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 a Custodian
---------------------------
POOLING AND SERVICING AGREEMENT
Dated as of May 1, 2006
---------------------------
XXXXXX XXXXXXX MORTGAGE LOAN TRUST 2006-7
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-7
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS............................................................................................17
Section 1.01. Definitions........................................................................................17
ARTICLE II DECLARATION OF TRUST; ISSUANCE OF CERTIFICATES........................................................74
Section 2.01. Creation and Declaration of Trust Fund; Conveyance of Mortgage Loans...............................74
Section 2.02. Acceptance of Trust Fund by Trustee; Review of Documentation for Trust Fund........................77
Section 2.03. Representations and Warranties of the Depositor....................................................78
Section 2.04. Representations and Warranties of the Depositor and the Seller as to the Mortgage Loans............80
Section 2.05. Representations and Warranties of the Seller; Discovery of Breach; Repurchase or
Substitution of Mortgage Loans.................................................................81
Section 2.06. Grant Clause.......................................................................................85
Section 2.07. Depositor's Option to Purchase Breached Mortgage Loans.............................................86
Section 2.08. Release of Mortgage Documents for Servicing........................................................86
ARTICLE III THE CERTIFICATES.....................................................................................86
Section 3.01. The Certificates...................................................................................86
Section 3.02. Registration.......................................................................................87
Section 3.03. Transfer and Exchange of Certificates..............................................................87
Section 3.04. Cancellation of Certificates.......................................................................91
Section 3.05. Replacement of Certificates........................................................................91
Section 3.06. Persons Deemed Owners..............................................................................92
Section 3.07. Temporary Certificates.............................................................................92
Section 3.08. Appointment of Paying Agent........................................................................92
Section 3.09. Book-Entry Certificates............................................................................93
ARTICLE IV ADMINISTRATION OF THE TRUST FUND......................................................................94
Section 4.01. Custodial Accounts; Distribution Account...........................................................94
Section 4.02. Permitted Withdrawals from the Custodial Accounts and the Distribution Account.....................95
Section 4.03. [Reserved].........................................................................................97
Section 4.04. [Reserved].........................................................................................97
Section 4.05. Reports to Trustee and Certificateholders..........................................................97
ARTICLE V DISTRIBUTIONS TO HOLDERS OF CERTIFICATES..............................................................100
Section 5.01. Distributions Generally...........................................................................100
Section 5.02. Priorities of Distribution........................................................................101
Section 5.03. Allocation of Principal Payments to Class 5-A Certificates........................................111
Section 5.04. Allocation of Losses..............................................................................111
Section 5.05. Advances by the Master Servicer...................................................................113
Section 5.06. Compensating Interest Payments....................................................................114
Section 5.07. [Reserved]........................................................................................114
Section 5.08. Cross-Collateralization; Adjustments to Available Funds...........................................114
Section 5.09. Determination of Pass-Through Rates for LIBOR Certificates........................................115
Section 5.10 The Reserve Funds.............................................................................117
Section 5.11 The Corridor Contracts........................................................................120
ARTICLE VI CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR; EVENTS OF DEFAULT...........................120
Section 6.01. Duties of Trustee and the Securities Administrator................................................120
Section 6.02. Certain Matters Affecting the Trustee and the Securities Administrator............................123
Section 6.03. Trustee and Securities Administrator Not Liable for Certificates..................................124
Section 6.04. Trustee and the Securities Administrator May Own Certificates.....................................125
Section 6.05. Eligibility Requirements for Trustee..............................................................125
Section 6.06. Resignation and Removal of Trustee and the Securities Administrator...............................125
Section 6.07. Successor Trustee and Successor Securities Administrator..........................................129
Section 6.08. Merger or Consolidation of Trustee or the Securities Administrator................................130
Section 6.09. Appointment of Co-Trustee, Separate Trustee or Custodian..........................................130
Section 6.10. Authenticating Agents.............................................................................132
Section 6.11. Indemnification of the Trustee and the Securities Administrator...................................132
Section 6.12. Fees and Expenses of the Master Servicer, Securities Administrator, the Trustee and the
Custodians....................................................................................133
Section 6.13. Collection of Monies..............................................................................134
Section 6.14. Events of Default; Trustee To Act; Appointment of Successor.......................................134
Section 6.15. Additional Remedies of Trustee Upon Event of Default..............................................139
Section 6.16. Waiver of Defaults................................................................................139
Section 6.17. Notification to Holders...........................................................................139
Section 6.18. Directions by Certificateholders and Duties of Trustee During Event of Default....................139
Section 6.19. Action Upon Certain Failures of the Master Servicer and Upon Event of Default.....................140
Section 6.20. Preparation of Tax Returns and Other Reports......................................................140
Section 6.21. Certain Matters Regarding any Custodian Appointed Hereunder.......................................142
ARTICLE VII PURCHASE OF MORTGAGE LOANS AND TERMINATION OF THE TRUST FUND........................................141
Section 7.01. Purchase of Mortgage Loans; Termination of Trust Fund Upon Purchase or Liquidation of All
Mortgage Loans................................................................................141
Section 7.02. Procedure Upon Redemption of Trust Fund...........................................................143
Section 7.03. Additional Trust Fund Termination Requirements....................................................144
ARTICLE VIII RIGHTS OF CERTIFICATEHOLDERS.......................................................................145
Section 8.01. Limitation on Rights of Holders...................................................................145
Section 8.02. Access to List of Holders.........................................................................146
ii
Section 8.03. Acts of Holders of Certificates...................................................................146
ARTICLE IX ADMINISTRATION AND SERVICING OF MORTGAGE LOANS BY THE MASTER SERVICER................................147
Section 9.01. Duties of the Master Servicer; Enforcement of Servicers' and Master Servicer's Obligations........147
Section 9.02. Assumption of Master Servicing by Trustee.........................................................150
Section 9.03. Representations and Warranties of the Master Servicer.............................................151
Section 9.04. Compensation to the Master Servicer...............................................................152
Section 9.05. Merger or Consolidation...........................................................................153
Section 9.06. Resignation of Master Servicer and Securities Administrator.......................................153
Section 9.07. Assignment or Delegation of Duties by the Master Servicer and Securities Administrator............154
Section 9.08. Limitation on Liability of the Master Servicer and Others.........................................155
Section 9.09. Indemnification; Third-Party Claims...............................................................155
Section 9.10. Eligibility Requirements for Securities Administrator.............................................155
Section 9.11. Annual Statement as to Compliance.................................................................156
ARTICLE X REMIC ADMINISTRATION..................................................................................157
Section 10.01. REMIC Administration.............................................................................157
Section 10.02. Prohibited Transactions and Activities...........................................................159
Section 10.03. Indemnification with Respect to Prohibited Transactions or Loss of REMIC Status..................160
Section 10.04. REO Property.....................................................................................161
Section 10.05. Fidelity.........................................................................................161
ARTICLE XI MISCELLANEOUS PROVISIONS.............................................................................162
Section 11.01. Binding Nature of Agreement; Assignment..........................................................162
Section 11.02. Entire Agreement.................................................................................162
Section 11.03. Amendment........................................................................................162
Section 11.04. Voting Rights....................................................................................163
Section 11.05. Provision of Information.........................................................................163
Section 11.06. Governing Law....................................................................................164
Section 11.07. Notices..........................................................................................164
Section 11.08. Severability of Provisions.......................................................................164
Section 11.09. Indulgences; No Waivers..........................................................................165
Section 11.10. Headings Not To Affect Interpretation............................................................165
Section 11.11. Benefits of Agreement............................................................................165
Section 11.12. Special Notices to the Rating Agencies...........................................................165
Section 11.13. Conflicts........................................................................................166
Section 11.14. Counterparts.....................................................................................166
Section 11.15. No Petitions.....................................................................................166
Section 11.16. Indemnification by Trust.........................................................................166
iii
ARTICLE XII EXCHANGE ACT REPORTING..............................................................................167
Section 12.01. Filing Obligations...............................................................................167
Section 12.02. Form 10-D Reporting..............................................................................168
Section 12.03. Form 8-K Reporting...............................................................................170
Section 12.04. Form 10-K Reporting..............................................................................171
Section 12.05. Xxxxxxxx-Xxxxx Certification.....................................................................172
Section 12.06. Reports on Assessment of Compliance and Attestation..............................................173
Section 12.07. Use of Subcontractors............................................................................174
Section 12.08. Indemnification by the Master Servicer and the Securities Administrator..........................175
Section 12.09. Indemnification by the Custodian.................................................................179
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 Form of Corridor Contract
Exhibit E List of Purchase and Servicing Agreements
Exhibit F List of Custodial Agreements
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 May 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 a custodian (a "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, the Corridor Contracts and the assets held in the Reserve Funds)
as the following five separate real estate mortgage investment conduits (each,
a "REMIC"): REMIC 1A, REMIC 1B, REMIC 2, REMIC 3 and the Master REMIC. REMIC
1A will consist of the Mortgage Loans comprising Loan Group 1, 2 and 3
excluding any rights of the Trust Fund in respect of the Additional Collateral
and the Corridor Contracts and the assets held in the Reserve Funds. REMIC 1B
will consist of the Mortgage Loans comprising Loan Group 4, excluding any
rights of the Trust Fund in respect of the Additional Collateral and the
Corridor Contracts and the assets held in the Reserve Funds. Each of REMIC 1A
and REMIC 1B will issue uncertificated REMIC regular interests (the "REMIC 1A
Regular Interests" and the "REMIC 1B Regular Interests", respectively, and
collectively, the "REMIC 1 Regular Interests"). The REMIC 1A Regular Interests
and REMIC 1B Regular Interests will represent the "regular interests" in REMIC
1A and REMIC 1B, respectively, and the Class R1A Interest and Class R1B
Interest will represent the single Class of "residual interest" in each of
REMIC 1A and REMIC 1B.
The Trustee will hold the REMIC 1 Regular Interests for the benefit
of REMIC 2. REMIC 2 will consist of the REMIC 1 Interests and will be
evidenced by the REMIC 2 Regular Interests, which will constitute the regular
interests in REMIC 2 (the "REMIC 2 Regular Interests") and the Class R2
Interest, which will represent the single Class of "residual interest" in
REMIC 2.
The Trustee will hold the REMIC 2 Regular Interests for the benefit
of REMIC 3. REMIC 3 will consist of the REMIC 2 Interests and will be
evidenced by the REMIC 3 Regular Interests, which will constitute the regular
interests in REMIC 3 (the "REMIC 3 Regular Interests") and the Class R3
Interest, which will represent the single Class of "residual interest" in
REMIC 3.
The Trustee will hold the REMIC 3 Regular Interests for the benefit
of the Master REMIC. The Master REMIC will consist of the REMIC 3 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 R1A,
Class R1B, Class R2, R3 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 1A
--------
Except as provided below, REMIC 1A will issue a single regular
interest corresponding to each Mortgage Loan in Collateral Allocation Group 1,
Collateral Allocation Group 2, Collateral Allocation Group 3 and Collateral
Allocation Group 4 having a Net Mortgage Rate equal to that of its
corresponding Mortgage Loan and allocated principal, interest and Realized
Losses in the same manner as such items are allocated to their corresponding
Mortgage Loans.
REMIC 1A will issue a single regular interest corresponding to each
Mortgage Loan in Loan Group 1 having a Net Mortgage Rate less than or equal to
5.00%, two regular interests (referred to collectively herein as the "Class
1-A Interests" and the "Class 1-B Interests") for each Mortgage Loan in Loan
Group 1 having a Net Mortgage Rate greater than 5.00% and less than 6.00% and
a single regular interest for each Mortgage Loan in Loan Group 1 having a Net
Mortgage Rate greater than 6.00%.
Each REMIC 1A Regular Interest corresponding to a Mortgage Loan in
Loan Group 1 having a Net Mortgage Rate less than or equal to 5.00% will have
a Pass Through Rate of 5.00% and a principal balance, following the allocation
of scheduled principal, prepayments of principal and Realized Losses, equal to
the product of: (i) the Non-A-P Percentage of the related Mortgage Loan and
(ii) the related Mortgage Loan's principal balance. For purposes of the
calculating the Calculation Rate, each of the foregoing REMIC 1A Regular
Interest will be treated as part of Collateral Allocation Group 1.
Each of the Class 1-A Interests relating to a Mortgage Loan in Loan
Group 1 having a Net Mortgage Rate that exceeds 5.00% will have a Pass Through
Rate of 5.00% and a principal balance, following the allocation of scheduled
principal, prepayments of principal and Realized Losses, equal to the product
of: (i) 6.00% minus the Net Mortgage Rate in respect of the related Mortgage
Loan, divided by 1.00%, and (ii) the related Mortgage Loan's principal
balance. For purposes of the calculating the Calculation Rate, each Class 1-A
Interest will be treated as part of Collateral Allocation Group 1.
Each of the Class 1-B Interests relating to a Mortgage Loan in Loan
Group 1 having a Net Mortgage Rate that exceeds 5.00% will have a Pass Through
Rate of 6.00% and a principal balance: (a) in the case of Mortgage Loans
having a Net Mortgage Rate that is less than or equal to 6.00%, following the
allocation of scheduled principal, prepayments of principal and Realized
Losses, equal to the product of: (i) the Net Mortgage Rate in respect of the
related Mortgage Loan minus 5.00%, divided by 1.00%, and (ii) the related
Mortgage Loan's principal
2
balance, and (b) in the case of Mortgage Loans having a Net Mortgage Rate that
exceeds 6.00%, the related Mortgage Loan's principal balance. For purposes of
the calculating the Calculation Rate, each Class 1-B Interest will be treated
as part of Collateral Allocation Group 2.
REMIC 1A also will issue the Class 1A-1-A-P Interest, Class 1A-4-A-P
Interest, Class 1A-2-A-X Interest, Class 1A-4-A-X Interest, Class 1-A-P-1
Interest and the Class R-1A Interest. The Class 1A-1-A-P and 1A-4-A-P
Interests will have principal balances, following the allocation of scheduled
principal, prepayments of principal and Realized Losses, equal to the
principal balances in respect of the Class 1-A-P and 4-A-P Certificates,
respectively, and will not be entitled to receive distributions of interest.
The Class 1A-2-A-X and 1A-4-A-X Interests will have notional balances and pass
through rates equal to those in respect of the Class 2-A-X and Class 4-A-X
Certificates, respectively. The Class 1-A-P-1 Interest will not be entitled to
any interest, but will be entitled to 100% of any prepayment premiums paid on
the Collateral Allocation Group 1, Collateral Allocation Group 2, Collateral
Allocation Group 3 and Collateral Allocation Group 4 Mortgage Loans. The Class
R-1A Interest is the residual interest and will not be entitled to any
distributions of interest or principal.
REMIC 1B
--------
The REMIC 1B Interests, each of which (except for the Class R1B
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 1B Interest Initial Principal Interest Corresponding Master
Balance Rate REMIC Certificate
-------------------------------------------------------------------------------
1B-5-A-1 (1) (2) Class 5-A-1
-------------------------------------------------------------------------------
1B-5-A-2 (1) (2) Class 5-A-2
-------------------------------------------------------------------------------
1B-5-A-3 (1) (2) Class 5-A-3
-------------------------------------------------------------------------------
1B-5-A-4 (1) (2) Class 5-A-4
-------------------------------------------------------------------------------
1B-5-A-5 (1) (2) Class 5-A-5
-------------------------------------------------------------------------------
1B-5-M-1 (1) (2) Class 5-M-1
-------------------------------------------------------------------------------
1B-5-M-2 (1) (2) Class 5-M-2
-------------------------------------------------------------------------------
1B-5-B-1 (1) (2) Class 5-B-1
-------------------------------------------------------------------------------
1B-Accrual (1) N/A(2) N/A
-------------------------------------------------------------------------------
1B-P-2 $100 N/A(3) Class P-2
-------------------------------------------------------------------------------
R1B (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 1B-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 1B-Accrual
Interests will have a principal balance equal to 50% of the principal
balance of Mortgage Loans plus 50% of the Overcollateralized Amount.
3
(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 Cap.
(3) The Class 1B-P-2 Interest will not be entitled to any interest, but
will be entitled to 100% of any prepayment premiums paid on the
Collateral Allocation Group 5 Mortgage Loans.
(4) The R1B Interest is the sole Class of residual interest in REMIC 1B.
It pays no interest or principal.
REMIC 2
-------
The REMIC 2 Interests, each of which (except for the Class R2
Interests) is hereby designated as a REMIC regular interest for federal income
tax purposes, will have the principal balances, Pass-Through Rates and
Corresponding collateral allocation groups as set forth in the following
table:
Corresponding Corresponding
Initial Pass- Collateral Master
Principal Through Allocation REMIC
REMIC 2 Interests Balance Rate Group Class
----------------- ------- ----
2-A-1 (0.9% of the Assumed Balance of Collateral N/A
Allocation Group 1) (1) 5.00% 1
2-B-1 (0.1% of the Assumed Balance of Collateral N/A
Allocation Group 1) (1) 5.00% 1
N/A
2-C-1 (Excess of Collateral Allocation Group 1) (1) 5.00% 1
2-1-A-P (3) 0.00% 1 N/A
2-A-2 (0.9% of the Assumed Balance of Collateral N/A
Allocation Group 2) (1) 6.00% 2
2-B-2 (0.1% of the Assumed Balance of Collateral N/A
Allocation Group 2) (1) 6.00% 2
N/A
2-C-2 (Excess of Collateral Allocation Group 2) (1) 6.00% 2
2-2-A-X (4) (4) 2 N/A
2-A-3 (0.9% of the Assumed Balance of Collateral N/A
Allocation Group 3) (1) (2) 3
2-B-3 (0.1% of the Assumed Balance of Collateral N/A
Allocation Group 3) (1) (2) 3
N/A
2-C-3 (Excess of Collateral Allocation Group 3) (1) (2) 3
2-1-A-P (3) 0.00% 4 N/A
2-A-4 (0.9% of the Assumed Balance of Collateral N/A
Allocation Group 4) (1) 6.00% 4
2-B-4 (0.1% of the Assumed Balance of Collateral N/A
Allocation Group 4) (1) 6.00% 4
2-C-4 (Excess of Collateral Allocation Group 4) (1) 6.00% 4 N/A
4
2-4-A-X (4) (4) 4 N/A
2-5-A-1 (5) (5) N/A 5-A-1
2-5-A-2 (5) (5) N/A 5-A-2
2-5-A-3 (5) (5) N/A 5-A-3
2-5-A-4 (5) (5) N/A 5-A-4
2-5-A-5 (5) (5) N/A 5-A-5
2-5-M-1 (5) (5) N/A 5-M-1
2-5-M-2 (5) (5) N/A 5-M-2
2-5-B-1 (5) (5) N/A 5-B-1
2-OC (6) (6) N/A OC
2-P-1 $100 (7) N/A N/A
2-P-2 $100 (7) N/A N/A
2-$100 (5) (5) 4 A-R
R2 (8) (8) N/A N/A
---------------
(1) Each Class A Interest will have a principal balance initially equal to 0.9% of the Assumed Balance of its
corresponding Collateral Allocation Group. Each Class B Interest will have a principal balance initially
equal to 0.1% of the Assumed Balance of its corresponding Collateral Allocation Group. The initial
principal balance of each Class C Interest will equal the excess of the initial aggregate principal
balance of its corresponding Collateral Allocation Group over the initial aggregate principal balances of
the Class A and Class B Interests (and of the Class 2-1-A-P and Class 2-$100 Interests, in the case of the
Class 2-A-1 and Class 2-C-4 Interests, respectively) corresponding to such Collateral Allocation Group.
(2) The Weighted Average Net Mortgage Rate of the corresponding Collateral Allocation Group.
(3) For each Distribution Date, the Principal balance in respect of the Class 1-A-P Certificates.
(4) For each Distribution Date, the Class 2-2-A-X and Class 2-4-A-X Interests will have notional principal
balances and pass through rates equal to those in respect of the Class 2-A-X and Class 4-A-X Certificates.
(5) For each Distribution Date, each such Class will have the principal balance and Pass Through Rate in
respect of its Corresponding Master REMIC Class.
(6) For each Interest Accrual Period the Class 2-OC Interests will accrue a specified portion of the interest
on the Collateral Allocation Group 5 Mortgage Loans equal to the excess of the Net WAC Pass-Through Rate
of the Collateral Allocation Group 5 Mortgage Loans over the product of two and the weighted average
interest rate of the REMIC 1B Regular Interests having "(1)" designated in the column entitled "Initial
Principal Balance" with each such Class other than the Class 1B-Accrual Interest subject to a cap equal to
the Pass-Through Rate of the corresponding Master REMIC class and the 1B-Accrual Interest subject to a cap
of 0.00%.
5
(7) The Class 2-P1 and Class 2-P-2 Interests will not bear interest. The Class 2-P-1 will be entitled to all
Prepayment Charges collected in respect of the Aggregate Loan Group I Mortgage Loans. The Class 2-P-2 will
be entitled to all Prepayment Charges collected in respect of the Collateral Allocation Group 5 Mortgage
Loans.
(8) The Class R2 Interest is the sole class of residual interest in REMIC 2. It has no principal balance and
pays no principal or interest.
On each Distribution Date, the Available Funds from Collateral
Allocation Groups 1, 2, 3, and 4 shall be distributed with respect to the
REMIC 2 Interests in the following manner:
(1) Interest is to be distributed with respect to each REMIC 2 Interest
according to the formulas described above;
(2) Principal Amounts and Realized Losses will be allocated to make the Class
2-P1, Class 2-P-2 and Class 2-$100 balance equal to the principal balances of
the Class P-1, Class P-2 and Class A-R Certificates, respectively, for such
Distribution Date.
(3) If Cross-Over Situation does not exist with respect to any Class of
Interests, then Principal Amounts and Realized Losses arising with respect to
each Collateral Allocation Group will be allocated: first to cause the
Collateral Allocation Group's corresponding Class A and Class B to equal,
respectively, 0.9% of the Assumed Balance and 0.1% of the Assumed Balance; and
second to the Collateral Allocation Group's corresponding Class C Interest;
(4) If a Cross-Over Situation exists with respect to the Class A and Class B
Interests then:
(a) if the Calculation Rate in respect of the outstanding Class A and
Class B Interests is less than the Pass-Through Rate for the
Aggregate Group I Subordinate Certificates, Principal Relocation
Payments will be made proportionately to the outstanding Class A
Interests prior to any other distributions of principal from each
such Collateral Allocation Group; and
(b) if the Calculation Rate in respect of the outstanding Class A and
Class B Interests is greater than the Pass-Through Rate for the
Aggregate Group I Subordinate Certificates, Principal Relocation
Payments will be made proportionately to the outstanding Class B
Interests prior to any other distributions of principal from each
such Collateral Allocation Group.
In case of either (a) or (b), Principal Relocation Payments will be made so as
to cause the Calculation Rate in respect of the outstanding Class A and Class
B Interests to equal the Pass-Through Rate for the Aggregate Group I
Subordinate Certificates. With respect to each Collateral Allocation Group, if
(and to the extent that) the sum of (a) the principal payments comprising the
Principal Amount received during the Due Period and (b) the Realized Losses on
the Mortgage Loans in that Collateral Allocation Group, are insufficient to
make the necessary reductions of principal on the Class A and Class B
Interests, then interest will be added to the Collateral Allocation Group's
other REMIC 2 Interests that are not receiving Principal Relocation Payments,
in proportion to their principal balances.
6
(c) The outstanding aggregate Class A and Class B Interests for all
Collateral Allocation Groups will not be reduced below 1% of the
excess of (i) the aggregate Stated Principal Balances of the Mortgage
Loans as of the end of any Due Period over (ii) the Certificate
Balance of the Senior Certificates (excluding the Class A-R
Certificates) for all Certificate Groups as of the related
Distribution Date (after taking into account distributions of
principal on such Distribution Date).
If (and to the extent that) the limitation in paragraph (c) prevents the
distribution of principal to the Class A and Class B Interests of a Collateral
Allocation Group, and if the Collateral Allocation Group's Class C Interest
has already been reduced to zero, then the excess principal from that
Collateral Allocation Group will be paid to the Class C Interests of the other
Collateral Allocation Group, the aggregate Class A and Class B Interests of
which are less than 1% of the Assumed Balance. If the Mortgage Loans in the
Loan Group of the Class C Interest that receives such payment has a Weighted
Average Net Mortgage Rate below the Weighted Average Net Mortgage Rate of the
Collateral Allocation Group making the payment, then the payment will be
treated by REMIC 2 as a Realized Loss. Conversely, if the Collateral
Allocation Group of the Class C Interest that receives such payment has a
Weighted Average Net Mortgage Rate above the Weighted Average Net Mortgage
Rate of the Collateral Allocation Group making the payment, then the payment
will be treated by REMIC 2 as a reimbursement for prior Realized Losses.
REMIC 3
-------
The REMIC 3 Interests, each of which (except for the Class R3
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:
==================== ============== ================== ========================
Pass-Through
Class Principal Rate Corresponding Master
Class Designation Balance (per annum) REMIC Class
-------------------- -------------- ------------------ ------------------------
Class 3-1-A (1) 5.00000% Class 1-A
-------------------- -------------- ------------------ ------------------------
Class 3-1-A-P (1) 0.00% Class 1-A-P
-------------------- -------------- ------------------ ------------------------
Class 3-2-A (1) 6.00000% Class 2-A
-------------------- -------------- ------------------ ------------------------
Class 3-2-A-X (1) (2) Class 2-A-X
-------------------- -------------- ------------------ ------------------------
Class 3-3-A (1) (3) Class 3-A
-------------------- -------------- ------------------ ------------------------
Class 3-4-A-1 (1) 6.00000% Class 4-A-1
-------------------- -------------- ------------------ ------------------------
Class 3-4-A-2 (1) 6.00000% Class 4-A-2
-------------------- -------------- ------------------ ------------------------
Class 3-4-A-4 (1) 6.00000% Class 4-A-4
-------------------- -------------- ------------------ ------------------------
Class 3-4-A-5 (1) 6.00000% Class 4-A-5
-------------------- -------------- ------------------ ------------------------
Class 3-4-A-6 (1) 6.00000% Class 4-A-6
-------------------- -------------- ------------------ ------------------------
Class 3-4-A-7 (1) 6.00000% Class 4-A-7
-------------------- -------------- ------------------ ------------------------
Class 3-4-A-8 (1) 6.00000% Class 4-A-8
-------------------- -------------- ------------------ ------------------------
Class 3-4-A-P (1) 0.00% Class 4-A-P
-------------------- -------------- ------------------ ------------------------
Class 3-4-A-X (1) (2) Class 4-A-X
-------------------- -------------- ------------------ ------------------------
Class 3-5-A-1 (1) (4) Class 5-A-1
==================== ============== ================== ========================
7
==================== ============== ================== ========================
Class 3-5-A-2 (1) (4) Class 5-A-2
-------------------- -------------- ------------------ ------------------------
Class 3-5-A-3 (1) (4) Class 5-A-3
-------------------- -------------- ------------------ ------------------------
Class 3-5-A-4 (1) (4) Class 5-A-4
-------------------- -------------- ------------------ ------------------------
Class 3-5-A-5 (1) (4) Class 5-A-5
-------------------- -------------- ------------------ ------------------------
Class 3-$100(12) (1) 5.00000% Class A-R
-------------------- -------------- ------------------ ------------------------
Class 3-5-M-1 (1) (4) Class 5-M-1
-------------------- -------------- ------------------ ------------------------
Class 3-5-M-2 (1) (4) Class 5-M-2
-------------------- -------------- ------------------ ------------------------
Class 3-5-B-1 (1) (4) Class 5-B-1
-------------------- -------------- ------------------ ------------------------
Class 3-B-1 (1) (4) Class B-1
-------------------- -------------- ------------------ ------------------------
Class 3-B-2 (1) (4) Class B-2
-------------------- -------------- ------------------ ------------------------
Class 3-B-3 (1) (4) Class B-3
-------------------- -------------- ------------------ ------------------------
Class 3-B-4 (1) (4) Class B-4
-------------------- -------------- ------------------ ------------------------
Class 3-B-5 (1) (4) Class B-5
-------------------- -------------- ------------------ ------------------------
Class 3-B-6 (1) (4) Class B-6
-------------------- -------------- ------------------ ------------------------
Class 3-P-1 (1) (5) Class P-1
-------------------- -------------- ------------------ ------------------------
Class 3-P-2 (1) (5) Class P-2
-------------------- -------------- ------------------ ------------------------
Class 3-OC (1) (6) Class OC
-------------------- -------------- ------------------ ------------------------
R3 (7) (7) N/A
==================== ============== ================== ========================
------------------------------------------
(1) For each Distribution Date, the actual or notional principal balance,
as applicable, of the Corresponding Master REMIC Class.
(2) For each Distribution Date, the Class 3-2-A-X and Class 3-4-A-X
Interests will have notional principal balances and pass through
rates equal to those in respect of the Class 2-A-X and Class 4-A-X
Certificates.
(3) The Pass-Through Rate for the Class 3-A Certificates for any
Distribution Date will be a per annum rate equal to the Weighted
Average Net Mortgage Rate on the Group 3 Mortgage Loans. The
Pass-Through Rate for the Class 3-A Certificates for the first
Interest Accrual Period will be a per annum rate of 6.17685%.
(4) For each Distribution Date, the pass through rate of the
Corresponding Master REMIC Class.
(5) The Class 3-P1 and Class 3-P-2 Interests will not bear interest. The
Class 3-P-1 will be entitled to all Prepayment Charges collected in
respect of the Aggregate Loan Group I Mortgage Loans. The Class 3-P-2
will be entitled to all Prepayment Charges collected in respect of
the Collateral Allocation Group 5 Mortgage Loans.
(6) For each Distribution Date, the Class 3-OC Interests will be entitled
to all interest accruals and principal payments made in respect of
the Class 2-OC Interests.
(7) The Class R-3 Interest is the sole class of residual interest in
REMIC 2. It has no principal balance and pays no principal or
interest.
8
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):
=================== ======================= =========================== ====================== ======================
Class Designation Initial Class Pass-Through Integral
Principal Rate Minimum Multiples in
Balance (per annum) Denomination Excess of Minimum
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class 1-A $20,396,000.00 5.00000% $25,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class 1-A-P $45,662.00 (1) $25,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class 2-A $30,325,000.00 6.00000% $25,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class 2-A-X Notional (2) 6.00000% $100,000.00(3) $1,000.00(3)
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class 3-A $202,782,000.00 (4) $25,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class 4-A-1 $15,000,000.00 (5) $25,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class 4-A-2 $30,952,000.00 (5) $25,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class 4-A-3 Notional (2) (6) $100,000.00(3) $1,000.00(3)
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class 4-A-4 $38,069,000.00 6.00000% $25,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class 4-A-5 $13,749,000.00 6.00000% $25,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class 4-A-6 $3,412,000.00 6.00000% $1,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class 4-A-7 $10,493,000.00 6.00000% $25,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class 4-A-8 $4,129,000.00 6.00000% $25,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class 4-A-P $185,722.00 (1) $25,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class 4-A-X Notional (2) 6.00000% $100,000.00(3) $1,000.00(3)
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class 5-A-1 $64,046,000.00 (7) $25,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class 5-A-2 $42,914,000.00 (8) $25,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class 5-A-3 $6,926,000.00 (9) $25,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class 5-A-4 $17,855,000.00 (10) $25,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class 5-A-5 $14,638,000.00 (11) $25,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class A-R (12) $100.00 5.00000% (13) (13)
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class 5-M-1 $4,001,000.00 (14) $25,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class 5-M-2 $3,441,000.00 (15) $25,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class 5-B-1 $2,721,000.00 (16) $25,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class B-1 $6,984,000.00 (17) $25,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class B-2 $4,462,000.00 (17) $25,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class B-3 $2,715,000.00 (17) $25,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class B-4 $1,940,000.00 (17) $100,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class B-5 $1,358,000.00 (17) $100,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class B-6 $970,456.43 (17) $100,000.00 $1,000.00
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class P-1 $1,000.00 (18) $1,000.00 N/A
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class P-2 $1,000.00 (18) $1,000.00 N/A
------------------- ----------------------- --------------------------- ---------------------- ----------------------
Class OC (19) (19) (20) (20)
=================== ======================= =========================== ====================== ======================
9
------------------------------------------
(1) The Class 1-A-P and Class 4-A-P Certificates are principal only
certificates and are not entitled to receive any distributions of
interest.
(2) The Class 2-A-X, Class 4-A-3 and Class 4-A-X Certificates will be
Notional Amount Certificates, will have no Class Principal Balances
and will bear interest on their respective initial Notional Amounts
(initially, $262,820, $45,952,000 and $2,578,327, respectively).
(3) Minimum denomination is based on the Notional Amount of such Class.
(4) The Pass-Through Rate for the Class 3-A Certificates for any
Distribution Date will be a per annum rate equal to the Weighted
Average Net Mortgage Rate on the Group 3 Mortgage Loans. The
Pass-Through Rate for the Class 3-A Certificates for the first
Interest Accrual Period will be a per annum rate of 6.17685%.
(5) The Pass-Through Rate for the Class 4-A-1 and Class 4-A-2
Certificates for the Interest Accrual Period related to any
Distribution Date will be a per annum rate equal to one-month LIBOR
plus 0.75%, subject to a maximum per annum rate of 6.000% and a
minimum rate of 0.750%. The Pass-Through Rate for the Class 4-A-1 and
Class 4-A-2 Certificates for the first Interest Accrual Period will
be a per annum rate of 5.83125%.
(6) The Pass-Through Rate for the Class 4-A-3 Certificates for the
Interest Accrual Period related to any Distribution Date will be a
per annum rate equal to 5.250% minus one-month LIBOR, subject to a
maximum per annum rate of 5.250% and a minimum rate of 0.000%. The
Pass-Through Rate for the Class 4-A-3 Certificates for the first
Interest Accrual Period will be a per annum rate of 0.16875%.
(7) The Pass-Through Rate for the Class 5-A-1 Certificates for the
Interest Accrual Period related to any Distribution Date will be a
per annum rate equal to the least of (i) one-month LIBOR plus 0.09%,
(ii) the Net WAC Cap and (iii) 11.000%. The Pass-Through Rate for the
Class 5-A-1 Certificates for the first Interest Accrual Period will
be a per annum rate of 5.1825%.
(8) The Pass-Through Rate for the Class 5-A-2 Certificates for the
Interest Accrual Period related to any Distribution Date will be a
per annum rate equal to the least of (i) 5.962% and (ii) the Net WAC
Cap. The Pass-Through Rate for the Class 5-A-2 Certificates for the
first Interest Accrual Period will be a per annum rate of 5.962%.
(9) The Pass-Through Rate for the Class 5-A-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 lesser of (i) 6.315% and (ii) the Net WAC Cap.
Beginning with the Interest Accrual Period related to the
Distribution Date immediately following the first related Optional
Termination Date, the Pass-Through Rate for the Class 5-A-3
Certificates will be a per annum rate equal to the lesser of (i)
6.815% and (ii) the Net WAC Cap. The Pass-Through Rate for the Class
5-A-3 Certificates for the first Interest Accrual Period will be a
per annum rate of 6.315%.
10
(10) The Pass-Through Rate for the Class 5-A-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 lesser of (i) 6.407% and (ii) the Net WAC Cap.
Beginning with the Interest Accrual Period related to the
Distribution Date immediately following the first related Optional
Termination Date, the Pass-Through Rate for the Class 5-A-4
Certificates will be a per annum rate equal to the least of (i)
6.907% and (ii) the Net WAC Cap. The Pass-Through Rate for the Class
5-A-4 Certificates for the first Interest Accrual Period will be a
per annum rate of 6.407%.
(11) The Pass-Through Rate for the Class 5-A-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 lesser of (i) 6.141% and (ii) the Net WAC Cap.
Beginning with the Interest Accrual Period related to the
Distribution Date immediately following the first related Optional
Termination Date, the Pass-Through Rate for the Class 5-A-5
Certificates will be a per annum rate equal to the lesser of (i)
6.641% and (ii) the Net WAC Cap. The Pass-Through Rate for the Class
5-A-5 Certificates for the first Interest Accrual Period will be a
per annum rate of 6.141%.
(12) The Class A-R Certificates represent the sole Class of residual
interest in each REMIC.
(13) 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.
(14) The Pass-Through Rate for the Class 5-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) one-month LIBOR plus 0.320%, (ii) the
Net WAC Cap and (iii) 11.000%. Beginning with the Interest Accrual
Period related to the Distribution Date immediately following the
first related Optional Termination Date, the Pass-Through Rate for
the Class 5-M-1 Certificates will be a per annum rate equal to the
least of (i) one-month LIBOR plus 0.480%, (ii) the Net WAC Cap and
(iii) 11.000%. The Pass-Through Rate for the Class 5-M-1 Certificates
for the Interest Accrual Period related to the first Distribution
Date is a per annum rate of 5.4125%.
(15) The Pass-Through Rate for the Class 5-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) one-month LIBOR plus 0.410%, (ii) the
Net WAC Cap and (iii) 11.000%. Beginning with the Interest Accrual
Period related to the Distribution Date immediately following the
first related Optional Termination Date, the Pass-Through Rate for
the Class 5-M-2 Certificates will be a per annum rate equal to the
least of (i) one-month LIBOR plus 0.615%, (ii) the Net WAC Cap and
(iii) 11.000%. The Pass-Through Rate for the Class 5-M-2 Certificates
for the Interest Accrual Period related to the first Distribution
Date is a per annum rate of 5.5025%.
(16) The Pass-Through Rate for the Class 5-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) one-month LIBOR plus 1.100%, (ii) the
11
Net WAC Cap and (iii) 11.000%. Beginning with the Interest Accrual
Period related to the Distribution Date immediately following the
first related Optional Termination Date, the Pass-Through Rate for
the Class 5-B-1 Certificates will be a per annum rate equal to the
least of (i) one-month LIBOR plus 1.650%, (ii) the Net WAC Cap and
(iii) 11.000%. The Pass-Through Rate for the Class 5-B-1 Certificates
for the Interest Accrual Period related to the first Distribution
Date is a per annum rate of 6.1925%.
(17) The Pass-Through Rate for each Class of Aggregate Group I
Subordinated Certificates for the Interest Accrual Period related to
any Distribution Date will be a per annum rate equal to the sum of:
(1) 5.000% multiplied by the excess of the aggregate Stated Principal
Balance of the Collateral Allocation Group 1 Mortgage Loans as of the
Due Date in the month preceding the month of that Distribution Date
(after giving effect to prepayments received in the Prepayment Period
related to such prior Due Date) over the aggregate of the Class
Principal Balances of the Group 1 Senior Certificates immediately
prior to that Distribution Date, (2) 6.000% multiplied by the excess
of the aggregate Stated Principal Balance of the Collateral
Allocation Group 2 Mortgage Loans as of the Due Date in the month
preceding the month of that Distribution Date (after giving effect to
prepayments received in the Prepayment Period related to such prior
Due Date) over the aggregate of the Class Principal Balances of the
Group 2 Senior Certificates immediately prior to that Distribution
Date, (3) the Weighted Average Net Mortgage Rate on the Collateral
Allocation Group 3 Mortgage Loans multiplied by the excess of the
aggregate Stated Principal Balance of the Collateral Allocation Group
3 Mortgage Loans as of the Due Date in the month preceding the month
of that Distribution Date (after giving effect to prepayments
received in the Prepayment Period related to such prior Due Date)
over the aggregate of the Class Principal Balances of the Group 3
Senior Certificates immediately prior to that Distribution Date, and
(4) 6.000% multiplied by the excess of the aggregate Stated Principal
Balance of the Collateral Allocation Group 4 Mortgage Loans as of the
Due Date in the month preceding the month of that Distribution Date
(after giving effect to prepayments received in the Prepayment Period
related to such prior Due Date) over the aggregate of the Class
Principal Balances of the Group 4 Senior Certificates immediately
prior to that Distribution Date; divided by the aggregate of the
Class Principal Balances of the Aggregate Group I Subordinated
Certificates immediately prior to that Distribution Date. The
pass-through rate for each Class of subordinated Certificates for the
first Distribution Date will be a per annum rate of 6.04164%.
(18) The Class P-1 and Class P-2 Certificates will not be entitled to any
interest, but will be entitled to 100% of any prepayment premiums
paid on the Aggregate Group I Mortgage Loans and the Collateral
Allocation Group 5 Mortgage Loans, respectively. For the federal
income tax purposes, the Class P-1 and Class P-2 Certificates will be
entitled to 100% of the cash flow in respect of the Class 2-P-1
Interest and Class 2-P-2 Interests, respectively.
(19) For each Distribution Date, the Class OC Certificates will be
entitled to all interest accruals and principal payments made in
respect of the Class 3-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 Collateral Allocation Group 5 Mortgage Loans
less the interest accrued on the other interests issued by the Master
REMIC. The Class OC Distributable
12
Amount for any Distribution Date is payable from current interest on
the Collateral Allocation Group 5 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. For federal income tax purposes,
the Class OC Certificateholders' obligation to make payments of Basis
Risk Carry Forward Amounts will be treated as payments made pursuant
to an interest rate cap contract written by the Class OC
Certificateholders in favor of each Class of Group 5 Certificates.
(20) The Class OC Certificates will be issued as a single Class of
Certificates.
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 each of REMIC 1A and REMIC 1B to REMIC 2, from REMIC 2
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 Rates are 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 created hereunder (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.
13
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.
Aggregate Group I Certificates............. Aggregate Group I Senior Certificates and the Aggregate Group I
Subordinated Certificates.
Aggregate Group I Senior The Group 1 Senior Certificate, the Group 2 Senior Certificates, the
Certificates............................... Group 3 Senior Certificates and the Group 4 Senior Certificates.
Aggregate Group I Subordinated Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6
Certificates............................... Certificates
Book-Entry Certificates.................... All Classes of Certificates other than the Definitive 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
14
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 4-A-1, Class 4-A-2, Class 5-A-1, Class 5-M-1, Class 5-M-2 and
Class 5-B-1 Certificates.
Group 1 Certificates....................... Group 1 Senior Certificates and the portions of the Aggregate Group
I Subordinated Certificates related to Collateral Allocation Group 1.
Group 1 Senior Certificates................ Class 1-A, Class 1-A-P and Class A-R Certificates.
Group 2 Certificates....................... Group 2 Senior Certificates and the portions of the Aggregate Group
I Subordinated Certificates related to Collateral Allocation Group 2.
Group 2 Senior Certificates................ Class 2-A and Class 2-A-X Certificates.
Group 3 Certificates....................... Group 3 Senior Certificates and the portions of the Aggregate Group
I Subordinated Certificates related to Collateral Allocation Group 3.
Group 3 Senior Certificates................ Class 3-A Certificates.
Group 4 Certificates....................... Group 4 Senior Certificates and the portions of the Aggregate Group
I Subordinated Certificates related to Collateral Allocation Group 4.
Group 4 Senior Certificates................ Class 4-A-1, Class 4-A-2, Class 4-A-3, Class 4-A-4, Class 4-A-5,
Class 4-A-6, Class 4-A-7, Class 4-A-8, Class 4-A-X and Class 4-A-P
Certificates.
Group 4 LIBOR Certificates................. Class 4-A-1, Class 4-A-2 and Class 4-A-3 Certificates.
Group 5 Certificates....................... Group 5 Senior Certificates and the Group 5 Subordinated
Certificates.
Group 5 Senior Certificates................ Class 5-A-1, Class 5-A-2, Class 5-A-3, Class 5-A-4 and Class 5-A-5
Certificates.
Group 5 Subordinated Certificates.......... Class 5-M-1, Class 5-M-2 and Class 5-B-1 Certificates.
Group 5 LIBOR Certificates................. Class 5-A-1, Class 5-M-1, Class 5-M-2 and Class 5-B-1 Certificates.
Inverse Floating Rate Certificates......... Class 4-A-3 Certificates.
15
LIBOR Certificates......................... Floating Rate Certificates and Inverse Floating Rate Certificates.
Non-Delay Certificates..................... The LIBOR Certificates.
Notional Amount Certificates............... Class 2-A-X, Class 4-A-3 and Class 4-A-X Certificates.
Notional Amount Components................. None.
Offered Certificates All Classes of Certificates other than the Private Certificates.
Definitive Certificates.................... Private Certificates and the Residual Certificates.
Planned Principal Classes.................. None.
Principal Only Certificates................ None.
Private Certificates....................... Class P-1, Class P-2, Class OC, Class B-4, Class B-5 and Class B-6
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.
Senior Certificate Group................... Group 1 Senior Certificates, Group 2 Senior Certificates, Group 3
Senior Certificates, Group 4 Senior Certificates or Group 5 Senior
Certificates, as applicable.
Senior Certificates........................ Group 1 Senior Certificates, Group 2 Senior Certificates, Group 3
Senior Certificates, Group 4 Senior Certificates and Group 5 Senior
Certificates.
Subordinated Certificates.................. Aggregate Group I Subordinated Certificates and the Group 5
Subordinated Certificates.
Targeted Principal Classes................. None.
Underwriter................................ Xxxxxx Xxxxxxx & Co. Incorporated.
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.
16
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
The following words and phrases, unless the context otherwise
requires, shall have the following meanings:
A-P Formula Principal Amount: As to any Distribution Date and any
Collateral Allocation Group in Aggregate Group I, the sum of (i) the sum of
the applicable A-P Percentage of (a) the principal portion of each Scheduled
Payment (without giving effect, prior to the Bankruptcy Coverage Termination
Date, to any reductions thereof caused by any Debt Service Reductions or
Deficient Valuations) due on the Applicable Fraction of each Mortgage Loan in
the related Collateral Allocation Group on the related Due Date, (b) the
Stated Principal Balance of the Applicable Fraction of each Mortgage Loan in
the related Collateral Allocation Group that was repurchased by the Seller,
the Depositor, or the related Originator or purchased by the Master Servicer
pursuant to this Agreement as of such Distribution Date, (c) the Substitution
Adjustment Amount in connection with any the Applicable Fraction of Deleted
Mortgage Loan in the related Collateral Allocation Group received with respect
to such Distribution Date, (d) any Insurance Proceeds or Liquidation Proceeds
allocable to recoveries of principal of the Applicable Fraction of Mortgage
Loans in the related Collateral Allocation Group that are not yet Liquidated
Mortgage Loans received during the calendar month preceding the month of such
Distribution Date, (e) with respect to the Applicable Fraction of each
Mortgage Loan in the related Collateral Allocation Group that became a
Liquidated Mortgage Loan during the calendar month preceding the month of such
Distribution Date, the amount of Liquidation Proceeds allocable to principal
received with respect to such Mortgage Loan allocable to that Collateral
Allocation Group during the calendar month preceding the month of such
Distribution Date with respect to such Mortgage Loan and, if such Liquidated
Mortgage Loan is an Additional Collateral Mortgage Loan, the principal portion
of the proceeds of any Additional Collateral allocated to the Collateral
Allocation Group and (f) the Applicable Fraction of all Principal Prepayments
with respect to the Mortgage Loans in the related Collateral Allocation Group
received during the related Prepayment Period, and (ii) with respect to
Subsequent Recoveries attributable to the Applicable Fraction of a Discount
Mortgage Loan in the related Collateral Allocation Group which incurred (1) an
Excess Loss or (2) a Realized Loss after the related Senior Credit Support
Depletion Date, the A-P Percentage of the Applicable Fraction of any
Subsequent Recoveries on the Mortgage Loans related to such Collateral
Allocation Group received during the calendar month preceding the month of
such Distribution Date.
A-P Percentage: As to any Discount Mortgage Loan or Applicable
Fraction thereof in Collateral Allocation Group 1 or Collateral Allocation
Group 4, a fraction (expressed as a percentage) the numerator of which is the
excess of the Required Coupon for such Collateral Allocation Group over the
Net Mortgage Rate of such Discount Mortgage Loan and the denominator of which
is such Required Coupon. As to any Non-Discount Mortgage Loan or Applicable
Fraction thereof in Collateral Allocation Group 1 or Collateral Allocation
Group 4 and as to any Mortgage Loan or Applicable Fraction thereof in
Collateral Allocation Group 2 or Collateral Allocation Group 3, 0%.
17
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: With respect to any Class of Accrual Certificates or
any Accrual Component and any Distribution Date, the amount allocable to
interest on such Class of Accrual Certificates or Accrual Component with
respect to such Distribution Date pursuant to Section 5.02(a)(1)(iii),
5.02(a)(2)(iii), 5.02(a)(3)(iii) or 5.02(a)(4)(iii), as 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 May 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.
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: A 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
18
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 Group I Certificates: As specified in the Preliminary
Statement.
Aggregate Group I Loan Group: Any of Loan Group 1, Loan Group 2 and
Loan Group 3.
Aggregate Group I Mortgage Loans: Collectively, all of the Mortgage
Loans in Loan Group 1, Loan Group 2 and Loan Group 3.
Aggregate Group I Senior Certificates: As specified in the
Preliminary Statement.
Aggregate Group I Subordinated Certificates: As specified in the
Preliminary Statement.
Aggregate Group I Subordinated Principal Distribution Amount: With
respect to any Distribution Date and Aggregate Group I Collateral Allocation
Group, an amount equal to the sum, not less than zero, of (i) the Subordinated
Percentage of the applicable Non-A-P Percentage for such Collateral Allocation
Group of all amounts described in subclauses (a) through (d) of clause (i) of
the definition of "Non-A-P Formula Principal Amount" for such Distribution
Date, (ii) with respect to the Applicable Fraction of each Mortgage Loan in
that Collateral Allocation Group that became a Liquidated Mortgage Loan during
the calendar month preceding the month of such Distribution Date, the
applicable Non-A-P Percentage of the amount of the Liquidation Proceeds
allocated to principal received with respect thereto remaining after
application thereof pursuant to clause (ii) of the definition of Senior
Principal Distribution Amount, up to the Subordinated Percentage for such
Collateral Allocation Group of the applicable Non-A-P Percentage of the Stated
Principal Balance of the Applicable Fraction such Mortgage Loan, (iii) the
Subordinated Prepayment Percentage of the applicable Non-A-P Percentage of all
amounts described in subclause (f) of clause (i) of the definition of "Non-A-P
Formula Principal Amount" for such Collateral Allocation Group and
Distribution Date, and (iv)
19
the Subordinated Prepayment Percentage of any Subsequent Recoveries described
in clause (ii) of the definition of "Non-A-P Formula Principal Amount" for
such Collateral Allocation Group and Distribution Date reduced by Class A-P
Deferred Amounts; provided, however, that on any Distribution Date after the
third related Senior Termination Date, the Subordinated Principal Distribution
Amount will not be calculated by Collateral Allocation Group but will equal
the amount calculated pursuant to the formula set forth above based on the
applicable Subordinated Percentage or Subordinated Prepayment Percentage, as
applicable, for the Aggregate Group I Subordinated Certificates for such
Distribution Date with respect to all of the Aggregate Group I Mortgage Loans
as opposed to only the Applicable Fractions of the Mortgage Loans in the
related Collateral Allocation Group.
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.
Agreement: This Pooling and Servicing Agreement and all amendments or
supplements hereto.
Allocable Share: As to any Distribution Date and any Mortgage Loan in
Aggregate Loan Group I (i) with respect to Principal Only Certificates, zero,
(ii) with respect to the Class 2-A-X and Class 4-A-X Certificates, (a) the
ratio that the excess, if any, of the Net Mortgage Rate with respect to such
Mortgage Loan or the Applicable Fraction thereof, over the related Required
Coupon bears to such Net Mortgage Rate or (b) if the Net Mortgage Rate with
respect to such Mortgage Loan or the Applicable Fraction thereof does not
exceed the related Required Coupon, zero, (iii) with respect to each other
Class of Group 1, Group 2, Group 3 or Group 4 Certificates the product of (a)
the lesser of (I) the ratio that the related Required Coupon bears to the Net
Mortgage Rate of such Mortgage Loan or the Applicable Fraction thereof and
(II) one, multiplied by (b) the ratio that the amount calculated with respect
to such Distribution Date (A) with respect to the Aggregate Group I Senior
Certificates of the related Senior Certificate Group, pursuant to clause (i)
of the definition of Class Optimal Interest Distribution Amount (without
giving effect to any reduction of such amount pursuant to Section 5.02 (d))
and (B) with respect to the Aggregate Group I Subordinated Certificates,
pursuant to the definition of Assumed Interest Amount or after the third
related Senior Termination Date, pursuant to clause (i) of the
20
definition of Class Optimal Interest Distribution Amount (without giving
effect to any reduction of such amount pursuant to Section 5.02(d)) bears to
the amount calculated with respect to such Distribution Date for each Class of
Aggregate Group I Certificates pursuant to clause (i) of the definition of
Class Optimal Interest Distribution Amount (without giving effect to any
reduction of such amount pursuant to Section 5.02(d)) or the definition of
Assumed Interest Amount for such Collateral Allocation Group and Class, as
applicable and (iv) with respect to any other Class of Aggregate Group I
Certificates, the ratio that the amount calculated with respect to such
Distribution Date (A) with respect to the Aggregate Group I Senior
Certificates of the related Aggregate Group I Senior Certificate Group,
pursuant to clause (i) of the definition of Class Optimal Interest
Distribution Amount (without giving effect to any reduction of such amount
pursuant to Section 5.02 (d)) and (B) with respect to the Aggregate Group I
Subordinated Certificates, pursuant to the definition of Assumed Interest
Amount or after the third related Senior Termination Date, pursuant to clause
(i) of the definition of Class Optimal Interest Distribution Amount (without
giving effect to any reduction of such amount pursuant to Section 5.02(d))
bears to the amount calculated with respect to such Distribution Date for each
Class of Aggregate Group I Certificates pursuant to clause (i) of the
definition of Class Optimal Interest Distribution Amount (without giving
effect to any reduction of such amount pursuant to Section 5.02(d)) or the
definition of Assumed Interest Amount for such Collateral Allocation Group and
Class, as applicable.
Amount Available for Senior Principal: As to any Distribution Date
and (a) Collateral Allocation Group 1, Available Funds for such Distribution
Date and Collateral Allocation Group, reduced by the aggregate amount
distributable (or allocable to the Accrual Amount, if applicable) on such
Distribution Date in respect of interest on the related Senior Certificates
pursuant to Section 5.02(a)(1)(ii), (b) Collateral Allocation Group 2,
Available Funds for such Distribution Date and Collateral Allocation Group,
reduced by the aggregate amount distributable (or allocable to the Accrual
Amount, if applicable) on such Distribution Date in respect of interest on the
related Senior Certificates pursuant to Section 5.02(a)(2)(ii), (c) Collateral
Allocation Group 3, Available Funds for such Distribution Date and Collateral
Allocation Group, reduced by the aggregate amount distributable (or allocable
to the Accrual Amount, if applicable) on such Distribution Date in respect of
interest on the related Senior Certificates pursuant to Section 5.02(a)(3)(ii)
or (d) Collateral Allocation Group 4, Available Funds for such Distribution
Date and Collateral Allocation Group, reduced by the aggregate amount
distributable (or allocable to the Accrual Amount, if applicable) on such
Distribution Date in respect of interest on the related Senior Certificates
pursuant to Section 5.02(a)(4)(ii).
Amount Held for Future Distribution: As to any Distribution Date and
the Mortgage Loans related to a Collateral Allocation Group, 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 relating to such Collateral
Allocation Group and (ii) all Scheduled Payments due after the related Due
Date relating to such Collateral Allocation Group.
Applicable Credit Support Percentage: With respect to the Aggregate
Group I Certificates, as defined in Section 5.02(e) hereof.
Applicable Fraction: With respect to (a) any Mortgage Loan related to
Collateral Allocation Group 3, Collateral Allocation Group 4 and Collateral
Allocation Group 5, 100% and (b) any Mortgage Loan related to Collateral
Allocation Group 1 and Collateral Allocation Group
21
2, the percentage for such Mortgage Loan and Collateral Allocation Group set
forth on the Mortgage Loan Schedule but generally calculated as follows:
The Applicable Fraction of each Mortgage Loan in Loan Group 1 that is
allocated to Collateral Allocation Group 1 and Collateral Allocation Group 2
is as follows:
-------------------------- ----------------------------------------------
Loan Group 1
----------------------------------------------
Collateral Collateral
Net Mortgage Rate Allocation Allocation
of the Mortgage Loan Group 1 Group 2
-------------------------- ------------------ ---------------------------
less than or equal
to 5.00%................ 100.00% 0.00%
-------------------------- ------------------ ---------------------------
Greater than 5.00% and 6.00% - Net 100.00% - 6.00% - Net
less than 6.00%......... Mortgage Rate Mortgage Rate
------------- -------------
1.00% 1.00%
-------------------------- ------------------ ---------------------------
6.00% 0.00% 100.00%
and above...............
-------------------------- ------------------ ---------------------------
Applied Loss Amount: As to any Distribution Date, with respect to the
Group 5 Subordinated Certificates and the Class OC Certificates, the excess,
if any, of (i) the aggregate Class Principal Balances of the Group 5
Certificates and the Class OC Certificates, after giving effect to all
Realized Losses with respect to the Applicable Fractions of the Mortgage Loans
in Collateral Allocation Group 5 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 Applicable Fractions of the
Collateral Allocation Group 5 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 of the Group
5 Assets, 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
22
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.
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.
Assumed Balance: With respect to any Distribution Date, Class of
Aggregate Group I Subordinated Certificates and Aggregate Group I Collateral
Allocation Group, each such Class' pro rata interest (based on their
respective Class Principal Balances) in such Collateral Allocation Group equal
to the product of the Subordinated Percentage for such Collateral Allocation
Group as of such Distribution Date and the aggregate of the applicable Non-A-P
Percentage of the Stated Principal Balance of each Mortgage Loan or Applicable
Fraction thereof in such Collateral Allocation Group as of the Due Date
occurring in the month preceding the month of such Distribution Date (after
giving effect to Principal Prepayments received in the related Prepayment
Period).
Assumed Interest Amount: With respect to any Distribution Date and
Class of Aggregate Group I Subordinated Certificates, one month's interest
accrued during the related Interest Accrual Period at the Pass-Through Rate
for such Class on the applicable Assumed Balance immediately prior to that
Distribution Date.
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 of the
Collateral Allocation Group 5 Mortgage Loans, 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.
23
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
Group 5 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 Collateral Allocation Group 5 Mortgage Loans
serviced by it or 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 Collateral Allocation Group 5 Mortgage Loans), except:
o all scheduled payments of principal and related interest
collected on the Collateral Allocation Group 5 Mortgage
Loans but due on a date after the related Due Date;
o all partial Principal Prepayments received with respect to
the Collateral Allocation Group 5 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
Collateral Allocation Group 5 Mortgage Loans;
o all Principal Prepayments in Full received with respect to
the Collateral Allocation Group 5 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 Collateral Allocation Group 5
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 any Custodian
pursuant to the terms of this Agreement or the Custodial
Agreements, in each case with respect to the Collateral
Allocation Group 5 Mortgage Loans or otherwise allocable to
the Group 5 Certificates;
o reinvestment income on the balance of funds, if any, in the
Custodial Accounts or Distribution Account; and
24
o any fees payable to the Servicers and the Master Servicer,
in each case with respect to the Collateral Allocation Group
5 Mortgage Loans;
(2) all Advances on the Collateral Allocation Group 5 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
Collateral Allocation Group 5 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 Collateral Allocation Group 5
Mortgage Loans by the Seller or the related Originator.
Available Funds: As to any Distribution Date and the Mortgage Loans
or Applicable Fractions thereof in a Collateral Allocation Group in Aggregate
Loan Group I, the sum, for that Collateral Allocation Group, of (a) the
aggregate amount held in the Custodial Accounts at the close of business on
the related Determination Date, including any Subsequent Recoveries, in
respect of such Mortgage Loans in the related Loan Group in proportion to the
Applicable Fraction of those Mortgage Loans in that Collateral Allocation
Group net of (i) the Amount Held for Future Distribution, (ii) amounts
permitted to be withdrawn from the Custodial Accounts pursuant to Section
4.02(a) in respect of such Mortgage Loans or Applicable Fractions thereof and
(iii) amounts permitted to be withdrawn from the Distribution Account pursuant
to clauses (i)-(v) inclusive of Section 4.02(b), in each case in the related
Loan Group in proportion to the Applicable Fraction of those Mortgage Loans in
that Collateral Allocation Group, (b) the amount of all related Advances made
by the Servicers and the Master Servicer and all Compensating Interest
Payments or payments made in respect of Prepayment Interest Shortfalls paid by
the Servicers and the Master Servicer, in each case, in respect of such
Mortgage Loans in the related Loan Group in proportion to the Applicable
Fraction of those Mortgage Loans in that Collateral Allocation Group, (c) in
connection with Defective Mortgage Loans in the related Loan Group, as
applicable, the aggregate of the Purchase Prices and Substitution Adjustment
Amounts, in each case, in proportion to the Applicable Fraction of those
Mortgage Loans in that Collateral Allocation Group deposited on the related
Distribution Account Deposit Date minus (d) all related fees, charges and
other amounts payable or reimbursable to the Master Servicer, the Securities
Administrator, any Custodian or the Trustee under this Agreement or the
related Custodial Agreement or to the Servicers under the Purchase and
Servicing Agreements, or, if any amounts are not specifically related to the
Mortgage Loans or Applicable Fractions thereof in that Collateral Allocation
Group or the related Certificate Group, then the applicable Collateral
Allocation Group Percentage for such Collateral Allocation Group for such
Distribution Date of such amounts. The Holders of the Class P-1 Certificates
will be entitled to all Prepayment Penalties received on the Aggregate Group I
Mortgage Loans and such amounts will not be available for distribution to the
Holders of any other Class of Certificates.
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,
25
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.
Bankruptcy Coverage Termination Date: The point in time at which the
Bankruptcy Loss Coverage Amount is reduced to zero.
Bankruptcy Loss: With respect to any Mortgage Loan, a Deficient
Valuation or Debt Service Reduction reported to the Master Servicer by the
related Servicer; provided, however, that a Bankruptcy Loss shall not be
deemed a Bankruptcy Loss hereunder so long as the related Servicer has
notified the Master Servicer in writing that the related Servicer is
diligently pursuing any remedies that may exist in connection with the related
Mortgage Loan and either (A) the related Mortgage Loan is not in default with
regard to payments due thereunder or (B) delinquent payments of principal and
interest under the related Mortgage Loan and any related escrow payments in
respect of such Mortgage Loan are being advanced on a current basis by the
Master Servicer or the related Servicer, in either case without giving effect
to any Debt Service Reduction or Deficient Valuation, as reported by the
related Servicer to the Master Servicer.
Bankruptcy Loss Coverage Amount: As of any date of determination, the
Bankruptcy Loss Coverage Amount shall equal the Initial Bankruptcy Coverage
Amount as reduced by (i) the aggregate amount of Bankruptcy Losses allocated
to the Aggregate Group I Certificates since the Cut-off Date and (ii) any
permissible reductions in the Bankruptcy Loss Coverage Amount as evidenced by
a letter of each Rating Agency to the Trustee and the Securities Administrator
to the effect that any such reduction will not result in a downgrading of the
then current ratings assigned to the Classes of Aggregate Group I Certificates
rated by it.
Basic Principal Distribution Amount: For any Distribution Date and
the Group 5 Certificates will equal the excess of the Group 5 Principal
Remittance Amount over the Excess Subordinated Amount.
Basis Risk Carry Forward Amount: With respect to any Class of Group 5
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-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
26
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.
Calculation Rate: For the Aggregate Group I Certificates and each
Distribution Date, in the case of the Class A and Class B Interests of REMIC
1B, the product of (i) 10 and (ii) the weighted average rate of the
outstanding Class A and Class B Interests, treating each Class A Interest as
capped at zero or reduced by a fixed percentage of 100% of the interest
accruing on such Class.
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, (B) minus the sum of (i) all
distributions of principal previously made with respect thereto, (ii) with
respect to the Group 5 Subordinated Certificates only, all Applied Loss
Amounts allocated thereto and all other reductions in Certificate Balance
previously allocated thereto pursuant to Section 5.04 and (iii) with respect
to the Aggregate Group I Certificates only, all Realized Losses allocated
thereto (including Excess Losses) and all other reductions in Certificate
Balance previously allocated thereto pursuant to Section 5.04 (C) in the case
of any Class of Accrual Certificates, increased by the Accrual Amount added to
the Class Principal Balance of such Class prior to such date. No individual
Class OC Certificate has a Certificate Balance.
Certificate Group: As specified in the Preliminary Statement.
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
27
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).
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 4-A-1 Corridor Contract: With respect to the Class 4-A-1
Certificates, the transactions evidenced by the Class 4-A-1 Confirmation, a
form of which is attached hereto as Exhibit D.
Class 4-A-1 Reserve Fund: A fund created as part of the Trust Fund
pursuant to Section 5.10 of this Agreement but which is not an asset of any of
the REMICs.
Class 4-A-2 Reserve Fund: A fund created as part of the Supplemental
Interest Trust pursuant to Section 5.10 of this Agreement.
Class 5-A Certificates: The Class 5-A-1, Class 5-A-2, Class 5-A-3,
Class 5-A-4 and Class 5-A-5 Certificates.
Class 5-A Interest Distribution Amount: For the Class of Group 5
Senior Certificates and any Distribution Date, the 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 Group 5 Senior Certificates.
Class 5-A Principal Distribution Amount: With respect to any
Distribution Date and the Group 5 Senior Certificates (i) prior to the
Stepdown Date or on or after the Stepdown Date if a Trigger Event is in
effect, the Group 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 Group 5 Principal Distribution Amount for that
Distribution Date; and
o the excess (if any) of (A) the aggregate Class Principal
Balance of the Class 5-A Certificates immediately prior to
that Distribution Date over (B) the lesser of (i) the
aggregate Stated Principal Balance of the Collateral
Allocation Group 5 Mortgage
28
Loans as of the last day of the related Due Period
multiplied by 82.90% and (ii) the amount, if any, by which
(x) the aggregate Stated Principal Balance of the Collateral
Allocation Group 5 Mortgage Loans as of the last day of the
related Due Period exceeds (y) $800,326.
Class 5-B-1 Principal Distribution Amount: With respect to the Class
5-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 Group 5 Principal Distribution Amount for that
Distribution Date remaining after distribution of the Class 5-A Principal
Distribution Amount, the Class 5-M-1 Principal Distribution Amount and the
Class 5-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 Group 5 Principal Distribution Amount for that
Distribution Date remaining after distribution of the Class
5-A Principal Distribution Amount, the Class 5-M-1 Principal
Distribution Amount and the Class 5-M-2 Principal
Distribution Amount; and
o the excess (if any) of (A) the sum of (1) the Class
Principal Balance of the Class 5-B-1 Certificates
immediately prior to that Distribution Date and (2)
aggregate the Class Principal Balance of the Class 5-A and
Class 5-M Certificates (after taking into account the
payment of the Class 5-A, Class 5-M-1 and Class 5-M-2
Principal Distribution Amounts for such Distribution Date)
over (B) the lesser of (i) the aggregate Stated Principal
Balance of the Collateral Allocation Group 5 Mortgage Loans
as of the last day of the related Due Period multiplied by
95.60% and (ii) the amount, if any, by which (x) the
aggregate Stated Principal Balance of the Collateral
Allocation Group 5 Mortgage Loans as of the last day of the
related Due Period exceeds (y) $800,326.
Class 5-M Certificates: As set forth in the Preliminary Statement.
Class 5-M-1 Principal Distribution Amount: With respect to the Class
5-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 Group 5 Principal Distribution Amount for that
Distribution Date remaining after distribution of the Class 5-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 Group 5 Principal Distribution Amount for that
Distribution Date remaining after distribution of the Class
5-A Principal Distribution Amount; and
o the excess (if any) of (A) the sum of (1) the Class
Principal Balance of the Class 5-M-1 Certificates
immediately prior to that Distribution Date and (2)
aggregate the Class Principal Balance of the Class 5-A
Certificates (after taking into account the payment of the
Class 5-A Principal Distribution Amount for such
Distribution Date) over (B) the lesser of (i) the aggregate
Stated Principal Balance of the Collateral Allocation Group
5 Mortgage Loans as of the last day of the related Due
Period multiplied by
29
87.90% and (ii) the amount, if any, by which (x) the
aggregate Stated Principal Balance of the Collateral
Allocation Group 5 Mortgage Loans as of the last day of the
related Due Period exceeds (y) $800,326.
Class 5-M-2 Principal Distribution Amount: With respect to the Class
5-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 Group 5 Principal Distribution Amount for that
Distribution Date remaining after distribution of the Class 5-A Principal
Distribution Amount and the Class 5-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 Group 5 Principal Distribution Amount for that
Distribution Date remaining after distribution of the Class
5-A Principal Distribution Amount and the Class 5-M-1
Principal Distribution Amount; and
o the excess (if any) of (A) the sum of (1) the Class
Principal Balance of the Class 5-M-2 Certificates
immediately prior to that Distribution Date and (2) the
aggregate Class Principal Balance of the Class 5-A and Class
5-M-1 Certificates (after taking into account the payment of
the Class 5-A and Class 5-M-1 Principal Distribution Amounts
for such Distribution Date) over (B) the lesser of (i) the
aggregate Stated Principal Balance of the Group 1 Mortgage
Loans as of the last day of the related Due Period
multiplied by 92.20% and (ii) the amount, if any, by which
(x) the aggregate Stated Principal Balance of the Collateral
Allocation Group 5 Mortgage Loans as of the last day of the
related Due Period exceeds (y) $800,326.
Class A-P Certificates: The Class 1-A-P and Class 4-A-P Certificates.
Class A-P Deferred Amount: As to any Distribution Date and Collateral
Allocation Group, the aggregate of the applicable A-P Percentage of each
Realized Loss, other than any Excess Loss, on a Discount Mortgage Loan in that
Collateral Allocation Group to be allocated to the related Class A-P Component
on such Distribution Date on or prior to the Senior Credit Support Depletion
Date or previously allocated to but not yet paid to the Holders of the Class
A-P Certificates.
Class Interest Shortfall: As to any Distribution Date and Class of
Aggregate Group I Certificates, the amount by which the amount described in
clause (i) of the definition of Class Optimal Interest Distribution Amount for
such Class exceeds the amount of interest actually distributed on such Class
on such Distribution Date pursuant to such clause (i).
Class 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.
30
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: With respect to any
Distribution Date and interest bearing Class of Aggregate Group I Certificates
or, with respect to any interest bearing Component of Aggregate Group I
Certificates, the sum of (i) one month's interest accrued during the related
Interest Accrual Period at the Pass-Through Rate for such Class on the related
Class Principal Balance, Component Balance, Notional Amount or Component
Notional Amount, as applicable, immediately prior to such Distribution Date,
subject to reduction as provided in Section 5.02(d) and (ii) any Class Unpaid
Interest Amounts for such Class or Component.
Class P-1 Distribution Amount: For each Distribution Date and the
Aggregate Group I Mortgage Loans, an amount equal to the total of all
Prepayment Penalties received by the Securities Administrator from the
Servicers on the Aggregate Group I Mortgage Loans in the prior Due Period. The
Class P-1 Distribution Amount is not part of the Available Distribution Amount
and is therefore not available for distributions to the Classes of Aggregate
Group I Certificates.
Class P-2 Distribution Amount: For each Distribution Date and the
Collateral Allocation Group 5 Mortgage Loans, an amount equal to the total of
all Prepayment Penalties received by the Securities Administrator from the
Servicers on the Collateral Allocation Group 5 Mortgage Loans since the Due
Date related to the prior Distribution Date. The Class P-2 Distribution Amount
is not part of the Available Distribution Amount and is therefore not
available for distributions to the Classes of Group 5 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: With respect to any Distribution Date
and each Class of Aggregate Group I Subordinated Certificates, the quotient
(expressed as a percentage) of (a) the Class Principal Balance of such Class
of Aggregate Group I Subordinated Certificates immediately prior to such
Distribution Date, divided by (b) the aggregate of the Class Principal
Balances of all Classes of Aggregate Group I Certificates (other than the
related Notional Amount Certificates) immediately prior to such Distribution
Date.
Class Unpaid Interest Amounts: As to any Distribution Date and Class
of Aggregate Group I Certificates that is a Class of interest bearing
Certificates, the amount by which the aggregate Class Interest Shortfalls for
such Class on prior Distribution Dates exceeds the amount distributed on such
Class on prior Distribution Dates pursuant to clause (ii) of the definition of
Class Optimal Interest Distribution Amount.
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.
31
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: May 31, 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.
Collateral Allocation Group: Any of Collateral Allocation Group 1,
Collateral Allocation Group 2, Collateral Allocation Group 3, Collateral
Allocation Group 4 or Collateral Allocation Group 5.
Collateral Allocation Group 1: The respective Applicable Fractions of
the Mortgage Loans in Loan Group 1 so identified on the Mortgage Loan
Schedule.
Collateral Allocation Group 1 Mortgage Loans: The Mortgage Loans or
Applicable Fractions thereof in Collateral Allocation Group 1.
Collateral Allocation Group 2: The respective Applicable Fractions of
the Mortgage Loans in Loan Group 1 so identified on the Mortgage Loan
Schedule.
Collateral Allocation Group 2 Mortgage Loans: The Mortgage Loans or
Applicable Fractions thereof in Collateral Allocation Group 2.
Collateral Allocation Group 3: The respective Applicable Fractions of
the Mortgage Loans in Loan Group 2 so identified on the Mortgage Loan
Schedule.
Collateral Allocation Group 3 Mortgage Loans: The Mortgage Loans or
Applicable Fractions thereof in Collateral Allocation Group 3.
Collateral Allocation Group 4: The respective Applicable Fractions of
the Mortgage Loans in Loan Group 3 so identified on the Mortgage Loan
Schedule.
Collateral Allocation Group 4 Mortgage Loans: The Mortgage Loans or
Applicable Fractions thereof in Collateral Allocation Group 4.
Collateral Allocation Group 5: The respective Applicable Fractions of
the Mortgage Loans in Loan Group 4 so identified on the Mortgage Loan
Schedule.
Collateral Allocation Group 5 Mortgage Loans: The Mortgage Loans or
Applicable Fractions thereof in Collateral Allocation Group 5.
Collateral Allocation Group Percentage: As to any Collateral
Allocation Group and any Distribution Date, the fraction, expressed as a
percentage, the numerator of which is the aggregate Stated Principal Balance
of the Applicable Fractions of all the Mortgage Loans in that
32
Collateral Allocation Group as of the related Due Date, and the denominator of
which is the aggregate Stated Principal Balance of all of the Mortgage Loans
as of that Due Date.
Collateral Allocation Group Principal Balance: As to any Distribution
Date and Collateral Allocation Group, the sum of, with respect to each
Mortgage Loan related to that Collateral Allocation Group, the product of (x)
the Stated Principal Balance of that Mortgage Loan as of the Due Date in the
month preceding the month of the Distribution Date (after giving effect to
prepayments received in the Prepayment Period related to such prior Due Date)
and (y) the Applicable Fraction for that Mortgage Loan.
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.
Confirmation: With respect to the Class 4-A-1 Certificates, the
Confirmation (reference # KQBE2) dated May 31, 2006, evidencing a transaction
between the Corridor Contract Counterparty and the Securities Administrator.
With respect to the Class 4-A-2 Certificates, the Confirmations (reference #
KQBE0 [First Class 4-A-2 Corridor Contract]) and (reference # KQBE1 [Second
Class 4-A-2 Corridor Contract]), each dated May 31, 2006, evidencing a
transaction between the Corridor Contract Counterparty and the Securities
Administrator.
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
33
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 2006-7, 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 2006-7, 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 2006-7.
Corridor Contract: The Class 4-A-1 Corridor Contract, the First Class
4-A-2 Corridor Contract or the Second Class 4-A-2 Corridor Contract as
applicable.
Corridor Contract Counterparty: Xxxxxx Xxxxxxx Capital Services Inc.
Corridor Contract Scheduled Termination Date: With respect to the
Class 4-A-1 Corridor Contract, the Distribution Date in December 2010. With
respect to the First Class 4-A-2 Corridor Contract, the Distribution Date in
August 2027. With respect to the Second Class 4-A-2 Corridor Contract, the
Distribution Date in August 2009.
Cross-Over Situation: For the Aggregate Group I Certificates and any
Distribution Date and for each Aggregate Group I Collateral Allocation Group
(after taking into account principal distributions on such Distribution Date)
with respect to the Class A and Class B Interests, the Class A and Class B
Interests corresponding to any Aggregate Group I Collateral Allocation Group
are in the aggregate less than 1% of the Assumed Balance of the Aggregate
Group I Collateral Allocation Group to which they correspond.
34
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: The Custodial Agreements, listed in Exhibit F
hereof, as each such agreement may be amended or supplemented from time to
time as permitted hereunder.
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 Custodians are X.X. Xxxxxx Trust Company, National Association,
LaSalle Bank, National Association and Xxxxx Fargo Bank, National Association.
"Custodian" shall refer to each Custodian or all Custodians, as the context
requires.
Custodian Certification: As defined in Section 2.01.
Cut-off Date: May 1, 2006.
Cut-off Date Pool Principal Balance: $548,033,117.
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.
35
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.
Determination Date: With respect to each Servicer, the "Determination
Date" set forth in the related Purchase and Servicing Agreement.
Discount Mortgage Loan: Any Mortgage Loan or Applicable Fraction
thereof in Collateral Allocation Group 1 or Collateral Allocation Group 4, as
applicable, with a Net Mortgage Rate that is less than the Required Coupon for
that Loan Group. For the avoidance of doubt, there are no Discount Mortgage
Loans in Collateral Allocation Group 2, Collateral Allocation Group 3 or
Collateral Allocation Group 5.
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 June
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 June 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.
36
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 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.
37
Excess Loss: With respect to the Aggregate Group I Mortgage Loans,
the amount of any (i) Fraud Loss on an Aggregate Group I Mortgage Loan
realized after the Fraud Loss Coverage Termination Date, (ii) Special Hazard
Loss on an Aggregate Group I Mortgage Loan realized after the Special Hazard
Coverage Termination Date or (iii) Bankruptcy Loss on an Aggregate Group I
Mortgage Loan realized after the Bankruptcy Coverage Termination Date.
Excess Subordinated Amount: For any Distribution Date and the Group 5
Certificates will equal the excess, if any, of the Overcollateralized Amount
on that Distribution Date over (ii) the Overcollateralization Target Amount
for such Distribution Date.
Extra Principal Distribution Amount: For the Group 5 Certificates and
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.
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.
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.
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.
First Class 4-A-2 Corridor Contract: With respect to the Class 4-A-2
Certificates, the transaction evidenced by the First Class 4-A-2 Confirmation,
a form of which is attached hereto as Exhibit D.
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.
38
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.
Fraud Loan: With respect to the Aggregate Group I Mortgage Loans, a
Liquidated Mortgage Loan as to which a Fraud Loss has occurred, as reported by
the related Servicer to the Master Servicer.
Fraud Loss Coverage Amount: As of the Closing Date, $11,639,038,
subject to reduction from time to time, by the amount of Fraud Losses
allocated to the Aggregate Group I Certificates. In addition, on each
anniversary of the Cut-off Date, the Fraud Loss Coverage Amount for the
Mortgage Loans will be reduced as follows: (a) on the first, second, third and
fourth anniversaries of the Cut-off Date, to an amount equal to the lesser of
(i) 2%, for the first anniversaries, and 1%, for the second, third and fourth
anniversaries, of the then current aggregate Stated Principal Balance of the
Mortgage Loans on such anniversary and (ii) the excess of the Fraud Loss
Coverage Amount as of the preceding anniversary of the Cut-off Date over the
cumulative amount of Fraud Losses allocated to the Certificates since such
preceding anniversary; and (b) on the fifth anniversary of the Cut-off Date,
to zero.
Fraud Loss Coverage Termination Date: The point in time at which the
Fraud Loss Coverage Amount is reduced to zero.
Fraud Losses: Realized Losses on Aggregate Group I Mortgage Loans as
to which a loss is sustained by reason of a default arising from fraud,
dishonesty or misrepresentation in connection with the related Mortgage Loan,
including a loss by reason of the denial of coverage under any related Primary
Mortgage Insurance Policy because of such fraud, dishonesty or
misrepresentation.
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.
Group 1 Certificates: As specified in the Preliminary Statement.
Group 1 Mortgage Loans: The Mortgage Loans in Loan Group 1.
39
Group 1 Senior Certificates: As specified in the Preliminary
Statement.
Group 2 Certificates: As specified in the Preliminary Statement.
Group 2 Mortgage Loans: The Mortgage Loans in Loan Group 2.
Group 2 Senior Certificates: As specified in the Preliminary
Statement.
Group 3 Certificates: As specified in the Preliminary Statement.
Group 3 Mortgage Loans: The Mortgage Loans in Loan Group 3.
Group 3 Senior Certificates: As specified in the Preliminary
Statement.
Group 4 Certificates: As specified in the Preliminary Statement.
Group 4 Mortgage Loans: The Mortgage Loans in Loan Group 4.
Group 4 Priority Amount: For any Distribution Date will equal the sum
of (A) the Senior Percentage for the Group 4 Certificates, (B) the Scheduled
Principal Distribution Amount for Collateral Allocation Group 4, (C) the Group
4 Shift Percentage and (D) the Group 4 Priority Percentage and (ii) the
product of (A) the Senior Prepayment Percentage for the Group 4 Certificates,
(B) the Unscheduled Principal Distribution Amount for Collateral Allocation
Group 4, (C) the Group 4 Shift Percentage and (D) the Group 4 Priority
Percentage.
Group 4 Priority Percentage: For any Distribution Date will equal the
percentage equivalent of a fraction, the numerator of which is the aggregate
Class Principal Balance of the Class 4-A-7 and Class 4-A-8 Certificates
immediately prior to such Distribution Date, and the denominator of which is
the aggregate Class Principal Balance of the Group 4 Senior Certificates
(other than the Class 4-A-P Certificates) immediately prior to such
Distribution Date.
Group 4 Shift Percentage: With respect to any Distribution Date
occurring during the five years beginning on the first Distribution Date, 0%.
Thereafter, the Group 4 Shift Percentage for any Distribution Date occurring
on or after the fifth anniversary of the first Distribution Date will be as
follows: for any Distribution Date in the first year thereafter, 30%; for any
Distribution Date in the second year thereafter, 40%; for any Distribution
Date in the third year thereafter, 60%; for any Distribution Date in the
fourth year thereafter, 80%; for any Distribution Date thereafter, 100%.
Group 4 Senior Certificates: As specified in the Preliminary
Statement.
Group 5 Assets: The Collateral Allocation Group 5 Mortgage Loans, any
related REO Property, any other property related to Collateral Allocation
Group 5 remaining in the Trust Fund.
Group 5 Certificates: As specified in the Preliminary Statement.
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Group 5 Principal Distribution Amount: For the Group 5 Certificates
and 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.
Group 5 Principal Remittance Amount: For the Group 5 Certificates and
any Distribution Date, the sum of
(i) the principal portion of all Scheduled Payments on the Collateral
Allocation Group 5 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 Collateral Allocation Group 5 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 Collateral Allocation Group 5 Mortgage Loans, provided, that
in no event will the Group 5 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 Group 5 Certificates.
Group 5 Priority Amount: For any Distribution Date, the amount equal
to the product of (i) the Group 5 Priority Percentage, (ii) the Group 5 Shift
Percentage and (iii) the portion of the Group 5 Principal Distribution Amount
allocable to the Class 5-A Certificates for that Distribution Date.
Group 5 Priority Percentage: For any Distribution Date will equal the
percentage equivalent of a fraction, the numerator of which is the Class
Principal Balance of the Class 5-A-5 Certificates immediately prior to such
Distribution Date, and the denominator of which is the aggregate Class
Principal Balance of the Class 5-A Certificates immediately prior to that
Distribution Date.
Group 5 Reserve Fund: A Reserve Fund established by the Securities
Administrator on behalf of the Trustee for the benefit of the Holders of the
Group 5 Certificates and the Class OC Certificates. The Group 5 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).
Group 5 Senior Certificates: As specified in the Preliminary
Statement.
Group 5 Shift Percentage: With respect to each Distribution Date, the
percentage set forth below for that Distribution Date:
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Distribution Date Percentage
----------------- ----------
June 2006 --June 2009............... 0%
June 2009 --May 2011................ 45%
June 2011 --May 2012................ 80%
June 2012 --May 2013................ 100%
June 2013 and thereafter............ 300%
Group 5 Subordinated Certificates: As specified in the Preliminary
Statement.
Group 5 Subordinated Interest Distribution Amount: With respect to
any Class of Group 5 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 Collateral Allocation
Group 5 Mortgage Loans to the extent not covered by (x) Compensating Interest
paid by the Master Servicer or the Servicers for the Collateral Allocation
Group 5 Mortgage Loans and (y) Relief Act Interest Shortfalls on the
Collateral Allocation Group 5 Mortgage Loans.
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
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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 Bankruptcy Coverage Amount: $150,000.
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 Aggregate
Group I Mortgage Loans, the first Distribution Date following the date on
which the aggregate Stated Principal Balance of the Aggregate Group I Mortgage
Loans is equal to or less than 1% of the aggregate Stated Principal Balance
thereof as of the Cut-off Date. With respect to the Collateral Allocation
Group 5 Mortgage Loans, the first Distribution Date following the date on
which the aggregate Stated Principal Balance of the Collateral Allocation
Group 5 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.
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 Aggregate
Group I Certificates other than the Group 4 LIBOR Certificates, its
corresponding REMIC 2 REMIC Regular Interest and any Distribution Date, the
calendar month prior to the month of such Distribution Date. With respect to
any Class of Group 4 LIBOR Certificates, its corresponding REMIC 2 REMIC
Regular Interest and any Distribution Date, the one month period commencing on
the 25th day of the month preceding the month in which such Distribution Date
occurs and ending on the 24th day of the month in which such Distribution Date
occurs. With respect to each Class of Group 5 LIBOR Certificates and the June
2006 Distribution Date, the Interest Accrual Period will be the 26-day period
commencing on the Closing Date and ending on the day immediately preceding
that Distribution Date. The Interest Accrual Period for any Distribution Date
thereafter and any Class of Group 5 LIBOR Certificates shall be the one-month
period commencing on the Distribution Date in the month prior to the month in
which that Distribution Date occurs and ending on the day immediately
preceding that Distribution Date. For each other Class of Group 5 Certificates
and Distribution Date, the calendar month immediately prior to the month in
which that Distribution Date occurs. With respect to each Class of Group 5
LIBOR Certificates, interest will be calculated on the basis of a 360-day year
and the actual number of days that
43
elapsed in the related Interest Accrual Period and for each other Class of
Certificates, interest will be calculated on the basis of a 360-day year
consisting of twelve 30-day months.
Interest Carry Forward Amount: With respect to any Class of Group 5
Certificates and 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 Group 5
Certificates and any Distribution Date, the aggregate of the Class 5-A
Interest Distribution Amount and the Group 5 Subordinated Interest
Distribution Amount for that Distribution Date.
Interest Remittance Amount: For the Group 5 Certificates and any
Distribution Date, that portion of the Available Distribution Amount for such
Distribution Date that represents interest received or advanced on the
Collateral Allocation Group 5 Mortgage Loans.
Interest Transfer Amount: For any Distribution Date and for any
Undercollateralized Group of Aggregate Group I Senior Certificates, an amount
equal to one month's interest on the applicable Principal Transfer Amount at
the weighted average Pass-Through Rate of the applicable Undercollateralized
Group, plus any interest accrued on such Undercollateralized Group remaining
unpaid from prior Distribution Dates.
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 bank
collective investment funds), PTCE 95-60 (for transactions by insurance
company general accounts) or PTCE 96-23 (for transactions effected by "in
house asset managers"), or any comparable exemption available under Similar
Law.
Last Scheduled Distribution Date: With respect to the Group 1
Certificates and the Group 2 Certificates, the Distribution Date in June 2021.
With respect to all other Aggregate Group I Certificates, the Distribution
Date in June 2036. With respect to the Group 5 Certificates, the Distribution
Date in June 2036.
Latest Possible Maturity Date: The Distribution Date in June 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.
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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 Group: Any of Loan Group 1, Loan Group 2, Loan Group 3 and Loan
Group 4, as applicable.
Loan Group 1: All Mortgage Loans identified as Group 1 Mortgage Loans
on the Mortgage Loan Schedule.
Loan Group 2: All Mortgage Loans identified as Group 2 Mortgage Loans
on the Mortgage Loan Schedule.
Loan Group 3: All Mortgage Loans identified as Group 3 Mortgage Loans
on the Mortgage Loan Schedule.
Loan Group 4: All Mortgage Loans identified as Group 4 Mortgage Loans
on the Mortgage Loan Schedule.
Loan Group Percentage: As to any Loan Group and any Distribution
Date, the fraction, expressed as a percentage, the numerator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans in that Loan
Group as of the related Due Date, and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans as of that Due
Date.
Loan Group Principal Balance: As to any Distribution Date and Loan
Group, the aggregate Stated Principal Balance of the Mortgage Loans in that
Loan Group outstanding on the Due Date in the month preceding the month of the
Distribution Date (after giving effect to prepayments received in the
Prepayment Period related to such prior Due Date).
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
45
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.
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: The private placement memorandum dated May 31, 2006,
relating to the Private Certificates.
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 of the Group 5 Assets is being held, an amount equal to the sum of
(a) 100% of the current aggregate Stated Principal Balance of the Collateral
Allocation Group 5 Mortgage Loans, plus accrued interest thereon, (b) the fair
market value of any related REO Property in the Trust Fund and all other
property related to Collateral Allocation Group 5 in the Trust Fund being
purchased, (c) any unreimbursed Servicing Advances related to the Collateral
Allocation Group 5 Mortgage Loans and (d) any expenses incurred by the Auction
Administrator in the Auction process.
46
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.
Mortgage Documents: With respect to each Mortgage Loan, the mortgage
documents required to be delivered to the Custodian pursuant to each Custodial
Agreement.
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 Collateral
Allocation Group 5 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) identify the designated Loan Group in which such Mortgage Loan is
included, (iii) identify any LPMI Mortgage Loan and designate the rate at
which the premium for such insurance is calculated, (iv) separately identify
the Additional Collateral Mortgage Loans, (v) identify the Applicable Fraction
and related Collateral Allocation Group or Collateral Allocation Groups for
such Mortgage Loan.
Mortgage Note: The original executed note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage under a Mortgage Loan.
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.
Mortgage Rate: As to any Mortgage Loan, the annual rate of interest
borne by the related Mortgage Notes.
MortgageIT Mortgage Loan: Each Mortgage Loan originated by
MortgageIT, Inc. and listed on the Mortgage Loan Schedule.
47
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.
MSCC Serviced Mortgage Loan: Each Mortgage Loan originated and
serviced by Xxxxxx Xxxxxxx Credit Corp. and listed on the Mortgage Loan
Schedule.
MSCC Purchase Agreement: The Second Amended and Restated Master
Mortgage Loan Purchase Agreement listed in Exhibit E hereto between the Seller
and Xxxxxx Xxxxxxx Credit Corp. (as successor to Xxxxxx Xxxxxxx Xxxx Xxxxxx
Credit Corporation).
MSCC Purchase and Servicing Agreement: Collectively, the MSCC
Purchase Agreement and the MSCC Servicing Agreement.
MSCC Servicing Agreement: The Amended and Restated Master Servicing
Agreement listed in Exhibit E hereto between the Seller and Xxxxxx Xxxxxxx
Credit Corp. (as successor to Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit Corporation).
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.
Net Monthly Excess Cashflow: For the Group 5 Certificates and 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 Class 5-A Interest Distribution Amounts payable to the
holders of the Group 5 Senior Certificates, the Subordinated Interest
Distribution Amounts payable to the holders of the Group 5 Subordinated
Certificates and the Group 5 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 and
Collateral Allocation Group, the amount by which the aggregate of Prepayment
Interest Shortfalls for the Mortgage Loans in such Collateral Allocation Group
exceeds the Compensating Interest Payments for the Mortgage Loans or
Applicable Fractions thereof in such Collateral Allocation Group (and any
amounts paid by the Master Servicer in respect of such shortfalls pursuant to
Section 5.06) and that Distribution Date, in each case, based upon the
Applicable Fractions thereof that are part of such Collateral Allocation
Group.
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Net Swap Payment: Not Applicable.
Net Swap Receipt: Not Applicable.
Net WAC Pass-Through Rate: For the Group 5 Certificates and any
Distribution Date, a per annum rate equal to (i) the Weighted Average Net
Mortgage Rate of the Collateral Allocation Group 5 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 Group 5 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 June 2006
Distribution Date, the number of days in the related Interest Accrual Period
shall be 26.
Non-A-P Formula Principal Amount: As to any Distribution Date and
Collateral Allocation Group in Aggregate Loan Group I, the sum of (i) the sum
of (x) the applicable Non-A-P Percentage of (a) the principal portion of each
Scheduled Payment (without giving effect, prior to the Bankruptcy Coverage
Termination Date, to any reductions thereof caused by any Debt Service
Reductions or Deficient Valuations) due on the Applicable Fraction of each
Mortgage Loan in the related Collateral Allocation Group on the related Due
Date, (b) the Stated Principal Balance of the Applicable Fraction of each
Mortgage Loan in the related Collateral Allocation Group that was repurchased
by the Seller or an Originator or purchased by the Master Servicer pursuant to
this Agreement as of such Distribution Date, (c) the Substitution Adjustment
Amount in connection with any Deleted Mortgage Loan in such Collateral
Allocation Group received with respect to such Distribution Date, (d) any
Insurance Proceeds or Liquidation Proceeds allocable to recoveries of
principal of the Applicable Fraction of Mortgage Loans in the related
Collateral Allocation Group that are not yet Liquidated Mortgage Loans
received during the calendar month preceding the month of such Distribution
Date, (e) with respect to the Applicable Fraction of each Mortgage Loan in the
related Collateral Allocation Group that became a Liquidated Mortgage Loan
during the calendar month preceding the month of such Distribution Date, the
amount of Liquidation Proceeds allocable to principal received with respect to
such Mortgage Loan allocable to that Collateral Allocation Group during the
calendar month preceding the month of such Distribution Date with respect to
such Mortgage Loan and, if such Liquidated Mortgage Loan is an Additional
Collateral Mortgage Loan, the principal portion of the proceeds of any
Additional Collateral allocated to the Collateral Allocation Group, and (f)
the Applicable Fraction of all Principal Prepayments with respect to the
Mortgage Loans in the related Collateral Allocation Group received during the
related Prepayment Period, and (ii) (A) any Subsequent Recoveries for such
Loan Group received during the calendar month preceding the month of such
Distribution Date, or (B) with respect to Subsequent Recoveries attributable
to the Applicable Fraction of a Discount Mortgage Loan in the related
Collateral Allocation Group which incurred (1) an Excess Loss or (2) a
Realized Loss after the Senior Credit Support Depletion Date, the Non-A-P
Percentage of the Applicable Fraction of any Subsequent Recoveries on the
Mortgage Loans related to such Collateral Allocation Group received during the
calendar month preceding the month of such Distribution Date.
Non-A-P Percentage: As to the Applicable Fraction any Discount
Mortgage Loan in Collateral Allocation Group 1 or Collateral Allocation Group
4, a fraction (expressed as a percentage) the numerator of which is the Net
Mortgage Rate of such Discount Mortgage Loan and the denominator of which is
the Required Coupon for such Collateral Allocation Group. As
49
to any Non-Discount Mortgage in Collateral Allocation Group 1 or Collateral
Allocation Group 4 and any Mortgage Loan or Applicable Fraction thereof in
Collateral Allocation Group 2, Collateral Allocation Group 3 or Collateral
Allocation Group 5, 100%.
Non-A-P Pool Balance: With respect to Collateral Allocation Group 1
and Collateral Allocation Group 4 and any Due Date is equal to the excess, if
any, of (x) the Applicable Fraction of the aggregate Stated Principal Balance
of all Mortgage Loans in the related Collateral Allocation Group over (y) the
sum of the product of the A-P Percentage of the Applicable Fraction of the
Stated Principal Balance of each Discount Mortgage Loan in that Collateral
Allocation Group. The Non-A-P Pool Balance for Collateral Allocation Group 2
or Collateral Allocation Group 3, and any Due Date is equal to the Applicable
Fraction of the aggregate Stated Principal Balance of all of the Aggregate
Group I Mortgage Loans in Collateral Allocation Group 2 or Collateral
Allocation Group 3, respectively.
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
Certificate.
Non-Delay Certificates: As specified in the Preliminary Statement.
Non-Discount Mortgage Loan: Any Mortgage Loan in Collateral
Allocation Group 1 or Collateral Allocation Group 4 with an Net Mortgage Rate
that is greater than or equal to the Required Coupon for that Collateral
Allocation Group. For the avoidance of doubt, all of the Mortgage Loans in
Collateral Allocation Group 2, Collateral Allocation Group 3 and Collateral
Allocation Group 5 are Non-Discount Mortgage Loans.
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: With respect to any Distribution Date and the Class
2-A-X Certificates, an amount equal to the product of (i) a fraction, the
numerator of which is the excess of (a) weighted average of the Net Mortgage
Rates for each Mortgage Loan in Loan Group 1 with a Net Mortgage Rate greater
than 6.00% (all of which have been allocated to Collateral Allocation Group 2)
as of the Due Date in the preceding calendar month (after giving effect to
prepayments received in the related Prepayment Period) over (b) 6.00%, and the
denominator of which is 6.00% and (ii) the aggregate of the Stated Principal
Balances of the Non-Discount Mortgage Loans in Collateral Allocation Group 2
as of the Due Date (after giving effect to prepayments received in the related
Prepayment Period).
With respect to any Distribution Date and the Class 4-A-3
Certificates, the aggregate Class Principal Balance of the Class 4-A-1 and
Class 4-A-2 Certificates immediately prior to that Distribution Date.
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With respect to any Distribution Date and the Class 4-A-X
Certificates, an amount equal to the product of (i) a fraction, the numerator
of which is the excess of (a) weighted average of the Net Mortgage Rates for
the Non-Discount Collateral Allocation Group 4 Mortgage Loan as of the Due
Date in the preceding calendar month (after giving effect to prepayments
received in the related Prepayment Period) over (b) 6.00%, and the denominator
of which is 6.00% and (ii) the aggregate of the Stated Principal Balances of
the Non-Discount Collateral Allocation Group 4 Mortgage Loans as of that Due
Date (after giving effect to prepayments received in the related Prepayment
Period).
Notional Amount Certificates: As specified in the Preliminary
Statement.
Offered Certificates: As specified in the Preliminary Statement.
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 or in the case of
any other Person, 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.
Original Applicable Credit Support Percentage: With respect to each
of the following Classes of Aggregate Group I Subordinated Certificates, the
corresponding percentage described below, as of the Closing Date:
The Aggregate Group I Subordinated Original Applicable
Certificates Credit Support Percentage
-------------------------------------- -------------------------
Class B-1............................. 4.75%
Class B-2............................. 2.95%
Class B-3............................. 1.80%
Class B-4............................. 1.10%
Class B-5............................. 0.60%
51
Class B-6............................. 0.25%
Original Subordinate Principal Balance: On or prior to the third
related Senior Termination Date, the Subordinated Percentage for an Aggregate
Group I Loan Group of the aggregate of the Stated Principal Balances of the
Aggregate Group I Mortgage Loans in such Loan Group, in each case as of the
Cut-off Date; or if such date is after the third related Senior Termination
Date, the aggregate of the Class Principal Balances of the Aggregate Group I
Subordinated Certificates as of the Closing Date.
Originator: Any one of American Home Mortgage Corporation, EverBank,
FNBA, Xxxxxx Xxxxxxx Credit Corp., MortgageIT, Inc., Ohio Savings or Wachovia
Mortgage Corporation, as applicable.
Overcollateralization Increase Amount: With respect to the Group 5
Certificates and 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 Group 5 Principal Remittance Amount on such Distribution Date has
been distributed).
Overcollateralization Release Amount: For any Distribution Date and
the Group 5 Certificates, 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 Group 5 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
Collateral Allocation Group 5 Mortgage Loans and any REO Properties related to
the Collateral Allocation Group 5 Mortgage Loans pursuant to 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 Group 5 Certificates on that Distribution Date.
Overcollateralization Target Amount: With respect to the Group 5
Certificates and any Distribution Date (i) prior to the Stepdown Date, the
product of (x) 2.20% and (y) the aggregate Stated Principal Balance of the
Collateral Allocation Group 5 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) 4.40% and (y) the aggregate Stated
Principal Balance of the Mortgage Loans as of the related Due Date and (b) the
product of (x) 2.20% and (y) the aggregate Stated Principal Balance of the
Collateral Allocation Group 5 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 $800,326.
Overcollateralized Amount: With respect to the Group 5 Certificates
as of the Closing Date will be an amount equal to $3,523,176. With respect to
any Distribution Date following the Closing Date, an amount by which the
aggregate Stated Principal Balance of the Collateral Allocation Group 5
Mortgage Loans immediately following the Distribution Date exceeds the
52
aggregate Class Principal Balances of the Group 5 Certificates after taking
into account all payments of principal on such Distribution Date.
Overcollateralized Group: With respect to any Distribution Date and
Aggregate Group I Senior Certificate Group, as defined in Section 5.08 hereof.
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;
(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
53
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 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;
54
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 Serviced Mortgage Loan: Each Mortgage Loan originated and
serviced by Cendant Mortgage Corporation and listed on the Mortgage Loan
Schedule.
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.
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.
Pool Percentage: With respect to either Collateral Allocation Group 5
or the Aggregate Group I Mortgage Loans in the aggregate and any Distribution
Date, the fraction, expressed as a percentage, the numerator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans in Collateral
Allocation Group 5 or the Aggregate Group I Mortgage Loans in the aggregate,
respectively, as of the related Due Date, and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans in the
Mortgage Pool as of that Due Date.
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
55
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.
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 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: For each Collateral Allocation Group in
Aggregate Loan Group I, the sum of the Non-A-P Formula Principal Distribution
Amount and the Non-A-P Percentage of any Realized Losses allocated to such
Collateral Allocation Group.
56
Principal Relocation Payment: A payment from any Collateral
Allocation Group in Aggregate Loan Group I to a Subsidiary REMIC Regular
Interest other than a Regular Interest corresponding to that Collateral
Allocation Group as provided in the Preliminary Statement. Principal
Relocation Payments shall be made of principal allocations comprising the
Non-A-P Formula Principal Distribution Amount from a Collateral Allocation
Group and shall include a proportionate allocation of Realized Losses from the
Mortgage Loans or Applicable Fractions thereof related to such Collateral
Allocation Group.
Principal Transfer Amount: For any Distribution Date and for any
Undercollateralized Group related to Aggregate Loan Group I, the excess, if
any, of the aggregate Class Principal Balance of such Undercollateralized
Group immediately prior to such Distribution Date, over the aggregate Stated
Principal Balance of the related Collateral Allocation Group immediately prior
to such Distribution Date.
Priority Amount: Not applicable.
Priority Percentage: Not applicable.
Private Certificate: As specified in the Preliminary Statement.
Pro Rata Share: As to any Distribution Date, the Aggregate Group I
Subordinated Principal Distribution Amount and any Class of Aggregate Group I
Subordinated Certificates, the portion of the Aggregate Group I Subordinated
Principal Distribution Amount allocable to such Class, equal to the product of
the Aggregate Group I Subordinated Principal Distribution Amount on such
Distribution Date and a fraction, the numerator of which is the related Class
Principal Balance thereof and the denominator of which is the aggregate of the
Class Principal Balances of the Aggregate Group I Subordinated Certificates.
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 May 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
57
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.
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 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.
58
Redemption Price: With respect to any Class of Aggregate Group I
Certificates to be redeemed, an amount equal to 100% of the related Class
Principal Balance of the Certificates to be so redeemed, together with
interest on such amount at the applicable Pass-Through Rate through the
related Accrual Period (as increased by any Class Unpaid Interest Amounts),
and including, in the case of the Redemption Price payable in connection with
the redemption and retirement of all of the Aggregate Group I Certificates,
the payment of 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 and the Servicers pursuant to this Agreement and the
Purchase and Servicing Agreements, or to the Custodian under the Custodial
Agreements (to the extent such amounts are not paid to the Custodian by the
Seller) related to the Aggregate Group I Mortgage Loans. With respect to the
Group 5 Certificates, in the aggregate, and any Distribution Date, the sum of
(a) 100% of the aggregate Stated Principal Balance of the Collateral
Allocation Group 5 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 the Custodial Agreements (to the extent such amounts
are not paid to the Custodian by the Seller) related to the Collateral
Allocation Group 5 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 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 any
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. .
59
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 1A: As specified in the Preliminary Statement.
REMIC 1A Interest: As specified in the Preliminary Statement.
REMIC 1A Regular Interest: As specified in the Preliminary Statement.
REMIC 1B: As specified in the Preliminary Statement.
REMIC 1B Interest: As specified in the Preliminary Statement.
REMIC 1B Regular Interest: As specified in the Preliminary Statement.
REMIC 2: As specified in the Preliminary Statement.
REMIC 2 Interest: As specified in the Preliminary Statement.
REMIC 2 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, substantially in
the form attached to the related Custodial Agreement, (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 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
60
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,
any Custodian, any Servicer, any originator identified in the Prospectus
Supplement, the Corridor Contract Counterparty, 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 any 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: With respect to the Collateral Allocation Group 1
Mortgage Loans, 5.00% per annum, with respect to the Collateral Allocation
Group 2 Mortgage Loans 6.00% per annum, and, with respect to the Collateral
Allocation Group 4 Mortgage Loans, 6.00% per annum.
Required Distributions: Not applicable.
Reserve Fund Deposit: With respect to each Reserve Fund, $1,000.
Reserve Fund: The Group 5 Reserve Fund, Class 4-A-1 Reserve Fund or
the Class 4-A-2 Reserve Fund, as applicable.
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
61
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.
Scheduled Principal Distribution Amount: As to any Distribution Date
and a Collateral Allocation Group in Aggregate Loan Group I, an amount equal
to the Non-A-P Percentage of all amounts described in subclauses (a) through
(d) of clause (i) of the definition of "Non-A-P Formula Principal Amount" for
such Distribution Date and such Collateral Allocation Group; provided,
however, that if a Bankruptcy Loss that is an Excess Loss is sustained with
respect to a
62
Mortgage Loan in the related Loan Group that is not a Liquidated Mortgage
Loan, the Scheduled Principal Distribution Amount for such Collateral
Allocation Group will be reduced on the related Distribution Date by the
applicable Non-A-P Percentage of the principal portion of such Bankruptcy Loss
based on the Applicable Fraction of such Mortgage Loan.
Second Class 4-A-2 Corridor Contract: With respect to the Class 4-A-2
Certificates, the transaction evidenced by the Second Class 4-A-2
Confirmation, a form of which is attached hereto as Exhibit D.
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 Credit Support Depletion Date: With respect to the Aggregate
Group I Senior Certificates, the date on which the Class Principal Balance of
each Class of Aggregate Group I Subordinated Certificates has been reduced to
zero.
Senior Defaulted Swap Termination Payment: Not Applicable.
Senior Enhancement Percentage: For any Distribution Date and the
Group 5 Senior Certificates, the percentage obtained by dividing (x) the sum
of (i) the aggregate Class Principal Balance of the Group 5 Subordinated
Certificates and (ii) the Overcollateralized Amount by (y) the aggregate
Stated Principal Balance of the Collateral Allocation Group 5 Mortgage Loans
as of the end of the related Due Period, calculated after taking into account
distributions of principal on the Collateral Allocation Group 5 Mortgage Loans
and distribution of the Group 5 Principal Distribution Amount to the holders
of the Certificates then entitled to distributions of principal on such
Distribution Date.
63
Senior Percentage: As to any Aggregate Group I Senior Certificate
Group and Distribution Date, the percentage equivalent of a fraction the
numerator of which is the aggregate of the Class Principal Balances of each
Class of Senior Certificates in that Senior Certificate Group (other than the
related Class of Class A-P Certificates and Notional Amount Certificates)
immediately prior to such Distribution Date and the denominator of which is
the aggregate of the applicable Non-A-P Percentage of the Stated Principal
Balance of each Mortgage Loan or the Applicable Fraction thereof in the
related Collateral Allocation Group as of the Due Date occurring in the month
prior to the month of such Distribution Date (after giving effect to
prepayments received in the Prepayment Period related to such prior Due Date);
provided, however, that on any Distribution Date after the third related
Senior Termination Date, the Senior Percentage for the Senior Certificates of
the remaining Senior Certificate Group in Aggregate Certificate Group I is the
percentage equivalent of a fraction, the numerator of which is the aggregate
of the Class Principal Balances of each such Class of Aggregate Group I Senior
Certificates (other than the related Class of Class A-P Certificates and
Notional Amount Certificates) of such remaining Senior Certificate Group
immediately prior to such Distribution Date and the denominator is the
aggregate of the Class Principal Balances of all Classes of Aggregate Group I
Certificates (other than the related Class of Class A-P Certificates and
related Classes of Notional Amount Certificates), immediately prior to such
Distribution Date.
Senior Prepayment Percentage: As to an Aggregate Group I Senior
Certificate Group and any Distribution Date during the five years beginning on
the first Distribution Date, 100%. The Senior Prepayment Percentage for any
Distribution Date occurring on or after the fifth anniversary of the first
Distribution Date will, except as provided herein, be as follows: for any
Distribution Date in the first year thereafter, the related Senior Percentage
plus 70% of the related Subordinated Percentage for such Distribution Date;
for any Distribution Date in the second year thereafter, the related Senior
Percentage plus 60% of the related Subordinated Percentage for such
Distribution Date; for any Distribution Date in the third year thereafter, the
related Senior Percentage plus 40% of the related Subordinated Percentage for
such Distribution Date; for any Distribution Date in the fourth year
thereafter, the related Senior Percentage plus 20% of the related Subordinated
Percentage for such Distribution Date; and for any Distribution Date
thereafter, the related Senior Percentage for such Distribution Date (unless
on any Distribution Date the Senior Percentage exceeds the initial Senior
Percentage of such Senior Certificate Group, in which case the Senior
Prepayment Percentage for such Distribution Date will once again equal 100%).
Notwithstanding the foregoing, no decrease in any Senior Prepayment Percentage
will occur unless both of the Senior Step Down Conditions are satisfied with
respect to all Aggregate Group I Collateral Allocation Groups.
Senior Principal Distribution Amount: As to any Distribution Date and
Aggregate Group I Senior Certificate Group, the sum of (i) the sum, not less
than zero, of the related Senior Percentage of the applicable Non-A-P
Percentage of all amounts described in subclauses (a) through (d) of clause
(i) of the definition of Non-A-P Formula Principal Amount with respect to the
related Collateral Allocation Group for such Distribution Date, (ii) with
respect to any Mortgage Loan in the related Loan Group that became a
Liquidated Mortgage Loan during the calendar month preceding the month of such
Distribution Date, the lesser of (x) the related Senior Percentage of the
applicable Non-A-P Percentage of the Stated Principal Balance of the
Applicable Fraction of such Mortgage Loan and (y) either (A) the related
Senior Prepayment Percentage of the applicable Non-A-P Percentage of the
amount of the Liquidation Proceeds
64
allocable to principal received on the Applicable Fraction of the Mortgage
Loan, or (B) if an Excess Loss was sustained with respect to such Liquidated
Mortgage Loan during such prior calendar month, the related Senior Percentage,
of the applicable Non-A-P Percentage of the amount of the Liquidation Proceeds
allocable to principal received with respect to the Applicable Fraction of
such Mortgage Loan, and (iii) the sum of (x) the related Senior Prepayment
Percentage of the applicable Non-A-P Percentage of the amounts described in
subclause (f) of clause (i) of the definition of Non-A-P Formula Principal
Amount with respect to the related Collateral Allocation Group for such
Distribution Date plus (y) the related Senior Prepayment Percentage of any
Subsequent Recoveries described in clause (ii) of the definition of Non-A-P
Formula Principal Amount for such Distribution Date; provided, however, that
if a Bankruptcy Loss that is an Excess Loss is sustained on a Mortgage Loan or
the Applicable Fraction thereof in the related Collateral Allocation Group
that is not a Liquidated Mortgage Loan, the Senior Principal Distribution
Amount will be reduced on the related Distribution Date by the related Senior
Percentage of the applicable Non-A-P Percentage of the principal portion of
such Bankruptcy Loss; provided further, however, on any Distribution Date
after the third related Senior Termination Date, the Senior Principal
Distribution Amount for the remaining Senior Certificate Group will be
calculated pursuant to the above formula based on all the Mortgage Loans in
Aggregate Loan Group I, as opposed to the Mortgage Loans or Applicable
Fractions thereof in the related Collateral Allocation Group and, if such
Distribution Date is after the third related Senior Termination Date, shall be
reduced by the amount of the principal distribution made pursuant to (a) if
the Group 1 Senior Certificates are reduced to zero on such date, Section
5.02(a)(1)(iv)(y), (b) if the Group 2 Senior Certificates are reduced to zero
on such date, Section 5.02(a)(2)(iv)(y), (c) if the Group 3 Senior
Certificates are reduced to zero on such date, Section 5.02(a)(3)(iv)(y) or
(d) if the Group 4 Senior Certificates are reduced to zero on such date,
Section 5.02(a)(4)(iv)(y).
Senior Step Down Conditions: With respect to all Aggregate Group I
Mortgage Loans and any Distribution Date: (i) the outstanding principal
balance of all Mortgage Loans delinquent 60 days or more on such Distribution
Date (including any Mortgage Loans in foreclosure, REO Property and Mortgage
Loans the mortgagors of which are in bankruptcy) (averaged over the preceding
six month period), as a percentage of (a) if such date is on or prior to the
third related Senior Termination Date, the Subordinated Percentage for such
Collateral Allocation Group of the aggregate of the applicable Non-A-P
Percentage of the aggregate Stated Principal Balance of the Aggregate Group I
Mortgage Loans or Applicable Fractions thereof in that Collateral Allocation
Group, or (b) if such date is after the third related Senior Termination Date,
the aggregate Class Principal Balance of the Aggregate Group I Subordinated
Certificates, does not equal or exceed 50%, and (ii) cumulative Realized
Losses on the Aggregate Group I Mortgage Loans in each Loan Group as of such
Distribution Date do not exceed: (a) for the Distribution Date on the fifth
anniversary of the first Distribution Date, 30% of the Original Subordinate
Principal Balance, (b) for the Distribution Date on the sixth anniversary of
the first Distribution Date, 35% of the Original Subordinate Principal
Balance, (c) for the Distribution Date on the seventh anniversary of the first
Distribution Date, 40% of the Original Subordinate Principal Balance, (d) for
the Distribution Date on the eighth anniversary of the first Distribution
Date, 45% of the Original Subordinate Principal Balance, and (e) for the
Distribution Date on the ninth anniversary of the first Distribution Date, 50%
of the Original Subordinate Principal Balance.
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Senior Termination Date: For Senior Certificate Group 1, the
Distribution Date on which the aggregate Class Principal Balance of the Group
1 Senior Certificates (other than the Class 1-A-P Certificates) has been
reduced to zero. For Senior Certificate Group 2, the Distribution Date on
which the aggregate Class Principal Balance of the Group 2 Senior Certificates
has been reduced to zero. For Senior Certificate Group 3, the Distribution
Date on which the aggregate Class Principal Balance of the Group 3 Senior
Certificates has been reduced to zero. For Senior Certificate Group 4, the
Distribution Date on which the aggregate Class Principal Balance of the Group
4 Senior Certificates (other than the Class 4-A-P Certificates) has been
reduced to zero.
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., Xxxxxx Xxxxxxx Credit Corp., Cendant Mortgage Corporation,
Wachovia 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 any 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: Not applicable.
Similar Law: As defined in Section 3.03(d) hereof.
Special Hazard Coverage Termination Date: The point in time at which
the related Special Hazard Loss Coverage Amount is reduced to zero.
Special Hazard Loss: With respect to the Aggregate Group I Mortgage
Loans, any Realized Loss suffered by a Mortgaged Property on account of direct
physical loss, as reported by the related Servicer to the Master Servicer, but
not including (i) any loss of a type covered by
66
a hazard insurance policy or a flood insurance policy required to be
maintained with respect to such Mortgaged Property to the extent of the amount
of such loss covered thereby, or (ii) any loss caused by or resulting from:
(a) normal wear and tear;
(b) fraud, conversion or other dishonest act on the part of
the Trustee, the Master Servicer or any of their agents or employees
(without regard to any portion of the loss not covered by any errors
and omissions policy);
(c) errors in design, faulty workmanship or faulty
materials, unless the collapse of the property or a part thereof
ensues and then only for the ensuing loss;
(d) nuclear or chemical reaction or nuclear radiation or
radioactive or chemical contamination, all whether controlled or
uncontrolled, and whether such loss be direct or indirect, proximate
or remote or be in whole or in part caused by, contributed to or
aggravated by a peril covered by the definition of the term "Special
Hazard Loss;"
(e) hostile or warlike action in time of peace and war,
including action in hindering, combating or defending against an
actual, impending or expected attack:
1. by any government or sovereign power, de jure or
de facto, or by any authority maintaining or using military,
naval or air forces; or
2. by military, naval or air forces; or
3. by an agent of any such government, power,
authority or forces;
(f) any weapon of war employing nuclear fission, fusion or
other radioactive force, whether in time of peace or war; or
(g) insurrection, rebellion, revolution, civil war, usurped
power or action taken by governmental authority in hindering,
combating or defending against such an occurrence, seizure or
destruction under quarantine or customs regulations, confiscation by
order of any government or public authority or risks of contraband or
illegal transportation or trade.
Special Hazard Loss Coverage Amount: With respect to the Aggregate
Group I Certificates and the first Distribution Date, $4,581,979. With respect
to any Distribution Date after the first Distribution Date, the lesser of (a)
the greatest of (i) 1% of the aggregate of the principal balances of the
Aggregate Group I Mortgage Loans, (ii) twice the principal balance of the
largest Aggregate Group I Mortgage Loan in the Trust Fund and (iii) the
aggregate of the principal balances of all Aggregate Group I Mortgage Loans
secured by Mortgaged Properties located in the single California postal zip
code area having the highest aggregate principal balance of any such zip code
area and (b) the related Special Hazard Loss Coverage Amount as of the Closing
Date less the amount, if any, of Special Hazard Losses allocated to the
Certificates since the Closing Date. All principal balances for the purpose of
this definition will be calculated as of the first day of the calendar month
preceding the month of such Distribution
67
Date after giving effect to Scheduled Payments on the Aggregate Group I
Mortgage Loans then due, whether or not paid.
Special Hazard Mortgage Loan: With respect to the Aggregate Group I
Mortgage Loans, a Liquidated Mortgage Loan as to which a Special Hazard Loss
has occurred.
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 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: With respect to the Group 5 Certificates will be the
later to occur of:
(1) the earlier to occur of
(x) the Distribution Date in June 2009, and
(y) the Distribution Date on which the aggregate Class
Principal Balance of the Class 5-A Certificates is reduced to zero;
and
(2) the first Distribution Date on which the Class 5-A Credit
Enhancement Percentage (calculated for this purpose only after taking into
account distributions of principal on the Collateral Allocation Group 5
Mortgage Loans, but prior to any distribution of the Group 5 Principal
Distribution Amount to the holders of the Group 5 Certificates on the
Distribution Date) is greater than or equal to 17.10%.
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 any Custodian, as the case
may be.
Subordinated Certificates: As specified in the Preliminary Statement.
Subordinated Percentage: As to any Distribution Date on or prior to
the third related Senior Termination Date and any Aggregate Group I Collateral
Allocation Group, 100% minus the Senior Percentage for the Senior Certificate
Group relating to such Collateral Allocation Group for such Distribution Date.
As to any Distribution Date after the third related Senior Termination Date,
100% minus the Senior Percentage for such Distribution Date.
Subordinated Prepayment Percentage: As to any Distribution Date and
Aggregate Group I Loan Group, 100% minus the related Senior Prepayment
Percentage for such Distribution Date.
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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).
Substitution Event: Not Applicable.
Supplemental Interest Trust: The corpus of a trust created pursuant
to Section 5.10 hereof, consisting of the First Class 4-A-2 Corridor Contract,
the Second Class 4-A-2 Corridor Contract and amounts on deposit in the Class
4-A-2 Reserve Fund.
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.
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Three Month Rolling Average: With respect to the Collateral
Allocation Group 5 Mortgage Loans and 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 Collateral Allocation Group 5
Mortgage Loans that are 60 or more days Delinquent (including Mortgage Loans
in foreclosure, REO Property or discharged in bankruptcy).
Transaction Documents: This Agreement, each Assignment, Assumption
and Recognition Agreement, each Corridor Contract, each Custodial Agreement
and any other document or agreement entered into in connection with the Trust
Fund, the Certificates or the Mortgage Loans.
Trigger Event: With respect to any Distribution Date and the Group 5
Certificates, a Trigger Event is in effect if (x) the Three Month Rolling
Average with respect to the Collateral Allocation Group 5 Mortgage Loans
exceeds 40.00% of the Senior Enhancement Percentage for the prior Distribution
Date, or (y) the aggregate amount of Realized Losses on the Collateral
Allocation Group 5 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 Collateral Allocation Group 5 Mortgage Loans as of
the Cut-off exceeds the applicable percentages set forth below with respect to
such Distribution Date:
Distribution Date Percentage
----------------- ----------
June 2008 --June 2009............................. 0.35% for the first month, plus an additional 1/12th of 0.60%
for each month thereafter
June 2009 --May 2010.............................. 0.95% for the first month, plus an additional 1/12th of 0.70%
for each month thereafter
June 2010 --May 2011.............................. 1.65% for the first month, plus an additional 1/12th of 0.60%
for each month thereafter
June 2011 --May 2012.............................. 2.25% for the first month, plus an additional 1/12th of 0.25%
for each month thereafter
June 2012 and thereafter......................... 2.50%
Trust: Xxxxxx Xxxxxxx Mortgage Loan Trust 2006-7.
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 and under the Custodial Agreements; (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 Class 4-A-1
Corridor Contract and the amounts on deposit in the Class 4-A-1 Reserve Fund
and the Group 5 Reserve Fund; and
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(viii) all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing. The First Class 4-A-2 Corridor Contract, Second Class 4-A-2
Corridor Contract and the amounts on deposit in the Class 4-A-2 Reserve Fund
are assets of the Supplemental Interest Trust.
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.
UCC: The Uniform Commercial Code as enacted in the relevant
jurisdiction.
Undercollateralization Distribution: With respect to any Distribution
Date and Aggregate Group I Senior Certificate Group, as defined in Section
5.08 hereof.
Undercollateralized Group: With respect to any Distribution Date and
Aggregate Group I Senior Certificate Group, as defined in Section 5.08 hereof.
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 April 26,
2006, among the Seller, the Depositor and the Underwriter.
Uniform Commercial Code: The Uniform Commercial Code as in effect in
any applicable jurisdiction from time to time.
Unpaid Interest Shortfall Amount: For any Class of Group 5
Certificates, the sum of Relief Act Interest Shortfalls and net prepayment
interest shortfalls on the Collateral Allocation Group 5 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: For any Class of Group 5 Certificates,
the portion of any Realized Losses previously allocated to that Class
remaining unpaid from prior Distribution Dates.
Unscheduled Principal Distribution Amount: As to any Distribution
Date and a Collateral Allocation Group in Aggregate Loan Group I, an amount
equal to the sum of (1) with respect to each Mortgage Loan in the related Loan
Group that became a Liquidated Mortgage Loan during the calendar month
preceding the month of such Distribution Date, the Non-A-P Percentage of the
Liquidation Proceeds allocable to principal received with respect to such
Mortgage Loan based on the Applicable Fraction thereof, (2) the applicable
Non-A-P Percentage of the amount described in subclause (f) of clause (i) of
the definition of Non-A-P Formula Principal Amount
71
for such Collateral Allocation Group and Distribution Date and (3) the amount
described in clause (ii) of the definition of Non-A-P Formula Principal Amount
for such Collateral Allocation Group and that Distribution Date.
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.
Wachovia Serviced Mortgage Loan: Each Mortgage Loan originated by
Wachovia Mortgage Corporation and serviced by Wachovia Mortgage Corporation
and listed on the Mortgage Loan Schedule.
Wachovia Purchase Agreement: The Seller's Purchase, Warranties and
Servicing Agreement listed in Exhibit E hereto between the Seller and Wachovia
Mortgage Corporation.
Weighted Average Net Mortgage Rate: As to any Distribution Date and
Collateral Allocation Group, the average of the Net Mortgage Rate of the
Applicable Fraction of each Mortgage Loan in that Collateral Allocation Group,
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.
Yield Supplement Amount: With respect to the Class 4-A-1 Certificates
and any Distribution Date on or prior to the Corridor Contract Termination
Date, on which LIBOR exceeds 5.25%, an amount equal to interest for the
related Interest Accrual Period on the Class Principal Balance of the Class
4-A-1 Certificates immediately prior to such Distribution Date at a rate equal
to the excess of (i) the lesser of LIBOR and 8.75% over (ii) 5.25%. With
respect to the Class 4-A-2 Certificates, the First Class 4-A-2 Corridor
Contract and any Distribution Date on or prior to the First Class 4-A-2
Corridor Contract Termination Date, on which LIBOR exceeds 5.25%, an amount
equal to interest for the related Interest Accrual Period on the Class
Principal Balance of the Class 4-A-1 Certificates immediately prior to such
Distribution Date at a rate equal to the excess of (i) the lesser of LIBOR and
5.60% over (ii) 5.25%. With respect to the Class 4-A-2 Certificates, the
Second Class 4-A-2 Corridor Contract and any Distribution Date on or prior to
the Second Class 4-A-2 Corridor Contract Termination Date, on which LIBOR
exceeds 5.60%, an amount equal to interest for the related Interest Accrual
Period on the Class Principal Balance of the Class 4-A-1 Certificates
immediately prior to such Distribution Date at a rate equal to the excess of
(i) the lesser of LIBOR and 8.75% over (ii) 5.60%.
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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) $2,000 (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-1 and Class P-2 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 with respect to each Mortgage Loan (each, a "Trustee Mortgage File") so
transferred and assigned:
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(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 2006-7,
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 2006-7, 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:
(a) the original of any security agreement or similar
document executed in connection with the
Cooperative Loan;
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(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 under
the related Custodial Agreement.
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.
(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 applicable Custodian the
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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 applicable Custodian on behalf of the Trustee and is not so
delivered, the Depositor will provide a copy of such title insurance policy to
the applicable 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 applicable 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 applicable 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 each of the Custodians that each 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, any 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 and in the Custodial Agreements 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 and in
the applicable Custodial Agreements.
With respect to the MSMCI Mortgage Loans only, not later than 180
days after the Closing Date, the Trustee shall enforce the related Custodian's
obligation, to the extent required by the related Custodial Agreement, 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
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Custodial Certification"), with any applicable exceptions noted thereon. To
the extent that a Custodian must deliver a Final Certification under the
related Custodial Agreement, the Trustee shall enforce that 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,
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threatened or likely to be asserted against or affecting the
Depositor, before or by any court, administrative agency, arbitrator
or governmental body (A) with 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
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(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.
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.
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 Mortgage Loan have been made as of the Closing Date, such FNBN
Mortgage Loan is not
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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 Wachovia Serviced Mortgage Loans the Seller
hereby makes the representations and warranties contained in Section 3.02 of
the Wachovia Purchase Agreement (other than the representation contained in
Section 3.02(d) of the Wachovia Purchase Agreement) to and for the benefit of
the Depositor, the Trustee and the Trust Fund. With respect to the Wachovia
Serviced 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 Wachovia Serviced Mortgage Loan
have been made as of the Closing Date, such Wachovia Serviced 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 Wachovia
Serviced 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 Wachovia Serviced
Mortgage Loan; as to each Wachovia Serviced 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 5.6c Glossary Revised, Appendix E which is attached
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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 as required under the related Custodial Agreements, 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. The Purchase
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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
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.
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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,
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
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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.
ARTICLE III
THE CERTIFICATES
Section 3.01. The Certificates.
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(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, X-0, X-0, X-0, Class P-1, Class P-2 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; 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.
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(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, 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
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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.
During the period the Supplemental Interest Trust is in effect, no
transfer of a Class 4-A-2 Certificate shall be made unless the Securities
Administrator shall have received either (i) a representation from the
transferee of such Certificate acceptable to and in form and substance
satisfactory to the Securities Administrator to the effect that such
transferee is not a Plan, or (ii) a representation that the purchase and
holding of the Certificate satisfy the requirements for exemptive relief under
an Investor Based Exemption or a similar exemption, or in the case of a Plan
subject to Similar Law, will not constitute a non-exempt violation of such
Similar Law. In the event such a representation letter is not delivered, one
of the foregoing representations, as appropriate, shall be deemed to have been
made by the transferee's (including an initial acquirer's) acceptance of the
Certificate. In the event that such representation is violated, such transfer
or acquisition shall be void and of no effect.
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
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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 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.
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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 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
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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 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
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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.
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
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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.
(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
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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.
(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 2006-7, 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 Funds, 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 Funds 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 Custodians, 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, any Purchase and
Servicing Agreement or any Custodial Agreements.
(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
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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 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.
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(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:
(i) to pay all costs and expenses described in clause (d) of
the definition of "Available Funds" and 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;
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(d) the amount of any unpaid Class Interest Shortfall remaining
unpaid, and the related accrued interest thereon, with respect to each Class
of Certificates, and with respect to the Class 4-A-1 and Class 4-A-2
Certificates, the amount paid under any related Corridor Contract;
(e) the Class Principal Balance or Notional Amount 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 in
each Loan Group and in the Trust Fund and the Collateral Allocation Group
Principal Balance at the end of the related Prepayment Period, and the
applicable Weighted Average Net Mortgage Rate of each Loan Group and the
Mortgage Pool and the Applicable Fraction of each Mortgage Loan in each
Collateral Allocation Group at the beginning of the related Due Period and the
weighted average remaining term to maturity of each Loan Group, the Mortgage
Pool and each Collateral Allocation Group;
(g) the Senior Percentage and the Subordinated Percentage for each
Collateral Allocation Group and for the Aggregate Loan Group I and Collateral
Allocation Group 5 for the following Distribution Date;
(h) the Senior Prepayment Percentage and Subordinate Prepayment
Percentage for each Collateral Allocation Group in Aggregate Loan Group I for
the following Distribution Date;
(i) in the aggregate and with respect to each Loan Group and each
Collateral Allocation Group, the amount of the Servicing Fee paid to or
retained by the Master Servicer and by each Servicer, respectively, and in the
aggregate with respect to each Loan Group;
(j) in the aggregate and with respect to each Loan Group and
Collateral Allocation Group, the amount of Monthly Advances for the related
Due Period;
(k) in the aggregate and with respect to each Loan Group and
Collateral Allocation Group (based upon the Applicable Fractions of the
Mortgage Loans), determined by use of the MBA Method, the number and Stated
Principal Balance of the Mortgage Loans that were (A) Delinquent (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) in the aggregate and with respect to each Loan Group and
Collateral Allocation Group (based upon the Applicable Fractions of the
Mortgage Loans), the total number, principal balance and market value (if
available) of any REO Properties as of the close of business on the last day
of the preceding Due Period;
(m) in the aggregate and with respect to each Loan Group and
Collateral Allocation Group (based upon the Applicable Fractions of the
Mortgage Loans), the amount of Realized Losses incurred during the preceding
calendar month;
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(n) in the aggregate and with respect to each Loan Group and
Collateral Allocation Group (based upon the Applicable Fractions of the
Mortgage Loans), the cumulative amount of Realized Losses incurred since the
Closing Date;
(o) the Realized Losses, if any, allocated to each Class of
Certificates on that Distribution Date;
(p) the Class Principal Balance or Notional Amount of each Class of
Certificates after giving effect to the distribution of principal on the
Distribution Date;
(q) with respect to the Aggregate Group I Certificates, the Special
Hazard Loss Coverage Amount, the Fraud Loss Coverage Amount and the Bankruptcy
Loss Coverage Amount, in each case as of the related Determination Date;
(r) the Pass-Through Rate for each Class of Certificates for that
Distribution Date;
(s) with respect to the Aggregate Group I Certificates, the amount of
any Transfer Payment Received paid to an Undercollateralized Group or Transfer
Payment Made by an Overcollateralized Group pursuant to Section 5.08 hereof;
(t) the amount received by the Securities Administrator pursuant to
the Corridor Contract Counterparty from the Corridor Contracts with respect to
that Distribution Date;
(u) the total amount of Prepayment Penalties collected and due to the
Trust Fund, as reported by the Servicers;
(v) the applicable Record Date(s) for such Distribution Date;
(w) with respect to the Group 5 Certificates, 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 not otherwise distributable to the Class OC Certificates;
(x) with respect to the Group 5 Certificates, 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, including any Basis Risk Carry Forward Amount
not covered by amounts otherwise distributable to the Class OC Certificates;
(y) with respect to the Group 5 Certificates, 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);
(z) with respect to the Group 5 Certificates, 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;
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(aa) with respect to the Group 5 Certificates, the amount distributed
on the Class OC Certificates;
(bb) with respect to the Group 5 Certificates, the Overcollateralized
Amount and the Overcollateralization Target Amount; and
(cc) with respect to the Group 5 Certificates, 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.
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
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Certificates or Residual 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) With respect to the Available Funds for Collateral Allocation
Group 1 on each Distribution Date, the Securities Administrator shall withdraw
such Available Funds from the funds available therefor in the Distribution
Account and apply such funds to distributions on the specified Classes of
Group 1 Senior Certificates in the following order and priority and, in each
case, to the extent of such Available Funds remaining:
(i) [Reserved];
(ii) concurrently, to each interest-bearing Class of Group 1
Senior Certificates, an amount allocable to interest equal to the
related Class Optimal Interest Distribution Amount, any shortfall
being allocated among such Classes in proportion to the amount of the
Class Optimal Interest Distribution Amount that would have been
distributed in the absence of such shortfall; provided that prior to
an Accrual Termination Date, the related Accrual Amount shall be
distributed as provided in Section 5.02(a)(1)(iii);
(iii) [Reserved];
(iv) to each Class of Group 1 Senior Certificates,
concurrently as follows:
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(x) to the Class 1-A-P Certificates, an amount
allocable to the related A-P Formula Principal Amount, up to
the outstanding Class Principal Balance thereof; and
(y) on each Distribution Date prior to the Senior
Credit Support Depletion Date the related Non-A-P Formula
Principal Amount up to the amount of the Senior Principal
Distribution Amount for Collateral Allocation Group 1 for
such Distribution Date, will be distributed, sequentially,
to the following Classes of Certificates in the following
order of priority:
1. to the Class A-R Certificates until its Class
Principal Balance is reduced to zero; and
2. to the Class 1-A Certificates, until its Class
Principal Balance is reduced to zero; and
(v) to the Class 1-A-P Certificates, in an amount up to the
related Class A-P Deferred Amount, from amounts otherwise
distributable (without regard to this Section 5.02(a)(1)(v))
sequentially, to the Class B-6, Class B-5, Class B-4, Class B-3,
Class B-2, and Class B-1 Certificates, in that order, pursuant to
Section 5.02(a)(6) hereof.
(2) With respect to Available Funds for Collateral
Allocation Group 2, on each Distribution Date, the Securities Administrator
shall withdraw the Available Funds from the funds available therefor in the
Distribution Account and apply such funds to distributions on the specified
Classes of Group 2 Certificates in the following order and priority and, in
each case, to the extent of Available Funds remaining:
(i) [Reserved];
(ii) concurrently, to each interest-bearing Class of Group 2
Senior Certificates, an amount allocable to interest equal to the
related Class Optimal Interest Distribution Amount, any shortfall
being allocated among such Classes in proportion to the amount of the
Class Optimal Interest Distribution Amount that would have been
distributed in the absence of such shortfall; provided that prior to
an Accrual Termination Date, the related Accrual Amount shall be
distributed as provided in Section 5.02(a)(2)(iii);
(iii) [Reserved]; and
(iv) to each Class of Group 2 Senior Certificates,
concurrently as follows:
(x) [Reserved]; and
(y) on each Distribution Date prior to the Senior
Credit Support Depletion Date the related Non-A-P Formula
Principal Amount up to the amount of the Senior Principal
Distribution Amount for Collateral Allocation Group 2 for
such Distribution Date, will be distributed, to the Class
2-A Certificates until its Class Principal Balance is
reduced to zero; and
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(v) [Reserved];
(3) With respect to Available Funds for Collateral
Allocation Group 3, on each Distribution Date, the Securities Administrator
shall withdraw the Available Funds from the funds available therefor in the
Distribution Account and apply such funds to distributions on the specified
Classes of Group 3 Certificates in the following order and priority and, in
each case, to the extent of Available Funds remaining:
(vi) [Reserved];
(vii) concurrently, to each interest-bearing Class of Group
3 Senior Certificates, an amount allocable to interest equal to the
related Class Optimal Interest Distribution Amount, any shortfall
being allocated among such Classes in proportion to the amount of the
Class Optimal Interest Distribution Amount that would have been
distributed in the absence of such shortfall; provided that prior to
an Accrual Termination Date, the related Accrual Amount shall be
distributed as provided in Section 5.02(a)(3)(iii);
(viii) [Reserved];
(ix) to each Class of Group 3 Senior Certificates,
concurrently as follows:
(x) [Reserved]; and
(y) on each Distribution Date prior to the Senior
Credit Support Depletion Date the related Non-A-P Formula
Principal Amount up to the amount of the Senior Principal
Distribution Amount for Collateral Allocation Group 3 for
such Distribution Date, will be distributed to the Class 3-A
Certificates until its Class Principal Balance is reduced to
zero; and
(x) [Reserved].
(4) With respect to Available Funds for Collateral
Allocation Group 4, on each Distribution Date, the Securities Administrator
shall withdraw the Available Funds from the funds available therefor in the
Distribution Account and apply such funds to distributions on the specified
Classes of Group 4 Certificates in the following order and priority and, in
each case, to the extent of Available Funds remaining:
(xi) [Reserved];
(xii) concurrently, to each interest-bearing Class of Group
4 Senior Certificates, an amount allocable to interest equal to the
related Class Optimal Interest Distribution Amount, any shortfall
being allocated among such Classes in proportion to the amount of the
Class Optimal Interest Distribution Amount that would have been
distributed in the absence of such shortfall; provided that prior to
an Accrual Termination Date, the related Accrual Amount shall be
distributed as provided in Section 5.02(a)(4)(iii);
(xiii) [Reserved];
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(xiv) to each Class of Group 4 Senior Certificates,
concurrently as follows:
(x) to the Class 4-A-P Certificates, an amount
allocable to the related A-P Formula Principal Amount, up to
the outstanding Class Principal Balance thereof; and
(y) on each Distribution Date prior to the Senior
Credit Support Depletion Date the related Non-A-P Formula
Principal Amount up to the amount of the Senior Principal
Distribution Amount for Collateral Allocation Group 4 for
such Distribution Date, will be distributed to the Group 4
Senior in the following order of priority:
1. the lesser of (a) 90% of the
portion of the Senior Principal Distribution Amount
for Collateral Allocation Group 4 and (b) the Group
4 Priority Amount, concurrently, to the Class 4-A-7
and Class 4-A-8 Certificates, pro rata, until their
respective Class Principal Balances are reduced to
zero;
2. in an amount up to $50,688 on
each Distribution Date, concurrently, to the Class
4-A-1 and Class 4-A-2 Certificates, pro rata, until
their respective Class Principal Balances are
reduced to zero;
3. in an amount up to $405,506 on
each Distribution Date, sequentially, to the Class
4-A-4 and Class 4-A-5 Certificates, in that order,
until their respective Class Principal Balances are
reduced to zero;
4. concurrently, to the Class
4-A-1 and Class 4-A-2 Certificates, pro rata, until
their respective Class Principal Balances are
reduced to zero;
5. sequentially, to the Class
4-A-4, Class 4-A-5 and Class 4-A-6 Certificates, in
that order, until their respective Class Principal
Balances are reduced to zero; and
6. concurrently, to the Class
4-A-7 and Class 4-A-8 Certificates, pro rata,
without regard to the Group 4 Priority Amount,
until their respective Class Principal Balances are
reduced to zero; and
(xv) to the Class 4-A-P Certificates, in an amount up to the
related Class A-P Deferred Amount, from amounts otherwise
distributable (without regard to this Section 5.02(a)(4)(v))
sequentially, to the Class B-6, Class B-5, Class B-4, Class B-3,
Class B-2, and Class B-1 Certificates, in that order, pursuant to
Section 5.02(a)(6) hereof.
(5) On each Distribution Date, after making the distributions described in
Section 5.02(a)(1), Section 5.02(a)(2), Section 5.02(a)(3) and Section
5.02(a)(4) above, Available Funds from each Collateral Allocation Group in
Aggregate Loan Group I after making the distributions described in Section
5.02(a)(1), Section 5.02(a)(2), Section 5.02(a)(3) and Section 5.02(a)(4) will
be
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distributed to the Aggregate Group I Senior Certificates to the extent
provided in Section 5.08 hereof.
(6) On each Distribution Date, Available Funds from all of the Aggregate Group
I Loan Groups remaining after making the distributions described in Section
5.02(a)(1), Section 5.02(a)(2), Section 5.02(a)(3), Section 5.02(a)(4) and
Section 5.02(a)(5) above, will be distributed to the Aggregate Group I
Subordinated Certificates, the Class P-1 Certificates and the Class A-R
Certificates in the following order and priority and, in each case, to the
extent of such funds remaining:
(A) to the Class B-1 Certificates, an amount
allocable to interest equal to the Class Optimal Interest
Distribution Amount for such Class for such Distribution
Date;
(B) to the Class B-1 Certificates, an amount
allocable to principal equal to its Pro Rata Share for such
Distribution Date until the Class Principal Balance thereof
is reduced to zero;
(C) to the Class B-2 Certificates, an amount
allocable to interest equal to the Class Optimal Interest
Distribution Amount for such Class for such Distribution
Date;
(D) to the Class B-2 Certificates, an amount
allocable to principal equal to its Pro Rata Share for such
Distribution Date until the Class Principal Balance thereof
is reduced to zero;
(E) to the Class B-3 Certificates, an amount
allocable to interest equal to the amount of the Class
Optimal Interest Distribution Amount for such Class for such
Distribution Date;
(F) to the Class B-3 Certificates, an amount
allocable to principal equal to its Pro Rata Share for such
Distribution Date until the Class Principal Balance thereof
is reduced to zero;
(G) to the Class B-4 Certificates, an amount
allocable to interest equal to the amount of the Class
Optimal Interest Distribution Amount for such Class for such
Distribution Date;
(H) to the Class B-4 Certificates, an amount
allocable to principal equal to its Pro Rata Share for such
Distribution Date until the Class Principal Balance thereof
is reduced to zero;
(I) to the Class B-5 Certificates, an amount
allocable to interest equal to the Class Optimal Interest
Distribution Amount for such Class for such Distribution
Date;
(J) to the Class B-5 Certificates, an amount
allocable to principal equal to its Pro Rata Share for such
Distribution Date until the Class Principal Balance thereof
is reduced to zero;
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(K) to the Class B-6 Certificates, an amount
allocable to interest equal to the Class Optimal Interest
Distribution Amount for such Class for such Distribution
Date; and
(L) to the Class B-6 Certificates, an amount
allocable to principal equal to its Pro Rata Share for such
Distribution Date until the Class Principal Balance thereof
is reduced to zero;
(M) [Reserved]; and
(N) to the Class A-R Certificates, any remaining
funds in the Trust Fund; provided, that such amounts shall
not include the $1,000 held in trust for the Class P-1 or
Class P-2 Certificates.
On each Distribution Date, all amounts representing Prepayment
Penalties on the Aggregate Group I Mortgage Loans received by the Securities
Administrator with respect to the related Prepayment Period will be
distributed to the holders of the Class P-1 Certificates. On the Distribution
Date in November 2011, the $1,000 held in trust for the Class P-1 Certificates
will be distributed to the holders of the Class P-1 Certificates.
On any Distribution Date, amounts distributed in respect of Class A-P
Deferred Amounts will not reduce the Class Principal Balance of the related
Class of Class A-P Certificates.
On any Distribution Date, to the extent the Amount Available for
Senior Principal related to a Collateral Allocation Group is insufficient to
make the full distribution required to be made pursuant to subclause (iv)(x)
above for such Collateral Allocation Group, (A) the amount distributable on
the related Class of Class A-P Certificates in respect of principal pursuant
to such subclause (iv)(x) shall be equal to the product of (1) the Amount
Available for Senior Principal for that Collateral Allocation Group and
Distribution Date and (2) a fraction, the numerator of which is the A-P
Formula Principal Amount for that Collateral Allocation Group and Distribution
Date and the denominator of which is the sum of the A-P Formula Principal
Amount and the Senior Principal Distribution Amount for that Collateral
Allocation Group and Distribution Date and (B) the amount distributable on the
Senior Certificates, other than the related Class of Class A-P Certificates,
in respect of principal pursuant to clause (iv)(y) shall be equal to the
product of (1) the Amount Available for Senior Principal for that Collateral
Allocation Group and Distribution Date and (2) a fraction, the numerator of
which is the Senior Principal Distribution Amount for that Collateral
Allocation Group and Distribution Date and the denominator of which is the sum
of the Senior Principal Distribution Amount and the A-P Formula Principal
Amount for that Collateral Allocation Group and Distribution Date.
(7) 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 Group 5 Certificates in the following order of
priority:
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(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 Group 5 Certificates that have outstanding Class
Principal Balances, sequentially, in the following order of priority:
(i) concurrently, to the Class 5-A-1, Class 5-A-2,
Class 5-A-3, Class 5-A-4 and Class 5-A-5
Certificates their respective Class 5-A Interest
Distribution Amounts for such Distribution Date,
pro rata, based on their respective Class 5-A
Interest Distribution Amounts for such Distribution
Date;
(ii) sequentially, to the Class 5-M-1, Class 5-M-2 and
Class 5-B-1 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 Group 5
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)(7)(C) hereof.
(B)(i) 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 Group 5 Certificates shall be entitled to receive payments and
distributions in respect of principal from the Group 5 Principal
Distribution Amount, respectively, in the following order of
priority:
(i) to the holders of the Group 5 Senior Certificates
pursuant to Section 5.03 hereof, until their
respective Class Principal Balances are reduced to
zero;
(ii) to the holders of the Class 5-M-1, Class 5-M-2 and
Class 5-B-1 Certificates, in that order, until
their respective Class Principal Balances are
reduced to zero; and
(iii) any remaining Group 5 Principal Distribution Amount
on any Distribution Date will be will be
distributed pursuant to Section 5.02(a)(7)(C)
hereof; or
(xvi) 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 Group 5 Certificates shall be entitled to receive
payments and distributions in respect of principal from the Group 5
Principal Distribution Amount, respectively, in the following order
of priority:
(i) to the holders of the Group 5 Senior Certificates
pursuant to Section 5.03 hereof, until their
respective Class Principal Balances are reduced to
zero;
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(ii) to the Class 5-M-1 Certificates, the Class 5-M-1
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero;
(iii) to the Class 5-M-2 Certificates, the Class 5-M-2
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero;
(iv) to the Class 5-B-1 Certificates, the Class 5-B-1
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero; and
(v) any remaining Group 5 Principal Distribution Amount
on any Distribution Date will be will be
distributed pursuant to Section 5.02(a)(7)(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
Group 5 Certificates in the following order of priority, in each case to the
extent of the amounts remaining:
(i) to the Class 5-M-1 Certificates, the related Interest
Carry Forward Amount;
(ii) to the Class 5-M-1 Certificates, the related Unpaid
Realized Loss Amount;
(iii) to the Class 5-M-2 Certificates, the related Interest
Carry Forward Amount;
(iv) to the Class 5-M-2 Certificates, the related Unpaid
Realized Loss Amount;
(v) to the Class 5-B-1 Certificates, the related Interest
Carry Forward Amount;
(vi) to the Class 5-B-1 Certificates, the related Unpaid
Realized Loss Amount;
(vii) to the Group 5 Reserve Fund, the amount of any Basis
Risk Carry Forward Amount for such Distribution Date and from the
Group 5 Reserve Fund sequentially, first (i) concurrently, to the
Class 5-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 5-M-1, Class 5-M-2 and Class
5-B-1 Certificates, in that order, in an amount up to the amount of
any Basis Risk Carry Forward Amount for such Classes of Certificates;
(ix) sequentially, first (i) concurrently, to the Class 5-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
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and then (ii) sequentially, to the Class 5-M-1, Class 5-M-2 and Class
5-B-1 Certificates, in that order, in an amount up to the amount of
any Unpaid Interest Shortfall Amount for such Classes of
Certificates;
(x) to the Class OC Certificates, the Class OC Distributable
Amount; and
(xi) 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-2 Distribution
Amount, will be distributed first, to the holders of the Class P-2
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)(7)(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)(7)(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)(7)(C) as
necessary so as to accomplish such result.
(D) On each Distribution Date, the Class P-2 Distribution Amount
received during the related Prepayment Period will be distributed to the
holders of the Class P-2 Certificates. On the Distribution Date in November
2011, the $1,000 held in trust for the Class P-2 Certificates will be
distributed to the holders of the Class P-2 Certificates.
(b) On each Distribution Date with respect to each Class or Component
of Accrual Certificates, the Accrual Amount for such Class or Component for
such Distribution Date shall not (except as provided in the second to last
sentence in this paragraph) be distributed as interest with respect to such
Class or Component of Accrual Certificates, but shall instead be added to the
related Class Principal Balance of such Class on the related Distribution
Date. With respect to any Distribution Date on which principal payments on any
Class or Component of Accrual Certificates are distributed pursuant to Section
5.02(a)(1)(iv)(y), Section 5.02(a)(2)(iv)(y), Section 5.02(a)(3)(iv)(y) or
5.02(a)(4)(iv)(y), as applicable, the related Accrual Amount shall be deemed
to have been added on such Distribution Date to the related Class Principal
Balance or Component Balance (and included in the amount distributable on the
related Class or Classes or Component of Accretion Directed Certificates
pursuant to Section 5.02(a)(1)(iii), Section 5.02(a)(2)(iii), Section
5.02(a)(3)(iii) or Section 5.02(a)(4)(iii), as applicable, for such
Distribution Date) and the related distribution thereon shall be deemed to
have been applied concurrently towards the reduction of all or a portion of
the amount so added and, to the extent of any excess, towards the reduction of
the Class Principal Balance or Component Balance of such Class or Component of
Accrual Certificates immediately prior to such Distribution Date.
(c) On each Distribution Date on or after the Senior Credit Support
Depletion Date for the Aggregate Group I Certificates, notwithstanding the
allocations and priorities set forth in Section 5.02(a)(4)(iv)(y), the portion
of Available Funds available to be distributed as
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principal of the Group 4 Senior Certificates (other than the Class 4-A-P
Certificates) shall be distributed concurrently, as principal, on such
Classes, pro rata, on the basis of their respective Class Principal Balances,
until the Class Principal Balances thereof are reduced to zero.
(d) On each Distribution Date, the amount referred to in clause (i)
of the definition of Class Optimal Interest Distribution Amount for each Class
of Aggregate Group I Certificates for such Distribution Date shall be reduced
for each Class of Aggregate Group I Senior Certificates of a Senior
Certificate Group and each Class of Aggregate Group I Subordinated
Certificates by (i) the related Class' pro rata share of Net Prepayment
Interest Shortfalls for such Aggregate Group I Collateral Allocation Group
based (x) with respect to a Class of Aggregate Group I Senior Certificates, on
the related Class Optimal Interest Distribution Amount and (y) with respect to
a Class of Aggregate Group I Subordinated Certificates on or prior to the
third related Senior Termination Date on the Assumed Interest Amount and on or
after such Senior Termination Date, the related Class' Class Optimal Interest
Distribution Amount for such Distribution Date, without taking into account
such Net Prepayment Interest Shortfalls and (ii) the related Class' Allocable
Share of (A) after the Special Hazard Coverage Termination Date, with respect
to the Applicable Fraction of each Mortgage Loan in the related Aggregate
Group I Collateral Allocation Group (or, after the Senior Credit Support
Depletion Date, any Aggregate Group I Mortgage Loan) that became a Special
Hazard Mortgage Loan during the calendar month preceding the month of such
Distribution Date, the excess of one month's interest at the related Net
Mortgage Rate on the Applicable Fraction of the Stated Principal Balance of
such Mortgage Loan as of the first day of the related Due Period in such month
over the amount of Liquidation Proceeds applied as interest on the Applicable
Fraction of such Mortgage Loan with respect to such month, (B) after the
Bankruptcy Coverage Termination Date, with respect to each Aggregate Group I
Mortgage Loan that became subject to a Bankruptcy Loss during the calendar
month preceding the month of such Distribution Date, the interest portion of
the related Debt Service Reduction or Deficient Valuation allocable to the
Applicable Fraction of such Mortgage Loan, (C) each Relief Act Reduction for
the Applicable Fractions of the Aggregate Group I Mortgage Loans in the
related Collateral Allocation Group (or, after the Senior Credit Support
Depletion Date, any Mortgage Loan) incurred during the calendar month
preceding the month of such Distribution Date and (D) after the Fraud Loss
Coverage Termination Date, with respect to the Applicable Fraction of each
Mortgage Loan in the related Aggregate Group I Collateral Allocation Group
(or, after the Senior Credit Support Depletion Date, any Aggregate Group I
Mortgage Loan) that became a Fraud Loan during the calendar month preceding
the month of such Distribution Date, the excess of one month's interest at the
related Net Mortgage Rate on the Applicable Fraction of the Stated Principal
Balance of such Mortgage Loan as of the first day of the related Due Period in
such month over the amount of Liquidation Proceeds applied as interest on the
Applicable Fraction of such Mortgage Loan with respect to such month.
(e) Notwithstanding the priority and allocation contained in Section
5.02(a)(6), if, on any Distribution Date, with respect to any Class of
Aggregate Group I Subordinated Certificates (other than the Class of Aggregate
Group I Subordinated Certificates then outstanding with the highest priority
of distribution), the sum of the related Class Subordination Percentages of
such Class and of all Classes of Aggregate Group I Subordinated Certificates
which have a higher numerical Class designation than such Class (the
"Applicable Credit Support Percentage") is less than the Original Applicable
Credit Support Percentage for such
108
Class, no distribution of Principal Prepayments will be made to any such
Classes (the "Restricted Classes") and the amount of such Principal
Prepayments otherwise distributable to the Restricted Classes shall be
distributed to the outstanding Classes of Aggregate Group I Subordinated
Certificates having lower numerical Class designations than such Class, pro
rata, based on their respective Class Principal Balances immediately prior to
such Distribution Date and shall be distributed in the sequential order
provided in Section 5.02(a)(6). Notwithstanding anything in this Agreement to
the contrary, the Class of Subordinated Certificates then outstanding with the
highest distribution priority shall not be a Restricted Class.
(f) If the amount of a Realized Loss on an Aggregate Group I Mortgage
Loan has been reduced by application of Subsequent Recoveries with respect to
a Liquidated Mortgage Loan in Aggregate Loan Group I, the Applicable Fraction
of the amount of such Subsequent Recoveries will be applied sequentially, in
the order of payment priority, to increase the Class Principal Balance of each
Class of Aggregate Group I Certificates to which Realized Losses have been
allocated, but in each case by not more than the amount of Realized Losses
previously allocated to that Class of Aggregate Group I Certificates pursuant
to Section 5.04. Holders of such Certificates will not be entitled to any
payment in respect of the Class Optimal Interest Distribution Amount on the
amount of such increases for any Interest Accrual Period preceding the
Distribution Date on which such increase occurs. Any such increases shall be
applied pro rata to the Certificate Balance of each Certificate of such Class.
Section 5.03. Allocation of Principal Payments to Class 5-A
Certificates.
On each Distribution Date, principal distributions allocated to the
Class 5-A Certificates are required to be allocated sequentially, in the
following order of priority:
1. to the Class 5-A-5 Certificates, the Group 5 Priority
Amount, until its Class Principal Balance is reduced to zero;
2. sequentially, to the Class 5-A-1, Class 5-A-2, Class
5-A-3 and Class 5-A-4 Certificates, in that order, until their respective
Class Principal Balances are reduced to zero; and
3. to the Class 5-A-5 Certificates, without regard to the
Group 5 Priority Amount, until its Class Principal Balance is reduced to zero.
Notwithstanding the allocation of principal to the Class 5-A
Certificates described above, from and after the Distribution Date on which
the aggregate Class Principal Balances of the Group 5 Subordinated
Certificates and the Class Principal Balance of the Class OC Certificates have
been reduced to zero, any principal distributions allocated to the Class 5-A
Certificates are required to be allocated concurrently, to the Class 5-A-1,
Class 5-A-2, Class 5-A-3, Class 5-A-4 and Class 5-A-5 Certificates, pro rata,
until their respective Class Principal Balances have been 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, including Excess Losses,
experienced on the Mortgage Loan in the related Aggregate
109
Loan Group for the related Distribution Date, separately identifying Realized
Losses on the Mortgage Loans in each Loan Group.
(b) Realized Losses with respect to the Aggregate Group I Mortgage
Loans on any Distribution Date shall be allocated as follows:
(i) the applicable A-P Percentage of any Realized Loss,
including any Excess Loss, on an Aggregate Group I Mortgage Loan,
based upon the related Applicable Fraction, in a Collateral
Allocation Group shall be allocated to the related Class of Class A-P
Certificates, until the Class Principal Balance thereof is reduced to
zero; and
(ii) (A) the applicable Non-A-P Percentage of any Realized
Loss (other than an Excess Loss) shall be allocated first to the
Aggregate Group I Subordinated Certificates in reverse order of their
respective numerical Class designations (beginning with the Class of
Subordinated Certificates then outstanding with the highest numerical
Class designation) until the respective Class Principal Balance of
each such Class is reduced to zero, and second to the Aggregate Group
I Senior Certificates (other than the Class A-P Certificates or the
Notional Amount Certificates, as applicable), pro rata on the basis
of their respective Class Principal Balances, in the case of any
Class of Accrual Certificates or Accrual Component, on the basis of
the lesser of their Class Principal Balance or Component Balance, as
applicable, and their initial Class Principal Balance or Component
Balance, as applicable, in each case immediately prior to the related
Distribution Date until the respective Class Principal Balance of
each such Class is reduced to zero, except that the applicable
Non-A-P Percentage of any Realized Losses on the Collateral
Allocation Group 4 Mortgage Loans based upon the Applicable Fraction
thereof that would otherwise be allocated to the Class 4-A-2, Class
4-A-4 or Class 4-A-5 Certificates will instead be allocated to the
Class 4-A-8 Certificates, until its Class Principal Balance is
reduced to zero.
(B) the applicable Non-A-P Percentage of any Excess Losses
on the Aggregate Group I Mortgage Loans, based upon the related
Applicable Fraction, in a Collateral Allocation Group shall be
allocated to the Classes of Aggregate Group I Certificates of the
related Senior Certificate Group (other than the Class A-P
Certificates or the Notional Amount Certificates, as applicable) and
the Aggregate Group I Subordinated Certificates then outstanding, pro
rata, on the basis of, with respect to such Aggregate Group I Senior
Certificates, their respective Class Principal Balances, or in the
case of any Class of Accrual Certificates or Accrual Component, on
the basis of the lesser of their respective Class Principal Balance
and their respective initial Class Principal Balance or their
respective Component Balance or their respective initial Component
Balance, as the case may be, in each case immediately prior to the
related Distribution Date and, with respect to each Class of
Aggregate Group I Subordinated Certificates, the applicable Assumed
Balance for each such Class relating to the Collateral Allocation
Group in which such Realized Loss occurs; provided, however, on any
Distribution Date after the third related Senior Termination Date for
an Aggregate Group I Senior Certificate Group, such Excess Losses on
the Applicable Fractions of the Aggregate Group I Mortgage Loans in
the related Collateral Allocation Group will be allocated to the
Aggregate Group I Subordinated Certificates on the basis of their
respective Class
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Principal Balances; and provided further that after the related
Senior Credit Support Depletion Date, such Excess Losses shall be
allocated pro rata to all Classes and Components of Aggregate Group I
Senior Certificates (other than the Class A-P Certificates or the
Notional Amount Certificates, as applicable) regardless of Senior
Certificate Group on the basis of their respective initial Class
Principal Balances or Component Balances, as applicable, or in the
case of any or in the case of any Class of Accrual Certificates or
Accrual Component, on the basis of the lesser of their respective
Class Principal Balance and their respective initial Class Principal
Balance or their respective Component Balance or their respective
initial Component Balance, as the case may be, in each case
immediately prior to the related Distribution Date.
(iii) any Applied Loss Amounts on the Collateral Allocation
Group 5 Mortgage Loans shall be allocated first to the Class OC
Certificates, until its Class Principal Balance is reduced to zero,
and second, sequentially, to the Class 5-B-1, Class 5-M-2 and Class
5-M-1 Certificates, in that order, until the respective Class
Principal Balance of each such Class is reduced to zero.
(c) (i) The Class Principal Balance of the Class of Aggregate Group I
Subordinated Certificates then outstanding with the highest numerical Class
designation shall be reduced on each Distribution Date by the sum of (i) the
amount of any payments on each Class of Class A-P Certificates in respect of
related Class A-P Deferred Amounts and (ii) the amount, if any, by which the
aggregate of the Class Principal Balances of all outstanding Classes of
Aggregate Group I Certificates (after giving effect to the distribution of
principal and the allocation of Realized Losses and Class A-P Deferred Amounts
on such Distribution Date) exceeds the aggregate Stated Principal Balance of
the Aggregate Group I Mortgage Loans for the following Distribution Date.
(ii) The Class Principal Balance of the Class of Group 5
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 Group 5 Certificates (after
giving effect to the distribution of principal and the allocation of
Applied Loss Amounts on the Collateral Allocation Group 5 Mortgage
Loans on such Distribution Date) exceeds the aggregate Stated
Principal Balance of the Collateral Allocation Group 5 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
5-A Certificates in respect of Realized Losses on the Collateral
Allocation Group 5 Mortgage Loans.
(d) Any Realized Loss allocated to a Class of Aggregate Group I
Certificates or any Applied Loss Amounts allocated to a Class of Group 5
Subordinated 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.
(e) 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,
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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, Applied Loss Amounts or
Excess Losses allocated to a Class of Component Certificates will be
allocated, pro rata, to the related Components.
(f) For the avoidance of doubt, no Realized Losses on the Mortgage
Loans shall be allocated to the Class P-1 or Class P-2 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, 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. Cross-Collateralization; Adjustments to Available
Funds.
(a) With respect to the Aggregate Group I Certificates, On each
Distribution Date after the first Senior Termination Date but prior to the
earlier of the Senior Credit Support Depletion Date and the third related
Senior Termination Date, the Securities Administrator shall distribute the
principal portion of Available Funds on the Applicable Fractions of the
Mortgage Loans relating to the Senior Certificates that will have been paid in
full to the holders of the Senior Certificates of the other Certificate Groups
in Aggregate Certificate Group I.
(b) If on any Distribution Date the aggregate Class Principal Balance
of the Senior Certificates of a Senior Certificate Group (other than any
related Class of Class A-P Certificates or Component thereof) after giving
effect to distributions to be made on that Distribution Date, is
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greater than the Non-A-P Pool Balance for that Collateral Allocation Group
(any such group, an "Undercollateralized Group"), all amounts otherwise
distributable as principal to the Aggregate Group I Subordinated Certificates
(or, following the Senior Credit Support Depletion Date, the amounts described
in the following sentence) will be distributed as principal to the Senior
Certificates of that Undercollateralized Group (other than any related Class
of Class A-P Certificates or Component thereof) until the aggregate Class
Principal Balance of the Senior Certificate Group (other than any related
Class of Class A-P Certificates or Component thereof) of the
Undercollateralized Group equals the Non-A-P Pool Balance for that Collateral
Allocation Group (such distribution, an "Undercollateralization
Distribution"). If a Senior Certificate Group (other than any related Class of
Class A-P Certificates or Component thereof) in Aggregate Certificate Group I
constitutes an Undercollateralized Group on any Distribution Date following
the Senior Credit Support Depletion Date, Undercollateralization Distributions
will be made from the excess of Available Funds for the other Collateral
Allocation Groups remaining after all required amounts for that Distribution
Date have been distributed to those Senior Certificate Groups (other than any
related Class of Class A-P Certificates or Component thereof). If more than
one Undercollateralized Group on any Distribution Date is entitled to an
Undercollateralization Distribution, such Undercollateralization Distribution
will be allocated among the Undercollateralized Groups, pro rata, based upon
the amount by which the aggregate Class Principal Balance of each Class of
Senior Certificates in such Senior Certificate Group (other than any related
Class of Class A-P Certificates or Component thereof) exceeds the sum of the
Non-A-P Balances for the related Undercollateralized Group. If more than one
Senior Certificate Group on any Distribution Date is required to make an
Undercollateralization Distribution to an Undercollateralized Group, the
payment of such Undercollateralization Distributions will be allocated among
such Senior Certificate Groups (other than any related Class of Class A-P
Certificates or Component thereof), pro rata, based upon the aggregate excess
of Available Funds for the Senior Certificate Groups other than the
Undercollateralized Group remaining after all required amounts for that
Distribution Date have been distributed to those Senior Certificates.
On each Distribution Date after the first Senior Termination Date but
prior to the earlier of the Senior Credit Support Depletion Date and the third
related Senior Termination Date, the Non-A-P Formula Principal Amount for the
Collateral Allocation Group relating to the Senior Certificate Group that has
been paid in full, will be distributed to the other Senior Certificate Groups
(other than any related Class of Class A-P Certificates or Component thereof),
so that each remaining Senior Certificate Group receives its pro rata portion
thereof. If principal from one Collateral Allocation Group is distributed to
the Senior Certificate Groups (other than any related Class of Class A-P
Certificates or Component thereof) that are not related to that Collateral
Allocation Group according to this paragraph, the Aggregate Group I
Subordinated Certificates will not receive that principal as a distribution.
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
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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 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
5.08125% with respect to the Group 4 LIBOR Certificates and 5.09250%
with respect to the Group 5 LIBOR Certificates.
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
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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 Funds.
(a) On the Closing Date, the Securities Administrator shall establish
and maintain in the Trustee's name, in trust for the benefit of the Holders of
the Class 4-A-1 Certificates, the Class 4-A-1 Reserve Fund, into which the
Depositor shall, on such date, deposit $1,000.00. On the Closing Date, the
Securities Administrator shall establish and maintain in the Trustee's name,
in trust for the benefit of the Holders of the Class 4-A-2 Certificates, the
Class 4-A-2 Reserve Fund, into which the Depositor shall, on such date,
deposit $1,000.00. Each 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
of the Trustee held pursuant to this Agreement. Each Reserve Fund shall not be
an asset of any REMIC established hereby. The Class 4-A-2 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 of the Trustee held pursuant to this
Agreement. The Class 4-A-2 Reserve Fund shall be held by a separate trust (the
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"Supplemental Interest Trust"). For the avoidance of doubt, any amounts paid
from the Class 4-A-2 Reserve Fund to the Class 4-A-2 Certificates shall be
deemed to have been distributed from the Supplemental Interest Trust.
(b) On each Distribution Date, the Securities Administrator, on
behalf of the Trustee, will deposit in the Class 4-A-1 Reserve Fund any
amounts received in respect of the Class 4-A-1 Corridor Contract for the
related Interest Accrual Period. On each Distribution Date, amounts so
received in respect of the Class 4-A-1 Corridor Contract will be distributed
to the Class 4-A-1 Certificates in an amount up to the amount necessary to pay
the Yield Supplement Amount for the Class 4-A-1 Certificates for that
Distribution Date. Any amounts remaining in the Class 4-A-1 Reserve Fund on
the Distribution Date immediately following the earlier of (i) the Class 4-A-1
Corridor Contract Termination Date and (ii) the date on which the Class
Principal Balance of the Class 4-A-1 Certificates is reduced to zero, will be
distributed to the Corridor Contract Counterparty, and will not be available
for payment of any Yield Supplement Amount on the Class 4-A-1 Certificates.
Funds in the Class 4-A-1 Reserve Fund shall be invested in Permitted
Investments as directed in writing by the Class 4-A-1 Certificateholder. Any
earnings on amounts in the Reserve Fund shall be for the benefit of the Class
4-A-1 Certificateholders. The Class 4-A-1 Certificates shall evidence
ownership of the Reserve Fund for federal income tax purposes and the Holders
thereof shall direct the Securities Administrator, in writing, as to
investment of amounts on deposit therein. The applicable Class 4-A-1
Certificateholder(s) shall be liable for any losses incurred on such
investments. In the absence of written instructions from the Class 4-A-1
Certificateholder to the Securities Administrator as to investment of funds on
deposit in the Reserve Fund, such funds shall be invested in the Xxxxx Fargo
Advantage Prime Investment Money Market Fund. For all Federal income tax
purposes, the Class 4-A-1 Reserve Fund shall not constitute an asset of any
REMIC created hereunder.
Upon termination of the Trust Fund any amounts remaining in the Class
4-A-1 Reserve Fund shall be distributed to Xxxxxx Xxxxxxx & Co. Incorporated.
(c) On the Closing Date, there is hereby established a separate trust
(the "Supplemental Interest Trust"), the assets of which shall consist of the
Class 4-A-2 Reserve Fund and the Securities Administrator's rights and
obligations under the Class 4-A-2 Corridor Contract. The Supplemental Interest
Trust shall be maintained by the Supplemental Interest Trustee, who initially,
shall be the Trustee.
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On the Closing Date, the Securities Administrator shall establish and
maintain in its name, in trust for the benefit of the Holders of the Class
4-A-2 Certificates, the Class 4-A-2 Reserve Fund, and shall deposit $1,000
therein upon receipt from or on behalf of the Depositor of such amount. All
funds on deposit in the Class 4-A-2 Reserve Fund shall be held separate and
apart from, and shall not be commingled with, any other moneys, including
without limitation, other moneys held by the Securities Administrator pursuant
to this Agreement.
On each Distribution Date, the Securities Administrator shall deposit
into the Class 4-A-2 Reserve Fund all amounts received in respect of the Class
4-A-2 Corridor Contract for the related Interest Accrual Period.
Funds in the Class 4-A-2 Reserve Fund shall be invested in Permitted
Investments as directed in writing by the Class 4-A-2 Certificateholder. Any
earnings on amounts in the Reserve Fund shall be for the benefit of the Class
4-A-2 Certificateholders. The Class 4-A-2 Certificates shall evidence
ownership of the Reserve Fund for federal income tax purposes and the Holders
thereof shall direct the Securities Administrator, in writing, as to
investment of amounts on deposit therein. The applicable Class 4-A-2
Certificateholder(s) shall be liable for any losses incurred on such
investments. In the absence of written instructions from the Class 4-A-2
Certificateholder to the Securities Administrator as to investment of funds on
deposit in the Reserve Fund, such funds shall be invested in the Xxxxx Fargo
Advantage Prime Investment Money Market Fund. Any net investment earnings on
such amounts shall be retained therein until withdrawn as provided herein. Any
losses incurred in the Class 4-A-2 Reserve Fund in respect of any such
investments shall be charged against amounts on deposit in the Class 4-A-2
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 held in the Class
4-A-2 Reserve Fund and made in accordance with this Section 5.10. The Class
4-A-2 Reserve Fund will not constitute an asset of the Trust Fund nor of any
REMIC created hereunder.
(d) On the Closing Date, the Securities Administrator shall establish
and maintain in its name, in trust for the benefit of the Group 5
Certificates, the Group 5 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 Group 5 Reserve Fund the amounts specified
pursuant to Section 5.02(a)(7)(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 Group 5 Reserve Fund to
make distributions to the Classes of Group 5 Certificates in accordance with
the priorities set forth in Section 5. 02(a)(7)(C)(viii). On the Distribution
Date on which the termination of the Group 5 Certificates occurs pursuant to
Section 7.02, after making all distributions required in connection with the
Group 5 Certificates, the Securities Administrator shall withdraw from the
Group 5 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 Group 5 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
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Trustee pursuant to this Agreement. Amounts held in the Group 5 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 Group 5
Reserve Fund pursuant to this Section 4.01. The Group 5 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 Group 5 Reserve Fund. The
Securities Administrator shall keep records that accurately reflect the funds
on deposit in the Group 5 Reserve Fund. Funds in the Group 5 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 Group 5 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 Group 5 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 Group 5 Reserve Fund in respect of any such investments shall be charged
against amounts on deposit in the Group 5 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 Group 5 Reserve Fund and made in accordance with
this Section 4.01. The Class OC Certificates shall evidence ownership of the
Group 5 Reserve Fund for federal tax purposes.
To the extent that a Class of Group 5 Certificates receives interest
in excess of the Net WAC Pass-Through Rate, such interest shall be deemed to
have been paid to the Group 5 Reserve Fund and then paid by the Group 5
Reserve Fund to those Certificateholders. For purposes of the Code, amounts
deemed deposited in the Group 5 Reserve Fund shall be deemed to have first
been distributed to the Class OC Certificates.
Section 5.11 The Corridor Contracts.
(a) The Depositor hereby directs the Securities Administrator, solely
in its capacity as Securities Administrator hereunder and not in its
individual capacity, to execute and deliver the Corridor Contracts
concurrently with the execution and delivery of this Agreement. Except as may
be directed in writing by the Depositor or by a majority in interest of the
Class 4-A-1 Certificates or the Class 4-A-2 Certificates, as applicable, the
Securities Administrator shall have no duty or responsibility to enter into
any other interest rate cap contract or agreement upon the expiration or
termination of any Corridor Contract. The Class 4-A-1 Corridor Contract will
be an asset of the Trust Fund but will not be an asset of any REMIC. The First
Class 4-A-2 Corridor Contract and the Second Class 4-A-2 Corridor Contract
will be assets of the Supplemental Interest Trust. The Securities
Administrator shall deposit any amounts received from the Corridor Contract
Counterparty with respect to the Class 4-A-1 Corridor Contract into the Class
4-A-1 Reserve Fund. The Securities Administrator shall deposit any amounts
received from the Corridor Contract Counterparty with respect to the First
Class 4-A-2 Corridor Contract and the Second Class 4-A-2 Corridor Contract
into the Class 4-A-2 Reserve Fund.
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(b) The Securities Administrator will prepare and deliver any notices
required to be delivered to the Corridor Contract Counterparty under each
Corridor Contract.
(c) The Securities Administrator, on behalf of the Trustee shall
terminate the Corridor Contract Counterparty with respect to a Corridor
Contract upon the occurrence of an event of default under that Corridor
Contract of which a Responsible Officer of the Securities Administrator has
actual knowledge. Upon such a termination, the Corridor Contract Counterparty
may be required to pay an amount to the Securities Administrator, on behalf of
the Trustee, in respect of market quotations for the replacement cost of the
related Corridor Contract.
(d) (i) On each Distribution Date, following the distribution of any
amounts in respect of interest pursuant to Section 5.02(a)(4)(ii), the
Securities Administrator shall distribute amounts on deposit in the Reserve
Fund from the Class 4-A-1 Corridor Contract, to the holders of the Class 4-A-1
Certificates. Amounts withdrawn from the Reserve Fund shall be distributed as
follows: from any Class 4-A-1 Corridor Contract Payment on deposit in the
Reserve Fund with respect to any Distribution Date on prior to the related
Corridor Contract Termination Date on which one-month LIBOR exceeds 5.25%, an
amount equal to interest for the related Interest Accrual Period on the Class
Principal Balance of the Class 4-A-1 Certificates immediately prior to such
Distribution Date at a rate equal to the excess of (i) the lesser of one-month
LIBOR and 8.75% over (ii) 5.25%, to the holders of the Class 4-A-1
Certificates.
(ii) On each Distribution Date, following the distribution
of any amounts in respect of interest pursuant to Section
5.02(a)(4)(ii), the Securities Administrator shall distribute amounts
on deposit in the Reserve Fund from the First Class 4-A-2 Corridor
Contract, to the Holders of the Class 4-A-2 Certificates. Amounts
withdrawn from the Reserve Fund shall be distributed as follows: from
any First Class 4-A-2 Corridor Contract Payment on deposit in the
Reserve Fund with respect to any Distribution Date on prior to the
related Corridor Contract Termination Date on which one-month LIBOR
exceeds 5.25%, an amount equal to interest for the related Interest
Accrual Period on the Class Principal Balance of the Class 4-A-2
Certificates immediately prior to such Distribution Date at a rate
equal to the excess of (i) the lesser of one-month LIBOR and 5.60%
over (ii) 5.25%, to the holders of the Class 4-A-2 Certificates.
(iii) On each Distribution Date, following the distribution
of any amounts in respect of interest pursuant to Section
5.02(a)(4)(ii), the Securities Administrator shall distribute amounts
on deposit in the Reserve Fund from the Second Class 4-A-2 Corridor
Contract, to the Holders of the Class 4-A-2 Certificates. Amounts
withdrawn from the Reserve Fund shall be distributed as follows: from
any Second Class 4-A-2 Corridor Contract Payment on deposit in the
Reserve Fund with respect to any Distribution Date on prior to the
related Corridor Contract Termination Date on which one-month LIBOR
exceeds 5.60%, an amount equal to interest for the related Interest
Accrual Period on the Class Principal Balance of the Class 4-A-2
Certificates immediately prior to such Distribution Date at a rate
equal to the excess of (i) the lesser of one-month LIBOR and 8.75%
over (ii) 5.60%, to the holders of the Class 4-A-2 Certificates.
(f) (i) For so long as the Class 4-A-1 Corridor Contract is
outstanding, in the event that there are any payments made under the Class
4-A-1 Corridor Contract on any
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Distribution Date in excess of the Yield Supplement Amount for the Class 4-A-1
Certificates for that Distribution Date, those amounts will be distributed to
the Corridor Contract Counterparty and will not be available to make payments
on the Class 4-A-1 Certificates on that Distribution Date or any future
Distribution Dates.
(ii) Any payments made under the First Class 4-A-2 Corridor
Contract and the Second Class 4-A-2 Corridor Contract on any
Distribution Date in excess of the Yield Supplement Amount for the
Class 4-A-2 Certificates for that Distribution Date, shall remain on
deposit in the Class 4-A-2 Reserve Fund to pay Yield Supplement
Amounts on the Class 4-A-2 Certificates and will be withdrawn
therefrom and distributed to the Class 4-A-2 Certificates to the
extent needed to pay any related Yield Supplement Amount of the Class
4-A-2 Certificates, for such Distribution Date and all future
distribution dates until the earlier of (i) the date on which the
Class Principal Balance of the Class 4-A-2 Certificates has been
reduced to zero and (ii) the related Corridor Contract Termination
Date. Thereafter all amounts on deposit in the Class 4-A-2 Reserve
Fund will be distributed to the Corridor Contract Counterparty.
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,
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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:
(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;
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(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 any 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 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
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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.
(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,
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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 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, any Corridor Contract 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
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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
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
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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 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
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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 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
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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-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
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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 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.
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(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) Any successor trustee or successor securities administrator
appointed as provided in Section 6.06 shall also be the successor trustee or
successor securities administrator, as applicable, with respect to the
Supplemental Interest Trust.
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 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.
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(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 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.
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(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 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
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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, the Custodial Agreements, or the Corridor
Contract 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 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 Custodians.
(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 each
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
Custodians and the Master Servicer. Any expenses incurred by the Trustee or
the Custodians shall be reimbursed in accordance with Section 6.11.
Notwithstanding any provision in any
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Custodial Agreement to the contrary, the parties hereto acknowledge and agree
that (i) the Master Servicer shall only be obligated to pay to each Custodian
the fee agreed to by such 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 a
Custodian under the related Custodial Agreement, all of which shall be payable
in accordance with the terms and conditions of such Custodial Agreement.
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 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 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
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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
(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
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(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
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
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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 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
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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 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
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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 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
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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.
(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.
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(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.
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.
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 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 related to the
Collateral Allocation Group 5 Mortgage Loans, the Auction Administrator shall
solicit bids for the Group 5 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 Group 5 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 Group 5 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 Collateral
Allocation Group 5 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 Group 5
Assets to the Auction Purchaser at that Mortgage Loan Auction Price; provided,
however, that the
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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 Collateral Allocation
Group 5 Mortgage Loans of the sale of the related Group 5 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) Optional Termination Related to the Collateral
Allocation Group 5 Mortgage Loans. On any Distribution Date occurring
after the Initial Optional Termination Date related to the Collateral
Allocation Group 5 Mortgage Loans, the Master Servicer has the option
to cause the Trust Fund to adopt a plan of complete liquidation of
the Collateral Allocation Group 5 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 Collateral Allocation Group 5 Mortgage Loans and all other assets
of the Trust Fund related to the Group 5 Certificates (with respect
to the Group 5 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 Group 5 Assets shall be sold to the Master Servicer at a price
equal to the related Redemption Price.
(ii) Optional Termination Related to the Aggregate Group I
Mortgage Loans. On any Distribution Date occurring on or after the
Initial Optional Termination Date related to the Aggregate Group I
Mortgage Loans, the Master Servicer has the option to cause the Trust
to adopt a plan of complete liquidation of the Aggregate Group I
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 Aggregate Group I
Mortgage Loans and all other assets of the Trust related to the
Aggregate Group I Certificates (with respect to the Aggregate Group I
Certificates, the "Purchase Date") deliver written notice to the
Trustee and the Securities Administrator and either (a) deposit in
the Distribution Account the related aggregate 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 property of the Trust related to the Aggregate Group I
Certificates shall be sold to the Master Servicer at a price equal to
the aggregate Redemption Price for the Aggregate Group I
Certificates.
(d) The Depositor, the Master Servicer, each Servicer, the Securities
Administrator, the Trustee and the Custodian shall be reimbursed from the
Redemption Price for
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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 or the related Custodial 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 related to the Group 5
Certificates or the Aggregate Group I Certificates, as applicable, will occur,
shall be given promptly by the Securities Administrator by first class mail to
the related Certificateholders mailed in the case of a redemption of the
related 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
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Certificate(s) for payment of the final distribution thereon in accordance
with this Section. The 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 or Notional Amounts 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 portion
of the Trust Fund related to the Group 5 Certificates or the Aggregate Group I
Certificates, as applicable, shall be reimbursed from proceeds received from
the liquidation of the Trust Fund.
(d) Any purchase of the Group 5 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 Group 5 Assets so purchased and shall transfer or
deliver to the Auction Purchaser the purchased Group 5 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 Collateral Allocation Group 5 Mortgage Loans or the
Aggregate Group I Mortgage Loans, as applicable, 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;
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(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;
(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
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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
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
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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 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
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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
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.
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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 (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 Mae- 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.
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(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 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.
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Section 9.03. Representations and Warranties of the Master Servicer.
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;
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(vii) the Master Servicer, or an affiliate thereof the
primary business of which is the servicing of conventional
residential mortgage loans, is a Xxxxxx Xxx- 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 Funds" and (ii) amounts representing assumption
fees, late payment charges or other ancillary income not included in the
definition of "Available Funds" 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.
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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 Mae 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
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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.
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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,
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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, any
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.
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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 Regulation 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
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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
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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 Group 5 Certificates to receive Basis
Risk Carry Forward Amounts from amounts on deposit in the Group 5 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 Group 5 Certificates. Thus, the
Group 5 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) The Trustee shall treat the Class 4-A-1 Reserve Fund as an
outside reserve fund within the meaning of Treasury Regulation 1.860G-2(h)
which is owned by the Class 4-A-1 Certificates, and that is not an asset of
any REMIC created hereunder. The Class 4-A-1 Certificates shall be treated as
representing ownership of a Master REMIC regular interest and a position in an
interest rate cap contract (the Class 4-A-1 Corridor Contract). The Trustee
shall assume that the position of the Class 4-A-1 Certificates in such
interest rate cap contract has a value of $104,000.
(o) The Trustee shall treat the Class 4-A-2 Reserve Fund as an
outside reserve fund within the meaning of Treasury Regulation 1.860G-2(h)
which is owned by the Class 4-A-2 Certificates, and that is an asset of the
Supplemental Interest Trust. The Class 4-A-2 Certificates shall be treated as
representing ownership of a Master REMIC regular interest and a position in
two interest rate cap contracts (the First Class 4-A-2 Corridor Contract and
Second Class 4-A-2 Corridor Contract). The Trustee shall assume that the
position of the Class 4-A-2 Certificates in such interest rate cap contracts
have values of $222,000 and $69,000, respectively.
Section 10.02. Prohibited Transactions and Activities.
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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).
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).
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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 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.
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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.
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
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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.
(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
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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).
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
2006-7, (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 2006-7, (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 2006-7, (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
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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.
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.
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(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.
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.
Pursuant to the Custodial Agreements, each of the Custodians shall be
indemnified by the Trust to the extent specified in the related Custodial
Agreement.
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ARTICLE XII
EXCHANGE ACT REPORTING
Section 12.01. Filing Obligations.
(a) The Master Servicer, the Securities Administrator, the Trustee
and each 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 each 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, each 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 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
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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 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
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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 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.
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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 close 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.
(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-
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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, each Custodian and the Securities Administrator (each such
party and each 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 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
171
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 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
172
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, each 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 each 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 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,
each 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, each Custodian (for so long as a Form
10-K will be filed in respect
173
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, each 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.
(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.
174
(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 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
175
(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 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.
176
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 a Custodian
By: /s/ Xxxxxxxxxxx Xxxxx
----------------------------------------
Name: Xxxxxxxxxxx Xxxxx
Title: Assistant Vice President
By: /s/ Xxxx X. Xxxxx
----------------------------------------
Name: Xxxx X. 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 May 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 2006-7, 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 2006-7
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. Mortgage Loan Sale and Servicing Agreement, dated as of January 1, 2006,
between American Home Mortgage Corp., as seller, American Home Mortgage
Servicing, Inc., as servicer and Xxxxxx Xxxxxxx Mortgage Capital Inc.,
as purchaser;
3. Third Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of November 7, 2005, between Everbank, as seller and Xxxxxx Xxxxxxx
Mortgage Capital Inc., as purchaser;
4. 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.
5. 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;
6. 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;
7. Third Amended And Restated Master Mortgage Loan Purchase Agreement, dated
as of November 1, 2005 and an Amended and Restated Master Servicing Agreement,
dated as of February 1, 2004, between Xxxxxx Xxxxxxx Credit Corporation, as
seller and servicer and Xxxxxx Xxxxxxx Mortgage Capital Inc., as purchaser;
8. Mortgage Loan Purchase And Warranties Agreement, dated as of December 1,
2005, between Ohio Savings Bank, as seller and Xxxxxx Xxxxxxx Mortgage Capital
Inc., as purchaser;
9. Seller's Purchase, Warranties and Interim Servicing Agreement, dated as of
February 28, 2005, between Wachovia Mortgage Corporation, as seller and Xxxxxx
Xxxxxxx Mortgage Capital Inc., as purchaser; and
10. Seller's Purchase, Warranties and Servicing Agreement, dated as of
September 1, 2004, as supplemented by an Amended and Restated Regulation AB
Compliance Addendum dated as of April 17, 2006, each between Wachovia Mortgage
Corporation, as seller and servicer and Xxxxxx Xxxxxxx Mortgage Capital Inc.,
as purchaser.
E-1
EXHIBIT F
LIST OF CUSTODIAL AGREEMENTS
1. Custodial Agreement, dated as of May 1, 2006, among Xxxxxx Xxxxxxx Mortgage
Capital Inc., as purchaser, American Home Mortgage Corp., as seller, American
Home Mortgage Servicing, Inc., as servicer, Wachovia Mortgage Corporation, as
seller and servicer, Xxxxx Fargo Bank, National Association, as securities
administrator and master servicer, LaSalle Bank National Association, as
trustee, and X.X. Xxxxxx Trust Company, National Association, as custodian.
2. Custodial Agreement, dated as of May 1, 2006, among Xxxxxx Xxxxxxx Mortgage
Capital Inc., as purchaser, Xxxxxx Xxxxxxx Credit Corporation, as seller and
servicer, LaSalle Bank National Association, as trustee, Xxxxx Fargo Bank,
National Association, as securities administrator and master servicer, and
Xxxxx Fargo Bank, National Association, as custodian.
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 2006-7,
Mortgage Pass-Through Certificates
Reference is hereby made to the Pooling and Servicing Agreement,
dated as of May 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 2006-7, 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 May 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 May 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 2006-7
Re: Pooling and Servicing Agreement ("Pooling and Servicing
-------------------------------------------------------
Agreement") relating to Xxxxxx Xxxxxxx Mortgage Loan Trust
----------------------------------------------------------
2006-7, Mortgage Pass-Through Certificates, Series 2006-7
---------------------------------------------------------
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]
[X.X. XXXXXX TRUST COMPANY, NATIONAL
ASSOCIATION, as
Custodian]
[XXXXX FARGO 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 2006-7
Re: Pooling and Servicing Agreement ("Pooling and Servicing
-------------------------------------------------------
Agreement") relating to Xxxxxx Xxxxxxx Mortgage Loan Trust
----------------------------------------------------------
2006-7, Mortgage Pass-Through Certificates, Series 2006-7
---------------------------------------------------------
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]
[X.X. XXXXXX TRUST COMPANY, NATIONAL
ASSOCIATION, as Custodian]
[XXXXX FARGO BANK, NATIONAL ASSOCIATION,]
as Custodian
By: _______________________
Authorized Representative
L-2-3
EXHIBIT M
REQUEST FOR RELEASE OF DOCUMENTS
[Name and Address of appropriate Custodian]
Re: Pooling and Servicing Agreement ("Pooling and Servicing
-------------------------------------------------------
Agreement") relating to Xxxxxx Xxxxxxx Mortgage Loan Trust
----------------------------------------------------------
2006-7, Mortgage Pass-Through Certificates, Series 2006-7
---------------------------------------------------------
and Custodial Agreement relating to Xxxxxx Xxxxxxx Mortgage
-----------------------------------------------------------
Loan Trust 2006-7
-----------------
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 pursuant to the above-captioned Custodial
Agreement, 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: _____________________________________________
_____________________________________________
M-1
Date: _____________________________________________
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
(ii) Master Servicer
Information from Item 2(a) of Part II of Form 10-Q:
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 Any responsible party for disclosure
items on Form 8-K Disclose any information required to be Form 8-K
reported on during the fourth quarter covered by the Form
10-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 (b) Sponsor/Seller as to
(a) 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 All parties (with respect to any agreement entered
Agreement 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 All parties (with respect to any agreement entered
Definitive Agreement 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
assets at the time of the report Servicer
---------------------------------------------------------- --------------------------------------------------------
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
Requires disclosure of any removal, replacement, trustee with any amendment or
substitution or addition of any master servicer, modification therewith)
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":
------------------------------------------------------------------------------------------ ----------------------
Servicing Criteria Applicable 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 S, MS, SA
authorized personnel.
--------------------- ----------------------
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
------------------------------------------------------------------------------------------ ----------------------
Servicing Criteria Applicable 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
------------------------------------------------------------------------------------------ ----------------------
Servicing Criteria Applicable 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 S
monthly basis, or such other period specified in the transaction
agreements, and describe the entity's activities in monitoring
delinquent mortgage loans
--------------------- -------------------------------------------------------------------- ----------------------
0-3
------------------------------------------------------------------------------------------ ----------------------
Servicing Criteria Applicable 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
recognized and recorded in accordance with the transaction S, MS
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.
--------------------- -------------------------------------------------------------------- ----------------------
--------------------- -------------------------------------------------------------------- ----------------------
0-4
[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 2006-7-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
------------------------------------------------------------------------------------------------
State/Jurisdiction Name of Anti-Predatory Lending Category under
------------------ ------------------------------ --------------
Law/Effective Date Applicable
------------------ ----------
Anti-Predatory 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 Heights, OH Ordinance No. 72-2003 (PSH), Mun. Code Covered Loan
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 Lending High Cost Home Loan
Practices Act, Conn. Gen. Stat. xx.xx.
36a-746 et seq.
Effective October 1, 2001
---------------------------- ---------------------------------------- --------------------------
District of Columbia Home Loan Protection Act, D.C. Code Covered Loan
xx.xx. 26-1151.01 et seq.
Effective for loans closed on or after
January 28, 2003
---------------------------- ---------------------------------------- --------------------------
Florida Fair Lending Act, Fla. Stat. Xxx. xx.xx. High Cost Home Loan
494.0078 et seq.
Q-1
Standard & Poor's High Cost Loan Categorization
-----------------------------------------------
------------------------------------------------------------------------------------------------
State/Jurisdiction Name of Anti-Predatory Lending Category under
------------------ ------------------------------ --------------
Law/Effective Date Applicable
------------------ ----------
Anti-Predatory Lending
----------------------
Law
---
---------------------------- ---------------------------------------- --------------------------
Effective October 2, 2002
---------------------------- ---------------------------------------- --------------------------
Georgia (Oct. 1, 0000 - Xxxxxxx Xxxx Xxxxxxx Xxx, Xx. Code High Cost Home Loan
Mar. 6, 2003) Xxx. xx.xx. 7-6A-1 et seq.
Effective October 1, 2002 - March 6,
2003
---------------------------- ---------------------------------------- --------------------------
Georgia as amended (Mar. Georgia Fair Lending Act, Ga. Code High Cost Home Loan
7, 2003 - current) Xxx. xx.xx. 7-6A-1 et seq.
Effective for loans closed on or after
March 7, 2003
---------------------------- ---------------------------------------- --------------------------
HOEPA Section 32 Home Ownership and Equity Protection High Cost Loan
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. Comp. High Risk Home Loan
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. Xxx. High Loan to Value
xx.xx. 16a-1-101 et seq. Consumer Loan (id. ss.
16a-3-207) and;
Sections 16a-1-301 and 16a-3-207 --------------------------
became effective April 14, 1999;
Section 16a-3-308a became effective High APR Consumer Loan
July 1, 1999 (id. ss. 16a-3-308a)
---------------------------- ---------------------------------------- --------------------------
Kentucky 2003 KY H.B. 287 - High Cost Home Loan High Cost Home Loan
Act, Ky. Rev. Stat. xx.xx. 360.100
et seq.
Effective June 24, 2003
---------------------------- ---------------------------------------- --------------------------
Maine Truth in Lending, Me. Rev. Stat. tit. High Rate High Fee
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
-----------------------------------------------
------------------------------------------------------------------------------------------------
State/Jurisdiction Name of Anti-Predatory Lending Category under
------------------ ------------------------------ --------------
Law/Effective Date Applicable
------------------ ----------
Anti-Predatory Lending
----------------------
Law
---
---------------------------- ---------------------------------------- --------------------------
Massachusetts Part 40 and Part 32, 209 C.M.R. xx.xx. High Cost Home Loan
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. Stat. Home Loan
xx.xx. 598D.010 et seq.
Effective October 1, 2003
---------------------------- ---------------------------------------- --------------------------
New Jersey New Jersey Home Ownership Security Act High Cost Home Loan
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 High Cost Home Loan
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 sections Covered Loan
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 Mortgage
various sections of Title 14A)
Effective July 1, 2000; amended
effective January 1, 2004
---------------------------- ---------------------------------------- --------------------------
Q-3
Standard & Poor's High Cost Loan Categorization
-----------------------------------------------
------------------------------------------------------------------------------------------------
State/Jurisdiction Name of Anti-Predatory Lending Category under
------------------ ------------------------------ --------------
Law/Effective Date Applicable
------------------ ----------
Anti-Predatory Lending
----------------------
Law
---
---------------------------- ---------------------------------------- --------------------------
Effective October 2, 2002
---------------------------- ---------------------------------------- --------------------------
South Carolina South Carolina High Cost and Consumer High Cost Home Loan
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 Mortgage
Lender, Broker and Servicer Act, W. Loan Act Loan
Va. Code Xxx. xx.xx. 31-17-1 et seq.
Effective June 5, 2002
---------------------------- ---------------------------------------- --------------------------
Standard & Poor's Covered Loan Categorization
---------------------------------------------
---------------------------- ---------------------------------------- --------------------------
State/Jurisdiction Name of Anti-Predatory Lending Category under
------------------ ------------------------------ --------------
Law/Effective Date Applicable
------------------ ----------
Anti-Predatory Lending
----------------------
Law
---
---------------------------- ---------------------------------------- --------------------------
Georgia (Oct. 1, 2002 - Georgia Fair Lending Act, Ga. Code Covered Loan
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 Act Covered Home Loan
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
------------------------------------------
---------------------------- ---------------------------------------- --------------------------
State/Jurisdiction Name of Anti-Predatory Lending Category under
------------------ ------------------------------ --------------
Law/Effective Date Applicable
------------------ ----------
Anti-Predatory Lending
----------------------
Law
---
---------------------------- ---------------------------------------- --------------------------
Georgia (Oct. 1, 2002 - Georgia Fair Lending Act, Ga. 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
------------------------------------------
---------------------------- ---------------------------------------- --------------------------
State/Jurisdiction Name of Anti-Predatory Lending Category under
------------------ ------------------------------ --------------
Law/Effective Date Applicable
------------------ ----------
Anti-Predatory Lending
----------------------
Law
---
---------------------------- ---------------------------------------- --------------------------
New Jersey New Jersey Home Ownership Security Act Home Loan
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. Home Loan
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 High Consumer Home Loan
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 Consumer Home Loan
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)
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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
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Typed Name
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SCHEDULE A
MORTGAGE LOAN SCHEDULE
[On File with the Trustee and the Securities Administrator]
SCH. A-1
2
SCHEDULE B
PRINCIPAL BALANCES SCHEDULE
[Attached to Prospectus Supplement, if applicable]
SCH. B-1
