Provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust Administrator receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Trustee shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Trustee shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap Account. In no event shall the Trustee be responsible for the selection of any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the 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 Interest Rate Swap Agreement, the Trust is entitled to receive a payment from a replacement swap provider, the Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment (other than any shall be made from the Swap Termination Payment resulting from a Swap Provider Trigger Event) owed Account to the Swap Provider (after taking into 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 Provider Payment is made to an account any upfront payment received from other than the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Account, then, notwithstanding anything to the Mortgage Loans prior contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid to the determination Swap Provider immediately upon receipt of Available Funds such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust Administrator from to Certificateholders, the Servicer, any Custodian, any Responsible Party, the Trustee or any other Person. The Trustee shall account for the Swap Administrator, for distribution in accordance with subsection (d) below, Account as an asset of the Grantor Trust and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Administration AgreementAccount are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Class X REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Basis Risk CarryForward Amounts (and, without duplication, Upper-Tier CarryForward Amounts) from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders beneficial owners of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Closing DateInterest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. The Trustee shall cause any xxxxxxexxxx xxap provider to provide a copy of the related replacement interest rate swap agreement to the Trustee and the Depositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2006-He4)
Swap Account. (a) No later than the Closing Date, the Trust Administrator shall establish and maintain with itself, as agent for The Depositor hereby directs the Trustee, in its capacity as Supplemental Interest Trustee to execute, deliver and perform its obligations under the Swap Agreement on the Startup Date and thereafter on behalf of the Supplemental Interest Trust, and to establish the Swap Account pursuant to Section 7.02(a). The Seller, the Depositor, the Servicer and the Certificateholders, by their acceptance of such Certificates acknowledge and agree that the Trustee shall execute, deliver and perform its obligations under the Swap Agreement and shall do so solely in its capacity as Supplemental Interest Trustee of the Supplemental Interest Trust and not in its individual capacity. Promptly upon receipt, the Supplemental Interest Trustee will deposit into the Swap Account all funds received from the Trustee pursuant to Section 7.03(a) and Section 7.03(b) clause 19. and all funds received from the Swap Provider under the Swap Agreement. Amounts on deposit in the Swap Account shall be invested in accordance with Section 7.05.
(b) On each Distribution Date after the Startup Day but not beyond the February 2013 Distribution Date, to the extent necessary, following all distributions pursuant to Section 7.03(b), the Supplemental Interest Trustee shall apply, all amounts, if any, on deposit in the Swap Account (other than investment earnings on funds held in the Swap Account, which shall be for the account of the Servicer) in the following order of priority:
(i) first, to the Swap Provider, any Net Swap Payment owed to the Swap Provider pursuant to the Swap Agreement for such Distribution Date and any Net Swap Payments owed to the Swap Provider remaining unpaid from prior Distribution Dates;
(ii) second, to the Swap Provider, any Swap Termination Payment owed to the Swap Provider not resulting from a separateSwap Provider Trigger Event pursuant to the Swap Agreement;
(iii) third, segregated trust account titledto the Offered Certificates (other than the Class M-10 Certificates), “the Net Subordination Deficiency for the applicable Distribution Date, allocated in the order of priority set forth in Section 7.03(b) clauses C.3. through C.12.;
(iv) fourth, sequentially, to the Class M-0, Xxxxx Fargo BankX-0, N.A. as TrusteeClass M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9 Certificates, in trust for that order, any related Class Principal Carryover Shortfall, to the registered holders of MASTR Second Lien Trust 2006-1extent remaining undistributed after the distributions pursuant to Section 7.03(b);
(v) fifth, Mortgage Pass-Through concurrently, to the Senior Certificates, Series 2006any related Class Interest Carryover Shortfall, pro rata, to the extent remaining undistributed based on such amounts after the distributions pursuant to Section 7.03(b);
(vi) sixth, sequentially, to the Class M-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9 Certificates, in that order, any related Class Interest Carryover Shortfall, to the extent remaining undistributed after the distributions pursuant to Section 7.03(b);
(vii) seventh, to pay the applicable Certificateholders (other than the Class M-10 Certificates) any Net WAC Cap Carryover to the extent remaining undistributed after the distributions pursuant to Section 7.03(b), allocated in the order of priority set forth in Section 7.03(b) clauses C.17. and C.18.;
(viii) eighth, to the Swap Provider, any Swap Termination Payments resulting from a Swap Provider Trigger Event; and
(ix) ninth, to the Class X-1—Swap Account” IO Certificates, any remainder; provided, that the cumulative amount of distributions pursuant to clauses (iii) and (iv) above on each Distribution Date, and all prior Distribution Dates, will not exceed the “Swap Account”). Such account shall be an Eligible Account cumulative amount of Realized Losses with respect to that Distribution Date and amounts therein shall be held uninvested. all prior Distribution Dates.
(c) [Reserved].
(d) The Swap Account shall be treated as an “outside reserve fund” within the meaning of Treasury Regulation Section 1.8606-2(h) and shall not be an asset of any REMIC or the Trust Estate created pursuant to this Agreement and, instead, shall be an asset of the Supplemental Interest Trust, but . For state and federal tax purposes the beneficial owners of the Class X-IO Certificates shall not be an asset the beneficial owners of any REMICthe Swap Account.
(b) On each Distribution Date, prior to any distribution to any Certificate, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account any upfront payment received from the counterparty to a replacement swap agreement) from funds collected and received with respect to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution in accordance with subsection (d) below, pursuant to the Swap Administration Agreement. For federal income tax purposes, any amounts paid to the Swap Provider on each Distribution Date shall first be deemed paid in respect of the Class SWAP-IO Interest to the extent of the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(ce) For federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator Trustee shall treat the Holders of Offered Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect to the Holders of the Class CE X-IO Certificates. Pursuant to each such notional principal contract, all Holders of Offered Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE X-IO Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class X-IO Distribution Shortfall Amount”). A Class X-IO Distribution Shortfall Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC RateCap, and a Class X-IO Distribution Shortfall Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE X-IO Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts Cap Carryovers to the Holders of the Offered Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Offered Certificates (other than the Class CE, Class P and Class R Certificates) of a Class X-IO Distribution Shortfall Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator Supplemental Interest Trustee pursuant to the notional principal contract. Thus, each Offered Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator Supplemental Interest Trustee shall treat such notional principal contract as having a value of $10,000 380,000 as of the Closing Startup Date.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Nationstar Home Equity Loan Trust 2007-C)
Swap Account. (a) No later than On or before the Closing Dateissuance of the Certificates, the Trust Administrator shall establish and maintain Trustee will open with itselfan Eligible Depository one or more accounts in the name of the Trustee (or its designee) (collectively, as agent for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—Swap Account” (the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvested. The Swap Account shall be an asset ) to hold funds for the benefit of the Supplemental Interest Trust, but shall not be an asset Holders of any REMICthe FA Class Certificates.
(b) On each Distribution DateThe manner in which the Swap Account is maintained may at any time be changed without notice to, prior to any distribution to any Certificateor the approval of, the Trust Administrator shall deposit into Holders of the Swap Account: FA Class Certificates, so long as (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account any upfront payment received from the counterparty to a replacement swap agreement) from funds collected and received Account is maintained with respect to the Mortgage Loans prior to the determination of Available Funds an Eligible Depository and (ii) amounts received by the Trust Administrator from funds held in the Swap AdministratorAccount by, or for distribution in accordance with subsection (d) belowthe account of, pursuant to the Swap Administration Agreement. For federal income tax purposes, any amounts paid to the Swap Provider on each Distribution Date shall first be deemed paid in respect of the Class SWAP-IO Interest to the extent of the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount shall be deemed paid in respect of a Class IO Distribution Amount (as defined below)Trustee are at all times identified.
(c) For federal income tax purposes, The Trustee will deposit all moneys received by it in respect of the Swap Agreement into the Swap Account. The Trustee will also deposit into the Swap Account shall the amounts provided in Subsection 4.08(a). All such moneys deposited from time to time into the Swap Account, and all investments made with such moneys, will be owned held by the beneficial owners Trustee in the Swap Account for the benefit of the Holders of the FA Class CE CertificatesCertificates and the Swap Counterparty as herein provided, subject to withdrawal by the Trustee for the purposes set forth in Subsection 4.08(a) and Section 5.04.
(d) For federal income tax purposes, The Swap Account will not be part of any REMIC created hereby. No payments from the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect Swap Account to the Holders of the FA Class CE Certificates. Pursuant to each such notional principal contract, all Holders of Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to the Holders of the Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not will be payments with respect to a “regular interest interest” in a REMIC within the meaning of Code Section 860G(a)(1). However860G(a)(i) of the Code.”
(j) The first sentence of Section 5.02 of the Trust Agreement is hereby revised to read as follows: “All or a portion of the amounts on deposit in the Certificate Account or the Swap Account may be invested and reinvested in one or more investments that, any payment from at the Certificates (other time of their acquisition, are Eligible Investments maturing not later than the Class CEapplicable Distribution Date or, Class P and Class R Certificatesif funds in the Certificate Account are to be transferred to another Certificate Account, by the expected date of transfer.”
(k) Subsection 5.04(a) of a Class IO the Trust Agreement is hereby deleted and replaced in its entirety by the following:
(a) Amounts credited to the Certificate Account and to the Swap Account on any Distribution Date will be withdrawn pursuant to Subsection 4.03(a) and Subsection 4.08(a) by the Trustee for application towards the distributions required by the Trust Documents, including payments to the Swap Provider. The Trustee may consolidate funds in one or more Certificate Accounts prior to transfer to the applicable Paying Agent.”
(l) Subsection 5.04(c) of the Trust Agreement is hereby deleted and replaced in its entirety by the following:
(c) In the event that amounts remain in the Certificate Account in any month following (A) distribution of the Certificate Distribution Amount shall for such month, (B) payment of amounts due pursuant to Subsection 5.04(b), and (C) the deposit into the Swap Account of any amount that is required to be treated paid by the Trustee to the Swap Counterparty under the Swap Agreement for tax purposes such month, such amounts may be withdrawn by the Trustee and retained by it as having compensation for its administrative obligations hereunder but only to the extent such withdrawn amounts are not needed to make payment of the Certificate Distribution Amount in future periods. Any amount so withdrawn will no longer be a part of the Trust Fund.” Pursuant to a REMIC Master Trust Agreement Dated as of May 1, 2010 and Issue Supplement dated as of August 1, 2016 Guaranteed REMIC Pass-Through Certificate evidencing an undivided beneficial ownership interest in Xxxxxx Xxx Multifamily REMIC Trust 2016-M8 Class: M8-FA Original Class Balance: $396,128,729 Issue Date: August 1, 2016 Variable Interest Rate Certificate No.: 1 Final Distribution Date: July 2026 CUSIP No.: 0000XX0X0 Registered Holder: Cede & Co. Taxpayer Identification Number: 00-0000000 FEDERAL NATIONAL MORTGAGE ASSOCIATION, a body corporate organized and existing under the laws of the United States (“Xxxxxx Xxx”), which term includes any successor), in its corporate capacity, for value received, hereby promises to distribute to the Registered Holder identified above or registered assigns (the “Holder”), subject to the terms and conditions of the REMIC master trust agreement dated as of May 1, 2010 (the “Trust Agreement”), as supplemented by an issue supplement dated as of August 1, 2016 (the “Issue Supplement”), each between Xxxxxx Mae in its corporate capacities as issuer and guarantor, and Xxxxxx Xxx as trustee (the “Trustee”), the principal sum equal to the principal amount stated above from time to time as provided in the Trust Agreement, as supplemented or amended by the Issue Supplement, on the 25th day of each month (or, if such 25th day is not a Business Day, on the first Business Day next succeeding such 25th day) (each, a “Distribution Date”), commencing in September 2016 and ending on or before the Final Distribution Date specified above, and to distribute interest (computed on the basis of the actual number of days in each Interest Accrual Period and a 360-day year) on the remaining principal amount of this Class M8-FA REMIC Certificate from time to time as provided in the Trust Agreement, as supplemented or amended by the Issue Supplement, until the Class Balance of the Class M8-FA REMIC Certificates has been received by reduced to zero, at the variable interest rate as described, and subject to the limitations specified, in the Prospectus Supplement. This Class M8-FA REMIC Certificate represents (i) a “regular interest” in a “real estate mortgage investment conduit” as those terms are defined in the Internal Revenue Code of 1986, as amended, and (ii) the right to receive, and the obligation to make, certain payments under the Swap Agreement. This Class M8-FA REMIC Certificate is one of a duly authorized issue of Guaranteed REMIC Pass-Through Certificates of Xxxxxx Xxx (herein called the “REMIC Certificates”), representing the beneficial ownership of Xxxxxx Xxx XXXXX Trust 2016-M8 (herein called the “Trust Fund”), all issued and to be issued under the Trust Agreement and the Issue Supplement, to which Trust Agreement and all amendments and trust agreements supplemental thereto (including the Issue Supplement) reference is hereby made for a statement of the respective rights thereunder of the Issuer, the Guarantor, the Trustee and the Holders of such the REMIC Certificates of each Class thereof and the terms upon which this Class M8-FA REMIC Certificate is, and is to be, authenticated and made available. All capitalized terms used in this Class M8-FA REMIC Certificate that are defined in the Trust Agreement, as supplemented or amended by the Issue Supplement, will have the meanings assigned to them in the Trust Agreement, as so supplemented or amended. Beneficial ownership of the Class M8-FA REMIC Certificates may be held only in book-entry form through the Holder hereof and its participating member firms. The Holder hereof, by its acceptance of this Certificate, agrees to be bound by the Trust Agreement and the Issue Supplement. The Holder of this Certificate agrees to, and will be bound by, the book-entry procedures set forth in the Trust Agreement and the Issue Supplement. Distributions on this Class M8-FA REMIC Certificate will be made by wire transfer in immediately available funds by the Paying Agent not later than the related Distribution Date to the REMIC Certificateholder as of the preceding Record Date as it appears on the Certificate Register or to its nominee; provided, however, that the final distribution in respect of their interests this Class M8-FA REMIC Certificate will be made only upon presentation and surrender of this Class M8- FA REMIC Certificate at the Corporate Trust Office of the Paying Agent as specified in the Master Trust Agreement and the Issue Supplement. Any reduction in the principal amount of this Class M8-FA REMIC Certificate (or any predecessor Class M8-FA REMIC Certificate) effected by any payments made on any Distribution Date will be binding upon all future Holders of this Class M8-FA REMIC Certificate and of any Class M8-FA REMIC Certificate issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not noted hereon. The Record Date for each Distribution Date is the last day of the month preceding the month in which such Distribution Date occurs. The Trust Agreement permits, with certain exceptions therein provided, the amendment thereof and the modification of the rights and obligations of Xxxxxx Xxx and the rights of the REMIC Certificateholders under the Trust Agreement and the Issue Supplement at any time by the Issuer and the Trustee with the consent of the Holders of REMIC Certificates of each Class representing not less than 51% of the Voting Rights of such Class. Any such consent by the Holder of this Class M8-FA REMIC Certificate will be conclusive and binding on such Holder and upon all future Holders of this Class M8-FA REMIC Certificate and of any Class M8-FA REMIC Certificate issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent is made upon this Class M8-FA REMIC Certificate. The Trust Agreement also permits the amendment thereof or the amendment of the Issue Supplement, in certain limited circumstances, without the consent of the Holders of any of the REMIC Certificates. This Class M8-FA REMIC Certificate is issuable only as having been paid a registered Class M8-FA REMIC Certificate. As provided in the Trust Agreement and the Issue Supplement and subject to certain limitations set forth therein, the transfer of this Class M8-FA REMIC Certificate is registrable in the Certificate Register of the Trustee upon surrender of this Class M8-FA REMIC Certificate for registration of transfer at the office or agency maintained by the Trustee for such Holders purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Swap Administrator pursuant Issuer, the Trustee and the Certificate Registrar duly executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, and such other documents as the Issuer, the Trustee or the Certificate Registrar may require, and thereupon a new Class M8- FA REMIC Certificate for the same initial Certificate Balance will be issued to the notional principal contractdesignated transferee. ThusA service charge in an amount determined by the Trustee will be imposed for any registration of transfer or exchange of this Class M8-FA REMIC Certificate and the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. The Issuer, each the Guarantor, the Trustee, the Certificate (other than Registrar and any of their respective agents may treat the Person in whose name this Class P and Class R Certificates) shall be treated M8-FA REMIC Certificate is registered as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest inowner hereof for all purposes, and obligations with respect tonone of the Issuer, a notional principal contractthe Guarantor, the Trustee, the Certificate Registrar or any of their respective agents will be affected by notice to the contrary. For federal income tax purposesThis Class M8-FA REMIC Certificate, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as Agreement and the Issue Supplement will be construed in accordance with, and governed by, the substantive laws of the Closing DateDistrict of Columbia applicable to agreements made and to be performed therein (without giving effect to conflicts of law principles). This Class M8-FA REMIC Certificate is issued under and is subject to the terms, provisions and conditions of the Trust Agreement and the Issue Supplement, to which Trust Agreement and Issue Supplement the Holder of this Class M8-FA REMIC Certificate by virtue of the acceptance hereof assents and by which such Holder is bound. Unless the certificate of authentication hereon has been executed by or on behalf of the Certificate Registrar by manual or facsimile signature, this Class M8-FA REMIC Certificate will not be entitled to any benefit under the Trust Agreement or the Issue Supplement, or be valid for any purpose.
Appears in 1 contract
Samples: Issue Supplement
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest-bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, Swap Termination Payments (including, without duplication, Replacement Swap Provider Payments), Net Swap Payments owed to the Swap Provider, Net Swap Receipts and, without duplication, amounts distributable on the Class IO Interest for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, other than a Defaulted Swap Termination Payment, owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses that have not yet been reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M-and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any distribution remaining unpaid Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amounts or, without duplication, Upper-Tier CarryForward Amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trustee shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor swap provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust Administrator receives a Swap Termination Payment and a successor swap provider cannot be obtained, then the Trustee shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Trustee shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment or Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate 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 will not be treated as a Swap Termination Payment (for purposes of determining the distributions from the Swap Account until the final Distribution Date. In no event shall the Trustee be responsible for the selection of any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the Trust entering into a replacement interest rate swap, the Trust is entitled to receive a Replacement Swap Provider Payment from a replacement swap provider, the Trustee shall direct the replacement swap provider to make such Replacement Swap Provider Payment to the Swap Account. Notwithstanding the foregoing, any Replacement Swap Provider Payment shall be made from the Swap Account to the Swap Provider 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 Provider Payment is made to an account other than the Swap Account, then, notwithstanding anything to the contrary contained in this Agreement, any Replacement Swap Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider Payment by the Trust, 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 doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust to Certificateholders, any Servicer, the Custodian, any Responsible Party, the Trustee or any other Person. However, to the extent any Replacement Swap Provider Payment received from a replacement swap provider and paid to the Swap Provider being replaced is less than the full amount of a Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account Provider, any upfront payment received from remaining amount of the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Termination Payment shall be paid to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution Provider on subsequent Distribution Dates in accordance with subsection this Section 4.02 and Section 4.06 (d) below, pursuant unless the Replacement Swap Provider Payment is paid to the Swap Administration Provider on a Distribution Date, in which case such remaining amounts will be paid on such Distribution Date). The Trustee shall account for the Swap Account as an asset of the Grantor Trust and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (without duplication of previously paid Replacement Swap Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Class X REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts from the Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account), subject to the obligation to pay Class IO Shortfalls, as rights and obligations under a separate limited recourse notional principal contract, the Holder of contract between the Class CE Certificates X Certificateholders and Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Schedule to the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under the terms of the Schedule to the Interest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. In addition, in the event a "Xxxxxexx Xxxxnt" (other than as defined in the Class CEInterest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, Class P and Class R Certificates) the Trustee shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of this the Schedule to the Interest Rate Swap Agreement. Any payments The Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates from amounts deemed received Trustee and the Depositor. If a Responsible Officer of the Trustee receives written notice that the Swap Provider or its guarantor has been downgraded below the levels set forth in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R CertificatesPart 5(f) of a Class IO Distribution Amount the Interest Rate Swap Agreement and the posting of collateral is required in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement, the Trustee shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to demand that the Swap Administrator pursuant to Provider or its guarantor post collateral in accordance with the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificatesterms of Part 5(f) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateInterest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Home Equity Loan Trust 2007-1)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, Swap Termination Payments, Net Swap Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any distribution remaining unpaid Basis Risk CarryForward Amount and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trustee shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor Swap Provider meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust Administrator receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Trustee shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Trustee shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap Account. In no event shall the Trustee be responsible for the selection of any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the 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 Interest Rate Swap Agreement, the Trust is entitled to receive a payment from a replacement swap provider, the Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment (other than any shall be made from the Swap Termination Payment resulting from a Swap Provider Trigger Event) owed Account to the Swap Provider (after taking into 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 Provider Payment is made to an account any upfront payment received from other than the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Account, then, notwithstanding anything to the Mortgage Loans prior contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid to the determination Swap Provider immediately upon receipt of Available Funds such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust Administrator from to Certificateholders, the Servicer, any Responsible Party, the Trustee or any other Person. The Trustee shall account for the Swap AdministratorAccount as an asset of a grantor trust under subpart E, for distribution in accordance with subsection (d) below, 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 Swap Administration AgreementAccount are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk CarryForward Amounts) from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Interest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. In addition, in the event a "Xxxxxexx Xxxxnt" (other than as defined in the Class CEInterest Rate Swap Agreement) was due but was not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, Class P and Class R Certificates) the Trustee shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of this the Interest Rate Swap Agreement. Any payments The Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within Trustee and the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateDepositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Capital I Inc. Trust 2006-Nc2)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the LIBOR Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, prior to any distribution to any CertificateSwap Termination Payments, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(after taking into account any upfront payment received from the counterparty to a replacement swap agreementi) from funds collected and received with respect to the Mortgage Loans prior Swap Provider, the sum of (x) all Net Swap Payments and (y) any Swap Termination Payment, other than a Defaulted Swap Termination Payment, to the determination of Available Funds and Swap Provider, if any, owed for that Distribution Date;
(ii) amounts received by to the Trust Administrator Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iii) sequentially, to the Class M-1, Class M-2, Class M-3, Class B-1, Class B-2, Class B-3 and Clxxx X-0 Xxxxxxicates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and (iii), to the extent unpaid from Available Funds;
(iv) to the LIBOR Certificates, to pay Basis Risk Carry Forward Amounts as described in Section 4.02(a)(iii)(R), to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(v) sequentially, to the Class A, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2, Class B-3 and Class B-4 Certificates, in that order, to pay principal as described in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to maintain the Subordinated Amount at the Specified Subordinated Amount, after giving effect to payments and distributions from Available Funds;
(vi) sequentially, to the Class M-1, Class M-2, Class M-3, Class B-1, Class B-2, Class B-3 and Clxxx X-0 Xxxxxxicates, in that order, to pay any Unpaid Interest Amounts as described in Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(vii) to the Swap AdministratorProvider, any Defaulted Swap Termination Payment owed to the Swap Provider for distribution that Distribution Date; and
(viii) to the holders of the Class X Certificates, any remaining amounts. Upon termination of the Trust, any amounts remaining in accordance with subsection (d) below, the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.07. The Trustee shall account for the Swap Administration 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 Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, Class X Interest) and second, other than any Defaulted Swap Termination Payment, by the Holders of the applicable Class or Classes of LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk Carry Forward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the LIBOR Certificateholders from the Excess Reserve Fund Account or the Swap Account shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE X Certificates (in respect of the Class X Interest or the Class IO Interest, respectively) and then to the respective Class or Classes of LIBOR Certificates. Pursuant In addition, the Trustee shall account for the rights of Holders of each Class of LIBOR Certificates to receive payments of Basis Risk Carry Forward Amounts from the Swap Account (along with Basis Risk Carry Forward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class X Certificateholders in favor of Holders of each such notional principal contractClass. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, all the Holders of Certificates (other than the Class PX Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, Class CE and Class R Certificates) shall be taxable on all income earned thereon, and any amounts reimbursed from the Upper Tier REMIC to the Swap Account shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts been distributed to the Holders of the Certificates (other than the Class CE, Class P and Class R X Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing Date.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Securitized Asset Backed Receivables LLC Trust 2005-He1)
Swap Account. (a) No later than On the Closing Date, the Trust Securities Administrator shall establish and maintain with itselfin its name, as agent a separate non-interest-bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall not be an asset invested and shall be held separate and apart from, and shall not be commingled with, any other moneys, including, without limitation, other moneys of any REMIC.
(b) the Securities Administrator held pursuant to this Agreement. On the Business Day immediately preceding each Distribution Date, Swap Termination Payments (including, without duplication, Replacement Swap Provider Payments), Net Swap Payments owed to the Swap Provider, Net Swap Receipts and, without duplication, amounts distributable on the Class IO Interest for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, other than a Defaulted Swap Termination Payment, owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class B-1, Class X-0 xxx Xxxxx B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses that have not yet been reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class B-1, Class X-0 xxx Xxxxx B-3 Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M-and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any distribution remaining unpaid Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amounts or, without duplication, Upper-Tier CarryForward Amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class B-1, Class X-0 xxx Xxxxx B-3 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trust Securities Administrator shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor swap provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust receives a Swap Termination Payment and a successor swap provider cannot be obtained, then the Securities Administrator shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Securities Administrator shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment or Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate 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 will not be treated as a Swap Termination Payment for purposes of determining the distributions from the Swap Account until the final Distribution Date. In no event shall the Securities Administrator be responsible for the selection of any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that the Trust enters into a replacement interest rate swap agreement and the Trust is entitled to receive a Replacement Swap Provider Payment from a replacement swap provider, the Securities Administrator shall direct the replacement swap provider (or its guarantor) to make such Replacement Swap Provider Payment to the Swap Account. Notwithstanding the foregoing, any Replacement Swap Provider Payment shall be made from the Swap Account to the Swap Provider 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 Provider Payment is made to an account other than the Swap Account, then, notwithstanding anything to the contrary contained in this Agreement, any Replacement Swap Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider Payment by the Trust, 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 doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust to Certificateholders, any Servicer, the Master Servicer, the Securities Administrator, any Custodian, the Trustee or any other Person. However, to the extent any Replacement Swap Provider Payment received from a replacement swap provider and paid to the Swap Provider being replaced is less than the full amount of a Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account Provider, any upfront payment received from remaining amount of the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Termination Payment shall be paid to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution Provider on subsequent Distribution Dates in accordance with subsection this Section 4.02 and Section 4.06 (d) below, pursuant unless the Replacement Swap Provider Payment is paid to the Swap Administration Provider on a Distribution Date, in which case such remaining amounts will be paid on such Distribution Date). The Securities Administrator shall account for the Swap Account as an asset of the Grantor Trust and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (without duplication of previously paid Replacement Swap Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Class X REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Securities Administrator to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Securities Administrator, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to such receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts from the Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account), subject to the obligation to pay Class IO Shortfalls, as rights and obligations under a separate limited recourse notional principal contract, the Holder of contract between the Class CE Certificates X Certificateholders and Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Schedule to the Interest Rate Swap Agreement, the Securities Administrator shall send any notices and make any demands, on behalf of the Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under the terms of the Schedule to the Interest Rate Swap Agreement, the Securities Administrator shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. In addition, in the event a "Xxxxxexx Xxxxnt" (other than as defined in the Class CEInterest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, Class P and Class R Certificates) the Securities Administrator shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of this the Schedule to the Interest Rate Swap Agreement. Any payments The Securities Administrator shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates from amounts deemed received Securities Administrator and the Depositor. If a Responsible Officer of the Securities Administrator receives written notice that the Swap Provider or its guarantor has been downgraded below the levels set forth in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R CertificatesPart 5(f) of a Class IO Distribution Amount the Interest Rate Swap Agreement and the posting of collateral is required in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement, the Securities Administrator shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to demand that the Swap Administrator pursuant to Provider or its guarantor post collateral in accordance with the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificatesterms of Part 5(f) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateInterest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2007-He7)
Swap Account. (a) No later than On the Closing Date, there is hereby established the Supplemental Interest Trust, into which the Depositor shall deposit the Interest Rate Swap Agreement. The Supplemental Interest Trust shall be maintained by the Supplemental Interest Trust Trustee. On the Closing Date, the Supplemental Interest Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—Swap Account” the Certificates (the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvested) as a part of the Trust Fund. The Swap Account shall be an asset Eligible Account, and funds on deposit therein shall be held separate and apart from, and shall not be commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any Distribution Date, Swap Termination Payments, Net Swap Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any remaining unpaid Basis Risk CarryForward Amount, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay any Unpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Supplemental Interest TrustTrust receives a Swap Termination Payment, but the Supplemental Interest Trust Trustee shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor Swap Provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Supplemental Interest Trust receives a Swap Termination Payment and a successor Swap Provider cannot be an asset obtained, then the Supplemental Interest Trust Trustee shall deposit the Swap Termination Payment into the reserve account that is a sub-account of any REMIC.
(b) the Swap Account. On each subsequent Distribution Date, prior to any distribution to any CertificateDate (so long as funds are available in the reserve account), the Supplemental Interest Trust Administrator Trustee shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment Receipt due the Supplemental Interest Trust (calculated in accordance with the terms of the original Interest Rate Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap Account. In no event shall the Supplemental Interest Trust Trustee be responsible for the selection of any successor or replacement swap provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. 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 Interest Rate Swap Agreement, the Supplemental Interest Trust is entitled to receive a payment from a replacement swap provider, the Supplemental Interest Trust Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment (other than any shall be made from the Swap Termination Payment resulting from a Swap Provider Trigger Event) owed Account to the Swap Provider (after taking into 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 Provider Payment is made to an account any upfront payment received from other than the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Account, then, notwithstanding anything to the Mortgage Loans prior contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid to the determination Swap Provider immediately upon receipt of Available Funds such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust Administrator from to Certificateholders, the Servicer, any Custodian, any Responsible Party, the Trustee or any other Person. The beneficial owners of the Swap Administrator, for distribution in accordance with subsection (d) below, pursuant to Account are the Swap Administration AgreementClass X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from REMIC VI, first, by the REMIC VI Regular Interest Swap-IO and second, other than any Defaulted Swap Termination Payment, from REMIC III by the Holders of the applicable Class or Classes of Offered Certificates (in respect of the Class SWAP-IO Interest Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE X Certificates. Pursuant to each such notional principal contract, all Holders of Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, then to the Holder respective Class or Classes of the Class CE Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contract, receive payments of Basis Risk CarryForward Amounts from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an “outside reserve fund” for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Supplemental Interest Trust Trustee shall send any notices and make any demands, on behalf of the Supplemental Interest Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under the terms of the Interest Rate Swap Agreement, the Supplemental Interest Trust Trustee shall immediately demand that Mxxxxx Sxxxxxx, the guarantor of the Swap Provider’s obligations under the guarantee of Mxxxxx Sxxxxxx relating to the Interest Rate Swap Agreement, make any and all payments then required to be made by Mxxxxx Sxxxxxx pursuant to such guarantee. In addition, in the event a “Delivery Amount” (other than as defined in the Class CEInterest Rate Swap Agreement) was due but was not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, Class P and Class R Certificates) the Supplemental Interest Trust Trustee shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of this the Interest Rate Swap Agreement. Any payments The Supplemental Interest Trust Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates from amounts deemed received Supplemental Interest Trust Trustee and the Depositor. If a Responsible Officer of the Trustee receives written notice that the Swap Provider or its guarantor has been downgraded below the levels set forth in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R CertificatesPart 5(f) of a Class IO Distribution Amount the Interest Rate Swap Agreement and the posting of collateral is required in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement, the Trustee shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to demand that the Swap Administrator pursuant to Provider or its guarantor post collateral in accordance with the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificatesterms of Part 5(f) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateInterest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2006-He7)
Swap Account. (a) No later than The Trustee is hereby authorized and directed in its capacity as Supplemental Interest Trustee to enter into the Closing Swap Agreement on behalf of the Supplemental Interest Trust and to establish the Swap Account pursuant to Section 7.02(a). Promptly upon receipt, the Supplemental Interest Trustee will deposit into the Swap Account all funds received from the Trustee pursuant to Section 7.03(a) and Section 7.03(b) clause 21 and all funds received from the Swap Provider under the Swap Agreement. Amounts on deposit in the Swap Account shall be invested in accordance with Section 7.05.
(b) On each Distribution Date after the Startup Day but not beyond the September 2014 Distribution Date, to the Trust Administrator extent necessary, following all distributions pursuant to Section 7.03(b), the Supplemental Interest Trustee shall establish and maintain with itselfapply, as agent all amounts, if any, on deposit in the Swap Account (other than investment earnings on funds held in the Swap Account, which shall be for the Trusteeaccount of the Servicer) in the following order of priority:
(i) first, to the Swap Provider, any Net Swap Payment owed to the Swap Provider pursuant to the Swap Agreement for such Distribution Date and any Net Swap Payments owed to the Swap Provider remaining unpaid from prior Distribution Dates;
(ii) second, to the Swap Provider, any Swap Termination Payment owed to the Swap Provider not resulting from a separateSwap Provider Trigger Event pursuant to the Swap Agreement;
(iii) third, segregated trust account titledconcurrently, “to the Senior Certificates, any related Class Interest Carryover Shortfall, pro rata, to the extent remaining undistributed after the distributions pursuant to Section 7.03(b);
(iv) fourth, sequentially, to the Class X-0, Xxxxx Fargo BankX-0, N.A. as TrusteeClass M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class M-11 Certificates, in trust that order, any related Class Interest Carryover Shortfall, to the extent remaining undistributed after the distributions pursuant to Section 7.03(b);
(v) fifth, to the Senior Certificates and Subordinate Certificates, the Net Subordination Deficiency for the registered holders applicable Distribution Date, allocated in the order of MASTR Second Lien Trust 2006-1priority set forth in clauses 4. through 15. under Section 7.03(b);
(vi) sixth, Mortgage Pass-Through sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class M-11 Certificates, Series 2006-1—in that order, any related Class Principal Carryover Shortfall, to the extent remaining undistributed after the distributions pursuant to Section 7.03(b);
(vii) seventh, to pay the applicable Certificateholders any Net WAC Cap Carryover to the extent remaining undistributed after the distributions pursuant to Section 7.03(b), allocated in the order of priority set forth in clauses 19. and 20. of 7.03(b); and
(viii) eighth, to the Swap Account” Provider, any Swap Termination Payments resulting from a Swap Provider Trigger Event; provided, that the cumulative amount of distributions pursuant to clauses (v) and (vi) above on each Distribution Date, and all prior Distribution Dates, will not exceed the “cumulative amount of Realized Losses with respect to that Distribution Date and all prior Distribution Dates. Any amount remaining on deposit in the Swap Account”). Such account Account after the application of funds pursuant to this Section 7.12(b) on the September 2014 Distribution Date shall be an Eligible Account and amounts therein shall be held uninvested. paid from the separate trust referred to in subsection (d) below to (or upon the order of) the Servicer.
(c) [Reserved].
(d) The Swap Account shall be treated as an “outside reserve fund” within the meaning of Treasury Regulation Section 1.8606-2(h) and shall not be an asset of any REMIC or the Trust Estate created pursuant to this Agreement and, instead, shall be an asset of the Supplemental Interest Trust. For state and federal tax purposes the Servicer, but on the Distribution Date in September 2014, shall not be an asset the beneficial owner of any REMICthe Swap Account.
(b) On each Distribution Date, prior to any distribution to any Certificate, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account any upfront payment received from the counterparty to a replacement swap agreement) from funds collected and received with respect to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution in accordance with subsection (d) below, pursuant to the Swap Administration Agreement. For federal income tax purposes, any amounts paid to the Swap Provider on each Distribution Date shall first be deemed paid in respect of the Class SWAP-IO Interest to the extent of the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(ce) For federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator Trustee shall treat the Holders of Offered Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect to the Holders of the Class CE X-IO Certificates. Pursuant to each such notional principal contract, all Holders of Offered Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE X-IO Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class X-IO Distribution Shortfall Amount”). A Class X-IO Distribution Shortfall Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC RateCap, and a Class X-IO Distribution Shortfall Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE X-IO Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts Cap Carryovers to the Holders of the Offered Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Offered Certificates (other than the Class CE, Class P and Class R Certificates) of a Class X-IO Distribution Shortfall Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator Supplemental Interest Trustee pursuant to the notional principal contract. Thus, each Offered Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator Supplemental Interest Trustee shall treat such notional principal contract as having a value of $10,000 as of the Closing Date.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Centex Home Equity Loan Trust 2006-A)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, Swap Termination Payments, Net Swap Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed on each Distribution Date in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any distribution remaining unpaid Basis Risk CarryForward Amount and, without duplication, Upper Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trustee shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor Swap Provider meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust Administrator receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Trustee shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Trustee shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap Account. In no event shall the Trustee be responsible for the selection of any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the 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 Interest Rate Swap Agreement, the Trust is entitled to receive a payment from a replacement swap provider, the Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment (other than any shall be made from the Swap Termination Payment resulting from a Swap Provider Trigger Event) owed Account to the Swap Provider (after taking into 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 Provider Payment is made to an account any upfront payment received from other than the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Account, then, notwithstanding anything to the Mortgage Loans prior contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid to the determination Swap Provider immediately upon receipt of Available Funds such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust Administrator from to Certificateholders, any Servicer, the Responsible Party, the Trustee or any other Person. The Trustee shall account for the Swap AdministratorAccount as an asset of a grantor trust under subpart E, for distribution in accordance with subsection (d) below, 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 Swap Administration AgreementAccount are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Upper-Tier CarryForward Amounts (including, but without duplication, Basis Risk CarryForward Amounts) from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Interest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. In addition, in the event a "Xxxxxexx Xxxxnt" (other than as defined in the Class CEInterest Rate Swap Agreement) was due but was not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, Class P and Class R Certificates) the Trustee shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of this the Interest Rate Swap Agreement. Any payments The Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within Trustee and the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateDepositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Home Equity Loan Trust 2006-2)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the LIBOR Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, prior to any distribution to any CertificateSwap Termination Payments, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(after taking into account any upfront payment received from the counterparty to a replacement swap agreementi) from funds collected and received with respect to the Mortgage Loans prior Swap Provider, the sum of (x) all Net Swap Payments and (y) any Swap Termination Payment, other than a Defaulted Swap Termination Payment, to the determination of Available Funds and Swap Provider, if any, owed for that Distribution Date;
(ii) amounts received by to the Trust Administrator Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iii) sequentially, to the Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certxxxxxxxx, xx xhat order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and (iii), to the extent unpaid from Available Funds;
(iv) to the LIBOR Certificates, to pay Basis Risk Carry Forward Amounts as described in Section 4.02(a)(iii)(N)-(O), to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(v) sequentially, to the Class A, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates, in that order, to pay principal as described in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount at the Specified Subordinated Amount as a result of current or prior Realized Losses not previously reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) sequentially, to the Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certxxxxxxxx, xx xhat order, to pay any Unpaid Interest Amounts as described in Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(vii) to the Swap AdministratorProvider, any Defaulted Swap Termination Payment owed to the Swap Provider for distribution that Distribution Date; and
(viii) to the holders of the Class X Certificates, any remaining amounts. Upon termination of the Trust, any amounts remaining in accordance with subsection (d) below, the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. The Trustee shall account for the Swap Administration 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 Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, Class X Interest) and second, other than any Defaulted Swap Termination Payment, by the Holders of the applicable Class or Classes of LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk Carry Forward Amounts and, without duplication, Upper-Tier Carry Forward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the LIBOR Certificateholders from the Excess Reserve Fund Account or the Swap Account shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE X Certificates (in respect of the Class X Interest or the Class IO Interest, respectively) and then to the respective Class or Classes of LIBOR Certificates. Pursuant In addition, the Trustee shall account for the rights of Holders of each Class of LIBOR Certificates to receive payments of Basis Risk Carry Forward Amounts and, without duplication, Upper-Tier Carry Forward Amounts from the Swap Account (along with Basis Risk Carry Forward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class X Certificateholders in favor of Holders of each such notional principal contractClass. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, all the Holders of Certificates (other than the Class PX Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, Class CE and Class R Certificates) shall be taxable on all income earned thereon, and any amounts reimbursed from the Upper-Tier REMIC to the Swap Account shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts been distributed to the Holders of the Certificates (other than the Class CE, Class P and Class R X Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing Date.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (SABR LLC Trust 2006-Fr1)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, prior to any distribution to any CertificateSwap Termination Payments, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursed, after taking giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any remaining unpaid Basis Risk CarryForward Amount and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay any Unpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the Trust entering into account any upfront a replacement interest rate swap following the occurrence of an Additional Termination Event of the type described in Part 1(h)(ii) of the Interest Rate Swap Agreement, the Trust is entitled to receive a payment received from the counterparty to a replacement swap agreement) from funds collected and received with respect provider, the Trustee shall direct the replacement swap provider to make such payment to the Mortgage Loans prior Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the determination Swap Provider immediately upon receipt of Available Funds such payment, regardless of whether the date of receipt thereof is a Distribution Date. To the extent that any Replacement Swap Provider 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 Provider immediately upon receipt of such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust Administrator from to Certificateholders, the Servicer, any Responsible Party, the Trustee or any other Person. The Trustee shall account for the Swap AdministratorAccount as an asset of a grantor trust under subpart E, for distribution in accordance with subsection (d) below, 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 Swap Administration AgreementAccount are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk CarryForward Amounts) from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Interest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. In addition, in the event a "Xxxxxexx Xxxxnt" (other than as defined in the Class CEInterest Rate Swap Agreement) was due but was not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, Class P and Class R Certificates) the Trustee shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of this the Interest Rate Swap Agreement. Any payments The Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within Trustee and the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateDepositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Capital I Inc. Trust 2006-Nc2)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of any REMIC.
(b) the Trustee held pursuant to this Agreement. On the Business Day immediately preceding each Distribution Date, Swap Termination Payments (including, without duplication, Replacement Swap Provider Payments), Net Swap Payments owed to the Swap Provider, Net Swap Receipts and, without duplication, amounts distributable on the Class IO Interest for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, other than a Defaulted Swap Termination Payment, owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Claxx X-0, Xxxxx B-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the LIBOR Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses that have not yet been reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Claxx X-0, Xxxxx B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the LIBOR Certificates, any distribution remaining unpaid Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amounts or, without duplication, Upper-Tier CarryForward Amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Claxx X-0, Xxxxx B-2 and Class B-3 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trustee shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor swap provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust Administrator receives a Swap Termination Payment and a successor swap provider cannot be obtained, then the Trustee shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Trustee shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment or Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate 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 will not be treated as a Swap Termination Payment for purposes of determining the distributions from the Swap Account until the final Distribution Date. In no event shall the Trustee be responsible for the selection of any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that the Trust enters into a replacement interest rate swap agreement and the Trust is entitled to receive a Replacement Swap Provider Payment from a replacement swap provider, the Trustee shall direct the replacement swap provider (or its guarantor) to make such Replacement Swap Provider Payment to the Swap Account. Notwithstanding the foregoing, any Replacement Swap Provider Payment shall be made from the Swap Account to the Swap Provider 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 Provider Payment is made to an account other than the Swap Account, then, notwithstanding anything to the contrary contained in this Agreement, any Replacement Swap Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider Payment by the Trust, 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 doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust to Certificateholders, any Servicer, the Custodian, any Responsible Party, the Trustee or any other Person. However, to the extent any Replacement Swap Provider Payment received from a replacement swap provider and paid to the Swap Provider being replaced is less than the full amount of a Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account Provider, any upfront payment received from remaining amount of the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Termination Payment shall be paid to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution Provider on subsequent Distribution Dates in accordance with subsection this Section 4.02 and Section 4.06 (d) below, pursuant unless the Replacement Swap Provider Payment is paid to the Swap Administration Provider on a Distribution Date, in which case such remaining amounts will be paid on such Distribution Date). The Trustee shall account for the Swap Account as an asset of the Grantor Trust and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (without duplication of previously paid Replacement Swap Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Class X REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the LIBOR Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceLIBOR Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of LIBOR Certificates to such receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts from the Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account), subject to the obligation to pay Class IO Shortfalls, as rights and obligations under a separate limited recourse notional principal contract, the Holder of contract between the Class CE Certificates X Certificateholders and Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Schedule to the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under the terms of the Schedule to the Interest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. In addition, in the event a "Xxxxxexx Xxxxnt" (other than as defined in the Class CEInterest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, Class P and Class R Certificates) the Trustee shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of this the Schedule to the Interest Rate Swap Agreement. Any payments The Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates from amounts deemed received Trustee and the Depositor. If a Responsible Officer of the Trustee receives written notice that the Swap Provider or its guarantor has been downgraded below the levels set forth in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R CertificatesPart 5(f) of a Class IO Distribution Amount the Interest Rate Swap Agreement and the posting of collateral is required in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement, the Trustee shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to demand that the Swap Administrator pursuant to Provider or its guarantor post collateral in accordance with the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificatesterms of Part 5(f) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateInterest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2007-He4)
Swap Account. (a) No later than On the Closing Date, there is hereby established the Supplemental Interest Trust, into which the Depositor shall deposit the Interest Rate Swap Agreement. The Supplemental Interest Trust shall be maintained by the Supplemental Interest Trust Trustee. On the Closing Date, the Supplemental Interest Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—Swap Account” the Certificates (the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvested) as a part of the Trust Fund. The Swap Account shall be an asset Eligible Account, and funds on deposit therein shall be held separate and apart from, and shall not be commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any Distribution Date, Swap Termination Payments, Net Swap Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any remaining unpaid Basis Risk CarryForward Amount, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay any Unpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Supplemental Interest TrustTrust receives a Swap Termination Payment, but the Supplemental Interest Trust Trustee shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor Swap Provider meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Supplemental Interest Trust receives a Swap Termination Payment and a successor Swap Provider cannot be an asset obtained, then the Supplemental Interest Trust Trustee shall deposit the Swap Termination Payment into the reserve account that is a sub-account of any REMIC.
(b) the Swap Account. On each subsequent Distribution Date, prior to any distribution to any CertificateDate (so long as funds are available in the reserve account), the Supplemental Interest Trust Administrator Trustee shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment Receipt due the Supplemental Interest Trust (calculated in accordance with the terms of the original Interest Rate Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap Account. In no event shall the Supplemental Interest Trust Trustee be responsible for the selection of any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. 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 Interest Rate Swap Agreement, the Supplemental Interest Trust is entitled to receive a payment from a replacement swap provider, the Supplemental Interest Trust Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment (other than any shall be made from the Swap Termination Payment resulting from a Swap Provider Trigger Event) owed Account to the Swap Provider (after taking into 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 Provider Payment is made to an account any upfront payment received from other than the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Account, then, notwithstanding anything to the Mortgage Loans prior contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid to the determination Swap Provider immediately upon receipt of Available Funds such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust Administrator from to Certificateholders, the Servicer, any Responsible Party, the Trustee or any other Person. The beneficial owners of the Swap Administrator, for distribution in accordance with subsection (d) below, pursuant to Account are the Swap Administration AgreementClass X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from REMIC III, first, by the Class IO Interest and second, other than any Defaulted Swap Termination Payment, from REMIC III by the Holders of the applicable Class or Classes of Offered Certificates (in respect of the Class SWAP-IO Interest Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE X Certificates. Pursuant to each such notional principal contract, all Holders of Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, then to the Holder respective Class or Classes of the Class CE Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contract, receive payments of Basis Risk CarryForward Amounts from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an “outside reserve fund” for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Supplemental Interest Trust Trustee shall send any notices and make any demands, on behalf of the Supplemental Interest Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Interest Rate Swap Agreement, the Supplemental Interest Trust Trustee shall immediately demand that Xxxxxx Xxxxxxx, the guarantor of the Swap Provider’s obligations under the guarantee of Xxxxxx Xxxxxxx relating to the Interest Rate Swap Agreement, make any and all payments then required to be made by Xxxxxx Xxxxxxx pursuant to such guarantee. In addition, in the event a “Delivery Amount” (other than as defined in the Class CEInterest Rate Swap Agreement) was due but was not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, Class P and Class R Certificates) the Supplemental Interest Trust Trustee shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of this the Interest Rate Swap Agreement. Any payments The Supplemental Interest Trust Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within Supplemental Interest Trust Trustee and the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateDepositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2006-Nc3)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, Swap Termination Payments, Net Swap Payments owed to the Swap Provider, Net Swap Receipts and, without duplication, amounts distributable on the Class UT-PFIO Interest for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses that have not yet been reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any distribution remaining unpaid Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amounts or, without duplication, Upper-Tier CarryForward Amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trustee shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor Swap Provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust Administrator receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Trustee shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Trustee shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap Account. In no event shall the Trustee be responsible for the selection of any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the 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 Interest Rate Swap Agreement, the Trust is entitled to receive a payment from a replacement swap provider, the Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment (other than any shall be made from the Swap Termination Payment resulting from a Swap Provider Trigger Event) owed Account to the Swap Provider (after taking into 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 Provider Payment is made to an account any upfront payment received from other than the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Account, then, notwithstanding anything to the Mortgage Loans prior contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid to the determination Swap Provider immediately upon receipt of Available Funds such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust Administrator from to Certificateholders, any Servicer, any Custodian, any Responsible Party, the Trustee or any other Person. The Trustee shall account for the Swap Administrator, for distribution in accordance with subsection (d) below, Account as an asset of the Grantor Trust and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Administration AgreementAccount are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X and Class UT-PFIO Interests) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X and Class UT-PFIO Interests and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders beneficial owners of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Closing DateInterest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. The Trustee shall cause any xxxxxxexxxx xxap provider to provide a copy of the related replacement interest rate swap agreement to the Trustee and the Depositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2006-He5)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest-bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, Swap Termination Payments, Net Swap Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed on each Distribution Date in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M-and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any distribution remaining unpaid Basis Risk CarryForward Amount and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trustee shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor Swap Provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust Administrator receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Trustee shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Trustee shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap Account. In no event shall the Trustee be responsible for the selection of any successor or replacement swap provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the 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 Interest Rate Swap Agreement, the Trust is entitled to receive a payment from a replacement swap provider, the Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment (other than any shall be made from the Swap Termination Payment resulting from a Swap Provider Trigger Event) owed Account to the Swap Provider (after taking into 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 Provider Payment is made to an account any upfront payment received from other than the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Account, then, notwithstanding anything to the Mortgage Loans prior contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid to the determination Swap Provider immediately upon receipt of Available Funds such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust Administrator from to Certificateholders, any Servicer, the Responsible Party, the Trustee or any other Person. The Trustee shall account for the Swap Administrator, for distribution in accordance with subsection (d) below, Account as an asset of the Grantor Trust and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Administration AgreementAccount are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Upper-Tier CarryForward Amounts (including, but without duplication, Basis Risk CarryForward Amounts) from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Interest Rate Swap Agreement, the Trustee shall immediately demand that Xxxxxx Xxxxxxx, the guarantor of the Swap Provider's obligations under the guarantee of Xxxxxx Xxxxxxx relating to the Interest Rate Swap Agreement, make any and all payments then required to be made by Xxxxxx Xxxxxxx pursuant to such guarantee. In addition, in the event a "Delivery Amount" (other than as defined in the Class CEInterest Rate Swap Agreement) was due but was not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, Class P and Class R Certificates) the Trustee shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of this the Interest Rate Swap Agreement. Any payments The Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within Trustee and the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateDepositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Home Equity Loan Trust 2006-3)
Swap Account. (a) No later than the Closing Date, the Trust Administrator Trustee shall establish and maintain with itself, as agent for the Trustee, a separate, segregated trust account to be titled, “Xxxxx "Wells Fargo Bank, N.A. as Trustee, in trust for the registered holders of MASTR Second Lien Trust 2006holderx xx Asset Backed Funding Corporation Asset-1, Mortgage Pass-Through Backed Certificates, Series 2006-1—Swap OPT3--Swap Account” (the “Swap Account”). ." Such account shall be an Eligible Account and amounts funds on deposit therein shall be held separate and apart from, and shall not be commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. Amounts therein shall be held uninvested. The Swap Account shall be an asset of the Supplemental Interest Trust, but shall not be an asset of any REMIC.
(b) On the Business Day prior to each Distribution Date, prior to any distribution to any Certificate, the Trust Administrator Trustee shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account any upfront payment received from the counterparty to a replacement interest rate swap agreement) from funds collected and received with respect to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap AdministratorTrustee, for distribution in accordance with subsection (d) below, pursuant to the Swap Administration AgreementSection 4.02(c). For federal income tax purposes, any amounts paid to the Swap Provider as a Net Swap Payment on the Business Day prior to each Distribution Date shall first be deemed paid paid, pursuant to Section 4.08 hereof (i) from REMIC 1 to REMIC 2, pro rata to the REMIC 1 Regular Interests based on the Uncertificated Accrued Interest thereon, (ii) then from REMIC 2 to REMIC 3, pro rata to the REMIC 2 Regular Interests based on Uncertificated Accrued Interest thereon, (iii) then from REMIC 3 to REMIC 4 in respect of the Class SWAP-LTIO Interest, (iv) then from REMIC 4 to REMIC 5 in respect of the Swap IO Interest Interest, and (v) then from the Class CE Certificates to the extent Swap Provider in respect of the amount distributable Net Swap Payment due to the Swap Provider on such Class SWAP-IO Interest Distribution Date. To the extent the payment provided for in the preceding sentence is less than the amount due to the Swap Provider on such Distribution Date, and any remaining amount such additional amounts shall be deemed paid in a manner similar to the deemed payments provided in the preceding sentence to the Holders of the Offered Certificates and the Class B Certificates in respect of a the Class IO Distribution Amount (as defined in Section 4.09(d) below), and then shall be deemed paid to the Class CE Certificates pursuant to the notional principal contract described in Section 4.09(d) below and then to the Swap Provider. Any amounts deemed paid by any REMIC created hereunder pursuant to the preceding two sentences shall not be duplicated by any payments deemed made pursuant to Section 4.08 on the succeeding Distribution Date. Any Swap Termination Payment triggered by a Swap Provider Trigger Event owed to the Swap Provider pursuant to the Interest Rate Swap Agreement will be subordinated to distributions to the Holders of the Class A Certificates, Class B Certificates, and Class M Certificates and shall be paid as set forth under Section 4.02(b)(xxxiv).
(c) For federal income tax purposes, the Swap Account shall be owned by the beneficial owners Holders of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator The Trustee shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Residual Certificates) as having entered into a notional principal contract with respect to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of Certificates (other than the Class P, Class CE and Class R Residual Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest Regular Interests in REMIC 4 corresponding to such Class Classes of Certificates over (ii) the amount payable on such Class Classes of Certificates on such Distribution Date (such excess, a “"Class IO Distribution Amount”"). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rateapplicable Cap, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder Holders of the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Cap Carryover Amounts to the Holders of the Certificates (other than the Class CE, Class P and Class R Residual Certificates) ), in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest Regular Interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Residual Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC 4 and as having been paid by such Holders to the Swap Administrator Trustee pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Residual Certificates) shall be treated as representing not only ownership of regular interests Regular Interests in the Master REMICREMIC 4, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing Date.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (ABFC 2006-Opt3 Trust)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of any REMIC.
(b) the Trustee held pursuant to this Agreement. On the Business Day immediately preceding each Distribution Date, prior to any distribution to any CertificateSwap Termination Payments, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to maintain the Subordinated Amount at the Specified Subordinated Amount, after taking giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any remaining unpaid Basis Risk CarryForward Amount, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay any Unpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the Trust entering into account any upfront a replacement interest rate swap following the occurrence of an Additional Termination Event of the type described in Part 1(h)(ii) of the Interest Rate Swap Agreement, the Trust is entitled to receive a payment received from the counterparty to a replacement swap agreement) from funds collected and received with respect provider, the Trustee shall direct the replacement swap provider to make such payment to the Mortgage Loans prior Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the determination Swap Provider immediately upon receipt of Available Funds such payment, regardless of whether the date of receipt thereof is a Distribution Date. To the extent that any Replacement Swap Provider 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 Provider immediately upon receipt of such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust Administrator from to Certificateholders, the Servicer, the Custodian, any Responsible Party, the Trustee or any other Person. The Trustee shall account for the Swap AdministratorAccount as an asset of a grantor trust under subpart E, for distribution in accordance with subsection (d) below, 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 Swap Administration AgreementAccount are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk CarryForward Amounts) from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders beneficial owners of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Closing DateInterest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. The Trustee shall cause any xxxxxxexxxx xxap provider to provide a copy of the related replacement interest rate swap agreement to the Trustee and the Depositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Capital I Inc. Trust 2006-He1)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, Swap Termination Payments (including, without duplication, Replacement Swap Provider Payments), Net Swap Payments owed to the Swap Provider, Net Swap Receipts and, without duplication, amounts distributable on the Class IO Interest for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, other than a Defaulted Swap Termination Payment, owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the LIBOR Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses that have not yet been reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the LIBOR Certificates, any distribution remaining unpaid Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amounts or, without duplication, Upper-Tier CarryForward Amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trustee shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor swap provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust Administrator receives a Swap Termination Payment and a successor swap provider cannot be obtained, then the Trustee shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Trustee shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment or Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate 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 will not be treated as a Swap Termination Payment (for purposes of determining the distributions from the Swap Account until the final Distribution Date. In no event shall the Trustee be responsible for the selection of any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the Trust entering into a replacement interest rate swap, the Trust is entitled to receive a Replacement Swap Provider Payment from a replacement swap provider, the Trustee shall direct the replacement swap provider to make such Replacement Swap Provider Payment to the Swap Account. Notwithstanding the foregoing, any Replacement Swap Provider Payment shall be made from the Swap Account to the Swap Provider 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 Provider Payment is made to an account other than the Swap Account, then, notwithstanding anything to the contrary contained in this Agreement, any Replacement Swap Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider Payment by the Trust, 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 doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust to Certificateholders, any Servicer, the Custodian, the Responsible Party, the Trustee or any other Person. However, to the extent any Replacement Swap Provider Payment received from a replacement swap provider and paid to the Swap Provider being replaced is less than the full amount of a Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account Provider, any upfront payment received from remaining amount of the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Termination Payment shall be paid to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution Provider on subsequent Distribution Dates in accordance with subsection this Section 4.02 and Section 4.06 (d) below, pursuant unless the Replacement Swap Provider Payment is paid to the Swap Administration Provider on a Distribution Date, in which case such remaining amounts will be paid on such Distribution Date). The Trustee shall account for the Swap Account as an asset of the Grantor Trust and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (without duplication of previously paid Replacement Swap Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Class X REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the LIBOR Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceLIBOR Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of LIBOR Certificates to such receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts from the Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account), subject to the obligation to pay Class IO Shortfalls, as rights and obligations under a separate limited recourse notional principal contract, the Holder of contract between the Class CE Certificates X Certificateholders and Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Schedule to the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under the terms of the Schedule to the Interest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. In addition, in the event a "Xxxxxexx Xxxxnt" (other than as defined in the Class CEInterest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, Class P and Class R Certificates) the Trustee shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of this the Schedule to the Interest Rate Swap Agreement. Any payments The Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates from amounts deemed received Trustee and the Depositor. If a Responsible Officer of the Trustee receives written notice that the Swap Provider or its guarantor has been downgraded below the levels set forth in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R CertificatesPart 5(f) of a Class IO Distribution Amount the Interest Rate Swap Agreement and the posting of collateral is required in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement, the Trustee shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to demand that the Swap Administrator pursuant to Provider or its guarantor post collateral in accordance with the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificatesterms of Part 5(f) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateInterest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2007-He3)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, prior to any distribution to any CertificateSwap Termination Payments, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class X-0, Xxxxx M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to maintain the Subordinated Amount at the Specified Subordinated Amount, after taking giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class X-0, Xxxxx M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any remaining unpaid Basis Risk CarryForward Amount, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class X-0, Xxxxx M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay any Unpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the Trust entering into account any upfront a replacement interest rate swap following the occurrence of an Additional Termination Event of the type described in Part 1(h)(ii) of the Interest Rate Swap Agreement, the Trust is entitled to receive a payment received from the counterparty to a replacement swap agreement) from funds collected and received with respect provider, the Trustee shall direct the replacement swap provider to make such payment to the Mortgage Loans prior Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the determination Swap Provider immediately upon receipt of Available Funds such payment, regardless of whether the date of receipt thereof is a Distribution Date. To the extent that any Replacement Swap Provider 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 Provider immediately upon receipt of such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust Administrator from to Certificateholders, the Servicer, any Responsible Party, the Trustee or any other Person. The Trustee shall account for the Swap AdministratorAccount as an asset of a grantor trust under subpart E, for distribution in accordance with subsection (d) below, 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 Swap Administration AgreementAccount are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk CarryForward Amounts) from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders beneficial owners of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Closing DateInterest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Xxxx Pxxxxxxx's obligations under the guarantee of Morgan Stanley relating to the Interxxx Xxtx Xxxx Agreement, make any and all payments then required to be made by Morgan Stanley pursuant to such guarxxxxx. Xxx Xxxstee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Trustee and the Depositor.
Appears in 1 contract
Swap Account. (a) No later than the Closing Date, the Trust Administrator Trustee shall establish and maintain with itself, as agent for the Trustee, a separate, segregated trust account to be titled, “Xxxxx "Wells Fargo Bank, N.A. as Trustee, in trust for the registered holders of MASTR Second Lien Trust 2006holderx xx Asset Backed Funding Corporation Asset-1, Mortgage Pass-Through Backed Certificates, Series 2006-1—Swap OPT1--Swap Account” (the “Swap Account”). ." Such account shall be an Eligible Account and amounts funds on deposit therein shall be held separate and apart from, and shall not be commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. Amounts therein shall be held uninvested. The Swap Account shall be an asset of the Supplemental Interest Trust, but shall not be an asset of any REMIC.
(b) On the Business Day prior to each Distribution Date, prior to any distribution to any Certificate, the Trust Administrator Trustee shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account any upfront payment received from the counterparty to a replacement interest rate swap agreement) from funds collected and received with respect to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap AdministratorTrustee, for distribution in accordance with subsection (d) below, pursuant to the Swap Administration AgreementSection 4.02(c). For federal income tax purposes, any amounts paid to the Swap Provider on the Business Day prior to each Distribution Date shall first be deemed paid paid, pursuant to Section 4.08 hereof (i) from REMIC 1 to REMIC 2, pro rata to the REMIC 1 Regular Interests based on the Uncertificated Accrued Interest thereon, (ii) then from REMIC 2 to REMIC 3 , pro rata to the REMIC 2 Regular Interests based on Uncertificated Accrued Interest thereon, (iii) then from REMIC 3 to REMIC 4 in respect of the Class SWAP-LTIO Interest, (iv) then from REMIC 4 to REMIC 5 in respect of the Swap IO Interest Interest, and (v) then from the Class CE Certificates to the extent Swap Provider in respect of the amount distributable Net Swap Payment due to the Swap Provider on such Class SWAP-IO Interest Distribution Date. To the extent the payment provided for in the preceding sentence is less than the amount of the Net Swap Payment due to the Swap Provider on such Distribution Date, and any remaining amount such additional amounts shall be deemed paid in a manner similar to the deemed payments provided in the preceding sentence to the Holders of the Offered Certificates and the Class B Certificates in respect of a the Class IO Distribution Amount (as defined in Section 4.09(d) below), and then shall be deemed paid to the Class CE Certificates pursuant to the notional principal contract described in Section 4.09(d) below and then to the Swap Provider. Any amounts deemed paid by any REMIC created hereunder pursuant to the preceding two sentences shall not be duplicated by any payments deemed made pursuant to Section 4.08 on the succeeding Distribution Date. Any Swap Termination Payment triggered by a Swap Provider Trigger Event owed to the Swap Provider pursuant to the Interest Rate Swap Agreement will be subordinated to distributions to the Holders of the Class A Certificates, Class B Certificates, and Class M Certificates and shall be paid as set forth under Section 4.02(b)(xxxiv).
(c) For federal income tax purposes, the Swap Account shall be owned by the beneficial owners Holders of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator The Trustee shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Residual Certificates) as having entered into a notional principal contract with respect to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of Certificates (other than the Class P, Class CE and Class R Residual Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest Regular Interest in REMIC 4 corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “"Class IO Distribution Amount”"). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rateapplicable Cap, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder Holders of the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Cap Carryover Amounts to the Holders of the Certificates (other than the Class CE, Class P and Class R Residual Certificates) ), in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest Regular Interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Residual Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC 4 and as having been paid by such Holders to the Swap Administrator Trustee pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Residual Certificates) shall be treated as representing not only ownership of regular interests Regular Interests in the Master REMICREMIC 4, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing Date.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (ABFC 2006-Opt1 Trust)
Swap Account. (a) No later than On the Closing Date, the Trust Securities Administrator shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of any REMIC.
(b) the Securities Administrator held pursuant to this Agreement. On the Business Day immediately preceding each Distribution Date, Swap Termination Payments (including, without duplication, Replacement Swap Provider Payments), Net Swap Payments owed to the Swap Provider, Net Swap Receipts and, without duplication, amounts distributable on the Class IO Interest for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, other than a Defaulted Swap Termination Payment, owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses that have not yet been reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any distribution remaining unpaid Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amounts or, without duplication, Upper-Tier CarryForward Amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trust Securities Administrator shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor swap provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust receives a Swap Termination Payment and a successor swap provider cannot be obtained, then the Securities Administrator shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Securities Administrator shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment or Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate 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 will not be treated as a Swap Termination Payment for purposes of determining the distributions from the Swap Account until the final Distribution Date. In no event shall the Securities Administrator be responsible for the selection of any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that the Trust enters into a replacement interest rate swap agreement and the Trust is entitled to receive a Replacement Swap Provider Payment from a replacement swap provider, the Securities Administrator shall direct the replacement swap provider (or its guarantor) to make such Replacement Swap Provider Payment to the Swap Account. Notwithstanding the foregoing, any Replacement Swap Provider Payment shall be made from the Swap Account to the Swap Provider 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 Provider Payment is made to an account other than the Swap Account, then, notwithstanding anything to the contrary contained in this Agreement, any Replacement Swap Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider Payment by the Trust, 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 doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust to Certificateholders, any Servicer, the Master Servicer, the Securities Administrator, any Custodian, any Responsible Party, the Trustee or any other Person. However, to the extent any Replacement Swap Provider Payment received from a replacement swap provider and paid to the Swap Provider being replaced is less than the full amount of a Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account Provider, any upfront payment received from remaining amount of the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Termination Payment shall be paid to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution Provider on subsequent Distribution Dates in accordance with subsection this Section 4.02 and Section 4.06 (d) below, pursuant unless the Replacement Swap Provider Payment is paid to the Swap Administration Provider on a Distribution Date, in which case such remaining amounts will be paid on such Distribution Date). The Securities Administrator shall account for the Swap Account as an asset of the Grantor Trust and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (without duplication of previously paid Replacement Swap Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Class X REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Securities Administrator to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Securities Administrator, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to such receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts from the Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account), subject to the obligation to pay Class IO Shortfalls, as rights and obligations under a separate limited recourse notional principal contract, the Holder of contract between the Class CE Certificates X Certificateholders and Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Schedule to the Interest Rate Swap Agreement, the Securities Administrator shall send any notices and make any demands, on behalf of the Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under the terms of the Schedule to the Interest Rate Swap Agreement, the Securities Administrator shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. In addition, in the event a "Xxxxxexx Xxxxnt" (other than as defined in the Class CEInterest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, Class P and Class R Certificates) the Securities Administrator shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of this the Schedule to the Interest Rate Swap Agreement. Any payments The Securities Administrator shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates from amounts deemed received Securities Administrator and the Depositor. If a Responsible Officer of the Securities Administrator receives written notice that the Swap Provider or its guarantor has been downgraded below the levels set forth in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R CertificatesPart 5(f) of a Class IO Distribution Amount the Interest Rate Swap Agreement and the posting of collateral is required in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement, the Securities Administrator shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to demand that the Swap Administrator pursuant to Provider or its guarantor post collateral in accordance with the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificatesterms of Part 5(f) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateInterest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2007-He5)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, Swap Termination Payments, Net Swap Payments owed to the Swap Provider, Net Swap Receipts and, without duplication, amounts distributable on the Class UT-PFIO Interest for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses that have not yet been reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any distribution remaining unpaid Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amounts or, without duplication, Upper-Tier CarryForward Amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trustee shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor Swap Provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust Administrator receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Trustee shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Trustee shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap Account. In no event shall the Trustee be responsible for the selection of any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the 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 Interest Rate Swap Agreement, the Trust is entitled to receive a payment from a replacement swap provider, the Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment (other than any shall be made from the Swap Termination Payment resulting from a Swap Provider Trigger Event) owed Account to the Swap Provider (after taking into 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 Provider Payment is made to an account any upfront payment received from other than the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Account, then, notwithstanding anything to the Mortgage Loans prior contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid to the determination Swap Provider immediately upon receipt of Available Funds such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust Administrator from to Certificateholders, any Servicer, any Custodian, any Responsible Party, the Trustee or any other Person. The Trustee shall account for the Swap Administrator, for distribution in accordance with subsection (d) below, Account as an asset of the Grantor Trust and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Administration AgreementAccount are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account in respect of the Class SWAPUT-PFIO Interest from the Class X REMIC, first, by the Holder of the Class X Certificates (in respect of the Class IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X and Class UT-PFIO Interests and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders beneficial owners of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Closing DateInterest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. The Trustee shall cause any xxxxxxexxxx xxap provider to provide a copy of the related replacement interest rate swap agreement to the Trustee and the Depositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2006-He5)
Swap Account. (a) No later than On the Closing Date, the Trust Securities Administrator shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for -108- benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the LIBOR Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Securities Administrator held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, prior to any distribution to any CertificateSwap Termination Payments, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(after taking into account any upfront payment received from the counterparty to a replacement swap agreementi) from funds collected and received with respect to the Mortgage Loans prior Swap Provider, the sum of (x) all Net Swap Payments and (y) any Swap Termination Payment, other than a Defaulted Swap Termination Payment, to the determination of Available Funds and Swap Provider, if any, owed for that Distribution Date;
(ii) amounts received by to the Trust Administrator Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iii) sequentially, to the Class M-1, Class M-2, Class M-3, Class B-1, Class B-2, Class B-3 and Xxxxx X-0 Xxxxificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and (iii), to the extent unpaid from Available Funds;
(iv) to the LIBOR Certificates, to pay Basis Risk Carry Forward Amounts as described in Section 4.02(a)(iii)(P)-(Q), to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(v) sequentially, to the Class A, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2, Class B-3 and Class B-4 Certificates, in that order, to pay principal as described in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount at the Specified Subordinated Amount as a result of current or prior Realized Losses not previously reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) sequentially, to the Class M-1, Class M-2, Class M-3, Class B-1, Class B-2, Class B-3 and Xxxxx X-0 Xxxxificates, in that order, to pay any Unpaid Interest Amounts as described in Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(vii) to the Swap AdministratorProvider, any Defaulted Swap Termination Payment owed to the Swap Provider for distribution that Distribution Date; and (viii) to the holders of the Class X Certificates, any remaining amounts. Upon termination of the Trust, any amounts remaining in accordance with subsection (d) below, the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. The Securities Administrator shall account for the Swap Administration 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 Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, Class X Interest) and second, other than any Defaulted Swap Termination Payment, by the Holders of the applicable Class or Classes of LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk Carry Forward Amounts and, without duplication, Upper-Tier Carry Forward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Securities Administrator to the LIBOR Certificateholders from the Excess Reserve Fund Account or the Swap Account shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Securities Administrator, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE X Certificates (in respect of the Class X Interest or the Class IO Interest, respectively) and then to the respective Class or Classes of LIBOR Certificates. Pursuant In addition, the Securities Administrator shall account for the rights of Holders of each Class of LIBOR Certificates to receive payments of Basis Risk Carry Forward Amounts and, without duplication, Upper-Tier Carry Forward Amounts from the Swap Account (along with Basis Risk Carry Forward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class X Certificateholders in favor of Holders of each such notional principal contractClass. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, all the Holders of Certificates (other than the Class PX Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, Class CE and Class R Certificates) shall be taxable on all income earned thereon, and any amounts reimbursed from the Upper-Tier REMIC to the Swap Account shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts been distributed to the Holders of the Certificates Class X Certificates. In the event the Swap Provider does not deliver the Delivery Amount (other than as defined in the Class CE, Class P and Class R CertificatesInterest Rate Swap Agreement) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract Securities Administrator, the Securities Administrator shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders provide notice of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders failure to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership Provider within one Business Day of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing Datefailure.
Appears in 1 contract
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, Swap Termination Payments (including, without duplication, Replacement Swap Provider Payments), Net Swap Payments owed to the Swap Provider, Net Swap Receipts and, without duplication, amounts distributable on the Class IO Interest for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, other than a Defaulted Swap Termination Payment, owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses that have not yet been reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any distribution remaining unpaid Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amounts or, without duplication, Upper-Tier CarryForward Amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trustee shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor swap provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust Administrator receives a Swap Termination Payment and a successor swap provider cannot be obtained, then the Trustee shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Trustee shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment or Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate 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 will not be treated as a Swap Termination Payment (for purposes of determining the distributions from the Swap Account until the final Distribution Date. In no event shall the Trustee be responsible for the selection of any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the Trust entering into a replacement interest rate swap, the Trust is entitled to receive a Replacement Swap Provider Payment from a replacement swap provider, the Trustee shall direct the replacement swap provider to make such Replacement Swap Provider Payment to the Swap Account. Notwithstanding the foregoing, any Replacement Swap Provider Payment shall be made from the Swap Account to the Swap Provider 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 Provider Payment is made to an account other than the Swap Account, then, notwithstanding anything to the contrary contained in this Agreement, any Replacement Swap Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider Payment by the Trust, 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 doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust to Certificateholders, any Servicer, the Custodian, any Responsible Party, the Trustee or any other Person. However, to the extent any Replacement Swap Provider Payment received from a replacement swap provider and paid to the Swap Provider being replaced is less than the full amount of a Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account Provider, any upfront payment received from remaining amount of the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Termination Payment shall be paid to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution Provider on subsequent Distribution Dates in accordance with subsection this Section 4.02 and Section 4.06 (d) below, pursuant unless the Replacement Swap Provider Payment is paid to the Swap Administration Provider on a Distribution Date, in which case such remaining amounts will be paid on such Distribution Date). The Trustee shall account for the Swap Account as an asset of the Grantor Trust and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (without duplication of previously paid Replacement Swap Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Class X REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts from the Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account), subject to the obligation to pay Class IO Shortfalls, as rights and obligations under a separate limited recourse notional principal contract, the Holder of contract between the Class CE Certificates X Certificateholders and Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Schedule to the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under the terms of the Schedule to the Interest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. In addition, in the event a "Xxxxxexx Xxxxnt" (other than as defined in the Class CEInterest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, Class P and Class R Certificates) the Trustee shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of this the Schedule to the Interest Rate Swap Agreement. Any payments The Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates from amounts deemed received Trustee and the Depositor. If a Responsible Officer of the Trustee receives written notice that the Swap Provider or its guarantor has been downgraded below the levels set forth in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R CertificatesPart 5(f) of a Class IO Distribution Amount the Interest Rate Swap Agreement and the posting of collateral is required in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement, the Trustee shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to demand that the Swap Administrator pursuant to Provider or its guarantor post collateral in accordance with the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificatesterms of Part 5(f) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateInterest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2007-He1)
Swap Account. (a) No later than On the Closing Date, the Trust Securities Administrator shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of any REMIC.
(b) the Securities Administrator held pursuant to this Agreement. On the Business Day immediately preceding each Distribution Date, Swap Termination Payments (including, without duplication, Replacement Swap Provider Payments), Net Swap Payments owed to the Swap Provider, Net Swap Receipts and, without duplication, amounts distributable on the Class IO Interest for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Replacement Swap Provider Payment and without duplication, any Swap Termination Payment other than a Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses that have not yet been reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any distribution remaining unpaid Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amounts or, without duplication, Upper-Tier CarryForward Amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trust Securities Administrator shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor swap provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust receives a Swap Termination Payment and a successor swap provider cannot be obtained, then the Securities Administrator shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Securities Administrator shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate 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 will not be treated as a Swap Termination Payment for purposes of determining the distributions from the Swap Account until the final Distribution Date. In no event shall the Securities Administrator be responsible for the selection of any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the Trust entering into a replacement interest rate swap following the occurrence of an Additional Termination Event of the type referred to in Part 1(i)(A) (i) of the Schedule to the Interest Rate Swap Agreement, the Trust is entitled to receive a Replacement Swap Provider Payment from a replacement swap provider, the Securities Administrator shall direct the replacement swap provider to make such Replacement Swap Provider Payment to the Swap Account. Any Replacement Swap Provider Payment or Swap Termination Payment (other than a Defaulted Swap Termination Payment) shall be made from the Swap Account to the Swap Provider 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 Provider Payment or Swap Termination Payment resulting from (other than a Defaulted Swap Termination Payment) is made to an account other than the Swap Account, then, notwithstanding anything to the contrary contained in this Agreement, any Replacement Swap Provider Trigger EventPayment or Swap Termination Payment (other than a Defaulted Swap Termination Payment) shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider Payment or Swap Termination Payment (other than a Defaulted Swap Termination 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 doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust to Certificateholders, any Servicer, the Master Servicer, the Securities Administrator, any Custodian, any Responsible Party, the Trustee or any other Person. However, to the extent any Replacement Swap Provider Payment received by the Swap Provider being replaced is less than the Swap Termination Payment owed to the Swap Provider (after taking into account Provider, any upfront payment received from the counterparty to a replacement swap agreement) from funds collected and received with respect remaining amounts will be paid to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution Provider on subsequent Distribution Dates in accordance with subsection (d) below, this Section 4.06. The Securities Administrator shall account for the Swap Account as an asset of the Grantor Trust and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Administration AgreementAccount are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (without duplication of previously paid Replacement Swap Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Class X REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Securities Administrator to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Securities Administrator, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to such receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts from the Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) subject to the obligation to pay Class IO Shortfalls, as rights and obligations under a separate limited recourse notional principal contract, the Holder of contract between the Class CE Certificates X Certificateholders and Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Schedule to the Interest Rate Swap Agreement, the Securities Administrator shall send any notices and make any demands, on behalf of the Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under the terms of the Schedule to the Interest Rate Swap Agreement, the Securities Administrator shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. The Securities Administrator xx xxdxxxxx, in the event a "Delivery Amount" (other than as defined in the Class CEInterest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, Class P and Class R Certificates) the Securities Administrator shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of this the Schedule to the Interest Rate Swap Agreement. Any payments The Securities Administrator shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates from amounts deemed received Securities Administrator and the Depositor. If a Responsible Officer of the Securities Administrator receives written notice that the Swap Provider or its guarantor has been downgraded below the levels set forth in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R CertificatesPart 5(f) of a Class IO Distribution Amount the Interest Rate Swap Agreement and the posting of collateral is required in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement, the Securities Administrator shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to demand that the Swap Administrator pursuant to Provider or its guarantor post collateral in accordance with the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificatesterms of Part 5(f) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateInterest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2006-He8)
Swap Account. (a) No later than On the Closing Date, the Trust Securities Administrator shall establish and maintain with itselfin its name, as agent a separate non-interest-bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of any REMIC.
(b) the Securities Administrator held pursuant to this Agreement. On the Business Day immediately preceding each Distribution Date, Swap Termination Payments (including, without duplication, Replacement Swap Provider Payments), Net Swap Payments owed to the Swap Provider, Net Swap Receipts and, without duplication, amounts distributable on the Class IO Interest for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, other than a Defaulted Swap Termination Payment, owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses that have not yet been reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M-and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any distribution remaining unpaid Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amounts or, without duplication, Upper-Tier CarryForward Amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trust Securities Administrator shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor swap provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust receives a Swap Termination Payment and a successor swap provider cannot be obtained, then the Securities Administrator shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Securities Administrator shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment or Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate 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 will not be treated as a Swap Termination Payment for purposes of determining the distributions from the Swap Account until the final Distribution Date. In no event shall the Securities Administrator be responsible for the selection of any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the Trust entering into a replacement interest rate swap agreement, the Trust is entitled to receive a Replacement Swap Provider Payment from a replacement swap provider, the Securities Administrator shall direct the replacement swap provider (or its guarantor) to make such Replacement Swap Provider Payment to the Swap Account. Notwithstanding the foregoing, any Replacement Swap Provider Payment shall be made from the Swap Account to the Swap Provider 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 Provider Payment is made to an account other than the Swap Account, then, notwithstanding anything to the contrary contained in this Agreement, any Replacement Swap Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider Payment by the Trust, 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 doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust to Certificateholders, any Servicer, the Master Servicer, the Securities Administrator, the Responsible Party, the Trustee or any other Person. However, to the extent any Replacement Swap Provider Payment received from a replacement swap provider and paid to the Swap Provider being replaced is less than the full amount of a Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account Provider, any upfront payment received from remaining amount of the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Termination Payment shall be paid to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution Provider on subsequent Distribution Dates in accordance with subsection this Section 4.02 and Section 4.06 (d) below, pursuant unless the Replacement Swap Provider Payment is paid to the Swap Administration Provider on a Distribution Date, in which case such remaining amounts will be paid on such Distribution Date). The Securities Administrator shall account for the Swap Account as an asset of the Grantor Trust and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (without duplication of previously paid Replacement Swap Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Class X REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Securities Administrator to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Securities Administrator, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to such receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts from the Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account), subject to the obligation to pay Class IO Shortfalls, as rights and obligations under a separate limited recourse notional principal contract, the Holder of contract between the Class CE Certificates X Certificateholders and Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Schedule to the Interest Rate Swap Agreement, the Securities Administrator shall send any notices and make any demands, on behalf of the Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under the terms of the Schedule to the Interest Rate Swap Agreement, the Securities Administrator shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. In addition, in the event a "Xxxxxexx Xxxxnt" (other than as defined in the Class CEInterest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, Class P and Class R Certificates) the Securities Administrator shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of this the Schedule to the Interest Rate Swap Agreement. Any payments The Securities Administrator shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates from amounts deemed received Securities Administrator and the Depositor. If a Responsible Officer of the Securities Administrator receives written notice that the Swap Provider or its guarantor has been downgraded below the levels set forth in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R CertificatesPart 5(f) of a Class IO Distribution Amount the Interest Rate Swap Agreement and the posting of collateral is required in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement, the Securities Administrator shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to demand that the Swap Administrator pursuant to Provider or its guarantor post collateral in accordance with the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificatesterms of Part 5(f) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateInterest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Home Equity Loan Trust 2007-2)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, Swap Termination Payments, Net Swap Payments owed to the Swap Provider, Net Swap Receipts and, without duplication, amounts distributable on the Class IO Interest for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Claxx X-0, Xxxxx B-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses that have not yet been reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Claxx X-0, Xxxxx B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any distribution remaining unpaid Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amounts or, without duplication, Upper-Tier CarryForward Amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Claxx X-0, Xxxxx B-2 and Class B-3 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trustee shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor Swap Provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust Administrator receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Trustee shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Trustee shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap Account. In no event shall the Trustee be responsible for the selection of any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the 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 Interest Rate Swap Agreement, the Trust is entitled to receive a payment from a replacement swap provider, the Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment (other than any shall be made from the Swap Termination Payment resulting from a Swap Provider Trigger Event) owed Account to the Swap Provider (after taking into 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 Provider Payment is made to an account any upfront payment received from other than the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Account, then, notwithstanding anything to the Mortgage Loans prior contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid to the determination Swap Provider immediately upon receipt of Available Funds such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust Administrator from to Certificateholders, any Servicer, any Custodian, any Responsible Party, the Trustee or any other Person. The Trustee shall account for the Swap Administrator, for distribution in accordance with subsection (d) below, Account as an asset of the Grantor Trust and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Administration AgreementAccount are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Class X REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts from the Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account), subject to the obligation to pay Class IO Shortfalls, as rights and obligations under a separate limited recourse notional principal contract, the Holder of contract between the Class CE Certificates X Certificateholders and Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under the terms of the Interest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations undex xxx gxxxxxxxe of Morgan Stanley relating to the Interest Rate Swap Agreement, make any xxx xlx xxxxxnts then required to be made by Morgan Stanley pursuant to such guarantee. In addition, in the event x "Xxxixxxx Xxount" (other than as defined in the Class CEInterest Rate Swap Agreement) was due but was not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, Class P and Class R Certificates) the Trustee shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of this the Interest Rate Swap Agreement. Any payments The Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates from amounts deemed received Trustee and the Depositor. If a Responsible Officer of the Trustee receives written notice that the Swap Provider or its guarantor has been downgraded below the levels set forth in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R CertificatesPart 5(f) of a Class IO Distribution Amount the Interest Rate Swap Agreement and the posting of collateral is required in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement, the Trustee shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to demand that the Swap Administrator pursuant to Provider or its guarantor post collateral in accordance with the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificatesterms of Part 5(f) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateInterest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2006-He6)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, prior to any distribution to any CertificateSwap Termination Payments, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(after taking into account any upfront payment received from the counterparty to a replacement swap agreementi) from funds collected and received with respect to the Mortgage Loans prior Swap Provider, all Net Swap Payments, if any, owed to the determination of Available Funds and Swap Provider for that Distribution Date;
(ii) amounts received by the Trust Administrator from to the Swap AdministratorProvider, any Swap Termination Payment, other than a Defaulted Swap Termination Payment, if any, owed to the Swap Provider for distribution that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in accordance with subsection Section 4.02(a)(i), to the extent unpaid from Available Funds;
(div) belowsequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the LIBOR Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to maintain the Subordinated Amount at the Specified Subordinated Amount, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the LIBOR Certificates, any remaining unpaid Basis Risk CarryForward Amount, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay any Unpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. The Trustee shall account for the Swap Administration 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 Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the LIBOR Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceLIBOR Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of LIBOR Certificates to such notional principal contractreceive payments of Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk CarryForward Amounts) from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders beneficial owners of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Closing DateInterest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2005-He7)
Swap Account. (a) No later than the Closing Date, the Trust Administrator shall establish and maintain with itself, as agent for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—Swap Account” (the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvested. The Class A-1 Swap Account shall be an asset “outside reserve fund” within the meaning of Treasury Regulation Section 1.860G-2(h). Upon the termination of the Trust, or the payment in full of the Class A Certificate and the Subordinate Certificates, all amounts remaining on deposit in the Class A-1 Swap Account shall be released by the Trust and distributed to the Class CE Certificateholders. The Class A-1 Swap Account shall be part of the Trust but not part of any REMIC. Upon receipt of any amounts paid under the Class A-1 Swap Agreement, and following any distributions of Net Monthly Excess Cashflow pursuant to Section 4.1(a)(iii) above, withdrawals from the Reserve Fund pursuant to Section 4.1(a)(iv) above, the Cap Account pursuant to Section 4.1(a)(vi) above and Certificate Swap Account, pursuant to Section 4.1(a)(vii) above, the Securities Administrator shall deposit such amounts into the Class A-1 Swap Account for distribution pursuant to Section 4.1(a)(viii) above. In the event that the Class A-1 Swap Agreement is terminated prior to the Termination Date (as defined in the Class A-1 Swap Agreement), the Trustee on behalf of the Supplemental Interest Trust, but at the direction of the Depositor, shall not use reasonable efforts to appoint a successor swap provider using any Swap Termination Payments paid by the Class A-1 Swap Provider. To the extent the Supplemental Interest Trust is required to pay a Swap Termination Payment to the Class A-1 Swap Provider, all or a portion of such amount received from a replacement swap provider upon entering into a replacement interest rate swap agreement or similar agreement will be an asset of any REMIC.
(b) On each Distribution Date, prior applied to any distribution to any Certificate, the Trust Administrator shall deposit into the Swap Account: Termination Payment owing to the Class A-1 Swap Provider, and any remaining portion will be distributed to Certificateholders according to the order of priorities of Section 4.1(a)(viii) above. If the Trustee on behalf of the Supplemental Interest Trust is unable to locate a qualified successor swap provider, any such Swap Termination Payments will be deposited in the Class A-1 Swap Account and the Securities Administrator, on each subsequent Distribution Date (i) until the termination date of the Class A-1 Swap Agreement or the appointment of a successor swap provider), will withdraw the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed due to the Swap Provider Supplemental Interest Trust (after taking into account any upfront payment received from the counterparty to a replacement swap agreement) from funds collected and received with respect to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution in accordance with subsection (d) below, pursuant to the Swap Administration Agreement. For federal income tax purposes, any amounts paid to the Swap Provider on each Distribution Date shall first be deemed paid in respect of the Class SWAP-IO Interest to the extent of the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to the Holders of the Certificates (other than the Class CE, Class P and Class R Certificates) calculated in accordance with the terms of this the Class A-1 Swap Agreement. Any payments ) and distribute such Net Swap Payment to the holders of the Certificates from amounts deemed received in respect of this notional principal contract shall not accordance with Section 4.1. Three Business Days prior to each Distribution Date on which any amount will be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment distributed from the Certificates (other than Class A-1 Swap Account to the Class CEA-1 Certificates in accordance with Section 4.1(a)(viii), the Securities Administrator shall determine the amount of any Class P A-1 Amount for that Distribution Date and report such Class R Certificates) of a A-1 Amount to the Class IO Distribution Amount A-1 Swap Provider on that same day in accordance with the notice provisions contained in Section 11.5 hereof; provided, however, that the Securities Administrator shall be treated for tax purposes as having been received by the Holders of under no obligation to report such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders Class A-1 Amount to the Class A-1 Swap Administrator pursuant to Provider unless it has first received the notional principal contract. Thus, each Cap Agreement Report or Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat Swap Report for such notional principal contract as having a value of $10,000 as of the Closing Distribution Date.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Deutsche Alt-a Securities Mortgage Loan Trust, Series 2006-Ar4)
Swap Account. (a) No later than The Trustee is hereby authorized and directed in its capacity as Supplemental Interest Trustee to enter into the Closing Swap Agreement on behalf of the Supplemental Interest Trust and to establish the Swap Account pursuant to Section 7.02(a). Promptly upon receipt, the Supplemental Interest Trustee will deposit into the Swap Account all funds received from the Trustee pursuant to Section 7.03(a) and Section 7.03(b) clause 21 and all funds received from the Swap Provider under the Swap Agreement. Amounts on deposit in the Swap Account shall be invested in accordance with Section 7.05.
(b) On each Distribution Date after the Startup Day but not beyond the November 2012 Distribution Date, to the Trust Administrator extent necessary, following all distributions pursuant to Section 7.03(b), the Supplemental Interest Trustee shall establish and maintain with itselfapply, as agent all amounts, if any, on deposit in the Swap Account (other than investment earnings on funds held in the Swap Account, which shall be for the Trusteeaccount of the Servicer) in the following order of priority:
(i) first, to the Swap Provider, any Net Swap Payment owed to the Swap Provider pursuant to the Swap Agreement for such Distribution Date and any Net Swap Payments owed to the Swap Provider remaining unpaid from prior Distribution Dates;
(ii) second, to the Swap Provider, any Swap Termination Payment owed to the Swap Provider not resulting from a separateSwap Provider Trigger Event pursuant to the Swap Agreement;
(iii) third, segregated trust account titledto the Offered Certificates, “the Net Subordination Deficiency for the applicable Distribution Date, allocated in the order of priority set forth in clauses 4. through 15. under Section 7.03(b);
(iv) fourth, sequentially, to the Class X-0, Xxxxx Fargo BankX-0, N.A. as TrusteeClass M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class M-11 Certificates, in trust for that order, any related Class Principal Carryover Shortfall, to the registered holders of MASTR Second Lien Trust 2006-1extent remaining undistributed after the distributions pursuant to Section 7.03(b);
(v) fifth, Mortgage Pass-Through concurrently, to the Senior Certificates, Series 2006any related Class Interest Carryover Shortfall, pro rata, to the extent remaining undistributed after the distributions pursuant to Section 7.03(b);
(vi) sixth, sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class M-11 Certificates, in that order, any related Class Interest Carryover Shortfall, to the extent remaining undistributed after the distributions pursuant to Section 7.03(b);
(vii) seventh, to pay the applicable Certificateholders any Net WAC Cap Carryover to the extent remaining undistributed after the distributions pursuant to Section 7.03(b), allocated in the order of priority set forth in clauses 19. and 20. of 7.03(b);
(viii) eighth, to the Swap Provider, any Swap Termination Payments resulting from a Swap Provider Trigger Event; and
(ix) ninth, to the Class X-1—Swap Account” IO Certificates, any remainder; provided, that the cumulative amount of distributions pursuant to clauses (iii) and (iv) above on each Distribution Date, and all prior Distribution Dates, will not exceed the “Swap Account”). Such account shall be an Eligible Account cumulative amount of Realized Losses with respect to that Distribution Date and amounts therein shall be held uninvested. all prior Distribution Dates.
(c) [Reserved].
(d) The Swap Account shall be treated as an “outside reserve fund” within the meaning of Treasury Regulation Section 1.8606-2(h) and shall not be an asset of any REMIC or the Trust Estate created pursuant to this Agreement and, instead, shall be an asset of the Supplemental Interest Trust, but . For state and federal tax purposes the beneficial owners of the Class X-IO Certificates shall not be an asset the beneficial owners of any REMICthe Swap Account.
(b) On each Distribution Date, prior to any distribution to any Certificate, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account any upfront payment received from the counterparty to a replacement swap agreement) from funds collected and received with respect to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution in accordance with subsection (d) below, pursuant to the Swap Administration Agreement. For federal income tax purposes, any amounts paid to the Swap Provider on each Distribution Date shall first be deemed paid in respect of the Class SWAP-IO Interest to the extent of the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(ce) For federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator Trustee shall treat the Holders of Offered Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect to the Holders of the Class CE X-IO Certificates. Pursuant to each such notional principal contract, all Holders of Offered Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE X-IO Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class X-IO Distribution Shortfall Amount”). A Class X-IO Distribution Shortfall Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC RateCap, and a Class X-IO Distribution Shortfall Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE X-IO Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts Cap Carryovers to the Holders of the Offered Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Offered Certificates (other than the Class CE, Class P and Class R Certificates) of a Class X-IO Distribution Shortfall Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator Supplemental Interest Trustee pursuant to the notional principal contract. Thus, each Offered Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator Supplemental Interest Trustee shall treat such notional principal contract as having a value of $10,000 as of the Closing Startup Date.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Nationstar Home Equity Loan Trust 2006-B)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, prior to any distribution to any CertificateSwap Termination Payments, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to maintain the Subordinated Amount at the Specified Subordinated Amount, after taking giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any remaining unpaid Basis Risk CarryForward Amount, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay any Unpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the Trust entering into account any upfront a replacement interest rate swap following the occurrence of an Additional Termination Event of the type described in Part 1(h)(ii) of the Interest Rate Swap Agreement, the Trust is entitled to receive a payment received from the counterparty to a replacement swap agreement) from funds collected and received with respect provider, the Trustee shall direct the replacement swap provider to make such payment to the Mortgage Loans prior Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the determination Swap Provider immediately upon receipt of Available Funds such payment, regardless of whether the date of receipt thereof is a Distribution Date. To the extent that any Replacement Swap Provider 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 Provider immediately upon receipt of such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust Administrator from to Certificateholders, the Servicer, any Responsible Party, the Trustee or any other Person. The Trustee shall account for the Swap AdministratorAccount as an asset of a grantor trust under subpart E, for distribution in accordance with subsection (d) below, 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 Swap Administration AgreementAccount are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk CarryForward Amounts) from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders beneficial owners of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Closing DateInterest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. The Trustee shall cause any xxxxxxexxxx xxap provider to provide a copy of the related replacement interest rate swap agreement to the Trustee and the Depositor.
Appears in 1 contract
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, Swap Termination Payments, Net Swap Payments owed to the Swap Provider, Net Swap Receipts and, without duplication, amounts distributable on the Class UT-PFIO Interest for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses that have not yet been reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any distribution remaining unpaid Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amounts or, without duplication, Upper-Tier CarryForward Amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trustee shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor Swap Provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust Administrator receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Trustee shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Trustee shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap Account. In no event shall the Trustee be responsible for the selection of any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the 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 Interest Rate Swap Agreement, the Trust is entitled to receive a payment from a replacement swap provider, the Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment (other than any shall be made from the Swap Termination Payment resulting from a Swap Provider Trigger Event) owed Account to the Swap Provider (after taking into 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 Provider Payment is made to an account any upfront payment received from other than the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Account, then, notwithstanding anything to the Mortgage Loans prior contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid to the determination Swap Provider immediately upon receipt of Available Funds such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust Administrator from to Certificateholders, any Servicer, any Custodian, any Responsible Party, the Trustee or any other Person. The Trustee shall account for the Swap Administrator, for distribution in accordance with subsection (d) below, Account as an asset of the Grantor Trust and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Administration AgreementAccount are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X and Class UT-PFIO Interests) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X and Class UT-PFIO Interests and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders beneficial owners of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Closing DateInterest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. The Trustee shall cause any xxxxxxexxxx xxap provider to provide a copy of the related replacement interest rate swap agreement to the Trustee and the Depositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2006-He5)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, Swap Termination Payments (including, without duplication, Replacement Swap Provider Payments), Net Swap Payments owed to the Swap Provider, Net Swap Receipts and, without duplication, amounts distributable on the Class IO Interest for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, other than a Defaulted Swap Termination Payment, owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the LIBOR Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses that have not yet been reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the LIBOR Certificates, any distribution remaining unpaid Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amounts or, without duplication, Upper-Tier CarryForward Amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trustee shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor swap provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust Administrator receives a Swap Termination Payment and a successor swap provider cannot be obtained, then the Trustee shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Trustee shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment or Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate 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 will not be treated as a Swap Termination Payment (for purposes of determining the distributions from the Swap Account until the final Distribution Date. In no event shall the Trustee be responsible for the selection of any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the Trust entering into a replacement interest rate swap, the Trust is entitled to receive a Replacement Swap Provider Payment from a replacement swap provider, the Trustee shall direct the replacement swap provider to make such Replacement Swap Provider Payment to the Swap Account. Notwithstanding the foregoing, any Replacement Swap Provider Payment shall be made from the Swap Account to the Swap Provider 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 Provider Payment is made to an account other than the Swap Account, then, notwithstanding anything to the contrary contained in this Agreement, any Replacement Swap Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider Payment by the Trust, 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 doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust to Certificateholders, any Servicer, any Custodian, any Responsible Party, the Trustee or any other Person. However, to the extent any Replacement Swap Provider Payment received from a replacement swap provider and paid to the Swap Provider being replaced is less than the full amount of a Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account Provider, any upfront payment received from remaining amount of the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Termination Payment shall be paid to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution Provider on subsequent Distribution Dates in accordance with subsection this Section 4.02 and Section 4.06 (d) below, pursuant unless the Replacement Swap Provider Payment is paid to the Swap Administration Provider on a Distribution Date, in which case such remaining amounts will be paid on such Distribution Date). The Trustee shall account for the Swap Account as an asset of the Grantor Trust and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (without duplication of previously paid Replacement Swap Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Class X REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the LIBOR Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceLIBOR Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of LIBOR Certificates to such receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts from the Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account), subject to the obligation to pay Class IO Shortfalls, as rights and obligations under a separate limited recourse notional principal contract, the Holder of contract between the Class CE Certificates X Certificateholders and Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Schedule to the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under the terms of the Schedule to the Interest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. In addition, in the event a "Xxxxxexx Xxxxnt" (other than as defined in the Class CEInterest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, Class P and Class R Certificates) the Trustee shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of this the Schedule to the Interest Rate Swap Agreement. Any payments The Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates from amounts deemed received Trustee and the Depositor. If a Responsible Officer of the Trustee receives written notice that the Swap Provider or its guarantor has been downgraded below the levels set forth in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R CertificatesPart 5(f) of a Class IO Distribution Amount the Interest Rate Swap Agreement and the posting of collateral is required in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement, the Trustee shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to demand that the Swap Administrator pursuant to Provider or its guarantor post collateral in accordance with the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificatesterms of Part 5(f) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateInterest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2007-He2)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the LIBOR Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, prior to any distribution to any CertificateSwap Termination Payments, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(after taking into account any upfront payment received from the counterparty to a replacement swap agreementi) from funds collected and received with respect to the Mortgage Loans prior Swap Provider, the sum of (x) all Net Swap Payments and (y) any Swap Termination Payment, other than a Defaulted Swap Termination Payment, to the determination of Available Funds and Swap Provider, if any, owed for that Distribution Date;
(ii) amounts received by to the Trust Administrator Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iii) sequentially, to the Class M-1, Class M-2, Class M-3, Class B-1, Class B-2, Class B-3 and Clxxx X-0 Xxxxxxicates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and (iii), to the extent unpaid from Available Funds;
(iv) to the LIBOR Certificates, to pay Basis Risk Carry Forward Amounts as described in Section 4.02(a)(iii)(Q), to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(v) sequentially, to the Class A, Class M-1, Class M-2 and Class M-3, Certificates, in that order, to pay principal as described in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to maintain the Subordinated Amount at the Specified Subordinated Amount, after giving effect to payments and distributions from Available Funds;
(vi) sequentially, to the Class M-1, Class M-2, Class M-3, Class B-1, Class B-2, Class B-3 and Clxxx X-0 Xxxxxxicates, in that order, to pay any Unpaid Interest Amounts as described in Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(vii) to the Swap AdministratorProvider, any Defaulted Swap Termination Payment owed to the Swap Provider for distribution that Distribution Date; and
(viii) to the holders of the Class X Certificates, any remaining amounts. Upon termination of the Trust, any amounts remaining in accordance with subsection (d) below, the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. The Trustee shall account for the Swap Administration 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 Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, Class X Interest) and second, other than any Defaulted Swap Termination Payment, by the Holders of the applicable Class or Classes of LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk Carry Forward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the LIBOR Certificateholders from the Excess Reserve Fund Account or the Swap Account shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE X Certificates (in respect of the Class X Interest or the Class IO Interest, respectively) and then to the respective Class or Classes of LIBOR Certificates. Pursuant In addition, the Trustee shall account for the rights of Holders of each Class of LIBOR Certificates to receive payments of Basis Risk Carry Forward Amounts from the Swap Account (along with Basis Risk Carry Forward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class X Certificateholders in favor of Holders of each such notional principal contractClass. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, all the Holders of Certificates (other than the Class PX Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, Class CE and Class R Certificates) shall be taxable on all income earned thereon, and any amounts reimbursed from the Upper-Tier REMIC to the Swap Account shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts been distributed to the Holders of the Certificates (other than the Class CE, Class P and Class R X Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing Date.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Sabr Trust 2005-Fr3)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, prior to any distribution to any CertificateSwap Termination Payments, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(after taking into account any upfront payment received from the counterparty to a replacement swap agreementi) from funds collected and received with respect to the Mortgage Loans prior Swap Provider, all Net Swap Payments, if any, owed to the determination of Available Funds and Swap Provider for that Distribution Date;
(ii) amounts received by the Trust Administrator from to the Swap AdministratorProvider, any Swap Termination Payment, other than a Defaulted Swap Termination Payment, if any, owed to the Swap Provider for distribution that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in accordance with subsection Section 4.02(a)(i), to the extent unpaid from Available Funds;
(div) belowsequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Claxx X-0, Xxxxx B-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to maintain the Subordinated Amount at the Specified Subordinated Amount, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Claxx X-0, Xxxxx B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any remaining unpaid Basis Risk CarryForward Amount, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Claxx X-0, Xxxxx B-2 and Class B-3 Certificates, to pay any Unpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. The Trustee shall account for the Swap Administration 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 Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk CarryForward Amounts) from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders beneficial owners of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Closing DateInterest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Home Equity Loan Trust 2005-4)
Swap Account. (a) No later than the Closing Date, the Trust Administrator shall establish and maintain with itself, as agent for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—Swap Account” (the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvested. The Swap Account shall be an asset of the Supplemental Interest Trust, but shall not be an asset of any REMIC.
(b) On each Distribution Date, prior following all distributions and deposits made pursuant to any distribution to any Certificatesubsections (a) through (d) above, the Trust Administrator shall deposit into Trustee will withdraw all funds available in the Swap Account: Account (the “Swap Distribution Amount”) to make the following payments in the following order of priority:
(i) first, to the amount of Swap Counterparty, any Net Swap Payment or owed to the Swap Termination Payment Counterparty pursuant to the Swap Agreement for such Distribution Date;
(other than ii) second, to the Swap Counterparty, any Swap Termination Payment owed to the Swap Counterparty not resulting from a Swap Provider Counterparty Trigger EventEvent pursuant to the Swap Agreement;
(iii) third, concurrently, to the Class A-1, Class A-2 and Class A-3 Certificates, pro rata, any remaining applicable Interest Distribution Amount for that Distribution Date;
(iv) fourth, concurrently, to the Class A-1, Class A-2 and Class A-3 Certificates, pro rata, any remaining Class Unpaid Interest Amounts for the classes of Senior Certificates;
(v) fifth, to the Class M-1 Certificates, any remaining Interest Distribution Amount for that Distribution Date;
(vi) sixth, to the Class M-1 Certificates, any remaining Class Unpaid Interest Amount for the Class M-1 Certificates;
(vii) seventh, to the Class M-2 Certificates, any remaining Interest Distribution Amount for that Distribution Date;
(viii) eighth, to the Class M-2 Certificates, any remaining Class Unpaid Interest Amount for the Class M-2 Certificates;
(ix) ninth, to the Class M-3 Certificates, any remaining Interest Distribution Amount for that Distribution Date;
(x) tenth, to the Class M-3 Certificates, any remaining Class Unpaid Interest Amount for the Class M-3 Certificates;
(xi) eleventh, to the Class M-4 Certificates, any remaining Interest Distribution Amount for that Distribution Date;
(xii) twelfth, to the Class M-4 Certificates, any remaining Class Unpaid Interest Amount for the Class M-4 Certificates;
(xiii) thirteenth, to the Class M-5 Certificates, any remaining Interest Distribution Amount for that Distribution Date;
(xiv) fourteenth, to the Class M-5 Certificates, any remaining Class Unpaid Interest Amount for the Class M-5 Certificates;
(xv) fifteenth, to the Class M-6 Certificates, any remaining Interest Distribution Amount for that Distribution Date;
(xvi) sixteenth, to the Class M-6 Certificates, any remaining Class Unpaid Interest Amount for the Class M-6 Certificates;
(xvii) seventeenth, to the Class M-7 Certificates, any remaining Interest Distribution Amount for that Distribution Date;
(xviii) eighteenth, to the Class M-7 Certificates, any remaining Class Unpaid Interest Amount for the Class M-7 Certificates;
(xix) nineteenth, to the Class M-8 Certificates, any remaining Interest Distribution Amount for that Distribution Date;
(xx) twentieth, to the Class M-8 Certificates, any remaining Class Unpaid Interest Amount for the Class M-8 Certificates;
(xxi) twenty-first, to the Class B-1 Certificates, any remaining Interest Distribution Amount for that Distribution Date;
(xxii) twenty-second, to the Class B-1 Certificates, any remaining Class Unpaid Interest Amount for the Class B-1 Certificates;
(xxiii) twenty-third, to the Class B-2 Certificates, any remaining Interest Distribution Amount for that Distribution Date;
(xxiv) twenty-forth, to the Class B-2 Certificates, any remaining Class Unpaid Interest Amount for the Class B-2 Certificates;
(xxv) twenty-fifth, to the Class B-3 Certificates, any remaining Interest Distribution Amount for that Distribution Date;
(xxvi) twenty-sixth, to the Class B-3 Certificates, any remaining Class Unpaid Interest Amount for the Class B-3 Certificates;
(xxvii) twenty-seventh, to fund the Swap Extra Principal Distribution Amount for that Distribution Date in accordance with the priorities set forth under subsections (b) and (c) above;
(xxviii) twenty-eighth, to pay to each Class of Offered Certificates, any remaining Net WAC Cap Carryover for that Class, after taking into account amounts deposited into the Net WAC Cap Account with respect to that Class of Offered Certificate pursuant to clause (xxxvii) of subsection (d) above (with distributions of Net WAC Cap Carryover to the Offered Certificates to be made on a pro rata basis based on the related unpaid Net WAC Cap Carryover);
(xxix) twenty-ninth, to fund the Swap Class M-1 Realized Loss Amortization Amount for that Distribution Date;
(xxx) thirtieth, to fund the Swap Class M-2 Realized Loss Amortization Amount for that Distribution Date;
(xxxi) thirty-first, to fund the Swap Class M-3 Realized Loss Amortization Amount for that Distribution Date;
(xxxii) thirty-second, to fund the Swap Class M-4 Realized Loss Amortization Amount for that Distribution Date;
(xxxiii) thirty-third, to fund the Swap Class M-5 Realized Loss Amortization Amount for that Distribution Date;
(xxxiv) thirty-fourth, to fund the Swap Class M-6 Realized Loss Amortization Amount for that Distribution Date;
(xxxv) thirty-fifth, to fund the Swap Class M-7 Realized Loss Amortization Amount for that Distribution Date;
(xxxvi) thirty-sixth, to fund the Swap Class M-8 Realized Loss Amortization Amount for that Distribution Date;
(xxxvii) thirty-seventh, to fund the Swap Class B-1 Realized Loss Amortization Amount for that Distribution Date;
(xxxviii) thirty-eighth, to fund the Swap Class B-2 Realized Loss Amortization Amount for that Distribution Date;
(xxxix) thirty-ninth, to fund the Swap Class B-3 Realized Loss Amortization Amount for that Distribution Date;
(xl) fortieth, to the Swap Counterparty, any Swap Termination Payment owed to the Swap Provider (after taking into account any upfront payment received Counterparty resulting from the counterparty to a replacement swap agreement) from funds collected and received with respect to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution in accordance with subsection (d) below, Counterparty Trigger Event pursuant to the Swap Administration Agreement. For federal income tax purposes, any amounts paid to the Swap Provider on each Distribution Date shall first be deemed paid in respect of the Class SWAP; and (xli) forty-IO Interest to the extent of the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Datefirst, to the Holder of the Class CE Certificates an aggregate amount equal to the excessX Certificates, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO any remaining Swap Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to the Holders of the Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing Date.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Popular ABS Mortgage Pass-Through Trust 2007-A)
Swap Account. (a) On the Closing Date, there is hereby established a separate trust (the "Supplemental Interest Trust"), into which the Depositor shall deposit: (i) the Interest Rate Swap Agreement, (ii) the Swap Administration Agreement and (iii) [$________________]. The Supplemental Interest Trust shall be maintained by the Supplemental Interest Trust Trustee, who initially, shall be the Trustee. No later than the Closing Date, the Supplemental Interest Trust Administrator Trustee shall establish and maintain with itself, as agent for the Trustee, a separate, segregated trust account to be held in the Supplemental Interest Trust, titled, “Xxxxx Fargo Bank"Swap Account, N.A. [____________________], as Supplemental Interest Trust Trustee, in trust for the Swap Provider and the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—Swap Account” (the “Swap Account”). [_______________________________]" Such account shall be an Eligible Account and amounts funds on deposit therein shall be held separate and apart from, and shall not be commingled with, any other moneys, including, without limitation, other moneys of the Trustee, in its capacity as Supplemental Interest Trust Trustee, held pursuant to this Agreement. Amounts therein shall be held uninvested. The Swap Account shall be an asset of the Supplemental Interest Trust, but shall not be an asset of any REMIC.
(b) On each Distribution Date, prior to any distribution to any Certificate, the Trustee shall deliver to the Supplemental Interest Trust Administrator shall Trustee for deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account any upfront payment received from the counterparty to a replacement swap agreement) from funds collected and received with respect to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Supplemental Interest Trust Administrator Trustee from the Swap Administrator, for distribution in accordance with subsection (dSection 4.01(e) belowabove, pursuant to the Swap Administration Agreement, dated as of the Closing Date (the "Swap Administration Agreement"), among [____________________] in its capacity as Supplemental Interest Trustee, Trustee and Swap Administrator and Option One Mortgage Corporation (in substantially the form attached hereto as Exhibit N). For federal income tax purposes, any amounts paid to the Swap Provider on each Distribution Date shall first be deemed paid to the Swap Provider in respect of the Class SWAP-IO Interest to the extent of the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount shall be deemed paid to the Swap Provider in respect of a Class IO Distribution Amount (as defined below).
(c) For federal income tax purposes, the Swap Account shall be owned by the beneficial owners majority Holder of the Class CE C Certificates.
(d) For federal income tax purposesTo the extent that the Supplemental Interest Trust is determined to be a separate legal entity from the Supplemental Interest Trust Trustee, any obligation of the Supplemental Interest Trust Administrator Trustee under the Interest Rate Swap Agreement shall be deemed to be an obligation of the Supplemental Interest Trust.
(e) The Trustee shall treat the Holders of Certificates (other than the Class P, Class CE C and Class R Certificates) as having entered into a notional principal contract with respect to the Holders of the Class CE C Certificates. Pursuant to each such notional principal contract, all Holders of Certificates (other than the Class P, Class CE C and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE C Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest REMIC 3 Regular Interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “"Class IO Distribution Amount”"). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata PRO RATA among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC RateCertificates, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE C Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to the Holders of the Certificates (other than the Class CEC, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest Regular Interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CEC, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC 3 and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests Regular Interests in the Master REMICREMIC 3, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing Date.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Option One Mortgage Acceptance Corp)
Swap Account. (a) No later than the Closing Date, the Trust Administrator shall establish and maintain with itself, as agent for The Depositor hereby directs the Trustee, in its capacity as Supplemental Interest Trustee to execute, deliver and perform its obligations under the Swap Agreement on the Startup Date and thereafter on behalf of the Supplemental Interest Trust, and to establish the Swap Account pursuant to Section 7.02(a). The Seller, the Depositor, the Servicer and the Certificateholders, by their acceptance of such Certificates acknowledge and agree that the Trustee shall execute, deliver and perform its obligations under the Swap Agreement and shall do so solely in its capacity as Supplemental Interest Trustee of the Supplemental Interest Trust and not in its individual capacity. Promptly upon receipt, the Supplemental Interest Trustee will deposit into the Swap Account all funds received from the Trustee pursuant to Section 7.03(a) and Section 7.03(b) clause 20 and all funds received from the Swap Provider under the Swap Agreement. Amounts on deposit in the Swap Account shall be invested in accordance with Section 7.05.
(b) On each Distribution Date after the Startup Day but not beyond the February 2013 Distribution Date, to the extent necessary, following all distributions pursuant to Section 7.03(b), the Supplemental Interest Trustee shall apply, all amounts, if any, on deposit in the Swap Account (other than investment earnings on funds held in the Swap Account, which shall be for the account of the Servicer) in the following order of priority:
(i) first, to the Swap Provider, any Net Swap Payment owed to the Swap Provider pursuant to the Swap Agreement for such Distribution Date and any Net Swap Payments owed to the Swap Provider remaining unpaid from prior Distribution Dates;
(ii) second, to the Swap Provider, any Swap Termination Payment owed to the Swap Provider not resulting from a separateSwap Provider Trigger Event pursuant to the Swap Agreement;
(iii) third, segregated trust account titledto the Offered Certificates (other than the Class M-8 and Class M-9 Certificates), “the Net Subordination Deficiency for the applicable Distribution Date, allocated in the order of priority set forth in Section 7.03(b) clauses C.3. through C.10.;
(iv) fourth, sequentially, to the Class X-0, Xxxxx Fargo BankX-0, N.A. as TrusteeClass M-3, Class M-4, Class M-5, Class M-6 and Class M-7 Certificates, in trust for that order, any related Class Principal Carryover Shortfall, to the registered holders of MASTR Second Lien Trust 2006-1extent remaining undistributed after the distributions pursuant to Section 7.03(b);
(v) fifth, Mortgage Pass-Through concurrently, to the Senior Certificates, Series 2006any related Class Interest Carryover Shortfall, pro rata, to the extent remaining undistributed based on such amounts after the distributions pursuant to Section 7.03(b);
(vi) sixth, sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6 and Class M-7 Certificates, in that order, any related Class Interest Carryover Shortfall, to the extent remaining undistributed after the distributions pursuant to Section 7.03(b);
(vii) seventh, to pay the applicable Certificateholders (other than the Class M-8 and Class M-9 Certificates) any Net WAC Cap Carryover to the extent remaining undistributed after the distributions pursuant to Section 7.03(b), allocated in the order of priority set forth in Section 7.03(b) clauses C.16. and C.17.;
(viii) eighth, to the Swap Provider, any Swap Termination Payments resulting from a Swap Provider Trigger Event; and
(ix) ninth, to the Class X-1—Swap Account” IO Certificates, any remainder; provided, that the cumulative amount of distributions pursuant to clauses (iii) and (iv) above on each Distribution Date, and all prior Distribution Dates, will not exceed the “Swap Account”). Such account shall be an Eligible Account cumulative amount of Realized Losses with respect to that Distribution Date and amounts therein shall be held uninvested. all prior Distribution Dates.
(c) [Reserved].
(d) The Swap Account shall be treated as an “outside reserve fund” within the meaning of Treasury Regulation Section 1.8606-2(h) and shall not be an asset of any REMIC or the Trust Estate created pursuant to this Agreement and, instead, shall be an asset of the Supplemental Interest Trust, but . For state and federal tax purposes the beneficial owners of the Class X-IO Certificates shall not be an asset the beneficial owners of any REMICthe Swap Account.
(b) On each Distribution Date, prior to any distribution to any Certificate, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account any upfront payment received from the counterparty to a replacement swap agreement) from funds collected and received with respect to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution in accordance with subsection (d) below, pursuant to the Swap Administration Agreement. For federal income tax purposes, any amounts paid to the Swap Provider on each Distribution Date shall first be deemed paid in respect of the Class SWAP-IO Interest to the extent of the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(ce) For federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator Trustee shall treat the Holders of Offered Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect to the Holders of the Class CE X-IO Certificates. Pursuant to each such notional principal contract, all Holders of Offered Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE X-IO Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class X-IO Distribution Shortfall Amount”). A Class X-IO Distribution Shortfall Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC RateCap, and a Class X-IO Distribution Shortfall Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE X-IO Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts Cap Carryovers to the Holders of the Offered Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Offered Certificates (other than the Class CE, Class P and Class R Certificates) of a Class X-IO Distribution Shortfall Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator Supplemental Interest Trustee pursuant to the notional principal contract. Thus, each Offered Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator Supplemental Interest Trustee shall treat such notional principal contract as having a value of $10,000 as of the Closing Startup Date.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Nationstar Home Equity Loan Trust 2007-B)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, prior to any distribution to any CertificateSwap Termination Payments, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(after taking into account any upfront payment received from the counterparty to a replacement swap agreementi) from funds collected and received with respect to the Mortgage Loans prior Swap Provider, all Net Swap Payments, if any, owed to the determination of Available Funds and Swap Provider for that Distribution Date;
(ii) amounts received by the Trust Administrator from to the Swap AdministratorProvider, any Swap Termination Payment, other than a Defaulted Swap Termination Payment, if any, owed to the Swap Provider for distribution that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in accordance with subsection Section 4.02(a)(i), to the extent unpaid from Available Funds;
(div) belowsequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to maintain the Subordinated Amount at the Specified Subordinated Amount, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any remaining unpaid Basis Risk CarryForward Amount, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay any Unpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. The Trustee shall account for the Swap Administration 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 Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal X Interest and then to the excess, if any, respective Class or Classes of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk CarryForward Amounts) from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders beneficial owners of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall take any and all such actions as may be necessary or appropriate to enforce the rights of the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing Datewith respect thereto.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Abs Capital I Inc)
Swap Account. (a) No later than On the Closing Date, there is hereby established the Supplemental Interest Trust, into which the Depositor shall deposit the Interest Rate Swap Agreement. The Supplemental Interest Trust shall be maintained by the Supplemental Interest Trust Trustee. On the Closing Date, the Supplemental Interest Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—Swap Account” the Certificates (the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvested) as a part of the Trust Fund. The Swap Account shall be an asset Eligible Account, and funds on deposit therein shall be held separate and apart from, and shall not be commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any Distribution Date, Swap Termination Payments, Net Swap Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class B-4 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class B-4 Certificates, to pay Basis Risk CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any remaining unpaid Basis Risk CarryForward Amount, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class B-4 Certificates, to pay any Unpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Supplemental Interest TrustTrust receives a Swap Termination Payment, but the Supplemental Interest Trust Trustee shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor Swap Provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Supplemental Interest Trust receives a Swap Termination Payment and a successor Swap Provider cannot be an asset obtained, then the Supplemental Interest Trust Trustee shall deposit the Swap Termination Payment into the reserve account that is a sub-account of any REMIC.
(b) the Swap Account. On each subsequent Distribution Date, prior to any distribution to any CertificateDate (so long as funds are available in the reserve account), the Supplemental Interest Trust Administrator Trustee shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment Receipt due the Supplemental Interest Trust (calculated in accordance with the terms of the original Interest Rate Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap Account. In no event shall the Supplemental Interest Trust Trustee be responsible for the selection of any successor or replacement swap provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. 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 Interest Rate Swap Agreement, the Supplemental Interest Trust is entitled to receive a payment from a replacement swap provider, the Supplemental Interest Trust Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment (other than any shall be made from the Swap Termination Payment resulting from a Swap Provider Trigger Event) owed Account to the Swap Provider (after taking into 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 Provider Payment is made to an account any upfront payment received from other than the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Account, then, notwithstanding anything to the Mortgage Loans prior contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid to the determination Swap Provider immediately upon receipt of Available Funds such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust Administrator from to Certificateholders, the Servicer, the Responsible Party, the Trustee or any other Person. The beneficial owners of the Swap Administrator, for distribution in accordance with subsection (d) below, pursuant to Account are the Swap Administration AgreementClass X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from REMIC VI, first, by the REMIC VI Regular Interest Swap-IO and second, other than any Defaulted Swap Termination Payment, from REMIC III by the Holders of the applicable Class or Classes of Offered Certificates (in respect of the Class SWAP-IO Interest Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE X Certificates, and then to the respective Class or Classes of Offered Certificates. Pursuant In addition, the Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Basis Risk CarryForward Amounts from the Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class X Certificateholders in favor of Holders of each such notional principal contractClass. It is the intention of the parties hereto that, all Holders of Certificates (other than for federal and state income and state and local franchise tax purposes, the Class P, Class CE and Class R Certificates) shall Supplemental Interest Trust be treated disregarded as having agreed to pay, on each Distribution Date, to an entity separate from the Holder of the Class CE X Certificates an aggregate amount equal to unless and until the excess, if any, of date when either (ia) the amount payable on such Distribution Date on the regular interest corresponding to such there is more than one Class X Certificateholder or (b) any Class of Certificates over (iiin addition to the Class X Certificates is recharacterized as an equity interest in the Supplemental Interest Trust for federal income tax purposes, in which case it is the intention of the parties hereto that, for federal and state income and state and local franchise tax purposes, the Supplemental Interest Trust be treated as a partnership. The Supplemental Interest Trust will be an “outside reserve fund” within the meaning of Treasury Regulation Section 1.860G-2(h) and not an asset of any Trust REMIC. With respect to the amount payable failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Supplemental Interest Trust Trustee shall send any notices and make any demands, on such Class behalf of Certificates on such Distribution Date (such excessthe Supplemental Interest Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under the terms of the Interest Rate Swap Agreement, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections the Supplemental Interest Trust Trustee shall immediately demand that Mxxxxx Sxxxxxx, the guarantor of the Swap Provider’s obligations under the guarantee of Mxxxxx Sxxxxxx relating to the Interest Rate Swap Agreement, make any and all payments then required to be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable made by Mxxxxx Sxxxxxx pursuant to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balanceguarantee. In addition, pursuant to such notional principal contractin the event a “Delivery Amount” (as defined in the Interest Rate Swap Agreement) was due but was not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, the Holder Supplemental Interest Trust Trustee shall deliver a notice of failure to transfer collateral on the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to the Holders of the Certificates (other than the Class CEnext Business Day following such failure, Class P and Class R Certificates) in accordance with the terms of this the Interest Rate Swap Agreement. Any payments The Supplemental Interest Trust Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates from amounts deemed received Supplemental Interest Trust Trustee and the Depositor. If a Responsible Officer of the Trustee receives written notice that the Swap Provider or its guarantor has been downgraded below the levels set forth in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R CertificatesPart 5(f) of a Class IO Distribution Amount the Interest Rate Swap Agreement and the posting of collateral is required in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement, the Trustee shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to demand that the Swap Administrator pursuant to Provider or its guarantor post collateral in accordance with the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificatesterms of Part 5(f) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateInterest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2006-Nc5)
Swap Account. (a) No later than the Closing Date, the Trust Administrator shall establish and maintain with itself, as agent for The Depositor hereby directs the Trustee, in its capacity as Supplemental Interest Trustee to execute, deliver and perform its obligations under the Swap Agreement on the Startup Date and thereafter on behalf of the Supplemental Interest Trust, and to establish the Swap Account pursuant to Section 7.02(a). The Seller, the Depositor, the Servicer and the Certificateholders, by their acceptance of such Certificates acknowledge and agree that the Trustee shall execute, deliver and perform its obligations under the Swap Agreement and shall do so solely in its capacity as Supplemental Interest Trustee of the Supplemental Interest Trust and not in its individual capacity. Promptly upon receipt, the Supplemental Interest Trustee will deposit into the Swap Account all funds received from the Trustee pursuant to Section 7.03(a) and Section 7.03(b) clause 20 and all funds received from the Swap Provider under the Swap Agreement. Amounts on deposit in the Swap Account shall be invested in accordance with Section 7.05.
(b) On each Distribution Date after the Startup Day but not beyond the December 2012 Distribution Date, to the extent necessary, following all distributions pursuant to Section 7.03(b), the Supplemental Interest Trustee shall apply, all amounts, if any, on deposit in the Swap Account (other than investment earnings on funds held in the Swap Account, which shall be for the account of the Servicer) in the following order of priority:
(i) first, to the Swap Provider, any Net Swap Payment owed to the Swap Provider pursuant to the Swap Agreement for such Distribution Date and any Net Swap Payments owed to the Swap Provider remaining unpaid from prior Distribution Dates;
(ii) second, to the Swap Provider, any Swap Termination Payment owed to the Swap Provider not resulting from a separateSwap Provider Trigger Event pursuant to the Swap Agreement;
(iii) third, segregated trust account titledto the Offered Certificates, “the Net Subordination Deficiency for the applicable Distribution Date, allocated in the order of priority set forth in clauses 4. through 15. under Section 7.03(b);
(iv) fourth, sequentially, to the Class X-0, Xxxxx Fargo BankX-0, N.A. as TrusteeClass M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates, in trust for that order, any related Class Principal Carryover Shortfall, to the registered holders of MASTR Second Lien Trust 2006-1extent remaining undistributed after the distributions pursuant to Section 7.03(b);
(v) fifth, Mortgage Pass-Through concurrently, to the Senior Certificates, Series 2006any related Class Interest Carryover Shortfall, pro rata, to the extent remaining undistributed after the distributions pursuant to Section 7.03(b);
(vi) sixth, sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates, in that order, any related Class Interest Carryover Shortfall, to the extent remaining undistributed after the distributions pursuant to Section 7.03(b);
(vii) seventh, to pay the applicable Certificateholders any Net WAC Cap Carryover to the extent remaining undistributed after the distributions pursuant to Section 7.03(b), allocated in the order of priority set forth in clauses 18. and 19. of 7.03(b);
(viii) eighth, to the Swap Provider, any Swap Termination Payments resulting from a Swap Provider Trigger Event; and
(ix) ninth, to the Class X-1—Swap Account” IO Certificates, any remainder; provided, that the cumulative amount of distributions pursuant to clauses (iii) and (iv) above on each Distribution Date, and all prior Distribution Dates, will not exceed the “Swap Account”). Such account shall be an Eligible Account cumulative amount of Realized Losses with respect to that Distribution Date and amounts therein shall be held uninvested. all prior Distribution Dates.
(c) [Reserved].
(d) The Swap Account shall be treated as an “outside reserve fund” within the meaning of Treasury Regulation Section 1.8606-2(h) and shall not be an asset of any REMIC or the Trust Estate created pursuant to this Agreement and, instead, shall be an asset of the Supplemental Interest Trust, but . For state and federal tax purposes the beneficial owners of the Class X-IO Certificates shall not be an asset the beneficial owners of any REMICthe Swap Account.
(b) On each Distribution Date, prior to any distribution to any Certificate, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account any upfront payment received from the counterparty to a replacement swap agreement) from funds collected and received with respect to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution in accordance with subsection (d) below, pursuant to the Swap Administration Agreement. For federal income tax purposes, any amounts paid to the Swap Provider on each Distribution Date shall first be deemed paid in respect of the Class SWAP-IO Interest to the extent of the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(ce) For federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator Trustee shall treat the Holders of Offered Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect to the Holders of the Class CE X-IO Certificates. Pursuant to each such notional principal contract, all Holders of Offered Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE X-IO Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class X-IO Distribution Shortfall Amount”). A Class X-IO Distribution Shortfall Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC RateCap, and a Class X-IO Distribution Shortfall Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE X-IO Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts Cap Carryovers to the Holders of the Offered Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Offered Certificates (other than the Class CE, Class P and Class R Certificates) of a Class X-IO Distribution Shortfall Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator Supplemental Interest Trustee pursuant to the notional principal contract. Thus, each Offered Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator Supplemental Interest Trustee shall treat such notional principal contract as having a value of $10,000 310,000 as of the Closing Startup Date.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Nationstar Home Equity Loan Trust 2007-A)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, prior to any distribution to any CertificateSwap Termination Payments, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Clxxx X-0, Xxxxx B-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to maintain the Subordinated Amount at the Specified Subordinated Amount, after taking giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk Carry Forward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Clxxx X-0, Xxxxx B-2 and Class B-3 Certificates, to pay Basis Risk Carry Forward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any remaining unpaid Basis Risk Carry Forward Amount, pro rata, based on their respective remaining unpaid Basis Risk Carry Forward Amount after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Clxxx X-0, Xxxxx B-2 and Class B-3 Certificates, to pay any Unpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the Trust entering into account any upfront a replacement interest rate swap following the occurrence of an Additional Termination Event of the type described in Part 1(h)(ii) of the Interest Rate Swap Agreement, the Trust is entitled to receive a payment received from the counterparty to a replacement swap agreement) from funds collected and received with respect provider, the Trustee shall direct the replacement swap provider to make such payment to the Mortgage Loans prior Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the determination Swap Provider immediately upon receipt of Available Funds such payment, regardless of whether the date of receipt thereof is a Distribution Date. To the extent that any Replacement Swap Provider 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 Provider immediately upon receipt of such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust Administrator from to Certificateholders, the Servicer, any Responsible Party, the Trustee or any other Person. The Trustee shall account for the Swap AdministratorAccount as an asset of a grantor trust under subpart E, for distribution in accordance with subsection (d) below, 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 Swap Administration AgreementAccount are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk Carry Forward Amounts and, without duplication, Upper-Tier Carry Forward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Upper-Tier Carry Forward Amounts (including, but without duplication Basis Risk Carry Forward Amounts) from the Holder of Swap Account (along with Basis Risk Carry Forward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders beneficial owners of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Closing DateInterest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations unxxx xxe xxxxxxtee of Morgan Stanley relating to the Interest Rate Swap Agreement, make axx xxx xxx xxxments then required to be made by Morgan Stanley pursuant to such guarantee. The Trustee shall cause xxx xxpxxxxxxxt swap provider to provide a copy of the related replacement interest rate swap agreement to the Trustee and the Depositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Abs Capital I Inc)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, Swap Termination Payments, Net Swap Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses that have not yet been reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any distribution remaining unpaid Basis Risk CarryForward Amount, and, without duplication, Upper Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount or Upper-Tier CarryForward Amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trustee shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor Swap Provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust Administrator receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Trustee shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Trustee shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap Account. In no event shall the Trustee be responsible for the selection of any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the 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 Interest Rate Swap Agreement, the Trust is entitled to receive a payment from a replacement swap provider, the Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment (other than any shall be made from the Swap Termination Payment resulting from a Swap Provider Trigger Event) owed Account to the Swap Provider (after taking into 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 Provider Payment is made to an account any upfront payment received from other than the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Account, then, notwithstanding anything to the Mortgage Loans prior contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid to the determination Swap Provider immediately upon receipt of Available Funds such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust Administrator from to Certificateholders, the Servicer, any Custodian, any Responsible Party, the Trustee or any other Person. The Trustee shall account for the Swap Administrator, for distribution in accordance with subsection (d) below, Account as an asset of the Grantor Trust and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Administration AgreementAccount are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Basis Risk CarryForward Amounts (and, without duplication, Upper-Tier CarryForward Amounts) from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders beneficial owners of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Closing DateInterest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under txx xxxrxxxxx xf Morgan Stanley relating to the Interest Rate Swap Agreement, make any anx xxx pxxxxxxx then required to be made by Morgan Stanley pursuant to such guarantee. The Trustee shall cause any rxxxxxxmxxx xxxp provider to provide a copy of the related replacement interest rate swap agreement to the Trustee and the Depositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2006-He4)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, prior to any distribution to any CertificateSwap Termination Payments, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(after taking into account any upfront payment received from the counterparty to a replacement swap agreementi) from funds collected and received with respect to the Mortgage Loans prior Swap Provider, all Net Swap Payments, if any, owed to the determination of Available Funds and Swap Provider for that Distribution Date;
(ii) amounts received by the Trust Administrator from to the Swap AdministratorProvider, any Swap Termination Payment, other than a Defaulted Swap Termination Payment, if any, owed to the Swap Provider for distribution that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in accordance with subsection Section 4.02(a)(i), to the extent unpaid from Available Funds;
(div) belowsequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to maintain the Subordinated Amount at the Specified Subordinated Amount, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any remaining unpaid Basis Risk CarryForward Amount, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay any Unpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. The Trustee shall account for the Swap Administration 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 Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk CarryForward Amounts) from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders beneficial owners of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Closing DateInterest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2005-He6)
Swap Account. (a) No later than the Closing Date, the Trust Securities Administrator shall establish and maintain with itself, as agent for the Trustee, a separate, segregated trust account to be titled, “Xxxxx "Wells Fargo Bank, N.A. as TrusteeSecurities Administrator, in trust for the registered holders xxxxxtered Holders of MASTR Second Lien Trust 2006Asset Backed Funding Corporation Asset-1, Mortgage Pass-Through Backed Certificates, Series 20062007-1—Swap WMC1--Swap Account” (the “Swap Account”). ." Such account shall be an Eligible Account and amounts funds on deposit therein shall be held separate and apart from, and shall not be commingled with, any other moneys, including, without limitation, other moneys of the Securities Administrator held pursuant to this Agreement. Amounts therein shall be held uninvested. The Swap Account shall be an asset of the Supplemental Interest Trust, but shall not be an asset of any REMIC.
(b) On the Business Day prior to each Distribution Date, prior to any distribution to any Certificate, the Trust Securities Administrator shall (A) deposit into the Swap Account: (i) the amount of Account any Net Swap Payment or and Swap Termination Payment received from the Swap Provider and any Replacement Swap Provider Payment received from a replacement swap provider for such Distribution Date and (B) deposit into the Swap Account from amounts on deposit in the Distribution Account, any Net Swap Payment and Swap Termination Payment (other than any Swap Termination Payment Payments resulting from a Swap Provider Trigger EventEvent and without duplication of any previously paid Replacement Swap Provider Payment) owed to the Swap Provider (after taking into account any upfront payment received from the counterparty for such Distribution Date, in each case prior to a replacement swap agreement) from funds collected and received with respect distributions to Certificateholders. Any amount owed to the Mortgage Loans Swap Provider representing a Swap Termination Payment triggered by a Swap Provider Trigger Event will be deposited into the Swap Account as set forth under Section 4.02(b)(xxxv). On the Business Day prior to each Distribution Date, in the determination case of Available Funds priorities first, second and (ii) amounts received by eighth of Section 4.02(c), and on each Distribution Date, in the Trust case of priorities third, fourth, fifth, sixth, seventh and ninth of Section 4.02(c), the Securities Administrator shall withdraw from the Swap Administrator, for distribution Account any amounts on deposit and apply them as set forth in accordance with subsection (d) below, pursuant to the Swap Administration AgreementSection 4.02(c). For federal income tax purposes, any amounts paid to the Swap Provider as a Net Swap Payment on the Business Day prior to each Distribution Date shall first be deemed paid paid, pursuant to Section 4.08 hereof (i) from REMIC 1 to REMIC 2, pro rata to the REMIC 1 Regular Interests based on the Uncertificated Accrued Interest thereon, (ii) then from REMIC 2 to REMIC 3, pro rata to the REMIC 2 Regular Interests based on Uncertificated Accrued Interest thereon, (iii) then from REMIC 3 to REMIC 4 in respect of the Class SWAP-LTIO Interest, (iv) then from REMIC 4 to REMIC 5 in respect of the Swap IO Interest Interest, and (v) then from the Class CE Certificates to the extent Swap Provider in respect of the amount distributable Net Swap Payment due to the Swap Provider on such Class SWAP-IO Interest Distribution Date. To the extent the payment provided for in the preceding sentence is less than the amount due to the Swap Provider on such Distribution Date, and any remaining amount such additional amounts shall be deemed paid in a manner similar to the deemed payments provided in the preceding sentence to the Holders of the Offered Certificates in respect of a the Class IO Distribution Amount (as defined in Section 4.09(d) below), and then shall be deemed paid to the Class CE Certificates pursuant to the notional principal contract described in Section 4.09(d) below and then to the Swap Provider. Any amounts deemed paid by any REMIC created hereunder pursuant to the preceding two sentences shall not be duplicated by any payments deemed made pursuant to Section 4.08 on the succeeding Distribution Date.
(c) For federal income tax purposes, the Swap Account shall be owned by the beneficial owners Holders of the Class CE Certificates.
(d) For federal income tax purposes, the Trust The Securities Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Residual Certificates) as having entered into a notional principal contract with respect to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of Certificates (other than the Class P, Class CE and Class R Residual Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest Regular Interests in REMIC 4 corresponding to such Class Classes of Certificates over (ii) the amount payable on such Class Classes of Certificates on such Distribution Date (such excess, a “"Class IO Distribution Amount”"). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC RatePool Cap, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder Holders of the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Cap Carryover Amounts to the Holders of the Certificates (other than the Class CE, Class P and Class R Residual Certificates) ), in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest Regular Interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Residual Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC 4 and as having been paid by such Holders to the Swap Securities Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Residual Certificates) shall be treated as representing not only ownership of regular interests Regular Interests in the Master REMICREMIC 4, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing Date.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (ABFC 2007-Wmc1 Trust)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the LIBOR Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, prior to any distribution to any CertificateSwap Termination Payments, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(after taking into account any upfront payment received from the counterparty to a replacement swap agreementi) from funds collected and received with respect to the Mortgage Loans prior Swap Provider, the sum of (x) all Net Swap Payments and (y) any Swap Termination Payment, other than a Defaulted Swap Termination Payment, to the determination of Available Funds and Swap Provider, if any, owed for that Distribution Date;
(ii) amounts received by to the Trust Administrator Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and (iii), to the extent unpaid from Available Funds;
(iv) to the LIBOR Certificates, to pay Basis Risk Carry Forward Amounts as described in Section 4.02(a)(iii)(T)-(U), to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(v) sequentially, to the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, in that order, to pay principal as described in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to maintain the Subordinated Amount at the Specified Subordinated Amount, after giving effect to payments and distributions from Available Funds;
(vi) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, in that order, to pay any Unpaid Interest Amounts as described in Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(vii) to the Swap AdministratorProvider, any Defaulted Swap Termination Payment owed to the Swap Provider for distribution that Distribution Date; and
(viii) to the holders of the Class X Certificates, any remaining amounts. Upon termination of the Trust, any amounts remaining in accordance with subsection (d) below, the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. The Trustee shall account for the Swap Administration 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 Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, Class X Interest) and second, other than any Defaulted Swap Termination Payment, by the Holders of the applicable Class or Classes of LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk Carry Forward Amounts and, without duplication, Upper-Tier Carry Forward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the LIBOR Certificateholders from the Excess Reserve Fund Account or the Swap Account shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE X Certificates (in respect of the Class X Interest or the Class IO Interest, respectively) and then to the respective Class or Classes of LIBOR Certificates. Pursuant In addition, the Trustee shall account for the rights of Holders of each Class of LIBOR Certificates to receive payments of Basis Risk Carry Forward Amounts and, without duplication, Upper-Tier Carry Forward Amounts from the Swap Account (along with Basis Risk Carry Forward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class X Certificateholders in favor of Holders of each such notional principal contractClass. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, all the Holders of Certificates (other than the Class PX Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, Class CE and Class R Certificates) shall be taxable on all income earned thereon, and any amounts reimbursed from the Upper-Tier REMIC to the Swap Account shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts been distributed to the Holders of the Certificates (other than the Class CE, Class P and Class R X Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing Date.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Securitized Asset Backed Receivables LLC Trust 2005-Op2)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of any REMIC.
(b) the Trustee held pursuant to this Agreement. On the Business Day immediately preceding each Distribution Date, prior Swap Termination Payments, Net Swap Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any distribution Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any CertificateUnpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to maintain the Subordinated Amount at the Specified Subordinated Amount, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any remaining unpaid Basis Risk CarryForward Amount, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay any Unpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trustee shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement with a successor Swap Provider meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust Administrator receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Trustee shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Trustee shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment or Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap Account. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the 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 Interest Rate Swap Agreement, the Trust is entitled to receive a payment from a replacement swap provider, the Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment (other than any shall be made from the Swap Termination Payment resulting from a Swap Provider Trigger Event) owed Account to the Swap Provider (after taking into 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 Provider Payment is made to an account any upfront payment received from other than the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Account, then, notwithstanding anything to the Mortgage Loans prior contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid to the determination Swap Provider immediately upon receipt of Available Funds such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust Administrator from to Certificateholders, the Servicer, the Custodian, any Responsible Party, the Trustee or any other Person. The Trustee shall account for the Swap AdministratorAccount as an asset of a grantor trust under subpart E, for distribution in accordance with subsection (d) below, 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 Swap Administration AgreementAccount are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk CarryForward Amounts) from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders beneficial owners of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Closing DateInterest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. The Trustee shall cause any xxxxxxexxxx xxap provider to provide a copy of the related replacement interest rate swap agreement to the Trustee and the Depositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Capital I Inc. Trust 2006-He1)
Swap Account. (a) No later than On the Closing Date, there is hereby established the Supplemental Interest Trust, into which the Depositor shall deposit the Interest Rate Swap Agreement and the Interest Rate Cap Agreement. The Supplemental Interest Trust shall be maintained by the Supplemental Interest Trust Trustee. On the Closing Date, the Supplemental Interest Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—Swap Account” the Certificates (the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvested) as a part of the Trust Fund. The Swap Account shall be an asset Eligible Account, and funds on deposit therein shall be held separate and apart from, and shall not be commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any Distribution Date, Swap Termination Payments, Net Swap Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, other than a Defaulted Swap Termination Payment, owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class B-4 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class B-4 Certificates, to pay Basis Risk CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any remaining unpaid Basis Risk CarryForward Amount, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class B-4 Certificates, to pay any Unpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Supplemental Interest TrustTrust receives a Swap Termination Payment, but the Supplemental Interest Trust Trustee shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor Swap Provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Supplemental Interest Trust receives a Swap Termination Payment and a successor Swap Provider cannot be an asset obtained, then the Supplemental Interest Trust Trustee shall deposit the Swap Termination Payment into the reserve account that is a sub-account of any REMIC.
(b) the Swap Account. On each subsequent Distribution Date, prior to any distribution to any CertificateDate (so long as funds are available in the reserve account), the Supplemental Interest Trust Administrator Trustee shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Receipt due the Supplemental Interest Trust (calculated in accordance with the terms of the original Interest Rate Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap Account. In no event shall the Supplemental Interest Trust Trustee be responsible for the selection of any successor or replacement swap provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the Supplemental Interest Trust entering into a replacement interest rate swap agreement and the Supplemental Interest Trust is entitled to receive a Replacement Swap Provider Payment, the Supplemental Interest Trust Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Notwithstanding the foregoing, any Replacement Swap Provider Payment shall be made from the Swap Account to the Swap Provider 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 Provider Payment is made to an account other than the Swap Account, then any Replacement Swap Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider Payment by the Trust, 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 doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust to Certificateholders, the Servicers, the Responsible Party, the Trustee or any other Person. However, to the extent any Replacement Swap Provider Payment received from a replacement swap provider and paid to the Swap Provider being replaced is less than the full amount of a Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account Provider, any upfront payment received from remaining amount of the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Termination Payment shall be paid to the Mortgage Loans prior to Swap Provider on the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution subsequent Distribution Dates in accordance with subsection this Section 4.06 and Section 4.02 (d) below, pursuant unless the Replacement Swap Provider Payment is paid to the Swap Administration AgreementProvider on a Distribution Date, in which case such remaining amounts will be paid on such Distribution Date). The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from REMIC VI, first, by the REMIC VI Regular Interest Swap-IO and second, other than any Defaulted Swap Termination Payment, from REMIC III by the Holders of the applicable Class or Classes of Offered Certificates (in respect of the Class SWAP-IO Interest Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE X Certificates, and then to the respective Class or Classes of Offered Certificates. Pursuant In addition, the Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Basis Risk CarryForward Amounts from the Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class X Certificateholders in favor of Holders of each such notional principal contractClass. It is the intention of the parties hereto that, all Holders of Certificates (other than for federal and state income and state and local franchise tax purposes, the Class P, Class CE and Class R Certificates) shall Supplemental Interest Trust be treated disregarded as having agreed to pay, on each Distribution Date, to an entity separate from the Holder of the Class CE X Certificates an aggregate amount equal to unless and until the excess, if any, of date when either (ia) the amount payable on such Distribution Date on the regular interest corresponding to such there is more than one Class X Certificateholder or (b) any Class of Certificates over (iiin addition to the Class X Certificates is recharacterized as an equity interest in the Supplemental Interest Trust for federal income tax purposes, in which case it is the intention of the parties hereto that, for federal and state income and state and local franchise tax purposes, the Supplemental Interest Trust be treated as a partnership. The Supplemental Interest Trust will be an “outside reserve fund” within the meaning of Treasury Regulation Section 1.860G-2(h) and not an asset of any Trust REMIC. With respect to the amount payable failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Supplemental Interest Trust Trustee shall send any notices and make any demands, on such Class behalf of Certificates on such Distribution Date (such excessthe Supplemental Interest Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under the terms of the Interest Rate Swap Agreement, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections the Supplemental Interest Trust Trustee shall immediately demand that Mxxxxx Sxxxxxx, the guarantor of the Swap Provider’s obligations under the guarantee of Mxxxxx Sxxxxxx relating to the Interest Rate Swap Agreement, make any and all payments then required to be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable made by Mxxxxx Sxxxxxx pursuant to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balanceguarantee. In addition, pursuant to such notional principal contractin the event a “Delivery Amount” (as defined in the Interest Rate Swap Agreement) was due but was not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, the Holder Supplemental Interest Trust Trustee shall deliver a notice of failure to transfer collateral on the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to the Holders of the Certificates (other than the Class CEnext Business Day following such failure, Class P and Class R Certificates) in accordance with the terms of this the Interest Rate Swap Agreement. Any payments The Supplemental Interest Trust Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates from amounts deemed received Supplemental Interest Trust Trustee and the Depositor. If a Responsible Officer of the Trustee receives written notice that the Swap Provider or its guarantor has been downgraded below the levels set forth in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R CertificatesPart 5(f) of a Class IO Distribution Amount the Interest Rate Swap Agreement and the posting of collateral is required in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement, the Trustee shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to demand that the Swap Administrator pursuant to Provider or its guarantor post collateral in accordance with the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificatesterms of Part 5(f) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateInterest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2007-Nc1)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, Swap Termination Payments, Net Swap Payments owed to the Swap Provider, Net Swap Receipts and, without duplication, amounts distributable on the Class IO Interest for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses that have not yet been reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any distribution remaining unpaid Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amounts or, without duplication, Upper-Tier CarryForward Amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trustee shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor Swap Provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust Administrator receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Trustee shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Trustee shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap Account. In no event shall the Trustee be responsible for the selection of any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the 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 Interest Rate Swap Agreement, the Trust is entitled to receive a payment from a replacement swap provider, the Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment (other than any shall be made from the Swap Termination Payment resulting from a Swap Provider Trigger Event) owed Account to the Swap Provider (after taking into 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 Provider Payment is made to an account any upfront payment received from other than the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Account, then, notwithstanding anything to the Mortgage Loans prior contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid to the determination Swap Provider immediately upon receipt of Available Funds such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust Administrator from to Certificateholders, any Servicer, any Custodian, any Responsible Party, the Trustee or any other Person. The Trustee shall account for the Swap Administrator, for distribution in accordance with subsection (d) below, Account as an asset of the Grantor Trust and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Administration AgreementAccount are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under the terms of the Interest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. In addition, in the event a "Xxxxxexx Xxxxnt" (other than as defined in the Class CEInterest Rate Swap Agreement) was due but was not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, Class P and Class R Certificates) the Trustee shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of this the Interest Rate Swap Agreement. Any payments The Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates from amounts deemed received Trustee and the Depositor. If a Responsible Officer of the Trustee receives written notice that the Swap Provider or its guarantor has been downgraded below the levels set forth in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R CertificatesPart 5(f) of a Class IO Distribution Amount the Interest Rate Swap Agreement and the posting of collateral is required in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement, the Trustee shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to demand that the Swap Administrator pursuant to Provider or its guarantor post collateral in accordance with the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificatesterms of Part 5(f) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateInterest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2006-He6)
Swap Account. (a) No later than On the Closing Date, the Trust Securities Administrator shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the LIBOR Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Securities Administrator held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, prior to any distribution to any CertificateSwap Termination Payments, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(after taking into account any upfront payment received from the counterparty to a replacement swap agreementi) from funds collected and received with respect to the Mortgage Loans prior Swap Provider, the sum of (x) all Net Swap Payments and (y) any Swap Termination Payment, other than a Defaulted Swap Termination Payment, to the determination of Available Funds and Swap Provider, if any, owed for that Distribution Date;
(ii) amounts received by to the Trust Administrator Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iii) sequentially, to the Class M-1, Class M-2, Class M-3, Class B-1, Class B-2, Class B-3 and Clxxx X-0 Xxxxxxicates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and (iii), to the extent unpaid from Available Funds;
(iv) to the LIBOR Certificates, to pay Basis Risk Carry Forward Amounts as described in Section 4.02(a)(iii)(P)-(Q), to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(v) sequentially, to the Class A, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2, Class B-3 and Class B-4 Certificates, in that order, to pay principal as described in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount at the Specified Subordinated Amount as a result of current or prior Realized Losses not previously reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) sequentially, to the Class M-1, Class M-2, Class M-3, Class B-1, Class B-2, Class B-3 and Clxxx X-0 Xxxxxxicates, in that order, to pay any Unpaid Interest Amounts as described in Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(vii) to the Swap AdministratorProvider, any Defaulted Swap Termination Payment owed to the Swap Provider for distribution that Distribution Date; and
(viii) to the holders of the Class X Certificates, any remaining amounts. Upon termination of the Trust, any amounts remaining in accordance with subsection (d) below, the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. The Securities Administrator shall account for the Swap Administration 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 Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, Class X Interest) and second, other than any Defaulted Swap Termination Payment, by the Holders of the applicable Class or Classes of LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk Carry Forward Amounts and, without duplication, Upper-Tier Carry Forward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Securities Administrator to the LIBOR Certificateholders from the Excess Reserve Fund Account or the Swap Account shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Securities Administrator, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE X Certificates (in respect of the Class X Interest or the Class IO Interest, respectively) and then to the respective Class or Classes of LIBOR Certificates. Pursuant In addition, the Securities Administrator shall account for the rights of Holders of each Class of LIBOR Certificates to receive payments of Basis Risk Carry Forward Amounts and, without duplication, Upper-Tier Carry Forward Amounts from the Swap Account (along with Basis Risk Carry Forward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class X Certificateholders in favor of Holders of each such notional principal contractClass. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, all the Holders of Certificates (other than the Class PX Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, Class CE and Class R Certificates) shall be taxable on all income earned thereon, and any amounts reimbursed from the Upper-Tier REMIC to the Swap Account shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts been distributed to the Holders of the Certificates Class X Certificates. In the event the Swap Provider does not deliver the Delivery Amount (other than as defined in the Class CE, Class P and Class R CertificatesInterest Rate Swap Agreement) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract Securities Administrator, the Securities Administrator shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders provide notice of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders failure to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership Provider within one Business Day of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing Datefailure.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Securitized Asset Backed Receivables LLC Trust 2006-Wm1)
Swap Account. (a) No later than On the Closing Date, the Trust Securities Administrator shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall not be an asset invested and shall be held separate and apart from, and shall not be commingled with, any other moneys, including, without limitation, other moneys of any REMIC.
(b) the Securities Administrator held pursuant to this Agreement. On the Business Day immediately preceding each Distribution Date, Swap Termination Payments (including, without duplication, Replacement Swap Provider Payments), Net Swap Payments owed to the Swap Provider, Net Swap Receipts and, without duplication, amounts distributable on the Class IO Interest for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, other than a Defaulted Swap Termination Payment, owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class B-4 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses that have not yet been reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class B-4 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any distribution remaining unpaid Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amounts or, without duplication, Upper-Tier CarryForward Amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class B-4 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trust Securities Administrator shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor swap provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust receives a Swap Termination Payment and a successor swap provider cannot be obtained, then the Securities Administrator shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Securities Administrator shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment or Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate 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 will not be treated as a Swap Termination Payment for purposes of determining the distributions from the Swap Account until the final Distribution Date. In no event shall the Securities Administrator be responsible for the selection of any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that the Trust enters into a replacement interest rate swap agreement and the Trust is entitled to receive a Replacement Swap Provider Payment from a replacement swap provider, the Securities Administrator shall direct the replacement swap provider (or its guarantor) to make such Replacement Swap Provider Payment to the Swap Account. Notwithstanding the foregoing, any Replacement Swap Provider Payment shall be made from the Swap Account to the Swap Provider 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 Provider Payment is made to an account other than the Swap Account, then, notwithstanding anything to the contrary contained in this Agreement, any Replacement Swap Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider Payment by the Trust, 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 doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust to Certificateholders, any Servicer, the Master Servicer, the Securities Administrator, any Custodian, any Responsible Party, the Trustee or any other Person. However, to the extent any Replacement Swap Provider Payment received from a replacement swap provider and paid to the Swap Provider being replaced is less than the full amount of a Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account Provider, any upfront payment received from remaining amount of the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Termination Payment shall be paid to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution Provider on subsequent Distribution Dates in accordance with subsection this Section 4.02 and Section 4.06 (d) below, pursuant unless the Replacement Swap Provider Payment is paid to the Swap Administration Provider on a Distribution Date, in which case such remaining amounts will be paid on such Distribution Date). The Securities Administrator shall account for the Swap Account as an asset of the Grantor Trust and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (without duplication of previously paid Replacement Swap Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Class X REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Securities Administrator to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Securities Administrator, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to such receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts from the Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account), subject to the obligation to pay Class IO Shortfalls, as rights and obligations under a separate limited recourse notional principal contract, the Holder of contract between the Class CE Certificates X Certificateholders and Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Schedule to the Interest Rate Swap Agreement, the Securities Administrator shall send any notices and make any demands, on behalf of the Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under the terms of the Schedule to the Interest Rate Swap Agreement, the Securities Administrator shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. In addition, in the event a "Xxxxxexx Xxxxnt" (other than as defined in the Class CEInterest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, Class P and Class R Certificates) the Securities Administrator shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of this the Schedule to the Interest Rate Swap Agreement. Any payments The Securities Administrator shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates from amounts deemed received Securities Administrator and the Depositor. If a Responsible Officer of the Securities Administrator receives written notice that the Swap Provider or its guarantor has been downgraded below the levels set forth in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R CertificatesPart 5(f) of a Class IO Distribution Amount the Interest Rate Swap Agreement and the posting of collateral is required in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement, the Securities Administrator shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to demand that the Swap Administrator pursuant to Provider or its guarantor post collateral in accordance with the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificatesterms of Part 5(f) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateInterest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2007-He6)
Swap Account. (a) No later than The Securities Administrator, on behalf of the Closing DateTrustee, the Trust Administrator shall establish and maintain with itself, as agent for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for Swap Account (the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—"Swap Account” ("), on behalf of the “Supplemental Interest Trust and the Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedProvider. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of any REMIC.
(b) the Securities Administrator held pursuant to this Agreement. On the Business Day immediately preceding each Distribution Date, Swap Termination Payments (including, without duplication, Replacement Swap Provider Payments), Net Swap Payments owed to the Swap Provider, Net Swap Receipts and, without duplication, amounts distributable on the Class UT-PFIO Interest for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, other than a Defaulted Swap Termination Payment, owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interests and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2, Class B-3 and Class B-4 Certificates, in that order, to pay Accrued Certificate Interests and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the LIBOR Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses that have not yet been reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk Carry Forward Amounts and, without duplication, Upper-Tier Carry Forward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2, Class B-3 and Class B-4 Certificates, to pay Basis Risk Carry Forward Amounts and, without duplication, Upper-Tier Carry Forward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the LIBOR Certificates, any distribution remaining unpaid Basis Risk Carry Forward Amounts, and, without duplication, Upper-Tier Carry Forward Amounts, pro rata, based on their respective remaining unpaid Basis Risk Carry Forward Amounts or, without duplication, Upper-Tier Carry Forward Amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2, Class B-3 and Class B-4 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trust Securities Administrator shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor swap provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust receives a Swap Termination Payment and a successor swap provider cannot be obtained, then the Securities Administrator shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Securities Administrator shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account any upfront payment received from the counterparty to a replacement swap agreement) from funds collected and received with respect to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by Receipt due the Trust Administrator from the Swap Administrator, for distribution in accordance with subsection (d) below, pursuant to the Swap Administration Agreement. For federal income tax purposes, any amounts paid to the Swap Provider on each Distribution Date shall first be deemed paid in respect of the Class SWAP-IO Interest to the extent of the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to the Holders of the Certificates (other than the Class CE, Class P and Class R Certificates) calculated in accordance with the terms of this the original Interest Rate Swap Agreement. Any payments to ) and treat such amount as a Net Swap Receipt for purposes of determining the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment distributions from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests Swap Account. The remaining amount in the Master REMIC reserve account will remain in that account and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall will not be treated as representing not only ownership a Swap Termination Payment for purposes of regular interests in determining the Master REMIC, but also ownership distributions from the Swap Account until the final Distribution Date. In no event shall the Securities Administrator be responsible for the selection of an any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing Daterate swap agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Natixis Real Estate Capital Trust 2007-He2)
Swap Account. (a) No later than On the Closing Date, the Trust Securities Administrator shall establish and maintain with itselfin its name, as agent a separate non-interest-bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of any REMIC.
(b) the Securities Administrator held pursuant to this Agreement. On the Business Day immediately preceding each Distribution Date, Swap Termination Payments, Net Swap Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed on each Distribution Date in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M-and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any distribution remaining unpaid Basis Risk CarryForward Amount and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount or Upper-Tier CarryForward Amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trust Securities Administrator shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor Swap Provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Securities Administrator shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Securities Administrator shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate Swap Agreement) and treat such amount as a Net Swap Receipt for purposes of determining the distributions from the Swap Account. In no event shall the Securities Administrator be responsible for the selection of any successor or replacement swap provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the Trust entering into a replacement interest rate swap following the occurrence of an Additional Termination Event of the type described in Part 1(k)(iv) of the Interest Rate Swap Agreement, the 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 (other than any shall be made from the Swap Termination Payment resulting from a Swap Provider Trigger Event) owed Account to the Swap Provider (after taking into 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 Provider Payment is made to an account any upfront payment received from other than the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Account, then, notwithstanding anything to the Mortgage Loans prior contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid to the determination Swap Provider immediately upon receipt of Available Funds such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust to Certificateholders, any Servicer, the Securities Administrator, the Responsible Parties, the Trustee or any other Person. The Securities Administrator from shall account for the Swap Administrator, for distribution in accordance with subsection (d) below, Account as an asset of the Grantor Trust and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Administration AgreementAccount are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Securities Administrator to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Securities Administrator, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders beneficial owners of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Securities Administrator shall send any notices and make any demands, on behalf of the Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Interest Rate Swap Agreement, the Securities Administrator shall treat such notional principal contract as having a value of $10,000 as immediately demand that Morgan Stanley, the guarantor of the Closing DateSwap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. The Securities Administrator xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the Depositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley IXIS Real Estate Capital Trust 2006-1)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, prior to any distribution to any CertificateSwap Termination Payments, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed on each Distribution Date in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursed, after taking giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any remaining unpaid Basis Risk CarryForward Amount and, without duplication, Upper Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay any Unpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the Trust entering into account any upfront a replacement interest rate swap following the occurrence of an Additional Termination Event of the type described in Part 1(h)(ii) of the Interest Rate Swap Agreement, the Trust is entitled to receive a payment received from the counterparty to a replacement swap agreement) from funds collected and received with respect provider, the Trustee shall direct the replacement swap provider to make such payment to the Mortgage Loans prior Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the determination Swap Provider immediately upon receipt of Available Funds such payment, regardless of whether the date of receipt thereof is a Distribution Date. To the extent that any Replacement Swap Provider 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 Provider immediately upon receipt of such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust Administrator from to Certificateholders, any Servicer, the Responsible Party, the Trustee or any other Person. The Trustee shall account for the Swap AdministratorAccount as an asset of a grantor trust under subpart E, for distribution in accordance with subsection (d) below, 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 Swap Administration AgreementAccount are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Upper-Tier CarryForward Amounts (including, but without duplication, Basis Risk CarryForward Amounts) from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under terms of the Interest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. In addition, in the event a "Xxxxxexx Xxxxnt" (other than as defined in the Class CEInterest Rate Swap Agreement) was due but was not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, Class P and Class R Certificates) the Trustee shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of this the Interest Rate Swap Agreement. Any payments The Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within Trustee and the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateDepositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Home Equity Loan Trust 2006-2)
Swap Account. (a) No later than On the Closing Date, the Trust Securities Administrator shall establish and maintain with itself, as agent for in the name of the Trustee, on behalf of the Supplement Interest Trust, a separate, segregated trust separate account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for the registered holders benefit of MASTR Second Lien Trust 2006the Holders of the Class A-1-1, Mortgage Pass-Through Certificates, Series 2006-1—Swap Account” 1 Certificates and Class CE Certificates (the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvested. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other monies, including, without limitation, other monies of any REMICthe Trustee or of the Securities Administrator held pursuant to this Agreement.
(b) On each Distribution Date, prior to any distribution to any Certificate, the Trust Securities Administrator shall deposit into withdraw all amounts which were deposited in the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to Account as specifically described in this Agreement and the Swap Provider (after taking into account any upfront payment received from the counterparty to a replacement swap agreement) from funds collected Agreement and received with respect to the Mortgage Loans prior to the determination of Available Funds and (ii) distribute such amounts received by the Trust Administrator from the Swap Administrator, for distribution in accordance with subsection (dthe provisions of Section 4.1(a)(vii) below, pursuant to the Swap Administration of this Agreement. For federal income tax purposes, any amounts paid to the Swap Provider on each Distribution Date shall first be deemed paid in respect of the Class SWAP-IO Interest to the extent of the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) The Swap Account constitutes an “outside reserve fund” within the meaning of Treasury Regulation § 1.860G-2(h) and is not an asset of any REMIC. The Holders of the Class CE Certificates shall be the beneficial owner of the Swap Account, subject to the power of the Securities Administrator to transfer amounts under this Agreement. The Securities Administrator shall keep records that accurately reflect the funds on deposit in the Swap Account. The Securities Administrator shall, at the written direction of the majority of the Class CE Certificateholders, invest amounts on deposit in the Swap Account in Eligible Investments. In the absence of written direction to the Securities Administrator from the Majority Class CE Certificateholder, all funds in the Swap Account shall remain uninvested. On each Distribution Date, the Securities Administrator shall distribute, not in respect of any REMIC, any interest earned on the Swap Account in the prior month to the Holders of the Class CE Certificates. For federal income tax purposes, the Swap Account shall will be owned by the beneficial owners of the Class CE Certificatesa disregarded entity.
(d) For federal income tax purposes[Reserved]
(e) [Reserved]
(f) [Reserved]
(g) In the event that the Swap Agreement is terminated prior to the Termination Date (as defined in the Swap Agreement), the Trustee on behalf of the Supplemental Interest Trust, at the direction of the Depositor, shall use reasonable efforts to appoint a successor swap provider using any Swap Termination Payments paid by the Swap Provider. To the extent the Supplemental Interest Trust Administrator shall treat is required to pay a Swap Termination Payment to the Holders Swap Provider, all or a portion of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered such amount received from a replacement swap provider upon entering into a notional principal contract with respect replacement interest rate swap agreement or similar agreement will be applied to the Holders Swap Termination Payment owing to the Swap Provider. If the Trustee on behalf of the Class CE Certificates. Pursuant Supplemental Interest Trust is unable to each locate a qualified successor swap provider, any such notional principal contract, all Holders of Certificates (other than Swap Termination Payments will be deposited in the Class P, Class CE Swap Account and Class R Certificates) shall be treated as having agreed to paythe Securities Administrator, on each Distribution Date, to the Holder of the Class CE Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such subsequent Distribution Date (such excessuntil the termination date of the Swap Agreement or the appointment of a successor swap provider), a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) will withdraw the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal any Net Swap Payment due to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to the Holders of the Certificates Supplemental Interest Trust (other than the Class CE, Class P and Class R Certificates) calculated in accordance with the terms of this the Swap Agreement. Any payments ) and distribute such Net Swap Payment to the Certificates from amounts deemed received in respect holders of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations accordance with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateSection 4.1.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Deutsche Alt-a Securities Mortgage Loan Trust, Series 2006-Ar2)
Swap Account. (a) No later than On the Closing Date, the Trust Securities Administrator shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates and the Certificate Insurer (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of any REMIC.
(b) the Securities Administrator held pursuant to this Agreement. On the Business Day immediately preceding each Distribution Date, prior Swap Termination Payments (including, without duplication, Replacement Swap Provider Payments), Net Swap Payments owed to the Swap Provider, Net Swap Receipts and, without duplication, amounts distributable on the Class IO Interest for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any distribution Swap Termination Payment, other than a Defaulted Swap Termination Payment, owed to any Certificatethe Swap Provider for that Distribution Date;
(iii) to the Certificate Insurer, the Certificate Insurer's Premium for that Distribution Date, to the extent unpaid from Available Funds;
(iv) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(v) to the Certificate Insurer, the amount of any Reimbursement Amount, as well as any other amounts owed to the Certificate Insurer under this Agreement and under the Insurance Agreement, then owing to the Certificate Insurer, and to the extent unpaid from Available Funds;
(vi) sequentially, to the Class M-1, Class M-2, Class B-1, Class B-2, Class B-3 , Class B-4 and Class B-5 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(vii) to the LIBOR Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses that have not yet been reimbursed, after giving effect to payments and distributions from Available Funds;
(viii) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(ix) sequentially, to the Class M-1, Class M-2, Class B-1, Class B-2, Class B-3 , Class B-4 and Class B-5 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(x) to the LIBOR Certificates, any remaining unpaid Basis Risk CarryForward Amounts, and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amounts or, without duplication, Upper-Tier CarryForward Amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(xi) sequentially, to the Class M-1, Class M-2, Class B-1, Class B-2, Class B-3, Class B-4 and Class B-5 Certificates, to pay any Unpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(xii) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xiii) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Securities Administrator shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor swap provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust receives a Swap Termination Payment and a successor swap provider cannot be obtained (or, if the Trust chooses (with the consent of the Certificate Insurer), not to enter into a replacement Interest Rate Swap Agreement), then the Securities Administrator shall deposit the Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Securities Administrator shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment or Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate 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 will not be treated as a Swap Termination Payment for purposes of determining the distributions from the Swap Account until the final Distribution Date. In no event shall the Securities Administrator be responsible for the selection of any successor or replacement Swap Provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that the Trust enters into a replacement interest rate swap agreement and the Trust is entitled to receive a Replacement Swap Provider Payment from a replacement swap provider, the Securities Administrator shall direct the replacement swap provider (or its guarantor) to make such Replacement Swap Provider Payment to the Swap Account. Notwithstanding the foregoing, any Replacement Swap Provider Payment shall be made from the Swap Account to the Swap Provider 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 Provider Payment is made to an account other than the Swap Account, then, notwithstanding anything to the contrary contained in this Agreement, any Replacement Swap Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider Payment by the Trust, 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 doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust to Certificateholders, the Servicer, the Master Servicer, the Securities Administrator, the Trustee or any other Person. However, to the extent any Replacement Swap Provider Payment received from a replacement swap provider and paid to the Swap Provider being replaced is less than the full amount of a Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account Provider, any upfront payment received from remaining amount of the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Termination Payment shall be paid to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution Provider on subsequent Distribution Dates in accordance with subsection this Section 4.02 and Section 4.06 (d) below, pursuant unless the Replacement Swap Provider Payment is paid to the Swap Administration Provider on a Distribution Date, in which case such remaining amounts will be paid on such Distribution Date). The Securities Administrator shall account for the Swap Account as an asset of the Grantor Trust and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments (without duplication of previously paid Replacement Swap Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Class X REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Securities Administrator to the LIBOR Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Securities Administrator, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceLIBOR Certificates. In addition, pursuant the Securities Administrator shall account for the rights of Holders of each Class of LIBOR Certificates to such receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts from the Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account), subject to the obligation to pay Class IO Shortfalls, as rights and obligations under a separate limited recourse notional principal contract, the Holder of contract between the Class CE Certificates X Certificateholders and Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Schedule to the Interest Rate Swap Agreement, the Securities Administrator shall send any notices and make any demands, on behalf of the Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under the terms of the Schedule to the Interest Rate Swap Agreement, the Securities Administrator shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. In addition, in the event a "Xxxxxexx Xxxxnt" (other than as defined in the Class CEInterest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, Class P and Class R Certificates) the Securities Administrator shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of this the Schedule to the Interest Rate Swap Agreement. Any payments The Securities Administrator shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates from amounts deemed received Securities Administrator and the Depositor. If a Responsible Officer of the Securities Administrator receives written notice that the Swap Provider or its guarantor has been downgraded below the levels set forth in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R CertificatesPart 5(f) of a Class IO Distribution Amount the Interest Rate Swap Agreement and the posting of collateral is required in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement, the Securities Administrator shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to demand that the Swap Administrator pursuant to Provider or its guarantor post collateral in accordance with the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificatesterms of Part 5(f) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing DateInterest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2007-Nc4)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, prior to any distribution to any CertificateSwap Termination Payments, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(after taking into account any upfront payment received from the counterparty to a replacement swap agreementi) from funds collected and received with respect to the Mortgage Loans prior Swap Provider, all Net Swap Payments, if any, owed to the determination of Available Funds and Swap Provider for that Distribution Date;
(ii) amounts received by the Trust Administrator from to the Swap AdministratorProvider, any Swap Termination Payment, other than a Defaulted Swap Termination Payment, if any, owed to the Swap Provider for distribution that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in accordance with subsection Section 4.02(a)(i), to the extent unpaid from Available Funds;
(div) belowsequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to maintain the Subordinated Amount at the Specified Subordinated Amount, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any remaining unpaid Basis Risk CarryForward Amount, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 Certificates, to pay any Unpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. The Trustee shall account for the Swap Administration 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 Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk CarryForward Amounts) from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders beneficial owners of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall take any and all such actions as may be necessary or appropriate to enforce the rights of the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing Datewith respect thereto.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2005-He5)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of the Trustee held pursuant to this Agreement. On any REMIC.
(b) On each Distribution Date, prior to any distribution to any CertificateSwap Termination Payments, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
(after taking into account any upfront payment received from the counterparty to a replacement swap agreementi) from funds collected and received with respect to the Mortgage Loans prior Swap Provider, all Net Swap Payments, if any, owed to the determination of Available Funds and Swap Provider for that Distribution Date;
(ii) amounts received by the Trust Administrator from to the Swap AdministratorProvider, any Swap Termination Payment, other than a Defaulted Swap Termination Payment, if any, owed to the Swap Provider for distribution that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in accordance with subsection Section 4.02(a)(i), to the extent unpaid from Available Funds;
(div) belowsequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to maintain the Subordinated Amount at the Specified Subordinated Amount, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any remaining unpaid Basis Risk CarryForward Amount, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class X-0, Xxxxx X-2 and Class B-3 Certificates, to pay any Unpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. The Trustee shall account for the Swap Administration 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 Swap Account are the Class X Certificateholders. For federal income tax purposes, any amounts Net Swap Payments and Swap Termination Payments payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Upper Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal X Interest and then to the excess, if any, respective Class or Classes of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such notional principal contractreceive payments of Upper-Tier Carry Forward Amounts (including, but without duplication Basis Risk CarryForward Amounts) from the Holder of Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account) as rights in a separate limited recourse interest rate cap contract written by the Class CE Certificates X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders beneficial owners of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall take any and all such actions as may be necessary or appropriate to enforce the rights of the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing Datewith respect thereto.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2005-Wmc6)
Swap Account. (a) No later than On the Closing Date, the Trust Administrator Trustee shall establish and maintain with itselfin its name, as agent a separate non-interest-bearing trust account for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for benefit of the registered holders of MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—the Certificates (the "Swap Account” (") as a part of the “Swap Account”). Such account shall be an Eligible Account and amounts therein shall be held uninvestedTrust Fund. The Swap Account shall be an asset of the Supplemental Interest TrustEligible Account, but and funds on deposit therein shall be held separate and apart from, and shall not be an asset commingled with, any other moneys, including, without limitation, other moneys of any REMIC.
(b) the Trustee held pursuant to this Agreement. On each Distribution Date, Swap Termination Payments (including, without duplication, Replacement Swap Provider Payments), Net Swap Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited into the Swap Account. Funds in the Swap Account will be distributed on each Distribution Date in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including, without limitation, any Senior Defaulted Swap Termination Payment, but not including any other Defaulted Swap Termination Payment, owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i), to the extent unpaid from Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Cxxxx X-0, Xxxxs B-2 and Class B-3 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and, in the same manner and order of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary to restore the Subordinated Amount to the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their Class Certificate Balances for such Distribution Date, up to the Swap Payment Allocation for each Class of Class A Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Cxxxx X-0, Xxxxs B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M-and Class B Certificates and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any distribution remaining unpaid Basis Risk CarryForward Amount and, without duplication, Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount or Upper-Tier CarryForward Amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Cxxxx X-0, Xxxxs B-2 and Class B-3 Certificates, to pay any CertificateUnpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(x) to the Swap Provider, any Defaulted Swap Termination Payment, other than a Senior Defaulted Swap Termination Payment, owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining amounts. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Trustee shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by the Depositor with a successor swap provider (or its guarantor) meeting the ratings requirements set forth in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminated, so long as the Swap Termination Payment is sufficient to obtain such replacement interest rate swap agreement. In the event that the Trust Administrator receives a Swap Termination Payment, and a successor swap provider (or its guarantor) cannot be obtained, then the Trustee shall deposit any Swap Termination Payment into the reserve account that is a sub-account of the Swap Account. On each subsequent Distribution Date (so long as funds are available in the reserve account), the Trustee shall withdraw from the reserve account and deposit into the Swap Account: (i) Account an amount equal to the amount of any Net Swap Payment or Receipt due the Trust (calculated in accordance with the terms of the original Interest Rate 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 will not be treated as a Swap Termination Payment (other than for purposes of determining the distributions from the Swap Account until the final Distribution Date. In no event shall the Trustee be responsible for the selection of any successor or replacement swap provider or any shortfalls caused by a failure to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any amounts remaining in the Swap Account shall be distributed pursuant to the priorities set forth in this Section 4.06. In the event that, upon the Trust entering into a replacement interest rate swap following the occurrence of an Additional Termination Event of the type described in Part 1(q)(iv) of the Schedule to the Interest Rate Swap Agreement, the Trust is entitled to receive a payment from a replacement swap provider, the Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment resulting shall be made from a the Swap Provider Trigger Event) owed Account to the Swap Provider (after taking into 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 Provider Payment is made to an account any upfront payment received from other than the counterparty to a replacement swap agreement) from funds collected and received with respect Swap Account, then, notwithstanding anything to the Mortgage Loans prior contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid to the determination Swap Provider immediately upon receipt of Available Funds such Replacement Swap Provider Payment, regardless of whether the date of receipt thereof is a Distribution Date and (ii) amounts received without regard to anything to the contrary contained in this Agreement. For the avoidance of doubt, the parties agree that the Swap Provider shall have first priority to any Replacement Swap Provider Payment over the payment by the Trust Administrator from to Certificateholders, any Servicer, the Responsible Party, the Trustee or any other Person. The Trustee shall account for the Swap Administrator, for distribution in accordance with subsection (d) below, Account as an asset of the Grantor Trust and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Administration AgreementAccount are the Class X Certificateholders. For federal income tax purposes, Net Swap Payments and Replacement Swap Provider Payments, including, without duplication, any amounts Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Provider on each Distribution Date shall first be deemed paid Account from the Class X REMIC, first, by the Holder of the Class X Certificates (in respect of the Class SWAP-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent of provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount Trustee to the Offered Certificateholders shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(c) For accounted for by the Trustee, for federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect amounts paid first to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of X Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder in respect of the Class CE Certificates an aggregate amount equal to the excess, if any, of X Interest and (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of such balanceOffered Certificates. In addition, pursuant the Trustee shall account for the rights of Holders of each Class of Offered Certificates to such receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts from the Swap Account (along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Account), subject to the obligation to pay Class IO Shortfalls as rights and obligations under a separate limited recourse notional principal contract, the Holder of contract between the Class CE Certificates X Certificateholders and Holders of each such Class. The Swap Account shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account for all federal income tax purposes, and shall be taxable on all income earned thereon. With respect to the failure of the Swap Provider to perform any of its obligations under the Interest Rate Swap Agreement, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreement, or the termination of the Interest Rate Swap Agreement, the Trustee shall send any notices and make any demands, on behalf of the Trust as are required under the Interest Rate Swap Agreement. To the extent that the Swap Provider fails to make any payment required under the terms of the Interest Rate Swap Agreement, the Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required to be made by Morgan Stanley pursuant to such guarantee. In addition, in the event a "Xxxxxexx Xxxxnt" (other than as defined in the Class CEInterest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, Class P and Class R Certificates) the Trustee shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of this the Interest Rate Swap Agreement. Any payments The Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Certificates Trustee and the Depositor. If a Responsible Officer of the Trustee receives written notice, from amounts deemed received Standard & Poor's, that the Swap Provider or its guarantor has been downgraded below the levels set forth in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates Part 5(j) or (other than the Class CE, Class P and Class R Certificatesk) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders Schedule to the Interest Rate Swap Administrator pursuant Agreement and the posting of collateral is required in accordance with the terms of Part 5(j) or (k) of the Schedule to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposesInterest Rate Swap Agreement, the Trust Administrator Trustee shall treat such notional principal contract as having a value demand that the Swap Provider or its guarantor post collateral in accordance with the terms of $10,000 as Part 5(j) or (k) of the Closing DateSchedule to the Interest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Ixis Real Estate Capital Trust 2006-2)
Swap Account. (a) No later The Depositor hereby directs the Securities Administrator, in its capacity as Supplemental Interest Trustee to execute, deliver, make the representations and warranties and perform its obligations under the Swap Agreement on the Startup Date and thereafter on behalf of the Supplemental Interest Trust, and to establish the Swap Account pursuant to Section 7.02. The Seller, the Depositor, the Servicer, the Master Servicer, the Trustee and the Certificateholders, by their acceptance of such Certificates acknowledge and agree that the Securities Administrator shall execute, deliver and perform its obligations under the Swap Agreement and shall do so solely in its capacity as Supplemental Interest Trustee of the Supplemental Interest Trust and not in its individual capacity. Promptly upon receipt, the Supplemental Interest Trustee will deposit into the Swap Account all funds received from the Securities Administrator pursuant to Section 7.03(a) and Section 7.03(b) clause 18. and all funds received from the Swap Provider under the Swap Agreement. Amounts on deposit in the Swap Account shall be invested in accordance with Section 7.05.
(b) On each Distribution Date (or, in the case of payments to the Swap Provider that occur prior to each Distribution Date, one Business Day prior to such Distribution Date to the extent such payments are available to be made on the related Distribution Date) after the Startup Day but not beyond the June 2013 Distribution Date, to the extent necessary, following all distributions pursuant to Section 7.03(b), the Supplemental Interest Trustee shall apply, all amounts, if any, on deposit in the Swap Account (other than investment earnings on funds held in the Swap Account, which shall be for the account of the Servicer) in the following order of priority:
(i) first, to the Swap Provider, any Net Swap Payment owed to the Swap Provider pursuant to the Swap Agreement for such Distribution Date and any Net Swap Payments owed to the Swap Provider remaining unpaid from prior Distribution Dates;
(ii) second, to the Swap Provider, any Swap Termination Payment owed to the Swap Provider not resulting from a Swap Provider Trigger Event pursuant to the Swap Agreement;
(iii) third, to the Offered Certificates (other than the Closing Class M-7B, Class M-8 and Class M-9B Certificates), the Net Subordination Deficiency for the applicable Distribution Date, allocated in the Trust Administrator shall establish order of priority set forth in Section 7.03(b) clauses C.3. through C.12.;
(iv) fourth, sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7A and maintain with itself, as agent for the Trustee, a separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as TrusteeClass M-9A Certificates, in trust for that order, any related Class Principal Carryover Shortfall, to the registered holders of MASTR Second Lien Trust 2006-1extent remaining undistributed after the distributions pursuant to Section 7.03(b);
(v) fifth, Mortgage Pass-Through concurrently, to the Senior Certificates, Series 2006any related Class Interest Carryover Shortfall, pro rata, to the extent remaining undistributed based on such amounts after the distributions pursuant to Section 7.03(b);
(vi) sixth, sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7A and Class M-9A Certificates, in that order, any related Class Interest Carryover Shortfall, to the extent remaining undistributed after the distributions pursuant to Section 7.03(b);
(vii) seventh, to pay the applicable Certificateholders (other than the Class M-7B, Class M-8 and Class M-9B Certificates) any Net WAC Cap Carryover to the extent remaining undistributed after the distributions pursuant to Section 7.03(b), allocated in the order of priority set forth in Section 7.03(b) clauses C.16. and C.17.;
(viii) eighth, to the Swap Provider, any Swap Termination Payments resulting from a Swap Provider Trigger Event; and
(ix) ninth, to the Class X-1—Swap Account” IO Certificates, any remainder; provided, that the cumulative amount of distributions pursuant to clauses (iii) and (iv) above on each Distribution Date, and all prior Distribution Dates, will not exceed the “Swap Account”). Such account shall be an Eligible Account cumulative amount of Realized Losses with respect to that Distribution Date and amounts therein shall be held uninvested. all prior Distribution Dates.
(c) [Reserved].
(d) The Swap Account shall be treated as an “outside reserve fund” within the meaning of Treasury Regulation Section 1.8606-2(h) and shall not be an asset of any REMIC or the Trust Estate created pursuant to this Agreement and, instead, shall be an asset of the Supplemental Interest Trust, but . For state and federal tax purposes the beneficial owners of the Class X-IO Certificates shall not be an asset the beneficial owners of any REMICthe Swap Account.
Section 7.13. Tax Treatment of the Offered Certificates: Class X-IO Shortfall Amounts and Net WAC Cap Carryover Amounts.
(b) On each Distribution Date, prior to any distribution to any Certificate, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account any upfront payment received from the counterparty to a replacement swap agreement) from funds collected and received with respect to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution in accordance with subsection (d) below, pursuant to the Swap Administration Agreement. For federal income tax purposes, any amounts paid to the Swap Provider on each Distribution Date shall first be deemed paid in respect of the Class SWAP-IO Interest to the extent of the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(ca) For federal income tax purposes, each Class of Offered Certificates represents (i) ownership of REMIC regular interests, (ii) obligations to make payments to the Swap Account Supplemental Interest Trust in respect of Class X-IO Shortfall Amounts, and (iii) the rights to receive payments in respect of Net WAC Cap Carryovers. With respect to any Class of Offered Certificate, for federal income tax purposes, the Securities Administrator shall be owned by treat the beneficial obligation to make payments in respect of Class X-IO Shortfall Amounts and the rights to receive payments in respect of Net WAC Cap Carryovers as interests in a notional principal contract between the owners of the Offered Certificates on the one hand and the owners of the Class CE X-IO Certificates on the other.
(b) To the extent a Class X-IO Shortfall Amount exists on any Distribution Date, such Class X-IO Shortfall Amount shall be allocated among the Classes of Offered Certificates in the following order of priority: (i) first, to each Class of Offered Certificates to the extent that the interest accrued on such Class for the related Interest Period at the applicable Certificate Rate (determined by substituting REMIC II Net WAC Cap for the relevant Net WAC Cap in the definition thereof) exceeds the amount of interest distributable thereon at the applicable Certificate Interest Rate; and (ii) in reduction of principal distributions that would have been made on the Offered Certificates for such Distribution Date had there been no Class X-IO Shortfall Amount, first to the Subordinate Certificates in reverse order of seniority, and then pro-rata among the Senior Certificates in proportion to the principal distributions (determined without regard to Class X-IO Shortfall Amounts) on each such Class. To the extent a Class X-IO Shortfall Amount is allocated to any Class of Offered Certificates, that Class shall be treated as having received a distribution on a REMIC regular interest in respect of such amount and then as having paid such amount to the Supplemental Interest Trust on behalf of the owners of the Class X-IO Certificates pursuant to a notional principal contract.
(c) To the extent any Class of Offered Certificates receives a payment in respect of Net WAC Cap Carryovers on any Distribution Date, regardless of whether such payment is made from the Net WAC Cap Carryover Reserve Fund or the Supplemental Interest Trust, such payment shall be treated as a payment made under the terms of a notional principal contract by the owners of the Class X-IO Certificates. Moreover, to the extent that on any Distribution Date the amount of interest payable on any Class of Offered Certificates at the applicable Certificate Interest Rate exceeds the REMIC II Net WAC Cap, such excess shall also be treated as a payment under the terms of the notional principal contract by the owner of the Class X-IO Certificates.
(d) For federal income tax reporting purposes, the Trust Administrator shall treat the Holders of Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect to the Holders of the Class CE Certificates. Pursuant to each such notional principal contract, all Holders of Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder an aggregate value in favor of the Class CE owners of the Offered Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) in the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts to the Holders of the Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class CE, Class P and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator shall treat such notional principal contract as having a value of $10,000 as of the Closing Date57,609,758.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Home Equity Loan Trust 2007-Fre1)
Swap Account. (a) No later than The Trustee is hereby authorized and directed in its capacity as Supplemental Interest Trustee to enter into the Closing Swap Agreement on behalf of the Supplemental Interest Trust and to establish the Swap Account pursuant to Section 7.02(a). Promptly upon receipt, the Supplemental Interest Trustee will deposit into the Swap Account all funds received from the Trustee pursuant to Section 7.03(a) and Section 7.03(b) clause 21 and all funds received from the Swap Provider under the Swap Agreement. Amounts on deposit in the Swap Account shall be invested in accordance with Section 7.05.
(b) On each Distribution Date after the Startup Day but not beyond the September 2014 Distribution Date, to the Trust Administrator extent necessary, following all distributions pursuant to Section 7.03(b), the Supplemental Interest Trustee shall establish and maintain with itselfapply, as agent all amounts, if any, on deposit in the Swap Account (other than investment earnings on funds held in the Swap Account, which shall be for the Trusteeaccount of the Servicer) in the following order of priority:
(i) first, to the Swap Provider, any Net Swap Payment owed to the Swap Provider pursuant to the Swap Agreement for such Distribution Date and any Net Swap Payments owed to the Swap Provider remaining unpaid from prior Distribution Dates;
(ii) second, to the Swap Provider, any Swap Termination Payment owed to the Swap Provider not resulting from a separateSwap Provider Trigger Event pursuant to the Swap Agreement;
(iii) third, segregated trust account titledconcurrently, “to the Senior Certificates, any related Class Interest Carryover Shortfall, pro rata, to the extent remaining undistributed after the distributions pursuant to Section 7.03(b);
(iv) fourth, sequentially, to the Class X-0, Xxxxx Fargo BankX-0, N.A. as TrusteeClass M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class M-11 Certificates, in trust that order, any related Class Interest Carryover Shortfall, to the extent remaining undistributed after the distributions pursuant to Section 7.03(b);
(v) fifth, to the Senior Certificates and Subordinate Certificates, the Net Subordination Deficiency for the registered holders applicable Distribution Date, allocated in the order of MASTR Second Lien Trust 2006-1priority set forth in clauses 4. through 15. under Section 7.03(b);
(vi) sixth, Mortgage Pass-Through sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class M-11 Certificates, Series 2006in that order, any related Class Principal Carryover Shortfall, to the extent remaining undistributed after the distributions pursuant to Section 7.03(b);
(vii) seventh, to pay the applicable Certificateholders any Net WAC Cap Carryover to the extent remaining undistributed after the distributions pursuant to Section 7.03(b), allocated in the order of priority set forth in clauses 19. and 20. of 7.03(b);
(viii) eighth, to the Swap Provider, any Swap Termination Payments resulting from a Swap Provider Trigger Event; and
(ix) ninth, on any Distribution Date prior to the September 2014 Distribution Date, to the Class X-1—IO Certificates, any remainder; provided, that the cumulative amount of distributions pursuant to clauses (v) and (vi) above on each Distribution Date, and all prior Distribution Dates, will not exceed the cumulative amount of Realized Losses with respect to that Distribution Date and all prior Distribution Dates. Any amount remaining on deposit in the Swap Account” (Account after the “Swap Account”). Such account application of funds pursuant to this Section 7.12(b) on the September 2014 Distribution Date shall be an Eligible Account and amounts therein shall be held uninvested. paid from the separate trust referred to in subsection (d) below to (or upon the order of) the Servicer.
(c) [Reserved].
(d) The Swap Account shall be treated as an “outside reserve fund” within the meaning of Treasury Regulation Section 1.8606-2(h) and shall not be an asset of any REMIC or the Trust Estate created pursuant to this Agreement and, instead, shall be an asset of the Supplemental Interest Trust, but . For state and federal tax purposes the beneficial owners of the Class X-IO Certificates shall not be an asset the beneficial owners of any REMICthe Swap Account.
(b) On each Distribution Date, prior to any distribution to any Certificate, the Trust Administrator shall deposit into the Swap Account: (i) the amount of any Net Swap Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after taking into account any upfront payment received from the counterparty to a replacement swap agreement) from funds collected and received with respect to the Mortgage Loans prior to the determination of Available Funds and (ii) amounts received by the Trust Administrator from the Swap Administrator, for distribution in accordance with subsection (d) below, pursuant to the Swap Administration Agreement. For federal income tax purposes, any amounts paid to the Swap Provider on each Distribution Date shall first be deemed paid in respect of the Class SWAP-IO Interest to the extent of the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount shall be deemed paid in respect of a Class IO Distribution Amount (as defined below).
(ce) For federal income tax purposes, the Swap Account shall be owned by the beneficial owners of the Class CE Certificates.
(d) For federal income tax purposes, the Trust Administrator Trustee shall treat the Holders of Offered Certificates (other than the Class P, Class CE and Class R Certificates) as having entered into a notional principal contract with respect to the Holders of the Class CE X-IO Certificates. Pursuant to each such notional principal contract, all Holders of Offered Certificates (other than the Class P, Class CE and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class CE X-IO Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the regular interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class X-IO Distribution Shortfall Amount”). A Class X-IO Distribution Shortfall Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Net WAC RateCap, and a Class X-IO Distribution Shortfall Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class CE X-IO Certificates shall be treated as having agreed to pay Net WAC Rate Carryover Amounts Cap Carryovers to the Holders of the Offered Certificates (other than the Class CE, Class P and Class R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a regular interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Offered Certificates (other than the Class CE, Class P and Class R Certificates) of a Class X-IO Distribution Shortfall Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in the Master REMIC and as having been paid by such Holders to the Swap Administrator Supplemental Interest Trustee pursuant to the notional principal contract. Thus, each Offered Certificate (other than the Class P and Class R Certificates) shall be treated as representing not only ownership of regular interests in the Master REMIC, but also ownership of an interest in, and obligations with respect to, a notional principal contract. For federal income tax purposes, the Trust Administrator Supplemental Interest Trustee shall treat such notional principal contract as having a value of $10,000 as of the Closing Date.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Centex Home Equity Loan Trust 2006-A)
