STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
as DEPOSITOR,
and
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as GRANTOR TRUSTEE
GRANTOR TRUST AGREEMENT
Dated as of March 31, 2006
GreenPoint Mortgage Funding Grantor Trust 2006-AR2
Mortgage Pass-Through Certificates,
Series 2006-AR2
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS...................................................1
ARTICLE II CONVEYANCE OF UNDERLYING CERTIFICATES; ORIGINAL ISSUANCE
OF CERTIFICATES...............................................7
Section 2.01. CONVEYANCE OF UNDERLYING CERTIFICATES TO GRANTOR
TRUSTEE.................................................7
Section 2.02. ACCEPTANCE BY GRANTOR TRUSTEE...........................8
Section 2.03. SWAP AGREEMENT..........................................8
Section 2.04. REPRESENTATIONS AND WARRANTIES CONCERNING THE
DEPOSITOR...............................................8
ARTICLE III ACCOUNTS.....................................................10
Section 3.01. GRANTOR TRUST DISTRIBUTION ACCOUNT.....................10
Section 3.02. PERMITTED WITHDRAWALS AND TRANSFERS FROM THE
GRANTOR TRUST DISTRIBUTION ACCOUNT.....................10
ARTICLE IV CERTIFICATES.................................................11
Section 4.01. CERTIFICATES...........................................11
Section 4.02. REGISTRATION OF TRANSFER AND EXCHANGE OF
CERTIFICATES...........................................12
Section 4.03. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES......14
Section 4.04. PERSONS DEEMED OWNERS..................................14
Section 4.05. ERISA RESTRICTIONS.....................................14
ARTICLE V PAYMENTS TO CERTIFICATEHOLDERS...............................16
Section 5.01. DISTRIBUTIONS ON THE CERTIFICATES......................16
Section 5.02. ALLOCATION OF LOSSES...................................17
Section 5.03. PAYMENTS...............................................17
Section 5.04. STATEMENTS TO CERTIFICATEHOLDERS.......................18
ARTICLE VI INDEMNIFICATION..............................................20
Section 6.01. INDEMNIFICATION OF THE GRANTOR TRUSTEE.................20
ARTICLE VII CONCERNING THE GRANTOR TRUSTEE...............................21
Section 7.01. DUTIES OF THE GRANTOR TRUSTEE..........................21
Section 7.02. CERTAIN MATTERS AFFECTING THE GRANTOR TRUSTEE..........22
Section 7.03. GRANTOR TRUSTEE NOT LIABLE FOR CERTIFICATES OR
MORTGAGE LOANS.........................................23
Section 7.04. GRANTOR TRUSTEE MAY OWN CERTIFICATES...................24
Section 7.05. EXPENSES...............................................24
Section 7.06. ELIGIBILITY REQUIREMENTS FOR GRANTOR TRUSTEE ..........24
Section 7.07. INSURANCE..............................................25
Section 7.08. RESIGNATION AND REMOVAL OF THE GRANTOR TRUSTEE ........25
Section 7.09. SUCCESSOR GRANTOR TRUSTEE..............................26
Section 7.10. MERGER OR CONSOLIDATION OF GRANTOR TRUSTEE.............26
Section 7.11. APPOINTMENT OF CO-GRANTOR TRUSTEE OR SEPARATE
GRANTOR TRUSTEE........................................27
Section 7.12. FEDERAL INFORMATION RETURNS AND REPORTS TO
CERTIFICATEHOLDERS; GRANTOR TRUST ADMINISTRATION.......28
ARTICLE VIII TERMINATION..................................................29
Section 8.01. TERMINATION UPON REPURCHASE BY THE DEPOSITOR OR
ITS DESIGNEE OR LIQUIDATION OF THE MORTGAGE LOANS......29
ARTICLE IX MISCELLANEOUS PROVISIONS.....................................30
Section 9.01. INTENT OF PARTIES......................................30
Section 9.02. ACTION UNDER UNDERLYING DOCUMENTS......................30
Section 9.03. AMENDMENT..............................................30
Section 9.04. RECORDATION OF AGREEMENT...............................31
Section 9.05. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.............31
Section 9.06. ACTS OF CERTIFICATEHOLDERS.............................32
Section 9.07. GOVERNING LAW..........................................33
Section 9.08. NOTICES................................................33
Section 9.09. SEVERABILITY OF PROVISIONS.............................34
Section 9.10. SUCCESSORS AND ASSIGNS.................................34
Section 9.11. ARTICLE AND SECTION HEADINGS...........................34
Section 9.12. COUNTERPARTS...........................................34
Section 9.13. NOTICE TO RATING AGENCIES..............................34
Section 9.14. ENFORCEMENT OF RIGHTS..................................34
Exhibit A GRANTOR TRUST CLASS III-A-1 CERTIFICATE
Exhibit B COPY OF UNDERLYING CERTIFICATES
Exhibit C SWAP AGREEMENT
Exhibit D UNDERLYING POOLING AND SERVICING AGREEMENT
GRANTOR TRUST AGREEMENT
Grantor Trust Agreement, dated March 31, 2006, between Structured Asset
Mortgage Investments II Inc., a Delaware corporation, as depositor (the
"Depositor") and Xxxxx Fargo Bank, National Association, as grantor trustee
(the "Grantor Trustee").
PRELIMINARY STATEMENT
On the Closing Date, the Depositor will acquire the Underlying
Certificates. On the Closing Date, the Depositor will transfer the Underlying
Certificates and receive the Certificates evidencing the entire beneficial
ownership interest in the Trust Fund.
The Grantor Trustee on behalf of the Trust shall make an election for
the assets constituting the Trust Fund to be treated for federal income tax
purposes as a grantor trust.
In consideration of the mutual agreements herein contained, the
Depositor and the Grantor Trustee agree as follows:
ARTICLE I
Definitions
Whenever used in this Agreement, the following words and phrases,
unless otherwise expressly provided or unless the context otherwise requires,
shall have the meanings specified in this Article. Capitalized terms not
otherwise defined herein shall have the meanings assigned to such terms in
the Underlying Pooling and Servicing Agreement.
Accrued Certificate Interest: For the Certificates and any
Distribution Date, the interest accrued during the related Interest Accrual
Period at the applicable Pass-Through Rate on the Current Principal Amount of
the Certificates immediately prior to such Distribution Date, less any
Underlying Interest Shortfall allocated to the Underlying Certificates
pursuant to the Underlying Pooling and Servicing Agreement). Interest on the
Certificates shall be calculated on the basis of a 360-day year and the
actual number of days in the related Interest Accrual Period.
Affiliate: As to any Person, any other Person controlling, controlled
by or under common control with such Person. "Control" means the power to
direct the management and policies of a Person, directly or indirectly,
whether through ownership of voting securities, by contract or otherwise.
"Controlled" and "Controlling" have meanings correlative to the foregoing.
The Grantor Trustee may conclusively presume that a Person is not an
Affiliate of another Person unless a Responsible Officer of the Grantor
Trustee has actual knowledge to the contrary.
Agreement: This Grantor Trust Agreement and all amendments hereof and
supplements hereto.
Assumed Final Distribution Date: March 25, 2036, or if such day is not
a Business Day, the next succeeding Business Day.
Available Funds: With respect to any Distribution Date and the Class
III-A-1 Underlying Certificates, the sum of (i) any payments received by the
Grantor Trustee with respect to the Class III-A-1 Underlying Certificates and
(ii) any payments received by the Grantor Trustee from or with respect to the
Swap Counterparty pursuant to the Swap Agreement, following the payment of
amounts to reimburse the Grantor Trustee for its reimbursable expenses as set
forth herein.
Bankruptcy Code: The United States Bankruptcy Code, as amended as
codified in 11 U.S.C. §§ 101-1330.
Book-Entry Certificates: The Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which the New York Stock Exchange or Federal Reserve is closed or on
which banking institutions in the jurisdiction in which the Underlying
Trustee, the Custodian, the Certificate Insurer or the Servicer are
authorized or obligated by law or executive order to be closed.
Certificate: Any Class III-A-1 Certificate evidencing a beneficial
ownership interest in the Trust Fund signed by the Grantor Trustee in
substantially the forms annexed hereto as Exhibit A, with the blanks therein
appropriately completed.
Certificate Owner: Any Person who is the beneficial owner of a
Certificate registered in the name of DTC or its nominee.
Certificate Register: The register maintained pursuant to Section 4.02.
Certificateholder: A Holder of a Certificate.
Class III-A-1 Underlying Certificates: The Class III-A-1 Certificates
issued pursuant to the Underlying Pooling and Servicing Agreement.
Closing Date: March 31, 2006.
Code: The Internal Revenue Code of 1986, as amended.
Corporate Trust Office: With respect to the Grantor Trustee and the
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 Group,
GreenPoint Mortgage Funding Grantor Trust 2006-AR2, 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 Group, GreenPoint Mortgage Funding Grantor Trust 2006-AR2.
Current Principal Amount: With respect to the Certificates as of any
Distribution Date, the initial principal amount of the Certificate on the
Closing Date, reduced by (i) all amounts allocable to principal previously
distributed with respect to the Certificate and (ii) the principal portion of
all Underlying Realized Losses allocated prior to such Distribution Date to
such Certificate (indirectly, through the related Underlying Certificates).
Cut-Off Date: March 1, 2006.
Depositor: Structured Asset Mortgage Investments II Inc., a Delaware
limited liability company, or its successors in interest.
Distribution Date: The 25th day of any month, beginning in the month
immediately following the month of the Closing Date, or, if such 25th day is
not a Business Day, the Business Day immediately following.
DTC: The Depository Trust Company, the nominee of which is Cede & Co.,
or any successor thereto.
DTC Agreement: The meaning specified in Subsection 4.01(a) hereof.
DTC Custodian: The Grantor Trustee, or its successor in interest as
custodian for DTC.
DTC Participant: A broker, dealer, bank or other financial institution
or other Person for whom from time to time DTC effects book-entry transfers
and pledges of securities deposited with DTC.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Xxxxxx Mae: Xxxxxx Xxx (also known as Federal National Mortgage
Association) or any successor thereto.
FDIC: Federal Deposit Insurance Corporation or any successor thereto.
Fractional Undivided Interest: The fractional undivided interest
evidenced by any Certificate, the numerator of which is the Current Principal
Amounts allocated to such Certificate and the denominator of which is the
aggregate Current Principal Amounts of the Certificates.
Xxxxxxx Mac: Xxxxxxx Mac (also known as the Federal Home Loan Mortgage
Corporation) or any successor thereto.
Grantor Trust Distribution Account: The trust account or accounts
created and maintained pursuant to Section 3.01, which shall be denominated
"Xxxxx Fargo Bank, National Association, as Grantor Trustee for the benefit
of the holders of Structured Asset Mortgage Investments II Inc., GreenPoint
Mortgage Funding Grantor Trust 2006-AR2, Mortgage Pass-Through Certificates,
Series 2006-AR2 - Grantor Trust Distribution Account."
Grantor Trustee: Xxxxx Fargo Bank, National Association, or its
successor in interest, or any successor grantor trustee appointed as herein
provided.
Holder: The Person in whose name a Certificate is registered in the
Certificate Register, except that, subject to Subsections 9.03(b) and
9.06(e), solely for the purpose of giving any consent pursuant to this
Agreement, any Certificate registered in the name of the Depositor or the
Grantor Trustee or any Affiliate thereof shall be deemed not to be
outstanding and the Fractional Undivided Interest evidenced thereby shall not
be taken into account in determining whether the requisite percentage of
Fractional Undivided Interests necessary to effect any such consent has been
obtained.
Indemnified Persons: The Grantor Trustee and their respective
officers, directors, agents and employees and any separate grantor trustee or
co-grantor trustee and their respective officers, directors, agents and
employees.
Independent: When used with respect to any specified Person, this term
means that such Person (a) is in fact independent of the Depositor and of any
Affiliate of the Depositor, (b) does not have any direct financial interest
or any material indirect financial interest in the Depositor or any Affiliate
of the Depositor and (c) is not connected with the Depositor or any Affiliate
of the Depositor as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
Interest Accrual Period: With respect to the Certificates, the period
from and including the preceding Distribution Date (or, in the case of the
first Distribution Date, from the Closing Date) to and including the day
prior to the current Distribution Date. For purposes of clarification, if
the Closing Date occurs in a month that contains thirty one (31) days, the
first Interest Accrual Period shall include the 31st day of such month.
LIBOR: LIBOR as determined by the Underlying Trustee pursuant to the
Underlying Pooling and Servicing Agreement.
Moody's: Xxxxx'x Investors Service, Inc. or its successor in interest.
One-Month LIBOR: One-Month LIBOR as determined by the Underlying
Trustee pursuant to the Underlying Pooling and Servicing Agreement.
Opinion of Counsel: A written opinion of counsel who is or are
acceptable to the Grantor Trustee and who, unless required to be Independent
(an "Opinion of Independent Counsel"), may be internal counsel for the
Depositor.
Optional Termination Date: As defined in the Underlying Pooling and
Servicing Agreement.
Pass-Through Rate: With respect to the Class III-A-1 Certificates and
any Distribution Date, One-Month LIBOR plus 0.230% per annum, calculated on
the basis of a 360-day year and the actual number of days in the related
Interest Accrual Period.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Rating Agencies: S&P and Moody's.
Record Date: With respect to the Certificates, the Business Day
preceding the applicable Distribution Date.
Responsible Officer: Any officer assigned to the Corporate Trust
Office (or any successor thereto), including any Vice President, Assistant
Vice President, Trust Officer, any Assistant Secretary, any trust officer or
any other officer of the Grantor Trustee customarily performing functions
similar to those performed by any of the above designated officers and having
direct responsibility for the administration of this Agreement.
S&P: Standard and Poor's, a division of The XxXxxx-Xxxx Companies,
Inc., and its successor in interest.
Swap Agreement: The ISDA Master Agreement and related Confirmation,
dated the Closing Date, between the Swap Counterparty and the Grantor Trustee
with respect to the Class III-A-1 Certificates.
Swap Counterparty: Bear Xxxxxxx Capital Markets Inc., or any successor
swap counterparty appointed in accordance with the Swap Agreement.
Swap Counterparty Payment: On each Distribution Date, amounts due to
the Swap Counterparty pursuant to the Swap Agreement.
Swap Termination Event: A default by the Swap Counterparty of its
obligations under the Swap Agreement.
Trust Fund or Trust: The corpus of the trust created by this
Agreement, consisting of the Underlying Certificates, the Swap Agreement and
the other assets described in Section 2.01.
Underlying Certificates: The Class III-A-1 Certificates issued
pursuant to the Underlying Pooling and Servicing Agreement.
Underlying Certificates Remittance Report: The remittance report
provided to the Holders of the Underlying Certificates in accordance with
Section 6.04 of the Underlying Pooling and Servicing Agreement.
Underlying Interest Shortfalls: Any Underlying Realized Losses and Net
Interest Shortfalls (as defined in the Underlying Pooling and Servicing
Agreement) allocated to the Underlying Certificates pursuant to Section
6.02(g) of the Underlying Pooling and Servicing Agreement.
Underlying Mortgage Loans: The Mortgage Loans deposited into the
Underlying Trust created by the Underlying Pooling and Servicing Agreement.
Underlying Pooling and Servicing Agreement: The Pooling and Servicing
Agreement dated as of March 1, 2006, by and among Structured Asset Mortgage
Investments II Inc., as depositor, Xxxxx Fargo Bank, National Association,
not in its individual capacity but solely as trustee, and EMC Mortgage
Corporation, as servicer, company and sponsor, attached hereto as Exhibit D.
Underlying Realized Losses: Any Realized Losses on the Mortgage Loans
allocated to the Underlying Certificates pursuant to the Underlying Pooling
and Servicing Agreement.
Underlying Trust: The corpus of the trust created by the Underlying
Pooling and Servicing Agreement.
Underlying Trustee: Xxxxx Fargo Bank, National Association, as trustee
under the Underlying Pooling and Servicing Agreement, or its successor in
interest, or any successor trustee appointed as provided in the Underlying
Pooling and Servicing Agreement.
ARTICLE II
Conveyance of Underlying Certificates;
Original Issuance of Certificates
Section 2.01. CONVEYANCE OF UNDERLYING CERTIFICATES TO GRANTOR TRUSTEE.
The Depositor, concurrently with the execution and delivery hereof, does
hereby transfer, convey and assign to the Grantor Trustee, in trust, for the
use and benefit of the Certificateholders, (i) all the right, title and
interest of the Depositor in and to the Underlying Certificates, (ii) all
distributions on the Underlying Certificates after the Closing Date and (iii)
all other assets constituting the Trust Fund.
In connection with such transfer and assignment, the Depositor is
causing the delivery of the Underlying Certificates to the Grantor Trustee.
It is intended by the Depositor that the conveyance of the Depositor's
right, title and interest in and to the Underlying Certificates and all other
assets constituting the Trust Fund pursuant to this Agreement shall
constitute, and be construed as, an absolute sale of the Underlying
Certificates and the other assets constituting the Trust Fund by the
Depositor to the Grantor Trustee for the benefit of the Certificateholders.
Furthermore, it is not intended by the Depositor that such conveyance be
deemed a pledge of the Underlying Certificates and the other assets
constituting the Trust Fund by the Depositor to the Grantor Trustee to secure
a debt or other obligation of the Depositor. However, in the event that,
notwithstanding the intent of the parties, the Underlying Certificates and
the other assets constituting the Trust Fund are held to be the property of
the Depositor, or if for any other reason this Agreement is held or deemed to
create a security interest in the Underlying Certificates and the other
assets constituting the Trust Fund, then it is intended by the Depositor as
follows: (a) this Agreement shall also be deemed to be a security agreement
within the meaning of Articles 8 and 9 of the Uniform Commercial Code; (b)
the conveyance provided for in this Section shall be deemed to be a grant by
the Depositor to the Grantor Trustee of a security interest in all of the
Depositor's right, title and interest in and to the Underlying Certificates,
and all amounts payable to the holders of the Underlying Certificates and all
proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts from time to time held or invested in the Grantor Trust
Distribution Account, whether in the form of cash, instruments, securities or
other property; (c) the possession by the Grantor Trustee (or its agent,
providing that the agent authenticates a record acknowledging that it holds
possession for the benefit of the Grantor Trustee) of the Underlying
Certificates and such other items of property as constitute instruments,
money, negotiable documents or chattel paper shall be deemed to be
"possession by the secured party" for purposes of perfecting the security
interest pursuant to Section 9-313 of the Uniform Commercial Code; and (d)
notifications to persons holding such property, and acknowledgments, receipts
or confirmations from persons holding such property, shall be deemed to be
notifications to or acknowledgments, receipts or confirmations from,
financial intermediaries, bailees or agents (as applicable) of the Grantor
Trustee for the purpose of perfecting such security interest under applicable
law. It is also intended that the Trust Fund be classified (for Federal tax
purposes) as a grantor trust under subpart E, part I of subchapter J of
chapter 1 of the Code, of which the Certificateholders are owners, rather
than as an association taxable as a corporation. The powers granted and
obligations undertaken in this Agreement shall be construed so as to further
such intent.
Section 2.02. ACCEPTANCE BY GRANTOR TRUSTEE. The Grantor Trustee hereby
acknowledges the receipt by it of the Underlying Certificates and declares
that it holds and will hold such Underlying Certificates and all other assets
and documents included in the Trust Fund, in trust, upon the trusts herein
set forth, for the exclusive use and benefit of all present and future
Certificateholders in accordance with the terms of this Agreement.
ection 2.03. SWAP AGREEMENT. On the Closing Date, the Grantor Trustee
shall enter into the Swap Agreement with the Swap Counterparty.
Section 2.04. REPRESENTATIONS AND WARRANTIES CONCERNING THE DEPOSITOR.
The Depositor hereby represents and warrants to the Grantor Trustee as
follows:
(i) the Depositor (a) is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and (b) is
qualified and in good standing as a foreign corporation to do business
in each jurisdiction where such qualification is necessary, except
where the failure so to qualify would not reasonably be expected to
have a material adverse effect on the Depositor's business as presently
conducted or on the Depositor's ability to enter into this Agreement
and to consummate the transactions contemplated hereby;
(ii) the Depositor has full corporate power to own its property, to carry on
its business as presently conducted and to enter into and perform its
obligations under this Agreement;
(iii) 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; and 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 articles of
incorporation or by-laws of the Depositor, except those conflicts,
breaches or defaults which would not reasonably be expected to have a
material adverse effect on the Depositor's ability to enter into this
Agreement and to consummate the transactions contemplated hereby;
(iv) 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 those
consents, approvals, notices, registrations or other actions as have
already been obtained, given or made;
(v) this Agreement has been duly executed and delivered by the Depositor
and, assuming due authorization, execution and delivery by the other
parties hereto, constitutes a valid and binding obligation of the
Depositor enforceable against it in accordance with its terms (subject
to applicable bankruptcy and insolvency laws and other similar laws
affecting the enforcement of the rights of creditors generally);
(vi) there are no actions, suits or proceedings pending or, to the knowledge
of the Depositor, threatened against the Depositor, before or by any
court, administrative agency, arbitrator or governmental body (i) with
respect to any of the transactions contemplated by this Agreement or
(ii) 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
the Depositor's ability to enter into this Agreement or perform its
obligations under this Agreement; and the Depositor is not in default
with respect to any order of any court, administrative agency,
arbitrator or governmental body so as to materially and adversely
affect the transactions contemplated by this Agreement; and
(vii) immediately prior to the transfer and assignment to the Grantor
Trustee, each Underlying Certificate was not subject to an assignment
or pledge, and the Depositor had good and marketable title to and was
the sole owner thereof and had full right to transfer and sell such
Underlying Certificate to the Grantor Trustee free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security interest.
ARTICLE III
Accounts
Section 3.01. GRANTOR TRUST DISTRIBUTION ACCOUNT.
(a) The Grantor Trustee shall establish and maintain in the name of the
Grantor Trustee, for the benefit of the Certificateholders, the Grantor Trust
Distribution Account as a segregated trust account or accounts. The Grantor
Trustee will deposit in the Grantor Trust Distribution Account any amounts
paid to the Grantor Trust by the Underlying Trust to or with respect to the
Underlying Certificates pursuant to the Underlying Pooling and Servicing
Agreement and any amounts paid to the Grantor Trust pursuant to the Swap
Agreement.
(b) All amounts deposited to the Grantor Trust Distribution Account shall
be held by the Grantor Trustee in the name of the Grantor Trustee in trust
for the benefit of the Certificateholders in accordance with the terms and
provisions of this Agreement.
(c) The Grantor Trust Distribution Account shall constitute a trust account
of the Trust Fund segregated on the books of the Grantor Trustee and held by
the Grantor Trustee in trust in its Corporate Trust Office, and the Grantor
Trust Distribution Account and the funds deposited therein shall not be
subject to, and shall be protected from, all claims, liens, and encumbrances
of any creditors or depositors of the Grantor Trustee (whether made directly,
or indirectly through a liquidator or receiver of the Grantor Trustee). The
amount at any time credited to the Grantor Trust Distribution Account shall
be uninvested.
Section 3.02. PERMITTED WITHDRAWALS AND TRANSFERS FROM THE GRANTOR TRUST
DISTRIBUTION ACCOUNT.
(a) The Grantor Trustee may clear and terminate the Grantor Trust
Distribution Account pursuant to Section 8.01(d) and remove amounts from time
to time deposited in error into the Grantor Trust Distribution Account.
(b) On an ongoing basis, the Grantor Trustee shall withdraw from the
Grantor Trust Distribution Account any expenses, disbursements and advances
recoverable by the Grantor Trustee pursuant to Section 7.05 and any amounts
payable as indemnification pursuant to Section 6.01; provided however, to the
extent the amounts recoverable pursuant to Sections 6.01 or 7.05 relate to
the Certificates or the Swap Agreement, such amounts shall be deducted from
the Available Funds allocated to the Certificates.
(c) On each Distribution Date, the Grantor Trustee shall pay the amount
distributable to the Swap Counterparty and the Holders of the Certificates in
accordance with Section 5.01 from Available Funds in the Grantor Trust
Distribution Account.
ARTICLE IV
Certificates
Section 4.01. CERTIFICATES.
(a) DTC, the Depositor and the Grantor Trustee have entered into a
Depository Agreement dated as of March 31, 2006 (the "DTC Agreement"). The
Certificates shall at all times remain registered in the name of DTC or its
nominee and at all times: (i) registration of such Certificates may not be
transferred by the Grantor Trustee except to a successor to DTC; (ii)
ownership and transfers of registration of such Certificates on the books of
DTC shall be governed by applicable rules established by DTC; (iii) DTC may
collect its usual and customary fees, charges and expenses from its DTC
Participants; (iv) the Grantor Trustee shall deal with DTC as representative
of the Certificate Owners for purposes of exercising the rights of
Certificateholders under this Agreement, and requests and directions for, and
votes of, such representative shall not be deemed to be inconsistent if they
are made with respect to different Certificate Owners; and (v) the Grantor
Trustee may rely and shall be fully protected in relying upon information
furnished by DTC with respect to its DTC Participants.
All transfers by Certificate Owners of the Book-Entry Certificates
shall be made in accordance with the procedures established by the DTC
Participant or brokerage firm representing such Certificate Owners. Each DTC
Participant shall only transfer Book-Entry Certificates of Certificate Owners
it represents or of brokerage firms for which it acts as agent in accordance
with DTC's normal procedures.
(b) If (i)(A) the Depositor advises the Grantor Trustee in writing that DTC
is no longer willing or able to properly discharge its responsibilities under
the DTC Agreement and (B) the Grantor Trustee or the Depositor is unable to
locate a qualified successor within 30 days thereafter or (ii) the Depositor
at its option advises the Grantor Trustee in writing that it elects to
terminate the book-entry system through DTC, the Grantor Trustee shall
request that DTC notify all Certificate Owners of the occurrence of any such
event and of the availability of definitive, fully registered Certificates to
Certificate Owners requesting the same. Upon surrender to the Grantor Trustee
of the Certificates by DTC, accompanied by registration instructions from DTC
for registration, the Grantor Trustee shall issue and sign the definitive
Certificates. Neither of the Depositor nor the Grantor 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.
(c) The Certificates shall have the following designation and initial
principal amount:
Designation Initial Principal Amount
___________________________________________________________
III-A-1 $354,776,000
The Certificates shall have the Pass-Through Rate as defined herein.
(d) With respect to each Distribution Date, the Certificates shall accrue
interest during the related Interest Accrual Period. Interest on the
Certificates shall be calculated on the basis of a 360-day year and the
actual number of days in the related Interest Accrual Period, based upon the
Pass-Through Rate set forth above and the Current Principal Amount of the
Certificates applicable to such Distribution Date.
(e) The Certificates shall be substantially in the form set forth in
Exhibit A. On original issuance, the Grantor Trustee shall sign the
Certificates and shall deliver the Certificates at the direction of the
Depositor. Pending the preparation of definitive Certificates, the Grantor
Trustee may sign temporary Certificates that are printed, lithographed or
typewritten, in authorized denominations, substantially of the tenor of the
definitive Certificates in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers or authorized signatories executing such Certificates may determine,
as evidenced by their execution of such Certificates. 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 of
the Grantor Trustee, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Certificates, the Grantor Trustee
shall sign and shall deliver in exchange therefor, a like aggregate principal
amount, in authorized denominations, of definitive Certificates. Until so
exchanged, such temporary Certificates shall in all respects be entitled to
the same benefits as definitive Certificates.
(f) The Book-Entry Certificates will be registered as a single Certificate
held by a nominee of DTC or the DTC Custodian, and beneficial interests will
be held by investors through the book-entry facilities of DTC in minimum
denominations of $1,000 and increments of $1.00 in excess thereof. On the
Closing Date, the Grantor Trustee shall execute the Certificate in the entire
Current Principal Amount of the Certificates. The Grantor Trustee shall sign
the Certificates by facsimile or manual signature on behalf of the Grantor
Trustee by one of its authorized signatories, who shall be a Responsible
Officer of the Grantor Trustee or its agent. A Certificate bearing the
manual or facsimile signature of an individual who was an authorized
signatory of the Grantor Trustee or its agent at the time of issuance shall
bind the Grantor Trustee, notwithstanding that such individual has ceased to
hold such position prior to the delivery of such Certificate.
(g) No Certificate shall be entitled to any benefit under this Agreement,
or be valid for any purpose, unless there appears on such Certificate the
manually executed signature of the Grantor Trustee, or its agent, and such
signature upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates issued on the Closing Date shall be dated the
Closing Date. All Certificates issued thereafter shall be dated the date of
their signature.
Section 4.02. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) The Grantor Trustee shall maintain at its Corporate Trust Office a
Certificate Register in which, subject to such reasonable regulations as it
may prescribe, the Grantor Trustee shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein
provided.
(b) Subject to Subsection 4.01(a), upon surrender for registration of
transfer of any Certificate at any office or agency of the Grantor Trustee
maintained for such purpose, the Grantor Trustee shall sign and shall
deliver, in the name of the designated transferee or transferees, a new
Certificate of a like aggregate Fractional Undivided Interest, but bearing a
different number.
(c) At the option of the Certificateholders, Certificates may be exchanged
for other Certificates of authorized denominations of a like aggregate
Fractional Undivided Interest, upon surrender of the Certificates to be
exchanged at any such office or agency; provided, however, that no
Certificate may be exchanged for new Certificates unless the original
Fractional Undivided Interest represented by each such new Certificate (i) is
at least equal to the minimum authorized denomination or (ii) is acceptable
to the Depositor as indicated to the Grantor Trustee in writing. Whenever
any Certificates are so surrendered for exchange, the Grantor Trustee shall
sign and deliver the Certificates which the Certificateholder making the
exchange is entitled to receive.
(d) If the Grantor Trustee so requires, every Certificate presented or
surrendered for transfer or exchange shall be duly endorsed by, or be
accompanied by a written instrument of transfer, with a signature guarantee,
in form satisfactory to the Grantor Trustee, duly executed by the holder
thereof or his or her attorney duly authorized in writing.
(e) No service charge shall be made for any transfer or exchange of
Certificates, but the Grantor Trustee may require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
(f) The Grantor Trustee shall cancel all Certificates surrendered for
transfer or exchange but shall retain such Certificates in accordance with
its standard retention policy or for such further time as is required by the
record retention requirements of the Securities Exchange Act of 1934, as
amended, and thereafter may destroy such Certificates.
(g) The following legend shall be placed on the Certificates, whether upon
original issuance or upon issuance of any other Certificate in exchange
therefor or upon transfer thereof:
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (ERISA), UNLESS THE PURCHASE OF THE CERTIFICATES ON
BEHALF OF SUCH PERSON WILL NOT RESULT IN OR CONSTITUTE A NONEXEMPT
PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE, IS
PERMISSIBLE UNDER APPLICABLE LAW AND WILL NOT GIVE RISE TO ANY
OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE SERVICER, THE UNDERLYING
TRUSTEE OR THE GRANTOR TRUSTEE IN ADDITION TO THOSE OBLIGATIONS SET
FORTH IN THE UNDERLYING POOLING AND SERVICING AGREEMENT.
THE CERTIFICATES ARE SUBJECT TO THE RESTRICTIONS IN SECTION 4.05 OF THE
AGREEMENT.
Section 4.03. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
(a) If (i) any mutilated Certificate is surrendered to the Grantor Trustee,
or the Grantor Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate, and (ii) there is delivered to
the Grantor Trustee such security or indemnity as it may require to save it
harmless, and (iii) the Grantor Trustee has not received notice that such
Certificate has been acquired by a third Person, the Grantor Trustee shall
sign and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor and
Fractional Undivided Interest but in each case bearing a different number.
The mutilated, destroyed, lost or stolen Certificate shall thereupon be
canceled of record by the Grantor Trustee and shall be of no further effect
and evidence no rights.
(b) Upon the issuance of any new Certificate under this Section 4.03, the
Grantor 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 Grantor Trustee) connected
therewith. Any duplicate Certificate issued pursuant to this Section 4.03
shall constitute complete and indefeasible evidence of ownership in the Trust
Fund, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 4.04. PERSONS DEEMED OWNERS. Prior to due presentation of a
Certificate for registration of transfer, the Depositor, the Grantor Trustee
and any agent of the Depositor or the Grantor Trustee may treat the Person in
whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions pursuant to Section 5.01 and for all
other purposes whatsoever. Neither the Depositor, the Grantor Trustee, nor
any agent of the Depositor or the Grantor Trustee shall be affected by notice
to the contrary. No Certificate shall be deemed duly presented for a transfer
effective on any Record Date unless the Certificate to be transferred is
presented no later than the close of business on the third Business Day
preceding such Record Date.
Section 4.05. ERISA RESTRICTIONS.
(a) Subject to the provisions of subsection (b), no Certificates may be
acquired directly or indirectly by, or on behalf of, an employee benefit plan
or other retirement arrangement which is subject to Title I of ERISA and
Section 4975 of the Code, unless the purchase of such Certificates by or on
behalf of such Plan is permissible under applicable law, will not constitute
or result in a non-exempt prohibited transaction under ERISA or Section 4975
of the Code and will not subject the Depositor, the Servicer, the Underlying
Trustee or the Grantor Trustee to any obligation in addition to those
undertaken in the Underlying Pooling and Servicing Agreement.
(b) Any Person acquiring an interest in a Certificate, by acquisition of
such Certificate, shall be deemed to have represented to the Grantor Trustee
that either: (i) it is not acquiring an interest in such Certificate directly
or indirectly by, or on behalf of, an employee benefit plan or other
retirement arrangement which is subject to Title I of ERISA and/or Section
4975 of the Code, or (ii) the transfer and/or holding of an interest in such
Certificate to that Person and the subsequent servicing, management and/or
operation of the Trust and its assets: (I) will not result in any prohibited
transaction which is not covered under an individual or class prohibited
transaction exemption ("PTE"), including, but not limited to, XXX 00-00, XXX
00-00, XXX 00-0, XXX 95-60 or PTE 96-23 and (II) will not subject the
Depositor, the Servicer, the Underlying Trustee or the Grantor Trustee to any
obligation in addition to those undertaken in the Underlying Pooling and
Servicing Agreement. The Grantor Trustee will not be required to monitor,
determine or inquire as to compliance with the foregoing transfer
restrictions and none of such Persons shall have any liability for the
transfer of any Book-Entry Certificates made in violation of the transfer
restrictions set forth herein.
ARTICLE V
Payments to Certificateholders
Section 5.01. DISTRIBUTIONS ON THE CERTIFICATES.
(a) Interest and principal on the Certificates will be distributed monthly
on each Distribution Date, commencing in April 2006, in an aggregate amount
equal to the Available Funds for such Distribution Date.
On each Distribution Date, the Available Funds shall be
distributed as follows:
(i) FIRST, to the Swap Counterparty, the Swap Counterparty Payment (if any)
and certain termination payments (as set forth in the Swap Agreement),
if applicable, for such distribution date (other than where the Swap
Counterparty is the defaulting or affected party);
(ii) SECOND, to the extent of remaining Available Funds, to the
Certificates, the Current Interest on such class for such distribution
date;
(iii) THIRD, to the extent of remaining Available Funds, to the Certificates,
any principal distributions received from the underlying Class III-A-1
Certificates, in reduction of the Current Principal Amount thereof,
until the Current Principal Amount thereof has been reduced to zero;
and;
(iv) FOURTH, to the extent of remaining Available Funds to the Swap
Counterparty, any termination payments (as set forth in the Swap
Agreement) where the Swap Counterparty is the defaulting or affected
party.
(b) No Accrued Certificate Interest will be payable with respect to the
Certificates after the Distribution Date on which the Current Principal
Amount of the Certificates has been reduced to zero.
Section 5.02. ALLOCATION OF LOSSES.
(a) On or prior to each Determination Date, the Grantor Trustee, based
solely upon information provided to it and calculations with respect thereto
conducted by the Underlying Trustee pursuant to Section 6.04 of the
Underlying Pooling and Servicing Agreement, shall determine the amount of any
Underlying Realized Losses on the Mortgage Loans to be allocated to the
Underlying Certificates (and, correspondingly, to the related Certificates).
(b) With respect to any Certificates on any Distribution Date, the
principal portion of each Underlying Realized Loss allocated to the related
Underlying Certificates (and, correspondingly, to such Certificates) shall be
allocated among the related Certificates in proportion to their respective
Current Principal Amounts, until the Current Principal Amount thereof has
been reduced to zero.
Section 5.03. PAYMENTS.
(a) On each Distribution Date, other than the final Distribution Date, the
Grantor Trustee shall distribute to each Certificateholder of record on the
directly preceding Record Date the Certificateholder's pro rata share (based
on the aggregate Fractional Undivided Interest represented by such Holder's
Certificates) of all amounts required to be distributed on such Distribution
Date to the related Certificates, based solely on information provided to the
Grantor Trustee and calculations with respect thereto conducted by the
Underlying Trustee and the Swap Counterparty. The Grantor Trustee shall not
be required to confirm, verify or recompute any such information but shall be
entitled to rely conclusively on such information.
(b) Payment of the above amounts to each Certificateholder shall be made
(i) by check mailed to each Certificateholder entitled thereto at the address
appearing in the Certificate Register or (ii) upon receipt by the Grantor
Trustee, on or before the fifth Business Day preceding the related Record
Date, of written instructions from a Certificateholder, by wire transfer to a
United States dollar account maintained by the payee at any United States
depository institution with appropriate facilities for receiving such a wire
transfer; provided, however, that the final payment in respect of the
Certificates will be made only upon presentation and surrender of such
respective Certificates at the office or agency of the Grantor Trustee
specified in the notice to Certificateholders of such final payment.
Section 5.04. STATEMENTS TO CERTIFICATEHOLDERS.
(a) Concurrently with each distribution to Certificateholders, the Grantor
Trustee shall make available via the Grantor Trustee's internet website as
set forth below, all of the information provided to the Grantor Trustee with
respect to the Underlying Certificates pursuant to Section 6.04 of the
Underlying Pooling and Servicing Agreement.
The Grantor Trustee may make available each month, to any interested
party, the monthly statement to Certificateholders via the Grantor Trustee's
website initially located at xxx.xxxxxxx.xxx. Assistance in using the
website can be obtained by calling the Grantor Trustee's customer service
desk at (000) 000-0000. Parties that are unable to use the above distribution
option are entitled to have a paper copy mailed to them via first class mail
by calling the customer service desk and indicating such. The Grantor Trustee
shall have the right to change the way such reports are distributed in order
to make such distribution more convenient and/or more accessible to the
parties, and the Grantor Trustee shall provide timely and adequate written
notification to all parties regarding any such change.
(b) Within a reasonable period of time after the end of the preceeding
calendar year, beginning in 2007, the Grantor Trustee will furnish such
report to each Holder of the Certificates of record at any time during the
prior calendar year as to the aggregate of amounts reported pursuant to
subclauses (a)(i) and (a)(ii) of Section 6.04 of the Underlying Pooling and
Servicing Agreement with respect to the Certificates, and at the request of
the Holders, any other amounts which would enable such Holders to prepare
their tax returns for such calendar year. Such obligations shall be deemed to
have been satisfied to the extent that substantially comparable information
shall be provided by the Grantor Trustee to such Holders pursuant to the
requirements of the Code.
ARTICLE VI
Indemnification
Section 6.01. INDEMNIFICATION OF THE GRANTOR TRUSTEE. The Trust shall
indemnify the Indemnified Persons for, and will hold them harmless against,
any loss, liability or expense incurred on their part, arising out of, or in
connection with, this Agreement, the Swap Agreement and the Certificates,
including the costs and expenses (including reasonable legal fees and
expenses) of defending themselves against any such claim other than (i) any
loss, liability or expense related to such Indemnified Person's failure to
perform such Indemnified Person's duties in strict compliance with this
Agreement (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) and (ii) any loss, liability or
expense incurred by reason of such Indemnified Person's willful misfeasance,
bad faith or negligence in the performance or non-performance of duties
hereunder or by reason of such Indemnified Person's reckless disregard of
obligations and duties hereunder. Any amounts payable to an Indemnified
Person as set forth herein shall be paid by the Grantor Trustee to such
Indemnified Person from the Grantor Trust Distribution Account. This
indemnity shall survive the resignation or removal of the Grantor Trustee and
the termination of this Agreement.
ARTICLE VII
Concerning the Grantor Trustee
Section 7.01. DUTIES OF THE GRANTOR TRUSTEE.
(a) The Grantor Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement as duties of the
Grantor Trustee.
(b) Upon receipt of all resolutions, certificates, statements, opinions,
reports, documents, orders or other instruments which are specifically
required to be furnished to the Grantor Trustee pursuant to any provision of
this Agreement, the Grantor Trustee shall examine them to determine whether
they are in the form required by this Agreement; provided, however, that the
Grantor Trustee shall not be responsible for the accuracy or verification of
any calculation provided to it pursuant to this Agreement.
(c) On each Distribution Date, the Grantor Trustee shall make monthly
distributions and the final distribution to the Certificateholders from
Available Funds in the Grantor Trust Distribution Account as provided in
Section 5.01 herein based on a report prepared by the Underlying Trustee with
respect to such distributions.
(d) No provision of this Agreement shall be construed to relieve the
Grantor Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however,
that:
(i) The duties and obligations of the Grantor Trustee shall be determined
solely by the express provisions of this Agreement, the Grantor Trustee
shall not be liable except for the performance of its duties and
obligations as are specifically set forth in this Agreement, no implied
covenants or obligations shall be read into this Agreement against the
Grantor Trustee and, in the absence of bad faith on the part of the
Grantor Trustee, the Grantor Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Grantor
Trustee and conforming to the requirements of this Agreement;
(ii) The Grantor Trustee shall not be liable in its individual capacity for
an error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Grantor Trustee unless it shall be proved
that the Grantor Trustee was negligent in ascertaining the pertinent
facts;
(iii) The Grantor Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in
accordance with the directions of the Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 25%
of the Trust Fund, if such action or non-action relates to the time,
method and place of conducting any proceeding for any remedy available
to the Grantor Trustee or exercising any trust or other power conferred
upon the Grantor Trustee under this Agreement;
(iv) The Grantor Trustee shall not in any way be liable by reason of any
insufficiency in the Grantor Trust Distribution Account unless it is
determined by a court of competent jurisdiction that the Grantor
Trustee's negligence, negligent failure to act or willful misconduct
was the primary cause of such insufficiency (except to the extent that
the Grantor Trustee is obligor and has defaulted thereon); and
(v) Anything in this Agreement to the contrary notwithstanding, in no event
shall the Grantor Trustee be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Grantor Trustee has been advised
of the likelihood of such loss or damage and regardless of the form of
action.
The Grantor Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if there
is reasonable ground for believing that the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
to it.
(e) All funds received by the Grantor Trustee and required to be
deposited in the Grantor Trust Distribution Account pursuant to this
Agreement will be promptly so deposited by the Grantor Trustee.
(f) Except for those actions that the Grantor Trustee is required
expressly to take hereunder, the Grantor Trustee shall not have any
obligation or liability to take any action or to refrain from taking any
action hereunder in the absence of written direction as provided hereunder.
(g) The Grantor Trustee hereby acknowledges and agrees to reasonably
cooperate with the Trustee and the Depositor in facilitating compliance by
such parties with the provisions of Regulation AB and related rules and
regulations of the Commission, including any filings required thereby. The
Grantor Trustee acknowledges that interpretations of the requirements of the
requirements of Regulation AB may change over time, whether due to
interpretive guidance provided by the Commission or its staff, consensus
among participants in the mortgage-backed securities markets, advice of
counsel, or otherwise, and agrees to comply with requests made by the Trustee
and the Depositor in good faith for delivery of information on the basis of
evolving interpretations of Regulation AB to the extent reasonably
practicable. The Grantor Trustee shall cooperate reasonably with the Trustee
and the Depositor to deliver to such parties (including any of their
respective assignees or designees), any and all disclosure, statements,
reports, certifications, records and any other information necessary in the
reasonable, good faith determination of the Trustee and the Depositor to
permit the Trustee and the Depositor to comply with the provisions of
Regulation AB.
Section 7.02. CERTAIN MATTERS AFFECTING THE GRANTOR TRUSTEE.
Except as otherwise provided in Section 7.01:
(i) The Grantor Trustee may rely and shall be protected in acting or
refraining from acting in reliance on any resolution, certificate of
the Depositor, the Servicer or the Underlying Trustee, any certificate
of auditors or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, appraisal, bond or other paper
or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) The Grantor Trustee may consult with counsel and any written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection with respect to any action taken or
suffered or omitted by it hereunder in good faith and in accordance
with such written advice or Opinion of Counsel;
(iii) The Grantor Trustee shall not be under any obligation to exercise any
of the trusts or powers vested in it by this Agreement, other than its
obligation to give notices pursuant to this Agreement, and shall not be
under any obligation to institute, conduct or defend any litigation
hereunder or in relation hereto at the request, order or direction of
any of the Certificateholders pursuant to the provisions of this
Agreement, unless such Certificateholders shall have offered to the
Grantor Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby;
(iv) The Grantor Trustee shall not be liable in its individual capacity for
any action taken, suffered or omitted by it in good faith and believed
by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(v) The Grantor Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing to do so
by Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 25% of the Trust Fund and provided that the
payment within a reasonable time to the Grantor Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Grantor Trustee,
reasonably assured to the Grantor Trustee by the security afforded to
it by the terms of this Agreement. The Grantor Trustee may require
reasonable indemnity against such expense or liability as a condition
to taking any such action. The reasonable expense of every such
examination shall be paid pro rata by the Certificateholders requesting
the investigation;
(vi) The Grantor Trustee may (to the extent it is authorized hereunder to so
execute or perform) execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or through its Affiliates,
agents or attorneys. The Grantor Trustee shall not be liable or
responsible for the misconduct or negligence of any agent or attorney
of the Grantor Trustee appointed hereunder by the Grantor Trustee with
due care;
(vii) Should the Grantor Trustee deem the nature of any action required on
its part, other than a payment or transfer under Section 3.02 or
Section 5.01, to be unclear, the Grantor Trustee may require prior to
such action that it be provided by the Depositor with reasonable
further instructions;
(viii)The right of the Grantor Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Grantor Trustee shall not be accountable for other than its negligence,
bad faith, negligent failure to act or willful misconduct in the
performance of any such act; and
(ix) The Grantor Trustee shall not be required to give any bond or surety
with respect to the execution of the trust created hereby or the powers
granted hereunder, except as provided in Section 7.07.
Section 7.03. GRANTOR TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE
LOANS. The recitals contained herein and in the Certificates (other than the
signature of the Grantor Trustee on the Certificates) shall be taken as the
statements of the Depositor, and the Grantor Trustee shall not have any
responsibility for their correctness. The Grantor Trustee does not make any
representation as to the validity or sufficiency of the Certificates (other
than the signature of the Grantor Trustee on the Certificates). The Grantor
Trustee's signature on the Certificates shall be solely in its capacity as
Grantor Trustee, and shall not constitute the Certificates an obligation of
the Grantor Trustee in any other capacity. The Grantor Trustee shall not be
accountable for the use or application by the Depositor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor with respect to the Underlying
Certificates. The Grantor Trustee shall not be responsible for the legality,
sufficiency or validity of this Agreement, the Swap Agreement or any document
or instrument relating to this Agreement, the validity of the execution of
this Agreement or of any supplement hereto or instrument of further assurance
by any Person other than it, or the validity, priority, perfection or
sufficiency of the security for the Certificates issued hereunder or intended
to be issued hereunder. The Grantor Trustee shall not at any time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Mortgage or any Mortgage Loan, or the perfection and
priority of any Mortgage or the maintenance of any such perfection and
priority, or for or with respect to the sufficiency of the Trust Fund or its
ability to generate the payments to be distributed to Certificateholders
under this Agreement. The Grantor Trustee shall not 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 7.04. GRANTOR TRUSTEE MAY OWN CERTIFICATES. The Grantor Trustee,
in its individual capacity or in any capacity other than as Grantor Trustee
hereunder, may become the owner or pledgee of any Certificates with the same
rights it would have if it were not Grantor Trustee and may otherwise deal
with the parties hereto.
Section 7.05. EXPENSES. The Grantor Trustee and any director, officer,
employee or agent of such party, will be entitled to recover from the Grantor
Trust Distribution Account pursuant to Section 3.02(b) all reasonable out-
of-pocket expenses, disbursements and advances of such party in connection
with any event of default or breach of this Agreement or any claim or legal
action (including any pending or threatened claim or legal action) incurred
or made by such party in the administration of the trusts hereunder
(including the reasonable compensation, expenses and disbursements of its
counsel) except any such expense, disbursement or advance as may arise from
its negligence, negligent failure to act, or intentional misconduct or which
is the responsibility of the Certificateholders or the Trust Fund hereunder.
If funds in the Grantor Trust Distribution Account are insufficient therefor,
such party shall recover such expenses, disbursements and advances from the
Depositor. Such compensation and reimbursement obligation shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust.
Section 7.06. ELIGIBILITY REQUIREMENTS FOR GRANTOR TRUSTEE. The Grantor
Trustee, and any successor Grantor Trustee, shall during the entire duration
of this Agreement be a state bank or trust company or a national banking
association organized and doing business under the laws of such state or the
United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus and undivided profits of
at least $40,000,000 or, in the case of a successor Grantor Trustee,
$50,000,000, subject to supervision or examination by federal or state
authority and rated "BBB" or higher by Standard & Poor's and "Baa2" or higher
by Moody's with respect to any outstanding long-term unsecured unsubordinated
debt, and, in the case of a successor Grantor Trustee other than pursuant to
Section 7.10, rated in one of the two highest long-term debt categories of,
or otherwise acceptable to, each of the Rating Agencies. If the Grantor
Trustee 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 7.06 the combined capital and surplus of
such corporation shall be deemed to be its total equity capital (combined
capital and surplus) as set forth in its most recent report of condition so
published. In case at any time the Grantor Trustee shall cease to be eligible
in accordance with the provisions of this Section 7.06, the Grantor Trustee
shall resign immediately in the manner and with the effect specified in
Section 7.08.
Section 7.07. INSURANCE. The Grantor Trustee, at its own expense, shall
at all times maintain and keep in full force and effect: (i) fidelity
insurance, (ii) theft of documents insurance and (iii) forgery insurance
(which may be collectively satisfied by a "Financial Institution Bond" and/or
a "Bankers' Blanket Bond"). All such insurance shall be in amounts, with
standard coverage and subject to deductibles, as are customary for insurance
typically maintained by banks or their affiliates which act as custodians for
investor-owned mortgage pools. A certificate of an officer of the Grantor
Trustee as to such party's compliance with this Section 7.07 shall be
furnished to any Certificateholder upon reasonable written request.
Section 7.08. RESIGNATION AND REMOVAL OF THE GRANTOR TRUSTEE.
(a) Subject to the terms of this Agreement, the Grantor Trustee may at any
time resign and be discharged from the Trust hereby created by giving written
notice thereof to the Depositor, with a copy to the Rating Agencies. Upon
receiving such notice of resignation, the Depositor shall promptly appoint a
successor Grantor Trustee, by written instrument, in triplicate, one copy of
which instrument shall be delivered to each of the resigning Grantor Trustee
and the successor Grantor Trustee. If no successor Grantor Trustee shall have
been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Grantor Trustee may
assign its duties and obligations hereunder to a Person who satisfies the
requirements of Section 7.06 or may petition any court of competent
jurisdiction for the appointment of a successor Grantor Trustee. The Grantor
Trustee may resign hereunder unless it shall also resign as Underlying
Trustee under the Underlying Pooling and Servicing Agreement.
(b) If at any time the Grantor Trustee shall cease to be eligible in
accordance with the provisions of Section 7.06 and shall fail to resign after
written request therefor by the Depositor, or if at any time the Grantor
Trustee shall become incapable of acting, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Grantor Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Grantor
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Depositor shall promptly remove the
Grantor Trustee and appoint a successor Grantor Trustee by written
instrument, in triplicate, one copy of which instrument shall be delivered to
the Grantor Trustee so removed and one copy of which instrument shall be
delivered to the successor Grantor Trustee so appointed.
(c) The Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund may at any time remove the
Grantor Trustee and appoint a successor Grantor Trustee by written instrument
or instruments, in quadruplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Depositor and such party so removed and one copy of
which instrument shall be delivered to the successor so appointed.
(d) No resignation or removal of the Grantor Trustee and appointment of a
successor Grantor Trustee pursuant to any of the provisions of this Section
7.08 shall become effective except upon appointment of and acceptance of such
appointment by the successor Grantor Trustee as provided in Section 7.09.
Section 7.09. SUCCESSOR GRANTOR TRUSTEE.
(a) Any successor Grantor Trustee appointed as provided in Section 7.08
shall execute, acknowledge and deliver to the Depositor and to its
predecessor Grantor Trustee an instrument accepting such appointment
hereunder. The resignation or removal of the predecessor Grantor Trustee
shall then become effective and such successor Grantor Trustee without any
further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with
like effect as if originally named as Grantor Trustee herein. The predecessor
Grantor Trustee shall, after its receipt of payment of its outstanding fees
and expenses, promptly deliver to the successor Grantor Trustee all assets
and records of the Trust held by it hereunder, and the Depositor and the
predecessor Grantor Trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor Grantor Trustee all such rights,
powers, duties and obligations.
(b) No successor Grantor Trustee shall accept appointment as provided in
this Section 7.09 unless at the time of such acceptance such successor
Grantor Trustee shall be eligible under the provisions of Section 7.06.
(c) Upon acceptance of appointment by a successor Grantor Trustee as
provided in this Section 7.09, the successor Grantor Trustee shall mail
notice of the succession of such Grantor Trustee hereunder to all
Certificateholders at their addresses as shown in the Certificate Register
and to the Rating Agencies.
Section 7.10. MERGER OR CONSOLIDATION OF GRANTOR TRUSTEE. Any state bank
or trust company or national banking association into which the Grantor
Trustee may be merged or converted or with which it may be consolidated, or
any state bank or trust company or national banking association resulting
from any merger, conversion or consolidation to which the Grantor Trustee
shall be a party, or any state bank or trust company or national banking
association succeeding to all or substantially all of the corporate business
of the Grantor Trustee shall be the successor of the Grantor Trustee
hereunder, provided such state bank or trust company or national banking
association shall be eligible under the provisions of Section 7.06. Such
succession shall be valid without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 7.11. APPOINTMENT OF CO-GRANTOR TRUSTEE OR SEPARATE GRANTOR
TRUSTEE.
(a) Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust or property constituting the same may at the time be
located, the Depositor and the Grantor Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Grantor Trustee and the Depositor to act as
co-grantor trustee or co-grantor trustees, jointly with the Grantor Trustee,
or separate grantor trustee or separate grantor trustees, of all or any part
of the Trust, and to vest in such Person or Persons, in such capacity, such
title to the Trust, or any part thereof, and, subject to the other provisions
of this Section 7.11, such powers, duties, obligations, rights and trusts as
the Depositor and the Grantor Trustee may consider necessary or desirable.
(b) If the Depositor shall not have joined in such appointment within 15
days after the receipt by it of a written request so to do, the Grantor
Trustee shall have the power to make such appointment without any action by
or consent of the Depositor.
(c) No co-grantor trustee or separate grantor trustee hereunder shall be
required to meet the terms of eligibility as a successor Grantor Trustee
under Section 7.06 hereunder and no notice to Certificateholders of the
appointment of co-grantor trustee(s) or separate grantor trustee(s) shall be
required under Section 7.08 hereof.
(d) In the case of any appointment of a co-grantor trustee or separate
grantor trustee pursuant to this Section 7.11, all rights, powers, duties and
obligations conferred or imposed upon the Grantor Trustee and required to be
conferred on such co-grantor trustee shall be conferred or imposed upon and
exercised or performed by the Grantor Trustee and such separate grantor
trustee or co-grantor trustee jointly, except to the extent that under any
law of any jurisdiction in which any particular act or acts are to be
performed, the Grantor 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 or any portion thereof in any
such jurisdiction) shall be exercised and performed by such separate grantor
trustee or co-grantor trustee at the direction of the Grantor Trustee.
(e) Any notice, request or other writing given to the Grantor Trustee shall
be deemed to have been given to each of the then separate grantor trustees
and co-grantor trustees, as effectively as if given to each of them. Every
instrument appointing any separate grantor trustee or co-grantor trustee
shall refer to this Agreement and the conditions of this Article VII. Each
separate grantor trustee and co-grantor 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 Grantor 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 Grantor Trustee. Every such instrument shall be filed with the Grantor
Trustee.
(f) To the extent not prohibited by law, any separate grantor trustee or
co-grantor trustee may, at any time, request the Grantor Trustee, its agent
or attorney-in-fact, with full power and authority, to do any lawful act
under or with respect to this Agreement on its behalf and in its name. If any
separate grantor trustee or co-grantor trustee shall die, become incapable of
acting, resign or be removed, all of its estates, properties rights, remedies
and trusts shall vest in and be exercised by the Grantor Trustee, to the
extent permitted by law, without the appointment of a new or successor
Grantor Trustee.
(g) No grantor trustee under this Agreement shall be personally liable by
reason of any act or omission of another grantor trustee under this
Agreement. The Depositor and the Grantor Trustee acting jointly may at any
time accept the resignation of or remove any separate grantor trustee or
co-grantor trustee.
Section 7.12. FEDERAL INFORMATION RETURNS AND REPORTS TO
CERTIFICATEHOLDERS; GRANTOR TRUST ADMINISTRATION.
(a) The Underlying Trustee, pursuant to Section 9.12(g) of the Underlying
Pooling and Servicing Agreement, shall perform its obligations relating to
the Trust in a manner so as to maintain the status of the Trust Fund as a
grantor trust under subpart E, part I of subchapter J of chapter 1 of the
Code and not as an association taxable as a corporation, as a taxable
mortgage pool, or as a partnership and to prevent the imposition of any
federal, state or local income or other tax on the Trust Fund.
(b) The Underlying Trustee shall furnish or cause to be furnished to
holders of the Certificates, and shall file or cause to be filed with the
Internal Revenue Service, together with Form 1041 or such other form as may
be applicable, such information with respect to the income and deductions of
the Trust Fund at the time or times and in the manner required by the Code,
including furnishing the Grantor Trustee with such other customary factual
information to enable Certificateholders to prepare their tax returns,
including information required with respect to computing the accrual of
original issue and market discount.
(c) Notwithstanding any other provisions of this Agreement, the Underlying
Trustee shall comply with all federal withholding requirements with respect
to payments to Certificateholders. The consent of Certificateholders shall
not be required for any such withholding. In the event the Grantor Trustee,
based solely on instructions from such Certificateholder or other Person,
withholds any amount from any Certificateholder pursuant to federal
withholdings requirements, the Grantor Trustee shall indicate to such
Certificateholder the amount so withheld.
(d) The Underlying Trustee agrees to indemnify the Trust Fund, the Grantor
Trustee and the Depositor for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by the Trust
Fund, the Grantor Trustee or the Depositor as a result of a breach of the
Underlying Trustee's obligations set forth in this Section 7.12.
ARTICLE VIII
Termination
Section 8.01. TERMINATION UPON REPURCHASE BY THE DEPOSITOR OR ITS
DESIGNEE OR LIQUIDATION OF THE MORTGAGE LOANS.
(a) The respective obligations and responsibilities of the Depositor and
the Grantor Trustee created hereby, other than the obligation of the Grantor
Trustee to make payments to Certificateholders as hereinafter set forth,
shall terminate upon the termination of the Underlying Pooling and Servicing
Agreement or upon the making of the final payment or other liquidation of the
Underlying Certificates, or any advance with respect thereto.
(b) In no event, however, shall the Trust 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 of this Agreement.
(c) The Grantor Trustee shall give notice of any termination of the Trust
to the Certificateholders, with a copy to the Rating Agencies, upon which the
Certificateholders shall surrender their Certificates to the Grantor Trustee
for payment by the Grantor Trustee of the final distribution and cancellation
with respect thereto. Such notice shall be given by letter, mailed not later
than the 20th day of the month of such final distribution, and shall specify
(i) the Distribution Date upon which final payment of the Certificates will
be made upon presentation and surrender of the Certificates at the office of
the Grantor Trustee therein designated, (ii) the amount of any such final
payment and (iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made by the Grantor
Trustee only upon presentation and surrender of the Certificates at the
office of the Grantor Trustee therein specified.
(d) Upon the presentation and surrender of the Certificates, the Grantor
Trustee shall distribute to the remaining Certificateholders, in accordance
with their respective interests and based solely upon information provided to
it by the Underlying Trustee and calculations conducted by the Underlying
Trustee with respect thereto, all Available Funds remaining in the Grantor
Trust Distribution Account.
(e) If not all of the Certificateholders shall surrender their Certificates
for cancellation within six months after the time specified in the
above-mentioned written notice, then the Grantor Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If, within six months after the second notice, not all the
Certificates shall have been surrendered for cancellation, then the Grantor
Trustee may take appropriate steps, or appoint any agent to take appropriate
steps, to contact the remaining Certificateholders concerning surrender of
their Certificates, and the cost thereof shall be paid out of the funds and
other assets which remain subject to this Agreement.
ARTICLE IX
Miscellaneous Provisions
Section 9.01. INTENT OF PARTIES. The parties intend that the Trust Fund
shall be treated as a grantor trust for federal income tax purposes and that
the provisions of this Agreement should be construed in furtherance of this
intent.
Section 9.02. ACTION UNDER UNDERLYING DOCUMENTS. In the event that there
are any matters arising under the Underlying Pooling and Servicing Agreement
related to an Underlying Certificate which require the vote or direction of
holders of the Underlying Certificates thereunder, the Grantor Trustee, as
holder of the Underlying Certificates will vote such Underlying Certificate
in accordance with the written instructions received from holders of
Certificates evidencing at least 51% of the Fractional Undivided Interest of
the related Class of Certificates. In the absence of any such instructions,
the Grantor Trustee will not vote such Underlying Certificates.
Upon written request, the Grantor Trustee will forward to the
Certificateholders copies of any communications received regarding matters
arising that require action by holders of the Underlying Certificates.
Section 9.03. AMENDMENT.
(a) This Agreement may be amended from time to time by the Depositor and
the Grantor Trustee without the consent of the Swap Counterparty (other than
with respect to any amendment hereto that materially and adversely affects
the rights of the Swap Counterparty hereunder, which amendment shall require
the consent of the Swap Counterparty) and without notice to or the consent of
any of the Certificateholders, (i) to cure any ambiguity, (ii) to correct or
supplement any provisions herein that may be defective or inconsistent with
any other provisions herein, (iii) to conform the terms hereof to the
disclosure in the Prospectus or the Prospectus Supplement (as each such term
is defined in the Underlying Pooling and Servicing Agreement), (iv) to comply
with any changes in the Code or (v) to make any other provisions with respect
to matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement; provided, however, that,
with regard to clauses (iv) and (v) of this Section 9.03(a), such action
shall not, as evidenced by an Opinion of Independent Counsel, adversely
affect in any material respect the interests of any Certificateholder.
(b) This Agreement may also be amended from time to time by the Depositor
and Grantor Trustee with the consent of the Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 51% of
the Trust Fund, 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 Certificateholders; provided,
however, that no such amendment shall (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, (ii) reduce the aforesaid percentage of
Certificates the Holders of which are required to consent to any such
amendment, without the consent of the Holders of all Certificates then
outstanding, or (iii) result in the imposition of a tax on the Trust Fund or
cause the Trust Fund to fail to be classified as a grantor trust under
subpart E, part I of subchapter J of chapter 1 of the Code, as evidenced by
an Opinion of Counsel which shall be provided to the Grantor Trustee other
than at the Grantor Trustee's expense. Notwithstanding any other provision
of this Agreement, for purposes of the giving or withholding of consents
pursuant to this Section 9.03(b), Certificates registered in the name of or
held for the benefit of the Depositor, the Grantor Trustee or any Affiliate
thereof or nominee thereof shall be entitled to vote their Fractional
Undivided Interests with respect to matters affecting such Certificates.
(c) Promptly after the execution of any such amendment, the Grantor Trustee
shall furnish a copy of such amendment or written notification of the
substance of such amendment to the Swap Counterparty and each
Certificateholder, with a copy to the Rating Agencies.
(d) In the case of an amendment under Section 9.03(b) above, it shall not
be necessary for the Certificateholders to approve the particular form of
such an amendment. Rather, it shall be sufficient if the Certificateholders
approve the substance of the amendment. The manner of obtaining such consents
and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as the
Grantor Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the parties
hereto shall be entitled to receive and rely upon an Opinion of Counsel
stating that the execution of such amendment is authorized or permitted by
this Agreement. The parties hereto may, but shall not be obligated to, enter
into any such amendment which affects such parties' respective rights, duties
or immunities under this Agreement.
Section 9.04. RECORDATION OF AGREEMENT. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other
comparable jurisdictions in which any or all of the Mortgaged Properties are
situated, and in any other appropriate public recording office or elsewhere.
The Depositor shall effect such recordation, at the expense of the Trust and
upon the request in writing of a Certificateholder, but only if such
direction is accompanied by an Opinion of Counsel (provided at the expense of
the Certificateholder requesting recordation) to the effect that such
recordation would materially and beneficially affect the interests of the
Certificateholders or is required by law.
Section 9.05. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
(a) The death or incapacity of any Certificateholder shall not terminate
this Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust, nor
otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
(b) Except as expressly provided in this Agreement, no Certificateholders
shall have any right to vote or in any manner otherwise control the operation
and management of the Trust, 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 establish the Certificateholders from
time to time as partners or members of an association; nor shall any
Certificateholders 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.
(c) No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at
law upon, under or with respect to this Agreement against the Depositor or
any successor to any such parties unless (i) such Certificateholder
previously shall have given to the Grantor Trustee a written notice of a
continuing default, as herein provided, (ii) the Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 51% of
the Trust Fund shall have made written request upon the Grantor Trustee to
institute such action, suit or proceeding in its own name as Grantor Trustee
hereunder and shall have offered to the Grantor Trustee such reasonable
indemnity as it may require against the costs and expenses and liabilities to
be incurred therein or thereby, and (iii) the Grantor Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding.
(d) No one or more Certificateholders shall have any right by virtue of any
provision of this Agreement to affect the rights of any other
Certificateholders or to obtain or seek to obtain priority or preference over
any other such Certificateholder, or to enforce any right under this
Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 9.05, each and every
Certificateholder and the Grantor Trustee shall be entitled to such relief as
can be given either at law or in equity.
Section 9.06. ACTS OF CERTIFICATEHOLDERS.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Certificateholders
in person or by an agent duly appointed in writing. Except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Grantor Trustee and/or, where
it is expressly required by this Agreement, to the Depositor and/or the
Grantor Trustee. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
Agreement and conclusive in favor of the Grantor Trustee and the Depositor if
made in the manner provided in this Section 9.06.
(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 a certificate of a notary public or other officer authorized by law to
take acknowledgments of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his or her 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 Grantor
Trustee deems sufficient.
(c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing on such Certificates, except an endorsement in
accordance with Section 4.02 made on a Certificate presented in accordance
with Section 4.04) shall be proved by the Certificate Register, and neither
the Grantor Trustee, the Depositor nor any successor to any such parties
shall be affected by any notice to the contrary.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action of 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 or exchange thereof, if applicable, or in
lieu thereof with respect to anything done, omitted or suffered to be done by
the Grantor Trustee, the Depositor or any successor to any such party in
reliance thereon, whether or not notation of such action is made upon such
Certificates.
(e) In determining whether the Holders of the requisite percentage of
Certificates evidencing Fractional Undivided Interests have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, Certificates owned by the Grantor Trustee, the Depositor or any
Affiliate thereof shall be disregarded, except as otherwise provided in
Section 9.03(b) and except that, in determining whether the Grantor Trustee
and the Depositor and any Affiliate thereof shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Certificates which such party knows to be so owned shall be so
disregarded. Certificates which have been pledged in good faith to the
Grantor Trustee, the Depositor or any Affiliate thereof may be regarded as
outstanding if the pledgor establishes to the satisfaction of the Grantor
Trustee the pledgor's right to act with respect to such Certificates and that
the pledgor is not an Affiliate of the Grantor Trustee or the Depositor, as
the case may be.
Section 9.07. GOVERNING LAW. THIS AGREEMENT AND THE CERTIFICATES SHALL
BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS RULES, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
Section 9.08. NOTICES. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at (including delivery by
facsimile) or mailed by registered mail, return receipt requested, postage
prepaid, or by recognized overnight courier, to (i) in the case of the
Depositor, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Vice
President-Servicing, telecopier number: (000) 000-0000, or to such other
address as may hereafter be furnished to the other parties hereto in writing;
(ii) in the case of the Grantor Trustee, at its Corporate Trust Office, or
such other address as may hereafter be furnished to the other parties hereto
in writing or (iii) in the case of the Rating Agencies, Xxxxx'x Investors
Service, Inc., 00 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and
Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Residential
Mortgage Surveillance. Any notice delivered to the Depositor or the Grantor
Trustee under this Agreement shall be effective only upon receipt. Any notice
required or permitted to be mailed to a Certificateholder, unless otherwise
provided herein, shall be given by first-class mail, postage prepaid, at the
address of such Certificateholder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given when mailed, whether or not the
Certificateholder receives such notice.
Section 9.09. 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 severed from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the holders thereof.
Section 9.10. SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the respective successors
and assigns of the parties hereto.
Section 9.11. ARTICLE AND SECTION HEADINGS. The article and section
headings herein are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof.
Section 9.12. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which when so executed and delivered shall be an
original but all of which together shall constitute one and the same
instrument.
Section 9.13. NOTICE TO RATING AGENCIES. The article and section
headings herein are for convenience of reference only, and shall not limited
or otherwise affect the meaning hereof. The Grantor Trustee shall promptly
provide notice to each Rating Agency with respect to each of the following of
which it has actual knowledge:
(1) Any material change or amendment to this Agreement;
(2) The resignation or termination of the Grantor Trustee under this
Agreement;
(3) The final payment to Certificateholders; and
(4) Any change in the location of the Grantor Trust Distribution Account.
Section 9.14. ENFORCEMENT OF RIGHTS. The Grantor Trustee shall take such
action as may be necessary to enforce the rights of the Trust pursuant to the
Swap Agreement and, to the extent any Swap Agreement is terminated prior to
the Termination Date set forth therein, shall enter into any replacement swap
agreement as directed by the Depositor.
[Signature page follows]
IN WITNESS WHEREOF, the Depositor and the Grantor Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized as of the day and year first above written.
STRUCTURED ASSET MORTGAGE INVESTMENTS II
INC, as Depositor
By:_______________________________________
Name: Xxxxx Xxxxxxxxxxx
Title: Vice President
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Grantor Trustee
By:_______________________________________
Name:
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 31st day of March, 2006, before me, a notary public in and for
said State, personally appeared ____________, known to me to be a
____________ of Structured Asset Mortgage Investments II Inc., the
corporation that executed the within instrument, and also known to me to be
the person who executed it on behalf of said limited liability company, and
acknowledged to me that such limited liability company executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
______________________________________
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 31st day of March, 2006, before me, a notary public in and for
said State, personally appeared __________, known to me to be an
_____________ of Xxxxx Fargo Bank, National Association, the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
______________________________________
Notary Public
[Notarial Seal]
EXHIBIT A
GRANTOR TRUST CLASS III-A-1 CERTIFICATE
THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DECREASED BY
THE PRINCIPAL PAYMENTS MADE WITH RESPECT HERETO AND UNDERLYING REALIZED
LOSSES ALLOCABLE TO THE UNDERLYING CERTIFICATES. ACCORDINGLY, FOLLOWING THE
INITIAL ISSUANCE OF THE CERTIFICATES, THE CURRENT PRINCIPAL AMOUNT OF THIS
CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL AMOUNT BY
INQUIRY OF THE GRANTOR TRUSTEE NAMED HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE GRANTOR TRUSTEE OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED (ERISA), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, UNLESS THE PROPOSED TRANSFEREE PROVIDES THE GRANTOR TRUSTEE WITH AN
OPINION OF COUNSEL, ADDRESSED TO THE GRANTOR TRUSTEE, THE SERVICER, THE
DEPOSITOR AND THE UNDERLYING TRUSTEE AND ON WHICH THEY MAY RELY THAT IS
SATISFACTORY TO THE GRANTOR TRUSTEE, THE SERVICER AND THE UNDERLYING TRUSTEE
THAT THE PURCHASE OF THE CLASS III-A-1 CERTIFICATES ON BEHALF OF SUCH PERSON
WILL NOT RESULT IN OR CONSTITUTE A NONEXEMPT PROHIBITED TRANSACTION UNDER
ERISA OR SECTION 4975 OF THE CODE, IS PERMISSIBLE UNDER APPLICABLE LAW AND
WILL NOT GIVE RISE TO ANY OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE
SERVICER, THE UNDERLYING TRUSTEE OR THE GRANTOR TRUSTEE IN ADDITION TO THOSE
OBLIGATIONS SET FORTH IN THE UNDERLYING POOLING AND SERVICING AGREEMENT.
THE CERTIFICATES ARE SUBJECT TO THE RESTRICTIONS IN SECTION 4.05 OF THE
AGREEMENT.
Certificate No. 1 Variable Pass-Through Rate
Grantor Trust Class III-A-1
Date of Grantor Trust Agreement: Aggregate Initial Current Principal
March 31, 2006 Amount of this Certificate as of
the Cut-off Date: $[____________]
Cut-off Date: March 1, 2006
First Distribution Date: Initial Current Principal Amount of
April 25, 2006 this Certificate as of the Cut-off
Date: $[____________]
Assumed Final Distribution Date: CUSIP: [____________]
March 25, 2036
GREENPOINT MORTGAGE FUNDING GRANTOR TRUST
2006-AR2
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2006-AR2
evidencing a fractional undivided interest in the distributions
allocable to the Grantor Trust Class III-A-1 Certificates with respect
to a Trust Fund consisting primarily of the Underlying Certificates
sold by STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Structured Asset
Mortgage Investments II Inc. (the "Depositor") or the Grantor Trustee
referred to below or any of their affiliates or any other person. Neither
this Certificate nor the Underlying Certificates are guaranteed or insured by
any governmental entity or by the Depositor, the Grantor Trustee or any of
their respective affiliates or any other person. None of the Depositor, the
Servicer or the Grantor Trustee nor any of their respective affiliates will
have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.
This certifies that Cede & Co. is the registered owner of the
Fractional Undivided Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust
(the "Trust Fund") consisting primarily of the Class III-A-1 certificates
(the "Underlying Certificates") sold by the Depositor. The Trust Fund was
created pursuant to the Grantor Trust Agreement, dated as of March 31, 2006
(the "Agreement"), among the Depositor, as depositor, Xxxxx Fargo Bank,
National Association, as grantor trustee (the "Grantor Trustee"), a summary
of certain of the pertinent provisions of which is set forth hereafter. To
the extent not defined herein, capitalized terms used herein shall have the
meaning ascribed to them in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of its acceptance
hereof assents and by which such Holder is bound.
Interest on this Certificate will accrue during the period from and
including the preceding Distribution Date (or in the case of the first
Distribution Date, from the Closing Date) to and including the day prior to
the current Distribution Date on the Current Principal Amount hereof at a per
annum rate equal to the Pass-Through Rate set forth in the Agreement. The
Grantor Trustee will distribute on the 25th day of each month, or, if such
25th day is not a Business Day, the immediately following Business Day (each,
a "Distribution Date"), commencing on the First Distribution Date specified
above, to the Person in whose name this Certificate is registered at the
close of business on the Business Day immediately preceding such Distribution
Date, an amount equal to the product of the Fractional Undivided Interest
evidenced by this Certificate and the amount (of interest and principal, if
any) required to be distributed to the Holders of Certificates of the same
Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month immediately following the month of the latest
scheduled maturity date of any Mortgage Loan and is not likely to be the date
on which the Current Principal Amount of this Class of Certificates will be
reduced to zero.
Distributions on this Certificate will be made by the Grantor Trustee
by check mailed to the address of the Person entitled thereto as such name
and address shall appear on the Certificate Register or, if such Person so
requests by notifying the Grantor Trustee in writing, as specified in the
Agreement. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Grantor Trustee of the
pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Grantor Trustee for
that purpose and designated in such notice. The Initial Current Principal
Amount of this Certificate is set forth above. The Current Principal Amount
hereof will be reduced to the extent of distributions allocable to principal
hereon and any Underlying Realized Losses on the Mortgage Loans allocable to
the Underlying Certificates (and, correspondingly, to the Certificates).
This Certificate is one of a duly authorized issue of Certificates designated
as set forth on the face hereof (the "Certificates"), issued in one Class.
The Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Fund for payment hereunder and that the
Grantor Trustee is not liable to the Certificateholders for any amount
payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Grantor Trustee with respect thereto.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement from
time to time by the Depositor and the Grantor Trustee with the consent of the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the Trust Fund. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in lieu hereof, whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the Holders of any
of the Certificates or the consent of the Swap Counterparty, or without the
consent of the Holders of any of the Certificates but with the consent of the
Swap Counterparty.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable with the Grantor
Trustee upon surrender of this Certificate for registration of transfer at
the offices or agencies maintained by the Grantor Trustee for such purposes,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to, the Grantor Trustee, duly executed by the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates in authorized denominations representing a like aggregate
Fractional Undivided Interest will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates without coupons
in the Class and denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates evidencing the
same Class and in the same aggregate Fractional Undivided Interest, as
requested by the Holder surrendering the same.
No service charge will be made to the Certificateholders for any such
registration of transfer, but the Grantor Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The Depositor, the Grantor Trustee and any agent of any
of them may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of Depositor, the Grantor Trustee
or any such agent shall be affected by notice to the contrary. The
obligations created by the Agreement and the Trust Fund created thereby
(other than the obligations to make payments to Certificateholders with
respect to the termination of the Agreement) shall terminate upon the
termination of the Underlying Pooling and Servicing Agreement or upon the
making of the final payment or other liquidation with respect to the
Underlying Certificates. In no event, however, will the Trust Fund created
by the Agreement continue beyond the expiration of 21 years after the death
of certain persons identified in the Agreement.
Unless this Certificate has been signed by an authorized signatory of
the Grantor Trustee by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.
[Signature page follows]
IN WITNESS WHEREOF, the Grantor Trustee has caused this Certificate to
be duly executed.
Dated: March 31, 2006
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
Not in its individual capacity but solely as
Grantor Trustee
By: _____________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class III-A-1 Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Grantor Trustee
By: _____________________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ____________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a
Fractional Undivided Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorizes the transfer of registration of such
interest to assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Grantor Trustee to issue a new Certificate of
a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
Dated: _________________________________________
Signature by or on behalf of assignor
_________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to __________________________________ for the
account of _____________________________ account number __________, or, if
mailed by check, to _________________________________________. Applicable
statements should be mailed to
_________________________________________________________. This information
is provided by _______________________________________, the assignee named
above, or ____________________________, as its agent.
EXHIBIT B
Copy of Underlying Certificates
EXHIBIT C
Swap Agreement
EXHIBIT D
Underlying Pooling and Servicing Agreement
