Swap Account. On the Closing Date, the Securities Administrator shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 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 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 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 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 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. 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 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 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 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 shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 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 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 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. On (a) No later than the Closing Date, the Securities Trust Administrator shall establish and maintain in its namewith itself, as agent for the Trustee, a separate non-interest bearing separate, segregated trust account titled, “Xxxxx Fargo Bank, N.A. as Trustee, in trust for the benefit of the registered holders of the Certificates MASTR Second Lien Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1—Swap Account” (the "“Swap Account") as a part of the Trust Fund”). Such account shall be an Eligible Account and amounts therein shall be held uninvested. The Swap Account shall be an Eligible Accountasset of the Supplemental Interest Trust, and funds on deposit therein shall be held separate and apart from, and but shall not be commingled with, an asset of any other moneys, including, without limitation, other moneys of the Securities Administrator held pursuant to this Agreement. REMIC.
(b) On the Business Day immediately preceding each Distribution Date, Swap Termination Paymentsprior to any distribution to any Certificate, Net Swap Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited Trust Administrator shall deposit 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 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 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 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 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. In no event shall the Securities Administrator be responsible for the selection of any successor Payment 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 shall be made (other than any Swap Termination Payment resulting from the a Swap Account Provider Trigger Event) owed to the Swap Provider immediately upon receipt (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 such payment, regardless of whether Available Funds and (ii) amounts received by 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 Trust Administrator from the Swap AccountAdministrator, thenfor distribution in accordance with subsection (d) below, notwithstanding anything to the contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid pursuant 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 without regard to anything to the contrary contained in this Administration 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 shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, Net Swap Payments and Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable any amounts paid to the Swap Provider on each Distribution Date shall first be deemed to be paid to the Swap 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, to the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders extent of the applicable amount distributable on such Class or Classes of Offered Certificates (SWAP-IO Interest on such Distribution Date, and any remaining amount shall be deemed paid in respect of a Class IO ShortfallsDistribution Amount (as defined below).
(c) as and to the extent provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administrator, for 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 amounts paid first having entered into a notional principal contract with respect to the Holders of the Class X 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 Class X Interest Master REMIC and (to the extent remaining after payments as having been paid by such Holders to the Swap Provider) Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class IO InterestP 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 then to the respective Class or Classes of Offered Certificatesobligations with respect to, a notional principal contract. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account for all For federal income tax purposes, and the Trust Administrator shall be taxable on all income earned thereon. With respect to the failure treat such notional principal contract as having a value of $10,000 as 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 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the DepositorClosing 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, the Securities Administrator shall establish and maintain in its namethe name of the Trustee, on behalf of the Supplement Interest Trust, a separate non-interest bearing trust account for the benefit of the holders Holders of the Class A-1-1 Certificates and Class CE Certificates (the "“Swap Account") as a part of the Trust Fund”). The Swap Account shall be an Eligible Account, and funds on deposit therein shall be held separate and apart from, and shall not be commingled with, any other moneysmonies, including, without limitation, other moneys monies of the Trustee or of the Securities Administrator held pursuant to this Agreement. .
(b) On the Business Day immediately preceding each Distribution Date, the Securities Administrator shall withdraw all amounts which were deposited in the Swap Termination PaymentsAccount as specifically described in this Agreement and the Swap Agreement and distribute such amounts in accordance with the provisions of Section 4.1(a)(vii) of this Agreement.
(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, Net Swap Payments owed subject to the Swap Provider and Net Swap Receipts for power of the Securities Administrator to transfer amounts under this Agreement. The Securities Administrator shall keep records that Distribution Date will be deposited into accurately reflect the funds on deposit in the Swap Account. Funds 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 will be distributed a disregarded entity.
(d) [Reserved]
(e) [Reserved]
(f) [Reserved]
(g) In the event that the Swap Agreement is terminated prior to the Termination Date (as defined in the following order Swap Agreement), the Trustee on behalf of priority:
(i) 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 is required to pay a Swap Termination Payment 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 or a portion of such amount received 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 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 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 Securities Administrator shall use the Swap Termination Payment to enter replacement swap provider upon entering 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 similar agreement will be applied to the Swap Termination Payment owing to the Swap Provider. If the Trustee on behalf of the Supplemental Interest Trust is sufficient unable to obtain locate a qualified successor swap provider, any such replacement interest rate swap agreement. In the event that the Trust receives a Swap Termination Payment Payments will be deposited in the Swap Account 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 Administrator, on each subsequent Distribution Date (so long as funds are available in until the reserve accounttermination date of the Swap Agreement or the appointment of a successor swap provider), the Securities Administrator shall will withdraw from the reserve account and deposit into the Swap Account an amount equal to the amount of any Net Swap Receipt Payment due to the Supplemental Interest Trust (calculated in accordance with the terms of the original Interest Rate Swap Agreement) and treat distribute such amount as a Net Swap Receipt for purposes of determining Payment to 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 holders of the Trust, Certificates in accordance with Section 4.1.
(h) Two Business Days prior to each Distribution Date on which any amounts remaining in the Swap Account shall amount will 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 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 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 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 shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the UpperA-1-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X 1 Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In additionaccordance with Section 4.1(a)(vii), the Securities Administrator shall account for determine the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset amount of any Trust REMIC. Furthermore, the Holders of the Class X Certificates shall be the beneficial owners of the Swap Account A-1-1 Amount for all federal income tax purposes, that Distribution Date and shall be taxable on all income earned thereon. With respect report such Class A-1-1 Amount to the failure of the Swap Provider to perform any of its obligations under on that same day in accordance with the Interest Rate Swap Agreementnotice provisions contained in Section 11.5 hereof; provided, the breach by the Swap Provider of any of its representations and warranties made pursuant to the Interest Rate Swap Agreementhowever, or the termination of the Interest Rate Swap Agreement, that the Securities Administrator shall send any notices and make any demands, on behalf of the Trust as are required be under the Interest Rate Swap Agreement. To the extent that no obligation to report such Class A-1-1 Amount to the Swap Provider fails to make any payment required under terms of unless it has first received 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 Cap Contract Report for 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 DepositorDistribution 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. On (a) No later than the Closing Date, the Securities Administrator Trustee shall establish and maintain in its namewith itself, as agent for the Trustee, a separate non-interest bearing separate, segregated trust account for the benefit of the holders of the Certificates (the titled, "Swap Account") , Wells Fargo Bank, N.A., as a part Xxxxxee, in trust for the Swap Provider and the registered holders of the Trust Fund. The Swap Account Park Place Securities, Inc., Asset-Backed Pass-Through Certificates, Series 2004-WHQ2." Such account shall be an Eligible Account, Account and funds on deposit amounts 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. uninvested.
(b) On the Business Day immediately preceding each Distribution Date, Swap Termination Paymentsprior to any distribution to any Certificate, Net Swap Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited Trustee shall deposit into the Swap Account. Funds in the Swap Account will be distributed in the following order of priority:
pursuant to 3.05(c)(i): (i) to the Swap Provider, all amount of any 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 or Swap Termination Payment owed to the Swap Provider for that Distribution Date;
(iii) from funds collected and received with respect 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), Mortgage Loans prior 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 determination 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 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 (viiii) 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 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 Securities Administrator shall use the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed amounts received 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 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 Trustee 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 thatswap administration agreement, upon the Trust entering into a replacement interest rate swap following the occurrence of an Additional Termination Event dated as of the type described Closing Date, among the Wells Fargo Bank, N.A. in Part 1(h)(iiixx xxpacity as Trustee, Wells Fargo Bank, N.A. in ixx xxpacity as Swap Administrator and Ameriquest Mortgage Company (the "Swap Administration Agreement").
(c) 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 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 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 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 shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, Net Swap Payments and Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable to the Swap Provider Administration Account shall be deemed to be paid to the Swap Account from the Upper-Tier REMIC, first, owned by the majority Holder of the Class X Certificates (in respect of CE Certificates. Notwithstanding 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administratorforegoing, for federal income tax purposes, as amounts paid first to the Holders calculations of Uncertificated Interest accrued on the Class X Certificates in respect of the Class X SWAP-IO Interest and (shall be shall be deemed to the extent remaining after payments have been paid to the Swap Provider) Account regardless of any reduction in the Class IO Interest, and then actual amounts paid to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk CarryForward Amounts) from the Swap Account (along with Basis Risk CarryForward Amounts payable resulting 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders calculation of the Class X Certificates shall be the beneficial owners of the Net 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 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 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the DepositorPayment.
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. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1X-0, Class B-2 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 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 maintain the Subordinated Amount to at the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursedAmount, 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-1X-0, Class B-2 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 LIBOR 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 B-1X-0, Class B-2 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 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 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. 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 Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 the Custodian, any Responsible Party, the Trustee or any other Person. The Securities Administrator Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier 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 LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered LIBOR Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered LIBOR Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered LIBOR Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator 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 Securities Administrator xxxxx xxxxx xny replacement swap Trustee shall cause any xxxxxxexxxx xxap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator 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. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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 other than a Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment Payment, if any, 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-1Clasx X-0, Class B-2 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 maintain the Subordinated Amount to at the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursedAmount, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk Upper-Tier CarryForward Amounts andincluding, without duplication, Upper Tier 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-1Clasx X-0, Class B-2 Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk Upper-Tier CarryForward Amounts, andAmounts including, without duplication, Upper Tier 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, and, without duplication, Upper Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount 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-1Clasx X-0, Class B-2 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 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 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. 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 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 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 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 The Trustee or any other Person. The Securities Administrator shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Upper Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication duplication, 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator Trustee shall send any notices and make any demands, on behalf of the Trust 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 Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx xuxxxxxxx of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs then required and all paymenxx xxxn xxxxxxed 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 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. On the Closing Date, the Securities Administrator shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the LIBOR Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator held pursuant to this Agreement. On the Business Day immediately preceding each 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, the sum of (x) all Net Swap PaymentsPayments and (y) any Swap Termination Payment, other than a Defaulted Swap Termination Payment, to the Swap Provider, 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;
(iviii) 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 CertificatesCerxxxxxxxxx, in 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 Section 4.02(a)(iii(iii), to the extent unpaid from Available Funds;
(viv) 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 LIBOR Certificates, to pay Basis Risk CarryForward Carry Forward Amounts andas described in Section 4.02(a)(iii)(N)-(O), 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);
(viiv) 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 M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 CertificatesCerxxxxxxxxx, 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 B-1, Class B-2 and Class B-3 Certificatesxx that order, to pay any Unpaid Realized Loss AmountInterest Amounts as described in Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(xvii) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xiviii) 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, 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 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. 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 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 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 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 shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Upper Tier 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 LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent provided in Section 8.13. Any Basis Risk CarryForward Carry Forward Amounts and, without duplication, Upper-Upper Tier CarryForward Carry Forward Amounts distributed by the Securities Administrator to the Offered LIBOR Certificateholders from the Excess Reserve Fund Account or the Swap Account shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates (in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) or the Class IO Interest, respectively) and then to the respective Class or Classes of Offered LIBOR Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered LIBOR Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk CarryForward Amounts) Carry Forward Amounts and, without duplication, Upper Tier Carry Forward Amounts from the Swap Account (along with Basis Risk CarryForward 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 , and any amounts reimbursed from the Upper Tier REMIC to the failure Swap Account shall be treated as having been distributed to the Holders of the Class X Certificates. In the event the Swap Provider to perform any of its obligations under does not deliver the Delivery Amount (as defined in 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 AgreementSecurities Administrator, the Securities Administrator shall send any notices and make any demands, on behalf provide notice of the Trust as are required under the Interest Rate Swap Agreement. To the extent that such failure to the Swap Provider fails to make any payment required under terms within one Business Day of 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the Depositorfailure.
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. On the Closing Date, the Securities Administrator shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 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 and 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 other than a Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment 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-1B-0, Class B-2 and 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 Offered 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 previously 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 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-1B-0, Class B-2 and Xxxxx X-0 xnd Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper 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 LIBOR Certificates, any remaining unpaid Basis Risk CarryForward AmountAmounts, and, without duplication, Upper Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount 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-1B-0, Class B-2 and Xxxxx X-0 xnd 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 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 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 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 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 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 that the Trust entering enters 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, agreement and the Trust is entitled to receive a payment Replacement Swap Provider Payment from a replacement swap provider, the Securities Administrator shall direct the replacement swap provider (or its guarantor) to make such payment Replacement Swap Provider Payment to the Swap Account. Any Senior Defaulted Notwithstanding the foregoing, any Replacement Swap Termination 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 Senior Defaulted Replacement Swap Termination Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider PaymentPayment 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 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 owed to the Swap Provider, any remaining amount of the Swap Termination Payment shall be paid to the Swap Provider on subsequent Distribution Dates in accordance with this Section 4.02 and Section 4.06 (unless the Replacement Swap Provider Payment is paid to the Swap 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 a grantor trust under subpart E, Part I of subchapter J of the Code 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, Net Swap Payments and Swap Termination Payments (other than Senior Defaulted without duplication of previously paid Replacement Swap Termination Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Account from the Upper-Tier 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 LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered LIBOR Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered LIBOR Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered LIBOR Certificates to receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk 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 in and obligations under a separate limited recourse interest rate cap notional principal contract written by between the Class X Certificateholders in favor of and Holders of each such Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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" (as defined in the Interest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, 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 the Schedule to the Interest Rate Swap Agreement. The Securities Administrator xxxxx xxxxx xny shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the 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 Part 5(f) of 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 demand that the Swap Provider or its guarantor post collateral in accordance with the terms of Part 5(f) of the Interest 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. On the Closing Date, the Securities Administrator shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator held pursuant to this Agreement. On the Business Day immediately preceding each Distribution Date, Swap Termination Paymentsfollowing all distributions and deposits made pursuant to subsections (a) through (d) above, Net Swap Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date Trustee will be deposited into the Swap Account. Funds withdraw all funds available in the Swap Account will be distributed (the “Swap Distribution Amount”) to make the following payments in the following order of priority:
(i) first, to the Swap ProviderCounterparty, all any Net Swap Payments, if any, Payment owed to the Swap Provider Counterparty pursuant to the Swap Agreement for such Distribution Date;
(ii) second, to the Swap Counterparty, any Swap Termination Payment owed to the Swap Counterparty not resulting from a Swap Counterparty Trigger Event 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;
(iiiv) fourth, concurrently, to the Swap ProviderClass A-1, Class A-2 and Class A-3 Certificates, pro rata, any Swap Termination Paymentremaining Class Unpaid Interest Amounts for the classes of Senior Certificates;
(v) fifth, including, without limitationto the Class M-1 Certificates, any Senior Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment owed to the Swap Provider remaining Interest Distribution Amount for that Distribution Date;
(iiivi) 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) sequentiallysixth, 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 M-1 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts and, if applicable, any remaining Class 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 M-1 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) sequentiallyseventh, 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 M-2 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper Tier CarryForward Amounts, up to the Swap Payment Allocation any remaining Interest Distribution Amount 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)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 unpaid Basis Risk CarryForward AmountNet WAC Cap Carryover for that Class, and, without duplication, Upper Tier CarryForward Amounts, after taking into account amounts deposited into the Net WAC Cap Account with respect to that Class of Offered Certificate pursuant to clause (xxxi) of subsection (d) above (with distributions of Net WAC Cap Carryover to the Offered Certificates to be made on a pro rata, rata basis based on their respective remaining the related unpaid Basis Risk CarryForward Amount after the allocation of payments as set forth in clauses (vi) and (vii) aboveNet WAC Cap Carryover);
(ixxxv) sequentiallytwenty-fifth, to fund the Swap 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 M-1 Realized Loss Amount, to the extent unpaid from Available FundsAmortization Amount for that Distribution Date;
(xxxvi) twenty-sixth, to fund the Swap ProviderClass M-2 Realized Loss Amortization Amount for that Distribution Date;
(xxvii) twenty-seventh, any remaining Defaulted Swap Termination Payment owed to fund the Swap Provider Class 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
(xixxxiv) thirty-fourth, 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, 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 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. 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 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 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 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 shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 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 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the DepositorAmount.
Appears in 2 contracts
Samples: Pooling and Servicing Agreement (Popular ABS Mortgage Pass-Through Trust 2006-E), Pooling and Servicing Agreement (Popular ABS Mortgage Pass-Through Trust 2006-D)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee 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-1X-0, Class B-2 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 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 maintain the Subordinated Amount to at the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursedAmount, 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-1X-0, Class B-2 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 LIBOR 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 B-1X-0, Class B-2 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 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 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. 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 Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier 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 LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered LIBOR Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered LIBOR Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered LIBOR Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator 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 Securities Administrator xxxxx xxxxx xny replacement swap Trustee shall cause any xxxxxxexxxx xxap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator 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. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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-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 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 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 Securities Administrator 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 receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Securities Administrator 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 Securities Administrator Trustee shall withdraw from the reserve account and deposit into the Swap 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. In no event shall the Securities Administrator Trustee be responsible for the selection of any successor or replacement swap provider 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 Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code 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, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator 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 Securities Administrator xxxxx xxxxx xny replacement swap Trustee shall cause any xxxxxxexxxx xxap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator 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. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each any Distribution Date, Swap Termination Payments (including, without duplication, Replacement Swap Provider Payments), Net Swap Payments owed to the Swap Provider and 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 other than a Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment 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 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 previously 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 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 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 LIBOR Certificates, any remaining unpaid Basis Risk CarryForward AmountAmounts, and, without duplication, Upper Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount 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 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 Securities Administrator 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 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 swap provider cannot be obtained, then the Securities Administrator 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 Securities Administrator Trustee shall withdraw from the reserve account and deposit into the Swap 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 Trustee be responsible for the selection of any successor or replacement swap provider 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 Agreementswap, the Trust is entitled to receive a payment Replacement Swap Provider Payment from a replacement swap provider, the Securities Administrator Trustee shall direct the replacement swap provider to make such payment Replacement Swap Provider Payment to the Swap Account. Any Senior Defaulted Notwithstanding the foregoing, any Replacement Swap Termination 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 Senior Defaulted Replacement Swap Termination Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider PaymentPayment 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 Securities Administrator, 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 owed to the Swap Provider, any remaining amount of the Swap Termination Payment shall be paid to the Swap Provider on subsequent Distribution Dates in accordance with this Section 4.02 and Section 4.06 (unless the Replacement Swap Provider Payment is paid to the Swap Provider on a Distribution Date, in which case such remaining amounts will be paid on such Distribution Date). The Securities Administrator Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code 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, Net Swap Payments and Swap Termination Payments (other than Senior Defaulted without duplication of previously paid Replacement Swap Termination Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Account from the Upper-Tier 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 LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered LIBOR Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered LIBOR Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered LIBOR Certificates to receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk 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 in and obligations under a separate limited recourse interest rate cap notional principal contract written by between the Class X Certificateholders in favor of and Holders of each such Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 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 Securities Administrator 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" (as defined in the Interest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, 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 the Schedule to the Interest Rate Swap Agreement. The Securities Administrator xxxxx xxxxx xny Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator 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 Part 5(f) of 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 demand that the Swap Provider or its guarantor post collateral in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2007-He2)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1X-0, Class B-2 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 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-1X-0, Class B-2 Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, Amounts and, without duplication, Upper 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, Amount and, without duplication, Upper 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-1X-0, Class B-2 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 Securities Administrator 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 receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Securities Administrator 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 Securities Administrator Trustee shall withdraw from the reserve account and deposit into the Swap 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. In no event shall the Securities Administrator Trustee be responsible for the selection of any successor or replacement swap provider 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 Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator 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" (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 Trustee shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of the Interest Rate Swap Agreement. The Securities Administrator xxxxx xxxxx xny Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator Trustee and the Depositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Capital I Inc. Trust 2006-Nc2)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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 other than a Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment Payment, if any, 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 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 maintain the Subordinated Amount to at the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursedAmount, 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 LIBOR 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 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 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, 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 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. 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 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 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 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 The Trustee or any other Person. The Securities Administrator shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier 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 LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered LIBOR Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered LIBOR Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered LIBOR Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator 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 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 ABS Capital I Inc. Trust 2005-He7)
Swap Account. On (a) The Depositor hereby directs the Closing DateTrustee, 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 Securities Administrator Depositor, the Servicer and the Certificateholders, by their acceptance of such Certificates acknowledge and agree that the Trustee shall establish execute, deliver and maintain perform its obligations under the Swap Agreement and shall do so solely in its name, a separate non-interest bearing trust account for the benefit capacity as Supplemental Interest Trustee of the holders of Supplemental Interest Trust and not in its individual capacity. Promptly upon receipt, the Certificates (Supplemental Interest Trustee will deposit into the "Swap Account"Account all funds received from the Trustee pursuant to Section 7.03(a) as a part of and Section 7.03(b) clause 19. and all funds received from the Trust FundSwap Provider under the Swap Agreement. The Amounts on deposit in the Swap Account shall be an Eligible Account, and funds on deposit therein shall be held separate and apart from, and shall invested in accordance with Section 7.05.
(b) On each Distribution Date after the Startup Day but not be commingled with, any other moneys, including, without limitation, other moneys of beyond the Securities Administrator held pursuant to this Agreement. On the Business Day immediately preceding each February 2013 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 extent necessary, following all distributions pursuant to Section 7.03(b), the Swap Account. Funds Supplemental Interest Trustee shall apply, all amounts, if any, on deposit in the Swap Account will (other than investment earnings on funds held in the Swap Account, which shall be distributed for the account of the Servicer) in the following order of priority:
(i) first, to the Swap Provider, all any Net Swap Payments, if any, Payment owed to the Swap Provider pursuant to the Swap Agreement for that such Distribution DateDate 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, 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 Datenot resulting from a Swap Provider Trigger Event pursuant to the Swap Agreement;
(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)third, to the extent unpaid from Available FundsOffered 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-1M-0, Class M-2Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1M-7, Class B-2 M-8 and Class B-3 M-9 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)related Class Principal Carryover Shortfall, to the extent unpaid from Available Fundsremaining undistributed after the distributions pursuant to Section 7.03(b);
(v) fifth, concurrently, to the Offered Senior Certificates, to pay principal as described andany related Class Interest Carryover Shortfall, in the same manner and order of priority as set forthpro rata, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary remaining undistributed based on such amounts after the distributions pursuant 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 FundsSection 7.03(b);
(vi) to the Class A Certificatessixth, 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-1M-0, Class M-2Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1M-7, Class B-2 M-8 and Class B-3 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 Basis Risk CarryForward Amounts, and, without duplication, Upper Tier CarryForward Amounts, up to the Swap Payment Allocation for each applicable Certificateholders (other than the Class of Class M and Class B Certificates and M-10 Certificates) any Net WAC Cap Carryover to the extent unpaid from Available Funds (including Basis Risk Payments on deposit remaining undistributed after the distributions pursuant to Section 7.03(b), allocated in the Excess Reserve Fund Account)order of priority set forth in Section 7.03(b) clauses C.17. and C.18.;
(viii) to the Offered Certificateseighth, 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 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 Payments resulting from a Swap Provider for that Distribution DateTrigger Event; and
(xiix) ninth, to the holders of the Class X X-IO Certificates, any remaining amounts. Notwithstanding the foregoingremainder; provided, 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, 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 an amount equal to the cumulative amount of any Net Swap Receipt due the Trust distributions pursuant to clauses (calculated in accordance with the terms of the original Interest Rate Swap Agreementiii) 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(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 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 above on each Distribution Date. To , and all prior Distribution Dates, will not exceed the extent cumulative amount of Realized Losses with respect to 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 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 shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, Net Swap Payments and Swap Termination Payments all prior Distribution Dates.
(other than Senior Defaulted Swap Termination Paymentsc) payable to the Swap Provider shall be deemed to be paid to the Swap Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates [Reserved].
(in respect of the Class IO Interest and, if applicable, the Class X Interestd) 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be treated as an "“outside reserve fund" for federal income tax purposes ” within the meaning of Treasury Regulation Section 1.8606-2(h) and shall not be an asset of any REMIC or the Trust REMICEstate created pursuant to this Agreement and, instead, shall be an asset of the Supplemental Interest Trust. Furthermore, For state and federal tax purposes the Holders beneficial owners of the Class X X-IO Certificates shall be the beneficial owners of the Swap Account for all Account.
(e) For federal income tax purposes, and the Trustee shall be taxable on all income earned thereon. With treat the Holders of Offered Certificates as having entered into a notional principal contract with respect to the failure Holders of the Swap Provider Class X-IO Certificates. Pursuant to perform any each such notional principal contract, all Holders of its obligations under Offered Certificates shall be treated as having agreed to pay, on each Distribution Date, to the Interest Rate Swap AgreementHolder of the Class 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 Shortfall Amount”). A Class X-IO 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 Cap, and a Class X-IO 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 breach Holder of the Class X-IO Certificates shall be treated as having agreed to pay Net WAC Cap Carryovers to the Holders of the Offered 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 of a Class X-IO Shortfall Amount shall be treated for tax purposes as having been received by the Swap Provider Holders of any such Certificates in respect of its representations their interests in the Master REMIC and warranties made as having been paid by such Holders to the Supplemental Interest Trustee pursuant to the notional principal contract. Thus, each Offered Certificate 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 Supplemental Interest Rate Swap Agreement, or the termination Trustee shall treat such notional principal contract as having a value of $380,000 as 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 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the DepositorStartup Date.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Nationstar Home Equity Loan Trust 2007-C)
Swap Account. (a) On or before the Closing Dateissuance of the Certificates, the Securities Administrator shall establish and maintain Trustee will open with an Eligible Depository one or more accounts in the name of the Trustee (or its namedesignee) (collectively, a separate non-interest bearing trust account the “Swap Account”) to hold funds for the benefit of the holders Holders of the Certificates FA Class Certificates.
(b) The manner in which the "Swap Account is maintained may at any time be changed without notice to, or the approval of, the Holders of the FA Class Certificates, so long as (i) the Swap Account is maintained with an Eligible Depository and (ii) funds held in the Swap Account by, or for the account of, the Trustee are at all times identified.
(c) 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 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 held by the Trustee in the Swap Account for the benefit of the Holders of the FA Class Certificates 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) The Swap Account will not be part of any REMIC created hereby. No payments from the Swap Account to the Holders of the FA Class Certificates will be payments with respect to a “regular interest” in a REMIC within the meaning of Section 860G(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, at the time of their acquisition, are Eligible Investments maturing not later than the applicable Distribution Date or, if 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 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 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 paid by the Trustee to the Swap Counterparty under the Swap Agreement for such month, such amounts may be withdrawn by the Trustee and retained by it as 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 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 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 Swap Account shall Holder hereof, by its acceptance of this Certificate, agrees to be an Eligible Accountbound 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 on deposit therein shall be held separate and apart from, and shall by the Paying Agent not be commingled with, any other moneys, including, without limitation, other moneys later than the related Distribution Date to the REMIC Certificateholder as of the Securities Administrator held pursuant preceding Record Date as it appears on the Certificate Register or to its nominee; provided, however, that the final distribution in respect of this AgreementClass 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 Trust Agreement and the Issue Supplement. On Any reduction in 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 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 deposited into binding upon all future Holders of this Class M8-FA REMIC Certificate and of any Class M8-FA REMIC Certificate issued upon the Swap Accountregistration of transfer hereof or in exchange herefor or in lieu hereof, whether or not noted hereon. Funds 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 a registered Class M8-FA REMIC Certificate. As provided in the Swap Account will be distributed 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 following order Certificate Register of priority:
(i) 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 purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory 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 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 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 PaymentIssuer, the Securities Administrator shall use Trustee and the Swap Termination Payment to enter into a replacement interest rate swap agreement as directed by Certificate Registrar duly executed by, the Depositor with a successor Swap Provider (Holder hereof or its guarantor) meeting the ratings requirements set forth such Holder’s attorney duly authorized in the Interest Rate Swap Agreement being terminated on the same remaining terms as those in the Interest Rate Swap Agreement being terminatedwriting, so long and such other documents 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 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. 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 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 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 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 PartyIssuer, 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 designated transferee. A 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 Persongovernmental charge that may be imposed in connection therewith. The Securities Administrator shall account Issuer, the Guarantor, the Trustee, the Certificate Registrar and any of their respective agents may treat the Person in whose name this Class M8-FA REMIC Certificate is registered as the owner hereof for the Swap Account as an asset of a grantor trust under subpart Eall purposes, Part I of subchapter J and none of the Code Issuer, the Guarantor, the Trustee, the Certificate Registrar or any of their respective agents will be affected by notice to the contrary. This Class M8-FA REMIC Certificate, the Trust Agreement and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners the Issue Supplement will be construed in accordance with, and governed by, the substantive laws of the Swap Account are the District of Columbia applicable to agreements made and to be performed therein (without giving effect to conflicts of law principles). This Class X Certificateholders. For federal income tax purposes, Net Swap Payments M8-FA REMIC Certificate is issued under and Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable is subject to the Swap Provider shall be deemed terms, provisions and conditions of the Trust Agreement and the Issue Supplement, to be paid to the Swap Account from the Upper-Tier REMIC, first, by which Trust Agreement and Issue Supplement the Holder of the this Class X Certificates (in respect M8-FA REMIC Certificate by virtue of the Class IO Interest and, if applicable, acceptance hereof assents and by which such Holder is bound. Unless the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC certificate of authentication hereon has been executed by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator shall send any notices and make any demands, on behalf of the Trust as are required Certificate Registrar by manual or facsimile signature, this Class M8-FA REMIC Certificate will not be entitled to any benefit under the Interest Rate Swap Agreement. To Trust Agreement or the extent that the Swap Provider fails to make Issue Supplement, or be valid for any payment required under terms of 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the Depositorpurpose.
Appears in 1 contract
Samples: Issue Supplement
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest interest-bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator 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 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 Payment, but not including any other Defaulted Swap Termination Payment 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-1Cxxxx X-0, Class 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 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-1Cxxxx X-0, Class Xxxxs B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, Amounts and, without duplication, Upper Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M 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, Amount and, without duplication, Upper 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-1Cxxxx X-0, Class Xxxxs 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 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 Securities Administrator 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 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 Payment, and a successor Swap Provider swap provider (or its guarantor) cannot be obtained, then the Securities Administrator Trustee shall deposit the 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 Securities Administrator Trustee shall withdraw from the reserve account and deposit into the Swap 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 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)(ii1(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 Securities Administrator Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 the Responsible Party, the Trustee or any other Person. The Securities Administrator Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code 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, Net Swap Payments and Replacement Swap Provider Payments, including, without duplication, any Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk 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 in and obligations under a separate limited recourse interest rate cap notional principal contract written by between the Class X Certificateholders in favor of and Holders of each such Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator 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" (as defined in the Interest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, 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 the Interest Rate Swap Agreement. The Securities Administrator xxxxx xxxxx xny Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator Trustee and the Depositor. If a Responsible Officer of the Trustee receives written notice, from Standard & Poor's, that the Swap Provider or its guarantor has been downgraded below the levels set forth in Part 5(j) or (k) of the Schedule to the Interest Rate Swap Agreement and the posting of collateral is required in accordance with the terms of Part 5(j) or (k) of the Schedule to the Interest Rate Swap Agreement, the Trustee shall demand that the Swap Provider or its guarantor post collateral in accordance with the terms of Part 5(j) or (k) of the Schedule 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. On (a) The Trustee is hereby authorized and directed in its capacity as Supplemental Interest Trustee to enter into the Closing DateSwap Agreement on behalf of the Supplemental Interest Trust and to establish the Swap Account pursuant to Section 7.02(a). Promptly upon receipt, the Securities Administrator shall establish Supplemental Interest Trustee will deposit into the Swap Account all funds received from the Trustee pursuant to Section 7.03(a) and maintain Section 7.03(b) clause 21 and all funds received from the Swap Provider under the Swap Agreement. Amounts on deposit in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an Eligible Account, and funds on deposit therein shall be held separate and apart from, and shall invested in accordance with Section 7.05.
(b) On each Distribution Date after the Startup Day but not be commingled with, any other moneys, including, without limitation, other moneys of beyond the Securities Administrator held pursuant to this Agreement. On the Business Day immediately preceding each September 2014 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 extent necessary, following all distributions pursuant to Section 7.03(b), the Swap Account. Funds Supplemental Interest Trustee shall apply, all amounts, if any, on deposit in the Swap Account will (other than investment earnings on funds held in the Swap Account, which shall be distributed for the account of the Servicer) in the following order of priority:
(i) first, to the Swap Provider, all any Net Swap Payments, if any, Payment owed to the Swap Provider pursuant to the Swap Agreement for that such Distribution DateDate 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, 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 Datenot resulting from a Swap Provider Trigger Event pursuant to the Swap Agreement;
(iii) third, concurrently, to the Class A Senior Certificates, to pay Accrued Certificate any related Class Interest Distribution Amounts andCarryover Shortfall, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i)pro rata, to the extent unpaid from Available Fundsremaining undistributed after the distributions pursuant to Section 7.03(b);
(iv) fourth, sequentially, to the Class M-1X-0, Class M-2Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1M-7, Class B-2 M-8, Class M-9, Class M-10 and Class B-3 M-11 Certificates, in that order, to pay Accrued Certificate any related Class Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii)Carryover Shortfall, to the extent unpaid from Available Fundsremaining undistributed after the distributions pursuant to Section 7.03(b);
(v) fifth, to the Offered Senior Certificates and Subordinate Certificates, to pay principal as described andthe Net Subordination Deficiency for the applicable Distribution Date, allocated in the same manner and order of priority as set forth, forth in clauses 4. through 15. under Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B7.03(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 Certificatessixth, 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-1X-0, Class M-2Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1M-7, Class B-2 M-8, Class M-9, Class M-10 and Class B-3 M-11 Certificates, to pay Basis Risk CarryForward Amountsin that order, andany related Class Principal Carryover Shortfall, 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 remaining undistributed after the Excess Reserve Fund Accountdistributions pursuant to Section 7.03(b);
(viiivii) seventh, to pay the applicable Certificateholders any Net WAC Cap Carryover to the Offered Certificates, any extent 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 undistributed after the allocation distributions pursuant to Section 7.03(b), allocated in the order of payments as priority set forth in clauses (vi) 19. and (vii) above;20. of 7.03(b); and
(ixviii) sequentiallyeighth, 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 remaining Defaulted Swap Termination Payment owed 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 Provider for that Account after the application of funds pursuant to this Section 7.12(b) on the September 2014 Distribution Date; andDate shall be paid from the separate trust referred to in subsection (d) below to (or upon the order of) the Servicer.
(xic) [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 the holders this Agreement and, instead, shall be an asset of the Class X CertificatesSupplemental Interest Trust. For state and federal tax purposes the Servicer, 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 Distribution Date in September 2014, shall be 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 beneficial owner of the Swap Account. On each subsequent Distribution Date .
(so long as funds are available in the reserve account)e) For federal income tax purposes, the Securities Administrator Trustee shall withdraw from treat the reserve account and deposit Holders of Offered Certificates as having entered into a notional principal contract with respect to the Swap Account Holders of the Class X-IO Certificates. Pursuant to each such notional principal contract, all Holders of Offered Certificates shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class 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 Shortfall Amount”). A Class X-IO Shortfall Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of any 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 Swap Receipt due WAC Cap, and a Class X-IO Shortfall Amount payable from principal collections shall be allocated to the Trust (calculated 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 X-IO Certificates shall be treated as having agreed to pay Net WAC Cap Carryovers to the Holders of the Offered Certificates in accordance with the terms of this Agreement. Any payments to the original Interest Rate Swap Agreement) and treat such amount as Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a Net Swap Receipt for purposes regular interest in a REMIC within the meaning of determining the distributions Code Section 860G(a)(1). However, any payment from the Swap Account. In no event Offered Certificates of a Class X-IO Shortfall Amount shall be treated for tax purposes as having been received by the Securities Administrator be responsible for the selection Holders 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 such Certificates in respect of the Trust, any amounts remaining their interests in the Swap Account shall be distributed Master REMIC and as having been paid by such Holders to the Supplemental Interest Trustee pursuant to the priorities set forth notional principal contract. Thus, each Offered Certificate shall be treated as representing not only ownership of regular interests in this Section 4.06. In the event thatMaster REMIC, upon the Trust entering into a replacement interest rate swap following the occurrence but also ownership of an Additional Termination Event of the type described in Part 1(h)(ii) of the Interest Rate Swap Agreementinterest in, the Trust is entitled to receive and obligations with respect to, a payment from a replacement swap provider, the Securities Administrator shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholdersnotional principal contract. For federal income tax purposes, Net Swap Payments and Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable to the Swap Provider Supplemental Interest Trustee shall be deemed to be paid to the Swap Account from the Upper-Tier REMIC, first, by the Holder treat such notional principal contract as having a value of $10,000 as 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 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 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the DepositorClosing Date.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Centex Home Equity Loan Trust 2006-A)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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 other than a Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment Payment, if any, 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-1X-0, Class B-2 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 maintain the Subordinated Amount to at the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursedAmount, 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-1X-0, Class B-2 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 B-1X-0, Class B-2 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 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 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. 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 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 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 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 The Trustee or any other Person. The Securities Administrator shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator Trustee shall send take any notices and make any demands, on behalf all such actions as may be necessary or appropriate to enforce the rights 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 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the Depositorwith respect thereto.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Abs Capital I Inc)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each any Distribution Date, Swap Termination Payments, Net Swap Payments owed to the Swap Provider and 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-1X-0, Class B-2 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 previously 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 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-1X-0, Class B-2 Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper 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 AmountAmounts, and, without duplication, Upper Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount 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-1X-0, Class B-2 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 Securities Administrator 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 receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Securities Administrator 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 Securities Administrator Trustee shall withdraw from the reserve account and deposit into the Swap 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. In no event shall the Securities Administrator Trustee be responsible for the selection of any successor or replacement swap provider 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 Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code 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, 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 Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class IO Interest and, if applicable, the Class X Interestand 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and Class UT-PFIO Interests and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator 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 Securities Administrator xxxxx xxxxx xny replacement swap Trustee shall cause any xxxxxxexxxx xxap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator Trustee and the Depositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2006-He5)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1Clxxx X-0, Class 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 maintain the Subordinated Amount to at the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursedAmount, 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 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 B-1Clxxx X-0, Class Xxxxx B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper Tier CarryForward 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 CarryForward Carry Forward Amount, and, without duplication, Upper Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward 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, Class B-1Clxxx X-0, Class 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. 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, 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 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. 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 Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Carry Forward Amounts and, without duplication, Upper-Tier CarryForward Carry Forward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Carry Forward Amounts (including, but without duplication Basis Risk CarryForward Carry Forward Amounts) from the Swap Account (along with Basis Risk CarryForward 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx unxxx xxe xxxxxxtee of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs xxx xxxments then required to be made by Morgan Stanley pursuant to such guarantee. The Securities Administrator xxxxx xxxxx xny replacement Trustee shall cause xxx xxpxxxxxxxt swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator Trustee and the Depositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Abs Capital I Inc)
Swap Account. On the Closing Date, the Securities Administrator shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator held pursuant to this Agreement. On the Business Day immediately preceding each Distribution Date, Swap Termination Paymentsfollowing all distributions and deposits made pursuant to subsections (a) through (d) above, Net Swap Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date Trustee will be deposited into the Swap Account. Funds withdraw all funds available in the Swap Account will be distributed (the “Swap Distribution Amount”) to make the following payments in the following order of priority:
(i) first, to the Swap ProviderCounterparty, all any Net Swap Payments, if any, Payment owed to the Swap Provider Counterparty pursuant to the Swap Agreement for such Distribution Date;
(ii) second, to the Swap Counterparty, any Swap Termination Payment owed to the Swap Counterparty not resulting from a Swap Counterparty Trigger Event 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;
(iiiv) 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 ProviderCounterparty, 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 Counterparty resulting 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 a Swap Counterparty Trigger Event pursuant to the Swap Payment Allocation for each Class of Class A Certificates Agreement; and to the extent unpaid from Available Funds (including Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(viixli) sequentiallyforty-first, 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 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 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 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 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. 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 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 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 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 shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 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 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the DepositorAmount.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Popular ABS Mortgage Pass-Through Trust 2007-A)
Swap Account. 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 Securities Administrator Supplemental Interest Trust Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "“Swap Account"”) as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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-1X-0, Class M-2Xxxxx 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 M-1X-0, Class M-2Xxxxx 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 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-1X-0, Class M-2Xxxxx 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 Trust receives a Swap Termination Payment, the Securities Administrator 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 obtained, then the Securities Administrator Supplemental Interest Trust 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 Securities Administrator Supplemental Interest Trust Trustee shall withdraw from the reserve account and deposit into the Swap 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 Securities Administrator Supplemental Interest Trust Trustee be responsible for the selection of any successor or replacement swap provider 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 Securities Administrator Supplemental Interest Trust Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier REMICREMIC III, 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 III by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO InterestCertificates, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk CarryForward Amounts) 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 Class. The Swap Account shall be an "“outside reserve fund" ” for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator Supplemental Interest Trust Trustee shall immediately demand that Morgan StanleyXxxxxx Xxxxxxx, the guarantor of the Swap Provider's ’s obligations under xxx xxaxxxxxx the guarantee of Morgan Stanley Xxxxxx Xxxxxxx relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs and all payments then required to be made by Morgan Stanley Xxxxxx Xxxxxxx pursuant to such guarantee. In addition, in 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 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 the Interest Rate Swap Agreement. The Securities Administrator xxxxx xxxxx xny Supplemental Interest Trust Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator Supplemental Interest Trust Trustee and the Depositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2006-Nc3)
Swap Account. On the Closing Date, the Securities Administrator shall establish and maintain in its name, a separate non-interest interest-bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 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 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, Amounts and, without duplication, Upper Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M 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, Amount and, without duplication, Upper 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 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 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 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. 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)(ii1(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 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 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 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, any Servicer, any Custodian, any the Responsible PartyParties, the Trustee or any other Person. The Securities Administrator shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code 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, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 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 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 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. On (a) No later than the Closing Date, the Securities Administrator Trustee shall establish and maintain in its namea separate, a separate non-interest bearing segregated trust account to be titled, "Wells Fargo Bank, N.A. as Trustee, in trust for the benefit of the holders of the Certificates (the "Swap registered holderx xx Asset Backed Funding Corporation Asset-Backed Certificates, Series 2006-OPT1--Swap Account") as a part of the Trust Fund. The Swap Account ." Such account shall be an Eligible Account, 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 Securities Administrator Trustee held pursuant to this Agreement. Amounts therein shall be held uninvested.
(b) On the Business Day immediately preceding prior to each Distribution Date, Swap Termination Paymentsprior to any distribution to any Certificate, Net Swap Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited Trustee shall deposit 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 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 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 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 an amount equal to the amount of any Net Swap Receipt due Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Trust Swap Provider (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 after taking into account any upfront payment received 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 counterparty to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any ) from Available Funds and (ii) 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 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 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 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 received by the Trust to CertificateholdersTrustee, the Securities Administrator, any Servicer, any Custodian, any Responsible Party, the Trustee or any other Person. The Securities Administrator shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholdersdistribution in accordance with Section 4.02(c). For federal income tax purposes, Net Swap Payments and Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable any amounts paid to the Swap Provider on the Business Day prior to each Distribution Date shall be deemed paid, pursuant to be paid 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 LTIO Interest, (iv) then from REMIC 4 to REMIC 5 in respect of the Swap IO Interest, and (v) then from the Class CE Certificates to the Swap Account from the Upper-Tier REMIC, first, by the Holder Provider in respect of the Net Swap Payment due to the Swap Provider on such 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, 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 X B Certificates (in respect of the Class IO Interest andDistribution Amount (as defined in Section 4.09(d) below), if applicable, and then shall be deemed paid to the Class X InterestCE Certificates pursuant to the notional principal contract described in Section 4.09(d) below and second, other than then to the Swap Provider. Any amounts deemed paid by any Defaulted 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, from the Upper-Tier REMIC Payment triggered by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and a Swap Provider Trigger Event owed to the extent provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Swap Provider pursuant to the Offered Certificateholders shall Interest Rate Swap Agreement will be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first subordinated to distributions to the Holders of the Class X A Certificates, Class B Certificates, and Class M Certificates in respect 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 Holders of the Class X CE Certificates.
(d) The Trustee shall treat the Holders of Certificates (other than the Class P, Class CE and 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 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 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 applicable 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 remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificatessuch balance. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates pursuant to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermorenotional principal contract, the Holders of the Class X CE Certificates shall be treated as having agreed to pay Cap Carryover Amounts to the beneficial owners Holders of the Swap Account for all federal income tax purposesCertificates (other than the Class CE, Class P and 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 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 Residual Certificates) of a Class IO Distribution Amount shall be taxable on all income earned thereon. With treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in REMIC 4 and as having been paid by such Holders 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 Trustee pursuant to the Interest Rate Swap Agreementnotional principal contract. Thus, or each Certificate (other than the termination Class P and Residual Certificates) shall be treated as representing not only ownership of the Interest Rate Swap AgreementRegular Interests in REMIC 4, the Securities Administrator shall send any notices but also ownership of an interest in, and make any demandsobligations with respect to, 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 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the Depositornotional principal contract.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (ABFC 2006-Opt1 Trust)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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-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 previously 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 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 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 Securities Administrator 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 receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Securities Administrator 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 Securities Administrator Trustee shall withdraw from the reserve account and deposit into the Swap 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. In no event shall the Securities Administrator Trustee be responsible for the selection of any successor or replacement swap provider 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 Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code 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, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Basis Risk CarryForward Amounts (and, without duplication, Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx of txx xxxrxxxxx xf Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx anx xxx xxxxxxxs pxxxxxxx then required to be made by Morgan Stanley pursuant to such guarantee. The Securities Administrator xxxxx xxxxx xny replacement swap Trustee shall cause any rxxxxxxmxxx xxxp provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator Trustee and the Depositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2006-He4)
Swap Account. On The Class A-1 Swap Account shall be an “outside reserve fund” within the Closing Datemeaning 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 establish and maintain 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 its namethe Class A-1 Swap Agreement), a separate non-interest bearing trust account for the benefit Trustee on behalf of the holders Supplemental Interest Trust, at the direction of the Certificates (the "Swap Account") as Depositor, shall use reasonable efforts to appoint a part of the Trust Fund. The Swap Account shall be an Eligible Account, and funds on deposit therein shall be held separate and apart from, and shall not be commingled with, successor swap provider using any other moneys, including, without limitation, other moneys of the Securities Administrator held pursuant to this Agreement. On the Business Day immediately preceding each Distribution Date, Swap Termination Payments, Net Payments paid by the Class A-1 Swap Payments owed Provider. To the extent the Supplemental Interest Trust is required to pay a Swap Termination Payment 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 Class A-1 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 or a portion of such amount received 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 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 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 Securities Administrator shall use the Swap Termination Payment to enter replacement swap provider upon entering 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 similar agreement will be applied to the Swap 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 sufficient unable to obtain locate a qualified successor swap provider, any such replacement interest rate swap agreement. In the event that the Trust receives a Swap Termination Payment Payments will be deposited in the Class A-1 Swap Account 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 Administrator, on each subsequent Distribution Date (so long as funds are available in until the reserve accounttermination date of the Class A-1 Swap Agreement or the appointment of a successor swap provider), the Securities Administrator shall will withdraw from the reserve account and deposit into the Swap Account an amount equal to the amount of any Net Swap Receipt Payment due to the Supplemental Interest Trust (calculated in accordance with the terms of the original Interest Rate Class A-1 Swap Agreement) and treat distribute such amount as a Net Swap Receipt for purposes Payment to the holders of determining the distributions Certificates in accordance with Section 4.1. Three Business Days prior to each Distribution Date on which any amount will be distributed 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 Class A-1 Swap Account shall be distributed pursuant to the priorities set forth Class A-1 Certificates in this accordance with 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 provider4.1(a)(viii), the Securities Administrator shall direct determine the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap Provider immediately upon receipt amount of such payment, regardless of whether the date of receipt thereof is a Distribution Date. To the extent any Class A-1 Amount for 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 without regard to anything report such Class A-1 Amount to the contrary Class A-1 Swap Provider on that same day in accordance with the notice provisions contained in this Agreement. For the avoidance of doubtSection 11.5 hereof; provided, the parties agree however, 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 shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each be under no obligation to report such Class of Offered Certificates A-1 Amount to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 A-1 Swap Provider to perform any of its obligations under unless it has first received the Interest Rate Cap Agreement Report or Certificate 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 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 Report for 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 DepositorDistribution Date.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Deutsche Alt-a Securities Mortgage Loan Trust, Series 2006-Ar4)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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 other than a Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment Payment, if any, 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-1Claxx X-0, Class 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 maintain the Subordinated Amount to at the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursedAmount, 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-1Claxx X-0, Class 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 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-1Claxx X-0, Class 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. 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, 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 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. 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 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 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 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 The Trustee or any other Person. The Securities Administrator shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator 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 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 Home Equity Loan Trust 2005-4)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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 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-1X-0, Class B-2 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 B-1X-0, Class B-2 Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, 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, 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-1X-0, Class B-2 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 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 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. 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 Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 the Responsible Party, the Trustee or any other Person. The Securities Administrator Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication duplication, 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator 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" (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 Trustee shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of the Interest Rate Swap Agreement. The Securities Administrator xxxxx xxxxx xny Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator Trustee and the Depositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Home Equity Loan Trust 2006-2)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest interest-bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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 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-1X-0, Class M-2Xxxxx 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 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-1X-0, Class M-2Xxxxx 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, Amounts and, without duplication, Upper Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M 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, Amount and, without duplication, Upper 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-1X-0, Class M-2Xxxxx 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 Trust receives a Swap Termination Payment, the Securities Administrator 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 receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Securities Administrator 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 Securities Administrator Trustee shall withdraw from the reserve account and deposit into the Swap 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. In no event shall the Securities Administrator 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 Securities Administrator Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 the Responsible Party, the Trustee or any other Person. The Securities Administrator Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code 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, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication duplication, 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator Trustee shall immediately demand that Morgan StanleyXxxxxx Xxxxxxx, the guarantor of the Swap Provider's obligations under xxx xxaxxxxxx the guarantee of Morgan Stanley Xxxxxx Xxxxxxx relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs and all payments then required to be made by Morgan Stanley Xxxxxx Xxxxxxx pursuant to such guarantee. In addition, in 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 Trustee shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of the Interest Rate Swap Agreement. The Securities Administrator xxxxx xxxxx xny Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator Trustee and the Depositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Home Equity Loan Trust 2006-3)
Swap Account. On the Closing Date, the Securities Administrator shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates and the Certificate Insurer (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 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 and 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 other than a Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment Payment, owed to the 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;
(ivv) 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 M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 B-2, Class B-3 , Class B-4 and Class B-3 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;
(vvii) to the Offered 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 previously yet been reimbursed, after giving effect to payments and distributions from Available Funds;
(viviii) to the Class A Certificates, to pay Basis Risk CarryForward Amounts and, without duplication, Upper 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);
(viiix) 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 B-2, Class B-3 , Class B-4 and Class B-3 B-5 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper 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);
(viiix) to the Offered LIBOR Certificates, any remaining unpaid Basis Risk CarryForward AmountAmounts, and, without duplication, Upper Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount Amounts or, without duplication, Upper-Tier CarryForward Amounts after the allocation of payments as set forth in clauses (vi) and (vii) above;
(ixxi) 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 B-2, Class B-3, Class B-4 and Class B-3 B-5 Certificates, to pay any Unpaid Realized Loss Amount, to the extent unpaid from Available Funds;
(xxii) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xixiii) 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 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 swap provider cannot be obtainedobtained (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 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 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 that the Trust entering enters 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, agreement and the Trust is entitled to receive a payment Replacement Swap Provider Payment from a replacement swap provider, the Securities Administrator shall direct the replacement swap provider (or its guarantor) to make such payment Replacement Swap Provider Payment to the Swap Account. Any Senior Defaulted Notwithstanding the foregoing, any Replacement Swap Termination 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 Senior Defaulted Replacement Swap Termination Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider PaymentPayment 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, 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 owed to the Swap Provider, any remaining amount of the Swap Termination Payment shall be paid to the Swap Provider on subsequent Distribution Dates in accordance with this Section 4.02 and Section 4.06 (unless the Replacement Swap Provider Payment is paid to the Swap 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 a grantor trust under subpart E, Part I of subchapter J of the Code 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, Net Swap Payments and Swap Termination Payments (other than Senior Defaulted without duplication of previously paid Replacement Swap Termination Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Account from the Upper-Tier 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 LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered LIBOR Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered LIBOR Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered LIBOR Certificates to receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk 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 in and obligations under a separate limited recourse interest rate cap notional principal contract written by between the Class X Certificateholders in favor of and Holders of each such Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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" (as defined in the Interest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, 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 the Schedule to the Interest Rate Swap Agreement. The Securities Administrator xxxxx xxxxx xny shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the 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 Part 5(f) of 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 demand that the Swap Provider or its guarantor post collateral in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2007-Nc4)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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-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 previously 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 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 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 Securities Administrator 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 receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Securities Administrator 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 Securities Administrator Trustee shall withdraw from the reserve account and deposit into the Swap 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. In no event shall the Securities Administrator Trustee be responsible for the selection of any successor or replacement swap provider 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 Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code 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, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Basis Risk CarryForward Amounts (and, without duplication, Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator 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 Securities Administrator xxxxx xxxxx xny replacement swap Trustee shall cause any xxxxxxexxxx xxap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator Trustee and the Depositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2006-He4)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1X-0, Class B-2 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 maintain the Subordinated Amount to at the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursedAmount, 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-1X-0, Class B-2 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 B-1X-0, Class B-2 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 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 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. 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 Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator 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 Securities Administrator xxxxx xxxxx xny replacement swap Trustee shall cause any xxxxxxexxxx xxap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator Trustee and the Depositor.
Appears in 1 contract
Swap Account. On the Closing Date, the Securities Administrator shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 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 and 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 other than a Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment 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-1X-0, Xxxxx X-2, Class B-2 B-3 and Class B-3 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 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 previously 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 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-1X-0, Xxxxx X-2, Class B-2 B-3 and Class B-3 B-4 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper 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 LIBOR Certificates, any remaining unpaid Basis Risk CarryForward AmountAmounts, and, without duplication, Upper Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount 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-1X-0, Xxxxx X-2, Class B-2 B-3 and Class B-3 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 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 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 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 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 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 that the Trust entering enters 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, agreement and the Trust is entitled to receive a payment Replacement Swap Provider Payment from a replacement swap provider, the Securities Administrator shall direct the replacement swap provider (or its guarantor) to make such payment Replacement Swap Provider Payment to the Swap Account. Any Senior Defaulted Notwithstanding the foregoing, any Replacement Swap Termination 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 Senior Defaulted Replacement Swap Termination Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider PaymentPayment 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 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 owed to the Swap Provider, any remaining amount of the Swap Termination Payment shall be paid to the Swap Provider on subsequent Distribution Dates in accordance with this Section 4.02 and Section 4.06 (unless the Replacement Swap Provider Payment is paid to the Swap 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 a grantor trust under subpart E, Part I of subchapter J of the Code 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, Net Swap Payments and Swap Termination Payments (other than Senior Defaulted without duplication of previously paid Replacement Swap Termination Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Account from the Upper-Tier 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 LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered LIBOR Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered LIBOR Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered LIBOR Certificates to receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk 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 in and obligations under a separate limited recourse interest rate cap notional principal contract written by between the Class X Certificateholders in favor of and Holders of each such Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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" (as defined in the Interest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, 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 the Schedule to the Interest Rate Swap Agreement. The Securities Administrator xxxxx xxxxx xny shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the 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 Part 5(f) of 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 demand that the Swap Provider or its guarantor post collateral in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2007-Nc3)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each any Distribution Date, Swap Termination Payments, Net Swap Payments owed to the Swap Provider and 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 previously 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 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 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 AmountAmounts, and, without duplication, Upper Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount 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 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 Securities Administrator 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 receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Securities Administrator 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 Securities Administrator Trustee shall withdraw from the reserve account and deposit into the Swap 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. In no event shall the Securities Administrator Trustee be responsible for the selection of any successor or replacement swap provider 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 Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code 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, 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 Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect of the Class IO Interest and, if applicable, the Class X Interestand 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and Class UT-PFIO Interests and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator 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 Securities Administrator xxxxx xxxxx xny replacement swap Trustee shall cause any xxxxxxexxxx xxap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator Trustee and the Depositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2006-He5)
Swap Account. On the Closing Date, the Securities Administrator shall establish and maintain in its name, a separate non-interest bearing trust account for the -108- benefit of the holders of the LIBOR Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator held pursuant to this Agreement. On the Business Day immediately preceding each 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, the sum of (x) all Net Swap PaymentsPayments and (y) any Swap Termination Payment, other than a Defaulted Swap Termination Payment, to the Swap Provider, 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;
(iviii) 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 B-2, Class B-3 Certificatesand 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 Section 4.02(a)(iii(iii), to the extent unpaid from Available Funds;
(viv) 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 LIBOR Certificates, to pay Basis Risk CarryForward Carry Forward Amounts andas described in Section 4.02(a)(iii)(P)-(Q), 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);
(viiv) 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 M-4, Class M-5, Class M-6, Class B-1, Class B-2 and B-2, Class B-3 Certificatesand Xxxxx X-0 Xxxxificates, 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 B-1, Class B-2 and Class B-3 Certificatesthat order, to pay any Unpaid Realized Loss AmountInterest Amounts as described in Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(xvii) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
and (xiviii) 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, 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 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. 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 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 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 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 shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Upper Tier 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 LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent provided in Section 8.13. Any Basis Risk CarryForward Carry Forward Amounts and, without duplication, Upper-Tier CarryForward Carry Forward Amounts distributed by the Securities Administrator to the Offered LIBOR Certificateholders from the Excess Reserve Fund Account or the Swap Account shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates (in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) or the Class IO Interest, respectively) and then to the respective Class or Classes of Offered LIBOR Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered LIBOR Certificates to receive payments of Basis Risk Carry Forward Amounts and, without duplication, Upper-Tier CarryForward Carry Forward Amounts (including, but without duplication Basis Risk CarryForward Amounts) from the Swap Account (along with Basis Risk CarryForward 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 , and any amounts reimbursed from the Upper-Tier REMIC to the failure Swap Account shall be treated as having been distributed to the Holders of the Class X Certificates. In the event the Swap Provider to perform any of its obligations under does not deliver the Delivery Amount (as defined in 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 AgreementSecurities Administrator, the Securities Administrator shall send any notices and make any demands, on behalf provide notice of the Trust as are required under the Interest Rate Swap Agreement. To the extent that such failure to the Swap Provider fails to make any payment required under terms within one Business Day of 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the Depositorfailure.
Appears in 1 contract
Swap Account. 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 Securities Administrator Supplemental Interest Trust Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "“Swap Account"”) as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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-1M-0, Class M-2Xxxxx 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 M-1M-0, Class M-2Xxxxx 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 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-1M-0, Class M-2Xxxxx 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 Trust receives a Swap Termination Payment, the Securities Administrator 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 obtained, then the Securities Administrator Supplemental Interest Trust 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 Securities Administrator Supplemental Interest Trust Trustee shall withdraw from the reserve account and deposit into the Swap 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 Securities Administrator 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 Securities Administrator Supplemental Interest Trust Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier REMICREMIC VI, first, by the Holder of the Class X Certificates (in respect of the Class REMIC VI Regular Interest Swap-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC III by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO InterestCertificates, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk CarryForward Amounts) 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 Class. The Swap Account shall be an "“outside reserve fund" ” for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator Supplemental Interest Trust Trustee shall immediately demand that Morgan StanleyMxxxxx Sxxxxxx, the guarantor of the Swap Provider's ’s obligations under xxx xxaxxxxxx the guarantee of Morgan Stanley Mxxxxx Sxxxxxx relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs and all payments then required to be made by Morgan Stanley Mxxxxx Sxxxxxx pursuant to such guarantee. In addition, in 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 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 the Interest Rate Swap Agreement. The Securities Administrator xxxxx xxxxx xny Supplemental Interest Trust Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator 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 Part 5(f) of 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 demand that the Swap Provider or its guarantor post collateral in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2006-He7)
Swap Account. On The Securities Administrator, on behalf of the Closing DateTrustee, the Securities Administrator shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates Swap Account (the "Swap Account") as a part ), on behalf of the Supplemental Interest Trust Fundand the Swap Provider. The Swap Account shall be an 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 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 and 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 other than a Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment Payment, owed to the Swap Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate Interest Distribution Amounts 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 B-1X-0, Xxxxx X-2, Class B-2 B-3 and Class B-3 B-4 Certificates, in that order, to pay Accrued Certificate Interest Distribution Amounts 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 Offered 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 previously yet been reimbursed, after giving effect to payments and distributions from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward Carry Forward Amounts and, without duplication, Upper Upper-Tier CarryForward 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 B-1X-0, Xxxxx X-2, Class B-2 B-3 and Class B-3 B-4 Certificates, to pay Basis Risk CarryForward Amounts, Carry Forward Amounts and, without duplication, Upper Upper-Tier CarryForward 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 LIBOR Certificates, any remaining unpaid Basis Risk CarryForward AmountCarry Forward Amounts, and, without duplication, Upper Upper-Tier CarryForward Carry Forward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount 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 B-1X-0, Xxxxx X-2, Class B-2 B-3 and Class B-3 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 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 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 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 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 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 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 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 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 shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 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 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 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 (Natixis Real Estate Capital Trust 2007-He2)
Swap Account. On (a) The Depositor hereby directs the Closing DateTrustee, 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 Securities Administrator Depositor, the Servicer and the Certificateholders, by their acceptance of such Certificates acknowledge and agree that the Trustee shall establish execute, deliver and maintain perform its obligations under the Swap Agreement and shall do so solely in its name, a separate non-interest bearing trust account for the benefit capacity as Supplemental Interest Trustee of the holders of Supplemental Interest Trust and not in its individual capacity. Promptly upon receipt, the Certificates (Supplemental Interest Trustee will deposit into the "Swap Account"Account all funds received from the Trustee pursuant to Section 7.03(a) as a part of and Section 7.03(b) clause 20 and all funds received from the Trust FundSwap Provider under the Swap Agreement. The Amounts on deposit in the Swap Account shall be an Eligible Account, and funds on deposit therein shall be held separate and apart from, and shall invested in accordance with Section 7.05.
(b) On each Distribution Date after the Startup Day but not be commingled with, any other moneys, including, without limitation, other moneys of beyond the Securities Administrator held pursuant to this Agreement. On the Business Day immediately preceding each February 2013 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 extent necessary, following all distributions pursuant to Section 7.03(b), the Swap Account. Funds Supplemental Interest Trustee shall apply, all amounts, if any, on deposit in the Swap Account will (other than investment earnings on funds held in the Swap Account, which shall be distributed for the account of the Servicer) in the following order of priority:
(i) first, to the Swap Provider, all any Net Swap Payments, if any, Payment owed to the Swap Provider pursuant to the Swap Agreement for that such Distribution DateDate 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, 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 Datenot resulting from a Swap Provider Trigger Event pursuant to the Swap Agreement;
(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)third, to the extent unpaid from Available FundsOffered 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 M-1X-0, Class M-2Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 M-6 and Class B-3 M-7 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)related Class Principal Carryover Shortfall, to the extent unpaid from Available Fundsremaining undistributed after the distributions pursuant to Section 7.03(b);
(v) fifth, concurrently, to the Offered Senior Certificates, to pay principal as described andany related Class Interest Carryover Shortfall, in the same manner and order of priority as set forthpro rata, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary remaining undistributed based on such amounts after the distributions pursuant 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 FundsSection 7.03(b);
(vi) to the Class A Certificatessixth, 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-1X-0, Class M-2Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 M-6 and Class B-3 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 Basis Risk CarryForward Amounts, and, without duplication, Upper Tier CarryForward Amounts, up to the Swap Payment Allocation for each applicable Certificateholders (other than the Class of Class M M-8 and Class B Certificates and M-9 Certificates) any Net WAC Cap Carryover to the extent unpaid from Available Funds (including Basis Risk Payments on deposit remaining undistributed after the distributions pursuant to Section 7.03(b), allocated in the Excess Reserve Fund Account)order of priority set forth in Section 7.03(b) clauses C.16. and C.17.;
(viii) to the Offered Certificateseighth, 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 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 Payments resulting from a Swap Provider for that Distribution DateTrigger Event; and
(xiix) ninth, to the holders of the Class X X-IO Certificates, any remaining amounts. Notwithstanding the foregoingremainder; provided, 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, 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 an amount equal to the cumulative amount of any Net Swap Receipt due the Trust distributions pursuant to clauses (calculated in accordance with the terms of the original Interest Rate Swap Agreementiii) 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(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 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 above on each Distribution Date. To , and all prior Distribution Dates, will not exceed the extent cumulative amount of Realized Losses with respect to 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 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 shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, Net Swap Payments and Swap Termination Payments all prior Distribution Dates.
(other than Senior Defaulted Swap Termination Paymentsc) payable to the Swap Provider shall be deemed to be paid to the Swap Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates [Reserved].
(in respect of the Class IO Interest and, if applicable, the Class X Interestd) 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be treated as an "“outside reserve fund" for federal income tax purposes ” within the meaning of Treasury Regulation Section 1.8606-2(h) and shall not be an asset of any REMIC or the Trust REMICEstate created pursuant to this Agreement and, instead, shall be an asset of the Supplemental Interest Trust. Furthermore, For state and federal tax purposes the Holders beneficial owners of the Class X X-IO Certificates shall be the beneficial owners of the Swap Account for all Account.
(e) For federal income tax purposes, and the Trustee shall be taxable on all income earned thereon. With treat the Holders of Offered Certificates as having entered into a notional principal contract with respect to the failure Holders of the Swap Provider Class X-IO Certificates. Pursuant to perform any each such notional principal contract, all Holders of its obligations under Offered Certificates shall be treated as having agreed to pay, on each Distribution Date, to the Interest Rate Swap AgreementHolder of the Class 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 Shortfall Amount”). A Class X-IO 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 Cap, and a Class X-IO 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 breach Holder of the Class X-IO Certificates shall be treated as having agreed to pay Net WAC Cap Carryovers to the Holders of the Offered 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 of a Class X-IO Shortfall Amount shall be treated for tax purposes as having been received by the Swap Provider Holders of any such Certificates in respect of its representations their interests in the Master REMIC and warranties made as having been paid by such Holders to the Supplemental Interest Trustee pursuant to the notional principal contract. Thus, each Offered Certificate 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 Supplemental Interest Rate Swap Agreement, or the termination Trustee shall treat such notional principal contract as having a value of $10,000 as 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 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the DepositorStartup Date.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Nationstar Home Equity Loan Trust 2007-B)
Swap Account. 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 Securities Administrator Supplemental Interest Trust Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "“Swap Account"”) as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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 other than a Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment 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-1M-0, Class M-2Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 B-2, Class B-3 and Class B-3 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 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-1M-0, Class M-2Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 B-2, Class B-3 and Class B-3 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 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-1M-0, Class M-2Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 B-2, Class B-3 and Class B-3 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 Trust receives a Swap Termination Payment, the Securities Administrator 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 obtained, then the Securities Administrator Supplemental Interest Trust 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 Securities Administrator Supplemental Interest Trust Trustee shall withdraw from the reserve account and deposit into the Swap 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 Securities Administrator 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 agreement and the occurrence of an Additional Termination Event of the type described in Part 1(h)(ii) of the Supplemental Interest Rate Swap Agreement, the Trust is entitled to receive a payment from a replacement swap providerReplacement Swap Provider Payment, the Securities Administrator Supplemental Interest Trust Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Notwithstanding the foregoing, any Replacement Swap Termination 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, then any Senior Defaulted Replacement Swap Termination Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider PaymentPayment 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 Securities AdministratorServicers, any Servicer, any Custodian, any the Responsible Party, the Trustee or any other Person. The Securities Administrator shall account for However, to the extent any Replacement Swap Provider Payment received from a replacement swap provider and paid to the Swap Account as an asset Provider being replaced is less than the full amount of a grantor trust under subpart ESwap Termination Payment owed to the Swap Provider, Part I of subchapter J any remaining amount of the Code Swap Termination Payment shall be paid to the Swap Provider on the subsequent Distribution Dates in accordance with this Section 4.06 and not as an asset of any Trust REMIC created pursuant Section 4.02 (unless the Replacement Swap Provider Payment is paid to this Agreementthe Swap Provider 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, 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 Account from the Upper-Tier REMICREMIC VI, first, by the Holder of the Class X Certificates (in respect of the Class REMIC VI Regular Interest Swap-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC III by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO InterestCertificates, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk CarryForward Amounts) 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 Class. The Swap Account shall 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 "outside reserve fund" entity separate from the Holder of the Class X Certificates unless and until the date when either (a) there is more than one Class X Certificateholder or (b) any Class of Certificates in addition to the Class X Certificates is recharacterized as an equity interest in the Supplemental Interest Trust for federal income tax purposes 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. 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 Securities Administrator 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 Securities Administrator Supplemental Interest Trust Trustee shall immediately demand that Morgan StanleyMxxxxx Sxxxxxx, the guarantor of the Swap Provider's ’s obligations under xxx xxaxxxxxx the guarantee of Morgan Stanley Mxxxxx Sxxxxxx relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs and all payments then required to be made by Morgan Stanley Mxxxxx Sxxxxxx pursuant to such guarantee. In addition, in 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 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 the Interest Rate Swap Agreement. The Securities Administrator xxxxx xxxxx xny Supplemental Interest Trust Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator 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 Part 5(f) of 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 demand that the Swap Provider or its guarantor post collateral in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2007-Nc1)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1X-0, Class B-2 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 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-1X-0, Class B-2 Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, Amounts and, without duplication, Upper 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, Amount and, without duplication, Upper 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-1X-0, Class B-2 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 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 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. 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 Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator 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" (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 Trustee shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of the Interest Rate Swap Agreement. The Securities Administrator xxxxx xxxxx xny Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator Trustee and the Depositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Capital I Inc. Trust 2006-Nc2)
Swap Account. 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 Securities Administrator Supplemental Interest Trust Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "“Swap Account"”) as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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-1M-0, Class M-2Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 B-2, Class B-3 and Class B-3 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 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-1M-0, Class M-2Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 B-2, Class B-3 and Class B-3 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 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-1M-0, Class M-2Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 B-2, Class B-3 and Class B-3 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 Trust receives a Swap Termination Payment, the Securities Administrator 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 obtained, then the Securities Administrator Supplemental Interest Trust 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 Securities Administrator Supplemental Interest Trust Trustee shall withdraw from the reserve account and deposit into the Swap 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 Securities Administrator 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 Securities Administrator Supplemental Interest Trust Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 the Responsible Party, the Trustee or any other Person. The Securities Administrator shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier REMICREMIC VI, first, by the Holder of the Class X Certificates (in respect of the Class REMIC VI Regular Interest Swap-IO Interest and, if applicable, the Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC III by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and to the extent provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO InterestCertificates, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk CarryForward Amounts) 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 Class. The Swap Account shall 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 "outside reserve fund" entity separate from the Holder of the Class X Certificates unless and until the date when either (a) there is more than one Class X Certificateholder or (b) any Class of Certificates in addition to the Class X Certificates is recharacterized as an equity interest in the Supplemental Interest Trust for federal income tax purposes 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. 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 Securities Administrator 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 Securities Administrator Supplemental Interest Trust Trustee shall immediately demand that Morgan StanleyMxxxxx Sxxxxxx, the guarantor of the Swap Provider's ’s obligations under xxx xxaxxxxxx the guarantee of Morgan Stanley Mxxxxx Sxxxxxx relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs and all payments then required to be made by Morgan Stanley Mxxxxx Sxxxxxx pursuant to such guarantee. In addition, in 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 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 the Interest Rate Swap Agreement. The Securities Administrator xxxxx xxxxx xny Supplemental Interest Trust Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator 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 Part 5(f) of 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 demand that the Swap Provider or its guarantor post collateral in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2006-Nc5)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each any Distribution Date, Swap Termination Payments, Net Swap Payments owed to the Swap Provider and 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 previously 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 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 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 AmountAmounts, and, without duplication, Upper Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount 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 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 Securities Administrator 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 receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Securities Administrator 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 Securities Administrator Trustee shall withdraw from the reserve account and deposit into the Swap 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. In no event shall the Securities Administrator Trustee be responsible for the selection of any successor or replacement swap provider 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 Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code 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, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator 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" (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 Trustee shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of the Interest Rate Swap Agreement. The Securities Administrator xxxxx xxxxx xny Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator 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 Part 5(f) of 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 demand that the Swap Provider or its guarantor post collateral in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2006-He6)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the LIBOR Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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, the sum of (x) all Net Swap PaymentsPayments and (y) any Swap Termination Payment, other than a Defaulted Swap Termination Payment, to the Swap Provider, 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;
(iviii) 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 B-2, Class B-3 Certificatesand 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 Section 4.02(a)(iii(iii), to the extent unpaid from Available Funds;
(viv) 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 LIBOR Certificates, to pay Basis Risk CarryForward Carry Forward Amounts andas described in Section 4.02(a)(iii)(Q), 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);
(viiv) 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 M-4, Class M-5, Class M-6, Class B-1, Class B-2 and B-2, Class B-3 Certificatesand Clxxx X-0 Xxxxxxicates, 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 B-1, Class B-2 and Class B-3 Certificatesthat order, to pay any Unpaid Realized Loss AmountInterest Amounts as described in Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(xvii) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xiviii) 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, 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 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. 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 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 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 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 The Trustee or any other Person. The Securities Administrator shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Upper Tier 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 LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Carry Forward Amounts distributed by the Securities Administrator Trustee to the Offered LIBOR Certificateholders from the Excess Reserve Fund Account or the Swap Account shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates (in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) or the Class IO Interest, respectively) and then to the respective Class or Classes of Offered LIBOR Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered LIBOR Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk CarryForward Amounts) Carry Forward Amounts from the Swap Account (along with Basis Risk CarryForward 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 , and any amounts reimbursed from the Upper-Tier REMIC to the failure Swap Account shall be treated as having been distributed to the Holders 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 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the DepositorClass X Certificates.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Sabr Trust 2005-Fr3)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each any Distribution Date, Swap Termination Payments (including, without duplication, Replacement Swap Provider Payments), Net Swap Payments owed to the Swap Provider and 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 other than a Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment 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 previously 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 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 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 AmountAmounts, and, without duplication, Upper Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount 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 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 Securities Administrator 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 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 swap provider cannot be obtained, then the Securities Administrator 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 Securities Administrator Trustee shall withdraw from the reserve account and deposit into the Swap 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 Trustee be responsible for the selection of any successor or replacement swap provider 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 Agreementswap, the Trust is entitled to receive a payment Replacement Swap Provider Payment from a replacement swap provider, the Securities Administrator Trustee shall direct the replacement swap provider to make such payment Replacement Swap Provider Payment to the Swap Account. Any Senior Defaulted Notwithstanding the foregoing, any Replacement Swap Termination 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 Senior Defaulted Replacement Swap Termination Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider PaymentPayment 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 Securities Administrator, any Servicer, any 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 owed to the Swap Provider, any remaining amount of the Swap Termination Payment shall be paid to the Swap Provider on subsequent Distribution Dates in accordance with this Section 4.02 and Section 4.06 (unless the Replacement Swap Provider Payment is paid to the Swap Provider on a Distribution Date, in which case such remaining amounts will be paid on such Distribution Date). The Securities Administrator Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code 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, Net Swap Payments and Swap Termination Payments (other than Senior Defaulted without duplication of previously paid Replacement Swap Termination Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk 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 in and obligations under a separate limited recourse interest rate cap notional principal contract written by between the Class X Certificateholders in favor of and Holders of each such Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 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 Securities Administrator 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" (as defined in the Interest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, 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 the Schedule to the Interest Rate Swap Agreement. The Securities Administrator xxxxx xxxxx xny Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator 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 Part 5(f) of 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 demand that the Swap Provider or its guarantor post collateral in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2007-He1)
Swap Account. On the Closing Date, the Securities Administrator shall establish and maintain in its name, a separate non-interest interest-bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an Eligible Account, and funds on deposit therein shall not be invested and 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. 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 and 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 other than a Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment 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 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 previously 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 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 X-0 xxx Xxxxx B-3 Certificates, to pay Basis Risk CarryForward Amounts, Amounts and, without duplication, Upper Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M 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 AmountAmounts, and, without duplication, Upper Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount 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 X-0 xxx Xxxxx 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 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 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 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 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 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 that the Trust entering enters 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, agreement and the Trust is entitled to receive a payment Replacement Swap Provider Payment from a replacement swap provider, the Securities Administrator shall direct the replacement swap provider (or its guarantor) to make such payment Replacement Swap Provider Payment to the Swap Account. Any Senior Defaulted Notwithstanding the foregoing, any Replacement Swap Termination 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 Senior Defaulted Replacement Swap Termination Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider PaymentPayment 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 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 owed to the Swap Provider, any remaining amount of the Swap Termination Payment shall be paid to the Swap Provider on subsequent Distribution Dates in accordance with this Section 4.02 and Section 4.06 (unless the Replacement Swap Provider Payment is paid to the Swap 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 a grantor trust under subpart E, Part I of subchapter J of the Code 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, Net Swap Payments and Swap Termination Payments (other than Senior Defaulted without duplication of previously paid Replacement Swap Termination Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk 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 in and obligations under a separate limited recourse interest rate cap notional principal contract written by between the Class X Certificateholders in favor of and Holders of each such Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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" (as defined in the Interest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, 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 the Schedule to the Interest Rate Swap Agreement. The Securities Administrator xxxxx xxxxx xny shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the 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 Part 5(f) of 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 demand that the Swap Provider or its guarantor post collateral in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2007-He7)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the LIBOR Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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, the sum of (x) all Net Swap PaymentsPayments and (y) any Swap Termination Payment, other than a Defaulted Swap Termination Payment, to the Swap Provider, 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;
(iviii) 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 B-2, Class B-3 Certificatesand 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 Section 4.02(a)(iii(iii), to the extent unpaid from Available Funds;
(viv) 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 LIBOR Certificates, to pay Basis Risk CarryForward Carry Forward Amounts andas described in Section 4.02(a)(iii)(R), 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);
(viiv) 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 M-4, Class M-5, Class M-6, Class B-1, Class B-2 and B-2, Class B-3 Certificatesand Clxxx X-0 Xxxxxxicates, 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 B-1, Class B-2 and Class B-3 Certificatesthat order, to pay any Unpaid Realized Loss AmountInterest Amounts as described in Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(xvii) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xiviii) 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, 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 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. 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 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 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 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 Person4.07. The Securities Administrator Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Upper Tier 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 LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Carry Forward Amounts distributed by the Securities Administrator Trustee to the Offered LIBOR Certificateholders from the Excess Reserve Fund Account or the Swap Account shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates (in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) or the Class IO Interest, respectively) and then to the respective Class or Classes of Offered LIBOR Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered LIBOR Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk CarryForward Amounts) Carry Forward Amounts from the Swap Account (along with Basis Risk CarryForward 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 , and any amounts reimbursed from the Upper Tier REMIC to the failure Swap Account shall be treated as having been distributed to the Holders 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 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the DepositorClass X Certificates.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Securitized Asset Backed Receivables LLC Trust 2005-He1)
Swap Account. On the Closing Date, the Securities Administrator shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an Eligible Account, and funds on deposit therein shall not be invested and 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. 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 and 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 other than a Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment 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 B-2, Class B-3 and Class B-3 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 previously 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 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 B-2, Class B-3 and Class B-3 B-4 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper 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 AmountAmounts, and, without duplication, Upper Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount 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 B-2, Class B-3 and Class B-3 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 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 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 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 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 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 that the Trust entering enters 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, agreement and the Trust is entitled to receive a payment Replacement Swap Provider Payment from a replacement swap provider, the Securities Administrator shall direct the replacement swap provider (or its guarantor) to make such payment Replacement Swap Provider Payment to the Swap Account. Any Senior Defaulted Notwithstanding the foregoing, any Replacement Swap Termination 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 Senior Defaulted Replacement Swap Termination Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider PaymentPayment 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 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 owed to the Swap Provider, any remaining amount of the Swap Termination Payment shall be paid to the Swap Provider on subsequent Distribution Dates in accordance with this Section 4.02 and Section 4.06 (unless the Replacement Swap Provider Payment is paid to the Swap 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 a grantor trust under subpart E, Part I of subchapter J of the Code 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, Net Swap Payments and Swap Termination Payments (other than Senior Defaulted without duplication of previously paid Replacement Swap Termination Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk 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 in and obligations under a separate limited recourse interest rate cap notional principal contract written by between the Class X Certificateholders in favor of and Holders of each such Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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" (as defined in the Interest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, 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 the Schedule to the Interest Rate Swap Agreement. The Securities Administrator xxxxx xxxxx xny shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the 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 Part 5(f) of 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 demand that the Swap Provider or its guarantor post collateral in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2007-He6)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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 other than a Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment Payment, if any, 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-1X-0, Class B-2 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 maintain the Subordinated Amount to at the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursedAmount, 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-1X-0, Class B-2 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 B-1X-0, Class B-2 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 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 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. 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 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 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 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 The Trustee or any other Person. The Securities Administrator shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Upper Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Carry Forward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator Trustee shall send take any notices and make any demands, on behalf all such actions as may be necessary or appropriate to enforce the rights 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 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the Depositorwith respect thereto.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2005-Wmc6)
Swap Account. On (a) The Depositor hereby directs the Closing DateSecurities 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 establish execute, deliver and maintain perform its obligations under the Swap Agreement and shall do so solely in its name, a separate non-interest bearing trust account for the benefit capacity as Supplemental Interest Trustee of the holders of Supplemental Interest Trust and not in its individual capacity. Promptly upon receipt, the Certificates (Supplemental Interest Trustee will deposit into the "Swap Account"Account all funds received from the Securities Administrator pursuant to Section 7.03(a) as a part of and Section 7.03(b) clause 18. and all funds received from the Trust FundSwap Provider under the Swap Agreement. The Amounts on deposit in the Swap Account shall be an Eligible Accountinvested in accordance with Section 7.05.
(b) On each Distribution Date (or, 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 in the case of payments to the Securities Administrator held pursuant Swap Provider that occur prior to this Agreement. On the Business Day immediately preceding each Distribution Date, Swap Termination Payments, Net Swap Payments owed one Business Day prior to such Distribution Date to the Swap Provider and Net Swap Receipts for that extent such payments are available to be made on the related Distribution Date will be deposited into Date) after the Swap Account. Funds 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 will (other than investment earnings on funds held in the Swap Account, which shall be distributed for the account of the Servicer) in the following order of priority:
(i) first, to the Swap Provider, all any Net Swap Payments, if any, Payment owed to the Swap Provider pursuant to the Swap Agreement for that such Distribution DateDate 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, 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 Datenot resulting from a Swap Provider Trigger Event pursuant to the Swap Agreement;
(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)third, to the extent unpaid from Available FundsOffered Certificates (other than the Class M-7B, Class M-8 and Class M-9B 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-1X-0, Class M-2Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 M-7A and Class B-3 M-9A 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)related Class Principal Carryover Shortfall, to the extent unpaid from Available Fundsremaining undistributed after the distributions pursuant to Section 7.03(b);
(v) fifth, concurrently, to the Offered Senior Certificates, to pay principal as described andany related Class Interest Carryover Shortfall, in the same manner and order of priority as set forthpro rata, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary remaining undistributed based on such amounts after the distributions pursuant 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 FundsSection 7.03(b);
(vi) to the Class A Certificatessixth, 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-1X-0, Class M-2Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 M-7A and Class B-3 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 Basis Risk CarryForward Amountsthe applicable Certificateholders (other than the Class M-7B, and, without duplication, Upper Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M M-8 and Class B Certificates and M-9B Certificates) any Net WAC Cap Carryover to the extent unpaid from Available Funds (including Basis Risk Payments on deposit remaining undistributed after the distributions pursuant to Section 7.03(b), allocated in the Excess Reserve Fund Account)order of priority set forth in Section 7.03(b) clauses C.16. and C.17.;
(viii) to the Offered Certificateseighth, 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 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 Payments resulting from a Swap Provider for that Distribution DateTrigger Event; and
(xiix) ninth, to the holders of the Class X X-IO Certificates, any remaining amounts. Notwithstanding the foregoingremainder; provided, 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, 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 an amount equal to the cumulative amount of any Net Swap Receipt due the Trust distributions pursuant to clauses (calculated in accordance with the terms of the original Interest Rate Swap Agreementiii) 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(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 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 above on each Distribution Date. To , and all prior Distribution Dates, will not exceed the extent cumulative amount of Realized Losses with respect to 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 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 shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, Net Swap Payments and Swap Termination Payments all prior Distribution Dates.
(other than Senior Defaulted Swap Termination Paymentsc) payable to the Swap Provider shall be deemed to be paid to the Swap Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates [Reserved].
(in respect of the Class IO Interest and, if applicable, the Class X Interestd) 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be treated as an "“outside reserve fund" for federal income tax purposes ” within the meaning of Treasury Regulation Section 1.8606-2(h) and shall not be an asset of any REMIC or the Trust REMICEstate created pursuant to this Agreement and, instead, shall be an asset of the Supplemental Interest Trust. Furthermore, For state and federal tax purposes the Holders beneficial owners of the Class X X-IO Certificates shall be the beneficial owners of the Swap Account for all Account.
Section 7.13. Tax Treatment of the Offered Certificates: Class X-IO Shortfall Amounts and Net WAC Cap Carryover Amounts.
(a) For federal income tax purposes, each Class of Offered Certificates represents (i) ownership of REMIC regular interests, (ii) obligations to make payments to the Supplemental Interest Trust in respect of Class X-IO Shortfall Amounts, and shall be taxable on all income earned thereon(iii) the rights to receive payments in respect of Net WAC Cap Carryovers. With respect to the failure any Class of the Swap Provider to perform any of its obligations under the Interest Rate Swap AgreementOffered Certificate, 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 Agreementfor federal income tax purposes, the Securities Administrator shall send treat the 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 X-IO Certificates on the other.
(b) To the extent a Class X-IO Shortfall Amount exists on any notices 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 make (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 demandsClass 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 Trust as are required under owners of the Interest Rate Swap Agreement. 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 Swap Provider fails to make 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 required under the terms of the Interest Rate Swap Agreementnotional principal contract by the owner of the Class X-IO Certificates.
(d) For federal income tax reporting purposes, the Securities Administrator notional principal contract shall immediately demand that Morgan Stanley, the guarantor be treated as having an aggregate value in favor 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 xxxxx xxxxx xny replacement swap provider to provide a copy owners of the related replacement interest rate swap agreement to Offered Certificates in the Securities Administrator and the Depositoramount of $57,609,758.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Home Equity Loan Trust 2007-Fre1)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the LIBOR Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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, the sum of (x) all Net Swap PaymentsPayments and (y) any Swap Termination Payment, other than a Defaulted Swap Termination Payment, to the Swap Provider, 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;
(iviii) 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 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 maintain the Subordinated Amount to at the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursedAmount, 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-1X-0, Class B-2 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 B-1, Class B-2 and Class B-3 Certificatesthat order, to pay any Unpaid Realized Loss AmountInterest Amounts as described in Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(xvii) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xiviii) 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, 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 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. 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 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 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 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 The Trustee or any other Person. The Securities Administrator shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Upper Tier 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 LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent provided in Section 8.13. Any Basis Risk CarryForward Carry Forward Amounts and, without duplication, Upper-Tier CarryForward Carry Forward Amounts distributed by the Securities Administrator Trustee to the Offered LIBOR Certificateholders from the Excess Reserve Fund Account or the Swap Account shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates (in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) or the Class IO Interest, respectively) and then to the respective Class or Classes of Offered LIBOR Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered LIBOR Certificates to receive payments of Basis Risk Carry Forward Amounts and, without duplication, Upper-Tier CarryForward Carry Forward Amounts (including, but without duplication Basis Risk CarryForward Amounts) from the Swap Account (along with Basis Risk CarryForward 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 , and any amounts reimbursed from the Upper-Tier REMIC to the failure Swap Account shall be treated as having been distributed to the Holders 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 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the DepositorClass X Certificates.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Securitized Asset Backed Receivables LLC Trust 2005-Op2)
Swap Account. On the Closing Date, the Securities Administrator shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the LIBOR Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator held pursuant to this Agreement. On the Business Day immediately preceding each 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, the sum of (x) all Net Swap PaymentsPayments and (y) any Swap Termination Payment, other than a Defaulted Swap Termination Payment, to the Swap Provider, 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;
(iviii) 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 B-2, Class B-3 Certificatesand 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 Section 4.02(a)(iii(iii), to the extent unpaid from Available Funds;
(viv) 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 LIBOR Certificates, to pay Basis Risk CarryForward Carry Forward Amounts andas described in Section 4.02(a)(iii)(P)-(Q), 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);
(viiv) 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 M-4, Class M-5, Class M-6, Class B-1, Class B-2 and B-2, Class B-3 Certificatesand Clxxx X-0 Xxxxxxicates, 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 B-1, Class B-2 and Class B-3 Certificatesthat order, to pay any Unpaid Realized Loss AmountInterest Amounts as described in Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(xvii) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xiviii) 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, 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 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. 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 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 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 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 shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Upper Tier 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 LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent provided in Section 8.13. Any Basis Risk CarryForward Carry Forward Amounts and, without duplication, Upper-Tier CarryForward Carry Forward Amounts distributed by the Securities Administrator to the Offered LIBOR Certificateholders from the Excess Reserve Fund Account or the Swap Account shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates (in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) or the Class IO Interest, respectively) and then to the respective Class or Classes of Offered LIBOR Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered LIBOR Certificates to receive payments of Basis Risk Carry Forward Amounts and, without duplication, Upper-Tier CarryForward Carry Forward Amounts (including, but without duplication Basis Risk CarryForward Amounts) from the Swap Account (along with Basis Risk CarryForward 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 , and any amounts reimbursed from the Upper-Tier REMIC to the failure Swap Account shall be treated as having been distributed to the Holders of the Class X Certificates. In the event the Swap Provider to perform any of its obligations under does not deliver the Delivery Amount (as defined in 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 AgreementSecurities Administrator, the Securities Administrator shall send any notices and make any demands, on behalf provide notice of the Trust as are required under the Interest Rate Swap Agreement. To the extent that such failure to the Swap Provider fails to make any payment required under terms within one Business Day of 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the Depositorfailure.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Securitized Asset Backed Receivables LLC Trust 2006-Wm1)
Swap Account. On (a) The Trustee is hereby authorized and directed in its capacity as Supplemental Interest Trustee to enter into the Closing DateSwap Agreement on behalf of the Supplemental Interest Trust and to establish the Swap Account pursuant to Section 7.02(a). Promptly upon receipt, the Securities Administrator shall establish Supplemental Interest Trustee will deposit into the Swap Account all funds received from the Trustee pursuant to Section 7.03(a) and maintain Section 7.03(b) clause 21 and all funds received from the Swap Provider under the Swap Agreement. Amounts on deposit in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an Eligible Account, and funds on deposit therein shall be held separate and apart from, and shall invested in accordance with Section 7.05.
(b) On each Distribution Date after the Startup Day but not be commingled with, any other moneys, including, without limitation, other moneys of beyond the Securities Administrator held pursuant to this Agreement. On the Business Day immediately preceding each November 2012 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 extent necessary, following all distributions pursuant to Section 7.03(b), the Swap Account. Funds Supplemental Interest Trustee shall apply, all amounts, if any, on deposit in the Swap Account will (other than investment earnings on funds held in the Swap Account, which shall be distributed for the account of the Servicer) in the following order of priority:
(i) first, to the Swap Provider, all any Net Swap Payments, if any, Payment owed to the Swap Provider pursuant to the Swap Agreement for that such Distribution DateDate 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, 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 Datenot resulting from a Swap Provider Trigger Event pursuant to the Swap Agreement;
(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)third, to the extent unpaid from Available FundsOffered 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 M-1X-0, Class M-2Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1M-7, Class B-2 M-8, Class M-9, Class M-10 and Class B-3 M-11 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)related Class Principal Carryover Shortfall, to the extent unpaid from Available Fundsremaining undistributed after the distributions pursuant to Section 7.03(b);
(v) fifth, concurrently, to the Offered Senior Certificates, to pay principal as described andany related Class Interest Carryover Shortfall, in the same manner and order of priority as set forthpro rata, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary remaining undistributed after the distributions pursuant 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 FundsSection 7.03(b);
(vi) to the Class A Certificatessixth, 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-1X-0, Class M-2Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1M-7, Class B-2 M-8, Class M-9, Class M-10 and Class B-3 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 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 applicable Certificateholders any Net WAC Cap Carryover to the extent unpaid from Available Funds (including Basis Risk Payments on deposit remaining undistributed after the distributions pursuant to Section 7.03(b), allocated in the Excess Reserve Fund Accountorder of priority set forth in clauses 19. and 20. of 7.03(b);
(viii) to the Offered Certificateseighth, 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 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 Payments resulting from a Swap Provider for that Distribution DateTrigger Event; and
(xiix) ninth, to the holders of the Class X X-IO Certificates, any remaining amounts. Notwithstanding the foregoingremainder; provided, 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, 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 an amount equal to the cumulative amount of any Net Swap Receipt due the Trust distributions pursuant to clauses (calculated in accordance with the terms of the original Interest Rate Swap Agreementiii) 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(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 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 above on each Distribution Date. To , and all prior Distribution Dates, will not exceed the extent cumulative amount of Realized Losses with respect to 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 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 shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, Net Swap Payments and Swap Termination Payments all prior Distribution Dates.
(other than Senior Defaulted Swap Termination Paymentsc) payable to the Swap Provider shall be deemed to be paid to the Swap Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates [Reserved].
(in respect of the Class IO Interest and, if applicable, the Class X Interestd) 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be treated as an "“outside reserve fund" for federal income tax purposes ” within the meaning of Treasury Regulation Section 1.8606-2(h) and shall not be an asset of any REMIC or the Trust REMICEstate created pursuant to this Agreement and, instead, shall be an asset of the Supplemental Interest Trust. Furthermore, For state and federal tax purposes the Holders beneficial owners of the Class X X-IO Certificates shall be the beneficial owners of the Swap Account for all Account.
(e) For federal income tax purposes, and the Trustee shall be taxable on all income earned thereon. With treat the Holders of Offered Certificates as having entered into a notional principal contract with respect to the failure Holders of the Swap Provider Class X-IO Certificates. Pursuant to perform any each such notional principal contract, all Holders of its obligations under Offered Certificates shall be treated as having agreed to pay, on each Distribution Date, to the Interest Rate Swap AgreementHolder of the Class 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 Shortfall Amount”). A Class X-IO 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 Cap, and a Class X-IO 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 breach Holder of the Class X-IO Certificates shall be treated as having agreed to pay Net WAC Cap Carryovers to the Holders of the Offered 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 of a Class X-IO Shortfall Amount shall be treated for tax purposes as having been received by the Swap Provider Holders of any such Certificates in respect of its representations their interests in the Master REMIC and warranties made as having been paid by such Holders to the Supplemental Interest Trustee pursuant to the notional principal contract. Thus, each Offered Certificate 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 Supplemental Interest Rate Swap Agreement, or the termination Trustee shall treat such notional principal contract as having a value of $10,000 as 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 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the DepositorStartup Date.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Nationstar Home Equity Loan Trust 2006-B)
Swap Account. On (a) No later than the Closing Date, the Securities Administrator Trustee shall establish and maintain in its namea separate, a separate non-interest bearing segregated trust account to be titled, "Wells Fargo Bank, N.A. as Trustee, in trust for the benefit of the holders of the Certificates (the "Swap registered holderx xx Asset Backed Funding Corporation Asset-Backed Certificates, Series 2006-OPT3--Swap Account") as a part of the Trust Fund. The Swap Account ." Such account shall be an Eligible Account, 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 Securities Administrator Trustee held pursuant to this Agreement. Amounts therein shall be held uninvested.
(b) On the Business Day immediately preceding prior to each Distribution Date, Swap Termination Paymentsprior to any distribution to any Certificate, Net Swap Payments owed to the Swap Provider and Net Swap Receipts for that Distribution Date will be deposited Trustee shall deposit 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 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 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 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 an amount equal to the amount of any Net Swap Receipt due Payment or Swap Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) owed to the Trust Swap Provider (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 after taking into account any upfront payment received 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 counterparty to enter into a replacement interest rate swap agreement. Upon termination of the Trust, any ) from Available Funds and (ii) 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 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 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 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 received by the Trust to CertificateholdersTrustee, the Securities Administrator, any Servicer, any Custodian, any Responsible Party, the Trustee or any other Person. The Securities Administrator shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholdersdistribution in accordance with Section 4.02(c). For federal income tax purposes, Net Swap Payments and Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable any amounts paid to the Swap Provider as a Net Swap Payment on the Business Day prior to each Distribution Date shall be deemed paid, pursuant to be paid 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 LTIO Interest, (iv) then from REMIC 4 to REMIC 5 in respect of the Swap IO Interest, and (v) then from the Class CE Certificates to the Swap Account from the Upper-Tier REMIC, first, by the Holder Provider in respect of the Net Swap Payment due to the Swap Provider on such 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, 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 X B Certificates (in respect of the Class IO Interest andDistribution Amount (as defined in Section 4.09(d) below), if applicable, and then shall be deemed paid to the Class X InterestCE Certificates pursuant to the notional principal contract described in Section 4.09(d) below and second, other than then to the Swap Provider. Any amounts deemed paid by any Defaulted 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, from the Upper-Tier REMIC Payment triggered by the Holders of the applicable Class or Classes of Offered Certificates (in respect of Class IO Shortfalls) as and a Swap Provider Trigger Event owed to the extent provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Swap Provider pursuant to the Offered Certificateholders shall Interest Rate Swap Agreement will be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first subordinated to distributions to the Holders of the Class X A Certificates, Class B Certificates, and Class M Certificates in respect 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 Holders of the Class X Interest CE Certificates.
(d) The Trustee shall treat the Holders of Certificates (other than the Class P, Class CE and 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 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 Interests in REMIC 4 corresponding to such Classes of Certificates over (ii) the amount payable on such 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 applicable 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 remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificatessuch balance. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates pursuant to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermorenotional principal contract, the Holders of the Class X CE Certificates shall be treated as having agreed to pay Cap Carryover Amounts to the beneficial owners Holders of the Swap Account for all federal income tax purposesCertificates (other than the Class CE, Class P and 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 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 Residual Certificates) of a Class IO Distribution Amount shall be taxable on all income earned thereon. With treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in REMIC 4 and as having been paid by such Holders 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 Trustee pursuant to the Interest Rate Swap Agreementnotional principal contract. Thus, or each Certificate (other than the termination Class P and Residual Certificates) shall be treated as representing not only ownership of the Interest Rate Swap AgreementRegular Interests in REMIC 4, the Securities Administrator shall send any notices but also ownership of an interest in, and make any demandsobligations with respect to, 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 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the Depositornotional principal contract.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (ABFC 2006-Opt3 Trust)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee 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-1X-0, Class B-2 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 maintain the Subordinated Amount to at the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursedAmount, 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-1X-0, Class B-2 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 B-1X-0, Class B-2 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 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 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. 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 Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 the Custodian, any Responsible Party, the Trustee or any other Person. The Securities Administrator Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator 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 Securities Administrator xxxxx xxxxx xny replacement swap Trustee shall cause any xxxxxxexxxx xxap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator Trustee and the Depositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Capital I Inc. Trust 2006-He1)
Swap Account. (a) On the Closing Date, there is hereby established a separate trust (the Securities Administrator "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 Trustee shall establish and maintain in its namea separate, a separate non-interest bearing segregated trust account for to be held in the benefit of the holders of the Certificates (the Supplemental Interest Trust, titled, "Swap Account") , [____________________], as a part Supplemental Interest Trust Trustee, in trust for the Swap Provider and the registered holders of the Trust Fund. The Swap Account [_______________________________]" Such account shall be an Eligible Account, 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 Securities Administrator Trustee, in its capacity as Supplemental Interest Trust Trustee, held pursuant to this Agreement. Amounts therein shall be held uninvested.
(b) On the Business Day immediately preceding each Distribution Date, Swap Termination Paymentsprior to any distribution to any Certificate, Net Swap Payments owed the Trustee shall deliver to the Swap Provider and Net Swap Receipts Supplemental Interest Trust Trustee for that Distribution Date will be deposited deposit 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 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 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 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 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. In no event shall the Securities Administrator be responsible for the selection of any successor Payment 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 shall be made (other than any Swap Termination Payment resulting from the a Swap Account Provider Trigger Event) owed to the Swap Provider immediately upon receipt (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 such payment, regardless of whether Available Funds and (ii) amounts received by 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 Supplemental Interest Trust Trustee from the Swap AccountAdministrator, thenfor distribution in accordance with Section 4.01(e) above, notwithstanding anything to the contrary contained in this Agreement, any Senior Defaulted Swap Termination Payment shall be paid pursuant to the Swap Provider immediately upon receipt of such Replacement Swap Provider PaymentAdministration Agreement, 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 Securities Administrator, any Servicer, any Custodian, any Responsible Party, the Trustee or any other Person. The Securities Administrator shall account for the Swap Account dated as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code Closing Date (the "Swap Administration Agreement"), among [____________________] in its capacity as Supplemental Interest Trustee, Trustee and not Swap Administrator and Option One Mortgage Corporation (in substantially the form attached hereto as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X CertificateholdersExhibit N). For federal income tax purposes, Net Swap Payments and Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable 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 majority Holder of the Class C Certificates.
(d) To 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 paid to the Swap Account from the Upper-Tier REMIC, first, by the Holder an obligation of the Class X Certificates Supplemental Interest Trust.
(in respect of the Class IO Interest and, if applicable, the Class X Intereste) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by The Trustee shall treat the Holders of the applicable Class or Classes of Offered Certificates (in respect of other than the Class IO ShortfallsP, Class C and Class R Certificates) as and to the extent provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first having entered into a notional principal contract with respect to the Holders of the Class X C Certificates. Pursuant to each such notional principal contract, all Holders of Certificates (other than the Class P, Class C and Class R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class C Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the 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 among such Certificates based on the amount of interest otherwise payable to such Certificates, 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 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 C, 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 C, 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 the Class X Interest their interests in REMIC 3 and (to the extent remaining after payments as having been paid by such Holders to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Agreementnotional principal contract. Thus, or each Certificate (other than the termination Class P and Class R Certificates) shall be treated as representing not only ownership of the Interest Rate Swap AgreementRegular Interests in REMIC 3, the Securities Administrator shall send any notices but also ownership of an interest in, and make any demandsobligations with respect to, 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 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the Depositornotional principal contract.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Option One Mortgage Acceptance Corp)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator 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 and 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 other than a Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment 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-1Claxx X-0, Class 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 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 previously 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 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-1Claxx X-0, Class Xxxxx B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper 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 LIBOR Certificates, any remaining unpaid Basis Risk CarryForward AmountAmounts, and, without duplication, Upper Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount 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-1Claxx X-0, Class 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. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Securities Administrator 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 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 swap provider cannot be obtained, then the Securities Administrator 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 Securities Administrator Trustee shall withdraw from the reserve account and deposit into the Swap 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 Trustee be responsible for the selection of any successor or replacement swap provider 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 that the Trust entering enters 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, agreement and the Trust is entitled to receive a payment Replacement Swap Provider Payment from a replacement swap provider, the Securities Administrator Trustee shall direct the replacement swap provider (or its guarantor) to make such payment Replacement Swap Provider Payment to the Swap Account. Any Senior Defaulted Notwithstanding the foregoing, any Replacement Swap Termination 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 Senior Defaulted Replacement Swap Termination Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider PaymentPayment 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 Securities Administrator, any Servicer, any 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 owed to the Swap Provider, any remaining amount of the Swap Termination Payment shall be paid to the Swap Provider on subsequent Distribution Dates in accordance with this Section 4.02 and Section 4.06 (unless the Replacement Swap Provider Payment is paid to the Swap Provider on a Distribution Date, in which case such remaining amounts will be paid on such Distribution Date). The Securities Administrator Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code 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, Net Swap Payments and Swap Termination Payments (other than Senior Defaulted without duplication of previously paid Replacement Swap Termination Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Account from the Upper-Tier 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 LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered LIBOR Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered LIBOR Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered LIBOR Certificates to receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk 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 in and obligations under a separate limited recourse interest rate cap notional principal contract written by between the Class X Certificateholders in favor of and Holders of each such Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 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 Securities Administrator 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" (as defined in the Interest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, 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 the Schedule to the Interest Rate Swap Agreement. The Securities Administrator xxxxx xxxxx xny Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator 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 Part 5(f) of 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 demand that the Swap Provider or its guarantor post collateral in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2007-He4)
Swap Account. On the Closing Date, the Securities Administrator shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 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 and 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 Termination Payment, including, Provider Payment and without limitationduplication, any Senior Defaulted Swap Termination Payment but not including any 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 previously 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 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 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 AmountAmounts, and, without duplication, Upper Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount 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 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 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 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 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 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 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 referred to in Part 1(h)(ii1(i)(A) (i) of the Schedule to the Interest Rate Swap Agreement, the Trust is entitled to receive a payment Replacement Swap Provider Payment from a replacement swap provider, the Securities Administrator shall direct the replacement swap provider to make such payment Replacement Swap Provider Payment to the Swap Account. Any Senior Replacement Swap Provider Payment or Swap Termination Payment (other than a Defaulted Swap Termination Payment 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 (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 Senior Replacement Swap Provider Payment or Swap Termination Payment (other than a Defaulted Swap Termination Payment 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 Servicer, 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, any remaining amounts will be paid to the Swap Provider on subsequent Distribution Dates in accordance with this Section 4.06. The Securities Administrator shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code 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, Net Swap Payments and Swap Termination Payments (other than Senior Defaulted without duplication of previously paid Replacement Swap Termination Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk 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 in and obligations under a separate limited recourse interest rate cap notional principal contract written by between the Class X Certificateholders in favor of and Holders of each such Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 xxxxx xxxxx xny xx xxdxxxxx, in the event a "Delivery Amount" (as defined in the Interest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, 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 the Schedule to the Interest Rate Swap Agreement. The Securities Administrator shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the 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 Part 5(f) of 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 demand that the Swap Provider or its guarantor post collateral in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2006-He8)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each any Distribution Date, Swap Termination Payments (including, without duplication, Replacement Swap Provider Payments), Net Swap Payments owed to the Swap Provider and 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 other than a Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment 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-1X-0, Class B-2 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 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 previously 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 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-1X-0, Class B-2 Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper 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 LIBOR Certificates, any remaining unpaid Basis Risk CarryForward AmountAmounts, and, without duplication, Upper Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount 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-1X-0, Class B-2 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 Securities Administrator 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 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 swap provider cannot be obtained, then the Securities Administrator 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 Securities Administrator Trustee shall withdraw from the reserve account and deposit into the Swap 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 Trustee be responsible for the selection of any successor or replacement swap provider 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 Agreementswap, the Trust is entitled to receive a payment Replacement Swap Provider Payment from a replacement swap provider, the Securities Administrator Trustee shall direct the replacement swap provider to make such payment Replacement Swap Provider Payment to the Swap Account. Any Senior Defaulted Notwithstanding the foregoing, any Replacement Swap Termination 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 Senior Defaulted Replacement Swap Termination Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider PaymentPayment 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 Securities Administrator, any Servicer, any the Custodian, any 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 owed to the Swap Provider, any remaining amount of the Swap Termination Payment shall be paid to the Swap Provider on subsequent Distribution Dates in accordance with this Section 4.02 and Section 4.06 (unless the Replacement Swap Provider Payment is paid to the Swap Provider on a Distribution Date, in which case such remaining amounts will be paid on such Distribution Date). The Securities Administrator Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code 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, Net Swap Payments and Swap Termination Payments (other than Senior Defaulted without duplication of previously paid Replacement Swap Termination Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Account from the Upper-Tier 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 LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered LIBOR Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered LIBOR Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered LIBOR Certificates to receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk 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 in and obligations under a separate limited recourse interest rate cap notional principal contract written by between the Class X Certificateholders in favor of and Holders of each such Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 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 Securities Administrator 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" (as defined in the Interest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, 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 the Schedule to the Interest Rate Swap Agreement. The Securities Administrator xxxxx xxxxx xny Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator 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 Part 5(f) of 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 demand that the Swap Provider or its guarantor post collateral in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2007-He3)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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 other than a Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment Payment, if any, 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 maintain the Subordinated Amount to at the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursedAmount, 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 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 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 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 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. 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 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 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 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 The Trustee or any other Person. The Securities Administrator shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator 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 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 ABS Capital I Inc. Trust 2005-He6)
Swap Account. On (a) No later than the Closing Date, the Securities Administrator shall establish and maintain in its namea separate, a separate non-interest bearing segregated trust account to be titled, "Wells Fargo Bank, N.A. as Securities Administrator, in trust for the benefit xxxxxtered Holders of the holders of the Certificates (the "Swap Asset Backed Funding Corporation Asset-Backed Certificates, Series 2007-WMC1--Swap Account") as a part of the Trust Fund. The Swap Account ." Such account shall be an Eligible Account, 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 Securities Administrator held pursuant to this Agreement. Amounts therein shall be held uninvested.
(b) On the Business Day immediately preceding prior to each Distribution Date, the Securities Administrator shall (A) deposit into the Swap Account any Net Swap Payment and Swap Termination PaymentsPayment 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 Swap Termination Payments resulting from a Swap Provider Trigger Event and without duplication of any previously paid Replacement Swap Provider Payment) owed to the Swap Provider and Net for such Distribution Date, in each case prior to distributions to Certificateholders. Any amount owed to the Swap Receipts for that Distribution Date Provider representing a Swap Termination Payment triggered by a Swap Provider Trigger Event will be deposited into the Swap AccountAccount as set forth under Section 4.02(b)(xxxv). Funds in On the Swap Account will be distributed in the following order of priority:
(i) Business Day prior to the Swap Provider, all Net Swap Payments, if any, owed to the Swap Provider for that each 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 case of priorities first, second and order eighth of priority as set forth, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B4.02(c), 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 each 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) sequentiallycase of priorities third, to the Class M-1fourth, Class M-2fifth, Class M-3sixth, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 seventh 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 ninth 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 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 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, 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 accountSection 4.02(c), the Securities Administrator shall withdraw from the reserve account and deposit into the Swap 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. 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 on deposit and apply them as 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 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 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 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 shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders4.02(c). For federal income tax purposes, Net Swap Payments and Swap Termination Payments (other than Senior Defaulted Swap Termination Payments) payable any amounts paid to the Swap Provider as a Net Swap Payment on the Business Day prior to each Distribution Date shall be deemed paid, pursuant to be paid 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 LTIO Interest, (iv) then from REMIC 4 to REMIC 5 in respect of the Swap IO Interest, and (v) then from the Class CE Certificates to the Swap Account from the Upper-Tier REMIC, first, by the Holder Provider in respect of the Class X Net Swap Payment due to the Swap Provider on such 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, 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 the Class IO Interest andDistribution Amount (as defined in Section 4.09(d) below), if applicableand 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 Class X Interest) and second, other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC Account shall be owned by the Holders of the applicable Class or Classes CE Certificates.
(d) The Securities Administrator shall treat the Holders of Offered Certificates (in respect of other than the Class IO ShortfallsP, Class CE and Residual Certificates) as and to the extent provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first having entered into a notional principal contract with respect to the Holders of the Class X CE Certificates. Pursuant to each such notional principal contract, all Holders of Certificates in respect (other than the Class P, Class CE and Residual Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class X Interest CE Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the Regular Interests in REMIC 4 corresponding to such Classes of Certificates over (ii) the amount payable on such 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 Pool 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 remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificatessuch balance. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates pursuant to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermorenotional principal contract, the Holders of the Class X CE Certificates shall be treated as having agreed to pay Cap Carryover Amounts to the beneficial owners Holders of the Swap Account for all federal income tax purposesCertificates (other than the Class CE, Class P and 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 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 Residual Certificates) of a Class IO Distribution Amount 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 treated for tax purposes as having been received by the Swap Provider Holders of any such Certificates in respect of its representations their interests in REMIC 4 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 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 having been paid 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 Holders to the Securities Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and the DepositorResidual Certificates) shall be treated as representing not only ownership of Regular Interests in REMIC 4, but also ownership of an interest in, and obligations with respect to, a notional principal contract.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (ABFC 2007-Wmc1 Trust)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the LIBOR Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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, the sum of (x) all Net Swap PaymentsPayments and (y) any Swap Termination Payment, other than a Defaulted Swap Termination Payment, to the Swap Provider, 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;
(iviii) 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 CertificatesCertxxxxxxxx, in that 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 Section 4.02(a)(iii(iii), to the extent unpaid from Available Funds;
(viv) 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 LIBOR Certificates, to pay Basis Risk CarryForward Carry Forward Amounts andas described in Section 4.02(a)(iii)(N)-(O), 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);
(viiv) 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 M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 CertificatesCertxxxxxxxx, 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 B-1, Class B-2 and Class B-3 Certificatesxx xhat order, to pay any Unpaid Realized Loss AmountInterest Amounts as described in Section 4.02(a)(iii), to the extent unpaid from Available Funds;
(xvii) to the Swap Provider, any remaining Defaulted Swap Termination Payment owed to the Swap Provider for that Distribution Date; and
(xiviii) 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, 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 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. 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 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 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 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 The Trustee or any other Person. The Securities Administrator shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Upper Tier 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 LIBOR Certificates (in respect of Class IO Shortfalls) as and to the extent provided in Section 8.13. Any Basis Risk CarryForward Carry Forward Amounts and, without duplication, Upper-Tier CarryForward Carry Forward Amounts distributed by the Securities Administrator Trustee to the Offered LIBOR Certificateholders from the Excess Reserve Fund Account or the Swap Account shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates (in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) or the Class IO Interest, respectively) and then to the respective Class or Classes of Offered LIBOR Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered LIBOR Certificates to receive payments of Basis Risk Carry Forward Amounts and, without duplication, Upper-Tier CarryForward Carry Forward Amounts (including, but without duplication Basis Risk CarryForward Amounts) from the Swap Account (along with Basis Risk CarryForward 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 , and any amounts reimbursed from the Upper-Tier REMIC to the failure Swap Account shall be treated as having been distributed to the Holders 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 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the DepositorClass X Certificates.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (SABR LLC Trust 2006-Fr1)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee 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-1X-0, Class B-2 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 maintain the Subordinated Amount to at the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursedAmount, 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-1X-0, Class B-2 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 B-1X-0, Class B-2 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 Securities Administrator 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 receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Securities Administrator 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 Securities Administrator Trustee shall withdraw from the reserve account and deposit into the Swap 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. 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 Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 the Custodian, any Responsible Party, the Trustee or any other Person. The Securities Administrator Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator 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 Securities Administrator xxxxx xxxxx xny replacement swap Trustee shall cause any xxxxxxexxxx xxap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator Trustee and the Depositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Capital I Inc. Trust 2006-He1)
Swap Account. On the Closing Date, the Securities Administrator shall establish and maintain in its name, a separate non-interest interest-bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 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 and 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 other than a Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment 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-1X-0, Class B-2 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 previously 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 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-1X-0, Class B-2 Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, Amounts and, without duplication, Upper Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M 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 AmountAmounts, and, without duplication, Upper Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount 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-1X-0, Class B-2 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 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 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 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 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 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 Agreementagreement, the Trust is entitled to receive a payment Replacement Swap Provider Payment from a replacement swap provider, the Securities Administrator shall direct the replacement swap provider (or its guarantor) to make such payment Replacement Swap Provider Payment to the Swap Account. Any Senior Defaulted Notwithstanding the foregoing, any Replacement Swap Termination 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 Senior Defaulted Replacement Swap Termination Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider PaymentPayment 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 Servicer, any Custodian, any 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 owed to the Swap Provider, any remaining amount of the Swap Termination Payment shall be paid to the Swap Provider on subsequent Distribution Dates in accordance with this Section 4.02 and Section 4.06 (unless the Replacement Swap Provider Payment is paid to the Swap 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 a grantor trust under subpart E, Part I of subchapter J of the Code 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, Net Swap Payments and Swap Termination Payments (other than Senior Defaulted without duplication of previously paid Replacement Swap Termination Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk 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 in and obligations under a separate limited recourse interest rate cap notional principal contract written by between the Class X Certificateholders in favor of and Holders of each such Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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" (as defined in the Interest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, 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 the Schedule to the Interest Rate Swap Agreement. The Securities Administrator xxxxx xxxxx xny shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the 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 Part 5(f) of 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 demand that the Swap Provider or its guarantor post collateral in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Home Equity Loan Trust 2007-2)
Swap Account. (a) On the Closing Date, the Securities Administrator shall establish and maintain in its namethe name of the Trustee, on behalf of the Supplement Interest Trust, a separate non-interest bearing trust account for the benefit of the holders Holders of the Class A-1-1 Certificates and Class CE Certificates (the "“Swap Account") as a part of the Trust Fund”). The Swap Account shall be an Eligible Account, and funds on deposit therein shall be held separate and apart from, and shall not be commingled with, any other moneysmonies, including, without limitation, other moneys monies of the Trustee or of the Securities Administrator held pursuant to this Agreement. .
(b) On the Business Day immediately preceding each Distribution Date, the Securities Administrator shall withdraw all amounts which were deposited in the Swap Termination PaymentsAccount as specifically described in this Agreement and the Swap Agreement and distribute such amounts in accordance with the provisions of Section 4.1(a)(vii) of this Agreement.
(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, Net Swap Payments owed subject to the Swap Provider and Net Swap Receipts for power of the Securities Administrator to transfer amounts under this Agreement. The Securities Administrator shall keep records that Distribution Date will be deposited into accurately reflect the funds on deposit in the Swap Account. Funds 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 will be distributed a disregarded entity.
(d) [Reserved]
(e) [Reserved]
(f) [Reserved]
(g) In the event that the Swap Agreement is terminated prior to the Termination Date (as defined in the following order Swap Agreement), the Trustee on behalf of priority:
(i) 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 is required to pay a Swap Termination Payment 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 or a portion of such amount received 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 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 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 Securities Administrator shall use the Swap Termination Payment to enter replacement swap provider upon entering 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 similar agreement will be applied to the Swap Termination Payment owing to the Swap Provider. If the Trustee on behalf of the Supplemental Interest Trust is sufficient unable to obtain locate a qualified successor swap provider, any such replacement interest rate swap agreement. In the event that the Trust receives a Swap Termination Payment Payments will be deposited in the Swap Account 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 Administrator, on each subsequent Distribution Date (so long as funds are available in until the reserve accounttermination date of the Swap Agreement or the appointment of a successor swap provider), the Securities Administrator shall will withdraw from the reserve account and deposit into the Swap Account an amount equal to the amount of any Net Swap Receipt Payment due to the Supplemental Interest Trust (calculated in accordance with the terms of the original Interest Rate Swap Agreement) and treat distribute such amount as a Net Swap Receipt for purposes of determining Payment to 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 holders 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 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 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 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 shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk CarryForward Amounts) from the Swap Account (along accordance 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 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 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the DepositorSection 4.1.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Deutsche Alt-a Securities Mortgage Loan Trust, Series 2006-Ar2)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each any Distribution Date, Swap Termination Payments, Net Swap Payments owed to the Swap Provider and 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-1Claxx X-0, Class 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 previously 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 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-1Claxx X-0, Class Xxxxx B-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper 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 AmountAmounts, and, without duplication, Upper Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount 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-1Claxx X-0, Class 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. Notwithstanding the foregoing, in the event that the Trust receives a Swap Termination Payment, the Securities Administrator 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 receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Securities Administrator 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 Securities Administrator Trustee shall withdraw from the reserve account and deposit into the Swap 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. In no event shall the Securities Administrator Trustee be responsible for the selection of any successor or replacement swap provider 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 Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code 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, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk 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 in and obligations under a separate limited recourse interest rate cap notional principal contract written by between the Class X Certificateholders in favor of and Holders of each such Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap Provider's obligations under undex xxx xxaxxxxxx gxxxxxxxe of Morgan Stanley relating to the Interest Rate Swap Agreement, make any axx xxx xxxxxxxs xlx xxxxxnts then required to be made by Morgan Stanley pursuant to such guarantee. In addition, in the event x "Xxxixxxx Xxount" (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 Trustee shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of the Interest Rate Swap Agreement. The Securities Administrator xxxxx xxxxx xny Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator 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 Part 5(f) of 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 demand that the Swap Provider or its guarantor post collateral in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2006-He6)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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 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-1X-0, Class B-2 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 B-1X-0, Class B-2 Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, 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, 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-1X-0, Class B-2 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 Securities Administrator 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 receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Securities Administrator 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 Securities Administrator Trustee shall withdraw from the reserve account and deposit into the Swap 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. In no event shall the Securities Administrator Trustee be responsible for the selection of any successor or replacement swap provider 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 Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 the Responsible Party, the Trustee or any other Person. The Securities Administrator Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication duplication, 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator 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" (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 Trustee shall deliver a notice of failure to transfer collateral on the next Business Day following such failure, in accordance with the terms of the Interest Rate Swap Agreement. The Securities Administrator xxxxx xxxxx xny Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator Trustee and the Depositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Home Equity Loan Trust 2006-2)
Swap Account. On (a) The Trustee is hereby authorized and directed in its capacity as Supplemental Interest Trustee to enter into the Closing DateSwap Agreement on behalf of the Supplemental Interest Trust and to establish the Swap Account pursuant to Section 7.02(a). Promptly upon receipt, the Securities Administrator shall establish Supplemental Interest Trustee will deposit into the Swap Account all funds received from the Trustee pursuant to Section 7.03(a) and maintain Section 7.03(b) clause 21 and all funds received from the Swap Provider under the Swap Agreement. Amounts on deposit in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an Eligible Account, and funds on deposit therein shall be held separate and apart from, and shall invested in accordance with Section 7.05.
(b) On each Distribution Date after the Startup Day but not be commingled with, any other moneys, including, without limitation, other moneys of beyond the Securities Administrator held pursuant to this Agreement. On the Business Day immediately preceding each September 2014 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 extent necessary, following all distributions pursuant to Section 7.03(b), the Swap Account. Funds Supplemental Interest Trustee shall apply, all amounts, if any, on deposit in the Swap Account will (other than investment earnings on funds held in the Swap Account, which shall be distributed for the account of the Servicer) in the following order of priority:
(i) first, to the Swap Provider, all any Net Swap Payments, if any, Payment owed to the Swap Provider pursuant to the Swap Agreement for that such Distribution DateDate 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, 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 Datenot resulting from a Swap Provider Trigger Event pursuant to the Swap Agreement;
(iii) third, concurrently, to the Class A Senior Certificates, to pay Accrued Certificate any related Class Interest Distribution Amounts andCarryover Shortfall, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i)pro rata, to the extent unpaid from Available Fundsremaining undistributed after the distributions pursuant to Section 7.03(b);
(iv) fourth, sequentially, to the Class M-1X-0, Class M-2Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1M-7, Class B-2 M-8, Class M-9, Class M-10 and Class B-3 M-11 Certificates, in that order, to pay Accrued Certificate any related Class Interest Distribution Amounts and, if applicable, any Unpaid Interest Amounts as described in Section 4.02(a)(i) and Section 4.02(a)(iii)Carryover Shortfall, to the extent unpaid from Available Fundsremaining undistributed after the distributions pursuant to Section 7.03(b);
(v) fifth, to the Offered Senior Certificates and Subordinate Certificates, to pay principal as described andthe Net Subordination Deficiency for the applicable Distribution Date, allocated in the same manner and order of priority as set forth, forth in clauses 4. through 15. under Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B7.03(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 Certificatessixth, 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-1X-0, Class M-2Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1M-7, Class B-2 M-8, Class M-9, Class M-10 and Class B-3 M-11 Certificates, 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 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 applicable Certificateholders any Net WAC Cap Carryover to the extent unpaid from Available Funds (including Basis Risk Payments on deposit remaining undistributed after the distributions pursuant to Section 7.03(b), allocated in the Excess Reserve Fund Accountorder of priority set forth in clauses 19. and 20. of 7.03(b);
(viii) to the Offered Certificateseighth, 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 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 Payments resulting from a Swap Provider for that Distribution DateTrigger Event; and
(xiix) ninth, on any Distribution Date prior to the holders of September 2014 Distribution Date, to the Class X X-IO Certificates, any remaining amounts. Notwithstanding the foregoingremainder; provided, in the event that the Trust receives a Swap Termination Paymentcumulative amount of distributions pursuant to clauses (v) and (vi) above on each Distribution Date, and all prior Distribution Dates, will not exceed the Securities Administrator shall use the Swap Termination Payment cumulative amount of Realized Losses with respect 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 all prior Distribution Dates. Any amount remaining on deposit into the Swap 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. 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 after the application of funds pursuant to the priorities set forth in this Section 4.06. In 7.12(b) on 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 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 September 2014 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 Date 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 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 shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier REMIC, first, by separate trust referred to in subsection (d) below to (or upon 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Providerorder of) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts Servicer.
(including, but without duplication Basis Risk CarryForward Amountsc) from the Swap Account [Reserved].
(along with Basis Risk CarryForward Amounts payable from the Excess Reserve Fund Accountd) as rights in a separate limited recourse interest rate cap contract written by the Class X Certificateholders in favor of Holders of each such Class. The Swap Account shall be treated as an "“outside reserve fund" for federal income tax purposes ” within the meaning of Treasury Regulation Section 1.8606-2(h) and shall not be an asset of any REMIC or the Trust REMICEstate created pursuant to this Agreement and, instead, shall be an asset of the Supplemental Interest Trust. Furthermore, For state and federal tax purposes the Holders beneficial owners of the Class X X-IO Certificates shall be the beneficial owners of the Swap Account for all Account.
(e) For federal income tax purposes, and the Trustee shall be taxable on all income earned thereon. With treat the Holders of Offered Certificates as having entered into a notional principal contract with respect to the failure Holders of the Swap Provider Class X-IO Certificates. Pursuant to perform any each such notional principal contract, all Holders of its obligations under Offered Certificates shall be treated as having agreed to pay, on each Distribution Date, to the Interest Rate Swap AgreementHolder of the Class 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 Shortfall Amount”). A Class X-IO 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 Cap, and a Class X-IO 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 breach Holder of the Class X-IO Certificates shall be treated as having agreed to pay Net WAC Cap Carryovers to the Holders of the Offered 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 of a Class X-IO Shortfall Amount shall be treated for tax purposes as having been received by the Swap Provider Holders of any such Certificates in respect of its representations their interests in the Master REMIC and warranties made as having been paid by such Holders to the Supplemental Interest Trustee pursuant to the notional principal contract. Thus, each Offered Certificate 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 Supplemental Interest Rate Swap Agreement, or the termination Trustee shall treat such notional principal contract as having a value of $10,000 as 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 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the DepositorClosing Date.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Centex Home Equity Loan Trust 2006-A)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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 other than a Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment Payment, if any, 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-1X-0, Class M-2Xxxxx 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 maintain the Subordinated Amount to at the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursedAmount, 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-1X-0, Class M-2Xxxxx 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 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-1X-0, Class M-2Xxxxx 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 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, 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 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. 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 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 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 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 The Trustee or any other Person. The Securities Administrator shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator Trustee shall send take any notices and make any demands, on behalf all such actions as may be necessary or appropriate to enforce the rights 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 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the Depositorwith respect thereto.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2005-He5)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest interest-bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each any Distribution Date, Swap Termination Payments (including, without duplication, Replacement Swap Provider Payments), Net Swap Payments owed to the Swap Provider and 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 other than a Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment 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 previously 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 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, Amounts and, without duplication, Upper Upper-Tier CarryForward Amounts, up to the Swap Payment Allocation for each Class of Class M 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 AmountAmounts, and, without duplication, Upper Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount 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 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 Securities Administrator 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 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 swap provider cannot be obtained, then the Securities Administrator 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 Securities Administrator Trustee shall withdraw from the reserve account and deposit into the Swap 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 Trustee be responsible for the selection of any successor or replacement swap provider 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 Agreementswap, the Trust is entitled to receive a payment Replacement Swap Provider Payment from a replacement swap provider, the Securities Administrator Trustee shall direct the replacement swap provider to make such payment Replacement Swap Provider Payment to the Swap Account. Any Senior Defaulted Notwithstanding the foregoing, any Replacement Swap Termination 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 Senior Defaulted Replacement Swap Termination Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider PaymentPayment 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 Securities Administrator, any Servicer, any 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 owed to the Swap Provider, any remaining amount of the Swap Termination Payment shall be paid to the Swap Provider on subsequent Distribution Dates in accordance with this Section 4.02 and Section 4.06 (unless the Replacement Swap Provider Payment is paid to the Swap Provider on a Distribution Date, in which case such remaining amounts will be paid on such Distribution Date). The Securities Administrator Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code 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, Net Swap Payments and Swap Termination Payments (other than Senior Defaulted without duplication of previously paid Replacement Swap Termination Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk 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 in and obligations under a separate limited recourse interest rate cap notional principal contract written by between the Class X Certificateholders in favor of and Holders of each such Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 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 Securities Administrator 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" (as defined in the Interest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, 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 the Schedule to the Interest Rate Swap Agreement. The Securities Administrator xxxxx xxxxx xny Trustee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator 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 Part 5(f) of 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 demand that the Swap Provider or its guarantor post collateral in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley Home Equity Loan Trust 2007-1)
Swap Account. On (a) The Depositor hereby directs the Closing DateTrustee, 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 Securities Administrator Depositor, the Servicer and the Certificateholders, by their acceptance of such Certificates acknowledge and agree that the Trustee shall establish execute, deliver and maintain perform its obligations under the Swap Agreement and shall do so solely in its name, a separate non-interest bearing trust account for the benefit capacity as Supplemental Interest Trustee of the holders of Supplemental Interest Trust and not in its individual capacity. Promptly upon receipt, the Certificates (Supplemental Interest Trustee will deposit into the "Swap Account"Account all funds received from the Trustee pursuant to Section 7.03(a) as a part of and Section 7.03(b) clause 20 and all funds received from the Trust FundSwap Provider under the Swap Agreement. The Amounts on deposit in the Swap Account shall be an Eligible Account, and funds on deposit therein shall be held separate and apart from, and shall invested in accordance with Section 7.05.
(b) On each Distribution Date after the Startup Day but not be commingled with, any other moneys, including, without limitation, other moneys of beyond the Securities Administrator held pursuant to this Agreement. On the Business Day immediately preceding each December 2012 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 extent necessary, following all distributions pursuant to Section 7.03(b), the Swap Account. Funds Supplemental Interest Trustee shall apply, all amounts, if any, on deposit in the Swap Account will (other than investment earnings on funds held in the Swap Account, which shall be distributed for the account of the Servicer) in the following order of priority:
(i) first, to the Swap Provider, all any Net Swap Payments, if any, Payment owed to the Swap Provider pursuant to the Swap Agreement for that such Distribution DateDate 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, 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 Datenot resulting from a Swap Provider Trigger Event pursuant to the Swap Agreement;
(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)third, to the extent unpaid from Available FundsOffered 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 M-1X-0, Class M-2Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1M-7, Class B-2 M-8, Class M-9 and Class B-3 M-10 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)related Class Principal Carryover Shortfall, to the extent unpaid from Available Fundsremaining undistributed after the distributions pursuant to Section 7.03(b);
(v) fifth, concurrently, to the Offered Senior Certificates, to pay principal as described andany related Class Interest Carryover Shortfall, in the same manner and order of priority as set forthpro rata, in Section 4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the extent necessary remaining undistributed after the distributions pursuant 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 FundsSection 7.03(b);
(vi) to the Class A Certificatessixth, 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-1X-0, Class M-2Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1M-7, Class B-2 M-8, Class M-9 and Class B-3 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 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 applicable Certificateholders any Net WAC Cap Carryover to the extent unpaid from Available Funds (including Basis Risk Payments on deposit remaining undistributed after the distributions pursuant to Section 7.03(b), allocated in the Excess Reserve Fund Accountorder of priority set forth in clauses 18. and 19. of 7.03(b);
(viii) to the Offered Certificateseighth, 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 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 Payments resulting from a Swap Provider for that Distribution DateTrigger Event; and
(xiix) ninth, to the holders of the Class X X-IO Certificates, any remaining amounts. Notwithstanding the foregoingremainder; provided, 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, 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 an amount equal to the cumulative amount of any Net Swap Receipt due the Trust distributions pursuant to clauses (calculated in accordance with the terms of the original Interest Rate Swap Agreementiii) 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(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 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 above on each Distribution Date. To , and all prior Distribution Dates, will not exceed the extent cumulative amount of Realized Losses with respect to 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 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 shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, Net Swap Payments and Swap Termination Payments all prior Distribution Dates.
(other than Senior Defaulted Swap Termination Paymentsc) payable to the Swap Provider shall be deemed to be paid to the Swap Account from the Upper-Tier REMIC, first, by the Holder of the Class X Certificates [Reserved].
(in respect of the Class IO Interest and, if applicable, the Class X Interestd) 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be treated as an "“outside reserve fund" for federal income tax purposes ” within the meaning of Treasury Regulation Section 1.8606-2(h) and shall not be an asset of any REMIC or the Trust REMICEstate created pursuant to this Agreement and, instead, shall be an asset of the Supplemental Interest Trust. Furthermore, For state and federal tax purposes the Holders beneficial owners of the Class X X-IO Certificates shall be the beneficial owners of the Swap Account for all Account.
(e) For federal income tax purposes, and the Trustee shall be taxable on all income earned thereon. With treat the Holders of Offered Certificates as having entered into a notional principal contract with respect to the failure Holders of the Swap Provider Class X-IO Certificates. Pursuant to perform any each such notional principal contract, all Holders of its obligations under Offered Certificates shall be treated as having agreed to pay, on each Distribution Date, to the Interest Rate Swap AgreementHolder of the Class 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 Shortfall Amount”). A Class X-IO 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 Cap, and a Class X-IO 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 breach Holder of the Class X-IO Certificates shall be treated as having agreed to pay Net WAC Cap Carryovers to the Holders of the Offered 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 of a Class X-IO Shortfall Amount shall be treated for tax purposes as having been received by the Swap Provider Holders of any such Certificates in respect of its representations their interests in the Master REMIC and warranties made as having been paid by such Holders to the Supplemental Interest Trustee pursuant to the notional principal contract. Thus, each Offered Certificate 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 Supplemental Interest Rate Swap Agreement, or the termination Trustee shall treat such notional principal contract as having a value of $310,000 as 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 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 xxxxx xxxxx xny replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator and the DepositorStartup Date.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Nationstar Home Equity Loan Trust 2007-A)
Swap Account. On the Closing Date, the Securities Administrator shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 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 and 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 other than a Defaulted Swap Termination Payment but not including any other Defaulted Swap Termination Payment 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-1X-0, Class B-2 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 previously 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 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-1X-0, Class B-2 Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper 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 AmountAmounts, and, without duplication, Upper Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount 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-1X-0, Class B-2 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 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 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 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 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 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 that the Trust entering enters 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, agreement and the Trust is entitled to receive a payment Replacement Swap Provider Payment from a replacement swap provider, the Securities Administrator shall direct the replacement swap provider (or its guarantor) to make such payment Replacement Swap Provider Payment to the Swap Account. Any Senior Defaulted Notwithstanding the foregoing, any Replacement Swap Termination 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 Senior Defaulted Replacement Swap Termination Provider Payment shall be paid to the Swap Provider immediately upon receipt of such Replacement Swap Provider PaymentPayment 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 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 owed to the Swap Provider, any remaining amount of the Swap Termination Payment shall be paid to the Swap Provider on subsequent Distribution Dates in accordance with this Section 4.02 and Section 4.06 (unless the Replacement Swap Provider Payment is paid to the Swap 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 a grantor trust under subpart E, Part I of subchapter J of the Code 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, Net Swap Payments and Swap Termination Payments (other than Senior Defaulted without duplication of previously paid Replacement Swap Termination Provider Payments) payable to the Swap Provider shall be deemed to be paid to the Swap Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator to the Offered Certificateholders shall be accounted for by the Securities Administrator, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk 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 in and obligations under a separate limited recourse interest rate cap notional principal contract written by between the Class X Certificateholders in favor of and Holders of each such Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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" (as defined in the Interest Rate Swap Agreement) payable but not delivered by the Swap Provider as required by the Interest Rate Swap Agreement, 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 the Schedule to the Interest Rate Swap Agreement. The Securities Administrator xxxxx xxxxx xny shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the 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 Part 5(f) of 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 demand that the Swap Provider or its guarantor post collateral in accordance with the terms of Part 5(f) of the Interest Rate Swap Agreement.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2007-He5)
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each 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-1, Class M-2, Class M-3, Class M-4X-0, Class 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 restore maintain the Subordinated Amount to at the Specified Subordinated Amount for prior or current Realized Losses not previously reimbursedAmount, 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-4X-0, Class Xxxxx 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 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-4X-0, Class 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. 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, 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 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. 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 Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any Trust REMIC created pursuant to this Agreement. The beneficial owners of the Swap Account are the Class X Certificateholders. For federal income tax purposes, 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 Account from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator Trustee shall immediately demand that Morgan Stanley, the guarantor of the Swap ProviderXxxx Pxxxxxxx's obligations under xxx xxaxxxxxx the guarantee of Morgan Stanley relating to the Interest Rate Swap Interxxx Xxtx Xxxx Agreement, make any axx xxx xxxxxxxs and all payments then required to be made by Morgan Stanley pursuant to such guaranteeguarxxxxx. The Securities Administrator xxxxx xxxxx xny Xxx Xxxstee shall cause any replacement swap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator Trustee and the Depositor.
Appears in 1 contract
Swap Account. On the Closing Date, the Securities Administrator Trustee shall establish and maintain in its name, a separate non-interest bearing trust account for the benefit of the holders of the Certificates (the "Swap Account") as a part of the Trust Fund. The Swap Account shall be an 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 Securities Administrator Trustee held pursuant to this Agreement. On the Business Day immediately preceding each any Distribution Date, Swap Termination Payments, Net Swap Payments owed to the Swap Provider and 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-1X-0, Class B-2 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 previously 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 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-1X-0, Class B-2 Xxxxx X-2 and Class B-3 Certificates, to pay Basis Risk CarryForward Amounts, and, without duplication, Upper 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 AmountAmounts, and, without duplication, Upper Upper-Tier CarryForward Amounts, pro rata, based on their respective remaining unpaid Basis Risk CarryForward Amount 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-1X-0, Class B-2 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 Securities Administrator 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 receives a Swap Termination Payment and a successor Swap Provider cannot be obtained, then the Securities Administrator 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 Securities Administrator Trustee shall withdraw from the reserve account and deposit into the Swap 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. In no event shall the Securities Administrator Trustee be responsible for the selection of any successor or replacement swap provider 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 Trustee shall direct the replacement swap provider to make such payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall be made from the Swap Account to the Swap 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 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 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 Trustee shall account for the Swap Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code 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, 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 Account in respect of the Class UT-PFIO Interest from the Upper-Tier 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 provided in Section 8.13. Any Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts distributed by the Securities Administrator Trustee to the Offered Certificateholders shall be accounted for by the Securities AdministratorTrustee, for federal income tax purposes, as amounts paid first to the Holders of the Class X Certificates in respect of the Class X Interest and Class UT-PFIO Interests and (to the extent remaining after payments to the Swap Provider) the Class IO Interest, and then to the respective Class or Classes of Offered Certificates. In addition, the Securities Administrator Trustee shall account for the rights of Holders of each Class of Offered Certificates to receive payments of Basis Risk CarryForward Amounts and, without duplication, Upper-Tier CarryForward Amounts (including, but without duplication 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 Class. The Swap Account shall be an "outside reserve fund" for federal income tax purposes and not an asset of any Trust REMIC. Furthermore, the Holders of the Class 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 Securities Administrator 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 Securities Administrator 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 Securities Administrator xxxxx xxxxx xny replacement swap Trustee shall cause any xxxxxxexxxx xxap provider to provide a copy of the related replacement interest rate swap agreement to the Securities Administrator Trustee and the Depositor.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Morgan Stanley ABS Capital I Inc. Trust 2006-He5)