Exhibit 99.1
EXECUTION COPY
XXXXXX XXXXXXX CAPITAL I INC.
Depositor
XXXXX FARGO BANK, NATIONAL ASSOCIATION
Master Servicer and Securities Administrator
and
LASALLE BANK NATIONAL ASSOCIATION
Trustee and Custodian
---------------------------
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2006
---------------------------
XXXXXX XXXXXXX MORTGAGE LOAN TRUST 2006-12XS
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-12XS
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS............................................................................................11
Section 1.01. Definitions........................................................................................11
ARTICLE II DECLARATION OF TRUST; ISSUANCE OF CERTIFICATES........................................................52
Section 2.01. Creation and Declaration of Trust Fund; Conveyance of Mortgage Loans...............................52
Section 2.02. Acceptance of Trust Fund by Trustee; Review of Documentation for Trust Fund........................55
Section 2.03. Representations and Warranties of the Depositor....................................................56
Section 2.04. Representations and Warranties of the Depositor and the Seller as to the Mortgage Loans............58
Section 2.05. Representations and Warranties of the Seller; Discovery of Breach; Repurchase or
Substitution of Mortgage Loans.................................................................58
Section 2.06. Grant Clause.......................................................................................62
Section 2.07. Depositor's Option to Purchase Breached Mortgage Loans.............................................63
Section 2.08. Release of Mortgage Documents for Servicing........................................................63
ARTICLE III THE CERTIFICATES.....................................................................................64
Section 3.01. The Certificates...................................................................................64
Section 3.02. Registration.......................................................................................64
Section 3.03. Transfer and Exchange of Certificates..............................................................65
Section 3.04. Cancellation of Certificates.......................................................................68
Section 3.05. Replacement of Certificates........................................................................68
Section 3.06. Persons Deemed Owners..............................................................................69
Section 3.07. Temporary Certificates.............................................................................69
Section 3.08. Appointment of Paying Agent........................................................................69
Section 3.09. Book-Entry Certificates............................................................................70
ARTICLE IV ADMINISTRATION OF THE TRUST FUND......................................................................71
Section 4.01. Custodial Accounts; Distribution Account...........................................................71
Section 4.02. Permitted Withdrawals from the Custodial Accounts and the Distribution Account.....................73
Section 4.03. [Reserved].........................................................................................74
Section 4.04. [Reserved].........................................................................................74
Section 4.05. Reports to Trustee and Certificateholders..........................................................74
ARTICLE V DISTRIBUTIONS TO HOLDERS OF CERTIFICATES...............................................................77
Section 5.01. Distributions Generally............................................................................77
Section 5.02. Priorities of Distribution.........................................................................77
Section 5.03. Allocation of Principal Payments to Class A Certificates...........................................81
Section 5.04. Allocation of Losses...............................................................................82
Section 5.05. Advances by the Master Servicer....................................................................83
Section 5.06. Compensating Interest Payments.....................................................................83
Section 5.07. [Reserved].........................................................................................84
Section 5.08. [Reserved].........................................................................................84
Section 5.09. Determination of Pass-Through Rates for LIBOR Certificates.........................................84
Section 5.10 The Reserve Fund...................................................................................85
ARTICLE VI CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR; EVENTS OF DEFAULT............................87
Section 6.01. Duties of Trustee and the Securities Administrator.................................................87
Section 6.02. Certain Matters Affecting the Trustee and the Securities Administrator.............................90
Section 6.03. Trustee and Securities Administrator Not Liable for Certificates...................................91
Section 6.04. Trustee and the Securities Administrator May Own Certificates......................................92
Section 6.05. Eligibility Requirements for Trustee...............................................................92
Section 6.06. Resignation and Removal of Trustee and the Securities Administrator................................92
Section 6.07. Successor Trustee and Successor Securities Administrator...........................................95
Section 6.08. Merger or Consolidation of Trustee or the Securities Administrator.................................96
Section 6.09. Appointment of Co-Trustee, Separate Trustee or Custodian...........................................97
Section 6.10. Authenticating Agents..............................................................................98
Section 6.11. Indemnification of the Trustee and the Securities Administrator....................................99
Section 6.12. Fees and Expenses of the Master Servicer, Securities Administrator, the Trustee and the
Custodian.....................................................................................100
Section 6.13. Collection of Monies..............................................................................100
Section 6.14. Events of Default; Trustee To Act; Appointment of Successor.......................................100
Section 6.15. Additional Remedies of Trustee Upon Event of Default..............................................105
Section 6.16. Waiver of Defaults................................................................................105
Section 6.17. Notification to Holders...........................................................................106
Section 6.18. Directions by Certificateholders and Duties of Trustee During Event of Default....................106
Section 6.19. Action Upon Certain Failures of the Master Servicer and Upon Event of Default.....................106
Section 6.20. Preparation of Tax Returns and Other Reports......................................................106
Section 6.21. Certain Matters Regarding any Custodian Appointed Hereunder.......................................106
ARTICLE VII PURCHASE OF MORTGAGE LOANS AND TERMINATION OF THE TRUST FUND........................................107
Section 7.01. Purchase of Mortgage Loans; Termination of Trust Fund Upon Purchase or Liquidation of All
Mortgage Loans................................................................................107
Section 7.02. Procedure Upon Redemption of Trust Fund...........................................................109
Section 7.03. Additional Trust Fund Termination Requirements....................................................110
ARTICLE VIII RIGHTS OF CERTIFICATEHOLDERS.......................................................................111
Section 8.01. Limitation on Rights of Holders...................................................................111
Section 8.02. Access to List of Holders.........................................................................112
Section 8.03. Acts of Holders of Certificates...................................................................112
ii
ARTICLE IX ADMINISTRATION AND SERVICING OF MORTGAGE LOANS BY THE MASTER SERVICER................................113
Section 9.01. Duties of the Master Servicer; Enforcement of Servicers' and Master Servicer's Obligations........113
Section 9.02. Assumption of Master Servicing by Trustee.........................................................116
Section 9.03. Representations and Warranties of the Master Servicer.............................................116
Section 9.04. Compensation to the Master Servicer...............................................................118
Section 9.05. Merger or Consolidation...........................................................................119
Section 9.06. Resignation of Master Servicer and Securities Administrator.......................................119
Section 9.07. Assignment or Delegation of Duties by the Master Servicer and Securities Administrator............120
Section 9.08. Limitation on Liability of the Master Servicer and Others.........................................121
Section 9.09. Indemnification; Third-Party Claims...............................................................121
Section 9.10. Eligibility Requirements for Securities Administrator.............................................121
Section 9.11. Annual Statement as to Compliance.................................................................122
ARTICLE X REMIC ADMINISTRATION..................................................................................123
Section 10.01. REMIC Administration.............................................................................123
Section 10.02. Prohibited Transactions and Activities...........................................................125
Section 10.03. Indemnification with Respect to Prohibited Transactions or Loss of REMIC Status..................126
Section 10.04. REO Property.....................................................................................126
Section 10.05. Fidelity.........................................................................................127
ARTICLE XI MISCELLANEOUS PROVISIONS.............................................................................127
Section 11.01. Binding Nature of Agreement; Assignment..........................................................127
Section 11.02. Entire Agreement.................................................................................127
Section 11.03. Amendment........................................................................................128
Section 11.04. Voting Rights....................................................................................129
Section 11.05. Provision of Information.........................................................................129
Section 11.06. Governing Law....................................................................................129
Section 11.07. Notices..........................................................................................130
Section 11.08. Severability of Provisions.......................................................................130
Section 11.09. Indulgences; No Waivers..........................................................................130
Section 11.10. Headings Not To Affect Interpretation............................................................130
Section 11.11. Benefits of Agreement............................................................................130
Section 11.12. Special Notices to the Rating Agencies...........................................................131
Section 11.13. Conflicts........................................................................................131
Section 11.14. Counterparts.....................................................................................131
Section 11.15. No Petitions.....................................................................................132
Section 11.16. Indemnification by Trust.........................................................................132
ARTICLE XII EXCHANGE ACT REPORTING..............................................................................132
iii
Section 12.01. Filing Obligations...............................................................................132
Section 12.02. Form 10-D Reporting..............................................................................134
Section 12.03. Form 8-K Reporting...............................................................................135
Section 12.04. Form 10-K Reporting..............................................................................136
Section 12.05. Xxxxxxxx-Xxxxx Certification.....................................................................138
Section 12.06. Reports on Assessment of Compliance and Attestation..............................................138
Section 12.07. Use of Subcontractors............................................................................139
Section 12.08. Indemnification by the Master Servicer and the Securities Administrator..........................140
Section 12.09. Indemnification by the Custodian.................................................................140
iv
ATTACHMENTS
Exhibit A Forms of Certificates
Exhibit B Form of Residual Certificate Transfer Affidavit (Transferee)
Exhibit C Form of Residual Certificate Transfer Affidavit (Transferor)
Exhibit D [Reserved]
Exhibit E List of Purchase and Servicing Agreements
Exhibit F [Reserved]
Exhibit G Assignment and Notice of Transfer with respect to each
Additional Collateral Mortgage Loan
Exhibit H Form of Rule 144A Transfer Certificate
Exhibit I Form of Purchaser's Letter for Institutional Accredited
Investors
Exhibit J Form of ERISA Transfer Affidavit
Exhibit K Form of Letter of Representations with the Depository Trust
Company
Exhibit L-1 Form of Initial Custodian Certification
Exhibit L-2 Form of Final Custodian Certification
Exhibit M Assignment and Notice of Transfer with respect to each
Additional Collateral Mortgage Loan
Exhibit N Additional Disclosure Required Under Regulation AB
Exhibit O Form of Servicing Criteria to be Addressed in Assessment of
Compliance Statement
Exhibit P Additional Disclosure Notification
Exhibit Q Glossary of Terms for Standard & Poor's LEVELS(R) Version 5.7
File Format
Exhibit R Form of Lost Note Affidavit
Schedule A Mortgage Loan Schedule
Schedule B Principal Balances Schedule
v
This POOLING AND SERVICING AGREEMENT, dated as of September 1, 2006
(the "Agreement"), by and among XXXXXX XXXXXXX CAPITAL I INC., a Delaware
corporation, as depositor (the "Depositor"), LASALLE BANK NATIONAL ASSOCIATION,
a national banking association, as trustee (the "Trustee"), and as the custodian
(the "Custodian") and XXXXX FARGO BANK, NATIONAL ASSOCIATION, in its separate
capacities as master servicer (the "Master Servicer"), as securities
administrator (the "Securities Administrator") and, in its capacity as
Securities Administrator, as auction administrator (the "Auction Administrator")
and acknowledged by XXXXXX XXXXXXX MORTGAGE CAPITAL INC., a New York
corporation, as seller (the "Seller"), for purposes of Section 2.05.
WITNESSETH THAT
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 herein, the Trustee will
make multiple elections to treat segregated pools of assets subject to this
Agreement for federal income tax purposes (other than the Additional Collateral
and the Reserve Fund) as the following two separate real estate mortgage
investment conduits (each, a "REMIC"): REMIC 1 and the Master REMIC. REMIC 1
will consist of the Mortgage Loans, excluding any rights of the Trust Fund in
respect of the Additional Collateral and the Reserve Fund. REMIC 1 will issue
uncertificated REMIC regular interests (the "REMIC 1 Regular Interests"). The
REMIC 1 Regular Interests will represent the "regular interests" in REMIC 1, and
the Class R1 Interest will represent the single Class of "residual interest" in
REMIC 1.
The Trustee will hold the REMIC 1 Regular Interests for the benefit of
the Master REMIC. The Master REMIC will consist of the REMIC 1 Interests and
will be evidenced by the Certificates (other than the Class A-R Certificates),
which will constitute the regular interests in the Master REMIC (the "Regular
Certificates") and the Class MR Interest, which will represent the single Class
of "residual interest" in the Master REMIC. The Class A-R Certificates will
represent the beneficial ownership of each of the Class R1 and Class MR
Interests. The "latest possible maturity date" for federal income tax purposes
of all regular and residual interests created hereunder will be the Latest
Possible Maturity Date.
REMIC 1
The REMIC 1 Interests, each of which (except for the Class R1
Interests) is hereby designated as a REMIC regular interest for federal income
tax purposes, will have the principal balances, Pass-Through Rates and
Corresponding Master REMIC Certificates as set forth in the following table:
--------------------------------------------------------------------------------------------------------------------
REMIC 1 Interest Initial Principal Balance Interest Rate Corresponding Master REMIC
Certificate
--------------------------------------------------------------------------------------------------------------------
1-A-1 (1) (2) Class A-1
--------------------------------------------------------------------------------------------------------------------
1-A-2A (1) (2) Class A-2A
--------------------------------------------------------------------------------------------------------------------
1-A-2B (1) (2) Class A-2B
--------------------------------------------------------------------------------------------------------------------
1-A-3 (1) (2) Class A-3
--------------------------------------------------------------------------------------------------------------------
1-A-4 (1) (2) Class A-4
--------------------------------------------------------------------------------------------------------------------
1-A-5A (1) (2) Class A-5A
--------------------------------------------------------------------------------------------------------------------
1-A-5B (1) (2) Class A-5B
--------------------------------------------------------------------------------------------------------------------
1-A-6A (1) (2) Class A-6A
--------------------------------------------------------------------------------------------------------------------
1-A-6B (1) (2) Class A-6B
--------------------------------------------------------------------------------------------------------------------
1-M-1 (1) (2) Class M-1
--------------------------------------------------------------------------------------------------------------------
1-M-2 (1) (2) Class M-2
--------------------------------------------------------------------------------------------------------------------
1-M-3 (1) (2) Class M-3
--------------------------------------------------------------------------------------------------------------------
1-M-4 (1) (2) Class M-4
--------------------------------------------------------------------------------------------------------------------
1-M-5 (1) (2) Class M-5
--------------------------------------------------------------------------------------------------------------------
1-M-6 (1) (2) Class M-6
--------------------------------------------------------------------------------------------------------------------
1-B-1 (1) (2) Class B-1
--------------------------------------------------------------------------------------------------------------------
1-B-2 (1) (2) Class B-2
--------------------------------------------------------------------------------------------------------------------
1-B-3 (1) (2) Class B-3
--------------------------------------------------------------------------------------------------------------------
1-Accrual (1) N/A(2) N/A
--------------------------------------------------------------------------------------------------------------------
1-P $1,000 N/A(3) Class P
--------------------------------------------------------------------------------------------------------------------
R1 (4) N/A(4) N/A
--------------------------------------------------------------------------------------------------------------------
---------------
(1) For each Distribution Date, following the allocation of scheduled
principal, prepayments and Realized Losses: (i) each such Class of
Interests (other than the Class 1-Accrual Interest) will have a
principal balance equal to 50% of the principal balance in respect of
the Corresponding Class of Certificates, (ii) the Class 1-Accrual
Interests will have a principal balance equal to 50% of the principal
balance of Mortgage Loans plus 50% of the Overcollateralized Amount.
(2) The interest rate with respect to any Distribution Date (and the
related Interest Accrual Period) for this REMIC Interest is a per annum
rate equal to the Net WAC Pass-Through Rate.
(3) The Class 1-P Interest will not be entitled to any interest, but will
be entitled to 100% of any prepayment premiums paid on the Mortgage
Loans.
(4) The R1 Interest is the sole Class of residual interest in REMIC 1. It
pays no interest or principal.
The Master REMIC
The following table sets forth characteristics of the Master REMIC
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):
2
======================== ======================= =========================== ====================== ======================
Pass-Through
Initial Class Rate Integral Multiples
Class Designation Principal Balance (per annum) Minimum Denomination in Excess of Minimum
------------------------ ----------------------- --------------------------- ---------------------- ----------------------
Class A-1 $206,097,000.00 (1) $25,000.00 $1,000.00
------------------------ ----------------------- --------------------------- ---------------------- ----------------------
Class A-2A $46,757,000.00 (2) $25,000.00 $1,000.00
------------------------ ----------------------- --------------------------- ---------------------- ----------------------
Class A-2B $5,200,000.00 (3) $25,000.00 $1,000.00
------------------------ ----------------------- --------------------------- ---------------------- ----------------------
Class A-3 $55,366,000.00 (4) $25,000.00 $1,000.00
------------------------ ----------------------- --------------------------- ---------------------- ----------------------
Class A-4 $88,558,000.00 (5) $25,000.00 $1,000.00
------------------------ ----------------------- --------------------------- ---------------------- ----------------------
Class A-5A $30,275,000.00 (6) $25,000.00 $1,000.00
------------------------ ----------------------- --------------------------- ---------------------- ----------------------
Class A-5B $5,000,000.00 (7) $25,000.00 $1,000.00
------------------------ ----------------------- --------------------------- ---------------------- ----------------------
Class A-6A $43,724,000.00 (8) $25,000.00 $1,000.00
------------------------ ----------------------- --------------------------- ---------------------- ----------------------
Class A-6B $4,860,000.00 (9) $25,000.00 $1,000.00
------------------------ ----------------------- --------------------------- ---------------------- ----------------------
Class A-R (10) $100.00 7.32742% (11) (11)
------------------------ ----------------------- --------------------------- ---------------------- ----------------------
Class M-1 $6,255,000.00 (12) $25,000.00 $1,000.00
------------------------ ----------------------- --------------------------- ---------------------- ----------------------
Class M-2 $6,255,000.00 (13) $25,000.00 $1,000.00
------------------------ ----------------------- --------------------------- ---------------------- ----------------------
Class M-3 $3,388,000.00 (14) $25,000.00 $1,000.00
------------------------ ----------------------- --------------------------- ---------------------- ----------------------
Class M-4 $2,867,000.00 (15) $25,000.00 $1,000.00
------------------------ ----------------------- --------------------------- ---------------------- ----------------------
Class M-5 $2,867,000.00 (16) $25,000.00 $1,000.00
------------------------ ----------------------- --------------------------- ---------------------- ----------------------
Class M-6 $1,824,000.00 (17) $25,000.00 $1,000.00
------------------------ ----------------------- --------------------------- ---------------------- ----------------------
Class B-1 $2,345,000.00 (18) $25,000.00 $1,000.00
------------------------ ----------------------- --------------------------- ---------------------- ----------------------
Class B-2 $1,824,000.00 (19) $25,000.00 $1,000.00
------------------------ ----------------------- --------------------------- ---------------------- ----------------------
Class B-3 $2,345,000.00 (20) $25,000.00 $1,000.00
------------------------ ----------------------- --------------------------- ---------------------- ----------------------
Class P $1,000.00 (21) $1,000.00 N/A
------------------------ ----------------------- --------------------------- ---------------------- ----------------------
Class OC (22) (22) (23) (23)
======================== ======================= =========================== ====================== ======================
------------------------------------------
(1) The Pass-Through Rate for the Class A-1 Certificates for the Interest
Accrual Period related to any Distribution Date on or prior to the
Initial Optional Termination Date will be a per annum rate equal to the
least of (i) LIBOR + 0.12000%, (ii) the Net WAC Pass-Through Rate and
(iii) 11.00000%. Beginning with the Interest Accrual Period related to
the Distribution Date immediately following the Initial Optional
Termination Date, the Pass-Through Rate for the Class A-1 Certificates
will be a per annum rate equal to the least of (i) LIBOR + 0.24000%,
(ii) the Net WAC Pass-Through Rate and (iii) 11.00000%. The
Pass-Through Rate for the Class A-1 Certificates for the first Interest
Accrual Period will be a per annum rate of 5.44438%.
(2) The Pass-Through Rate for the Class A-2A Certificates for the Interest
Accrual Period related to any Distribution Date on or prior to the
Initial Optional Termination Date will be a per annum rate equal to the
lesser of (i) 5.66737% and (ii) the Net WAC Pass-Through Rate.
Beginning with the Interest Accrual Period related to the Distribution
Date immediately following the Initial Optional Termination Date, the
Pass-Through Rate for the Class A-2A Certificates will be a per annum
rate equal to the lesser of (i) 6.16737% and (ii) the Net WAC
Pass-Through Rate. The Pass-Through Rate for the Class A-2A
Certificates for the first Interest Accrual Period will be a per annum
rate of 5.66737%.
3
(3) The Pass-Through Rate for the Class A-2B Certificates for the Interest
Accrual Period related to any Distribution Date on or prior to the
Initial Optional Termination Date will be a per annum rate equal to the
lesser of (i) 5.73816% and (ii) the Net WAC Pass-Through Rate.
Beginning with the Interest Accrual Period related to the Distribution
Date immediately following the Initial Optional Termination Date, the
Pass-Through Rate for the Class A-2B Certificates will be a per annum
rate equal to the lesser of (i) 6.23816% and (ii) the Net WAC
Pass-Through Rate. The Pass-Through Rate for the Class A-2B
Certificates for the first Interest Accrual Period will be a per annum
rate of 5.73816%.
(4) The Pass-Through Rate for the Class A-3 Certificates for the Interest
Accrual Period related to any Distribution Date on or prior to the
Initial Optional Termination Date will be a per annum rate equal to the
lesser of (i) 5.79844% and (ii) the Net WAC Pass-Through Rate.
Beginning with the Interest Accrual Period related to the Distribution
Date immediately following the Initial Optional Termination Date, the
Pass-Through Rate for the Class A-3 Certificates will be a per annum
rate equal to the lesser of (i) 6.29844% and (ii) the Net WAC
Pass-Through Rate. The Pass-Through Rate for the Class A-3 Certificates
for the first Interest Accrual Period will be a per annum rate of
5.79844%.
(5) The Pass-Through Rate for the Class A-4 Certificates for the Interest
Accrual Period related to any Distribution Date on or prior to the
Initial Optional Termination Date will be a per annum rate equal to the
lesser of (i) 6.01191% and (ii) the Net WAC Pass-Through Rate.
Beginning with the Interest Accrual Period related to the Distribution
Date immediately following the Initial Optional Termination Date, the
Pass-Through Rate for the Class A-4 Certificates will be a per annum
rate equal to the lesser of (i) 6.51191% and (ii) the Net WAC
Pass-Through Rate. The Pass-Through Rate for the Class A-4 Certificates
for the first Interest Accrual Period will be a per annum rate of
6.01191%.
(6) The Pass-Through Rate for the Class A-5A Certificates for the Interest
Accrual Period related to any Distribution Date on or prior to the
Initial Optional Termination Date will be a per annum rate equal to the
lesser of (i) 6.09179% and (ii) the Net WAC Pass-Through Rate.
Beginning with the Interest Accrual Period related to the Distribution
Date immediately following the Initial Optional Termination Date, the
Pass-Through Rate for the Class A-5A Certificates will be a per annum
rate equal to the lesser of (i) 6.59179% and (ii) the Net WAC
Pass-Through Rate. The Pass-Through Rate for the Class A-5A
Certificates for the first Interest Accrual Period will be a per annum
rate of 6.09179%.
(7) The Pass-Through Rate for the Class A-5B Certificates for the Interest
Accrual Period related to any Distribution Date on or prior to the
Initial Optional Termination Date will be a per annum rate equal to the
lesser of (i) 6.23995% and (ii) the Net WAC Pass-Through Rate.
Beginning with the Interest Accrual Period related to the Distribution
Date immediately following the Initial Optional Termination Date, the
Pass-Through Rate for the Class A-5B Certificates will be a per annum
rate equal to the lesser of (i) 6.73995% and (ii) the Net WAC
Pass-Through Rate. The Pass-Through Rate for the
4
Class A-5B Certificates for the first Interest Accrual Period will be a
per annum rate of 6.23995%.
(8) The Pass-Through Rate for the Class A-6A Certificates for the Interest
Accrual Period related to any Distribution Date on or prior to the
first related Optional Termination Date will be a per annum rate equal
to the lesser of (i) 5.72629% and (ii) the Net WAC Pass-Through Rate.
Beginning with the Interest Accrual Period related to the Distribution
Date immediately following the Initial Optional Termination Date, the
Pass-Through Rate for the Class A-6A Certificates will be a per annum
rate equal to the lesser of (i) 6.22629% and (ii) the Net WAC
Pass-Through Rate. The Pass-Through Rate for the Class A-6A
Certificates for the first Interest Accrual Period will be a per annum
rate of 5.72629%.
(9) The Pass-Through Rate for the Class A-6B Certificates for the Interest
Accrual Period related to any Distribution Date on or prior to the
first related Optional Termination Date will be a per annum rate equal
to the lesser of (i) 5.82543% and (ii) the Net WAC Pass-Through Rate.
Beginning with the Interest Accrual Period related to the Distribution
Date immediately following the Initial Optional Termination Date, the
Pass-Through Rate for the Class A-6B Certificates will be a per annum
rate equal to the lesser of (i) 6.32543% and (ii) the Net WAC
Pass-Through Rate. The Pass-Through Rate for the Class A-6B
Certificates for the first Interest Accrual Period will be a per annum
rate of 5.82543%.
(10) The Class A-R Certificates represent the sole Class of residual
interest in each REMIC.
(11) 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.
(12) The Pass-Through Rate for the Class M-1 Certificates for the Interest
Accrual Period related to any Distribution Date on or prior to the
first related Optional Termination Date will be a per annum rate equal
to the least of (i) LIBOR + 0.33000%, (ii) the Net WAC Pass-Through
Rate and (iii) 11.00000%. Beginning with the Interest Accrual Period
related to the Distribution Date immediately following the Initial
Optional Termination Date, the Pass-Through Rate for the Class M-1
Certificates will be a per annum rate equal to the least of (i) LIBOR +
0.49500%, (ii) the Net WAC Pass-Through Rate and (iii) 11.00000%. The
Pass-Through Rate for the Class M-1 Certificates for the first Interest
Accrual Period will be a per annum rate of 5.65438%.
(13) The Pass-Through Rate for the Class M-2 Certificates for the Interest
Accrual Period related to any Distribution Date on or prior to the
first related Optional Termination Date will be a per annum rate equal
to the least of (i) LIBOR + 0.34000%, (ii) the Net WAC Pass-Through
Rate and (iii) 11.00000%. Beginning with the Interest Accrual Period
related to the Distribution Date immediately following the Initial
Optional Termination Date, the Pass-Through Rate for the Class M-2
Certificates will be a per annum rate equal to the least of (i) LIBOR +
0.51000%, (ii) the Net WAC Pass-Through Rate and (iii)
5
11.00000%. The Pass-Through Rate for the Class M-2 Certificates for the
first Interest Accrual Period will be a per annum rate of 5.66438%.
(14) The Pass-Through Rate for the Class M-3 Certificates for the Interest
Accrual Period related to any Distribution Date on or prior to the
first related Optional Termination Date will be a per annum rate equal
to the least of (i) LIBOR + 0.37000%, (ii) the Net WAC Pass-Through
Rate and (iii) 11.00000%. Beginning with the Interest Accrual Period
related to the Distribution Date immediately following the Initial
Optional Termination Date, the Pass-Through Rate for the Class M-3
Certificates will be a per annum rate equal to the least of (i) LIBOR +
0.55500%, (ii) the Net WAC Pass-Through Rate and (iii) 11.00000%. The
Pass-Through Rate for the Class M-3 Certificates for the first Interest
Accrual Period will be a per annum rate of 5.69438%.
(15) The Pass-Through Rate for the Class M-4 Certificates for the Interest
Accrual Period related to any Distribution Date on or prior to the
first related Optional Termination Date will be a per annum rate equal
to the least of (i) LIBOR + 0.43000%, (ii) the Net WAC Pass-Through
Rate and (iii) 11.00000%. Beginning with the Interest Accrual Period
related to the Distribution Date immediately following the Initial
Optional Termination Date, the Pass-Through Rate for the Class M-4
Certificates will be a per annum rate equal to the least of (i) LIBOR +
0.64500%, (ii) the Net WAC Pass-Through Rate and (iii) 11.00000%. The
Pass-Through Rate for the Class M-4 Certificates for the first Interest
Accrual Period will be a per annum rate of 5.75438%.
(16) The Pass-Through Rate for the Class M-5 Certificates for the Interest
Accrual Period related to any Distribution Date on or prior to the
first related Optional Termination Date will be a per annum rate equal
to the least of (i) LIBOR + 0.45000%, (ii) the Net WAC Pass-Through
Rate and (iii) 11.00000%. Beginning with the Interest Accrual Period
related to the Distribution Date immediately following the Initial
Optional Termination Date, the Pass-Through Rate for the Class M-5
Certificates will be a per annum rate equal to the least of (i) LIBOR +
0.67500%, (ii) the Net WAC Pass-Through Rate and (iii) 11.00000%. The
Pass-Through Rate for the Class M-5 Certificates for the first Interest
Accrual Period will be a per annum rate of 5.77438%.
(17) The Pass-Through Rate for the Class M-6 Certificates for the Interest
Accrual Period related to any Distribution Date on or prior to the
first related Optional Termination Date will be a per annum rate equal
to the least of (i) LIBOR + 0.52000%, (ii) the Net WAC Pass-Through
Rate and (iii) 11.00000%. Beginning with the Interest Accrual Period
related to the Distribution Date immediately following the Initial
Optional Termination Date, the Pass-Through Rate for the Class M-6
Certificates will be a per annum rate equal to the least of (i) LIBOR +
0.78000%, (ii) the Net WAC Pass-Through Rate and (iii) 11.00000%. The
Pass-Through Rate for the Class M-6 Certificates for the first Interest
Accrual Period will be a per annum rate of 5.84438%.
(18) The Pass-Through Rate for the Class B-1 Certificates for the Interest
Accrual Period related to any Distribution Date on or prior to the
first related Optional Termination Date will be a per annum rate equal
to the least of (i) LIBOR + 0.95000%, (ii) the Net WAC Pass-Through
Rate and (iii) 11.00000%. Beginning with the Interest Accrual Period
6
related to the Distribution Date immediately following the Initial
Optional Termination Date, the Pass-Through Rate for the Class B-1
Certificates will be a per annum rate equal to the least of (i) LIBOR +
1.42500%, (ii) the Net WAC Pass-Through Rate and (iii) 11.00000%. The
Pass-Through Rate for the Class B-1 Certificates for the first Interest
Accrual Period will be a per annum rate of 6.27438%.
(19) The Pass-Through Rate for the Class B-2 Certificates for the Interest
Accrual Period related to any Distribution Date on or prior to the
first related Optional Termination Date will be a per annum rate equal
to the least of (i) LIBOR + 1.100000%, (ii) the Net WAC Pass-Through
Rate and (iii) 11.00000%. Beginning with the Interest Accrual Period
related to the Distribution Date immediately following the Initial
Optional Termination Date, the Pass-Through Rate for the Class B-2
Certificates will be a per annum rate equal to the least of (i) LIBOR +
1.65000%, (ii) the Net WAC Pass-Through Rate and (iii) 11.00000%. The
Pass-Through Rate for the Class B-2 Certificates for the first Interest
Accrual Period will be a per annum rate of 6.42438%.
(20) The Pass-Through Rate for the Class B-3 Certificates for the Interest
Accrual Period related to any Distribution Date on or prior to the
first related Optional Termination Date will be a per annum rate equal
to the least of (i) LIBOR + 1.75000%, (ii) the Net WAC Pass-Through
Rate and (iii) 11.00000%. Beginning with the Interest Accrual Period
related to the Distribution Date immediately following the Initial
Optional Termination Date, the Pass-Through Rate for the Class B-3
Certificates will be a per annum rate equal to the least of (i) LIBOR +
2.62500%, (ii) the Net WAC Pass-Through Rate and (iii) 11.00000%. The
Pass-Through Rate for the Class B-3 Certificates for the first Interest
Accrual Period will be a per annum rate of 7.07438%.
(21) The Class P Certificates will not be entitled to any interest, but will
be entitled to 100% of any prepayment premiums paid on the Mortgage
Loans. For the federal income tax purposes, the Class P Certificates
will be entitled to 100% of the cash flow in respect of the Class 1-P
Interest.
(22) For each Distribution Date, the Class OC Certificates will be entitled
to all interest accruals and principal payments made in respect of the
Class 1-OC Interests. The Pass-Through Rate of the Class OC
Certificates shall be a rate sufficient to entitle it to all interest
accrued on the Mortgage Loans, less the interest accrued on the other
interests issued by the Master REMIC. The Class OC Distributable Amount
for any Distribution Date is payable from current interest on the
Mortgage Loans and any OC Release Amount for that Distribution Date.
The Class OC Certificates will represent beneficial ownership of a
regular interest issued by the Master REMIC, subject to the obligation
to make payments in respect of Basis Risk Carry Forward Amounts to the
Certificates. For federal income tax purposes, the Class OC
Certificateholders' obligation to make payments of Basis Risk Carry
Forward Amounts to the Certificates will be treated as payments made
pursuant to an interest rate cap contract written by the Class OC
Certificateholders in favor of Certificates.
(23) The Class OC Certificates will be issued as a single Class of
Certificates.
7
The foregoing provisions in the Preliminary Statement are intended to
cause net interest and principal collections in respect of the Mortgage Loans to
be distributed from REMIC 1 to the Master REMIC and from the Master REMIC to
each Class of Certificates. The Preliminary Statement will be interpreted and
applied consistently with such intent.
For any purpose for which the Pass-Through Rate is calculated, the
interest rate on the Mortgage Loans shall be appropriately adjusted to account
for the difference between the monthly day count convention of the Mortgage
Loans and the monthly day count convention of the regular interests issued by
each of the REMICs. For purposes of calculating the Pass-Through Rates for each
of the interests issued by each REMIC other than the Master REMIC such rates
shall be adjusted to equal a monthly day count convention based on a 30 day
month for each Due Period and a 360-day year so that the Mortgage Loans and all
regular interests will be using the same monthly day count convention.
The fiscal year of each REMIC will end on December 31.
8
Set forth below are designations of Classes or Components of Certificates and
other defined terms to the categories used herein:
Accretion Directed Certificates............ None.
Accretion Directed Components.............. None.
Accrual Certificates....................... None.
Accrual Components......................... None.
Book-Entry Certificates.................... All Classes of Certificates other than the Definitive Certificates.
Class A Certificates....................... Class A-1, Class A-2A, Class X-0X, Xxxxx X-0, Class A-4, Class A-5A,
Class A-5B, Class A-6A and Class A-6B Certificates.
Class B Certificates....................... Class B-1, Class B-2 and Class B-3 Certificates.
Class M Certificates....................... Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class M-6
Certificates.
Class M Senior Certificates................ Class M-1, Class M-2 and Class M-3 Certificates.
Class P Certificates....................... Class P Certificates.
Component Certificates..................... None.
Components................................. For purposes of calculating distributions of principal and/or
interest, the Component Certificates, if any, will be comprised of
multiple payment components having the designations, Initial
Component Balances or Notional Amounts, as applicable, and
Pass-Through Rates set forth below:
Initial Component
Destination Principal Balance Pass-Through Rate
----------- ----------------- -----------------
N/A N/A N/A
9
Definitive Certificates.................... Private Certificates and the Residual Certificates.
Delay Certificates......................... All interest-bearing Classes of Certificates other than the
Non-Delay Certificates, if any.
ERISA-Restricted Certificates.............. The Residual Certificates and Private 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 and Subordinated Certificates.
Senior Certificates........................ Class A-R, Class A-1, Class A-2A, Class X-0X, Xxxxx X-0, Class A-4,
Class A-5A, Class A-5B, Class A-6A and Class A-6B Certificates.
Subordinated Certificates.................. Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class B-1, Class B-2 and Class B-3 Certificates.
Class M Senior Certificates................ Class M-1, Class M-2 and Class M-3 Certificates.
Inverse Floating Rate Certificates......... None.
LIBOR Certificates......................... Floating Rate Certificates and Inverse Floating Rate Certificates.
Non-Delay Certificates..................... The LIBOR Certificates.
Notional Amount Certificates............... None.
Notional Amount Components................. None.
Offered Certificates....................... All Classes of Certificates other than the Private Certificates.
Planned Principal Classes.................. None.
Principal Only Certificates................ None.
Private Certificates....................... Class P and Class OC Certificates.
Rating Agencies............................ S&P and Xxxxx'x.
Regular Certificates....................... All Classes of Certificates, other than the Residual Certificates.
Residual Certificates...................... Class A-R Certificates.
Scheduled Principal Classes................ None.
Targeted Principal Classes................. None.
Underwriter................................ Xxxxxx Xxxxxxx & Co. Incorporated.
10
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.
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
The following words and phrases, unless the context otherwise requires,
shall have the following meanings:
Accountant: A Person engaged in the practice of accounting who (except
when this Agreement provides that an Accountant must be Independent) may be
employed by or affiliated with the Depositor or an Affiliate of the Depositor.
Accretion Directed Certificates: As specified in the Preliminary
Statement.
Accretion Direction Rule: Not applicable.
Accrual Amount: Not applicable.
Accrual Certificates: As specified in the Preliminary Statement.
Accrual Components: As specified in the Preliminary Statement.
Accrual Termination Date: Not applicable.
Acknowledgements: The Assignment, Assumption and Recognition
Agreements, each dated as of September 1, 2006, assigning rights under the
Purchase and Servicing Agreements from the Seller to the Depositor and from the
Depositor to the Trustee, for the benefit of the Certificateholders.
Act: The Securities Act of 1933, as amended.
Additional Collateral: With respect to any Additional Collateral
Mortgage Loan, the marketable securities and other acceptable collateral pledged
as collateral pursuant to the related pledge agreements.
Additional Collateral Mortgage Loan: Each Mortgage Loan identified as
such in the Mortgage Loan Schedule.
Additional Form 10-D Disclosure: As defined in Section 12.02 hereof.
Additional Form 10-K Disclosure: As defined in Section 12.04 hereof.
11
Additional Servicer: Each affiliate of each Servicer that services any
of the Mortgage Loans and each Person who is not an affiliate of the any
Servicer, who services 10% or more of the Mortgage Loans. For clarification
purposes, the Master Servicer and the Securities Administrator are Additional
Servicers.
Adjustment Date: With respect to any Mortgage Loan with an Adjustable
Mortgage Rate, the date specified in each Mortgage Note as a date on which the
Mortgage Rate on the related Mortgage Loan will be adjusted.
Advance: With respect to a Mortgage Loan, the payments required to be
made by the Master Servicer or the applicable Servicer with respect to any
Distribution Date pursuant to this Agreement or the applicable Purchase and
Servicing Agreement, as applicable, the amount of any such payment being equal
to the aggregate of the payments of principal and interest (net of the
applicable Servicing Fee and net of any net income in the case of any REO
Property) on the Mortgage Loans that were due on the related Due Date and not
received as of the close of business on the related Determination Date, less the
aggregate amount of any such delinquent payments that the Master Servicer or the
applicable Servicer has determined would constitute Nonrecoverable Advances if
advanced.
Adverse REMIC Event: Either (i) loss of status as a REMIC, within the
meaning of Section 860D of the Code, for any group of assets identified as a
REMIC in the Preliminary Statement to this Agreement, or (ii) imposition of any
tax, including the tax imposed under Section 860F(a)(1) on prohibited
transactions, and the tax imposed under Section 860G(d) on certain contributions
to a REMIC, on any REMIC created hereunder to the extent such tax would be
payable from assets held as part of the Trust Fund.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Expense Rate: With respect to any Mortgage Loan, the
applicable Servicing Fee Rate and, with respect to any LPMI Mortgage Loan, the
interest premium charged by the mortgagee to obtain or maintain any Primary
Mortgage Insurance Policy.
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 B 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 B hereto.
Aggregate Voting Interests: The aggregate of the Voting Interests of
all the Certificates under this Agreement.
12
Agreement: This Pooling and Servicing Agreement and all amendments or
supplements hereto.
Allocable Share: Not applicable.
American Home Mortgage Loan: Each Mortgage Loan originated by American
Home Mortgage Corporation and listed on the Mortgage Loan Schedule.
American Home Purchase Agreement: The Mortgage Loan Purchase Agreement
listed in Exhibit E hereto between the Seller and American Home Mortgage
Corporation.
Amount Held for Future Distribution: As to any Distribution Date, the
aggregate amount held in the Custodial Accounts at the close of business on the
related Determination Date on account of (i) Principal Prepayments received
after the related Prepayment Period and Liquidation Proceeds and Subsequent
Recoveries received in the month of such Distribution Date and (ii) all
Scheduled Payments due after the related Due Date.
Applied Loss Amount: As to any Distribution Date, with respect to the
Subordinated Certificates, the excess, if any, of (i) the aggregate Class
Principal Balances of the Certificates, after giving effect to all Realized
Losses with respect to the Mortgage Loans during the Due Period for such
Distribution Date and payments of principal on such Distribution Date over (ii)
the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
Appraised Value: With respect to any Mortgage Loan, the Appraised Value
of the related Mortgaged Property shall be: (i) with respect to a Mortgage Loan
other than a Refinancing Mortgage Loan, the lesser of (a) the value of the
Mortgaged Property based upon the appraisal made at the time of the origination
of such Mortgage Loan and (b) the sales price of the Mortgaged Property at the
time of the origination of such Mortgage Loan; and (ii) with respect to a
Refinancing Mortgage Loan, the value of the Mortgaged Property based upon the
appraisal made at the time of the origination of such Refinancing Mortgage Loan.
Assets: As such term is used with respect to any Auction, as defined in
Section 7.01(b) hereof.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument, in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Trustee, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering the Mortgage Loans secured by Mortgaged Properties located in the same
jurisdiction, if permitted by law; provided, however, that the Trustee shall not
be responsible for determining whether any such assignment is in recordable form
or sufficient under the laws of the applicable jurisdiction to reflect the sale
of the Mortgage to the Trustee.
Assignment of Proprietary Lease: With respect to a Cooperative Loan, an
assignment of the Proprietary Lease sufficient under the laws of the
jurisdiction wherein the related Cooperative Unit is located to reflect the
assignment of such Proprietary Lease; provided, however, that the Trustee shall
not be responsible for determining whether such assignment is sufficient to
reflect the assignment of the Proprietary Lease.
13
Assignment of Recognition Agreement: With respect to a Cooperative
Loan, an assignment of the Recognition Agreement sufficient under the laws of
the jurisdiction wherein the related Cooperative Unit is located to reflect the
assignment of such Recognition Agreement; provided, however, that the Trustee
shall not be responsible for determining whether such assignment is sufficient
to reflect the assignment of the Recognition Agreement.
Auction: As defined in Section 7.01(b) hereof.
Auction Administrator: The Securities Administrator, or any successor
in interest, or if any successor Auction Administrator shall be appointed as
herein provided, then such successor Auction Administrator.
Auction Date: As defined in Section 7.01(b) hereof.
Auction Excess Proceeds: With respect to an Auction Sale, the excess of
the Mortgage Loan Auction Price paid by the Auction Purchaser over the Minimum
Bid Price.
Auction Purchaser: As defined in Section 7.01(b) hereof. For the
avoidance of doubt, the Auction Purchaser cannot be the Seller or an Affiliate
of the Seller.
Auction Sale: As defined in Section 7.01(b) hereof.
Authenticating Agent: Any authenticating agent appointed pursuant to
Section 6.10 until any successor authenticating agent for the Certificates is
named, and thereafter "Authenticating Agent" shall mean any such successor. The
initial Authenticating Agent shall be the Securities Administrator under this
Agreement.
Authorized Officer: Any Person who may execute an Officer's Certificate
on behalf of the Depositor.
Available Distribution Amount: For any Distribution Date and the
Certificates, the sum of the following amounts:
(1) the total amount of all cash received by or on behalf of each
Servicer with respect to the Mortgage Loans serviced by it and received by the
Master Servicer by the related Servicer Remittance Date and not previously
distributed (including Liquidation Proceeds, Subsequent Recoveries, condemnation
proceeds and Insurance Proceeds with respect to the Mortgage Loans), except:
o all scheduled payments of principal and related interest collected on
the Mortgage Loans but due on a date after the related Due Date;
o all partial Principal Prepayments received with respect to the Mortgage
Loans after the related Prepayment Period, together with all related
interest accrued on such Mortgage Loans;
o all Prepayment Penalties received in connection with the Mortgage
Loans;
14
o all Principal Prepayments in Full received with respect to the Mortgage
Loans after the related Prepayment Period, together with all related
interest accrued on such Mortgage Loans;
o Liquidation Proceeds, condemnation proceeds and Insurance Proceeds
received on such Mortgage Loans after the previous calendar month;
o all amounts reimbursable to a Servicer pursuant to the terms of the
related Purchase and Servicing Agreement or this Agreement, as
applicable, or to the Master Servicer, the Securities Administrator,
the Trustee and/or the Custodian pursuant to the terms of this
Agreement;
o reinvestment income on the balance of funds, if any, in the Custodial
Accounts or Distribution Account; and
o any fees payable to the Servicers and the Master Servicer, in each case
with respect to the Mortgage Loans;
(2) all Advances on the Mortgage Loans made by each Servicer and/or the
Master Servicer for that Distribution Date;
(3) any amounts paid as Compensating Interest with respect to the
Mortgage Loans by each Servicer and/or the Master Servicer for that Distribution
Date; and
(4) the total amount of any cash deposited in the Distribution Account
in connection with the repurchase of any Mortgage Loans by the Depositor, the
Seller or the related Originator.
Available Funds: Not applicable.
Bankruptcy: As to any Person, the making of an assignment for the
benefit of creditors, the filing of a voluntary petition in bankruptcy,
adjudication as a bankrupt or insolvent, the entry of an order for relief in a
bankruptcy or insolvency proceeding, the seeking of reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief, or
seeking, consenting to or acquiescing in the appointment of a trustee, receiver
or liquidator, dissolution, or termination, as the case may be, of such Person
pursuant to the provisions of either the Bankruptcy Code or any other similar
state laws.
Bankruptcy Code: The United States Bankruptcy Code of 1986, as amended.
Basic Principal Distribution Amount: For any Distribution Date will
equal the excess of the Principal Remittance Amount over the Excess Subordinated
Amount.
Basis Risk Carry Forward Amount: With respect to any Class of
Certificates and any Distribution Date on which the Pass-Through Rate for that
Class of Certificates is limited to the Net WAC Pass-Through Rate, an amount
equal to the sum of (i) the excess of (x) the amount of interest such Class of
Certificates would have been entitled to receive on such Distribution Date if
the Net WAC Pass-Through Rate had not been applicable to such Class on such
Distribution Date over (y) the amount of interest accrued on such Distribution
Date at the Net WAC Pass-
15
Through Rate and (ii) the related Basis Risk Carry Forward Amount for the
previous Distribution Date not previously distributed together with interest
thereon at a rate equal to the related Pass-Through Rate for such Class of
Certificates for the most recently ended Interest Accrual Period.
Book-Entry Certificates: Beneficial interests in Certificates
designated as "Book-Entry Certificates" in this Agreement, ownership and
transfers of which shall be evidenced or made through book entries by a Clearing
Agency as described in Section 3.09; provided, that after the occurrence of a
Book-Entry Termination whereupon book-entry registration and transfer are no
longer permitted and Definitive Certificates are to be issued to Certificate
Owners, such Book-Entry Certificates shall no longer be "Book-Entry
Certificates." The Classes of Certificates that constitute "Book-Entry
Certificates" as of the Closing Date are set forth in the Preliminary Statement.
Book-Entry Termination: The date on which the Clearing Agency is no
longer willing or able to properly discharge its responsibilities with respect
to the Book Entry Certificates, and the Depositor is unable to locate a
qualified successor.
Breached Mortgage Loan: A Mortgage Loan (a)(i) on which the first
payment was not made or (ii) that has been delinquent one or two times in the
six months following the Cut-off Date and (b) as to which the Seller obtained a
representation or warranty that no condition set forth in (a)(i) or, for the
same or other period time specified in such representation or warranty (a)(ii),
exists.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which banking institutions in New York, New York or, if other than New
York, the city in which the Corporate Trust Office of the Trustee is located, or
the States of Maryland or Minnesota, are authorized or obligated by law or
executive order to be closed.
Certificate: Any one of the certificates signed by the Trustee, or the
Securities Administrator on the Trustee's behalf, and authenticated by the
Securities Administrator as Authenticating Agent in substantially the forms
attached hereto as Exhibit A.
Certificate Balance: With respect to any Certificate other than a Class
OC 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
principal balance or notional amount, as applicable, as of the Closing Date (A)
plus any Subsequent Recoveries added to the Certificate Balance of such
Certificate pursuant to Section 5.02 hereof, (B) minus the sum of (i) all
distributions of principal previously made with respect thereto, and (ii) with
respect to the Subordinated Certificates only, all Applied Loss Amounts
allocated thereto and all other reductions in Certificate Balance previously
allocated thereto pursuant to Section 5.04 hereof. No individual Class OC
Certificate has a Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
who is the owner of such Book-Entry Certificate, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly or as an indirect participant, in accordance with
the rules of such Clearing Agency).
16
Certificate Register and Certificate Registrar: The register maintained
and the registrar appointed pursuant to Section 3.02. The initial Certificate
Registrar is the Securities Administrator under this Agreement.
Certificateholder: The meaning provided in the definition of "Holder."
Certification Party: As defined in Section 12.05 hereof.
Certifying Person: As defined in Section 12.05 hereof.
Class: All Certificates bearing the same Class designation as set forth
in the Preliminary Statement.
Class A Interest Distribution Amount: With respect to any Distribution
Date and any Class of Senior Certificates, interest accrued during the related
Interest Accrual Period on the related Class Principal Balance of that Class
immediately prior to the Distribution Date at the Pass-Through Rate for that
Class reduced (to an amount not less than zero), in the case of such Class, by
the allocable share, if any, for that Class of Prepayment Interest Shortfalls to
the extent not covered by Compensating Interest paid by the Master Servicer or
the Servicers and Relief Act Interest Shortfalls, together with the Interest
Carry Forward Amount, if any, for such Distribution Date for such Class of
Senior Certificates.
Class A Principal Distribution Amount: With respect to any Distribution
Date and any Class of Senior Certificates, (i) prior to the Stepdown Date or on
or after the Stepdown Date if a Trigger Event is in effect, the Principal
Distribution Amount or (ii) on or after the Stepdown Date if a Trigger Event is
not in effect for that Distribution Date, the lesser of:
o the Principal Distribution Amount for that Distribution Date;
and
o the excess (if any) of (A) the aggregate Class Principal
Balance of the Class A Certificates immediately prior to that
Distribution Date over (B) the lesser of (i) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period multiplied by 86.40% and (ii)
the amount, if any, by which (x) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of
the related Due Period exceeds (y) $1,824,496.
Class B Certificates: As specified in the Preliminary Statement.
Class B-1 Principal Distribution Amount: With respect to the Class B-1
Certificates and any Distribution Date (i) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that Distribution
Date, the Principal Distribution Amount for that Distribution Date remaining
after distribution of the Class A Principal Distribution Amount, the Class M-1
Principal Distribution Amount, the Class M-2 Principal Distribution Amount, the
Class M-3 Principal Distribution Amount, the Class M-4 Principal Distribution
Amount, the Class M-5 Principal Distribution Amount and the Class M-6 Principal
Distribution Amount or (ii) on or after the Stepdown Date if a Trigger Event is
not in effect for that Distribution Date, the lesser of:
17
o the Principal Distribution Amount for that Distribution Date
remaining after distribution of the Class A Principal Distribution
Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution
Amount, the Class M-4 Principal Distribution Amount, the Class M-5
Principal Distribution Amount and the Class M-6 Principal
Distribution Amount; and
o the excess (if any) of (A) the sum of (1) the Class Principal
Balance of the Class B-1 Certificates immediately prior to that
Distribution Date and (2) the aggregate Class Principal Balance of
the Class A Certificates and the Class M Certificates (after taking
into account the payment of the Class A, Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5 and Class M-6 Principal Distribution
Amounts for such Distribution Date) over (B) the lesser of (i) the
aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period multiplied by 96.30% and (ii) the
amount, if any, by which (x) the aggregate Stated Principal Balance
of the Mortgage Loans as of the last day of the related Due Period
exceeds (y) $1,824,496.
Class B-2 Principal Distribution Amount: With respect to the Class
B-2 Certificates and any Distribution Date (i) prior to the Stepdown Date or on
or after the Stepdown Date if a Trigger Event is in effect for that Distribution
Date, the Principal Distribution Amount for that Distribution Date remaining
after distribution of the Class A Principal Distribution Amount, the Class M-1
Principal Distribution Amount, the Class M-2 Principal Distribution Amount, the
Class M-3 Principal Distribution Amount, the Class M-4 Principal Distribution
Amount, the Class M-5 Principal Distribution Amount, the Class M-6 Principal
Distribution Amount and the Class B-1 Principal Distribution Amount or (ii) on
or after the Stepdown Date if a Trigger Event is not in effect for that
Distribution Date, the lesser of:
o the Principal Distribution Amount for that Distribution Date
remaining after distribution of the Class A Principal Distribution
Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution
Amount, the Class M-4 Principal Distribution Amount, the Class M-5
Principal Distribution Amount, the Class M-6 Principal Distribution
Amount and the Class B-1 Principal Distribution Amount; and
o the excess (if any) of (A) the sum of (1) the Class Principal
Balance of the Class B-2 Certificates immediately prior to that
Distribution Date and (2) the aggregate Class Principal Balance of
the Class A Certificates, the Class M Certificates and the Class B-1
Certificates (after taking into account the payment of the Class A,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and
Class B-1 Principal Distribution Amounts for such Distribution Date)
over (B) the lesser of (i) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period
multiplied by 97.00% and (ii) the amount, if any, by which (x) the
aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period exceeds (y) $1,824,496.
Class B-3 Principal Distribution Amount: With respect to the Class
B-3 Certificates and any Distribution Date (i) prior to the Stepdown Date or on
or after the Stepdown Date if a
18
Trigger Event is in effect for that Distribution Date, the Principal
Distribution Amount for that Distribution Date remaining after distribution of
the Class A Principal Distribution Amount, the Class M-1 Principal Distribution
Amount, the Class M-2 Principal Distribution Amount, the Class M-3 Principal
Distribution Amount, the Class M-4 Principal Distribution Amount, the Class M-5
Principal Distribution Amount, the Class M-6 Principal Distribution Amount, the
Class B-1 Principal Distribution Amount and the Class B-2 Principal Distribution
Amount or (ii) on or after the Stepdown Date if a Trigger Event is not in effect
for that Distribution Date, the lesser of:
o the Principal Distribution Amount for that Distribution Date
remaining after distribution of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution
Amount, the Class M-2 Principal Distribution Amount, the Class
M-3 Principal Distribution Amount, the Class M-4 Principal
Distribution Amount, the Class M-5 Principal Distribution
Amount, the Class M-6 Principal Distribution Amount, the Class
B-1 Principal Distribution Amount and the Class B-2 Principal
Distribution Amount; and
o the excess (if any) of (A) the sum of (1) the Class Principal
Balance of the Class B-3 Certificates immediately prior to
that Distribution Date and (2) the aggregate Class Principal
Balance of the Class A Certificates, the Class M Certificates
and the Class B-1 and Class B-2 Certificates (after taking
into account the payment of the Class A, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class B-1 and
Class B-2 Principal Distribution Amounts for such Distribution
Date) over (B) the lesser of (i) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of
the related Due Period multiplied by 97.90% and (ii) the
amount, if any, by which (x) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the
related Due Period exceeds (y) $1,824,496.
Class Interest Shortfall: Not applicable.
Class M Certificates: As specified in the Preliminary Statement.
Class M Senior Certificates: As specified in the Preliminary Statement.
Class M-1 Principal Distribution Amount: With respect to the Class M-1
Certificates and any Distribution Date (i) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that Distribution
Date, the Principal Distribution Amount for that Distribution Date remaining
after distribution of the Class A Principal Distribution Amount or (ii) on or
after the Stepdown Date if a Trigger Event is not in effect for that
Distribution Date, the lesser of:
o the Principal Distribution Amount for that Distribution Date
remaining after distribution of the Class A Principal
Distribution Amount; and
o the excess (if any) of (A) the sum of (1) the Class Principal
Balance of the Class M-1 Certificates immediately prior to
that Distribution Date and (2) the aggregate Class Principal
Balance of the Class A Certificates (after taking into account
the payment of
19
the Class A Principal Distribution Amount for such
Distribution Date) over (B) the lesser of (i) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period multiplied by 88.80% and (ii)
the amount, if any, by which (x) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of
the related Due Period exceeds (y) $1,824,496.
Class M-2 Principal Distribution Amount: With respect to the Class M-2
Certificates and any Distribution Date (i) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that Distribution
Date, the Principal Distribution Amount for that Distribution Date remaining
after distribution of the Class A Principal Distribution Amount and the Class
M-1 Principal Distribution Amount or (ii) on or after the Stepdown Date if a
Trigger Event is not in effect for that Distribution Date, the lesser of:
o the Principal Distribution Amount for that Distribution Date
remaining after distribution of the Class A Principal
Distribution Amount and the Class M-1 Principal Distribution
Amount; and
o the excess (if any) of (A) the sum of (1) the Class Principal
Balance of the Class M-2 Certificates immediately prior to
that Distribution Date and (2) the aggregate Class Principal
Balance of the Class A Certificates and the Class M-1
Certificates (after taking into account the payment of the
Class A and Class M-1 Principal Distribution Amounts for such
Distribution Date) over (B) the lesser of (i) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period multiplied by 91.20% and (ii)
the amount, if any, by which (x) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of
the related Due Period exceeds (y) $1,824,496.
Class M-3 Principal Distribution Amount: With respect to the Class M-3
Certificates and any Distribution Date (i) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that Distribution
Date, the Principal Distribution Amount for that Distribution Date remaining
after distribution of the Class A Principal Distribution Amount, the Class M-1
Principal Distribution Amount and the Class M-2 Principal Distribution Amount or
(ii) on or after the Stepdown Date if a Trigger Event is not in effect for that
Distribution Date, the lesser of:
o the Principal Distribution Amount for that Distribution Date
remaining after distribution of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution
Amount and the Class M-2 Principal Distribution Amount; and
o the excess (if any) of (A) the sum of (1) the Class Principal
Balance of the Class M-3 Certificates immediately prior to
that Distribution Date and (2) the aggregate Class Principal
Balance of the Class A Certificates and the Class M-1 and
Class M-2 Certificates (after taking into account the payment
of the Class A, Class M-1 and Class M-2 Principal Distribution
Amounts for such Distribution Date) over (B) the lesser of (i)
the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period multiplied by
92.50% and (ii) the amount, if any,
20
by which (x) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period
exceeds (y) $1,824,496.
Class M-4 Principal Distribution Amount: With respect to the Class M-4
Certificates and any Distribution Date (i) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that Distribution
Date, the Principal Distribution Amount for that Distribution Date remaining
after distribution of the Class A Principal Distribution Amount, the Class M-1
Principal Distribution Amount, the Class M-2 Principal Distribution Amount and
the Class M-3 Principal Distribution Amount or (ii) on or after the Stepdown
Date if a Trigger Event is not in effect for that Distribution Date, the lesser
of:
o the Principal Distribution Amount for that Distribution Date
remaining after distribution of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution
Amount, the Class M-2 Principal Distribution Amount and the
Class M-3 Principal Distribution Amount; and
o the excess (if any) of (A) the sum of (1) the Class Principal
Balance of the Class M-4 Certificates immediately prior to
that Distribution Date and (2) the aggregate Class Principal
Balance of the Class A Certificates and the Class M Senior
Certificates (after taking into account the payment of the
Class A, Class M-1, Class M-2 and Class M-3 Principal
Distribution Amounts for such Distribution Date) over (B) the
lesser of (i) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period
multiplied by 93.60% and (ii) the amount, if any, by which (x)
the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period exceeds (y)
$1,824,496.
Class M-5 Principal Distribution Amount: With respect to the Class M-5
Certificates and any Distribution Date (i) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that Distribution
Date, the Principal Distribution Amount for that Distribution Date remaining
after distribution of the Class A Principal Distribution Amount, the Class M-1
Principal Distribution Amount, the Class M-2 Principal Distribution Amount, the
Class M-3 Principal Distribution Amount and the Class M-4 Principal Distribution
Amount or (ii) on or after the Stepdown Date if a Trigger Event is not in effect
for that Distribution Date, the lesser of:
o the Principal Distribution Amount for that Distribution Date
remaining after distribution of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution
Amount, the Class M-2 Principal Distribution Amount, the Class
M-3 Principal Distribution Amount and the Class M-4 Principal
Distribution Amount; and
o the excess (if any) of (A) the sum of (1) the Class Principal
Balance of the Class M-5 Certificates immediately prior to
that Distribution Date and (2) the aggregate Class Principal
Balance of the Class A Certificates, the Class M Senior
Certificates and the Class M-4 Certificates (after taking into
account the payment of the Class A, Class M-1, Class M-2,
Class M-3 and Class M-4 Principal Distribution Amounts for
such Distribution Date) over (B) the lesser of (i) the
aggregate Stated Principal Balance of the Mortgage Loans as of
the last day of the related Due Period multiplied by 94.70%
21
and (ii) the amount, if any, by which (x) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of
the related Due Period exceeds (y) $1,824,496.
Class M-6 Principal Distribution Amount: With respect to the Class M-6
Certificates and any Distribution Date (i) prior to the Stepdown Date or on or
after the Stepdown Date if a Trigger Event is in effect for that Distribution
Date, the Principal Distribution Amount for that Distribution Date remaining
after distribution of the Class A Principal Distribution Amount, the Class M-1
Principal Distribution Amount, the Class M-2 Principal Distribution Amount, the
Class M-3 Principal Distribution Amount, the Class M-4 Principal Distribution
Amount and the Class M-5 Principal Distribution Amount or (ii) on or after the
Stepdown Date if a Trigger Event is not in effect for that Distribution Date,
the lesser of:
o the Principal Distribution Amount for that Distribution Date
remaining after distribution of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution
Amount, the Class M-2 Principal Distribution Amount, the Class
M-3 Principal Distribution Amount, the Class M-4 Principal
Distribution Amount and the Class M-5 Principal Distribution
Amount; and
o the excess (if any) of (A) the sum of (1) the Class Principal
Balance of the Class M-6 Certificates immediately prior to
that Distribution Date and (2) the aggregate Class Principal
Balance of the Class A Certificates, the Class M Senior
Certificates and the Class M-4 and Class M-5 Certificates
(after taking into account the payment of the Class A, Class
M-1, Class M-2, Class M-3, Class M-4 and Class M-5 Principal
Distribution Amounts for such Distribution Date) over (B) the
lesser of (i) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period
multiplied by 95.40% and (ii) the amount, if any, by which (x)
the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period exceeds (y)
$1,824,496.
Class OC Certificates: As specified in the Preliminary Statement.
Class OC Distributable Amount: With respect to any Distribution Date
and the Class OC Certificates, the excess, if any, of (x) the sum of (i) the
amount of interest accrued during the related Accrual Period at the related
Pass-Through Rate on the Class Principal Balance for such Distribution Date and
not included in the Extra Principal Distribution Amount on that Distribution
Date and (ii) the Overcollateralization Release Amount, if any, for such
Distribution Date, over (y) the Overcollateralization Increase Amount, if any,
for such Distribution Date.
Class OC Interest: The Upper-Tier Regular Interest as specified and
described in the Preliminary Statement and the related footnote thereto.
Class Optimal Interest Distribution Amount: Not applicable.
Class P Distribution Amount: For each Distribution Date and the
Mortgage Loans, an amount equal to the total of all Prepayment Penalties
received by the Securities Administrator from the Servicers on the Mortgage
Loans in the prior Due Period. The Class P Distribution
22
Amount is not part of the Available Distribution Amount and is therefore not
available for distributions to the other Classes of Certificates.
Class Principal Balance: With respect to any Class of Certificates
other than the Class OC Certificates and as to any date of determination, the
aggregate of the Certificate Balances of all Certificates of such Class as of
such date. With respect to the Class OC Certificates and any Distribution Date,
the Overcollateralized Amount as of that Distribution Date.
Class Subordination Percentage: Not applicable.
Clearing Agency: An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. As
of the Closing Date, the Clearing Agency shall be The Depository Trust Company.
Clearing Agency Participant: A broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
Closing Date: September 29, 2006.
Code: The Internal Revenue Code of 1986, as amended, and as it may be
further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
Collateralization Event: Not applicable.
Commission: The U.S. Securities and Exchange Commission.
Compensating Interest Payment: As to any Distribution Date, an amount
equal to the lesser of (i) the Prepayment Interest Shortfall on the Mortgage
Loans serviced by such Servicer with respect to such Distribution Date and (ii)
the portion of the applicable Servicing Fee that the related Servicer is
required to remit to the Trust as compensation therefor in accordance with the
terms of the related Purchase and Servicing Agreement.
Component: As specified in the Preliminary Statement.
Component Balance: With respect to any Component and any Distribution
Date, the Initial Component Balance thereof on the Closing Date, (A) plus any
Subsequent Recoveries added to the Component Balance of such Component pursuant
to Section 5.02, (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: As specified in the Preliminary Statement.
Component Notional Amount: Not applicable.
23
Consent: A document executed by the Cooperative Corporation (i)
consenting to the sale of the Cooperative Unit to the Mortgagor and (ii)
certifying that all maintenance charges relating to the Cooperative Unit have
been paid.
Controlling Person: With respect to any Person, any other Person who
"controls" such Person within the meaning of the Securities Act.
Cooperative Corporation: The entity that holds title (fee or an
acceptable leasehold estate) to the real property and improvements constituting
the Cooperative Property and which governs the Cooperative Property, which
Cooperative Corporation must qualify as a Cooperative Housing Corporation under
Section 216 of the Code.
Cooperative Loan: A Mortgage Loan secured by Cooperative Shares and a
Proprietary Lease, if any.
Cooperative Property: The real property and improvements owned by the
Cooperative Corporation, that includes the allocation of individual dwelling
units to the holders of the shares of the Cooperative Corporation.
Cooperative Shares: Shares issued by a Cooperative Corporation.
Cooperative Unit: With respect to any Cooperative Loan, a specific unit
in a Cooperative Property.
Corporate Trust Office: With respect to the Trustee, the designated
office of the Trustee in the State of Illinois at which at any particular time
its corporate trust business with respect to this Agreement is administered,
which office at the date of the execution of this Agreement is located at 000
Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attn: Global
Securities and Trust Services MSM 2006-12XS, and which is the address to which
notices to and correspondence with the Trustee should be directed, or at such
other address as the Trustee may designate from time to time by notice to the
Certificateholders, the Depositor, the Master Servicer and the Securities
Administrator or the principal corporate trust office of any successor Trustee.
With respect to the Certificate Registrar and presentment of Certificates for
registration of transfer, exchange or final payment, Xxxxx Fargo Bank, National
Association, Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000,
Attention: Corporate Trust, Xxxxxx Xxxxxxx Mortgage Loan Trust 2006-12XS, and
for all other purposes, X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000 (or for overnight
deliveries, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000), Attention:
Corporate Trust, Xxxxxx Xxxxxxx Mortgage Loan Trust 2006-12XS.
Custodial Account: Each custodial account (other than an Escrow
Account) established and maintained by a Servicer pursuant to a Purchase and
Servicing Agreement.
Custodial Agreement: Not applicable.
Custodial Delivery Failure: With respect to any Custodian appointed
hereunder, as defined in Section 6.21 hereof.
Custodian: A Person who is at anytime appointed by the Depositor as a
custodian of the Mortgage Documents and the Trustee Mortgage Files. The initial
Custodian is LaSalle Bank National Association.
24
Custodian Certification: As defined in Section 2.01.
Cut-off Date: September 1, 2006.
Cut-off Date Pool Principal Balance: $521,284,433.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction
by a court of competent jurisdiction in a proceeding under the Bankruptcy Code
in the Scheduled Payment for such Mortgage Loan which became final and
non-appealable, except such a reduction resulting from a Deficient Valuation or
any reduction that results in a permanent forgiveness of principal.
Deceased Holder: Not Applicable.
Defaulted Swap Termination Payment: Not Applicable.
Defective Mortgage Loan: The meaning specified in Section 2.05(a).
Deficient Valuation: With respect to any Mortgage Loan, a valuation of
the related Mortgaged Property by a court of competent jurisdiction in an amount
less than the then outstanding indebtedness under the Mortgage Loan, or any
reduction in the amount of principal to be paid in connection with any Scheduled
Payment that results in a permanent forgiveness of principal, which valuation or
reduction results from an order of such court which is final and non-appealable
in a proceeding under the Bankruptcy Code.
Definitive Certificate: A Certificate of any Class issued in
definitive, fully registered, certificated form. As of the Closing Date the
Classes of Certificates being issued as "Definitive Certificates" are set forth
in the Preliminary Statement.
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased, or replaced
or to be replaced with a Replacement Mortgage Loan.
Delinquent: Any Mortgage Loan with respect to which the Scheduled
Payment due on a Due Date is not received.
Depositor: Xxxxxx Xxxxxxx Capital I Inc., a Delaware corporation having
its principal place of business in New York, or its successors in interest.
Depository: Cede & Co., or any other organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of the
Book-Entry Certificates. 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.
25
Determination Date: With respect to each Servicer, the "Determination
Date" set forth in the related Purchase and Servicing Agreement.
Disqualified Organization: A "disqualified organization" as defined in
Section 860E(e)(5) of the Code.
Distribution Account: The separate Eligible Account created and
maintained by the Securities Administrator, on behalf of the Trustee, pursuant
to Section 4.01. Funds in the Distribution Account (exclusive of any earnings on
investments made with funds deposited in the Distribution Account) shall be held
in trust for the Trustee and the Certificateholders for the uses and purposes
set forth in this Agreement.
Distribution Account Deposit Date: With respect to each Servicer, not
later than 1:00 p.m., New York time, on 18th day of each calendar month after
the initial issuance of the Certificates or, if such 18th day is not a Business
Day, either the immediately preceding or immediately following Business Day, as
set forth in the related Acknowledgement, commencing in October 2006.
Distribution Date: The 25th day of each month or, if such 25th day is
not a Business Day, the next succeeding Business Day, commencing in October
2006.
Due Date: With respect to any Distribution Date, the first day of the
month in which such Distribution Date occurs. With respect to any Mortgage Loan,
the date on which a Scheduled Payment is due under the related Mortgage Note as
indicated in the applicable Purchase and Servicing Agreement.
Due Period: As to any Distribution Date, the period beginning on the
second day of the month preceding the month of such Distribution Date, and
ending on the first day of the month of such Distribution Date.
XXXXX: The Commission's Electronic Data Gathering, Analysis and
Retrieval system.
Eligible Account: Any of (i) an 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 each Rating Agency at the time any amounts are held on
deposit therein, or (ii) an account or accounts in a depository institution or
trust company in which such accounts are insured by the FDIC or the SAIF (to the
limits established by the FDIC or the SAIF) 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 (which shall be limited to Permitted
Investments) 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 trust account or accounts maintained with
the trust department of a federal or state chartered depository institution or
trust company, acting in its fiduciary capacity or (iv) any other account
acceptable to each Rating Agency, as evidenced by a signed writing delivered by
each Rating Agency. Eligible Accounts
26
may bear interest, and may include, if otherwise qualified under this
definition, accounts maintained with the Trustee, the Paying Agent, the
Securities Administrator or the Master Servicer.
Eligible Institution: An institution having the highest short-term debt
rating, and one of the two highest long-term debt ratings of the Rating Agencies
or the approval of the Rating Agencies.
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.
Escrow Account: With respect to each Mortgage Loan, as defined in
Article I of the related Purchase and Servicing Agreement.
Estoppel Letter: A document executed by the Cooperative Corporation
certifying, with respect to a Cooperative Unit, (i) the appurtenant Proprietary
Lease will be in full force and effect as of the date of issuance thereof, (ii)
the related stock certificate was registered in the Mortgagor's name and the
Cooperative Corporation has not been notified of any lien upon, pledge of, levy
of execution on or disposition of such stock certificate, and (iii) the
Mortgagor is not in default under the appurtenant Proprietary Lease and all
charges due the Cooperative Corporation have been paid.
Event of Default: Any one of the conditions or circumstances enumerated
in Section 6.14.
Excess Priority Amount: Not applicable.
Excess Subordinated Amount: For any Distribution Date will equal the
excess, if any, of the Overcollateralized Amount on that Distribution Date over
(ii) the Overcollateralization Target Amount for such Distribution Date.
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 be filed with respect to the Trust Fund under the Exchange Act.
Extra Principal Distribution Amount: For any Distribution Date will be
the lesser of the Net Monthly Excess Cashflow for such Distribution Date and the
Overcollateralization Increase Amount as of that Distribution Date.
Xxxxxx Xxx: The entity formerly known as the Federal National Mortgage
Association, a federally chartered and privately owned corporation organized and
existing under the Federal National Mortgage Association Charter Act, or any
successor thereto.
27
FDIC: The Federal Deposit Insurance Corporation or any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Final Custodian Certification: As defined in Section 2.02 hereof.
Fiscal Agent: Not applicable.
Fitch: Fitch, Inc., or any successor thereto. If Fitch is designated as
a Rating Agency in the Preliminary Statement, for purposes of Section 11.07 the
address for notices to Fitch shall be Fitch, Inc., Xxx Xxxxx Xxxxxx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage Surveillance Group, or
such other address as Fitch may hereafter furnish to the Depositor, the Trustee
and the Master Servicer.
FNBN Mortgage Loan: Each Mortgage Loan originated by First National
Bank of Nevada and listed on the Mortgage Loan Schedule.
FNBN Purchase Agreement: The Mortgage Loan Purchase Agreement listed in
Exhibit E hereto between the Seller and First National Bank of Nevada.
Form 8-K Disclosure: As defined in Section 12.03 hereof.
Global Securities: The global certificates representing the Book-Entry
Certificates.
GMAC Serviced Mortgage Loan: Each Mortgage Loan serviced by GMAC
Mortgage Corporation and listed on the Mortgage Loan Schedule.
GMAC Servicing Agreement: The Servicing Agreement listed in Exhibit E
hereto between the Seller and GMAC Mortgage Corporation.
GreenPoint Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement listed in Exhibit E hereto between the Seller and
GreenPoint Mortgage Funding, Inc. as seller and servicer.
GreenPoint Serviced Mortgage Loan: Each Mortgage Loan originated and
serviced by GreenPoint Mortgage Funding, Inc. and listed on the Mortgage Loan
Schedule.
Hemisphere Mortgage Loan: Each Mortgage Loan originated by The
Hemisphere National Bank and listed on the Mortgage Loan Schedule.
Hemisphere Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement listed in Exhibit E hereto between the Seller and The
Hemisphere National Bank.
Hemisphere Serviced Mortgage Loan: Each Mortgage Loan serviced by The
Hemisphere National Bank and listed on the Mortgage Loan Schedule.
28
Hemisphere Servicing Agreement: The Servicing Agreement listed in
Exhibit E hereto between the Seller and The Hemisphere National Bank.
Holder: The registered owner of any Certificate as recorded on the
books of the Certificate Registrar except that, solely for the purposes of
taking any action or giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Depositor, the Trustee, the Master
Servicer, the Securities Administrator and any Servicer, or any Affiliate
thereof shall be deemed not to be outstanding in determining whether the
requisite percentage necessary to effect any such consent has been obtained,
except that, in determining whether the Trustee or the Securities Administrator
shall be protected in relying upon any such consent, only Certificates that a
Responsible Officer of the Trustee or the Securities Administrator,
respectively, knows to be so owned shall be disregarded. The Trustee or the
Securities Administrator may request and conclusively rely on certifications by
the Depositor, the Master Servicer, the Securities Administrator or any Servicer
in determining whether any Certificates are registered to an Affiliate of the
Depositor, the Master Servicer, the Securities Administrator or any Servicer.
HUD: The United States Department of Housing and Urban Development, or
any successor thereto.
Indemnifying Party: As specified in Section 12.08 hereof.
Independent: When used with respect to any Accountants, a Person who is
"independent" within the meaning of Rule 2-01(b) of the Securities and Exchange
Commission's Regulation S-X. When used with respect to any other Person, a
Person who (a) is in fact independent of another specified Person and any
Affiliate of such other Person, (b) does not have any material direct financial
interest in such other Person or any Affiliate of such other Person, and (c) is
not connected with such other Person or any Affiliate of such other Person as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions.
Index: As to each Mortgage Loan, the index from time to time in effect
for adjustment of the Mortgage Rate as set forth as such on the related Mortgage
Note.
Initial Component Balance: As specified in the Preliminary Statement.
Initial Custodian Certification: As defined in Section 2.02.
Initial Optional Termination Date: With respect to the Mortgage Loans,
the first Distribution Date following the date on which the aggregate Stated
Principal Balance of the Mortgage Loans is equal to or less than 10% of the
aggregate Stated Principal Balance thereof as of the Cut-off Date.
Insurance Policy: With respect to any Mortgage Loan, any insurance
policy, including all names and endorsements thereto in effect, including any
replacement policy or policies for any Insurance Policies.
29
Insurance Proceeds: Proceeds paid by any Insurance Policy (excluding
proceeds required to be applied to the restoration and repair of the related
Mortgaged Property or released to the Mortgagor), in each case other than any
amount included in such Insurance Proceeds in respect of Insured Expenses and
the proceeds from any Limited Purpose Surety Bond.
Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
Interest Accrual Period: With respect to each Class of Delay
Certificates, its corresponding Subsidiary REMIC Regular Interest and any
Distribution Date, the calendar month prior to the month of such Distribution
Date. With respect to any Class of Non-Delay Certificates, its corresponding
Subsidiary REMIC Regular Interest and the Distribution Date in October 2006, the
26 day period commencing on the Closing Date and ending on the day immediately
preceding such Distribution Date. With respect to any Class of Non-Delay
Certificates, its corresponding Subsidiary REMIC Regular Interest and each
Distribution Date following the Distribution Date in October 2006, the one month
period commencing on the Distribution Date in the calendar month preceding the
month in which such Distribution Date occurs and ending on the day immediately
preceding such Distribution Date. For purposes of computing interest accruals on
each Class of Non-Delay Certificates, each Interest Accrual Period has the
actual number of days in such month and each year is assumed to have 360 days.
For purposes of computing interest accruals on each Class of Delay Certificates,
each Interest Accrual Period has 30 days in such month and each year is assumed
to have 360 days.
Interest Carry Forward Amount: With respect to any Distribution Date,
the amount, if any, by which the Interest Distribution Amount for that Class of
Certificates for the immediately preceding Distribution Date exceeds the actual
amount distributed on such Class in respect of interest on the immediately
preceding Distribution Date, together with any Interest Carry Forward Amount
with respect to such Class remaining unpaid from the previous Distribution Date,
plus interest accrued thereon at the related Pass-Through Rate for the most
recently ended Interest Accrual Period.
Interest Determination Date: With respect to any Interest Accrual
Period for any Class of LIBOR Certificates, the second Business Day prior to the
first day of such Interest Accrual Period.
Interest Distribution Amount: With respect to the Senior Certificates,
the Class A Interest Distribution Amount. With respect to the Subordinated
Certificates, the Subordinated Interest Distribution Amount.
Interest Remittance Amount: For the Certificates and any Distribution
Date, that portion of the Available Distribution Amount for such Distribution
Date that represents interest received or advanced on the Mortgage Loans.
Interest Transfer Amount: Not applicable.
Investor Based Exemption: Any of Prohibited Transaction Class Exemption
("PTCE") 84-14 (for transactions by independent "qualified professional asset
managers"), PTCE 90-1 (for transactions by insurance company pooled separate
accounts), PTCE 91-38 (for transactions by
30
bank collective investment funds), PTCE 95-60 (for transactions by insurance
company general accounts), PTCE 96-23 (for transactions effected by "in house
asset managers") the service provider exemption provided by Section 308(b)(17)
of ERISA and Section 4975(d)(20) of the Code, or any comparable exemption
available under Similar Law.
Last Scheduled Distribution Date: The Distribution Date in October
2036.
Latest Possible Maturity Date: The Distribution Date in October 2036.
LIBOR: The London interbank offered rate for one-month United States
dollar deposits calculated in the manner described in Section 5.09.
LIBOR Business Day: Any day on which banks in London, England and The
City of New York are open and conducting transactions in foreign currency and
exchange.
LIBOR Certificates: As specified in the Preliminary Statement.
Limited Purpose Surety Bond: Collectively, Ambac Assurance Corporation
Surety Bond No. AB0039BE and any other Limited Purpose Surety Bond securing an
Additional Collateral Mortgage Loan.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in the
calendar month preceding the month of such Distribution Date and as to which the
related Servicer has certified (in accordance with its Purchase and Servicing
Agreement) that it has received all amounts it expects to receive in connection
with the liquidation of such Mortgage Loan including the final disposition of an
REO Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds, received
in connection with the partial or complete liquidation of defaulted Mortgage
Loans, whether through trustee's sale, foreclosure sale or otherwise or amounts
received in connection with any condemnation or partial release of a Mortgaged
Property and any other proceeds received in connection with an REO Property.
Living Holders: Not applicable.
Loan-To-Value Ratio: With respect to any Mortgage Loan and as to any
date of determination, the fraction (expressed as a percentage) the numerator of
which is the principal balance of the related Mortgage Loan at such date of
determination and the denominator of which is the Appraised Value of the related
Mortgaged Property.
LPMI Mortgage Loan: Certain Mortgage Loans as to which the lender
(rather than the borrower) acquires the Primary Mortgage Insurance Policy and
charges the related borrower an interest premium.
Master REMIC: As described in the Preliminary Statement.
31
Master Servicer: Xxxxx Fargo Bank, National Association, a national
banking association organized under the laws of the United States in its
capacity as Master Servicer and any Person succeeding as Master Servicer
hereunder or any successor in interest, or if any successor master servicer
shall be appointed as herein provided, then such successor master servicer.
Master Servicer Compensation: With respect to any Master Servicer that
is a successor to Xxxxx Fargo Bank, National Association as Master Servicer, the
portion of the earnings on the funds on deposit in the Distribution Account
payable on each Distribution Date pursuant to Section 4.02(b)(ii) hereof agreed
to by and between such successor Master Servicer and the successor securities
administrator; provided, that the sum of such Master Servicer Compensation and
the Securities Administrator Compensation payable on each Distribution Date
shall not exceed the total earnings on funds in the Distribution Account payable
pursuant to Section 4.02(b)(ii) hereof earned since the prior Distribution Date.
Memorandum: Not applicable.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
to Mortgage Electronic Registration Systems, Inc.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the
MERS(R) System.
MERS(R) System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The mortgage identification number for any MERS Mortgage Loan.
Minimum Auction Price: With respect to any Distribution Date on which
an Auction is being held, an amount equal to the sum of (a) 100% of the current
aggregate Stated Principal Balance of the Mortgage Loans, plus accrued interest
thereon, (b) the fair market value of any related REO Property in the Trust Fund
and all other property in the Trust Fund being purchased, (c) any unreimbursed
Servicing Advances related to the Mortgage Loans and (d) any expenses incurred
by the Auction Administrator in the Auction process.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
Moody's: Xxxxx'x Investors Service, Inc., or any successor thereto. If
Xxxxx'x is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 11.07 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 or the Master Servicer.
Mortgage: A mortgage, deed of trust or other instrument encumbering a
fee simple interest in real property securing a Mortgage Note, together with
improvements thereto.
32
Mortgage Documents: With respect to each Mortgage Loan, the mortgage
documents required to be delivered to the Custodian.
Mortgage Loan: A Mortgage and the related notes or other evidences of
indebtedness secured by each such Mortgage conveyed, transferred, sold, assigned
to or deposited with the Trustee pursuant to Section 2.01 (including any REO
Property), including without limitation, each Mortgage Loan listed on the
Mortgage Loan Schedule, as amended from time to time.
Mortgage Loan Auction Price: The price, calculated as set forth in
Section 7.01(b), to be paid in connection with the purchase of the Mortgage
Loans by the Auction Purchaser.
Mortgage Loan Schedule: The schedule attached hereto as Schedule A,
which shall identify each Mortgage Loan, as such schedule may be amended by the
Depositor or a Servicer from time to time to reflect the addition of Replacement
Mortgage Loans to, or the deletion of Deleted Mortgage Loans from, the Trust
Fund. Such schedule shall, among other things (i) designate the Servicer
servicing such Mortgage Loan and the applicable Servicing Fee Rate; (ii)
[reserved], (iii) identify any LPMI Mortgage Loan and designate the rate at
which the premium for such insurance is calculated and (iv) separately identify
the Additional Collateral Mortgage Loans, if any.
Mortgage Note: The original executed note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage under a Mortgage Loan.
Mortgage Rate: As to any Mortgage Loan, the annual rate of interest
borne by the related Mortgage Note.
Mortgaged Property: The underlying property, including any Additional
Collateral, securing a Mortgage Loan which, with respect to a Cooperative Loan,
is the related Cooperative Shares and Proprietary Lease.
MortgageIT Mortgage Loan: Each Mortgage Loan originated by MortgageIT,
Inc. and listed on the Mortgage Loan Schedule.
MortgageIT Purchase Agreement: The Mortgage Loan Purchase Agreement
listed in Exhibit E hereto between the Seller and MortgageIT, Inc.
Mortgagor: The obligor on a Mortgage Note.
MSMCI Mortgage Loan: A Mortgage Loan sold by the Seller to the
Depositor pursuant to the MSMCI Purchase Agreement.
MSMCI Purchase Agreement: The Mortgage Loan Purchase Agreement listed
in Exhibit E hereto between the Seller and the Depositor.
Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan
or any other disposition of related Mortgaged Property, the related Liquidation
Proceeds net of Advances, Servicer Advances, Servicing Fees and any other
accrued and unpaid servicing fees received and retained in connection with the
liquidation of such Mortgage Loan or Mortgaged Property.
33
Net Monthly Excess Cashflow: For any Distribution Date, the excess, if
any, of (x) the Available Distribution Amount for the Distribution Date over (y)
the sum for the Distribution Date of the aggregate of the Interest Distribution
Amounts payable to the holders of the Certificates, the Principal Distribution
Amount.
Net Mortgage Rate: With respect to any Mortgage Loan and any
Distribution Date, the related Mortgage Rate as of the Due Date in the month
preceding the month of such Distribution Date reduced by the Aggregate Expense
Rate for such Mortgage Loan.
Net Prepayment Interest Shortfalls: As to any Distribution Date, the
amount by which the aggregate of Prepayment Interest Shortfalls exceeds the
Compensating Interest Payments for that Distribution Date (and any amounts paid
by the Master Servicer in respect of such shortfalls pursuant to Section 5.06).
Each Class' pro rata share of the Net Interest Shortfalls on the Mortgage Loans
shall be based on the amount of interest the Class otherwise would have been
entitled to receive on such Distribution Date.
Net Swap Payment: Not Applicable.
Net Swap Receipt: Not Applicable.
Net WAC Pass-Through Rate: For any Distribution Date, a per annum rate
equal to the Weighted Average Net Mortgage Rate of the Mortgage Loans as of the
first day of the month preceding the month in which such Distribution Date
occurs, adjusted in the case of the LIBOR Certificates only, to accrue on the
basis of a 360-day year and the actual number of days in the related Interest
Accrual Period, except that with respect to the October 2006 Distribution Date,
the number of days in the related Interest Accrual Period shall be 26.
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
Certificate.
Non-Delay Certificates: As specified in the Preliminary Statement.
Non-permitted Foreign Holder: As defined in Section 3.03(f).
Non-U.S. Person: Any person other than a "United States person" within
the meaning of Section 7701(a)(30) of the Code.
Nonrecoverable Advance: Any portion of an Advance or Servicer Advance
previously made or proposed to be made by the Master Servicer and/or a Servicer
(as certified in an Officer's Certificate of such Servicer), which in the good
faith judgment of such party, shall not be ultimately recoverable by such party
from the related Mortgagor, related Liquidation Proceeds or otherwise.
Notional Amount: Not applicable.
Notional Amount Certificates: As specified in the Preliminary
Statement.
Offered Certificates: As specified in the Preliminary Statement.
34
Offering Document: The Prospectus or the Memorandum, as applicable.
Officer's Certificate: A certificate signed by two Authorized Officers
of the Depositor or the Chairman of the Board, any Vice Chairman, the President,
any Vice President or any Assistant Vice President of the Master Servicer or the
Securities Administrator or in the case of any other Person, signed by an
authorized officer of such Person, and in each case delivered to the Trustee or
the Securities Administrator, as applicable signed by an authorized officer of
that Person.
Officer's Certificate of a Servicer: A certificate (i) 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 a Servicer, or (ii) if provided for herein, signed by a Servicing
Officer, as the case may be, and delivered to the Trustee, the Securities
Administrator or the Master Servicer, as required hereby.
Opinion of Counsel: A written opinion of counsel, reasonably acceptable
in form and substance to the Trustee, the Securities Administrator or the Master
Servicer, as required hereby, and who may be in-house or outside counsel to the
Depositor, the Master Servicer, the Securities Administrator or the Trustee but
which must be Independent outside counsel with respect to any such opinion of
counsel concerning the transfer of any Residual Certificate or concerning
certain matters with respect to ERISA, or the taxation, or the federal income
tax status, of each REMIC.
Opteum Mortgage Loan: Each Mortgage Loan originated by Opteum Financial
Services, LLC and listed on the Mortgage Loan Schedule.
Opteum Purchase Agreement: The Mortgage Loan Purchase Agreement listed
in Exhibit E hereto between the Seller and Opteum Financial Services, LLC.
Original Applicable Credit Support Percentage: Not applicable.
Originator: Any one of American Home Mortgage Corporation, First
National Bank of Nevada, GreenPoint Mortgage Funding, Inc., The Hemisphere
National Bank, MortgageIT, Inc., Opteum Financial Services, LLC, Quicken Loans,
Inc. and PHH Mortgage Corporation, as applicable.
Overcollateralization Increase Amount: With respect to any Distribution
Date, the amount, if any, by which the Overcollateralization Target Amount
exceeds the Overcollateralized Amount for such Distribution Date (calculated for
this purpose only after assuming that 100% of the Principal Remittance Amount on
such Distribution Date has been distributed).
Overcollateralization Release Amount: For any Distribution Date, the
lesser of (1) the Principal Remittance Amount and (2) the excess of (a) the
Overcollateralized Amount over (b) the Overcollateralization Target Amount. In
addition, in connection with the final distribution on the Certificates pursuant
to Section 7.02 hereof, the Overcollateralization Release Amount for the related
Distribution Date shall also include the excess, if any of, (a) the purchase
price paid for the Mortgage Loans and any REO Properties related to the Mortgage
Loans pursuant to
35
Section 7.01 hereof, less any costs incurred by the Trust Fund in connection
with the liquidation thereof pursuant to Section 7.02 hereof, over (b) the
amount distributed on the Certificates on that Distribution Date.
Overcollateralization Target Amount: With respect to any Distribution
Date (i) prior to the Stepdown Date, the product of (x) 1.05% and (y) the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
(ii) on and after the Stepdown Date, provided that a Trigger Event is not in
effect, the lesser of (a) the product of (x) 2.10% and (y) the aggregate Stated
Principal Balance of the Mortgage Loans as of the related Due Date and (b) the
product of (x) 1.05% and (y) the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date and (iii) on and after the Stepdown Date,
if a Trigger Event is in effect, the Overcollateralization Target Amount for the
immediately preceding Distribution Date; provided, however, that on each
Distribution Date the Overcollateralization Target Amount shall not be lower
than $1,824,496.
Overcollateralized Amount: As of the Closing Date, an amount equal to
$5,477,433. With respect to any Distribution Date following the first
Distribution Date, the amount by which the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period exceeds the
aggregate Class Principal Balances of the Offered Certificates after taking into
account all payments of principal on such Distribution Date.
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.
Paying Agent: Any paying agent appointed pursuant to Section 3.08. The
initial Paying Agent shall be the Securities Administrator under this Agreement.
PCOAB: The Public Company Accounting Oversight Board.
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 initial principal balance or notional
amount, as applicable, of such Certificate by the aggregate of the Class
Principal Balance or Notional Amount, as applicable, of all Certificates of the
same Class.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof,
provided that such obligations are backed by the full faith and credit
of the United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency, or such lower
rating as shall not result in the downgrading or withdrawal of the
ratings then assigned to the Certificates by the Rating Agencies, as
evidenced by a signed writing delivered by each Rating Agency;
36
(iii) commercial or finance company paper which is then
receiving the highest commercial or finance company paper rating of
each Rating Agency rating such paper, or such lower rating as shall not
result in the downgrading or withdrawal of the ratings then assigned to
the Certificates by the Rating Agencies, as evidenced by a signed
writing delivered by each Rating Agency;
(iv) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or trust
company incorporated under the laws of the United States or of any
state thereof and subject to supervision and examination by federal
and/or state banking authorities, provided that the commercial paper
and/or long-term unsecured debt obligations of such depository
institution or trust company (or in the case of the principal
depository institution in a holding company system, the commercial
paper or long-term unsecured debt obligations of such holding company,
but only if Xxxxx'x is not the applicable Rating Agency) are then rated
one of the two highest long-term and the highest short-term ratings of
each Rating Agency for such securities, or such lower ratings as shall
not result in the downgrading or withdrawal of the ratings then
assigned to the Certificates by the Rating Agencies, as evidenced by a
signed writing delivered by each Rating Agency;
(v) demand or time deposits or certificates of deposit issued
by any bank or trust company or savings institution to the extent that
such deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation acceptable to the Rating
Agencies at the time of the issuance of such agreements, as evidenced
by a signed writing delivered by each Rating Agency;
(vii) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered into
with a depository institution or trust company (acting as principal)
described in clause (iv) above;
(viii) securities (other than stripped bonds, stripped coupons
or instruments sold at a purchase price in excess of 115% of the face
amount thereof) bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any
state thereof which, at the time of such investment, have one of the
two highest ratings of each Rating Agency (except if the Rating Agency
is Moody's, such rating shall be the highest commercial paper rating of
Moody's for any such series), or such lower rating as shall not result
in the downgrading or withdrawal of the ratings then assigned to the
Certificates by the Rating Agencies, as evidenced by a signed writing
delivered by each Rating Agency;
(ix) interests in any money market fund which at the date of
acquisition of the interests in such fund and throughout the time such
interests are held in such fund has the highest applicable rating by
each Rating Agency rating such fund or such lower rating as shall not
result in a change in the rating then assigned to the Certificates by
each Rating Agency, as evidenced by a signed writing delivered by each
Rating Agency, including
37
funds for which the Trustee, the Master Servicer, the Securities
Administrator or any of its Affiliates is investment manager or
adviser;
(x) short-term investment funds sponsored by any trust company
or national banking association incorporated under the laws of the
United States or any state thereof which on the date of acquisition has
been rated by each applicable Rating Agency in their respective highest
applicable rating category or such lower rating as shall not result in
a change in the rating then specified stated maturity and bearing
interest or sold at a discount acceptable to each Rating Agency as
shall not result in the downgrading or withdrawal of the ratings then
assigned to the Certificates by the Rating Agencies, as evidenced by a
signed writing delivered by each Rating Agency; and
(xi) such other investments having a specified stated maturity
and bearing interest or sold at a discount acceptable to the Rating
Agencies as shall not result in the downgrading or withdrawal of the
ratings then assigned to the Certificates by the Rating Agencies, as
evidenced by a signed writing delivered by each Rating Agency;
provided, that no such instrument shall be a Permitted Investment if (i) such
instrument evidences the right to receive interest only payments with respect to
the obligations underlying such instrument or (ii) such instrument would require
the Depositor to register as an investment company under the Investment Company
Act of 1940, as amended.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
PHH Purchase Agreement: The Mortgage Loan Purchase and Warranties
Agreement listed in Exhibit E hereto among the Seller, PHH Mortgage Corporation
(formerly known as Cendant Mortgage Corporation), as a seller and servicer, and
Xxxxxx'x Gate Residential Mortgage Trust, as a seller.
PHH Purchase and Servicing Agreement: Collectively, the PHH Purchase
Agreement and the PHH Servicing Agreement.
PHH Serviced Mortgage Loan: Each Mortgage Loan originated and serviced
by PHH Mortgage Corporation (formerly known as Cendant Mortgage Corporation) and
listed on the Mortgage Loan Schedule.
PHH Servicing Agreement: Second Amended and Restated Mortgage Loan Flow
Purchase, Sale & Servicing Agreement listed on Exhibit E hereto between the
Seller and PHH Mortgage Corporation (formerly known as Cendant Mortgage
Corporation) and Xxxxxx'x Gate Residential Mortgage Trust.
Plan: Any employee benefit plan or other plan or arrangement subject to
Section 406 of ERISA or Section 4975 of the Code, including individual
retirement accounts and annuities, Xxxxx plans and collective investment funds
and separate accounts in which such plans, accounts or arrangements are
invested.
38
Plan Asset Regulations: The Department of Labor regulations set forth
in 29 C.F.R. ss.2510.3-101.
Planned Balance: With respect to any group of Planned Principal Classes
or Components in the aggregate and any Distribution Date appearing in Schedule B
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 B hereto, the applicable amount appearing opposite
such Distribution Date for such Class or Component.
Planned Principal Classes: As specified in the Preliminary Statement.
Prepayment Interest Shortfall: With respect to each Mortgage Loan, the
amount of the shortfall in interest payable on such Mortgage Loan that occurs as
a result of the prepayment by the related Mortgagor of such Mortgage Loan
calculated in accordance with formula set forth in the related Purchase and
Servicing Agreement.
Prepayment Penalty: As to a Mortgage Loan, any penalty payable by a
Mortgagor in connection with certain partial prepayments and all prepayments in
full made within the related Prepayment Penalty Period, the Prepayment Penalties
with respect to each applicable Mortgage Loan so held by the Trust Fund being
identified in the Prepayment Penalty Schedule.
Prepayment Penalty Period: As to any Mortgage Loan, the period of time
during which a Prepayment Penalty may be imposed.
Prepayment Penalty Schedule: As of any date, the list of Prepayment
Penalties included in the Trust Fund on that date (including the Prepayment
Penalty summary attached thereto). The Prepayment Penalty Schedule shall set
forth the following information with respect to each Prepayment Penalty:
o the Mortgage Loan account number;
o a code indicating the type of Prepayment Penalty;
o the state of origination in which the related Mortgage Property is
located;
o the first date on which a monthly payment is or was due under the
related Mortgage Note;
o the term of the Prepayment Penalty;
o the original principal amount of the related Mortgage Loan; and
o the Cut-off Date Principal Balance of the related Mortgage Loan.
The Prepayment Penalty Schedule shall be amended from time to time by
the Seller in accordance with this Agreement.
Prepayment Period: With respect to any Mortgage Loan and any
Distribution Date, the calendar month preceding that Distribution Date.
39
Prepayment Shift Percentage: Not applicable.
Primary Mortgage Insurance Policy: Each policy of primary mortgage
guaranty insurance or any replacement policy therefor with respect to any
Mortgage Loan.
Principal Distribution Amount: For any Distribution Date will be the
sum of the Basic Principal Distribution Amount and the Extra Principal
Distribution Amount, in each case for that Distribution Date, and, with respect
to the first Distribution Date, the $100 deposited in respect of the Class A-R
Certificates pursuant to Section 2.01 hereof.
Principal Prepayment: Any payment of principal by a Mortgagor on a
Mortgage Loan that is received in advance of its scheduled Due Date and is not
accompanied by an amount representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Reductions: Not applicable.
Principal Remittance Amount: For the Certificates and any Distribution
Date, the sum of
(i) the principal portion of all Scheduled Payments on the Mortgage
Loans due during the related Due Period, whether or not received on or prior to
the related Determination Date;
(ii) the principal portion of all proceeds received in respect of the
repurchase of a Mortgage Loan (or, in the case of a substitution, certain
amounts representing a principal adjustment as required by this Agreement)
during the related Prepayment Period; and
(iii) the principal portion of all other unscheduled collections,
including Insurance Proceeds, condemnation proceeds, Liquidation Proceeds and
all partial Principal Prepayments and Principal Prepayments in full, received
during the related Prepayment Period, to the extent applied as recoveries of
principal on the Mortgage Loans, provided, that in no event will the Principal
Remittance Amount with respect to any Distribution Date be (x) less than zero or
(y) greater than the then outstanding aggregate Class Principal Balance of the
Certificates.
Priority Amount: With respect to any Distribution Date, the amount
equal to the product of (i) the Priority Percentage, (ii) the Shift Percentage
and (iii) the portion of the Principal Distribution Amount allocable to the
Class A Certificates for that Distribution Date.
Priority Percentage: With respect to any Distribution Date, the
fraction, expressed as a percentage, the numerator of which is the aggregate
Class Principal Balance of the Class A-6A and Class A-6B Certificates and the
denominator of which is the aggregate Class Principal Balance of the Class A
Certificates, in each case prior to giving effect to any distributions of
principal on the Certificates on that Distribution Date.
Private Certificate: As specified in the Preliminary Statement.
40
Pro Rata Share: Not applicable.
Pro Rata Subordinated Percentage: Not applicable.
Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
Proprietary Lease: With respect to any Cooperative Property, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Cooperative Shares.
Prospectus: The prospectus supplement dated September 26, 2006,
together with the accompanying prospectus dated March 14, 2006, relating to the
Certificates.
Purchase and Servicing Agreements: Collectively, the mortgage loan
purchase and servicing agreements, each as amended by the related
Acknowledgement, listed in Exhibit E hereto, as each such agreement may be
amended or supplemented from time to time as permitted hereunder.
Purchase Date: As defined in Section 7.01(c).
Purchase Price: With respect to any Mortgage Loan required or permitted
to be purchased by the Seller or Depositor pursuant to this Agreement, or by the
related Originator or Servicer pursuant to the related Purchase and Servicing
Agreement, an amount equal to the sum of (i) 100% of the unpaid principal
balance of the Mortgage Loan on the date of such purchase and (ii) accrued
interest thereon at the applicable Net Mortgage Rate from the date through which
interest was last paid by the Mortgagor to the Due Date in the month in which
the Purchase Price is to be distributed to Certificateholders, or such other
amount as may be specified in the related Purchase and Servicing Agreement and
(iii) costs and damages incurred by the Trust Fund in connection with a
repurchase pursuant to Section 2.05 hereof that arises out of a violation of any
predatory or abusive lending law with respect to the related Mortgage Loan.
Quicken Mortgage Loan: Each Mortgage Loan originated by Quicken Loans,
Inc. and listed on the Mortgage Loan Schedule.
Quicken Purchase Agreement: The Mortgage Loan Purchase Agreement listed
in Exhibit E hereto between the Seller and Quicken Loans, Inc.
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.
Realized Loss: With respect to each Liquidated Mortgage Loan, an amount
(not less than zero or more than the Stated Principal Balance of the related
Mortgage Loan) as of the date of such liquidation, equal to (i) the Stated
Principal Balance of the Liquidated Mortgage Loan as of the date of such
liquidation, plus (ii) interest at the Net Mortgage Rate from the Due Date as to
41
which interest was last paid or advanced (and not reimbursed) to
Certificateholders up to the Due Date in the month in which Liquidation Proceeds
are required to be distributed on the Stated Principal Balance of such
Liquidated Mortgage Loan from time to time, minus (iii) the Liquidation
Proceeds, if any, received during the month in which such liquidation occurred,
to the extent applied as recoveries of interest at the Net Mortgage Rate and to
principal of the Liquidated Mortgage Loan. With respect to each Mortgage Loan
which has become the subject of a Deficient Valuation, if the principal amount
due under the related Mortgage Note has been reduced, the difference between the
principal balance of the Mortgage Loan outstanding immediately prior to such
Deficient Valuation and the principal balance of the Mortgage Loan as reduced by
the Deficient Valuation. With respect to each Mortgage Loan which has become the
subject of a Debt Service Reduction and any Distribution Date, the amount, if
any, by which the principal portion of the related Scheduled Payment has been
reduced.
To the extent the Master Servicer or a Servicer receives Subsequent
Recoveries with respect to any Mortgage Loan, the amount of the Realized Loss
with respect to that Mortgage Loan will be reduced by such Subsequent
Recoveries.
Recognition Agreement: An agreement among a Cooperative Corporation, a
lender and a Mortgagor with respect to a Cooperative Loan whereby such parties
(i) acknowledge that such lender may make, or intends to make, such Cooperative
Loan, and (ii) make certain agreements with respect to such Cooperative Loan.
Record Date: As to any Distribution Date (i) with respect to the
Non-Delay Certificates, the last Business Day preceding such Distribution Date
(or the Closing Date, in the case of the first Distribution Date) unless such
Certificates shall no longer be Book-Entry Certificates, in which case the
Record Date shall be the last Business Day of the month preceding the month of
such Distribution Date and (ii) in the case of the Delay Certificates (including
the Non-Delay Certificates that are subsequently reissued as Definitive
Certificates), the last Business Day of the month preceding the month of each
Distribution Date.
Redemption Price: With respect to the Certificates, in the aggregate,
and any Distribution Date, the sum of (a) 100% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the related Due Date (after giving effect to
Principal Prepayments received in the related Prepayment Period), (b) the fair
market value of any related REO Property and (c) all amounts (including, without
limitation, all previously unreimbursed Advances and Servicer Advances and
accrued and unpaid Servicing Fees ) payable or reimbursable to the Trustee, the
Securities Administrator, the Master Servicer, the Servicers or the Custodian
pursuant to this Agreement, the Purchase and Servicing Agreements, or (to the
extent such amounts are not paid to the Custodian by the Seller) related to the
Mortgage Loans.
Refinancing Mortgage Loan: Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.
Regular Certificates: As specified 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
42
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.
Relevant Servicing Criteria: The Servicing Criteria applicable to the
various parties, as set forth on Exhibit O attached hereto. For clarification
purposes, multiple parties can have responsibility for the same Relevant
Servicing Criteria. With respect to a Servicing Function Participant engaged by
the Master Servicer, the Securities Administrator, any Servicer or the
Custodian, the term "Relevant Servicing Criteria" may refer to a portion of the
Relevant Servicing Criteria applicable to such parties.
Relief Act: The Servicemembers' Civil Relief Act (formerly known as the
Soldiers' and Sailors' Civil Relief Act of 1940), as amended, and any similar
state laws.
Relief Act Reduction: A reduction in the amount of the monthly interest
payment on a Mortgage Loan pursuant to the Servicemembers' Civil Relief Act.
Relief Act Shortfalls: With respect to any Distribution Date and any
Mortgage Loan as to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended calendar month as a result of
the application of the Relief Act, the amount, if any, by which (i) interest
collectible on such Mortgage Loan for the most recently ended calendar month is
less than (ii) interest accrued thereon for such month pursuant to the Mortgage
Note.
REMIC: Each pool of assets in the Trust Fund designated as a REMIC as
described in the Preliminary Statement.
REMIC 1: As specified in the Preliminary Statement.
REMIC 1 Interest: As specified in the Preliminary Statement.
REMIC 1 Regular Interest: As specified in the Preliminary Statement.
REMIC Provisions: The provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Sections 860A
through 860G of the Code, and related provisions, and regulations, including
proposed regulations and rulings, and administrative pronouncements promulgated
thereunder, as the foregoing may be in effect from time to time.
REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan or otherwise treated as having been acquired pursuant to the REMIC
Provisions.
Replacement Mortgage Loan: A mortgage loan substituted by an Originator
or the Seller for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in a Request for Release, (i) have a Stated Principal
Balance, after deduction of all Scheduled Payments due in the month of
substitution, not in excess of the Stated Principal Balance of the Deleted
Mortgage Loan, (ii) if such Mortgage Loan is a fixed-rate Mortgage Loan, have a
43
Mortgage Rate not less than (and not more than two percentage points greater
than) the mortgage rate of the Deleted Mortgage Loan, (iii) if such Mortgage
Loan is an adjustable-rate Mortgage Loan, have a Mortgage Rate not less than
(and not more than two percentage points greater than) the mortgage rate of the
Deleted Mortgage Loan, (iv) have a Loan-to-Value Ratio equal to or less than
that of the Deleted Mortgage Loan, (v) have a remaining term to maturity not
greater than (and not more than one year less than) that of the Deleted Mortgage
Loan, (vi) is otherwise acceptable to the Seller, (vii) if such Mortgage Loan is
an adjustable-rate Mortgage Loan, have the same adjustment date as that of the
Deleted Mortgage Loan, (viii) if such Mortgage Loan is an adjustable-rate
Mortgage Loan, have a minimum Mortgage Rate not less than that of the Deleted
Mortgage Loan, (ix) if such Mortgage Loan is an adjustable-rate Mortgage Loan,
have the same Index as that of the Deleted Mortgage Loan, (x) comply with all of
the representations and warranties set forth in the related underlying servicing
agreement, as modified by any related assignment thereof, and (xi) shall be
accompanied by an Opinion of Counsel that such Replacement Mortgage Loan would
not adversely affect the REMIC status of any REMIC created hereunder or would
not otherwise be prohibited by this Pooling and Servicing Agreement.
Replacement Swap Counterparty Payment: Not Applicable.
Reportable Event: As defined in Section 12.03 hereof.
Reporting Party: The Depositor, any Originator, the Master Servicer,
the Custodian, any Servicer, any originator identified in the Prospectus
Supplement, any credit enhancement provider described herein and any other
material transaction party as may be mutually agreed between the Depositor and
the Master Servicer from time to time for the purpose of complying with the
requirements of the Commission.
Reporting Subcontractor: With respect to the Master Servicer, the
Securities Administrator or the Custodian, any Subcontractor determined by such
Person pursuant to Section 12.08(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.
Repurchase Price: With respect to any Mortgage Loan purchased from the
Trust pursuant to Section 2.07 hereof, 100% of the unpaid principal balance of
such Mortgage Loan, plus all related accrued and unpaid interest, and the amount
of any unreimbursed Servicing Advances made by the Servicers or the Master
Servicer related to the Mortgage Loan.
Request for Release: The Request for Release submitted by the
applicable Servicer to the Trustee or the applicable Custodian, as applicable,
substantially in the form of Exhibit M or the equivalent form under the
applicable Custodial Agreement.
Required Coupon: Not applicable.
Required Distributions: Not applicable.
Reserve Fund: A Reserve Fund established by the Securities
Administrator on behalf of the Trustee for the benefit of the Holders of the
Certificates. The Reserve Fund is an "outside Reserve Fund" within the meaning
of Treasury regulation Section 1.860G-2(h), which is not an asset of any REMIC,
ownership of which is evidenced by the Class OC Certificates, and which is
established and maintained pursuant to Section 5.10(d).
44
Reserve Fund Deposit: $1,000.
Residual Certificate: The Class A-R Certificates.
Responsible Officer: With respect to the Trustee, any officer in the
corporate trust department or similar group of the Trustee with direct
responsibility for the administration of this Agreement and also, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his or her knowledge of and familiarity with the particular
subject. With respect to the Master Servicer, any officer in its master
servicing operations with direct responsibility for the Administration of this
Agreement. With respect to the Securities Administrator, any officer in the
corporate trust department or similar group of the Securities Administrator with
direct responsibility for the administration of this Agreement and also, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his or her knowledge of and familiarity with the
particular subject.
Restricted Classes: As defined in Section 5.02(e).
Restricted Global Security: As defined in Section 3.01(c).
Rule 144A: Rule 144A under the Securities Act.
SAIF: The Saving's Association Insurance Fund, or any successor
thereto.
Xxxxxxxx-Xxxxx Act: 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).
Xxxxxxxx-Xxxxx Certification: A written certification covering the
activities of all Servicing Function Participants and signed by a senior officer
of the Master Servicer in charge of the master servicing function that complies
with (i) the Xxxxxxxx-Xxxxx Act of 2002, as amended from time to time, and (ii)
Exchange Act Rules 13a-14(d) and 15d-14(d), as in effect from time to time.
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, for
purposes of Section 11.07 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 and the Master Servicer.
Scheduled Balances: Not applicable.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due
on any Due Date allocable to principal and/or interest on such Mortgage Loan
which, unless otherwise specified in the related Purchase and Servicing
Agreement, shall give effect to any related Debt Service Reduction and any
Deficient Valuation that affects the amount of the monthly payment due on such
Mortgage Loan.
Scheduled Principal Classes: As specified in the Preliminary Statement.
45
Scheduled Principal Distribution Amount: Not applicable.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations thereunder.
Securities Administrator: Xxxxx Fargo Bank, National Association, not
in its individual capacity but solely as Securities Administrator, or any
successor in interest, or if any successor Securities Administrator shall be
appointed as herein provided, then such successor Securities Administrator.
Securities Administrator Compensation: With respect to any Securities
Administrator that is a successor to Xxxxx Fargo Bank, National Association as
Securities Administrator, the portion of the earnings on the funds on deposit in
the Distribution Account payable on each Distribution Date pursuant to Section
4.02(b)(ii) hereof agreed to by and between such Securities Administrator and
the successor master servicer; provided, that (x) such Securities Administrator
Compensation payable on each Distribution Date shall equal at least one day's
earnings accrued since the prior Distribution Date and (y) the sum of such
Securities Administrator Compensation and the Master Servicer Compensation
payable on each Distribution Date shall not exceed the total earnings on the
funds on deposit in the Distribution Account payable on each Distribution Date
pursuant to Section 4.02(b)(ii) hereof earned since the prior Distribution Date.
Seller: Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York corporation.
Senior Certificate Group: As specified in the Preliminary Statement.
Senior Certificates: As specified in the Preliminary Statement.
Senior Defaulted Swap Termination Payment: Not Applicable.
Senior Enhancement Percentage: For any Distribution Date and the Senior
Certificates, the percentage obtained by dividing (x) the sum of (i) the
aggregate Class Principal Balance of the Subordinated Certificates and (ii) the
Overcollateralized Amount by (y) the aggregate Stated Principal Balance of the
Mortgage Loans as of the end of the related Due Period, calculated after taking
into account distributions of principal on the Mortgage Loans and distribution
of the Principal Distribution Amount to the holders of the Certificates then
entitled to distributions of principal on such Distribution Date.
Senior Turbo Allocation Amount: Not applicable.
Sequential Trigger Event: With respect to any Distribution Date, a
Sequential Trigger Event is in effect if (a) with respect to any Distribution
Date occurring before October 2008, the circumstances in which the aggregate
amount of Realized Losses on the Mortgage Loans incurred since the Cut-off Date
through the last day of the related Prepayment Period divided by the aggregate
Stated Principal Balance of the Mortgage Loans as of the Cut-off Date exceeds
0.25% and (b) with respect to any Distribution Date occurring in or after
October 2008, a Trigger Event.
46
Servicer: Each Servicer under a Purchase and Servicing Agreement, and
its respective successors and assigns. As of the Closing Date, the Servicers of
the Mortgage Loans shall be GMAC Mortgage Corporation, GreenPoint Mortgage
Funding, Inc., The Hemisphere National Bank, Cendant Mortgage Corporation and
Xxxxx Fargo National Association.
Servicer Advance: A "Servicer Advance" or "Servicing Advance" as
defined in the applicable Purchase and Servicing Agreement.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d)
of Regulation AB, as the same may be amended from time to time.
Servicing Fee: As to any Distribution Date and each Mortgage Loan, an
amount equal to the product of (a) one-twelfth of the related Servicing Fee Rate
and (b) the Stated Principal Balance of such Mortgage Loan as of the first day
of the related Due Period.
Servicing Fee Rate: With respect to each Mortgage Loan and any
Distribution Date, the per annum rate specified in the related Purchase and
Servicing Agreement.
Servicing Function Participant: Any Sub-Servicer, Subcontractor or any
other Person, other than each Servicer, the Master Servicer, the Trustee, the
Securities Administrator and the Custodian, that is performing activities
addressed by the Servicing Criteria.
Servicing Officer: Any officer of the related Servicer involved in, or
responsible for, the administration and servicing of the related Mortgage Loans
whose name and facsimile signature appear on a list of servicing officers
furnished to the Master Servicer by the related Servicer on the Closing Date
pursuant to the related Purchase and Servicing Agreement, as such list may from
time to time be amended.
Shift Percentage: With respect to each Distribution Date, the
percentage set forth below for that Distribution Date:
Distribution Date Percentage
----------------- ----------
October 2006 --September 2009..................... 0%
October 2009 --September 2011..................... 45%
October 2011 --September 2012..................... 80%
October 2012 --September 2013..................... 100%
October 2013 and thereafter...................... 300%
Similar Law: As defined in Section 3.03(d) hereof.
Startup Day: The day designated as such pursuant to Section 10.01(b)
hereof.
Stated Principal Balance: As to any Mortgage Loan and Due Date, the
unpaid principal balance of such Mortgage Loan as of such Due Date as specified
in the amortization schedule at the time relating thereto (before any adjustment
to such amortization schedule by reason of any moratorium or similar waiver or
grace period) after giving effect to any previous partial Principal Prepayments
and Liquidation Proceeds allocable to principal (other than with respect to any
47
Liquidated Mortgage Loan) and to the payment of principal due on such Due Date
and irrespective of any delinquency in payment by the related Mortgagor.
Stepdown Date: The later to occur of:
(1) the earlier to occur of
(x) the Distribution Date in October 2009, and
(y) the Distribution Date on which the aggregate Class
Principal Balance of the Class A Certificates is reduced to zero; and
(2) the first Distribution Date on which the Senior Enhancement
Percentage (calculated for this purpose only after taking into account
distributions of principal on the Mortgage Loans, but prior to any distribution
of the Principal Distribution Amount to the holders of the Certificates then
entitled to distributions of principal on the Distribution Date) is greater than
or equal to 13.60%.
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 Mortgage Loans but
performs one or more discrete functions identified in Item 1122(d) of Regulation
AB with respect to Mortgage Loans under the direction or authority of any
Servicer (including a Sub-Servicer of any Servicer), the Securities
Administrator, the Master Servicer, the Trustee or the Custodian, as the case
may be.
Subordinated Certificates: As specified in the Preliminary Statement.
Subordinated Interest Distribution Amount: With respect to any Class of
Subordinated Certificates and any Distribution Date, interest accrued during the
related Interest Accrual Period on the related Class Principal Balance of that
Class immediately prior to the Distribution Date at the Pass-Through Rate for
that Class reduced (to an amount not less than zero), in the case of such Class,
by the allocable share, if any, for that Class of Prepayment Interest Shortfalls
on the Mortgage Loans to the extent not covered by (x) Compensating Interest
paid by the Master Servicer or the Servicers for the Mortgage Loans and (y)
Relief Act Interest Shortfalls on the Mortgage Loans.
Subsequent Recoveries: As to any Distribution Date, with respect to a
Liquidated Mortgage Loan that resulted in a Realized Loss in a prior calendar
month, amounts received by the Securities Administrator from the related
Servicer (net of any related expenses permitted to be reimbursed pursuant to
Section 4.02) specifically related to such Liquidated Mortgage Loan.
Sub-Servicer: Any Person that (i) is considered to be a Servicing
Function Participant, (ii) services Mortgage Loans on behalf of any Servicer,
and (iii) is responsible for the performance (whether directly or through
sub-servicers or Subcontractors) of Servicing functions required to be performed
under this Agreement, any related Servicing Agreement or any sub-servicing
agreement that are identified in Item 1122(d) of Regulation AB.
Substitution Adjustment Amount: As defined in the second paragraph of
Section 2.05(b).
48
Substitution Event: Not Applicable.
Swap Account: Not Applicable.
Swap Agreement: Not Applicable.
Swap Counterparty: Not Applicable.
Swap Payment Allocation: Not Applicable.
Swap Payment Rate: Not Applicable.
Swap Termination Date: Not Applicable.
Swap Termination Payment: 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 B 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 B hereto, the
applicable amount appearing opposite such Distribution Date for such Class or
Component.
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 Securities Administrator.
Tax Matters Person Certificate: The Class A-R Certificate with a
Denomination of $0.01.
Three Month Rolling Average: With respect to the end of the Due Period
related to any Distribution Date, will equal the rolling 3 month average
percentage of the aggregate Stated Principal Balance of the Mortgage Loans that
are 60 or more days Delinquent (including Mortgage Loans in foreclosure, REO
Property or discharged in bankruptcy).
Trigger Event: With respect to any Distribution Date, a Trigger Event
is in effect if (x) the Three Month Rolling Average with respect to the Mortgage
Loans exceeds 50.00% of the Senior Enhancement Percentage for the prior
Distribution Date, or (y) the aggregate amount of Realized Losses on the
Mortgage Loans incurred since the Cut-off Date through the last day of the
related Due Period divided by the aggregate outstanding principal balance of the
Mortgage Loans as of the Cut-off exceeds the applicable percentages set forth
below with respect to such Distribution Date:
49
Distribution Date Percentage
----------------- ----------
October 2008 --September 2009..................... 0.25% for the first month, plus an additional 1/12th of 0.35%
for each month thereafter
October 2009 --September 2010..................... 0.60% for the first month, plus an additional 1/12th of 0.45%
for each month thereafter
October 2010 --September 2011..................... 1.05% for the first month, plus an additional 1/12th of 0.45%
for each month thereafter
October 2011 --September 2012..................... 1.50% for the first month, plus an additional 1/12th of 0.30%
for each month thereafter
October 2012 and thereafter...................... 1.80%
Trust: Xxxxxx Xxxxxxx Mortgage Loan Trust 2006-12XS.
Trust Fund: The corpus of the trust created pursuant to this Agreement
consisting of (i) the Mortgage Loans and all interest and principal received on
or with respect thereto after the Cut-off Date (other than Scheduled Payments
due on or prior to the Cut-off Date) to the extent not applied in computing the
Cut-off Date Principal Balance thereof; (ii) all cash, instruments or property
held or required to be held in the Custodial Accounts and the Distribution
Account and all amounts deposited therein pursuant to the applicable provisions
of this Agreement; (iii) property that secured a Mortgage Loan and has been
acquired by foreclosure, deed-in-lieu of foreclosure or otherwise; (iv) the
Depositor's rights assigned to the Trustee under the Purchase and Servicing
Agreements, as modified by the Acknowledgements; (v) all insurance policies
related to the Mortgage Loans and any insurance proceeds; (vi) the pledge,
control and guaranty agreements and the Limited Purpose Surety Bond relating to
the Additional Collateral Mortgage Loans; (vii) the amounts on deposit in the
Reserve Fund and (viii) all proceeds of the conversion, voluntary or
involuntary, of any of the foregoing.
Trustee: LaSalle Bank National Association, a national banking
association, organized under the laws of the United States and any Person
succeeding the Trustee hereunder, or if any successor trustee or any co-trustee
shall be appointed as herein provided, then such successor trustee and such
co-trustee, as the case may be.
Trustee Mortgage Files: With respect to each Mortgage Loan, the
Mortgage Documents to be retained in the custody and possession of the Trustee
or Custodian on behalf of the Trustee identified in Section 2.01(a) hereof.
Turbo Allocation Amount: Not applicable.
UCC: The Uniform Commercial Code as enacted in the relevant
jurisdiction.
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.
Underwriter: As specified in the Preliminary Statement.
Underwriting Agreement: The Underwriting Agreement, dated September 26,
2006, among the Seller, the Depositor and the Underwriter.
50
Uniform Commercial Code: The Uniform Commercial Code as in effect in
any applicable jurisdiction from time to time.
Unpaid Interest Shortfall Amount: The sum of Relief Act Interest
Shortfalls and net prepayment interest shortfalls on the Mortgage Loans
allocated to such Class of Certificates on that Distribution Date and such
amounts from any prior Distribution Date remaining unpaid.
Unpaid Realized Loss Amount: The portion of any Realized Losses
previously allocated to that Class remaining unpaid from prior Distribution
Dates.
Unscheduled Principal Distribution Amount: Not applicable.
Voting Interests: The portion of the voting rights of all the
Certificates that is allocated to any Certificate for purposes of the voting
provisions of this Agreement. At all times during the term of this Agreement,
1.00% of all Voting Interests shall be allocated to the Class OC Certificates,
each Class of Notional Amount Certificates and the Class A-R Certificates.
Voting Interests shall be allocated among all other Classes of Certificates pro
rata based on Class Principal Balances for each Class then outstanding. Voting
Interests shall be allocated among the Certificates within each such Class in
proportion to their Certificate Balances or Percentage Interests.
Weighted Average Net Mortgage Rate: As to any Distribution Date, the
average of the Net Mortgage Rate of each Mortgage Loan, weighted on the basis of
the Applicable Fraction of its Stated Principal Balance as of the end of the
Prepayment Period related to the immediately preceding Distribution Date.
Xxxxx Fargo Serviced Mortgage Loan: Each Mortgage Loan serviced by
Xxxxx Fargo Bank, National Association and listed on the Mortgage Loan Schedule.
Xxxxx Fargo Servicing Agreement: The Servicing Agreement listed in
Exhibit E hereto between the Seller and Xxxxx Fargo Bank, National Association.
51
ARTICLE II
DECLARATION OF TRUST;
ISSUANCE OF CERTIFICATES
Section 2.01. Creation and Declaration of Trust Fund; Conveyance of
Mortgage Loans.
(a) Concurrently with the execution and delivery of this Agreement, the
Depositor does hereby transfer, assign, set over, deposit with and otherwise
convey to the Trustee, without recourse, subject to Sections 2.02 and 2.05, in
trust, all the right, title and interest of the Depositor in and to the Trust
Fund. Such conveyance includes, without limitation, (i) the Mortgage Loans,
including the right to all payments of principal and interest received on or
with respect to the Mortgage Loans on and after the Cut-off Date (other than
Scheduled Payments due on or before such date), and all such payments due after
such date but received prior to such date and intended by the related Mortgagors
to be applied after such date; (ii) all of the Depositor's right, title and
interest in and to all amounts from time to time credited to and the proceeds of
the Distribution Account, any Custodial Accounts or any Escrow Account
established with respect to the Mortgage Loans; (iii) all of the rights and
obligations of the Depositor as assignee of the Seller with respect to the
Seller's rights and obligations under the Purchase and Servicing Agreements
pursuant to the Acknowledgements; (iv) all of the Depositor's right, title or
interest in REO Property and the proceeds thereof; (v) all of the Depositor's
rights under any Insurance Policies related to the Mortgage Loans; (vi) $1,000
(which amount has been delivered by the Depositor to the Securities
Administrator to be held in the Distribution Account until distributed to the
Holders of the Class P Certificates pursuant to Section 5.02(a)) and $100, plus
interest, (which amount has been delivered by the Depositor to the Securities
Administrator to be held in the Distribution Account until distributed to the
Holders of the Class A-R Certificates pursuant to Section 5.02(a)); and (vii) if
applicable, the Depositor's security interest in any collateral pledged to
secure the Mortgage Loans, including the Mortgaged Properties and any Additional
Collateral relating to the Additional Collateral Mortgage Loans, including, but
not limited to, the pledge, control and guaranty agreements and the Limited
Purpose Surety Bond, to have and to hold, in trust; and the Trustee declares
that, subject to the review provided for in Section 2.02, it has received and
shall hold the Trust Fund, as trustee, in trust, for the benefit and use of the
Holders of the Certificates and for the purposes and subject to the terms and
conditions set forth in this Agreement, and, concurrently with such receipt, has
caused to be executed, authenticated and delivered to or upon the order of the
Depositor, in exchange for the Trust Fund, Certificates in the authorized
denominations evidencing the entire ownership of the Trust Fund.
The foregoing sale, transfer, assignment, set-over, deposit and
conveyance does not and is not intended to result in the creation or assumption
by the Trustee of any obligation of the Depositor, the Seller or any other
Person in connection with the Mortgage Loans or any other agreement or
instrument relating thereto except as specifically set forth therein.
In connection with such transfer and assignment of the Mortgage Loans,
the Depositor shall cause to be delivered and the Custodian acting on the
Trustee's behalf will continue to hold the documents or instruments listed below
52
with respect to each Mortgage Loan (each, a "Trustee Mortgage File") so
transferred and assigned:
(i) with respect to each Mortgage Loan, the original Mortgage Note
endorsed without recourse in proper form to the order of "LaSalle Bank National
Association, as Trustee of Xxxxxx Xxxxxxx Mortgage Loan Trust 2006-12XS,
Mortgage Pass-Through Certificates, without recourse", or in blank (in each
case, with all necessary intervening endorsements, as applicable);
(ii) with respect to each Mortgage Loan (other than a Cooperative Loan)
that is not a MERS Mortgage Loan, the original Mortgage with evidence of
recording thereon, or if the original Mortgage has not yet been returned from
the recording office, a copy of such Mortgage certified by the applicable
Originator, title company, escrow agent or closing attorney to be a true copy of
the original of the Mortgage which has been sent for recording in the
appropriate jurisdiction in which the Mortgaged Property is located, and in the
case of the each MERS Mortgage Loan, the original Mortgage, noting the presence
of the MIN of the Mortgage Loans and either language indicating that the
Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM Loan or if the
Mortgage Loan was not a MOM Loan at origination, the original Mortgage and the
assignment thereof to MERS, with evidence of recording indicated thereon;
(iii) with respect to each Mortgage Loan (other than a Cooperative
Loan) that is not a MERS Mortgage Loan, the Assignment of Mortgage in form and
substance acceptable for recording in the relevant jurisdiction, such assignment
being either (A) in blank, without recourse, or (B) endorsed to "LaSalle Bank
National Association, as Trustee of Xxxxxx Xxxxxxx Mortgage Loan Trust
2006-12XS, Mortgage Pass-Through Certificates, without recourse";
(iv) with respect to each Mortgage Loan (other than a Cooperative Loan)
that is not a MERS Mortgage Loan, the originals of all intervening assignments
of the Mortgage, if any, with evidence of recording thereon, or if the original
intervening assignment has not yet been returned from the recording office, a
copy of such assignment certified by the applicable Originator, title company,
escrow agent or closing attorney to be a true copy of the original of the
assignment which has been sent for recording in the appropriate jurisdiction in
which the Mortgaged Property is located;
(v) with respect to each Mortgage Loan (other than a Cooperative Loan),
the originals of all assumption, modification, consolidation or extension
agreements, if any, with evidence of recording thereon;
(vi) if any, with respect to each Mortgage Loan (other than a
Cooperative Loan), the original policy of title insurance (or a true copy
thereof) with respect to any such Mortgage Loan, or, if such policy has not yet
been delivered by the insurer, the title commitment or title binder to issue
same;
(vii) if any, with respect to each Mortgage Loan (other than a
Cooperative Loan), the original power of attorney and guaranty agreement with
respect to such Mortgage Loan;
(viii) [reserved];
(ix) with respect to each Mortgage Loan which constitutes a Cooperative
Loan:
53
(a) the original of any security agreement or similar
document executed in connection with the Cooperative
Loan;
(b) the original Recognition Agreement and the original
Assignment of Recognition Agreement;
(c) UCC-1 financing statements with recording information
thereon from the appropriate governmental recording
offices if necessary to perfect the security interest
of the Cooperative Loan under the Uniform Commercial
Code in the jurisdiction in which the Cooperative
Property is located, accompanied by UCC-3 financing
statements executed in blank for recordation of the
change in the secured party thereunder;
(d) an Estoppel Letter and/or Consent;
(e) a search for (i) federal tax liens, mechanics' liens,
lis pendens, judgments of record or otherwise against
(x) the Cooperative Corporation and (y) the seller of
the Cooperative Unit, (ii) filings of financing
statements and (iii) the deed of the cooperative
project into the Cooperative Corporation;
(f) the guaranty of the Mortgage Note and Cooperative
Loan, if any;
(g) the original Proprietary Lease and the Assignment of
Proprietary Lease executed by the Mortgagor in blank
or if the Proprietary Lease has been assigned by the
Mortgagor to the Seller, then the Seller must execute
an assignment of the Assignment of Proprietary Lease
in blank; and
(h) if any, the original or certified copy of the
certificates evidencing ownership of the Cooperative
Shares issued by the Cooperative Corporation and
related assignment of such certificates or an
assignment of such Cooperative Shares, in blank,
executed by the Mortgagor with such signature
guaranteed;
(x) [reserved]; and
(xi) any other document or instruments required to be delivered.
In addition, in connection with the assignment of any MERS Mortgage
Loan, it is understood that the related Originator will cause the MERS(R) System
to indicate that such Mortgage Loans have been assigned by the related
Originator to the Trustee in accordance with this Agreement for the benefit of
the Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
the information required by the MERS(R) System to identify the series of
Certificates issued in connection with such Mortgage Loans. It is further
understood that the related Originator will not, and the Master Servicer hereby
agrees that it will not, alter the information referenced in this paragraph with
respect to any Mortgage Loan during the term of this Agreement unless and until
such Mortgage Loan is repurchased in accordance with the terms of this
Agreement.
On or prior to the Closing Date, the Depositor shall cause to be
delivered to the Master Servicer, the Trustee and the Custodian an electronic
copy of the Mortgage Loan Schedule in a form acceptable to the Master Servicer,
the Depositor, the Trustee and the Custodian.
54
(b) As soon as is practicable after the Closing Date, the Depositor
shall cause the Servicer of any Additional Collateral Mortgage Loan to deliver
to the Custodian the Assignment and Notice of Transfer with respect to each
Additional Collateral Mortgage Loan as well as the assignments of any rights
with respect to each Additional Collateral Mortgage Loan under any Limited
Purpose Surety Bond.
(c) In instances where a title insurance policy is required to be
delivered to the Custodian on behalf of the Trustee and is not so delivered, the
Depositor will provide a copy of such title insurance policy to the Custodian on
behalf of the Trustee, as promptly as practicable after the execution and
delivery hereof, but in any case within 180 days of the Closing Date.
(d) For Mortgage Loans (if any) that have been prepaid in full after
the Cut-off Date and prior to the Closing Date, the Depositor, in lieu of
delivering the above documents, herewith delivers such amount to the Securities
Administrator, and delivers to the Securities Administrator, the Trustee, and
the Custodian, an Officer's Certificate which shall include a statement to the
effect that all amounts received in connection with such prepayment that are
required to be deposited in the Distribution Account pursuant to Section 4.01
have been so deposited. All original documents that are not delivered to the
Custodian on behalf of the Trustee shall be held by the Master Servicer or the
related Servicer in trust for the benefit of the Trustee and the
Certificateholders.
(e) Neither the Depositor nor the Trust will acquire or hold any
Mortgage Loan that would violate the representations made by the Seller set
forth in clauses (iv) through (vi) of Section 2.05(b) hereof.
Section 2.02. Acceptance of Trust Fund by Trustee; Review of
Documentation for Trust Fund.
(a) The Trustee, by execution and delivery hereof, acknowledges receipt
by it of notice from the Custodian that holds the documents identified in the
Initial Custodial Certification in the form annexed hereto as Exhibit L-1 (the
"Initial Custodial Certification") pertaining to the Mortgage Loans listed on
the Mortgage Loan Schedule.
(b) Nothing in this Agreement shall be construed to constitute an
assumption by the Trust Fund, the Trustee, the Custodian or the
Certificateholders of any unsatisfied duty, claim or other liability on any
Mortgage Loan or to any Mortgagor.
(c) Each of the parties hereto acknowledges that (i) the Custodian has
delivered to the Depositor, the Master Servicer and the Trustee, the Initial
Custodial Certification, in the form annexed hereto as Exhibit L-1, stating that
it has performed the applicable review of the Mortgage Loans as required herein
on the Closing Date and (ii) thereafter, if applicable, the Custodian shall
perform the applicable review of the Mortgage Loans and deliver the further
certifications (including but not limited to the Final Custodial Certification)
as provided herein.
With respect to the MSMCI Mortgage Loans only, not later than 180 days
after the Closing Date, the Trustee shall enforce the Custodian's obligation, to
deliver to the Depositor, the Master Servicer and the Trustee a Final Custodial
Certification in the form annexed hereto as Exhibit L-2 (the "Final Custodial
Certification"), with any applicable exceptions noted thereon.
55
To the extent that the Custodian must deliver a Final Certification, the Trustee
shall enforce the Custodian's obligation to make available, upon request of any
Certificateholder, a copy of any exceptions noted on the related Initial
Custodial Certification or the related Final Custodial Certification.
(d) Upon execution of this Agreement, the Depositor hereby delivers to
the Trustee (with a copy to the Master Servicer) and the Trustee acknowledges
receipt of the Acknowledgements, together with the related Purchase and
Servicing Agreements.
(e) Neither the Trustee nor the Custodian shall make any representation
as to: (i) the validity, legality, sufficiency, enforceability or genuineness of
any of the documents contained in the Trustee Mortgage File of any of the
Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, perfection, priority, effectiveness or suitability
of any such Mortgage Loan. Except as specifically required hereunder, neither
the Trustee nor the Custodian shall be responsible to verify the validity,
sufficiency or genuiness of any document in the Trustee Mortgage File.
Section 2.03. Representations and Warranties of the Depositor.
(a) The Depositor hereby represents and warrants to the Trustee, for
the benefit of the Certificateholders, and to the Master Servicer and the
Securities Administrator as of the Closing Date or such other date as is
specified, that:
(i) the Depositor is a corporation duly organized, validly
existing and in good standing under the laws governing its creation and
existence and has full corporate power and authority to own its
property, to carry on its business as presently conducted, to enter
into and perform its obligations under this Agreement, and to create
the trust pursuant hereto;
(ii) the execution and delivery by the Depositor of this
Agreement have been duly authorized by all necessary corporate action
on the part of the Depositor; neither the execution and delivery of
this Agreement, nor the consummation of the transactions herein
contemplated, nor compliance with the provisions hereof, will conflict
with or result in a breach of, or constitute a default under, any of
the provisions of any law, governmental rule, regulation, judgment,
decree or order binding on the Depositor or its properties or the
certificate of incorporation or bylaws of the Depositor;
(iii) the execution, delivery and performance by the Depositor
of this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice
to, the registration with, or the taking of any other action in respect
of, any state, federal or other governmental authority or agency,
except such as has been obtained, given, effected or taken prior to the
date hereof;
(iv) this Agreement has been duly executed and delivered by
the Depositor and, assuming due authorization, execution and delivery
by the Trustee, the Master Servicer and the Securities Administrator,
constitutes a valid and binding obligation of the Depositor enforceable
against it in accordance with its terms except as such enforceability
may be subject to (A) applicable bankruptcy and insolvency laws and
other similar laws affecting the enforcement of the rights of creditors
generally and (B) general principles of equity regardless of whether
such enforcement is considered in a proceeding in equity or at law;
(v) there are no actions, suits or proceedings pending or, to
the knowledge of the Depositor, threatened or likely to be asserted
against or affecting the Depositor, before or by any court,
administrative agency, arbitrator or governmental body (A) with
56
respect to any of the transactions contemplated by this Agreement or
(B) with respect to any other matter which in the judgment of the
Depositor will be determined adversely to the Depositor and will if
determined adversely to the Depositor materially and adversely affect
it or its business, assets, operations or condition, financial or
otherwise, or adversely affect its ability to perform its obligations
under this Agreement;
(vi) immediately prior to the transfer and assignment of the
Mortgage Loans to the Trustee, the Depositor was the sole owner of
record and holder of each Mortgage Loan, and the Depositor had good and
marketable title thereto, and had full right to transfer and sell each
Mortgage Loan to the Trustee free and clear, subject only to (1) liens
of current real property taxes and assessments not yet due and payable
and, if the related Mortgaged Property is a condominium unit, any lien
for common charges permitted by statute, (2) covenants, conditions and
restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage acceptable to
mortgage lending institutions in the area in which the related
Mortgaged Property is located and specifically referred to in the
lender's title insurance policy or attorney's opinion of title and
abstract of title delivered to the originator of such Mortgage Loan,
and (3) such other matters to which like properties are commonly
subject which do not, individually or in the aggregate, materially
interfere with the benefits of the security intended to be provided by
the Mortgage, of any encumbrance, equity, participation interest, lien,
pledge, charge, claim or security interest, and had full right and
authority, subject to no interest or participation of, or agreement
with, any other party, to sell and assign each Mortgage Loan pursuant
to this Agreement;
(vii) This Agreement creates a valid and continuing security
interest (as defined in the applicable Uniform Commercial Code (the
"UCC"), in the Mortgage Loans in favor of the Trustee, which security
interest is prior to all other liens, and is enforceable as such
against creditors of and purchasers from the Depositor;
(viii) The Mortgage Loans constitute "instruments" within the
meaning of the applicable UCC;
(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
Mortgage Loans. The Depositor has not authorized the filing of and is
not aware of any financing statement against the Depositor that
includes a description of the collateral covering the Mortgage Loans
other than a financing statement relating to the security interest
granted to the Trustee hereunder or that has been terminated. The
Depositor is not aware of any judgment or tax lien filings against the
Depositor;
(x) None of the Mortgage Loans have any marks or notations
indicating that such Mortgage Loans have been pledged, assigned or
otherwise conveyed to any Person other than the Trustee; and
(xi) The Depositor has received all consents and approvals
required by the terms of the Mortgage Loans to convey the Mortgage
Loans hereunder to the Trustee.
57
The foregoing representations made in this Section 2.03 shall survive
the termination of this Agreement and shall not be waived by any party hereto.
Section 2.04. Representations and Warranties of the Depositor and the
Seller as to the Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee with
respect to the Mortgage Loans or each Mortgage Loan, as the case may be, as of
the date hereof or such other date set forth herein that as of the Closing Date:
(a) Immediately prior to the transfer and assignment contemplated
herein, the Depositor was the sole owner and holder of the Mortgage Loans. The
Mortgage Loans were not assigned or pledged by the Depositor and the Depositor
had good and marketable title thereto, and the Depositor had full right to
transfer and sell the Mortgage Loans to the Trustee, for the benefit of the
Certificateholders, free and clear of any encumbrance, participation interest,
lien, equity, pledge, claim or security interest and had full right and
authority subject to no interest or participation in, or agreement with any
other party to sell or otherwise transfer the Mortgage Loans.
(b) As of the Closing Date, the Depositor has transferred all right,
title and interest in the Mortgage Loans to the Trustee on behalf of the Trust.
(c) As of the Closing Date, the Depositor has not transferred the
Mortgage Loans to the Trustee on behalf of the Trust with any intent to hinder,
delay or defraud an of its creditors.
It is understood and agreed that the representations and warranties set
forth in this Section 2.04 shall survive delivery of the respective Mortgage
Files to the Trustee or the Custodian and shall inure to the benefit of the
Trustee, notwithstanding any restrictive or qualified endorsement or assignment.
Section 2.05. Representations and Warranties of the Seller; Discovery
of Breach; Repurchase or Substitution of Mortgage Loans.
(a) With respect to the MSMCI Mortgage Loans the Seller hereby makes
the representations and warranties contained in Section 3.01 of the MSMCI
Purchase Agreement to and for the benefit of the Depositor, the Trustee and the
Trust Fund.
The Seller hereby represents and warrants that no Mortgage Loan
contains a provision whereby the related mortgagor is permitted to convert the
Mortgage Rate from an adjustable rate to a fixed rate.
With respect to the FNBN Mortgage Loans the Seller hereby makes the
representations and warranties contained in Section 9.02 of the FNBN Purchase
Agreement (other than the representation contained in Section 9.02(b) of the
FNBN Purchase Agreement) to and for the benefit of the Depositor, the Trustee
and the Trust Fund. With respect to the FNBN Mortgage Loans the Seller hereby
represents and warrants to and for the benefit of the Depositor, the Trustee and
the Trust Fund that all payments due on or prior to the Cut-off Date for each
FNBN
58
Mortgage Loan have been made as of the Closing Date, such FNBN Mortgage Loan is
not delinquent thirty (30) days or more in payment and has not been dishonored;
there are no material defaults under the terms of such FNBN Mortgage Loan; the
Seller has not advanced funds, or induced, solicited or knowingly received any
advance of funds from a party other than the owner of the Mortgaged Property
subject to the Mortgage, directly or indirectly, for the payment of any amount
required by any FNBN Mortgage Loan; as to each FNBN Mortgage Loan, there has
been no more than one thirty (30) day delinquency during the immediately
preceding thirty-day period. The Seller agrees to comply with the provisions of
this Section 2.05 in respect of a breach of any of such representations and
warranties.
With respect to the Quicken Mortgage Loans the Seller hereby makes the
representations and warranties contained in Section 9.02 of the Quicken Purchase
Agreement (other than the representation contained in Section 9.02(b) of the
Quicken Purchase Agreement) to and for the benefit of the Depositor, the Trustee
and the Trust Fund. With respect to the Quicken Mortgage Loans the Seller hereby
represents and warrants to and for the benefit of the Depositor, the Trustee and
the Trust Fund that all payments due on or prior to the Cut-off Date for each
Quicken Mortgage Loan have been made as of the Closing Date, such Quicken
Mortgage Loan is not delinquent thirty (30) days or more in payment and has not
been dishonored; there are no material defaults under the terms of such Quicken
Mortgage Loan; the Seller has not advanced funds, or induced, solicited or
knowingly received any advance of funds from a party other than the owner of the
Mortgaged Property subject to the Mortgage, directly or indirectly, for the
payment of any amount required by any Quicken Mortgage Loan; as to each Quicken
Mortgage Loan, there has been no more than one thirty (30) day delinquency
during the immediately preceding thirty-day period. The Seller agrees to comply
with the provisions of this Section 2.05 in respect of a breach of any of such
representations and warranties.
The Seller hereby represents and warrants to the Trustee with respect
to the Mortgage Loans as of the date hereof or such other date set forth herein
that as of the Closing Date:
(i) Each Mortgage Loan at origination complied in all material
respects with applicable predatory and abusive lending laws and
consummation of the transactions contemplated by this Agreement will
not involve the violation of any such laws.
(ii) All of the Mortgage Loans were originated in compliance
with all applicable laws, including, but not limited to, all applicable
anti-predatory and abusive lending laws.
(iii) None of the Mortgage Loans is covered by the Home
Ownership and Equity Protection Act of 1994 ("HOEPA").
(iv) None of the Mortgage Loans is a "high cost" loan as
defined by applicable predatory and abusive lending laws.
(v) No Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable, and with respect to the foregoing, the terms "High Cost
Loan" and "Covered Loan" have the meaning assigned to them in the then
current version of Standard & Poor's LEVELS(R), which is now Version
5.7 Glossary Revised, Appendix E which is attached
59
hereto as Exhibit Q (the "Glossary") where (x) a "High Cost Loan" is
each loan identified in the column "Category under applicable
anti-predatory lending law" of the table entitled "Standard & Poor's
High Cost Loan Categorization" in the Glossary as each such loan is
defined in the applicable anti-predatory lending law of the State or
jurisdiction specified in such table and (y) a "Covered Loan" is each
loan identified in the column "Category under applicable anti-predatory
lending law" of the table entitled "Standard & Poor's High Covered Loan
Categorization" in the Glossary as each such loan is defined in the
applicable anti-predatory lending law of the State or jurisdiction
specified in such table.
(vi) No Mortgage Loan originated on or after October 1, 2002
through March 6, 2003 is governed by the Georgia Fair Lending Act.
Upon discovery by the Depositor, the Seller or the related Originator
or receipt of written notice of any materially defective document in, or,
following the date of delivery to the Trustee of the Custodian's certifications,
that a document is missing from, a Trustee Mortgage File, or discovery by the
Trustee, the Depositor, the Seller or the related Originator of the breach by
such Originator or Seller of any representation or warranty under the related
Purchase and Servicing Agreement, as modified by the Acknowledgement, in the
case of the Originator, or under this Agreement, in the case of the Seller, in
respect of any Mortgage Loan which materially adversely affects the value of
that Mortgage Loan or the interest therein of the Certificateholders (a
"Defective Mortgage Loan") (each of the Depositor, the Seller and the related
Originator hereby agreeing to give written notice thereof to the Trustee and the
other of such parties), the Trustee, or its designee, shall promptly notify the
Depositor and the Seller or the related Originator, as applicable, in writing of
such nonconforming or missing document or breach and request that the Seller or
related Originator deliver such missing document or cure or cause the cure of
such defect or breach within a period of time specified in the related Purchase
and Servicing Agreement, and if the Seller or related Originator, as applicable,
does not deliver such missing document or cure such defect or breach in all
material respects during such period, the Trustee, shall enforce the obligations
of the related Originator under the related Purchase and Servicing Agreement, as
modified by the Acknowledgement, or the Seller under this Agreement, as
applicable, and cause the related Originator or the Seller, as the case may be,
to repurchase that Mortgage Loan from the Trust Fund at the Purchase Price on or
prior to the Determination Date following the expiration of such specified
period (subject to Section 2.05(c) below); provided, however, that, in
connection with any such breach that could not reasonably have been cured within
such specified period (unless permitted a greater period of time to cure under
the related Purchase and Servicing Agreement), subject to Section 2.05(c) below,
if the related Originator or the Seller, as applicable, shall have commenced to
cure such breach within such specified period, the related Originator or the
Seller shall be permitted to proceed thereafter diligently and expeditiously to
cure the same within such additional time as is reasonably necessary to cure
such breach. To the extent that the amount by which the Purchase Price (as
defined in this Agreement) exceeds the repurchase price payable by the related
Originator under the related Purchase and Servicing Agreement, including any
costs and damages that are incurred by the Trust Fund as a result of any
violation of any applicable federal, state, or local predatory or abusive
lending law arising from or in connection with the origination of any Mortgage
Loan repurchased by the related Originator or the Seller, the payment of such
excess shall be borne by the Seller. With respect to a breach of a
representation or warranty of a Hemisphere Serviced
60
Mortgage Loan or an Opteum Mortgage Loan by the related Originator under the
related Purchase and Servicing Agreement, if that Originator fails to cure the
breach or repurchase the affected Mortgage Loan within the time period required
by that Purchase and Servicing Agreement, the Seller hereby agrees to honor that
Originator's cure obligations. The Purchase Price for the repurchased Mortgage
Loan shall be deposited in the related Distribution Account, and the Trustee, or
its designee, upon receipt of written certification from the Securities
Administrator of such deposit, shall release or cause the Custodian to release
to the related Originator or the Seller, as applicable, the related Trustee
Mortgage File and shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, representation or warranties, as
either party shall furnish to it and as shall be necessary to vest in such party
any Mortgage Loan released pursuant hereto and the Trustee, or its designee,
shall have no further responsibility with regard to such Trustee Mortgage File
(it being understood that the Trustee shall have no responsibility for
determining the sufficiency of such assignment for its intended purpose). If
pursuant to the foregoing provisions the related Originator or the Seller
repurchases a Mortgage Loan that is a MERS Mortgage Loan, the related Servicer
shall cause MERS to designate on the MERS(R) System the related Originator or
the Seller, as applicable, as the beneficial holder of such Mortgage Loan.
In lieu of repurchasing any such Mortgage Loan as provided above,
either party may cause such Mortgage Loan to be removed from the Trust Fund (in
which case it shall become a Deleted Mortgage Loan) and substitute one or more
Replacement Mortgage Loans in the manner and subject to the limitations set
forth in Section 2.05(b) below. It is understood and agreed that the obligations
of the Originators and the Seller to cure or to repurchase (or to substitute
for) any related Mortgage Loan as to which a document is missing, a material
defect in a constituent document exists or as to which such a breach has
occurred and is continuing shall constitute the sole remedy against the such
party respecting such omission, defect or breach available to the Trustee on
behalf of the Certificateholders.
(b) Any substitution of Replacement Mortgage Loans for Deleted Mortgage
Loans made pursuant to Section 2.05(a) above must be effected prior to the last
Business Day that is within two years after the Closing Date. As to any Deleted
Mortgage Loan for which the related Originator or the Seller substitutes a
Replacement Mortgage Loan or Loans, such substitution shall be effected by
delivering to the Custodian, on behalf of the Trustee, for such Replacement
Mortgage Loan or Loans, the Mortgage Note, the Mortgage, any related assignment
thereof and the Acknowledgement to the Trustee, and such other documents and
agreements, with all necessary endorsements thereon, together with an Officers'
Certificate stating that each such Replacement Mortgage Loan satisfies the
definition thereof and specifying the Substitution Adjustment Amount (as
described below), if any, in connection with such substitution. Monthly Payments
due with respect to Replacement Mortgage Loans in the month of substitution
shall not be included as part of the Trust Fund and shall be retained by the
related Originator or the Seller, as applicable. For the month of substitution,
distributions to the Certificateholders shall reflect the collections and
recoveries in respect of such Deleted Mortgage in the Due Period preceding the
month of substitution and the related Originator or the Seller, as applicable,
shall thereafter be entitled to retain all amounts subsequently received in
respect of such Deleted Mortgage Loan. Upon such substitution, such Replacement
Mortgage Loan shall constitute part of the Trust Fund and shall be subject in
all respects to the terms of this Agreement and the related Purchase and
Servicing Agreement, as modified by the related
61
Acknowledgement, including all representations and warranties thereof included
in such Purchase and Servicing Agreement, as modified by the Acknowledgement, in
each case as of the date of substitution.
For any month in which an Originator or the Seller substitutes one or
more Replacement Mortgage Loans for one or more Deleted Mortgage Loans, the
related Servicer shall determine the excess (each, a "Substitution Adjustment
Amount"), if any, by which the aggregate Purchase Price of all such Deleted
Mortgage Loans exceeds the aggregate Stated Principal Balance of the Replacement
Mortgage Loans replacing such Deleted Mortgage Loans, together with one month's
interest on such excess amount at the applicable Net Mortgage Rate. On the date
of such substitution, the related Originator or Seller, as applicable, shall
deliver or cause to be delivered to the related Servicer for deposit in the
related Custodial Account an amount equal to the related Substitution Adjustment
Amount, if any, and the Custodian, on behalf of the Trustee, upon receipt of the
related Replacement Mortgage Loan or Loans and Request for Release and
certification by such Servicer of such deposit, shall release to the related
Originator or the Seller, as applicable, the related Trustee Mortgage File or
Files and the Trustee or the Custodian, as applicable, shall execute and deliver
such instruments of transfer or assignment, in each case without recourse, as
the related Originator or Seller shall deliver to it and as shall be necessary
to vest therein any Deleted Mortgage Loan released pursuant hereto.
In addition, the related Originator or the Seller, as applicable, shall
obtain at its own expense and deliver to the Trustee and the Securities
Administrator an Opinion of Counsel to the effect that such substitution (either
specifically or as a class of transactions) shall not cause an Adverse REMIC
Event. If such Opinion of Counsel cannot be delivered, then such substitution
may only be effected at such time as the required Opinion of Counsel can be
given.
(c) Upon discovery by the related Originator, the Seller, the Master
Servicer, the Depositor or the Trustee that any Mortgage Loan does not
constitute a "qualified mortgage" within the meaning of Section 860G(a)(3) of
the Code, the party discovering such fact shall within two Business Days give
written notice thereof to the other parties. In connection therewith, the
applicable party shall repurchase or, subject to the limitations set forth in
Section 2.05(b), substitute one or more Replacement Mortgage Loans for the
affected Mortgage Loan within 90 days of the earlier of discovery or receipt of
such notice with respect to such affected Mortgage Loan. Any such repurchase or
substitution shall be made in the same manner as set forth in Section 2.05(a)
above and/or in accordance with this Section 2.05(c). The Trustee shall
re-convey to the related Originator or the Seller, as applicable, the Mortgage
Loan to be released pursuant hereto in the same manner, and on the same terms
and conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty.
Section 2.06. Grant Clause.
(a) It is intended that the conveyance of the Depositor's right, title
and interest in and to property constituting the Trust Fund pursuant to this
Agreement shall constitute, and shall be construed as, a sale of such property
and not a grant of a security interest to secure a loan. However, if such
conveyance is deemed to be in respect of a loan, it is intended that: (1) the
rights and obligations of the parties shall be established pursuant to the terms
of this Agreement; (2) the Depositor hereby grants to the Trustee for the
benefit of the Holders of the Certificates a first priority security interest in
all of the Depositor's right, title and interest in, to and under,
62
whether now owned or hereafter acquired, the Trust Fund and all proceeds of any
and all property constituting the Trust Fund to secure payment of the
Certificates; and (3) this Agreement shall constitute a security agreement under
applicable law. If such conveyance is deemed to be in respect of a loan and the
trust created by this Agreement terminates prior to the satisfaction of the
claims of any Person holding any Certificate, the security interest created
hereby shall continue in full force and effect and the Trustee shall be deemed
to be the collateral agent for the benefit of such Person, and all proceeds
shall be distributed as herein provided.
(b) The Depositor shall, to the extent consistent with this Agreement,
take such reasonable actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans and
the other property 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 this Agreement. The Depositor will, at
its own expense, make all initial filings on or about the Closing Date and shall
forward a copy of such filing or filings to the Trustee. Without limiting the
generality of the foregoing, the Depositor shall prepare and forward for filing,
or shall cause to be forwarded for filing, at the expense of the Depositor, all
filings necessary to maintain the effectiveness of any original filings
necessary under the relevant UCC to perfect the Trustee's security interest in
or lien on the Mortgage Loans, including without limitation (x) continuation
statements, and (y) such other statements as may be occasioned by (1) any change
of name of an Originator, the Depositor or the Trustee, (2) any change of
location of the place of business or the chief executive office of the Seller or
the Depositor, (3) any transfer of any interest of an Originator or the
Depositor in any Mortgage Loan or (4) any change under the relevant UCC or other
applicable laws. Neither the Originators nor the Depositor shall organize under
the law of any jurisdiction other than the State under which each is organized
as of the Closing Date (whether changing its jurisdiction of organization or
organizing under an additional jurisdiction) without giving 30 days prior
written notice of such action to its immediate and intermediate transferee,
including the Trustee. Before effecting such change, any Originator or the
Depositor proposing to change its jurisdiction of organization shall prepare and
file in the appropriate filing office any financing statements or other
statements necessary to continue the perfection of the interests of its
immediate and intermediate transferees, including the Trustee, in the Mortgage
Loans. In connection with the transactions contemplated by this Agreement, each
of the Originators and the Depositor authorizes its immediate or intermediate
transferee (but not the Trustee) to file in any filing office any initial
financing statements, any amendments to financing statements, any continuation
statements, or any other statements or filings described in this paragraph (b).
Section 2.07. Depositor's Option to Purchase Breached Mortgage Loans.
(a) Subject to the terms specified in this Agreement, the Depositor has
the option, but is not obligated, to purchase from the Trust Fund any Breached
Mortgage Loan at the Repurchase Price; provided that the entity from which the
Seller purchased the Mortgage Loan has both (a) agreed to purchase the Mortgage
Loan from the Depositor and (b) has represented to the Seller that it has the
ability to purchase such Mortgage Loan from the Depositor, as soon as is
practicable thereafter at the Repurchase Price.
Section 2.08. Release of Mortgage Documents for Servicing
(a) From time to time and as appropriate for the foreclosure or
servicing of any of the Mortgage Loans, the Custodian shall, upon receipt in
writing, facsimile or electronic transmission from the Master Servicer or a
Servicer of a Request for Release release to the Master Servicer or such
Servicer the Mortgage Documents set forth in such Request for Release. All
Mortgage Documents released by the Custodian to the Master Servicer or a
Servicer pursuant to this Section 2.08 shall be held by the Master Servicer or
such Servicer in trust for the benefit of the Trust pursuant to the applicable
Purchase and Servicing Agreement. Upon the repurchase of any Mortgage Loan or
upon the payment in full of any Mortgage Loan, and upon receipt by the Custodian
of (i) the Request for Release (which Request for Release shall include a
statement to the effect that all amounts payable to the Trust in connection with
a repurchase have been deposited in the related Custodial Account or the
Collection Account or (ii) direction of the Depositor or the Trustee, as
applicable, the Custodian shall promptly release the related Mortgage Documents
in accordance with such Request for Release or direction.
63
ARTICLE III
THE CERTIFICATES
Section 3.01. The Certificates.
(a) The Certificates shall be issuable in registered form only and
shall be securities governed by Article 8 of the New York Uniform Commercial
Code. The Book-Entry Certificates will be evidenced by one or more certificates,
beneficial ownership of which will be held in the dollar denominations in
Certificate Balance, or Notional Amount, as applicable, or in the Percentage
Interests, specified herein. Each Class of Certificates will be issued in the
minimum denominations and integral multiples thereof of the initial Certificate
Balance (or Notional Amount) specified in the Preliminary Statement hereto.
(b) The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer of the Trustee or of the
Securities Administrator on the Trustee's behalf. Each Certificate shall, on
original issue, be authenticated by the Authenticating Agent upon the order of
the Depositor upon receipt by the Trustee of the Trustee Mortgage Files
described in Section 2.01. No Certificate shall be entitled to any benefit under
this Agreement, or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein, executed by an authorized officer of the Authenticating Agent, by
manual signature, and such certification upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. At any time and from time to time after the execution
and delivery of this Agreement, the Depositor may deliver Certificates executed
by or on behalf of the Trustee to the Authenticating Agent for authentication
and the Authenticating Agent shall authenticate and deliver such Certificates as
in this Agreement provided and not otherwise.
(c) The Class OC, Class P and Class A-R Certificates offered and sold
in reliance on the exemption from registration under Rule 144A under the Act
shall be issued initially in definitive, fully registered form without interest
coupons with the applicable legends set forth in Exhibit A added to the forms of
such Certificates (each, a "Restricted Global Security").
Section 3.02. Registration.
The Securities Administrator is hereby appointed, and the Securities
Administrator hereby accepts its appointment as, initial Certificate Registrar
in respect of the Certificates and shall maintain books for the registration and
for the transfer of Certificates (the "Certificate Register"). The Trustee may
appoint a bank or trust company to act as successor Certificate Registrar. A
registration book shall be maintained for the Certificates collectively. The
Certificate Registrar may resign or be discharged or removed and a new successor
may be appointed in accordance with the procedures and requirements set forth in
Sections 6.06 and 6.07 hereof with respect to the resignation, discharge or
removal of the Securities Administrator and the appointment of a successor
Securities Administrator. The Certificate Registrar may appoint, by a written
instrument delivered to the Holders and the Master Servicer, any bank or trust
company to act as co-registrar under such conditions as the Certificate
Registrar may prescribe;
64
provided, however, that the Certificate Registrar shall not be relieved of any
of its duties or responsibilities hereunder by reason of such appointment.
Section 3.03. Transfer and Exchange of Certificates.
(a) A Certificate (other than Book-Entry Certificates which shall be
subject to Section 3.09 hereof) may be transferred by the Holder thereof only
upon presentation and surrender of such Certificate at the office of the
Certificate Registrar duly endorsed or accompanied by an assignment duly
executed by such Holder or his duly authorized attorney in such form as shall be
satisfactory to the Certificate Registrar. Upon the transfer of any Certificate
in accordance with the preceding sentence, the Securities Administrator on
behalf of the Trustee shall execute, and the Authenticating Agent shall
authenticate and deliver to the transferee, one or more new Certificates of the
same Class and evidencing, in the aggregate, the same aggregate Certificate
Balance (or Notional Amount) as the Certificate being transferred. No service
charge shall be made to a Certificateholder for any registration of transfer of
Certificates, but the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer of Certificates.
(b) A Certificate may be exchanged by the Holder thereof for any number
of new Certificates of the same Class, in authorized denominations, representing
in the aggregate the same Certificate Balance (or Notional Amount) as the
Certificate surrendered, upon surrender of the Certificate to be exchanged at
the office of the Certificate Registrar duly endorsed or accompanied by a
written instrument of transfer duly executed by such Holder or his duly
authorized attorney in such form as is satisfactory to the Certificate
Registrar. Certificates delivered upon any such exchange will evidence the same
obligations, and will be entitled to the same rights and privileges, as the
Certificates surrendered. No service charge shall be made to a Certificateholder
for any exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any exchange of Certificates. Whenever any
Certificates are so surrendered for exchange, the Securities Administrator on
behalf of the Trustee shall execute, and the Authenticating Agent shall
authenticate, date and deliver the Certificates which the Certificateholder
making the exchange is entitled to receive.
(c) By acceptance of a Restricted Certificate, whether upon original
issuance or subsequent transfer, each Holder of such a Certificate acknowledges
the restrictions on the transfer of such Certificate set forth thereon and
agrees that it will transfer such a Certificate only as provided herein.
The following restrictions shall apply with respect to the transfer and
registration of transfer of a Restricted Certificate to a transferee that takes
delivery in the form of a Definitive Certificate:
(i) The Certificate Registrar shall register the transfer of a
Restricted Certificate if the requested transfer is (x) to the
Depositor or an affiliate (as defined in Rule 405 under the 0000 Xxx)
of the Depositor or (y) being made to a "qualified institutional buyer"
(a "QIB") as defined in Rule 144A under the Securities Act of 1933,
65
as amended (the "Act") by a transferor that has provided the
Certificate Registrar with a certificate in the form of Exhibit H
hereto; and
(ii) The Certificate Registrar shall register the transfer of
a Restricted Certificate if the requested transfer is being made to an
"accredited investor" under Rule 501(a)(1), (2), (3) or (7) under the
Act, or to any Person all of the equity owners in which are such
accredited investors, by a transferor who furnishes to the Certificate
Registrar a letter of the transferee substantially in the form of
Exhibit I hereto.
(d) No transfer of an ERISA-Restricted Certificate in the form of a
Definitive Certificate shall be made to any Person or shall be effective unless
the Certificate Registrar, on behalf of the Trustee, has received (A) a
certificate substantially in the form of Exhibit J hereto (or Exhibit B, in the
case of a Residual Certificate) from such transferee or (B) an Opinion of
Counsel satisfactory to the Certificate Registrar and the Securities
Administrator to the effect that the purchase and holding of such a Certificate
will not constitute or result in any nonexempt prohibited transactions under
Title I of ERISA or Section 4975 of the Code or a plan subject to any Federal,
state or local law ("Similar Law") materially similar to the foregoing
provisions of ERISA or the Code and will not subject the Certificate Registrar,
the Trustee, the Master Servicer, the Depositor or the Securities Administrator
to any obligation in addition to those undertaken in the Agreement; provided,
however, that the Certificate Registrar will not require such certificate or
opinion in the event that, as a result of a change of law or otherwise, counsel
satisfactory to the Certificate Registrar has rendered an opinion to the effect
that the purchase and holding of an ERISA-Restricted Certificate by a Plan or a
Person that is purchasing or holding such a Certificate with the assets of a
Plan will not constitute or result in a prohibited transaction under Title I of
ERISA or Section 4975 of the Code and will not subject the Certificate
Registrar, the Trustee, the Master Servicer, the Depositor or the Securities
Administrator to any obligation in addition to those undertaken in this
Agreement. Each Transferee of an ERISA-Restricted Certificate that is a
Book-Entry Certificate shall be deemed to have made the appropriate
representation set forth in paragraph 2 and the representation set forth in
paragraph 3 of Exhibit J. The preparation and delivery of the certificate and
opinions referred to above shall not be an expense of the Trust Fund, the
Certificate Registrar, the Trustee, the Master Servicer, the Depositor or the
Securities Administrator.
Notwithstanding the foregoing, no opinion or certificate shall be
required for the initial issuance of the ERISA-Restricted Certificates to the
Underwriter. The Certificate Registrar shall have no obligation to monitor
transfers of Book-Entry Certificates that are ERISA-Restricted Certificates and
shall have no liability for transfers of such Certificates in violation of the
transfer restrictions. The Certificate Registrar 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 3.03(d) and neither the Securities
Administrator nor the Paying Agent shall have any liability 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 Certificate Registrar in accordance
with the foregoing requirements. The Securities Administrator, on behalf of the
Trustee, shall be entitled, but not obligated, to recover from any Holder of any
ERISA-Restricted Certificate that was in fact a Plan or a Person acting on
behalf of a Plan any payments made on such ERISA-Restricted Certificate at and
after such time. Any such payments so recovered by the Securities Administrator,
on
66
behalf of the Trustee, shall be paid and delivered by the Securities
Administrator, on behalf of the Trustee, to the last preceding Holder of such
Certificate that is not such a Plan or Person acting on behalf of a Plan.
(e) As a condition of the registration of transfer or exchange of any
Certificate, the Certificate Registrar may require the certified taxpayer
identification number of the owner of the Certificate and the payment of a sum
sufficient to cover any tax or other governmental charge imposed in connection
therewith; provided, however, that the Certificate Registrar shall have no
obligation to require such payment or to determine whether or not any such tax
or charge may be applicable. No service charge shall be made to the
Certificateholder for any registration, transfer or exchange of a Certificate.
(f) Notwithstanding anything to the contrary contained herein, no
Residual Certificate may be owned, pledged or transferred, directly or
indirectly, by or to (i) a Disqualified Organization or (ii) an individual,
corporation or partnership or other person unless such person (A) is not a
Non-U.S. Person or (B) is a Non-U.S. Person that holds a Residual Certificate in
connection with the conduct of a trade or business within the United States and
has furnished the transferor and the Certificate Registrar with an effective
Internal Revenue Service Form W-8ECI or successor form at the time and in the
manner required by the Code (any such person who is not covered by clause (A) or
(B) above is referred to herein as a "Non-permitted Foreign Holder").
Prior to and as a condition of the registration of any transfer, sale
or other disposition of a Residual Certificate, the proposed transferee shall
deliver to the Certificate Registrar an affidavit in substantially the form
attached hereto as Exhibit B representing and warranting, among other things,
that such transferee is neither a Disqualified Organization, an agent or nominee
acting on behalf of a Disqualified Organization, nor a Non-permitted Foreign
Holder (any such transferee, a "Permitted Transferee"), and the proposed
transferor shall deliver to the Trustee and the Certificate Registrar an
affidavit in substantially the form attached hereto as Exhibit C. In addition,
the Trustee or the Certificate Registrar may (but shall have no obligation to)
require, prior to and as a condition of any such transfer, the delivery by the
proposed transferee of an Opinion of Counsel, addressed to the Trustee and the
Certificate Registrar, that such proposed transferee or, if the proposed
transferee is an agent or nominee, the proposed beneficial owner, is not a
Disqualified Organization, agent or nominee thereof, or a Non-permitted Foreign
Holder. Notwithstanding the registration in the Certificate Register of any
transfer, sale, or other disposition of a Residual Certificate to a Disqualified
Organization, an agent or nominee thereof, or Non-permitted Foreign Holder, such
registration shall be deemed to be of no legal force or effect whatsoever and
such Disqualified Organization, agent or nominee thereof, or Non-permitted
Foreign Holder shall not be deemed to be a Certificateholder for any purpose
hereunder, including, but not limited to, the receipt of distributions on such
Residual Certificate. The Depositor and the Certificate Registrar shall be under
no liability to any Person for any registration or transfer of a Residual
Certificate to a Disqualified Organization, agent or nominee thereof or
Non-permitted Foreign Holder or for the Paying Agent making any payments due on
such Residual Certificate to the Holder thereof or for taking any other action
with respect to such Holder under the provisions of the Agreement, so long as
the transfer was effected in accordance with this Section 3.03(f), unless the
Certificate Registrar shall have actual knowledge at the time of such transfer
or the time of such payment or other action that the transferee is a
Disqualified Organization, or an agent or nominee thereof, or Non-permitted
Foreign Holder. The Certificate Registrar shall be entitled to recover from any
Holder of a Residual Certificate that was a Disqualified
67
Organization, agent or nominee thereof, or Non-permitted Foreign Holder at the
time it became a Holder or any subsequent time it became a Disqualified
Organization, agent or nominee thereof, or Non-permitted Foreign Holder, all
payments made on such Residual Certificate at and after either such times (and
all costs and expenses, including but not limited to attorneys' fees, incurred
in connection therewith). Any payment (not including any such costs and
expenses) so recovered by the Certificate Registrar shall be paid and delivered
to the last preceding Holder of such Residual Certificate.
If any purported transferee shall become a registered Holder of a
Residual Certificate in violation of the provisions of this Section 3.03(f),
then upon receipt of written notice to the Trustee or the Certificate Registrar
that the registration of transfer of such Residual Certificate was not in fact
permitted by this Section 3.03(f), the last preceding Permitted Transferee shall
be restored to all rights as Holder thereof retroactive to the date of such
registration of transfer of such Residual Certificate. The Depositor, the
Certificate Registrar and 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 this Section 3.03(f), or for the Paying Agent making any payment
due on such Certificate to the registered Holder thereof or for taking any other
action with respect to such Holder under the provisions of this Agreement so
long as the transfer was registered upon receipt of the affidavit described in
the preceding paragraph of this Section 3.03(f).
(g) Each Holder or Certificate Owner of a Restricted Certificate,
ERISA-Restricted Certificate or Residual Certificate, or an interest therein, by
such Holder's or Owner's acceptance thereof, shall be deemed for all purposes to
have consented to the provisions of this section.
Section 3.04. Cancellation of Certificates.
Any Certificate surrendered for registration of transfer or exchange
shall be cancelled and retained in accordance with normal retention policies
with respect to cancelled certificates maintained by the Certificate Registrar.
Section 3.05. Replacement of Certificates.
If (i) any Certificate is mutilated and is surrendered to the Trustee
or the Certificate Registrar or (ii) the Certificate Registrar receives evidence
to its satisfaction of the destruction, loss or theft of any Certificate, and
there is delivered to the Trustee and the Certificate Registrar such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Depositor, the Trustee or the Certificate Registrar
that such destroyed, lost or stolen Certificate has been acquired by a protected
purchaser, the Securities Administrator on behalf of the Trustee shall execute
and the Authenticating Agent shall authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and Certificate Balance. Upon the issuance of any new
Certificate under this Section 3.05, the Trustee, the Depositor or the
Certificate Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and
68
expenses of the Trustee, the Depositor or the Certificate Registrar) connected
therewith. Any replacement Certificate issued pursuant to this Section 3.05
shall constitute complete and indefeasible evidence of ownership in the
applicable Trust Fund, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
If after the delivery of such new Certificate, a protected purchaser of
the original Certificate in lieu of which such new Certificate was issued
presents for payment such original Certificate, the Depositor, the Certificate
Registrar and the Trustee or any agent shall be entitled to recover such new
Certificate from the Person to whom it was delivered or any Person taking
therefrom, except a protected purchaser, and shall be entitled to recover upon
the security or indemnity provided therefor to the extent of any loss, damage,
cost or expenses incurred by the Depositor, the Certificate Registrar, the
Trustee or any agent in connection therewith.
Section 3.06. Persons Deemed Owners.
Subject to the provisions of Section 3.09 with respect to Book-Entry
Certificates, the Depositor, the Master Servicer, the Securities Administrator,
the Trustee, the Certificate Registrar, the Paying Agent and any agent of any of
them shall treat the Person in whose name any Certificate is registered upon the
books of the Certificate Registrar as the owner of such Certificate for the
purpose of receiving distributions pursuant to Sections 5.01 and 5.02 and for
all other purposes whatsoever, and neither the Depositor, the Master Servicer,
the Securities Administrator, the Trustee, the Certificate Registrar, the Paying
Agent nor any agent of any of them shall be affected by notice to the contrary.
Section 3.07. Temporary Certificates.
(a) Pending the preparation of definitive Certificates, upon the order
of the Depositor, the Securities Administrator on behalf of the Trustee shall
execute and the Authenticating Agent shall authenticate and deliver temporary
Certificates that are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Certificates in lieu of which they are issued and with such
variations as the authorized officers executing such Certificates may determine,
as evidenced by their execution of such Certificates.
(b) If temporary Certificates are issued, the Depositor will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office or agency of the Certificate Registrar without charge
to the Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Securities Administrator on behalf of the Trustee shall
execute and the Authenticating Agent shall authenticate and deliver in exchange
therefor a like aggregate Certificate Balance of definitive Certificates of the
same Class in the authorized denominations. Until so exchanged, the temporary
Certificates shall in all respects be entitled to the same benefits under this
Agreement as definitive Certificates of the same Class.
Section 3.08. Appointment of Paying Agent.
69
The Securities Administrator is hereby appointed as the initial Paying
Agent. The Trustee may appoint a successor Paying Agent (which may be the
Trustee) for the purpose of making distributions to the Certificateholders
hereunder. The Trustee shall cause any Paying Agent, other than the Securities
Administrator, to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee that such Paying Agent will hold all
sums held by it for the payment to the Certificateholders in an Eligible Account
(which shall be the Distribution Account) in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be paid to the
Certificateholders. All funds remitted by the Securities Administrator to any
such Paying Agent for the purpose of making distributions shall be paid to the
Certificateholders on each Distribution Date and any amounts not so paid shall
be returned on such Distribution Date to the Securities Administrator. If the
Paying Agent is not the Trustee or the Securities Administrator, the Securities
Administrator shall cause to be remitted to the Paying Agent on or before the
Business Day prior to each Distribution Date, by wire transfer in immediately
available funds, the funds to be distributed on such Distribution Date. Any
Paying Agent shall be either a bank or trust company or otherwise authorized
under law to exercise corporate trust powers.
Section 3.09. Book-Entry Certificates.
(a) Each Class of Book-Entry Certificates, upon original issuance,
shall be issued in the form of one or more typewritten Certificates representing
the Book-Entry Certificates. The Book-Entry Certificates shall initially be
registered on the Certificate Register in the name of the nominee of the
Clearing Agency, and no Certificate Owner will receive a definitive certificate
representing such Certificate Owner's interest in the Book-Entry Certificates,
except as provided in Section 3.09(c). Unless Definitive Certificates have been
issued to Certificate Owners of Book-Entry Certificates pursuant to Section
3.09(c):
(i) the provisions of this Section 3.09 shall be in full force
and effect;
(ii) the Certificate Registrar, the Paying Agent and the
Trustee shall deal with the Clearing Agency for all purposes (including
the making of distributions on the Book-Entry Certificates) as the
authorized representatives of the Certificate Owners and the Clearing
Agency and shall be responsible for crediting the amount of such
distributions to the accounts of such Persons entitled thereto, in
accordance with the Clearing Agency's normal procedures;
(iii) to the extent that the provisions of this Section 3.09
conflict with any other provisions of this Agreement, the provisions of
this Section 3.09 shall control; and
(iv) the rights of Certificate Owners shall be exercised only
through the Clearing Agency and the Clearing Agency Participants and
shall be limited to those established by law and agreements between
such Certificate Owners and the Clearing Agency and/or the Clearing
Agency Participants. Unless and until Definitive Certificates are
issued pursuant to Section 3.09(c), the initial Clearing Agency will
make book-entry transfers among the Clearing Agency Participants and
receive and transmit distributions of principal of and interest on the
Book-Entry Certificates to such Clearing Agency Participants.
70
(b) Whenever notice or other communication to the Certificateholders is
required under this Agreement, unless and until Definitive Certificates shall
have been issued to Certificate Owners pursuant to Section 3.09(c), the
Securities Administrator shall give all such notices and communications
specified herein to be given to Holders of the Book-Entry Certificates to the
Clearing Agency.
(c) If (i) (A) the Clearing Agency or the Depositor advises the
Certificate Registrar in writing that the Clearing Agency is no longer willing
or able to discharge properly its responsibilities with respect to the
Book-Entry Certificates, and (B) the Depositor is unable to locate a qualified
successor satisfactory to the Depositor and the Certificate Registrar or (ii)
after the occurrence of an Event of Default, Certificate Owners representing
beneficial interests aggregating not less than 50% of the Class Principal
Balance of a Class of Book-Entry Certificates advise the Paying Agent and the
Clearing Agency through the Clearing Agency Participants in writing that the
continuation of a book-entry system through the Clearing Agency is no longer in
the best interests of the Certificate Owners of a Class of Book-Entry
Certificates, the Certificate Registrar shall notify the Clearing Agency to
effect notification to all Certificate Owners, through the Clearing Agency, of
the occurrence of any such event and of the availability of Definitive
Certificates to Certificate Owners requesting the same. Upon surrender to the
Certificate Registrar of the Book-Entry Certificates by the Clearing Agency,
accompanied by registration instructions from the Clearing Agency for
registration, the Certificate Registrar shall issue the Definitive Certificates.
Neither the Depositor, the Certificate Registrar nor the Trustee shall be liable
for any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Certificates all references herein to obligations imposed upon or to
be performed by the Clearing Agency shall be deemed to be imposed upon and
performed by the Certificate Registrar, to the extent applicable, with respect
to such Definitive Certificates and the Certificate Registrar shall recognize
the holders of the Definitive Certificates as Certificateholders hereunder.
Notwithstanding the foregoing, the Certificate Registrar, upon the instruction
of the Depositor, shall have the right to issue Definitive Certificates on the
Closing Date in connection with credit enhancement programs.
ARTICLE IV
ADMINISTRATION OF THE TRUST FUND
Section 4.01. Custodial Accounts; Distribution Account.
(a) On or prior to the Closing Date, the Master Servicer shall have
caused each Servicer to establish and maintain one or more Custodial Accounts,
as provided in the related Purchase and Servicing Agreement, into which all
Scheduled Payments and unscheduled payments with respect to the related Mortgage
Loans, net of any deductions or reimbursements permitted under the related
Purchase and Servicing Agreement, shall be deposited. On each Distribution
Account Deposit Date, the Servicers shall remit to the Securities Administrator
for deposit into the Distribution Account, all amounts so required to be
deposited into such account in accordance with the terms of the related Purchase
and Servicing Agreements.
71
(b) The Securities Administrator, as Paying Agent for the Trust, shall
establish and maintain an Eligible Account entitled "Distribution Account of
LaSalle Bank National Association, as Trustee for the benefit of Xxxxxx Xxxxxxx
Mortgage Loan Trust 2006-12XS, Holders of Mortgage Pass-Through Certificates."
The Securities Administrator shall, promptly upon receipt from the Servicers on
each related Distribution Account Deposit Date, deposit into the Distribution
Account and retain on deposit until the related Distribution Date the following
amounts:
(i) the aggregate of collections with respect to the Mortgage
Loans remitted by the Servicers from the related Custodial Accounts in
accordance with the Purchase and Servicing Agreements;
(ii) any amounts required to be deposited by the Master
Servicer with respect to the Mortgage Loans for the related Due Period
pursuant to this Agreement, including the amount of any Advances or
Compensating Interest Payments with respect to the Mortgage Loans not
paid by the Servicers; and
(iii) any other amounts so required to be deposited in the
Distribution Account in the related Due Period pursuant to this
Agreement.
(c) In the event the Master Servicer or a Servicer has remitted in
error to the Distribution Account any amount not required to be remitted in
accordance with the definition of Available Distribution Amount, it may at any
time direct the Securities Administrator to withdraw such amount from the
Distribution Account for repayment to the Master Servicer or Servicer, as
applicable, by delivery of an Officer's Certificate to the Securities
Administrator and the Trustee which describes the amount deposited in error.
(d) On each Distribution Date and Initial Optional Termination Date,
the Securities Administrator, as Paying Agent, shall withdraw from funds
available in the Distribution Account and distribute the Available Distribution
Amount to the Certificateholders and any other parties entitled thereto in the
amounts and priorities set forth in Section 5.02. The Securities Administrator
may from time to time withdraw from the Distribution Account and pay the Master
Servicer, the Trustee, the Custodian, the Securities Administrator or any
Servicer any amounts permitted to be paid or reimbursed to such Person from
funds in the Distribution Account pursuant to this Agreement or any Purchase and
Servicing Agreement.
(e) Funds in the Distribution Account may be invested in Permitted
Investments selected by and at the written direction of the Securities
Administrator, which shall mature not later than one Business Day prior to the
Distribution Date (except that if such Permitted Investment is an obligation of
the Securities Administrator or any of its Affiliates, or is managed or advised
by the Securities Administrator or any Affiliate, then such Permitted Investment
shall mature not later than such applicable Distribution Date) and any such
Permitted Investment shall not be sold or disposed of prior to its maturity. All
such Permitted Investments shall be made in the name of the Trustee (in its
capacity as such) or its nominee. All income and gain realized from any
Permitted Investment of amounts on deposit in the Distribution Account shall be
for the benefit of the Securities Administrator, as additional compensation for
its duties hereunder, and shall be subject to its withdrawal or order from time
to time, and shall not be part of the
72
Trust Fund; provided, however, that if Xxxxx Fargo Bank, National Association is
no longer the Master Servicer and the Securities Administrator, any such income
and gain shall be used to pay the successor Master Servicer and the successor
Securities Administrator, the Master Servicer Compensation and the Securities
Administrator Compensation, respectively. The amount of any losses incurred in
respect of any such investments shall be deposited in such Distribution Account
by the Securities Administrator out of its own funds, without any right of
reimbursement therefor, immediately as realized.
Section 4.02. Permitted Withdrawals from the Custodial Accounts and the
Distribution Account.
(a) Each Servicer may from time to time make withdrawals from its
Custodial Account for the following purposes:
(i) to reimburse itself for unreimbursed Advances made by it,
such right of reimbursement pursuant to this subclause (i) being
limited to amounts received on the Mortgage Loan(s) in respect of which
any such Advance was made;
(ii) to reimburse itself for any Nonrecoverable Advance
previously made by it;
(iii) to reimburse itself for unreimbursed Servicer Advances,
each Servicer's right to reimbursement pursuant to this clause (a) with
respect to any Mortgage Loan being limited to amounts received on such
Mortgage Loan(s) which represent late recoveries of the payments for
which such advances were made pursuant to the related Purchase and
Servicing Agreement;
(iv) to reimburse itself for expenses incurred by it and
reimbursable pursuant to the related Purchase and Servicing Agreement;
and
(v) to withdraw any amount deposited in the Custodial Account
and not required to be deposited therein.
To the extent required by the related Purchase and Servicing Agreement
each Servicer shall keep and maintain separate accounting, on a Mortgage Loan by
Mortgage Loan basis, for the purpose of justifying any withdrawal from its
Custodial Account pursuant to such subclauses (i), (ii), (iii), (iv) and (v).
Prior to making any withdrawal from its Custodial Account pursuant to subclause
(ii), the related Servicer shall deliver to the Master Servicer an Officer's
Certificate of a Servicing Officer indicating the amount of any previous Advance
determined by the Servicer to be a Nonrecoverable Advance and identifying the
related Mortgage Loans(s), and their respective portions of such Nonrecoverable
Advance.
(b) The Securities Administrator shall withdraw funds from the
Distribution Account for distributions to Certificateholders in the manner
specified in this Agreement (and to withhold from the amounts so withdrawn, the
amount of any taxes that it is authorized to withhold pursuant to Section
10.01). In addition, the Securities Administrator may from time to time make
withdrawals from the Distribution Account for the following purposes:
73
(i) to pay all costs and expenses described in the sixth
bullet of clause (e) of the definition of "Available Distribution
Amount";
(ii) (x) for so long as Xxxxx Fargo Bank, National Association
is the Master Servicer and the Securities Administrator, to pay to the
Master Servicer the investment earnings on the Distribution Account as
its compensation for the related Distribution Date and (y) thereafter,
concurrently, to the Master Servicer and the Securities Administrator,
the Master Servicer Compensation and the Securities Administrator
Compensation, respectively;
(iii) to withdraw and return to the Master Servicer any amount
deposited in the Distribution Account and not required to be deposited
therein; and
(iv) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 7.01 hereof.
(v) [Reserved].
Section 4.03. [Reserved].
Section 4.04. [Reserved].
Section 4.05. Reports to Trustee and Certificateholders.
On each Distribution Date, the Securities Administrator shall have
prepared and shall make available to the Trustee, the Depositor, the Rating
Agencies and each Certificateholder a written report setting forth the following
information (on the basis of Mortgage Loan level information obtained from the
Master Servicer and the Servicers):
(a) the amount of the distributions, separately identified, with
respect to each Class of Certificates;
(b) the amount of the distributions set forth in the clause (a)
allocable to principal, separately identifying the aggregate amount of any
Principal Prepayments, liquidation proceeds or other unscheduled recoveries of
principal included in that amount;
(c) the amount of the distributions set forth in the clause (a)
allocable to interest and how it was calculated;
(d) [reserved];
(e) the Class Principal Balance of each Class of Certificates after
giving effect to the distribution of principal on that Distribution Date;
(f) the aggregate Stated Principal Balance of the Mortgage Loans at the
end of the related Prepayment Period, and the Weighted Average Net Mortgage Rate
and the Mortgage Pool at the beginning of the related Due Period;
74
(g) [reserved];
(h) [reserved];
(i) the amount of the Servicing Fee paid to or retained by the Master
Servicer and by each Servicer, respectively;
(j) the amount of Monthly Advances for the related Due Period;
(k) for each Distribution Date to and including the Distribution Date
in December 2006: the number and Stated Principal Balance of the Mortgage Loans
that were (A) Delinquent using the MBA Method (exclusive of Mortgage Loans in
foreclosure) (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or more days, (B)
in foreclosure and Delinquent (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or
more days and (C) in bankruptcy as of the close of business on the last day of
the calendar month preceding that Distribution Date;
(l) for each Distribution Date on and after the Distribution Date in
January 2007: the number and Stated Principal Balance of the Mortgage Loans that
were (A) Delinquent using the OTS Method (exclusive of Mortgage Loans in
foreclosure) (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or more days, (B)
in foreclosure and Delinquent (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or
more days and (C) in bankruptcy as of the close of business on the last day of
the calendar month preceding that Distribution Date;
(m) the total number and principal balance of any REO properties as of
the close of business on the last day of the preceding Due Period;
(n) the amount of Realized Losses incurred during the preceding
calendar month;
(o) the cumulative amount of Realized Losses incurred since the Closing
Date;
(p) the Realized Losses, if any, allocated to each Class of
Certificates on that Distribution Date;
(q) the Class Principal Balance of each Class of Certificates after
giving effect to the distribution of principal on the Distribution Date;
(r) the Pass-Through Rate for each Class of Certificates for that
Distribution Date;
(s) the total amount of Prepayment Penalties collected and due to the
Trust Fund, as reported by the Servicers;
(t) the applicable Record Date(s) for such Distribution Date;
(u) the amount thereof allocable to interest, any Unpaid Interest
Amount included in such distribution and any remaining Unpaid Interest Amount
after giving effect to such distribution, any Basis Risk Carry Forward Amount
for such Distribution Date;
75
(v) if the distribution to the Holders of such Class of Certificates is
less than the full amount that would be distributable to such Holders if there
were sufficient funds available therefor, the amount of the shortfall and the
allocation thereof as between principal and interest;
(w) whether a Trigger Event has occurred and is continuing (including
the calculation demonstrating the existence of the Trigger Event and the
aggregate outstanding balance of all 60+ Day Delinquent Mortgage Loans);
(x) the amount of any Net Monthly Excess Cash Flow on such Distribution
Date and the allocation thereof to the Certificateholders with respect to Unpaid
Interest Amounts, Unpaid Realized Loss Amounts, or Basis Risk Carry Forward
Amounts; and
(y) the amount distributed on the Class OC Certificates.
(z) the Overcollateralized Amount and the Overcollateralization Target
Amount.
(aa) the amount of any Subsequent Recoveries for such Distribution
Date.
The Securities Administrator shall make such reports available each
month via its website at xxxx://xxx.xxxxxxx.xxx. Assistance in using the website
may be obtained by calling the Securities Administrator's customer service desk
at (000) 000-0000. Certificateholders and other parties that are unable to use
the website are entitled to have a paper copy mailed to them via first class
mail by contacting the Securities Administrator and indicating such. In
preparing or furnishing the foregoing reports, the Securities Administrator
shall be entitled to rely conclusively on the accuracy of the information or
data regarding the Mortgage Loans and the related REO Properties that has been
provided to the Securities Administrator by the Master Servicer and the
Servicers, and neither the Trustee nor the Securities Administrator shall be
obligated to verify, recompute, reconcile or recalculate any such information or
data.
Upon the reasonable advance written request of any Certificateholder
that is a savings and loan, bank or insurance company, which request, if
received by the Trustee or any agent thereof, shall be promptly forwarded to the
Securities Administrator, the Securities Administrator shall provide, or cause
to be provided, (or, to the extent that such information or documentation is not
required to be provided by a Servicer under the applicable Purchase and
Servicing Agreement, shall use reasonable efforts to obtain such information and
documentation from such Servicer, and provide) to such Certificateholders such
reports and access to information and documentation regarding the Mortgage Loans
as such Certificateholders may reasonably deem necessary to comply with
applicable regulations of the Office of Thrift Supervision or its successor or
other regulatory authorities with respect to an investment in the Certificates;
provided, however, that the Securities Administrator shall be entitled to be
reimbursed by such Certificateholders for the Securities Administrator's actual
expenses incurred in providing such reports and access.
76
ARTICLE V
DISTRIBUTIONS TO HOLDERS OF CERTIFICATES
Section 5.01. Distributions Generally.
(a) Subject to Section 7.01 respecting the final distribution on the
Certificates, on each Distribution Date the Securities Administrator or the
Paying Agent shall make all distributions in accordance with this Article V.
Such distributions shall be made by check mailed to each Certificateholder's
address as it appears on the Certificate Register of the Certificate Registrar
or, upon written request made to the Securities Administrator at least five
Business Days prior to the related Record Date by any Certificateholder owning
an aggregate initial Certificate Balance of at least $1,000,000, or in the case
of a Class of Notional Amount Certificates, Residual Certificate or Class OC
Certificate, a Percentage Interest of not less than 100%, by wire transfer in
immediately available funds to an account specified in the request and at the
expense of such Certificateholder; provided, however, that the final
distribution in respect of any Certificate shall be made only upon presentation
and surrender of such Certificate at the Certificate Registrar's Corporate Trust
Office; provided, further, that the foregoing provisions shall not apply to any
Class of Certificates as long as such Certificate remains a Book-Entry
Certificate in which case all payments made shall be made through the Clearing
Agency and its Clearing Agency Participants. Notwithstanding the reduction of
the Class Principal 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 Master Servicer, the
Securities Administrator and the Trustee hereunder in accordance with Article
VII. Wire transfers will be made at the expense of the Holder requesting such
wire transfer by deducting a wire transfer fee from the related distribution.
Notwithstanding such final payment of principal of any of the Certificates, each
Residual Certificate will remain outstanding until the termination of each REMIC
and the payment in full of all other amounts due with respect to the Residual
Certificates and at such time such final payment in retirement of any Residual
Certificate will be made only upon presentation and surrender of such
Certificate at the Certificate Registrar's Corporate Trust Office. If any
payment required to be made on the Certificates is to be made on a day that is
not a Business Day, then such payment will be made on the next succeeding
Business Day.
(b) All distributions or allocations made with respect to the
Certificateholders within each Class on each Distribution Date shall be
allocated among the outstanding Certificates in such Class equally in proportion
to their respective initial Class Principal Balances or initial Class Notional
Amounts (or Percentage Interests).
Section 5.02. Priorities of Distribution.
(a) (1) On each Distribution Date, the Securities Administrator shall
withdraw from the Distribution Account the Available Distribution Amount (to the
extent that such amount is then on deposit in the Distribution Account) and
shall distribute such amount to the Certificates in the following order of
priority:
77
(A) With respect to the portion of Available Distribution Amount for
such Distribution Date consisting of the Interest Remittance Amount for
such Distribution Date, on each Distribution Date, the Securities
Administration shall withdraw the Interest Remittance Amount from the
Available Distribution Amount on deposit in the Distribution Account
for that Distribution Date, and distribute such funds to the specified
Class of Certificates that have outstanding Class Principal Balances,
sequentially, in the following order of priority:
(i) concurrently, to the Class A-R, Class A-1, Class
A-2A, Class X-0X, Xxxxx X-0, Class A-4, Class A-5A,
Class A-5B, Class A-6A and Class A-6B Certificates
their respective Class A Interest Distribution
Amounts for such Distribution Date, pro rata based on
their respective Class A Interest Distribution
Amounts for such Distribution Date;
(ii) sequentially, to the Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2
and Class B-3 Certificates, in that order, their
respective Subordinated Interest Distribution
Amounts, in each case, to the extent of the Interest
Remittance Amount remaining after distributions of
interest to the Classes of Certificates with a higher
payment priority; and
(iii) any remaining Interest Remittance Amount on any
Distribution Date will be distributed pursuant to
Section 5.02(a)(1)(C) hereof.
(B) (1) On each Distribution Date (a) prior to the Stepdown Date or (b)
on which a Trigger Event is in effect, the Holders of each Class of
Certificates shall be entitled to receive payments and distributions in
respect of principal from the Principal Distribution Amount,
respectively, in the following order of priority:
(i) sequentially, to the Class A-R Certificates, until
its Class Principal Balance is reduced to zero, and
then to the holders of the Class A Certificates
pursuant to Section 5.03 hereof, until their
respective Class Principal Balances are reduced to
zero;
(ii) sequentially, to the holders of the Class X-0, Xxxxx
X-0, Class M-3, Class M-4, Class M-5, Class M-6,
Class B-1, Class B-2 and Class B-3 Certificates, in
that order, until their respective Class Principal
Balances are reduced to zero; and
(iii) any remaining Principal Distribution Amount on any
Distribution Date will be will be distributed
pursuant to Section 5.02(a)(1)(C) hereof; or
(2) On each Distribution Date (a) on or after the Stepdown Date and (b)
on which a Trigger Event is not in effect, the Holders of each Class of
Certificates shall be entitled to receive payments and distributions in
respect of principal from the Principal Distribution Amount,
respectively, in the following order of priority:
78
(i) to the holders of the Senior Certificates pursuant to
Section 5.03 hereof, until their respective Class
Principal Balances are reduced to zero;
(ii) to the Class M-1 Certificates, the Class M-1
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero;
(iii) to the Class M-2 Certificates, the Class M-2
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero;
(iv) to the Class M-3 Certificates, the Class M-3
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero;
(v) to the Class M-4 Certificates, the Class M-4
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero;
(vi) to the Class M-5 Certificates, the Class M-5
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero;
(vii) to the Class M-6 Certificates, the Class M-6
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero;
(viii) to the Class B-1 Certificates, the Class B-1
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero; and
(ix) to the Class B-2 Certificates, the Class B-2
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero; and
(x) to the Class B-3 Certificates, the Class B-3
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero; and
(xi) any remaining Principal Distribution Amount on any
Distribution Date will be will be distributed
pursuant to Section 5.02(a)(1)(C) hereof.
(C) On each Distribution Date the remaining Net Monthly Excess
Cashflow, after giving effect to the distribution of the Extra
Principal Distribution Amount for that Distribution Date, shall be
distributed to the Certificates in the following order of priority, in
each case to the extent of the amounts remaining:
(i) to the Class M-1 Certificates, the related Interest
Carry Forward Amount;
(ii) to the Class M-1 Certificates, the related Unpaid
Realized Loss Amount;
(iii) to the Class M-2 Certificates, the related Interest
Carry Forward Amount;
(iv) to the Class M-2 Certificates, the related Unpaid
Realized Loss Amount;
(v) to the Class M-3 Certificates, the related Interest
Carry Forward Amount;
(vi) to the Class M-3 Certificates, the related Unpaid
Realized Loss Amount;
79
(vii) to the Class M-4 Certificates, the related Interest
Carry Forward Amount;
(viii) to the Class M-4 Certificates, the related Unpaid
Realized Loss Amount;
(ix) to the Class M-5 Certificates, the related Interest
Carry Forward Amount;
(x) to the Class M-5 Certificates, the related Unpaid
Realized Loss Amount;
(xi) to the Class M-6 Certificates, the related Interest
Carry Forward Amount;
(xii) to the Class M-6 Certificates, the related Unpaid
Realized Loss Amount;
(xiii) to the Class B-1 Certificates, the related Interest
Carry Forward Amount;
(xiv) to the Class B-1 Certificates, the related Unpaid
Realized Loss Amount;
(xv) to the Class B-2 Certificates, the related Interest
Carry Forward Amount;
(xvi) to the Class B-2 Certificates, the related Unpaid
Realized Loss Amount;
(xvii) to the Class B-3 Certificates, the related Interest
Carry Forward Amount;
(xviii) to the Class B-3 Certificates, the related Unpaid
Realized Loss Amount;
(xix) to the Reserve Fund, the amount of any Basis Risk Carry
Forward Amount for such Distribution Date and from the Reserve Fund
sequentially, first (i) concurrently, to the Class A Certificates,
first pro rata, based on their respective Class Principal Balances to
the extent needed to pay any Basis Risk Carry Forward Amount Carryover
for each such Class and then, pro rata, based on any Basis Risk Carry
Forward Amount Carryover for each such Class, in an amount up to the
amount of any Basis Risk Carry Forward Amount remaining unpaid for such
Classes of Certificates and then (ii) sequentially, to the Class X-0,
Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class
B-2 and Class B-3 Certificates, in that order, in an amount up to the
amount of any Basis Risk Carry Forward Amount for such Classes of
Certificates;
(xx) sequentially, first (i) concurrently, to the Class A
Certificates, first pro rata, based on their respective Class Principal
Balances to the extent needed to pay any Unpaid Interest Shortfall
Amount for each such Class and then, pro rata, based on any Unpaid
Interest Shortfall Amount for each such Class, in an amount up to the
amount of any Unpaid Interest Shortfall Amount remaining unpaid for
such Classes of Certificates and then (ii) sequentially, to the Class
X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1,
Class B-2 and Class B-3 Certificates, in that order, in an amount up to
the amount of any Unpaid Interest Shortfall Amount for such Classes of
Certificates;
(xxi) to the Class OC Certificates, the Class OC Distributable
Amount; and
80
(xxii) to the holders of the Class A-R Certificates, any
remaining amounts; provided that if such Distribution Date is the
Distribution Date immediately following the expiration of the latest
prepayment charge term or any Distribution Date thereafter, then any
such remaining amounts, together with the Class P Distribution Amount,
will be distributed first, to the holders of the Class P Certificates,
until the Class Principal Balance thereof has been reduced to zero; and
second, to the holders of the Class A-R Certificates.
For the avoidance of doubt, Section 5.02(a)(1)(C) is intended to cause the Class
OC Certificates to receive from amounts remaining after the application of all
other clauses of Section 5.02(a)(1)(C) preceding it, an amount up to the sum of
the Class OC Distributable Amount for that Distribution Date and any Class OC
Distributable Amounts remaining unpaid from prior Distribution Dates and the
Securities Administrator shall construe Section 5.02(a)(1)(C) as necessary so as
to accomplish such result.
(D) On each Distribution Date, the Class P Distribution Amount received
during the related Prepayment Period will be distributed to the holders of the
Class P Certificates. On the Distribution Date in January 2012, the $1,000 held
in trust for the Class P Certificates will be distributed to the holders of the
Class P Certificates.
Section 5.03. Allocation of Principal Payments to Class A Certificates.
(a) On each Distribution Date on which a Sequential Trigger is not in
effect, except as set forth in Section 5.03(c) hereof, principal will be
distributed to the Class A Certificates sequentially, in the following order of
priority:
1. concurrently, to the Class A-6A and Class A-6B
Certificates, pro rata, the Priority Amount, until
their respective Class Principal Balances are reduced
to zero;
2. to the Class A-1 Certificates, until its Class
Principal Balance is reduced to zero;
3. concurrently, to the Class A-2A and Class A-2B
Certificates, pro rata, until their respective Class
Principal Balances are reduced to zero;
4. sequentially, to the Class A-3 and Class A-4
Certificates, in that order, until their respective
Class Principal Balances are reduced to zero;
5. concurrently, to the Class A-5A and Class A-5B
Certificates, pro rata, until their respective Class
Principal Balances are reduced to zero; and
6. concurrently, to the Class A-6A and Class A-6B
Certificates, pro rata, without regard to the
Priority Amount, until their respective Class
Principal Balances are reduced to zero.
81
(b) On each Distribution Date on which a Sequential Trigger is in
effect, except as set forth in Section 5.03(c) hereof, principal will be
distributed to the Class A Certificates sequentially, in the following order of
priority:
1. sequentially, to the Class A-6A and Class A-6B
Certificates, in that order, the Priority Amount,
until their respective Class Principal Balances are
reduced to zero;
2. sequentially, to the Class A-1, Class A-2A, Class
X-0X, Xxxxx X-0, Class A-4, Class A-5A and Class A-5B
Certificates, in that order, until their respective
Class Principal Balances are reduced to zero; and
3. sequentially, to the Class A-6A and Class A-6B
Certificates, in that order, without regard to the
Priority Amount, until their respective Class
Principal Balances are reduced to zero.
(c) Notwithstanding the allocation of principal to the Class A
Certificates described above, in the event that the aggregate Class Principal
Balance of the Subordinated Classes and the Class OC Certificates have been
reduced to zero, principal distributions to the Class A Certificates will be
distributed concurrently, to the Class A-1, Class A-2A, Class X-0X, Xxxxx X-0,
Class A-4, Class A-5A, Class A-5B, Class A-6A and Class A-6B Certificates, pro
rata, until, their respective Class Principal Balances are reduced to zero, with
the exception that if a Sequential Trigger Event is in effect, the pro rata
portions of principal distributions otherwise allocable to the Class X-0X, Xxxxx
X-0X and Class A-6B Certificates will first instead be allocated to the Class
A-2A, Class A-5A and Class A-6A Certificates, respectively, until their
respective Class Principal Balances are reduced to zero.
Section 5.04. Allocation of Losses.
(a) On or prior to each Distribution Date, the Securities Administrator
shall aggregate the information provided by each Servicer with respect to the
total amount of Realized Losses experienced on the Mortgage Loans for the
related Distribution Date.
(b) Applied Loss Amounts with respect to the Mortgage Loans on any
Distribution Date shall be allocated as follows:
(i) any Applied Loss Amounts on the Mortgage Loans shall be
allocated first to the Class OC Certificates, until its Class Principal
Balance is reduced to zero, and second, to the Subordinated
Certificates in reverse order of their respective priorities of payment
(beginning with the Class of Class B Certificates then outstanding with
the highest numerical Class designation or, if no Classes of Class B
Certificates are outstanding, then beginning with the Class of Class M
Certificates then outstanding with the highest numerical Class
designation) until the respective Class Principal Balance of each such
Class is reduced to zero; and
82
(ii) The Class Principal Balance of the Class of Subordinated
Certificates then outstanding with the highest numerical Class
designation shall be reduced on each Distribution Date by the amount,
if any, by which the aggregate of the Class Principal Balances of all
outstanding Classes of Offered Certificates (after giving effect to the
distribution of principal and the allocation of Applied Loss Amounts on
the Mortgage Loans on such Distribution Date) exceeds the aggregate
Stated Principal Balance of the Mortgage Loans for the following
Distribution Date. For the avoidance of doubt, no reductions will be
made in the Class Principal Balance of the Class A Certificates in
respect of Realized Losses on the Mortgage Loans.
(c) Any Applied Loss Amounts allocated to a Class of Certificates or
any reduction in the Class Principal Balance of a Class of Certificates pursuant
to Section 5.04(b) above shall be allocated among the Certificates of such Class
in proportion to their respective Certificate Balances.
(d) Any allocation of Realized Losses to a Certificate or to any
Component or any reduction in the Certificate Balance of a Certificate, pursuant
to Section 5.04(b) above shall be accomplished by reducing the Certificate
Balance or Component Balance thereof, as applicable, immediately following the
distributions made on the related Distribution Date in accordance with the
definition of "Certificate Balance" or "Component Balance," as the case may be.
All Realized Losses or Applied Loss Amounts allocated to a Class of Component
Certificates will be allocated, pro rata, to the related Components.
(e) For the avoidance of doubt, no Realized Losses on the Mortgage
Loans shall be allocated to the Class P Certificates.
Section 5.05. Advances by the Master Servicer.
If any Servicer fails to remit any Advance required to be made under
the applicable Purchase and Servicing Agreement, the Master Servicer shall
itself make, or shall cause the successor Servicer to make, such Advance. If the
Master Servicer determines that an Advance is required, it shall on the Business
Day preceding the related Distribution Date immediately following such
Determination Date remit to the Securities Administrator from its own funds (or
funds advanced by the applicable Servicer) for deposit in the Distribution
Account immediately available funds in an amount equal to such Advance. The
Master Servicer and each Servicer shall be entitled to be reimbursed for all
Advances made by it. Notwithstanding anything to the contrary herein, in the
event the Master Servicer determines in its reasonable judgment that an Advance
is non-recoverable, the Master Servicer shall be under no obligation to make
such Advance. If the Master Servicer determines that an Advance is
non-recoverable, it shall, on or prior to the related Distribution Date, deliver
an Officer's Certificate to the Trustee and the Securities Administrator to such
effect.
Section 5.06. Compensating Interest Payments.
The amount of compensation payable to the Securities Administrator in
respect of the Mortgage Loans and any Distribution Date shall be reduced (but
not below zero) by the amount of any aggregate Compensating Interest Payment
from the Servicers for such Distribution Date,
83
but only to the extent that Prepayment Interest Shortfalls relating to such
Distribution Date are required to be paid by the Servicers pursuant to the
Purchase and Servicing Agreements, as amended by the Acknowledgements, but are
not actually paid by the Servicer. Such amount shall not be treated as an
Advance and shall not be reimbursable.
Section 5.07. [Reserved].
Section 5.08. [Reserved].
Section 5.09. Determination of Pass-Through Rates for LIBOR
Certificates.
(a) On each Interest Determination Date after the initial Interest
Determination Date and for so long as any LIBOR Certificates are outstanding,
the Securities Administrator will determine LIBOR on the basis of the British
Bankers' Association ("BBA") "Interest Settlement Rate" for one-month deposits
in U.S. dollars as found on Telerate page 3750 as of 11:00 a.m. London time on
each LIBOR Determination Date. "Telerate Page 3750" means the display page
currently so designated on the Moneyline Telerate Service (formerly the Dow
Xxxxx Markets) (or such other page as may replace that page on that service for
the purpose of displaying comparable rates or prices).
(b) If on any Interest Determination Date, LIBOR cannot be determined
as provided in paragraph (a) of this Section 5.09, the Securities Administrator
shall either (i) request each Reference Bank to inform the Securities
Administrator 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 Securities
Administrator 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 Securities Administrator 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 Securities
Administrator 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 Securities
Administrator, being so made, or (ii) in the event that the Securities
Administrator can determine no such arithmetic mean, the lowest
84
one-month United States dollar lending rate which New York City banks
selected by the Securities Administrator are quoting on such Interest
Determination Date to leading European banks.
(iii) If on any Interest Determination Date the Securities
Administrator 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 or (B) in the case of
the first Interest Determination Date, LIBOR shall be 5.32438%.
Until all of the LIBOR Certificates are paid in full, the Securities
Administrator will at all times retain at least four Reference Banks for the
purpose of determining LIBOR with respect to each Interest Determination Date.
The Securities Administrator 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 common control with, the Securities Administrator 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 Master Servicer
should terminate its appointment as Reference Bank, the Securities Administrator
shall promptly appoint or cause to be appointed another Reference Bank. The
Securities Administrator 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 Securities Administrator 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.
(d) In determining LIBOR, any Pass-Through Rate for the LIBOR
Certificates, any Interest Settlement Rate, or any Reserve Interest Rate, the
Securities Administrator 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 Securities Administrator shall not
have any liability or responsibility to any Person for (i) the 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 5.09.
(e) The establishment of LIBOR and each Pass-Through Rate for the LIBOR
Certificates by the Securities Administrator shall (in the absence of manifest
error) be final, conclusive and binding upon each Holder of a Certificate and
the Securities Administrator.
Section 5.10 The Reserve Fund.
85
On the Closing Date, the Securities Administrator shall establish and
maintain in its name, in trust for the benefit of the Certificates, the Reserve
Fund and shall deposit $1,000 therein upon receipt of such amount from or on
behalf of the Underwriter. On each Distribution Date, the Securities
Administrator shall transfer from the Distribution Account to the Reserve Fund
the amounts specified pursuant to Section 5.02(a)(1)(C)(viii). Any such amounts
transferred shall be treated for federal tax purposes as amounts distributed to
the Holders of the Class OC Certificates. On each Distribution Date, to the
extent required, the Securities Administrator shall withdraw amounts in the
Reserve Fund to make distributions to the Classes of Certificates in accordance
with the priorities set forth in Section 5.02(a)(1)(C) (viii). On the
Distribution Date on which the termination of the Certificates occurs pursuant
to Section 7.02, after making all distributions required in connection with the
Certificates, the Securities Administrator shall withdraw from the Reserve Fund
(to the extent of funds available on deposit therein) any remaining amounts and
distribute them to the Holders of the Class OC Certificates.
The Reserve Fund shall be an Eligible Account, and funds on deposit
therein shall be held separate and apart from, and shall not be commingled with,
any other moneys, including without limitation, other moneys held by the
Securities Administrator on behalf of the Trustee pursuant to this Agreement.
Amounts held in the Reserve Fund from time to time shall continue to constitute
assets of the Trust Fund, but not of any REMIC created under this Agreement,
until released from the Reserve Fund pursuant to this Section 5.10. The Reserve
Fund constitutes an "outside Reserve Fund" within the meaning of Treasury
Regulation ss. 1.860G-2(h) and is not an asset of any REMIC. The Holders of the
Class OC Certificates shall be the owner of the Reserve Fund. The Securities
Administrator shall keep records that accurately reflect the funds on deposit in
the Reserve Fund. Funds in the Reserve Fund may be invested in Permitted
Investments at the written direction of the Majority of the Holders of the Class
OC Certificates, which Permitted Investments shall mature not later than the
Business Day immediately preceding the first Distribution Date that follows the
date of such investment (except that if such Permitted Investment is an
obligation of the institution that maintains the Reserve Fund, then such
Permitted Investment shall mature not later than such Distribution Date) and
shall not be sold or disposed of prior to maturity; provided, however, that if
the Securities Administrator does not receive written investment directions, the
funds in the Reserve Fund shall be invested in the Xxxxx Fargo Prime Investment
Money Market Fund. All such Permitted Investments shall be made in the name of
the Trustee, for the benefit of the Holders of the Class OC Certificates. All
losses incurred in the Reserve Fund in respect of any such investments shall be
charged against amounts on deposit in the Reserve Fund (or such investments
immediately as realized). The Securities Administrator shall not be liable for
the amount of any loss incurred in respect of any investment or lack of
investment of funds in the Reserve Fund. The Class OC Certificates shall
evidence ownership of the Reserve Fund for federal tax purposes.
To the extent that a Class of Certificates receives interest in excess
of the Net WAC Pass-Through Rate, such interest shall be deemed to have been
paid to the Reserve Fund and then paid by the Reserve Fund to those
Certificateholders. For purposes of the Code, amounts deemed deposited in the
Reserve Fund shall be deemed to have first been distributed to the Class OC
Certificates.
86
ARTICLE VI
CONCERNING THE TRUSTEE AND
THE SECURITIES ADMINISTRATOR; EVENTS OF DEFAULT
Section 6.01. Duties of Trustee and the Securities Administrator.
(a) The Trustee, except during the continuance of an Event of Default,
and the Securities Administrator undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement. Any permissive right of
the Trustee or the Securities Administrator provided for in this Agreement shall
not be construed as a duty of the Trustee or the Securities Administrator. If an
Event of Default has occurred and has not otherwise been cured or waived, the
Trustee or the Securities Administrator shall exercise such of the rights and
powers vested in it by this Agreement and use the same degree of care and skill
in their exercise as a prudent Person would exercise or use under the
circumstances in the conduct of such Person's own affairs, unless the Trustee is
acting as master servicer, in which case it shall use the same degree of care
and skill (in its capacity as successor Master Servicer) as a master servicer
hereunder.
(b) Each of the Trustee and the Securities Administrator, upon receipt
of all resolutions, certificates, statements, opinions, reports, documents,
orders or other instruments furnished to the Trustee or the Securities
Administrator which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they are in
the form required by this Agreement; provided, however, that neither the Trustee
nor the Securities Administrator shall be responsible for the accuracy or
content of any such resolution, certificate, statement, opinion, report,
document, order or other instrument furnished by the Master Servicer or any
Servicer to the Trustee or the Securities Administrator pursuant to this
Agreement, and shall not be required to recalculate or verify any numerical
information furnished to the Trustee or the Securities Administrator pursuant to
this Agreement. Subject to the immediately preceding sentence, if any such
resolution, certificate, statement, opinion, report, document, order or other
instrument is found not to conform to the form required by this Agreement in a
material manner the Securities Administrator shall take such action as it deems
appropriate to cause the instrument to be corrected, and if the instrument is
not corrected to the Securities Administrator 's satisfaction, the Securities
Administrator will provide notice thereof to the Certificateholders and will, at
the expense of the Trust Fund, which expense shall be reasonable given the scope
and nature of the required action, take such further action as directed by the
Certificateholders.
(c) Neither the Trustee nor the Securities Administrator shall have any
liability arising out of or in connection with this Agreement, except for its
respective negligence or willful misconduct. Notwithstanding anything in this
Agreement to the contrary, neither the Trustee nor the Securities Administrator
shall be liable for special, indirect or consequential losses or damages of any
kind whatsoever (including, but not limited to, lost profits). No provision of
this Agreement shall be construed to relieve the Trustee or the Securities
Administrator from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that:
87
(i) The Trustee shall not be personally liable with respect to
any action taken, suffered or omitted to be taken by it in good faith
in accordance with the direction of Holders of Certificates as provided
in Section 6.18 hereof;
(ii) For all purposes under this Agreement, the Trustee shall
not be deemed to have notice of any 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 is
received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Holders of the Certificates and this
Agreement;
(iii) For all purposes under this Agreement, the Securities
Administrator shall not be deemed to have notice of any Event of
Default (other than resulting from a failure by the Master Servicer (i)
to remit funds (or to make Advances) or (ii) to furnish information to
the Securities Administrator when required to do so) unless a
Responsible Officer of the Securities Administrator has actual
knowledge thereof or unless written notice of any event which is in
fact such a default is received by the Securities Administrator at the
address provided in Section 11.07, and such notice references the
Holders of the Certificates and this Agreement;
(iv) No provision of this Agreement shall require the Trustee
or the Securities Administrator to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that
repayment of such funds or indemnity reasonably satisfactory to it
against such risk or liability is not reasonably assured to it; and
none of the provisions contained in this Agreement shall in any event
require the Trustee or the Securities Administrator to perform, or be
responsible for the manner of performance of, any of the obligations of
the Master Servicer under this Agreement;
(v) Neither the Trustee nor the Securities Administrator shall
be responsible for any act or omission of each other or the Master
Servicer, the Depositor, the Seller, any Servicer or the Custodian.
(d) The Trustee shall have no duty hereunder with respect to any
complaint, claim, demand, notice or other document it may receive or which may
be alleged to have been delivered to or served upon it by the parties as a
consequence of the assignment of any Mortgage Loan hereunder; provided, however,
that the Trustee shall promptly remit to the Master Servicer, upon receipt any
such complaint, claim, demand, notice or other document (i) which is delivered
to the Corporate Trust Office of the Trustee, (ii) of which a Responsible
Officer has actual knowledge, and (iii) which contains information sufficient to
permit the Trustee to make a determination that the real property to which such
document relates is a Mortgaged Property related to a Mortgage Loan.
(e) Neither the Trustee nor the Securities Administrator shall be
personally liable with respect to any action taken, suffered or omitted to be
taken by it in good faith in accordance with the direction of the
Certificateholders of any Class holding Certificates which evidence, as to such
Class, Percentage Interests aggregating not less than 25% as to the time, method
and
88
place of conducting any proceeding for any remedy available to the Trustee or
the Securities Administrator or exercising any trust or power conferred upon the
Trustee or the Securities Administrator, as applicable, under this Agreement or
the Acknowledgements.
(f) Neither the Trustee nor the Securities Administrator shall be
required to perform services under this Agreement, or to expend or risk its own
funds or otherwise incur financial liability for the performance of any of its
duties hereunder or the exercise of any of its rights or powers if there is
reasonable ground for believing that the timely payment of its fees and expenses
or the repayment of such funds or indemnity reasonably satisfactory to it
against such risk or liability is not reasonably assured to it, and none of the
provisions contained in this Agreement shall in any event require the Trustee or
the Securities Administrator, as applicable, to perform, or be responsible for
the manner of performance of, any of the obligations of the Master Servicer or
any Servicer under this Agreement or any Purchase and Servicing Agreement except
during such time, if any, as the Trustee shall be the successor to, and be
vested with the rights, duties, powers and privileges of, the Master Servicer in
accordance with the terms of this Agreement.
(g) The Trustee shall not be held liable by reason of any insufficiency
in the Distribution Account resulting from any investment loss on any Permitted
Investment included therein (except to the extent that the Trustee is the
obligor and has defaulted thereon).
(h) Neither the Trustee nor, except as otherwise provided herein, the
Securities Administrator shall have any duty (A) to see to any recording,
filing, or depositing of this Agreement or any agreement referred to herein or
any financing statement or continuation statement evidencing a security
interest, or to see to the maintenance of any such recording or filing or
depositing or to any rerecording, refiling or redepositing of any thereof, (B)
to see to any insurance, (C) to see to the payment or discharge of any tax,
assessment, or other governmental charge or any lien or encumbrance of any kind
owing with respect to, assessed or levied against, any part of the Trust Fund
other than from funds available in the Distribution Account, or (D) to confirm
or verify the contents of any reports or certificates of the Master Servicer or
any Servicer delivered to the Trustee or the Securities Administrator pursuant
to this Agreement believed by the Trustee or the Securities Administrator, as
applicable, to be genuine and to have been signed or presented by the proper
party or parties.
(i) Neither the Securities Administrator nor the Trustee shall be
liable in its individual capacity for an error of judgment made in good faith by
a Responsible Officer or other officers of the Trustee or the Securities
Administrator, as applicable, unless it shall be proved that the Trustee or the
Securities Administrator, as applicable, was negligent in ascertaining the
pertinent facts.
(j) Notwithstanding anything in this Agreement to the contrary, neither
the Securities Administrator nor the Trustee shall be liable for special,
indirect or consequential losses or damages of any kind whatsoever (including,
but not limited to, lost profits), even if the Trustee or the Securities
Administrator, as applicable, has been advised of the likelihood of such loss or
damage and regardless of the form of action.
89
(k) Neither the Securities Administrator nor the Trustee shall be
responsible for the acts or omissions of the other, it being understood that
this Agreement shall not be construed to render them agents of one another, or
of any Servicer.
Section 6.02. Certain Matters Affecting the Trustee and the Securities
Administrator.
Except as otherwise provided in Section 6.01:
(i) Each of the Trustee and the Securities Administrator may
request, and may rely and shall be protected in acting or refraining
from acting upon any resolution, Officer's Certificate, certificate of
auditors or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other paper
or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) Each of the Trustee and the Securities Administrator may
consult with counsel and any advice of its counsel or Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such advice or Opinion of Counsel;
(iii) Neither the Trustee nor the Securities Administrator
shall be personally liable for any action taken, suffered or omitted by
it in good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Agreement;
(iv) Unless an Event of Default shall have occurred and be
continuing, neither the Trustee nor the Securities Administrator shall
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 to do so by the Holders of at
least a majority in Class Principal Balance (or Percentage Interest) of
each Class of Certificates; provided, however, that, if the payment
within a reasonable time to the Trustee or the Securities
Administrator, as applicable, of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee or the Securities Administrator, as
applicable, not reasonably assured to the Trustee or the Securities
Administrator by the security afforded to it by the terms of this
Agreement, the Trustee or the Securities Administrator, as applicable,
may require indemnity reasonably satisfactory to it against such
expense or liability or payment of such estimated expenses from the
Certificateholders as a condition to proceeding. The reasonable expense
thereof shall be paid by the party requesting such investigation and if
not reimbursed by the requesting party shall be reimbursed to the
Trustee or the Securities Administrator, as applicable, by the Trust
Fund;
(v) Each of the Trustee and the Securities Administrator may
execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents, custodians or
attorneys, which agents, custodians or attorneys shall have any and all
of the rights, powers, duties and obligations of the Trustee and the
Securities
90
Administrator conferred on them by such appointment, provided that each
of the Trustee and the Securities Administrator shall continue to be
responsible for its duties and obligations hereunder to the extent
provided herein, and provided further that neither the Trustee nor the
Securities Administrator shall be responsible for any misconduct or
negligence on the part of any such agent or attorney appointed with due
care by the Trustee or the Securities Administrator, as applicable;
(vi) Neither the Trustee nor the Securities Administrator
shall be under any obligation to exercise any of the trusts or powers
vested in it by this Agreement or the Acknowledgements or to institute,
conduct or defend any litigation hereunder or in relation hereto, in
each case 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 or the
Securities Administrator, as applicable, security or indemnity
reasonably satisfactory to it against the costs, expenses and
liabilities which may be incurred therein or thereby;
(vii) The right of the Trustee and the Securities
Administrator to perform any discretionary act enumerated in this
Agreement shall not be construed as a duty, and neither the Trustee nor
the Securities Administrator shall be answerable for other than its
negligence or willful misconduct in the performance of such act; and
(viii) Neither the Trustee nor the Securities Administrator
shall be required to give any bond or surety in respect of the
execution of the Trust Fund created hereby or the powers granted
hereunder.
Section 6.03. Trustee and Securities Administrator Not Liable for
Certificates.
The Trustee and the Securities Administrator make no representations as
to the validity or sufficiency of this Agreement, any Purchase and Servicing
Agreement or Acknowledgement or of the Certificates (other than, in the case of
the Securities Administrator, the certificate of authentication on the
Certificates) or of any Mortgage Loan, or related document save that the Trustee
and the Securities Administrator represent that, assuming due execution and
delivery by the other parties hereto, this Agreement has been duly authorized,
executed and delivered by it and constitutes its valid and binding obligation,
enforceable against it in accordance with its terms except that such
enforceability may be subject to (A) applicable bankruptcy and insolvency laws
and other similar laws affecting the enforcement of the rights of creditors
generally, and (B) general principles of equity regardless of whether such
enforcement is considered in a proceeding in equity or at law. The Trustee and
the Securities Administrator shall not be accountable for the use or application
by the Depositor of funds paid to the Depositor in consideration of the
assignment of the Mortgage Loans to the Trust Fund by the Depositor or for the
use or application of any funds deposited into the Distribution Account or any
other fund or account maintained with respect to the Certificates. The Trustee
and the Securities Administrator shall not be responsible for the legality or
validity of this Agreement or any other document or agreement described in this
Section 6.03 or the validity, priority, perfection or sufficiency of the
security for the Certificates issued or intended to be issued hereunder. Neither
the Trustee nor, except as otherwise provided herein, the Securities
Administrator shall have any responsibility for filing any financing or
continuation statement in
91
any public office at any time or to otherwise perfect or maintain the perfection
of any security interest or lien granted to it hereunder or to record this
Agreement.
Section 6.04. Trustee and the Securities Administrator May Own
Certificates.
The Trustee and the Securities Administrator and any Affiliate or agent
of either of them in its individual or any other capacity may become the owner
or pledgee of Certificates and may transact banking and trust business with the
other parties hereto and their Affiliates with the same rights it would have if
it were not Trustee, Securities Administrator or such agent.
Section 6.05. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be (i) an institution whose
accounts are insured by the FDIC, (ii) a corporation or national banking
association, organized and doing business under the laws of any State or the
United States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by federal or state authority and (iii)
not an Affiliate of the Master Servicer or any Servicer. If such corporation or
national banking association publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then, for the purposes of this Section, the combined capital and
surplus of such corporation or national banking 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 provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.06.
Section 6.06. Resignation and Removal of Trustee and the Securities
Administrator.
(a) The Trustee may at any time resign and be discharged from the trust
hereby created by giving written notice thereof to the Securities Administrator,
the Depositor and the Master Servicer. Upon receiving such notice of
resignation, the Depositor will promptly appoint a successor trustee, by written
instrument, one copy of which instrument shall be delivered to the resigning
Trustee, one copy to the successor trustee, one copy to the Securities
Administrator and one copy to the Master Servicer. If no successor trustee shall
have been so appointed and shall have accepted appointment within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.
At least 15 calendar days prior to the effective date of such
resignation, the Trustee shall provide (x) written notice to the Depositor and
the Master Servicer of any successor pursuant to this Section (other than a
successor appointed by the Depositor in accordance with the preceding paragraph)
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.
(b) If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 6.05 and shall fail to resign after
written request therefor by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged a bankrupt or insolvent, or
92
a receiver of the Trustee of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of either of their
property or affairs for the purpose of rehabilitation, conservation or
liquidation, (iii) (A) a tax is imposed or threatened with respect to the Trust
Fund by any state in which the Trustee or the Trust Fund held by the Trustee is
located due to the location of the Trustee, (B) the imposition of such tax would
be avoided by the appointment of a different trustee and (C) the Trustee fails
to indemnify the Trust Fund against such tax (iv) the continued use of the
Trustee would result in a downgrading of the rating by any Rating Agency of any
Class of Certificates with a rating, or (v) the Trustee fails to comply with its
obligations under the penultimate paragraph of Section 6.14(a), in the preceding
paragraph or Article XII 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 (iv), the Depositor shall remove the Trustee and the
Depositor shall appoint a successor trustee, acceptable to the Master Servicer
by written instrument, one copy of which instrument shall be delivered to the
Trustee so removed, one copy to the successor trustee, one copy to the
Securities Administrator and one copy to the Master Servicer.
(c) The Holders of more than 50% of the Class Principal Balance (or
Percentage Interest) of each Class of Certificates may at any time upon 30 days'
written notice to the Trustee and to the Depositor remove the Trustee by such
written instrument, signed by such Holders or their attorney-in-fact duly
authorized, one copy of which instrument shall be delivered to the Depositor,
one copy to the Trustee, one copy to the Securities Administrator and one copy
to the Master Servicer; the Depositor shall thereupon appoint a successor
trustee in accordance with this Section.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee, as provided
in Section 6.07. If no successor trustee shall have been so appointed and shall
have accepted appointment within 30 days after such notice of dismissal, the
Trustee who received such notice of dismissal may petition any court of
competent jurisdiction for the appointment of a successor trustee.
(e) The Securities Administrator shall not resign except in accordance
with the provisions of Sections 9.06 and 9.07 hereof, to the same extent that
the Master Servicer is entitled to resign or assign or delegate, as applicable,
its duties hereunder.
(f) If at any time the Securities Administrator shall cease to be
eligible in accordance with the provisions of Section 9.10 hereof and shall fail
to resign after written request thereto by the Depositor, or if at any time the
Securities Administrator shall become incapable of acting, or shall be adjudged
as bankrupt or insolvent, or a receiver of the Securities Administrator or of
its property shall be appointed, or any public officer shall take charge or
control of the Securities Administrator or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, or a tax is imposed with
respect to the Trust Fund by any state in which the Securities Administrator or
the Trust Fund is located and the imposition of such tax would be avoided by the
appointment of a different Securities Administrator, then the Depositor or the
Trustee may remove the Securities Administrator and appoint a successor
securities administrator by written instrument, in triplicate, one copy of which
instrument shall
93
be delivered to the Securities Administrator so removed, one copy of which shall
be delivered to the Master Servicer and one copy to the successor securities
administrator.
(g) If no successor securities administrator shall have been appointed
and shall have accepted appointment within 60 days after Xxxxx Fargo Bank, N.A.,
as Securities Administrator, ceases to be the securities administrator pursuant
to this Section 6.06, then the Trustee (as successor Securities Administrator)
shall perform the duties of the Securities Administrator pursuant to this
Agreement. The Trustee shall notify the Rating Agencies of any change of the
Securities Administrator. In such event, the Trustee shall assume all of the
rights and obligations of the Securities Administrator hereunder arising
thereafter except that the Trustee shall not be (i) liable for losses of the
predecessor Securities Administrator or any acts or omissions of the predecessor
Securities Administrator hereunder, (ii) deemed to have made any representations
and warranties of the Securities Administrator made herein and (iii) subject to
the same resignation limitations as set forth in Section 9.06 hereof; provided,
however, that the Trustee (as successor securities administrator) shall not
resign until a successor securities administrator has accepted appointment
pursuant to Section 6.07 hereof. The Trustee shall not be accountable, shall
have no liability and makes no representation as to any acts or omissions
hereunder of the Securities Administrator until such time as the Trustee may be
required to act as successor Securities Administrator pursuant to this Section
6.06 and thereupon only for the acts or omissions of the Trustee as successor
Securities Administrator. If the Trustee is unwilling, or unable, to act as
successor Securities Administrator, then, in such event, the Trustee may
appoint, or petition a court of competent jurisdiction to appoint a successor
Securities Administrator meeting the criteria set forth in Section 9.10 hereof.
Such successor Securities Administrator shall be entitled to the Securities
Administrator Compensation.
(h) The Trustee as successor securities administrator shall be entitled
to be reimbursed for all reasonable costs and expenses associated with the
transfer of the duties of the Securities Administrator by the predecessor
Securities Administrator, including, without limitation, any costs or expenses
associated with the complete transfer of all securities administrator data and
the completion, correction or manipulation of such securities administrator data
as may be required by the Trustee as successor securities administrator to
correct any errors or insufficiencies in such securities administrator data or
otherwise to enable the Trustee or successor securities administrator to perform
the duties of the Securities Administrator properly and effectively; provided,
however, that the predecessor Securities Administrator shall not be obligated to
make any such reimbursements if such Securities Administrator was terminated or
removed without cause or if such termination or removal was a result of the
imposition of any tax on the Trust Estate by any state in which the Securities
Administrator or the Trust Fund is located. If such costs are not paid by the
predecessor Securities Administrator, the Trustee shall pay such costs from the
Trust Fund.
(i) The Trustee, as successor Securities Administrator, as compensation
for its activities hereunder as successor Securities Administrator, shall be
entitled to retain or withdraw from the Distribution Account an amount equal to
the Securities Administrator Compensation.
(j) The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Securities Administrator and appoint a
successor securities administrator by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys-in-
94
fact duly authorized, one complete set of which instruments shall be delivered
by the successor Securities Administrator to the Trustee, one complete set to
the Securities Administrator so removed and one complete set to the successor so
appointed. Notice of any removal of the Securities Administrator shall be given
to each Rating Agency by the successor securities administrator.
(k) Any resignation or removal of the Securities Administrator and
appointment of a successor securities administrator pursuant to any of the
provisions of this Section 6.06 or Section 9.06 shall become effective upon
acceptance by the successor securities administrator of appointment as provided
in Section 6.07 hereof.
(l) If the Securities Administrator and the Master Servicer are the
same Person, any removal of the Master Servicer pursuant to an Event of Default
shall also result in the removal of the Securities Administrator and require the
appointment of a successor pursuant to this Section and Section 6.07.
(m) The Securities Administrator shall cooperate with the Trustee and
any successor securities administrator in effecting the termination of the
Securities Administrator's responsibilities and rights hereunder, providing to
the Trustee and successor securities administrator all documents and records in
electronic or other form reasonably requested by it to enable it to assume the
Securities Administrator's functions hereunder and for the transfer to the
Trustee or successor Securities Administrator of all amounts in the Distribution
Account or any other account or fund maintained by the Securities Administrator
with respect to the Trust Fund. Neither the Trustee nor the Master Servicer, as
applicable, nor any other successor, as applicable, shall be deemed to be in
default hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof caused by (i) the failure of the
predecessor Securities Administrator to deliver, or any delay in delivering,
cash, documents or records to it, (ii) the failure of the predecessor Securities
Administrator to cooperate as required by this Agreement, (iii) the failure of
the predecessor Securities Administrator to deliver the related Mortgage Loan
data as required by this Agreement or (iv) restrictions imposed by any
regulatory authority having jurisdiction over the predecessor Securities
Administrator. No successor securities administrator shall be deemed to be in
default hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof caused by (i) the failure of the
Master Servicer to deliver, or any delay in delivering cash, documents or
records to it related to such distribution, or (ii) the failure of Trustee or
the Master Servicer to cooperate as required by this Agreement.
Section 6.07. Successor Trustee and Successor Securities Administrator.
(a) Any successor trustee or successor securities administrator
appointed as provided in Section 6.06 shall execute, acknowledge and deliver to
the Depositor and to its predecessor trustee or predecessor securities
administrator, as applicable, an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
or predecessor securities administrator, as applicable, shall become effective
and such successor trustee or successor securities administrator, as applicable,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
like effect as if originally named as trustee or
95
securities administrator, as applicable, herein. The predecessor trustee or
predecessor securities administrator, as applicable, shall deliver to the
successor trustee or successor securities administrator, as applicable, all
Trustee Mortgage Files and documents and statements related to each Trustee
Mortgage File held by it hereunder, and shall duly assign, transfer, deliver and
pay over to the successor trustee the entire Trust Fund, together with all
necessary instruments of transfer and assignment or other documents properly
executed necessary to effect such transfer and such of the records or copies
thereof maintained by the predecessor trustee in the administration hereof as
may be requested by the successor trustee and shall thereupon be discharged from
all duties and responsibilities under this Agreement. In addition, the Depositor
and the predecessor trustee or predecessor securities administrator, as
applicable, shall execute and deliver such other instruments and do such other
things as may reasonably be required to more fully and certainly vest and
confirm in the successor trustee or successor securities administrator, as
applicable, all such rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in this
Section unless at the time of such appointment such successor trustee shall be
eligible under the provisions of Section 6.05 and 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.
(c) Upon acceptance of appointment by a successor trustee or successor
securities administrator, as applicable, as provided in this Section, the Master
Servicer shall mail notice of the succession of such trustee or securities
administrator, as applicable, hereunder to all Holders of Certificates at their
addresses as shown in the Certificate Register and to any Rating Agency. The
costs of such mailing shall be borne by the Master Servicer.
(d) Any successor securities administrator shall also either serve as
auction administrator pursuant to Section 7.01(b) hereof or select an investment
bank to act as auction administrator at the expense of the Trust Fund.
(e) [Reserved].
Section 6.08. Merger or Consolidation of Trustee or the Securities
Administrator.
Any Person into which the Trustee or Securities Administrator may be
merged or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Trustee or Securities
Administrator shall be a party, or any Persons succeeding to the business of the
Trustee or Securities Administrator, shall be the successor to the Trustee or
Securities Administrator hereunder, without the execution or filing of any paper
or any further act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding, provided that, in the case of the Trustee, such
Person shall be eligible under the provisions of Section 6.05.
At least 15 calendar days prior to the effective date of any succession
by merger or consolidation of the Trustee or the Securities Administrator, the
Trustee or the Securities Administrator, as applicable, shall provide (x)
written notice to the Depositor of any successor
96
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 or Securities Administrator, as
applicable.
Section 6.09. Appointment of Co-Trustee, Separate Trustee or Custodian.
(a) Notwithstanding any other provisions hereof, at any time, the
Trustee, the Depositor or the Certificateholders evidencing more than 50% of the
Class Principal Balance (or Percentage Interest) of every Class of Certificates
shall have the power from time to time to appoint one or more Persons, approved
by the Trustee, to act either as co-trustees jointly with the Trustee, or as
separate trustees, or as custodians, for the purpose of holding title to,
foreclosing or otherwise taking action with respect to any Mortgage Loan outside
the state where the Trustee has its principal place of business where such
separate trustee or co-trustee is necessary or advisable (or the Trustee has
been advised by the Master Servicer that such separate trustee or co-trustee is
necessary or advisable) under the laws of any state in which a property securing
a Mortgage Loan is located or for the purpose of otherwise conforming to any
legal requirement, restriction or condition in any state in which a property
securing a Mortgage Loan is located or in any state in which any portion of the
Trust Fund is located. The separate Trustees, co-trustees, or custodians so
appointed shall be trustees or custodians for the benefit of all the
Certificateholders and shall have such powers, rights and remedies as shall be
specified in the instrument of appointment; provided, however, that no such
appointment shall, or shall be deemed to, constitute the appointee an agent of
the Trustee. The obligation of the Master Servicer to make Advances pursuant to
Section 5.05 hereof shall not be affected or assigned by the appointment of a
co-trustee.
(b) Every separate trustee, co-trustee, and custodian shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all powers, duties, obligations and rights conferred upon
the Trustee in respect of the receipt, custody and payment of moneys
shall be exercised solely by the Trustee;
(ii) all other rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed
upon and exercised or performed by the Trustee and such separate
trustee, co-trustee, or custodian jointly, except to the extent that
under any law of any jurisdiction in which any particular act or acts
are to be performed the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties
and obligations, including the holding of title to the Trust Fund or
any portion thereof in any such jurisdiction, shall be exercised and
performed by such separate trustee, co-trustee, or custodian;
(iii) no trustee or custodian hereunder shall be personally
liable by reason of any act or omission of any other trustee or
custodian hereunder; and
(iv) the Trustee may at any time, by an instrument in writing
executed by it, with the concurrence of the Depositor, accept the
resignation of or remove any separate
97
trustee, co-trustee or custodian, so appointed by it or them, if such
resignation or removal does not violate the other terms of this
Agreement.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee, co-trustee or custodian shall refer to this Agreement and the
conditions of this Article VI. 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 given
to the Master Servicer.
(d) Any separate trustee, co-trustee or custodian may, at any time,
constitute the Trustee its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate
trustee, co-trustee or custodian 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.
(e) No separate trustee, co-trustee or custodian hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
6.05 hereunder and no notice to the Certificateholders of the appointment shall
be required under Section 6.07 hereof.
(f) The Securities Administrator on behalf of the Trustee agrees to
instruct the co-trustees, if any, to the extent necessary to fulfill the
Trustee's obligations hereunder.
(g) The Trust shall pay the reasonable compensation of the co-trustees
(which compensation shall not reduce any compensation payable to the Trustee
under such Section).
Section 6.10. Authenticating Agents.
(a) The Trustee may appoint one or more Authenticating Agents which
shall be authorized to act on behalf of the Trustee in authenticating
Certificates. The Securities Administrator is hereby appointed as initial
Authenticating Agent, and the Securities Administrator accepts such appointment.
Wherever reference is made in this Agreement to the authentication of
Certificates by the Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication on behalf of the Trustee by
an Authenticating Agent and a certificate of authentication executed on behalf
of the Trustee by an Authenticating Agent. Each Authenticating Agent must be a
corporation organized and doing business under the laws of the United States of
America or of any state, having a combined capital and surplus of at least
$15,000,000, authorized under such laws to do a trust business and subject to
supervision or examination by federal or state authorities.
(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or
98
consolidation to which any Authenticating Agent shall be a party, or any Person
succeeding to the corporate agency business of any Authenticating Agent, shall
continue to be the Authenticating Agent without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at least
30 days' advance written notice of resignation to the Trustee and the Depositor.
The Trustee may at any time terminate the agency of any Authenticating Agent by
giving written notice of termination to such Authenticating Agent and the
Depositor. Upon receiving a notice of resignation or upon such a termination, or
in case at any time any Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 6.10, the Trustee may appoint a
successor authenticating agent, shall give written notice of such appointment to
the Depositor and shall mail notice of such appointment to all Holders of
Certificates. Any successor authenticating agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. No successor authenticating agent
shall be appointed unless eligible under the provisions of this Section 6.10. No
Authenticating Agent shall have responsibility or liability for any action taken
by it as such at the direction of the Trustee.
Section 6.11. Indemnification of the Trustee and the Securities
Administrator.
The Trustee (in its individual capacity and in its representative
capacity as Trustee hereunder) and the Securities Administrator and their
respective directors, officers, employees and agents shall be entitled to
indemnification from the Trust Fund for any loss, liability or expense
(including the reasonable compensation and the expenses and disbursements of its
agents or counsel), incurred without negligence or willful misconduct on their
part, arising out of, or in connection with, the acceptance or administration of
the trusts created hereunder or under the Purchase and Servicing Agreements, the
Acknowledgements, or in connection with the performance of their duties
hereunder or thereunder including the costs and expenses of defending themselves
against any claim in connection with the exercise or performance of any of their
powers or duties hereunder or thereunder, provided that:
(i) with respect to any such claim, the Trustee or the
Securities Administrator, as applicable, shall have given the Depositor
written notice thereof promptly after the Trustee, the Securities
Administrator, as applicable, shall have knowledge thereof;
(ii) while maintaining control over its own defense, the
Trustee or the Securities Administrator, as applicable, shall cooperate
and consult fully with the Depositor in preparing such defense; and
(iii) notwithstanding anything to the contrary in this Section
6.11, the Trust Fund shall not be liable for settlement of any such
claim by the Trustee or the Securities Administrator, as applicable,
entered into without the prior consent of the Depositor, which consent
shall not be unreasonably withheld.
The provisions of this Section 6.11 shall survive any termination of
this Agreement and the resignation or removal of the Trustee or the Securities
Administrator or Custodian, as
99
applicable, and shall be construed to include, but not be limited to any loss,
liability or expense under any environmental law.
Section 6.12. Fees and Expenses of the Master Servicer, Securities
Administrator, the Trustee and the Custodian.
(a) For so long as Xxxxx Fargo Bank, National Association is the Master
Servicer and the Securities Administrator, the Securities Administrator shall be
entitled to be paid by the Master Servicer reasonable compensation for the
Securities Administrator's services hereunder in an amount to be agreed upon
between the Master Servicer and the Securities Administrator. Should Xxxxx Fargo
Bank, National Association no longer be both the Master Servicer and the
Securities Administrator, the Securities Administrator shall be entitled to
receive the Securities Administrator Compensation payable pursuant to Section
4.02(b)(ii) hereof. The Securities Administrator shall be entitled to all
disbursements and advancements incurred or made by the Securities Administrator
in accordance with this Agreement (including fees and expenses of its counsel
and all persons not regularly in its employment), except any such expenses
arising from its negligence, bad faith or willful misconduct.
(b) As compensation for its services hereunder, the Trustee and the
Custodian shall each be entitled to receive a fee (which, in the case of the
Trustee, shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) which shall be paid by the Master
Servicer pursuant to a separate agreement between the Trustee, the Custodian and
the Master Servicer. Any expenses incurred by the Trustee or the Custodian shall
be reimbursed in accordance with Section 6.11. The parties hereto acknowledge
and agree that (i) the Master Servicer shall only be obligated to pay to the
Custodian the fee agreed to by the Custodian and the Master Servicer in the
separate fee agreement referred to above, and (ii) except as may be expressly
set forth therein with respect to the Master Servicer, in no event shall the
Master Servicer have any responsibility or liability for the payment of any
other fees or any expenses or other amounts, if any, that may be payable to the
Custodian, all of which shall be payable in accordance with the terms and
conditions herein.
Section 6.13. Collection of Monies.
Except as otherwise expressly provided in this Agreement, the
Securities Administrator on behalf of the Trustee may demand payment or delivery
of, and shall receive and collect, all money and other property payable to or
receivable by the Securities Administrator on behalf of the Trustee pursuant to
this Agreement. The Securities Administrator on behalf of the Trustee shall hold
all such money and property received by it as part of the Trust Fund and shall
distribute it as provided in this Agreement.
Section 6.14. Events of Default; Trustee To Act; Appointment of
Successor.
(a) The occurrence of any one or more of the following events shall
constitute an "Event of Default" with respect to the Master Servicer:
(i) Any failure by the Master Servicer to furnish the
Securities Administrator the Mortgage Loan data on the Mortgage Loans
sufficient to prepare the reports described in Section 4.05 which
continues unremedied for a period of one Business Day
100
after the date upon which written notice of such failure shall have
been given to the Master Servicer by the Trustee or the Securities
Administrator or to the Master Servicer, the Securities Administrator
and the Trustee by the Holders of not less than 25% of the Class
Principal Balance or Percentage Interest of each Class of Certificates
affected thereby; or
(ii) Any failure on the part of the Master Servicer duly to
observe or perform in any material respect any other of the covenants
or agreements (other than those referred to in (vii) and (ix) below) on
the part of the Master Servicer contained in this Agreement (including
any obligation to enforce any Purchase and Servicing Agreement) or any
representation or warranty of the Master Servicer shall prove to be
untrue in any material respect, which failure or breach continues
unremedied for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have
been given to the Master Servicer by the Trustee or the Securities
Administrator, or to the Master Servicer, the Securities Administrator
and the Trustee by the Holders of more than 50% of the Aggregate Voting
Interests of the Certificates; provided that the sixty-day cure period
shall not apply so long as the Depositor is required to file Exchange
Act Reports with respect to the Trust Fund, the failure to comply with
the requirements set forth in Section 9.11, Section 9.05 and Section
9.06 (with respect to notice and information to be provided to the
Depositor) or Article XII, for which the grace period shall not exceed
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); or
(iii) A decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Master Servicer, and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days or
any Rating Agency reduces or withdraws or threatens to reduce or
withdraw the rating of the Certificates because of the financial
condition or loan servicing capability of such Master Servicer; or
(iv) The Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities, voluntary liquidation
or similar proceedings of or relating to the Master Servicer or of or
relating to all or substantially all of its property; or
(v) The Master Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make
an assignment for the benefit of its creditors or voluntarily suspend
payment of its obligations; or
(vi) The Master Servicer shall be dissolved, or shall dispose
of all or substantially all of its assets, or consolidate with or merge
into another entity or shall permit another entity to consolidate or
merge into it, such that the resulting entity does not meet the
criteria for a successor servicer as specified in Section 9.05 hereof;
or
101
(vii) If a representation or warranty set forth in Section
9.03 hereof shall prove to be incorrect as of the time made in any
respect that materially and adversely affects the interests of the
Certificateholders, and the circumstance or condition in respect of
which such representation or warranty was incorrect shall not have been
eliminated or cured within 90 days after the date on which written
notice of such incorrect representation or warranty shall have been
given to the Master Servicer by the Trustee or the Securities
Administrator, or to the Master Servicer, the Securities Administrator
and the Trustee by the Holders of more than 50% of the Aggregate Voting
Interests of the Certificates; or
(viii) A sale or pledge of any of the rights of the Master
Servicer hereunder or an assignment of this Agreement by the Master
Servicer or a delegation of the rights or duties of the Master Servicer
hereunder shall have occurred in any manner not otherwise permitted
hereunder and without the prior written consent of the Trustee and
Certificateholders holding more than 50% of the Aggregate Voting
Interests of the Certificates; or
(ix) After receipt of notice from the Trustee or the
Securities Administrator, any failure of the Master Servicer to make
any Advances required to be made by it hereunder; or
(x) (a) Any failure by the Master Servicer to deposit in the
Distribution Account or remit to the Securities Administrator any
payment required to be made by the Master Servicer under the terms of
this Agreement (other than an Advance required pursuant to Section 5.05
hereof), which failure shall continue unremedied for three Business
Days after the date upon which written notice of such failure shall
have been given to the Master Servicer by the Securities Administrator,
Trustee or the Depositor or to the Master Servicer and the Trustee by
the Holders of Certificates having not less than 25% of the Voting
Rights evidenced by the Certificates or (b) any failure by the Master
Servicer to deposit in the Distribution Account or remit to the
Securities Administrator any Advance required to be made by the Master
Servicer under Section 5.05 hereof, which failure shall continue
unremedied for one Business Day after the date upon which written
notice of such failure shall have been given to the Master Servicer by
the Securities Administrator, Trustee or the Depositor or to the Master
Servicer and the Trustee by the Holders of Certificates having not less
than 25% of the Voting Rights evidenced by the Certificates; or
(xi) If the Master Servicer and the Securities Administrator
are the same Person, any removal of the Securities Administrator
pursuant to Section 6.06.
If an Event of Default described in clauses (i) through (ix) or (xi) of
this Section shall occur with respect to the Master Servicer, then, in each and
every case, subject to applicable law, so long as any such Event of Default
shall not have been remedied within any period of time prescribed by this
Section, the Trustee, by notice in writing to the Master Servicer may, and, if
so directed by (a) Certificateholders evidencing more than 50% of the Class
Principal Balance of each Class of Certificates or (b) the Depositor, in the
case of a failure related to a filing obligation triggered by a Reportable
Event; the Trustee shall by notice in writing to the Master Servicer (with a
copy to each Rating Agency and the Depositor), terminate all of the respective
102
rights and obligations of the Master Servicer hereunder and in and to the
Mortgage Loans and the proceeds thereof. Subject to Section 6.01(c)(ii), if an
Event of Default described in clause (x) of this Section shall occur with
respect to the Master Servicer, then, in each and every case, subject to
applicable law, so long as any such Event of Default shall not have been
remedied within any period of time prescribed by this Section, the Trustee shall
by notice in writing to the Master Servicer terminate all of the respective
rights and obligations of the Master Servicer hereunder and in and to the
Mortgage Loans and the proceeds thereof. On or after the receipt by the Master
Servicer of such written notice, all authority and power of the Master Servicer,
and with respect to the Master Servicer only in its capacity as Master Servicer
under this Agreement, whether with respect to the Mortgage Loans or otherwise,
shall pass to and be vested in the Trustee; and the Trustee is hereby authorized
and empowered to execute and deliver, on behalf of the defaulting Master
Servicer as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the affected Mortgage
Loans and related documents or otherwise. The defaulting Master Servicer agrees
to cooperate with the Trustee and the Securities Administrator in effecting the
termination of the defaulting Master Servicer's responsibilities and rights
hereunder as Master Servicer which includes, without limitation, notifying the
Servicers of the assignment of the master servicing function and providing the
Trustee or its designee all documents and records in electronic or other form
reasonably requested by it to enable the Trustee or its designee to assume the
defaulting Master Servicer's functions hereunder and the transfer to the Trustee
for administration by it of all amounts which shall at the time be or should
have been deposited by the defaulting Master Servicer in the Distribution
Account, any related Custodial Account and any other account or fund maintained
with respect to the Certificates or thereafter received with respect to the
affected Mortgage Loans. The Master Servicer being terminated shall bear all
costs of the transfer of the master servicing to the successor master servicer,
including but not limited to those of the Trustee or Securities Administrator
reasonably allocable to specific employees and overhead, legal fees and
expenses, accounting and financial consulting fees and expenses, and costs of
amending the Agreement, if necessary. If such costs are not paid by the
terminated Master Servicer, the Trustee shall pay such costs from the Trust
Fund.
Notwithstanding the termination of its activities as Master Servicer,
any terminated Master Servicer shall continue to be entitled to reimbursement
under this Agreement to the extent such reimbursement relates to the period
prior to such Master Servicer's termination.
The Securities Administrator and the Master Servicer shall promptly
notify the Responsible Officers of the Trustee and the Depositor of the
occurrence and continuance of an Event of Default. If any Event of Default shall
occur, the Trustee, upon a Responsible Officer of the Trustee becoming aware of
the occurrence thereof, shall promptly notify each Rating Agency of the nature
and extent of such Event of Default. The Securities Administrator shall
immediately give written notice to the Master Servicer upon the failure of the
Master Servicer to make Advances as required under this Agreement with a copy to
the Trustee.
Upon the occurrence of an Event of Default, the Trustee shall provide
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
103
Item 6.02 of Form 8-K with respect to a successor master servicer in the event
the Trustee should succeed to the duties of the Master Servicer as set forth
herein.
In order to comply with applicable Form 8-K reporting requirements
under Regulation AB, at least 15 calendar days prior to the effective date of
such appointment, (x) the Trustee shall provide written notice to the Depositor
of such successor pursuant to this Section 6.14 and (y) such successor Master
Servicer shall provide 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 master servicer.
(b) On and after the time the Master Servicer receives a notice of
termination from the Trustee or the Securities Administrator, as applicable,
pursuant to Section 6.14(a) or the Trustee or the Securities Administrator, as
applicable, receives the resignation of the Master Servicer evidenced by an
Opinion of Counsel pursuant to Section 9.06, the Trustee, unless another master
servicer shall have been appointed, shall be the successor in all respects to
the Master Servicer, in its capacity as such under this Agreement and the
transactions set forth or provided for herein and shall have all the rights and
powers and be subject to all the responsibilities, duties and liabilities
relating thereto and arising thereafter placed on the Master Servicer,
hereunder, including the obligation to make Advances; provided, however, that
any failure to perform such duties or responsibilities caused by the failure of
the Master Servicer to provide information required by this Agreement shall not
be considered a default by the Trustee or the Securities Administrator, as
applicable, hereunder. In addition, neither the Trustee nor the Securities
Administrator, as applicable, shall have any responsibility for any act or
omission of the Master Servicer prior to the issuance of any notice of
termination. The Trustee shall have no liability relating to the representations
and warranties of the Master Servicer set forth in Section 9.03. In the capacity
as such successor, the Trustee shall have the same limitations on liability
herein granted to the Master Servicer. As compensation for being the successor
master servicer, the Trustee shall be entitled to receive all compensation
payable to the Master Servicer under this Agreement. Any successor to the Master
Servicer hereunder also may assume the obligations of the Securities
Administrator hereunder as successor in such capacity shall be entitled to the
compensation payable to the Securities Administrator pursuant to Section 4.02
hereof from and after the date of such assumption.
(c) Notwithstanding the above, the Trustee may, if it shall be
unwilling to continue to so act, or shall, if it is unable to so act, petition a
court of competent jurisdiction to appoint, or appoint on its own behalf any
established housing and home finance institution servicer, master servicer,
servicing or mortgage servicing institution having a net worth of not less than
$15,000,000 and meeting such other standards for a successor master servicer, as
are set forth in this Agreement, as the successor to such Master Servicer in the
assumption of all of the respective responsibilities, duties or liabilities of a
master servicer, like the Master Servicer. Any entity designated by the Trustee,
may be an Affiliate of the Trustee; provided, however, that, unless such
Affiliate meets the net worth requirements and other standards set forth herein
for a successor master servicer, the Trustee, in its individual capacity shall
agree, at the time of such designation, to be and remain liable to the Trust
Fund for such Affiliate's actions and omissions in performing its duties
hereunder. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments on
104
the Mortgage Loans as it and such successor shall agree; provided, however, that
no such compensation shall be in excess of that permitted to the Master Servicer
hereunder. The Trustee and such successor shall take such actions, consistent
with this Agreement, as shall be necessary to effectuate any such succession and
may make other arrangements with respect to the master servicing to be conducted
hereunder which are not inconsistent herewith. The Master Servicer shall
cooperate with the Trustee and any successor master servicer in effecting the
termination of the Master Servicer's responsibilities and rights hereunder
including, without limitation, notifying the Servicers of the assignment of the
master servicing functions and providing the Trustee and successor master
servicer all documents and records in electronic or other form reasonably
requested by it to enable it to assume the Master Servicer's functions hereunder
and the transfer to the Trustee or such successor all amounts which shall at the
time be or should have been deposited by the Master Servicer in the Distribution
Account, any Custodial Account, or any other account or fund maintained with
respect to the Certificates or thereafter be received with respect to the
Mortgage Loans. Neither the Trustee nor the Securities Administrator, as
applicable, nor any other successor, as applicable, shall be deemed to be in
default hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof caused by (i) the failure of the
Master Servicer to deliver, or any delay in delivering, cash, documents or
records to it, (ii) the failure of the Master Servicer to cooperate as required
by this Agreement, (iii) the failure of the Master Servicer to deliver the
related Mortgage Loan data as required by this Agreement or (iv) restrictions
imposed by any regulatory authority having jurisdiction over the Master
Servicer. No successor master servicer shall be deemed to be in default
hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof caused by (i) the failure of the
Securities Administrator to deliver, or any delay in delivering cash, documents
or records to it related to such distribution, or (ii) the failure of Trustee or
the Securities Administrator to cooperate as required by this Agreement.
Section 6.15. Additional Remedies of Trustee Upon Event of Default.
During the continuance of any Event of Default, so long as such Event
of Default shall not have been remedied, the Trustee, in addition to the rights
specified in Section 6.14, shall have the right, in its own name and as trustee
of the Trust Fund, to take all actions now or hereafter existing at law, in
equity or by statute to enforce its rights and remedies and to protect the
interests, and enforce the rights and remedies, of the Certificateholders
(including the institution and prosecution of all judicial, administrative and
other proceedings and the filings of proofs of claim and debt in connection
therewith). Except as otherwise expressly provided in this Agreement, no remedy
provided for by this Agreement shall be exclusive of any other remedy, and each
and every remedy shall be cumulative and in addition to any other remedy, and no
delay or omission to exercise any right or remedy shall impair any such right or
remedy or shall be deemed to be a waiver of any Event of Default.
Section 6.16. Waiver of Defaults.
More than 50% of the Aggregate Voting Interests of the
Certificateholders may waive any default or Event of Default by the Master
Servicer in the performance of its obligations hereunder, except that a default
in the making of any required deposit to the Distribution Account that would
result in a failure of the Securities Administrator or the Paying Agent to
105
make any required payment of principal of or interest on the Certificates may
only be waived with the consent of 100% of the affected Certificateholders. Upon
any such waiver of a past default, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon except to the extent
expressly so waived.
Section 6.17. Notification to Holders.
Upon termination of the Master Servicer or appointment of a successor
to the Master Servicer, in each case as provided herein, the Trustee shall
promptly mail notice thereof by first class mail to the Securities Administrator
and the Certificateholders at their respective addresses appearing on the
Certificate Register. The Trustee shall also, within 45 days after the
occurrence of any Event of Default known to the Trustee, give written notice
thereof to the Securities Administrator and the Certificateholders, unless such
Event of Default shall have been cured or waived prior to the issuance of such
notice and within such 45-day period.
Section 6.18. Directions by Certificateholders and Duties of Trustee
During Event of Default.
Subject to the provisions of Section 8.01 hereof, during the
continuance of any Event of Default, Holders of Certificates evidencing not less
than 25% of the Class Principal Balance (or Percentage Interest) of each Class
of Certificates affected thereby may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Agreement; provided,
however, that the Trustee shall be under no obligation to pursue any such
remedy, or to exercise any of the trusts or powers vested in it by this
Agreement (including, without limitation, (i) the conducting or defending of any
administrative action or litigation hereunder or in relation hereto and (ii) the
terminating of the Master Servicer or any successor master servicer from its
rights and duties as master servicer hereunder) at the request, order or
direction of any of the Certificateholders, unless such Certificateholders shall
have offered to the Trustee security or indemnity reasonably satisfactory to it
against the cost, expenses and liabilities which may be incurred therein or
thereby; and, provided further, that, subject to the provisions of Section 8.01,
the Trustee shall have the right to decline to follow any such direction if the
Trustee, in accordance with an Opinion of Counsel, determines that the action or
proceeding so directed may not lawfully be taken or if the Trustee in good faith
determines that the action or proceeding so directed would involve it in
personal liability for which it is not indemnified to its satisfaction.
Section 6.19. Action Upon Certain Failures of the Master Servicer and
Upon Event of Default.
In the event that a Responsible Officer of the Trustee shall have
actual knowledge or written notice of any action or inaction of the Master
Servicer that would become an Event of Default upon the Master Servicer's
failure to remedy the same after notice, the Trustee shall give notice thereof
to the Master Servicer.
Section 6.20. Preparation of Tax Returns and Other Reports.
Section 6.21. Certain Matters Regarding any Custodian Appointed
Hereunder
(a) The Custodian shall maintain continuous custody of all items
constituting the Trustee Mortgage Files in secure facilities in accordance with
customary standards for such custody and shall reflect in its records the
interest of the Trustee for the benefit of the Certificateholders therein. Each
Mortgage Note (and Assignment of Mortgage) shall be maintained in fire resistant
facilities.
(b) With respect to the documents constituting each Trustee Mortgage
File relating to a Mortgage Loan listed on the Mortgage Loan Schedule, the
Custodian shall (i) act exclusively as the custodian for the Trustee, (ii) hold
all documents constituting such Trustee Mortgage File received by it for the
exclusive use and benefit of the Trust, and (iii) make disposition thereof only
in accordance with the terms of this Agreement.
(c) In the event that (i) the Trustee, a Servicer, the Securities
Administrator, the Master Servicer or the Custodian shall be served by a third
party with any type of levy, attachment, writ or court order with respect to any
Trustee Mortgage File or any document included within a Trustee Mortgage File or
(ii) a third party shall institute any court proceeding by which any Trustee
Mortgage File or a document included within a Trustee Mortgage File shall be
required to be delivered otherwise than in accordance with the provisions of
this Agreement, the party receiving such service shall promptly deliver or cause
to be delivered to the other parties to this Agreement copies of all court
papers, orders, documents and other materials concerning such proceedings. The
Custodian shall, to the extent permitted by law, continue to hold and maintain
all the Trustee Mortgage Files that are the subject of such proceedings pending
a final, nonappealable order of a court of competent jurisdiction permitting or
directing disposition thereof. Upon final determination of such court, the
Custodian shall dispose of such Trustee Mortgage File or any document included
within such Trustee Mortgage File as directed by the Trustee which shall give a
direction consistent with such determination. Expenses and fees (including
reasonable attorney's fees) of the Custodian incurred as a result of such
proceedings shall be borne by the Trust Fund.
(d) The Custodian shall provide access to the Mortgage Loan Documents
in its possession regarding the related Mortgage Loans and REO Property and the
servicing thereof to the Trustee, the Master Servicer, the Securities
Administrator, the related Servicer, the Certificateholders, the FDIC, and the
supervisory agents and examiners of the FDIC, such access being afforded only
upon reasonable prior written request and during normal business hours at the
office of the Custodian. The Custodian shall allow representatives of the above
entities to photocopy any of the records and documentation and shall provide
equipment for that purpose at the expense of the person requesting such access.
(e) The Custodian shall have no duties or responsibilities except those
that are specifically set forth herein, or as subsequently agreed in writing by
the parties hereto, and no implied covenants or obligations shall be read into
this Agreement against the Custodian.
(f) The Custodian shall have no responsibility nor duty with respect to
any Trustee Mortgage Files while not in its possession.
(g) The Custodian shall be under no obligation to make any
investigation into the facts or matters stated in any resolution, exhibit,
request, representation, opinion, certificate, statement, acknowledgement,
consent, order or document in the Trustee Mortgage File.
(h) If the Trustee and a Custodian are the same Person, any removal or
resignation of that Person in either capacity shall also result in the removal
of the Person in its other capacity.
(i) In the event that the Custodian fails to produce a Mortgage Note,
Assignment of Mortgage or any other document related to a Mortgage Loan that was
in its possession pursuant to Section 2.01 within five (5) Business Days after
required or requested by the Depositor, the Trustee, the Master Servicer or the
related Servicer, and provided, that (i) Custodian previously delivered to the
Trustee an Initial Certification or a Final Certification with respect to such
document; (ii) such document is not outstanding pursuant to a Request for
Release; and (iii) such document was held by the Custodian on behalf of the
Trustee (a "Custodial Delivery Failure"), then the Custodian shall (a) with
respect to any missing Mortgage Note, promptly deliver to the Depositor, the
Trustee, the Master Servicer or the Servicer upon request, a Lost Note Affidavit
in the form of Exhibit R annexed hereto and (b) with respect to any missing
document related to such Mortgage Loan including but not limited to, a missing
Mortgage Note, indemnify the Depositor, Trustee, the Master Servicer or the
Servicer in accordance with the succeeding paragraph of this Section 6.21(i).
The Custodian appointed hereunder agrees to indemnify and hold the
Depositor, the Trustee, the Master Servicer and the Servicer and their
respective employees, officers, directors and agents harmless against any and
all direct liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements, including reasonable
attorney's fees, that may be imposed on, incurred by, or asserted against it or
them in any way relating to or arising out of such Custodial Delivery Failure.
The foregoing indemnification shall survive any termination or assignment of
this Agreement or the removal or resignation of the Custodian hereunder.
106
(a) The Securities Administrator shall prepare or cause to be prepared
on behalf of the Trust Fund, based upon information calculated in accordance
with this Agreement pursuant to instructions given by the Depositor, and the
Securities Administrator shall file federal tax returns, all in accordance with
Article X hereof. If the Securities Administrator is notified in writing that a
state tax return or other return is required, then, at the sole expense of the
Trust Fund, the Securities Administrator shall prepare and file such state
income tax returns and such other returns as may be required by applicable law
relating to the Trust Fund, and, if required by state law, shall file any other
documents to the extent required by applicable state tax law (to the extent such
documents are in the Securities Administrator's possession). The Securities
Administrator shall forward copies to the Depositor of all such returns and Form
1099 supplemental tax information and such other information within the control
of the Securities Administrator as the Depositor may reasonably request in
writing, and shall forward to each Certificateholder such forms and furnish such
information within the control of the Securities Administrator as are required
by the Code and the REMIC Provisions to be furnished to them, and will prepare
and forward to Certificateholders Form 1099 (supplemental tax information) (or
otherwise furnish information within the control of the Securities
Administrator) to the extent required by applicable law. The Master Servicer
will indemnify the Securities Administrator and the Trustee for any liability of
or assessment against the Securities Administrator or the Trustee, as
applicable, resulting from any error in any of such tax or information returns
directly resulting from errors in the information provided by such Master
Servicer except to the extent that such information was provided in reasonable
reliance upon information from any Servicer.
(b) The Securities Administrator shall prepare and file with the
Internal Revenue Service ("IRS"), on behalf of the Trust Fund and each REMIC
created hereunder, an application for an employer identification number on IRS
Form SS-4 or by any other acceptable method. The Securities Administrator shall
also file a Form 8811 as required. The Securities Administrator, upon receipt
from the IRS of the Notice of Taxpayer Identification Number Assigned, shall
upon request promptly forward a copy of such notice to the Trustee and the
Depositor. The Securities Administrator shall furnish any other information that
is required by the Code and regulations thereunder to be made available to the
Certificateholders. The Master Servicer agrees that it shall cause each Servicer
to, provide the Securities Administrator with such information related to the
Mortgage Loans in the possession of such Servicer, as may reasonably be required
for the Securities Administrator to prepare such reports.
For the avoidance of doubt, if the entity serving as Trustee is also
serving as a Custodian, such entity in its capacity as Custodian shall have the
same rights, protections and indemnities as are afforded to the Trustee
hereunder provided that such Custodian shall not be indemnified by the Trust
Fund for any liability, obligation, loss, damage, penalty, action, judgment,
suit, cost, expense or disbursement imposed on, incurred by or asserted against
the Custodian because of the breach by the Custodian of its obligations
hereunder, which breach was caused by negligence, lack of good faith or willful
misconduct on the part of the Custodian or any of its directors, officers,
agents or employees.
ARTICLE VII
PURCHASE OF MORTGAGE LOANS AND
TERMINATION OF THE TRUST FUND
Section 7.01. Purchase of Mortgage Loans; Termination of Trust Fund
Upon Purchase or Liquidation of All Mortgage Loans.
(a) The respective obligations and responsibilities of the Trustee, the
Securities Administrator and the Master Servicer created hereby (other than the
obligation of the Securities Administrator to make payments to the
Certificateholders as set forth in Section 7.02), shall terminate on the
earliest of (i) the final payment or other liquidation of the last Mortgage Loan
remaining in the Trust Fund and the disposition of all REO Property, (ii) the
sale or auction of
107
the property held by the Trust Fund in accordance with both (x) Section 7.01(b)
or 7.01(c) and (iii) the Latest Possible Maturity Date; provided, however, that
in no event shall the Trust Fund created hereby continue beyond the expiration
of 21 years from the death of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late Ambassador of the United States to the Court of St. James's,
living on the date hereof. Any termination of the Trust Fund shall be carried
out in such a manner so that the termination of each REMIC included therein
shall qualify as a "qualified liquidation" under the REMIC Provisions.
(b) On the Initial Optional Termination date, the Auction Administrator
shall solicit bids for the Assets from at least three institutions that are
regular purchasers and/or sellers in the secondary market of residential whole
mortgage loans similar to the Mortgage Loans. If the Auction Administrator
receives at least three bids for the Assets, and one of such bids is equal to or
greater than the Minimum Auction Price, the Auction Administrator shall sell
(such sale, an "Auction") the related Assets to the highest bidder (the "Auction
Purchaser") at the price offered by the Auction Purchaser (the "Mortgage Loan
Auction Price"). If the Auction Administrator receives less than three bids, or
does not receive any bid that is at least equal to the Minimum Auction Price,
the Auction Administrator shall, on each six-month anniversary of the Initial
Optional Termination Date for the Mortgage Loans, repeat these auction
procedures until the Auction Administrator receives a bid that is at least equal
to the Minimum Auction Price, at which time the Auction Administrator shall sell
the Assets to the Auction Purchaser at that Mortgage Loan Auction Price;
provided, however, that the Auction Administrator shall not be required to
repeat these auction procedures on any Distribution Date for any six-month
anniversary of the Initial Optional Termination Date unless the Auction
Administrator reasonably believes that there is a reasonable likelihood of
receiving a bid of at least the Minimum Auction Price. The Auction Administrator
shall give notice to the Rating Agencies and each Servicer that is servicing any
of the Mortgage Loans of the sale of the related Assets pursuant to this Section
7.01(b) (an "Auction Sale") and of the Auction Date.
(c) In the event that the Master Servicer chooses to exercise its
optional termination rights it shall do so in accordance with the following:
(i) On any Distribution Date occurring after the Initial
Optional Termination Date related to the Mortgage Loans, the Master
Servicer has the option to cause the Trust Fund to adopt a plan of
complete liquidation of the Mortgage Loans pursuant to Sections 7.02
and 7.03 hereof to sell all of the property related thereto. If the
Master Servicer elects to exercise such option, it shall no later than
30 days prior to the Distribution Date selected for purchase of the
Mortgage Loans and all other assets of the Trust Fund related to the
Certificates (with respect to the Certificates, the "Purchase Date")
deliver written notice to the Trustee and the Securities Administrator
and either (a) deposit in the Distribution Account the related
Redemption Price or (b) state in such notice that the Redemption Price
shall be deposited in the Distribution Account not later than 10:00
a.m., New York City time, on the applicable Purchase Date. Upon
exercise of such option, the Assets shall be sold to the Master
Servicer at a price equal to the related Redemption Price.
(d) The Depositor, the Master Servicer, each Servicer, the Securities
Administrator, the Trustee and the Custodian shall be reimbursed from the
Redemption Price for
108
any Advances, Servicer Advances, accrued and unpaid Servicing Fees or other
amounts with respect to the Mortgage Loans and any related assets being
purchased pursuant to Section 7.01(b) or (c) above that are reimbursable to such
parties (and such other amounts which, if not related to the Mortgage Loans and
other assets of the Trust Fund not being purchased, that are then due and owing
to any such Person) under this Agreement and the related Purchase and Servicing
Agreement.
Section 7.02. Procedure Upon Redemption of Trust Fund.
(a) Notice of any termination pursuant to the provisions of Section
7.01, specifying the Distribution Date upon which the final distribution shall
be made or the purchase of the Trust's assets, as applicable, will occur, shall
be given promptly by the Securities Administrator by first class mail to the
Certificateholders mailed in the case of a redemption of the Certificates, no
later than (i) the first day of the month in which the Distribution Date
selected for redemption of such Certificates shall occur or (ii) upon (x) the
sale of all of the property of the Trust Fund by the Securities Administrator or
in the case of a sale of assets of the Trust Fund, or (y) upon the final payment
or other liquidation of the last Mortgage Loan or REO Property in the Trust
Fund. Such notice shall specify (A) the Initial Optional Termination Date,
Distribution Date upon which final distribution on the Certificates of all
amounts required to be distributed to Certificateholders pursuant to Section
5.02 will be made upon presentation and surrender of the Certificates at the
Certificate Registrar's Corporate Trust Office, and (B) that the Record Date
otherwise applicable to such Distribution Date is not applicable, distribution
being made only upon presentation and surrender of the Certificates at the
office or agency of the Securities Administrator therein specified. The
Securities Administrator shall give such notice to the Trustee, the Master
Servicer and the Certificate Registrar at the time such notice is given to
Holders of the Certificates. Upon any such termination, the duties of the
Certificate Registrar with respect to the affected Certificates shall terminate
and, in the event that such termination is the second termination pursuant to
Section 7.01, the Securities Administrator shall terminate the Distribution
Account and any other account or fund maintained with respect to the
Certificates, subject to the Securities Administrator's obligation hereunder to
hold all amounts payable to Certificateholders in trust without interest pending
such payment.
(b) In the event that all of the Holders do not surrender their
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, the Securities Administrator 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 one year after the second notice any Certificates shall not
have been surrendered for cancellation, the Securities Administrator may take
appropriate steps to contact the remaining Certificateholders concerning
surrender of such Certificates, and the cost thereof shall be paid out of the
amounts distributable to such Holders. If within two years after the second
notice any Certificates shall not have been surrendered for cancellation, the
Securities Administrator shall deliver any remaining funds being held by it to
the Holder of the Class A-R Certificates and the Holder of the Class A-R
Certificates shall, subject to applicable state law relating to escheatment,
hold all amounts distributable to such Holders for the benefit of such Holders.
No interest shall accrue on any amount held by the Securities Administrator and
not distributed to a Certificateholder due to such Certificateholder's failure
to surrender its Certificate(s) for payment of the final distribution thereon in
accordance with this Section. The
109
foregoing provisions are intended to distribute to each Class of Certificates
any accrued and unpaid interest and/or principal to which they are entitled
based on their Pass-Through Rates and Class Certificate Balances set forth in
the Preliminary Statement upon liquidation of the Trust Fund.
(c) Any reasonable expenses incurred by the Securities Administrator in
connection with any purchase or termination or liquidation of the Trust Fund
shall be reimbursed from proceeds received from the liquidation of the Trust
Fund.
(d) Any purchase of the Assets by the related Auction Purchaser shall
be made on an Auction Date by receipt of the Auction Administrator of the
related Mortgage Loan Auction Price from the Auction Purchaser, and deposit of
the such Mortgage Loan Auction Price into the Distribution Account by the
Auction Administrator before the Distribution Date on which such purchase is
effected. Upon deposit of such purchase price into the Distribution Account, the
Trustee and the Securities Administrator, shall, upon request and at the expense
of the Auction Purchaser, execute and deliver all such instruments of transfer
or assignment, in each case without recourse, as shall be reasonably requested
by the Auction Purchaser to vest title in the Auction Purchaser in the Assets so
purchased and shall transfer or deliver to the Auction Purchaser the purchased
Assets.
Section 7.03. Additional Trust Fund Termination Requirements.
(a) On the termination of the Trust Fund under Section 7.01 (a), upon
an Auction Sale pursuant to Section 7.01(b) or upon the exercise of the right to
purchase all of the Mortgage Loans pursuant to Section 7.01(c), the Securities
Administrator, on behalf of the Trustee, shall comply with requirements of this
Section 7.03 with respect to each Lower Tier REMIC relating to the assets to be
sold (the "Affected REMIC") and with respect to the Certificates corresponding
to the Affected REMIC (the "Corresponding Certificates"), unless the party
having the right to purchase the assets of the Affected REMIC (the "Purchaser")
delivers to the Trustee and the Securities Administrator, an Opinion of Counsel
(at the Master Servicer's expense), addressed to the Trustee and the Securities
Administrator to the effect that the failure of the Trustee and the Securities
Administrator to comply with the requirements of this Section 7.03 will not
result in an Adverse REMIC Event:
(i) Within 89 days prior to the time of making the final
payment on the Corresponding Certificates, (and upon notification by
(1) the Auction Administrator in the case of a purchase under Section
7.01(b) or (2) the Master Servicer in the case of a purchase under
Section 7.01(c)(i) or Section 7.01(c)(ii), as applicable) the
Securities Administrator on behalf of the Trustee shall adopt on behalf
of the Affected REMIC, a plan of complete liquidation, meeting the
requirements of a qualified liquidation under the REMIC Provisions;
(ii) Any sale of the assets of the Affected REMIC shall be for
cash and shall occur at or after the time the plan of complete
liquidation is adopted and prior to the time the final payments on the
Corresponding Certificates are made;
110
(iii) On the date specified for final payment of the
Corresponding Certificates, the Securities Administrator shall make
final distributions of principal and interest on the Corresponding
Certificates in accordance with Section 5.02 and, after payment of, or
provision for any outstanding expenses, distribute or credit, or cause
to be distributed or credited, to the Holders of the Residual
Certificates all cash on hand after such final payment (other than cash
retained to meet claims), and the portion of the Trust Fund (and the
Affected REMIC) shall terminate at that time; and
(iv) In no event may the final payment on the Corresponding
Certificates or the final distribution or credit to the Holders of the
Residual Certificates be made after the 89th day from the date on which
the plan of complete liquidation is adopted.
(b) By its acceptance of a Residual Certificate, each Holder thereof
hereby agrees to accept the plan of complete liquidation adopted by the
Securities Administrator on behalf of the Trustee under this Section and to take
such other action in connection therewith as may be reasonably requested by the
Trustee, the Securities Administrator or any Servicer.
ARTICLE VIII
RIGHTS OF CERTIFICATEHOLDERS
Section 8.01. Limitation on Rights of Holders.
(a) The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or this Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or
take any action or proceeding in any court for a partition or winding up of this
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them. Except as otherwise expressly provided herein, no
Certificateholder, solely by virtue of its status as a Certificateholder, shall
have any right to vote or in any manner otherwise control the Master Servicer or
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 person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(b) No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of the continuance thereof, as hereinbefore provided, and unless
also the Holders of Certificates evidencing not less than 25% of the Class
Principal Amount or Class Notional Amount (or Percentage Interest) of
Certificates of each Class affected thereby shall have made written request upon
the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the cost, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for sixty days after its receipt
of such notice, request and offer of indemnity, shall have
111
neglected or refused to institute any such action, suit or proceeding and no
direction inconsistent with such written request has been given such Trustee
during such sixty-day period by such Certificateholders; it being understood and
intended, and being expressly covenanted by each Certificateholder with every
other Certificateholder, the Securities Administrator and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner whatever
by virtue or by availing of any provision of this Agreement to affect, disturb
or prejudice the rights of the Holders of any other of such Certificates, or to
obtain or seek to obtain priority over or preference to any other such Holder,
or to enforce any right under this Agreement, except in the manner herein
provided and for the benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.
Section 8.02. Access to List of Holders.
(a) If the Trustee is not acting as Certificate Registrar, the
Certificate Registrar will furnish or cause to be furnished to the Trustee,
within fifteen days after receipt by the Certificate Registrar of a request by
the Trustee in writing, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Certificateholders of each Class as
of the most recent Record Date.
(b) If three or more Holders or Certificate Owners (hereinafter
referred to as "Applicants") apply in writing to the Certificate Registrar, and
such application states that the Applicants desire to communicate with other
Holders with respect to their rights under this Agreement or under the
Certificates and is accompanied by a copy of the communication which such
Applicants propose to transmit, then the Certificate Registrar shall, within
five Business Days after the receipt of such application, afford such Applicants
reasonable access during the normal business hours of the Certificate Registrar
to the most recent list of Certificateholders held by the Certificate Registrar
or shall, as an alternative, send, at the Applicants' expense, the written
communication proffered by the Applicants to all Certificateholders at their
addresses as they appear in the Certificate Register.
(c) Every Holder or Certificate Owner, if the Holder is a Clearing
Agency, by receiving and holding a Certificate, agrees with the Depositor, the
Master Servicer, the Securities Administrator, the Certificate Registrar and the
Trustee that none of the Depositor, the Master Servicer, the Securities
Administrator, the Certificate Registrar nor the Trustee shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Certificateholders hereunder, regardless of the source from
which such information was derived.
Section 8.03. Acts of Holders of Certificates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders or Certificate Owners, if the Holder is a Clearing Agency, may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and
the Securities
112
Administrator and, where expressly required herein, to the Master Servicer. Such
instrument or instruments (as the action embodies therein and evidenced thereby)
are herein sometimes referred to as an "Act" of the Holders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agents shall be sufficient for any purpose of this
Agreement and conclusive in favor of the Trustee, the Securities Administrator
and the Master Servicer, if made in the manner provided in this Section. Each of
the Trustee, the Securities Administrator and the Master Servicer shall promptly
notify the others of receipt of any such instrument by it, and shall promptly
forward a copy of such instrument to the others.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments or deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by an officer of a corporation or a member of a partnership on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the individual
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
(c) The ownership of Certificates (whether or not such Certificates
shall be overdue and notwithstanding any notation of ownership or other writing
thereon made by anyone other than the Trustee) shall be proved by the
Certificate Register, and none of the Trustee, the Securities Administrator, the
Master Servicer or the Depositor shall be affected by any notice to the
contrary.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Certificate shall bind every future
Holder of the same Certificate and the Holder of every Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Trustee or
the Master Servicer in reliance thereon, whether or not notation of such action
is made upon such Certificate.
ARTICLE IX
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01. Duties of the Master Servicer; Enforcement of Servicers'
and Master Servicer's Obligations.
(a) The Master Servicer, on behalf of the Trustee, the Depositor and
the Certificateholders shall monitor the performance of the Servicers under the
Purchase and Servicing Agreements, and shall use its reasonable good faith
efforts to cause the Servicers duly and punctually to perform all of their
respective duties and obligations thereunder. Upon the occurrence of a default
of which a Responsible Officer of the Master Servicer has actual knowledge under
a Purchase and Servicing Agreement, the Master Servicer shall promptly notify
113
the Trustee thereof, and shall specify in such notice the action, if any, the
Master Servicer is taking in respect of such default. So long as any such
default shall be continuing, the Master Servicer may, and shall if it determines
such action to be in the best interests of Certificateholders, (i) terminate all
of the rights and powers of such Servicer pursuant to the applicable provisions
of the related Purchase and Servicing Agreement; (ii) exercise any rights it may
have to enforce the related Purchase and Servicing Agreement against such
Servicer; and/or (iii) waive any such default under the related Purchase and
Servicing Agreement or take any other action with respect to such default as is
permitted thereunder. Notwithstanding anything to the contrary in this
Agreement, with respect to any Additional Collateral Mortgage Loan, the Master
Servicer will have no duty or obligation to supervise, monitor or oversee the
activities of the related Servicer under any Purchase and Servicing Agreement
with respect to any Additional Collateral or under any agreement relating to the
pledge of, or the perfection of a pledge or security interest in, any Additional
Collateral except upon the occurrence of the following events (i) in the case of
a final liquidation of any Mortgaged Property secured by Additional Collateral,
the Master Servicer shall enforce the obligation of the Servicer under the
related Servicing Agreement to liquidate such Additional Collateral as required
by such Servicing Agreement, and (ii) if the Master Servicer assumes the
obligations of such Servicer as successor Servicer under the related Servicing
Agreement pursuant to this Section 9.01, as successor Servicer, it shall be
bound to service and administer the Additional Collateral in accordance with the
provisions of such Servicing Agreement.
(b) Upon any termination by the Master Servicer of a Servicer's rights
and powers pursuant to its Purchase and Servicing Agreement, the rights and
powers of such Servicer with respect to the related Mortgage Loans shall vest in
the Master Servicer and the Master Servicer shall be the successor in all
respects to such Servicer in its capacity as Servicer with respect to such
Mortgage Loans under the related Purchase and Servicing Agreement, unless or
until the Master Servicer shall have appointed (and the Trustee shall have
acknowledged), with the consent of the Rating Agencies and in accordance with
the applicable provisions of the related Purchase and Servicing Agreement, a new
Xxxxxx Xxx- or FHLMC-approved Person to serve as successor to the Servicer;
provided, however, that it is understood and agreed by the parties hereto that
there will be a period of transition (not to exceed 90 days) before the actual
servicing functions can be fully transferred to a successor servicer (including
the Master Servicer). With such letter from the Rating Agencies, the Master
Servicer may elect to continue to serve as successor servicer under the Purchase
and Servicing Agreement. Upon appointment of a successor servicer, as authorized
under this Section 9.01(b), unless the successor servicer shall have assumed the
obligations of the terminated Servicer under such Purchase and Servicing
Agreement, the Master Servicer and such successor servicer shall enter into a
servicing agreement in a form substantially similar to the affected Purchase and
Servicing Agreement, and the Trustee shall acknowledge such servicing agreement.
In connection with any such appointment, the Master Servicer may make such
arrangements for the compensation of such successor servicer as it and such
successor servicer shall agree, but in no event shall such compensation of any
successor servicer (including the Master Servicer) be in excess of that payable
to the Servicer under the affected Purchase and Servicing Agreement.
The Master Servicer shall pay the costs of such enforcement (including
the termination of a Servicer, the appointment of a successor servicer or the
transfer and assumption of the servicing by the Master Servicer) at its own
expense and shall be reimbursed therefor initially
114
(i) by the terminated Servicer, (ii) from a general recovery resulting from such
enforcement only to the extent, if any, that such recovery exceeds all amounts
due in respect of the related Mortgage Loans, (iii) from a specific recovery of
costs, expenses or attorney's fees against the party against whom such
enforcement is directed, or (iv) to the extent that such amounts described in
(i)-(iii) above are insufficient to reimburse the Master Servicer for such costs
of enforcement, from the Trust Fund, as provided in Section 9.04.
If the Master Servicer assumes the servicing with respect to any of the
Mortgage Loans, it will not assume liability for the representations and
warranties of any Servicer it replaces or for the errors or omissions of such
Servicer.
If the Seller is the owner of the servicing rights and the Seller
chooses to terminate that Servicer with or without cause and sell those
servicing rights to a successor servicer, then the Depositor shall (i) cause the
Seller to give reasonable prior written notice to the Master Servicer, and (ii)
obtain a letter from the Rating Agencies indicating that the appointment of the
proposed successor servicer will not result in a downgrade or withdrawal of the
rating of any of the Certificates, and a New Xxxxxx Xxx- or FHLMC-approved
Person reasonably acceptable to the Master Servicer shall be chosen by the
Seller and appointed as successor servicer with the acknowledgment of the Master
Servicer and the Trustee; provided, however, that the Seller shall not be
required to get a no-downgrade letter from the Rating Agencies if: (i) the
Rating Agencies received prior written notice of the transfer of the servicing
rights and the name of the successor Servicer, (ii) such successor Servicer has
a servicing rating in the highest category of Fitch or Xxxxx'x to the extent
that Fitch or Xxxxx'x, respectively, is a Rating Agency, and such successor
Servicer has a servicer evaluation ranking in one of the two highest categories
of S&P to the extent that S&P is a Rating Agency, and (iii) such successor
Servicer shall service the related Mortgage Loans under either the Purchase and
Servicing Agreement together with the related Assignment Agreement under which
such Mortgage Loans are currently being serviced or under another Servicing
Agreement together with a related Assignment Agreement that have already been
reviewed and approved by the Rating Agencies. The Depositor shall cause the
costs of such transfer including any costs of such transfer (including any costs
of the Master Servicer) to be borne by the Seller.
At least 15 calendar days prior to the effective date of such
termination, (x) the Depositor shall provide written notice to the Master
Servicer and 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 servicer.
(c) Upon any termination of a Servicer's rights and powers pursuant to
its Purchase and Servicing Agreement, the Master Servicer shall promptly notify
the Trustee and the Rating Agencies, specifying in such notice that the Master
Servicer or any successor servicer, as the case may be, has succeeded such
Servicer under the related Purchase and Servicing Agreement or under any other
servicing agreement reasonably satisfactory to the Master Servicer and the
Rating Agencies, which notice shall also specify the name and address of any
such successor servicer.
(d) The Depositor shall not consent to the assignment by any Servicer
of such Servicer's rights and obligations under the related Purchase and
Servicing Agreement without
115
the prior written consent of the Master Servicer, which consent shall not be
unreasonably withheld.
(e) The Trustee shall execute and deliver, at the written request of
the Master Servicer or any Servicer, and furnish to the Master Servicer and any
Servicer, at the expense of the requesting party, a power of attorney in the
standard form provided by the Trustee to take title to the Mortgaged Properties
after foreclosure in the name of and on behalf of the Trustee in its capacity as
Trustee hereunder and for the purposes described herein to the extent necessary
or desirable to enable the Master Servicer or any Servicer to perform its
respective duties. The Trustee shall not be liable for the actions of the Master
Servicer or any Servicer under such powers of attorney.
Section 9.02. Assumption of Master Servicing by Trustee.
(a) In the event the Master Servicer shall for any reason no longer be
the Master Servicer (including by reason of any Event of Default by the Master
Servicer under this Agreement), the Trustee shall thereupon assume all of the
rights and obligations of such Master Servicer hereunder and under each Purchase
and Servicing Agreement entered into with respect to the Mortgage Loans or shall
appoint or petition a court to appoint a Xxxxxx-Xxx or FHLMC-approved servicer
as successor servicer that is acceptable to the Depositor and the Rating
Agencies. The Trustee, as successor master servicer, its designee or any
successor master servicer appointed by the Trustee shall be deemed to have
assumed all of the Master Servicer's interest herein and therein to the same
extent as if such Purchase and Servicing Agreements had been assigned to the
assuming party, except that the Master Servicer shall not thereby be relieved of
any liability or obligations of the Master Servicer under such Purchase and
Servicing Agreement accruing prior to its replacement as Master Servicer, and
shall be liable to the Trustee, and hereby agrees to indemnify and hold harmless
the Trustee (in its individual corporate capacity and as Trustee hereunder) from
and against all costs, damages, expenses and liabilities (including reasonable
attorneys' fees) incurred by the Trustee as a result of such liability or
obligations of the Master Servicer and in connection with the Trustee's
assumption (but not its performance, except to the extent that costs or
liability of the Trustee are created or increased as a result of negligent or
wrongful acts or omissions of the Master Servicer prior to its replacement as
Master Servicer) of the Master Servicer's obligations, duties or
responsibilities thereunder. To the extent that the costs and expenses of the
Trustee described in this Section are not timely reimbursed by the Master
Servicer, the Trustee shall be entitled to reimbursement from the Distribution
Account and the Master Servicer is hereby obligated to reimburse the Trust
promptly for such amounts by deposit thereof in the Distribution Account.
(b) The Master Servicer that has been terminated shall, upon request of
the Trustee but at the expense of such Master Servicer, deliver to the assuming
party all documents and records relating to each Purchase and Servicing
Agreement, this Agreement and the related Mortgage Loans and an accounting of
amounts collected and held by it and otherwise use its best efforts to effect
the orderly and efficient transfer of each Purchase and Servicing Agreement and
this Agreement to the assuming party.
Section 9.03. Representations and Warranties of the Master Servicer.
116
The Master Servicer hereby represents and warrants to the Depositor,
the Securities Administrator and the Trustee, for the benefit of the
Certificateholders, as of the Closing Date that:
(i) it is validly existing and in good standing under the laws
of the United States of America as a national banking association, and
as Master Servicer has full power and authority to transact any and all
business contemplated by this Agreement and to execute, deliver and
comply with its obligations under the terms of this Agreement, the
execution, delivery and performance of which have been duly authorized
by all necessary corporate action on the part of the Master Servicer;
(ii) the execution and delivery of this Agreement by the
Master Servicer and its performance and compliance with the terms of
this Agreement will not (A) violate the Master Servicer's charter or
bylaws, (B) violate any law or regulation or any administrative decree
or order to which it is subject or (C) constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a
default) under, or result in the breach of, any material contract,
agreement or other instrument to which the Master Servicer is a party
or by which it is bound or to which any of its assets are subject,
which violation, default or breach would materially and adversely
affect the Master Servicer's ability to perform its obligations under
this Agreement;
(iii) this Agreement constitutes, assuming due authorization,
execution and delivery hereof by the other respective parties hereto, a
legal, valid and binding obligation of the Master Servicer, enforceable
against it in accordance with the terms hereof, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors'
rights in general, and by general equity principles (regardless of
whether such enforcement is considered in a proceeding in equity or at
law);
(iv) the Master Servicer is not in default with respect to any
order or decree of any court or any order or regulation of any federal,
state, municipal or governmental agency to the extent that any such
default would materially and adversely affect its performance
hereunder;
(v) the Master Servicer is not a party to or bound by any
agreement or instrument or subject to any charter provision, bylaw or
any other corporate restriction or any judgment, order, writ,
injunction, decree, law or regulation that may materially and adversely
affect its ability as Master Servicer to perform its obligations under
this Agreement or that requires the consent of any third person to the
execution of this Agreement or the performance by the Master Servicer
of its obligations under this Agreement;
(vi) no litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which
would prohibit its entering into this Agreement or performing its
obligations under this Agreement;
117
(vii) the Master Servicer, or an affiliate thereof the primary
business of which is the servicing of conventional residential mortgage
loans, is a Xxxxxx Mae- or FHLMC-approved seller/servicer;
(viii) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Master Servicer of or compliance by the
Master Servicer with this Agreement or the consummation of the
transactions contemplated by this Agreement, except for such consents,
approvals, authorizations and orders (if any) as have been obtained;
and
(ix) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master
Servicer.
It is understood and agreed that the representations and warranties set
forth in this Section shall survive the execution and delivery of this
Agreement. The Master Servicer shall indemnify the Depositor, the Securities
Administrator and the Trustee and hold them harmless against any loss, damages,
penalties, fines, forfeitures, legal fees and related costs, judgments, and
other costs and expenses resulting from any claim, demand, defense or assertion
based on or grounded upon, or resulting from, a material breach of the Master
Servicer's representations and warranties contained in this Section 9.03. It is
understood and agreed that the enforcement of the obligation of the Master
Servicer set forth in this Section to indemnify the Depositor, the Securities
Administrator and the Trustee as provided in this Section constitutes the sole
remedy (other than as set forth in Section 6.14) of the Depositor, the
Securities Administrator and the Trustee, respecting a breach of the foregoing
representations and warranties. Such indemnification shall survive any
termination of the Master Servicer as Master Servicer hereunder, the resignation
or removal of the Trustee and any termination of this Agreement.
Any cause of action against the Master Servicer relating to or arising
out of the breach of any representations and warranties made in this Section
shall accrue upon discovery of such breach by either the Depositor, the Master
Servicer or the Trustee or notice thereof by any one of such parties to the
other parties.
Section 9.04. Compensation to the Master Servicer.
The Master Servicer shall be compensated for its duties hereunder
pursuant to Section 4.02(b) hereof. The Master Servicer shall either retain or
withdraw from the Distribution Account (i) amounts necessary to reimburse itself
for any previously unreimbursed Advances, Servicer Advances and Nonrecoverable
Advances with respect to the Mortgage Loans in accordance with the definition of
"Available Distribution Amount" and (ii) amounts representing assumption fees,
late payment charges or other ancillary income not included in the definition of
"Available Distribution Amount" and which are not required to be remitted by the
Servicers to the Securities Administrator or deposited by the Securities
Administrator into the Distribution Account and (iii) any amounts to which the
Master Servicer is entitled pursuant to 4.01(e) hereof. The Master Servicer
shall be required to pay all expenses incurred by it in connection with its
activities hereunder and shall not be entitled to reimbursement therefor except
as provided in this Agreement.
118
In addition, the Master Servicer shall be entitled to reimbursement
from the Distribution Account for all reasonable expenses, disbursements and
advances incurred or made by the Master Servicer in connection with the
performance of its duties hereunder and under the Purchase and Servicing
Agreements, as modified by the Acknowledgements (including the reasonable
compensation and the expenses and disbursements of its agents and counsel), to
the extent not otherwise reimbursed pursuant to this Agreement, except any such
expense, disbursement or advance as may be attributable to its willful
misfeasance, bad faith or negligence.
The Master Servicer and any director, officer, employee or agent of the
Master Servicer shall be indemnified by the Trust and held harmless thereby
against any loss, liability or expense (including reasonable legal fees and
disbursements of counsel) incurred on their part that may be sustained in
connection with, arising out of, or related to, any claim or legal action
(including any pending or threatened claim or legal action) relating to this
Agreement, the Purchase and Servicing Agreements or the Certificates, other than
any loss, liability or expense resulting from the Master Servicer's failure to
perform its duties hereunder or thereunder or incurred by reason of the Master
Servicer's negligence, willful misfeasance or bad faith.
Section 9.05. Merger or Consolidation.
Any Person into which the Master Servicer may be merged or
consolidated, or any Person resulting from any merger, conversion, other change
in form or consolidation to which the Master Servicer shall be a party, or any
Person succeeding to the business of the Master Servicer shall be the successor
to the Master Servicer hereunder, without the execution or filing of any paper
or any further act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding; provided, however, that the successor or resulting
Person to the Master Servicer shall be a Person that shall be qualified and
approved to service mortgage loans for Xxxxxx Xxx or FHLMC and shall have a net
worth of not less than $15,000,000.
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 Master Servicer, the Master Servicer 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 Master Servicer.
Section 9.06. Resignation of Master Servicer and Securities
Administrator.
Except as otherwise provided in Sections 9.05, 9.07 and 9.10 hereof,
neither the Master Servicer nor the Securities Administrator shall resign from
the obligations and duties hereby imposed on it unless the duties of the Master
Servicer or the Securities Administrator, as applicable, hereunder are no longer
permissible under applicable law or are in material conflict by reason of
applicable law with any other activities carried on by it and cannot be cured.
Any such determination permitting the resignation of the Master Servicer or the
Securities Administrator shall be evidenced by an Opinion of Counsel that shall
be Independent to such effect delivered to the Trustee. No resignation of the
Master Servicer or the Securities Administrator shall become effective until the
Trustee shall have assumed, or a successor master
119
servicer or successor securities administrator, as applicable, shall have been
appointed pursuant to Section 6.07 or 9.02, as applicable, and until such
successor shall have assumed, such Master Servicer's or Securities
Administrator's responsibilities and obligations under this Agreement. Notice of
any such resignation shall be given promptly by the Master Servicer or the
Securities Administrator, as applicable, to the Depositor and the Trustee.
If, at any time, the Master Servicer resigns under this Section 9.06,
or transfers or assigns its rights and obligations under Section 9.07, or is
removed as Master Servicer pursuant to Section 6.14, then at such time Xxxxx
Fargo Bank, National Association (or any successor thereto) also shall resign or
be removed, as applicable, as Securities Administrator, Auction Administrator,
Paying Agent, Authenticating Agent and Certificate Registrar under this
Agreement. In such event, the obligations of the Master Servicer and the
Securities Administrator shall be assumed by the Trustee as successor or by such
other successor master servicer and/or securities administrator, as applicable,
appointed by the Trustee (subject to the provisions of Sections 6.07 and
9.02(a)).
As a condition to the effectiveness of any such resignation, at least
15 calendar days prior to the effective date of such resignation, the Master
Servicer 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 Master Servicer.
Section 9.07. Assignment or Delegation of Duties by the Master Servicer
and Securities Administrator.
Except as expressly provided herein, neither the Master Servicer nor
the Securities Administrator shall assign or transfer any of their respective
rights, benefits or privileges hereunder to any other Person, or delegate to or
subcontract with, or authorize or appoint any other Person to perform any of the
respective duties, covenants or obligations to be performed by the Master
Servicer or Securities Administrator, as applicable, hereunder; provided,
however, that the Master Servicer and the Securities Administrator shall each
have the right with the prior written consent of the Trustee and the Depositor
(which consent shall not be unreasonably withheld), and upon delivery to the
Trustee and the Depositor of a letter from each Rating Agency to the effect that
such action shall not result in a downgrading of the Certificates, to delegate
or assign to or subcontract with or authorize or appoint any qualified Person to
perform and carry out any of the respective duties, covenants or obligations to
be performed and carried out by the Master Servicer or the Securities
Administrator, as applicable, hereunder. Notice of such permitted assignment
shall be given promptly by the Master Servicer or the Securities Administrator,
as applicable, to the Depositor and the Trustee. If, pursuant to any provision
hereof, the respective duties of the Master Servicer or the Securities
Administrator are transferred to a successor master servicer or successor
securities administrator, as applicable, the entire amount of the compensation
payable to the Master Servicer or Securities Administrator pursuant hereto shall
thereafter be payable to such successor master servicer or successor securities
administrator. Such successor Master Servicer shall also pay the fees of the
Trustee, as provided herein.
120
Section 9.08. Limitation on Liability of the Master Servicer and
Others.
(a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Trustee or 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 Master
Servicer or any such person against any liability that would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in its
performance of its duties or by reason of reckless disregard for its obligations
and duties under this Agreement. The Master Servicer and any director, officer,
employee or agent of the Master Servicer 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 Master Servicer shall be under no obligation
to appear in, prosecute or defend any legal action that is not incidental to its
duties to master service the Mortgage Loans in accordance with this Agreement
and that in its opinion may involve it in any expenses or liability; provided,
however, that the Master Servicer may in its sole discretion undertake any such
action that it may deem necessary or desirable in respect to this Agreement and
the rights and duties of the parties hereto and the interests of 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 Master Servicer shall be entitled to be
reimbursed therefor out of the Distribution Account.
The Master Servicer shall not be liable for any acts or omissions of
the Servicers except to the extent that damages or expenses are incurred as a
result of such act or omissions and such damages and expenses would not have
been incurred but for the negligence, willful misfeasance, bad faith or
recklessness of the Master Servicer in supervising, monitoring and overseeing
the obligations of the Servicers in this Agreement and the Purchase and
Servicing Agreements.
Section 9.09. Indemnification; Third-Party Claims.
The Master Servicer agrees to indemnify the Depositor, the Securities
Administrator and the Trustee, and hold them harmless against any and all
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, liability, fees and expenses that the Depositor,
the Securities Administrator or the Trustee may sustain as a result of the
Master Servicer's willful misfeasance, bad faith or negligence in the
performance of its duties hereunder or by reason of its reckless disregard for
its obligations and duties under this Agreement, the Acknowledgements and the
related Purchase and Servicing Agreements. The Depositor, the Securities
Administrator and the Trustee shall immediately notify the Master Servicer if a
claim is made by a third party with respect to this Agreement or the Mortgage
Loans entitling the Depositor, the Securities Administrator or the Trustee to
indemnification under this Section 9.09, whereupon the Master Servicer shall
assume the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or them in respect of such
claim.
Section 9.10. Eligibility Requirements for Securities Administrator.
The Securities Administrator hereunder shall at all times be a
corporation or association organized and doing business under the laws the
United States of America or any state thereof,
121
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 of at least
investment grade or at least "A/F1" by Fitch if Fitch is a 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 9.10 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 Securities Administrator shall cease to be
eligible in accordance with the provisions of this Section 9.10, the Securities
Administrator shall resign immediately in the manner and with the effect
specified in Section 6.06 hereof. The entity serving as Securities Administrator
may have normal banking and trust relationships with the Depositor, the Seller,
the Master Servicer, the Custodian or the Trustee and their respective
affiliates.
The Securities Administrator (i) may not be an Originator, Master
Servicer, Servicer, the Depositor or an affiliate of the Depositor unless the
Securities Administrator is in an institutional trust department, (ii) must be
authorized to exercise corporate trust powers under the laws of its jurisdiction
of organization, and (iii) must be rated at least "A/F1" by Fitch, if Fitch is a
Rating Agency, or the equivalent rating by S&P or Xxxxx'x (or such rating
acceptable to Fitch pursuant to a written confirmation). If at any time the
Securities Administrator shall cease to be eligible in accordance with the
provisions of this Section 9.10, the Securities Administrator shall resign in
the manner and with the effect specified in Section 6.06 hereof. If no successor
Securities Administrator shall have been appointed and shall have accepted
appointment within 60 days after the Securities Administrator ceases to be the
Securities Administrator pursuant to this Section 9.10, then the Trustee shall
become the successor Securities Administrator and shall, in accordance with
Article VI hereof and in such capacity, perform the duties of the Securities
Administrator pursuant to this Agreement. The Trustee shall notify the Rating
Agencies of any change of Securities Administrator.
Section 9.11. Annual Statement as to Compliance.
The Master Servicer and the Securities Administrator shall deliver (and
the Master Servicer and Securities Administrator shall cause any Additional
Servicer engaged by it to deliver) or otherwise make available to the Depositor
and the Securities Administrator on or before March 15 of each year, commencing
in March 2007, an Officer's Certificate stating, as to the signer thereof, that
(A) a review of such party's activities during the preceding calendar year or
portion thereof and of such party's performance under this Agreement, or such
other applicable agreement in the case of an Additional Servicer, has been made
under such officer's supervision, (B) to the best of such officer's knowledge,
based on such review, such party has fulfilled all its obligations under this
Agreement, or such other applicable agreement in the case of an Additional
Servicer, in all material respects throughout such year or portion thereof, or,
if there has been a failure to fulfill any such obligation in any material
respect, specifying each such failure known to such officer and the nature and
status thereof and (C) in the case of the Master Servicer, to the best of such
officer's knowledge, each Servicer has fulfilled all its obligations under its
Servicing Agreement in all material respects throughout such year, 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.
122
The Master Servicer shall enforce any obligation of the Servicers, to
the extent set forth in the related Servicing Agreement, to deliver to the
Master Servicer and to the Depositor an annual statement of compliance and all
reports and other information required from the Servicers under Reg AB within
the time frame set forth in, and in such form and substance as may be required
pursuant to, the related Servicing Agreement The Master Servicer shall include
such annual statements of compliance with its own annual statement of compliance
to be submitted to the Securities Administrator pursuant to this Section.
ARTICLE X
REMIC ADMINISTRATION
Section 10.01. REMIC Administration.
(a) REMIC elections as set forth in the Preliminary Statement shall be
made on Forms 1066 or other appropriate federal tax or information return for
the taxable year ending on the last day of the calendar year in which the
Certificates are issued. The regular interests and residual interest in each
REMIC shall be as designated in the Preliminary Statement.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of section 860G(a)(9) of the Code. The latest possible
maturity date for purposes of Treasury Regulation 1.860G-1(a)(4) will be the
Latest Possible Maturity Date.
(c) The Securities Administrator shall represent the Trust Fund in any
administrative or judicial proceeding relating to an examination or audit by any
governmental taxing authority with respect thereto. The Securities Administrator
shall pay any and all tax related expenses (not including taxes) of each REMIC,
including but not limited to any professional fees or expenses related to audits
or any administrative or judicial proceedings with respect to such REMIC that
involve the Internal Revenue Service or state tax authorities, but only to the
extent that (i) such expenses are ordinary or routine expenses, including
expenses of a routine audit but not expenses of litigation (except as described
in (ii)); or (ii) such expenses or liabilities (including taxes and penalties)
are attributable to the negligence or willful misconduct of the Securities
Administrator in fulfilling its duties hereunder (including its duties as tax
return preparer). The Securities Administrator shall be entitled to
reimbursement of expenses to the extent provided in clause (i) above from the
Distribution Account, provided, however, the Securities Administrator shall not
be entitled to reimbursement for expenses incurred in connection with the
preparation of tax returns and other reports as required by Section 6.20 and
this Section.
(d) The Securities Administrator shall prepare, the Trustee shall sign
and the Securities Administrator shall file all of each REMIC's federal and
appropriate state tax and information returns as such REMIC's direct
representative. The expenses of preparing and filing such returns shall be borne
by the Securities Administrator. In preparing such returns, the Securities
Administrator shall, with respect to each REMIC other than the Master REMIC: (i)
treat the accrual period for interests in such REMIC as the calendar month; (ii)
account for distributions made from each REMIC other than the Master REMIC as
made on the first day of each succeeding calendar month; (iii) account for
income under the all-OID method at the
123
weighted average of the Net Mortgage Rates; (iv) use the aggregation method
provided in Treasury Regulation section 1.1275-2(c); and (v) account for income
and expenses related to each REMIC other than the Master REMIC in the manner
resulting in the lowest amount of excess inclusion income possible accruing to
the Holder of the residual interest in each such REMIC.
(e) The Securities Administrator or its designee shall perform on
behalf of each REMIC all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions, or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, if required by the Code, the REMIC
Provisions, or other such guidance, the Securities Administrator shall provide,
upon receipt of additional reasonable compensation, (i) to the Treasury or other
governmental authority such information as is necessary for the application of
any tax relating to the transfer of a Residual Certificate to any disqualified
person or organization pursuant to Treasury Regulation 1.860E-2(a)(5) and any
person designated in Section 860E(e)(3) of the Code and (ii) to the
Certificateholders and the Trustee such information or reports as are required
by the Code or REMIC Provisions.
(f) To the extent within their control, the Trustee, the Securities
Administrator, the Master Servicer and the Holders of Certificates shall take
any action or cause any REMIC to take any action necessary to maintain the
status of any REMIC as a REMIC under the REMIC Provisions and shall assist each
other as necessary to create or maintain such status. None of the Trustee, the
Securities Administrator, the Master Servicer, nor the Holder of any Residual
Certificate shall knowingly take any action, cause any REMIC to take any action
or fail to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could result in an
Adverse REMIC Event unless the Trustee, the Securities Administrator and the
Master Servicer have received an Opinion of Counsel (at the expense of the party
seeking to take such action) to the effect that the contemplated action will not
endanger such status or result in the imposition of such a tax. In addition,
prior to taking any action with respect to any REMIC or the assets therein, or
causing any REMIC to take any action, which is not expressly permitted under the
terms of this Agreement, any Holder of a Residual Certificate will consult with
the Trustee, the Securities Administrator, the Master Servicer or their
respective designees, in writing, with respect to whether such action could
cause an Adverse REMIC Event to occur with respect to any REMIC, and no such
Person shall take any such action or cause any REMIC to take any such action as
to which the Trustee, the Securities Administrator or the Master Servicer has
advised it in writing that an Adverse REMIC Event could occur; provided,
however, that if no Adverse REMIC Event would occur but such action could result
in the imposition of additional taxes on the Residual Certificateholders, no
such Person shall take any such action, or cause any REMIC to take any such
action without the written consent of the Residual Certificateholders.
(g) Each Holder of a Residual Certificate shall pay when due any and
all taxes imposed on the related REMIC by federal or state governmental
authorities. To the extent that such taxes are not paid by a Residual
Certificateholder, the Paying Agent shall pay any remaining REMIC taxes out of
current or future amounts otherwise distributable to the Holder of the Residual
Certificate in any such REMIC or, if no such amounts are available, (A) out of
other amounts held in the Distribution Account, and shall reduce amounts
otherwise payable to holders
124
of regular interests in any such REMIC or (B) to the extent that any such taxes
are imposed on the REMIC as a result of the breach of any representation,
warranty or covenant of the Master Servicer, the Securities Administrator or any
Servicer, then the Master Servicer, the Securities Administrator, or that
Servicer, as applicable, shall pay when due any and all such taxes.
(h) The Securities Administrator shall, for federal income tax
purposes, maintain books and records with respect to each REMIC on a calendar
year and on an accrual basis.
(i) No additional contributions of assets shall be made to any REMIC,
except as expressly provided in this Agreement.
(j) Neither the Securities Administrator nor the Master Servicer shall
enter into any arrangement by which any REMIC will receive a fee or other
compensation for services.
(k) [Reserved].
(l) The Class A-R Holder shall act as "tax matters person" with respect
to each REMIC created hereunder and the Securities Administrator shall act as
agent for the Class A-R Holder in such roles, unless and until another party is
so designated by the Class A-R Holder.
(m) The Securities Administrator, on behalf of the Trustee, shall treat
the rights of the holders of the Certificates to receive Basis Risk Carry
Forward Amounts from amounts on deposit in the Reserve Fund as rights in an
interest rate cap contract written by the Holders of the Class OC Certificates
in favor of the Holders of the Certificates. Thus, the Certificates shall be
treated as representing ownership of not only a Master REMIC regular interest,
but also ownership of an interest in an interest rate cap contract. For purposes
of determining the issue price of the Master REMIC regular interest, the
Securities Administrator, on behalf of the Trustee, shall assume that this
interest rate cap contract has a value of $5,000.
(n) [Reserved].
(o) [Reserved].
Section 10.02. Prohibited Transactions and Activities.
Neither the Depositor, the Master Servicer nor the Trustee shall sell,
dispose of, or substitute for any of the Mortgage Loans, except in a disposition
pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the bankruptcy of the
Trust Fund, (iii) the termination of each REMIC pursuant to Article VII of this
Agreement, (iv) a substitution pursuant to Article II of this Agreement or (v) a
repurchase of Mortgage Loans pursuant to Article II of this Agreement, nor
acquire any assets for any REMIC, nor sell or dispose of any investments in the
Distribution Account for gain, nor accept any contributions to any REMIC after
the Closing Date, unless it has received an Opinion of Counsel (at the expense
of the party causing such sale, disposition, substitution or acceptance) that
such disposition, acquisition, substitution, or acceptance will not result in an
Adverse REMIC Event, (b) affect the distribution of interest or principal on the
Certificates or (c) result in the encumbrance of the assets transferred or
assigned to the Trust Fund (except pursuant to the provisions of this
Agreement).
125
The Master Servicer with respect to the Mortgage Loans shall not
consent to any modification of any such Mortgage Loan for which the consent of
the Master Servicer is required under the applicable Purchase and Servicing
Agreement under which such Mortgage Loan is serviced, that would (i) increase
the interest rate in respect of such Mortgage, defer for a period in excess of
six months or forgive the payment of any principal or interest, reduce the
outstanding principal amount (except for actual payments of principal), increase
the Servicing Fee on such Mortgage Loan or extend the final maturity date on
such Mortgage Loan, or (ii) result in a substitution or release of collateral or
in the provision of additional collateral for the Mortgage Loan, unless the
applicable Mortgage Loan is in default or default is reasonably foreseeable in
respect of such Mortgage Loan, or the Master Servicer has received an Opinion of
Counsel (at the expense of the party requesting consent for such modification)
that such modification will not result in an Adverse REMIC Event.
Section 10.03. Indemnification with Respect to Prohibited Transactions
or Loss of REMIC Status.
Upon the occurrence of an Adverse REMIC Event due to the negligent
performance by the Securities Administrator of its duties and obligations set
forth herein, the Securities Administrator shall indemnify the
Certificateholders of the related Residual Certificate against any and all
losses, claims, damages, liabilities or expenses ("Losses") resulting from such
negligence; provided, however, that the Securities Administrator shall not be
liable for any such Losses attributable to the action or inaction of the
Depositor, the Trustee or the Holder of the Residual Certificate, nor for any
such Losses resulting from misinformation provided by any of the foregoing
parties on which the Securities Administrator has relied. Notwithstanding the
foregoing, however, in no event shall the Securities Administrator have any
liability (1) for any action or omission that is taken in accordance with and in
compliance with the express terms of, or which is expressly permitted by the
terms of, this Agreement or under any Purchase and Servicing Agreements or under
any Acknowledgement, (2) for any Losses other than arising out of malfeasance,
willful misconduct or negligent performance by the Service Administrator of its
duties and obligations set forth herein, and (3) for any special or
consequential damages to Certificateholders of the related Residual Certificate
(in addition to payment of principal and interest on the Certificates).
Section 10.04. REO Property.
(a) Notwithstanding any other provision of this Agreement, the Master
Servicer, acting on behalf of the Trustee hereunder, shall not, except to the
extent provided in the applicable Purchase and Servicing Agreement, knowingly
permit any Servicer to, rent, lease, or otherwise earn income on behalf of any
REMIC with respect to any REO Property which might cause an Adverse REMIC Event
unless the applicable Servicer has provided to the Trustee and the Securities
Administrator an Opinion of Counsel concluding that, under the REMIC Provisions,
such action would not adversely affect the status of any REMIC as a REMIC and
any income generated for any REMIC by the REO Property would not result in an
Adverse REMIC Event.
(b) The Depositor shall cause the applicable Servicer (to the extent
provided in its Purchase and Servicing Agreement) to make reasonable efforts to
sell any REO Property for its
126
fair market value. In any event, however, the Depositor shall, or shall cause
the applicable Servicer (to the extent provided in its Purchase and Servicing
Agreement) to, dispose of any REO Property within three years of its acquisition
by the Trust Fund unless the Depositor or the applicable Servicer (on behalf of
the Trust Fund) has received a grant of extension from the Internal Revenue
Service to the effect that, under the REMIC Provisions and any relevant proposed
legislation and under applicable state law, the REMIC may hold REO Property for
a longer period without causing an Adverse REMIC Event. If such an extension has
been received, then the Depositor, acting on behalf of the Trustee hereunder,
shall, or shall cause the applicable Servicer to, continue to attempt to sell
the REO Property for its fair market value for such period longer than three
years as such extension permits (the "Extended Period"). If such an extension
has not been received and the Depositor or the applicable Servicer, acting on
behalf of the Trust Fund hereunder, is unable to sell the REO Property within 33
months after its acquisition by the Trust Fund or if such an extension, has been
received and the Depositor or the applicable Servicer is unable to sell the REO
Property within the period ending three months before the close of the Extended
Period, the Depositor shall cause the applicable Servicer, before the end of the
three year period or the Extended Period, as applicable, to (i) purchase such
REO Property at a price equal to the REO Property's fair market value or (ii)
auction the REO Property to the highest bidder (which may be the applicable
Servicer) in an auction reasonably designed to produce a fair price prior to the
expiration of the three-year period or the Extended Period, as the case may be.
Section 10.05. Fidelity.
The Master Servicer, at its expense, shall maintain in effect a blanket
fidelity bond and an errors and omissions insurance policy, affording coverage
with respect to all directors, officers, employees and other Persons acting on
such Master Servicer's behalf, and covering errors and omissions in the
performance of the Master Servicer's obligations hereunder. The errors and
omissions insurance policy and the fidelity bond shall be in such form and
amount generally acceptable for entities serving as master servicers and
trustees.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Binding Nature of Agreement; Assignment.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
Section 11.02. Entire Agreement.
This Agreement contains the entire agreement and understanding among
the parties hereto with respect to the subject matter hereof, and supersedes all
prior and contemporaneous agreements, understandings, inducements and
conditions, express or implied, oral or written, of any nature whatsoever with
respect to the subject matter hereof. The express terms hereof control and
supersede any course of performance and/or usage of the trade inconsistent with
any of the terms hereof.
127
Section 11.03. Amendment.
(a) This Agreement (other than the provisions of Article XII hereof)
may be amended from time to time by the Depositor, the Master Servicer, the
Securities Administrator, and the Trustee, without notice to or the consent of
any of the Holders, (i) to cure any ambiguity or mistake, (ii) to cause the
provisions herein to conform to or be consistent with or in furtherance of the
statements made with respect to the Certificates, the Trust Fund or this
Agreement in any Offering Document, or to correct or supplement any provision
herein which may be inconsistent with any other provisions herein or with the
provisions of any Purchase and Servicing Agreement, (iii) to make any other
provisions with respect to matters or questions arising under this Agreement or
(iv) to add, delete, or amend any provisions to the extent necessary or
desirable to comply with any requirements imposed by the Code and the REMIC
Provisions. No such amendment effected pursuant to the preceding sentence shall,
as evidenced by an Opinion of Counsel, result in an Adverse REMIC Event, nor
shall such amendment effected pursuant to clause (iii) of such sentence
adversely affect in any material respect the interests of any Holder. Prior to
entering into any amendment without the consent of Holders pursuant to this
paragraph, the Trustee shall be provided with an Opinion of Counsel (at the
expense of the party requesting such amendment) to the effect that such
amendment is permitted under this Section. Any such amendment shall be deemed
not to adversely affect in any material respect any Holder, if the Trustee
receives written confirmation from each Rating Agency that such amendment will
not cause such Rating Agency to reduce the then current rating assigned to the
Certificates.
(b) This Agreement (other than the provisions of Article XII hereof)
may also be amended from time to time by the Depositor, the Master Servicer, the
Securities Administrator and the Trustee, with the consent of the Holders of not
less than 66-2/3% of the Class Principal Balance (or Percentage 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;
provided, however, that no such amendment shall be made unless the Trustee
receives an Opinion of Counsel, at the expense of the party requesting the
change, that such change will not cause an Adverse REMIC Event; and provided
further, that no such amendment may (i) reduce in any manner the amount of, or
delay the timing of, payments received on Mortgage Loans which are required to
be distributed on any Certificate, without the consent of the Holder of such
Certificate or (ii) reduce the aforesaid percentages of Class Principal Balance
or Class Notional Amount (or Percentage Interest) of Certificates of each Class,
the Holders of which are required to consent to any such amendment without the
consent of the Holders of 100% of the Class Principal Balance or Class Notional
Amount (or Percentage Interest) of each Class of Certificates affected thereby.
For purposes of this paragraph, references to "Holder" or "Holders" shall be
deemed to include, in the case of any Class of Book-Entry Certificates, the
related Certificate Owners.
(c) In the event the parties to this Agreement desire to further
clarify or amend any provision of Article XII hereof, this Agreement shall be
amended to reflect the new agreement between the parties covering matters in
Article XII, which amendment shall not require any Opinion of Counsel or Rating
Agency confirmations or the consent of any Certificateholder.
128
(d) Promptly after the execution of any such amendment, the Securities
Administrator shall furnish written notification of the substance of such
amendment to each Holder, the Depositor and the Rating Agencies.
(e) It shall not be necessary for the consent of Holders under this
Section 11.03 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 Holders shall be subject to such reasonable regulations as
the Trustee may prescribe.
Section 11.04. Voting Rights.
Except to the extent that the consent of all affected
Certificateholders is required pursuant to this Agreement, with respect to any
provision of this Agreement requiring the consent of Certificateholders
representing specified percentages of aggregate outstanding Certificate Balance
or Class Notional Amount (or Percentage Interest), Certificates owned by the
Depositor, the Master Servicer, the Securities Administrator, the Trustee, any
Servicer or any Affiliates thereof are not to be counted so long as such
Certificates are owned by the Depositor, the Master Servicer, the Securities
Administrator, the Trustee, any Servicer or any Affiliate thereof.
Section 11.05. Provision of Information.
(a) For so long as any of the Certificates of any Class are "restricted
securities" within the meaning of Rule 144(a)(3) under the Act, each of the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
(upon instruction from the Depositor) agree to cooperate with each other to
provide to any Certificateholders and to any prospective purchaser of
Certificates designated by such holder, upon the request of such holder or
prospective purchaser, any information required to be provided to such holder or
prospective purchaser to satisfy the condition set forth in Rule 144A(d)(4)
under the Act. Any reasonable, out-of-pocket expenses incurred by the Trustee,
the Master Servicer or the Securities Administrator in providing such
information shall be reimbursed by the Depositor.
(b) The Securities Administrator shall provide to any person to whom a
Prospectus was delivered, upon the request of such person specifying the
document or documents requested, a copy (excluding exhibits) of any report on
Form 8-K or Form 10-K filed with the Securities and Exchange Commission pursuant
to Section 6.20(b). Any reasonable out-of-pocket expenses incurred by the
Securities Administrator in providing copies of such documents shall be
reimbursed by the Depositor.
Section 11.06. Governing Law.
(a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK (OTHER THAN SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW).
129
Section 11.07. Notices.
All requests, demands, notices, authorizations, directions, consents,
waivers and communications hereunder shall be in writing and shall be deemed to
have been duly given when received by (a) in the case of the Depositor, Xxxxxx
Xxxxxxx Capital I Inc., 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, telephone
number (000) 000-0000, Attention: Xxxxxx Xxxxxxx Mortgage Loan Trust 2006-12XS,
(b) in the case of the Seller, Xxxxxx Xxxxxxx Mortgage Capital Inc., 0000 Xxxxxx
xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx Xxxxxxx Mortgage
Loan Trust 2006-12XS, (c) in the case of the Master Servicer or the Securities
Administrator, Xxxxx Fargo Bank, National Association, X.X. Xxx 00, Xxxxxxxx,
Xxxxxxxx 00000 (or, for overnight deliveries, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx 00000), telecopy number (000) 000-0000, Attention: Xxxxxx Xxxxxxx
Mortgage Loan Trust 2006-12XS, (d) with respect to the Trustee or the
Certificate Registrar, its respective Corporate Trust Office and (e) in the case
of the Rating Agencies, the address specified therefor in the definition
corresponding to the name of such Rating Agency, or as to each party such other
address as may hereafter be furnished by such party to the other parties in
writing. All demands, notices and communications to a party hereunder shall be
in writing and shall be deemed to have been duly given when delivered to such
party at the relevant address, facsimile number or electronic mail address set
forth above or at such other address, facsimile number or electronic mail
address as such party may designate from time to time by written notice in
accordance with this Section 11.07.
Section 11.08. 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 11.09. Indulgences; No Waivers.
Neither the failure nor any delay on the part of a party to exercise
any right, remedy, power or privilege under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
power or privilege preclude any other or further exercise of the same or of any
other right, remedy, power or privilege, nor shall any waiver of any right,
remedy, power or privilege with respect to any occurrence be construed as a
waiver of such right, remedy, power or privilege with respect to any other
occurrence. No waiver shall be effective unless it is in writing and is signed
by the party asserted to have granted such waiver.
Section 11.10. Headings Not To Affect Interpretation.
The headings contained in this Agreement are for convenience of
reference only, and they shall not be used in the interpretation hereof.
Section 11.11. Benefits of Agreement.
130
Nothing in this Agreement or in the Certificates, express or implied,
shall give to any Person, other than the parties to this Agreement and their
successors hereunder and the Holders of the Certificates, any benefit or any
legal or equitable right, power, remedy or claim under this Agreement, except to
the extent specified in Section 11.15.
Section 11.12. Special Notices to the Rating Agencies.
(a) The Depositor shall give prompt notice to the Rating Agencies of
the occurrence of any of the following events of which it has notice:
(i) any amendment to this Agreement pursuant to Section 11.03;
(ii) any assignment by the Master Servicer of its rights
hereunder or delegation of its duties hereunder;
(iii) the occurrence of any Event of Default described in
Section 6.14;
(iv) any notice of termination given to the Master Servicer
pursuant to Section 6.14 and any resignation of the Master Servicer
hereunder;
(v) the appointment of any successor to any Master Servicer
pursuant to Section 6.14;
(vi) the making of a final payment pursuant to Section 7.02;
and
(vii) any termination of the rights and obligations of any
Servicer under the applicable Purchase and Servicing Agreement.
(b) All notices to the Rating Agencies provided for this Section shall
be in writing and sent by first class mail, telecopy or overnight courier, to
the address specified therefor in the definition corresponding to the name of
such Rating Agency.
(c) The Securities Administrator shall provide or make available to the
Rating Agencies reports prepared pursuant to Section 4.05. In addition, the
Securities Administrator shall, at the expense of the Trust Fund, make available
to each Rating Agency such information as such Rating Agency may reasonably
request regarding the Certificates or the Trust Fund, to the extent that such
information is reasonably available to the Securities Administrator.
(d) The Depositor hereby represents to S&P that, to the Depositor's
knowledge, the information provided to such Rating Agency, including the loan
level detail, is true and correct according to such Rating Agency's
requirements.
Section 11.13. Conflicts.
To the extent that the terms of this Agreement conflict with the terms
of any Purchase and Servicing Agreement, the related Purchase and Servicing
Agreement shall govern.
Section 11.14. Counterparts.
131
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, and all of which together shall
constitute one and the same instrument.
Section 11.15. No Petitions.
The Trustee and the Master Servicer (not in its individual corporate
capacity, but solely as Master Servicer hereunder), by entering into this
Agreement, hereby covenant and agree that they shall not at any time institute
against the Depositor, or join in any institution against the Depositor of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to this Agreement or any
of the documents entered into by the Depositor in connection with the
transactions contemplated by this Agreement, except that the Trustee shall not
be prohibited from filing a proof of claim in any such proceeding.
Section 11.16. Indemnification by Trust.
Pursuant to the Purchase and Servicing Agreements, each of the
Originators and Servicers shall be indemnified by the Trust to the extent
specified in the related Purchase and Servicing Agreement.
ARTICLE XII
EXCHANGE ACT REPORTING
Section 12.01. Filing Obligations.
(a) The Master Servicer, the Securities Administrator, the Trustee and
the Custodian 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 Master Servicer, the Securities
Administrator, the Trustee and the Custodian shall (and the Master Servicer
shall cause each Servicer, to the extent required by the related Servicing
Agreement, to) 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. Each of the Master Servicer (and the Master Servicer
shall cause any Servicer to notify promptly, to the extent required by the
related Servicing Agreement), the Securities Administrator, the Custodian and
the Trustee shall promptly notify the Depositor and the Master Servicer (if the
notifying party is not the Master Servicer), but in no event later than two (2)
Business Days after its occurrence, of any Reportable Event either (i) with
respect to itself or any Affiliate of it or (ii) with respect to any Reporting
Party, to the extent that it has received notice thereof.
(b) On or prior to January 30 of the first year in which the Securities
Administrator is able to do so under applicable law, the Securities
Administrator shall prepare
132
and file a Form 15 relating to the automatic suspension of reporting in respect
of the Trust under the Exchange Act.
(c) In the event that the Securities Administrator is unable to file
timely with the Commission all or any required portion of any Form 8-K, Form
10-D or Form 10-K required to be filed by this Agreement because required
disclosure information was either not delivered to it or delivered to it after
the delivery deadlines set forth in this Agreement or for any other reason, the
Securities Administrator will immediately notify the Depositor. In the case of
Form 10-D and Form 10-K, the parties to this Agreement will (and the Master
Servicer shall cause each Servicer to cooperate) prepare and file a Form 12b-25
and a Form 10-DA and Form 10-KA as applicable, pursuant to Rule 12b-25 of the
Exchange Act. In the case of Form 8-K, the Securities Administrator will, upon
receipt of all required Form 8-K Disclosure Information shall include such
disclosure information in the next Form 10-D unless directed by the Depositor to
file a Form 8-K with such Form 8-K Disclosure Information. In the event that any
previously filed Form 8-K, Form 10-D or Form 10-K needs to be amended, and such
amendment includes any Additional Form 10-D Disclosure, any Additional Form 10-K
Disclosure or any Form 8-K Disclosure Information or an amendment to any such
disclosure, the Securities Administrator will notify the Depositor and each
Servicer affected by such amendment (unless such amendment is solely for the
purpose of restating the monthly statement referred to in Section 4.05 hereof)
and such parties will cooperate to prepare any necessary Form 8-KA, Form 10-DA
or Form 10-KA. Any Form 15, Form 12b-25 or any amendment to a Form 8-K or a Form
10-D shall be signed by a duly authorized representative of the Master Servicer.
Any amendment to a Form 10-K shall be signed by a senior officer of the Master
Servicer in charge of the master servicing function. The parties to this
Agreement acknowledge that the performance by the Master Servicer and the
Securities Administrator of its duties under this Article XII related to the
timely preparation and filing of a Form 15, Form 12b-25 or any amendment to a
Form 8-K, Form 10-D or Form 10-K is contingent upon each such party performing
its duties under this Section. Neither the Master Servicer nor the Securities
Administrator shall have any liability for any loss, expense, damage, claim
arising out of or with respect to any failure to properly prepare, execute
and/or timely file any such Form 15, Form 12b-25 or any amendments to a Form
8-K, Form 10-D or Form 10-K, where such failure results from the Securities
Administrator's inability or failure to obtain or receive, on a timely basis,
any information from any other party hereto needed to prepare, arrange for
execution or file such Form 15, Form 12b-25 or any amendments to Form 8-K, Form
10-D or Form 10-K, not resulting from their own respective negligence, bad faith
or willful misconduct.
(d) All items under this Article XII to be reviewed by the Depositor
should be forwarded electronically to xxxxxxxxxxxxxx@xxxxxxxxxxxxx.xxx. In
addition, for purposes of this Article XII, if the Securities Administrator or
the Master Servicer is required to provide any information or documentation to
such other party, for so long as Xxxxx Fargo Bank, National Association is both
Securities Administrator and Master Servicer, that delivery will be
automatically deemed to have been made.
(e) Each of Form 10-D and Form 10-K requires the registrant to indicate
(by checking "yes" or "no") that it "(1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements
133
for the past 90 days." The Depositor shall notify the Securities Administration
in writing, no later than the fifth calendar day after the related Distribution
Date with respect to the filing of a report on Form 10-D and no later than March
15th with respect to the filing of a report on Form 10-K, if the answer to the
questions should be "no." In the absence of such notification by the Depositor
to the Securities Administrator, the Securities Administrator shall be entitled
to assume that the answer to the questions on Form 10-D and Form 10-K should be
"yes". The Securities Administrator shall be entitled to rely on such
representations in preparing, executing and/or filing any such report.
Section 12.02. Form 10-D Reporting.
(a) No later than 5:00 p.m., New York time, on the 15th calendar day
after each Distribution Date (subject to permitted extensions under the Exchange
Act), the Securities Administrator shall prepare and file on behalf of the Trust
any Form 10-D required by the Exchange Act, in form and substance as required by
the Exchange Act. The Securities Administrator shall file each Form 10-D with a
copy of the related Monthly Statement attached thereto. Any disclosure in
addition to the Monthly Statement that is required to be included on Form 10-D
("Additional Form 10-D Disclosure") shall be prepared and filed by the
Securities Administrator pursuant to the following paragraph and the Securities
Administrator will have no duty or liability for any failure hereunder to
determine any Additional Form 10-D Disclosure, except as set forth in the next
paragraph.
(b) In accordance with the respective reporting obligations set forth
on Exhibit N-1 hereto, within 5 calendar days after the related Distribution
Date, the Master Servicer and any other Reporting Party shall be required to
provide to the Securities Administrator and the Depositor in XXXXX-compatible
form, or in such other form as otherwise agreed upon by the Securities
Administrator and such party, the form and substance of any Additional Form 10-D
Disclosure, if applicable, together with an Additional Disclosure Notification
in the form of Exhibit P attached hereto (an "Additional Disclosure
Notification"). The Securities Administrator shall notify the Depositor of any
Additional Form 10-D Disclosure with respect to itself or any of its Affiliates
and any other Additional Form 10-D Disclosure received by it. Within one (1)
Business Day of such notification, the Depositor will approve or disapprove, as
the case may be, the inclusion of the Additional Form 10-D Disclosure on Form
10-D. The Depositor will be responsible for any reasonable additional fees and
expenses assessed or incurred by the Securities Administrator in connection with
including any Additional Form 10-D Disclosure on Form 10-D pursuant to this
paragraph.
(c) After preparing the Form 10-D, and no later than the close of
business on the 11th calendar day after the Distribution Date, the Securities
Administrator shall forward electronically a draft copy of the Form 10-D to the
Master Servicer and to the Depositor for review. No later than the 13th calendar
day after the Distribution Date, the Depositor shall notify the Securities
Administrator in writing (which may be provided electronically) of any changes
to or approve the filing of such Form 10-D. In the absence of receipt of any
written changes or approval, or if the Depositor does not request a copy of a
Form 10-D, the Securities Administrator shall be entitled to assume that such
Form 10-D is in final form and the Securities Administrator may proceed with the
execution and filing of the Form 10-D. A duly authorized representative of the
Master Servicer shall sign the Form 10-D and return an electronic or fax
134
copy of such signed Form 10-D (with an original executed hard copy to follow by
overnight mail) to the Securities Administrator. If a Form 10-D cannot be filed
on time or if a previously filed Form 10-D needs to be amended, the Securities
Administrator will follow the procedures set forth in Section 12.01(c) hereof.
Promptly (but no later than 1 Business Day) after filing with the Commission,
the Securities Administrator will make available on its internet website a final
executed copy of each Form 10-D prepared and filed by the Securities
Administrator. The signing party at the Master Servicer can be contacted by
e-mail at xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx or by facsimile (000) 000-0000.
Each party to this Agreement acknowledges that the performance by the Securities
Administrator and the Master Servicer of its duties under this Section 12.02
related to the timely preparation, execution and filing of Form 10-D is
contingent upon such parties strictly observing all applicable deadlines in the
performance of their duties under this Section 12.02. Neither the Securities
Administrator nor the Master Servicer shall have any liability for any loss,
expense, damage, claim arising out of or with respect to any failure to properly
prepare, execute and/or timely file such Form 10-D, where such failure results
from the Securities Administrator's inability or failure to obtain or receive,
on a timely basis, any information from any other party hereto (other than an
Affiliate thereof) needed to prepare, arrange for execution or file such Form
10-D, not resulting from their respective negligence, bad faith or willful
misconduct.
Section 12.03. Form 8-K Reporting.
(a) As directed by the Depositor, within four (4) Business Days after
the occurrence of an event requiring disclosure on Form 8-K (each such event, a
"Reportable Event"), the Securities Administrator shall prepare and file on
behalf of the Trust any Form 8-K, as required by the Exchange Act, provided that
the Depositor shall file the initial Form 8-K (operative agreements) in
connection with the issuance of the Certificates. Any disclosure or information
related to a Reportable Event or that is otherwise required to be included on
Form 8-K ("Form 8-K Disclosure Information") shall be prepared by the Securities
Administrator pursuant to the following paragraph and the Securities
Administrator will have no duty or liability for any failure hereunder to
determine or prepare any Form 8-K Disclosure Information or any Form 8-K, except
as set forth in the next paragraph.
(b) In accordance with the respective reporting obligations set forth
on Exhibit N-3 hereto, no later than the end of business on the second Business
Day immediately following the occurrence of a Reportable Event, each of the
Securities Administrator, the Custodian, the Trustee, the Master Servicer and
the Depositor shall be required to provide to the Securities Administrator and
the Depositor, as applicable, in XXXXX-compatible form, or in such other form as
otherwise agreed upon by the Securities Administrator and such party, the form
and substance of any Additional Form 8-K Disclosure, if applicable, together
with an Additional Disclosure Notification. The Securities Administrator shall
notify the Depositor of any Form 8-K Disclosure Information with respect to
itself or any of its Affiliates and any other Form 8-K Disclosure Information
received by it. The Depositor will approve or disapprove, as the case may be,
the inclusion of the Form 8-K Disclosure Information on Form 8-K. The Depositor
will be responsible for any reasonable additional fees and expenses assessed or
incurred by the Securities Administrator in connection with including any Form
8-K Disclosure Information on Form 8-K pursuant to this paragraph.
135
(c) After preparing the Form 8-K, the Securities Administrator shall
forward electronically a draft copy of the Form 8-K to the Depositor and the
Master Servicer for review no later than 12:00 p.m., New York time, on the third
Business Day following the Reportable Event. The Depositor shall notify the
Securities Administrator in writing (which may be provided electronically) of
any changes to or approval of such Form 8-K no later than the close of business
on the third Business Day following the Reportable Event. In the absence of
receipt of any written changes or approval, the Securities Administrator shall
be entitled to assume that such Form 8-K is in final form and the Securities
Administrator may proceed with the execution and filing of the Form 8-K. By
12:00 p.m., New York time, on the fourth Business Day after the occurrence of
the Reportable Event, a duly authorized representative of the Master Servicer
shall sign the Form 8-K, then return an electronic or fax copy of such signed
Form 8-K (with an original executed hard copy to follow by overnight mail) to
the Securities Administrator. If a Form 8-K cannot be filed on time or if a
previously filed Form 8-K needs to be amended, the Securities Administrator will
follow the procedures set forth in Section 12.01(c). With respect to each Form
8-K prepared and filed by the Securities Administrator, promptly (but no later
than 1 Business Day) after filing with the Commission, the Securities
Administrator will, make available on its internet website a final executed copy
thereof. The parties to this Agreement acknowledge that the performance by the
Master Servicer and the Securities Administrator of its duties under this
Section 12.03 related to the timely preparation, execution and filing of Form
8-K is contingent upon such parties strictly observing all applicable deadlines
in the performance of their duties under this Section 12.03. Neither the
Securities Administrator nor the Master Servicer shall have any liability for
any loss, expense, damage, claim arising out of or with respect to any failure
to properly prepare, execute and/or timely file such Form 8-K, where such
failure results from the Securities Administrator's inability or failure to
obtain or receive, on a timely basis, any information from any other party
hereto (other than an Affiliate thereof) needed to prepare, arrange for
execution or file such Form 8-K, not resulting from their respective negligence,
bad faith or willful misconduct.
Section 12.04. Form 10-K Reporting.
(a) Within 90 days (including the 90th day) after the end of each
fiscal year of the Trust or such earlier date as may be required by the Exchange
Act (the "10-K Filing Deadline"), commencing in March 2007 and continuing until
the Trust has been deregistered with the Commission, the Securities
Administrator shall prepare and file on behalf of the Trust a Form 10-K, in form
and substance as required by the Exchange Act. Each such Form 10-K shall include
the following items, in each case to the extent they have been delivered to the
Securities Administrator within the applicable time frames set forth in this
Agreement and the related Servicing Agreement, (i) an annual compliance
statement for each Servicer, each Additional Servicer, the Master Servicer, the
Custodian and the Securities Administrator (each such party and the Custodian, a
"Reporting Servicer") as described under Section 9.11, (ii)(A) the annual
reports on assessment of compliance with servicing criteria for each Reporting
Servicer, as described under Section 12.06, and (B) if each Reporting Servicer's
report on assessment of compliance with servicing criteria described under
Section 12.06 identifies any material instance of noncompliance, disclosure
identifying such instance of noncompliance, or if each Reporting Servicer's
report on assessment of compliance with servicing criteria described under
Section 12.06 is not included as an exhibit to such Form 10-K, disclosure that
such report is not included and an explanation why such report is not included,
(iii)(A) the registered public accounting firm
136
attestation report for each Reporting Servicer, as described under Section
12.06, and (B) if any registered public accounting firm attestation report
described under Section 12.06 identifies any material instance of noncompliance,
disclosure identifying such instance of noncompliance, or if any such registered
public accounting firm attestation report is not included as an exhibit to such
Form 10-K, disclosure that such report is not included and an explanation why
such report is not included, and (iv) a Xxxxxxxx-Xxxxx Certification as
described in Section 12.05. Any disclosure or information in addition to (i)
through (iv) above that is required to be included on Form 10-K ("Additional
Form 10-K Disclosure") shall be determined and prepared by and at the direction
of the Depositor pursuant to the following paragraph and the Securities
Administrator will have no duty or liability for any failure hereunder to
determine or prepare any Additional Form 10-K Disclosure, except as set forth in
the next paragraph.
(b) In accordance with the respective reporting obligations set forth
on Exhibit N-2 hereto, no later than March 15 of each year that the Trust is
subject to the Exchange Act reporting requirements, commencing in 2007 and
continuing until the Trust has been deregistered with the Commission, the Master
Servicer and any other Reporting Party shall be required to provide to the
Securities Administrator and the Depositor, in XXXXX-compatible form, or in such
other form as otherwise agreed upon by the Securities Administrator and such
party, the form and substance of any Additional Form 10-K Disclosure, if
applicable, together with an Additional Disclosure Notification. The Securities
Administrator shall notify the Depositor of any Additional Form 10-K Disclosure
with respect to itself or any of its Affiliates and any other Additional Form
10-K Disclosure received by it. Within one (1) Business Day of such
notification, the Depositor will approve or disapprove, as the case may be, the
inclusion of the Additional Form 10-K Disclosure on Form 10-K. The Depositor
will be responsible for any reasonable additional fees and expenses assessed or
incurred by the Securities Administrator in connection with including any
Additional Form 10-K Disclosure on Form 10-K pursuant to this paragraph.
(c) After preparing the Form 10-K, the Securities Administrator shall
forward electronically a draft copy of the Form 10-K to the Master Servicer and,
upon request, to the Depositor for review. No later than the earlier of: (x)
three (3) Business Days following the receipt by the Depositor and (y) March
25th, the Depositor and the Master Servicer shall notify the Securities
Administrator in writing (which may be provided electronically) of any changes
to or approve the filing of such Form 10-K. In the absence of receipt of any
written changes or approval, or if the Depositor does not request a copy of a
Form 10-K, the Securities Administrator shall be entitled to assume that such
Form 10-K is in final form and the Securities Administrator may proceed with the
execution and filing of the Form 10-K. A senior officer of the Master Servicer
in charge of the master servicing function shall sign the Form 10-K and return
an electronic or fax copy of such signed Form 10-K (with an original executed
hard copy to follow by overnight mail) to the Securities Administrator. If a
Form 10-K cannot be filed on time or if a previously filed Form 10-K needs to be
amended, the Securities Administrator will follow the procedures set forth in
Section 12.01(c). Promptly (but no later than 1 Business Day) after filing with
the Commission, the Securities Administrator will make available on its internet
website a final executed copy of each Form 10-K prepared and filed by the
Securities Administrator. The parties to this Agreement acknowledge that the
performance by the Master Servicer and the Securities Administrator of its
duties under this Section 12.04 related to the timely preparation, execution and
filing of Form 10-K is contingent upon such parties (and any
137
Additional Servicer or Servicing Function Participant) strictly observing all
applicable deadlines in the performance of their duties under this Section
12.04, Section 9.11 Section 12.05 and Section 12.06. Neither the Master Servicer
nor the Securities Administrator shall have any liability for any loss, expense,
damage, claim arising out of or with respect to any failure to properly prepare,
execute and/or timely file such Form 10-K, where such failure results from the
Master Servicer's or the Securities Administrator's inability or failure to
obtain or receive, on a timely basis, any information from any other party
hereto needed to prepare, arrange for execution or file such Form 10-K, not
resulting from their own respective negligence, bad faith or willful misconduct.
Section 12.05. Xxxxxxxx-Xxxxx Certification.
Each Form 10-K shall include a Xxxxxxxx-Xxxxx Certification required to
be included therewith pursuant to the Xxxxxxxx-Xxxxx Act. The senior officer of
the Master Servicer in charge of the master servicing function shall sign the
Xxxxxxxx-Xxxxx Certification and shall serve as the Certifying Person on behalf
of the Trust.
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 12.06. Reports on Assessment of Compliance and Attestation.
(a) By March 15 of each year (such date includes the expiration of any
applicable grace period), commencing in March 2007, the Master Servicer, the
Securities Administrator, the Custodian (for so long as a Form 10-K will be
filed on behalf of the Trust for the preceding calendar year) and each other
Reporting Party, each at its own expense, shall furnish or otherwise make
available, and each such party shall cause any Servicing Function Participant
engaged by it to furnish, each at its own expense, to the Securities
Administrator and the Depositor, a report on an assessment of compliance with
the Relevant Servicing Criteria that contains (A) a statement by such party of
its responsibility for assessing compliance with the Relevant Servicing
Criteria, (B) a statement that such party used the Relevant Servicing Criteria
to assess compliance with the Relevant Servicing Criteria, (C) such party's
assessment of compliance with the Relevant Servicing Criteria as of and for the
fiscal year covered by the Form 10-K required to be filed pursuant to Section
12.04, including, if there has been any material instance of noncompliance with
the Relevant Servicing Criteria, a discussion of each such failure and the
nature and status thereof, and (D) a statement that a registered public
accounting firm has issued an attestation report on such party's assessment of
compliance with the Relevant Servicing Criteria as of and for such period.
No later than the end of each fiscal year for the Trust for which a
10-K is required to be filed, the Master Servicer and the Custodian shall each
forward to the Securities Administrator the name of each Servicing Function
Participant engaged by it and what Relevant Servicing Criteria will be addressed
in the report on assessment of compliance prepared by such Servicing Function
Participant; however if the Master Servicer and the Securities Administrator are
the same entity, then the Master Servicer is not required to forward to the
Securities Administrator
138
its assessment of compliance with the Relevant Servicing Criteria as of and for
the fiscal year covered by the Form 10-K required to be filed pursuant to
Section 12.04. When the Master Servicer and the Securities Administrator (or any
Servicing Function Participant engaged by them) submit their assessments to the
Securities Administrator, such parties will also at such time include the
assessment (and attestation pursuant to Section 12.06(b) of each Servicing
Function Participant engaged by it.
Promptly after receipt of each such report on assessment of compliance,
(i) the Depositor shall review each such report and, if applicable, consult with
the Master Servicer, the Securities Administrator, the Custodian and any
Servicing Function Participant engaged by such parties as to the nature of any
material instance of noncompliance with the Relevant Servicing Criteria by each
such party, and (ii) the Securities Administrator shall confirm that the
assessments, taken as a whole, address all of the Servicing Criteria and taken
individually address the Relevant Servicing Criteria for each party as set forth
on Exhibit O and on any similar exhibit set forth in each Servicing Agreement in
respect of each Servicer and notify the Depositor of any exceptions.
(b) By March 15 of each year, commencing in March 2007, the Master
Servicer, the Securities Administrator, the Custodian (for so long as a Form
10-K will be filed in respect of the Trust for the preceding calendar year) and
each other Reporting Party, each at its own expense, shall cause, and each such
party shall cause any Servicing Function Participant engaged by it to cause,
each at its own expense, a registered public accounting firm (which may also
render other services to the Master Servicer, the Trustee, the Custodian, the
Securities Administrator, or such other Servicing Function Participants, as the
case may be) and that is a member of the American Institute of Certified Public
Accountants to furnish a report to the Securities Administrator and the
Depositor, to the effect that (i) it has obtained a representation regarding
certain matters from the management of such party, which includes an assertion
that such party has complied with the Relevant Servicing Criteria, and (ii) on
the basis of an examination conducted by such firm in accordance with standards
for attestation engagements issued or adopted by the PCAOB, it is expressing an
opinion as to whether such party's compliance with the Relevant Servicing
Criteria was fairly stated in all material respects, or it cannot express an
overall opinion regarding such party's assessment of compliance with the
Relevant Servicing Criteria. In the event that an overall opinion cannot be
expressed, such registered public accounting firm shall state in such report why
it was unable to express such an opinion. Such report must be available for
general use and not contain restricted use language.
Promptly after receipt of such report from the Master Servicer, the
Securities Administrator, the Custodian or any Servicing Function Participant
engaged by such parties, (i) the Depositor shall review the report and, if
applicable, consult with such parties as to the nature of any defaults by such
parties, in the fulfillment of any of each such party's obligations hereunder or
under any other applicable agreement, and (ii) the Securities Administrator
shall confirm that each assessment submitted pursuant to Section 12.06(a) is
coupled with an attestation meeting the requirements of this Section 12.06(b)
and notify the Depositor of any exceptions.
Section 12.07. Use of Subcontractors.
139
(a) The Master Servicer shall cause any Subcontractor used by the
Master Servicer for the benefit of the Depositor to comply with the provisions
of Section 9.11 and this Article XII to the same extent as if such Subcontractor
were the Master Servicer (except with respect to the Master Servicer's duties
with respect to preparing and filing any Exchange Act Reports or as the
Certifying Person). The Master Servicer shall be responsible for obtaining from
each Subcontractor and delivering to the Depositor any servicer compliance
statement required to be delivered by such Subcontractor under Section 9.11, any
assessment of compliance and attestation required to be delivered by such
Subcontractor under Section 12.07 and any certification required to be delivered
to the Certifying Person under Section 12.05 as and when required to be
delivered. As a condition to the succession to any Subcontractor as subservicer
under this Agreement by any Person (i) into which such Subcontractor may be
merged or consolidated, or (ii) which may be appointed as a successor to any
Subcontractor, the Master Servicer shall provide to the Depositor, at least 15
calendar days prior to the effective date of such succession or appointment, (x)
written notice to the Depositor of such succession or appointment 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.
(b) It shall not be necessary for the Master Servicer or the Trustee to
seek the consent of the Depositor or any other party hereto to the utilization
of any Subcontractor. The Master Servicer or the Trustee, as applicable, shall
promptly upon request provide to the Depositor (or any designee of the
Depositor, such as the Master Servicer or 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 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 Master Servicer or the Trustee, as applicable,
shall cause any such Subcontractor used by such Person for the benefit of the
Depositor to comply with the provisions of Sections 12.07 and 12.09 of this
Agreement to the same extent as if such Subcontractor were the Master Servicer
(except with respect to the Master Servicer's duties with respect to preparing
and filing any Exchange Act Reports or as the Certifying Person) or the Trustee,
as applicable. The Master Servicer or the Trustee, as applicable, shall be
responsible for obtaining from each Subcontractor and delivering to the
Depositor and the Master Servicer, any assessment of compliance and attestation
required to be delivered by such Subcontractor under Section 12.07, in each case
as and when required to be delivered.
Section 12.08. Indemnification by the Master Servicer and the
Securities Administrator.
(a) The Master Servicer and the Securities Administrator (each, an
"Indemnifying Party"), shall, severally and not jointly, indemnify the Depositor
and the Seller for the preparation, execution or filing of any report required
to be filed with the Commission with respect to the Trust Fund, or for execution
of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the
Exchange Act with respect to the Trust Fund; and the respective present and
140
former directors, officers, employees and agents of each of the foregoing and
shall hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, legal fees and expenses and related costs,
judgments, and any other costs, fees and expenses that any of them may sustain
arising out of or based upon:
(i) any untrue statement of a material fact contained or
alleged to be contained in or the omission or alleged omission to state
a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading in (A) any compliance certificate
delivered by it, or by any Servicing Function Participant engaged by
it, pursuant to this Agreement, (B) any assessment or attestation
delivered by or on behalf of it, or by any Servicing Function
Participant engaged by it, pursuant to this Agreement, or (C) any
Additional Form 10-D Disclosure, Additional Form 10-K Disclosure or
Form 8-K Disclosure Information concerning the Securities Administrator
or the Master Servicer and provided by either of them;
(ii) any failure by the Indemnifying Party to perform its
obligations when and as required under this Article XII; or
(iii) any negligence, bad faith or willful misconduct by the
Indemnifying Party.
In the case of any failure of performance described in clause (a)(ii)
of this Section, the Indemnifying Party shall promptly reimburse the Seller or
the Depositor, as applicable, and each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission with
respect to such Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect
to the Trust, for all costs reasonably incurred by each such party in order to
obtain the information, report, certification, accountants' letter or other
material not delivered as required by the Indemnifying Party or any Subservicer
or Subcontractor of the Indemnifying Party.
(b) (i) Any failure by the Indemnifying Party or any Subservicer or any
Subcontractor of the Indemnifying Party to deliver any information, report,
certification or accountants' letter when and as required under this Article
XII, including (except as provided below) any failure by the Indemnifying Party
to identify pursuant to Section 12.07 any Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, which
continues unremedied for ten calendar days after the date on which such
information, report, certification or accountants' letter was required to be
delivered shall constitute an Event of Default with respect to the Indemnifying
Party under this Agreement, and shall entitle the Seller or Depositor, as
applicable, in its sole discretion to terminate the rights and obligations of
the Indemnifying Party under this Agreement without payment (notwithstanding
anything in this Agreement to the contrary) of any compensation to the
Indemnifying Party; provided that to the extent that any provision of this
Agreement and/or any applicable Reconstitution Agreement expressly provides for
the survival of certain rights or obligations following termination of the
Master Servicer as servicer, such provision shall be given effect.
Neither the Seller nor any Depositor shall be entitled to terminate the
rights and obligations of an Indemnifying Party pursuant to this subparagraph
(b)(ii) if a failure of the
141
Master Servicer to identify a Subcontractor "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB was attributable
solely to the role or functions of such Subcontractor with respect to mortgage
loans other than the Mortgage Loans.
(ii) The Indemnifying Party shall promptly reimburse the
Seller and any Depositor for all reasonable expenses incurred by them,
in connection with the termination of the Indemnifying Party and the
transfer of their duties to a successor. The provisions of this
paragraph shall not limit whatever rights the Seller or the Depositor
may have under other provisions of this Agreement or otherwise, whether
in equity or at law, such as an action for damages, specific
performance or injunctive relief.
Section 12.09. Indemnification by the Custodian.
(a) If the entity serving as Trustee is also serving as a Custodian,
such entity in its capacity as Custodian shall indemnify the Depositor, each
affiliate of the Depositor, the Master Servicer and each Person who controls any
of such parties (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act); and the respective directors, officers, and
employees of each of the foregoing (each, an "Indemnified Party"), and shall
hold each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs, judgments, and
any other costs, fees and expenses that any of them may sustain directly
relating to:
(i) (A) any untrue statement of a material fact contained or
alleged to be contained in any information, compliance assessment or
other material it is required to provide or cause to be provided under
this Article XII (collectively, the "Custodian Information"), or (B)
the omission or alleged omission to state in the Custodian Information
a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; or
(ii) any failure to deliver or cause to be delivered any
information, report, certification, accountants' attestation or other
material when and as required under this Article XII.
If the indemnification provided for herein is unavailable or
insufficient to hold harmless an Indemnified Party, then the Custodian agrees
that it shall contribute to the amount paid or payable by such Indemnified Party
as a result of any claims, losses, damages or liabilities incurred by such
Indemnified Party in such proportion as is appropriate to reflect the relative
fault of such Indemnified Party on the one hand and the Custodian on the other.
(b) In the case of any failure of performance described in clause (a)
of this Section 12.09, the Custodian shall promptly reimburse the Indemnified
Party responsible for the preparation, execution or filing of any report
required to be filed with the Commission with respect to such Securitization
Transaction, or for execution of a certification pursuant to Rule 13a-14(d) or
Rule 15d-14(d) under the Exchange Act with respect to the Trust, for all costs
reasonably incurred by each such party in order to obtain the information,
report, certification, accountants' letter or other material not delivered as
required.
(c) This indemnification shall survive the termination of this
Agreement or the termination of any party to this Agreement.
142
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers hereunto duly authorized as of the
day and year first above written.
XXXXXX XXXXXXX CAPITAL I INC.,
as Depositor
By: /s/ Xxxxxxx Xxx
------------------------------------
Name: Xxxxxxx Xxx
Title: Vice President
LASALLE BANK NATIONAL ASSOCIATION,
as Trustee and Custodian
By: /s/ Xxxx Xxxxx
------------------------------------
Name: Xxxx Xxxxx
Title: Vice President
By: /s/ Xxxx Xxxxx
------------------------------------
Name: Xxxx Xxxxx
Title: Vice President
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Master Servicer
By: /s/ Xxxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxxx Xxxxx
Title: Vice President
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Securities Administrator
By: /s/ Xxxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxxx Xxxxx
Title: Vice President
Solely for purposes of Section 2.05
accepted and agreed to by:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By: /s/ Xxxxxxx Xxx
------------------------------------
Name: Xxxxxxx Xxx
Title: Vice President
EXHIBIT A
FORMS OF CERTIFICATES
A-1
EXHIBIT B
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEREE)
STATE OF )
) ss.:
COUNTY OF )
[NAME OF OFFICER], _________________ being first duly sworn, deposes
and says:
1. That he [she] is [title of officer] ________________________
of [name of Purchaser]
_________________________________________ (the "Purchaser"), a
_______________________ [description of type of entity] duly
organized and existing under the laws of the [State of
__________] [United States], on behalf of which he [she] makes
this affidavit.
2. That the Purchaser's Taxpayer Identification Number is [ ].
3. That the Purchaser is not a "disqualified organization" within
the meaning of Section 860E(e)(5) of the Internal Revenue Code
of 1986, as amended (the "Code") and will not be a
"disqualified organization" as of [date of transfer], and that
the Purchaser is not acquiring a Residual Certificate (as
defined in the Agreement) for the account of, or as agent
(including a broker, nominee, or other middleman) for, any
person or entity from which it has not received an affidavit
substantially in the form of this affidavit. For these
purposes, a "disqualified organization" means the United
States, any state or political subdivision thereof, any
foreign government, any international organization, any agency
or instrumentality of any of the foregoing (other than an
instrumentality if all of its activities are subject to tax
and a majority of its board of directors is not selected by
such governmental entity), any cooperative organization
furnishing electric energy or providing telephone service to
persons in rural areas as described in Code Section
1381(a)(2)(C), any "electing large partnership" within the
meaning of Section 775 of the Code, or any organization (other
than a farmers' cooperative described in Code Section 521)
that is exempt from federal income tax unless such
organization is subject to the tax on unrelated business
income imposed by Code Section 511.
4. That the Purchaser either (x) is not, and on
__________________ [date of transfer] will not be, an employee
benefit plan or other retirement arrangement subject to
Section 406 of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or Section 4975 of the Code
("Code"), (collectively, a "Plan") or a person acting on
behalf of any such Plan or investing the assets of any such
Plan to acquire a Residual Certificate; (y) is an insurance
company that is purchasing the Certificate with funds
contained in an "insurance company general account" as defined
in Section V(e) of Prohibited Transaction Class Exemption
("PTCE") 95-60 and the purchase and holding of the Certificate
satisfy the requirements for exemptive relief under Sections I
and III of XXXX
X-0
95-60; or (z) herewith delivers to the Certificate Registrar
an opinion of counsel satisfactory to the Certificate
Registrar and the Securities Administrator and upon which the
Certificate Registrar, the Trustee, the Master Servicer, the
Depositor and Securities Administrator shall be entitled to
rely, to the effect that the purchase or holding of such
Residual Certificate by the Investor will not result in any
non-exempt prohibited transactions under Title I of ERISA or
Section 4975 of the Code and will not subject the Certificate
Registrar, the Trustee, the Depositor, the Master Servicer or
the Securities Administrator to any obligation in addition to
those undertaken by such entities in the Pooling and Servicing
Agreement, which opinion of counsel shall not be an expense of
the Trust Fund or any of the above parties.
5. That the Purchaser hereby acknowledges that under the terms of
the Pooling and Servicing Agreement, dated as of September 1,
2006 (the "Agreement"), by and among Xxxxxx Xxxxxxx Capital I
Inc., as Depositor, Xxxxx Fargo Bank, National Association, as
Master Servicer and as Administrator and LaSalle Bank National
Association, as Trustee with respect to Xxxxxx Xxxxxxx
Mortgage Loan Trust 2006-12XS, Mortgage Pass-Through
Certificates, no transfer of the Residual Certificates shall
be permitted to be made to any person unless the Certificate
Registrar has received a certificate from such transferee
containing the representations in paragraphs 3 and 4 hereof.
6. That the Purchaser does not hold REMIC residual securities as
nominee to facilitate the clearance and settlement of such
securities through electronic book-entry changes in accounts
of participating organizations (such entity, a "Book-Entry
Nominee").
7. That the Purchaser does not have the intention to impede the
assessment or collection of any federal, state or local taxes
legally required to be paid with respect to such Residual
Certificate.
8. That the Purchaser will not transfer a Residual Certificate to
any person or entity (i) as to which the Purchaser has actual
knowledge that the requirements set forth in paragraph 3,
paragraph 6 or paragraph 10 hereof are not satisfied or that
the Purchaser has reason to believe does not satisfy the
requirements set forth in paragraph 7 hereof, and (ii) without
obtaining from the prospective Purchaser an affidavit
substantially in this form and providing to the Certificate
Registrar a written statement substantially in the form of
Exhibit C to the Agreement.
9. That the Purchaser understands that, as the holder of a
Residual Certificate, the Purchaser may incur tax liabilities
in excess of any cash flows generated by the interest and that
it intends to pay taxes associated with holding such Residual
Certificate as they become due.
10. That the Purchaser (i) is not a Non-U.S. Person or (ii) is a
Non-U.S. Person that holds a Residual Certificate in
connection with the conduct of a trade or business within the
United States and has furnished the transferor the Certificate
Registrar
B-2
with an effective Internal Revenue Service Form W-8ECI
(Certificate of Foreign Person's Claim for Exemption From
Withholding on Income Effectively Connected With the Conduct
of a Trade or Business in the United States) or successor form
at the time and in the manner required by the Code or (iii) is
a Non-U.S. Person that has delivered to the transferor, the
Trustee and the Certificate Registrar an opinion of a
nationally recognized tax counsel to the effect that the
transfer of such Residual Certificate to it is in accordance
with the requirements of the Code and the regulations
promulgated thereunder and that such transfer of a Residual
Certificate will not be disregarded for federal income tax
purposes. "Non-U.S. Person" means an individual, corporation,
partnership or other person other than (i) a citizen or
resident of the United States; (ii) a corporation, partnership
or other entity created or organized in or under the laws of
the United States or any state thereof, including for this
purpose, the District of Columbia; (iii) an estate that is
subject to U.S. federal income tax regardless of the source of
its income; (iv) 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
trustees have authority to control all substantial decisions
of the trust; and, (v) to the extent provided in Treasury
regulations, certain trusts in existence on August 20, 1996
that are treated as United States persons prior to such date
and elect to continue to be treated as United States persons.
11. The Purchaser will not cause income from the Residual
Certificate to be attributable to a foreign permanent
establishment or fixed base of the Purchaser or another U.S.
taxpayer.
12. That the Purchaser agrees to such amendments of the Pooling
and Servicing Agreement as may be required to further
effectuate the restrictions on transfer of any Residual
Certificate to such a "disqualified organization," an agent
thereof, a Book-Entry Nominee, or a person that does not
satisfy the requirements of paragraph 7 and paragraph 10
hereof.
13. That the Purchaser consents to the designation of the
Securities Administrator to act as agent for the "tax matters
person" of each REMIC created by the Trust Fund pursuant to
the Pooling and Servicing Agreement.
B-3
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[title of officer] this _____ day of __________ 20__.
---------------------------------
[name of Purchaser]
By:__________________________________
Name:
Title:
Personally appeared before me the above-named [name of officer]
________________, known or proved to me to be the same person who executed the
foregoing instrument and to be the [title of officer] _________________ of the
Purchaser, and acknowledged to me that he [she] executed the same as his [her]
free act and deed and the free act and deed of the Purchaser.
Subscribed and sworn before me this _____ day of __________ 20__.
NOTARY PUBLIC
----------------------------
COUNTY OF ________________
STATE OF __________________
My commission expires the _____ day of __________ 20__.
B-4
EXHIBIT C
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEROR)
----------------------------
Date
Re: Xxxxxx Xxxxxxx Mortgage Loan Trust 2006-12XS
Mortgage Pass-Through Certificates
_______________________ (the "Transferor") has reviewed the attached
affidavit of _____________________________ (the "Transferee"), and has no actual
knowledge that such affidavit is not true and has no reason to believe that the
information contained in paragraph 7 thereof is not true, and has no reason to
believe that the Transferee has the intention to impede the assessment or
collection of any federal, state or local taxes legally required to be paid with
respect to a Residual Certificate. In addition, the Transferor has conducted a
reasonable investigation at the time of the transfer and found that the
Transferee had historically paid its debts as they came due and found no
significant evidence to indicate that the Transferee will not continue to pay
its debts as they become due.
Very truly yours,
-------------------------------------
Name:
Title:
C-1
EXHIBIT D
[RESERVED]
D-1
EXHIBIT E
LIST OF PURCHASE AND SERVICING AGREEMENTS
1. Second Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of December 1, 2005, between American Home Mortgage Corp., as seller
and Xxxxxx Xxxxxxx Mortgage Capital Inc., as purchaser.
2. Master Mortgage Loan Purchase and Warranties Agreement, dated as of January
20, 2005 between First National Bank of Nevada, as seller and Xxxxxx Xxxxxxx
Mortgage Capital Inc., as purchaser.
3. First Amended and Restated Servicing Agreement, dated as of January 1, 2006,
between GMAC Mortgage Corporation, as servicer and Xxxxxx Xxxxxxx Mortgage
Capital Inc., as purchaser.
4. Amended and Restated Mortgage Loan Purchase And Warranties Agreement, dated
as of May 1, 2005, between MortgageIT, Inc., as seller and Xxxxxx Xxxxxxx
Mortgage Capital Inc., as purchaser.
5. Mortgage Loan Purchase and Warranties Agreement, dated as of August 1, 2006,
between Opteum Financial Services, LLC, as seller and Xxxxxx Xxxxxxx Mortgage
Capital Inc., as purchaser.
6. Second Amended and Restated Mortgage Loan Purchase and Warranties Servicing
Agreement, dated as of June 1, 2006, between Xxxxxx Xxxxxxx Mortgage Capital
Inc., as purchaser, and Quicken Loans, Inc., as seller.
7. Fifth Amended and Restated Mortgage Loan Sale And Servicing Agreement, dated
as of June 1, 2006, between GreenPoint Mortgage Funding, Inc., as seller and
servicer, and Xxxxxx Xxxxxxx Mortgage Capital Inc., as purchaser.
8. Mortgage Loan Sale and Servicing Agreement dated as of December 1, 2005,
between The Hemisphere National Bank, as seller and servicer and Xxxxxx Xxxxxxx
Mortgage Capital Inc., as purchaser.
9. Third Amended and Restated Mortgage Loan Flow Purchase, Sale & Servicing
Agreement, dated as of January 1, 2006, among PHH Mortgage Corporation (formerly
known as Cendant Mortgage Corporation), as seller and servicer, and Xxxxxx'x
Gate Residential Mortgage Trust, as a seller, and Xxxxxx Xxxxxxx Mortgage
Capital Inc., as purchaser.
10. Master Seller's Warranties and Servicing Agreement, dated as of April 1,
2006, between Xxxxx Fargo Bank, National Association, as servicer and Xxxxxx
Xxxxxxx Mortgage Capital Inc., as purchaser.
E-1
EXHIBIT F
[Reserved]
F-1
EXHIBIT G
ASSIGNMENT AND NOTICE OF TRANSFER WITH RESPECT TO ADDITIONAL
COLLATERAL MORTGAGE LOANS
G-1
EXHIBIT H
FORM OF RULE 144A TRANSFER CERTIFICATE
Re: Xxxxxx Xxxxxxx Mortgage Loan Trust 2006-12XS,
Mortgage Pass-Through Certificates
Reference is hereby made to the Pooling and Servicing Agreement, dated
as of September 1, 2006 (the "Pooling and Servicing Agreement"), by and among
Xxxxxx Xxxxxxx Capital I Inc., as Depositor, Xxxxx Fargo Bank, National
Association, as Master Servicer, as Securities Administrator and, in its
capacity as Securities Administrator, as Auction Administrator, LaSalle Bank
National Association, as Trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Pooling and Servicing Agreement.
This letter relates to $__________ initial Certificate Balance of Class
_____ Certificates which are held in the form of Definitive Certificates
registered in the name of ______________ (the "Transferor"). The Transferor has
requested a transfer of such Definitive Certificates for Definitive Certificates
of such Class registered in the name of [insert name of transferee].
In connection with such request, and in respect of such Certificates,
the Transferor hereby certifies that such Certificates are being transferred in
accordance with (i) the transfer restrictions set forth in the Pooling and
Servicing Agreement and the Certificates and (ii) Rule 144A under the Securities
Act to a purchaser that the Transferor reasonably believes is a "qualified
institutional buyer" within the meaning of Rule 144A purchasing for its own
account or for the account of a "qualified institutional buyer," which purchaser
is aware that the sale to it is being made in reliance upon Rule 144A, in a
transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States or any other
applicable jurisdiction.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Underwriter, the Certificate Registrar and the
Depositor.
_____________________________________
[Name of Transferor]
By:__________________________________
Name:
Title:
Dated: ___________, ____
H-1
EXHIBIT I
FORM OF PURCHASER'S LETTER FOR
INSTITUTIONAL ACCREDITED INVESTOR
Date
Dear Sirs:
In connection with our proposed purchase of $______________ principal
amount of Xxxxxx Xxxxxxx Mortgage Loan Trust 2006-12XS, Mortgage Pass-Through
Certificates (the "Privately Offered Certificates") of Xxxxxx Xxxxxxx Capital I
Inc. (the "Depositor"), we confirm that:
(1) We understand that the Privately Offered Certificates have not been,
and will not be, registered under the Securities Act of 1933, as
amended (the "Securities Act"), and may not be sold except as permitted
in the following sentence. We agree, on our own behalf and on behalf of
any accounts for which we are acting as hereinafter stated, that if we
should sell any Privately Offered Certificates within two years of the
later of the date of original issuance of the Privately Offered
Certificates or the last day on which such Privately Offered
Certificates are owned by the Depositor or any affiliate of the
Depositor we will do so only (A) to the Depositor, (B) to "qualified
institutional buyers" (within the meaning of Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act
("QIBs"), (C) pursuant to the exemption from registration provided by
Rule 144 under the Securities Act, or (D) to an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the Securities Act that is not a QIB (an
"Institutional Accredited Investor") which, prior to such transfer,
delivers to the Certificate Registrar under the Pooling and Servicing
Agreement, dated as of September 1, 2006 (the "Pooling and Servicing
Agreement"), by and among Xxxxxx Xxxxxxx Capital I Inc., as Depositor,
Xxxxx Fargo Bank, National Association, as Master Servicer, as
Securities Administrator and, in its capacity as Securities
Administrator, as Auction Administrator and LaSalle Bank National
Association, as Trustee, a signed letter in the form of this letter;
and we further agree, in the capacities stated above, to provide to any
person purchasing any of the Privately Offered Certificates from us a
notice advising such purchaser that resales of the Privately Offered
Certificates are restricted as stated herein.
(2) We understand that, in connection with any proposed resale of any
Privately Offered Certificates to an Institutional Accredited Investor,
we will be required to furnish to the Certificate Registrar a
certification from such transferee in the form hereof to confirm that
the proposed sale is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act. We further understand that the Privately Offered
Certificates purchased by us will bear a legend to the foregoing
effect.
(3) We are acquiring the Privately Offered Certificates for investment
purposes and not with a view to, or for offer or sale in connection
with, any distribution in violation of the
I-1
Securities Act. We have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of
our investment in the Privately Offered Certificates, and we and any
account for which we are acting are each able to bear the economic risk
of such investment.
(4) We are an Institutional Accredited Investor and we are acquiring the
Privately Offered Certificates purchased by us for our own account or
for one or more accounts (each of which is an Institutional Accredited
Investor) as to each of which we exercise sole investment discretion.
(5) We have received such information as we deem necessary in order to make
our investment decision.
(6) If we are acquiring ERISA-Restricted Certificates, we understand that
in accordance with ERISA, the Code and the Exemption, no Plan and no
person acting on behalf of such a Plan may acquire such Certificate
except in accordance with Section 3.03(d) of the Pooling and Servicing
Agreement.
Terms used in this letter which are not otherwise defined herein have
the respective meanings assigned thereto in the Pooling and Servicing Agreement.
I-2
You and the Certificate Registrar are entitled to rely upon this letter
and are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
_____________________________________
[Purchaser]
By:__________________________________
Name:
Title:
I-3
EXHIBIT J
FORM OF ERISA TRANSFER AFFIDAVIT
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is the ______________________ of ______________ (the
"Investor"), a [corporation duly organized] and existing under the laws of
__________, on behalf of which he makes this affidavit.
2. The Investor either (x) is not, and on ___________ [date of
transfer] will not be, an employee benefit plan or other plan or arrangement
subject to Section 406 of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code"), (collectively, a "Plan") or a person acting on behalf of
any such Plan or investing the assets of any such Plan; (y) if the Certificate
has been the subject of an ERISA-Qualifying Underwriting, is an insurance
company that is purchasing the Certificate with funds contained in an "insurance
company general account" as defined in Section V(e) of Prohibited Transaction
Class Exemption ("PTCE") 95-60 and the purchase and holding of the Certificate
satisfy the requirements for exemptive relief under Sections I and III of PTCE
95-60; or (z) herewith delivers to the Certificate Registrar an opinion of
counsel satisfactory to the Certificate Registrar and the Securities
Administrator and upon which the Certificate Registrar, the Trustee, the Master
Servicer, the Depositor and the Securities Administrator shall be entitled to
rely, to the effect that the purchase and holding of such Certificate by the
Investor will not constitute or result in any non-exempt prohibited transactions
under Title I of ERISA or Section 4975 of the Code and will not subject the
Certificate Registrar, the Trustee, the Master Servicer, the Depositor or the
Securities Administrator to any obligation in addition to those undertaken by
such entities in the Pooling and Servicing Agreement, which opinion of counsel
shall not be an expense of the Trust Fund or the above parties.
3. The Investor hereby acknowledges that under the terms of the Pooling
and Servicing Agreement, dated as of September 1, 2006 (the "Pooling and
Servicing Agreement"), by and among Xxxxxx Xxxxxxx Capital I Inc., as Depositor,
Xxxxx Fargo Bank, National Association, as Master Servicer, as Securities
Administrator and, in its capacity as Securities Administrator, as Auction
Administrator and LaSalle Bank National Association, as Trustee, no transfer of
the ERISA-Restricted Certificates shall be permitted to be made to any person
unless the Certificate Registrar has received a certificate from such transferee
in the form hereof.
J-1
IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to proper authority, by its duly authorized
officer, duly attested, this ____ day of _______________ 20___.
_____________________________________
[Investor]
By:__________________________________
Name:
Title:
ATTEST:
STATE OF )
) ss.:
COUNTY OF )
Personally appeared before me the above-named ________________, known
or proved to me to be the same person who executed the foregoing instrument and
to be the ____________________ of the Investor, and acknowledged that he
executed the same as his free act and deed and the free act and deed of the
Investor.
Subscribed and sworn before me this _____ day of _________ 20___.
_____________________________________
NOTARY PUBLIC
My commission expires the
_____ day of __________ 20___.
J-2
EXHIBIT K
FORM OF LETTER OF REPRESENTATIONS
WITH THE DEPOSITORY TRUST COMPANY
[On File with Securities Administrator]
K-1
EXHIBIT L-1
FORM OF INITIAL CUSTODIAL CERTIFICATION
May __, 2006
Xxxxxx Xxxxxxx Capital I Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, National Association
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
LaSalle Bank National Association, as Trustee
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Trust Administration - MSM 2006-12XS
Re: Pooling and Servicing Agreement ("Pooling and Servicing
Agreement") relating to Xxxxxx Xxxxxxx Mortgage Loan Trust
2006-12XS, Mortgage Pass-Through Certificates, Series
2006-12XS
Ladies and Gentlemen:
In accordance with and subject to the provisions of Section 2.02 of the
Pooling and Servicing Agreement, the undersigned, as Custodian, hereby certifies
that, except for the exceptions noted on the schedule attached hereto, (a) all
documents required to be delivered to the Custodian pursuant to Sections
2.01(a)(i) through (iv) and (ix)(b), (c) (solely to the extent of the UCC-1),
(g) and (h), and if delivered to it, the documents identified in Section
2.01(a)(v) through (vii) and (ix)(c) (solely to the extent of the UCC-3) and (f)
of the Pooling and Servicing Agreement are in its possession, (b) such documents
have been reviewed by it and have not been mutilated, damaged, defaced, torn or
otherwise physically altered, and such documents relate to such Mortgage Loan,
(c) based on its review and examination and only as to the foregoing documents,
such documents appear regular on their face and related to such Mortgage Loan
and (d) each Mortgage Note has been endorsed and each assignment of Mortgage has
been delivered as provided in Section 2.01 of the Pooling and Servicing
Agreement. The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically mentioned above.
The Custodian makes no representations as to: (i) the validity, legality,
sufficiency, enforceability or genuineness of any of the documents delivered in
accordance with Section 2.01 of the Pooling and Servicing Agreement or any of
the Mortgage Loans identified in the Mortgage Loan Schedule, or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.
L-1-1
The Custodian acknowledges receipt of notice that the Depositor has
granted to the Trustee for the benefit of the Certificateholders a security
interest in all of the Depositor's right, title and interest in and to the
Mortgage Loans.
L-1-2
Capitalized terms used herein without definition shall have the meaning
assigned to them in the Pooling and Servicing Agreement.
[LASALLE BANK NATIONAL ASSOCIATION]
as Custodian
By:__________________________________
Authorized Representative
X-0-0
XXXXXXX X-0
FORM OF FINAL CUSTODIAL CERTIFICATION
May __, 2006
Xxxxxx Xxxxxxx Capital I Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, National Association
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
LaSalle Bank National Association, as Trustee
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Trust Administration - MSM 2006-12XS
Re: Pooling and Servicing Agreement ("Pooling and Servicing
Agreement") relating to Xxxxxx Xxxxxxx Mortgage Loan Trust
2006-12XS, Mortgage Pass-Through Certificates, Series
2006-12XS
Ladies and Gentlemen:
In accordance with and subject to the provisions of Section 2.02 of the
Pooling and Servicing Agreement, the undersigned, as Custodian, hereby certifies
that, except for the exceptions noted on the schedule attached hereto, (a) all
documents required to be delivered to the Custodian pursuant to Sections
2.01(a)(i) through (iv) and (ix)(b), (c) (solely to the extent of the UCC-1),
(g) and (h), and if delivered to it, the documents identified in Section
2.01(a)(v) through (vii) and (ix)(c) (solely to the extent of the UCC-3) and (f)
of the Pooling and Servicing Agreement are in its possession, (b) such documents
have been reviewed by it and have not been mutilated, damaged, defaced, torn or
otherwise physically altered, and such documents relate to such Mortgage Loan,
(c) based on its examination and only as to the foregoing documents, these
documents with respect to each Mortgage Loan accurately reflect the information
contained in the Mortgage Note and Mortgage and (d) each Mortgage Note has been
endorsed and each assignment of Mortgage has been delivered as provided in
Section 2.01 of the Pooling and Servicing Agreement. The Custodian has made no
independent examination of any documents contained in each Mortgage File beyond
the review specifically mentioned above. The Custodian makes no representations
as to: (i) the validity, legality, sufficiency, enforceability or genuineness of
any of the documents delivered in accordance with Section 2.01 of the Pooling
and Servicing Agreement or any of the Mortgage Loans identified in the Mortgage
Loan Schedule, or (ii) the collectibility, insurability, effectiveness or
suitability of any such Mortgage Loan.
L-2-1
The Custodian acknowledges receipt of notice that the Depositor has
granted to the Trustee for the benefit of the Certificateholders a security
interest in all of the Depositor's right, title and interest in and to the
Mortgage Loans.
L-2-2
Capitalized terms used herein without definition shall have the meaning
assigned to them in the Pooling and Servicing Agreement.
[LASALLE BANK NATIONAL ASSOCIATION]
as Custodian
By:__________________________
Authorized Representative
L-2-3
EXHIBIT M
REQUEST FOR RELEASE OF DOCUMENTS
[Name and Address of Custodian]
Re: Pooling and Servicing Agreement ("Pooling and Servicing
Agreement") relating to Xxxxxx Xxxxxxx Mortgage Loan Trust
2006-12XS, Mortgage Pass-Through Certificates, Series
2006-12XS
In connection with the administration of the Mortgage Loans in the
Trust created by the above-captioned Pooling and Servicing Agreement and that
are held by you as Custodian, we request the release, and hereby acknowledge
receipt, of the Mortgage File for the Mortgage Loan described below, for the
reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
__________ 1. Mortgage Paid in Full
__________ 2. Foreclosure
__________ 3. Substitution
__________ 4. Other Liquidation (Repurchases, etc.)
__________ 5. Nonliquidation
Reason: ______________________
Address to which Custodian should
Deliver the Mortgage File:
___________________________________________
___________________________________________
___________________________________________
By:________________________________________
(authorized signer)
Issuer:____________________________________
Address: __________________________________
__________________________________
__________________________________
Date: __________________________________
M-1
Custodian
---------------
[insert name of appropriate Custodian]
Please acknowledge the execution of the above request by your signature and date
below:
___________________________________________
Signature
_____________________
Date
Documents returned to Custodian:
___________________________________________
Signature
_____________________
Date
M-2
EXHIBIT N-1
Additional Form 10-D Disclosure
ADDITIONAL FORM 10-D DISCLOSURE
---------------------------------------------------------- --------------------------------------------------------
Item on Form 10-D Responsible Party
---------------------------------------------------------- --------------------------------------------------------
Item 1: Distribution and Pool Performance Information
---------------------------------------------------------- --------------------------------------------------------
Information included in the [Monthly Statement] Servicer, Master Servicer and Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
Any information required by 1121 which is NOT included Depositor
on the [Monthly Statement]
---------------------------------------------------------- --------------------------------------------------------
Item 2: Legal Proceedings
Any legal proceeding pending against the following
entities or their respective property, that is material
to Certificateholders, including any proceedings known
to be contemplated by governmental authorities:
---------------------------------------------------------- --------------------------------------------------------
o Issuing Entity (Trust Fund) Trustee, Master Servicer, Securities Administrator and
Depositor
---------------------------------------------------------- --------------------------------------------------------
o Sponsor (Seller) Seller (if a party to the Pooling and Servicing
Agreement) or Depositor
---------------------------------------------------------- --------------------------------------------------------
o Depositor Depositor
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------- --------------------------------------------------------
o Custodian Custodian
---------------------------------------------------------- --------------------------------------------------------
o 1110(b) Originator Depositor
---------------------------------------------------------- --------------------------------------------------------
o Any 1108(a)(2) Servicer (other than the Master Servicer
Servicer or Securities Administrator)
---------------------------------------------------------- --------------------------------------------------------
o Any other party contemplated by 1100(d)(1) Depositor
---------------------------------------------------------- --------------------------------------------------------
Item 3: Sale of Securities and Use of Proceeds (i) Depositor (with respect to the Closing Date) and
Information from Item 2(a) of Part II of Form 10-Q: (ii) Master Servicer
With respect to any sale of securities by the sponsor,
depositor or issuing entity, that are backed by the same
asset pool or are otherwise issued by the issuing
entity, whether or not registered, provide the sales and
use of proceeds information in Item 701 of Regulation
S-K. Pricing information can be omitted if securities
-------------------------------------------------------------------------------------------------------------------
N-1-1
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-D DISCLOSURE
---------------------------------------------------------- --------------------------------------------------------
Item on Form 10-D Responsible Party
---------------------------------------------------------- --------------------------------------------------------
were not registered.
---------------------------------------------------------- --------------------------------------------------------
Item 4: Defaults Upon Senior Securities Securities Administrator and Trustee
Information from Item 3 of Part II of Form 10-Q:
Report the occurrence of any Event of Default (after
expiration of any grace period and provision of any
required notice)
---------------------------------------------------------- --------------------------------------------------------
Item 5: Submission of Matters to a Vote of Security Securities Administrator and
Holders Trustee
Information from Item 4 of Part II of Form 10-Q
---------------------------------------------------------- --------------------------------------------------------
Item 6: Significant Obligors of Pool Assets Depositor
Item 1112(b) - Significant Obligor Financial Information*
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the Form 10-D
for the distribution period in which updated information
is required pursuant to the Item.
---------------------------------------------------------- --------------------------------------------------------
Item 7: Significant Enhancement Provider Information
Item 1114(b)(2) - Credit Enhancement Provider Financial
Information*
---------------------------------------------------------- --------------------------------------------------------
o Determining applicable disclosure threshold Depositor
---------------------------------------------------------- --------------------------------------------------------
o Requesting required financial information (including Depositor
any required accountants' consent to the use thereof) or
effecting incorporation by reference
---------------------------------------------------------- --------------------------------------------------------
Item 1115(b) - Derivative Counterparty Financial
Information*
---------------------------------------------------------- --------------------------------------------------------
o Determining current maximum probable exposure Depositor
---------------------------------------------------------- --------------------------------------------------------
o Determining current significance percentage Depositor
---------------------------------------------------------- --------------------------------------------------------
o Requesting required financial information (including Depositor
any required accountants' consent to the use thereof) or
effecting incorporation by reference
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the Form 10-D
for the distribution period in which updated information
is required pursuant to the Items.
---------------------------------------------------------- --------------------------------------------------------
Item 8: Other Information Any responsible party for the applicable Form 8-K
Disclosure item
-------------------------------------------------------------------------------------------------------------------
N-1-2
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-D DISCLOSURE
---------------------------------------------------------- --------------------------------------------------------
Item on Form 10-D Responsible Party
---------------------------------------------------------- --------------------------------------------------------
Disclose any information required to be reported on Form
8-K during the period covered by the Form 10-D but not
reported
---------------------------------------------------------- --------------------------------------------------------
Item 9: Exhibits
---------------------------------------------------------- --------------------------------------------------------
Monthly Statement to Certificateholders Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
Exhibits required by Item 601 of Regulation S-K, such as Depositor
material agreements
-------------------------------------------------------------------------------------------------------------------
N-1-3
EXHIBIT N-2
Additional Form 10-K Disclosure
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-K DISCLOSURE
---------------------------------------------------------- --------------------------------------------------------
Item on Form 10-K Responsible Party
---------------------------------------------------------- --------------------------------------------------------
Item 1B: Unresolved Staff Comments Depositor
---------------------------------------------------------- --------------------------------------------------------
Item 9B: Other Information
Disclose any information required to be reported on Form Any responsible party for disclosure
8-K during the fourth quarter covered by the Form 10-K items on Form 8-K
but not reported
---------------------------------------------------------- --------------------------------------------------------
Item 15: Exhibits, Financial Statement Schedules (i) As to agreements, Securities
Administrator/Depositor and (ii) as to financial
statements, Reporting Parties (as to themselves)
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1112(b): Significant Obligors of Pool Assets
---------------------------------------------------------- --------------------------------------------------------
Significant Obligor Financial Information* Depositor
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the Form 10-D
for the distribution period in which updated information
is required pursuant to the Item.
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1114(b)(2): Credit Enhancement Provider
Financial Information
---------------------------------------------------------- --------------------------------------------------------
o Determining applicable disclosure threshold Depositor
---------------------------------------------------------- --------------------------------------------------------
o Requesting required financial information (including Depositor
any required accountants' consent to the use thereof) or
effecting incorporation by reference
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the Form 10-D
for the distribution period in which updated information
is required pursuant to the Items.
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1115(b): Derivative Counterparty Financial
Information
---------------------------------------------------------- --------------------------------------------------------
o Determining current maximum probable exposure Depositor
---------------------------------------------------------- --------------------------------------------------------
o Determining current significance percentage Depositor
---------------------------------------------------------- --------------------------------------------------------
o Requesting required financial information (including Depositor
any required accountants' consent to the use thereof) or
effecting incorporation by reference
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the Form 10-D
for the distribution period in which updated information
is required pursuant to the Items.
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1117: Legal Proceedings
-------------------------------------------------------------------------------------------------------------------
N-2-1
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-K DISCLOSURE
---------------------------------------------------------- --------------------------------------------------------
Item on Form 10-K Responsible Party
---------------------------------------------------------- --------------------------------------------------------
Any legal proceeding pending against the following
entities or their respective property, that is material
to Certificateholders, including any proceedings known
to be contemplated by governmental authorities:
---------------------------------------------------------- --------------------------------------------------------
o Issuing Entity (Trust Fund) Trustee, Master Servicer, Securities Administrator and
Depositor
---------------------------------------------------------- --------------------------------------------------------
o Sponsor (Seller) Seller (if a party to the Pooling and Servicing
Agreement) or Depositor
---------------------------------------------------------- --------------------------------------------------------
o Depositor Depositor
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------- --------------------------------------------------------
o Custodian Custodian
---------------------------------------------------------- --------------------------------------------------------
o 1110(b) Originator Depositor
---------------------------------------------------------- --------------------------------------------------------
o Any 1108(a)(2) Servicer (other than the Master Servicer
Servicer or Securities Administrator)
---------------------------------------------------------- --------------------------------------------------------
o Any other party contemplated by 1100(d)(1) Depositor
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1119: Affiliations and Relationships
---------------------------------------------------------- --------------------------------------------------------
Whether (a) the Sponsor (Seller), Depositor or Issuing Depositor as to (a)
Entity is an affiliate of the following parties, and Sponsor/Seller as to (a)
(b) to the extent known and material, any of the
following parties are affiliated with one another:
---------------------------------------------------------- --------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------- --------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Any other 1108(a)(3) servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
o Any 1110 Originator Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1112(b) Significant Obligor Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1114 Credit Enhancement Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1115 Derivate Counterparty Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any other 1101(d)(1) material party Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
Whether there are any "outside the ordinary course Depositor as to (a)
business arrangements" other than would be obtained in Sponsor/Seller as to (a)
an arm's length transaction between (a) the Sponsor
(Seller), Depositor or Issuing Entity on the one hand,
and (b) any of the following parties (or their
affiliates) on the other hand, that exist currently or
within the past two years and that are material to a
Certificateholder's understanding of the Certificates:
-------------------------------------------------------------------------------------------------------------------
N-2-2
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-K DISCLOSURE
---------------------------------------------------------- --------------------------------------------------------
Item on Form 10-K Responsible Party
---------------------------------------------------------- --------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------- --------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Any other 1108(a)(3) servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
o Any 1110 Originator Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1112(b) Significant Obligor Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1114 Credit Enhancement Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1115 Derivate Counterparty Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any other 1101(d)(1) material party Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
Whether there are any specific relationships involving Depositor as to (a)
the transaction or the pool assets between (a) the Sponsor/Seller as to (a)
Sponsor (Seller), Depositor or Issuing Entity on the one
hand, and (b) any of the following parties (or their
affiliates) on the other hand, that exist currently or
within the past two years and that are material:
---------------------------------------------------------- --------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------- --------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Any other 1108(a)(3) servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
o Any 1110 Originator Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1112(b) Significant Obligor Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1114 Credit Enhancement Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1115 Derivate Counterparty Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any other 1101(d)(1) material party Depositor/Sponsor
-------------------------------------------------------------------------------------------------------------------
N-2-3
EXHIBIT N-3
Form 8-K Disclosure Information
-------------------------------------------------------------------------------------------------------------------
FORM 8-K DISCLOSURE INFORMATION
---------------------------------------------------------- --------------------------------------------------------
Item on Form 8-K Responsible Party
---------------------------------------------------------- --------------------------------------------------------
Item 1.01- Entry into a Material Definitive Agreement All parties (with respect to any agreement entered into
by such party)
Disclosure is required regarding entry into or amendment
of any definitive agreement that is material to the
securitization, even if depositor is not a party.
Examples: servicing agreement, custodial agreement.
Note: disclosure not required as to definitive
agreements that are fully disclosed in the prospectus
---------------------------------------------------------- --------------------------------------------------------
Item 1.02- Termination of a Material Definitive All parties (with respect to any agreement
Agreement entered into by such party)
Disclosure is required regarding termination of any
definitive agreement that is material to the
securitization (other than expiration in accordance with
its terms), even if depositor is not a party.
Examples: servicing agreement, custodial agreement.
---------------------------------------------------------- --------------------------------------------------------
Item 1.03- Bankruptcy or Receivership
Disclosure is required regarding the bankruptcy or
receivership, with respect to any of the following:
---------------------------------------------------------- --------------------------------------------------------
o Sponsor (Seller) Depositor/Sponsor (Seller)
---------------------------------------------------------- --------------------------------------------------------
o Depositor Depositor
---------------------------------------------------------- --------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------- --------------------------------------------------------
o Affiliated Servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
o Other Servicer servicing 20% or more of the pool Servicer
assets at the time of the report
---------------------------------------------------------- --------------------------------------------------------
o Other material servicers Servicer
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
o Significant Obligor Depositor
---------------------------------------------------------- --------------------------------------------------------
o Credit Enhancer (10% or more) Depositor
---------------------------------------------------------- --------------------------------------------------------
o Derivative Counterparty Depositor
---------------------------------------------------------- --------------------------------------------------------
o Custodian Custodian
-------------------------------------------------------------------------------------------------------------------
N-3-1
-------------------------------------------------------------------------------------------------------------------
FORM 8-K DISCLOSURE INFORMATION
---------------------------------------------------------- --------------------------------------------------------
Item on Form 8-K Responsible Party
---------------------------------------------------------- --------------------------------------------------------
Item 2.04- Triggering Events that Master Servicer/Securities Administrator/
Accelerate or Increase a Direct Financial Depositor (with respect to any agreement to which
Obligation or an Obligation under an Off- neither the Master Servicer nor the Securities
Balance Sheet Arrangement Administrator is a party)
Includes an early amortization, performance trigger or
other event, including event of default, that would
materially alter the payment priority/distribution of
cash flows/amortization schedule.
Disclosure will be made of events other than waterfall
triggers which are disclosed in the monthly statements
to the certificateholders.
---------------------------------------------------------- --------------------------------------------------------
Item 3.03- Material Modification to Rights of Security Securities Administrator
Holders
Disclosure is required of any material modification to
documents defining the rights of Certificateholders,
including the Pooling and Servicing Agreement.
---------------------------------------------------------- --------------------------------------------------------
Item 5.03- Amendments of Articles of Securities Administrator and Depositor
Incorporation or Bylaws; Change of Fiscal
Year
Disclosure is required of any amendment "to the
governing documents of the issuing entity".
---------------------------------------------------------- --------------------------------------------------------
Item 6.01- ABS Informational and Computational Material Depositor
---------------------------------------------------------- --------------------------------------------------------
Item 6.02- Change of Servicer or Trustee Master Servicer/Securities Administrator/
Servicer/Depositor/Trustee (as to itself)/successor
trustee
Requires disclosure of any removal, replacement,
substitution or addition of any master servicer,
affiliated servicer, other servicer servicing 10% or
more of pool assets at time of report, other material
servicers or trustee.
---------------------------------------------------------- --------------------------------------------------------
Reg AB disclosure about any new servicer or master Servicer/Master Servicer/Depositor
servicer is also required.
---------------------------------------------------------- --------------------------------------------------------
Reg AB disclosure about any new Trustee is also required. successor trustee
---------------------------------------------------------- --------------------------------------------------------
Item 6.03- Change in Credit Enhancement or External Depositor/Securities Administrator/Trustee (to the
Support extent action is required by the Trustee in connection
with any amendment or modification therewith)
Covers termination of any enhancement in manner other
than by its terms, the addition of an enhancement, or a
material change in the enhancement provided. Applies to
external
-------------------------------------------------------------------------------------------------------------------
N-3-2
-------------------------------------------------------------------------------------------------------------------
FORM 8-K DISCLOSURE INFORMATION
---------------------------------------------------------- --------------------------------------------------------
Item on Form 8-K Responsible Party
---------------------------------------------------------- --------------------------------------------------------
credit enhancements as well as derivatives.
---------------------------------------------------------- --------------------------------------------------------
Reg AB disclosure about any new enhancement provider is Depositor
also required.
---------------------------------------------------------- --------------------------------------------------------
Item 6.04- Failure to Make a Required Distribution Securities Administrator/Trustee (to the extent the
Trustee has knowledge thereof)/Depositor (to the
extent the Depositor has knowledge thereof)
---------------------------------------------------------- --------------------------------------------------------
Item 6.05- Securities Act Updating Disclosure Depositor
If any material pool characteristic differs by 5% or
more at the time of issuance of the securities from the
description in the final prospectus, provide updated Reg
AB disclosure about the actual asset pool.
---------------------------------------------------------- --------------------------------------------------------
If there are any new servicers or originators required Depositor
to be disclosed under Regulation AB as a result of the
foregoing, provide the information called for in Items
1108 and 1110 respectively.
---------------------------------------------------------- --------------------------------------------------------
Item 7.01- Reg FD Disclosure All parties
---------------------------------------------------------- --------------------------------------------------------
Item 8.01- Other Events Depositor
Any event, with respect to which information is not
otherwise called for in Form 8-K, that the registrant
deems of importance to certificateholders.
---------------------------------------------------------- --------------------------------------------------------
Item 9.01- Financial Statements and Exhibits Responsible party for reporting/disclosing the
financial statement or exhibit
-------------------------------------------------------------------------------------------------------------------
N-3-3
EXHIBIT O
[FORM OF]
SERVICING CRITERIA TO BE ADDRESSED IN
ASSESSMENT OF COMPLIANCE STATEMENT
The assessment of compliance to be delivered by each party listed below shall address, at a minimum, the
criteria identified as below as "Applicable Servicing Criteria":
-----------------------------------------------------------------------------------------------------------------
Applicable Servicing
Criteria/
Servicing Criteria Responsible Party
-----------------------------------------------------------------------------------------------------------------
Reference Criteria
--------------------- -------------------------------------------------------------------- ----------------------
General Servicing Considerations
--------------------- ----------------------
1122(d)(1)(i) Policies and procedures are instituted to monitor any performance
or other triggers and events of default in accordance with the S, MS, SA
transaction agreements.
--------------------- ----------------------
1122(d)(1)(ii) If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor the
third party's performance and compliance with such servicing S, MS, SA
activities.
--------------------- ----------------------
1122(d)(1)(iii) Any requirements in the transaction agreements to
maintain a back-up servicer for the mortgage loans N/A
are maintained.
--------------------- ----------------------
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect on
the party participating in the servicing function throughout the
reporting period in the amount of coverage required by and S, MS, SA
otherwise in accordance with the terms of the transaction
agreements.
--------------------- ----------------------
Cash Collection and Administration
--------------------- ----------------------
1122(d)(2)(i) Payments on mortgage loans are deposited into the
appropriate custodial bank accounts and related bank
clearing accounts no more than two business days S, MS, SA
following receipt, or such other number of days specified in
the transaction agreements.
--------------------- ----------------------
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an
obligor or to an investor are made only by authorized personnel. S, MS, SA
--------------------- ----------------------
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash flows
or distributions, and any interest or other fees charged for such
advances, are made, reviewed and approved as specified in the S, MS
transaction agreements.
--------------------- ----------------------
O-1
-----------------------------------------------------------------------------------------------------------------
Applicable Servicing
Criteria/
Servicing Criteria Responsible Party
-----------------------------------------------------------------------------------------------------------------
Reference Criteria
--------------------- -------------------------------------------------------------------- ----------------------
1122(d)(2)(iv) The related accounts for the transaction, such as cash reserve
accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with S, MS, SA
respect to commingling of cash) as set forth in the transaction
agreements.
--------------------- ----------------------
1122(d)(2)(v) Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction agreements.
For purposes of this criterion, "federally insured depository S, MS, SA
institution" with respect to a foreign financial institution means
a foreign financial institution that meets the requirements of
Rule 13k-1(b)(1) of the Securities Exchange Act.
--------------------- ----------------------
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized S, MS, SA
access.
--------------------- ----------------------
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including custodial
accounts and related bank clearing accounts. These reconciliations
are (A) mathematically accurate; (B) prepared within 30 calendar
days after the bank statement cutoff date, or such other number of
days specified in the transaction agreements; (C) reviewed and S, MS, SA
approved by someone other than the person who prepared the
reconciliation; and (D) contain explanations for reconciling
items. These reconciling items are resolved within 90 calendar
days of their original identification, or such other number of
days specified in the transaction agreements.
--------------------- ----------------------
Investor Remittances and Reporting
--------------------- ----------------------
1122(d)(3)(i) Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements. Specifically,
such reports (A) are prepared in accordance with timeframes and
other terms set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms specified in S, MS, SA
the transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with
investors' or the trustee's records as to the total unpaid
principal balance and number of mortgage loans serviced by the
Servicer.
--------------------- ----------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in accordance
with timeframes, distribution priority and other terms set forth S, MS, SA
in the transaction agreements.
--------------------- ----------------------
O-2
-----------------------------------------------------------------------------------------------------------------
Applicable Servicing
Criteria/
Servicing Criteria Responsible Party
-----------------------------------------------------------------------------------------------------------------
Reference Criteria
--------------------- -------------------------------------------------------------------- ----------------------
1122(d)(3)(iii) Disbursements made to an investor are posted within two business
days to the Servicer's investor records, or such other number of S, MS, SA
days specified in the transaction agreements.
--------------------- ----------------------
1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree with
cancelled checks, or other form of payment, or custodial bank S, MS, SA
statements.
--------------------- ----------------------
Pool Asset Administration
--------------------- ----------------------
1122(d)(4)(i) Collateral or security on mortgage loans is maintained as required S, C
by the transaction agreements or related mortgage loan documents.
--------------------- ----------------------
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as required by S, C
the transaction agreements.
--------------------- ----------------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are
made, reviewed and approved in accordance with any conditions or S
requirements in the transaction agreements.
--------------------- ----------------------
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made in
accordance with the related mortgage loan documents are posted to
the Servicer's obligor records maintained no more than two
business days after receipt, or such other number of days S
specified in the transaction agreements, and allocated to
principal, interest or other items (e.g., escrow) in accordance
with the related mortgage loan documents.
--------------------- ----------------------
1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree with the
Servicer's records with respect to an obligor's unpaid principal S
balance.
--------------------- ----------------------
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's
mortgage loans (e.g., loan modifications or re-agings) are made,
reviewed and approved by authorized personnel in accordance with S
the transaction agreements and related pool asset documents.
--------------------- ----------------------
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and S
concluded in accordance with the timeframes or other requirements
established by the transaction agreements.
--------------------- ----------------------
1122(d)(4)(viii) Records documenting collection efforts are maintained during the
period a mortgage loan is delinquent in accordance with the
transaction agreements. Such records are maintained on at least a
monthly basis, or such other period specified in the transaction
agreements, and describe the entity's activities in monitoring S
delinquent mortgage loans
--------------------- ----------------------
O-3
-----------------------------------------------------------------------------------------------------------------
Applicable Servicing
Criteria/
Servicing Criteria Responsible Party
-----------------------------------------------------------------------------------------------------------------
Reference Criteria
--------------------- -------------------------------------------------------------------- ----------------------
including, for example, phone calls, letters and payment
rescheduling plans in cases where delinquency is deemed temporary
(e.g., illness or unemployment).
--------------------- -------------------------------------------------------------------- ----------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return for mortgage
loans with variable rates are computed based on the related S
mortgage loan documents.
--------------------- ----------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as escrow
accounts): (A) such funds are analyzed, in accordance with the
obligor's mortgage loan documents, on at least an annual basis, or
such other period specified in the transaction agreements; (B)
interest on such funds is paid, or credited, to obligors in S
accordance with applicable mortgage loan documents and state laws;
and (C) such funds are returned to the obligor within 30 calendar
days of full repayment of the related mortgage loans, or such
other number of days specified in the transaction agreements.
--------------------- ----------------------
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or insurance
payments) are made on or before the related penalty or expiration
dates, as indicated on the appropriate bills or notices for such
payments, provided that such support has been received by the S
servicer at least 30 calendar days prior to these dates, or such
other number of days specified in the transaction agreements.
--------------------- ----------------------
1122(d)(4)(xii) Any late payment penalties in connection with any payment to be
made on behalf of an obligor are paid from the servicer's funds
and not charged to the obligor, unless the late payment was due to S
the obligor's error or omission.
--------------------- ----------------------
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within two S
business days to the obligor's records maintained by the servicer,
or such other number of days specified in the transaction
agreements.
--------------------- ----------------------
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are S, MS
recognized and recorded in accordance with the transaction
agreements.
--------------------- ----------------------
1122(d)(4)(xv) Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is SA
maintained as set forth in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
O-4
[NAME OF REPORTING PARTY]
Date:_________________________
By:___________________________
Name:
Title:
Key:
S = each Servicer
MS = Master Servicer
SA = Securities Administrator
C = Custodian
O-5
EXHIBIT P
Additional Disclosure Notification
Xxxxx Fargo Bank, N.A. as Securities Administrator
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
E-mail: xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx
[insert name and address of Depositor]
Attn: Corporate Trust Services - MSM 2006-12XS-SEC REPORT PROCESSING
RE: **Additional Form [ ] Disclosure**Required
Ladies and Gentlemen:
In accordance with Section [12.02(b)][12.03(b)][12.04(b)] of the
Pooling and Servicing Agreement, dated as of [ ] [ ], 2006, among [ ], as [ ], [
], as [ ], [ ], as [ ] and [ ], as [ ]. The Undersigned, as [ ], hereby notifies
you that certain events have come to our attention that [will][may] need to be
disclosed on Form [ ].
Description of Additional Form [ ] Disclosure:
-----------------------------------------------
List of Any Attachments hereto to be included in the Additional Form [ ]
Disclosure:
Any inquiries related to this notification should be directed to [ ],
phone number: [ ]; email address: [ ].
[NAME OF PARTY]
as [role]
By:_________________________
Name:
Title:
P-1
EXHIBIT Q
GLOSSARY of TERMS for STANDARD & POOR'S LEVELS(R) VERSION 5.7 FILE FORMAT
APPENDIX E - Standard & Poor's Predatory Lending Categories
-----------------------------------------------------------
Standard & Poor's has categorized loans governed by anti-predatory lending laws
in the Jurisdictions listed below into three categories based upon a combination
of factors that include (a) the risk exposure associated with the assignee
liability and (b) the tests and thresholds set forth in those laws. Note that
certain loans classified by the relevant statute as Covered are included in
Standard & Poor's High Cost Loan Category because they included thresholds and
tests that are typical of what is generally considered High Cost by the
industry.
Standard & Poor's High Cost Loan Categorization
-----------------------------------------------
--------------------------------------------------------------------------------
Category under
--------------
Applicable
----------
State/Jurisdiction Name of Anti-Predatory Lending Anti-Predatory
------------------ ------------------------------ --------------
Law/Effective Date Lending Law
------------------ -----------
--------------------------------------------------------------------------------
Arkansas Arkansas Home Loan Protection Act, High Cost Home Loan
Ark. Code Xxx. xx.xx. 00-00-000
et seq.
Effective July 16, 2003
--------------------------------------------------------------------------------
Cleveland Ordinance No. 72-2003 (PSH), Mun. Code Covered Loan
Heights, OH xx.xx. 757.01 et seq.
Effective June 2, 2003
--------------------------------------------------------------------------------
Colorado Consumer Equity Protection, Colo. Covered Loan
Stat. Xxx. xx.xx. 5-3.5-101 et seq.
Effective for covered loans
offered or entered into on or
after January 1, 2003. Other
provisions of the Act took effect
on June 7, 2002
--------------------------------------------------------------------------------
Connecticut Connecticut Abusive Home Loan High Cost Home Loan
Lending Practices Act, Conn. Gen. Stat
xx.xx. 36a-746 et seq.
Effective October 1, 2001
--------------------------------------------------------------------------------
District of Home Loan Protection Act, D.C. Code Covered Loan
Columbia xx.xx. 26-1151.01 et seq.
Effective for loans closed on or after
January 28, 2003
--------------------------------------------------------------------------------
Florida Fair Lending Act, Fla. Stat. Xxx. High Cost Home Loan
xx.xx.
494.0078 et seq.
--------------------------------------------------------------------------------
Q-1
Standard & Poor's High Cost Loan Categorization
-----------------------------------------------
--------------------------------------------------------------------------------
Category under
--------------
Applicable
----------
State/Jurisdiction Name of Anti-Predatory Lending Anti-Predatory
------------------ ------------------------------ --------------
Law/Effective Date Lending Law
------------------ -----------
Effective October 2, 2002
--------------------------------------------------------------------------------
Georgia (Oct. 0, Xxxxxxx Xxxx Xxxxxxx Xxx, Xx. Code High Cost Home Loan
2002 - Mar. 6, 2003) Xxx. xx.xx. 7-6A-1 et seq.
Effective October 1, 2002 - March 6,
2003
--------------------------------------------------------------------------------
Georgia as amended Georgia Fair Lending Act, Ga. Code High Cost Home Loan
(Mar. 7, 2003 - Xxx. xx.xx. 7-6A-1 et seq.
current)
Effective for loans closed on or
after March 7, 2003
--------------------------------------------------------------------------------
HOEPA Section 32 Home Ownership and Equity High Cost Loan
Protection Act of 1994, 15 U.S.C.
ss. 1639, 12 C.F.R. xx.xx. 226.32
and 226.34
Effective October 1, 1995,
amendments October 1, 2002
--------------------------------------------------------------------------------
Illinois High Risk Home Loan Act, Ill. High Risk Home Loan
Comp.
Stat. tit. 815, xx.xx. 137/5 et seq.
Effective January 1, 2004
(prior to this date,
regulations under Residential
Mortgage License Act effective
from May 14, 2001)
--------------------------------------------------------------------------------
Kansas Consumer Credit Code, Kan. Stat. High Loan to Value
Xxx. xx.xx. 16a-1-101 et seq. Consumer Loan (id.
ss. 16a-3-207) and;
--------------------
Sections 16a-1-301 and 16a-3-207 High APR Consumer
became effective April 14, 1999; Loan (id. ss.
Section 16a-3-308a became 16a-3-308a)
effective July 1, 1999
--------------------------------------------------------------------------------
Kentucky 2003 KY H.B. 287 - High Cost Home High Cost Home Loan
Loan Act, Ky. Rev. Stat. xx.xx.
360.100 et seq.
Effective June 24, 2003
--------------------------------------------------------------------------------
Maine Truth in Lending, Me. Rev. Stat. High Rate High Fee
tit. 9-A, xx.xx. 8-101 et seq. Mortgage
Effective September 29, 1995 and as
amended from time to time
--------------------------------------------------------------------------------
Q-2
Standard & Poor's High Cost Loan Categorization
-----------------------------------------------
--------------------------------------------------------------------------------
Category under
--------------
Applicable
----------
State/Jurisdiction Name of Anti-Predatory Lending Anti-Predatory
------------------ ------------------------------ --------------
Law/Effective Date Lending Law
------------------ -----------
--------------------------------------------------------------------------------
Massachusetts Part 40 and Part 32, 209 C.M.R. High Cost Home Loan
xx.xx. 32.00 et seq. and 209 C.M.R.
xx.xx. 40.01 et seq.
--------------------------------------------------------------------------------
Effective March 22, 2001 and amended
from time to time
--------------------------------------------------------------------------------
Nevada Assembly Xxxx No. 284, Nev. Rev. Home Loan
Stat. xx.xx. 598D.010 et seq.
Effective October 1, 2003
--------------------------------------------------------------------------------
New Jersey New Jersey Home Ownership Security High Cost Home Loan
Act of 2002, N.J. Rev. Stat. xx.xx.
46:10B 22 et seq.
Effective for loans closed on or
after November 27, 2003
--------------------------------------------------------------------------------
New Mexico Home Loan Protection Act, N.M. Rev. High Cost Home Loan
Stat. xx.xx. 58-21A-1 et seq.
Effective as of January 1, 2004;
Revised as of February 26, 2004
--------------------------------------------------------------------------------
New York N.Y. Banking Law Article 6-l High Cost Home Loan
Effective for applications made on
or after April 1, 2003
--------------------------------------------------------------------------------
North Carolina Restrictions and Limitations on High Cost Home Loan
High Cost Home Loans, N.C. Gen.
Stat. xx.xx. 24-1.1E et seq.
Effective July 1, 2000; amended
October 1, 2003 (adding open-end
lines of credit)
--------------------------------------------------------------------------------
Ohio H.B. 386 (codified in various Covered Loan
sections of the Ohio Code), Ohio
Rev. Code Xxx.
xx.xx. 1349.25 et seq.
Effective May 24, 2002
--------------------------------------------------------------------------------
Oklahoma Consumer Credit Code (codified in Subsection 10
various sections of Title 14A) Mortgage
Effective July 1, 2000; amended
effective January 1, 2004
--------------------------------------------------------------------------------
Q-3
Standard & Poor's High Cost Loan Categorization
-----------------------------------------------
--------------------------------------------------------------------------------
Category under
--------------
Applicable
----------
State/Jurisdiction Name of Anti-Predatory Lending Anti-Predatory
------------------ ------------------------------ --------------
Law/Effective Date Lending Law
------------------ -----------
--------------------------------------------------------------------------------
South Carolina South Carolina High Cost and High Cost Home Loan
Consumer Home Loans Act, S.C. Code
Xxx. xx.xx. 37-23-10 et seq.
Effective for loans taken on or after
January 1, 2004
--------------------------------------------------------------------------------
West Virginia West Virginia Residential Mortgage West Virginia
Lender, Broker and Servicer Act, W. Mortgage Loan Act
Va. Code Xxx. xx.xx. 31-17-1 et seq. Loan
Effective June 5, 2002
--------------------------------------------------------------------------------
Standard & Poor's Covered Loan Categorization
---------------------------------------------
--------------------------------------------------------------------------------
Category under
--------------
Applicable
----------
State/Jurisdiction Name of Anti-Predatory Lending Anti-Predatory
------------------ ------------------------------ --------------
Law/Effective Date Lending Law
------------------ -----------
--------------------------------------------------------------------------------
Georgia (Oct. 0, Xxxxxxx Xxxx Xxxxxxx Xxx, Xx. Code Covered Loan
2002 - Mar. 6, 2003) Xxx. xx.xx. 7-6A-1 et seq.
Effective October 1, 2002 - March
6, 2003
--------------------------------------------------------------------------------
New Jersey New Jersey Home Ownership Security Covered Home Loan
Act of 2002, N.J. Rev. Stat. xx.xx.
46:10B 22 et seq. Effective
November 27, 2003 - July 5, 2004
--------------------------------------------------------------------------------
Standard & Poor's Home Loan Categorization
------------------------------------------
--------------------------------------------------------------------------------
Category under
--------------
Applicable
----------
State/Jurisdiction Name of Anti-Predatory Lending Anti-Predatory
------------------ ------------------------------ --------------
Law/Effective Date Lending Law
------------------ -----------
--------------------------------------------------------------------------------
Georgia (Oct. 1, 0000 Xxxxxxx Xxxx Xxxxxxx Xxx, Xx. Code Home Loan
- Mar. 6, 2003) Xxx. xx.xx. 7-6A-1 et seq.
Effective October 1, 2002 - March
6, 2003
--------------------------------------------------------------------------------
Q-4
Standard & Poor's Home Loan Categorization
------------------------------------------
--------------------------------------------------------------------------------
Category under
--------------
Applicable
----------
State/Jurisdiction Name of Anti-Predatory Lending Anti-Predatory
------------------ ------------------------------ --------------
Law/Effective Date Lending Law
------------------ -----------
--------------------------------------------------------------------------------
New Jersey New Jersey Home Ownership Security Home Loan
Act of 2002, N.J. Rev. Stat. xx.xx.
46:10B 22 et seq.
Effective for loans closed on or
after November 27, 2003
--------------------------------------------------------------------------------
New Mexico Home Loan Protection Act, N.M. Home Loan
Rev.Stat. xx.xx. 58-21A-1 et seq.
Stat. xx.xx. 58-21A-1 et seq.
Effective as of January 1, 2004;
Revised as of February 26, 2004
--------------------------------------------------------------------------------
North Carolina Restrictions and Limitations on Consumer Home Loan
High Cost Home Loans, N.C. Gen.
Stat. xx.xx. 24-1.1E et seq.
Effective July 1, 2000; amended
October 1, 2003 (adding open-end
lines of credit)
--------------------------------------------------------------------------------
South Carolina South Carolina High Cost and Consumer Home Loan
Consumer Home Loans Act, S.C. Code
Xxx. xx.xx. 37-23-10 et seq.
Effective for loans taken on or
after January 1, 2004
--------------------------------------------------------------------------------
Q-5
EXHIBIT R
---------
FORM OF LOST NOTE AFFIDAVIT - LA SALLE AS CUSTODIAN
---------------------------------------------------
I, as _________________________ (title) of ________ (the "Custodian"),
am authorized to make this Lost Note Affidavit on behalf of __________. In
connection with the administration of the Mortgage Loans held by _______________
as Custodian on behalf of ____________ ("____") or the Trust of such mortgage
loans, as the case may be (the "Investor"), I (hereinafter called "Deponent"),
being duly sworn, depose and say that:
Custodian's address is:
[CUSTODIAN'S Address]
Custodian previously delivered to the Investor a signed Trust Receipt
with respect to the Mortgage Note referred to below;
Such Mortgage Note was endorsed or sold to the Investor by
_________________________ pursuant to the terms and provisions of a
____________________ Agreement dated and effective as of _________ ______, ____;
Such Mortgage Note is not outstanding pursuant to a Request for Release
of Documents;
Such Mortgage Note (hereinafter called the "Original") has been lost;
Deponent has made or has caused to be made diligent search for Original
and has been unable to find or recover same;
The Custodian was the Custodian of the Original at the time of loss;
and
Deponent agrees that, if the Original should ever come into Custodian's
possession, custody or power, Custodian will immediately and without
consideration surrender Original to the Investor.
Attached hereto is a true and correct copy of the (i) Mortgage Note,
endorsed in blank by the Mortgagee, and (ii) [Mortgage][Deed of Trust] with
evidence of recording thereon which secures the Mortgage Note.
Deponent hereby agrees that the Custodian shall indemnify and hold
harmless the Purchaser, the Trust, the Servicer of the related Mortgage Loan and
their respective employees, officers, directors and agents against any loss,
liability or damage, including reasonable attorney's fees, resulting from the
unavailability of the Mortgage Note, including but not limited to any loss,
liability or damage arising from (i) any false statement contained in this Lost
Note Affidavit, (ii) any claim of any party that it has already purchased a
mortgage loan evidenced by the lost Mortgage Note or any interest in such
mortgage loan, (iii) any claim of any borrower with respect to the existence of
terms of a Mortgage Loan evidenced by the lost Mortgage Note, (iv) the issuance
of new instrument in lieu thereof and (v) any claim whether or not based upon or
arising from honoring or refusing to honor the Original when presented by anyone
(items (i) through (iv) above are hereinafter referred to as the "Losses") and
(b) if required by any Rating Agency in connection with placing such lost
Mortgage Note into a securitization transaction, shall obtain a surety bond from
an insurer acceptable to the applicable Rating Agency in an amount acceptable to
such Rating Agency to cover any Losses with respect to such lost Mortgage Note.
Capitalized terms used herein but not defined herein have the meanings
given them in the Custodial Agreement, dated as of July 1, 2006, between Xxxxxx
Xxxxxxx Mortgage Capital Inc. and the Custodian.
This Lost Note Affidavit is intended to be relied on by the Investor,
its successors, and assigns and _______________________ represents and warrants
that it has the authority to perform its obligations under this Lost Note
Affidavit.
IN WITNESS WHEREOF, the Custodian has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[title of officer] this _____ day of __________ 20__.
---------------------------------
[LA SALLE BANK NATIONAL ASSOCIATION]
By:
----------------------------
Name:
Title:
On this _________ day of _______________________, ____, before me
appeared ____________________________________________, to me personally known,
who being duly sworn did say that she/he is the ______________________________
of ______________________, and that said Lost Note Affidavit was signed and
sealed on behalf of such corporation and said _____________________________
acknowledged this instrument to be the free act and deed of said corporation.
Subscribed and sworn before me this _____ day of __________ 20__.
NOTARY PUBLIC
----------------------------
COUNTY OF ________________
STATE OF __________________
My commission expires the _____ day of __________ 20__.
Signature
Typed Name
R-1
SCHEDULE A
MORTGAGE LOAN SCHEDULE
[On File with the Trustee and the Securities Administrator]
SCH. A-1
SCHEDULE B
PRINCIPAL BALANCES SCHEDULE
[Attached to Prospectus Supplement, if applicable]
SCH. B-1
