Exhibit 99.1
EXECUTION COPY
CWALT, INC.,
Depositor
UBS SECURITIES LLC,
Underlying Certificate Seller
and
THE BANK OF NEW YORK,
Trustee, Securities Intermediary and Bank
-------------------------------
TRUST AGREEMENT
Dated as of October 25, 2006
-------------------------------
CWALT, Inc.
Alternative Loan Trust Resecuritization 2006-37R
Resecuritization Pass-Through Certificates, Series 2006-37R
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS 5
Section 1.01 Defined Terms..........................................................5
ARTICLE II CONVEYANCE OF THE DEPOSITED UNDERLYING CERTIFICATES; ORIGINAL ISSUANCE OF
CERTIFICATES 21
Section 2.01 Conveyance of the Deposited Underlying Certificates...................21
Section 2.02 Acceptance by Trustee. ..............................................22
Section 2.03 Representations and Warranties of the Underlying
Certificate Seller. .................................................22
Section 2.04 Representations and Warranties of the Depositor. ....................24
Section 2.05 Issuance of Certificates. ...........................................26
Section 2.06 REMIC Matters. ......................................................26
Section 2.07 Presentation for Transfer. ..........................................26
ARTICLE III ADMINISTRATION OF THE TRUST FUND; PAYMENTS AND REPORTS TO
CERTIFICATEHOLDERS 28
Section 3.01 Defaults by the Underlying Trust. ...................................28
Section 3.02 Distribution Account, Securities Account and Yield
Supplement Reserve Fund...............................................28
Section 3.03 Permitted Withdrawals From the Distribution Account and
the Yield Supplement Reserve Fund. ..................................30
Section 3.04 Distributions.........................................................30
Section 3.05 The Corridor Contract.................................................32
Section 3.06 Allocation of Realized Losses.........................................32
Section 3.07 Determination of Pass-Through Rates for LIBOR
Certificates..........................................................32
Section 3.08 Monthly Statements to Certificateholders. ...........................34
Section 3.09 Reports of the Trustee; Distribution Account. .......................35
Section 3.10 Access to Certain Documentation and Information. ....................35
Section 3.11 Annual Statement as to Compliance.....................................35
ARTICLE IV THE CERTIFICATES 36
Section 4.01 The Certificates......................................................36
Section 4.02 Certificate Register; Registration of Transfer and
Exchange of Certificates..............................................36
Section 4.03 Mutilated, Destroyed, Lost or Stolen Certificates.....................40
Section 4.04 Persons Deemed Owners.................................................41
Section 4.05 Access to List of Certificateholders' Names and
Addresses.............................................................41
Section 4.06 Maintenance of Office or Agency.......................................41
ARTICLE V CONCERNING THE TRUSTEE 42
Section 5.01 Duties of Trustee.....................................................42
Section 5.02 Certain Matters Affecting the Trustee.................................42
Section 5.03 Trustee Not Liable for Certificates or Deposited
Underlying Certificates...............................................44
Section 5.04 Trustee May Own Certificates..........................................44
Section 5.05 Trustee's Fees and Expenses...........................................44
Section 5.06 Indemnification of the Trustee........................................44
Section 5.07 Eligibility Requirements for Trustee..................................44
Section 5.08 Resignation and Removal of Trustee....................................45
Section 5.09 Successor Trustee.....................................................46
Section 5.10 Merger or Consolidation of Trustee....................................46
Section 5.11 Appointment of Co-Trustee or Separate Trustee.........................47
Section 5.12 Tax Matters...........................................................48
ARTICLE VI THE DEPOSITOR 51
Section 6.01 Liability of the Depositor............................................51
Section 6.02 Merger, Consolidation or Conversion of the Depositor..................51
Section 6.03 Limitation on Liability of the Depositor and Others...................51
ARTICLE VII TERMINATION 52
Section 7.01 Termination...........................................................52
Section 7.02 Final Distribution on the Certificates................................52
Section 7.03 Additional Termination Requirements...................................53
ARTICLE VIII MISCELLANEOUS PROVISIONS 55
Section 8.01 Amendment. ..........................................................55
Section 8.02 Action Under and Conflicts With the Underlying
Agreement. ..........................................................56
Section 8.03 Recordation of Agreement..............................................57
Section 8.04 Certain REMIC Matters.................................................57
Section 8.05 Limitation on Rights of Certificateholders............................57
Section 8.06 Governing Law.........................................................58
Section 8.07 Notices...............................................................58
Section 8.08 Severability of Provisions............................................59
Section 8.09 Successors and Assigns................................................59
Section 8.10 Article and Section Headings..........................................59
Section 8.11 Certificates Nonassessable and Fully Paid.............................59
Section 8.12 Protection of Assets..................................................59
ARTICLE IX EXCHANGE ACT REPORTING 60
Section 9.01 Filing Obligations....................................................60
Section 9.02 Form 10-D Filings.....................................................60
Section 9.03 Form 8-K Filings......................................................61
Section 9.04 Form 10-K Filings.....................................................61
Section 9.05 Xxxxxxxx-Xxxxx Certification..........................................62
Section 9.06 Form 15 Filing........................................................62
Section 9.07 Report on Assessment of Compliance and Attestation....................62
Section 9.08 Use of Subcontractors.................................................63
Section 9.09 Amendments............................................................64
Section 9.10 Reconciliation of Accounts............................................64
Schedule I List of Deposited Underlying Certificates and Underlying Agreements
Schedule II [Reserved]
Exhibit A - Form of Class A Certificate ...................................................A-1
Exhibit B - [Reserved].....................................................................B-1
Exhibit C - Form of Residual Certificate...................................................C-1
Exhibit D - Form of Reverse of Certificate.................................................D-1
Exhibit E - Form of Transferor Affidavit...................................................E-1
Exhibit F - Form of Transfer Affidavit for the Class A-R Certificate ......................F-1
Exhibit G - Form of Monthly Statement......................................................G-1
Exhibit H - Form of Performance Certification..............................................H-1
Exhibit I - Form of Servicing Criteria to be Addressed in Assessment
of Compliance Statement....................................................................I-1
Exhibit J - List of Item 1119 Parties......................................................J-1
Exhibit K - Form of Xxxxxxxx-Xxxxx Certification...........................................K-1
Exhibit L - Form of Item 1123 Certificate..................................................L-1
Exhibit M - Form of Corridor Contract......................................................M-1
Exhibit N - Form of Corridor Contract Assignment Agreement.................................N-1
TRUST AGREEMENT, dated as of October 25, 2006, by and among CWALT, Inc.,
as depositor (the "Depositor"), UBS Securities LLC, as underlying certificate
seller (the "Underlying Certificate Seller"), and The Bank of New York, as
trustee (the "Trustee") and in its capacities as Securities Intermediary and
as Bank (each as defined below).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Depositor, the Underlying Certificate Seller and the
Trustee desire to enter into a trust agreement dated as of the date hereof
(the "Trust Agreement"); and
WHEREAS, the Underlying Certificate Seller has transferred its interests
in and to the Deposited Underlying Certificates (as defined herein) to the
Depositor pursuant to a xxxx of sale executed by the Underlying Certificate
Seller in favor of the Depositor;
NOW THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. As provided in this Agreement, for
federal income tax purposes, (1) the Yield Supplement Trust will be a Grantor
Trust owned by the Underlying Certificate Seller and (2) the Trustee will
elect to treat the Trust Fund as a real estate mortgage investment conduit (a
"REMIC" or, in the alternative, the "Master REMIC"). The Master REMIC will be
evidenced by the Certificates, each of which (other than the Class A-R
Certificate) will represent ownership of one or more "REMIC regular interests"
in the Master REMIC. The Class A-R Certificate will represent ownership of the
sole Class of "REMIC residual interest" in the Master REMIC. The latest
possible maturity date, for federal income tax purposes, of all REMIC regular
interests created in this Agreement shall be the Latest Possible Maturity
Date.
The following table sets forth characteristics of the Certificates,
together with the minimum denominations and integral multiples in excess
thereof in which such Classes shall be issuable (except that one Certificate
of each Class of Certificates may be issued in a different amount and, in
addition, one Residual Certificate representing the Tax Matters Person
Certificate may be issued in a different amount):
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Integral
Initial Class Pass-Through Multiples
Class Certificate Rate Minimum in Excess of
Designation Balance (per annum) Denomination Minimum
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Class A-1 $58,556,429 (1) $25,000.00 $1.00
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Class A-2 $9,759,404 (2) $25,000.00 $1.00
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Class A-R (3) $100 6.00% (4) (4)
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(1) The Class A-1 Certificates will bear interest during each Interest
Accrual Period at a per annum rate of LIBOR plus 0.60%, subject to a
maximum and minimum Pass-Through Rate of 7.00% and 0.60% per annum,
respectively. The Pass-Through Rate for the Class A-1 Certificates for
the Interest Accrual Period for the first Distribution Date is 5.92% per
annum.
(2) The Class A-2 Certificates will bear interest during each Interest
Accrual Period at a per annum rate of (a) 38.40% minus (b) the product of
LIBOR and 6.00, subject to a maximum and minimum Pass-Through Rate of
38.40% and 0.00% per annum, respectively. The Pass-Through Rate for the
Class A-2 Certificates for the Interest Accrual Period for the first
Distribution Date is 6.48% per annum.
(3) The Class A-R Certificate evidences the sole Class of residual interest
in the Master REMIC.
(4) The Class A-R Certificate shall be issued as two separate certificates,
one with an initial Certificate Balance of $99.99 and the Tax Matters
Person Certificate with an initial Certificate Balance of $0.01.
It is not intended that the Class A-R Certificates be entitled to any
cash flow pursuant to this Agreement except as provided in Section
3.04(a)(1)(i) and Section 3.04(a)(2)(A) hereunder, (that is, its entitlement
to $100 plus interest thereon in the waterfall).
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Set forth below are designations of Classes of Certificates to the categories
used herein:
Accretion Directed
Certificates.................... None.
Accrual Certificates............ None.
Accrual Components.............. None.
Book-Entry Certificates......... All Classes of Certificates other than
the Physical Certificates.
Component Certificates.......... None.
Components...................... For purposes of calculating
distributions, the Component
Certificates will be comprised of
multiple payment components having the
designations, Initial Component Balances
and Pass-Through Rates set forth below:
Initial Pass-
Component Through
Designation Balance Rate
----------- ------- ----
N/A N/A N/A
Delay Certificates..............
All interest-bearing Classes of
Certificates other than the Non-Delay
Certificates, if any.
ERISA-Restricted
Certificates.................... Residual Certificates; and any
Certificate of a Class that ceases to
satisfy the applicable rating
requirement under the Underwriter's
Exemption.
Floating Rate Certificates...... Class A-1 Certificates.
Inverse Floating Rate
Certificates.................... Class A-2 Certificates.
COFI Certificates............... None.
LIBOR Certificates.............. Floating Rate and Inverse Floating Rate
Certificates.
Non-Delay Certificates.......... LIBOR Certificates.
Notional Amount
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Certificates.................... None.
Notional Amount Components...... None.
Offered Certificates............ All Classes of Certificates.
Physical Certificates........... Residual Certificates.
Planned Principal Classes....... None.
Planned Principal Components.... None.
Principal Only Certificates .... None.
Rating Agencies................. S&P and Xxxxx'x.
Regular Certificates............ All Classes of Certificates other than
the Residual Certificates.
Residual Certificates........... Class A-R Certificate.
Scheduled Principal
Classes......................... None.
Senior Certificates............. Class A-1, Class A-2 and Class A-R
Certificates.
Subordinated Certificates....... None.
Targeted Principal Classes ..... None.
Targeted Principal
Components...................... None.
Underwriter..................... UBS Securities LLC.
With respect to any of the foregoing designations as to which the
corresponding reference is "None," all defined terms and provisions herein
relating solely to such designations shall be of no force or effect, and any
calculations herein incorporating references to such designations shall be
interpreted without reference to such designations and amounts. Defined terms
and provisions herein relating to statistical rating agencies not designated
above as Rating Agencies shall be of no force or effect.
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ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
Account: The Distribution Account, Securities Account or any other
account related to the Trust Fund.
Accretion Directed Certificates: As specified in the Preliminary
Statement.
Accretion Direction Rule: Not applicable.
Accrual Amount: With respect to any Class of Accrual Certificates and
any Distribution Date prior to the Accrual Termination Date, the amount
allocable to interest on such Class of Accrual Certificates with respect to
such Distribution Date pursuant to Section 3.04(a)(ii).
Accrual Certificates: As specified in the Preliminary Statement.
Accrual Components: As specified in the Preliminary Statement.
Accrual Termination Date: Not applicable.
Additional Designated Information: As defined in Section 9.02.
Aggregate Planned Balance: With respect to any group of Planned
Principal Classes or Components and any Distribution Date, the amount set
forth for such group for such Distribution Date in Schedule II hereto.
Aggregate Targeted Balance: With respect to any group of Targeted
Principal Classes or Components and any Distribution Date, the amount set
forth for such group for such Distribution Date in Schedule II hereto.
Agreement: This Trust Agreement and all amendments hereof and
supplements hereto.
Allocated Underlying Net Interest Shortfalls: As to any Distribution
Date, the Underlying Net Interest Shortfalls allocated to the Deposited
Underlying Certificates in accordance with the Underlying Agreement in
connection with distributions thereon for such Distribution Date.
Allocated Underlying Net Prepayment Interest Shortfalls: As to any
Distribution Date, the Underlying Net Prepayment Interest Shortfalls allocated
to the Deposited Underlying Certificates in accordance with the Underlying
Agreement in connection with distributions thereon for such Distribution Date.
Allocated Underlying Realized Losses: As to any Distribution Date, the
Underlying Realized Losses allocated to the Deposited Underlying Certificates
in accordance with the Underlying Agreement in connection with distributions
thereon for such Distribution Date.
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Available Interest Funds: As to any Distribution Date, the aggregate of
all previously undistributed amounts received by the Trustee on or prior to
such Distribution Date as distributions of interest on the Deposited
Underlying Certificates.
Available Principal Funds: As to any Distribution Date, the aggregate of
all previously undistributed amounts received by the Trustee on or prior to
such Distribution Date as distributions of principal on the Deposited
Underlying Certificates, reduced by the sum of expenses and liabilities
reimbursable to the Depositor pursuant to Section 6.03 hereof and any taxes
imposed on the Trust Fund to be paid from amounts otherwise distributable to
Certificateholders pursuant to Section 5.12 hereof (in each case, that have
not been previously paid by a reduction of Available Principal Funds).
Bank: As defined in Section 3.02.
BNY: The Bank of New York, a New York Banking corporation, or its
successor in interest.
Book-Entry Certificate: As specified in the Preliminary Statement.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which banking institutions in the City of New York, New York, or the
State of California or the city in which the Corporate Trust Office of the
Trustee is located are authorized or obligated by law or executive order to be
closed.
Certificate: Any one of the Certificates executed by the Trustee
substantially in the forms attached hereto as exhibits.
Certificate Balance: With respect to any Certificate at any date, the
maximum dollar amount of principal to which the Holder thereof is then
entitled hereunder, such amount being equal to the Denomination thereof (A)
plus any Underlying Subsequent Recoveries added to the Certificate Balance of
such Certificate pursuant to Section 3.04, and (B) minus the sum of (i) all
distributions of principal previously made with respect thereto and (ii) all
Underlying Realized Losses allocated thereto and, all other reductions in
Certificate Balance (including the pro rata portion of certain expenses and
liabilities reimbursable to the Depositor pursuant to Section 3.03(b) and any
taxes imposed on the Trust Fund paid pursuant to Section 3.03(c)) previously
allocated thereto pursuant to Section 3.06.
Certificate Group: Not applicable.
Certificateholder or Holder: The person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purpose of
giving any consent pursuant to this Agreement, any Certificate registered in
the name of the Depositor or any affiliate of the Depositor shall be deemed
not to be Outstanding and the Percentage Interest evidenced thereby shall not
be taken into account in determining whether the requisite amount of
Percentage Interests necessary to effect such consent has been obtained;
provided, however, that if any such Person (including the Depositor) owns 100%
of the Percentage Interests evidenced by a Class of Certificates, such
Certificates shall be deemed to be Outstanding for purposes of any provision
hereof that requires the consent of the Holders of Certificates of a
particular Class as a condition
6
to the taking of any action hereunder. The Trustee is entitled to rely
conclusively on a certification of the Depositor or any affiliate of the
Depositor in determining which Certificates are registered in the name of an
affiliate of the Depositor.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
who is the beneficial owner of such Book-Entry Certificate. For the purposes
of this Agreement, in order for a Certificate Owner to enforce any rights
hereunder, it shall first have to provide evidence of its beneficial ownership
in a Certificate that is reasonably satisfactory to the Trustee or the
Depositor, as applicable.
Certificate Register: The register maintained pursuant to Section
4.02(a).
Certification Party: As defined in Section 9.05.
Certifying Party: As defined in Section 9.05.
Class: All Certificates bearing the same Class designation as set
forth in the Preliminary Statement.
Class 1-A-3 Deposited Underlying Certificates: A 61.5984591630%
percentage interest in the CWALT, Inc., Alternative Loan Trust 2006-4CB,
Mortgage Pass-Through Certificates, Series 2006-4CB, Class 1-A-3 Certificates.
Class A-R Certificate: Collectively, the single Certificate and the Tax
Matters Person Certificate, in each case executed and countersigned by the
Trustee.
Class Certificate Balance: With respect to any Class and as to any date
of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class Interest Shortfall: As to any Distribution Date and Class, the
amount by which the amount described in clause (i) of the definition of Class
Optimal Interest Distribution Amount for such Class exceeds the amount of
interest actually distributed on such Class on such Distribution Date pursuant
to such clause (i).
Class Optimal Interest Distribution Amount: With respect to any
Distribution Date and interest bearing Class or, with respect to any interest
bearing component, the sum of (i) one month's interest accrued during the
related Interest Accrual Period at the Pass-Through Rate for such Class on the
related Class Certificate Balance, Component Balance, Notional Amount or
Component Notional Amount, as applicable, immediately prior to such
Distribution Date, subject to reduction as provided in 3.04(e) and (ii) any
Class Unpaid Interest Amounts for such Class or Component.
Class Unpaid Interest Amounts: As to any Distribution Date and Class of
interest bearing Certificates, the amount by which the aggregate Class
Interest Shortfalls for such Class on prior Distribution Dates exceeds the
amount distributed on such Class on prior Distribution Dates pursuant to
clause (ii) of the definition of Class Optimal Interest Distribution Amount.
Closing Date: October 30, 2006.
7
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Commission: The U.S. Securities and Exchange Commission.
Component Balance: With respect to any Component and any Distribution
Date, the Initial Component Balance thereof on the Closing Date, (A) plus any
Underlying Subsequent Recoveries added to the Component Balance of such
Component pursuant to Section 3.04, (B) minus the sum of all amounts applied
in reduction of the principal balance of such Component and Realized Losses
allocated thereto on previous Distribution Dates.
Component Certificates: Not applicable.
Component Notional Amount: Not applicable.
Confirmation: The confirmation, with UBS AG reference number 37477141,
dated October 30, 2006, evidencing a transaction between UBS AG, London Branch
and UBS Real Estate Securities, Inc.
Corporate Trust Office: The designated office of the Trustee in the
State of New York at which at any particular time its corporate trust business
with respect to this Agreement shall be administered, which office at the date
of the execution of this Agreement is located at 000 Xxxxxxx Xxxxxx, 0X, Xxx
Xxxx, Xxx Xxxx 00000 (Attn: Resecuritization Group, CWALT, Inc. Series
2006-37R, facsimile no. (000) 000-0000/9), and which is the address to which
notices to and correspondence with the Trustee should be directed.
Corresponding Classes of Certificates: Not applicable.
Corridor Contract: The transaction evidenced by the Confirmation, a
form of which is attached hereto as Exhibit M.
Corridor Contract Assignment Agreement: The agreement, dated as of the
Closing Date, among UBS Real Estate Securities, Inc., the Yield Supplement
Trustee and the Corridor Contract Counterparty, a form of which is attached
hereto as Exhibit N.
Corridor Contract Counterparty: UBS AG, London Branch.
Corridor Contract Scheduled Termination Date: The Distribution Date in
December 2010.
Delivery: When used with respect to any Distribution Account Property or
Securities Account Property means delivery of such Distribution Account
Property or Securities Account Property, as applicable, as follows (terms used
in the following provisions that are not otherwise defined are used as defined
in Article 8 of the UCC):
(1) in the case of each certificated security (other than a clearing
corporation security (as defined below)) or instrument, by:
8
(A) the delivery of such certificated security or instrument to
the Securities Intermediary registered in the name of the Securities
Intermediary or its affiliated nominee or endorsed to the Securities
Intermediary or in blank,
(B) the Securities Intermediary continuously indicating by
book-entry that such certificated security or instrument is credited to
the Securities Account, and
(C) the Securities Intermediary maintaining continuous possession
of such certificated security or instrument in the State of New York;
(2) in the case of each uncertificated security (other than a clearing
corporation security), by causing:
(A) such uncertificated security to be continuously registered on
the books of the issuer thereof to the Securities Intermediary, and
(B) the Securities Intermediary continuously indicating by
book-entry that such uncertificated security is credited to the
Securities Account;
(3) in the case of each security in the custody of or maintained on the
books of a clearing corporation or its nominee (a "clearing corporation
security"), by causing:
(A) the relevant clearing corporation to credit such clearing
corporation security to the securities account of the Securities
Intermediary, and
(B) the Securities Intermediary continuously indicating by
book-entry that such clearing corporation security is credited to the
Securities Account;
(4) in the case of each security issued or guaranteed by the United
States of America or agency or instrumentality thereof and that is maintained
in book-entry records of the Federal Reserve Bank of New York ("FRBNY") (each
such security, a "government security"), by causing:
(A) the creation of a security entitlement to such government
security by the credit of such government security to the securities
account of the Securities Intermediary at the FRBNY, and
(B) the Securities Intermediary continuously indicating by
book-entry that such government security is credited to the Securities
Account;
(5) in the case of each security entitlement not governed by clauses (1)
through (4) above, by:
(A) causing a securities intermediary (x) to indicate by
book-entry that the underlying "financial asset" (as defined in Section
8-102(a)(9) of the UCC) has been credited to be the Securities
Intermediary's securities account, (y) to receive a financial asset from
the Securities Intermediary or acquiring the underlying financial asset
for the Securities Intermediary, and in either case, accepting it for
credit to the Securities
9
Intermediary's securities account or (z) to be become obligated under
other law, regulation or rule to credit the underlying financial asset
to the Security Intermediary's securities account,
(B) the making by such securities intermediary of entries on its
books and records continuously identifying such security entitlement as
belonging to the Securities Intermediary and continuously indicating by
book-entry that such securities entitlement is credited to the
Securities Intermediary's securities account, and
(C) the Securities Intermediary continuously indicating by
book-entry that such security entitlement (or all rights and property of
the Securities Intermediary representing such securities entitlement) is
credited to the Securities Account; and
(6) in the case of cash or money, by:
(A) the delivery of such cash or money to the Bank, and
(B) the Bank's continuously crediting such cash or money to the
Distribution Account.
Denomination: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Certificate Balance of this Certificate" or
the "Initial Notional Amount of this Certificate" or, if neither of the
foregoing, the Percentage Interest appearing on the face thereof.
Deposited Underlying Certificates: As set forth on Schedule I hereto,
other than any rights to or interest in the Underlying Yield Supplement
Amounts.
Depositor: CWALT, Inc., a Delaware corporation, or its successors in
interest.
Depository: The Depository Trust Company, or any successor Depository
hereafter named. The nominee of the initial Depository for purposes of
registering those Certificates that are to be Book-Entry Certificates is Cede
& Co. The Depository shall at all times be a "clearing corporation" as defined
in Section 8-102(a)(5) of the Uniform Commercial Code of the State of New York
and a "clearing agency" registered pursuant to the provisions of Section 17A
of the Securities Exchange Act of 1934, as amended.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Definitive Certificate: Any definitive, fully registered Certificate.
Delay Certificates: As specified in the Preliminary Statement.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.02 in the name of the Trustee
for the benefit of the Certificateholders and designated "The Bank of New York
in trust for registered holders of CWALT, Inc. Alternative Loan Trust
Resecuritization 2006-37R, Resecuritization Pass-Through
10
Certificates, Series 2006-37R." Funds in, and other property credited to, the
Distribution Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in this Agreement.
Distribution Account Property: The Distribution Account, all amounts,
investments and other property held from time to time in the Distribution
Account, and all proceeds of the foregoing.
Distribution Date: The same day as each Underlying Distribution Date.
XXXXX: The Commission's Electronic Data Gathering, Analysis and
Retrieval system.
Eligible Account: Any of (i) a segregated account or accounts maintained
with a federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a
depository institution or trust company that is the principal subsidiary of a
holding company, the debt obligations of such holding company) have the
highest short-term ratings of Xxxxx'x and Fitch and one of the two highest
short-term ratings of S&P, if S&P is a Rating Agency, at the time any amounts
are held on deposit therein, or (ii) a segregated account or accounts in a
depository institution or trust company in which such accounts are insured by
the FDIC (to the limits established by the FDIC) and the uninsured deposits in
which accounts are otherwise secured such that, as evidenced by an Opinion of
Counsel delivered to the Trustee and to each Rating Agency, the
Certificateholders have a claim with respect to the funds in such account or a
perfected first priority security interest against any collateral securing
such funds that is superior to claims of any other depositors or creditors of
the depository institution or trust company in which such account is
maintained, or (iii) a segregated trust account or accounts maintained with
the trust department of a federal or state chartered depository institution
subject to regulations regarding fiduciary funds on deposit similar to Title
XII of the C.F.R. Section 9.10(b) which in either case has corporate trust
powers acting in its fiduciary capacity, (iv) any other account acceptable to
each Rating Agency. Eligible Accounts may bear interest, and may include, if
otherwise qualified under this definition, accounts maintained with the
Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of an
Underwriter's Exemption.
ERISA-Restricted Certificate: As specified in the Preliminary Statement.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
Exchange Act Reports: Any reports on Form 10-D, Form 8-K and Form 10-K
required to by filed by the Depositor with respect to the Trust Fund under the
Exchange Act.
Fitch: Fitch, Inc., or any successor thereto. If Fitch is designated as
a Rating Agency in the Preliminary Statement, the address for notices to Fitch
shall be Fitch, Inc., Xxx Xxxxx Xxxxxx
00
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Pass-Through
Monitoring, or such other address as Fitch may hereafter furnish to the
Depositor.
Form 10-D Disclosure Item: With respect to any Person, any material
litigation or governmental proceedings pending against such Person, or against
any of the Trust Fund, the Depositor, the Trustee or any co-trustee, if such
Person has actual knowledge thereof.
Form 10-K Disclosure Item: With respect to any Person, (a) any Form 10-D
Disclosure Item and (b) any affiliations or relationships between such Person
and any Item 1119 Party.
Grantor Trust: A trust described in section 671 of the Code, the items
of income, deductions and credits of which must be included in computing the
taxable income and credits of the person treated as the owner of such trust
(either the grantor or other person designated under the Code).
Initial Class Certificate Balance: With respect to each Class of
Certificates, the Class Certificate Balance of such Class on the Closing Date.
Interest Accrual Period: With respect to each Class of Delay
Certificates and any Distribution Date, the calendar month prior to the month
of such Distribution Date. With respect to any Class of Non-Delay Certificates
and any Distribution Date, the one month period commencing on the 25th day of
the month preceding the month in which such Distribution Date occurs and
ending on the 24th day of the month in which such Distribution Date occurs.
Interest Determination Date: Not applicable.
Interest Rate: Not applicable.
Investment Company Act: The Investment Company Act of 1940, as amended.
Item 1119 Party: The Depositor, any Underlying Certificate Seller, the
Trustee and any other material transaction party, as identified in Exhibit J
hereto, as updated pursuant to Section 9.04.
Latest Possible Maturity Date: The Distribution Date in April 2036.
LIBOR: The London interbank offered rate for one-month United States
dollar deposits calculated in the manner described in Section 3.07.
LIBOR Certificates: As specified in the Preliminary Statement.
Limited Exchange Act Reporting Obligations: The obligations of the
Trustee under Section 3.11(b), Section 5.10 and Section 5.08 with respect to
notice and information to be provided to the Depositor and Article 9 (except
Section 9.07(a)(i) and (ii)).
Majority in Interest: As to any Class of Certificates, the Holders of
Certificates of such Class evidencing, in the aggregate, at least 51% of the
Percentage Interests evidenced by all Certificates of such Class.
12
Master REMIC: As described in the Preliminary Statement.
Moody's: Xxxxx'x Investors Service, Inc., or any successor thereto.
If Xxxxx'x is designated as a Rating Agency in the Preliminary Statement, the
address for notices to Moody's shall be Xxxxx'x Investors Service, Inc., 00
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Pass-Through
Monitoring, or such other address as Moody's may hereafter furnish to the
Depositor.
Non-Delay Certificates: As specified in the Preliminary Statement.
Notional Amount: Not applicable.
Notional Amount Certificates: As specified in the Preliminary
Statement.
Officers' Certificate: A certificate in the case of the Depositor,
signed by the Chairman of the Board, the Vice Chairman of the Board, the
President, a Managing Director, a Vice President (however denominated), an
Assistant Vice President, the Treasurer, the Secretary, or one of the
Assistant Treasurers or Assistant Secretaries of the Depositor.
Opinion of Counsel: A written opinion of counsel, who may be counsel for
the Depositor, including, in-house counsel, reasonably acceptable to the
Trustee; provided, however, that with respect to the interpretation or
application of the REMIC Provisions, such counsel must (i) in fact be
independent of the Depositor, (ii) not have any direct financial interest in
the Depositor or in any affiliate thereof, and (iii) not be connected with the
Depositor as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect,
legal or beneficial.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to
this Agreement.
Pass-Through Rate: For any interest bearing Class of Certificates or
Component, the per annum rate set forth or calculated in the manner described
in the Preliminary Statement.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
13
Performance Certification: As defined in Section 9.05.
Permitted Transferee: Any Person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an
organization (except certain farmers' cooperatives described in Code Section
521) which is exempt from tax imposed by Chapter 1 of the Code (including the
tax imposed by Code Section 511 on unrelated business taxable income) on any
excess inclusions (as defined in Code Section 860E(c)(1)) with respect to any
Class A-R Certificate, (iv) rural electric and telephone cooperatives
described in Code Section 1381(a)(2)(c), (v) an "electing partnership" as
defined in Code Section 775, (vi) a Person that is not a citizen or resident
of the United States, a corporation, partnership, or other entity created or
organized in or under the laws of the United States or any political
subdivision thereof, an estate or trust whose income from sources without the
United States is includible in gross income for United States federal income
tax purposes regardless of its connection with the conduct of a trade or
business within the United States, or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more United States fiduciaries have the authority to control
all substantial decisions of the trust unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
W-8ECI or any applicable successor form, and (vii) any other Person so
designated by the Trustee based upon an Opinion of Counsel that the Transfer
of an Ownership Interest in a Class A-R Certificate to such Person may cause
the Trust Fund to fail to qualify as a REMIC at any time that certain
Certificates are Outstanding. The terms "United States," "State" and
"International Organization" shall have the meanings set forth in Code Section
7701 or successor provisions. A corporation will not be treated as an
instrumentality of the United States or of any State or political subdivision
thereof if all of its activities are subject to tax, and with the exception of
the FHLMC, a majority of its board or directors is not selected by such
governmental unit.
Person: Any individual, corporation, partnership, joint venture, limited
liability company, association, joint-stock company, trust, unincorporated
organization or government, or any agency or political subdivision thereof.
Physical Certificate: As specified in the Preliminary Statement.
Planned Balance: With respect to any group of Planned Principal Classes
or Components in the aggregate and any Distribution Date appearing in Schedule
II hereto, the Aggregate Planned Balance for such group and Distribution Date.
With respect to any other Planned Principal Class or Component and any
Distribution Date appearing in Schedule II hereto, the applicable amount
appearing opposite such Distribution Date for such Class or Component.
Planned Principal Class: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated October 27,
2006, to the Prospectus dated October 26, 2006, relating to the Offered
Certificates.
Purchase Price: The fair market value of the Deposited Underlying
Certificates as determined based on any market quotes for identical Deposited
Underlying Certificates not
14
deposited under this Agreement (and adjusted for the Underlying Certificate
Seller's interest in the Underlying Yield Supplement Amounts); but no less
than the principal balance of the Deposited Underlying Certificates
immediately prior to the Distribution Date of such repurchase plus unpaid
interest thereon due on or prior to the Distribution Date of such repurchase
(it being understood that all distributions made on the Deposited Underlying
Certificates up to immediately prior to the Distribution Date of such
repurchase shall be property of the Trust Fund).
Rating Agency: Each of the Rating Agencies specified in the Preliminary
Statement. If any such organization or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating
organization, or other comparable Person, as is designated by the Depositor,
notice of which designation shall be given to the Trustee. References herein
to a given rating category of a Rating Agency shall mean such rating category
without giving effect to any modifiers.
Record Date: With respect to each Distribution Date, the last day of the
calendar month preceding the month in which such Distribution Date occurs.
Reference Bank: As defined in Section 3.07 hereof.
Regular Certificates: As specified in the Preliminary Statement.
Regular Interest: A "regular interest" (as defined in Section
860G(a)(1) of the Code) in any REMIC described in the Preliminary Statement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005))
or by the staff of the Commission, or as may be provided by the Commission or
its staff from time to time.
REMIC: A "real estate mortgage investment conduit" within the meaning
of section 860D of the Code.
REMIC Change of Law: Any proposed, temporary or final regulation,
revenue ruling, revenue procedure or other official announcement or
interpretation relating to REMICs and the REMIC Provisions issued after the
Closing Date.
REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
Reportable Event: Any event required to be reported on Form 8-K and, in
any event, the following:
15
(a) entry into a definitive agreement related to the Trust Fund, the
Certificates, or Underlying Deposited Certificates, or an amendment to a
Transaction Document, even if the Depositor is not a party to such agreement
(e.g., a servicing agreement with a servicer contemplated by Item 1108(a)(3)
of Regulation AB);
(b) termination of a Transaction Document (other than by expiration of
the agreement on its stated termination date or as a result of all parties
completing their obligations under such agreement), even if the Depositor is
not a party to such agreement; (e.g., a servicing agreement with a servicer
contemplated by Item 1108(a)(3) of Regulation AB);
(c) with respect to the Trustee only, if the Trustee becomes aware of
any bankruptcy or receivership with respect to the Underlying Certificate
Seller, the Depositor, any enhancement or support provider contemplated by
Items 1114(b) or 1115 of Regulation AB, or any other material party
contemplated by Item 1101(d)(1) of Regulation AB;
(d) with respect to the Trustee and the Depositor, the occurrence of an
early amortization, performance trigger or other event, including an Event of
Default under this Agreement;
(e) the resignation, removal, replacement, substitution of the Trustee;
(f) [reserved]; and
(g) with respect to the Trustee and the Depositor, a required
distribution to Holders of the Certificates is not made as of the required
Distribution Date under this Agreement.
Reporting Subcontractor: With respect to the Trustee, any Subcontractor
determined by such Person pursuant to Section 11.08(b) to be "participating in
the servicing function" within the meaning of Item 1122 of Regulation AB.
References to a Reporting Subcontractor shall refer only to the Subcontractor
of such Person and shall not refer to Subcontractors generally.
Residual Certificates: As described in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, the Secretary, any Assistant
Secretary, any Trust Officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also to whom, with respect to a particular matter, such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
Rule 3a-7: Rule 3a-7 of the Investment Company Act, as then in effect
(or any successor rule).
Xxxxxxxx-Xxxxx Certification: As defined in Section 7.05.
Securities Account: As defined in Section 3.02 hereof.
16
Securities Account Property: The Securities Account, all amounts,
investments and other property held from time to time in the Securities
Account, including the Deposited Underlying Certificates, and all proceeds of
the foregoing.
Securities Intermediary: As defined in Section 3.02(b) hereof.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d)
of Regulation AB.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc. If
S&P is designated as a Rating Agency in the Preliminary Statement, the address
for notices to S&P shall be Standard & Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Mortgage Surveillance Monitoring, or such other address
as S&P may hereafter furnish to the Depositor.
Shift Percentage: Not applicable.
SR-A-R Interest: Not applicable.
Startup Day: The Closing Date.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood
by participants in the mortgage-backed securities market) of Underlying
Mortgage Loans but performs one or more discrete functions identified in Item
1122(d) of Regulation AB with respect to Underlying Mortgage Loans under the
direction or authority of the Trustee.
Subsidiary REMIC: Not applicable.
Subsidiary REMIC Interest: Not applicable.
Subsidiary REMIC Regular Interest: Not applicable.
Targeted Balance: With respect to any group of Targeted Principal
Classes or Components in the aggregate and any Distribution Date appearing in
Schedule II hereto, the Aggregate Targeted Balance for such group and
Distribution Date. With respect to any other Targeted Principal Class or
Component and any Distribution Date appearing in Schedule II hereto, the
applicable amount appearing opposite such Distribution Date for such Class or
Component.
Targeted Principal Classes: As specified in the Preliminary Statement.
Tax Matters Person: The person designated as "tax matters person" in
the manner provided under Treasury regulation ss. 1.860F-4(d) and temporary
Treasury regulation ss. 301.6231(a)(7)1T. Initially, the Tax Matters Person
shall be the Trustee.
Tax Matters Person Certificate: The Class A-R Certificate with a
Denomination of $0.01.
17
Transaction Documents: This Agreement and any other document or
agreement entered into in connection with the Trust Fund, the Certificates or
the Underlying Deposited Certificates.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer Affidavit: A certificate substantially in the form of Exhibit
F annexed hereto.
Transferor Affidavit: A certificate substantially in the form of
Exhibit E hereto.
Trustee: The Bank of New York and its successors and, if a successor
trustee is appointed hereunder, such successor.
Trust Fund: The corpus of the trust created by this Agreement and
evidenced by the Certificates, consisting of: (A) the Deposited Underlying
Certificates, (B) all distributions thereon due to the holders of the
Deposited Underlying Certificates after October 25, 2006 in respect of the
terms thereof, (C) the Distribution Account and the Securities Account, (D)
all investment property, deposit accounts, accounts, general intangibles,
money, instruments, documents and other property evidencing any and all of the
foregoing, and (E) all proceeds of any and all of the foregoing.
UCC: The Uniform Commercial Code as in effect in the State of New York.
Underlying Agreement: The Pooling and Servicing Agreement, dated as of
February 1, 2006, among CWALT, Inc., as depositor, Countrywide Home Loans,
Inc., as seller, Park Granada LLC, as a seller, Countrywide Home Loans
Servicing LP, as master servicer, and The Bank of New York, as trustee,
related to CWALT, Inc. Alternative Loan Trust 2005-4CB, Mortgage Pass-Through
Certificates, Series 2006-4CB, as it may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
Underlying Certificate Account: Means the "Certificate Account" as
defined in the Underlying Agreement.
Underlying Certificate Seller: UBS Securities LLC, a limited liability
company formed under the laws of the State of Delaware, or its successors in
interest.
Underlying Distribution Date: Means the "Distribution Date" as defined
in the Underlying Agreement.
Underlying Event of Default: Means "Event of Default" as defined in
the Underlying Agreement.
Underlying Liquidated Mortgage Loan: Means "Liquidated Mortgage Loan"
as defined in the Underlying Agreement.
Underlying Master Servicer: Countrywide Home Loans Servicing L.P.
18
Underlying Net Interest Shortfalls: Means "Net Interest Shortfalls" as
defined in the Underlying Agreement.
Underlying Net Prepayment Interest Shortfalls: Means "Net Prepayment
Interest Shortfalls" as defined in the Underlying Agreement.
Underlying Realized Losses: Means "Realized Losses" as defined in the
Underlying Agreement.
Underlying Relief Act Reductions: Means any "Relief Act Reductions" as
defined in the Underlying Agreement.
Underlying Senior Credit Support Depletion Date: Means the "Senior
Credit Support Depletion Date" as defined in the Underlying Agreement.
Underlying Subsequent Recoveries: Means "Subsequent Recoveries" as
defined in the Underlying Agreement.
Underlying Trust: Means the "Trust Fund" as defined in the Underlying
Agreement.
Underlying Trustee: Means "Trustee" as defined in the Underlying
Agreement.
Underlying Yield Supplement Amounts: Any amounts received by the Trustee
with respect to yield supplement amounts on the Class 1-A-3 Deposited
Underlying Certificates from the proceeds of an underlying interest rate
corridor contract.
Underwriter's Exemption: Prohibited Transaction Exemption 2002-41, 67
Fed. Reg. 54487 (2002), as amended (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department
of Labor.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to each Class of
Notional Amount Certificates, if any (such Voting Rights to be allocated among
the holders of Certificates of each such Class in accordance with their
respective Percentage Interests), and (b) the remaining Voting Rights (or 100%
of the Voting Rights if there is no Class of Notional Amount Certificates)
shall be allocated among Holders of the remaining Classes of Certificates in
proportion to the Certificate Balances of their respective Certificates on
such date.
Yield Supplement Reserve Fund: The separate fund created and initially
maintained by the Yield Supplement Trustee pursuant to Section 3.02 in the
name of the Yield Supplement Trustee for the benefit of the Underlying
Certificate Seller and designated "The Bank of New York in trust for UBS
Securities LLC for CWALT, Inc., Alternative Loan Trust Resecuritization
2006-37R, Mortgage Pass-Through Certificates, Series 2006-37R." Funds in the
Yield Supplement Reserve Fund shall be held in trust for UBS Securities LLC
for the uses and purposes set forth in this Agreement. For all federal income
tax purposes, the Yield Supplement Reserve Fund will be beneficially owned by
the Underlying Certificate Seller.
19
Yield Supplement Trust: The separate trust created under this Agreement
pursuant to Section 3.02. For all federal income tax purposes, the Yield
Supplement Trust will be a Grantor Trust owned by the Underlying Certificate
Seller.
Yield Supplement Trustee: The Bank of New York, a New York banking
corporation, not in its individual capacity, but solely in its capacity as
trustee of the Yield Supplement Trust for the benefit of UBS Securities LLC
under this Agreement, and any successor thereto, and any corporation or
national banking association resulting from or surviving any consolidation or
merger to which it or its successors may be a party and any successor trustee
as may from time to time be serving as successor trustee hereunder.
20
ARTICLE II
CONVEYANCE OF THE DEPOSITED UNDERLYING CERTIFICATES;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of the Deposited Underlying Certificates. The
Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, convey, sell and assign to the Trustee, on behalf of the Holders of
the Certificates, without recourse, all the right, title and interest of the
Depositor in and to the Deposited Underlying Certificates with appropriate
endorsements and other documentation sufficient under the Underlying Agreement
to transfer each such Deposited Underlying Certificate to the Trustee,
including all distributions thereon due after October 25, 2006, and all
proceeds of the foregoing. The Underlying Certificate Seller, concurrently
with the execution and delivery hereof, does hereby transfer, convey, sell and
assign to the Yield Supplement Trustee, on behalf of the Yield Supplement
Trust, without recourse, all the right, title and interest of the Underlying
Certificate Seller in and to the Underlying Yield Supplement Amounts,
including all distributions with respect to the Underlying Yield Supplement
Amounts due after October 25, 2006, and all proceeds of the foregoing. Each of
the Underlying Certificate Seller and the Depositor severally agrees to
transfer to the Trustee (by wire transfer of immediately available funds), any
amounts it receives in respect of the Deposited Underlying Certificates and
the Underlying Yield Supplement Amounts due thereon after October 25, 2006 on
the same day it receives such funds.
The transfer of the Deposited Underlying Certificates and all other
assets constituting the Trust Fund is absolute and is intended by the parties
hereto as a sale. The Underlying Certificate Seller hereby confirms that it
has caused the beneficial ownership interest in the Deposited Underlying
Certificates to be registered with a Depository Participant or an indirect
participant in the Depository in the name of the Securities Intermediary for
the benefit of the Trustee on behalf of the Certificateholders.
The Securities Intermediary hereby confirms to the Trustee that (i) the
Deposited Underlying Certificates have been confirmed by the Depository to
have been delivered to the Trustee (on behalf of the Certificateholders),
subject to no other interests, and held with the Securities Intermediary, as a
Depository Participant, in book-entry form, and (ii) the Securities
Intermediary is holding such Deposited Underlying Certificate for the account
of the Trustee, on behalf of the Certificateholders. The Trustee hereby
acknowledges the receipt by it and the Securities Intermediary of the
Deposited Underlying Certificates and the other documents and instruments
referenced above, in good faith and without actual notice of any adverse
claim, and declares that it holds and will hold the Deposited Underlying
Certificates and the other documents and instruments, and that it holds and
will continuously hold all other assets in the Trust Fund, in each case, in
the State of New York, in trust for the exclusive use and benefit of all
present and future Certificateholders. The Trustee shall not permit the
Deposited Underlying Certificates or any other asset constituting the Trust
Fund to be subjected to any lien, claim or encumbrance arising by, through or
under the Trustee or any person claiming by, through or under the Trustee. The
Depositor agrees to provide to the Trustee all documents required for the
transfer to the Trustee of the Deposited Underlying Certificates.
21
It is intended that the conveyance of the Deposited Underlying
Certificates by the Depositor to the Trustee as provided in this Section be,
and be construed as, a sale of the Deposited Underlying Certificates by the
Depositor to the Trustee for the benefit of the Certificateholders. It is,
further, not intended that such conveyance be deemed a pledge of the Deposited
Underlying Certificates by the Depositor to the Trustee to secure a debt or
other obligation of the Depositor. However, in the event that the Deposited
Underlying Certificates are held to be the property of the Depositor, or if
for any reason this Agreement is held or deemed to create a security interest
in the Deposited Underlying Certificates, then it is intended that this
Agreement shall also be deemed to be a security agreement within the meaning
of Articles 8 and 9 of the UCC and the corresponding articles of the Uniform
Commercial Code of any other applicable jurisdiction; and the Depositor hereby
grants to the Trustee for the benefit of the Certificateholders a security
interest in all of the Depositor's right, title and interest, whether now
owned or existing or hereafter acquired or arising, in and to the Trust Fund.
The Depositor and the Trustee, at the Depositor's direction and expense,
shall, to the extent consistent with this Agreement, take such actions as may
be necessary to ensure that, if this Agreement were deemed to create a
security interest in the Deposited Underlying Certificates and other assets
constituting the Trust Fund described above, such security interest would be
deemed to be a perfected security interest of first priority under applicable
law and will be maintained as such throughout the term of the Agreement.
Section 2.02 Acceptance by Trustee. The Trustee hereby confirms that it
has confirmation from BNY, in its capacity as Securities Intermediary for the
Trustee that (i) the Deposited Underlying Certificates in book-entry form have
been confirmed by the Depository to have been delivered to the Trustee,
subject to no other interests, and held in the Securities Intermediary in
book-entry form, as a participant in the Depository and (ii) the Securities
Intermediary is holding such Deposited Underlying Certificates in book-entry
form for the account of the Trustee, as owner of the Deposited Underlying
Certificates in its capacity as trustee for the Certificateholders. The
Trustee declares that it shall hold ownership interest in the Deposited
Underlying Certificates in trust and shall hold all proceeds of any of the
foregoing and all other rights, titles or interests of the Trustee in any
asset included in the Trust Fund from time to time in trust, upon the terms
herein set forth, for the use and benefit of all present and future
Certificateholders. The Trustee agrees, for the benefit of Certificateholders,
to confirm that the class designation and original principal balance with
respect to the Deposited Underlying Certificates conform to the information
set forth on Schedule I on the Closing Date.
Section 2.03 Representations and Warranties of the Underlying
Certificate Seller. The Underlying Certificate Seller hereby represents and
warrants to the Depositor and the Trustee
(a) With respect to the Deposited Underlying Certificates as of the
Closing Date as follows:
(i) prior to the transfer of the Deposited Underlying Certificates
to the Depositor, the Underlying Certificate Seller was the sole owner
of the Deposited Underlying Certificates free and clear of any lien,
pledge, charge or encumbrance of any kind;
22
(ii) the Underlying Certificate Seller has not assigned any
interest in the Deposited Underlying Certificates or any distributions
thereon, except as contemplated herein;
(iii) the crediting of the Deposited Underlying Certificates to
the Securities Account is sufficient to effect the transfer of all
right, title and interest in the Deposited Underlying Certificates to
the Trustee pursuant to Section 2.01 hereof free and clean of any lien,
pledge, charge or encumbrance of any kind;
(iv) the Deposited Underlying Certificates constitute a
"securities entitlement" within the meaning of the UCC;
(v) the Underlying Certificate Seller is not aware of any default
or event of default under, or breach of any terms of, the Underlying
Agreement or the Deposited Underlying Certificates; and
(vi) the information set forth on Schedule I to this Agreement is
true and correct as of the Closing Date; and
(vii) the Deposited Underlying Certificates have been credited to
the Securities Account.
The representations and warranties set forth in this Section 2.03(a)
shall survive the transfer and assignment of the Deposited Underlying
Certificates by the Depositor to the Trustee up to and including the
Distribution Date in October 2006. Upon discovery by the Underlying
Certificate Seller, the Depositor or a Responsible Officer of the Trustee of a
breach of any of the foregoing representations and warranties which materially
and adversely affects the interests of the Certificateholders in the Deposited
Underlying Certificates, the Underlying Certificate Seller, the Depositor or
the Trustee shall give prompt written notice to the other parties and to the
Certificateholders. If such notice is given or received on or prior to the
Distribution Date in November 2006, the Underlying Certificate Seller shall
cure such breach in all material respects or, if such breach cannot be cured,
the Underlying Certificate Seller shall repurchase the Deposited Underlying
Certificates from the Trustee on the Distribution Date immediately following
the date on which the Underlying Certificate Seller is so directed by Holders
of a Majority in Interest of the related Class or Classes of Regular
Certificates. Any such repurchase of the Deposited Underlying Certificates by
the Underlying Certificate Seller shall be accomplished on the Distribution
Date of repurchase, by the payment on the Business Day prior to such
Distribution Date by the Underlying Certificate Seller to the Trustee of an
amount equal the Purchase Price. The payment of the Purchase Price shall be
considered a prepayment in full of the Deposited Underlying Certificates and
shall be delivered to the Trustee for deposit in the Distribution Account in
accordance with the provisions of Section 3.02 hereof. Upon such deposit into
such Distribution Account, the repurchased Deposited Underlying Certificates
shall be released to the Underlying Certificate Seller, and the Trustee and
the Depositor shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, as shall be reasonably requested
and provided by the Underlying Certificate Seller to vest in the Underlying
Certificate Seller, or its designee or assignee, title to the Deposited
Underlying Certificates repurchased pursuant hereto. The obligation of the
Underlying Certificate Seller to cure such
23
breach of representations and warranties or effect such repurchase of the
Deposited Underlying Certificates shall constitute the sole remedy respecting
such breach available to Certificateholders or the Trustee on behalf of
Certificateholders.
(b) With respect to the Underlying Certificate Seller:
(i) The Underlying Certificate Seller is a limited liability
company duly formed, validly existing and in good standing under the
laws of the State of Delaware with full power and authority to execute,
deliver and perform this Agreement.
(ii) This Agreement has been duly authorized, executed and
delivered by the Underlying Certificate Seller and constitutes the
legal, valid and binding agreement of the Underlying Certificate Seller,
enforceable in accordance with its terms, except as enforcement hereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally or by general principles of equity,
regardless of whether such enforceability is considered in a proceeding
in equity or at law.
(iii) Neither the execution nor the delivery of this Agreement nor
the issuance, delivery and sale of the Certificates, nor the
consummation of any other of the transactions contemplated herein nor
the fulfillment of the terms of this Agreement or the Certificates will
result in the breach of any term or provision of the charter, by-laws or
resolutions of the Underlying Certificate Seller or conflict with,
result in a breach, violation or acceleration of or constitute a default
under, the terms of any material indenture or other agreement or
instrument to which the Underlying Certificate Seller is a party or by
which it is bound, or any statute, order or regulation applicable to the
Underlying Certificate Seller of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Underlying Certificate Seller.
(iv) There are no actions or proceedings against, or
investigations of, the Underlying Certificate Seller pending, or, to the
knowledge of the Underlying Certificate Seller, threatened, before any
court, administrative agency or other tribunal (A) asserting the
invalidity of this Agreement or the Certificates, (B) seeking to prevent
the issuance of the Certificates or the consummation of any of the
transactions contemplated by this Agreement, or (C) which might
materially and adversely affect the validity or enforceability of this
Agreement or the Certificates.
It is understood and agreed that the representations and warranties set
forth in this Section 2.03(b) shall survive delivery of the Trust Fund to the
Trustee. Upon discovery by the Underlying Certificate Seller, the Depositor or
a Responsible Officer of the Trustee of a breach of any of the foregoing
representations and warranties which breach materially and adversely affects
the interests of the Certificateholders, the party discovering such breach
shall give prompt written notice to the other parties and to the Rating
Agencies.
Section 2.04 Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants to the Trustee as of the Closing Date
as follows:
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(i) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
with full power and authority to execute, deliver and perform this
Agreement.
(ii) This Agreement has been duly authorized, executed and
delivered by the Depositor and constitutes the legal, valid and binding
agreement of the Depositor, enforceable in accordance with its terms,
except as enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally or by
general principles of equity, regardless of whether such enforceability
is considered in a proceeding in equity or at law.
(iii) Neither the execution nor the delivery of this Agreement nor
the issuance, delivery and sale of the Certificates, nor the
consummation of any other of the transactions contemplated herein nor
the fulfillment of the terms of this Agreement or the Certificates will
result in the breach of any term or provision of the charter or by-laws
of the Depositor or conflict with, result in a breach, violation or
acceleration of or constitute a default under, the terms of any material
indenture or other agreement or instrument to which the Depositor is a
party or by which it is bound, or any statute, order or regulation
applicable to the Depositor of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Depositor.
(iv) There are no actions or proceedings against, or
investigations of, the Depositor pending, or, to the knowledge of the
Depositor, threatened, before any court, administrative agency or other
tribunal (A) asserting the invalidity of this Agreement or the
Certificates, (B) seeking to prevent the issuance of the Certificates or
the consummation of any of the transactions contemplated by this
Agreement, or (C) which might materially and adversely affect the
validity or enforceability of this Agreement or the Certificates.
(v) This Agreement creates a valid and continuing security
interest in the Deposited Underlying Certificates in favor of the
Trustee, on behalf of the Trust Fund, which security interest is prior
to all other liens and is enforceable as such as against creditors and
purchasers from the Depositor.
(vi) Immediately before the assignment of the Deposited Underlying
Certificates to the Trustee, the Depositor had good and marketable title
to such Deposited Underlying Certificates free and clear of any lien,
claim, encumbrance of any Person. The Depositor has received all
consents and approvals required by the terms of the Deposited Underlying
Certificates to the transfer to the Trustee of its interest and rights
in the Deposited Underlying Certificates.
(vii) The Distribution Account constitutes a "deposit account" (as
defined in Section 9-102(a)(29) of the UCC). The Securities Account
constitutes a "securities account" (as defined in Section 8-501(a) of
the UCC). The Deposited Underlying Certificates have been credited to
the Securities Account. The Securities Intermediary
25
has agreed to treat all assets credited to the Securities Account as
"financial assets" (as defined in Section 8-102(a)(9) of the UCC).
(viii) This Agreement is an agreement pursuant to which the
Securities Intermediary or the Bank, as the case may be, has agreed to
comply with all instructions or directions originated by the Trustee
relating to the Distribution Account and the Securities Account without
further consent by the Depositor.
(ix) Other than the security interest granted to the Trustee
pursuant to this Agreement, the Depositor has not pledged, assigned,
sold, granted a security interest in, or otherwise conveyed any of the
Deposited Underlying Certificates. The Depositor has not authorized the
filing of and is not aware of any financing statements against the
Depositor that include a description of the collateral covering the
Deposited Underlying Certificates. The Depositor is not aware of any
judgment or tax lien filings against the Depositor.
(x) The Depositor is not aware of any default or event of default
under, or breach of any terms of, the Underlying Agreement or the
Deposited Underlying Certificates.
(xi) Neither the Distribution Account nor the Securities Account
is in the name of any person other than the Trustee. The Depositor has
not consented to the compliance by the Securities Intermediary of the
Securities Account with entitlement orders of any person other than the
Trustee.
It is understood and agreed that the representations and warranties set
forth in this Section 2.04 shall survive delivery of the Trust Fund to the
Trustee. Upon discovery by the Depositor or a Responsible Officer of the
Trustee of a breach of any of the foregoing representations and warranties
which breach materially and adversely affects the interests of the
Certificateholders, the party discovering such breach shall give prompt
written notice to the other party and to the Rating Agencies.
Section 2.05 Issuance of Certificates. The Trustee acknowledges the
receipt by it of the Deposited Underlying Certificates and concurrently with
such receipt, the Trustee has duly executed, countersigned and delivered, to
or upon the order of the Depositor, the Certificates in authorized
denominations and registered in such names as the Depositor has directed in
writing.
Section 2.06 REMIC Matters. The Preliminary Statement sets forth the
designations and "latest possible maturity date" for federal income tax
purposes of all interests created hereby. The "Startup Day" for purposes of
the REMIC Provisions shall be the Closing Date. The "tax matters person" with
respect to each REMIC hereunder shall be the Trustee and the Trustee shall
hold the Tax Matters Person Certificate. Each REMIC's fiscal year shall be the
calendar year. Neither the rights to the Underlying Yield Supplement Amounts
nor any assets in the Yield Supplement Trust (including the rights and
obligations under the Corridor Contract Assignment Agreement) shall be part of
any REMIC described herein.
Section 2.07 Presentation for Transfer. On the Closing Date, the Underlying
Certificate Seller, the Depositor and/or the Trustee (as appropriate) shall
present the documents described in
26
Section 2.01 for registration of transfer of the Deposited Underlying
Certificates to the Trustee, pursuant to the requirements under the Underlying
Agreement.
27
ARTICLE III
ADMINISTRATION OF THE TRUST FUND;
PAYMENTS AND REPORTS TO CERTIFICATEHOLDERS
Section 3.01 Defaults by the Underlying Trust. In connection with its
receipt of any distribution on the Deposited Underlying Certificates on any
Distribution Date, if (i) the amount of any distribution varies from the
amount due thereon pursuant to the terms of the Underlying Agreement, (ii) the
Trustee shall not have received a distribution by the close of business on
such Distribution Date, or (iii) a Responsible Officer of the Trustee shall
gain actual knowledge of any default under the Underlying Agreement, the
Trustee shall promptly notify the Depositor, the Underlying Certificate Seller
and the Certificateholders, and shall, subject to the provisions of Article V
hereof, pursue such remedies as may be available to it as holder of such
Deposited Underlying Certificates in accordance with the terms of the
Underlying Agreement.
Section 3.02 Distribution Account, Securities Account and Yield
Supplement Reserve Fund. (a) The Trustee, for the benefit of the
Certificateholders, shall establish and maintain an account (the "Distribution
Account") at the Bank, which shall be an Eligible Account, entitled "CWALT
2006-37R Distribution Account." The Distribution Account shall be maintained
as a "deposit account" (as defined in Section 9-102(a)(29) of the UCC),
bearing a designation clearly indicating that the account and all funds
deposited in it are held for the exclusive benefit of the Certificateholders.
All amounts on deposit in the Distribution Account shall remain uninvested.
The Bank of New York ("BNY") hereby confirms the following with respect to the
Distribution Account: (A) the Distribution Account shall be established and
maintained as a "deposit account" (as defined in Section 9-102(a)(29) of the
UCC), (B) BNY is an organization engaged in the business of banking and is
acting in such capacity (in such capacity, the "Bank") in maintaining the
Distribution Account and (C) the Trustee is the Bank's sole "customer" (within
the meaning of Section 9-104 of the UCC) with respect to the Distribution
Account (other than the Securities Account). Notwithstanding anything to the
contrary and for the avoidance of doubt, if at any time the Bank shall receive
any instructions originated by the Trustee directing the disposition of funds
in the Distribution Account, the Bank shall comply with such instructions
without further consent by the Depositor, the Underlying Certificate Seller or
any other Person. Notwithstanding anything to the contrary, the Bank's
"jurisdiction" (within the meaning of Section 9-304 of the UCC) is the State
of New York.
The Distribution Account Property shall be Delivered to the Securities
Intermediary in accordance with the definition of "Delivery."
(b) By the date of this Agreement, the Trustee shall establish an
account (the "Securities Account") which shall be established and maintained
as a "securities account" as defined in Section 8-501 of the UCC to which
financial assets are or may be credited, (A) entitled "CWALT 2006-37R
Securities Account" BNY shall act in the capacity of a "securities
intermediary" as defined in Section 8-102(a)(14) of the UCC (in such capacity,
the "Securities Intermediary") with respect to the Securities Account, and (B)
the Securities Intermediary shall treat the Trustee as the sole "entitlement
holder" (within the meaning of Section 8-102(a)(7) of
28
the UCC) of the Securities Account and the sole Person entitled to exercise
the rights that comprise any financial asset credited to the Securities
Account.
The Securities Account Property, including the Deposited Underlying
Certificates, shall be Delivered to the Securities Intermediary in accordance
with the definition of "Delivery."
(c) Notwithstanding anything to the contrary and for the avoidance of
doubt, if at any time the Securities Intermediary shall receive any
notifications or entitlement orders from the Trustee directing it to transfer
or redeem any financial asset or other property relating to the Securities
Account, the Securities Intermediary shall comply with such notification or
other entitlement order without further consent by the Depositor or any other
Person. Notwithstanding anything to the contrary, the Securities
Intermediary's jurisdiction (as defined in Section 8-110(e) of the UCC) shall
be the State of New York.
(d) The Trustee shall upon receipt deposit in the Distribution Account
the following payments and collections in respect of the Deposited Underlying
Certificates:
(i) all distributions due and received on the Deposited Underlying
Certificates after October 25, 2006; and
(ii) any amount required to be deposited in the Distribution
Account pursuant to Section 2.03(a) hereof in connection with the
repurchase of a Deposited Underlying Certificate by the Underlying
Certificate Seller.
(e) Upon a determination by the Trustee that the final distribution
shall be made in respect of a Deposited Underlying Certificate, the Trustee
shall take such steps as may be necessary in connection with the final payment
thereon in accordance with the terms and conditions of the Underlying
Agreement. The Trustee shall promptly deposit in the Distribution Account the
final distribution received upon presentment and surrender of the affected
Deposited Underlying Certificate.
(f) The Depositor shall give notice to the Trustee, the Underlying
Certificate Seller and each Rating Agency of any proposed change of the
location of the Distribution Account or the Securities Account prior to any
change thereof.
(g) If the Bank or the Securities Intermediary has or subsequently
obtains by agreement, operation of law, or otherwise a security interest in
the Distribution Account or the Securities Account, each of the Bank and the
Securities Intermediary hereby agrees that the security interest shall be
subordinate to the security interest of the Trustee for the benefit of the
Certificateholders.
(h) On the Closing Date, there is hereby established a separate trust
(the "Yield Supplement Trust"), the assets of which shall consist of the
entitlement to the Underlying Yield Supplement Amounts, the Yield Supplement
Reserve Fund and the Yield Supplement Trustee's rights and obligations under
the Corridor Contract Assignment Agreement. The Yield Supplement Trust shall
be maintained by the Yield Supplement Trustee, who initially, shall be the
Trustee.
29
On the Closing Date, the Yield Supplement Trustee shall establish and
maintain in its name, in trust for the benefit of the Underlying Certificate
Seller, the Yield Supplement Reserve Fund, which shall be an Eligible Account,
and shall deposit $1,000 therein upon receipt from or on behalf of the
Depositor of such amount. All funds on deposit in the Yield Supplement Reserve
Fund shall be held separate and apart from, and shall not be commingled with,
any other moneys, including without limitation, other moneys held by the
Trustee pursuant to this Agreement.
The Trustee shall deposit or transfer into the Yield Supplement Reserve
Fund all amounts received in respect of the Underlying Yield Supplement
Amounts for the related Interest Accrual Period. The Yield Supplement Trustee
shall make withdrawals from the Yield Supplement Reserve Fund to make
distributions pursuant to Section 3.04 exclusively (other than as expressly
provided for in Section 3.03). Funds in the Yield Supplement Reserve Fund
shall not be invested.
Section 3.03 Permitted Withdrawals From the Distribution Account and the
Yield Supplement Reserve Fund. (a) The Trustee may from time to time withdraw
funds from the Distribution Account for the following purposes:
(i) to make payments to Certificateholders in the amounts and in
the manner provided in Section 3.04;
(ii) to reimburse the Depositor for expenses incurred by and
reimbursable to the Depositor with respect to each REMIC hereunder
pursuant to Section 6.03;
(iii) to pay any taxes imposed upon each REMIC hereunder, as
provided in Section 5.12; and
(iv) to clear and terminate the Distribution Account upon the
termination of the Trust Fund.
(b) The Yield Supplement Trustee may from time to time withdraw funds
from the Yield Supplement Reserve Fund for the following purposes:
(i) to make payments on the Corridor Contract, as provided in
Section 3.04(f);
(ii) to reimburse the Yield Supplement Trustee for the costs of
administering the Yield Supplement Trust; and
(iii) to clear and terminate the Yield Supplement Reserve Fund
upon the termination of this Agreement.
Section 3.04 Distributions.
(a) (1) On each Distribution Date, the Trustee shall withdraw from the
Distribution Account the Available Interest Funds from the Deposited
Underlying Certificates
30
for such Distribution Date and apply such funds to the distributions of
interest, in the following order of priority:
(i) concurrently to each Class of Certificates, an amount equal to
the related Class Optimal Interest Distribution Amount, any shortfall
being allocated pro rata among such Classes based on their respective
Class Optimal Interest Distribution Amounts for the Certificates before
reductions for such shortfalls; and
(ii) [Reserved].
(2) On each Distribution Date, the Trustee shall withdraw from the
Distribution Account the Available Principal Funds from the Deposited
Underlying Certificates for such Distribution Date and apply such funds to
distributions in respect of principal in the following order:
(A) to the Class A-R Certificates, until its Class
Certificate Balance is reduced to zero; and
(B) concurrently, to the Class A-1 and Class A-2
Certificates, pro rata, until their respective Class Certificate
Balances are reduced to zero;
(b) [Reserved].
(c) [Reserved].
(d) On each Distribution Date, the amount referred to in clause (i) of
the definition of Class Optimal Interest Distribution Amount for each Class of
Certificates for such Distribution Date shall be reduced by such Class's pro
rata share (based on interest then due and payable to such Class) of Allocated
Underlying Net Interest Shortfalls for such Distribution Date.
(e) If Subsequent Recoveries have been received with respect to an
Underlying Liquidated Mortgage Loan and are applied to increase the Class
Certificate Balance of the Deposited Underlying Certificates, that amount will
be applied pro rata to increase the Class Certificate Balance of each Class of
Certificates to which Realized Losses have been allocated, but in each case by
not more than the amount of Underlying Realized Losses previously allocated to
that Class of Certificates pursuant to Section 3.06. Holders of such
Certificates will not be entitled to any payment in respect of the Class
Optimal Interest Distribution Amount on the amount of such increases for any
Interest Accrual Period preceding the Distribution Date on which such increase
occurs. Any such increases shall be applied pro rata to the Certificate
Balance of each Certificate of such Class.
(f) On each Distribution Date on or prior to the Corridor Contract
Scheduled Termination Date, amounts on deposit in the Yield Supplement Reserve
Fund will be withdrawn therefrom and distributed to the Corridor Contract
Counterparty as payment under the Corridor Contract for such Distribution
Date.
Any amounts remaining in the Yield Supplement Reserve Fund after the
Corridor Contract Scheduled Termination Date will be distributed to the
Underlying Certificate Seller.
31
Section 3.05 The Corridor Contract.
The Underlying Certificate Seller shall cause UBS Real Estate
Securities, Inc. to assign all of its right, title and interest in and to the
Corridor Contract to, and shall cause all of its obligations in respect of
such transaction to be assumed by, the Yield Supplement Trustee on behalf of
the Yield Supplement Trust, on the terms and conditions set forth in the
Corridor Contract Assignment Agreement. The Corridor Contract will not be an
asset of the Trust Fund or of any REMIC. Funds on deposit in the Yield
Supplement Reserve Fund with respect to Underlying Yield Supplement Amounts
will be used to make payments to the Corridor Contract Counterparty according
to the Corridor Contract.
Upon an early termination of the Corridor Contract the Yield Supplement
Trustee, on behalf of the Yield Supplement Trust will be obligated to pay the
Corridor Contract Counterparty an amount in respect of such termination. Any
amounts owed by the Yield Supplement Trustee in respect of the termination of
the Corridor Contract shall be paid to the Corridor Contract Counterparty from
funds on deposit in the Yield Supplement Reserve Fund to the extent of the
Underlying Yield Supplement Amounts received on the immediately following
Distribution Date and the Underlying Yield Supplement Amounts received on
succeeding Distribution Dates.
Under no circumstance shall any funds other than Underlying Yield
Supplement Amounts be used to make any payment on the Corridor Contract.
Section 3.06 Allocation of Realized Losses.
(a) On or prior to the beginning of the second Business Day prior to
each Distribution Date, the Trustee shall determine the total amount of
Allocated Underlying Realized Losses for such Distribution Date. The Trustee
shall make such determination on the basis of amounts on deposit in the
Underlying Certificate Account (which Underlying Certificate Account it holds
as Underlying Trustee) or on the basis of the agreement referred to in the
last sentence of Section 5.07.
(b) Allocated Underlying Realized Losses with respect to any
Distribution Date shall be allocated to the Certificates, pro rata on the
basis of their respective Class Certificate Balances.
(c) Any Allocated Underlying Realized Loss allocated to a Class of
Certificates or any reduction in the Class Certificate Balance of a Class of
Certificates pursuant to Section 3.06(b) above shall be allocated among the
Certificates of such Class in proportion to their respective Certificate
Balances.
(d) Any allocation of Allocated Underlying Realized Losses to a
Certificate or any reduction in the Certificate Balance of a Certificate,
pursuant to Section 3.06(a) above shall be accomplished by reducing the
Certificate Balance thereof immediately following the distributions made on
the related Distribution Date in accordance with the definition of
"Certificate Balance."
Section 3.07 Determination of Pass-Through Rates for LIBOR Certificates.
32
(a) On each Interest Determination Date so long as any LIBOR
Certificates are outstanding, the Trustee will determine LIBOR on the basis of
the British Bankers' Association ("BBA") "Interest Settlement Rate" for
one-month deposits in U.S. dollars as quoted on the Bloomberg Terminal as of
each LIBOR Determination Date.
(b) If on any Interest Determination Date, LIBOR cannot be determined as
provided in paragraph (A) of this Section 4.08, the Trustee shall either (i)
request each Reference Bank to inform the Trustee of the quotation offered by
its principal London office for making one-month United States dollar deposits
in leading banks in the London interbank market, as of 11:00 a.m. (London
time) on such Interest Determination Date or (ii) in lieu of making any such
request, rely on such Reference Bank quotations that appear at such time on
the Reuters Screen LIBO Page (as defined in the International Swap Dealers
Association Inc. Code of Standard Wording, Assumptions and Provisions for
Swaps, 1986 Edition), to the extent available. LIBOR for the next Interest
Accrual Period will be established by the Trustee on each interest
Determination Date as follows:
(i) If on any Interest Determination Date two or more Reference
Banks provide such offered quotations, LIBOR for the next applicable
Interest Accrual Period shall be the arithmetic mean of such offered
quotations (rounding such arithmetic mean upwards if necessary to the
nearest whole multiple of 1/32%).
(ii) If on any Interest Determination Date only one or none of the
Reference Banks provides such offered quotations, LIBOR for the next
Interest Accrual Period shall be whichever is the higher of (i) LIBOR as
determined on the previous Interest Determination Date or (ii) the
Reserve Interest Rate. The "Reserve Interest Rate" shall be the rate per
annum which the Trustee determines to be either (i) the arithmetic mean
(rounded upwards if necessary to the nearest whole multiple of 1/32%) of
the one-month United States dollar lending rates that New York City
banks selected by the Trustee are quoting, on the relevant Interest
Determination Date, to the principal London offices of at least two of
the Reference Banks to which such quotations are, in the opinion of the
Trustee, being so made, or (ii) in the event that the Trustee can
determine no such arithmetic mean, the lowest one-month United States
dollar lending rate which New York City banks selected by the Trustee
are quoting on such Interest Determination Date to leading European
banks.
(iii) If on any Interest Determination Date the Trustee is
required but is unable to determine the Reserve Interest Rate in the
manner provided in paragraph (b) above, LIBOR for the related Classes of
Certificates shall be LIBOR as determined on the preceding applicable
Interest Determination Date. If on the initial LIBOR Determination Date
the Trustee is required but unable to determine LIBOR in the manner
provided above, LIBOR for the next Interest Accrual Period will be
5.32%.
Until all of the LIBOR Certificates are paid in full, the Trustee will
at all times retain at least four Reference Banks for the purpose of
determining LIBOR with respect to each Interest Determination Date. The
Underlying Certificate Seller initially shall designate the Reference Banks.
Each "Reference Bank" shall be a leading bank engaged in transactions in
Eurodollar deposits in the international Eurocurrency market, shall not
control, be controlled by, or be under
33
common control with, the Trustee and shall have an established place of
business in London. If any such Reference Bank should be unwilling or unable
to act as such or if the Underlying Certificate Seller should terminate its
appointment as Reference Bank, the Trustee shall promptly appoint or cause to
be appointed another Reference Bank. The Trustee shall have no liability or
responsibility to any Person for (i) the selection of any Reference Bank for
purposes of determining LIBOR or (ii) any inability to retain at least four
Reference Banks which is caused by circumstances beyond its reasonable
control.
(c) The Pass-Through Rate for each Class of LIBOR Certificates for each
Interest Accrual Period shall be determined by the Trustee on each Interest
Determination Date so long as the LIBOR Certificates are outstanding on the
basis of LIBOR and the respective formulae appearing in footnotes
corresponding to the LIBOR Certificates in the table relating to the
Certificates in the Preliminary Statement.
In determining LIBOR, any Pass-Through Rate for the LIBOR Certificates,
any Interest Settlement Rate, or any Reserve Interest Rate, the Trustee may
conclusively rely and shall be protected in relying upon the offered
quotations (whether written, oral or on the Dow Xxxxx Markets) from the BBA
designated banks, the Reference Banks or the New York City banks as to LIBOR,
the Interest Settlement Rate or the Reserve Interest Rate, as appropriate, in
effect from time to time. The Trustee shall not have any liability or
responsibility to any Person for (i) the Trustee's selection of New York City
banks for purposes of determining any Reserve Interest Rate or (ii) its
inability, following a good-faith reasonable effort, to obtain such quotations
from, the BBA designated banks, the Reference Banks or the New York City banks
or to determine such arithmetic mean, all as provided for in this Section
3.07.
The establishment of LIBOR and each Pass-Through Rate for the LIBOR
Certificates by the Trustee shall (in the absence of manifest error) be final,
conclusive and binding upon each Holder of a Certificate and the Trustee.
Section 3.08 Monthly Statements to Certificateholders. Concurrently with
each distribution on a Distribution Date, the Trustee will forward by
electronic delivery to each Rating Agency and make available to
Certificateholders on the Trustee's website
(xxxx://xxx.xxxxxxxxxxxxxxxxxxxx.xxx) a statement generally setting forth the
information contained in Exhibit G hereto.
In addition, the Trustee will make available to Certificateholders on
its website copies of the statements received by the Trustee as the holder of
the Deposited Underlying Certificates on behalf of the Trust Fund.
Certificateholders and other parties that are unable to use the
Trustee's website are entitled to have paper copies of these statements mailed
to them via first class mail by contacting the Trustee and indicating such.
Within a reasonable period of time after the end of each calendar year,
the Trustee will prepare and deliver to each person who at any time during the
previous calendar year was a Certificateholder of record a statement
containing the information required to satisfy any requirements of the Code,
the REMIC Provisions and regulations thereunder as from time to
34
time are in force. For purposes of this Section 3.08, the Trustee's duties are
limited to the extent that adequate information is reasonably available to the
Trustee as described herein.
Section 3.09 Reports of the Trustee; Distribution Account. Upon written
request of a Certificateholder or Certificate Owner and at the expense of such
Certificateholder or Certificate Owner, the Trustee shall make available to
Certificateholders or Certificate Owners within 15 days after the date of
receipt of such request a statement setting forth the status of the
Distribution Account as of the close of business on the last day of the
calendar month immediately preceding such request, and showing, for the period
covered by such statement, the aggregate of deposits into and withdrawals from
the Distribution Account.
Section 3.10 Access to Certain Documentation and Information. The
Trustee shall provide the related Certificateholders or Certificate Owners
with access to a copy of each report, if any, received by it as holder of the
Deposited Underlying Certificates under the Underlying Agreement. The Trustee
shall also provide the Depositor and the Underlying Certificate Seller with
access to any such report and to all written reports, documents and records
required to be maintained by the Trustee in respect of its duties hereunder.
Such access shall be afforded without charge but only upon reasonable request
evidenced by prior written notice received by the Trustee two Business Days
prior to the date of such proposed access and during normal business hours at
offices designated by the Trustee.
Section 3.11 Annual Statement as to Compliance.
The Trustee shall deliver to the Depositor on or before March 15
of each year, commencing with its 2007 fiscal year, an Officer's Certificate
stating, as to the signer thereof, that (i) a review of the activities of the
Trustee during the preceding calendar year (or applicable portion thereof) and
of the performance of the Trustee under this Agreement has been made under
such officer's supervision and (ii) to the best of such officer's knowledge,
based on such review, the Trustee has fulfilled all its obligations under this
Agreement in all material respects throughout such year (or applicable portion
thereof), or, if there has been a failure to fulfill any such obligation in
any material respect, specifying each such failure known to such officer and
the nature and status thereof.
The Trustee shall cause each Subcontractor, if any, to deliver to
the Depositor and the Trustee on or before March 15 of each year, commencing
with its 2007 fiscal year, an Officer's Certificate stating, as to the signer
thereof, that (i) a review of the activities of such Subcontractor during the
preceding calendar year (or applicable portion thereof) and of the performance
of the Subcontractor under the applicable agreement, has been made under such
officer's supervision and (ii) to the best of such officer's knowledge, based
on such review, such Subcontractor has fulfilled all its obligations under the
applicable agreement, in all material respects throughout such year (or
applicable portion thereof), or, if there has been a failure to fulfill any
such obligation in any material respect, specifying each such failure known to
such officer and the nature and status thereof.
The Trustee shall forward a copy of each such statement to each
Rating Agency.
35
ARTICLE IV
THE CERTIFICATES
Section 4.01 The Certificates.
The Certificates shall be substantially in the forms attached hereto as
exhibits. The Certificates shall be issuable in registered form, in the
minimum denominations, integral multiples in excess thereof (except that one
Certificate in each Class may be issued in a different amount which must be in
excess of the applicable minimum denomination) and aggregate denominations per
Class set forth in the Preliminary Statement.
Subject to Section 7.01 hereof respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions
to each Certificateholder of record on the preceding Record Date either (x) by
wire transfer in immediately available funds to the account of such holder at
a bank or other entity having appropriate facilities therefor, if (i) such
Holder has so notified the Trustee at least five Business Days prior to the
related Record Date and (ii) such Holder shall hold (A) a Notional Amount
Certificate, (B) 100% of the Class Certificate Balance of any Class of
Certificates or (C) Certificates of any Class with aggregate principal
Denominations of not less than $1,000,000 or (y) by check mailed by first
class mail to such Certificateholder at the address of such holder appearing
in the Certificate Register.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trust by an authorized officer of the Trustee. Certificates
bearing the manual or facsimile signatures of individuals who were, at the
time when such signatures were affixed, authorized to sign on behalf of the
Trustee shall bind the Trustee, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the countersignature and
delivery of such Certificates or did not hold such offices at the date of such
Certificate. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless countersigned by the Trustee by
manual signature, and such countersignature upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been
duly executed and delivered hereunder. All Certificates shall be dated the
date of their countersignature. On the Closing Date, the Trustee shall
countersign the Certificates to be issued at the direction of the Depositor,
or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the Trustee on
a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
Section 4.02 Certificate Register; Registration of Transfer and Exchange
of Certificates.
(a) The Trustee shall maintain, or cause to be maintained in accordance
with the provisions of Section 4.06 hereof, a Certificate Register for the
Trust Fund in which, subject to the provisions of subsections (b) and (c)
below and to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. Upon surrender for registration
of transfer of any
36
Certificate, the Trustee shall execute and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of transfer or exchange shall be accompanied by a
written instrument of transfer in form satisfactory to the Trustee duly
executed by the holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or exchange
shall be cancelled and subsequently destroyed by the Trustee in accordance
with the Trustee's customary procedures.
(b) [reserved]
(c) No transfer of an ERISA-Restricted Certificate shall be made unless
the Trustee shall have received either (i) a representation from the
transferee of such Certificate acceptable to and in form and substance
satisfactory to the Trustee (in the event such Certificate is a Residual
Certificate such requirement is satisfied only by the Trustee's receipt of a
Representation Letter from the Transferee substantially in the form of Exhibit
F to the effect that (x) such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA or a plan or arrangement subject
to Section 4975 of the Code, or a person acting on behalf of any such plan or
arrangement or using the assets of any such plan or arrangement to effect such
transfer, or (y) a representation that the purchaser is an insurance company
which is purchasing such Certificates with funds contained in an "insurance
company general account" (as such term is defined in Section V(e) of
Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the
purchase and holding of such Certificate satisfies the requirements for
exemptive relief under Sections I and III of PTCE 95-60 or (ii) in the case of
any ERISA-Restricted Certificate presented for registration in the name of an
employee benefit plan or arrangement subject to ERISA, or a plan or
arrangement subject to Section 4975 of the Code (or comparable provisions of
any subsequent enactments), or a trustee or any other person acting on behalf
of any such plan or arrangement, or using such plan's or arrangement's assets,
an Opinion of Counsel satisfactory to the Trustee, which Opinion of Counsel
shall not be an expense of either the Trustee or the Trust Fund, addressed to
the Trustee to the effect that the purchase and holding of such
ERISA-Restricted Certificate will not result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code and will
not subject the Trustee to any obligation in addition to those expressly
undertaken in this Agreement or to any liability. For purposes of the
preceding sentence, with respect to an ERISA-Restricted Certificate that is
not a Residual Certificate, in the event the representation letter or opinion
of counsel referred to in the preceding sentence is not so furnished, none of
the representations in clause (i), as appropriate, shall be
37
deemed to have been made to the Trustee by the transferee's (including an
initial acquiror's) acceptance of the ERISA-Restricted Certificates.
Notwithstanding anything else to the contrary herein, any purported transfer
of an ERISA-Restricted Certificate to or on behalf of an employee benefit plan
subject to ERISA or to Section 4975 of the Code without the delivery to the
Trustee of an Opinion of Counsel satisfactory to the Trustee as described
above shall be void and of no effect.
To the extent permitted under applicable law (including, but not limited
to, ERISA), the Trustee shall be under no liability to any Person for any
registration of transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 4.02(c) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements.
(d) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the
Trustee shall not register the Transfer of any Residual Certificate
unless, in addition to the certificates required to be delivered to the
Trustee under subparagraph (b) above, the Trustee shall have been
furnished with an affidavit (a "Transfer Affidavit") of the initial
owner or the proposed transferee in the form attached hereto as Exhibit
F.
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is not a
Permitted Transferee and to provide to the Trustee a certificate
substantially in the form attached hereto as Exhibit E stating that it
has no knowledge that such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
4.02(d) shall be absolutely null and void and shall vest no rights in
the purported Transferee. If any purported transferee shall become a
Holder of a Residual Certificate in violation of the provisions of this
Section 4.02(d), then the last preceding Permitted Transferee shall be
restored to all rights as Holder thereof retroactive to the date of
registration of Transfer of
38
such Residual Certificate. The Trustee shall be under no liability to
any Person for any registration of Transfer of a Residual Certificate
that is in fact not permitted by Section 4.02(c) and this Section
4.02(d) or for making any payments due on such Certificate to the Holder
thereof or taking any other action with respect to such Holder under the
provisions of this Agreement so long as the Transfer was registered
after receipt of the related Transfer Affidavit and Transferor
Certificate. The Trustee shall be entitled but not obligated to recover
from any Holder of a Residual Certificate that was in fact not a
Permitted Transferee at the time it became a Holder or, at such
subsequent time as it became other than a Permitted Transferee, all
payments made on such Residual Certificate at and after either such
time. Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted Transferee of
such Certificate.
(v) The Depositor shall use its best efforts to make available,
upon receipt of written request from the Trustee, all information
necessary to compute any tax imposed under Section 860E(e) of the Code
as a result of a Transfer of an Ownership Interest in a Residual
Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 4.02(d) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which
Opinion of Counsel shall not be an expense of the Trust Fund, the Trustee, the
Underlying Certificate Seller or the Depositor, to the effect that the
elimination of such restrictions will not cause each REMIC hereunder to fail
to qualify as a REMIC at any time that the Certificates are outstanding or
result in the imposition of any tax on the Trust Fund, a Certificateholder or
another Person. Each Person holding or acquiring any Ownership Interest in a
Residual Certificate hereby consents to any amendment of this Agreement which,
based on an Opinion of Counsel furnished to the Trustee, is reasonably
necessary (a) to ensure that the record ownership of, or any beneficial
interest in, a Residual Certificate is not transferred, directly or
indirectly, to a Person that is not a Permitted Transferee and (b) to provide
for a means to compel the Transfer of a Residual Certificate which is held by
a Person that is not a Permitted Transferee to a Holder that is a Permitted
Transferee.
(e) The preparation and delivery of all certificates and opinions
referred to above in this Section 4.02(e) in connection with transfer shall be
at the expense of the parties to such transfers.
(f) Except as provided below, the Book-Entry Certificates shall at all
times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the
Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Trustee shall
deal with the Depository, Depository Participants and indirect participating
firms as representatives of the Certificate Owners of the Book-Entry
Certificates for purposes of exercising the rights of
39
holders under this Agreement, and requests and directions for and votes of
such representatives shall not be deemed to be inconsistent if they are made
with respect to different Certificate Owners; and (vi) the Trustee may rely
and shall be fully protected in relying upon information furnished by the
Depository with respect to its Depository Participants and furnished by the
Depository Participants with respect to indirect participating firms and
persons shown on the books of such indirect participating firms as direct or
indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository, and (ii) the Trustee or the Depositor is
unable to locate a qualified successor or (y) after the occurrence of an
Underlying Event of Default, the Certificate Owners representing at least 51%
of the Certificate Balance of the Book-Entry Certificates together advise the
Trustee and the Depository through the Depository Participants in writing that
continuation of the book-entry system through the Depository is no longer in
the best interests of the Certificate Owners, the Trustee shall notify all
Certificate Owners, through the Depository, of the occurrence of any such
event and of the availability of definitive, fully-registered Certificates
(the "Definitive Certificates") to Certificate Owners requesting the same.
Upon surrender to the Trustee of the related Class of Certificates by the
Depository, accompanied by the instructions from the Depository for
registration, the Trustee shall issue the Definitive Certificates. Neither the
Depositor nor the Trustee shall be liable for any delay in delivery of such
instruction and each may conclusively rely on, and shall be protected in
relying on, such instructions. The Depositor shall provide the Trustee with an
adequate inventory of certificates to facilitate the issuance and transfer of
Definitive Certificates. Upon the issuance of Definitive Certificates all
references herein to obligations imposed upon or to be performed by the
Depository shall be deemed to be imposed upon and performed by the Trustee, to
the extent applicable with respect to such Definitive Certificates and the
Trustee shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder; provided that the Trustee shall not by virtue of
its assumption of such obligations become liable to any party for any act or
failure to act of the Depository.
Section 4.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there is delivered to the Depositor and the
Trustee such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, countersign and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any
new Certificate under this Section 4.03, the Trustee may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith.
40
Any replacement Certificate issued pursuant to this Section 4.03 shall
constitute complete and indefeasible evidence of ownership, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be
found at any time.
Section 4.04 Persons Deemed Owners.
The Depositor, the Trustee and any agent of the Depositor or the Trustee
may treat the Person in whose name any Certificate is registered as the owner
of such Certificate for the purpose of receiving distributions as provided in
this Agreement and for all other purposes whatsoever, and neither the
Depositor, the Trustee nor any agent of the Depositor or the Trustee shall be
affected by any notice to the contrary.
Section 4.05 Access to List of Certificateholders' Names and Addresses.
If three or more Certificateholders and/or Certificate Owners (a)
request such information in writing from the Trustee, (b) state that such
Certificateholders and/or Certificate Owners desire to communicate with other
Certificateholders and/or Certificate Owners with respect to their rights
under this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders and/or Certificate Owners propose
to transmit, or if the Depositor shall request such information in writing
from the Trustee, then the Trustee shall, within ten Business Days after the
receipt of such request, provide the Depositor or such Certificateholders
and/or Certificate Owners at such recipients' expense the most recent list of
the Certificateholders of such Trust Fund held by the Trustee, if any. The
Depositor and every Certificateholder and/or Certificate Owner, by receiving
and holding a Certificate or beneficial interest therein, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
Section 4.06 Maintenance of Office or Agency. The Trustee will maintain
or cause to be maintained at its expense an office or offices or agency or
agencies in New York City where Certificates may be surrendered for
registration of transfer or exchange. The Trustee initially designates its
Corporate Trust Office for such purposes. The Trustee will give prompt written
notice to the Certificateholders of any change in such location of any such
office or agency.
41
ARTICLE V
CONCERNING THE TRUSTEE
Section 5.01 Duties of Trustee.
The Trustee shall undertake to perform such duties and only such duties
as are specifically set forth in this Agreement.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are
in the form required by this Agreement; provided, however, that the Trustee
shall not be responsible for the accuracy or content of any such resolution,
certificate, statement, opinion, report, document, order or other instrument.
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act
or its own willful misconduct; provided, however, that:
(i) the duties and obligations of the Trustee shall be determined solely
by the express provisions of this Agreement, the Trustee shall not be liable
except for the performance of such duties and obligations as are specifically
set forth in this Agreement, no implied covenants or obligations shall be read
into this Agreement against the Trustee and the Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the Trustee
and conforming to the requirements of this Agreement which it believed in good
faith to be genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(ii) the Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be finally proven that the Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken by it in good faith in accordance with the
direction of Holders of Certificates evidencing not less than 25% of the
Voting Rights of Certificates relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this Agreement.
Section 5.02 Certain Matters Affecting the Trustee. Except as otherwise
provided in Section 5.01:
(i) the Trustee may request and rely upon and shall be protected in
acting or refraining from acting upon any resolution, Officers' Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document believed by it to be genuine and to have been signed or
42
presented by the proper party or parties and the Trustee shall have no
responsibility to ascertain or confirm the genuineness of any signature of any
such party or parties;
(ii) the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or
accountants and any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such Opinion of
Counsel;
(iii) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(iv) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other
paper or document, unless requested in writing so to do by Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to
each Class of Certificates;
(v) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
accountants or attorneys;
(vi) the Trustee shall not be required to risk or expend its own funds
or otherwise incur any financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers hereunder if it shall
have reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not assured to it;
(vii) the Trustee shall be under no obligation to exercise any of the
trusts, rights or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders, pursuant to the
provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee reasonable security or indemnity satisfactory to the
Trustee against the costs, expenses and liabilities which may be incurred
therein or thereby;
(viii) whenever in the administration of this Agreement the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith
on its part, conclusively rely upon an Officers' Certificate; and
(ix) the Trustee shall not be deemed to have notice of any breach by the
Underlying Certificate Seller of any representation, warranty or covenant or
any default or event of default unless a Responsible Officer of the Trustee
has actual knowledge thereof or unless written notice of any event which is in
fact such a default or breach is received by the Trustee at the Corporate
Trust Office of the Trustee, and such notice references the Certificates and
this Agreement.
All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of such Certificates, or the production thereof at the trial
or other proceeding relating thereto, and any such suit, action or
43
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of such Certificates, subject to the provisions of
this Agreement.
Section 5.03 Trustee Not Liable for Certificates or Deposited Underlying
Certificates. The recitals contained herein and in the Certificates shall be
taken as the statements of the Depositor or the Underlying Certificate Seller,
as the case may be, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates or of any Deposited
Underlying Certificates or related document other than with respect to the
Trustee's execution and counter-signature of the Certificates. The Trustee
shall not be accountable for the use or application by the Depositor or the
Underlying Certificate Seller of any funds paid to the Depositor or the
Underlying Certificate Seller in respect of the Deposited Underlying
Certificates.
Section 5.04 Trustee May Own Certificates. The Trustee in its individual
or any other capacity may become the owner or pledgee of Certificates with the
same rights as it would have if it were not the Trustee.
Section 5.05 Trustee's Fees and Expenses. The Trustee acknowledges that
on the Closing Date it will receive as compensation for all services rendered
by it in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder and for reimbursement of
certain expenses (including, for the first nine tax years of the Trust Fund,
REMIC tax preparation expenses), payment of a mutually agreed upon one time
fee from the Underlying Certificate Seller. In the event of the resignation or
removal of the Trustee pursuant to the terms of this Agreement, such Trustee
will transfer, deliver and otherwise convey a pro rated portion of such
payment to the successor Trustee as compensation to the successor trustee.
Section 5.06 Indemnification of the Trustee. The Underlying Certificate
Seller hereby covenants and agrees to indemnify the Trustee and any director,
officer, employee, or agent of the Trustee for and to hold them harmless
against, any and all losses, liabilities, damages, claims or expenses arising
out of or in connection with the acceptance or administration of the trust or
trusts hereunder (including, without limitation, any losses, liabilities,
damages, claims or expenses arising from the failure of the Underlying
Certificate Seller to perform its obligations in accordance with the
provisions of this Agreement or of defending itself against any claim or
liability in connection with the exercise or performance of any powers or
duties hereunder), other than those resulting from the negligence or bad faith
in the performance of any of the Trustee's duties hereunder or by reason of
reckless disregard of the Trustee's obligations and duties hereunder. Such
indemnification shall survive the termination of this Agreement and the Trust
Fund created hereby or the resignation or removal of the Trustee pursuant to
the terms hereof.
Section 5.07 Eligibility Requirements for Trustee. The Trustee hereunder
shall at all times be a corporation or association organized and doing
business under the laws of a state or the United States of America, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000, subject to supervision or examination by
federal or state authority and with a credit rating which would not cause
either of the Rating Agencies to reduce or withdraw their respective then
current ratings of the Certificates (or having provided such security from
time to time as is sufficient to avoid such reduction as
44
evidenced in writing by each rating agency). If such corporation or
association publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section 5.07 the combined capital and surplus of
such corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 5.07, the Trustee shall resign immediately in the
manner and with the effect specified in Section 5.08 hereof. The entity
serving as Trustee may have normal banking and trust relationships with the
Depositor and its affiliates and with the Underlying Certificate Seller and
its affiliates; provided, however, that such entity cannot be an affiliate of
the Depositor or the Underlying Certificate Seller. The Trustee hereunder
shall at all times be the same Person as the Underlying Trustee or shall have
an agreement with the Underlying Trustee to have access to the information
relating to the Underlying Certificate Account in order to enable the Trustee
to perform its duties under Section 3.06(a).
Section 5.08 Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice of resignation to the Depositor, the
Underlying Certificate Seller and each Rating Agency not less than 60 days
before the date specified in such notice when, subject to Section 5.09, such
resignation is to take effect, and acceptance by a successor trustee in
accordance with Section 5.09 meeting the qualifications set forth in Section
5.07. If no successor trustee meeting such qualifications shall have been so
appointed and have accepted appointment within 30 days after the giving of
such notice or resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.
As a condition to the effectiveness of any such resignation, at least 15
calendar days prior to the effective date of such resignation, the Trustee
shall provide (x) written notice to the Depositor of any successor pursuant to
this Section and (y) in writing and in form and substance reasonably
satisfactory to the Depositor, all information reasonably requested by the
Depositor in order to comply with its reporting obligation under Item 6.02 of
Form 8-K with respect to the resignation of the Trustee.
If at any time (i) the Trustee shall cease to be eligible in accordance
with the provisions of Section 5.07 hereof and shall fail to resign after
written request thereto by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, (iii)
a tax is imposed with respect to the Trust Fund by any state in which the
Trustee or the Trust Fund is located and the imposition of such tax would be
avoided by the appointment of a different trustee or (iv) during the period
that the Depositor is required to file Exchange Act Reports with respect to
the Trust Fund, the Trustee fails to comply with its obligations under this
Agreement, including the preceding paragraph, Section 5.09 or Article IX and
such failure is not remedied within the lesser of 10 calendar days or such
period in which the applicable Exchange Act Report can be filed timely
(without taking into account any extensions), then, in the case of clauses (i)
through (iii), the Depositor or the Master Servicer, or in the case of clause
(iv), the Depositor, may remove the Trustee and appoint a successor trustee by
written
45
instrument, in triplicate, one copy of which instrument shall be delivered to
the Trustee, one copy of which shall be delivered to the Master Servicer and
one copy of which shall be delivered to the successor trustee.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered by the successor Trustee to the Depositor, one complete set
to the Trustee so removed and one complete set to the successor so appointed,
together with a written description of the basis of such removal. Notice of
any removal of the Trustee shall be given to each Rating Agency and the
Underlying Certificate Seller by the successor trustee.
Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section 5.08 shall become
effective upon acceptance of appointment by the successor trustee as provided
in Section 5.09 hereof.
Section 5.09 Successor Trustee.
Any successor trustee appointed as provided in Section 5.08 hereof shall
execute, acknowledge and deliver to the Depositor and to its predecessor
trustee and the Depositor an instrument accepting such appointment hereunder
and thereupon the resignation or removal of the predecessor trustee shall
become effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if
originally named as trustee herein. The Depositor and the predecessor trustee
shall execute and deliver such instruments and do such other things as may
reasonably be required for more fully and certainly vesting and confirming in
the successor trustee all such rights, powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 5.09 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 5.07 hereof, its appointment
shall not adversely affect the then current rating of the Certificates and
such successor trustee has provided to the Depositor in writing and in form
and substance reasonably satisfactory to the Depositor, all information
reasonably requested by the Depositor in order to comply with its reporting
obligation under Item 6.02 of Form 8-K with respect to a replacement Trustee.
Upon acceptance of appointment by a successor trustee as provided in
this Section 5.09, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to
mail such notice within 10 days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed
at the expense of the Depositor.
Section 5.10 Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to the business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such corporation shall be
46
eligible under the provisions of Section 5.07 hereof without the execution or
filing of any paper or further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
As a condition to the effectiveness of any merger or consolidation, at
least 15 calendar days prior to the effective date of any merger or
consolidation of the Trustee, the Trustee shall provide (x) written notice to
the Depositor of any successor pursuant to this Section and (y) in writing and
in form and substance reasonably satisfactory to the Depositor, all
information reasonably requested by the Depositor in order to comply with its
reporting obligation under Item 6.02 of Form 8-K with respect to a replacement
Trustee.
Section 5.11 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund at the time be located, the Depositor and the Trustee
acting jointly shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by the Trustee to act as
co-trustee or co-trustees jointly with the Trustee, or separate trustee or
separate trustees, of all or any part of the Trust Fund, and to vest in such
Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust Fund or any part thereof,
whichever is applicable, and, subject to the other provisions of this Section
5.11, such powers, duties, obligations, rights and trusts as the Depositor and
the Trustee may consider necessary or desirable. If the Depositor shall not
have joined in such appointment within 15 days after the receipt by it of a
request to do so, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 5.07 and no
notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 5.09.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) To the extent necessary to effectuate the purposes of this Section
5.11, all rights, powers, duties and obligations conferred or imposed upon the
Trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly (it being understood
that such separate trustee or co-trustee is not authorized to act separately
without the Trustee joining in such act), except to the extent that under any
law of any jurisdiction in which any particular act or acts are to be
performed (whether as Trustee hereunder or as successor to the Depositor
hereunder), the Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the applicable Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed singly by
such separate trustee or co-trustee, but solely at the direction of the
Trustee;
(ii) No trustee hereunder shall be held personally liable by reason of
any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee; and
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(iii) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees,
when and as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article V. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee and a copy thereof given to the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 5.12 Tax Matters.
It is intended that the assets with respect to which any REMIC election
is to be made, as set forth in the Preliminary Statement, shall constitute,
and that the conduct of matters relating to such assets shall be such as to
qualify such assets as, a "real estate mortgage investment conduit" as defined
in and in accordance with the REMIC Provisions. In furtherance of such
intention, the Trustee covenants and agrees that it shall act as agent (and
the Trustee is hereby appointed to act as agent) on behalf of any such REMIC
and that in such capacity it shall: (a) prepare and file, or cause to be
prepared and filed, in a timely manner, a U.S. Real Estate Mortgage Investment
Conduit Income Tax Return (Form 1066 or any successor form adopted by the
Internal Revenue Service) and prepare and file or cause to be prepared and
filed with the Internal Revenue Service and applicable state or local tax
authorities income tax or information returns for each taxable year with
respect to any such REMIC, containing such information and at the times and in
the manner as may be required by the Code or state or local tax laws,
regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times and
in such manner as may be required thereby; (b) within thirty days of the
Closing Date, furnish or cause to be furnished to the Internal Revenue
Service, on Forms 8811 or as otherwise may be required by the Code, the name,
title, address, and telephone number of the person that the holders of the
Certificates may contact for tax information relating thereto, together with
such additional information as may be required by such Form, and update such
information at the time or times in the manner required by the Code; (c) make
or cause to be made elections that such assets be treated as a REMIC on the
federal tax return for its first taxable year (and, if necessary, under
applicable state law); (d) prepare and forward, or cause to be prepared and
forwarded, to the Certificateholders and to the Internal Revenue Service and,
if necessary, state tax authorities, all information returns and reports as
and when required to be provided to them in accordance with the REMIC
Provisions, including without limitation, the
48
calculation of any original issue discount using the Prepayment Assumption;
(e) provide information necessary for the computation of tax imposed on the
transfer of a Residual Certificate to a Person that is not a Permitted
Transferee, or an agent (including a broker, nominee or other middleman) of a
Non-Permitted Transferee, or a pass-through entity in which a Non-Permitted
Transferee is the record holder of an interest (the reasonable cost of
computing and furnishing such information may be charged to the Person liable
for such tax); (f) to the extent that they are under its control conduct
matters relating to such assets at all times that any Certificates are
outstanding so as to maintain the status as a REMIC under the REMIC
Provisions; (g) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of any REMIC;
(h) pay, from the sources specified in the last paragraph of this Section
5.12, the amount of any federal or state tax, including prohibited transaction
taxes as described below, imposed on any such REMIC prior to its termination
when and as the same shall be due and payable (but such obligation shall not
prevent the Trustee or any other appropriate Person from contesting any such
tax in appropriate proceedings and shall not prevent the Trustee from
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings); (i) ensure that federal, state or local income tax or
information returns shall be signed by the Trustee or such other person as may
be required to sign such returns by the Code or state or local laws,
regulations or rules; (j) maintain records relating to any such REMIC,
including but not limited to the income, expenses, assets and liabilities
thereof and the fair market value and adjusted basis of the assets determined
at such intervals as may be required by the Code, as may be necessary to
prepare the foregoing returns, schedules, statements or information; and (k)
as and when necessary and appropriate, represent any such REMIC in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of any such REMIC, enter into settlement agreements with any
governmental taxing agency, extend any statute of limitations relating to any
tax item of any such REMIC, and otherwise act on behalf of any such REMIC in
relation to any tax matter or controversy involving it.
In order to enable the Trustee to perform its duties as set forth
herein, the Depositor and the Underlying Certificate Seller shall provide, or
cause to be provided, to the Trustee within ten (10) days after the Closing
Date all information or data that the Trustee requests in writing and
determines to be relevant for tax purposes to the valuations and offering
prices of the Certificates, including, without limitation, the price, yield,
prepayment assumption and projected cash flows of the Certificates and the
Deposited Underlying Certificate. Thereafter, the Depositor and the Underlying
Certificate Seller shall provide to the Trustee promptly upon written request
therefor, any such additional information or data that the Trustee may, from
time to time, reasonably request in order to enable the Trustee to perform its
duties as set forth herein. The Underlying Certificate Seller hereby
indemnifies the Trustee for any losses, liabilities, damages, claims or
expenses of the Trustee arising from any errors or miscalculations of the
Trustee that result from any failure of the Depositor or the Underlying
Certificate Seller to provide, or to cause to be provided, accurate
information or data to the Trustee on a timely basis.
In the event that any tax is imposed on "prohibited transactions" of any
REMIC hereunder as defined in Section 860F(a)(2) of the Code, on the "net
income from foreclosure property" of any REMIC hereunder as defined in Section
860G(c) of the Code, on any contribution to such REMIC after the Startup Day
pursuant to Section 860G(d) of the Code, or
49
any other tax is imposed, including, without limitation, any minimum tax
imposed upon the REMIC hereunder pursuant to Sections 23153 and 24874 of the
California Revenue and Taxation Code, if not paid as otherwise provided for
herein, such tax shall be paid by (i) the Trustee, if any such other tax
arises out of or results from a breach by the Trustee of any of its
obligations under this Agreement, (ii) the Depositor, in the case of any such
minimum tax, or if such tax arises out of or results from a breach by the
Depositor of any of its obligations under this Agreement, (iii) the Underlying
Certificate Seller, if any such tax arises out of or results from the
Underlying Certificate Seller's obligation to repurchase the Deposited
Underlying Certificates pursuant to Section 2.03 or (iv) in all other cases,
or in the event that the Trustee, the Depositor or the Underlying Certificate
Seller fails to honor its obligations under the preceding clauses (i),(ii) or
(iii), any such tax will be paid with amounts otherwise to be distributed to
the Certificateholders, as provided in Section 3.03.
For all federal income tax purposes, the Yield Supplement Trust will be
a Grantor Trust owned by the Underlying Certificate Seller. In furtherance of
such intention, the Yield Supplement Trustee covenants and agrees that it
shall act as agent (and the Yield Supplement Trustee is hereby appointed to
act as agent) on behalf of any such Grantor Trust and that in such capacity it
shall prepare and file, or cause to be prepared and filed, in a timely manner
with the Internal Revenue Service and applicable state or local tax
authorities, income tax or information returns for each taxable year with
respect to such Grantor Trust, containing such information and at the times
and in the manner as may be required by the Code or state or local tax laws,
regulations, or rules, and furnish or cause to be furnished to the Underlying
Certificate Seller as owner of such Grantor Trust, the schedules, statements
or information at such times and in such manner as may be required thereby.
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ARTICLE VI
THE DEPOSITOR
Section 6.01 Liability of the Depositor. The Depositor shall be liable
in accordance herewith only to the extent of the obligations specifically
imposed upon and undertaken by the Depositor herein.
Section 6.02 Merger, Consolidation or Conversion of the Depositor. The
Depositor will keep in full effect its existence, rights and franchises as a
corporation under the laws of the United States or under the laws of one of
the states thereof and will each obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement to perform its duties under this Agreement.
Any Person into which the Depositor may be merged or consolidated, or
any Person resulting from any merger or consolidation to which the Depositor
shall be a party, or any person succeeding to the business of the Depositor,
shall be the successor of the Depositor hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.
Section 6.03 Limitation on Liability of the Depositor and Others. None
of the Depositor, or any of the directors, officers, employees or agents of
the Depositor shall be under any liability to the Certificateholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Depositor or any such Person against any
breach of representations or warranties made by it herein or protect the
Depositor or any such Person from any liability which would otherwise be
imposed by reasons of willful misfeasance, bad faith or gross negligence in
the performance of duties or by reason of reckless disregard of obligations
and duties hereunder. The Depositor and any director, officer, employee or
agent of the Depositor may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. The Depositor and any director, officer, employee
or agent of the Depositor shall be indemnified by the Trust Fund and held
harmless against any loss, liability or expense incurred in connection with
any audit, controversy or judicial proceeding relating to a governmental
taxing authority or any legal action relating to this Agreement or the
Certificates, other than any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or gross negligence in the performance of
duties hereunder or by reason of reckless disregard of obligations and duties
hereunder. The Depositor, shall be under no obligation to appear in, prosecute
or defend any legal action that is not incidental to its respective duties
hereunder and which in its opinion may involve it in any expense or liability;
provided, however, that the Depositor may in its discretion undertake any such
action that it may deem necessary or desirable in respect of this Agreement
and the rights and duties of the parties hereto and interests of the Trustee
and the Certificateholders hereunder. In such event, the legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Trust Fund, and the Depositor shall be entitled
to be reimbursed therefor out of the Distribution Account.
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ARTICLE VII
TERMINATION
Section 7.01 Termination.
Subject to Section 7.03, the obligations and responsibilities of the
Depositor, the Underlying Certificate Seller and the Trustee created hereby
with respect to the Trust Fund shall terminate upon the later of (i) a
termination of the Underlying Trust pursuant to Article IX of the Underlying
Agreement, (ii) the receipt of the final distribution to be made on the
Deposited Underlying Certificates in accordance with the terms and conditions
of the Underlying Agreement and (iii) the distribution to Certificateholders
of all amounts required to be distributed to them pursuant to this Agreement.
In no event shall the trusts created hereby continue beyond the earlier of (i)
the expiration of 21 years from the death of the survivor of the descendants
of Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to the Court of
St. James's, living on the date hereof and (ii) the Latest Possible Maturity
Date.
Section 7.02 Final Distribution on the Certificates.
If the Trustee receives notice that the Underlying Trust is to be
terminated in accordance with the terms of the Underlying Agreement, notice
shall be given by the Trustee to Certificateholders as promptly as practicable
thereafter.
Notice of any termination of the Trust Fund, specifying the Distribution
Date on which Certificateholders may surrender their Certificates for payment
of the final distribution and cancellation, shall be given promptly by the
Trustee by letter to Certificateholders mailed not earlier than the 10th day
and no later than the 15th day of the month next preceding the month of such
final distribution and not later than as promptly practicable after the
Trustee receives notice that the Underlying Trust is to be terminated in
accordance with the terms of the Underlying Agreement. Any such notice shall
specify (a) the Distribution Date upon which final distribution on the
Certificates will be made upon presentation and surrender of Certificates at
the office therein designated, (b) the amount of such final distribution, (c)
the location of the office or agency at which such presentation and surrender
must be made, and (d) that the Record Date otherwise applicable to such
Distribution Date is not applicable, distributions being made only upon
presentation and surrender of the Certificates at the office therein
specified. The Trustee will also give such notice to each Rating Agency at the
time such notice is given to Certificateholders.
Upon the final distribution with respect to the Trust Fund, the Trustee
shall promptly release to the Holder of the Class A-R Certificate the
Deposited Underlying Certificates.
Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to the Certificateholders of each Class, in the order
set forth in Section 3.04. hereof, on the final Distribution Date in
proportion to their respective Percentage Interests, with respect to
Certificateholders of the same Class, an amount equal to (i) as to each Class
of Regular Certificates, the Certificate Balance thereof plus accrued interest
thereon (or on their Notional
52
Amount, if applicable) in the case of an interest bearing Certificate and (ii)
as to the Residual Certificates, the amount, if any, which remains on deposit
in the Distribution Account (other than the amounts retained to meet claims)
after application pursuant to clause (i) above. Notwithstanding the reduction
of the Class Certificate Balance of any Class of Certificates to zero, such
Class will be outstanding hereunder (solely for the purpose of receiving
distributions and not for any other purpose) until the termination of the
respective obligations and responsibilities of the Depositor, the Underlying
Certificate Seller, and the Trustee hereunder in accordance with Article VII.
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in
the above mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If
within six months after the second notice all the applicable Certificates
shall not have been surrendered for cancellation, the Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust Fund. If within one year after the
second notice all Certificates shall not have been surrendered for
cancellation, the Class A-R Certificateholder shall be entitled to all
unclaimed funds and other assets of the Trust Fund which remain subject
hereto.
The Yield Supplement Trust shall terminate on the earlier of (i) the
Corridor Contract Scheduled Termination Date and (ii) the termination of this
Agreement.
Section 7.03 Additional Termination Requirements.
(a) Upon the receipt of the final distribution to be made on the
Deposited Underlying Certificates in accordance with the terms and conditions
of the Underlying Agreement, the Holder of the Class A-R Certificate shall
cause the Trust Fund to be terminated in accordance with the following
additional requirements, unless the Trustee has been supplied with an Opinion
of Counsel, at the expense of the Holder of the Class A-R Certificate, to the
effect that the failure to comply with the requirements of this Section 7.03
will not (i) result in the imposition of taxes on "prohibited transactions" on
any REMIC as defined in section 860F of the Code, or (ii) cause any REMIC to
fail to qualify as a REMIC at any time that any Certificates are outstanding:
(1) Upon receipt of the notice given pursuant to the Underlying
Agreement, but in no event later than 90 days prior to the final
Underlying Distribution Date set forth in the notice given by the Master
Servicer in accordance with the terms of the Underlying Agreement, the
Trustee shall prepare, at the expense of the "tax matters person," and
adopt a plan of complete liquidation within the meaning of section
860F(a)(4) of the Code which, as evidenced by an Opinion of Counsel
(which opinion shall not be an expense of the Trustee or the Tax Matters
Person), meets the requirements of a qualified liquidation; and
(2) Within 90 days after the time of adoption of such a plan of
complete liquidation, the Trustee shall sell all of the assets of the
Trust Fund to the Holder of the Class A-R Certificate for cash in
accordance with Section 7.01.
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(b) The Trustee as agent for any REMIC created hereunder hereby agrees
to adopt and sign such a plan of complete liquidation upon the written request
of the Holder of the Class A-R Certificate, and the receipt of the Opinion of
Counsel referred to in Section 7.03(a)(1) and to take such other action in
connection therewith as may be reasonably requested by the Holder of the Class
A-R Certificate.
(c) By their acceptance of the Certificates, the Holders thereof hereby
authorize the Holder of the Class A-R Certificate to prepare and the Trustee
to adopt and sign a plan of complete liquidation.
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ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01 Amendment. This Agreement may be amended from time to time
by the Depositor and the Trustee without the consent of any of the
Certificateholders (i) to cure any ambiguity or mistake; (ii) to correct any
defective provision herein or to supplement any provision herein which may be
inconsistent with any other provision herein; (iii) to conform this Agreement
to the final Prospectus Supplement provided to investors in connection with
the initial offering of the Certificates; (iv) to add to the duties of the
Depositor; (v) to modify, alter, amend, add, or to rescind any of the terms or
provisions contained in this Agreement to comply with any rules or regulations
promulgated by the Securities and Exchange Commission from time to time; (vi)
to add any other provisions with respect to matters or questions arising
hereunder; or (vii) to modify, alter, amend, add to or rescind any of the
terms or provisions contained in this Agreement; provided, that any action
pursuant to clauses (vi) or (vii) above shall not, as evidenced by an Opinion
of Counsel (which Opinion of Counsel shall not be an expense of the Trustee or
the Trust Fund), adversely affect in any material respect the interests of any
Certificateholder; provided, however, that the amendment shall not be deemed
to adversely affect in any material respect the interests of the
Certificateholders if the Person requesting the amendment obtains a letter
from each Rating Agency stating that the amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates; it being understood and agreed that any such letter in and of
itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating. Notwithstanding the foregoing, no amendment that
significantly changes the permitted activities of the Trust created by this
Agreement may be made without the consent of a Majority in Interest of each
Class of Certificates affected by such amendment. Each party to this Agreement
hereby agrees that it will cooperate with each other party in amending this
Agreement pursuant to clause (v) above. The Trustee and the Depositor also may
at any time and from time to time amend this Agreement without the consent of
the Certificateholders to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or helpful to (i) maintain the qualification
of any REMIC as a REMIC under the Code, (ii) avoid or minimize the risk of the
imposition of any tax on any REMIC pursuant to the Code that would be a claim
at any time prior to the final redemption of the Certificates or (iii) comply
with any other requirements of the Code, provided that the Trustee has been
provided an Opinion of Counsel, which opinion shall be an expense of the party
requesting such opinion but in any case shall not be an expense of the Trustee
or the Trust Fund, to the effect that such action is necessary or helpful to,
as applicable, (i) maintain such qualification, (ii) avoid or minimize the
risk of the imposition of such a tax or (iii) comply with any such
requirements of the Code.
This Agreement may also be amended from time to time by the Depositor
and the Trustee with the consent of the Underlying Certificate Seller (which
will not be unreasonably withheld) and the consent of the Holders of a
Majority in Interest of each Class of Certificates affected thereby for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any manner the
rights of the Holders of Certificates; provided, however, that no such
amendment shall (i) reduce in any manner the
55
amount of, or delay the timing of, payments required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of any
Class of Certificates in a manner other than as described in (i), without the
consent of the Holders of Certificates of such Class evidencing, as to such
Class, Percentage Interests aggregating 66 2/3% or (iii) reduce the aforesaid
percentages of Certificates the Holders of which are required to consent to
any such amendment, without the consent of the Holders of all such
Certificates then outstanding.
Any amendment made pursuant to either of the preceding two paragraphs
that materially and adversely affects the rights of the Underlying Certificate
Seller shall not be made without the prior written consent of the Underlying
Certificate Seller.
Notwithstanding any contrary provision of this Agreement, no amendment
shall adversely affect in any material respect the Corridor Contract
Counterparty without the prior written consent of the Corridor Contract
Counterparty, which consent shall not be unreasonably withheld.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have
first received an Opinion of Counsel, which opinion shall not be an expense of
the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on any REMIC or the Certificateholders or
cause any REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel (which Opinion shall not be
an expense of the Trustee or the Trust Fund) satisfactory to the Trustee that
(i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with; and
(ii) either (A) the amendment does not adversely affect in any material
respect the interests of any Certificateholder or (B) the conclusion set forth
in the immediately preceding clause (A) is not required to be reached pursuant
to this Section 8.01.
Section 8.02 Action Under and Conflicts With the Underlying Agreement.
Subject to the terms hereof, in the event that there shall be any matters
arising under the Underlying Agreement which require the vote or direction of
the holders of the Deposited Underlying Certificates, the Trustee, as holder
of the Deposited Underlying Certificates, shall vote the Deposited Underlying
Certificates in accordance with instructions received from Holders of a
Majority in Interest of the related Class of Regular Certificates. In the
absence of any such
56
instructions, the Trustee shall not vote; provided, however, that,
notwithstanding the absence of such instructions, in the event a required
distribution pursuant to the Underlying Agreement shall not have been made,
the Trustee shall, subject to the provisions of Article V hereof, pursue such
remedies as may be available to it as holder of such Deposited Underlying
Certificates in accordance with the terms of the Underlying Agreement.
Section 8.03 Recordation of Agreement. This Agreement (or an abstract
hereof, if acceptable by the applicable recording office) is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdiction in which any or all of the
properties subject to the underlying mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Depositor at its expense but only upon direction by the
Trustee accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one
and the same instrument.
Section 8.04 Certain REMIC Matters. The Depositor, upon request, shall
promptly furnish the Trustee with all such information as may be reasonably
required in connection with the Trustee's preparation of all Tax Returns of
each REMIC hereunder or to enable the Trustee to respond to reasonable
requests for information made by related Certificateholders in connection with
tax matters.
Section 8.05 Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the trust created hereby, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the trust
created hereby, or otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or
members of an association; nor shall any Certificateholder be under any
liability to any third party by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this
Agreement, unless there shall have been a failure to pay amounts due under
this Agreement to the Certificateholders and the Holders of Certificates
evidencing not less than 25% of the Voting Rights evidenced by the
Certificates shall also have made written request to the Trustee to institute
such action, suit or proceeding in its own name as Trustee hereunder and shall
have offered to the Trustee such reasonable indemnity as it may require
against the costs,
57
expenses, and liabilities to be incurred therein or thereby, and the Trustee,
for 60 days after its receipt of such notice, request and offer of indemnity
shall have neglected or refused to institute any such action, suit or
proceeding; it being understood and intended, and being expressly covenanted
by each Certificateholder with every other Certificateholder and the Trustee,
that no one or more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of any provisions of
this Agreement to affect, disturb or prejudice the rights of the Holders of
any other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Holder or to enforce any right under this
Agreement, except in the manner herein provided and for the common benefit of
all Certificateholders. For the protection and enforcement of the provisions
of this Section 8.05, each and every Certificateholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
Section 8.06 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 8.07 Notices. (a) The Trustee shall use its best efforts to
promptly provide notice to each Rating Agency with respect to each of the
following of which it has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The resignation or termination of the Trustee and the appointment
of any successor;
3. The repurchase of the Deposited Underlying Certificates pursuant
to Section 2.03;
4. The final payment to Certificateholders; and
5. Any rating action involving the Deposited Underlying Certificates,
which notice shall be made by first-class mail within two Business
Days after the Trustee gains actual knowledge thereof.
In addition, the Trustee shall promptly furnish to each Rating Agency,
the Underlying Certificate Seller copies of each report to Certificateholders
described in Section 3.08.
All demands, notices and directions hereunder shall be in writing and
shall be deemed effective when delivered to: (i) in the case of the Depositor,
CWALT, Inc., 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, Attention:
Structured Finance, and a copy to CWALT, Inc., 0000 Xxxx Xxxxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000, Attention: General Counsel, (ii) in the case of the
Underlying Certificate Seller, UBS Securities LLC 0000 Xxxxxx xx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Legal and (iii) in the case of the Trustee,
The Bank of New York, 000 Xxxxxxx Xxxxxx, 0X, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust - Resecuritization Unit, or such other address as
may hereafter be furnished by any party to the others. Any notice required or
permitted to be mailed to a Certificateholder shall be given by first class
mail,
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postage prepaid, at the address of such Holder as shown in the Certificate
Register; any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
Section 8.08 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the Holders thereof.
Section 8.09 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the respective successors
and assigns of the parties hereto, and all such provisions shall inure to the
benefit of the Certificateholders.
Section 8.10 Article and Section Headings. The article and section
headings herein are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof.
Section 8.11 Certificates Nonassessable and Fully Paid. It is the
intention of the Depositor that Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 8.12 Protection of Assets.
(a) Except for transactions and activities entered into in connection
with the securitization that is the subject of this Agreement, the Trust Fund
created by this Agreement is not authorized and has no power to:
(i) borrow money or issue debt;
(ii) merge with another entity, reorganize, liquidate or sell
assets; or
(iii) engage in any business or activities.
(b) Each party to this Agreement agrees that it will not file an
involuntary bankruptcy petition against the Trustee or the Trust Fund or
initiate any other form of insolvency proceeding until after the Certificates
have been paid.
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ARTICLE IX
EXCHANGE ACT REPORTING
Section 9.01 Filing Obligations.
The Trustee and Underlying Certificate Seller shall reasonably
cooperate with the Depositor in connection with the satisfaction of the
Depositor's reporting requirements under the Exchange Act with respect to the
Trust Fund. In addition to the information specified below, if so requested by
the Depositor for the purpose of satisfying its reporting obligation under the
Exchange Act, the Trustee and Underlying Certificate Seller shall provide the
Depositor with (a) such information which is available to such Person without
unreasonable effort or expense and within such timeframe as may be reasonably
requested by the Depositor to comply with the Depositor's reporting
obligations under the Exchange Act and (b) to the extent such Person is a
party (and the Depositor is not a party) to any agreement or amendment
required to be filed, copies of such agreement or amendment in
XXXXX-compatible form.
Section 9.02 Form 10-D Filings.
(a) In accordance with the Exchange Act, the Trustee shall prepare
for filing and file within 15 days after each Distribution Date (subject to
permitted extensions under the Exchange Act) with the Commission with respect
to the Trust Fund, a Form 10-D with copies of the Monthly Statement and, to
the extent delivered to the Trustee, no later than 10 days following the
Distribution Date, such other information identified by the Depositor, in
writing, to be filed with the Commission (such other information, the
"Additional Designated Information"). If the Depositor directs that any
Additional Designated Information is to be filed with any Form 10-D, the
Depositor shall specify the Item on Form 10-D to which such information is
responsive and, with respect to any Exhibit to be filed on Form 10-D, the
Exhibit number. Any information to be filed on Form 10-D shall be delivered to
the Trustee in XXXXX-compatible form or as otherwise agreed upon by the
Trustee and the Depositor, at the Depositor's expense, and any necessary
conversion to XXXXX-compatible format will be at the Depositor's expense. At
the reasonable request of, and in accordance with the reasonable directions
of, the Depositor, subject to the two preceding sentences, the Trustee shall
prepare for filing and file an amendment to any Form 10-D previously filed
with the Commission with respect to the Trust Fund. The Depositor shall sign
the Form 10-D filed on behalf of the Trust Fund.
(b) No later than each Distribution Date, the Trustee shall notify
the Depositor of any Form 10-D Disclosure Item, together with a description of
any such Form 10-D Disclosure Item in form and substance reasonably acceptable
to the Depositor. In addition to such information as the Trustee is obligated
to provide pursuant to other provisions of this Agreement, if so requested by
the Depositor, the Trustee shall provide such information, which is available
to the Trustee, without unreasonable effort or expense regarding the
performance of the Deposited Underlying Certificates as is reasonably required
to facilitate preparation of distribution reports in accordance with Item 1121
of Regulation AB. Such information shall be provided concurrently with the
delivering of the Monthly Statement, commencing with the first such report due
not less than five Business Days following such request.
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(c) The Trustee shall not have any responsibility to file any
items (other than those generated by it) that have not been received in a
format suitable (or readily convertible into a format suitable) for electronic
filing via the XXXXX system and shall not have any responsibility to convert
any such items to such format (other than those items generated by it or that
are readily convertible to such format). The Trustee shall have no liability
to the Certificateholders, the Trust Fund or the Depositor with respect to any
failure to properly prepare or file any of Form 10-D to the extent that such
failure is not the result of any negligence, bad faith or willful misconduct
on its part.
Section 9.03 Form 8-K Filings.
The Trustee shall prepare and file on behalf of the Trust Fund any
Form 8-K required by the Exchange Act. Each Form 8-K must be signed by the
Trustee. The Trustee shall promptly notify the Depositor, but in no event
later than one (1) Business Day after its occurrence, of any Reportable Event
of which it has actual knowledge. Each Person shall be deemed to have actual
knowledge of any such event to the extent that it relates to such Person or
any action or failure to act by such Person.
Section 9.04 Form 10-K Filings.
Prior to March 30th of each year, commencing in 2007 (or such
earlier date as may be required by the Exchange Act), the Depositor shall
prepare and file on behalf of the Trust Fund a Form 10-K, in form and
substance as required by the Exchange Act. A senior officer in charge of the
servicing function of the Trustee shall sign each Form 10-K filed on behalf of
the Trust Fund. Such Form 10-K shall include as exhibits each (i) annual
compliance statement described under Section 3.11, (ii) annual report on
assessments of compliance with servicing criteria described under Section 9.07
and (iii) accountant's report described under Section 9.07. Each Form 10-K
shall also include any Xxxxxxxx-Xxxxx Certification required to be included
therewith, as described in Section 9.05.
If the Item 1119 Parties listed on Exhibit J have changed since
the Closing Date, no later than March 1 of each year, the Depositor shall
provide the Trustee with an updated Exhibit J setting forth the Item 1119
Parties. No later than March 15 of each year, commencing in 2007, the Trustee
shall notify the Depositor of any Form 10-K Disclosure Item, together with a
description of any such Form 10-K Disclosure Item in form and substance
reasonably acceptable to the Depositor. Additionally, the Trustee shall
provide, and shall cause each Reporting Subcontractor retained by the Trustee
to provide, the following information no later than March 15 of each year in
which a Form 10-K is required to be filed on behalf of the Trust Fund: (i) if
such Person's report on assessment of compliance with servicing criteria
described under Section 9.07 or related registered public accounting firm
attestation report described under Section 9.07 identifies any material
instance of noncompliance, notification of such instance of noncompliance and
(ii) if any such Person's report on assessment of compliance with the
servicing criteria or related registered public accounting firm attestation
report is not provided to be filed as an exhibit to such Form 10-K,
information detailing the explanation why such report is not included.
61
Section 9.05 Xxxxxxxx-Xxxxx Certification.
Each Form 10-K shall include a certification (the "Xxxxxxxx-Xxxxx
Certification") required by Rules 13a-14(d) and 15d-14(d) under the Exchange
Act (pursuant to Section 302 of the Xxxxxxxx-Xxxxx Act of 2002 and the rules
and regulations of the Commission promulgated thereunder (including any
interpretations thereof by the Commission's staff)). No later than March 15 of
each year, beginning in 2007, the Trustee shall (unless such person is the
Certifying Person), cause each Reporting Subcontractor to, provide to the
Person who signs the Xxxxxxxx-Xxxxx Certification (the "Certifying Person") a
certification (each, a "Performance Certification"), in the form attached
hereto as Exhibit I, on which the Certifying Person, the entity for which the
Certifying Person acts as an officer, and such entity's officers, directors
and Affiliates (collectively with the Certifying Person, "Certification
Parties") can reasonably rely. The senior officer in charge of reviewing the
servicing function of the Trustee shall serve as the Certifying Person on
behalf of the Trust Fund. Neither the Trustee nor the Depositor will request
delivery of a certification under this clause unless the Depositor is required
under the Exchange Act to file an annual report on Form 10-K with respect to
the Trust Fund. In the event that prior to the filing date of the Form 10-K in
March of each year, the Trustee or the Depositor has actual knowledge of
information material to the Xxxxxxxx-Xxxxx Certification, the Trustee or the
Depositor, as the case may be, shall promptly notify the Depositor. The
respective parties hereto agree to cooperate with all reasonable requests made
by any Certifying Person or Certification Party in connection with such
Person's attempt to conduct any due diligence that such Person reasonably
believes to be appropriate in order to allow it to deliver any Xxxxxxxx-Xxxxx
Certification or portion thereof with respect to the Trust Fund.
Section 9.06 Form 15 Filing.
Prior to January 30 of the first year in which the Depositor is
able to do so under applicable law, the Depositor shall file a Form 15
relating to the automatic suspension of reporting in respect of the Trust Fund
under the Exchange Act.
Section 9.07 Report on Assessment of Compliance and Attestation.
(a) On or before March 15 of each calendar year, commencing in
2007:
(1) the Trustee shall deliver to the Depositor a report (in form
and substance reasonably satisfactory to the Depositor) regarding
the Trustee's assessment of compliance with the Servicing Criteria
during the immediately preceding calendar year, as required under
Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of
Regulation AB. Such report shall be signed by an authorized
officer of such Person and shall address each of the Servicing
Criteria specified on a certification substantially in the form of
Exhibit I hereto delivered to the Depositor concurrently with the
execution of this Agreement. To the extent any of the Servicing
Criteria are not applicable to such Person, with respect to
asset-backed securities transactions taken as a whole involving
such Person and that are backed by the same asset type backing the
Certificates, such report shall include such a statement to that
effect. The Depositor, and each of its respective officers and
directors shall be entitled to rely on upon each such servicing
criteria assessment.
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(2) The Trustee shall deliver to the Depositor a report of a
registered public accounting firm reasonably acceptable to the
Depositor that attests to, and reports on, the assessment of
compliance made by the Trustee and delivered pursuant to the
preceding paragraphs. Such attestation shall be in accordance with
Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the
Securities Act and the Exchange Act, including, without limitation
that in the event that an overall opinion cannot be expressed,
such registered public accounting firm shall state in such report
why it was unable to express such an opinion. Such report must be
available for general use and not contain restricted use language.
To the extent any of the Servicing Criteria are not applicable to
the Trustee, with respect to asset-backed securities transactions
taken as a whole involving the Trustee and that are backed by the
same asset type backing the Certificates, such report shall
include such a statement that that effect.
(3) The Trustee shall cause each Reporting Subcontractor to
deliver to the Depositor an assessment of compliance and
accountant's attestation as and when provided in paragraphs (a)
and (b) of this Section 9.07.
(4) The Trustee shall execute (and cause each Reporting
Subcontractor to execute) a reliance certificate to enable the
Certification Parties to rely upon each (i) annual compliance
statement provided pursuant to Section 3.11, (ii) annual report on
assessments of compliance with servicing criteria provided
pursuant to this Section 9.07 and (iii) accountant's report
provided pursuant to this Section 9.07 and shall include a
certification that each such annual compliance statement or report
discloses any deficiencies or defaults described to the registered
public accountants of such Person to enable such accountants to
render the certificates provided for in this Section 9.07.
(b) In the event that the Trustee or Reporting Subcontractor is
terminated or resigns during the term of this Agreement, such Person shall
provide documents and information required by this Section 9.07 with respect
to the period of time it was subject to this Agreement or provided services
with respect to the Trust Fund, the Certificates or the Deposited Underlying
Certificates.
(c) An assessment of compliance provided by a Subcontractor
pursuant to Section 9.07(a)(3) need not address any elements of the Servicing
Criteria other than those specified by the Trustee, as applicable, pursuant to
Section 9.07(a)(1).
Section 9.08 Use of Subcontractors.
It shall not be necessary for the Trustee to seek the consent of
the Depositor or any other party hereto to the utilization of any
Subcontractor. The Trustee shall promptly upon request provide to the
Depositor (or any designee of the Depositor, such as the administrator) a
written description (in form and substance satisfactory to the Depositor) of
the role and function of each Subcontractor utilized by such Person,
specifying (i) the identity of each such Subcontractor, (ii) which (if any) of
such Subcontractors are "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB, and (iii) which elements of the
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Servicing Criteria will be addressed in assessments of compliance provided by
each Subcontractor identified pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor determined
to be a Reporting Subcontractor, the Trustee shall cause any such
Subcontractor used by the Trustee for the benefit of the Depositor to comply
with the provisions of Sections 9.07 and 9.09 of this Agreement to the same
extent as if such Subcontractor were the Trustee (except with respect to
preparing and filing any Exchange Act Reports or as the Certifying Person).
The Trustee shall be responsible for obtaining from each Subcontractor and
delivering to the Depositor any assessment of compliance and attestation
required to be delivered by such Subcontractor under Section 9.05 and Section
9.07, in each case as and when required to be delivered.
Section 9.09 Amendments.
In the event the parties to this Agreement desire to further
clarify or amend any provision of this Article IX, this Agreement shall be
amended to reflect the new agreement between the parties covering matters in
this Article IX pursuant to Section 8.01, which amendment shall not require
any Opinion of Counsel or Rating Agency confirmations or the consent of any
Certificateholder.
Section 9.10 Reconciliation of Accounts.
Any reconciliation of Accounts performed by any party hereto, or
any Subcontractor shall be prepared no later than 45 calendar days after the
bank statement cutoff date.
* * *
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IN WITNESS WHEREOF, the Depositor, the Underlying Certificate Seller and
the Trustee have caused their names to be signed hereto by their respective
officers thereunto duly authorized, all as of the day and year first above
written.
CWALT, INC.,
as Depositor
By: /s/ Xxxxxx Xxxxxx
----------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
THE BANK OF NEW YORK,
not in its individual capacity,
but solely as Trustee
By: /s/ Xxxxx Xxxxxx
----------------------------------
Name: Xxxxx Xxxxxx
Title: Assistant Vice President
UBS SECURITIES LLC,
as Underlying Certificate Seller
By: /s/ Xxxxxx Xxxxx
----------------------------
Name: Xxxxxx Xxxxx
Title: Associate Director
UBS SECURITIES LLC,
as Underlying Certificate Seller
By: /s/ Xxxxx Xxxx
----------------------------
Name: Xxxxx Xxxx
Title: Associate Director
SCHEDULE I
LIST OF DEPOSITED UNDERLYING CERTIFICATES AND THE UNDERLYING AGREEMENT
DEPOSITED UNDERLYING PRINCIPAL BALANCES AS OF
CERTIFICATES OCTOBER 25, 2006(1) UNDERLYING AGREEMENT
------------------------------- ------------------------- -------------------------------
Approximately 61.5984591630% Class 1-A-3 Certificates: Pooling and Servicing
interest in each of the CWALT, $68,315,933 Agreement, dated as of February
Inc., Alternative Loan Trust 1, 2006 among CWALT, Inc., as
2006-4CB, Mortgage Pass-Through depositor, Countrywide Home
Certificates, Series 2006-4CB, Class 1-A-4 Certificates: Loans, Inc., as a seller, Park
Class 1-A-3 and Class 1-A-4 $68,315,933(2) Granada, LLC, as a seller, Park
Certificates. Monaco, Inc., as a seller, Park
Sienna LLC, as a seller,
Countrywide Home Loans
Servicing LP, as master
servicer, and The Bank of New
York, as trustee.
----------
(1) After giving effect to distributions made on such date.
(2) The Class 1-A-4 Certificates are notional amount certificates. The
notional amount of the Class 1-A-4 Certificates for each Distribution Date
will equal the Class Certificate Balance of the Class 1-A-3 Certificates
immediately prior to such Distribution Date.
S-I-1
SCHEDULE II
Principal Balances Schedule
[Reserved]
S-II-1
