EXECUTION COPY
CHASE MORTGAGE FINANCE CORPORATION,
DEPOSITOR,
JPMORGAN CHASE BANK, N.A.,
SERVICER AND CUSTODIAN,
JPMORGAN CHASE BANK, N.A.,
PAYING AGENT
AND
THE BANK OF NEW YORK,
TRUSTEE
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2006
$1,024,294,266
Multi-Class Mortgage Pass-Through Certificates
Series 2006-S2
ARTICLE I DEFINITIONS................................................ 1
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; TRUST FUND................... 37
Section 2.01 Conveyance of Mortgage Loans........................... 37
Section 2.02 Acceptance by Trustee.................................. 41
Section 2.03 Trust Fund; Authentication of Certificates............. 42
Section 2.04 REMIC Elections........................................ 42
Section 2.05 Permitted Activities of Trust.......................... 47
Section 2.06 Qualifying Special Purpose Entity...................... 47
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR AND THE
SERVICER; REPURCHASE OF MORTGAGE LOANS..................... 47
Section 3.01 Representations and Warranties of the Depositor with
respect to the Mortgage Loans.......................... 47
Section 3.02 Representations and Warranties of the Servicer......... 55
Section 3.03 Option to Substitute................................... 56
ARTICLE IV THE CERTIFICATES........................................... 56
Section 4.01 The Certificates....................................... 58
Section 4.02 Registration of Transfer and Exchange of Certificates.. 62
Section 4.03 Mutilated, Destroyed, Lost or Stolen Certificates...... 62
Section 4.04 Persons Deemed Owners.................................. 62
Section 4.05 Appointment of Paying Agent and Certificate Registrar;
Certificate Account.................................... 62
Section 4.06 Authenticating Agents.................................. 63
ARTICLE V ADMINISTRATION AND SERVICING OF MORTGAGE LOANS............. 64
Section 5.01 Servicer to Service Mortgage Loans..................... 64
Section 5.02 Sub-Servicing Agreements Between Servicer and
Sub-Servicers; Enforcement of Sub-Servicer's
Obligations............................................ 65
Section 5.03 Successor Sub-Servicers................................ 65
Section 5.04 Liability of the Servicer.............................. 66
Section 5.05 No Contractual Relationship Between Sub-Servicer and
Trustee or Certificateholders.......................... 66
Section 5.06 Termination of Sub-Servicing Agreement................. 66
Section 5.07 Collection of Mortgage Loan Payments................... 66
Section 5.08 Establishment of Collection Account; Deposit in
Collection Account..................................... 66
Section 5.09 Permitted Withdrawals from the Collection Account...... 68
Section 5.10 Establishment of Escrow Account; Deposits in Escrow
Account................................................ 68
Section 5.11 Permitted Withdrawals from Escrow Account.............. 69
Section 5.12 Payment of Taxes, Insurance and Other Charges.......... 69
Section 5.13 Transfer of Accounts................................... 69
Section 5.14 [Reserved]............................................. 69
Section 5.15 Maintenance of the Primary Insurance Policies.......... 69
Section 5.16 Maintenance of Standard Hazard Policies................ 69
Section 5.17 [Reserved]............................................. 70
Section 5.18 [Reserved]............................................. 70
Section 5.19 Fidelity Bond and Errors and Omissions Insurance....... 70
Section 5.20 Collections under Insurance Policies; Enforcement of
Due-On-Sale Clauses; Assumption Agreements............. 71
Section 5.21 Income and Realization from Defaulted Mortgage Loans... 71
Section 5.22 Trustee to Cooperate; Release of Mortgage Files........ 73
Section 5.23 Servicing and Other Compensation....................... 74
Section 5.24 1934 Act Reports....................................... 74
Section 5.25 Annual Statement as to Compliance...................... 76
Section 5.26 Assessment of Compliance and Independent Public
Accountants' Attestation; Financial Statements......... 76
Section 5.27 Access to Certain Documentation; Rights of the
Depositor in Respect of the Servicer................... 78
Section 5.28 REMIC-Related Covenants................................ 79
ARTICLE VI PAYMENTS TO THE CERTIFICATEHOLDERS......................... 80
Section 6.01 Distributions.......................................... 80
Section 6.02 Statements to the Certificateholders................... 87
Section 6.03 Advances by the Servicer............................... 89
Section 6.04 Allocation of Realized Losses.......................... 90
Section 6.05 Compensating Interest; Allocation of Certain Interest
Shortfalls............................................. 91
Section 6.06 Subordination.......................................... 92
Section 6.07 [Reserved]............................................. 92
ARTICLE VII REPORTS TO BE PREPARED BY THE SERVICER..................... 93
Section 7.01 Servicer Shall Provide Information as Reasonably
Required............................................... 93
Section 7.02 Federal Information Returns and Reports to
Certificateholders..................................... 93
ARTICLE VIII THE DEPOSITOR AND THE SERVICER............................. 94
Section 8.01 Indemnification; Third Party Claims.................... 94
Section 8.02 Merger or Consolidation of the Depositor or the
Servicer............................................... 94
Section 8.03 Limitation on Liability of the Depositor, the Servicer,
the Trustee and Others................................. 95
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Section 8.04 Depositor and Servicer Not to Resign................... 95
Section 8.05 Successor to the Servicer.............................. 95
Section 8.06 Maintenance of Ratings................................. 97
ARTICLE IX DEFAULT.................................................... 97
Section 9.01 Events of Default...................................... 97
Section 9.02 Waiver of Defaults..................................... 98
Section 9.03 Trustee to Act; Appointment of Successor............... 98
Section 9.04 Notification to Certificateholders and the Rating
Agencies............................................... 98
ARTICLE X CONCERNING THE TRUSTEE..................................... 98
Section 10.01 Duties of Trustee...................................... 98
Section 10.02 Certain Matters Affecting the Trustee.................. 99
Section 10.03 Trustee Not Liable for Certificates or Mortgage Loans.. 100
Section 10.04 Trustee May Own Certificates........................... 100
Section 10.05 Fees and Expenses...................................... 100
Section 10.06 Eligibility Requirements for Trustee................... 101
Section 10.07 Resignation and Removal of the Trustee................. 101
Section 10.08 Successor Trustee...................................... 102
Section 10.09 Merger or Consolidation of Trustee..................... 102
Section 10.10 Appointment of Co-Trustee or Separate Trustee.......... 102
Section 10.11 Appointment of Office or Agency........................ 103
Section 10.12 Indemnification........................................ 103
ARTICLE XI TERMINATION................................................ 104
Section 11.01 Termination............................................ 104
ARTICLE XII MISCELLANEOUS PROVISIONS................................... 106
Section 12.01 Severability of Provisions............................. 106
Section 12.02 Limitation on Rights of Certificateholders............. 106
Section 12.03 Amendment.............................................. 107
Section 12.04 Counterparts........................................... 107
Section 12.05 Duration of Agreement.................................. 107
Section 12.06 Governing Law.......................................... 107
Section 12.07 Notices................................................ 107
Section 12.08 Further Assurances..................................... 108
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EXHIBIT A MORTGAGE LOAN SCHEDULES
EXHIBIT A-1 MORTGAGE GROUP ONE MORTGAGE LOAN SCHEDULE
EXHIBIT A-2 MORTGAGE GROUP TWO MORTGAGE LOAN SCHEDULE
EXHIBIT B CONTENTS OF MORTGAGE FILE
EXHIBIT C FORM OF CLASS A CERTIFICATE
EXHIBIT D FORM OF CLASS M CERTIFICATE
EXHIBIT E FORM OF CLASS B CERTIFICATE
EXHIBIT F FORM OF CLASS A-R CERTIFICATE
EXHIBIT G FORM OF TRUSTEE CERTIFICATION
EXHIBIT H FORM OF INVESTMENT LETTER
EXHIBIT I FORM OF RULE 144A INVESTMENT LETTER
EXHIBIT J FORM OF SPECIAL SERVICING AND COLLATERAL FUND AGREEMENT
EXHIBIT K FORM OF CLASS A-R TRANSFEREE LETTER
EXHIBIT K-1 FORM OF CLASS A-R TRANSFEROR LETTER
EXHIBIT L REQUEST FOR RELEASE OF DOCUMENTS
EXHIBIT M FORM OF TRANSFEREE ERISA REPRESENTATION LETTER
EXHIBIT N [RESERVED]
EXHIBIT O FORM OF OFFICER'S CERTIFICATE (PAYING AGENT)
EXHIBIT P LETTER OF REPRESENTATIONS
EXHIBIT Q [RESERVED]
EXHIBIT R SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
EXHIBIT S FORM OF XXXXXXXX-XXXXX CERTIFICATION
EXHIBIT T FORM OF ITEM 1123 CERTIFICATION OF SERVICER
EXHIBIT U FORM OF CLASS 1-A10 YIELD MAINTENANCE AGREEMENT
EXHIBIT U-1 FORM OF CLASS 2-A8 YIELD MAINTENANCE AGREEMENT
EXHIBIT V TARGETED PRINCIPAL BALANCES FOR THE CLASS 2-A8 CERTIFICATES
SCHEDULE X 1934 ACT FORM 8-K REPORTING OBLIGATIONS
SCHEDULE Y 1934 ACT FORM 10-D REPORTING OBLIGATIONS
SCHEDULE Z 1934 ACT FORM 10-K REPORTING OBLIGATIONS
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This Pooling and Servicing Agreement, dated as of September 1, 2006,
is executed among Chase Mortgage Finance Corporation, as depositor (together
with its permitted successors and assigns, the "Depositor"), JPMorgan Chase
Bank, N.A. ("Chase"), as servicer (together with its permitted successors and
assigns, the "Servicer") and as custodian (together with its permitted
successors and assigns, the "Custodian"), JPMorgan Chase Bank, N.A., as paying
agent (in such capacity, together with its permitted successors and assigns, the
"Paying Agent") and The Bank of New York, as trustee (together with its
permitted successors and assigns, the "Trustee").
In consideration of the premises and the mutual agreements hereinafter
set forth, the Depositor, the Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
ACCEPTED SERVICING PRACTICES: With respect to any Mortgage Loan, those
mortgage servicing practices (including collection procedures) of prudent
mortgage banking institutions which service mortgage loans of the same type as
such Mortgage Loan in the jurisdiction where the related Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan) is located, and
which are in accordance with FNMA servicing practices and procedures for MBS
pool mortgages (as defined in the FNMA Guides including future updates).
ACCOUNTANT'S ATTESTATION: As defined in Section 5.26(b).
ADDITIONAL FORM 10-D DISCLOSURE: As defined in Section 5.24(b).
ADDITIONAL FORM 10-K DISCLOSURE: As defined in Section 5.24(d).
ADVANCE: The aggregate of the advances made by the Servicer with
respect to a particular Distribution Date pursuant to Section 6.03.
AFFILIATE: With respect to any specified Person, any other Person
controlling, controlled by or under common control with such Person. For the
purposes of this definition, "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; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
AGENCY & TRUST OFFICE: With respect to the Trustee, the office of the
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of execution of this instrument is
located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; and, with respect to
the Paying Agent, the office of the Paying Agent at which at any particular time
its corporate trust business shall be administered, which office at the date of
execution of this instrument is located at 000 Xxxxxx, 0xx Xxxxx, Xxxxxxx, Xxxxx
00000.
AGGREGATE SUBORDINATED PERCENTAGE: As defined in Section
6.01(I)(b)(vii)(A).
AGREEMENT: This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
APPRAISED VALUE: The value set forth in an appraisal or
recertification document made in connection with the origination of the related
Mortgage Loan as the value of the Mortgaged Property (or the related residential
dwelling unit in the Underlying Mortgaged Property, in the case of a Co-op
Loan).
ASSESSMENT OF COMPLIANCE: As defined in Section 5.26(a).
ASSIGNMENT OF MORTGAGE: An assignment of the Mortgage, notice of
transfer (or UCC-3 assignment (or equivalent instrument) with respect to each
Co-op Loan) or equivalent instrument, in recordable form (except in the case of
a Co-op Loan), sufficient under the laws of the jurisdiction where the related
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan) is located to reflect of record the sale and assignment of the Mortgage
Loan to the Trustee, which assignment, notice of transfer or equivalent
instrument may, if permitted by law, be in the form of one or more blanket
assignments covering Mortgages secured by Mortgaged Properties located in the
same county.
AUTHENTICATING AGENT: The meaning specified in Section 4.06(a).
AVAILABLE DISTRIBUTION AMOUNT: As to either Mortgage Group or, as the
context requires, both Mortgage Groups, on any Distribution Date, an amount
equal to the amount on deposit in the Collection Account with respect to such
Mortgage Group as of the close of business two Business Days immediately
preceding the related Distribution Date (but prior to making any deposits into
the Certificate Account on such date) except:
(a) amounts received on particular Mortgage Loans in such Mortgage
Group as late payments or other recoveries of principal or interest (including
any Subsequent Recoveries, Liquidation Proceeds, Insurance Proceeds and
condemnation awards) and respecting which the Servicer previously made an
unreimbursed Advance of such amounts;
(b) reimbursement for Nonrecoverable Advances and other amounts
permitted to be withdrawn by the Servicer pursuant to Section 5.09 from, or not
required to be deposited in, the Collection Account attributable, in each case,
to Mortgage Loans in such Mortgage Group;
(c) amounts representing the Servicing Fee attributable in each case
to the Mortgage Loans in such Mortgage Group with respect to such Distribution
Date;
(d) amounts representing all or part of a Monthly Payment with respect
to a Mortgage Loan in such Mortgage Group due (i) after the related Due Period
or (ii) on or prior to the Cut-off Date;
(e) all Repurchase Proceeds, Principal Prepayments, Liquidation
Proceeds, Insurance Proceeds, Subsequent Recoveries and condemnation awards with
respect to Mortgage Loans in such Mortgage Group received after the related
Principal Prepayment Period, and all related payments of interest representing
interest for any period of time after the last day of the related Due Period for
such Mortgage Loans; and
(f) all income from Eligible Investments held in the Collection
Account for the account of the Servicer.
BANKRUPTCY AMOUNT: As of any date of determination, $259,896.34 minus
all Bankruptcy Losses on the Mortgage Loans, if any, previously allocated to the
Certificates in accordance with Section 6.04.
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BANKRUPTCY CODE: Title 11 of the United States Code, as the same may
be amended from time to time.
BANKRUPTCY LOSS: With respect to any Mortgage Loan, a Realized Loss
resulting from a Deficient Valuation or Debt Service Reduction.
BASIS RISK SHORTFALL CARRYOVER AMOUNT: For any Distribution Date and
the Class 1-A10 and Class 2-A8 Certificates, an amount equal to the sum of (i)
the excess of (x) the amount of interest such Class of Certificates accrued for
such Distribution Date at the related Certificate Rate over (y) the amount such
Class of Certificates accrued for such Distribution Date at the per annum rate
of 6.25%, in the case of the Class 1-A10 Certificates, or at the per annum rate
of 6.00%, in the case of the Class 2-A8 Certificates, and (ii) the unpaid
portion of any Basis Risk Shortfall Carryover Amount for such Class of
Certificates from prior Distribution Dates together with interest accrued on
such unpaid portion for the most recently ended Accrual Period at the related
Certificate Rate.
BENEFICIAL HOLDER: A Person holding a beneficial interest in any
Book-Entry Certificate through a Participant or an Indirect Participant or a
Person holding a beneficial interest in any Definitive Certificate.
BOOK-ENTRY CERTIFICATES: The Class A Certificates (other than the
Class A-R, Class 1-AX and Class 2-AX Certificates), Class M Certificates, Class
B-1 Certificates and Class B-2 Certificates, referred to collectively.
BUSINESS DAY: Any day other than (a) a Saturday or Sunday, (b) a legal
holiday in the States of New York and Louisiana or (c) a day on which banking
institutions in the State of New York are authorized or obligated by law or
executive order to be closed.
CAP STRIKE RATE: With respect to any Distribution Date and either of
the Class 1-A10 Yield Maintenance Agreement or Class 2-A8 Yield Maintenance
Agreement, the rate set forth under the heading "Cap Strike Rate" in Exhibit U
or Exhibit U-1, respectively.
CARRY-OVER SUBORDINATED PRINCIPAL AMOUNT: As of any Distribution Date,
with respect to any Class of Subordinated Certificates, an amount, if any, equal
to the amount of principal distributable to such Class on any prior Distribution
Date that has not been so distributed and is not attributable to a Realized
Loss.
CASH LIQUIDATION: Recovery of all cash proceeds by the Servicer with
respect to the liquidation of any Mortgage Loan, including Insurance Proceeds
and other payments or recoveries (whether made at one time or over a period of
time) which the Servicer deems to be finally recoverable, in connection with the
sale, assignment or satisfaction of such Mortgage Loan, trustee's sale,
foreclosure sale or otherwise, but only if title to the related Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan)
was not acquired by foreclosure or deed in lieu of foreclosure by the Servicer
pursuant to Section 5.21.
CERTIFICATE: Any Class A, Class M or Class B Certificate.
CERTIFICATE ACCOUNT: The account created and maintained pursuant to
Section 4.05.
CERTIFICATEHOLDER or HOLDER: The Person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purposes of
giving any consent, waiver, request or demand pursuant to this Agreement, any
Certificate registered in the name of the Depositor, the Servicer, any
Sub-Servicer, or any of their respective Affiliates shall be disregarded and the
undivided Percentage Interest evidenced thereby shall not be taken into account
in determining whether the requisite amount of Percentage Interests necessary to
effect any such consent, waiver, request or demand has been obtained. The
Trustee and the Paying Agent shall be entitled to conclusively rely upon the
certificate of the
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Depositor or the Servicer as to the determination of which Certificates are
registered in the name of such Affiliates.
CERTIFICATE GROUP: Each of (i) the Class 1-A Certificates,
collectively and (ii) the Class 2-A Certificates, collectively.
CERTIFICATE OWNER: Any Person who is the beneficial owner of a
Book-Entry Certificate registered in the name of the Depository or its nominee.
CERTIFICATE RATE: The per annum rate of interest borne by each Class
of Certificates (other than the Class A-P Certificates), which (i) in the case
of the Class 1-A1, Class 1-A2, Class 1-A5, Class 1-A6, Class 1-A7, Class 1-A8,
Class 1-A9, Class 1-A11, Class 1-A12, Class 1-A13, Class 1-A14, Class 1-A15,
Class 1-A16, Class 1-A17, Class 1-A18, Class 1-A19, Class 1-AX and Class A-R
Certificates will be 6.25%, (ii) in the case of the Class 1-A3, 2-A1, Class
2-A3, Class 2-A4, Class 2-A5, Class 2-A6, Class 2-A7, Class 2-A9 and Class 2-AX
Certificates will be 6.00%, (iii) in the case of the Class 1-A4 Certificates
will be 6.50% and (iv) in the case of the Class 2-A2 Certificates, will be
5.75%. In the case of the Class 1-A10 Certificates, the Certificate Rate with
respect to the first Distribution Date will be 6.25%, and as to any Distribution
Date thereafter, the Certificate Rate on the Class 1-A10 Certificates will equal
the lesser of (A) 0.60% plus LIBOR and (B) 9.50%, but not less than 6.25%. In
the case of the Class 2-A8 Certificates, the Certificate Rate with respect to
the first Distribution Date will be 6.00%, and as to any Distribution Date
thereafter, the Certificate Rate on the Class 2-A8 Certificates will equal the
lesser of (A) 0.50% plus LIBOR and (B) 9.50%, but not less than 6.00%. With
respect to each Class of Subordinated Certificates, the per annum rate of
interest will equal the fraction, expressed as a percentage, (I) the numerator
of which will equal the sum of (i) the product of (x) 6.25% and (y) the Group
One Subordinated Amount, and (ii) the product of (x) 6.00% and (y) the Group Two
Subordinated Amount and (II) the denominator of which will equal the sum of the
Group One Subordinated Amount and the Group Two Subordinated Amount. For federal
income tax purposes, the Certificate Rate on each Class of Subordinate
Certificates can be expressed as a per annum rate equal to the weighted average
of the interest rates on the Lower-Tier REMIC Regular Interests ending with the
designation "A" weighted on the basis of their principal amounts immediately
prior to such Distribution Date. Interest with respect to each Class of
Certificates shall be calculated based on a 360 day year comprised of twelve
30-day months.
CERTIFICATE REGISTER: The register maintained pursuant to Section
4.02.
CERTIFICATE REGISTRAR: The Person appointed by the Trustee as
Certificate Registrar pursuant to Section 4.05.
CHASE: JPMorgan Chase Bank, N.A., a national banking association, or
its successor in interest.
CHF: Chase Home Finance LLC, a Delaware limited liability company, or
its successor in interest.
CLASS: Pertaining to the Class 1-A1, Class 1-A2, Class 1-A3, Class
1-A4, Class 1-A5, Class 1-A6, Class 1-A7, Class 1-A8, Class 1-A9, Class 1-A10,
Class 1-A11, Class 1-A12, Class 1-A13, Class 1-A14, Class 1-A15, Class 1-A16,
Class 1-A17, Class 1-A18, Class 1-A19, Class 1-AX, Class A-P, Class A-R, Class
2-A1, Class 2-A2, Class 2-A3, Class 2-A4, Class 2-A5, Class 2-A6, Class 2-A7,
Class 2-A8, Class 2-A9, Class 2-AX, Class A-M, Class M-1, Class B-1, Class B-2,
Class B-3, Class B-4, Class B-5 Certificates, any Lower-Tier REMIC Interest or
any Middle-Tier REMIC Interest, as the case may be.
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CLASS 1-A CERTIFICATES: The Class 1-A1, Class 1-A2, Class 1-A3, Class
1-A4, Class 1-A5, Class 1-A6, Class 1-A7, Class 1-A8, Class 1-A9, Class 1-A10,
Class 1-A11, Class 1-A12, Class 1-A13, Class 1-A14, Class 1-A15, Class 1-A16,
Class 1-A17, Class 1-A18, Class 1-A19, Class 1-AX and Class A-R Certificates,
referred to collectively.
CLASS 1-A DEFICIENCY AMOUNT: As defined in Section 6.01(I)(b)(iii)
hereof.
CLASS 1-A1 CERTIFICATE: Any one of the Class 1-A1 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 1-A1 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A1 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class A-1 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class 1-A1 Certificates
on such Distribution Date pursuant to Section 6.05(c), and (iii) any interest
shortfall resulting from the Relief Act allocated to the Class 1-A1 Certificates
on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A1 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 1-A1 Interest Accrual Amount
over the amount actually distributed to the Class 1-A1 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(A).
CLASS 1-A2 CERTIFICATE: Any one of the Class 1-A2 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 1-A2 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A2 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A2 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class 1-A2 Certificates
on such Distribution Date pursuant to Section 6.05(c), and (iii) any interest
shortfall resulting from the Relief Act allocated to the Class 1-A2 Certificates
on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A2 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 1-A2 Interest Accrual Amount
over the amount actually distributed to the Class 1-A2 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(B).
CLASS 1-A3 CERTIFICATE: Any one of the Class 1-A3 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 1-A3 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A3 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A3 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class 1-A3 Certificates
on such Distribution Date pursuant to Section
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6.05(c), and (iii) any interest shortfall resulting from the Relief Act
allocated to the Class 1-A3 Certificates on such Distribution Date pursuant to
Section 6.05(d).
CLASS 1-A3 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 1-A3 Interest Accrual Amount
over the amount actually distributed to the Class 1-A3 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(C).
CLASS 1-A4 CERTIFICATE: Any one of the Class 1-A4 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 1-A4 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A4 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A4 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class 1-A4 Certificates
on such Distribution Date pursuant to Section 6.05(c), and (iii) any interest
shortfall resulting from the Relief Act allocated to the Class 1-A4 Certificates
on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A4 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 1-A4 Interest Accrual Amount
over the amount actually distributed to the Class 1-A4 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(D).
CLASS 1-A5 CERTIFICATE: Any one of the Class 1-A5 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 1-A5 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A5 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A5 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class 1-A5 Certificates
on such Distribution Date pursuant to Section 6.05(c), and (iii) any interest
shortfall resulting from the Relief Act allocated to the Class 1-A5 Certificates
on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A5 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 1-A5 Interest Accrual Amount
over the amount actually distributed to the Class 1-A5 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(E).
CLASS 1-A6 CERTIFICATE: Any one of the Class 1-A6 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 1-A6 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A6 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A6 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class 1-A6 Certificates
on such Distribution Date pursuant to Section
6
6.05(c), and (iii) any interest shortfall resulting from the Relief Act
allocated to the Class 1-A6 Certificates on such Distribution Date pursuant to
Section 6.05(d).
CLASS 1-A6 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 1-A6 Interest Accrual Amount
over the amount actually distributed to the Class 1-A6 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(F).
CLASS 1-A7 CERTIFICATE: Any one of the Class 1-A7 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 1-A7 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A7 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A7 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class 1-A7 Certificates
on such Distribution Date pursuant to Section 6.05(c), and (iii) any interest
shortfall resulting from the Relief Act allocated to the Class 1-A7 Certificates
on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A7 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 1-A7 Interest Accrual Amount
over the amount actually distributed to the Class 1-A7 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(G).
CLASS 1-A8 CERTIFICATE: Any one of the Class 1-A8 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 1-A8 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A8 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A8 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class 1-A8 Certificates
on such Distribution Date pursuant to Section 6.05(c), and (iii) any interest
shortfall resulting from the Relief Act allocated to the Class 1-A8 Certificates
on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A8 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 1-A8 Interest Accrual Amount
over the amount actually distributed to the Class 1-A8 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(H).
CLASS 1-A9 CERTIFICATE: Any one of the Class 1-A9 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 1-A9 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A9 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A9 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class 1-A9 Certificates
on such Distribution Date pursuant to Section
7
6.05(c), and (iii) any interest shortfall resulting from the Relief Act
allocated to the Class 1-A9 Certificates on such Distribution Date pursuant to
Section 6.05(d).
CLASS 1-A9 LOCKOUT PERCENTAGE: With respect to any Distribution Date
will equal the Outstanding Certificate Principal Balance immediately preceding
such Distribution Date of the Class 1-A9 Certificates divided by the aggregate
Outstanding Certificate Principal Balance of the Class A-R, Class 1-A1, Class
1-A2, Class 1-A3, Class 1-A4, Class 1-A5, Class 1-A6, Class 1-A7, Class 1-A8,
Class 1-A9, Class 1-A10, Class 1-A11, Class 1-A12, and Class 1-A13 Certificates,
but in no case will the Class 1-A9 Lockout Percentage exceed 100%.
CLASS 1-A9 LOCKOUT PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, will equal the product of the (1) Class 1-A9 Lockout
Percentage and (2) the portion of the Non-PO Class 1-A Optimal Principal Amount
to be distributed pursuant to clause (1)(2) in the definition of Non-PO Class
1-A Principal Payment Rules and (3) the Lockout Shift Percentage.
CLASS 1-A9 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 1-A9 Interest Accrual Amount
over the amount actually distributed to the Class 1-A9 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(I).
CLASS 1-A10 CERTIFICATE: Any one of the Class 1-A10 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 1-A10 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Group One Remittance Rate on the Outstanding
Certificate Principal Balance of the Class 1-A10 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A10 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class 1-A10
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Relief Act allocated to the Class
1-A10 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A10 MAXIMUM YIELD MAINTENANCE AGREEMENT AMOUNT: The amount
described in Section 5.29(e).
CLASS 1-A10 SCHEDULED NOTIONAL AMOUNT: With respect to any
Distribution Date set forth in Exhibit U hereto, the amount set forth with
respect to such Distribution Date in Exhibit U under the heading "Notional."
CLASS 1-A10 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 1-A10 Interest Accrual Amount
over the amount actually distributed to the Class 1-A10 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(J).
CLASS 1-A10 YIELD MAINTENANCE AGREEMENT: The Yield Maintenance
Agreement set forth on Exhibit U hereto.
CLASS 1-A11 CERTIFICATE: Any one of the Class 1-A11 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
8
CLASS 1-A11 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A11 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A11 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class 1-A11
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Relief Act allocated to the Class
1-A11 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A11 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 1-A11 Interest Accrual Amount
over the amount actually distributed to the Class 1-A11 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(K).
CLASS 1-A12 CERTIFICATE: Any one of the Class 1-A12 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 1-A12 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A12 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A12 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class 1-A12
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Relief Act allocated to the Class
1-A12 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A12 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 1-A12 Interest Accrual Amount
over the amount actually distributed to the Class 1-A12 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(L).
CLASS 1-A13 ACCRETION TERMINATION DATE: The earlier to occur of the
(i) the Distribution Date following the Distribution Date on which the aggregate
Outstanding Certificate Principal Balance of the Class 1-A12 Certificates has
been reduced to zero and (ii) the Distribution Date following the Credit Support
Depletion Date.
CLASS 1-A13 CERTIFICATE: Any one of the Class 1-A13 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 1-A13 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A13 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A13 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class 1-A13
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Relief Act allocated to the Class
1-A13 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A13 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 1-A13 Interest Accrual Amount
over the amount actually distributed to the Class 1-A13 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(M).
9
CLASS 1-A14 CERTIFICATE: Any one of the Class 1-A14 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 1-A14 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A14 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A14 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class 1-A14
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Relief Act allocated to the Class
1-A14 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A14 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 1-A14 Interest Accrual Amount
over the amount actually distributed to the Class 1-A14 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(N).
CLASS 1-A15 CERTIFICATE: Any one of the Class 1-A15 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 1-A15 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A15 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A15 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class 1-A15
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Relief Act allocated to the Class
1-A15 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A15 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 1-A15 Interest Accrual Amount
over the amount actually distributed to the Class 1-A15 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(O).
CLASS 1-A16 CERTIFICATE: Any one of the Class 1-A16 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 1-A16 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A16 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A16 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class 1-A16
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Relief Act allocated to the Class
1-A16 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A16 LOCKOUT PERCENTAGE: With respect to any Distribution Date,
will equal the Outstanding Certificate Principal Balance of the Class 1-A16
Certificates divided by the aggregate Outstanding Certificate Principal Balance
immediately preceding such Distribution Date of the Class 1-A14, Class 1-A15,
Class 1-A16, Class 1-A17, Class 1-A18 and Class 1-A19 Certificates, but in no
case will the Class 1-A16 Lockout Percentage exceed 100%.
10
CLASS 1-A16 LOCKOUT PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, will equal the product of the (1) Class 1-A16 Lockout
Percentage and (2) the portion of the Non-PO Class 1-A Optimal Principal Amount
to be distributed pursuant to clause (I)(1) in the definition of Non-PO Class
1-A Principal Payment Rules and (3) the Lockout Shift Percentage.
CLASS 1-A16 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 1-A16 Interest Accrual Amount
over the amount actually distributed to the Class 1-A16 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(P).
CLASS 1-A17 CERTIFICATE: Any one of the Class 1-A17 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 1-A17 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A17 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A17 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class 1-A17
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Relief Act allocated to the Class
1-A17 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A17 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 1-A17 Interest Accrual Amount
over the amount actually distributed to the Class 1-A17 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(Q).
CLASS 1-A18 CERTIFICATE: Any one of the Class 1-A18 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 1-A18 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A18 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A18 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting from an Excess Loss allocated to the Class 1-A18
Certificates on such Distribution Date pursuant to Section 6.05(c), and (iii)
any interest shortfall resulting from the Relief Act allocated to the Class
1-A18 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-A18 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 1-A18 Interest Accrual Amount
over the amount actually distributed to the Class 1-A18 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(R).
CLASS 1-A19 CERTIFICATE: Any one of the Class 1-A19 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 1-A19 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 1-A19 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 1-A19 Certificates on
such Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss
Interest Shortfall resulting
11
from an Excess Loss allocated to the Class 1-A19 Certificates on such
Distribution Date pursuant to Section 6.05(c), and (iii) any interest shortfall
resulting from the Relief Act allocated to the Class 1-A19 Certificates on such
Distribution Date pursuant to Section 6.05(d).
CLASS 1-A19 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 1-A19 Interest Accrual Amount
over the amount actually distributed to the Class 1-A19 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(S).
CLASS 1-AX CERTIFICATE: Any one of the Class 1-AX Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 1-AX INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Class 1-AX Notional
Amount minus (i) any Compensating Interest Shortfall allocated to the Class 1-AX
Certificates on such Distribution Date pursuant to Section 6.05(b), (ii) any
Realized Loss Interest Shortfall resulting from an Excess Loss allocated to the
Class 1-AX Certificates on such Distribution Date pursuant to Section 6.05(c),
and (iii) any interest shortfall resulting from the Relief Act allocated to the
Class 1-AX Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 1-AX NOTIONAL AMOUNT: With respect to any Distribution Date, an
amount equal to the product of the aggregate Scheduled Principal Balance of the
Non-Discount Mortgage Loans in Mortgage Group One and a fraction the numerator
of which is the Group One Stripped Interest Rate and the denominator of which is
6.25%.
CLASS 1-AX SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 1-AX Interest Accrual Amount
over the amount actually distributed to the Class 1-AX Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(T).
CLASS 2-A CERTIFICATES: The Class 2-A1, Class 2-A2, Class 2-A3, Class
2-A4, Class 2-A5, Class 2-A6, Class 2-A7, Class 2-A8, Class 2-A9 and Class 2-AX
Certificates, referred to collectively.
CLASS 2-A DEFICIENCY AMOUNT: As defined in Section 6.01(I)(b)(iv)
hereof.
CLASS 2-A1 CERTIFICATE: Any one of the Class 2-A1 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 2-A1 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 2-A1 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 2-A1 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class 2-A1 Certificates
on such Distribution Date pursuant to Section 6.05(c), and (iii) any interest
shortfall resulting from the Relief Act allocated to the Class 2-A1 Certificates
on such Distribution Date pursuant to Section 6.05(d).
CLASS 2-A1 LOCKOUT PERCENTAGE: With respect to any Distribution Date,
the Outstanding Certificate Principal Balance of the Class 2-A1 Certificates
divided by the outstanding principal balance of the Class 2-A Certificates
immediately preceding such Distribution Date, but in no case will the Class 2-A1
Lockout Percentage exceed 100%.
12
CLASS 2-A1 LOCKOUT PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the product of (1) the Class 2-A1 Lockout Percentage and (2)
the Non-PO Class 2-A Optimal Principal Amount and (3) the Lockout Shift
Percentage.
CLASS 2-A-1 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 2-A1 Interest Accrual Amount
over the amount actually distributed to the Class 2-A1 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(U).
CLASS 2-A2 CERTIFICATE: Any one of the Class 2-A2 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 2-A2 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 2-A2 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 2-A2 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class 2-A2 Certificates
on such Distribution Date pursuant to Section 6.05(c), and (iii) any interest
shortfall resulting from the Relief Act allocated to the Class 2-A2 Certificates
on such Distribution Date pursuant to Section 6.05(d).
CLASS 2-A2 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 2-A2 Interest Accrual Amount
over the amount actually distributed to the Class 2-A2 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(V).
CLASS 2-A3 CERTIFICATE: Any one of the Class 2-A3 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 2-A3 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Class 2-A3 Notional
Amount minus (i) any Compensating Interest Shortfall allocated to the Class 2-A3
Certificates on such Distribution Date pursuant to Section 6.05(b), (ii) any
Realized Loss Interest Shortfall resulting from an Excess Loss allocated to the
Class 2-A3 Certificates on such Distribution Date pursuant to Section 6.05(c),
and (iii) any interest shortfall resulting from the Relief Act allocated to the
Class 2-A3 Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 2-A3 NOTIONAL AMOUNT: With respect to any Distribution Date, an
amount equal to the product of (a) the Outstanding Certificate Principal Balance
of the Class 2-A2 Certificates immediately prior to such Distribution Date and
(b) a fraction, the numerator of which is 0.25 and the denominator of which is
6.
CLASS 2-A3 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 2-A3 Interest Accrual Amount
over the amount actually distributed to the Class 2-A3 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(W).
CLASS 2-A4 CERTIFICATE: Any one of the Class 2-A4 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
13
CLASS 2-A4 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 2-A4 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 2-A4 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class 2-A4 Certificates
on such Distribution Date pursuant to Section 6.05(c), and (iii) any interest
shortfall resulting from the Relief Act allocated to the Class 2-A4 Certificates
on such Distribution Date pursuant to Section 6.05(d).
CLASS 2-A4 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 2-A4 Interest Accrual Amount
over the amount actually distributed to the Class 2-A4 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(X).
CLASS 2-A5 CERTIFICATE: Any one of the Class 2-A5 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 2-A5 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 2-A5 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 2-A5 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class 2-A5 Certificates
on such Distribution Date pursuant to Section 6.05(c), and (iii) any interest
shortfall resulting from the Relief Act allocated to the Class 2-A5 Certificates
on such Distribution Date pursuant to Section 6.05(d).
CLASS 2-A5 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 2-A5 Interest Accrual Amount
over the amount actually distributed to the Class 2-A5 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(Y).
CLASS 2-A6 CERTIFICATE: Any one of the Class 2-A6 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 2-A6 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 2-A6 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 2-A6 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class 2-A6 Certificates
on such Distribution Date pursuant to Section 6.05(c), and (iii) any interest
shortfall resulting from the Relief Act allocated to the Class 2-A6 Certificates
on such Distribution Date pursuant to Section 6.05(d).
CLASS 2-A6 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 2-A6 Interest Accrual Amount
over the amount actually distributed to the Class 2-A6 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(Z).
CLASS 2-A7 CERTIFICATE: Any one of the Class 2-A7 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
14
CLASS 2-A7 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 2-A7 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 2-A7 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class 2-A7 Certificates
on such Distribution Date pursuant to Section 6.05(c), and (iii) any interest
shortfall resulting from the Relief Act allocated to the Class 2-A7 Certificates
on such Distribution Date pursuant to Section 6.05(d).
CLASS 2-A7 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 2-A7 Interest Accrual Amount
over the amount actually distributed to the Class 2-A7 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(AA).
CLASS 2-A8 CERTIFICATE: Any one of the Class 2-A8 Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 2-A8 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Group Two Remittance Rate on the Outstanding
Certificate Principal Balance of the Class 2-A8 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 2-A8 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class 2-A8 Certificates
on such Distribution Date pursuant to Section 6.05(c), and (iii) any interest
shortfall resulting from the Relief Act allocated to the Class 2-A8 Certificates
on such Distribution Date pursuant to Section 6.05(d).
CLASS 2-A8 MAXIMUM YIELD MAINTENANCE AGREEMENT AMOUNT: The amount
described in Section 5.29(f).
CLASS 2-A8 SCHEDULED NOTIONAL AMOUNT: With respect to any Distribution
Date set forth in Exhibit U-1 hereto, the amount set forth with respect to such
Distribution Date in Exhibit U-1 under the heading "Notional."
CLASS 2-A8 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 2-A8 Interest Accrual Amount
over the amount actually distributed to the Class 2-A8 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(BB).
CLASS 2-A8 YIELD MAINTENANCE AGREEMENT: The Yield Maintenance
Agreement set forth on Exhibit U-1 hereto.
CLASS 2-A9 ACCRETION TERMINATION DATE: The earlier to occur of (i) the
Distribution Date following the Distribution Date on which the aggregate
Outstanding Certificate Principal Balance of the Class 2-A8 Certificates has
been reduced to zero and (ii) the Distribution Date following the Credit Support
Depletion Date.
CLASS 2-A9 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class 2-A9 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class 2-A9 Certificates on such
15
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class 2-A9 Certificates
on such Distribution Date pursuant to Section 6.05(c), and (iii) any interest
shortfall resulting from the Relief Act allocated to the Class 2-A9 Certificates
on such Distribution Date pursuant to Section 6.05(d).
CLASS 2-A9 SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 2-A9 Interest Accrual Amount
over the amount actually distributed to the Class 2-A9 Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(CC).
CLASS 2-AX CERTIFICATE: Any one of the Class 2-AX Certificates,
executed by the Depositor and authenticated by the Trustee (or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent), senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit C hereto.
CLASS 2-AX INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Class 2-AX Notional
Amount minus (i) any Compensating Interest Shortfall allocated to the Class 2-AX
Certificates on such Distribution Date pursuant to Section 6.05(b), (ii) any
Realized Loss Interest Shortfall resulting from an Excess Loss allocated to the
Class 2-AX Certificates on such Distribution Date pursuant to Section 6.05(c),
and (iii) any interest shortfall resulting from the Relief Act allocated to the
Class 2-AX Certificates on such Distribution Date pursuant to Section 6.05(d).
CLASS 2-AX NOTIONAL AMOUNT: With respect to any Distribution Date, an
amount equal to the product of (a) the aggregate Scheduled Principal Balance of
the Non-Discount Mortgage Loans in Mortgage Group Two and (b) a fraction the
numerator of which is the Group Two Stripped Interest Rate and the denominator
of which is 6.00%.
CLASS 2-AX SHORTFALL: With respect to any Distribution Date, the
amount equal to the excess, if any, of the Class 2-AX Interest Accrual Amount
over the amount actually distributed to the Class 2-AX Certificateholders on
such Distribution Date pursuant to Section 6.01(I)(b)(i)(DD).
CLASS A CERTIFICATES: The Class 1-A1, Class 1-A2, Class 1-A3, Class
1-A4, Class 1-A5, Class 1-A6, Class 1-A7, Class 1-A8, Class 1-A9, Class 1-A10,
Class 1-A11, Class 1-A12, Class 1-A13, Class 1-A14, Class 1-A15, Class 1-A16,
Class 1-A17, Class 1-A18, Class 1-A19, Class 1-AX, Class A-P, Class A-R, Class
2-A1, Class 2-A2, Class 2-A3, Class 2-A4, Class 2-A5, Class 2-A6, Class 2-A7,
Class 2-A8, Class 2-A9 and Class 2-AX Certificates, referred to collectively.
CLASS A PERCENTAGE: As of any Distribution Date, the fraction,
expressed as a percentage (which shall never exceed 100%), the numerator of
which is the Class A Principal Balance and the denominator of which is the
outstanding Principal Balance of the Mortgage Loans as of the immediately
preceding Due Date.
CLASS A PRINCIPAL BALANCE: As of any Distribution Date, (a) the Class A
Principal Balance for the immediately preceding Distribution Date less (b)
amounts distributed (or deemed distributed) to the Class A Certificateholders on
such preceding Distribution Date allocable to principal (including the principal
portion of Advances of the Servicer made pursuant to Section 6.03 and Realized
Losses allocated to the Class A Certificates pursuant to Section 6.04); provided
that the Class A Principal Balance on the first Distribution Date shall be the
Original Class A Principal Balance.
CLASS A-M CERTIFICATE: Any one of the Class A-M Certificates executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
subordinated in right of payment to the Class A Certificates, substantially in
the form of the Class M Certificate set forth in Exhibit D hereto.
CLASS A-M INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one (1) month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class A-M Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class A-M Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class A-M Certificates
on such Distribution Date pursuant to Section 6.05(c) and (iii) any interest
shortfall resulting from the Relief Act allocated to the Class A-M Certificates
on such Distribution Date pursuant to Section 6.05(d).
CLASS A-M PRINCIPAL BALANCE: As of any Distribution Date, (a) the
Class A-M Principal Balance for the immediately preceding Distribution Date less
(b) amounts distributed to the Class A-M Certificateholders on such preceding
Distribution Date allocable to principal (including the principal
16
portion of Advances of the Servicer made pursuant to Section 6.03 and Realized
Losses allocated to the Class A-M Certificates pursuant to Section 6.04);
provided that the Class A-M Principal Balance on the first Distribution Date
shall be the Original Class A-M Principal Balance, and provided further that if
the aggregate Outstanding Certificate Principal Balance of the Class B and Class
M-1 Certificates has been reduced to zero, as of any Distribution Date, the
Class A-M Principal Balance will equal the excess of the Mortgage Pool Principal
Balance (together with the portion of any Monthly Payment due but not paid with
respect to which an Advance has not been made) over the Class A Principal
Balance.
CLASS A-M SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class A-M Interest Accrual Amount over the
amount actually distributed to the Class A-M Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(c)(I)(A) and 6.01(I)(c)(1)(B).
CLASS A-P AMOUNT: With respect to any Distribution Date, the
applicable PO Percentage of (i) all principal received on or in respect of each
Discount Mortgage Loan (exclusive of any amounts in respect of any Monthly
Payment) during the related Principal Prepayment Period and (ii) all principal
received as part of a Monthly Payment on or in respect of a Discount Mortgage
Loan during the related Due Period.
CLASS A-P CERTIFICATE: Any one of the Class A-P Certificates, executed
by the Depositor and authenticated by the Trustee, senior in right of payment to
the Class M and Class B Certificates, substantially in the form of the Class A
Certificate set forth in Exhibit C hereto.
CLASS A-P COMPONENT ONE: The portion of the Class A-P Certificates so
designated in Section 4.01(d).
CLASS A-P COMPONENT TWO: The portion of the Class A-P Certificates so
designated in Section 4.01(d).
CLASS A-P SHORTFALL AMOUNT: With respect to any Distribution Date
prior to and including the Credit Support Depletion Date, to the extent of
amounts available to pay the Subordinated Optimal Principal Amount (without
regard to clause (b)(2) of the definition of such term), an amount equal to the
sum of (i) the applicable PO Percentage of the principal portion of any Realized
Loss (other than an Excess Loss) with respect to a Discount Mortgage Loan and
(ii) the sum of amounts, if any, by which the amounts specified in clause (i)
with respect to each prior Distribution Date exceeded the amount actually
distributed in respect thereof on such prior Distribution Date and not
subsequently distributed to the Class A-P Certificateholders.
CLASS A-R CERTIFICATE: The Class A-R Certificates, executed by the
Depositor and authenticated by the Trustee (or, if an Authenticating Agent has
been appointed pursuant to Section 4.06, the Authenticating Agent),
substantially in the form of the Class A-R Certificate set forth in Exhibit F
hereto.
CLASS A-R INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class A-R Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class A-R Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class A-R Certificates
on such Distribution Date pursuant to Section 6.05(c), and (iii) any interest
shortfall resulting from the Relief Act allocated to the Class A-R Certificates
on such Distribution Date pursuant to Section 6.05(d).
17
CLASS A-R SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class A-R Interest Accrual Amount over the
amount actually distributed to the Class A-R Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(EE).
CLASS B CERTIFICATES: The Class B-1, Class B-2, Class B-3, Class B-4
and Class B-5 Certificates, referred to collectively.
CLASS B PERCENTAGE: As of any Distribution Date, the difference
between 100% and the sum of (i) the Class A Percentage and (ii) the Class M
Percentage for such Distribution Date.
CLASS B PRINCIPAL BALANCE: As of any Distribution Date, the excess of
the Mortgage Pool Principal Balance (together with the principal portion of any
Monthly Payment due but not paid with respect to which an Advance has not been
made) over the sum of (i) the Class A Principal Balance and (ii) the Class M
Principal Balance.
CLASS B-1 CERTIFICATE: Any one of the Class B-1 Certificates executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
subordinated in right of payment to the Class A and Class M Certificates,
substantially in the form of the Class B Certificate set forth in Exhibit E
hereto.
CLASS B-1 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-1 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class B-1 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class B-1 Certificates
on such Distribution Date pursuant to Section 6.05(c) and (iii) any interest
shortfall resulting from the Relief Act allocated to the Class B-1 Certificates
on such Distribution Date pursuant to Section 6.05(d).
CLASS B-1 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-1 Interest Accrual Amount over the
amount actually distributed to the Class B-1 Certificates on such Distribution
Date pursuant to Section 6.01(I)(d)(1) (A) and (B).
CLASS B-2 CERTIFICATE: Any one of the Class B-2 Certificates executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
subordinated in right of payment to the Class A, Class M and Class B-1
Certificates, substantially in the form of the Class B Certificate set forth in
Exhibit E hereto.
CLASS B-2 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-2 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class B-2 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class B-2 Certificates
on such Distribution Date pursuant to Section 6.05(c) and (iii) any interest
shortfall resulting from the Relief Act allocated to the Class B-2 Certificates
on such Distribution Date pursuant to Section 6.05(d).
CLASS B-2 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-2 Interest Accrual Amount over the
amount actually distributed to the Class B-2 Certificates on such Distribution
Date pursuant to Section 6.01(I)(d)(2) (A) and (B).
CLASS B-3 CERTIFICATE: Any one of the Class B-3 Certificates executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
subordinated in right of payment to the Class A, Class M, Class
18
B-1 and Class B-2 Certificates, substantially in the form of the Class B
Certificate set forth in Exhibit E hereto.
CLASS B-3 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-3 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class B-3 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class B-3 Certificates
on such Distribution Date pursuant to Section 6.05(c) and (iii) any interest
shortfall resulting from the Relief Act allocated to the Class B-3 Certificates
on such Distribution Date pursuant to Section 6.05(d).
CLASS B-3 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-3 Interest Accrual Amount over the
amount actually distributed to the Class B-3 Certificates on such Distribution
Date pursuant to Section 6.01(I)(d)(3) (A) and (B).
CLASS B-4 CERTIFICATE: Any one of the Class B-4 Certificates executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
subordinated in right of payment to the Class A, Class M, Class B-1, Class B-2
and Class B-3 Certificates, substantially in the form of the Class B Certificate
set forth in Exhibit E hereto.
CLASS B-4 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-4 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class B-4 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class B-4 Certificates
on such Distribution Date pursuant to Section 6.05(c) and (iii) any interest
shortfall resulting from the Relief Act allocated to the Class B-4 Certificates
on such Distribution Date pursuant to Section 6.05(d).
CLASS B-4 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-4 Interest Accrual Amount over the
amount actually distributed to the Class B-4 Certificates on such Distribution
Date pursuant to Section 6.01(I)(d)(4) (A) and (B).
CLASS B-5 CERTIFICATE: Any one of the Class B-5 Certificates executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
subordinated in right of payment to the Class A, Class M, Class B-1, Class B-2,
Class B-3 and Class B-4 Certificates, substantially in the form of the Class B
Certificate set forth in Exhibit E hereto.
CLASS B-5 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class B-5 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class B-5 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class B-5 Certificates
on such Distribution Date pursuant to Section 6.05(c) and (iii) any interest
shortfall resulting from the Relief Act allocated to the Class B-5 Certificates
on such Distribution Date pursuant to Section 6.05(d).
CLASS B-5 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class B-5 Interest Accrual Amount over the
amount actually distributed to the Class B-5 Certificates on such Distribution
Date pursuant to Section 6.01(I)(d)(5) (A) and (B).
CLASS LT-R INTEREST: The sole residual interest in the Lower-Tier
REMIC.
19
CLASS M CERTIFICATES: The Class A-M and Class M-1 Certificates,
referred to collectively.
CLASS M PERCENTAGE: As of any Distribution Date, the percentage
obtained by dividing (i) the sum of the Class A-M Principal Balance and the
Class M-1 Principal Balance by (ii) the Mortgage Pool Principal Balance;
provided, however, that on any Distribution Date on which the Class B Percentage
equals 0%, the Class M Percentage shall equal 100% minus the Class A Percentage.
CLASS M PRINCIPAL BALANCE: As of any Distribution Date, the sum of the
Class A-M Principal Balance and the Class M-1 Principal Balance.
CLASS M-1 CERTIFICATE: Any one of the Class M-1 Certificates executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating
Agent has been appointed pursuant to Section 4.06, the Authenticating Agent),
subordinated in right of payment to the Class A Certificates and the Class A-M
Certificates, substantially in the form of the Class M Certificate set forth in
Exhibit D hereto.
CLASS M-1 INTEREST ACCRUAL AMOUNT: With respect to any Distribution
Date, one (1) month's interest at the Certificate Rate on the Outstanding
Certificate Principal Balance of the Class M-1 Certificates minus (i) any
Compensating Interest Shortfall allocated to the Class M-1 Certificates on such
Distribution Date pursuant to Section 6.05(b), (ii) any Realized Loss Interest
Shortfall resulting from an Excess Loss allocated to the Class M-1 Certificates
on such Distribution Date pursuant to Section 6.05(c) and (iii) any interest
shortfall resulting from the Relief Act allocated to the Class M-1 Certificates
on such Distribution Date pursuant to Section 6.05(d).
CLASS M-1 PRINCIPAL BALANCE: As of any Distribution Date, (a) the
Class M-1 Principal Balance for the immediately preceding Distribution Date less
(b) amounts distributed to the Class M-1 Certificateholders on such preceding
Distribution Date allocable to principal (including the principal portion of
Advances of the Servicer made pursuant to Section 6.03 and Realized Losses
allocated to the Class M-1 Certificates pursuant to Section 6.04); provided that
the Class M-1 Principal Balance on the first Distribution Date shall be the
Original Class M-1 Principal Balance, and provided further that if the aggregate
Outstanding Certificate Principal Balance of the Class B Certificates has been
reduced to zero, as of any Distribution Date, the Class M-1 Principal Balance
will equal the excess of the Mortgage Pool Principal Balance (together with the
portion of any Monthly Payment due but not paid with respect to which an Advance
has not been made) over the sum of the Class A Principal Balance and the Class
A-M Principal Balance.
CLASS M-1 SHORTFALL: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class M-1 Interest Accrual Amount over the
amount actually distributed to the Class M-1 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(c)(2)(A) and 6.01(I)(c)(2)(B).
CLASS MT-R INTEREST: The sole residual interest in the Middle-Tier
REMIC.
CLOSING DATE: September 26, 2006.
CODE: The Internal Revenue Code of 1986, as amended from time to time,
and any successor statutes thereto, and applicable U.S. Department of Treasury
temporary or final regulations promulgated thereunder.
COLLECTION ACCOUNT: The account created and maintained pursuant to
Section 5.08.
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COMMISSION: The United States Securities and Exchange Commission.
COMPENSATING INTEREST: The meaning specified in Section 6.05(a).
COMPENSATING INTEREST SHORTFALL: The meaning specified in Section
6.05(b).
CO-OP LEASE: With respect to a Co-op Loan, the lease with respect to a
dwelling unit occupied by the Mortgagor and relating to the stock allocated to
the related dwelling unit.
CO-OP LOAN: A Mortgage Loan secured by the pledge of stock allocated
to a dwelling unit in a residential cooperative housing corporation and a
collateral assignment of the related Co-op Lease.
COUNTERPARTY: JPMorgan Chase Bank, National Association, in its
capacity as cap counterparty under the Yield Maintenance Agreements, and its
successors in interest.
CREDIT SUPPORT: With respect to each Class of Subordinated
Certificates (other than the Class B-5 Certificates), the level of credit
support supporting such Class, expressed as a percentage of the aggregate
Outstanding Certificate Principal Balance of all Classes of Certificates (other
than the Class A-P Certficates). With respect to each Distribution Date, Credit
Support for each such Class will equal in each case the percentage, rounded to
two decimal places, obtained by dividing the aggregate Outstanding Certificate
Principal Balances immediately prior to such Distribution Date of all Classes of
Subordinated Certificates having higher numerical class designations than such
Class (for this purpose, the Class M Certificates shall be deemed to have a
lower numerical class designation than each Class of Class B Certificates and
the Class A-M Certificates shall be deemed to have a lower numerical class
designation than the Class M-1 Certificates) by the aggregate Outstanding
Certificate Principal Balance of all Classes of Certificates (other than the
Class A-P Certificates) immediately prior to such Distribution Date.
CREDIT SUPPORT DEPLETION DATE: The first Distribution Date on which
the aggregate Outstanding Certificate Principal Balance of the Subordinated
Certificates has been or will be reduced to zero.
CUSTODIAN: JPMorgan Chase Bank, N.A., and its permitted successors in
interest.
CUT-OFF DATE: September 1, 2006.
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a reduction
in the scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, other than such a
reduction resulting from a Deficient Valuation.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation of
the related Mortgaged Property (or stock allocated to a dwelling unit, in the
case of a Co-op Loan) by a court of competent jurisdiction in an amount less
than the then outstanding Principal Balance of the Mortgage Loan, which
valuation results from a proceeding initiated under the Bankruptcy Code.
DEFINITIVE CERTIFICATES: The Certificates referred to in Section
4.01(c).
DEPOSITOR: Chase Mortgage Finance Corporation, a Delaware corporation,
or its successor in interest or any successor under this Agreement appointed as
herein provided.
DEPOSITORY: The Depository Trust Company, the nominee of which is Cede
& Co.
DEPOSITORY AGREEMENT: The agreement referred to in Section 4.01(b).
21
DEPOSITORY PARTICIPANT: A broker, dealer, bank or other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
DETERMINATION DATE: The sixteenth day of the month in which the
related Distribution Date occurs (or, if such sixteenth day is not a Business
Day, the preceding Business Day).
DISCOUNT MORTGAGE LOAN: Any Mortgage Loan have a Net Mortgage Rate
less than the applicable Remittance Rate.
DISQUALIFIED ORGANIZATION: An organization referred to in Section
860E(e)(5) of the Code.
DISTRIBUTION DATE: The 25th day of any month, or if such 25th day is
not a Business Day, the first Business Day immediately following, beginning with
October 25, 2006.
DUE DATE: The first day of each month, being the day of the month on
which each Monthly Payment is due on a Mortgage Loan, exclusive of any days of
grace.
DUE PERIOD: With respect to any Distribution Date, the period from the
second day of the month preceding the month in which such Distribution Date
occurs through the first day of the month in which such Distribution Date
occurs.
ELIGIBLE ACCOUNT: An account that is (i) maintained with a depository
institution the long-term unsecured debt obligations of which are rated by each
Rating Agency in one of its two highest rating categories, or (ii) maintained
with the corporate trust department of a national bank or banking corporation
which (a) has a rating of at least Baa3 or P-3 by Xxxxx'x and (b) is either
Chase or is the corporate trust department of a national bank or banking
corporation which has a rating of at least A-1 by S&P and F1 by Fitch Ratings,
or (iii) an account or accounts the deposits in which are fully insured by the
FDIC, or (iv) an account or accounts in a depository institution in which such
accounts are insured by the FDIC (to the limit established by the FDIC), the
uninsured deposits in which accounts are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to and acceptable to the Trustee
and each Rating Agency, the Certificateholders have a claim with respect to the
funds in such account and a perfected first security interest against any
collateral (which shall be limited to Eligible Investments) securing such funds
that is superior to claims of any other depositors or creditors of the
depository institution with which such account is maintained, provided, however,
that such uninsured deposits do not result in the reduction of the ratings
assigned to the Certificates by the Rating Agencies as evidenced by a letter
from each Rating Agency or (v) otherwise acceptable to each Rating Agency
without reduction or withdrawal of the rating of any Class of Certificates, as
evidenced by a letter from each Rating Agency.
ELIGIBLE INVESTMENTS: One or more of the following:
(i) obligations of, or guaranteed as to principal and interest by, the
United States or obligations of any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United States;
provided that any such obligation held as a "cash flow investment" within the
meaning of section 860G(a)(6) of the Code shall mature before the next
Distribution Date;
(ii) repurchase agreements on obligations specified in clause (i)
maturing not more than two months from the date of acquisition thereof, provided
that the long-term unsecured obligations of the party agreeing to repurchase
such obligations are at the time rated by each Rating Agency with its highest
rating and the short-term debt obligations of the party agreeing to repurchase
are rated with one of the two highest ratings by Moody's, A-1+ by S&P and, if
rated by Fitch, F+ by Fitch;
22
(iii) federal funds, certificates of deposit, time deposits and
bankers' acceptances (other than bankers' acceptances issued by Chase or any of
its Affiliates) (which shall each have an original maturity of not more than 60
days and, in the case of bankers' acceptances, shall in no event have an
original maturity of more than 365 days) of any United States depository
institution or trust company incorporated under the laws of the United States or
any state, provided that the long-term unsecured debt obligations of such
depository institution or trust company at the date of acquisition thereof have
been rated by each Rating Agency with its highest rating and the short-term
obligations of such depository institution or trust company are rated A-1+ by
S&P, P-1 by Moody's and, if rated by Fitch, F+ by Fitch;
(iv) commercial paper (other than commercial paper issued by Chase or
any of its Affiliates) (having original maturities of not more than 365 days) of
any corporation incorporated under the laws of the United States or any state
thereof which on the date of acquisition has been rated by each Rating Agency in
its highest short-term unsecured commercial paper rating category; provided that
such commercial paper shall have a remaining maturity of not more than 45 days;
(v) units of taxable money market funds (including those for which the
Trustee or the Servicer or any Affiliate thereof acts as sponsor, administrator
or the like and receives compensation with respect to such investment) which may
be 12b-1 funds, as contemplated under the rules promulgated by the Commission
under the Investment Company Act of 1940, as amended, and which funds have been
rated by each Rating Agency in its highest rating category or which have been
designated in writing by each Rating Agency as Eligible Investments with respect
to this definition; or
(vi) other obligations or securities (other than investments or
obligations of Chase or any of its Affiliates) acceptable to each Rating Agency
rating the Certificates as an Eligible Investment hereunder and will not result
in a reduction or withdrawal in the then current rating of any Class of
Certificates, as evidenced by a letter to such effect from each Rating Agency;
Provided that no such instrument shall be an Eligible Investment if such
instrument evidences either (a) a right to receive only interest payments with
respect to the obligations underlying such instrument, or (b) both principal and
interest payments derived from obligations underlying such instrument where the
interest and principal payments with respect to such instrument provide a yield
to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations; and provided further that no such instrument shall be
purchased above par; and provided further that each Eligible Investment must be
a "permitted investment" within the meaning of Section 860G(a)(5) of the Code.
ERISA: The Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor statutes thereto, and applicable U.S.
Department of Labor temporary or final regulations promulgated thereunder.
ERISA QUALIFYING UNDERWRITING: A best efforts or firm commitment
underwriting or private placement that would satisfy the requirements of
Prohibited Transaction Exemption 2002-19, 67 Fed. Reg. 14797 (March 28, 2002),
as amended, or any substantially similar administrative exemption granted by the
U.S. Department of Labor to Chase, except, in relevant part, for the requirement
that the certificates have received a rating at the time of acquisition that is
in one of the three (or four, in the case of a "designated transaction") highest
generic rating categories by at least one of the Rating Agencies.
ERISA RESTRICTED CERTIFICATE: Any Class B-3, Class B-4 or Class B-5
Certificate and any other Certificate, as long as the acquisition and holding of
such Certificate is not covered by and exempt under Prohibited Transaction
Exemption 2002-19, 67 Fed. Reg. 14797 (March 28, 2002), as amended, or any
substantially similar administrative exemption granted by the U.S. Department of
Labor to Chase.
23
ESCROW ACCOUNT: The account or accounts created and maintained
pursuant to Section 5.10.
ESCROW PAYMENTS: The amounts constituting applicable ground rents,
taxes, assessments, water rates, Standard Hazard Policy premiums and other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant to
a Mortgage Loan.
EVENT OF DEFAULT: Any of the events specified in Section 9.01.
EXCEPTION REPORT: The report of the Custodian or Trustee, as
applicable, referred to in Section 2.02.
EXCESS BANKRUPTCY LOSS: Any Bankruptcy Loss, or portion thereof, which
exceeds the then applicable Bankruptcy Amount.
EXCESS FRAUD LOSS: Any Fraud Loss, or portion thereof, which exceeds
the then applicable Fraud Loss Amount.
EXCESS LOSSES: Excess Bankruptcy Losses, Excess Fraud Losses and
Excess Special Hazard Losses, referred to collectively.
EXCESS SPECIAL HAZARD LOSS: Any Special Hazard Loss, or portion
thereof, that exceeds the then applicable Special Hazard Amount.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
FDIC: The Federal Deposit Insurance Corporation or any successor
organization.
FHLMC: The Federal Home Loan Mortgage Corporation or any successor
organization.
FIDELITY BOND: The fidelity bond and errors and omissions insurance to
be maintained by the Servicer pursuant to Section 5.19.
FINAL SCHEDULED DISTRIBUTION DATE: The Distribution Date in October
2036.
FITCH RATINGS: Fitch, Inc. or its successor in interest.
FNMA: The Federal National Mortgage Association, or any successor
organization.
FNMA GUIDES: The FNMA Sellers' Guide and the FNMA Servicers' Guide,
and all amendments or additions thereto.
FRAUD LOSS: Any Realized Loss or portion thereof sustained by reason
of a default arising from fraud, dishonesty or misrepresentation in connection
with the related Mortgage Loan, including by reason of the denial of coverage
under any related Primary Insurance Policy.
FRAUD LOSS AMOUNT: As of any date of determination after the Cut-off
Date, an amount (initially, $30,728,827.98) equal to (X) prior to the third
anniversary of the Cut-off Date, (a) 1.00% of the aggregate principal balance of
all of the Mortgage Loans as of the most recent anniversary of the Cut-off Date
minus (b) the aggregate amounts allocated to the Certificates with respect to
Fraud Losses on the Mortgage Loans since the most recent anniversary of the
Cut-off Date up to such date of determination, (Y) from the third to (but
excluding) the fifth anniversary of the Cut-off Date, (a) 0.50% of the aggregate
principal balance of all of the Mortgage Loans as of the most recent anniversary
of the Cut-off Date
24
minus (b) the aggregate amounts allocated to the Certificates with respect to
Fraud Losses on the Mortgage Loans since the most recent anniversary of the
Cut-off Date up to such date of determination and (Z) on and after the fifth
anniversary of the Cut-off Date, zero.
GROUP ONE CLASS A-P AMOUNT: With respect to any Distribution Date, the
applicable PO Percentage of (i) all principal received on or in respect of each
Discount Mortgage Loan in Mortgage Group One (exclusive of any amounts in
respect of any Monthly Payment) during the related Principal Prepayment Period
and (ii) all principal received as part of a Monthly Payment on or in respect of
a Discount Mortgage Loan in Mortgage Group One during the related Due Period.
GROUP ONE MORTGAGE LOANS: The Mortgage Loans in Mortgage Group One.
GROUP ONE MORTGAGE POOL PRINCIPAL BALANCE: As of any date of
determination, the aggregate of the Principal Balances of each Outstanding
Mortgage Loan in Mortgage Group One on such date of determination less the
principal portion of any Monthly Payment due but not paid with respect to which
an Advance has not been made.
GROUP ONE NON-PO ALLOCATED AMOUNT: At the time of any determination,
the amount derived by (i) multiplying the outstanding Principal Balance of each
Mortgage Loan in Mortgage Group One on such date of determination by the Non-PO
Percentage with respect to such Mortgage Loan and (ii) summing the results.
GROUP ONE REMITTANCE RATE: 6.25% per annum.
GROUP ONE STRIPPED INTEREST RATE: The excess of the weighted average
Net Mortgage Rate of the Group One Mortgage Loans that are Non-Discount Mortgage
Loans over the Group One Remittance Rate.
GROUP ONE SUBORDINATED AMOUNT: For any Distribution Date, the excess
of the Group One Non-PO Allocated Amount immediately following the preceding
Distribution Date (or as of the Cut-off Date if there is no preceding
Distribution Date) over the aggregate outstanding Principal Balance of the Class
1-A Certificates (prior to giving effect to distributions to be made on such
Distribution Date and allocation of losses to be made on such Distribution
Date).
GROUP TWO CLASS A-P AMOUNT: With respect to any Distribution Date, the
applicable PO Percentage of (i) all principal received on or in respect of each
Discount Mortgage Loan in Mortgage Group Two (exclusive of any amounts in
respect of any Monthly Payment) during the related Principal Prepayment Period
and (ii) all principal received as part of a Monthly Payment on or in respect of
a Discount Mortgage Loan in Mortgage Group Two during the related Due Period.
GROUP TWO MORTGAGE LOANS: The Mortgage Loans in Mortgage Group Two.
GROUP TWO MORTGAGE POOL PRINCIPAL BALANCE: As of any date of
determination, the aggregate of the Principal Balances of each Outstanding
Mortgage Loan in Mortgage Group Two on such date of determination less the
principal portion of any Monthly Payment due but not paid with respect to which
an Advance has not been made.
GROUP TWO NON-PO ALLOCATED AMOUNT: At the time of any determination,
the amount derived by (i) multiplying the outstanding Principal Balance of each
Mortgage Loan in Mortgage Group Two on such date of determination by the Non-PO
Percentage with respect to such Mortgage Loan and (ii) summing the results.
25
GROUP TWO REMITTANCE RATE: 6.00% per annum.
GROUP TWO STRIPPED INTEREST RATE: The excess of the weighted average
Net Mortgage Rate of the Group Two Mortgage Loans that are Non-Discount Mortgage
Loans over the Group Two Remittance Rate.
GROUP TWO SUBORDINATED AMOUNT: For any Distribution Date, the excess
of the Group Two Non-PO Allocated Amount immediately following the preceding
Distribution Date (or as of the Cut-off Date, if there is no preceding
Distribution Date) over the the aggregate outstanding Principal Balance of the
Class 2-A Certificates (prior to giving effect to distributions to be made on
such Distribution Date and allocation of losses to be made on such Distribution
Date).
INDIRECT PARTICIPANT: A broker, dealer, bank or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Depository Participant, either directly or indirectly.
INSURANCE PROCEEDS: Proceeds paid by any insurer pursuant to any
insurance policy covering a Mortgage Loan, net of costs of collecting such
proceeds and net of amounts released to the Mortgagor or applied to the
restoration of the Mortgaged Property (or in the underlying Mortgaged Property,
in the case of a Co-op Loan).
INSURED EXPENSES: Expenses covered by any insurance policy.
INTEREST ACCRUAL PERIOD: With respect to any Distribution Date and any
Class of Certificates (other than the Class 1-A10, Class 2-A8 and Class A-P
Certificates), the calendar month immediately preceding the month in which the
related Distribution Date occurs, in each case calculated on the basis of a
360-day year of twelve 30-day months. With respect to any Distribution Date and
the Class 1-A10 and Class 2-A8 Certificates, the period from and including the
25th day of the month immediately preceding the month in which such Distribution
Date occurs (or from the Closing Date in the case of the first Distribution
Date), to but excluding, the 25th day of the month in which such Distribution
Date occurs, in each case calculated on the basis of a 360-day year of twelve
30-day months.
JPMMAC: X.X. Xxxxxx Mortgage Acquisition Corp., a Delaware
corporation, and its successor in interest.
LATE COLLECTIONS: With respect to any Mortgage Loan, all amounts
received during any Due Period, whether as late payments of Monthly Payments or
as Liquidation Proceeds, condemnation proceeds, Insurance Proceeds, Subsequent
Recoveries or with respect to a disposition of a Mortgaged Property (or stock
allocated to a dwelling unit, in the case of a Co-op Loan) which has been
acquired by foreclosure or deed in lieu of foreclosure or otherwise, which
represent late payments or collections of Monthly Payments due but delinquent
for a previous Due Period and not previously recovered.
LIBOR: With respect to any Distribution Date and the Certificate Rates
on the Class 1-A10 and Class 2-A8 Certificates, LIBOR as determined in
accordance with Section 6.07.
LIBOR BUSINESS DAY: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the city of London, England are
required or authorized by law to be closed.
LIBOR CERTIFICATES: The Class 1-A10 and Class 2-A8 Certificates,
collectively.
LIQUIDATED MORTGAGE LOAN: Any Mortgage Loan (a) as to which the
Servicer has determined that all amounts which it expects to recover from or on
account of such Mortgage Loan or
26
property acquired in respect thereof have been recovered, (b) as to which a Cash
Liquidation has taken place or (c) with respect to which the Mortgaged Property
(or stock allocated to a dwelling unit, in the case of a Co-op Loan) has been
acquired by foreclosure or deed in lieu of foreclosure and a disposition (the
term disposition shall include, for purposes of a repurchase pursuant to Section
11.01, any repurchase of a Mortgaged Property (or stock allocated to a dwelling
unit, in the case of a Co-op Loan) pursuant to such Section) of such Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan)
has occurred.
LIQUIDATION EXPENSES: Expenses which are incurred by the Servicer or
any Sub-Servicer in connection with the liquidation of any defaulted Mortgage
Loan or property acquired in respect thereof including, without limitation,
legal fees and expenses, any unreimbursed amount expended by the Servicer
pursuant to Sections 5.16 and 5.21 respecting the related Mortgage Loan and any
related and unreimbursed expenditures for real estate property taxes or for
property restoration or preservation.
LIQUIDATION PROCEEDS: Cash (including Insurance Proceeds) received by
the Servicer in connection with the liquidation of any Mortgage Loan or
Mortgaged Property (or stock allocated to a dwelling unit, in the case of a
Co-op Loan) acquired in respect thereof, whether through the sale or assignment
of such Mortgage Loan (other than pursuant to Section 5.21), trustee's sale,
foreclosure sale or otherwise, or the sale of the Mortgaged Property (or stock
allocated to a dwelling unit, in the case of a Co-op Loan) if the Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan) is
acquired in satisfaction of the Mortgage Loan other than amounts required to be
paid to the Mortgagor pursuant to law or the terms of the applicable Mortgage
Note.
LOAN-TO-VALUE RATIO: The fraction, expressed as a percentage, the
numerator of which is the principal amount of the related Mortgage Loan at the
time of origination (or, (i) for purposes of Section 5.15, at the time of
determination and (ii) for purposes of a Mortgage Loan with respect to which a
conversion from adjustable rate to fixed rate has occurred, at the time of
initial origination) and the denominator of which is the Appraised Value of the
related Mortgaged Property (or applicable dwelling unit, in the case of a Co-op
Loan) at the time of origination or, in the case of a Mortgage Loan financing
the acquisition of the Mortgaged Property (or applicable dwelling unit, in the
case of a Co-op Loan), the sales price of the Mortgaged Property (or applicable
dwelling unit, in the case of a Co-op Loan), if such sales price is less than
such appraised value; provided however, certain Mortgage Loans financing the
acquisition of a Mortgaged Property in New York will be based solely on the
appraised value.
LOCKOUT SHIFT PERCENTAGE: With respect to any Distribution Date, the
percentage indiated below:
DISTRIBUTION DATE OCCURRING IN LOCKOUT SHIFT PERCENTAGE
------------------------------ ------------------------
October 2006 through September 2011.................. 0%
October 2011 through September 2012.................. 30%
October 2012 through September 2013.................. 40%
October 2013 through September 2014.................. 60%
October 2014 through September 2015.................. 80%
October 2015 and thereafter.......................... 100%
LONDON BUSINESS DAY: Any day on which banks are open for business in
London and on which dealings in deposits in U.S. dollars are transacted in the
London interbank market.
LOWER-TIER REMIC: The Lower-Tier REMIC as described in Section 2.04.
27
LOWER-TIER REMIC INTEREST: Any one of the Classes of Lower-Tier REMIC
Interests described in Section 2.04.
LOWER-TIER REMIC REGULAR INTEREST: Any one of the Lower-Tier REMIC
Interests other than the Class LT-R Interest.
LOWER-TIER REMIC SUBORDINATED BALANCE RATIO: The ratio among the
Uncertificated Principal Balances of each of the Lower-Tier REMIC Regular
Interests ending with the designation "A" that is equal to the ratio among, with
respect to each such Lower-Tier REMIC Regular Interest, the excess of (x) the
aggregate Non-PO Percentage of the Principal Balance of each of the Mortgage
Loans in the related Mortgage Group over (y) the aggregate class principal
amounts of the Certificate Group related to such Mortgage Group.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.
MERS MORTGAGE LOAN: Any Mortgage Loan as to which the related
Mortgage, or an Assignment of Mortgage, has been or will be recorded in the name
of MERS or otherwise assigned to MERS, as agent for the holder from time to time
of the Mortgage Note.
MIDDLE-TIER REMIC: The Middle-Tier REMIC as described in Section 2.04.
MIDDLE-TIER REMIC INTEREST: Any one of the Classes of Middle-Tier
REMIC Interests described in Section 2.04.
MIDDLE-TIER REMIC REGULAR INTEREST: Any one of the Middle-Tier REMIC
Interests other than the Class MT-R Interest.
MODIFIED MORTGAGE LOAN: Any Mortgage Loan which the Servicer has
modified pursuant to Section 5.01.
MONTHLY PAYMENT: The minimum required monthly payment of principal and
interest due on a Mortgage Loan as specified in the Mortgage Note for any Due
Date (before any adjustment to such scheduled amount by reason of any bankruptcy
or similar proceeding or any moratorium or similar waiver or grace period).
Monthly Payments shall be deemed due on an Outstanding Mortgage Loan until such
time as it becomes a Liquidated Mortgage Loan.
MOODY'S: Xxxxx'x Investors Service, Inc. or its successor in interest.
MORTGAGE: With respect to a Mortgage Loan that is not a Co-op Loan,
the mortgage, deed of trust or other instrument creating a first lien or a first
priority ownership interest in an estate in fee simple in real property securing
a Mortgage Note. With respect to a Co-op Loan, the security agreement creating a
security interest in the stock allocated to a dwelling unit in a residential
cooperative housing corporation and pledged to secure such Co-op Loan and the
related Co-op Lease.
MORTGAGE FILE: As to each Mortgage Loan, the items referred to in
Exhibit B annexed hereto.
MORTGAGE GROUP: Pertaining to Mortgage Group One or Mortgage Group
Two, as the case may be.
MORTGAGE GROUP ONE: The Mortgage Loans in the Trust Fund that are
designated in the Mortgage Loan Schedule attached hereto as Exhibit A-1 as
comprising Mortgage Group One.
28
MORTGAGE GROUP ONE SUBORDINATED PERCENTAGE: As of any Distribution
Date, the difference between 100% and the Non-PO Class 1-A Percentage.
MORTGAGE GROUP ONE SUBORDINATED PREPAYMENT PERCENTAGE: As of any
Distribution Date, the difference between 100% and the Non-PO Class 1-A
Prepayment Percentage.
MORTGAGE GROUP TWO: The Mortgage Loans in the Trust Fund that are
designated in the Mortgage Loan Schedule attached herero as Exhibit A-2 as
comprising Mortgage Group Two.
MORTGAGE GROUP TWO SUBORDINATED PERCENTAGE: As of any Distribution
Date, the difference between 100% and the Non-PO Class 2-A Percentage.
MORTGAGE GROUP TWO SUBORDINATED PREPAYMENT PERCENTAGE: As of any
Distribution Date, the difference between 100% and the Non-PO Class 2-A
Prepayment Percentage.
MORTGAGE LOAN: An individual mortgage loan and all rights with respect
thereto, evidenced by a Mortgage and a Mortgage Note, sold and assigned by the
Depositor to the Trustee and which is subject to this Agreement and included in
the Trust Fund. The Mortgage Loans originally sold and subject to this Agreement
are identified on the Mortgage Loan Schedule.
MORTGAGE LOAN SCHEDULE: The schedule of Mortgage Loans attached hereto
as Exhibit A as it may be amended in accordance with Section 3.03, setting forth
the following information as to each Mortgage Loan: (i) the Mortgage Loan
identifying number; (ii) the city, state and zip code of the Mortgaged Property
(or Underlying Mortgaged Property, in the case of a Co-op Loan); (iii) an
indication of whether the Mortgaged Property (or the related residential
dwelling unit in the Underlying Mortgaged Property, in the case of a Co-op Loan)
is owner-occupied; (iv) the property type of the Mortgaged Property (or the
related residential dwelling unit in the Underlying Mortgaged Property, in the
case of a Co-op Loan); (v) the original number of months to stated maturity;
(vi) the number of months remaining to stated maturity from the Cut-off Date;
(vii) the original Loan-to-Value Ratio; (viii) the original principal balance of
the Mortgage Loan; (ix) the unpaid principal balance of the Mortgage Loan as of
the close of business on the Cut-off Date; (x) the Mortgage Rate; and (xi) the
amount of the current Monthly Payment.
MORTGAGE NOTE: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
MORTGAGE POOL: The pool of Mortgage Loans held in the Trust Fund.
MORTGAGE POOL PRINCIPAL BALANCE: As of any date of determination, the
aggregate of the Principal Balances of each Outstanding Mortgage Loan on such
date of determination less the principal portion of any Monthly Payment due but
not paid with respect to which an Advance has not been made, initially
$1,024,294,266.
MORTGAGED PROPERTY: The property securing a Mortgage Note.
MORTGAGE RATE: With respect to each Mortgage Loan, the per annum rate
of interest borne by the Mortgage Loan, as specified in the Mortgage Note. The
Mortgage Rate for any Mortgage Loan shall be zero with respect to the period
prior to the period during which interest accrues with respect to such Mortgage
Loan's first Monthly Payment.
MORTGAGOR: The obligor on a Mortgage Note.
29
NET LIQUIDATION PROCEEDS: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of Liquidation Expenses.
NET MORTGAGE RATE: With respect to each Mortgage Loan, a per annum
rate of interest for the applicable period equal to the Mortgage Rate less (i)
the Servicing Fee Rate and (ii) in the case of a substitute Mortgage Loan, any
excess of the Mortgage Rate on the substitute Mortgage Loan over the Mortgage
Rate on the removed Mortgage Loan.
NON-DISCOUNT MORTGAGE LOANS: Any Mortgage Loan having a Net Mortgage
Rate in excess of the applicable Remittance Rate.
NON-MERS MORTGAGE LOAN: Any Mortgage Loan other than a MERS Mortgage
Loan.
NON-PO CLASS 1-A OPTIMAL PRINCIPAL AMOUNT: With respect to any
Distribution Date, the lesser of (a) the Non-PO Class 1-A Principal Balance and
(b) the sum of:
(i) the Non-PO Class 1-A Percentage of the applicable Non-PO
Percentage of the principal portion of all Monthly Payments, whether
or not received, which were due during the related Due Period on Group
One Mortgage Loans which were outstanding during such Due Period;
(ii) the Non-PO Class 1-A Prepayment Percentage of the
applicable Non-PO Percentage of all Principal Prepayments made on any
Group One Mortgage Loan during the related Principal Prepayment
Period;
(iii) with respect to each Mortgage Loan not described in
(iv) below, the Non-PO Class 1-A Percentage of the applicable Non-PO
Percentage of the principal portion of all Insurance Proceeds,
condemnation awards and any other cash proceeds from a source other
than the applicable Mortgagor, to the extent required to be deposited
in the Collection Account pursuant to Section 5.08(iv) and (v), which
were received during the related Principal Prepayment Period with
respect to a Group One Mortgage Loan, net of related unreimbursed
Servicing Advances and net of any portion thereof which, as to any
such Mortgage Loan, constitutes Late Collections that have been the
subject of an Advance on any prior Distribution Date;
(iv) with respect to each Group One Mortgage Loan which has
become a Liquidated Mortgage Loan during the related Principal
Prepayment Period, the lesser of (A) the Non-PO Class 1-A Percentage
of the applicable Non-PO Percentage of an amount equal to the
Principal Balance of such Liquidated Mortgage Loan as of the Due Date
immediately preceding the date on which it became a Liquidated
Mortgage Loan and (B) the Non-PO Class 1-A Prepayment Percentage of
the applicable Non-PO Percentage of the Net Liquidation Proceeds with
respect to such liquidated Mortgage Loan (net of any unreimbursed
Advances);
(v) with respect to each Group One Mortgage Loan repurchased
during the related Principal Prepayment Period pursuant to Section
2.02, 3.01, 5.21 or 11.01, an amount equal to the Non-PO Class 1-A
Prepayment Percentage of the applicable Non-PO Percentage of the
principal portion of the Purchase Price (net of amounts with respect
to which a distribution of principal has previously been made to the
Non-PO Class 1-A Certificateholders); and
(vi) on or after the Credit Support Depletion Date, the
excess of the Non-PO Class 1-A Principal Balance (calculated after
giving effect to reductions thereof on such Distribution Date with
respect to the amounts described in (i) - (v) above) over the Group
One Non-PO Allocated Amount, as of the preceding Distribution Date.
30
NON-PO CLASS 2-A OPTIMAL PRINCIPAL AMOUNT: With respect to any
Distribution Date, the lesser of (a) the Non-PO Class 2-A Principal Balance and
(b) the sum of:
(i) the Non-PO Class 2-A Percentage of the applicable Non-PO
Percentage of the principal portion of all Monthly Payments, whether
or not received, which were due during the related Due Period on Group
Two Mortgage Loans which were outstanding during such Due Period;
(ii) the Non-PO Class 2-A Prepayment Percentage of the
applicable Non-PO Percentage of all Principal Prepayments made on any
Group Two Mortgage Loan during the related Principal Prepayment
Period;
(iii) with respect to each Mortgage Loan not described in
(iv) below, the Non-PO Class 2-A Percentage of the applicable Non-PO
Percentage of the principal portion of all Insurance Proceeds,
condemnation awards and any other cash proceeds from a source other
than the applicable Mortgagor, to the extent required to be deposited
in the Collection Account pursuant to Section 5.08(iv) and (v), which
were received during the related Principal Prepayment Period with
respect to a Group Two Mortgage Loan, net of related unreimbursed
Servicing Advances and net of any portion thereof which, as to any
such Mortgage Loan, constitutes Late Collections that have been the
subject of an Advance on any prior Distribution Date;
(iv) with respect to each Group Two Mortgage Loan which has
become a Liquidated Mortgage Loan during the related Principal
Prepayment Period, the lesser of (A) the Non-PO Class 2-A Percentage
of the applicable Non-PO Percentage of an amount equal to the
Principal Balance of such Liquidated Mortgage Loan as of the Due Date
immediately preceding the date on which it became a Liquidated
Mortgage Loan and (B) the Non-PO Class 2-A Prepayment Percentage of
the applicable Non-PO Percentage of the Net Liquidation Proceeds with
respect to such liquidated Mortgage Loan (net of any unreimbursed
Advances);
(v) with respect to each Group Two Mortgage Loan repurchased
during the related Principal Prepayment Period pursuant to Section
2.02, 3.01, 5.21 or 11.01, an amount equal to the Non-PO Class 2-A
Prepayment Percentage of the applicable Non-PO Percentage of the
applicable Non-PO Percentage of the principal portion of the Purchase
Price (net of amounts with respect to which a distribution of
principal has previously been made to the Non-PO Class 2-A
Certificateholders); and
(vi) on or after the Credit Support Depletion Date, the
excess of the Non-PO Class 2-A Principal Balance (calculated after
giving effect to reductions thereof on such Distribution Date with
respect to the amounts described in (i) - (v) above) over the Group
Two Non-PO Allocated Amount, as of the preceding Distribution Date.
NON-PO CLASS 1-A PERCENTAGE: As of any Distribution Date, a fraction,
expressed as a percentage (which shall never exceed 100%), the numerator of
which is the Non-PO Class 1-A Principal Balance and the denominator of which is
the Group One Non-PO Allocated Amount as of the immediately preceding Due Date.
NON-PO CLASS 2-A PERCENTAGE: As of any Distribution Date, a fraction,
expressed as a percentage (which shall never exceed 100%), the numerator of
which is the Non-PO Class 2-A Principal Balance and the denominator of which is
the Group Two Non-PO Allocated Amount of the immediately preceding Due Date.
31
NON-PO CLASS 1-A PREPAYMENT PERCENTAGE: As of any Distribution Date up
to and including the Distribution Date in September 2011, 100%; as of any
Distribution Date in the first year thereafter, the Non-PO Class 1-A Percentage
plus 70% of the Mortgage Group One Subordinated Percentage for such Distribution
Date; as of any Distribution Date in the second year thereafter, the Non-PO
Class 1-A Percentage plus 60% of the Mortgage Group One Subordinated Percentage
for such Distribution Date; as of any Distribution Date in the third year
thereafter, the Non-PO Class 1-A Percentage plus 40% of the Mortgage Group One
Subordinated Percentage for such Distribution Date; as of any Distribution Date
in the fourth year thereafter, the Non-PO Class 1-A Percentage plus 20% of the
Mortgage Group One Subordinated Percentage for such Distribution Date; and as of
any Distribution Date after the fourth year thereafter, the Non-PO Class 1-A
Percentage; provided that, if the Non-PO Class 1-A Percentage as of any such
Distribution Date is greater than the Non-PO Class 1-A Percentage on the first
Distribution Date, the Non-PO Class 1-A Prepayment Percentage shall be 100%; and
provided further, however, that whenever the Non-PO Class 1-A Percentage equals
0%, the Non-PO Class 1-A Prepayment Percentage shall equal 0%; and provided
further that no reduction of the Non-PO Class 1-A Prepayment Percentage below
the level in effect for the most recent period shall occur with respect to any
Distribution Date unless, as of the last day of the month preceding such
Distribution Date, (i) the aggregate outstanding Principal Balance of Mortgage
Loans with respect to both Mortgage Groups, each taken individually, delinquent
60 days or more (including for this purpose any Mortgage Loans in foreclosure
and Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust Fund) does not exceed 50% of the Mortgage Group One
Subordinated Percentage of the Mortgage Pool Principal Balance with respect to
Mortgage Group One as of such date and (ii) cumulative Realized Losses with
respect to both Mortgage Groups, each taken individually, do not exceed (a) 30%
of the related Subordinated Percentage of the Mortgage Pool Principal Balance
with respect to the related Mortgage Group as of the date of issuance of the
Certificates (the related "Original Subordinated Principal Balance") if such
Distribution Date occurs between and including October 2011 and September 2012,
(b) 35% of the related Original Subordinated Principal Balance if such
Distribution Date occurs between and including October 2012 and September 2013,
(c) 40% of the related Original Subordinated Principal Balance if such
Distribution Date occurs between and including October 2013 and September 2014,
(d) 45% of the related Original Subordinated Principal Balance if such
Distribution Date occurs between and including October 2014 and September 2015,
and (e) 50% of the related Original Subordinated Principal Balance if such
Distribution Date occurs during or after October 2015.
NON-PO CLASS 2-A PREPAYMENT PERCENTAGE: As of any Distribution Date up
to and including the Distribution Date in September 2011, 100%; as of any
Distribution Date in the first year thereafter, the Non-PO Class 2-A Percentage
plus 70% of the Mortgage Group Two Subordinated Percentage for such Distribution
Date; as of any Distribution Date in the second year thereafter, the applicable
Non-PO Class 2-A Percentage plus 60% of the Mortgage Group Two Subordinated
Percentage for such Distribution Date; as of any Distribution Date in the third
year thereafter, the Non-PO Class 2-A Percentage plus 40% of the Mortgage Group
Two Subordinated Percentage for such Distribution Date; as of any Distribution
Date in the fourth year thereafter, the applicable Non-PO Class 2-A Percentage
plus 20% of the Mortgage Group Two Subordinated Percentage for such Distribution
Date; and as of any Distribution Date after the fourth year thereafter, the
Non-PO Class 2-A Percentage; provided that, if the Non-PO Class 2-A Percentage
on the first Distribution Date is greater than the Non-PO Class 2-A Percentage,
the Non-PO Class 2-A Prepayment Percentage shall be 100%; and provided further,
however, that whenever the Non-PO Class 2-A Percentage equals 0%, the Non-PO
Class 2-A Prepayment Percentage shall equal 0%; and provided further that no
reduction of the Non-PO Class 2-A Prepayment Percentage below the level in
effect for the most recent period shall occur with respect to any Distribution
Date unless, as of the last day of the month preceding such Distribution Date,
(i) the aggregate outstanding Principal Balance of Mortgage Loans with respect
to both Mortgage Groups, each taken individually, delinquent 60 days or more
(including for this purpose any Mortgage Loans in foreclosure and Mortgage Loans
with respect to which the related Mortgaged Property has been acquired
32
by the Trust Fund) does not exceed 50% of the Mortgage Group Two Subordinated
Percentage of the Mortgage Pool Principal Balance with respect to Mortgage Group
Two as of such date and (ii) cumulative Realized Losses with respect to both
Mortgage Groups, each taken individually, do not exceed (a) 30% of the related
Subordinated Percentage of the Mortgage Pool Principal Balance with respect to
the related Mortgage Group as of the date of issuance of the Certificates (the
related "Original Subordinated Principal Balance") if such Distribution Date
occurs between and including October 2011 and September 2012, (b) 35% of the
related Original Subordinated Principal Balance if such Distribution Date occurs
between and including October 2012 and September 2013, (c) 40% of the related
Original Subordinated Principal Balance if such Distribution Date occurs between
and including October 2013 and September 2014, (d) 45% of the related Original
Subordinated Principal Balance if such Distribution Date occurs between and
including October 2014 and September 2015, and (e) 50% of the related Original
Subordinated Principal Balance if such Distribution Date occurs during or after
October 2015.
NON-PO CLASS 1-A PRINCIPAL BALANCE: As of any Distribution Date, (a)
the Non-PO Class 1-A Principal Balance for the immediately preceding
Distribution Date less (b) amounts distributed (or deemed distributed) to the
Class 1-A Certificateholders on such preceding Distribution Date allocable to
principal (including the principal portion of Advances of the Servicer made
pursuant to Section 6.03 and Realized Losses allocated to the Class 1-A
Certificates pursuant to Section 6.04); provided that the Non-PO Class 1-A
Principal Balance on the first Distribution Date shall be the Original Non-PO
Class 1-A Principal Balance.
NON-PO CLASS 2-A PRINCIPAL BALANCE: As of any Distribution Date, (a)
the Non-PO Class 2-A Principal Balance for the immediately preceding
Distribution Date less (b) amounts distributed (or deemed distributed) to the
Class 2-A Certificateholders on such preceding Distribution Date allocable to
principal (including the principal portion of Advances of the Servicer made
pursuant to Section 6.03 and Realized Losses allocated to the Class 2-A
Certificates pursuant to Section 6.04); provided that the Non-PO Class 2-A
Principal Balance on the first Distribution Date shall be the Original Non-PO
Class 2-A Principal Balance.
NON-PO CLASS 1-A PRINCIPAL PAYMENT RULES:
(I) With respect to any Distribution Date up to and including the
Credit Support Depletion Date, distributions to the Class 1-A Certificateholders
pursuant to Section 6.01(b)(ii)(A) shall be made in the following amounts and
priority:
Concurrently:
(0) 00.0000000000% as follows:
(A) first, to the Class 1-A16 Certificates, up to the Class
1-A16 Lockout Principal Distribution Amount;
(B) second, to the Class 1-A17, Class 1-A18 and Class 1-A19
Certificates, concurrently, as follows:
(i) 34.493564146% to the Class 1-A17 Certificates,
until the Outstanding Certificate Principal Balance of such Class has been
reduced to zero;
(ii) 65.506435854%, sequentially, to the Class
1-A18 Certificates and the Class 1-A19 Certificates, in that order, until the
Outstanding Certificate Principal Balance of each such Class has been reduced to
zero;
33
(C) third, to the Class 1-A14 and Class 1-A15 Certificates,
pro rata, based upon their outstanding principal balances, until the Outstanding
Certificate Principal Balance of each such Class has been reduced to zero;
(D) fourth, to the Class 1-A16 Certificates, until the
Outstanding Certificate Principal Balance of such Class has been reduced to
zero;
(0) 00.0000000000% as follows:
(A) first, to the Class 1-A9 Certificates, up to the Class
1-A9 Lockout Principal Distribution Amount;
(B) second, concurrently:
(i) 54.9469372125%, as follows:
(a) first, to the Class 1-A1, Class A-R
and Class 1-A2 Certificates, pro rata, based upon their outstanding principal
balances, until the Outstanding Certificate Principal Balance of each such Class
has been reduced to zero;
(b) second, to the Class 1-A3 and Class
1-A4 Certificates, pro rata, based upon their outstanding principal balances,
until the Outstanding Certificate Principal Balance of each such Class has been
reduced to zero;
(c) third, sequentially to the Class
1-A5, Class 1-A6, Class 1-A7 and Class 1-A8 Certificates, in that order, until
the Outstanding Certificate Principal Balance of each such class has been
reduced to zero;
(ii) 45.0530627875%, as follows:
(a) first, to the Class 1-A10
Certificates, up to an amount equal to 1% of the amount payable pursuant to this
clause (ii);
(b) second, on or after the Distribution
Date in April 2007, to the Class 1-A11 Certificates, up to an amount equal to
the lesser of (x) $422,000 and (y) an amount equal to 99% of the amount
remaining after payments made pursuant to clause (ii)(a) above;
(c) third, on or after the Distribution
Date in October 2007, sequentially, to the Class 1-A12 Certificates and the
Class 1-A13 Certificates, in that order, up to an aggregate amount equal to the
lesser of (x) $208,000 and (y) an amount equal to 99% of the amount remaining
after payments made pursuant to clause (ii)(b) above;
(d) fourth, sequentially, to the Class
1-A10, Class 1-A11, Class 1-A12 and Class 1-A13 Certificates, in that order,
until the Outstanding Certificate Principal Balance of each such Class has been
reduced to zero; and
(C) third, to the Class 1-A9 Certificates, until the
Outstanding Certificate Principal Balance of such class has been reduced to
zero;
(II) With respect to any Distribution Date after the Credit Support
Depletion Date, distributions pursuant to Section 6.01(b)(ii)(A) shall be made
pro rata among the outstanding Classes of
34
Class 1-A Certificates in relation to the respective Outstanding Certificate
Principal Balances of such outstanding Classes, and not in accordance with the
priority of payments among such Classes set forth in clause (I) above.
NON-PO CLASS 2-A PRINCIPAL PAYMENT RULES:
(I) With respect to any Distribution Date up to and including the
Credit Support Depletion Date, distributions to the Class 2-A Certificateholders
pursuant to Section 6.01(b)(ii)(B) shall be made in the following amounts and
priority:
first, to the Class 2-A1 Certificates, up to the Class 2-A1 Lockout
Principal Distribution Amount;
second, concurrently:
(0) 00.0000000000%, as follows:
(A) first, to the Class 2-A2 Certificates, until the
Outstanding Certificate Principal Balance of such Class has been reduced to
zero;
(B) second, to the Class 2-A4 Certificates, until the
Outstanding Certificate Principal Balance of such Class has been reduced to
zero;
(0) 00.0000000000%, as follows:
(A) first, on or after the Distribution Date in October
2009, to the Class 2-A5 Certificates, up to an amount equal to 99% of the amount
payable pursuant to this clause (2);
(B) second, on or after the Distribution Date in October
2010, to the Class 2-A6 Certificates, up to an amount equal to 99% of the amount
remaining after payments made pursuant to clause (2)(A) above;
(C) third, on or after the Distribution Date in October
2011, to the Class 2-A7 Certificates, up to an amount equal to 99% of the amount
remaining after payments made pursuant to clause (2)(B) above;
(D) fourth, to the Class 2-A8 Certificates, up to the amount
necessary to reduce the aggregate Outstanding Certificate Principal Balance of
such Class to its Targeted Principal Balance;
(E) fifth, to the Class 2-A9 Certificates, until the
Outstanding Certificate Principal Balance of such Class has been reduced to
zero;
(F) sixth, to the Class 2-A8 Certificates, until the
Outstanding Certificate Principal Balance of such Class has been reduced to
zero;
(G) seventh, sequentially, to the Class 2-A5, Class 2-A6 and
2-A7 Certificates, in that order, until the Outstanding Certificate Principal
Balance of each such Class has been reduced to zero; and
third, to the Class 2-A1 Certificates, until the Outstanding
Certificate Principal Balance of such Class has been reduced to zero.
35
(II) With respect to any Distribution Date after the Credit Support
Depletion Date, distributions pursuant to Section 6.01(b)(ii)(B) shall be made
pro rata among the outstanding Classes of Class 2-A Certificates in relation to
the respective Outstanding Certificate Principal Balances of such outstanding
Classes, and not in accordance with the priority of payments among such Classes
set forth in clause (I) above.
NON PO PERCENTAGE: With respect to each Mortgage Loan, the fraction,
expressed as a percentage (but not greater than 100%), the numerator of which
equals the applicable Net Mortgage Rate and the denominator of which equals the
applicable Remittance Rate.
NON-PO PRINCIPAL BALANCE: In the case of a Non-Discount Mortgage Loan,
the Scheduled Principal Balance of such Mortgage Loan and, in the case of a
Discount Mortgage Loan, the product of (i) the Scheduled Principal Balance of
such Mortgage Loan and (ii) the Non-PO Percentage for such Mortgage Loan.
NONRECOVERABLE ADVANCE: Any Advance previously made or proposed to be
made in respect of a Mortgage Loan by the Servicer pursuant to Section 6.03
which, in the good faith judgment of the Servicer, will not or, in the case of a
proposed Advance, would not, ultimately be recoverable by the Servicer from Late
Collections or otherwise. The determination by the Servicer that it has made, or
would be making, a Nonrecoverable Advance shall be evidenced by a certificate of
a Servicing Officer of the Servicer delivered to the Trustee, any co-trustee and
the Depositor and detailing the reasons for such determination.
OFFICERS' CERTIFICATE: A certificate signed by two of the Chairman of
the Board, the Vice Chairman of the Board, the President or a Vice President,
the Treasurer or the Secretary or one of the Assistant Treasurers or Assistant
Secretaries or any other duly authorized officer of the Depositor or the
Servicer, and delivered to the Trustee.
OPINION OF COUNSEL: A written opinion of counsel, who may be counsel
for the Depositor or the Servicer and who is reasonably acceptable to the
Trustee.
ORIGINAL CERTIFICATE PRINCIPAL BALANCE: With respect to any Class of
Certificates, the amount specified for such Class or Component in Section
4.01(d).
ORIGINAL CLASS A PRINCIPAL BALANCE: $980,761,758.
ORIGINAL NON-PO CLASS 1-A PRINCIPAL BALANCE: $507,501,854.
ORIGINAL NON-PO CLASS 2-A PRINCIPAL BALANCE: $472,011,180.
ORIGINAL CLASS M PRINCIPAL BALANCE: $ 29,704,500.
ORIGINAL CLASS B PRINCIPAL BALANCE: $ 13,828,008.
ORIGINAL CREDIT SUPPORT: With respect to any Class of Subordinated
Certificates (other than the Class B-5 Certificates), the level of Credit
Support indicated below:
Class A-M: 3.15%
Class M-1: 1.35%
Class B-1: 0.80%
Class B-2: 0.50%
Class B-3: 0.30%
36
Class B-4: 0.15%
OUTSTANDING CERTIFICATE GROUP: With respect to any Distribution Date,
any Certificate Group which has not become a Retired Certificate Group on any
prior Distribution Date.
ORIGINAL SUBORDINATED PRINCIPAL BALANCE: With respect to any Mortgage
Group, the related Subordinated Amount, as of the date of issuance of the
Certificates.
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE: With respect to any Class
of Certificates of Certificates or Component (other than the Class 1-AX, Class
2-A3 and Class 2-AX Certificates) and any Distribution Date, the Original
Certificate Principal Balance of such Class or Component minus the sum of (i)
any distributions of principal made on such Class or Component prior to such
Distribution Date and (ii) any Realized Losses allocated to such Class prior to
such Distribution Date plus, in the case of the Class 1-A13 Certificates, on
each Distribution Date prior to the Class 1-A13 Accretion Termination Date, the
amounts calculated for such Distribution Date pursuant to Section
6.01(I)(b)(i)(FF) and in the case of the 2-A9 Accretion Termination Date, the
amounts calculated for such Distribution Date pursuant to Section
6.01(I)(b)(i)(GG); provided, however, that on any Distribution Date on which a
Subsequent Recovery is distributed, the Outstanding Certificate Principal
Balance of any Class of Certificates then outstanding for which any Realized
Loss has been applied will be increased, in order of seniority, by an amount
equal to the lesser of (i) the amount the Class of Certificates has been reduced
by any Realized Losses which have not been previously offset by any Subsequent
Recovery pursuant to this proviso and (ii) the total amount of any Subsequent
Recovery distributed on such date to Certificateholders (as reduced (x) by
increases in the Outstanding Certificate Principal Balance of more senior
Classes of Certificates on such Distribution Date and (y) to reflect a
proportionate amount of what would (but for this clause (y)) have been the
increases in the Outstanding Certificate Principal Balance of Classes of
Certificates of equal seniority on such Distribution Date); provided, further,
however, that (I) with respect to the Class of Class B Certificates then
outstanding having the highest numerical class designation, the Outstanding
Certificate Principal Balance of such Class shall equal the excess of the
Mortgage Pool Principal Balance (together with the principal portion of any
Monthly Payment due but not paid with respect to which an Advance has not been
made) over the sum of the Outstanding Certificate Principal Balances of all
Classes of Certificates (other than the Class of Class B Certificates then
outstanding having the highest numerical class designation); and (II) during
such time as the Outstanding Certificate Principal Balance of the Class B-1
Certificates equals zero, with respect to the Class of Class M Certificates then
outstanding having the highest numerical class designation (for the purposes of
this paragraph, the Class M-1 Certificates shall be deemed to have a higher
numerical class designation than the Class A-M Certificates), the Outstanding
Certificate Principal Balance of such Class shall equal the excess of the
Mortgage Pool Principal Balance (together with the principal portion of any
Monthly Payment due but not paid with respect to which an Advance has not been
made) over the sum of the Outstanding Certificate Principal Balances of all
Classes of Certificates (other than the Class of Class M Certificates then
outstanding having the highest numerical class designation).
OUTSTANDING MORTGAGE LOAN: As to any Distribution Date, a Mortgage
Loan which was not paid in full during the related or any previous Principal
Prepayment Period, which did not become a Liquidated Mortgage Loan during the
related or any previous Principal Prepayment Period and which was not
repurchased under Section 2.02, 3.01, 5.01, 5.21 or 11.01 during the related or
any previous Principal Prepayment Period.
OVERCOLLATERALIZED GROUP: As defined in Section 6.01(I)(b)(ix)(B).
PASS-THRU ENTITY: A "Pass-Thru Entity" as defined in Section
860E(e)(6) of the Code.
37
PAYING AGENT: The Person appointed by the Trustee as Paying Agent
pursuant to Section 4.05.
PERCENTAGE INTEREST: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made hereunder, such
percentage interest being equal, with respect to any Class, to the percentage
obtained by dividing the Outstanding Certificate Principal Balance (or the Class
1-AX Notional Amount, Class 2-A3 Notional Amount and Class 2-AX Notional Amount
in the case of the Class 1-AX, Class 2-A3 and Class 2-AX Certificates,
respectively) of such Certificate by the aggregate of the Outstanding
Certificate Principal Balances (or the Class 1-AX Notional Amount, Class 2-A3
Notional Amount and Class 2-AX Notional Amount in the case of the Class 1-AX,
Class 2-A3 and Class 2-AX Certificates, respectively) of all the Certificates of
such Class and with respect to all Certificates, the percentage obtained by
dividing the Outstanding Certificate Principal Balance of such Certificate by
the aggregate of the Outstanding Certificate Principal Balances of all the
Certificates.
PERMITTED ACTIVITIES: The primary activities of the Trust created
pursuant to this Agreement which shall be: (i) holding Mortgage Loans
transferred from the Depositor and other assets of the Trust Fund, including any
credit enhancement and passive derivative financial instruments that pertain to
beneficial interests issued or sold to parties other than the Depositor, its
Affiliates, or its agents; (ii) issuing certificates and other interests in the
assets of the Trust Fund; (iii) receiving collections on the Mortgage Loans and
making payments on such certificates and interests in accordance with the terms
of this Agreement; and (iv) engaging in other activities that are necessary or
incidental to accomplish these limited purposes, which activities cannot be
contrary to the status of the Trust Fund as a qualified special purpose entity
under existing accounting literature.
PERSON: Any individual, corporation, partnership, limited liability
company, limited liability partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
PO PERCENTAGE: The PO Percentage with respect to each Mortgage Loan as
identified on the Mortgage Loan Schedule, such percentage being equal to the
fraction, expressed as a percentage (but not less than 0%), the numerator of
which equals the excess of the applicable Remittance Rate over the applicable
Net Mortgage Rate and the denominator of which equals the applicable Remittance
Rate.
PLAN: As defined in Section 4.02(d)(i).
PRIMARY INSURANCE POLICY: Each primary policy of mortgage guaranty
insurance or any replacement policy therefor referred to in Section 5.15 hereof.
PRINCIPAL BALANCE: At the time of any determination, the principal
balance of a Mortgage Loan remaining to be paid at the close of business on the
Cut-off Date (after deduction of all principal payments due on or before the
Cut-off Date whether or not paid) (or, in the case of a substitute Mortgage Loan
included in the Trust Fund pursuant to Section 3.03, the close of business as of
the date of substitution) reduced by all amounts previously distributed to
Certificateholders that are allocable to payments of principal on such Mortgage
Loan (including the principal portion of Advances of the Servicer made pursuant
to Section 6.03).
PRINCIPAL PREPAYMENT: Any payment or other recovery of principal on a
Mortgage Loan (other than Late Collections) which is received other than as part
of a monthly payment; provided, however, that the term Principal Prepayment does
not include Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries,
condemnation awards or other cash proceeds from a source other than the
applicable Mortgagor.
38
PRINCIPAL PREPAYMENT PERIOD: With respect to any Distribution Date,
the period beginning on the first day of the month preceding the month in which
such Distribution Date occurs and ending on the last day of such month.
PTCE: As defined in Section 4.02(d)(i).
PURCHASE PRICE: With respect to any Mortgage Loan required to be
purchased on any date pursuant to Section 2.02, 3.01, 5.01, 5.21 or 11.01, an
amount equal to the sum of (a) 100% of the Principal Balance thereof, (b) unpaid
accrued interest at the Mortgage Rate thereon from the Due Date on which
interest was last paid by the Mortgagor or Advanced by the Servicer to the Due
Date next following the date of repurchase, (c) the aggregate of any
unreimbursed Advances and any unreimbursed Servicing Advances and (d) any
unreimbursed costs, penalties and/or damages incurred by the Trust Fund and/or
the Trustee in connection with any violation relating to such Mortgage Loan of
any predatory or abusive lending law.
QUALIFIED INSURER: An insurance company duly qualified as such under
the laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, approved as an insurer by FNMA and
FHLMC and whose claims-paying ability is rated in the two highest rating
categories by S&P, Xxxxx'x and Fitch with respect to primary mortgage insurance
and in the two highest rating categories for general policyholder rating and
financial performance index rating by A.M. Best Company or its successor in
interest with respect to hazard and flood insurance.
RATE ADJUSTMENT DATE: The second LIBOR Business Day prior to the first
day of each Interest Accrual Period after the initial Interest Accrual Period.
RATE CAP CEILING: With respect to the Class 1-A10 Yield Maintenance
Agreement and the applicable Distribution Date, the rate specified in Exhibit U
under the heading "Ceiling" for that Distribution Date, and with respect to the
Class 2-A8 Yield Maintenance Agreement and the applicable Distribution Date, the
rate specified in Exhibit U-1 under the heading "Ceiling" for that Distribution
Date.
RATING AGENCY: Any nationally recognized statistical rating
organization, or its successor, that rated one or more Classes of Certificates
at the request of the Depositor at the time of the initial issuance of the
Certificates. If such organization or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating
organization, or other comparable Person, designated by the Depositor, notice of
which designation shall be given to the Trustee and the Servicer. References
herein to the two highest long-term debt rating categories of a Rating Agency
shall mean AA or better in the case of S&P and Fitch Ratings and Aa or better in
the case of Xxxxx'x.
REALIZED LOSS: With respect to (i) a Liquidated Mortgage Loan, the
amount, if any, by which the unpaid Principal Balance and accrued interest
thereon at a rate equal to the Net Mortgage Rate exceeds the amount actually
recovered by the Servicer with respect thereto (net of reimbursement of Advances
and Servicing Advances) at the time such Mortgage Loan became a Liquidated
Mortgage Loan or (ii) with respect to a Mortgage Loan which is not a Liquidated
Mortgage Loan, any amount of principal that the Mortgagor is no longer legally
required to pay (except for the extinguishment of debt that results from the
exercise of remedies due to default by the Mortgagor).
REALIZED LOSS INTEREST SHORTFALL: The meaning specified in Section
6.05(c).
RECORD DATE: With respect to each Class of Certificates (other than
the Class 1-A10 and Class 2-A8 Certificates), the close of business of the last
Business Day of the month preceding the month
39
of the related Distribution Date. With respect to the Class 1-A10 and Class 2-A8
Certificates, the close of business on the business day immediately preceding
the related Distribution Date.
REFERENCE BANKS: Four xxxxxx xxxxx in the London interbank market
selected by the Counterparty.
REGULATION AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. Sections 229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been provided
by the Commission in the adopting release (Asset-Backed Securities, Securities
Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff
from time to time.
RELEVANT MORTGAGE LOAN: The meaning specified in Section 5.01.
RELEVANT SALE AGREEMENT: With respect to any reference to CHF as
Seller, the Mortgage Loan Sale Agreement dated as of September 1, 2006 between
the Depositor and CHF, and with respect to any reference to JPMMAC as Seller,
the Mortgage Loan Sale Agreement dated as of September 1, 2006 between the
Depositor and JPMMAC.
RELEVANT SELLER: With respect to the Mortgage Loan Sale Agreement
dated as of September 1, 2006 between the Depositor and CHF, CHF, and with
respect to the Mortgage Loan Sale Agreement dated as of September 1, 2006
between the Depositor and JPMMAC, JPMMAC.
RELIEF ACT: The Servicemembers Civil Relief Act or the California
Military and Veterans Code, as amended, or any other similar state or local law.
REMIC: A "real estate mortgage investment conduit," as such term is
defined in Section 860D of the Code. References herein to "a REMIC" or "the
REMICs" shall mean one or all, as the context requires, of the REMICs created
hereunder.
REMIC POOL: Each of the Lower-Tier REMIC, the Middle-Tier REMIC and
the Upper-Tier REMIC.
REMIC PROVISIONS: Provisions of the federal income tax law relating to
REMICs which appear at Sections 860A through 860G of Part IV of Subchapter M of
Chapter 1 of Subtitle A of the Code, and related provisions, and U.S. Department
of the Treasury temporary, proposed or final regulations and rulings promulgated
thereunder, as the foregoing are in effect (or with respect to proposed
regulations, are proposed to be in effect) from time to time.
REMIC REPORTING AGENT: As defined in Section 7.02(b).
REMITTANCE RATE: The Group One Remittance Rate or the Group Two
Remittance Rate, as applicable.
REPURCHASE PROCEEDS: All proceeds of any Mortgage Loan or property
acquired in respect thereof repurchased pursuant to Section 2.02, 3.01, 5.01,
5.21 or 11.01.
RESERVE FUND: As defined in Section 5.29.
RESIDUAL INTEREST: The interest represented by (i) amounts, if any,
remaining in the Collection Account following termination of the Trust Fund
after payments to the Class A Certificateholders (other than the Class A-R
Certificateholders), the Class M Certificateholders and the Class B
Certificateholders and (ii) amounts paid in respect of principal and accrued
interest on the Class
40
A-R Certificates, other than, in the case of both (i) and (ii), amounts
attributable to the Class LT-R Interest or the Class MT-R Interest.
RESPONSIBLE OFFICER: When used with respect to the Trustee, any senior
vice president, any vice president, any assistant vice president, any senior
trust officer, any trust officer or any other officer of the Trustee in its
Agency & Trust Office customarily performing functions similar to those
performed by any of the above designated officers.
RETIRED CERTIFICATE GROUP: With respect to any Distribution Date, any
Certificate Group with respect to which the aggregate Outstanding Certificate
Principal Balance is reduced to zero on or before such Distribution Date.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.
or its successor in interest.
SALE AGREEMENTS: The Mortgage Loan Sale Agreement dated as of
September 1, 2006 between the Depositor and CHF and the Mortgage Loan Sale
Agreement dated as of September 1, 2006 between the Depositor and JPMMAC.
XXXXXXXX-XXXXX CERTIFICATION: The meaning specified in Section
5.24(f).
SCHEDULED PRINCIPAL BALANCE: With respect to any Mortgage Loan as of
any Distribution Date, the unpaid principal balance of such Mortgage Loan as
specified in the amortization schedule at the time relating thereto (before any
adjustment to such schedule by reason of bankruptcy or similar proceeding or any
moratorium or similar waiver or grace period) as of the Due Date in the month
preceding the month of such Distribution Date, or as the Cut-off Date, with
respect to the first (1st) Distribution Date, after giving effect to any
previously applied prepayments, the payment of principal due on such first day
of the month and any reduction of the principal balance of such Mortgage Loan by
a bankruptcy court, irrespective of any delinquency in payment by the related
Mortgagor.
SECTION 302 REQUIREMENTS: Any rules or regulations promulgated
pursuant to the Xxxxxxxx-Xxxxx Act of 2002 (as such may be amended from time to
time).
SECURITIES ACT: The Securities Act of 1933, as amended.
SELLERS: CHF and JPMMAC, referred to collectively.
SERVICER: Chase or any successor under this Agreement.
SERVICING ADVANCES: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Servicer of its
servicing obligations and which are "unanticipated expenses" (within the meaning
of Treasury regulations section 1.860G-1(b)(3)(ii)) including, but not limited
to, the cost of (i) the preservation, restoration and protection of the
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan), (ii) any enforcement or judicial proceedings, including foreclosures,
(iii) the management and liquidation of the Mortgaged Property (or stock
allocated to a dwelling unit, in the case of a Co-op Loan) if the Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan) is
acquired in satisfaction of the Mortgage, (iv) taxes and assessments on the
Mortgaged Properties subject to the Mortgage Loans and (v) compliance with the
obligations under Section 5.21.
SERVICING CRITERIA: The "servicing criteria" set forth in Item 1122(d)
of Regulation AB, as such may be amended from time to time.
41
SERVICING FEE: The amount of the monthly fee paid for the servicing of
the Mortgage Loans, equal to, as of any Distribution Date, with respect to each
Mortgage Loan, one-twelfth of the Servicing Fee Rate of the Principal Balance
thereof as of the Determination Date in the preceding month, subject to
adjustment as provided in Section 6.05. The Servicing Fee shall be payable only
at the time of and with respect to those Mortgage Loans for which payment is in
fact made of the entire amount of the Monthly Payments that shall have come due
and only at the time such Monthly Payment shall be made. The right to receive
the Servicing Fee is limited to, and the Servicing Fee is payable solely from,
the interest portion of such Monthly Payments (or the interest portion of any
Principal Prepayment in full) collected by the Servicer, or as otherwise
provided under Section 5.09 or 5.23.
SERVICING FEE RATE: 0.2560% per annum.
SERVICING OFFICER: Any officer of the Servicer or any Sub-Servicer
involved in, or responsible for, the administration and servicing of the
Mortgage Loans whose name appears on a written certificate listing servicing
officers furnished to the Trustee by the Servicer on or prior to the Closing
Date, and signed on behalf of the Servicer or any Sub-Servicer by its President,
any Vice President or its Treasurer, as such certificate may from time to time
be amended.
SFAS 140: Statement of Financial Accounting Standard No. 140,
Accounting for Transfers and Servicing of Financial Assets and Extinguishment of
Liabilities dated September 2000, published by the Financial Accounting
Standards Board of the Financial Accounting Foundation.
SIMILAR LAW: The meaning specified in Section 4.02(d).
SINGLE CERTIFICATE: A Certificate of any Class that evidences the
smallest permissible original denomination for such Class of Certificates as
specified in Section 4.01(d).
SPECIAL HAZARD AMOUNT: Initially, $10,242,942.66. As of the first
anniversary of the Cut-off Date, the Special Hazard Amount shall be reduced, but
not increased, to the lesser of (i) the initial Special Hazard Amount less the
sum of all amounts allocated to the Subordinated Certificates in respect of
Special Hazard Losses on the Mortgage Loans during such year or (ii) the
Adjustment Amount for such anniversary. As of each subsequent anniversary of the
Cut-off Date, the Special Hazard Amount shall be reduced, but not increased, to
the lesser of (i) the Special Hazard Amount on the immediately preceding
anniversary of the Cut-off Date less the sum of all amounts allocated to the
Subordinated Certificates in respect of Special Hazard Losses on the Mortgage
Loans during such year and (ii) the Adjustment Amount for such anniversary. The
"Adjustment Amount" with respect to each anniversary of the Cut-off Date will be
equal to 1.00% multiplied by the aggregate outstanding Principal Balance of the
Mortgage Loans.
SPECIAL HAZARD LOSS: With respect to any Mortgage Loan, any Realized
Loss or portion thereof resulting from direct physical loss or damage to the
related Mortgaged Property (or Underlying Mortgaged Property, in the case of a
Co-op Loan), which is not insured against under the Standard Hazard Policy
required to be maintained hereunder.
STANDARD HAZARD POLICY: Each standard hazard insurance policy or
replacement therefor referred to in Section 5.16.
STARTUP DAY: The meaning specified in Section 2.04(a).
SUBCONTRACTOR: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood by
participants in the mortgage-backed securities market) of Mortgage Loans but
performs one or more discrete functions identified in Item
42
1122(d) of Regulation AB with respect to Mortgage Loans as determined by and
under the direction or authority of the Servicer or a Sub-Servicer.
SUBORDINATED CERTIFICATES: The Class M and Class B Certificates,
referred to collectively.
SUBORDINATED OPTIMAL PRINCIPAL AMOUNT: With respect to any
Distribution Date, the lesser of (a) the aggregate Outstanding Certificate
Principal Balance of the Subordinated Certificates (before giving effect to any
distributions of principal on such Distribution Date) and (b) (1) the sum of:
(i) the applicable Subordinated Percentage of the applicable Non-PO Percentage
of the principal portion of all Monthly Payments, whether or not received, which
were due during the related Due Period on Mortgage Loans which were outstanding
during such Due Period; (ii) the applicable Subordinated Prepayment Percentage
of the applicable Non-PO Percentage of all Principal Prepayments made on any
Mortgage Loan during the related Principal Prepayment Period; (iii) with respect
to each Mortgage Loan not described in (iv) below, the applicable Subordinated
Percentage of the applicable Non-PO Percentage of the principal portion of all
Insurance Proceeds, condemnation awards and any other cash proceeds from a
source other than the applicable Mortgagor, to the extent required to be
deposited in the Collection Account pursuant to Section 5.08(iv) and (v), which
were received during the related Principal Prepayment Period, net of related
unreimbursed Servicing Advances and net of any portion thereof which, as to any
such Mortgage Loan, constitutes Late Collections that have been the subject of
an Advance on any prior Distribution Date; (iv) with respect to each Mortgage
Loan which has become a Liquidated Mortgage Loan during the related Principal
Prepayment Period, an amount equal to the portion (if any) of the Net
Liquidation Proceeds with respect to such Mortgage Loan (net of any unreimbursed
Advances) that was not included in the Group One Class A-P Amount, the Group Two
Class A-P Amount, the Non-PO Class 1-A Optimal Principal Amount or Non-PO Class
2-A Optimal Principal Amount with respect to such Distribution Date; and (v)
with respect to each Mortgage Loan repurchased or purchased during the related
Principal Prepayment Period pursuant to Section 2.02, 3.01, 5.01, 5.21 or 11.01,
an amount equal to the applicable Subordinated Prepayment Percentage of
applicable Non-PO Percentage of the principal portion of the Purchase Price (net
of amounts with respect to which a distribution of principal has previously been
made to the Subordinated Certificateholders) minus (2) the Class A-P Shortfall
Amount with respect to such Distribution Date.
SUBORDINATED PERCENTAGE: The Mortgage Group One Subordinated
Percentage or the Mortgage Group Two Subordinated Percentage, as the case may
be.
SUBORDINATED PREPAYMENT PERCENTAGE: The Mortgage Group One
Subordinated Prepayment Percentage or the Mortgage Group Two Subordinated
Prepayment Percentage, as the case may be.
SUB-SERVICER: Any Person that services Mortgage Loans on behalf of the
Servicer or any Sub-Servicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by the Servicer under
this Agreement that are identified in Item 1122(d) of Regulation AB. Any
Sub-Servicer shall meet the qualifications set forth in Section 5.02.
SUB-SERVICING AGREEMENT: Any agreement between the Servicer and any
Sub-Servicer, relating to servicing or administration of certain Mortgage Loans
as provided in Section 5.02, in such form as has been approved by the Servicer
and the Depositor.
SUBSEQUENT RECOVERY: The amount, if any, recovered by the Servicer
with respect to a Liquidated Mortgage Loan with respect to which a Realized Loss
has been incurred after liquidation and disposition of such Mortgage Loan.
43
SUBSTITUTE EXCESS INTEREST: As defined in Section 3.03.
TARGETED PRINCIPAL BALANCE: With respect to the Class 2-A8
Certificates, the aggregate amount specified for such Class for such
Distribution Date on Exhibit V hereto.
TELERATE SCREEN PAGE 3750: The display designated as page 3750 on the
Dow Xxxxx Telerate Service or such other page as may replace page 3750 on that
service for the purpose of displaying London interbank offered rates of major
banks.
TRUST: The Trust created pursuant to this Agreement.
TRUST FUND: The corpus of the Trust consisting of (i) the Mortgage
Loans, (ii) such assets as shall from time to time be identified as deposited in
the Collection Account and the Certificate Account, (iii) the Trust's rights
under the Yield Maintenance Agreements, (iv) property which secured a Mortgage
Loan and which has been acquired by foreclosure or deed in lieu of foreclosure,
(v) Standard Hazard Policies and any other insurance policies, and the proceeds
thereof and (vi) any proceeds of any of the foregoing.
TRUSTEE: The Bank of New York, a New York banking corporation and its
successors and any corporation resulting from or surviving any consolidation or
merger to which it or its successors may be a party, and any successor trustee
at the time serving as successor trustee hereunder, appointed as herein
provided.
UNCERTIFICATED PRINCIPAL BALANCE: With respect to any Lower-Tier REMIC
Regular Interest as of any Distribution Date, the initial principal amount of
such regular interest, reduced by (i) all amounts distributed on previous
Distribution Dates on such regular interest with respect to principal and (ii)
the principal portion of all Realized Losses allocated prior to such
Distribution Date to such regular interest, and increased with respect to
Subsequent Recoveries as provided in Section 2.04.
UNDERCOLLATERALIZED POOL: As defined in Section 6.01(I)(b)(ix)(B).
UPPER-TIER REMIC: The Upper-Tier REMIC as described in Section 2.04.
UPPER-TIER REMIC REGULAR INTERESTS: (i) Each of the Classes of
Certificates (other than the Class A-R Certificate, Class A-P Certificate, Class
1-A10 Certificate and Class 2-A8 Certificate), (ii) each of the Class A-P
Component One and Class A-P Component Two and (iii) the rights under each Class
of the Class 1-A10 and Class 2-A8 Certificates other than the rights with
respect to Basis Risk Shortfall Carryover Amounts.
U.S. PERSON: A "United States Person" as defined in Section
7701(a)(30) of the Code.
YIELD MAINTENANCE AGREEMENTS: The yield maintenance agreements
described in Section 5.29 and set forth in Exhibit U and Exhibit U-1 hereto.
YIELD MAINTENANCE AGREEMENT REMITTANCE DATE: The day that is two New
York business days prior to each Distribution Date, provided that if such day is
not a New York business day, such Yield Maintenance Agreement Remittance Date
shall be the next preceding New York business day.
[END OF ARTICLE I]
44
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; TRUST FUND
Section 2.01 Conveyance of Mortgage Loans. The Depositor, concurrently
with the execution and delivery hereof, does hereby sell, transfer, assign, set
over and convey to the Trustee without recourse all the right, title and
interest of the Depositor in and to the Mortgage Loans, including all interest
and principal received on or with respect to the Mortgage Loans on or after the
Cut-off Date (other than Monthly Payments due on the Mortgage Loans on or before
the Cut-off Date).
In connection with such assignment, the Depositor does hereby deliver
to, and deposit with, the Custodian on behalf of the Trustee the following
documents or instruments with respect to each Mortgage Loan so assigned:
(i) With respect to each Mortgage Loan which is not a Co-op Loan:
(A) Original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of ______, without recourse" and signed in the name
of the last endorsee by an authorized officer.
(B) The original Mortgage (including all riders thereto) with evidence
of recording thereon, or a copy thereof certified by the public recording office
in which such Mortgage has been recorded or, if the original Mortgage has not
been returned from the applicable public recording office, a true certified copy
of the original that was sent for recording, certified by the Relevant Seller.
(ii) With respect to each Non-MERS Mortgage Loan which is not a Co-op Loan:
(A) The original Assignment of Mortgage to "The Bank of New York, as
trustee (Chase Mortgage Finance Corporation)," which assignment shall be in form
and substance acceptable for recording, or a copy certified by the Relevant
Seller as a true and correct copy of the original Assignment of Mortgage which
has been sent for recordation. Subject to the foregoing, such assignments may,
if permitted by law, be by blanket assignments for Mortgage Loans covering
Mortgaged Properties situated within the same county. If the Assignment of
Mortgage is in blanket form, a copy of the Assignment of Mortgage shall be
included in the related individual Mortgage File.
(B) The original policy of title insurance, or in the event such
original title policy is unavailable a copy of the related policy (provided that
use of a copy is acceptable to the related title insurance or escrow company),
including riders and endorsements thereto, or if the policy has not yet been
issued, a written commitment or interim binder or preliminary report of title
issued by the title insurance or escrow company.
(C) Originals of all recorded intervening Assignments of Mortgage, or
copies thereof, certified by the public recording office in which such
Assignments or Mortgage have been recorded showing a complete chain of title
from the originator to the Depositor, with evidence of recording, thereon, or a
copy thereof certified by the public recording office in which such Assignment
of Mortgage has been recorded or, if the original Assignment of Mortgage has not
been returned from the applicable public recording office, a true certified
copy, certified by the Relevant Seller of the original Assignment of Mortgage
together with a certificate of the Relevant Seller certifying that the original
Assignment of Mortgage has been delivered for recording in the appropriate
public recording office of the jurisdiction in which the Mortgaged Property is
located.
(D) Originals, or copies thereof certified by the public recording
office in which such documents have been recorded, of each assumption,
extension, modification, written assurance or
45
substitution agreements, if applicable, or if the original of such document has
not been returned from the applicable public recording office, a true certified
copy, certified by the Relevant Seller, of such original document together with
certificate of Relevant Seller certifying the original of such document has been
delivered for recording in the appropriate recording office of the jurisdiction
in which the Mortgaged Property is located.
(E) If the Mortgage Note or Mortgage or any other material document or
instrument relating to the Mortgage Loan has been signed by a Person on behalf
of the Mortgagor, the original power of attorney or other instrument that
authorized and empowered such Person to sign bearing evidence that such
instrument has been recorded, if so required in the appropriate jurisdiction
where the Mortgaged Property is located (or, in lieu thereof, a duplicate or
conformed copy of such instrument, together with a certificate of receipt from
the recording office, certifying that such copy represents a true and complete
copy of the original and that such original has been or is currently submitted
to be recorded in the appropriate governmental recording office of the
jurisdiction where the Mortgaged Property is located), or if the original power
of attorney or other such instrument has been delivered for recording in the
appropriate public recording office of the jurisdiction in which the Mortgaged
Property is located, a copy of any applicable power of attorney.
(iii) With respect to each Co-op Loan:
(A) (I) The original Mortgage Note bearing all intervening
endorsements, endorsed "Pay to the order of ________, without
recourse" and signed in the name of the last endorsee by an
authorized officer.
(B) The original Mortgage entered into by the Mortgagor with respect
to such Co-Op Loan.
(C) The original Assignment of Mortgage to "The Bank of New York as
trustee (Chase Mortgage Finance Corporation)".
(D) Original Assignments of Mortgage showing a complete chain of
assignment from the originator of the related Co-Op Loan to the
Seller.
(E) Original Form UCC-1 and any continuation statements with evidence
of filing thereon entered into by the Mortgagor with respect to
such Co-Op Loan or if the original of such document has not been
returned from the applicable public recording office, a true
certified copy of the document sent for recording.
(F) Form UCC-3 (or copy thereof) by the applicable Mortgage Loan
Seller or its agent assigning the security interest covered by
such Form UCC-1 to "The Bank of New York as trustee" or to blank,
together with all Forms UCC-3 (or copies thereof) showing a
complete chain of assignment from the originator of the related
Co-op Loan to the Seller, with evidence of recording thereon.
(G) Stock certificate representing the stock allocated to the related
dwelling unit in the related residential cooperative housing
corporation and pledged by the related Mortgagor to the
originator of such Co-op Loan with a stock power in blank
attached.
(H) Original proprietary lease.
(I) Original assignment of proprietary lease, to the Trustee or to
blank, and all intervening assignments thereof.
(J) Original recognition agreement of the interests of the mortgagee
with respect to the Co-op Loan by the residential cooperative
housing corporation, the stock of
46
which was pledged by the related Mortgagor to the originator of
such Co-op Loan.
(K) Originals of any assumption, consolidation or modification
agreements relating to any of the items specified in (A) through
(F) above with respect to such Co-op Loan.
If in connection with any Mortgage Loan which is not a Co-op Loan the
Depositor cannot deliver the Mortgage, Assignments of Mortgage, or assumption,
consolidation or modification agreement, as the case may be, with evidence of
recording thereon concurrently with the execution and delivery of this Agreement
solely because of a delay caused by the public recording office where such
Mortgage, Assignments of Mortgage, or assumption, consolidation or modification
agreement, as the case may be, has been delivered for recordation, the Depositor
shall deliver or cause to be delivered to the Trustee written notice stating
that such Mortgage, Assignments of Mortgage, or assumption, consolidation or
modification agreement, as the case may be, has been delivered to the
appropriate public recording office for recordation. Thereafter, the Depositor
shall deliver or cause to be delivered to the Trustee such Mortgage, Assignments
of Mortgage, or assumption, consolidation or modification agreement, as the case
may be, with evidence of recording indicated thereon upon receipt thereof from
the public recording office.
With respect to any Non-MERS Mortgage Loans which are not Co-op Loans,
and as to which the related Mortgaged Property is located in Florida, the
Servicer shall cause to be recorded in the appropriate public recording office
for real property records each Assignment of Mortgage referred to in this
Section 2.01 as soon as practicable. With respect to any Non-MERS Mortgage Loans
which are not Co-op Loans as to which the related Mortgaged Property is located
outside of Florida, the Servicer shall not be obligated to cause to be recorded
the Assignment of Mortgage referred to in this Section 2.01. With respect to
Co-op Loans as to which the related dwelling unit is located in Florida, the
Servicer shall cause to be filed in the appropriate filing office the Form UCC-3
referred to in this Section 2.01 as soon as practicable. With respect to any
Co-op Loans as to which the related dwelling unit is located outside Florida,
the Servicer shall not be obligated to cause to be filed the Form UCC-3 referred
to in this Section 2.01. While each such Assignment of Mortgage or Form UCC-3 is
being recorded or filed, as applicable, the Servicer shall deliver to the
Trustee a photocopy of such document. If any such Assignment of Mortgage or Form
UCC-3 is returned unrecorded or unfiled to the Servicer because of any defect
therein, the Servicer shall cause such defect to be cured and such document to
be recorded or filed in accordance with this paragraph. The Depositor shall
deliver or cause to be delivered each such original recorded or filed Assignment
of Mortgage and intermediate assignment or Form UCC-3 to the Trustee within 270
days of the Closing Date or shall deliver to the Trustee on or before such date
an Officer's Certificate stating that such document has been delivered to the
appropriate public recording or filing office for recording or filing, but has
not been returned solely because of a delay caused by such recording or filing
office. In any event, the Depositor shall use all reasonable efforts to cause
each such document with evidence of recording or filing thereon to be delivered
to the Trustee within 300 days of the Closing Date.
With respect to each MERS Mortgage Loan, the Trustee, at the expense
of the Depositor and at the direction and with the cooperation of the Servicer,
shall cause to be taken such actions as are necessary to cause the Trustee to be
clearly identified as the owner of each such Mortgage Loan on the records of
MERS for purposes of the system of recording transfers of beneficial ownership
of mortgages maintained by MERS.
The ownership of each Mortgage Note, the Mortgage and the contents of
the related Mortgage File is vested in the Trustee. Neither the Depositor nor
the Servicer shall take any action inconsistent with such ownership and shall
not claim any ownership interest therein. The Depositor and the Servicer shall
respond to any third party inquiries with respect to ownership of the Mortgage
Loans by stating that
47
such ownership is held by the Trustee on behalf of the Certificateholders.
Mortgage documents relating to the Mortgage Loans not delivered to the Trustee
are and shall be held in trust by the Servicer or any Sub-Servicer, for the
benefit of the Trustee as the owner thereof, and the Servicer's or such
Sub-Servicer's possession of the contents of each Mortgage File so retained is
for the sole purpose of servicing the related Mortgage Loan, and such retention
and possession by the Servicer or such Sub-Servicer is in a custodial capacity
only. The Depositor agrees to take no action inconsistent with the Trustee's
ownership of the Mortgage Loans, to promptly indicate to all inquiring parties
that the Mortgage Loans have been sold and to claim no ownership interest in the
Mortgage Loans. Each Mortgage File and the mortgage documents relating to the
Mortgage Loans contain proprietary business information of the Servicer and its
customers. The Trustee and the Depositor agree that they will not use such
information for business purposes without the express written consent of the
Servicer and that all such information shall be kept strictly confidential.
It is the intention of this Agreement that the conveyance of the
Depositor's right, title and interest in and to the Trust Fund pursuant to this
Agreement shall constitute a purchase and sale and not a loan. If a conveyance
of Mortgage Loans from any Seller to the Depositor is characterized as a pledge
and not a sale, then the Depositor shall be deemed to have transferred to the
Trustee all of the Depositor's right, title and interest in, to and under the
obligations of such Seller deemed to be secured by said pledge; and it is the
intention of this Agreement that the Depositor shall also be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title, and interest in, to and under the obligations of such
Seller to the Depositor deemed to be secured by said pledge and that the Trustee
shall be deemed to be an independent custodian for purposes of perfection of the
security interest granted to the Depositor. If the conveyance of the Mortgage
Loans from the Depositor to the Trustee is characterized as a pledge, it is the
intention of this Agreement that this Agreement shall constitute a security
agreement under applicable law, and that the Depositor shall be deemed to have
granted to the Trustee a first priority security interest in all of the
Depositor's right, title and interest in, to and under the Mortgage Loans, all
payments of principal of or interest on such Mortgage Loans, all other rights
relating to and payments made in respect of the Trust Fund, and all proceeds of
any thereof. If the trust created by this Agreement terminates prior to the
satisfaction of the claims of any Person in any Certificates, the security
interest created hereby shall continue in full force and effect and the Trustee
shall be deemed to be the collateral agent for the benefit of such Person.
In addition to the conveyance made in the first paragraph of this
Section 2.01, the Depositor does hereby convey, assign and set over to the
Trustee all of its right, title and interest in that portion of the Trust Fund
described in items (ii), (iii), (iv) and (v) of the definition thereof and
further assigns to the Trustee for the benefit of the Certificateholders those
representations and warranties of the Sellers contained in the Sale Agreements
and described in Section 3.01 hereof and the benefit of the repurchase
obligations of the Sellers described in Sections 2.02 and 3.01 hereof and the
obligations of the Sellers contained in the Sale Agreements to take, at the
request of the Depositor or the Trustee, all action on its part which is
reasonably necessary to ensure the enforceability of a Mortgage Loan.
The parties hereto agree and understand that it is not intended that
any mortgage loan be included in the Trust that is any of (i) a "High-Cost Home
Loan" as defined in the New Jersey Home Ownership Act effective November 27,
2003, (ii) a "High-Cost Home Loan" as defined in the New Mexico Home Loan
Protection Act effective January 1, 2004, (iii) a "High-Cost Home Mortgage Loan"
as defined in the Massachusetts Predatory Home Loan Practices Act effective
November 7, 2004 or (iv) a "High-Cost Home Loan" as defined by the Indiana High
Cost Home Loan Law effective January 1, 2005.
Section 2.02 Acceptance by Trustee. Except as set forth in the
Exception Report delivered contemporaneously herewith (the "Exception Report"),
the Trustee acknowledges receipt by the
48
Custodian on the Trustee's behalf of the Mortgage Note for each Mortgage Loan
and delivery of a Mortgage File (but does not acknowledge receipt of all
documents required to be included in such Mortgage File) with respect to each
Mortgage Loan and declares that the Custodian holds and will hold on the
Trustee's behalf such documents and any other documents constituting a part of
the Mortgage Files delivered to it in trust for the use and benefit of all
present and future Certificateholders. The Depositor will cause the Relevant
Seller to repurchase any Mortgage Loans to which an exception was taken in the
Exception Report unless such exception is cured to the satisfaction of the
Trustee within 45 Business Days of the Closing Date. The Trustee may accept
delivery of such Mortgage Files by the Custodian on its behalf. The Custodian
will deliver a copy of the Exception Report to the Depositor and the Trustee
The Custodian, on the Trustee's behalf, agrees, for the benefit of
Certificateholders, to review each Mortgage File delivered to it within 270 days
after the Closing Date to ascertain that all documents required by Section 2.01
have been executed and received, and that such documents relate to the Mortgage
Loans identified in Exhibit A that have been conveyed to it. If the Custodian on
the Trustee's behalf finds any document or documents constituting a part of a
Mortgage File to be missing or defective (that is, mutilated, damaged, defaced
or unexecuted) in any material respect, the Custodian on the Trustee's behalf
shall promptly (and in any event within no more than five Business Days) after
such finding so notify the Servicer, the Relevant Seller, the Trustee and the
Depositor. In addition, the Custodian on the Trustee's behalf shall also notify
the Servicer, the Relevant Seller, the Trustee and the Depositor, if (a) in
examining the Mortgage Files, the documentation shows on its face (i) any
adverse claim, lien or encumbrance, (ii) that any Mortgage Note was overdue or
had been dishonored, (iii) any evidence on the face of any Mortgage Note or
Mortgage of any security interest or other right or interest therein, or (iv)
any defense against or claim to the Mortgage Note by any party or (b) the
original Mortgage with evidence of recording thereon with respect to a Mortgage
Loan is not received within 270 days of the Closing Date; provided, however,
that if the Depositor cannot deliver the original Mortgage with evidence of
recording thereon because of a delay caused by the public recording office where
such Mortgage has been delivered for recordation, the Depositor shall deliver or
cause to be delivered to the Custodian and the Trustee written notice stating
that such Mortgage has been delivered to the appropriate public recording
officer for recordation and thereafter the Depositor shall deliver or cause to
be delivered such Mortgage with evidence of recording thereon upon receipt
thereof from the public recording office. The Depositor shall request that the
Relevant Seller correct or cure such omission, defect or other irregularity, or
substitute a Mortgage Loan pursuant to the provisions of Section 3.03, within 60
days from the date the Relevant Seller was notified of such omission or defect
and, if the Relevant Seller does not correct or cure such omission or defect
within such period, that the Relevant Seller purchase such Mortgage Loan from
the Trustee within 90 days from the date the Depositor notified the Relevant
Seller and the Trustee of such omission, defect or other irregularity at the
Purchase Price of such Mortgage Loan. The Purchase Price for any Mortgage Loan
purchased pursuant to this Section 2.02 shall be paid to the Servicer and
deposited by the Servicer in the Collection Account promptly upon receipt, and,
upon receipt by the Trustee of written notification of such deposit signed by a
Servicing Officer, the Trustee shall promptly release to the Relevant Seller the
related Mortgage File and the Trustee shall execute and deliver such instruments
of transfer or assignment, without recourse, as shall be necessary to vest in
the Relevant Seller or its designee, as the case may be, any Mortgage Loan
released pursuant hereto, and the Trustee shall have no further responsibility
with regard to such Mortgage Loan. It is understood and agreed that the
obligation of the Relevant Seller to purchase, cure or substitute any Mortgage
Loan as to which a material defect in or omission of a constituent document
exists shall constitute the sole remedy respecting such defect or omission
available to the Trustee on behalf of Certificateholders. The Trustee shall be
under no duty or obligation to inspect, review and examine such documents,
instruments, certificates or other papers to determine that they are genuine,
enforceable or appropriate to the represented purpose, or that they have
actually been recorded, or that they are other than what they purport to be on
their face. The Trustee shall keep confidential the name of each Mortgagor and
shall not solicit any such Mortgagor for the purpose of refinancing the related
Mortgage Loan.
49
Within 280 days of the Closing Date, the Trustee based solely on
information provided to it by the Custodian shall deliver to the Depositor and
the Servicer the Trustee's Certification, substantially in the form of Exhibit G
attached hereto, setting forth the status of the Mortgage Files as of such date.
Section 2.03 Trust Fund; Authentication of Certificates. The Trustee
acknowledges and accepts the assignment to it of the Trust Fund created pursuant
to this Agreement in trust for the use and benefit of all present and future
Certificateholders. The Trustee acknowledges the assignment to it for the
benefit of the Trust Fund of the Mortgage Loans and has caused to be
authenticated and delivered to or upon the order of the Depositor, in exchange
for the Mortgage Loans, Certificates duly authenticated by the Trustee or, if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent in authorized denominations evidencing ownership of the
entire Trust Fund.
Section 2.04 REMIC Elections.
(a) The Depositor hereby instructs and authorizes the Paying Agent to
make appropriate elections to treat the Trust Fund as comprising three REMICs
(the Lower-Tier REMIC, the Middle-Tier REMIC and the Upper-Tier REMIC). This
Agreement shall be construed so as to carry out the intention of the parties
that each REMIC created hereunder be treated as a REMIC at all times prior to
the date on which the Trust Fund is terminated. The Closing Date is hereby
designated as the "startup day" of each REMIC created hereunder within the
meaning of Section 860G(a)(9) of the Code. The Lower-Tier REMIC shall hold as
assets all property of the Trust Fund other than (i) the Lower-Tier REMIC
Interests and the Middle-Tier REMIC Interests and (ii) the Yield Maintenance
Agreements and the Reserve Fund. Each of the Lower-Tier REMIC Regular Interests
is hereby designated a "regular interest" (within the meaning of Section
860G(a)(1) of the Code) in the Lower-Tier REMIC. The Middle-Tier REMIC shall
hold as assets the several classes of uncertificated Lower-Tier REMIC Regular
Interests. Each of the Middle-Tier REMIC Regular Interests is hereby designated
a "regular interest" (within the meaning of Section 860G(a)(1) of the Code) in
the Middle-Tier REMIC. The Upper-Tier REMIC shall hold as assets the several
classes of uncertificated Middle-Tier REMIC Regular Interests. Each of the
Upper-Tier REMIC Regular Interests is hereby designated as a "regular interest"
(within the meaning of Section 860G(a)(1) of the Code) in the Upper-Tier REMIC.
The Class LT-R Interest is hereby designated as the sole residual interest
(within the meaning of Section 860G(a)(2) of the Code) in the Lower-Tier REMIC.
The Class MT-R Interest is hereby designated as the sole residual interest
(within the meaning of Section 860G(a)(2) of the Code) in the Middle-Tier REMIC.
The Residual Interest is hereby designated as the sole residual interest (within
the meaning of Section 860G(a)(2) of the Code) in the Upper-Tier REMIC. The
Class A-R Certificate evidences ownership of the Class LT-R Interest, the Class
MT-R Interest and the Residual Interest. All interests described in this Section
2.04(a) shall be designated as such on the Startup Day.
50
LOWER-TIER REMIC
The following table specifies the class designation, initial principal
amount, pass-through rate and related Mortgage Group for each class of
Lower-Tier REMIC Interest.
Lower-Tier REMIC Interest Initial Principal Amount Pass-Through Rate Related Mortgage Group
------------------------- ------------------------ ----------------- ----------------------
LT-R (1) (1) N/A
LTA-P Component One $932,875.43 0.00% N/A
LTA-P Component Two $315,848.81 0.00% N/A
LT1-AX (2) 6.25% N/A
LT2-AX (3) 6.00% N/A
LT1-A (4) 6.25% Mortgage Group One
LT1-B (5) 6.25% Mortgage Group One
LT2-A (6) 6.00% Mortgage Group Two
LT2-B (5) 6.00% Mortgage Group Two
(1) The Class LT-R Interest shall represent the sole class of residual interest
in the Lower-Tier REMIC. The Class LT-R Interest will not have a principal
amount or an interest rate. The Class LT-R Interest shall be represented by
the Class A-R Certificate.
(2) The Class LT1A-X Interest is an interest only interest, has no principal
balance, is not entitled to payments of principal and will bear interest on
its notional amount. The notional amount of the Class LT1A-X Interest shall
equal the Class 1-AX Notional Amount.
(3) The Class LT2A-X Interest is an interest only interest, has no principal
balance, is not entitled to payments of principal and will bear interest on
its notional amount. The notional amount of the Class LT2A-X Interest shall
equal the Class 2-AX Notional Amount.
(4) The initial principal amount of the Class LT1-A Interest shall equal 1% of
the Group One Subordinated Amount as of the first Distribution Date.
(5) The initial principal amount of each Lower-Tier REMIC Interest ending with
the designation "B" shall equal the excess of (i) the initial Group One
Non-PO Allocated Amount (in the case of the Class LT1-B Interest) or the
initial Group Two Non-PO Allocated Amount (in the case of the Class LT2-B
Interest) over (ii) the initial principal amount of the Lower-Tier REMIC
Interest ending with the designation "A" that is related to the same
Mortgage Group.
(6) The initial principal amount of the Class LT2-A Interest shall equal 1% of
the Group Two Subordinated Amount as of the first Distribution Date.
Interest shall be payable to, and shortfalls and losses are allocable
to, the Class LT1-AX Interest as such amounts are payable or allocable to the
Class 1-AX Certificates. Interest shall be payable to, and shortfalls and losses
are allocable to, the Class LT2-AX Interest as such amounts are payable or
allocable to the Class 2-AX Certificates.
Principal shall be payable to, and shortfalls, losses, prepayments and
increases in principal amount related to Subsequent Recoveries are allocable to,
the Class LTA-P Component One Interest as such amounts are payable or allocable
to Class A-P Component One. Principal shall be payable to, and shortfalls,
losses, prepayments and increases in principal amount related to Subsequent
Recoveries are allocable to, the Class LTA-P Component Two Interest as such
amounts are payable or allocable to Class A-P Component Two.
51
After the foregoing allocations and distributions are made to the
Class LT1-AX Interest, Class LT2-AX Interest, the Class LTA-P Component One
Interest and the Class LTA-P Component Two Interest, distributions shall be
deemed to be made and Realized Losses shall be deemed to be allocated to the
other Lower-Tier REMIC Regular Interests first, so as to keep the Uncertificated
Principal Balance of each Lower-Tier REMIC Regular Interest ending with the
designation "A" equal to 1% of the excess of (x) the Group One Non-PO Allocated
Amount (in the case of the Class LT1-A Interest) or the Group Two Non-PO
Allocated Amount (in the case of the Class LT2-A Interest) over (y) the
aggregate class principal amounts of the Class 1-A Certificates (in the case of
the Class LT1-A Interest) or the Class 2-A Certificates (in the case of the
Class LT2-A Interest) (except that if 1% of any such excess is greater than the
principal amount of the corresponding Lower-Tier REMIC Regular Interest ending
with the designation "A", the least amount of principal and Realized Losses
shall be distributed and allocated to such Lower-Tier REMIC Regular Interests
such that the Lower-Tier REMIC Subordinated Balance Ratio is maintained); and
second, any remaining principal and Realized Losses to the Lower-Tier REMIC
Regular Interests ending with the designation "B" in such a manner that the
remaining principal balance of each such Lower-Tier REMIC Regular Interest
equals the excess of (x) the Group One Non-PO Allocated Amount (in the case of
the Class LT1-B Interest) or the Group Two Non-PO Allocated Amount (in the case
of the Class LT2-B Interest) over (y) the Uncertificated Principal Balance of
the Lower-Tier REMIC Regular Interest ending with the designation "A" which is
related to the same Mortgage Group. All computations with respect to the
Lower-Tier REMIC Interests shall be taken out to eight decimal places.
If on any Distribution Date there is an increase in the principal
amount of any Class of Certificates (other than the Class A-P Certificates)
related to Subsequent Recoveries, then, prior to distributions of principal and
allocations of losses on such Distribution Date with respect to the Lower-Tier
REMIC, there shall be a corresponding increase in the Uncertificated Principal
Balance of the Lower-Tier REMIC Regular Interests, with such increase allocated
among the Lower-Tier REMIC Regular Interests first, to each Lower-Tier REMIC
Regular Interest ending with the designation "A", so that the Uncertificated
Principal Balance of each such Lower-Tier REMIC Regular Interest continues to
equal the same percentage of the excess of (x) the Group One Non-PO Allocated
Amount (in the case of the Class LT1-A Interest) or the Group Two Non-PO
Allocated Amount (in the case of the Class LT2-A Interest) over (y) the
aggregate class principal amounts of the Class 1-A Certificates (in the case of
the Class LT1-A Interest) or the Class 2-A Certificates (in the case of the
Class LT2-A Interest) and so that the Lower-Tier REMIC Subordinated Balance
Ratio is maintained; and second, any remaining increase allocated to the
Lower-Tier REMIC Regular Interests ending with the designation "B" in such a
manner that the principal balance of each such Lower-Tier REMIC Regular Interest
equals the excess of (x) the Group One Non-PO Allocated Amount (in the case of
the Class LT1-B Interest) or the Group Two Non-PO Allocated Amount (in the case
of the Class LT2-B Interest) over (y) the Uncertificated Principal Balance of
the Lower-Tier REMIC Regular Interest ending with the designation "A" which is
related to the same Mortgage Group.
52
MIDDLE TIER REMIC
The following table specifies the class designation, interest rate,
initial principal amount and Classes of corresponding certificates for each
class of Middle-Tier REMIC Interest:
53
Pass-
Middle-Tier REMIC Through Corresponding
Interest Initial Balance Rate Certificates
------------------- -------------- -------- -----------------------
MT-R (1) (1) N/A
MT1-A1 (2) 6.25% Class 1-A1
MT1-A2 (2) 6.25% Class 1-A2
MT1-A3 (2) 6.00% Class 1-A3
MT1-A4 (2) 6.50% Class 1-A4
MT1-A5 (2) 6.25% Class 1-A5
MT1-A6 (2) 6.25% Class 1-A6
MT1-A7 (2) 6.25% Class 1-A7
MT1-A8 (2) 6.25% Class 1-A8
MT1-A9 (2) 6.25% Class 1-A9
MT1-A10 (2) 6.25% Class 1-A10
MT1-A11 (2) 6.25% Class 1-A11
MT1-A12 (2) 6.25% Class 1-A12
MT1-A13 (2) 6.25% Class 1-A13
MT1-A14 (2) 6.25% Class 1-A14
MT1-A15 (2) 6.25% Class 1-A15
MT1-A16 (2) 6.25% Class 1-A16
MT1-A17 (2) 6.25% Class 1-A17
MT1-A18 (2) 6.25% Class 1-A18
MT1-A19 (2) 6.25% Class 1-A19
MT1-AX (3) 6.25% Class 1-AX
MTA-P Component One $932,875.43 0.00% Class A-P Component One
MTA-R (2) 6.25% Class A-R
MT2-A1 (2) 6.00% Class 2-A1
MT2-A2 (2) 6.00% Class 2-A2, Class 2-A3
MT2-A4 (2) 6.00% Class 2-A4
MT2-A5 (2) 6.00% Class 2-A5
MT2-A6 (2) 6.00% Class 2-A6
MT2-A7 (2) 6.00% Class 2-A7
MT2-A8 (2) 6.00% Class 2-A8
MT2-A9 (2) 6.00% Class 2-A9
MT2-AX (4) 6.00% Class 2-AX
MTA-P Component Two $315,848.81 0.00% Class A-P Component Two
MTA-M (2) (5) Class A-M
MTM-1 (2) (5) Class M-1
MTB-1 (2) (5) Class B-1
MTB-2 (2) (5) Class B-2
MTB-3 (2) (5) Class B-3
MTB-4 (2) (5) Class B-4
MTB-5 (2) (5) Class B-5
----------
(1) The Class MT-R Interest shall represent the sole class of residual interest
in the Middle-Tier REMIC. The Class MT-R Interest will not have a principal
amount or an interest rate. The Class MT-R Interest shall be represented by
the Class A-R Certificate.
54
MT-R Interest shall be represented by the Class A-R Certificate.
(2) The initial principal amount of each of these interests shall be equal to
the Original Certificate Principal Balance the Class of corresponding
Certificates (disregarding the notional amount of any class of
"interest-only" certificates).
(3) The Class MT1-AX Interest is an interest only interest, has no principal
balance, is not entitled to payments of principal and will bear interest on
its notional amount. The notional amount of the Class MT1-AX Interest shall
equal the Class 1-AX Notional Amount.
(4) The Class MT2-AX Interest is an interest only interest, has no principal
balance, is not entitled to payments of principal and will bear interest on
its notional amount. The notional amount of the Class MT2-AX Interest shall
equal the Class 2-AX Notional Amount.
(5) For any Distribution Date, the interest rate for the Class MTA-M Interest,
Class MTM-1 Interest, Class MTB-1 Interest, Class MTB-2 Interest, Class
MTB-3 Interest, Class MTB-4 Interest and Class MTB-5 Interest shall be a
per annum rate equal to the weighted average of the interest rates on the
Class LT1-A Interest and the Class LT2-A Interest weighted on the basis of
their principal amounts immediately prior to such Distribution Date.
Principal and interest (disregarding payments in respect of Basis Risk Shortfall
Carryover Amounts) shall be payable to, and shortfalls, losses, prepayments and
increases in principal amount are allocable to, the Middle-Tier REMIC Regular
Interests as such amounts are payable and allocable to the corresponding
certificates under this Agreement (excluding Section 6.01(I)(a)(v) hereof).
(b) Solely for the purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury Regulations, the "latest possible maturity date" of each "regular
interest" in each REMIC created hereunder is the Distribution Date immediately
following the latest scheduled maturity of any Mortgage Loan.
(c) The "tax matters person" with respect to each REMIC created
hereunder for purposes of the REMIC Provisions shall be the beneficial owner of
the Class A-R Certificate having the largest Percentage Interest of such Class;
provided, however, that such largest beneficial owner and, to the extent
relevant, each other Holder of a Class A-R Certificate, by its acceptance
thereof, irrevocably appoints the Servicer as its agent and attorney-in-fact to
act as "tax matters person" with respect to each REMIC created hereunder for
purposes of the REMIC provisions.
(d) It is intended that each REMIC created hereunder shall constitute,
and that the affairs of the Trust Fund shall be conducted so as to qualify each
REMIC created hereunder as, a "real estate mortgage investment conduit" as
defined in and in accordance with the REMIC Provisions. In furtherance of such
intention, the Servicer covenants and agrees that it shall act as agent (and the
Servicer is hereby appointed to act as agent) on behalf of the Trust Fund, each
REMIC created hereunder and the Holder of the Class A-R Certificate and that in
such capacity it shall:
(i) prepare and file, or cause to be prepared and filed, in
a timely manner, a U.S. Real Estate Mortgage Investment Conduit Income
Tax Return (Form 1066) for each REMIC created hereunder and prepare
and file or cause to be prepared and filed with the Internal Revenue
Service and applicable state or local tax authorities income tax or
information returns for each taxable year with respect to each REMIC
created hereunder, using the calendar year as the taxable year and the
accrual method of accounting, containing such information and at the
times and in the manner as may be required by the Code or state or
local tax laws, regulations, or rules, and shall furnish or cause to
be furnished to Certificateholders the schedules, statements or
information at such times and in such manner as may be required
thereby;
55
(ii) within thirty days of the Closing Date, shall furnish
or cause to be furnished to the Internal Revenue Service, on Form 8811
or as otherwise may be required by the Code, the name, title, address,
and telephone number of the person that the Holders of the
Certificates may contact for tax information relating thereto (and the
Servicer shall act as the representative of the Trust Fund for this
purpose), together with such additional information as may be required
by such Form, and shall update such information at the time or times
in the manner required by the Code;
(iii) make or cause to be made an election, on behalf of
each REMIC created hereunder, to be treated as a REMIC, and make the
appropriate designations, if applicable, in accordance with this
Section 2.04 on the federal tax return of each REMIC hereunder for its
first taxable year (and, if necessary, under applicable state law);
(iv) prepare and forward, or cause to be prepared and
forwarded, to the Certificateholders and to the Internal Revenue
Service and, if necessary, state tax authorities, all information
returns or reports, or furnish or cause to be furnished by telephone,
mail, publication or other appropriate method such information, as and
when required to be provided to them in accordance with the REMIC
Provisions, including without limitation, the calculation of any
original issue discount;
(v) provide information necessary for the computation of tax
imposed on the transfer of the Class A-R Certificate to a Disqualified
Organization, or an agent (including a broker, nominee or other
middleman) of a Disqualified Organization, or a pass-through entity in
which a Disqualified Organization is the record holder of an interest
(the reasonable cost of computing and furnishing such information may
be charged to the Person liable for such tax);
(vi) ensure that federal, state or local income tax or
information returns shall be signed by the Trustee or such other
Person as may be required to sign such returns by the Code or state or
local laws, regulations or rules; and
(vii) maintain such records relating to each REMIC created
hereunder as may be required by the Code and as may be necessary to
prepare the foregoing returns, schedules, statements or information.
(e) Pursuant to Section 6.02(b), the Servicer, with the consent of the
Trustee, hereby appoints the Institution Trust Services Department of Chase to
perform the duties enumerated in (d) above.
(f) It is intended that the rights of each Class of the Class 1-A10
and Class 2-A8 Certificates to receive payments in respect of Basis Risk
Shortfall Carryover Amounts shall be treated as a right in interest rate cap
contracts and such shall be accounted for as property held separate and apart
from the regular interests in the Upper-Tier REMIC held by the Holders of the
Class 1-A10 and Class 2-A8 Certificates. This provision is intended to satisfy
the requirements of Treasury Regulations Section 1.860G-2(i) for the treatment
of property rights coupled with REMIC interests to be separately respected and
shall be interpreted consistently with such regulation.
Section 2.05 Permitted Activities of Trust. The Trust is created for
the object and purpose of engaging in the Permitted Activities.
Section 2.06 Qualifying Special Purpose Entity. For purposes of SFAS
140, the parties hereto intend that the Trust shall be treated as a "qualifying
special purpose entity" as such term is used in SFAS
56
140 and any successor rule thereto and its power and authority as stated in
Section 2.05 of this Agreement shall be limited in accordance with paragraph 35
thereof.
[END OF ARTICLE II]
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR AND
THE SERVICER; REPURCHASE OF MORTGAGE LOANS
Section 3.01 Representations and Warranties of the Depositor with
respect to the Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee for the
benefit of the Certificateholders that on or before the Closing Date it has
entered into the Sale Agreements with the Sellers, that the Sellers have made
the following representations and warranties with respect to each Mortgage Loan
in the Relevant Sale Agreement as of the Closing Date, which representations and
warranties run to and are for the benefit of the Depositor and the Trustee for
the benefit of the Certificateholders, and as to which the Depositor has
assigned to the Trustee for the benefit of the Certificateholders, pursuant to
Section 2.01 hereof, the right to cause the Relevant Seller to repurchase a
Mortgage Loan as to which there has occurred an uncured breach of
representations and warranties in accordance with the provisions of the Relevant
Sale Agreement.
(a) The information set forth in the Mortgage Loan Schedule is
complete, true and correct in all material respects;
(b) With respect to a Mortgage Loan which is not a Co-op Loan, the
Mortgage creates a first lien or a first priority ownership interest in an
estate in fee simple in real property securing the related Mortgage Note. With
respect to a Co-op Loan, the related Mortgage is a valid, enforceable and
subsisting first security interest on the related cooperative shares securing
the related Mortgage Note, subject only to (a) liens of the related residential
cooperative housing corporation for unpaid assessments representing the
Mortgagor's pro rata share of the related residential cooperative housing
corporation's payments for its blanket mortgage, current and future real
property taxes, insurance premiums, maintenance fees and other assessments to
which like collateral is commonly subject and (b) other matters to which like
collateral is commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the related security
agreement. There are no liens against or security interest in the cooperative
shares relating to each Co-op Loan (except for unpaid maintenance, assessments
and other amounts owed to the related cooperative which individually or in the
aggregate will not have a material adverse effect on such Co-op Loan), which
have priority over the Trustee's security interest in such cooperative shares;
(c) All payments due prior to the Cut-off Date for such Mortgage Loan
have been made as of the Closing Date, the Mortgage Loan is not delinquent in
payment more than 30 days and has not been dishonored; to the best of the
Relevant Seller's knowledge, there are no material defaults under the terms of
the Mortgage Loan; the Relevant Seller has not advanced funds, or induced,
solicited or knowingly received any advance of funds from a party other than the
owner of the Mortgaged Property subject to the Mortgage (or, with respect to a
Co-op Loan, the related Mortgagor), directly or indirectly, for the payment of
any amount required by the Mortgage Loan; there has been no more than one
delinquency in excess of 30 days during the preceding twelve-month period;
57
(d) To the best of the Relevant Seller's knowledge, all taxes,
governmental assessments, insurance premiums, water, sewer and municipal
charges, leasehold payments or ground rents which previously became due and
owing have been paid, or escrow funds have been established in an amount
sufficient to pay for every such escrowed item which remains unpaid and which
has been assessed but is not yet due and payable;
(e) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments. No Mortgagor has been released, in whole or in part, from the terms
thereof except in connection with an assumption agreement and which assumption
agreement is part of the Mortgage File and the terms of which are reflected in
the Mortgage Loan Schedule;
(f) The Mortgage Note and the Mortgage are not subject to any right of
rescission, set-off, counterclaim or defense, including, without limitation, the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or Mortgage, or the exercise of any right thereunder, render the Mortgage
Note or Mortgage unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
and no such right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto, and the Mortgagor was not a debtor in any state
or federal bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated;
(g) With respect to a Mortgage Loan which is not a Co-op Loan, all
buildings or other customarily insured improvements upon the Mortgaged Property
are insured by an insurer acceptable under the FNMA Guides against loss by fire,
hazards of extended coverage and such other hazards as are provided for in the
FNMA Guides or by FHLMC. All such standard hazard policies are in full force and
effect and on the date of origination contained a standard mortgagee clause
naming the Relevant Seller and its successors in interest and assigns as loss
payee and such clause is still in effect and all premiums due thereon have been
paid. If required by the Flood Disaster Protection Act of 1973, as amended, the
Mortgaged Property is covered by a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
which policy conforms to FNMA and FHLMC requirements. The Mortgage obligates the
Mortgagor thereunder to maintain all such insurance at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to maintain such insurance at the Mortgagor's cost and expense and to
seek reimbursement therefor from the Mortgagor;
(h) Any and all requirements of any federal, state or local laws and
all applicable predatory and abusive lending laws, including, without
limitation, usury, truth-in-lending, real estate settlement procedures, consumer
credit protection, equal credit opportunity or disclosure laws applicable to the
Mortgage Loan have been complied with in all material respects;
(i) The Mortgage has not been satisfied, canceled or subordinated, in
whole or in part, or rescinded, and the Mortgaged Property has not been released
from the lien of the Mortgage, in whole or in part nor has any instrument been
executed that would effect any such release, cancellation, subordination or
rescission;
(j) With respect to a Mortgage Loan which is not a Co-op Loan, the
Mortgage is a valid, subsisting, enforceable and perfected first lien on the
Mortgaged Property, including, all buildings on the Mortgaged Property. The
Mortgage and the Mortgage Note do not contain any evidence of any security
interest or other interest or right thereto. Such lien is free and clear of all
adverse claims, liens and encumbrances having priority over the first lien of
the Mortgage subject only to (1) the lien of non-delinquent current real
property taxes and assessments not yet due and payable, (2) covenants,
conditions and restrictions, rights of way, easements and other matters of the
public record as of the date of recording
58
which are acceptable to mortgage lending institutions generally and either (A)
which are referred to or otherwise considered in the appraisal made for the
originator of the Mortgage Loan, or (B) which do not adversely affect the
Appraised Value of the Mortgaged Property as set forth in such appraisal, and
(3) other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by the Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property. Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Mortgage Loan
establishes and creates a valid, subsisting, enforceable and perfected first
lien and first priority security interest on the property described therein, and
the Depositor has the full right to sell and assign the same to the Trustee for
the benefit of the Certificateholders;
(k) The Mortgage Note and the related Mortgage are original and
genuine and each is the legal, valid and binding obligation of the maker
thereof, enforceable in all respects in accordance with its terms subject to
bankruptcy, insolvency and other laws of general application affecting the
rights of creditors and the Depositor has taken all action necessary to transfer
such rights of enforceability to the Trustee for the benefit of the
Certificateholders. All parties to the Mortgage Note and the Mortgage had the
legal capacity to enter into the Mortgage Loan and to execute and deliver the
Mortgage Note and the Mortgage. The Mortgage Note and the Mortgage have been
duly and property executed by such parties. The proceeds of the Mortgage Loan
have been fully disbursed and there is no requirement for future advances
thereunder, and any and all requirements as to completion of any on-site or
off-site improvements and as to disbursements of any escrow funds therefor have
been complied with;
(l) The Relevant Seller is the sole owner and holder of the Mortgage
Loan and the indebtedness evidenced by the Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon recordation
the Relevant Seller will be the owner of record of the Mortgage and the
indebtedness evidenced by the Mortgage Note, and upon the sale of the Mortgage
Loan to the Trust for the benefit of the Certificateholders, the Relevant Seller
will retain the Mortgage File or any part thereof with respect thereto not
delivered to the Trust for the benefit of the Certificateholders or its designee
in trust only for the purpose of servicing and supervising the servicing of the
Mortgage Loan. Immediately prior to the transfer and assignment to the Trust for
the benefit of the Certificateholders, the Mortgage Loan, including the Mortgage
Note and the Mortgage, were 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 the Mortgage Loan to the Trustee for the
benefit of the Certificateholders free and clear of any encumbrance, equity,
lien, pledge, charge, claim or security interest and has the full right and
authority subject to no interest or participation of, or agreement with, any
other party, to sell and assign the Mortgage Loan pursuant to this Agreement and
following the sale of the Mortgage Loan, the Trustee for the benefit of the
Certificateholders will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest;
(m) With respect to a Mortgage Loan which is not a Co-op Loan, the
Mortgage Loan is covered by an ALTA lender's title insurance policy or other
generally acceptable form of policy or insurance acceptable to FNMA or FHLMC,
issued by a title insurer acceptable to FNMA or FHLMC and qualified to do
business in the jurisdiction where the Mortgaged Property is located, insuring
(subject to the exceptions contained in (j) (1), (2) and (3) above) the Relevant
Seller, its successors and assigns, as to the first priority lien of the
Mortgage in the original principal amount of the Mortgage Loan. Such lender's
title insurance policy insures ingress and egress by or upon the Mortgaged
Property or any interest therein. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. The Relevant Seller, its successors and assigns, are
the sole insureds of such lender's title insurance policy, and such lender's
title insurance policy is in full force and effect and will be in full force and
effect upon the consummation of the transactions contemplated by this Agreement.
No claims have been made under such lender's title
59
insurance policy, and no prior holder of the related Mortgage, including the
Relevant Seller, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy;
(n) There is no default, breach, violation or event of acceleration
existent, under the Mortgage or the related Mortgage Note and no event which,
with the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event permitting
acceleration; and neither the Relevant Seller nor any prior mortgagee has waived
any default, breach, violation or event permitting acceleration;
(o) There are no mechanics', or similar liens or claims which have
been filed for work, labor or material (and no rights are outstanding that under
law could give rise to such liens) affecting the related Mortgaged Property (or
the related residential dwelling unit in the Underlying Mortgage Property, in
the case of a Co-op Loan) which are or may be liens prior to or equal to the
lien of the related Mortgage;
(p) With respect to a Mortgage Loan which is not a Co-op Loan, all
improvements subject to the Mortgage which were considered in determining the
Appraised Value of the Mortgaged Property lie wholly within the boundaries and
building restriction lines of the Mortgaged Property (and wholly within the
project with respect to a condominium unit) and no improvements on adjoining
properties encroach upon the Mortgaged Property except those which are insured
against by the title insurance policy referred to in clause (m) above and all
improvements on the property comply with all applicable zoning and subdivision
laws and ordinances; the Mortgaged Property is lawfully occupied under
applicable law;
(q) The Mortgage Loan complies in all material respects with all the
terms, conditions and requirements of the Relevant Seller's underwriting
standards in effect at the time of origination of such Mortgage Loan. The
Mortgage Notes and Mortgages (exclusive of any riders) are on forms generally
acceptable to FNMA or FHLMC. Monthly Payments under the Mortgage Note are due
and payable on the first day of each month. The Mortgage contains the usual and
enforceable provisions of the originator at the time of origination for the
acceleration of the payment of the unpaid principal amount of the Mortgage Loan
if the related Mortgaged Property is sold without the prior consent of the
mortgagee thereunder;
(r) The Mortgaged Property (or Underlying Mortgaged Property, in the
case of a Co-op Loan), is not subject to any material damage by waste, fire,
earthquake, windstorm, flood or other casualty. To the best of the Relevant
Seller's knowledge, at origination of the Mortgage Loan there was, and there
currently is, no proceeding pending for the total or partial condemnation of the
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan);
(s) The related Mortgage contains customary and enforceable provisions
such as to render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security
provided thereby, including, (l) in the case of a Mortgage designated as a deed
of trust, by trustee's sale, and (2) otherwise by judicial foreclosure. There is
no homestead or other exemption available to the Mortgagor which would interfere
with the right to sell the Mortgaged Property at a trustee's sale or the right
to foreclose the Mortgage subject to applicable federal and state laws and
judicial precedent with respect to bankruptcy and right of redemption or similar
law;
(t) If the Mortgage constitutes a deed of trust, a trustee, authorized
and duly qualified if required under applicable law to act as such, has been
properly designated and currently so serves and is named in the Mortgage, and no
fees or expenses, except as may be required by local law, are or will become
payable by the Purchaser to the trustee under the deed of trust, except in
connection with a trustee's sale or attempted sale after default by the
Mortgagor;
60
(u) The Mortgage File contains an appraisal or a recertification
document (in the case of a Mortgage Loan originated under CHF's Streamlined
Refinance Program) of the related Mortgaged Property (or the related residential
dwelling unit in the Underlying Mortgaged Property, in the case of a Co-op
Loan), signed prior to the final approval of the mortgage loan application by an
appraiser approved by the Relevant Seller who had no interest, direct or
indirect, in the Mortgaged Property (or Underlying Mortgaged Property, in the
case of a Co-op Loan), or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of the Mortgage
Loan. The appraisal is in a form acceptable to FNMA or FHLMC;
(v) All parties which have had any interest in the Mortgage, whether
as mortgagee, assignee, pledgee or otherwise, are (or, during the period in
which they held and disposed of such interest, were) (A) in substantial
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property (or Underlying Mortgaged Property, in the
case of a Co-op Loan), is located, and (B) (1) organized under the laws of such
state, or (2) qualified to do business in such state, or (3) federal savings and
loan associations or national banks or a Federal Home Loan Bank or savings bank
having principal offices in such state, or (4) not doing business in such state;
(w) The related Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security interest of any applicable agreement or
chattel mortgage referred to above and such collateral does not serve as
security for any other obligation;
(x) The Mortgagor has received all disclosure materials required by
applicable law with respect to the making of such mortgage loans;
(y) The Mortgage Loan does not contain "graduated payment" features;
(z) The Mortgagor is not in bankruptcy and, to the best of the
Relevant Seller's knowledge, the Mortgagor is not insolvent;
(aa) The Mortgage Loans are fixed rate mortgage loans. Each Mortgage
Loan has an original term to maturity of not more than thirty (30) years with
interest payable in arrears on the first day of each month. No Mortgage Loan
contains terms or provisions which would result in negative amortization;
(bb) Each Mortgage Note, each Mortgage, each Assignment of Mortgage
and any other documents required pursuant to this Agreement to be delivered to
the Trustee on behalf of the Certificateholders or its designee, or its assignee
for each Mortgage Loan, have been, on or before the Closing Date, delivered to
the Trustee on behalf of the Certificateholders or its designee, or its
assignee;
(cc) All escrow payments have been collected in full compliance with
state and federal law and the provisions of the related Mortgage Note and
Mortgage. As to any Mortgage Loan that is the subject of an escrow, escrow of
funds is not prohibited by applicable law and has been established in an amount
sufficient to pay for every escrowed item that remains unpaid and has been
assessed but is not yet due and payable. No escrow deposits or other charges or
payments due under the Mortgage Note have been capitalized under any Mortgage or
the related Mortgage Note. Any interest required to be paid pursuant to state,
federal and local law has been properly paid and credited;
(dd) [Reserved];
(ee) In the event that at origination the Mortgage Loan has a
Loan-to-Value Ratio greater than 80%, the excess of the principal balance of the
Mortgage Loan over 75% of the Appraised Value of the
61
Mortgaged Property, with respect to a refinanced Mortgage Loan, or the lesser of
the Appraised Value or the purchase price of the Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan), with respect to a
purchase money Mortgage Loan, is and will be insured as to payment defaults by a
Primary Insurance Policy issued by a Qualified Insurer, except where the primary
mortgage insurance was (i) impermissible at origination at applicable law, in
which case such Mortgage Loan was originated in accordance with applicable law,
(ii) cancelled at the request of the Mortgagor pursuant to the cancellation
requirements of FNMA, FHLMC, state law or, as applicable the Home Owner and
Equity Protection Act of 1994, as amended, or (iii) automatically terminated in
accordance with the termination requirements of FNMA, FHLMC, state law or, as
applicable the Home Owner and Equity Protection Act of 1994, as amended. All
provisions of such Primary Insurance Policy have been and are being complied
with, such policy is in full force and effect, and all premiums due thereunder
have been paid. No action, inaction, or event has occurred and no state of facts
exists that has, or will result in the exclusion from, denial of, or defense to
coverage. Any Mortgage Loan subject to a Primary Insurance Policy obligates the
Mortgagor thereunder to maintain the Primary Insurance Policy and to pay all
premiums and charges in connection therewith. The Mortgage Rate for the Mortgage
Loan as set forth on the Mortgage Loan Schedule is net of any such insurance
premium;
(ff) The Assignment of Mortgage is in recordable form and is
acceptable for recording (or, in the case of a Co-op Loan, is in a form
acceptable for filing) under the laws of the jurisdiction in which the Mortgaged
Property (or underlying Mortgaged Property, in the case of a Co-op Loan) is
located;
(gg) As to Mortgage Loans that are not secured by an interest in a
leasehold estate, the Mortgaged Property (or Underlying Mortgaged Property, in
the case of a Co-op Loan), is located in the state identified in the Mortgage
Loan Schedule and consists of a single parcel of real property with a detached
single family residence erected thereon, or a two-to four-family dwelling, or an
individual condominium unit in a condominium project, or a dwelling unit in a
residential cooperative housing corporation or an individual unit in an attached
planned unit development or a detached planned unit development, provided,
however, that no residence or dwelling is a single parcel of real property with
a mobile home thereon. As of the date of origination, no portion of the
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan), was used for commercial purposes, and since the date of origination, to
the best of the Relevant Seller's knowledge, no portion of the Mortgaged
Property (or Underlying Mortgaged Property, in the case of a Co-op Loan), is
used for commercial purposes;
(hh) If the Mortgaged Property is a condominium unit or a planned unit
development (other than a de minimis planned unit development), as of the date
of origination of the related Mortgage Loan, such condominium or planned unit
development project met the the Relevant Seller's eligibility requirements, as
set forth in the Relevant Seller's underwriting guidelines as of such date; in
the case of each Co-op Loan, the related residential cooperative housing
corporation complied in all material respects with the Seller's requirements as
set forth in the the Relevant Seller's underwriting guidelines as of such date;
(ii) To the best of the Relevant Seller's knowledge, there is no
pending action or proceeding directly involving the Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan), in which compliance
with any environmental law, rule or regulation is an issue;
(jj) As of the Cut-off Date, the Relevant Seller has not granted any
interest rate relief to the Mortgagor under the Relief Act;
(kk) No Mortgage Loan was made in connection with the construction or
rehabilitation of a Mortgaged Property (or Underlying Mortgaged Property, in the
case of a Co-op Loan), or facilitating the
62
trade-in or exchange of a Mortgaged Property (or Underlying Mortgaged Property,
in the case of a Co-op Loan);
(ll) No action has been taken or failed to be taken by Depositor, on
or prior to the Closing Date, which has resulted or will result in an exclusion
from, denial of, or defense to coverage under any Primary Insurance Policy
(including, without limitation, any exclusions, denials or defenses which would
limit or reduce the availability of the timely payment of the full amount of the
loss otherwise due thereunder to the insured) whether arising out of actions,
representations, errors, omissions, negligence, or fraud of the Depositor, or
for any other reason under such coverage;
(mm) The Mortgage Loan was originated by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of
the National Housing Act, as amended, a savings and loan association, a savings
bank, a commercial bank, credit union, insurance company or similar institution
which is supervised and examined by a federal or state authority;
(nn) Principal payments on the Mortgage Loan commenced no more than
sixty (60) days after funds were disbursed in connection with the Mortgage Loan.
The Mortgage Note is payable on the first day of each month in equal monthly
installments of principal and interest, with interest calculated and payable in
arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity
date, over an original term of not more than thirty years from commencement of
amortization;
(oo) As of the Closing Date, the Mortgage Loan is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code (without regard
to Treasury Regulations Section 1.860G-2(f) or any similar rule that provides
that a defective obligation is a qualified mortgage for a temporary period);
(pp) With respect to a Mortgage Loan that is a Co-op Loan, the stock
that is pledged as security for the Mortgage Loan is held by a Person as a
tenant-stockholder (as defined in Section 216 of the Code) in a cooperative
housing corporation (as defined in Section 216 of the Code);
(qq) As of the Closing Date, the Mortgage Loan is not the subject of
pending or final foreclosure proceedings and the Relevant Seller would not,
based on the delinquency status of the Mortgage Loan, institute foreclosure
proceedings with respect to the Mortgage Loan prior to the next scheduled
payment for the Mortgage Loan;
(rr) As of the Closing Date, the Mortgage Loan does not provide for
interest other than at either (i) a single fixed rate in effect throughout the
term of the Mortgage Loan or (ii) a "variable rate" (within the meaning of
Treasury Regulation Section 1.860G-1(a)(3)) in effect throughout the term of the
Mortgage Loan;
(ss) No Mortgage Loan is a "covered loan" within the meaning of the
Georgia Fair Lending Act of 2002, as amended;
(tt) None of the Mortgage Loans are (a) covered by the Home Ownership
and Equity Protection Act of 1994 or (b) classified as a "high cost" loan or
similarly classified using different terminology under any federal, state or
local law imposing heightened regulatory scrutiny or additional legal liability
for residential mortgage loans having high interest rates, points and/or fees
such as predatory lending laws; None of the Mortgage Loans are "high cost" loans
as defined by the applicable federal, state or local predatory and abusive
lending laws nor is any Mortgage Loan a "High Cost Loan" or "Covered Loan," as
applicable (as such terms are defined in the current Standard & Poor's LEVELS(R)
Glossary which is now version 5.6 revised, appendix E) and no Mortgage Loan
originated on or after
63
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act of 2002, as amended; and
(uu) As to each Mortgage Loan that is secured by an interest in a
leasehold estate, (i) the use of a leasehold estate for residential properties
is an accepted practice in the area where the related Mortgaged Property is
located, (ii) residential property consisting of leasehold estates is marketable
in the area where the related Mortgaged Property is located, (iii) the related
lease has been recorded in the applicable land records, (iv) the lease is valid
and in good standing and is not subject to any prior lien by which the lease
could be terminated or subject to any charge or penalty, and (v) the remaining
term of the lease does not terminate less than five years after the maturity
date of such Mortgage Loan.
Upon discovery by any of the Depositor, the Servicer or the Trustee of
a breach of any of the foregoing representations and warranties which materially
and adversely affects the value of a Mortgage Loan or the interest of the
Certificateholders (or which materially and adversely affects the interests of
the Certificateholders in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the other parties
and to the Relevant Seller, which notice shall specify the date of discovery.
Pursuant to the Relevant Sale Agreement, the Relevant Seller shall within 90
days from the earlier of (i) the date of receipt of notice of such breach or
(ii) the date the Relevant Seller otherwise discovers such breach, cure such
breach, substitute a Mortgage Loan pursuant to the provisions of Section 3.03
or, if the breach relates to a particular Mortgage Loan, purchase such Mortgage
Loan from the Trustee at the Purchase Price. The Purchase Price for the
purchased Mortgage Loan shall be paid to the Servicer and shall be deposited by
the Servicer in the Collection Account promptly upon receipt, and, upon receipt
by the Trustee of written notification of such deposit signed by a Servicing
Officer, the Trustee shall promptly release to the Relevant Seller the related
Mortgage File, and the Trustee shall execute and deliver such instruments of
transfer or assignment as may be provided to it by the Servicer, without
recourse, as shall be necessary to vest in the Relevant Seller or its designee,
as the case may be, any Mortgage Loan released pursuant hereto, and the Trustee
shall have no further responsibility with regard to such Mortgage Loan. It is
understood and agreed that the obligation of the Relevant Seller to cure,
substitute or purchase any Mortgage Loan as to which such a breach has occurred
shall constitute the sole remedy respecting such breach available to
Certificateholders or the Trustee on behalf of Certificateholder.
Section 3.02 Representations and Warranties of the Servicer. The
Servicer represents and warrants to, and covenants with, the Trustee for the
benefit of the Certificateholders that as of the Closing Date:
(a) The Servicer is a limited liability company duly chartered and
validly existing in good standing under the laws of the State of Delaware, and
the Servicer is duly qualified or registered as a foreign corporation in good
standing in each jurisdiction in which the ownership or lease or its properties
or the conduct of its business requires such qualification;
(b) The execution and delivery of this Agreement by the Servicer and
its performance and compliance with the terms of this Agreement will not violate
the Servicer's certificate of formation or by-laws or constitute a default (or
an event which, with notice or lapse of time, or both, would constitute a
default) under, or result in the breach of, any material contract, agreement or
other instrument to which the Servicer is a party or which may be applicable to
the Servicer or any of its assets;
(c) This Agreement, assuming due authorization, execution and delivery
by the Trustee and the Depositor, constitutes a valid, legal and binding
obligation of the Servicer, enforceable against it in accordance with the terms
hereof subject to applicable bankruptcy, insolvency, reorganization, moratorium
and other laws affecting the enforcement of creditors' rights generally and to
general
64
principles of equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law;
(d) The Servicer is not in default with respect to any order or decree
of any court or any order, regulation or demand of any federal, state, municipal
or governmental agency, which default might have consequences that would
materially and adversely affect the condition (financial or other) or operations
of the Servicer or its properties or might have consequences that would affect
its performance hereunder; and
(e) No litigation is pending or, to the best of the Servicer's
knowledge, threatened against the Servicer which would prohibit its entering
into this Agreement or performing its obligations under this Agreement. It is
understood and agreed that the representations and warranties set forth in this
Section 3.02 shall survive the issuance and delivery of the Certificates and
shall be continuing as long as any Certificate shall be outstanding or this
Agreement has been terminated.
Section 3.03 Option to Substitute. If either of the Sellers is
required to repurchase any Mortgage Loan pursuant to Section 2.02 or 3.01, that
Seller may, at its option, within two years from the Closing Date, remove such
defective Mortgage Loan from the terms of this Agreement and substitute another
mortgage loan for such defective Mortgage Loan, in lieu of repurchasing such
defective Mortgage Loan. Any substitute Mortgage Loan shall (a) have a Principal
Balance at the time of substitution not in excess of the Principal Balance of
the removed Mortgage Loan (the amount of any difference, plus one month's
interest thereon at the Mortgage Rate borne by the removed Mortgage Loan, being
paid by the Relevant Seller and deemed to be a Principal Prepayment to be
deposited by the Servicer in the Collection Account), (b) have a Mortgage Rate
not less than, and not more than one percentage point greater than, the Mortgage
Rate of the removed Mortgage Loan (provided, however, that if the Mortgage Rate
on the substitute Mortgage Loan exceeds the Mortgage Rate on the removed
Mortgage Loan, the amount of that excess interest (the "Substitute Excess
Interest") shall be payable to the Class A-R Certificate), (c) have a remaining
term to stated maturity not later than, and not more than one year less than,
the remaining term to stated maturity of the removed Mortgage Loan, (d) be, in
the reasonable determination of the Servicer, of the same type, quality and
character (including location of the Mortgaged Property (or underlying Mortgaged
Property, in the case of a Co-op Loan)) as the removed Mortgage Loan as if the
breach had not occurred, (e) have a Loan-to-Value Ratio at origination no
greater than that of the removed Mortgage Loan and (f) be, in the reasonable
determination of the Relevant Seller, in material compliance with the
representations and warranties contained in the Sale Agreement and described in
Section 3.01, as of the date of substitution.
The Relevant Seller shall amend the Mortgage Loan Schedule to reflect
the withdrawal of the removed Mortgage Loan from this Agreement and the
substitution of such substitute Mortgage Loan therefor and shall send a copy of
such amended Mortgage Loan Schedule to the Servicer and the Trustee. The Sale
Agreements provide that upon such amendment the Relevant Seller shall be deemed
to have made as to such substitute Mortgage Loan the representations and
warranties set forth in Section 3.01 as of the date of such substitution, which
shall be continuing as long as any Certificate shall be outstanding or this
Agreement has not been terminated, and the remedies for breach of any such
representation or warranty shall be as set forth in Section 3.01. Upon such
amendment, the Custodian on behalf of the Trustee shall review the Mortgage File
delivered to it relating to the substitute Mortgage Loan, within the time and in
the manner and with the remedies specified in Section 2.02, except that for
purposes of this Section 3.03 (other than the two-year period specified in the
first sentence of this Section), such time shall be measured from the date of
the applicable substitution. In the event of such a substitution, accrued
interest on the substitute Mortgage Loan for the month in which the substitution
occurs and any Principal Prepayments made thereon during such month shall be the
property of the Trust Fund, and accrued interest for such month on the Mortgage
Loan for which the substitution is made and any Principal
65
Prepayments made thereon during such month shall be the property of the Relevant
Seller. The principal payment on a substitute Mortgage Loan due on the Due Date
in the month of substitution shall be the property of the Seller, and the
principal payment on the Mortgage Loan for which the substitution is made due on
such date shall be the property of the Trust Fund.
[END OF ARTICLE III]
ARTICLE IV
THE CERTIFICATES
Section 4.01 The Certificates.
(a) The Class A, Class M and Class B Certificates shall be
substantially in the forms thereof included within Exhibits C, D, E and F and
shall, on original issue, be executed by the Depositor and authenticated by the
Trustee (or, if an Authenticating Agent has been appointed pursuant to Section
4.06, the Authenticating Agent) upon receipt by the Trustee of the documents
specified in Section 2.01, delivered to or upon the order of the Depositor.
(b) The Depository and the Trustee have entered into a Depository
Agreement dated as of September 26, 2006 (the "Depository Agreement"). Except as
provided in paragraph (c) below, the Book-Entry Certificates shall at all times
remain registered in the name of the Depository or its nominee and at all times:
(i) registration of the Book-Entry Certificates may not be transferred as
provided in Section 4.02 except to a successor to the Depository; (ii) ownership
and transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iii) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (iv) the Paying Agent and the Trustee
shall deal with the Depository, Depository Participants and Indirect
Participants as representatives of the Certificate Owners of the Book-Entry
Certificates for purposes of exercising the rights of such Holders under this
Agreement, and requests and directions for and votes of such representatives
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; and (v) the Paying Agent and the Trustee may rely
and shall be fully protected in relying upon information furnished by the
Depository with respect to its Depository Participants and furnished by the
Depository Participants with respect to Indirect Participants and persons shown
on the books of such Indirect Participants as direct or indirect Certificate
Owners. The Depository Agreement provides that the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Certificates.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owners. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
(c) If (i)(A) the Depository advises the Depositor, the Paying Agent
or the Trustee in writing that the Depository is no longer willing or able to
properly discharge its responsibilities as Depository and (B) the Trustee, the
Paying Agent or the Depositor are unable after exercise of their reasonable best
efforts to locate a qualified successor or (ii) the Depositor at its option
advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository, the Trustee or, if a Paying Agent has been appointed
under Section 4.05, the Paying Agent, shall notify all Certificate Owners,
through the Depository, of the occurrence of any such event and of the
availability of definitive, fully registered
66
Certificates (the "Definitive Certificates") to Certificate Owners requesting
the same. Upon surrender to the Trustee or, if a Paying Agent has been appointed
under Section 4.05, the Paying Agent, of the Book-Entry Certificates by the
Depository for registration and receipt by the Trustee or, if a Paying Agent has
been appointed under Section 4.05, the Paying Agent, of an adequate supply of
certificates from the Depositor, the Trustee or if the Paying Agent is appointed
under Section 4.05, the Paying Agent shall issue the Definitive Certificates
based on information received from the Depository. Neither the Depositor, the
Servicer, the Paying Agent nor the Trustee shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions.
(d) The Certificates (other than the Class A-R Certificate) shall be
issuable in the minimum original dollar denominations (and integral multiples of
$1,000.00 in excess of such amount) and aggregate original dollar denominations
per Class (or in the case of the Class 1-AX, Class 2-A3 and 2-AX Certificates,
in the minimum denominations based upon the Class 1-AX Notional Amount, Class
2-A3 Notional Amount and the Class 2-AX Notional Amount, respectively) as set
forth in the following table (except that, if necessary, in order to aggregate
the Original Certificate Principal Balance of a Class, one Certificate of such
Class will be issued in a different denomination). A single Class A-R
Certificate will be issued in definitive form in a $100 denomination.
Aggregate Original Certificate
Minimum Principal Balance of all
Original Certificates of the CUSIP
Class Denomination Indicated Class Number
---------------------- ------------ ------------------------------ -----------
Class 1-A1............ $100,000.00 $113,847,000.00 16163B AA 2
Class 1-A2............ $100,000.00 $ 2,382,770.00 16163B AB 0
Class 1-A3............ $ 1,000.00 $ 3,563,000.00 16163B AC 8
Class 1-A4............ $ 1,000.00 $ 3,563,000.00 16163B AD 6
Class 1-A5............ $ 1,000.00 $ 4,175,000.00 16163B AE 4
Class 1-A6............ $ 1,000.00 $ 6,537,000.00 16163B AF 1
Class 1-A7............ $ 1,000.00 $ 482,000.00 16163B AG 9
Class 1-A8............ $ 1,000.00 $ 1,680,000.00 16163B AH 7
Class 1-A9............ $100,000.00 $ 64,000,000.00 16163B AJ 3
Class 1-A10........... $100,000.00 $ 53,540,000.00 16163B AK 0
Class 1-A11........... $100,000.00 $ 31,276,000.00 16163B AL 8
Class 1-A12.......... $100,000.00 $ 26,474,000.00 16163B AM 6
Class 1-A13........... $100,000.00 $ 410,000.00 16163B AN 4
Class 1-A14........... $100,000.00 $ 29,500,000.00 16163B AP 9
Class 1-A15........... $100,000.00 $ 617,407.00 16163B AQ 7
Class 1-A16........... $100,000.00 $ 20,500,000.00 16163B AR 5
Class 1-A17........... $100,000.00 $ 50,000,000.00 16163B AS 3
Class 1-A18........... $100,000.00 $ 92,639,000.00 16163B AT 1
Class 1-A19........... $100,000.00 $ 2,315,577.00 16163B AU 8
Class 1-AX............ $100,000.00 (1) 16163B AV 6
Class 2-A1............ $100,000.00 $ 98,500,000.00 16163B AW 4
Class 2-A2............ $100,000.00 65,000,000.00 16163B AX 2
Class 2-A3............ $100,000.00 (1) 16163B AY 0
Class 2-A4............ $ 1,000.00 $ 10,745,393.00 16163B AZ 7
Class 2-A5............ $100,000.00 $ 86,054,000.00 16163B BA 1
Class 2-A6............ $100,000.00 $ 65,508,000.00 16163B BB 9
Class 2-A7............ $100,000.00 $ 33,053,000.00 16163B BC 7
Class 2-A8............ $100,000.00 $101,372,000.00 16163B BD 5
67
Aggregate Original Certificate
Minimum Principal Balance of all
Original Certificates of the CUSIP
Class Denomination Indicated Class Number
---------------------- ------------ ------------------------------ -----------
Class 2-A9............ $100,000.00 $11,778,787.00 16163B BE 3
Class 2-AX............ $100,000.00 (1) 16163B BF 0
Class A-R(2).......... $ 100.00 $ 100.00 16163B BH 6
Class A-P(3).......... $100,000.00 $ 1,248,724.00 16163B BG 8
Class A-M............. $100,000.00 $11,267,200.00 16163B BN 3
Class M-1............. $100,000.00 $18,437,300.00 16163B BK 9
Class B-1............. $100,000.00 $ 5,633,600.00 16163B BP 8
Class B-2............. $100,000.00 $ 3,072,900.00 16163B BQ 6
Class B-3............. $100,000.00 $ 2,048,600.00 16163B BR 4
Class B-4............. $100,000.00 $ 1,536,400.00 16163B BS 2
Class B-5............. $100,000.00 $ 1,536,507.87 16163B BT 0
-------------
(1) The Class 1-AX, Class 2-A3 and Class 2-AX Certificates are interest-only
certificates, have no principal balance and will bear interest on their
notional amounts. The initial notional amounts of the Class 1-AX, Class
2-A3 and Class 2-AX Certificates are $27,458,235.19, $2,708,333.33 and
$35,644,909.86, respectively.
(2) The Class A-R Certificate represents the residual interest in each of the
REMIC Pools.
(3) The Class A-P Certificates consist of two components. The original
principal amount of Class A-P Component One is $932,875.43 and the original
principal amount of Class A-P Component Two is $315,848.81.
The Certificates shall be signed by manual or facsimile signature on
behalf of the Depositor by an officer of the Depositor. Certificates bearing the
manual or facsimile signatures of individuals who were at the time of signature
officers of the Depositor shall bind the Depositor, notwithstanding that such
individuals or any of them have ceased to be an officer prior to the
authentication and delivery of such Certificate or did not hold such offices at
the date of such Certificates. No Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there appears on such
Certificate a manual authentication by an officer of the Trustee (or if an
Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent) and such authentication upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication.
Section 4.02 Registration of Transfer and Exchange of Certificates.
(a) The Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent, shall cause to be kept a certificate register (the
"Certificate Register") in which, subject to such reasonable regulations as it
may prescribe, the Trustee or, if a Paying Agent has been appointed under
Section 4.05, the Paying Agent, shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
(b) Upon surrender for registration of transfer of any Certificate at
any office or agency of the Trustee, or if a Paying Agent has been appointed
hereunder pursuant to Section 4.05, the Paying Agent maintained for such
purpose, the Depositor shall execute and the Trustee or if an Authenticating
Agent is appointed under Section 4.06, the Authenticating Agent shall
authenticate and deliver, in the
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name of the designated transferee or transferees, a Certificate of a like Class
and aggregate Percentage Interest and dated the date of authentication by the
Authenticating Agent.
(c) No transfer of a Class B-3, Class B-4 or Class B-5 Certificate
shall be made unless such transfer is made pursuant to an effective registration
statement or otherwise in accordance with the requirements under the Securities
Act. If such a transfer is to be made in reliance upon an exemption from said
Act, (i) the Depositor may require (except with respect to the initial transfer
of a Class B-3, Class B-4 or Class B-5 Certificate from X.X. Xxxxxx Securities
Inc. and except if the transferee executes a certificate substantially in the
form of Exhibit H hereto) a written opinion of independent counsel acceptable to
and in form and substance reasonably satisfactory to the Depositor and the
Trustee that such transfer may be made pursuant to an exemption, describing the
applicable exemption and the basis therefor, from said Act and laws or is being
made pursuant to said Act and laws, which opinion of counsel shall not be an
expense of the Trust Fund, the Trustee, the Depositor or the Servicer, and (ii)
the Depositor shall require the transferee to execute a certification
substantially in the form of Exhibit H or Exhibit I.
(d) (i) No transfer of an ERISA Restricted Certificate or a Class A-R
Certificate shall be made unless the prospective transferee provides the
Depositor and the Trustee with (I) a representation as set forth in Exhibit K
for Class A-R Certificates or in Exhibit M for ERISA Restricted Certificates to
the effect that such transferee is not an employee benefit plan subject to Title
I of ERISA, a plan subject to Section 4975 of the Code or a plan or arrangement
subject to any provisions under any federal, state, local, non-U.S. or other
laws or regulations that are substantively similar to the foregoing provisions
of ERISA or the Code ("Similar Law") (collectively, a "Plan"), and is not
directly or indirectly acquiring the Certificate for, on behalf of or with any
assets of any such Plan, or (II) solely in the case of an ERISA Restricted
Certificate, (A) if the Certificate has been the subject of an ERISA-Qualifying
Underwriting, a representation as set forth in Exhibit M that such transferee is
an insurance company that is acquiring the ERISA-Restricted Certificate with
assets contained in an "insurance company general account," as defined in
Section V(E) of Prohibited Transaction Class Exemption ("PTCE") 95-60, and the
acquisition and holding of the Certificate are covered and exempt under Sections
I and III of PTCE 95-60, or (B) solely in the case of a Definitive Certificate,
an Opinion of Counsel reasonably satisfactory to the Depositor and the Trustee
to the effect that the acquisition and holding of such Certificate will not
constitute or result in a nonexempt prohibited transaction under ERISA or the
Code, or a violation of Similar Law, and will not subject the Depositor, the
Servicer or the Trustee to any obligation in addition to those expressly
undertaken in this Agreement, which Opinion of Counsel shall not be an expense
of the Depositor, the Servicer or the Trustee.
(ii) Except in the case of a Definitive Certificate, the
representations set forth in paragraph (i) of this Subsection 4.02(d), other
than subparagraph (i)(II)(B), shall be deemed to have been made to the Depositor
and the Trustee by the transferee's acceptance of an ERISA Restricted
Certificate or a Class A-R Certificate (or the acceptance by a Certificate Owner
of the beneficial interest in any Class of ERISA Restricted Certificates or a
Class A-R Certificate). Notwithstanding any other provision herein to the
contrary, any purported transfer of an ERISA Restricted Certificate or a Class
A-R Certificate to or on behalf of a Plan without the delivery to the Depositor
of a representation or an Opinion of Counsel reasonably satisfactory to the
Depositor and the Trustee as described above shall be void and of no effect.
None of the Depositor, the Servicer or the Trustee shall be under any liability
to any Person for any registration or transfer of any ERISA Restricted
Certificate or Class A-R Certificate that is in fact not permitted by this
Section 4.02(d) nor shall the Paying Agent be under any liability for making any
payments due on such Certificate to the Holder thereof or taking any other
action with respect to such Holder under the provisions of this Agreement so
long as the transfer was registered in accordance with the foregoing
requirements. The Depositor, Servicer, Paying Agent and/or Trustee shall be
entitled, but not obligated, to recover from any Holder of any ERISA Restricted
Certificate or Class A-R Certificate
69
that was in fact a Plan and that held such Certificate in violation of this
Section 4.02(d) all payments made on such ERISA Restricted Certificate or Class
A-R Certificate at and after the time it commenced such holding. Any such
payments so recovered shall be paid and delivered to the last preceding Holder
of such Certificate that is not a Plan.
(e) At the option of a Certificateholder, a Certificate may be
exchanged for another Certificate or Certificates of authorized denominations of
a like Class, upon surrender of the Certificate to be exchanged at any office or
agency of the Trustee, or if a Paying Agent has been appointed under Section
4.05, the Paying Agent, maintained for such purpose. Whenever the Certificate is
so surrendered for exchange, the Depositor shall execute and the Authenticating
Agent shall authenticate and deliver, the Certificate which the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for transfer or exchange shall (if so required by the
Authenticating Agent) be duly endorsed by, or be accompanied by a written
instrument of transfer in the form satisfactory to the Authenticating Agent duly
executed by, the Holder thereof or his attorney duly authorized in writing.
(f) No service charge shall be made to the Holder for any transfer or
exchange of a Certificate, but the Servicer may require payment by the
Certificateholders of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of such
Certificate.
(g) All Certificates surrendered for transfer or exchange shall be
destroyed by the Trustee or if a Paying Agent has been appointed under Section
4.05, the Paying Agent, in accordance with the Trustee's or, if a Paying Agent
has been appointed under Section 4.05, the Paying Agent's, standard procedures.
(h) [Reserved].
(i) A Disqualified Organization is prohibited from acquiring
beneficial ownership of a Class A-R Certificate. Notwithstanding anything to the
contrary contained herein, (i) unless and until the Servicer and the Trustee
shall have received an Opinion of Counsel, satisfactory to it in form and
substance, to the effect that the absence of the conditions contained in this
Section 4.02(i) would not result in the imposition of federal tax upon any REMIC
created hereunder or cause any REMIC created hereunder to fail to qualify as a
REMIC, no transfer, sale or other disposition of the Class A-R Certificate
(including for purposes of this section any beneficial interest therein) may be
made without the express written consent of the Certificate Registrar or, if no
Certificate Registrar is appointed, the Trustee, which consent is to be granted
by the Certificate Registrar or, if no Certificate Registrar is appointed, the
Trustee only upon compliance with the requirements of this Section and (ii) no
transfer, sale or other disposition of the Class A-R Certificate (or any
beneficial interest therein) may be made to a Person who is not a U.S. Person
unless such Person furnishes the transferor, the Certificate Registrar and the
Trustee, with a duly completed and effective Form W-8ECI (or any successor
thereto) or an Opinion of Counsel to the effect that such transfer is in
accordance with the requirements of the Code and that the transfer will not be
disregarded for federal income tax purposes. As a condition to granting its
consent to a transfer of a Class A-R Certificate, the Certificate Registrar or,
if no Certificate Registrar is appointed, the Trustee, shall require the
proposed transferee of such Certificate (including, in the case of the initial
issuance of the Class A-R Certificate, the initial Holder thereof) to execute a
letter and affidavit substantially in the form attached hereto as Exhibit K and
shall require the proposed transferor (other than in the case of the transfer to
the initial Holder) of such Certificate to execute a letter substantially in the
form attached hereto as Exhibit K-1. In the absence of a contrary instruction
from the transferor of such Certificate, declaration (11) in the affidavit in
Exhibit K may be left blank. If the transferor requests by written notice to the
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee,
prior to the date of the proposed transfer that one of the two other forms of
declaration (11) of such affidavit be used, then the
70
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee,
shall require that such form of declaration (11) be included in such affidavit.
As a condition to the granting of the consent referred to in this
Section 4.02(i), prior to the transfer, sale, pledge, hypothecation or other
disposition of the Class A-R Certificate or any interest therein, the
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee
shall require that (1) the proposed transferee deliver to the Trustee or
Certificate Registrar, as applicable, its taxpayer identification number and
state, under penalties of perjury that such number is the social security or
employer identification number, as the case may be, of the transferee or provide
an affidavit under penalties of perjury stating that as of the date of such
transfer such transferee is not and has no intention of becoming a Disqualified
Organization; (2) the proposed transferee deliver to the Trustee or Certificate
Registrar, as applicable, an affidavit stating (i) that such transferee is not
acquiring such Class A-R Certificate as an agent, broker, nominee, or middleman
for a Disqualified Organization, (ii) if the Class A-R Certificate is a
"non-economic residual interest" within the meaning of Treas. Reg. Section
1.860E-1(c)(2), (X) that no purpose of the acquisition of the Class A-R
Certificate is to avoid or impede the assessment or collection of tax, (Y) that
such transferee has historically paid its debts as they came due and will
continue to pay its debts as they come due, and (Z) that such transferee
represents that it understands that, as the holder of the non-economic residual
interest, the transferee may incur tax liabilities in excess of any cash flows
generated by the interest and that the transferee intends to pay taxes
associated with holding the residual interest, and (iii) unless the Certificate
Registrar or, if no Certificate Registrar is appointed, the Trustee consents to
the transfer of the Class A-R Certificate to a Person who is not a U.S. Person
and who has furnished either a duly completed and effective Form W-8ECI (or any
successor thereto) or an Opinion of Counsel to the effect that the transfer will
not be disregarded for federal income tax purposes, that it is a U.S. Person;
(3) if so requested by the transferor in written notice provided to the
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee,
prior to the date of the proposed transfer, the proposed transferee deliver to
the Trustee or Certificate Registrar, as applicable, an affidavit that includes
a declaration made in the form of declaration (11) in the affidavit set forth in
Exhibit K requested by the transferor; and (4) the transferor deliver to the
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee
a written certification that as of the date of such transfer it has no knowledge
and no reason to know that the affirmations described in clauses (1), (2) and
(3) were false. The Certificate Registrar or, if no Certificate Registrar is
appointed, the Trustee shall not grant the consent referred to in this Section
4.02(i) if it has actual knowledge that any statement made in the affidavit
issued pursuant to the preceding sentence is not true. Notwithstanding any
purported transfer, sale or other disposition of the Class A-R Certificate to a
Disqualified Organization or in violation of the provisions of this Section
4.02(i), such transfer, sale or other disposition shall be deemed to be of no
legal force or effect whatsoever and such Disqualified Organization shall not be
deemed to be a Class A-R Certificateholder for any purpose hereunder, including,
but not limited to, the receipt of distributions on such Class A-R Certificate.
If any purported transfer shall be in violation of the provisions of this
Section 4.02(i) then the prior Holder of the Class A-R Certificate shall, upon
discovery that the transfer of such Class A-R Certificate was not in fact
permitted by this Section 4.02(i), be restored to all rights and obligations as
a Holder thereof retroactive to the date of the purported transfer of such Class
A-R Certificate. The Trustee, the Servicer and the Certificate Registrar shall
be under no liability to any Person for any registration or transfer of a Class
A-R Certificate that is not permitted by this Section 4.02(i) or for making
payments due on such Class A-R Certificate to the purported Holder thereof or
taking any other action with respect to such purported Holder under the
provisions of this Agreement so long as the transfer was not registered under
the written certification of the Certificate Registrar or, if no Certificate
Registrar is appointed, the Trustee as described in this Section 4.02(i). The
prior Holder shall be entitled to recover from any purported Holder of a Class
A-R Certificate that was in fact not a permitted purported transferee under this
Section 4.02(i) at the time it became a purported Holder all payments made to
such purported Holder on such Class A-R Certificate; provided that the Servicer
shall not be responsible for such recovery. Each Class A-R Certificateholder, by
the acceptance of the Class A-R Certificate, shall be
71
deemed for all purposes to have consented to the provisions of this Section
4.02(i) and to any amendment to this Agreement deemed necessary by counsel of
the Trustee or the Servicer to ensure that the Class A-R Certificate is not
transferred to a Disqualified Organization and that any transfer of such Class
A-R Certificate will not cause the imposition of a tax upon any REMIC created
hereunder or cause any REMIC created hereunder to fail to qualify as a REMIC.
The restrictions on transfer of the Class A-R Certificate will cease to apply
and be void upon receipt by the Certificate Registrar or, if no Certificate
Registrar is appointed, the Trustee of an Opinion of Counsel to the effect that
such restrictions on transfer are no longer necessary to avoid the risk of
material federal taxation to any REMIC created hereunder or prevent any REMIC
created hereunder from qualifying as a REMIC.
(j) The Servicer shall make available upon written request to each
Holder and each proposed transferee of a Class B-3, Class B-4 or Class B-5
Certificate such information as may be required to permit the proposed transfer
to be effected pursuant to Rule 144A under the Securities Act.
Section 4.03 Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
any mutilated Certificate is surrendered to the Trustee or, if a Paying Agent
has been appointed under Section 4.05, the Paying Agent, or the Trustee or, if a
Paying Agent has been appointed under Section 4.05, the Paying Agent, receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (b) there is delivered to the Trustee or, if a Paying Agent has
been appointed under Section 4.05, the Paying Agent, such security or indemnity
as may be required by it to save it harmless, then, in the absence of notice to
the Trustee or, if a Paying Agent has been appointed under Section 4.05, the
Paying Agent, that such Certificate has been acquired by a bona fide purchaser,
the Trustee or, if a Paying Agent has been appointed under Section 4.05, the
Paying Agent, shall authenticate and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Class. Upon the issuance of any new Certificate under this Section,
the Trustee or, if a Paying Agent has been appointed under Section 4.05, the
Paying Agent, may require of the Certificateholder 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 connected therewith. Any replacement
Certificate of any Class issued pursuant to this Section shall constitute
complete and indefeasible evidence of ownership of the Percentage Interest in
the distributions to which the Certificateholders of such Class are entitled, as
if originally issued, whether or not the mutilated, destroyed, lost or stolen
Certificate shall be found at any time, and such mutilated, destroyed, lost or
stolen Certificate shall be of no force or effect under this Agreement, to the
extent permitted by law.
Section 4.04 Persons Deemed Owners. Prior to due presentation of a
Certificate of any Class for registration of transfer, the Depositor, the
Servicer, the Paying Agent and the Trustee may treat the Person in whose name
any Certificate is registered on the Record Date as the owner of such
Certificate and the Percentage Interest in the distributions to which the
Certificateholders of such Class are entitled on the relevant date as the Holder
of such Certificate and the Percentage Interest represented by such Certificate
for the purpose of receiving remittances pursuant to Section 6.01 and for all
other purposes whatsoever, and neither the Depositor, the Servicer, the Paying
Agent nor the Trustee shall be affected by notice to the contrary.
Section 4.05 Appointment of Paying Agent and Certificate Registrar;
Certificate Account. The Trustee shall appoint a Paying Agent and a Certificate
Registrar (the "Certificate Registrar") hereunder, provided such Paying Agent
and such Certificate Registrar shall not be the Depositor, any Seller, or an
Affiliate of the Depositor or any Seller unless such Paying Agent or such
Certificate Registrar is the World Securities Services Department of Chase. No
later than two Business Days prior to each Distribution Date, the Servicer shall
deposit or cause to be deposited with the Paying Agent from funds on deposit in
the Collection Account a sum up to the Available Distribution Amount, such sum
to be held in trust for the benefit of Certificateholders in a segregated
account (the "Certificate Account")
72
which shall be an Eligible Account in the name of "The Bank of New York, as
Trustee, in trust for and for the benefit of the Certificateholders of
Multi-Class Mortgage Pass-Through Certificates, Chase Mortgage Finance
Corporation, Series 2006-S2 - Certificate Account". The Paying Agent shall
establish such Certificate Account with a commercial bank, a savings bank or a
savings and loan association. The Paying Agent may invest moneys in the
Certificate Account in Eligible Investments, which shall mature not later than a
date sufficient to make payment on the Distribution Date next following the date
of such investment and shall not be sold or disposed of prior to maturity. All
income and gain realized from any such investment shall be for the benefit of
the Paying Agent as additional compensation and shall be subject to its
withdrawal or order from time to time. The amount of any losses incurred in
respect of any such investments (to the extent not offset by income from other
such investments) shall be deposited in the Certificate Account by the Paying
Agent out of its own funds immediately as realized. The Servicer shall cause the
Paying Agent to perform each of the obligations of the Paying Agent set forth
herein and shall be liable to the Trustee and the Certificateholders for failure
of the Paying Agent to perform such obligations. So long as the Paying Agent is
a party other than the Trustee, the Trustee shall have no liability in
connection with the performance or failure of performance of the Paying Agent.
The Trustee designates the World Securities Services Department of Chase as the
initial Paying Agent and initial Certificate Registrar. Only the Trustee may
remove the Paying Agent and Certificate Registrar and may do so at will,
provided that the Trustee gives 20 days' prior written notice of such removal to
the Paying Agent and Certificate Registrar and the Rating Agencies.
Notwithstanding anything to the contrary contained herein, no approvals or
consent shall be required for the subsequent appointment of The Bank of New York
as Paying Agent.
The Paying Agent will hold all sums held by it for the payment to
Certificateholders in trust for the benefit of the Certificateholders entitled
thereto until such sums shall be paid to such Certificateholders.
Section 4.06 Authenticating Agents.
(a) The Trustee may appoint one or more Authenticating Agents (each,
an "Authenticating Agent") which shall be authorized to act on behalf of the
Trustee in authenticating the Certificates. Wherever reference is made in this
Agreement to the authentication of Certificates by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be an entity organized and
doing business under the laws of the United States of America or of any state,
having a combined capital and surplus of at least $15,000,000, authorized under
such laws to do a trust business and subject to supervision or examination by
federal or state authorities. So long as the Authenticating Agent is a party
other than the Trustee, the Trustee shall have no liability in connection with
the performance or failure of performance of the Authenticating Agent. The
Trustee hereby appoints the Paying Agent as the initial Authenticating Agent.
(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which any Authenticating Agent shall be a
party, or any Person succeeding to the corporate agency business of any
Authenticating Agent, shall continue to be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at least
30 days' advance written notice of resignation to the Trustee and the Depositor.
The Trustee may at any time terminate the agency of any Authenticating Agent by
giving written notice of termination to such Authenticating Agent and the
Depositor. Upon receiving a notice of resignation or upon such a termination, or
in case at any
73
time any Authenticating Agent shall cease to be eligible in accordance within
the provisions of this Section 4.06, the Trustee may appoint a successor
Authenticating Agent, shall give written notice of such appointment to the
Depositor and shall mail notice of such appointment to all Holders of
Certificates. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section 4.06. No
Authenticating Agent shall have responsibility or liability for any action taken
by it as such at the direction of the Trustee. Each of the Authenticating Agent,
Certificate Registrar and Paying Agent shall be afforded the same rights,
protections and indemnities as the Trustee as set forth under Article VIII
hereunder.
[END OF ARTICLE IV]
ARTICLE V
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 5.01 Servicer to Service Mortgage Loans. The Servicer shall
service and administer the Mortgage Loans and shall have full power and
authority, acting alone or through Sub-Servicers as provided in Section 5.02, to
do any and all things which it may deem necessary or desirable in connection
with such servicing and administration, all in accordance with Accepted
Servicing Practices. Without limiting the generality of the foregoing, the
Servicer in its own name or in the name of a Sub-Servicer shall, pursuant to a
power of attorney granted hereby by the Trustee for such purposes, when the
Servicer or the Sub-Servicer, as the case may be, believes it appropriate in its
best judgment, to execute and deliver, on behalf of the Certificateholders and
the Trustee or any of them, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge and all other
comparable instruments, with respect to the Mortgage Loans and with respect to
the related Mortgaged Properties; provided, however, that subject to the
provisions of this paragraph, the Servicer may allow a modification with respect
to a Mortgage Loan if the Servicer would take such action in the ordinary course
of its business if it were the owner of the Mortgage Loan. The Servicer will
indemnify the Trustee for any misuse of such power of attorney provided
hereunder. The Servicer may agree to a modification of any Mortgage Loan (the
"Relevant Mortgage Loan") upon the request of the related Mortgagor, provided
that (i) the modification is in lieu of a refinancing and the Mortgage Rate on
the Relevant Mortgage Loan, as modified, is approximately a prevailing market
rate of newly-originated mortgage loans having similar terms, (ii) the aggregate
of the adjusted bases of all Modified Mortgage Loans (including the Relevant
Mortgage Loans) plus the aggregate adjusted bases of any assets that are not
qualified mortgages or permitted investments under Section 860G(a) of the Code
that are assets of the Trust Fund established hereunder at all times on any day
is less than one percent of the aggregate of the adjusted bases of all assets of
the Trust Fund (including such Modified Mortgage Loans) on such day, and (iii)
the Servicer purchases the Relevant Mortgage Loan from the Trust Fund as
described below. Effective immediately after such modification, and, in any
event, on the same Business Day on which the modification occurs, all right,
title and interest of the Trustee in and to the Modified Mortgage Loan shall
automatically be deemed transferred and assigned to the Servicer and all
benefits and burdens of ownership thereof, including without limitation the
right to accrued interest thereon from and including the date of modification
and the risk of default thereon, shall pass to the Servicer. To confirm such
transfer and assignment, the Servicer, as servicer hereunder, as soon as
practicable shall execute an instrument of assignment of the Modified Mortgage
Loan without recourse in customary form to the Servicer in its individual
capacity. The Servicer shall deposit the Purchase Price for any Modified
Mortgage Loan in the Collection Account pursuant to Section 5.08. Upon receipt
by the Trustee of written notification of any such deposit signed by a Servicing
Officer, the Trustee shall release to the Servicer the related Mortgage
74
File and shall execute and deliver such instruments of transfer or assignment,
in each case without recourse, as shall be necessary more fully to vest in the
Servicer any Modified Mortgage Loan previously transferred and assigned pursuant
thereto. Notwithstanding anything herein to the contrary, the Servicer shall not
make or permit any modification of a Mortgage Loan that would cause any REMIC
Pool to fail to qualify as a REMIC for federal income tax purposes or that would
result in the imposition of any material tax under Section 860F(a) or Section
860G(d) of the Code.
The Servicer shall furnish to the Trustee for execution and redelivery
to the Servicer or, at the request of the Servicer, a Sub-Servicer, such
documents necessary or appropriate to enable the Servicer to service and
administer the Mortgage Loans and the Trustee shall not be responsible for the
Servicer's application thereof. The Servicer agrees to remain eligible as either
a FNMA or FHLMC seller/servicer, or both, for so long as it is Servicer.
All Servicing Advances made by the Servicer in effecting the timely
payment of taxes, insurance and assessments on the properties subject to the
Mortgage Loans shall not, for the purpose of calculating monthly distributions
to Certificateholders, be added to the amount owing under the related Mortgage
Loans, notwithstanding that the terms of such Mortgage Loan so permit, and such
Servicing Advances shall be recoverable by the Servicer to the extent permitted
by Sections 5.09 and 5.23.
Section 5.02 Sub-Servicing Agreements Between Servicer and
Sub-Servicers; Enforcement of Sub-Servicer's Obligations.
(a) The Servicer may enter into Sub-Servicing Agreements with
Sub-Servicers for the servicing and administration of all or part of the
Mortgage Loans. References in this Agreement to actions taken or to be taken by
the Servicer in servicing the Mortgage Loans serviced by it include actions
taken or to be taken by a Sub-Servicer on behalf of the Servicer. Each
Sub-Servicing Agreement will be upon such terms and conditions as are not
inconsistent with this Agreement and as the Servicer and the Sub-Servicer have
agreed. The Servicer hereby agrees to notify the Trustee in writing promptly
upon the appointment of any Sub-Servicer. For purposes of this Agreement, the
receipt by the Sub-Servicer of any amount with respect to a Mortgage Loan (other
than amounts representing servicing compensation or reimbursement for an
advance) shall be treated as the receipt by the Servicer of such amount. The
Sub-Servicer shall deposit all such funds in an Eligible Account.
(b) As part of its servicing activities hereunder, the Servicer, for
the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Sub-Servicer under the related Sub-Servicing Agreement. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements as appropriate, and the pursuit of other
remedies, shall be in such form and carried out to such an extent and at such
time as the Servicer, in its good faith business judgment, would require were it
the owner of the related Mortgage Loans. The Servicer shall pay the costs of
such enforcement at its own expense but shall be reimbursed therefor only (i)
from a general recovery resulting from such enforcement only to the extent, if
any, that such recovery exceeds all amounts due in respect of the related
Mortgage Loans or (ii) from a specific recovery of costs, expenses or attorneys'
fees against the party against whom such enforcement is directed.
(c) The Servicer shall not permit a Sub-Servicer to perform any
servicing responsibilities hereunder with respect to the Mortgage Loans unless
that Sub-Servicer first agrees in writing with the Servicer to deliver an
Assessment of Compliance and an Accountant's Attestation in such manner and at
such times that permits the Servicer to comply with Section 5.25 of this
Agreement.
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Section 5.03 Successor Sub-Servicers. The Servicer shall be entitled
to terminate any Sub-Servicing Agreement that may exist in accordance with the
terms and conditions of such Sub-Servicing Agreement and without any limitation
by virtue of this Agreement.
Section 5.04 Liability of the Servicer. Notwithstanding any
Sub-Servicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a Sub-Servicer or reference
to actions taken through a Sub-Servicer or otherwise, the Servicer shall remain
obligated and liable to the Trustee and Certificateholders for the servicing and
administering of the Mortgage Loans in accordance with the provisions of this
Agreement without diminution of such obligation or liability by virtue of such
Sub-Servicing Agreements or arrangements or by virtue of indemnification from
the Sub-Servicer and to the same extent and under the same terms and conditions
as if the Servicer alone were servicing and administering the Mortgage Loans.
The Servicer shall be entitled to enter into any agreement with a Sub-Servicer
for indemnification of the Servicer and nothing contained in this Agreement
shall be deemed to limit or modify such indemnification.
Section 5.05 No Contractual Relationship Between Sub-Servicer and
Trustee or Certificateholders. Any Sub-Servicing Agreement that may be entered
into and any other transactions or services relating to the Mortgage Loans
involving a Sub-Servicer in its capacity as such and not as an originator shall
be deemed to be between the Sub-Servicer and the Servicer alone, and the Trustee
and Certificateholders shall not be deemed parties thereto and shall have no
claims, rights, obligations, duties or liabilities with respect to the
Sub-Servicer.
Section 5.06 Termination of Sub-Servicing Agreement. If the Servicer
shall for any reason no longer be the Servicer hereunder (including by reason of
any Event of Default), the Servicer shall thereupon terminate each Sub-Servicing
Agreement that may have been entered into, and the Trustee, its designee or the
successor servicer and the Trustee shall not be deemed to have assumed any of
the Servicer's interest therein or to have replaced the Servicer as a party to
any such Sub-Servicing Agreement.
Section 5.07 Collection of Mortgage Loan Payments. Continuously from
the date hereof until the principal and interest on all Mortgage Loans are paid
in full, the Servicer will proceed diligently to collect all payments due under
each of the Mortgage Loans when the same shall become due and payable; provided,
however, that the Servicer may elect, to the extent consistent with Accepted
Servicing Practices, to waive any late payment charge and shall, to the extent
such procedures shall be consistent with this Agreement, follow such collection
procedures as it follows with respect to conventional mortgage loans held in its
own portfolio. Any such arrangements shall not diminish or otherwise affect the
Servicer's obligation to make Advances pursuant to Section 6.03.
Section 5.08 Establishment of Collection Account; Deposit in
Collection Account. With respect to all of the Mortgage Loans, the Servicer
shall segregate and hold all funds collected and received pursuant to a Mortgage
Loan separate and apart from any of its own funds and general assets and shall
establish and maintain one or more Collection Accounts for the benefit of the
Certificateholders (collectively, the "Collection Account") which are Eligible
Accounts, in the form of a trust account, in the name of "The Bank of New York,
as Trustee, in trust for and for the benefit of the Certificateholders of
Multi-Class Mortgage Pass-Through Certificates, Chase Home Finance LLC as
subservicer for JPMorgan Chase Bank, N.A. as Servicer, Chase Mortgage Finance
Corporation, Series 2006-S2 - Collection Account." Such Collection Account shall
be established with a commercial bank, a savings bank or a savings and loan
association. The Servicer may invest, or cause the institution maintaining the
Collection Account to invest, moneys in the Collection Account in Eligible
Investments, which shall mature not later than two Business Days preceding the
Distribution Date next following the date of such investment and shall not be
sold or disposed of prior to its maturity. All income and gain realized from any
such
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investment shall be for the benefit of the Servicer as additional compensation
and shall be subject to its withdrawal or order from time to time. The amount of
any losses incurred in respect of any such investments (to the extent not offset
by income from other such investments) shall be deposited in the Collection
Account by the Servicer out of its own funds immediately as realized; provided,
however, that if the Trustee becomes the Servicer, the Trustee shall not be
required to deposit the amount of any loss incurred prior to it becoming the
Servicer.
The Servicer shall deposit or cause to be deposited in the
Collection Account on a daily basis (and not later than the second Business Day
following receipt), and retain therein:
(i) All payments which were received after the Cut-off Date
on account of principal of the Mortgage Loans (other than the
principal portion of Monthly Payments due on or before the Cut-off
Date), and all Principal Prepayments collected on or after the Cut-off
Date;
(ii) All payments which were received after the Cut-off Date
on account of interest on the Mortgage Loans (net of the Servicing
Fee)(other than the interest portion of Monthly Payments due on or
before the Cut-off Date);
(iii) Any Subsequent Recovery or Net Liquidation Proceeds;
(iv) All Insurance Proceeds received by the Servicer under
any title, hazard or other insurance policy, including amounts
required to be deposited pursuant to Sections 5.16 and 5.20, other
than proceeds to be held in the Escrow Account or applied to the
restoration or repair of the Mortgaged Property (or Underlying
Mortgaged Property, in the case of a Co-op Loan) or released to the
Mortgagor in accordance with the Servicer's normal servicing
procedures or otherwise applied or held as required by applicable law;
(v) All awards or settlements in respect of condemnation
proceedings affecting any Mortgaged Property (or Underlying Mortgaged
Property, in the case of a Co-op Loan), which are not released to the
Mortgagor in accordance with the Servicer's normal servicing
procedures;
(vi) All Repurchase Proceeds;
(vii) All Advances made by the Servicer pursuant to Section
6.03;
(viii) All amounts representing revenues under the insurance
provided pursuant to Section 5.19 to the extent of any losses borne by
any Certificateholder;
(ix) All revenues from any Mortgaged Property (or Underlying
Mortgaged Property in the case of a Co-op Loan) acquired by the
Servicer by foreclosure or deed in lieu of foreclosure net of any
Servicing Advances with respect to such Mortgaged Property (or
Underlying Mortgaged Property in the case of a Co-op Loan); and
(x) Any other amounts required to be deposited therein
pursuant to this Agreement.
The Servicer shall maintain accounting records on a Mortgage Loan by
Mortgage Loan basis with respect to the Collection Account. The Servicer shall
give notice to the Trustee, any Paying Agent, the Depositor and each Rating
Agency of any change in the location of the Collection Account, prior to the use
thereof. Notwithstanding anything to the contrary herein, no Monthly Payment or
any portion thereof shall be permitted to remain in the Collection Account for
more than 12 months. Any Monthly Payment or any portion thereof that has
remained in the Collection Account for 12 months shall be deemed a
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Principal Prepayment and distributed to Certificateholders pursuant to the
provisions of this Agreement on the Distribution Date immediately following the
end of such 12 month period.
Section 5.09 Permitted Withdrawals from the Collection Account. The
Servicer may, from time to time, withdraw funds from the Collection Account for
the following purposes:
(a) to reimburse itself for Advances made pursuant to Section 6.03
(including amounts to reimburse the related Sub-Servicer for advances made
pursuant to the applicable Sub-Servicing Agreement), the Servicer's and the
related Sub-Servicer's right to receive reimbursement pursuant to this subclause
(i) being limited to amounts received on particular Mortgage Loans which
represent Late Collections (net of the Servicing Fees) with respect to those
particular Mortgage Loans;
(b) to pay itself the Servicing Fee;
(c) to reimburse itself for unreimbursed Servicing Advances, or to pay
the related Sub-Servicer any unreimbursed Servicing Advances, the Servicer's
right to receive reimbursement or make payments to the Sub-Servicer pursuant to
this subclause (c) with respect to any Mortgage Loan being limited to related
Liquidation Proceeds, Insurance Proceeds, Subsequent Recoveries and condemnation
awards;
(d) to reimburse itself (or the related Sub-Servicer) or the Depositor
for expenses incurred by and recoverable by or reimbursable to it pursuant to
Section 5.01 or 5.16;
(e) to reimburse itself (or the related Sub-Servicer) for any
Nonrecoverable Advances;
(f) to pay to itself (or the related Sub-Servicer) income earned on
the investment of funds deposited in the Collection Account;
(g) to make deposits into the Certificate Account in the amounts and
in the manner provided for herein;
(h) to make payments to itself or others pursuant to any provision of
this Agreement, and to clear and terminate the Collection Account upon the
termination of this Agreement; and
(i) to withdraw amounts deposited in error.
Section 5.10 Establishment of Escrow Account; Deposits in Escrow
Account. With respect to those Mortgage Loans on which the Servicer or any
Sub-Servicer collects Escrow Payments, if any, the Servicer shall, and shall
cause any Sub-Servicer to, segregate and hold all funds collected and received
pursuant to each such Mortgage Loan which constitute Escrow Payments separate
and apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts, in the form of trust accounts. Such Escrow
Accounts shall be established with a commercial bank, a mutual savings bank or a
savings and loan association the deposits of which are insured by the FDIC in a
manner which shall provide maximum available insurance thereunder, and which may
be drawn on by the Servicer. The Servicer shall, if requested by the Trustee,
give notice to the Trustee of the location of any Escrow Account. Nothing in
this paragraph shall be deemed to require the Servicer to collect Escrow
Payments in the absence of a provision in the related Mortgage requiring such
collection.
The Servicer shall deposit, or cause to be deposited, in any Escrow
Account or Accounts on a daily basis, and retain therein, (i) all Escrow
Payments collected on account of any Mortgage Loans serviced by the Servicer,
for the purpose of effecting timely payment of any such items as required under
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the terms of this Agreement and (ii) all amounts representing proceeds of any
hazard insurance policy which are to be applied to the restoration or repair of
any Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan). The Servicer shall make withdrawals therefrom only to effect such
payments as are required under this Agreement, and for such other purposes as
are set forth in Section 5.11. The Servicer shall be entitled to retain any
interest paid on funds deposited in the Escrow Account by the depository
institution other than interest on escrowed funds required by law to be paid to
the related Mortgagor and, to the extent required by law, the Servicer shall pay
interest on escrowed funds to the related Mortgagor notwithstanding that the
Escrow Account is non-interest-bearing or that interest paid thereon is
insufficient for such purposes.
Section 5.11 Permitted Withdrawals from Escrow Account. Withdrawals
from any Escrow Account or Accounts may be made by a Servicer only (i) to effect
timely payments of ground rents, taxes, assessments, water rates, Standard
Hazard Policy premiums, or other items constituting Escrow Payments for the
related Mortgage, (ii) to reimburse the Servicer for any Servicing Advance made
by the Servicer, with respect to a related Mortgage Loan but only from amounts
received on the related Mortgage Loan which represent late payments or
collections of Escrow Payments thereunder, (iii) to refund to any Mortgagor any
funds found to be in excess of the amounts required under the terms of the
related Mortgage Loan or under applicable law, (iv) for application to
restoration or repair of the property subject to the related Mortgage, (v) to
pay to the Servicer, or to the Mortgagor to the extent required by law, any
interest paid on the funds deposited in the Escrow Account, (vi) to clear and
terminate the Escrow Account on the termination of this Agreement or (vii) to
withdraw amounts deposited in error.
Section 5.12 Payment of Taxes, Insurance and Other Charges. With
respect to each Mortgage Loan, the Servicer shall maintain, or cause to be
maintained, accurate records reflecting any delinquencies or nonpayments with
regard to taxes, assessments and Standard Hazard Policy premiums. The Servicer
assumes full responsibility for ensuring the payment of all such bills and shall
effect payments of all such bills irrespective of each Mortgagor's faithful
performance in the payment of same or the making of the Escrow Payments and
shall make advances from its own funds to effect such payments.
Section 5.13 Transfer of Accounts. The Servicer may transfer the
Collection Account or Escrow Account to an Eligible Account maintained with a
different depository institution from time to time and shall notify the Trustee
and the Paying Agent of any such transfer.
Section 5.14 [Reserved].
Section 5.15 Maintenance of the Primary Insurance Policies. The
Servicer shall not take, or permit any related Sub-Servicer to take, any action
which would result in non-coverage under any applicable Primary Insurance Policy
of any loss which, but for the actions of the Servicer or Sub-Servicer, would
have been covered thereunder. Except as otherwise required by applicable law, to
the extent coverage is available and until the Loan-to-Value Ratio of the
related Mortgage Loan is reduced to 80%, the Servicer shall keep or cause to be
kept in full force and effect each such Primary Insurance Policy in an amount
equal to the amount by which the unpaid principal balance of the related
Mortgage Loan exceeds 75% of the value (as described in the definition of
Loan-to-Value Ratio) of the related Mortgaged Property (or Underlying Mortgaged
Property, in the case of a Co-op Loan). The Servicer shall not cancel or refuse
to renew any such Primary Insurance Policy or consent to any related
Sub-Servicer canceling or refusing to renew any such Primary Insurance Policy
applicable to a Mortgage Loan subserviced by it, that is in effect at the date
of the initial issuance of the Certificates and is required to be kept in force
hereunder unless the replacement Primary Insurance Policy for such canceled or
non-renewed policy is maintained with an insurer whose claims-paying ability is
rated at least as high as the original insurer or is acceptable to each Rating
Agency as confirmed in writing by each such Rating Agency, unless otherwise
required by law.
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Section 5.16 Maintenance of Standard Hazard Policies.
(a) The Servicer shall cause to be maintained for each Mortgage Loan
(other than a Co-op Loan) a Standard Hazard Policy with extended coverage as is
prudent in the area where the Mortgaged Property is located in an amount which
is equal to the greater of (i) the lesser of (A) 100% of the maximum insurable
value of the improvements securing such Mortgage Loan or (B) the principal
balance owing on such Mortgage Loan, or (ii) such amount required to prevent the
Mortgagor or mortgagee from becoming a co-insurer. If the Mortgaged Property is
in an area identified at the time of origination in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) the Servicer will cause to be
maintained a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration with a generally acceptable
insurance carrier, in an amount representing coverage not less than the least of
(i) the outstanding Principal Balance of the Mortgage Loan, (ii) the full
insurable value or (iii) the maximum amount of insurance which is available
under the Flood Disaster Protection Act of 1973, as amended. The Servicer shall
also maintain on property acquired upon foreclosure, or by deed in lieu of
foreclosure, of any Mortgage Loan, fire and hazard insurance with extended
coverage in an amount which is not less than the lesser of (i) the outstanding
Principal Balance of the Mortgage Loan or (ii) the maximum insurable value of
the improvements which are a part of such property, liability insurance, and, to
the extent available, flood insurance in an amount as provided above. Any
amounts collected by the Servicer under any such policies (other than amounts to
be applied to the restoration or repair of the property subject to the related
Mortgage or property acquired in liquidation of the Mortgage Loan, or released
to the Mortgagor in accordance with the Servicer's normal servicing procedures)
shall be deposited, subject to applicable law, in the Collection Account. It is
understood and agreed that no earthquake or other additional insurance need be
required by the Servicer of any Mortgagor or maintained on property acquired in
respect of a Mortgage Loan, other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. All such Standard Hazard Policies and other policies shall
be endorsed with standard mortgagee clauses with loss payable to the Servicer or
its designee. Any such Standard Hazard Policies or other policies may be in the
form of blanket policies; provided, however, that in the event of any claim
arising in connection with a hazard loss the Servicer shall be obligated, in the
case of blanket insurance policies, to deposit in the Collection Account any
amount not payable under such blanket policy because of a deductible clause in
such policy and not otherwise payable under an individual policy. The Servicer
shall not interfere with the Mortgagor's freedom of choice in selecting either
his insurance carrier or agent; provided, however, that the Servicer shall not
accept any such insurance policies from insurance companies unless such
companies are acceptable insurers in the discretion of the Servicer.
(b) Any cost incurred by the Servicer in maintaining any of the
foregoing insurance shall not, for the purpose of calculating monthly
distributions to Certificateholders, be added to the amount owing under the
Mortgage Loan, notwithstanding that the terms of the Mortgage Loan so permit.
Such costs (other than the costs of maintaining a blanket hazard insurance
policy not attributable to a specific Mortgaged Property) shall be recoverable
by the Servicer from the Mortgagor or out of Insurance Proceeds, Subsequent
Recoveries or Liquidation Proceeds or to the extent permitted by Section 5.09.
Section 5.17 [Reserved].
Section 5.18 [Reserved].
Section 5.19 Fidelity Bond and Errors and Omissions Insurance. The
Servicer shall maintain, at its own expense, a blanket fidelity bond and an
errors and omissions insurance policy, with broad coverage with responsible
companies on all officers, employees or other persons acting on behalf of the
Servicer in any capacity with regard to the Mortgage Loans to handle funds,
money, documents and
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papers relating to the Mortgage Loans. Any such fidelity bond and errors and
omissions insurance shall protect and insure the Servicer against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such persons and shall be maintained at a level acceptable to
FNMA. No provision of this Section 5.19 requiring such fidelity bond and errors
and omissions insurance shall diminish or relieve the Servicer from its duties
and obligations as set forth in this Agreement. Upon request of the Trustee, the
Servicer shall cause to be delivered to the Trustee a certification evidencing
coverage under such fidelity bond and insurance policy. Promptly upon receipt of
any notice from the surety or the insurer that such fidelity bond or insurance
policy has been terminated or modified in a materially adverse manner, the
Servicer shall notify the Trustee and each Rating Agency of any such termination
or modification.
Section 5.20 Collections under Insurance Policies; Enforcement of
Due-On-Sale Clauses; Assumption Agreements.
(a) In connection with its activities as administrator and servicer of
the Mortgage Loans, the Servicer agrees to present, on behalf of itself, the
Trustee and the Certificateholders, claims to the insurer under any Standard
Hazard Policies and, in this regard, to take such reasonable action as shall be
necessary to permit recovery under any insurance policies. Pursuant to Section
5.08, the Servicer shall deposit Insurance Proceeds in the Collection Account.
(b) When any Mortgaged Property (or stock allocated to a dwelling
unit, in the case of a Co-op Loan) is conveyed by the Mortgagor, the Servicer
shall enforce any due-on-sale clause contained in any Mortgage Note or Mortgage,
to the extent permitted by such Mortgage Note or Mortgage, applicable law and
governmental regulations. Subject to the foregoing, the Servicer is authorized
to take or enter into an assumption or substitution agreement from or with the
Person to whom such property has been or is about to be conveyed. In connection
with such assumption or substitution, the Servicer shall apply such underwriting
standards and follow such practices and procedures as shall be normal and usual
and as it applies to mortgage loans owned solely by it.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any conveyance by the
Mortgagor of the Mortgaged Property (or stock allocated to a dwelling unit, in
the case of a Co-op Loan) or any assumption of a Mortgage Loan by operation of
law which the Servicer in good faith determines it may be restricted by law from
preventing, for any reason whatsoever.
(c) Subject to the Servicer's duty to enforce any due-on-sale clause
to the effect set forth in Section 5.20(b), in any case in which a Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan) is
to be conveyed to a Person by a Mortgagor, and such Person is to enter into an
assumption agreement or modification agreement or supplement to the Mortgage
Note or Mortgage, the Servicer shall so notify the Trustee by forwarding to the
Trustee the original copy of such assumption or substitution agreement, which
copy shall be added by the Trustee to the related Mortgage File and shall, for
all purposes, be considered a part of such Mortgage File to the same extent as
all other documents and instruments constituting a part thereof. In connection
with any such assumption, modification agreement or substitution agreement, the
interest rate of the related Mortgage Note shall not be changed, the principal
amount of the Mortgage Note shall not be increased or decreased and the maturity
of the Mortgage Note shall not be extended, nor shall it be shortened by more
than one year. Any fee collected by the Servicer for entering into an assumption
or substitution of liability agreement with respect to such Mortgage Loan shall
be retained by the Servicer as additional servicing compensation.
Section 5.21 Income and Realization from Defaulted Mortgage Loans. The
Servicer, on behalf of the Trustee, shall foreclose upon or otherwise comparably
convert the ownership of Mortgaged
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Properties (or stock allocated to a dwelling unit, in the case of a Co-op Loan)
securing such of the Mortgage Loans as come into and continue in default and as
to which no satisfactory arrangements can be made for collection of delinquent
payments pursuant to Section 5.07, shall manage, conserve, protect and operate
such Mortgaged Properties (or stock allocated to a dwelling unit, in the case of
a Co-op Loan) for the purposes of their prompt disposition and sale, and shall
dispose of such Mortgaged Properties (or stock allocated to a dwelling unit, in
the case of a Co-op Loan) on such terms and conditions as it deems in the best
interests of the Certificateholders. The Servicer shall sell such property prior
to the close of the third calendar year beginning after the year in which such
foreclosure or conversion occurs or such longer period as would not prevent such
Mortgaged Property (or stock allocated to a dwelling unit, in the case of a
Co-op Loan) from constituting "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code. The Servicer will ensure that no Mortgaged
Property shall be held, rented or otherwise used in such a manner or pursuant to
any terms that would (i) cause such Mortgaged Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
(ii) subject any REMIC Pool to the imposition of any federal income taxes on the
income earned on such Mortgaged Property, including any taxes imposed by reason
of Section 860F or 860G(c) of the Code. In connection with such activities, the
Servicer shall follow such practices and procedures as it shall deem necessary
or advisable, as shall be normal and usual in its general mortgage servicing
activities, including its management of foreclosed properties for a temporary
period as contemplated herein. The foregoing is subject to the provisions of
Section 5.28 of this Agreement and to the proviso that the Servicer shall not be
required to expend its own funds in connection with any management, foreclosure
or towards the restoration of any property unless it shall determine that such
management, restoration or foreclosure will increase any Subsequent Recoveries
or Liquidation Proceeds of the Mortgage Loan to Certificateholders after
reimbursement to itself for such expenses (respecting which it shall have
priority for purposes of withdrawals from the Collection Account pursuant to
Section 5.09). The Servicer shall be permitted to earn income with respect to
any Mortgaged Properties (or stock allocated to a dwelling unit, in the case of
a Co-op Loan), provided such income does not constitute "net income from
foreclosure property" within the meaning of Section 860G(c) of the Code. The
income earned from the management of such Mortgaged Properties (or stock
allocated to a dwelling unit, in the case of a Co-op Loan), net of reimbursement
to the Servicer for expenses (including any taxes) incurred in connection with
such management, shall be applied to the payment of principal of and interest on
the related defaulted Mortgage Loans (with interest accruing and principal
amortizing as though such Mortgage Loans were still current) and all such income
shall be deemed, for all purposes in this Agreement, to be payments on account
of principal and interest on the related Mortgage Notes and shall be deposited
into the Collection Account. To the extent the income received is in excess of
the amount attributable to amortizing principal and accrued interest at the Net
Mortgage Rate on the related Mortgage Loan, such excess shall be deposited in
the Collection Account.
The Servicer shall take into account the existence of any hazardous
substances, hazardous wastes or solid wastes, as such terms are defined in the
Comprehensive Environmental Response Compensation and Liability Act, as amended,
the Resources Conservation and Recovery Act of 1976, as amended, or other
federal, state or local environmental legislation, on a Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan) in determining
whether to foreclose upon or otherwise comparably convert the ownership of such
property. To the extent that the Servicer has actual knowledge of any such
substance or waste, it shall consult with the Trustee regarding the appropriate
course of action. The Servicer shall not institute foreclosure actions with
respect to a property containing substance or waste as described above if it
reasonably believes that such action would not be consistent with its servicing
standards, and in no event shall the Servicer manage, operate or take any other
action with respect thereto which the Servicer in good faith believes will
result in "clean-up" or other liability under applicable law. The net income
from the rental or sale of a REO Property shall be deposited in the Collection
Account within two (2) Business Days after receipt thereof by the Servicer.
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The Servicer may enter into a special servicing agreement with an
unaffiliated holder of 100% Percentage Interest of the Class of Class B
Certificates then outstanding having the highest numerical class designation or
a holder of a class of securities representing interests in such Class B
Certificate and/or other subordinate mortgage pass-through certificates, such
agreement to be (i) substantially in the form of Exhibit J hereto or (ii)
subject to each Rating Agency's acknowledgment that the ratings of the
Certificates in effect immediately prior to the entering into of such agreement
would not be qualified, downgraded or withdrawn and the Certificates would not
be placed on credit review status (except for possible upgrading) as a result of
such agreement. Any such agreement may contain provisions whereby such holder
may instruct the Servicer to commence or delay foreclosure proceedings with
respect to delinquent Mortgage Loans and will contain provisions for the deposit
of cash by the holder that would be available for distribution to
Certificateholders if Liquidation Proceeds are less than they otherwise may have
been had the Servicer acted in accordance with its normal procedures.
Section 5.22 Trustee to Cooperate; Release of Mortgage Files.
(a) Upon becoming aware of the payment in full of any Mortgage Loan,
or upon the receipt by the Servicer of a notification that payment in full will
be made in a manner customary for such purposes, the Servicer shall immediately
notify the Custodian with a copy to the Trustee by a certification (which
certification shall include a statement to the effect that all amounts received
or to be received in connection with such payment which are required to be
deposited in the Collection Account pursuant to Section 5.08 have been or will
be so deposited) of a Servicing Officer and shall request delivery to it of the
Mortgage File. Upon receipt of such certification and request, within five
Business Days the Custodian on behalf of the Trustee shall release the related
Mortgage File to the Servicer and the Trustee will execute and deliver to the
Servicer the request for reconveyance, deed of reconveyance or release or
satisfaction of mortgage or such other instruments releasing the lien of the
Mortgage as have been provided by the Servicer to the Trustee, together with the
Mortgage Note with written evidence of cancellation thereon, and the Trustee
shall have no further responsibility with respect to said Mortgage File. Upon
any such payment in full, or the receipt of such notification, the Servicer is
authorized to procure from the Trustee under the deed of trust which secured the
Mortgage Note, if any, a deed of full reconveyance covering the property
encumbered by such deed of trust, which assignment of deed of trust, except as
otherwise provided by any applicable law, shall be recorded by the Servicer in
the appropriate land records in the jurisdiction in which the assignment of deed
of trust is recorded, or, as the case may be, to procure from the Trustee an
instrument of satisfaction or, if the Mortgagor so requests, an assignment
without recourse, which deed of reconveyance, instrument of satisfaction or
assignment shall be delivered by the Servicer to the Person or Persons entitled
thereto. No expenses incurred in connection with any instrument of satisfaction
or deed of reconveyance shall be chargeable to the Collection Account or to the
Trustee.
(b) From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan, the Servicer shall deliver to the Custodian a
certificate of a Servicing Officer requesting that possession of the Mortgage
File be released to the Servicer and certifying as to the reason for such
release and that such release will not invalidate any insurance coverage
provided in respect of the Mortgage Loan under any of the insurance policies
required by this Agreement. With such certificate, the Servicer shall require
that the Custodian on behalf of the Trustee release the Mortgage File, and,
within five Business Days, the Custodian shall deliver the Mortgage File or any
document therein to the Servicer. The Servicer shall cause each Mortgage File so
released to be returned to the Custodian on behalf of the Trustee when the need
therefor by the Servicer no longer exists, unless (i) the Mortgage Loan has been
liquidated and the Net Liquidation Proceeds relating to the Mortgage Loan have
been deposited in the Collection Account or (ii) the Mortgage File has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property (or stock allocated to
a dwelling unit, in the
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case of a Co-op Loan) either judicially or non-judicially, and the Servicer has
delivered to the Custodian on behalf of the Trustee a certificate of a Servicing
Officer in the form of Exhibit L hereto certifying as to the name and address of
the Person to which such Mortgage File was delivered and the purpose or purposes
of such delivery.
(c) Upon written request of the Servicer, the Trustee shall execute
and deliver to the Servicer any court pleadings, requests for trustee's sale or
other documents prepared by and delivered by the Servicer to the Trustee
necessary to the foreclosure or trustee's sale in respect of a Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan) or
to any legal action brought to obtain judgment against any Mortgagor on the
Mortgage Note or Mortgage or to obtain a deficiency judgment, or to enforce any
other remedies or rights provided by the Mortgage Note or Mortgage or otherwise
available at law or in equity. Together with such documents or pleadings, the
Servicer shall deliver to the Trustee a certificate of a Servicing Officer
requesting that such pleadings or documents be executed by the Trustee and
certifying as to the reason such documents or pleadings are required and that
the execution and delivery thereof by the Trustee will not invalidate any
insurance coverage under the insurance policies required under this Agreement or
invalidate or otherwise affect the lien of the Mortgage, except for the
termination of such a lien upon completion of the foreclosure or trustee's sale.
The Trustee may rely on such certificate without further inquiry.
(d) The Servicer may provide an electronic transmission for release of
documents under this Section 5.22 in a form agreed to in advance of initial
transmission by both the Servicer and the Custodian, which form shall contain
information readable without intervention by Custodian's data processing
operations computer hardware and software staff, and arranged in a record layout
to be specified by Custodian (a "Paperless Release Request"). The Servicer
agrees to maintain and control access to electronic signature information and
assumes liability for any unauthorized use thereof, except for any unauthorized
use thereof by the Custodian and, provided that, the Servicer shall have no
liability arising from the form of transmission if the Servicer complies with
the Custodian's standards set forth in the next paragraph of this Section
5.22(d). The Servicer also agrees to maintain accurate records of electronic
transactions related to the custodial files. The Servicer hereby authorizes the
Custodian to automatically append the electronic signature of an authorized
representative to the applicable request for release of documents and agrees and
acknowledges that by appending such authorized representative's electronic
signature, the Custodian shall be entitled to rely thereon. For purposes of this
Agreement the term "electronic signature" means an electronic identifier
intended by the person using it to have the same force and effect as the use of
a manual signature.
The Servicer agrees in advance to comply with all Custodian data
encryption, security and record layout standards in connection with any
Paperless Release Request as may be amended from time to time upon notice from
Custodian to the Servicer. The Custodian reserves the right to restrict or
suspend the Servicer's access to the Custodian's computer systems for
maintenance or repairs or for any other reason in the Custodian's sole
discretion, provided however that the Custodian shall promptly provide the
Servicer with notice of such restriction or suspension. Notwithstanding the
foregoing, the Servicer is authorized to transmit and the Custodian is
authorized to accept signed facsimile copies of the requests for document
release described in this Section 5.22.
Section 5.23 Servicing and Other Compensation. The Servicer, as
compensation for its activities hereunder, shall be entitled to receive, on or
prior to each Distribution Date, the amounts provided for as the Servicing Fee
and as reimbursement for Nonrecoverable Advances, Servicing Advances and
reimbursement for Advances, all as specified by Section 5.09. The amount of
compensation or reimbursement provided for shall be accounted for on a Mortgage
Loan-by-Mortgage Loan basis.
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Additional servicing compensation in the form of assumption fees,
prepayment fees and late payment charges shall be retained by the Servicer, to
the extent permitted by applicable law. The Servicer shall be required to pay
all expenses incurred by it in connection with its servicing activities
hereunder (including the fees, expenses and indemnities of the Trustee and any
Sub-Servicer) and shall not be entitled to reimbursement therefor except as
specifically provided in Sections 5.09 and 5.21.
Section 5.24 1934 Act Reports.
(a) As set forth on Schedule X hereto, for so long as the Trust is
subject to the Exchange Act reporting requirements, no later than the end of
business on the 2nd Business Day after the occurrence of an event requiring
disclosure on Form 8-K (a "reportable event") (i) the Depositor, the Seller, the
Trustee and the Paying Agent shall notify the Servicer of any item reportable on
a Form 8-K of which each such party has knowledge (unless such item is specific
to the Servicer, in which case the Servicer will be deemed to have notice) and
(ii) shall deliver to the Servicer at least two Business Days prior to the
filing deadline for such Form 8-K, all information, data, and exhibits (unless
such information, data, and exhibits are specific to the Servicer) required to
be provided or filed with such Form 8-K. After preparing the Form 8-K on behalf
of the Depositor, the Servicer shall execute and promptly file such Form 8-K.
(b) For so long as the Trust is subject to the Exchange Act, within 15
days after each Distribution Date, the Servicer shall, on behalf of the Trust
and in accordance with industry standards, file with the Commission via the
Electronic Data Gathering and Retrieval System (XXXXX), a Form 10-D with (1) a
copy of the report to the Certificateholders for such Distribution Date as an
exhibit thereto and (2) any other information known to the Servicer or provided
to the Servicer to be included at its discretion in Form 10-D ("Additional Form
10-D Disclosure") as set forth in the next paragraph.
(c) For so long as the Trust is subject to the Exchange Act, as set
forth in Schedule Y hereto, within 5 calendar days after the related
Distribution Date (i) the parties hereto, as applicable, will be required to
provide to the Servicer, to the extent known to such party, any Additional Form
10-D Disclosure (including any breaches of pool asset representations and
warranties or transaction covenants of which the party has written notice and
which has not been included on the monthly distribution report for the period),
if applicable, and (ii) the Servicer, to the extent it deems necessary, shall
incorporate such Additional Form 10-D Disclosure into the Form 10-D and shall
file such Form 10-D by the 8th calendar day after the Distribution Date.
(d) For so long as the Trust is subject to the Exchange Act, prior to
the 90th calendar day after the end of the fiscal year for the trust, the
Servicer shall, on behalf of the Trust and in accordance with industry
standards, prepare and file with the Commission via XXXXX a Form 10 -K with
respect to the Trust Fund. Such Form 10-K shall include the following items: (i)
an annual compliance statement for the Servicer and each Subservicer, as
described in Section 5.25 of the Agreement, (ii)(A) the annual reports on
assessment of compliance with servicing criteria for the Paying Agent, each
Servicer, Subservicer and Subcontractor (unless the Servicer has determined that
such compliance statement is not required by Regulation AB), as described in
Section 5.25 of the Agreement, and (B) if any Reporting Servicer's report on
assessment of compliance with servicing criteria described in Section 5.25
identifies any material instance of noncompliance, disclosure identifying such
instance of noncompliance, or if any report on assessment of compliance with
servicing criteria described in Section 5.25 of the Agreement is not included as
an exhibit to such Form 10-K, disclosure that such report is not included and an
explanation why such report is not included, (iii)(A) the registered public
accounting firm attestation report for the Paying Agent, the Servicer and each
Subservicer, as described in Section 5.26 of the Agreement, and (B) if any
registered public accounting firm attestation report described in the Section
5.26 of the Agreement identifies any material instance of noncompliance,
disclosure identifying such instance of noncompliance, or if any such registered
public accounting firm attestation report is not
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included as an exhibit to such Form 10-K, disclosure that such report is not
included and an explanation why such report is not included, and (iv) a
Xxxxxxxx-Xxxxx Certification in the form attached hereto as Exhibit S, executed
by the senior officer in charge of securitizations of the Servicer. Any
disclosure or information in addition to (i) through (iv) above that is required
to be included on Form 10-K ("Additional Form 10-K Disclosure") shall be
determined and prepared by and at the direction of the Servicer pursuant to the
following paragraph.
(e) As set forth in Schedule Z hereto, no later than March 12 of each
year that the Trust is subject to the Exchange Act reporting requirements,
commencing in 2007, (i) the parties identified on Schedule Z shall be required
to provide to the Depositor and the Servicer, to the extent known, any
Additional Form 10-K Disclosure, if applicable, and (ii) the Servicer, to the
extent it deems necessary, shall incorporate such Additional Form 10-K
Disclosure into the Form 10-K and shall file such Form 10-K by the 85th calendar
day after the end of the fiscal year for the Trust.
(f) Each Form 10-K shall include a certification (the "Xxxxxxxx-Xxxxx
Certification") which shall be in the form attached hereto as Exhibit S. The
Depositor will cause its senior officer in charge of securitization to execute
the Xxxxxxxx-Xxxxx Certification required pursuant to Rule 13a-14 under the
Securities Exchange Act of 1934, as amended, by March 15 of each year in which
the Trust is subject to the reporting requirements of the Exchange Act. In
connection therewith, the Paying Agent shall sign a certification (in the form
attached hereto as Exhibit O) for the benefit of the Servicer and its officers,
directors and affiliates regarding certain aspects of the Form 10-K
Certification.
(g) Following the first date legally permissible under applicable
regulations and interpretations of the Commission, the Servicer shall, on behalf
of the Trust and in accordance with industry standards, file with the Commission
via XXXXX a Form 15 Suspension Notification with respect to the Trust Fund, if
applicable.
(h) The Servicer shall have no responsibility to file any items with
the Commission other than those specified in this section and the Servicer shall
execute any and all form 8-Ks and 10-Ds required hereunder. The Depositor shall
execute each form 10-K.
(i) If the Commission issues additional interpretative guidance or
promulgates additional rules or regulations with respect to Regulation AB or
otherwise, or if other changes in applicable law occur, that would require the
reporting arrangements, or the allocation of responsibilities with respect
thereto, described in this Section 5.24, to be conducted differently than as
described, the Depositor, the Servicer, the Paying Agent and the Trustee shall
comply with reasonable requests made by CHF, the Servicer or the Depositor to
amend the provisions of this Section 5.24 in order to comply with such amended
reporting requirements and to deliver additional or different information as CHF
or the Depositor may determine in good faith is necessary to comply with the
provisions of Regulation AB, provided that such information is available to such
party without unreasonable effort or expense or is reimbursed by the requesting
party and within such timeframe as may be reasonably requested. Any such
supplementation or modification shall be made without the consent of the
Certificateholders, and may result in a change in the reports filed by the
Servicer on behalf of the Trust under the Exchange Act.
(j) The Depositor, the Servicer, the Trustee and the Paying Agent
agree to use their good faith efforts to cooperate in complying with the
requirements of this Sections 5.24.
Section 5.25 Annual Statement as to Compliance. Not later than (a)
March 15 of each calendar year (other than the calendar year during which the
Closing Date occurs) or (b) with respect to any calendar year during which an
annual report on Form 10-K is not required to be filed pursuant to Section 5.24
on behalf of the Trust, by April 15 of each calendar year (or if such day is not
a Business
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Day, the immediately succeeding Business Day), the Servicer shall deliver to the
Depositor, an Officers' Certificate in the form attached hereto as Exhibit T
stating, as to each signatory thereof, that (i) a review of the activities of
the Servicer during the preceding calendar year and of the performance of the
Servicer under this Agreement has been made under such officer's supervision,
and (ii) to the best of such officer's knowledge, based on such review, the
Servicer has fulfilled all its obligations under this Agreement in all material
respects throughout such year or a portion thereof, or, if there has been a
failure to fulfill any such obligation in any material respect, specifying each
such failure known to such officer and the nature and status thereof. With
respect to any Subservicer that meets the criteria of Item 1108(a)(2)(i) through
(iii) of Regulation AB in the sole determination of the Servicer, the Servicer
shall request from such Subservicer, the Officer's Certificate set forth in this
Section 5.25 as and when required with respect to such Subservicer.
Section 5.26 Assessment of Compliance and Independent Public
Accountants' Attestation; Financial Statements.
(a) Not later than (i) March 15 of each calendar year (other than the
calendar year during which the Closing Date occurs) or (ii) with respect to any
calendar year during which an annual report on Form 10-K is not required to be
filed pursuant to Section 5.24 on behalf of the Trust, by April 15 of each
calendar year (or if such day is not a Business Day, the immediately succeeding
Business Day), the Servicer, at its own expense, shall deliver to the Trustee
and the Depositor an officer's assessment of its compliance with the Servicing
Criteria during the preceding calendar year as required by Rules 13a-18 and
15d-18 of the Exchange Act and Item 1122 of Regulation AB (the "Assessment of
Compliance"), which addresses the items set forth in Exhibit R hereto.
(b) Not later than (i) March 15 of each calendar year (other than the
calendar year during which the Closing Date occurs) or (ii) with respect to any
calendar year during which an annual report on Form 10-K is not required to be
filed pursuant to Section 5.24 on behalf of the Trust, April 15 of each calendar
year (or if such day is not a Business Day, the immediately succeeding Business
Day), the Servicer, at its own expense, shall cause a nationally or regionally
recognized firm of independent registered public accountants (who may also
render other services to any Servicer, the Sellers or any affiliate thereof)
which is a member of the American Institute of Certified Public Accountants to
furnish a statement to the Trustee, the Paying Agent and the Depositor that
attests to and reports on the assessment of compliance provided by such Servicer
pursuant to Section 5.26(a) (the "Accountant's Attestation"). Such Accountant's
Attestation shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of
Regulation S-X under the Securities Act and the Exchange Act.
(c) The Servicer shall request that any Subservicer and each
Subcontractor (to the extent determined by the Servicer to be required under
Regulation AB) not later than March 15 of each calendar year (other than the
calendar year during which the Closing Date occurs) with respect to any calendar
year during which the Trust's annual report on Form 10-K is required to be filed
in accordance with the Exchange Act and the rules and regulations of the
Commission, provide an Assessment of Compliance, which addresses the items set
forth in Exhibit R hereto. The Servicer shall request that any Subservicer
(other than the calendar year during which the Closing Date occurs) with respect
to any calendar year during which the Trust's annual report on Form 10-K is not
required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, by April 15 of each calendar year (or, in each
case, if such day is not a Business Day, the immediately succeeding Business
Day) provide an Assessment of Compliance, which addresses the items set forth in
Exhibit R hereto.
(d) Not later than March 15 of each calendar year (other than the
calendar year during which the Closing Date occurs) with respect to any calendar
year during which the Trust's annual report on Form 10-K is required to be filed
in accordance with the Exchange Act and the rules and regulations of
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the Commission, the Servicer shall request that each Subservicer and each
Subcontractor (to the extent determined by the Servicer to be required by
Regulation AB) provide an Accountant's Attestation by a registered public
accounting firm that attests to, and reports on, the Assessment of Compliance
pursuant to Section 5.26(c) above. Other than the calendar year during which the
Closing Date occurs, with respect to any calendar year during which the Trust's
annual report on Form 10-K is not required to be filed in accordance with the
Exchange Act and the rules and regulations of the Commission, not later than
April 15 of each calendar year (or, in each case, if such day is not a Business
Day, the immediately succeeding Business Day), the Servicer shall request that
each Subservicer provide an Accountant's Attestation by a registered public
accounting firm that attests to, and reports on, the Assessment of Compliance
pursuant to Section 5.26(c) above.
(e) Not later than, with respect to any calendar year during which the
Trust's annual report on Form 10K is required to be filed in accordance with the
Exchange Act and the rules and regulations of the Commission, March 15 (or, in
each case, if such day is not a Business Day, the immediately preceding Business
Day), the Paying Agent shall deliver to the Depositor and the Servicer an
Assessment of Compliance with regard to the Servicing Criteria applicable to the
Paying Agent during the preceding calendar year, which addresses the items set
forth in Exhibit R hereto.
(f) Not later than, with respect to any calendar year during which the
Trust's annual report on Form 10-K is required to be filed in accordance with
the Exchange Act and the rules and regulations of the Commission, March 15 (or,
in each case, if such day is not a Business Day, the immediately preceding
Business Day), the Paying Agent shall deliver to the Depositor and the Servicer
an Accountant's Attestation by a registered public accounting firm that attests
to, and reports on, the Assessment of Compliance pursuant to Section 5.26(e)
above.
(g) Not later than, with respect to any calendar year during which the
Trust's annual report on Form 10-K is required to be filed in accordance with
the Exchange Act and the rules and regulations of the Commission, 15 calendar
days before the date on which the Trust's annual report on Form 10-K is required
to be filed in accordance with the Exchange Act and the rules and regulations of
the Commission (or, in each case, if such day is not a Business Day, the
immediately preceding Business Day), the Servicer shall request that each
custodian, including the Custodian, deliver to the Servicer an Assessment of
Compliance with regard to the Servicing Criteria applicable to such custodian
during the preceding calendar year, which addresses the items set forth in
Exhibit R hereto; provided, however, that where the Custodian and the Servicer
are both Chase, the provisions of this Section 5.26(g) may be satisfied by the
delivery of a single report containing the Assessment of Compliance of Chase.
(h) Not later than March 12 (or, in each case, if such day is not a
Business Day, the immediately succeeding Business Day), of any calendar year
(other than the calendar year during which the Closing Date occurs) during which
the Trust's annual report on Form 10-K is required to be filed in accordance
with the Exchange Act and the rules and regulations of the Commission, the
Servicer shall request that each Custodian deliver to the Servicer an
Accountant's Attestation by a registered public accounting firm that attests to,
and reports on, the Assessment of Compliance pursuant to Section 5.26(g) above;
provided, however, that where the Custodian and the Servicer are both Chase, the
provisions of this Section 5.26(h) may be satisfied by the delivery of a single
report containing the Accountant's Attestation of Chase.
(i) Each of the parties hereto acknowledges and agrees that the
purpose of this Section 5.26 is to facilitate compliance by the Seller, the
Servicer and the Depositor with the provisions of Regulation AB, as such may be
amended or clarified from time to time. Therefore, each of the parties agrees
that the parties' obligations hereunder will be supplemented and modified as
necessary to be consistent with any such amendments, interpretive advice or
guidance, convention or consensus among active participants in
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the asset-backed securities markets, advice of counsel, or otherwise in respect
of the requirements of Regulation AB and the parties shall comply with
reasonable requests made by the Seller, the Servicer or the Depositor for
delivery of additional or different information as CHF or the Depositor may
determine in good faith is necessary to comply with the provisions of Regulation
AB, provided that such information is available to such party without
unreasonable effort or expense or is reimbursed by the requesting party and
within such timeframe as may be reasonably requested. Any such supplementation
or modification shall be made without the consent of the Certificateholders, and
may result in a change in the reports filed by the Servicer on behalf of the
Trust under the Exchange Act.
Section 5.27 Access to Certain Documentation; Rights of the Depositor
in Respect of the Servicer. The Servicer shall provide access to the Trustee and
Certificateholders which are savings and loan associations, banks or insurance
companies or examiners of any federal or state banking or insurance regulatory
authority to the documentation regarding the Mortgage Loans if so required by
applicable regulations of any regulatory authority, such access to be afforded
subject to reimbursement for expenses without charge but only upon reasonable
request and during normal business hours at the offices of the Servicer
designated by it. The Depositor may, but is not obligated to, enforce the
obligations of the Servicer under this Agreement. The Depositor shall not assume
any responsibility or liability for any action or failure to take action by the
Servicer and is not obligated to supervise the performance of the Servicer under
this Agreement or otherwise.
Section 5.28 REMIC-Related Covenants. For as long as the Trust Fund
shall exist, the Servicer, the Paying Agent and the Trustee shall act in
accordance herewith to assure continuing treatment of each REMIC created
hereunder as a REMIC. In particular:
(a) The Servicer shall not create, or permit the creation of, any
"interests" in any REMIC created hereunder within the meaning of Section 860G(a)
of the Code other than the "regular interests" in each such REMIC designated as
such in Section 2.04(a) and the "residual interest" in each such REMIC
designated as such in Section 2.04(a);
(b) As of all times as may be required by the Code, the Servicer will
ensure that substantially all of the assets of each REMIC created hereunder will
consist of "qualified mortgages" as defined in Section 860G(a)(3) of the Code
and "permitted investments" as defined in Section 860G(a)(5) of the Code. The
Paying Agent will maintain records that are sufficient to indicate the
compliance of each REMIC created hereunder with applicable requirements of the
Code (and applicable Proposed, Temporary or final Treasury Regulations) relating
to the assets held by such REMIC. Further, the Servicer shall not permit and the
Trustee shall not accept the transfer or substitution of any Mortgage Loan other
than pursuant to Section 3.03, 5.01 or 5.21 of this Agreement, and the Servicer
shall, in any case, not permit substitution unless the Servicer and the Trustee
have received an Opinion of Counsel, which will not be an expense of any REMIC
created hereunder, that such transfer or substitution would not adversely affect
the REMIC status of any REMIC created hereunder or would not otherwise be
prohibited by this Agreement;
(c) The Servicer shall ensure that no REMIC created hereunder receives
a fee or other compensation for services and that no REMIC created hereunder
receives any income from assets other than "qualified mortgages" within the
meaning of Section 860G(a)(3) of the Code or "permitted investments" within the
meaning of Section 860G(a)(5) of the Code, and shall take whatever action it
deems necessary to avoid any material tax imposed by the Code on any REMIC
created hereunder;
(d) None of the Depositor, the Servicer, the Paying Agent or the
Trustee shall sell or permit the sale of all or any portion of the Mortgage
Loans or of any Eligible Investment unless such sale is as a result of a
repurchase of the Mortgage Loans pursuant to this Agreement or the Trustee has
received an
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Opinion of Counsel, which will not be an expense of any REMIC created hereunder
or the Trustee, to the effect that such sale (i) is pursuant to a "qualified
liquidation" as defined in Section 860F(a)(4) of the Code and as described in
Section 11.01 hereof, or (ii) would not be treated as a "prohibited transaction"
within the meaning of Section 860F(a)(2) of the Code that results in the
realization of a material amount of gain or loss for federal income tax
purposes;
(e) The Trustee shall not accept any contribution to any REMIC created
hereunder after the Startup Day without an Opinion of Counsel (which shall not
be an expense of the Trustee) that such contribution is included within the
exceptions provided in Section 860G(d)(2) of the Code and, therefore, will not
be subject to the tax imposed by Section 860G(d)(1) of the Code; and
(f) Notwithstanding anything to the contrary in this Agreement, the
Servicer and the Trustee, at the direction of the Servicer, shall take any other
action or refuse to take any action otherwise required (including adjusting the
Purchase Price for any Mortgage Loan) where the Servicer deems such action or
inaction reasonably necessary to ensure the REMIC status of each REMIC created
hereunder under the Code and applicable regulations or to avoid the imposition
of any material tax liability on any REMIC created hereunder that will affect
amounts distributable to the Certificateholders.
(g) In the event that any applicable federal, state or local tax,
including interest, penalties or assessments, additional amounts or additions to
tax, is imposed on any REMIC created hereunder, such tax shall be treated in the
same manner as a Realized Loss and shall be charged against amounts otherwise
distributable to the Holders of the Certificates, except as provided in the last
sentence of this Section 5.28 (g). The Trustee or, if a Paying Agent has been
appointed under Section 4.05, the Paying Agent shall withdraw from the
Collection Account sufficient funds to pay or provide for the payment of, and to
actually pay, such tax as is estimated to be legally owed by (but such
authorization shall not prevent the Trustee or, if a Paying Agent has been
appointed under Section 4.05, the Paying Agent from contesting, at the expense
of the Trust Fund (other than as a consequence of a breach of its obligations
under this Agreement), any such tax in appropriate proceedings, and withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings). The Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent is hereby authorized to and shall segregate, into a
separate non-interest bearing account, the net income from any "prohibited
transaction" under Code Section 860F(a), the amount of any taxable contribution
to any REMIC created hereunder after the Startup Day that is subject to tax
under Code Section 860G(d), and 35% of any estimated "net income from
foreclosure property" under Section 860G(c) and use such income or amount, to
the extent necessary, to pay such tax. To the extent that any such tax is paid
to the Internal Revenue Service or applicable state or local tax authorities,
the Trustee or a Paying Agent has been appointed under Section 4.05, the Paying
Agent shall retain an equal amount from future amounts otherwise distributable
to the Holder of the Class A-R Certificate and shall distribute such retained
amounts to the Holders of the other Classes of Certificates, to the extent they
remain outstanding, until they are fully reimbursed for any amount of such taxes
previously charged to the then Holder of the Class A-R Certificate. Neither the
Trustee nor the Servicer shall be responsible for any taxes imposed on any REMIC
created hereunder except to the extent such taxes arise as a consequence of a
breach of their respective obligations under this Agreement. The Trustee shall
not be liable hereunder for any taxes imposed on any REMIC hereunder as the
result of any direction taken hereunder from the Servicer or any action of the
Servicer or Paying Agent hereunder.
Section 5.29 Reserve Fund; Yield Maintenance Agreements.
(a) On the Closing Date, the Paying Agent shall establish an account
(the "Reserve Fund"), which shall be an Eligible Account. The Reserve Fund shall
be entitled "Reserve Fund, The Bank of New York, as Trustee for the benefit of
the Holders of the Chase Mortage Finance Trust 2006-S2 LIBOR Certificates." On
each Distribution Date, the Paying Agent is hereby directed to, and shall
therefore,
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deposit into the Reserve Fund all amounts received under each Yield Maintenance
Agreement. For federal and state income tax purposes, the LIBOR
Certificateholders will be deemed to be the owners of the related portion of the
Reserve Fund and all amounts deposited into the Reserve Fund and shall be
taxable on any income earned thereon. The Reserve Fund shall not be an asset of
any REMIC. Amounts held in the Reserve Fund shall remain uninvested. The Reserve
Fund will be part of the Trust Fund but not part of any REMIC and any payments
to the LIBOR Certificates of Basis Risk Shortfall Carryover Amounts with respect
to the LIBOR Certificates will not be payments with respect to a "regular
interest" in a REMIC within the meaning of Code Section 860G(a)(1).
(b) The Depositor hereby directs the Paying Agent, to execute and
deliver on behalf of the Trust each of the Yield Maintenance Agreements and
authorizes the Paying Agent to perform its obligations thereunder on behalf of
the Trust in accordance with the terms of each Yield Maintenance Agreement. Each
Yield Maintenance Agreement will provide for the payment of Basis Risk Shortfall
Carryover Amounts for one Class of LIBOR Certificates to the extent provided in
Section 5.29(b)(i). On or before the Closing Date, the Paying Agent shall enter
into the Yield Maintenance Agreements on behalf of the Trust, with the
Counterparty. The Yield Maintenance Agreements shall be part of the Trust Fund
but not part of any REMIC.
On each Distribution Date, the Paying Agent shall distribute amounts
received under the Class 1-A10 Yield Maintenance Agreement on deposit in the
Reserve Fund to the Class 1-A10 Certificates, up to the Basis Risk Shortfall
Carryover Amount for the Class 1-A10 Certificates.
On each Distribution Date, the Paying Agent shall distribute amounts
received under the Class 2-A8 Yield Maintenance Agreement on deposit in the
Reserve Fund to the Class 2-A8 Certificates, up to the Basis Risk Shortfall
Carryover Amount for the Class 2-A8 Certificates.
(c) [Reserved.]
(d) The Seller, the Depositor and the Certificateholders by acceptance
of their Certificates acknowledge and agree that the Paying Agent shall execute,
deliver and perform its obligations under the Yield Maintenance Agreements and
shall do so solely in its capacity as Paying Agent of the Trust Fund and not in
its individual capacity. The Paying Agent is hereby directed to represent and
warrant to the Counterparty under the Yield Maintenance Agreements that the
beneficial owner for United States federal income tax purposes of payments made
under the Yield Maintenance Agreements is a "U.S. person" (as that term is used
in section 1.1441-4(a)(3)(ii) of United States Treasury Regulations (the
"Regulations")) for United States federal income tax purposes. Every provision
of this Agreement relating to the conduct of affecting the liability of or
affording protection to the Paying Agent shall apply to the Paying Agent's
execution of the Yield Maintenance Agreements and the performance of its duties
and satisfaction of its obligations thereunder.
(e) On the 20th calendar day of each month, the Paying Agent shall
calculate the Class 1-A10 Maximum Yield Maintenance Agreement Amount and notify
the Counterparty of such amount. On each Distribution Date, the "Class 1-A10
Maximum Yield Maintenance Agreement Amount" shall be an amount equal to the
lesser of:
(i) the product of:
(A) the excess, if any, of LIBOR (as calculated under
the Class 1-A10 Yield Maintenance Agreement subject to the
Rate Cap Ceiling) over the related Cap Strike Rate for that
Distribution Date;
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(B) the related Class 1-A10 Scheduled Notional Amount
for that Distribution Date; and
(C) a fraction, the numerator of which is 30 and the
denominator of which is 360;
and
(ii) the related Basis Risk Shortfall Carryover Amount
related to the Class 1-A10 Certificates.
(f) On the 20th calendar day of each month, the Paying Agent shall
calculate the Class 2-A8 Maximum Yield Maintenance Agreement Amount and notify
the Counterparty of such amount. On each Distribution Date, the "Class 2-A8
Maximum Yield Maintenance Agreement Amount" shall be an amount equal to the
lesser of:
(i) the product of:
(A) the excess, if any, of LIBOR (as calculated under
the Class 2-A8 Yield Maintenance Agreement subject to the
Rate Cap Ceiling) over the related Cap Strike Rate for that
Distribution Date;
(B) the related Class 2-A8 Scheduled Notional Amount
for that Distribution Date; and
(C) a fraction, the numerator of which is 30
and the denominator of which is 360; and
(ii) the related Basis Risk Shortfall Carryover Amount
related to the Class 2-A8 Certificates.
(g) If on any Distribution Date the Paying Agent has received any
excess amounts from the Yield Maintenance Agreements, such excess amounts shall
be returned to the Counterparty via the wiring instructions set forth in the
applicable Yield Maintenance Agreement.
[END OF ARTICLE V]
ARTICLE VI
PAYMENTS TO THE CERTIFICATEHOLDERS
Section 6.01 Distributions.
(I) Prior to the Credit Support Depletion Date, the Available Distribution
Amount shall be applied as follows:
(a) On each Distribution Date, the Paying Agent shall apply an amount
equal to the Available Distribution Amount in the following order of priority:
(i) Concurrently (A) solely from the Available Distribution
Amount with respect to Mortgage Group One, to the Class 1-A
Certificateholders (other than the Class A-P Certificates), all
amounts distributable pursuant to (b)(i)(A) through (T) and (EE)
below, and (B) solely from the Available Distribution Amount with
respect to Mortgage Group Two, to the Class 2-A
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Certificateholders (other than the Class A-P Certificates), all
amounts distributable pursuant to (b)(i)(U) through (DD) below;
(ii) the balance, if any, of the Available Distribution
Amount shall be distributed first, (A) concurrently, solely from the
Available Distribution Amount with respect to Mortgage Group One to
the Class 1-A and Class A-R Certificateholders in the amounts
distributable pursuant to (b)(ii)(A) below, up to the Non-PO Class 1-A
Optimal Principal Amount and (b)(iii) below, up to the amounts payable
thereunder and to Class A-P Component One, the Group One Class A-P
Amount pursuant to (b)(ii)(A) below and (B) concurrently, solely from
the Available Distribution Amount with respect to Mortgage Group Two
to the Class 2-A Certificateholders in the amounts distributable
pursuant to (b)(ii)(B) below, up to the Non-PO Class 2-A Optimal
Principal Amount and (b)(iv) below, up to the amounts payable
thereunder and to the Class A-P Component Two Certificates, the Group
Two Class A-P Amount pursuant to (b)(ii)(B) below, and second, to the
Class A-P Component One, the portion of the Class A-P Shortfall Amount
relating to the Group One Mortgage Loans and to the Class A-P
Component Two, the portion of the Class A-P Shortfall Amount relating
to the Group Two Mortgage Loans, in accordance with paragraph (b)(v)
below;
(iii) subject to subsection (b) below, to the Class M
Certificateholders, the balance, if any, of the Available Distribution
Amount after making the distributions provided for in paragraphs (i)
and (ii) above, in accordance with, and up to the amount calculated
pursuant to, Section 6.01(I)(c) below;
(iv) subject to subsection (b) below, to the Class B
Certificateholders, the balance, if any, of the Available Distribution
Amount after making the distributions provided for in paragraphs (i)
through (iii) above, in accordance with, and up to the amounts
calculated pursuant to, Section 6.01(I)(d) below; and
(v) to the Class A-R Certificateholders the balance, if any,
of the Available Distribution Amount remaining after the distributions
provided for in paragraphs (i) through (iv) above.
(b) Amounts payable to the Class A Certificateholders on any
Distribution Date shall be distributed as follows:
(i) to the extent the amount available for distribution
pursuant to paragraph (a)(i) above is sufficient:
(A) to the Class 1-A1 Certificateholders, (1) the Class
1-A1 Interest Accrual Amount plus (2) the Class 1-A1
Shortfall from the preceding Distribution Date;
(B) to the Class 1-A2 Certificateholders, (1) the Class
1-A2 Interest Accrual Amount plus (2) the Class 1-A2
Shortfall from the preceding Distribution Date;
(C) to the Class 1-A3 Certificateholders, (1) the Class
1-A3 Interest Accrual Amount plus (2) the Class 1-A3
Shortfall from the preceding Distribution Date;
(D) to the Class 1-A4 Certificateholders, (1) the Class
1-A4 Interest Accrual Amount plus (2) the Class 1-A4
Shortfall from the preceding Distribution Date;
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(E) to the Class 1-A5 Certificateholders, (1) the Class
1-A5 Interest Accrual Amount plus (2) the Class 1-A5
Shortfall from the preceding Distribution Date;
(F) to the Class 1-A6 Certificateholders, (1) the Class
1-A6 Interest Accrual Amount plus (2) the Class 1-A6
Shortfall from the preceding Distribution Date;
(G) to the Class 1-A7 Certificateholders, (1) the Class
1-A7 Interest Accrual Amount plus (2) the Class 1-A7
Shortfall from the preceding Distribution Date;
(H) to the Class 1-A8 Certificateholders, (1) the Class
1-A8 Interest Accrual Amount plus (2) the Class 1-A8
Shortfall from the preceding Distribution Date;
(I) to the Class 1-A9 Certificateholders, (1) the Class
1-A9 Interest Accrual Amount plus (2) the Class 1-A9
Shortfall from the preceding Distribution Date;
(J) to the Class 1-A10 Certificateholders, (1) the
Class 1-A10 Interest Accrual Amount plus (2) the Class 1-A10
Shortfall from the preceding Distribution Date;
(K) to the Class 1-A11 Certificateholders, (1) the
Class 1-A11 Interest Accrual Amount plus (2) the Class 1-A11
Shortfall from the preceding Distribution Date;
(L) to the Class 1-A12 Certificateholders, (1) the
Class 1-A12 Interest Accrual Amount plus (2) the Class 1-A12
Shortfall from the preceding Distribution Date;
(M) subject to (FF) below, to the Class 1-A13
Certificateholders, (1) the Class 1-A13 Interest Accrual
Amount plus (2) the Class 1-A13 Shortfall from the preceding
Distribution Date;
(N) to the Class 1-A14 Certificateholders, (1) the
Class 1-A14 Interest Accrual Amount plus (2) the Class 1-A14
Shortfall from the preceding Distribution Date;
(O) to the Class 1-A15 Certificateholders, (1) the
Class 1-A15 Interest Accrual Amount plus (2) the Class 1-A15
Shortfall from the preceding Distribution Date;
(P) to the Class 1-A16 Certificateholders, (1) the
Class 1-A16 Interest Accrual Amount plus (2) the Class 1-A16
Shortfall from the preceding Distribution Date;
(Q) to the Class 1-A17 Certificateholders, (1) the
Class 1-A17 Interest Accrual Amount plus (2) the Class 1-A17
Shortfall from the preceding Distribution Date;
(R) to the Class 1-A18 Certificateholders, (1) the
Class 1-A18 Interest Accrual Amount plus (2) the Class 1-A18
Shortfall from the preceding Distribution Date;
(S) to the Class 1-A19 Certificateholders, (1) the
Class 1-A19 Interest Accrual Amount plus (2) the Class 1-A19
Shortfall from the preceding Distribution Date;
(T) to the Class 1-AX Certificateholders, (1) the Class
1-AX Interest Accrual Amount plus (2) the Class 1-AX
Shortfall from the preceding Distribution Date;
(U) to the Class 2-A1 Certificateholders, (1) the Class
2-A1 Interest Accrual Amount plus (2) the Class 2-A1
Shortfall from the preceding Distribution Date;
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(V) to the Class 2-A2 Certificateholders, (1) the Class
2-A2 Interest Accrual Amount plus (2) the Class 2-A2
Shortfall from the preceding Distribution Date;
(W) to the Class 2-A3 Certificateholders, (1) the Class
2-A3 Interest Accrual Amount plus (2) the Class 2-A3
Shortfall from the preceding Distribution Date;
(X) to the Class 2-A4 Certificateholders, (1) the Class
2-A4 Interest Accrual Amount plus (2) the Class 2-A4
Shortfall from the preceding Distribution Date;
(Y) to the Class 2-A5 Certificateholders, (1) the Class
2-A5 Interest Accrual Amount plus (2) the Class 2-A5
Shortfall from the preceding Distribution Date;
(Z) to the Class 2-A6 Certificateholders, (1) the Class
2-A6 Interest Accrual Amount plus (2) the Class 2-A6
Shortfall from the preceding Distribution Date;
(AA) to the Class 2-A7 Certificateholders, (1) the
Class 2-A7 Interest Accrual Amount plus (2) the Class 2-A7
Shortfall from the preceding Distribution Date;
(BB) to the Class 2-A8 Certificateholders, (1) the
Class 2-A8 Interest Accrual Amount plus (2) the Class 2-A8
Shortfall from the preceding Distribution Date;
(CC) subject to (GG) below, to the Class 2-A9
Certificateholders, (1) the Class 2-A9 Interest Accrual
Amount plus (2) the Class 2-A9 Shortfall from the preceding
Distribution Date;
(DD) to the Class 2-AX Certificateholders, (1) the
Class 2-AX Interest Accrual Amount plus (2) the Class 2-AX
Shortfall from the preceding Distribution Date;
(EE) to the Class A-R Certificateholders, (1) the Class
A-R Interest Accrual Amount plus (2) the Class A-R Shortfall
from the preceding Distribution Date;
(FF) on each Distribution Date on or after the
Distribution Date in October 2007 and prior to the Class
1-A13 Accretion Termination Date, the Class 1-A13 Accrual
Amount will be distributed as principal as follows:
first, to the Class 1-A12 Certificates, until the Outstanding
Certificate Principal Balance of such Class has been reduced to zero; and
second, to the Class 1-A13 Certificates;
(GG) on each Distribution Date prior to the Class 2-A9
Accretion Termination Date, the Class 2-A9 Interest Accrual
Amount will be distributed as principal as follows:
first, to the Class 2-A8 Certificates, until the Outstanding
Certificate Principal Balance of such Class has been reduced to zero; and
second, to the Class 2-A9 Certificates.
(ii) concurrently, (A) to the Class 1-A Certificateholders,
solely from the Available Distribution Amount with respect to Mortgage
Group One up to the Non-PO Class 1-A Optimal Principal Amount,
allocated among the Class 1-A Certificates in accordance with the
Non-PO Class 1-A Principal Payment Rules and to the Class A-P
Component One, the Group One Class
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A-P Amount and (B) to the Class 2-A Certificateholders, solely from
the Available Distribution Amount with respect to Mortgage Group Two
up to the Non-PO Class 2-A Optimal Principal Amount, allocated among
the Class 2-A Certificates in accordance with the Non-PO Class 2-A
Principal Payment Rules and to Class A-P Component Two, the Group Two
Class A-P Amount;
(iii) to the extent that the Available Distribution Amount
with respect to Mortgage Group One is insufficient to make
distributions pursuant to paragraphs (b)(i)(A) through (U), (GG) and
(HH) or the portion of the Available Distribution Amount with respect
to Mortgage Group One remaining after giving effect to the
distributions in (b)(i) above is insufficient to distribute in full to
the Class 1-A Certificateholders amounts described in (b)(ii)(A) above
(such shortfall, the "Class 1-A Deficiency Amount") and the Available
Distribution Amount with respect to Mortgage Group Two remaining after
giving effect to the distributions in (b)(i) above exceeds the amount
required to distribute in full to the Class 2-A Certificateholders the
amounts described in (b)(ii)(B) above, such excess shall be
distributed in reduction of the Class 1-A Deficiency Amount in
application first to amounts payable pursuant to Section (b)(i) and
second to amounts payable pursuant to Section (b)(ii);
(iv) to the extent that the Available Distribution Amount
with respect to Mortgage Group Two is insufficient to make
distributions pursuant to paragraphs (b)(i)(V) through (FF) and (II)
or the portion of the Available Distribution Amount with respect to
Mortgage Group Two remaining after giving effect to the distributions
in (b)(i) above is insufficient to distribute in full to the Class 2-A
Certificateholders amounts described in (b)(ii)(B) above (such
shortfall, the "Class 2-A Deficiency Amount") and the Available
Distribution Amount with respect to Mortgage Group One remaining after
giving effect to the distributions in (b)(i) above exceeds the amount
required to distribute in full to the Class 1-A Certificateholders the
amounts described in (b)(ii)(A) above, such excess shall be
distributed in reduction of the Class 2-A Deficiency Amount in
application first to amounts payable pursuant to Section (b)(i) and
second to amounts payable pursuant to Section (b)(ii);
(v) to the Class A-P Component One the portion of the Class
A-P Shortfall Amount relating to the Group One Mortgage Loans and to
the Class A-P Component Two the portion of the Class A-P Shortfall
Amount relating to the Group Two Mortgage Loans; provided, however,
that any amount distributed pursuant to this Section 6.01(b)(v) shall
not cause a further reduction in the principal balance of the Class
A-P Component One or Class A-P Component Two, as applicable;
(vi) If the Available Distribution Amount with respect to
Mortgage Group One is insufficient to make the distributions set forth
in paragraphs (b)(i)(A) through (U), (GG) and (HH) above, the Paying
Agent shall distribute the Available Distribution Amount with respect
to Mortgage Group One to the Class 1-A Certificateholders pro rata in
accordance with the amounts otherwise distributable to them pursuant
to paragraphs (b)(i)(A) through (T) and (EE) above. If the Available
Distribution Amount with respect to Mortgage Group Two is insufficient
to make the distributions set forth in paragraphs (b)(i) (U) through
(DD) above, the Paying Agent shall distribute the Available
Distribution Amount with respect to Mortgage Group Two to the Class 2A
Certificateholders pro rata in accordance with the amounts otherwise
distributable to them pursuant to paragraphs (b)(i)(U) through (DD)
above; and
(vii) In addition to the foregoing distributions, the Class
1-A Certificates and Class 2-A Certificates will receive additional
principal distributions on any Distribution Date prior to the Credit
Support Depletion Date under the circumstances specified in (A) and
(B) below:
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(A) On any Distribution Date on or after the date on
which the aggregate Outstanding Certificate Principal
Balance of the Class 1-A Certificates or the Outstanding
Certificate Principal Balance of the Class 2-A Certificates
has been reduced to zero, all principal (other than the
applicable PO Percentage of any principal received on or in
respect of each Discount Mortgage Loan and limited to
amounts in excess of that needed to reduce the aggregate
Outstanding Certificate Principal Balance of the Class 1-A
Certificates or the Outstanding Certificate Principal
Balance of the Class 2-A Certificates to zero) on the
Mortgage Loans in the Mortgage Group relating to such Class
A Certificates that are no longer outstanding will be
distributed as principal to the remaining Class A
Certificates (other than the Class A-P Certificates) (pro
rata) in accordance with Section 6.01(I)(b)(ii)(A) or
6.01(I)(b)(ii)(B), as applicable, in reduction of the
Outstanding Certificate Principal Balances thereof, provided
that on such Distribution Date either (a) the Aggregate
Subordinated Percentage for such Distribution Date is less
than 200% of the initial Aggregate Subordinate Percentage,
or (b) the average outstanding Principal Balance of the
Mortgage Loans in either Mortgage Group delinquent 60 days
or more over the prior six months, as a percentage of the
corresponding Group One or Group Two Subordinated Amount, is
greater than or equal to 50%. For purposes of the foregoing,
the "Aggregate Subordinated Percentage" for any Distribution
Date is equal to the aggregate Outstanding Certificate
Principal Balance of the Subordinated Certificates
immediately prior to such Distribution Date divided by the
aggregate Scheduled Principal Balance of all of the Mortgage
Loans immediately prior to such Distribution Date.
(B) If on any Distribution Date on which the aggregate
Outstanding Certificate Principal Balance of the Class 1-A
Certificates or the Class 2-A Certificates would be greater
than the the Group One Non-PO Allocated Amount or the Group
Two Non-PO Allocated Amount, as the case may be (the
"Undercollateralized Group"), after giving effect to
distributions to be made on such Distribution Date, the
portion of the Available Distribution Amount in respect of
principal on the Mortgage Loans in the other Mortgage Group
(the "Overcollateralized Group") otherwise allocable to the
Subordinated Certificates will be distributed to the Classes
of Class A Certificates (other than the Class A-P
Certificates) relating to the Undercollateralized Group (in
accordance with the priorities set forth in Section
6.01(I)(b)(ii)), in reduction of the principal balances
thereof, until the aggregate principal balance of the
Certificates (other than the Class A-P Certificates)
included in the Undercollateralized Group is equal to the
Group One Non-PO Allocated Amount or the Group Two Non-PO
Allocated Amount, as the case may be. Moreover, the
Available Distribution Amount with respect to the
Overcollateralized Group will be further reduced (after
distributions of interest to the Class A Certificates
included in the Overcollateralized Group) in an amount equal
to one month's interest on the amount by which the
Undercollateralized Group is undercollateralized at 6.25%
per annum (if Mortgage Group One is the Undercollateralized
Group) or 6.00% per annum (if Mortgage Group Two is the
Undercollateralized Group), plus any shortfall of such
amounts from prior Distribution Dates; provided, however,
that in no event shall the Available Distribution Amount
with respect to the Overcollateralized Group on any
Distribution Date be reduced by more than the sum of (i) the
overcollateralized amount with respect to the
Overcollateralized Group and (ii) interest thereon at the
applicable Remittance Rate. Such amounts will be distributed
to the applicable Classes of Certificates in the priority of
interest payable on such Distribution Date.
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(c) Amounts payable on any Distribution Date to the Class M
Certificateholders pursuant to Section 6.01(I)(a)(iii) shall be distributed in
the following priority:
(1) Amounts payable on any Distribution Date to the Class A-M
Certificateholders shall be distributed up to an amount equal to (A) the Class
A-M Interest Accrual Amount plus (B) the Class A-M Shortfall from the preceding
Distribution Date plus (C) the portion of the Subordinated Optimal Principal
Amount allocable (pursuant to Section 6.01(I)(e)) to the Class A-M Certificates
plus (D) any Carry-over Subordinated Principal Amounts with respect to the Class
A-M Certificates; and
(2) Amounts payable on any Distribution Date to the Class M-1
Certificateholders shall be distributed up to an amount equal to (A) the Class
M-1 Interest Accrual Amount plus (B) the Class M-1 Shortfall from the preceding
Distribution Date plus (C) the portion of the Subordinated Optimal Principal
Amount allocable (pursuant to Section 6.01(I)(e)) to the Class M-1 Certificates
plus (D) any Carry-over Subordinated Principal Amounts with respect to the Class
M-1 Certificates plus (E) any portion of the Subordinated Optimal Principal
Amount allocated to the Class A-M Certificates in excess of the Outstanding
Certificate Principal Balance of such Class.
(d) Amounts payable on any Distribution Date to the Class B
Certificateholders pursuant to Section 6.01(I)(a)(iv) shall be distributed in
the following priority:
(1) first, to the Class B-1 Certificateholders, up to an amount
equal to (A) the Class B-1 Interest Accrual Amount plus (B) the Class B-1
Shortfall from the preceding Distribution Date plus (C) the pro rata portion, if
any, of the Subordinated Optimal Principal Amount allocable to the Class B-1
Certificates in accordance with Section 6.01(I)(e) plus (D) any Carry-over
Subordinated Principal Amounts with respect to the Class B-1 Certificates plus
(E) any portion of the Subordinated Optimal Principal Amount allocated to the
Class M-1 Certificates in excess of the Outstanding Certificate Principal
Balance of such Class;
(2) second, to the Class B-2 Certificateholders, up to an amount
equal to (A) the Class B-2 Interest Accrual Amount plus (B) the Class B-2
Shortfall from the preceding Distribution Date plus (C) the pro rata portion, if
any, of the Subordinated Optimal Principal Amount allocable to the Class B-2
Certificates in accordance with Section 6.01(I)(e) plus (D) any Carry-over
Subordinated Principal Amounts with respect to the Class B-2 Certificates plus
(E) any portion of the Subordinated Optimal Principal Amount allocated to the
Class B-1 Certificates in excess of the Outstanding Certificate Principal
Balance of such Class;
(3) third, to the Class B-3 Certificateholders, up to an amount
equal to (A) the Class B-3 Interest Accrual Amount plus (B) the Class B-3
Shortfall from the preceding Distribution Date plus (C) the pro rata portion, if
any, of the Subordinated Optimal Principal Amount allocable to the Class B-3
Certificates in accordance with Section 6.01(I)(e) plus (D) any Carry-over
Subordinated Principal Amounts with respect to the Class B-3 Certificates plus
(E) any portion of the Subordinated Optimal Principal Amount allocated to the
Class B-2 Certificates in excess of the Outstanding Certificate Principal
Balance of such Class;
(4) fourth, to the Class B-4 Certificateholders, up to an amount
equal to (A) the Class B-4 Interest Accrual Amount plus (B) the Class B-4
Shortfall from the preceding Distribution Date plus (C) the pro rata portion, if
any, of the Subordinated Optimal Principal Amount allocable to the Class B-4
Certificates in accordance with Section 6.01(I)(e) plus (D) any Carry-over
Subordinated Principal Amounts with respect to the Class B-4 Certificates plus
(E) any portion of the Subordinated Optimal Principal Amount allocated to the
Class B-3 Certificates in excess of the Outstanding Certificate Principal
Balance of such Class; and
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(5) fifth, to the Class B-5 Certificateholders, up to an amount
equal to (A) the Class B-5 Interest Accrual Amount plus (B) the Class B-5
Shortfall from the preceding Distribution Date plus (C) the pro rata portion, if
any, of the Subordinated Optimal Principal Amount allocable to the Class B-5
Certificates in accordance with Section 6.01(I)(e) plus (D) any Carry-over
Subordinated Principal Amounts with respect to the Class B-5 Certificates plus
(E) any portion of the Subordinated Optimal Principal Amount allocated to the
Class B-4 Certificates in excess of the Outstanding Certificate Principal
Balance of such Class.
(e) On each Distribution Date, the Subordinated Optimal Principal
Amount shall be allocated among the Classes of Subordinated Certificates
entitled, pursuant to the next succeeding sentence, to an allocation of
principal on such Distribution Date, pro rata based upon the Outstanding
Certificate Principal Balances of all such Classes so entitled. With respect to
the Subordinated Certificates, on each Distribution Date, principal shall be
distributable to (1) any Class of Subordinated Certificates which has current
Credit Support (before giving effect to any distribution of principal and any
Realized Losses allocable on such Distribution Date) greater than or equal to
the Original Credit Support for such Class; (2) the Class having the lowest
numerical class designation of any outstanding Class of Subordinated
Certificates which does not meet the criteria in (1) above; and (3) the Class
B-5 Certificates if all other outstanding Classes of Subordinated Certificates
meet the criteria in (1) above or if no other Class of Subordinated Certificates
is outstanding; provided, however, that no Class of Subordinated Certificates
shall receive any distributions of principal if any Class of Subordinated
Certificates having a lower numerical class designation than such Class fails to
meet the criteria in (1) above. For purposes of this Agreement, the Class M
Certificates shall be deemed to have a lower numerical class designation than
each Class of Class B Certificates and the Class A-M Certificates shall be
deemed to have a lower numerical class designation than the Class M-1
Certificates.
(II) On or after the Credit Support Depletion Date, the Available Distribution
Amount shall be applied, first, in respect of interest in accordance with
Section 6.01(I)(b)(i) and, second, in respect of principal to each Class of the
Class A Certificates, pro rata, based upon their respective outstanding
balances.
(III) Based upon the information received from the Servicer, as provided in
Section 6.02, the Paying Agent shall make all calculations necessary to make the
distributions described in this Section 6.01. All distributions made to
Certificateholders of any Class on each Distribution Date will be made to the
Certificateholders of the respective Class of record on the next preceding
Record Date, except that the final distribution with respect to each Class shall
be made as provided in the forms of Certificates. All distributions made to
Certificateholders shall be based on the Percentage Interest of the Class
represented by their respective Certificates, and shall be made either by
transfer in immediately available funds to the account of such Holder at a bank
or other financial or depository institution having appropriate facilities
therefor, if such Holder has so notified the Trustee or, if a Paying Agent has
been appointed under Section 4.05, the Paying Agent, in writing at least 10
Business Days prior to the first Distribution Date for which distribution by
wire transfer is to be made and such Holder's Certificates of such Class in the
aggregate evidence an original denomination of not less than $5,000,000 or such
Holder holds a 100% Percentage Interest of such Class or, if not, by check
mailed to the address of the Person entitled thereto as it appears on the
Certificate Register, except that the final distribution in retirement of the
Certificates will be made only upon presentation and surrender of the
Certificates at the office specified in the final Distribution Notice. If on any
Determination Date, the Servicer determines that there are no Mortgage Loans
outstanding and no other funds or assets in the Trust Fund other than the funds
in the Certificate Account, the Trustee or if a Paying Agent has been appointed
under Section 4.05, the Paying Agent shall promptly send the final distribution
notice to each Certificateholder specifying the manner in which the final
distribution will be made.
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Section 6.02 Statements to the Certificateholders.
(a) Not later than the earlier of (i) three Business Days after the
Determination Date and (ii) the second Business Day prior to each Distribution
Date, the Servicer shall send to the Paying Agent and the Trustee (in such
format as may be mutually agreed) the relevant information for purposes of this
Section 6.02. Not later than each Distribution Date, the Paying Agent shall make
available on its website located at xxx.xxxxxxxx.xxx/xxx or upon request shall
send to any Certificateholder, the Depositor, the Trustee, the Servicer, any
co-trustee, and each Rating Agency a statement setting forth the following
information, after giving effect to the distributions to be made by the Paying
Agent pursuant to Section 6.01 on or as of such Distribution Date:
(i) with respect to each Class of Certificates the amount of
such distribution to Holders of such Class allocable to principal;
(ii) with respect to each Class of Certificates the amount
of such distribution to Holders of such Class allocable to interest;
(iii) the aggregate amount of any Principal Prepayments,
Repurchase Proceeds or other unscheduled recoveries included in the
distributions to Certificateholders, in each case both in the
aggregate and by Pool;
(iv) the aggregate amount of any Advances by the Servicer
pursuant to Section 6.03, both in the aggregate and by Pool;
(v) the number of Outstanding Mortgage Loans and the
Mortgage Pool Principal Balance as of the close of business as of the
end of the related Principal Prepayment Period;
(vi) the related amount of the Servicing Fees (as adjusted
pursuant to Section 6.05) retained or withdrawn from the Collection
Account by the Servicer;
(vii) the number and aggregate principal amounts of Mortgage
Loans (A) delinquent (calculated using the Mortgage Bankers
Association (MBA) method) (1) one Monthly Payment, (2) two Monthly
Payments and (3) three or more Monthly Payments, (B) in foreclosure
and (C) in bankruptcy, in each case, as of the end of the close of
business on the first day of the calendar month of such Distribution
Date;
(viii) the number and the principal balance of Mortgage
Loans with respect to any real estate acquired through foreclosure or
grant of a deed in lieu of foreclosure;
(ix) the aggregate amount of all Advances recovered during
the related Due Period;
(x) with respect to the following Distribution Date, the
Class A Percentage, the Class M Percentage, the Class B Percentage,
the Class A Principal Balance, the Class M Principal Balance, the
Class B Principal Balance, the Non-PO Class A Percentage, the Non-PO
Class A Prepayment Percentage, the Non-PO Class 1-A Percentage, the
Non-PO Class 2-A Percentage, the Non-PO Class 1-A Prepayment
Percentage, the Non-PO Class 2-A Prepayment Percentage, the Non-PO
Class 1-A Principal Balance, the Non-PO Class 2-A Principal Balance
and the level of Credit Support, if any, with respect to each Class of
Subordinated Certificates;
(xi) the aggregate amount of Realized Losses during the
related Due Period and the aggregate amount of Realized Losses since
the Cut-off Date;
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(xii) the allocation to each Class of Certificate of any
Realized Losses during the related Due Period;
(xiii) the Outstanding Certificate Principal Balance of each
Class of Certificates immediately prior to and after giving effect to
the distributions to each Class on such Distribution Date;
(xiv) with respect to each Class of Certificates, any
amounts of Compensating Interest Shortfalls and reductions relating
to the Relief Act on such Distribution Date;
(xv) the number of Mortgage Loans with respect to which a
reduction in the Mortgage Rate has occurred pursuant to the Relief
Act, as well as the amount of interest not required to be paid with
respect to any such Mortgage Loans during the related Due Period as a
result of such reductions; both in the aggregate and for each Class of
Certificates;
(xvi) updated pool composition information such as weighted
average coupon, weighted average life, weighted average remaining
term, pool factors and prepayment amounts;
(xvii) if applicable, any material changes to methodology
regarding calculations of delinquencies and charge-offs;
(xviii) any material modifications, extensions or waivers to
pool asset terms, fees, penalties or payments during the distribution
period or that have cumulatively become material over time;
(xix) material breaches of pool asset representations or
warranties or transaction covenants;
(xx) information on ratio, coverage or other test used for
determining any early amortization, liquidation or other performance
trigger and whether the trigger was met;
(xxi) if applicable, information regarding any new issuance
of asset-backed securities backed by the same asset pool, any pool
asset changes (other than in connection with a pool asset converting
into cash in accordance with its terms), such as additions or removals
in connection with a prefunding period and pool asset substitutions
and repurchases (and purchase rates, if applicable), and cash flows
available for future purchases, such as the balances of any prefunding
or revolving accounts, if applicable; and
(xxii) any material changes in the solicitation,
credit-granting, underwriting, origination, acquisition or pool
selection criteria or procedures, as applicable, used to originate,
acquire or select the new pool assets.
The Paying Agent's responsibility for sending the above information to
the Certificateholders is limited to the availability, timeliness and accuracy
of the information derived from the Servicer which shall be provided as required
in this Section 6.02(a).
Upon reasonable advance notice in writing if required by federal
regulation, the Servicer will provide to each Certificateholder which is a
savings and loan association, bank or insurance company certain reports and
access during business hours to information and documentation regarding the
Mortgage Loans sufficient to permit such Certificateholder to comply with
applicable regulations of regulatory authorities with respect to investment in
the Certificates; provided, that the Servicer shall be
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entitled to be reimbursed by each such Certificateholder for the Servicer's
actual expenses incurred in providing such reports and access.
(b) The Servicer shall cause to be prepared, and the Servicer or the
Trustee, as required by applicable law, shall file, any and all tax returns,
information statements or other filings required to be delivered to
Certificateholders and any governmental taxing authority pursuant to any
applicable law with respect to the Trust Fund and the transactions contemplated
hereby (the Servicer or the Trustee may, at its option but with the consent of
the other, which consent shall not be unreasonably withheld, appoint an
organization which regularly engages in the preparation and filing of such
documents on a continuous basis for profit and which represents itself to be
expert in such matters) and the Servicer shall maintain a record of the
information necessary for the application of Section 860E(e) of the Code and
shall make such information available as required by Section 860D(a)(6) of the
Code; provided, however, that the Servicer shall notify the Trustee of the
Trustee's obligation to make any such filings and that any fees of the
organization appointed as provided above shall be paid by the Servicer; and
provided further that if an organization is employed, as described above, to
prepare and file any such filings, neither the Trustee nor the Servicer shall be
liable for any errors by such organization.
Section 6.03 Advances by the Servicer. If, on any Determination Date,
the Servicer determines that any Monthly Payments due on the immediately
preceding Due Date have not been received, the Servicer shall, unless it
determines in its sole discretion that such amounts will not be recoverable from
Late Collections, Liquidation Proceeds or otherwise, make an Advance on or
before two Business Days prior to the related Distribution Date in an amount
equal to the amount of such delinquent Monthly Payments, after adjustment of any
delinquent interest payment for the Servicing Fee. For purposes of this Section
6.03, the delinquent Monthly Payments referred to in the preceding sentence
shall be deemed to include an amount equal to the Monthly Payments that would
have been due on Mortgage Loans which have been foreclosed or otherwise
terminated and in connection with which the Servicer acquired and continues to
own the Mortgaged Properties on behalf of the Certificateholders. If the
Servicer makes an Advance, it shall on or prior to two Business Days prior to
such Distribution Date either (i) deposit in the Collection Account an amount
equal to such Advance, (ii) cause to be made an appropriate entry in the records
of the Collection Account that funds in such account being held for future
distribution or withdrawal have been, as permitted by this Section 6.03, used by
the Servicer to make such Advance or (iii) make Advances in the form of any
combination of clauses (i) and (ii) aggregating the amount of such Advance. Any
funds being held in the Collection Account for future distribution to
Certificateholders and so used pursuant to clause (ii) or (iii) above shall be
replaced by the Servicer from its own funds by deposit into the Collection
Account on or before any subsequent Distribution Date to the extent that funds
in the Collection Account on such Distribution Date shall be less than the
amount of payments required to be made to Certificateholders on such
Distribution Date. Any such Advance shall be included with the distribution to
the Certificateholders on the related Distribution Date. If the Servicer
determines not to make a Nonrecoverable Advance, it shall on the related
Determination Date furnish to the Trustee, any co-trustee, the Paying Agent and
each Rating Agency notice of such determination. The Servicer shall be entitled
to be reimbursed from the Collection Account for all Advances and Nonrecoverable
Advances as provided in Section 5.09.
Section 6.04 Allocation of Realized Losses.
(a) Prior to each Determination Date, the Servicer shall determine (i)
the total amount of Realized Losses, if any, incurred during the related
Principal Prepayment Period; (ii) whether and to what extent such Realized
Losses constitute Excess Losses; and (iii) the respective portions of such
Realized Losses allocable to interest and to principal.
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(b) The principal portion of any Realized Losses, other than Excess
Losses, shall be allocated as follows: first, to the Class B-5 Certificates
until the Outstanding Certificate Principal Balance of the Class B-5
Certificates has been reduced to zero; second, to the Class B-4 Certificates
until the Outstanding Certificate Principal Balance of the Class B-4
Certificates has been reduced to zero; third, to Class B-3 Certificates until
the Outstanding Certificate Principal Balance of the Class B-3 Certificates has
been reduced to zero; fourth, to the Class B-2 Certificates until the
Outstanding Certificate Principal Balance of the Class B-2 Certificates has been
reduced to zero; fifth, to the Class B-1 Certificates until the Outstanding
Certificate Principal Balance of the Class B-1 Certificates has been reduced to
zero; sixth, to the Class M-1 Certificates until the Outstanding Certificate
Principal Balance of the Class M-1 Certificates has been reduced to zero;
seventh, to the Class A-M Certificates until the Outstanding Certificate
Principal Balance of the Class A-M Certificates has been reduced to zero; and
eighth, (X) if the Realized Loss has occurred with respect to a Group One
Mortgage Loan, first to the Class 1-A Certificates on a pro rata basis until the
Outstanding Certificate Principal Balance of the Class 1-A Certificates has been
reduced to zero, and second to the Class 2-A Certificates on a pro rata basis
until the Outstanding Certificate Principal Balance of the Class 2-A
Certificates has been reduced to zero or (Y) if the Realized Loss has occurred
with respect to a Group Two Mortgage Loan, first to the Class 2-A Certificates
on a pro rata basis until the Outstanding Certificate Principal Balance of the
Class 2-A Certificates has been reduced to zero, and second to the Class 1-A
Certificates on a pro rata basis until the Outstanding Certificate Principal
Balance of the Class 1-A Certificates has been reduced to zero; provided,
however, that if a Realized Loss occurs with respect to a Discount Mortgage Loan
(a) the amount of such Realized Loss equal to the product of (i) the amount of
such Realized Loss and (ii) the PO Percentage with respect to such Discount
Mortgage Loan will be allocated to Class A-P Component One (if the Realized Loss
occurred with respect to a Group One Mortgage Loan), or to Class A-P Component
Two (if the Realized Loss occurred with respect to the Group Two Mortgage Loan)
and (b) the remainder of such Realized Loss will be allocated as described
above; provided however, that any portion of any Realized Loss, other than an
Excess Loss, that would otherwise be allocated to the Class 1-A14 or Class 1-A1
Certificates, respectively, in accordance with this paragraph will instead be
allocated to the Class 1-A15 or Class 1-A2 Certificates, respectively, until the
Outstanding Certificate Principal Balance of the Class 1-A1 or Class 1-A2
Certificates, respectively, has been reduced to zero. Notwithstanding the
preceding sentence, (i) the first $0.18 of the PO Percentage of the principal
portion of a Realized Loss on Discount Mortgage Loans in Mortgage Group One
shall not be allocated to any Certificate and (ii) the first $0.06 of the PO
Percentage of the principal portion of a Realized Loss on Discount Mortgage
Loans in Mortgage Group Two shall not be allocated to any Certificate. The
principal portion of any Excess Losses shall be allocated without priority among
(i) all Classes of Subordinated Certificates and (ii) the Class A Certificates,
pro rata based upon their respective Outstanding Certificate Principal Balances
(or, in the case of the Class 1-A13 and Class 2-A9 Certificates, the lesser of
their Original Certificate Principal Balance or their Outstanding Certificate
Principal Balance); provided however, that the Class A Certificates related to
the Mortgage Group in which the Excess Loss occurs will be allocated the portion
of such Excess Losses that would otherwise be allocated to the Class A
Certificates not related to such Mortgage Group; and provided, further, however,
that the applicable PO Percentage of any Excess Losses on the Discount Mortgage
Loans shall be allocated to Class A-P Component One (if the Excess Loss occurred
with respect to a Group One Mortgage Loan), or to Class A-P Component Two (if
the Excess Loss occurred with respect to a Group Two Mortgage Loan). For
purposes of the foregoing sentence, each Class of Subordinated Certificates will
be deemed to have an Outstanding Certificate Principal Balance (and to accrue
interest thereon) equal to the actual Outstanding Certificate Principal Balance
thereof times a fraction, the numerator of which is the Group One Subordinated
Amount (for a loss on a Group One Mortgage Loan) or the Group Two Subordinated
Amount (for a loss on a Group Two Mortgage Loan), and the denominator of which
is the aggregate of the Group One Subordinated Amount and the Group Two
Subordinated Amount.
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(c) As used herein, an allocation of a Realized Loss on a "pro rata
basis" among two or more specified Classes of Certificates means an allocation
on a pro rata basis, among the various Classes so specified, to each such Class
of Certificates on the basis of their Outstanding Certificate Principal Balances
(or, in the case of the Class 1-A13 and Class 2-A9 Certificates, the lesser of
(i) the Original Certificate Principal Balance of such Certificates and (ii) the
Outstanding Certificate Principal Balance of such Certificates) prior to giving
effect to distributions to be made on such Distribution Date. All Realized
Losses and all other losses allocated to a Class of Certificates hereunder will
be allocated among the Certificates of such Class in proportion to the
Percentage Interests evidenced thereby; provided, however, that for so long as
the Class 1-A15 or Class 1-A2 Certificates, respectively, are outstanding, the
interest portion of any Excess Loss that would otherwise be allocated to the
Class 1-A14 or Class 1-A1 Certificates, respectively, in accordance with this
Section 6.05(c) will instead be allocated to the Class 1-A15 or Class 1-A2
Certificates, respectively.
(d) In the event that a recovery is made with respect to any Realized
Loss, the amount of such recovery shall be treated as a Principal Prepayment and
deposited into the Collection Account and distributed on the applicable
Distribution Date.
Section 6.05 Compensating Interest; Allocation of Certain Interest
Shortfalls.
(a) Upon a Principal Prepayment of a Mortgage Loan, the Servicer shall
deposit into the Collection Account from its own funds, as a reduction of its
servicing compensation hereunder, an amount, if any, by which the amount of the
interest that would otherwise accrue with respect to such Mortgage Loan from the
date of prepayment to the Due Date in the related Due Period at the Net Mortgage
Rate exceeds the amount of the interest (adjusted to the Net Mortgage Rate)
collected from the Mortgagor with respect to such period (such amount,
"Compensating Interest"); provided, however, that with respect to any
Distribution Date, the Servicer's obligation to deposit any such amount is
limited to an amount equal to the product of (i) one-twelfth of 0.125% and (ii)
the aggregate Scheduled Principal Balance of the Mortgage Loans with respect to
such Distribution Date.
(b) On any Distribution Date, the excess, if any, of (X) Compensating
Interest with respect to such Distribution Date over (Y) the amount deposited in
the Collection Account pursuant to (a) above for such Distribution Date shall
equal the "Compensating Interest Shortfall" with respect to such Distribution
Date. On any Distribution Date, the Compensating Interest Shortfall shall be
allocated pro rata among the outstanding Classes of Class A, Class M and Class B
Certificates based on the amount of interest (disregarding any Basis Risk
Shortfall Carryover Amount) to which each such Class would otherwise be paid on
such Distribution Date had there been no such Compensating Interest Shortfall.
(c) On any Distribution Date, the interest portion of any Realized
Losses ("Realized Loss Interest Shortfall") (other than the interest portion of
Excess Losses) shall be allocated to the Class of Subordinated Certificates then
outstanding having the highest numerical class designation (for this purpose,
the Class M Certificates shall be deemed to have a lower numerical class
designation than each Class of Class B Certificates) or, if no Class of
Subordinated Certificates is then outstanding, to the Class A Certificates
(other than the Class A-P Certificates) pro rata among the outstanding Classes
of Class A Certificates (other than the Class A-P Certificates) based on the
amount of interest (disregarding any Basis Risk Shortfall Carryover Amount) to
which each such Class would otherwise be entitled (or in the case of the Class
1-A13 or Class 2-A9 Certificates, added to the principal balance of such Class,
prior to the Class 1-A13 Accretion Termination Date or Class 2-A9 Accretion
Termination Date, as applicable) on such Distribution Date had there been no
such Realized Loss Interest Shortfall. On any Distribution Date, the interest
portion of any Excess Losses shall be allocated pro rata among the outstanding
Classes of Certificates based upon the amount of interest (disregarding any
Basis Risk Shortfall Carryover Amount) to which each such Class would otherwise
be entitled (or in the case of the Class 1-A13 or Class 2-A9 Certificates, added
to
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the principal balance of such Class, prior to the Class 1-A13 Accretion
Termination Date or Class 2-A9 Accretion Termination Date, as applicable) on
such Distribution Date had there been no such Excess Losses allocable to
interest.
(d) Any interest shortfall resulting from the Relief Act shall be
allocated pro rata among the outstanding Classes of Certificates based upon the
amount of interest (disregarding any Basis Risk Shortfall Carryover Amount) to
which each such Class would otherwise be paid on such Distribution Date.
Section 6.06 Subordination. The rights of the Class B
Certificateholders to receive distributions in respect of the Class B
Certificates on any Distribution Date shall be subordinated to the rights of the
Class A and Class M Certificateholders to receive distributions in respect of
the Class A and Class M Certificates. The rights of the Class M-1
Certificateholders to receive distributions inrespect of the Class M-1
Certificates on any Distribution Date shall be subordinated to the rights of the
Class A and Class A-M Certificateholders to receive distributions in respect of
the Class A and Class A-M Certificates, respectively. The rights of the Class
A-M Certificateholders to receive distributions in respect of the Class A-M
Certificates on any Distribution Date shall be subordinated to the rights of the
Class A Certificateholders to receive distributions in respect of the Class A
Certificates. The rights of the Class B-1 Certificateholders to receive
distributions in respect of the Class B-1 Certificates on any Distribution Date
shall be subordinate to the rights of the Class A and Class M Certificateholders
to receive distributions in respect of such Class A and Class M Certificates.
Each Class of Class B Certificates (other than the Class B-1 Certificates) is
subordinated to the Class A Certificates, the Class M Certificates and each
Class of Class B Certificates having a lower numerical class designation than
such Class of Class B Certificates. The rights of the Servicer, as servicer, to
receive funds from the Collection Account, pursuant to Section 5.09, on account
of the Servicing Fee (except as provided in Section 6.05) in respect of each
Mortgage Loan, assumption fees, late payment charges and other mortgagor
charges, reimbursement of Advances and expenses or otherwise, shall not be
subordinated to the rights of the Class A, Class M or Class B
Certificateholders. Amounts held by the Servicer or the Paying Agent for future
distribution to the Class M or Class B Certificateholders, including, without
limitation, in the Collection Account, shall not be distributed in respect of
the Class M or Class B Certificates except in accordance with the terms of this
Agreement. The Class B Certificateholders are deemed to have granted a security
interest in such amounts to the Class A and Class M Certificateholders to secure
the rights of the Class A and Class M Certificateholders to receive
distributions in priority over the Class B Certificateholders. The Class M
Certificateholders are deemed to have granted a security interest in such
amounts to the Class A Certificateholders to secure the rights of the Class A
Certificateholders to receive distributions in priority over the Class A
Certificateholders.
Section 6.07 Determination of LIBOR. The meaning of LIBOR applicable
to the calculation of the Certificate Rates on the Class 1-A10 and Class 2-A8
Certificates for any Interest Accrual Period (other than the initial Interest
Accrual Period) will be determined by the Servicer on each Rate Adjustment Date
as follows:
For any Interest Accrual Period other than the first Interest Accrual
Period, "LIBOR" means, with respect to a Yield Maintenance Agreement Remittance
Date, the rate determined by the Counterparty to be (i) the per annum rate for
deposits in U.S. dollars for a period of one month which appears on the Telerate
Page 3750 Screen as of 11:00 a.m., London time, on the day that is two London
Business Days prior to the first day of the Interest Accrual Period relating to
such Yield Maintenance Agreement Remittance Date (rounded upwards, if necessary,
to the nearest 1/100,000 of 1%); (ii) if such rate does not appear on the
Telerate Page 3750 Screen, LIBOR shall be the arithmetic mean (rounded as
aforesaid) of the offered quotations obtained by the Counterparty from the
Reference Banks for deposits in U.S. dollars to leading banks in the London
interbank market as of approximately 11:00 a.m., London time, on
105
the day that is two London Business Days prior to the first day of the Interest
Accrual Period relating to such Yield Maintenance Agreement Remittance Date; or
(iii) if fewer than two Reference Banks provide the Counterparty with such
quotations, LIBOR shall be the rate per annum which the Counterparty determines
to be the arithmetic mean (rounded as aforesaid) of the offered quotations which
leading banks in New York City selected by the Counterparty are quoting in the
New York interbank market on the first day of the Interest Accrual Period
relating to such Yield Maintenance Agreement Remittance Date for deposits in
U.S. dollars to the Reference Banks or, if fewer than two such quotations are
available, to leading European and Canadian banks.
The establishment of LIBOR by the Counterparty on any Rate Adjustment
Date and the Servicer's subsequent calculation of the Certificate Rates
applicable to the Class 1-A10 and Class 2-A8 Certificates for the relevant
Interest Accrual Period, in the absence of manifest error, will be final and
binding.
[END OF ARTICLE VI]
ARTICLE VII
REPORTS TO BE PREPARED BY THE SERVICER
Section 7.01 Servicer Shall Provide Information as Reasonably
Required. The Servicer shall furnish to the Trustee or, if a Paying Agent has
been appointed pursuant to Section 4.05, the Paying Agent, during the term of
this Agreement, such periodic, special, or other reports or information, whether
or not provided for herein, as shall be necessary, reasonable, or appropriate in
respect to the Trustee or, if a Paying Agent has been appointed pursuant to
Section 4.05, the Paying Agent, or otherwise in respect to the purposes of this
Agreement, all such reports or information to be as provided by and in
accordance with such applicable instructions and directions as the Trustee or,
if a Paying Agent has been appointed pursuant to Section 4.05, the Paying Agent
may reasonably require.
Section 7.02 Federal Information Returns and Reports to
Certificateholders.
(a) For federal income tax purposes, the taxable year of each REMIC
Pool shall be a calendar year and the Servicer shall maintain or cause the
maintenance of the books of each REMIC Pool on the accrual method of accounting.
(b) The Servicer or anyone acting on its behalf pursuant to Section
2.04(g) shall prepare and file or cause to be filed with the Internal Revenue
Service federal tax or information returns with respect to the Trust Fund, each
REMIC Pool and the Certificates containing such information and at the times and
in the manner as may be required by the Code or applicable Treasury regulations,
and shall furnish to each Certificateholder at any time during the calendar year
for which such returns or reports are made such statements or information at the
times and in the manner as may be required thereby. Without limitation on any
other requirement of this Section 7.02, the Servicer shall make available the
information necessary for the application of Section 860E(e) of the Code within
60 days of such request. With respect to the Class A-R Certificate, the Servicer
shall provide such information or cause such information to be provided to (i)
the Internal Revenue Service, (ii) the transferor of a Class A-R Certificate to
a Disqualified Organization and (iii) a Pass-Thru Entity that holds a Class A-R
Certificate with one or more record holders that are Disqualified Organizations.
The Servicer also shall provide or cause to be provided promptly the above
described computation and information relating to the tax on transfers to
Disqualified Organizations or holdings by Pass-Thru Entities within sixty (60)
days after becoming aware of the transfer to a Disqualified Organization or
Pass-Thru Entity with one or more Disqualified Organization
106
owners, as the case may be. In addition, except as may be provided in Treasury
Regulations, any Person holding an interest in a Pass-Thru Entity as a nominee
for another will, with respect to such interest, be treated as a Pass-Thru
Entity. In connection with the foregoing, the Servicer shall provide the name,
address and telephone number of the person who can be contacted to obtain
information required to be reported to the holders of regular interests in any
REMIC created hereunder (the "REMIC Reporting Agent") as required by IRS Form
8811. The Trustee hereby designates the Servicer to serve as the REMIC Reporting
Agent. The Servicer shall indicate the elections to treat each of the Lower-Tier
REMIC, the Middle-Tier REMIC and the Upper-Tier REMIC as a REMIC (which
elections shall apply to the taxable period ending December 31, 2005 and each
calendar year thereafter) in such manner as the Code or applicable Treasury
regulations may prescribe. The Trustee shall sign all tax and information
returns filed pursuant to this Section 7.02 and any other returns as may be
required by the Code, and in doing so shall rely entirely upon, and shall have
no liability for information provided by, or calculations provided by, the
Servicer. The Servicer is hereby designated as the agent of the Holder of the
Class A-R Certificate who shall be the "tax matters person" (within the meaning
of Treas. Reg. Section 1.860F-4(d)) for each REMIC Pool. Any Holder of a Class
A-R Certificate will by acceptance thereof so appoint the Servicer as agent and
attorney-in-fact for the purpose of acting as tax matters person. In the event
that the Code or applicable Treasury regulations prohibit the Trustee from
signing tax or information returns or other statements, or the Servicer from
acting as tax matters person (as an agent or otherwise), the Trustee or the
Servicer, as the case may be, shall take whatever action that in its sole good
faith judgment is necessary for the proper filing of such information returns or
for the provision of a tax matters person, including designation of the Holder
of a Class A-R Certificate to sign such returns or act as tax matters person.
Each Holder of a Class A-R Certificate shall be bound by this Section 7.02 by
virtue of its acceptance of a Class A-R Certificate.
[END OF ARTICLE VII]
ARTICLE VIII
THE DEPOSITOR AND THE SERVICER
Section 8.01 Indemnification; Third Party Claims. The Servicer agrees
to indemnify the Depositor and the Trustee and hold the Depositor and the
Trustee, their officers, directors, employees and agents harmless against any
and all claims, losses, penalties, fines, forfeitures, legal fees and related
costs, judgments, and any other costs, fees and expenses that the Depositor or
the Trustee, or their officers, directors, employees or agents may sustain in
any way related to failure of the Servicer to perform its duties and service the
Mortgage Loans in compliance with the terms of this Agreement; provided that no
such indemnification shall be required with respect to acts of a prior Servicer.
The Servicer shall immediately notify the Depositor and the Trustee if a claim
is made by a third party with respect to this Agreement or the Mortgage Loans,
assume (with the consent of the Depositor and the Trustee) the defense of any
such claim and pay all expenses in connection therewith, including counsel fees,
and promptly pay, discharge and satisfy any judgment or decree which may be
entered against it, the Depositor or the Trustee, their officers, directors,
employees or agents in respect of such claim. This right to indemnification
shall survive the termination of this Agreement.
Section 8.02 Merger or Consolidation of the Depositor or the Servicer.
The Depositor and the Servicer will each keep in full effect its existence,
rights and franchises as a corporation, and will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its duties under this Agreement. The Servicer
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will not sell all or substantially all of its assets without the prior written
consent of the Depositor and the Trustee which shall not be unreasonably
withheld or delayed.
Any Person into which the Depositor or the Servicer may be merged or
consolidated, or to whom the Depositor or the Servicer has sold substantially
all of its assets, or any corporation resulting from any merger, conversion or
consolidation to which the Depositor or the Servicer shall be a party, or any
Person succeeding to the business of the Depositor or the Servicer, shall be the
successor of the Depositor or the Servicer hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person to the Servicer shall satisfy the requirements of
Section 8.05 with respect to the qualifications of a successor to the Servicer.
Notwithstanding anything else in this Section 8.02 and Section 8.04 to
the contrary, the Servicer may assign its rights and delegate its duties and
obligations under this Agreement; provided that the Person accepting such
assignment or delegation shall be a Person which is qualified to service
mortgage loans on behalf of FNMA or FHLMC, is approved in advance in writing by
the Trustee and the Depositor, is willing to service the Mortgage Loans and
executes and delivers to the Depositor and the Trustee an agreement, in form and
substance reasonably satisfactory to the Depositor and the Trustee, which
contains an assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or observed by the
Servicer under this Agreement; provided further that each Rating Agency's rating
of any of the Classes of Certificates that have been rated in effect immediately
prior to such assignment and delegation will not be qualified or reduced or
withdrawn as a result of such assignment and delegation. In the case of any such
assignment and delegation, the Servicer shall be released from its obligations
as Servicer under this Agreement, except that the Servicer shall remain liable
for all liabilities and obligations incurred by it as Servicer hereunder prior
to the satisfaction of the conditions to such assignment and delegation set
forth in the next preceding sentence.
Section 8.03 Limitation on Liability of the Depositor, the Servicer,
the Trustee and Others. Neither the Depositor, the Servicer nor any of the
directors, officers, employees or agents of the Depositor or the Servicer shall
be under any liability to the Trustee or the Certificateholders for any action
taken, or for refraining from the taking of any action, in good faith pursuant
to this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Depositor or the Servicer against any breach of
warranties or representations made herein, or failure to perform its obligations
in strict compliance with this Agreement, or any liability which would otherwise
be imposed by reason of any breach of the terms and conditions of this
Agreement. The Depositor, the Servicer, the Trustee, and any director, officer,
employee or agent of the Depositor, the Servicer or the Trustee may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. Neither the Depositor, the
Servicer nor the Trustee shall be under any obligation to appear in, prosecute
or defend any legal action which is not incidental to its respective duties to
service the Mortgage Loans in accordance with this Agreement and which in its
opinion may cause it to incur any expenses or liability; provided, however, that
the Depositor, the Servicer or the Trustee may in its discretion (and, in the
case of the Depositor or the Servicer, with the consent of the Trustee, which
consent shall not be unreasonably withheld) undertake any such action which it
may deem necessary or desirable with respect to this Agreement and the rights
and duties of the parties hereto. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities payable from the Collection Account and the Depositor, the Servicer
or the Trustee shall be entitled to be reimbursed therefor out of the Collection
Account as provided by Section 5.09; provided that no such right of
reimbursement shall exist with respect to the Servicer when such claim relates
to the failure of the Servicer to service the Mortgage Loans in strict
compliance with the terms of this Agreement or to a breach of a representation
or warranty made by the Servicer hereunder.
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Section 8.04 Depositor and Servicer Not to Resign. Except as described
in Section 8.02, neither the Depositor nor the Servicer shall assign this
Agreement or resign from the obligations and duties hereby imposed on it except
by mutual consent of the Depositor, the Servicer and all of the
Certificateholders unless the determination is made that its duties hereunder
are no longer permissible under applicable law and such incapacity cannot be
cured by the Depositor or the Servicer. Any such determination permitting the
resignation of the Depositor or the Servicer shall be evidenced by an opinion of
independent counsel to such effect delivered to the Trustee which opinion of
counsel shall be in form and substance acceptable to the Trustee. Upon any such
assignment or resignation, the Depositor or the Servicer, as appropriate, shall
send notice to all Certificateholders of the effect of such assignment or
resignation upon the then current rating of the Class of Certificates by each
Rating Agency whose rating on such Class is then in effect. No such resignation
shall become effective until a successor shall have assumed the Depositor's or
the Servicer's responsibilities and obligations hereunder in the manner provided
in Section 8.05. Any purported assignment or resignation which does not comply
with the requirements of this Section shall be of no effect.
Section 8.05 Successor to the Servicer. In connection with the
termination of the Servicer's responsibilities and duties under this Agreement
pursuant to Section 8.04 or 9.01, the Trustee shall succeed to and assume all of
the Servicer's responsibilities, rights, duties and obligations as Servicer (but
not in any other capacity) under this Agreement (except that the Trustee shall
not be obligated to make Advances if prohibited by applicable law nor to
effectuate repurchases or substitutions of Mortgage Loans pursuant to Section
2.02 and except that the Trustee makes no representations and warranties
pursuant to Sections 3.01 and 3.02). Prior to the termination of the Servicer's
responsibilities, duties and liabilities under this Agreement, the Trustee may
appoint a successor having a net worth of not less than $15,000,000 and which is
a FNMA or FHLMC approved seller/servicer in good standing and which shall
succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Servicer under this Agreement, except as aforesaid, if the
Trustee receives a letter from each Rating Agency that such appointment would
not result in a reduction or withdrawal of the current rating of any Class of
Certificates that is rated by a Rating Agency. Any co-trustee appointed pursuant
to Section 10.10 for purposes of this Section 8.05 shall have an obligation to
make Advances pursuant to Section 6.03 during such time as the Trustee is the
Servicer, which obligation shall be joint and several with that of the Trustee
as Servicer. If the Trustee has become the successor to the Servicer in
accordance with this Section or Section 9.03, then notwithstanding the above,
the Trustee may, if it shall be unwilling to so act, or shall, if it is unable
to so act, appoint, or petition a court of competent jurisdiction to appoint,
any established housing and home finance institution having a net worth of not
less than $15,000,000 and which is a FNMA or FHLMC approved seller/servicer in
good standing as the successor to the Servicer hereunder in the assumption of
all of the responsibilities, duties or liabilities of the Servicer hereunder. In
connection with any such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree or such court shall determine;
provided, however, that no such compensation shall be in excess of that
permitted under this Agreement without the consent of all of the
Certificateholders. If the Trustee is acting as Servicer, the Trustee shall be
entitled to all compensation of the Servicer hereunder, and all such
compensation due to the Trustee as Servicer shall be in addition to all
compensation it is entitled to as Trustee under this Agreement. If the
Servicer's duties, responsibilities and liabilities under this Agreement should
be terminated pursuant to Section 8.02, 8.04 or 9.01, the Servicer shall
discharge such duties and responsibilities during the period from the date it
acquires knowledge of such termination until the effective date thereof with the
same degree of diligence and prudence which it is obligated to exercise under
this Agreement, and shall take no action whatsoever that might impair or
prejudice the rights or financial condition of its successor or the Trust Fund.
The resignation or removal of the Servicer pursuant to Section 8.02, 8.04 or
9.01 shall not become effective until a successor shall be appointed pursuant to
this Section and shall in no event relieve the Servicer of liability for breach
of the representations and warranties made pursuant to Section 3.02.
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Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Servicer and to the Trustee an instrument accepting such
appointment, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer, with like effect as if originally named as a party to this Agreement
and the Certificates. Any termination or resignation of the Servicer or this
Agreement pursuant to Section 8.02, 8.04, 9.01 or 11.01 shall not affect any
claims that the Trustee may have against the Servicer for events or actions
taken or not taken by the Servicer arising prior to any such termination or
resignation.
The Servicer shall timely deliver to the successor the funds that
were, or were required to be, in the Collection Account and the Escrow Account,
if any, and all Mortgage Files and related documents, statements and
recordkeeping held by it hereunder and the Servicer shall account for all funds
and shall execute and deliver such instruments and do such other things as may
reasonably be required to more fully and definitely vest and confirm in the
successor all such rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer.
Upon a successor's acceptance of appointment as such, the Servicer
shall notify, in writing, the Trustee, the Certificateholders and each Rating
Agency of such appointment.
Section 8.06 Maintenance of Ratings. The Servicer shall cooperate with
the Depositor and take any action that may be reasonably necessary to maintain
the current rating or ratings on the Certificates.
[END OF ARTICLE VIII]
ARTICLE IX
DEFAULT
Section 9.01 Events of Default. If one or more of the following Events
of Default shall occur and be continuing, that is to say:
(a) any failure by the Servicer to remit any payment required to be
made or distributed under the terms of this Agreement which continues unremedied
for a period of three (3) Business Days after the date upon which written notice
of such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Trustee, the Paying Agent or the Depositor or to the Servicer,
the Trustee, the Paying Agent and the Depositor by the Holders of Certificates
of any Class evidencing, as to such Class, Percentage Interests aggregating not
less than 25%; or
(b) a breach by the Servicer in a material respect of any
representation or warranty set forth in Section 3.02, or failure on the part of
the Servicer duly to observe or perform in any material respect any other of the
covenants or agreements on the part of the Servicer set forth in this Agreement,
which continues unremedied for a period of 60 days after the date on which
written notice of such breach or failure, requiring the same to be remedied,
shall have been given to the Servicer by the Trustee or the Depositor or to the
Servicer, the Trustee and the Depositor by the Holders of Certificates of any
Class evidencing, as to such Class, Percentage Interests aggregating not less
than 25%; or
(c) the Servicer shall notify the Trustee and any Paying Agent
appointed pursuant to Section 4.05 in writing that it is unable to make an
Advance required to be made in accordance with Section 6.03; or;
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(d) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Servicer and such decree or order
shall have remained in force undischarged or unstayed for a period of 60 days;
or
(e) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the Servicer or
of or relating to all or substantially all of the Servicer's property; or
(f) the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations;
then, and in each and every such case, so long as an Event of Default shall not
have been remedied, upon receiving notice or knowledge of such event, the
Trustee shall notify the Certificateholders and each Rating Agency of such Event
of Default. The Trustee may, upon receipt of such notice or knowledge, and at
the written direction of the Holders of Certificates evidencing Percentage
Interests aggregating more than 50%, shall, by notice in writing to the
Servicer, terminate all the rights and obligations of the Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof. On or after
the receipt by the Servicer of such written notice, all authority and power of
the Servicer under this Agreement, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the successor appointed pursuant to
Section 8.05. Upon written request from the Trustee, the Servicer shall prepare,
execute and deliver, any and all documents and other instruments, place in such
successor's possession all Mortgage Files, and do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise, at the Servicer's sole
expense. The Servicer agrees to cooperate with the Trustee and any co-trustee in
effecting the termination of the Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited or
should have been credited by the Servicer to the Collection Account or Escrow
Account or thereafter received with respect to the Mortgage Loans. The Trustee
will have no obligation to take any action or institute, conduct or defend any
litigation under this Agreement at the request, order or direction of any of the
Holders of Certificates unless such Certificateholders have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which the Trustee may incur. The Paying Agent shall provide
information regarding the Certificateholders available to the Paying Agent in
order to allow the Trustee to comply with the provisions above.
Section 9.02 Waiver of Defaults. The Trustee may waive any default by
the Servicer in the performance of its obligations hereunder and its
consequences, except that a default in the making of any required distribution
on any of the Certificates may only be waived by the Holders of a majority of
the Percentage Interests of the affected Certificateholders. Upon any such
waiver of a past default, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.
Section 9.03 Trustee to Act; Appointment of Successor. On and after
the time the Servicer receives a notice of termination pursuant to Section 9.01,
the Trustee or a successor servicer appointed by it shall be the successor in
all respects to the Servicer to the extent provided in Section 8.05.
Section 9.04 Notification to Certificateholders and the Rating
Agencies.
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(a) Upon any such termination pursuant to Section 9.01, the Trustee
shall give prompt written notice thereof to Certificateholders at their
respective addresses appearing in the Certificate Register and to each Rating
Agency.
(b) Within sixty (60) days of a Responsible Officer of the Trustee
having received written notice of the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Holders of Certificates notice of each
such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived.
(c) The Paying Agent shall provide information regarding the
Certificateholders available to the Paying Agent in order to allow the Trustee
to comply with the provisions above.
[END OF ARTICLE IX]
ARTICLE X
CONCERNING THE TRUSTEE
Section 10.01 Duties of Trustee. The Trustee, prior to the occurrence
of an Event of Default and after the curing of all Events of Default which may
have occurred, undertakes to, and is empowered to, perform such duties and only
such duties as are specifically set forth in this Agreement. Any permissive
right of the Trustee as enumerated in this Agreement shall not be construed as a
duty; provided that in case an Event of Default has occurred (which has not been
cured), the Trustee shall exercise such of the rights and powers vested in it by
this Agreement, and use the same degree of care and skill in their exercise as a
prudent man would exercise or use under the circumstances in the conduct of such
man's own affairs.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default which may have occurred, the
duties and obligations of the Trustee shall be determined solely by
the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and,
in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Agreement;
(ii) The Trustee shall not be liable for an error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts; and
(iii) The Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Certificateholders of any Class
holding Certificates which evidence, as to such Class, Percentage
Interests aggregating not less than 25% as to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Agreement.
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(iv) The Trustee shall execute the Letter of Representations, a
form of which is attached hereto as Exhibit P, on behalf of the
Depositor.
Section 10.02 Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 10.01:
(a) The Trustee may rely upon and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate, certificate
of auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) The Trustee may consult with counsel, and any advice or Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(c) The Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Agreement or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request, order or
direction of any of the Certificateholders, pursuant to the provisions of this
Agreement, unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby;
(d) Neither the Trustee nor any of its directors, officers, employees
or agents shall be personally liable for any action taken, suffered or omitted
by it in good faith and believed by it or any of them to be authorized or within
the discretion or rights or powers conferred upon the Trustee by this Agreement;
(e) Prior to the occurrence of an Event of Default hereunder and after
the curing of all Events of Default which may have occurred, the Trustee shall
not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing to do so by Holders of Certificates of any Class
evidencing, as to such Class, Percentage Interests aggregating not less than 25%
(in the case of conflicting requests by two or more 25% or greater Percentage
Interests, the Trustee shall act in accordance with the first such request);
provided, however, that if the payment within a reasonable time to the 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 Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this Agreement,
the Trustee may require reasonable indemnity against such expense or liability
as a condition to such proceeding. The reasonable expense of every such
examination shall be paid by the Servicer, if an Event of Default shall have
occurred and is continuing, and otherwise by the Certificateholder requesting
the investigation;
(f) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
subcontractors or attorneys; and
(g) Nothing in this Agreement shall be construed to require the
Trustee (except as might otherwise be required in its capacity as successor
Servicer) to expend its own funds.
Section 10.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein shall be taken as the statements of the Depositor
or the Servicer, as the case may be, and the Trustee assumes no responsibility
for their correctness. The Trustee makes no representations or warranties as to
the validity or sufficiency of this Agreement or of the Certificates, of any
Mortgage Loan or related document or the Trust Estate. The Trustee shall not be
accountable for the use or application by
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the Depositor or the Servicer 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 or the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Depositor or the Servicer or the
Certificate Account by the Paying Agent. The Trustee shall have no
responsibility for the timeliness or the amount of payments made by the Paying
Agent to the Certificateholders.
Section 10.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights it would have if it were not Trustee.
Section 10.05 Fees and Expenses. The Paying Agent, from moneys
received from the Servicer, covenants and agrees to pay to the Trustee and its
agents a monthly fee (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) equal to the
product of (a) the aggregate Principal Balance of the Mortgage Loans as of the
Determination Date in the preceding month and (b) one-twelfth of 0.000010, and
the Servicer will pay or reimburse the Trustee, or its agents upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
Trustee or its agents in accordance with any of the provisions of this Agreement
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all persons not regularly in its employ, and the expenses
incurred by the Trustee in connection with the appointment of an office or
agency pursuant to Section 10.11) and the Servicer shall indemnify and hold
harmless the Trustee its officers, directors, employees and agents from and
against any and all claims, liabilities, losses or expenses (including but not
limited to reasonable attorneys fees) incurred in connection with the
administration of this Trust and the performance of its duties hereunder
provided that the Servicer shall not be required to reimburse any such expense
or indemnify against any such loss or liability incurred by the Trustee through
the Trustee's own negligence or bad faith. Notwithstanding anything to the
contrary in this Agreement, this Section shall survive the termination of this
Agreement.
Section 10.06 Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be an entity having its principal office in a state
and city acceptable to the Depositor and 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 of at
least $50,000,000 and subject to supervision or examination by federal or state
authority. The Trustee shall not be an Affiliate of either Seller or the
Depositor. If such entity publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 10.07.
Section 10.07 Resignation and Removal of the Trustee. The Trustee, and
any co-trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Depositor, the Servicer and each
Rating Agency. Upon receiving such notice of resignation, the Depositor shall
promptly appoint a successor trustee or co-trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee; provided that such appointment
does not result in a reduction or withdrawal of the rating of any of the Classes
of Certificates that have been rated. If no successor trustee shall have been so
appointed and have accepted appointment within thirty (30) days after the giving
of such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.
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If at any time, the Trustee shall cease to be eligible in accordance
with the provisions of Section 10.06 and shall fail to resign after written
request therefor by the Depositor, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then the Depositor
may remove the Trustee and appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee.
The Holders of Certificates evidencing in the aggregate more than 50%
of Percentage Interest may at any time remove the Trustee and appoint a
successor trustee by written instrument or instruments, in triplicate, signed by
such Holders or their attorneys-in-fact duly authorized, one complete set of
which instruments shall be delivered to the Depositor, one complete set to the
Trustee so removed and one complete set to the successor so appointed.
Any resignation or removal of the Trustee or any resignation of any
co-trustee and appointment of a successor trustee or co-trustee pursuant to any
of the provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 10.08, or upon
acceptance of appointment by a co-trustee, as applicable, unless with respect to
a co-trustee, the Trustee receives written notice from each Rating Agency that
the failure to appoint a successor co-trustee would not result in a withdrawal
or reduction of the rating of any of the Classes of Certificates that have been
rated, in which case the resignation of any co-trustee shall be effective upon
receipt of such written notice. Any co-trustee may not be removed unless the
Depositor and the Trustee each receive written notice from each Rating Agency
that such removal would not result in a withdrawal or reduction of the rating of
any of the Classes of Certificates that have been rated, in which case the
removal of any co-trustee shall be effective upon receipt of such written
notice.
Section 10.08 Successor Trustee. Any successor trustee appointed as
provided in Section 10.07 shall execute, acknowledge and deliver to the
Depositor and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective, and such successor trustee shall
become effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The predecessor trustee shall deliver to the successor
trustee all Mortgage Files and related documents and statements held by it
hereunder, and the Depositor, the Servicer and the predecessor trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for more fully and certainly vesting and confirming in the successor
trustee all such rights, powers, duties and obligations.
No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 10.06. Prior to the appointment of any
successor trustee becoming effective, the Depositor shall have received from
each Rating Agency written confirmation that such appointment would not result
in a reduction of the rating of the Class A or Class M Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section, the Servicer shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register, to the Servicer, any Sub-Servicer and to each Rating
Agency. If the Depositor fails to mail such notice within ten (10) days after
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be mailed at the expense of the Depositor.
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Section 10.09 Merger or Consolidation of Trustee. Any entity into
which the Trustee may be merged or converted or with which it may be
consolidated or any entity resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any entity succeeding to
the business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be eligible under the provisions of Section
10.06, 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 10.10 Appointment of Co-Trustee or Separate Trustee. At any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Fund or property securing the same may at the time
be located, the Depositor and the Trustee acting jointly shall have the power
and shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees, jointly with the
Trustee, of any part of the Trust Fund, and to vest in such Person or Persons,
in such capacity, such title to the Trust Fund, or any part thereof, and,
subject to the other provisions of this Section 10.10, such powers, duties,
obligations, rights and trusts as the Depositor and the Trustee may consider
necessary or desirable. If the Depositor shall not have joined in such
appointment within fifteen (15) days after the receipt by it of a request so to
do, or in case an Event of Default shall have occurred and be continuing, the
Trustee alone shall have the power to make such appointment. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility as
a successor trustee under Section 10.06, hereunder, and no notice to Holders of
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 10.08 hereof.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 10.10, all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly and severally, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed (whether as
Trustee hereunder or as successor to the Servicer hereunder), the Trustee shall
be incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to the
Trust Fund or any portion thereof in any such jurisdiction) shall be exercised
and performed by such separate trustee or co-trustee at the direction of the
Trustee.
Every instrument appointing any separate trustee or co-trustee shall
refer to this Agreement and the conditions of this Article X. Each separate
trustee and co-trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument of appointment,
either jointly with the Trustee or separately, as may be provided therein,
subject to all the provisions of this Agreement, specifically including every
provision of this Agreement relating to the conduct of, affecting the liability
of, or affording protection to, the Trustee. Every such instrument shall be
filed with the Trustee.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name.
Section 10.11 Appointment of Office or Agency. The Trustee may appoint
an office or agency in The City of New York where Certificates may be
surrendered for registration of transfer or exchange. The Trustee will maintain
an office at the address stated in Section 12.07 hereof where notices and
demands to or upon the Trustee in respect of the Certificates may be served.
Section 10.12 Indemnification.
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(a) The Paying Agent shall indemnify and hold harmless the Trustee,
the Depositor, the Servicer and their respective officers, directors, agents and
Affiliates from and against any losses, damages, penalties, fines, forfeitures,
reasonable legal fees and related costs, judgments and other costs and expenses
arising out of or based upon a failure of the Paying Agent to deliver when
required any Assessment of Compliance required of it pursuant to Section 5.26 or
any material misstatement or omission contained in any Assessment of Compliance
provided on its behalf pursuant to Section 5.26. If the indemnification provided
for herein is unavailable or insufficient to hold harmless the indemnified
parties, then the Paying Agent agrees that it shall contribute to the amount
paid or payable by the indemnified parties as a result of the losses, claims,
damages or liabilities of the indemnified parties in such proportion as is
appropriate to reflect the relative fault of the Paying Agent on the one hand
and of the indemnified parties on the other.
(b) The Servicer shall indemnify and hold harmless the Trustee, the
Paying Agent and the Depositor and their respective officers, directors, agents
and Affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable legal fees and related costs, judgments and other costs
and expenses arising out of or based upon a breach by the Servicer or any of its
officers, directors, agents or Affiliates of its obligations under Sections
5.24, 5.25, and 5.26, any material misstatement or omission in any documents
prepared thereunder (to the extent the Servicer is responsible for providing
information or calculating amounts included in such information), the failure of
the Servicer to deliver when required any Assessment of Compliance or
Accountant's Attestation required of it pursuant to Section 5.26 or Annual
Statement of Compliance required pursuant to Section 5.25, as applicable, or any
material misstatement or omission contained in any Assessment of Compliance,
Accountant's Attestation or Annual Statement of Compliance provided on its
behalf pursuant to Section 5.25 or 5.26, as applicable, or the negligence, bad
faith or willful misconduct of the Servicer in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless the indemnified parties, then the Servicer agrees that it shall
contribute to the amount paid or payable by the indemnified parties as a result
of the losses, claims, damages or liabilities of the indemnified parties in such
proportion as is appropriate to reflect the relative fault of the Servicer on
the one hand and of the indemnified parties on the other.
[END OF ARTICLE X]
ARTICLE XI
TERMINATION
Section 11.01 Termination. The respective obligations and
responsibilities of the Depositor, the Servicer (except the duty to pay the
Trustee's fees and expenses and indemnification hereunder) and the Trustee shall
terminate upon (i) the later of the final payment or other liquidation (or any
Advance with respect thereto) of the last Mortgage Loan or the disposition of
all property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and the remittance of all funds due hereunder; or (ii) at the
option of the Servicer, on any Distribution Date which occurs in the month next
following a Due Date on which the aggregate unpaid Principal Balance of all
Outstanding Mortgage Loans is less than 10% of the aggregate unpaid Principal
Balance of the Mortgage Loans on the Cut-off Date, so long as the Servicer
deposits or causes to be deposited in the Collection Account during the
Principal Prepayment Period related to such Distribution Date (and provides
notice to the Trustee with a copy to the Paying Agent appointed pursuant to
Section 4.05 of its intention to so deposit on or before 20th day of such
Principal Prepayment Period) an amount equal to the Purchase Price for each
Outstanding Mortgage Loan, less any unreimbursed Advances made with respect to
any Mortgage Loan (which amount shall offset completely any unreimbursed
Advances for which the Servicer is otherwise entitled to
117
reimbursement), and, with respect to all property acquired in respect of any
Mortgage Loan remaining in the Trust Fund, an amount equal to the fair market
value of such property, as determined by an appraisal to be conducted by an
appraiser selected by the Trustee, less unreimbursed Advances made with respect
to any Mortgage Loan with respect to which property has been acquired; provided,
however, that in no event 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 hereof. Notwithstanding the foregoing, a termination
may be effected by the making of such optional repurchases only if the
termination of the Trust Fund satisfies the requirement for a "qualified
liquidation" of the Trust Fund within the meaning of Section 860F(a)(4) of the
Code and the purchases of the Outstanding Mortgage Loans pursuant to this
Section 11.01 will not constitute "prohibited transactions" within the meaning
of Section 860F(a)(2) of the Code.
Notice of any termination, specifying the Distribution Date upon which
all Certificateholders may surrender their Certificates to the Trustee or, if a
Paying Agent has been appointed pursuant to Section 4.05, the Paying Agent for
payment and cancellation, shall be given promptly by the Trustee or, if a Paying
Agent has been appointed under Section 4.05, the Paying Agent, (upon direction
by the Depositor ten (10) days prior to the date such notice is to be mailed) by
signed letter to Certificateholders and each Rating Agency mailed no later than
the 25th day of the month preceding the month of such final distribution
specifying (i) the Distribution Date upon which final payment on the
Certificates will be made upon presentation and surrender of Certificates at the
office or agency of the Trustee or, if a Paying Agent has been appointed under
Section 4.05, the Paying Agent, therein designated and (ii) that the Record Date
otherwise applicable to such Distribution Date is not applicable, payments being
made only upon presentation and surrender of the Certificates at the office or
agency of the Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent, therein specified. The Servicer shall indicate the date
of adoption of the plan of qualified liquidation in a statement attached to the
final federal income tax return of each REMIC Pool. After giving such notice,
the Trustee or if a Paying Agent has been appointed under Section 4.05, the
Paying Agent shall not register the transfer or exchange of any Certificates. If
such notice is given in connection with the Servicer's election to purchase the
Outstanding Mortgage Loans, the Servicer shall deposit in the Collection Account
after adoption of the plan during the applicable Principal Prepayment Period an
amount equal to the purchase price as determined as provided in clause (ii) of
the preceding paragraph and on the Distribution Date on which such termination
is to occur, Certificateholders will be entitled to the amount of such purchase
price but not amounts in excess thereof, all as provided herein. Upon
presentation and surrender of the Certificates, the Trustee, or if a Paying
Agent has been appointed under Section 4.05, the Paying Agent shall notify the
Servicer and the Servicer shall cause to be distributed to Certificateholders an
amount equal to (a) the amount otherwise distributable on such Distribution
Date, if not in connection with a purchase; or (b) if the Servicer elected to so
purchase, the purchase price determined as provided in clause (ii) of the
preceding paragraph. Following such final deposit the Trustee shall promptly
release to the Servicer the Mortgage Files for the remaining Mortgage Loans, and
the Trustee shall execute all assignments, endorsements and other instruments
necessary to effectuate such transfer and shall have no further responsibility
with regard to said Mortgage Files.
If all of the Certificateholders shall not surrender their
Certificates for cancellation within three (3) months after the time specified
in the above-mentioned written notice, at the close of the 90 day period
beginning after the written notice is given, each remaining Certificateholder
will be credited with an amount that would have been otherwise distributed to
such Certificateholder, and the Trustee or, if a Paying Agent has been appointed
under Section 4.05, the Paying Agent, 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 three (3)
months after the second notice all the Certificates shall not have been
surrendered for cancellation, the Trustee or, if a Paying Agent has been
appointed under Section 4.05, the Paying Agent, shall appoint an agent to take
appropriate and reasonable steps to
118
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 in the Trust Fund hereunder.
[END OF ARTICLE XI]
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
Section 12.02 Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust Fund, 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 Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
No Certificateholder shall have any right to vote (except as expressly
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth, or contained in the terms of the Certificates, be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third Person by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any provision
of this Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to this Agreement, unless such Holder
previously shall have given to the Trustee a written notice of default and of
the continuance thereof, as hereinbefore provided, and the Holders of
Certificates of any Class evidencing in the aggregate not less than 25% of the
Percentage Interests of such Class shall have made written request upon the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder (in the case of conflicting requests by two or more 25% or greater
Percentage Interests, the Trustee shall act in accordance with the first such
request) and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred therein
or thereby, and the Trustee, for sixty (60) days after its receipt of such
notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
of any Class shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates of such Class or any other Class, or
to obtain or seek to obtain priority over or preference to any other such
Holder, or to enforce any right under this Agreement, except in the manner
herein provided and for the common benefit of Certificateholders of such Class
or all Classes, as the case may be. For the protection and enforcement of the
provisions of this Section, each and every Certificateholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
Section 12.03 Amendment. This Agreement may be amended from time to
time by the Depositor, the Servicer and the Trustee, without the consent of any
of the Certificateholders, to cure any
119
ambiguity, to correct or supplement any provisions herein which may be
inconsistent with any other provisions herein, to ensure continuing treatment of
each REMIC created hereunder as a REMIC to avoid or minimize the risk of
imposition of any tax on any REMIC created hereunder pursuant to the Code, or to
make any other provisions with respect to matters or questions arising under
this Agreement which shall not be materially inconsistent with the provisions of
this Agreement, provided that such actions shall not, as evidenced by an Opinion
of Counsel, adversely affect in any material respect the interests of any
Certificateholder of a Class having an Outstanding Certificate Principal Balance
of greater than zero or cause any REMIC created hereunder to fail to qualify as
a REMIC.
This Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interest of
each Class of Certificates having an Outstanding Certificate Principal Balance
greater than zero and affected thereby for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; 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 of any Class the Holders of which are required to
consent to any such amendment or (iii) change the percentage specified in clause
(ii) of the first paragraph of Section 11.01, without the consent of the Holders
of all Certificates of such Class then outstanding.
Notwithstanding anything to the contrary in this Agreement, this
Agreement may be amended from time to time by the Depositor, the Servicer and
the Trustee with the consent of Certificateholders evidencing not less than
66-2/3% of the interests held by parties other than the Depositor, its
Affiliates or its agents, for the purposes of significantly changing the
Permitted Activities of the Trust.
Promptly after the execution of any such amendment the Trustee shall
furnish written notification of the substance of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section 12.03 to approve the particular form of any proposed amendment but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe. In connection with any amendment
pursuant to this Section 12.03 the Trustee, Paying Agent and Depositor shall be
entitled to receive an Opinion of Counsel to the effect that such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution of such amendment in accordance with this Section 12.03 have been
met.
Section 12.04 Counterparts. This Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 12.05 Duration of Agreement. This Agreement shall continue in
existence and effect until terminated as herein provided.
Section 12.06 Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
Section 12.07 Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by first class or
120
registered mail, postage prepaid, to (i) in the case of the Depositor, Chase
Mortgage Finance Corporation, 000 Xxxx Xxxxxxxxx, 0xx Xxxxx Xxxxx, Xxxxxxxxx
Lake, New Jersey 07675, Attention: Structured Finance, (ii) in the case of the
Servicer, JPMorgan Chase Bank, N.A., 0000 Xxxxxxx Xxxxxxx, Xxxxxxxx, Xxxx 00000,
(iii) in the case of the Custodian, JPMorgan Chase Bank, N.A., 0000 Xxxxxx Xxxx,
Xxxxxx, Xxxxxxxxx, 00000, (iv) in the case of the Trustee, The Bank of New York,
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (v) in the case of the Paying
Agent, JPMorgan Chase Bank, N.A., 600 Xxxxxx, 0xx Xxxxx, Xxxxxxx, Xxxxx 00000,
(vi) in the case of Moody's, Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx,
0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (vii) in the case of Fitch Ratings, Xxx
Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (viii) in the case of S&P, Standard
& Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc., 00
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and (ix) in the case of any of the
foregoing persons, such other addresses as may hereafter be furnished by any
such persons to the other parties to this Agreement.
Section 12.08 Further Assurances. The Sellers and the Servicer agree
to do and perform, from time to time, any and all acts and to execute any and
all further instruments required or reasonably requested by the Trustee more
fully to effect the purposes of this Agreement, including, without limitation,
the execution of any financing statements and the preparation for execution by
the Trustee of any continuation statements relating to the Co-op Loans for
filing under the provisions of the Uniform Commercial Code as in effect in the
jurisdiction in which the Underlying Mortgaged Property related to the affected
Co-op Loan is located. The Trustee agrees that it shall promptly execute and
redeliver to the Relevant Seller or the Servicer for filing any such
continuation statement so prepared by such Seller relating to the Co-op Loans.
[END OF ARTICLE XII]
121
IN WITNESS WHEREOF, the Depositor, the Servicer, the Paying Agent and
the 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.
CHASE MORTGAGE FINANCE CORPORATION,
as Depositor
By:
------------------------------------
Name:
Title:
JPMORGAN CHASE BANK, N.A.,
as Servicer
By:
------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By:
------------------------------------
Name:
Title:
JPMORGAN CHASE BANK, N.A.,
as Custodian
By:
------------------------------------
Name:
Title:
JPMORGAN CHASE BANK, N.A.,
as Paying Agent
By:
------------------------------------
Name:
Title:
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[INTENTIONALLY OMITTED]
A-1
EXHIBIT A-1
MORTGAGE GROUP ONE MORTGAGE LOAN SCHEDULE
[INTENTIONALLY OMITTED]
EXHIBIT A-2
MORTGAGE GROUP TWO MORTGAGE LOAN SCHEDULE
[INTENTIONALLY OMITTED]
EXHIBIT B
CONTENTS OF MORTGAGE FILE
(i) With respect to each Mortgage Loan which is not a Co-op Loan:
(A) (I) Original Mortgage Note bearing all intervening endorsements,
endorsed, "Pay to the order of ___________, without recourse" and signed in the
name of the last endorsee by an authorized officer.
(B) The original Mortgage (including all riders thereto) with evidence
of recording thereon, or a copy thereof certified by the public recording office
in which such Mortgage has been recorded or, if the original Mortgage has not
been returned from the applicable public recording office, a true certified copy
of the original that was sent for recording, certified by the Seller.
(C) With respect to each Non-MERS Mortgage Loan which is not a Co-op
Loan, the original Assignment of Mortgage to "The Bank of New York, as trustee
(Chase Mortgage Finance Corporation)," which assignment shall be in form and
substance acceptable for recording, or a copy certified by the Relevant Seller
as a true and correct copy of the original Assignment of Mortgage which has been
sent for recordation. Subject to the foregoing, such assignments may, if
permitted by law, be by blanket assignments for Mortgage Loans covering
Mortgaged Properties situated within the same county. If the Assignment of
Mortgage is in blanket form, a copy of the Assignment of Mortgage shall be
included in the related individual Mortgage File.
(D) The original policy of title insurance, or in the event such
original title policy is unavailable a copy of the related policy (provided that
use of a copy is acceptable to the related title insurance or escrow company),
including riders and endorsements thereto, or if the policy has not yet been
issued, a written commitment or interim binder or preliminary report of title
issued by the title insurance or escrow company.
(E) Originals of all recorded intervening Assignments of Mortgage, or
copies thereof, certified by the public recording office in which such
Assignments or Mortgage have been recorded showing a complete chain of title
from the originator to the Depositor, with evidence of recording, thereon, or a
copy thereof certified by the public recording office in which such Assignment
of Mortgage has been recorded or, if the original Assignment of Mortgage has not
been returned from the applicable public recording office, a true certified
copy, certified by the Relevant Seller of the original Assignment of Mortgage
together with a certificate of the Relevant Seller certifying that the original
Assignment of Mortgage has been delivered for recording in the appropriate
public recording office of the jurisdiction in which the Mortgaged Property is
located.
(F) Originals, or copies thereof certified by the public recording
office in which such documents have been recorded, of each assumption,
extension, modification, written assurance or substitution agreements, if
applicable, or if the original of such document has not been returned from the
applicable public recording office, a true certified copy, certified by the
Relevant Seller, of such original document together with certificate of such
Seller certifying the original of such document has been delivered for recording
in the appropriate recording office of the jurisdiction in which the Mortgaged
Property is located.
(G) If the Mortgage Note or Mortgage or any other material document or
instrument relating to the Mortgage Loan has been signed by a Person on behalf
of the Mortgagor, the original power of
B-1
attorney or other instrument that authorized and empowered such Person to sign
bearing evidence that such instrument has been recorded, if so required in the
appropriate jurisdiction where the Mortgaged Property is located (or, in lieu
thereof, a duplicate or conformed copy of such instrument, together with a
certificate of receipt from the recording office, certifying that such copy
represents a true and complete copy of the original and that such original has
been or is currently submitted to be recorded in the appropriate governmental
recording office of the jurisdiction where the Mortgaged Property is located),
or if the original power of attorney or other such instrument has been delivered
for recording in the appropriate public recording office of the jurisdiction in
which the Mortgaged Property is located, a copy of any applicable power of
attorney.
(ii) With respect to each Co-op Loan:
(A)(I) The original Mortgage Note endorsed "Pay to the order
of ___________, without recourse" and signed in the name of the last
endorsee by an authorized officer.
(B) The original Mortgage entered into by the Mortgagor with
respect to such Co-op Loan.
(C) The original Assignment of Mortgage to "The Bank of New
York as trustee (Chase Mortgage Finance Corporation)."
(D) Original Assignments of Mortgage showing a complete
chain of assignment from the originator of the related Co-op Loan to
the Seller.
(E) Original Form UCC-1 and any continuation statements with
evidence of filing thereon entered into by the Mortgagor with respect
to such Co-op Loan or if the original of such document has not been
returned from the applicable public recording office, a true certified
copy of the document sent for recording.
(F) Form UCC-3 (or copy thereof) by the applicable Mortgage
Loan Seller or its agent assigning the security interest covered by
such Form UCC-1 to "The Bank of New York as trustee" or to blank,
together with all Forms UCC-3 (or copies thereof) showing a complete
chain of assignment from the originator of the related Co-op Loan to
the Seller, with evidence of recording thereon.
(G) Stock certificate representing the stock allocated to
the related dwelling unit in the related residential cooperative
housing corporation and pledged by the related Mortgagor to the
originator of such Co-op Loan with a stock power in blank attached.
(H) Original proprietary lease.
(I) Original assignment of proprietary lease, to the Trustee
or to blank, and all intervening assignments thereof.
(J) Original recognition agreement of the interests of the
mortgagee with respect to the Co-op Loan by the residential
cooperative housing corporation, the stock of which was pledged by the
related Mortgagor to the originator of such Co-op Loan.
(K) Originals of any assumption, consolidation or
modification agreements relating to any of the items specified in (A)
through (F) above with respect to such Co-op Loan.
B-2
EXHIBIT C
FORM OF CLASS A CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE").
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
MORTGAGE FINANCE CORPORATION ("CMFC"), JPMORGAN CHASE BANK, N.A. (THE
"SERVICER") OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER
THIS CERTIFICATE, THE REMIC REGULAR INTEREST REPRESENTED HEREBY NOR THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY CMFC, THE SERVICER, THE
TRUSTEE OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.
[THIS LEGEND WILL APPEAR ON THE CERTIFICATE ONLY IF SUCH CERTIFICATE IS AN
INTEREST-ONLY CERTIFICATE.] THE CLASS __-AX CERTIFICATES ARE NOT ENTITLED TO
DISTRIBUTIONS IN RESPECT OF PRINCIPAL.
[THIS LEGEND WILL APPEAR ON THE CERTIFICATE ONLY IF SUCH CERTIFICATE IS A
PRINCIPAL-ONLY CERTIFICATE.] THE CLASS A-P CERTIFICATES WILL NOT BE ENTITLED TO
PAYMENT OF INTEREST.
CLASS __-A__ CERTIFICATE
Number: 06-S2-__-A__-1 Original Denomination:
$
Cut-off Date: September 1, 2006 Final Scheduled Distribution Date:
October 25, 2036
First Distribution Date: Aggregate Original Principal Balance of all
October 25, 2006 Class __-A__ Certificates: $
Certificate Rate: CUSIP:
CHASE MORTGAGE FINANCE TRUST
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2006-S2
evidencing an ownership interest in distributions allocable to the Class __-A__
Certificates with respect to a pool of conventional one- to four-family mortgage
loans formed and sold by
CHASE MORTGAGE FINANCE CORPORATION
Unless this Certificate is presented by an authorized representative
of the Depository Trust Company, a New York corporation ("DTC"), to the Paying
Agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co. has an interest herein.
This certifies that CEDE & CO. is the registered owner of the
ownership interest (the "Ownership Interest") evidenced by this Certificate
(obtained by dividing the Original Denomination of this Certificate by the
aggregate Original Denomination of all Class __-A__ Certificates) in certain
distributions with respect to a pool of conventional one- to four-family first
lien mortgage loans (the "Mortgage Loans") formed and sold by Chase Mortgage
Finance Corporation (hereinafter called the "Depositor"), and certain other
property held in trust for the benefit of Certificateholders (collectively, the
"Trust Fund"). The Mortgage Loans are serviced by JPMorgan Chase Bank, N.A. (the
"Servicer") and are secured by first liens on Mortgaged Properties. The Trust
Fund was created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of September 1, 2006 among the Depositor, the Servicer,
the Paying Agent and The Bank of New York, as trustee (the "Trustee"), a summary
of certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Mortgage Finance Trust, Multi-Class Mortgage Pass-Through
Certificates, Series 2006-S2, Class __-A__ (the "Class __-A__ Certificates") and
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 the
acceptance hereof assents and by which Agreement such Holder is bound. Also
issued under the Agreement are Certificates designated as Chase Mortgage Finance
Trust, Multi-Class Mortgage Pass-Through Certificates, Series 2006-S2, Class M
Certificates and Class B Certificates. The Class A Certificates, the Class M
Certificates and the Class B Certificates are collectively referred to herein as
the "Certificates."
Pursuant to the terms of the Agreement, the Paying Agent appointed
under Section 4.05 of the Agreement will distribute from funds in the
Certificate Account the amount as described on the reverse hereof on the 25th
day of each month or, if such 25th day is not a Business Day, the Business Day
immediately following (the "Distribution Date"), commencing on October 25, 2006.
Such distributions will be made to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
preceding the month in which such payment is made.
Distributions on this Certificate will be made either by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, or by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Paying Agent in writing at least 10 Business Days prior to the
first Distribution Date for which distribution by wire
2
transfer is to be made, and such Holder's Certificates evidence an aggregate
Original Denomination of not less than $5,000,000 or such Holder holds a 100%
Percentage Interest of such Class. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Paying
Agent, of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office of the Paying Agent, for the purpose
and specified in such notice of final distribution.
The Paying Agent will cause to be kept at its Agency & Trust Office in
New York, New York, or at the office of its designated agent, a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Paying Agent will provide for the registration of Certificates and of
transfers and exchanges of Certificates. Upon surrender for registration of
transfer of any Certificate at any office or agency of the Paying Agent,
maintained for such purpose, the Paying Agent will, subject to the limitations
set forth in the Agreement, authenticate and deliver, in the name of the
designated transferee or transferees, a Certificate of a like class and dated
the date of authentication by the Authenticating Agent. Notwithstanding the
above, the final distribution on this Certificate will be made after due notice
by the Paying Agent of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency of the
Paying Agent, for that purpose and specified in such notice of final
distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
3
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be
duly executed.
Dated: September 26, 2006 CHASE MORTGAGE FINANCE CORPORATION
By:
------------------------------------
Authorized Officer
4
Dated: September 26, 2006 CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred
to in the within-mentioned Agreement.
JPMORGAN CHASE BANK, N.A.
as Authenticating Agent
By:
------------------------------------
Authorized Signatory
5
REVERSE OF CERTIFICATE
CHASE MORTGAGE FINANCE TRUST
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2006-S2
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Mortgage Finance Trust, Multi-Class Mortgage Pass-Through
Certificates, Series 2006-S2, issued in one or more Classes of Class A, Class M
and Class B Certificates. The Class A Certificates evidence in the aggregate the
Class A Percentage of distributions relating to repayments of principal and
interest on the Mortgage Loans. The Class M Certificates evidence in the
aggregate the Class M Percentage of distributions relating to repayments of
principal and interest on the Mortgage Loans. The Class B Certificates evidence
in the aggregate the Class B Percentage of distributions relating to repayments
of principal and interest on the Mortgage Loans.
Following the initial issuance of the Certificates, the Principal
Balance of this Certificate will be different from the Original Denomination
shown above. Anyone acquiring this Certificate may ascertain its current
Principal Balance by inquiry of the Paying Agent.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that neither the Trustee nor the Paying
Agent is liable to the Holders 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 Trustee and the Paying Agent.
The Paying Agent will cause to be kept at its Agency & Trust Office in
New York, New York, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Paying Agent will provide for the
registration of Certificates and of transfers and exchanges of Certificates.
Upon surrender for registration of transfer of any Certificate at any office or
agency of the Paying Agent, the Paying Agent will, subject to the limitations
set forth in the Agreement, authenticate and deliver, in the name of the
designated transferee or transferees, a Certificate of a like Class and dated
the date of authentication by the Authenticating Agent.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Paying Agent 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 the Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Depositor, the
Servicer, the Paying Agent and the Trustee may treat the Person in whose name
any Certificate is registered as the owner of such Certificate and the
Percentage Interest in the Trust Fund evidenced thereby for the purpose of
receiving distributions pursuant to the Agreement and for all other purposes
whatsoever, and neither the Depositor, the Servicer, the Paying Agent nor the
Trustee will be affected by notice to the contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions therein which may
be inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC (as hereinafter defined) included in the Trust Fund as a
REMIC, or
to make any other provisions with respect to matters or questions arising under
the Agreement which are not materially inconsistent with the provisions of the
Agreement, provided that such action does not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder or cause any REMIC included in the Trust Fund to fail to
qualify as a REMIC.
The Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment may (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) reduce the aforesaid
percentage of Certificates of any Class the Holders of which are required to
consent to any such amendment or (iii) change the percentage specified in clause
(ii) of the first paragraph of Section 11.01 of the Agreement, without the
consent of the Holders of all Certificates of such Class then outstanding.
The Agreement provides that the Trust Fund will elect to be treated as
one or more "real estate mortgage investment conduits" for federal income tax
purposes (each, a "REMIC"). The Class A Certificates (other than the Class A-R
Certificate), the Class M Certificates and the Class B Certificates will
constitute "regular interests" in a REMIC. The Class A-R Certificate will
constitute the sole class of "residual interest" in each of the REMICs.
The respective obligations and responsibilities of the Depositor, the
Servicer (except the duty to pay the Trustee's fees and expenses and
indemnification hereunder) and the Trustee shall terminate upon (i) the later of
the final payment or other liquidation (or any Advance with respect thereto) of
the last Mortgage Loan or the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due hereunder; or (ii) at the option of the Servicer on
any Distribution Date which occurs in the month next following a Due Date on
which the aggregate unpaid Principal Balance of all Outstanding Mortgage Loans
is less than 5% of the aggregate unpaid Principal Balance of the Mortgage Loans
on the Cut-off Date, so long as the Servicer deposits or causes to be deposited
in the applicable Collection Account during the Principal Prepayment Period
related to such Distribution Date (and provides notice to the Trustee of its
intention to so deposit on or before the 20th day of such Principal Prepayment
Period) an amount equal to the Purchase Price for each Outstanding Mortgage
Loan, less any unreimbursed Advances made with respect to any Mortgage Loan
(which amount shall offset completely any unreimbursed Advances for which the
Servicer is otherwise entitled to reimbursement), and, with respect to all
property acquired in respect of any Mortgage Loan remaining in the Trust Fund,
an amount equal to the fair market value of such property, as determined by an
appraisal to be conducted by an appraiser selected by the Trustee, less
unreimbursed Advances made with respect to any Mortgage Loan with respect to
which property has been acquired; provided, however, that in no event shall the
trust created by the Agreement continue beyond the expiration of 21 years from
the death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the Court of St. James's, living on the date
hereof.
2
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
________________________________________________________________________________
________________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
______________________________________________ Attorney to transfer the within
Certificate on the books kept for the registration thereof, with full power of
substitution in the premises.
Dated:
(Signature guaranty) ----------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Certificate in every particular, without
alteration or enlargement or any change
whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
C-3
EXHIBIT D
FORM OF CLASS M CERTIFICATE
THIS CLASS M CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE").
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
MORTGAGE FINANCE CORPORATION ("CMFC"), JPMORGAN CHASE BANK, N.A. (THE
"SERVICER") OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER
THIS CERTIFICATE, THE REMIC REGULAR INTEREST REPRESENTED HEREBY NOR THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY CMFC, THE SERVICER, THE
TRUSTEE OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.
CLASS M CERTIFICATE
Number: 06-S2-M-1 Original Denomination:
$____________
Cut-off Date: September 1, 2006 Final Scheduled Distribution Date:
October 25, 2036
First Distribution Date: Aggregate Original Principal Balance of all
October 25, 2006 Class M Certificates: $____________
Certificate Rate: CUSIP:
CHASE MORTGAGE FINANCE TRUST
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2006-S2
evidencing an ownership interest in distributions allocable to the Class M
Certificates with respect to a pool of conventional one- to four-family mortgage
loans formed and sold by
CHASE MORTGAGE FINANCE CORPORATION
Unless this Certificate is presented by an authorized representative
of the Depository Trust Company, a New York corporation ("DTC"), to the Paying
Agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co. has an interest herein.
This certifies that CEDE & CO. is the registered owner of the
ownership interest (the "Ownership Interest") evidenced by this Certificate
(obtained by dividing the Original Denomination of this Certificate by the
aggregate Original Denomination of all Class M Certificates) in certain
distributions with respect to a pool of conventional one-to four-family first
lien mortgage loans (the "Mortgage Loans") formed and sold by Chase Mortgage
Finance Corporation (hereinafter called the "Depositor"), and certain other
property held in trust for the benefit of Certificateholders (collectively, the
"Trust Fund"). The Mortgage Loans are serviced by JPMorgan Chase Bank, N.A. (the
"Servicer") and are secured by first lien on Mortgaged Properties. The Trust
Fund was created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of September 1, 2006 among the Depositor, the Servicer,
the Paying Agent and The Bank of New York, as trustee (the "Trustee"), a summary
of certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Mortgage Finance Trust, Multi-Class Mortgage Pass-Through
Certificates, Series 2006-S2, Class M (the "Class M Certificates") and 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 the acceptance
hereof assents and by which Agreement such Holder is bound. Also issued under
the Agreement are Certificates designated as Chase Mortgage Finance Trust,
Multi-Class Mortgage Pass-Through Certificates, Series 2006-S2, Class A
Certificates and Class B Certificates. The Class A Certificates are senior to,
and the Class B Certificates are subordinate to, the Class M Certificates in
right of payment to the extent described herein and in the Agreement. The Class
A Certificates, the Class M Certificates and the Class B Certificates are
collectively referred to herein as the "Certificates." Amounts properly
distributed to the Class M Certificateholders pursuant to the Agreement will be
deemed released from the Trust Fund, and the Class M Certificateholders will not
in any event be required to refund any such distributed amounts.
Pursuant to the terms of the Agreement, the Paying Agent will
distribute from funds in the Certificate Account the amount as described on the
reverse hereof on the 25th day of each month or, if such 25th day is not a
Business Day, the Business Day immediately following (the "Distribution Date"),
commencing on October 25, 2006. Such distributions will be made to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the month preceding the month in which such payment is made.
Distributions on this Certificate will be made either by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, or by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Paying Agent in writing at least 10 Business Days prior to the
first Distribution Date for which distribution by wire transfer is to be made,
and such Holder's Certificates evidence an aggregate Original Denomination of
not less than $5,000,000 or such Holder holds a 100% Percentage Interest of such
Class. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Paying Agent of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office of the Paying Agent for the purpose and specified in such notice of final
distribution.
The Paying Agent will cause to be kept at its Agency & Trust Office in
New York, New York, or at the office of its designated agent, a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Paying Agent will provide for the registration of Certificates and of
transfers and exchanges of Certificates. Upon surrender for registration of
transfer of any Certificate at any office or agency of the Paying Agent,
maintained for such purpose, the Paying Agent will, subject to the limitations
set forth in the Agreement, authenticate and deliver, in the name of the
designated transferee or transferees, a Certificate of a like class and dated
the date of authentication by the Authenticating Agent. Notwithstanding the
above, the final distribution on this Certificate will be made after due notice
by the Paying Agent of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency of the
Paying Agent, for that purpose and specified in such notice of final
distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be
duly executed.
Dated: September 26, 2006 CHASE MORTGAGE FINANCE CORPORATION
By:
------------------------------------
Authorized Officer
Dated: September 26, 2006 CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred
to in the within-mentioned Agreement.
JPMORGAN CHASE BANK, N.A.
as Authenticating Agent
By:
------------------------------------
Authorized Signatory
REVERSE OF CERTIFICATE
CHASE MORTGAGE FINANCE TRUST
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2006-S2
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Mortgage Finance Trust, Multi-Class Mortgage Pass-Through
Certificates, Series 2006-S2, issued in one or more Classes of Class A, Class M
and Class B Certificates. The Class A Certificates evidence in the aggregate the
Class A Percentage of distributions relating to repayments of principal and
interest on the Mortgage Loans. The Class M Certificates evidence in the
aggregate the Class M Percentage of distributions relating to repayments of
principal and interest on the Mortgage Loans. The Class B Certificates evidence
in the aggregate the Class B Percentage of distributions relating to repayments
of principal and interest on the Mortgage Loans.
Following the initial issuance of the Certificates, the Principal
Balance of this Certificate will be different from the Original Denomination
shown above. Anyone acquiring this Certificate may ascertain its current
Principal Balance by inquiry of the Paying Agent.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that neither the Trustee nor the Paying
Agent is liable to the Holders 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 Trustee and the Paying Agent.
The Paying Agent will cause to be kept at its Agency & Trust Office in
New York, New York, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Paying Agent will provide for the
registration of Certificates and of transfers and exchanges of Certificates.
Upon surrender for registration of transfer of any Certificate at any office or
agency of the Paying Agent, the Paying Agent will, subject to the limitations
set forth in the Agreement, authenticate and deliver, in the name of the
designated transferee or transferees, a Certificate of a like Class and dated
the date of authentication by the Authenticating Agent.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Paying Agent 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 the Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Depositor, the
Servicer, the Paying Agent and the Trustee may treat the Person in whose name
any Certificate is registered as the owner of such Certificate and the
Percentage Interest in the Trust Fund evidenced thereby for the purpose of
receiving distributions pursuant to the Agreement and for all other purposes
whatsoever, and neither the Depositor, the Servicer, the Paying Agent nor the
Trustee will be affected by notice to the contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions therein which may
be inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC (as hereinafter defined) included in the Trust Fund as a
REMIC, or
to make any other provisions with respect to matters or questions arising under
the Agreement which are not materially inconsistent with the provisions of the
Agreement, provided that such action does not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder or cause any REMIC included in the Trust Fund to fail to
qualify as a REMIC.
The Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment may (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) reduce the aforesaid
percentage of Certificates of any Class the Holders of which are required to
consent to any such amendment or (iii) change the percentage specified in clause
(ii) of the first paragraph of Section 11.01 of the Agreement, without the
consent of the Holders of all Certificates of such Class then outstanding.
The Agreement provides that the Trust Fund will elect to be treated as
one or more "real estate mortgage investment conduits" for federal income tax
purposes (each, a "REMIC"). The Class A Certificates (other than the Class A-R
Certificate), the Class M Certificates and the Class B Certificates will
constitute "regular interests" in a REMIC. The Class A-R Certificate will
constitute the sole class of "residual interest" in each of the REMICs.
The respective obligations and responsibilities of the Depositor, the
Servicer (except the duty to pay the Trustee's fees and expenses and
indemnification hereunder) and the Trustee shall terminate upon (i) the later of
the final payment or other liquidation (or any Advance with respect thereto) of
the last Mortgage Loan or the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due hereunder; or (ii) at the option of the Servicer, on
any Distribution Date which occurs in the month next following a Due Date on
which the aggregate unpaid Principal Balance of all Outstanding Mortgage Loans
is less than 5% of the aggregate unpaid Principal Balance of the Mortgage Loans
on the Cut-off Date, so long as the Servicer deposits or causes to be deposited
in the applicable Collection Account during the Principal Prepayment Period
related to such Distribution Date (and provides notice to the Trustee of its
intention to so deposit on or before the 20th day of such Principal Prepayment
Period) an amount equal to the Purchase Price for each Outstanding Mortgage
Loan, less any unreimbursed Advances made with respect to any Mortgage Loan
(which amount shall offset completely any unreimbursed Advances for which the
Servicer is otherwise entitled to reimbursement), and, with respect to all
property acquired in respect of any Mortgage Loan remaining in the Trust Fund,
an amount equal to the fair market value of such property, as determined by an
appraisal to be conducted by an appraiser selected by the Trustee, less
unreimbursed Advances made with respect to any Mortgage Loan with respect to
which property has been acquired; provided, however, that in no event shall the
trust created by the Agreement continue beyond the expiration of 21 years from
the death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the Court of St. James's, living on the date
hereof.
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
________________________________________________________________________________
________________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
___________________________________________________________________ Attorney to
transfer the within Certificate on the books kept for the registration thereof,
with full power of substitution in the premises.
Dated:
(Signature guaranty)
----------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Certificate in every particular, without
alteration or enlargement or any change
whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
D-1
EXHIBIT E
FORM OF CLASS B CERTIFICATE
THIS CLASS B-__ CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES AND THE CLASS M CERTIFICATES AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE").
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
MORTGAGE FINANCE CORPORATION ("CMFC"), JPMORGAN CHASE BANK, N.A. (THE
"SERVICER") OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER
THIS CERTIFICATE, THE REMIC REGULAR INTEREST REPRESENTED HEREBY NOR THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY CMFC, THE SERVICER, THE
TRUSTEE OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.
[THIS LEGEND WILL APPEAR ON THE CERTIFICATE ONLY IF SUCH CERTIFICATE IS A
NON-OFFERED CLASS B CERTIFICATE] THIS CLASS B-__ CERTIFICATE HAS NOT AND WILL
NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS
SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT OR UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 4.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
[THIS LEGEND WILL APPEAR ON THE CERTIFICATE ONLY IF SUCH CERTIFICATE IS AN ERISA
RESTRICTED CERTIFICATE.] NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS
THE DEPOSITOR AND THE TRUSTEE SHALL HAVE RECEIVED (A) A REPRESENTATION LETTER
FROM THE TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS
NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A PLAN SUBJECT TO SECTION
4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A PLAN
SUBJECT TO ANY PROVISIONS UNDER ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER
LAWS OR REGULATIONS THAT ARE SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS
OF ERISA OR THE CODE ("SIMILAR LAW") (COLLECTIVELY, A "PLAN"), AND IS NOT
DIRECTLY OR INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON BEHALF OF OR WITH ANY
ASSETS OF ANY SUCH PLAN, (B) IF THE CERTIFICATE HAS BEEN THE SUBJECT OF AN
ERISA-QUALIFYING UNDERWRITING, A REPRESENTATION LETTER TO THE EFFECT THAT SUCH
TRANSFEREE IS AN INSURANCE COMPANY THAT IS ACQUIRING THE CERTIFICATE WITH ASSETS
OF AN
E-1
"INSURANCE COMPANY GENERAL ACCOUNT" AS DEFINED IN SECTION V(E) OF PROHIBITED
TRANSACTION CLASS EXEMPTION ("PTCE") 95-60 AND THE ACQUISITION AND HOLDING OF
THE CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND III OF PTCE 95-60 OR
(C) SOLELY IN THE CASE OF A DEFINITIVE CERTIFICATE, AN OPINION OF COUNSEL
SATISFACTORY TO THE DEPOSITOR AND THE TRUSTEE, AND UPON WHICH THE DEPOSITOR AND
THE TRUSTEE SHALL BE ENTITLED TO RELY, TO THE EFFECT THAT THE ACQUISITION AND
HOLDING OF THIS CERTIFICATE BY THE PROSPECTIVE TRANSFEREE WILL NOT CONSTITUTE OR
RESULT IN A NONEXEMPT PROHIBITED TRANSACTION UNDER ERISA OR THE CODE OR A
VIOLATION OF SIMILAR LAW AND WILL NOT SUBJECT THE TRUSTEE, THE DEPOSITOR OR THE
SERVICER TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN BY SUCH ENTITIES IN
THE POOLING AND SERVICING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN
EXPENSE OF THE TRUSTEE, THE DEPOSITOR OR THE SERVICER.
CLASS B-__ CERTIFICATE
Number: 06-S2-B-__-1 Original Denomination: $____
Cut-off Date: September 1, 2006 Final Scheduled Distribution Date: October 25,
2036
First Distribution Date: Aggregate Original Principal Balance of all
October 25, 2006 Class B-__ Certificates: $__________
Certificate Rate: CUSIP:
E-2
CHASE MORTGAGE FINANCE TRUST
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2006-S2
evidencing an ownership interest in distributions allocable to the Class B-__
Certificates with respect to a pool of conventional one-to four-family mortgage
loans formed and sold by
CHASE MORTGAGE FINANCE CORPORATION
Unless this Certificate is presented by an authorized representative
of the Depository Trust Company, a New York corporation ("DTC"), to the Paying
Agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co. has an interest herein.
This certifies that CEDE & CO. is the registered owner of the
ownership interest (the "Ownership Interest") evidenced by this Certificate
(obtained by dividing the Original Denomination of this Certificate by the
aggregate Original Denomination of all Class B-__ Certificates) in certain
distributions with respect to a pool of conventional one- to four-family first
lien mortgage loans (the "Mortgage Loans") formed and sold by Chase Mortgage
Finance Corporation (hereinafter called the "Depositor"), and certain other
property held in trust for the benefit of Certificateholders (collectively, the
"Trust Fund"). The Mortgage Loans are serviced by JPMorgan Chase Bank, N.A. (the
"Servicer") and are secured by first liens on Mortgaged Properties. The Trust
Fund was created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of September 1, 2006 among the Depositor, the Servicer,
the Paying Agent and The Bank of New York, as trustee (the "Trustee"), a summary
of certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Mortgage Finance Trust, Multi-Class Mortgage Pass-Through
Certificates, Series 2006-S2, Class B-__ (the "Class B-__ Certificates") and 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 the
acceptance hereof assents and by which Agreement such Holder is bound. Also
issued under the Agreement are Certificates designated as Chase Mortgage Finance
Trust, Multi-Class Mortgage Pass-Through Certificates, Series 2006-S2, Class A
Certificates and Class M Certificates. The rights of the Class B-__
Certificateholders to receive distributions in respect of the Class B
Certificates on any Distribution Date are subordinated to the rights of the
Class A and Class M Certificateholders to receive distributions in respect of
the Class A and Class M Certificates to the extent, and only to the extent, set
forth in the Agreement. The Class A Certificates, the Class M Certificates and
the Class B Certificates are collectively referred to herein as the
"Certificates." Amounts properly distributed to the Class B Certificateholders
pursuant to the Agreement will be deemed released from the Trust Fund, and the
Class B Certificateholders will not in any event be required to refund any such
distributed amounts.
Pursuant to the terms of the Agreement, the Paying Agent appointed
under Section 4.05 of the Agreement will distribute from funds in the
Certificate Account the amount as described on the reverse hereof on the 25th
day of each month or, if such 25th day is not a Business Day, the Business Day
immediately following (the "Distribution Date"), commencing on October 25, 2006.
Such distributions will be made to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
preceding the month in which such payment is made.
E-3
Distributions on this Certificate will be made either by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, or by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Paying Agent in writing at least 10 Business Days prior to the
first Distribution Date for which distribution by wire transfer is to be made,
and such Holder's Certificates evidence an aggregate original denomination of
not less than $5,000,000 or such Holder holds a 100% Percentage Interest of such
Class. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Paying Agent, of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office of the Paying Agent, for the purpose and specified in such notice of
final distribution.
The Paying Agent will cause to be kept at its Agency & Trust Office in
New York, New York, or at the office of its designated agent, a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Paying Agent will provide for the registration of Certificates and of
transfers and exchanges of Certificates. Upon surrender for registration of
transfer of any Certificate at any office or agency of the Paying Agent,
maintained for such purpose, the Paying Agent will, subject to the limitations
set forth in the Agreement, authenticate and deliver, in the name of the
designated transferee or transferees, a Certificate of a like class and dated
the date of authentication by the Authenticating Agent. Notwithstanding the
above, the final distribution on this Certificate will be made after due notice
by the Paying Agent, of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency of the
Paying Agent, for that purpose and specified in such notice of final
distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
E-4
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be
duly executed.
Dated: September 26, 2006 CHASE MORTGAGE FINANCE CORPORATION
By:
--------------------------------------------
Authorized Officer
E-5
Dated: September 26, 2006 CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in
the within-mentioned Agreement.
JPMORGAN CHASE BANK, N.A.
as Authenticating Agent
By:
--------------------------------------------
Authorized Signatory
E-6
REVERSE OF CERTIFICATE
CHASE MORTGAGE FINANCE TRUST
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2006-S2
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Mortgage Finance Trust, Multi-Class Mortgage Pass-Through
Certificates, Series 2006-S2, issued in one or more Classes of Class A, Class M
and Class B Certificates. The Class A Certificates evidence in the aggregate the
Class A Percentage of distributions relating to repayments of principal and
interest on the Mortgage Loans. The Class M Certificates evidence in the
aggregate the Class M Percentage of distributions relating to repayments of
principal and interest on the Mortgage Loans. The Class B Certificates evidence
in the aggregate the Class B Percentage of distributions relating to repayments
of principal and interest on the Mortgage Loans.
Following the initial issuance of the Certificates, the Principal
Balance of this Certificate will be different from the Original Denomination
shown above. Anyone acquiring this Certificate may ascertain its current
Principal Balance by inquiry of the Paying Agent.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that neither the Trustee nor the Paying
Agent is liable to the Holders 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 Trustee and the Paying Agent.
The Paying Agent will cause to be kept at its Agency & Trust Office in
New York, New York, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Paying Agent will provide for the
registration of Certificates and of transfers and exchanges of Certificates.
Upon surrender for registration of transfer of any Certificate at any office or
agency of the Paying Agent, the Paying Agent will, subject to the limitations
set forth in the Agreement, authenticate and deliver, in the name of the
designated transferee or transferees, a Certificate of a like Class and dated
the date of authentication by the Authenticating Agent.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Paying Agent 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 the Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Depositor, the
Servicer, the Paying Agent and the Trustee may treat the Person in whose name
any Certificate is registered as the owner of such Certificate and the
Percentage Interest in the Trust Fund evidenced thereby for the purpose of
receiving distributions pursuant to the Agreement and for all other purposes
whatsoever, and neither the Depositor, the Servicer, the Paying Agent nor the
Trustee will be affected by notice to the contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions therein which may
be inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC (as hereinafter defined) included in the Trust Fund as a
REMIC, or to make any other provisions with respect to matters or questions
arising under the Agreement which are
E-7
not materially inconsistent with the provisions of the Agreement, provided that
such action does not, as evidenced by an Opinion of Counsel, adversely affect in
any material respect the interests of any Certificateholder or cause any REMIC
included in the Trust Fund to fail to qualify as a REMIC.
The Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment may (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) reduce the aforesaid
percentage of Certificates of any Class the Holders of which are required to
consent to any such amendment or (iii) change the percentage specified in clause
(ii) of the first paragraph of Section 11.01 of the Agreement, without the
consent of the Holders of all Certificates of such Class then outstanding.
The Agreement provides that the Trust Fund will elect to be treated as
one or more "real estate mortgage investment conduits" for federal income tax
purposes (each, a "REMIC"). The Class A Certificates (other than the Class A-R
Certificate), the Class M Certificates and the Class B Certificates will
constitute "regular interests" in a REMIC. The Class A-R Certificate will
constitute the sole class of "residual interest" in each of the REMICs.
The respective obligations and responsibilities of the Depositor, the
Servicer (except the duty to pay the Trustee's fees and expenses and
indemnification hereunder) and the Trustee shall terminate upon (i) the later of
the final payment or other liquidation (or any Advance with respect thereto) of
the last Mortgage Loan or the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due hereunder; or (ii) at the option of the Servicer, on
any Distribution Date which occurs in the month next following a Due Date on
which the aggregate unpaid Principal Balance of all Outstanding Mortgage Loans
is less than 5% of the aggregate unpaid Principal Balance of the Mortgage Loans
on the Cut-off Date, so long as the Servicer deposits or causes to be deposited
in the applicable Collection Account during the Principal Prepayment Period
related to such Distribution Date (and provides notice to the Trustee of its
intention to so deposit on or before the 20th day of such Principal Prepayment
Period) an amount equal to the Purchase Price for each Outstanding Mortgage
Loan, less any unreimbursed Advances made with respect to any Mortgage Loan
(which amount shall offset completely any unreimbursed Advances for which the
Servicers are otherwise entitled to reimbursement), and, with respect to all
property acquired in respect of any Mortgage Loan remaining in the Trust Fund,
an amount equal to the fair market value of such property, as determined by an
appraisal to be conducted by an appraiser selected by the Trustee, less
unreimbursed Advances made with respect to any Mortgage Loan with respect to
which property has been acquired; provided, however, that in no event shall the
trust created by the Agreement continue beyond the expiration of 21 years from
the death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the Court of St. James's, living on the date
hereof.
E-8
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
________________________________________________________________________________
________________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
______________________________________________________ Attorney to transfer the
within Certificate on the books kept for the registration thereof, with full
power of substitution in the premises.
Dated:
(Signature guaranty) ----------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Certificate in every particular, without
alteration or enlargement or any change
whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
E-9
EXHIBIT F
FORM OF CLASS A-R CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN MULTIPLE "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE
MORTGAGE FINANCE CORPORATION ("CMFC"), JPMORGAN CHASE BANK, N.A. (THE
"SERVICER") OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER
THIS CERTIFICATE, THE REMIC RESIDUAL INTERESTS REPRESENTED HEREBY NOR THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY CMFC, THE SERVICER, THE
TRUSTEE OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE DEPOSITOR AND THE
TRUSTEE SHALL HAVE RECEIVED A REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS
CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT
TO ANY PROVISIONS UNDER ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR
REGULATIONS THAT ARE SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA
OR THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY
ACQUIRING THIS CERTIFICATE FOR, ON BEHALF OF, OR WITH ANY ASSETS OF ANY SUCH
PLAN.
TRANSFERABILITY OF THIS CERTIFICATE IS RESTRICTED UNDER THE PROVISIONS OF
SECTION 4.02 OF THE AGREEMENT.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.
CLASS A-R CERTIFICATE
Number: 06-S2-A-R-1 Original Denomination: $100.00
Cut-off Date: September 1, 2006 Final Scheduled Distribution Date: October 25,
2036
First Distribution Date: Aggregate Original Principal Balance of Class
October 25, 2006 A-R Certificate: $100.00
Certificate Rate: CUSIP:
2
CHASE MORTGAGE FINANCE TRUST
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2006-S2
evidencing an ownership interest in distributions allocable to the Class A-R
Certificate with respect to a pool of conventional one-to four-family mortgage
loans formed and sold by
CHASE MORTGAGE FINANCE CORPORATION
This certifies that JPMORGAN CHASE BANK, N.A. is the registered owner
of the ownership interest (the "Ownership Interest") evidenced by this
Certificate in certain distributions with respect to a pool of conventional one-
to four-family first lien mortgage loans (the "Mortgage Loans") formed and sold
by Chase Mortgage Finance Corporation (hereinafter called the "Depositor"), and
certain other property held in trust for the benefit of Certificateholders
(collectively, the "Trust Fund"). The Mortgage Loans are serviced by JPMorgan
Chase Bank, N.A. (the "Servicer") and are secured by first liens on Mortgaged
Properties. The Trust Fund was created pursuant to a Pooling and Servicing
Agreement (the "Agreement"), dated as of September 1, 2006 among the Depositor,
the Servicer, the Paying Agent and The Bank of New York, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement.
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Mortgage Finance Trust, Multi-Class Mortgage Pass-Through
Certificates, Series 2006-S2, Class A-R (the "Class A-R Certificate") and 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 the
acceptance hereof assents and by which Agreement such Holder is bound. Also
issued under the Agreement are Certificates designated as Chase Mortgage Finance
Trust, Multi-Class Mortgage Pass-Through Certificates, Series 2006-S2, Class M
Certificates and Class B Certificates. The Class A Certificates, the Class M
Certificates and the Class B Certificates are collectively referred to herein as
the "Certificates."
Pursuant to the terms of the Agreement, the Paying Agent will
distribute from funds in the Certificate Account the amount as described on the
reverse hereof on the 25th day of each month or, if such 25th day is not a
Business Day, the Business Day immediately following (the "Distribution Date"),
commencing on October 25, 2006. Such distributions will be made to the Person in
whose name this Certificate is registered at the close of business on the last
Business Day of the month preceding the month in which such payment is made.
Distributions on this Certificate will be made either by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, or by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, if such Holder has so
notified the Paying Agent in writing at least 10 Business Days prior to the
first Distribution Date for which distribution by wire transfer is to be made,
and such Holder's Certificates evidence an aggregate Original Denomination of
not less than $5,000,000 or such Holder holds a 100% Percentage Interest of such
Class. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Paying Agent, of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office of the Paying Agent, for the purpose and specified in such notice of
final distribution.
The Paying Agent will cause to be kept at its Agency & Trust Office in
New York, New York, or at the office of its designated agent, a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Paying Agent will provide for the registration of Certificates and of
transfers and
3
exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Paying Agent, maintained for such
purpose, the Paying Agent will, subject to the limitations set forth in the
Agreement, authenticate and deliver, in the name of the designated transferee or
transferees, a Certificate of a like class and dated the date of authentication
by the Authenticating Agent. Notwithstanding the above, the final distribution
on this Certificate will be made after due notice by the Paying Agent of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency of the Agreement, the Paying Agent, for that
purpose and specified in such notice of final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication has been executed by the
Authenticating Agent, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
4
IN WITNESS WHEREOF, the Depositor has caused this Certificate to be
duly executed.
Dated: September 26, 2006 CHASE MORTGAGE FINANCE CORPORATION
By:
------------------------------------
Authorized Officer
5
Dated: September 26, 2006 CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred
to in the within-mentioned Agreement.
JPMORGAN CHASE BANK, N.A.
as Authenticating Agent
By:
------------------------------------
Authorized Signatory
6
REVERSE OF CERTIFICATE
CHASE MORTGAGE FINANCE TRUST
MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 2006-S2
This Certificate is one of a duly authorized issue of Certificates,
designated as Chase Mortgage Finance Trust, Multi-Class Mortgage Pass-Through
Certificates, Series 2006-S2, issued in one or more Classes of Class A, Class M
and Class B Certificates. The Class A Certificates evidence in the aggregate the
Class A Percentage of distributions relating to repayments of principal and
interest on the Mortgage Loans. The Class M Certificates evidence in the
aggregate the Class M Percentage of distributions relating to repayments of
principal and interest on the Mortgage Loans. The Class B Certificates evidence
in the aggregate the Class B Percentage of distributions relating to repayments
of principal and interest on the Mortgage Loans.
Following the initial issuance of the Certificates, the Principal
Balance of this Certificate will be different from the Original Denomination
shown above. Anyone acquiring this Certificate may ascertain its current
Principal Balance by inquiry of the Paying Agent.
The Holder, by its acceptance of this Certificate, agrees that it will
look solely to the Trust Fund and certain amounts resulting from credit
enhancements for payment hereunder and that neither the Trustee nor the Paying
Agent is liable to the Holders 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 Trustee and the Paying Agent.
The Paying Agent will cause to be kept at its Agency & Trust Office in
New York, New York, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Paying Agent will provide for the
registration of Certificates and of transfers and exchanges of Certificates.
Upon surrender for registration of transfer of any Certificate at any office or
agency of the Paying Agent, the Paying Agent will, subject to the limitations
set forth in the Agreement, authenticate and deliver, in the name of the
designated transferee or transferees, a Certificate of a like Class and dated
the date of authentication by the Authenticating Agent.
No service charge will be made to the Holder for any transfer or
exchange of the Certificate, but the Paying Agent 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 the Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Depositor, the
Servicer, the Paying Agent and the Trustee may treat the Person in whose name
any Certificate is registered as the owner of such Certificate and the
Percentage Interest in the Trust Fund evidenced thereby for the purpose of
receiving distributions pursuant to the Agreement and for all other purposes
whatsoever, and neither the Depositor, the Servicer, the Paying Agent nor the
Trustee will be affected by notice to the contrary.
The Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions therein which may
be inconsistent with the other provisions therein, to ensure continuing
treatment of each REMIC (as hereinafter defined) included in the Trust Fund as a
REMIC, or to make any other provisions with respect to matters or questions
arising under the Agreement which are
not materially inconsistent with the provisions of the Agreement, provided that
such action does not, as evidenced by an Opinion of Counsel, adversely affect in
any material respect the interests of any Certificateholder or cause any REMIC
included in the Trust Fund to fail to qualify as a REMIC.
The Agreement may also be amended from time to time by the Depositor,
the Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment may (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) reduce the aforesaid
percentage of Certificates of any Class the Holders of which are required to
consent to any such amendment or (iii) change the percentage specified in clause
(ii) of the first paragraph of Section 11.01 of the Agreement, without the
consent of the Holders of all Certificates of such Class then outstanding.
The Agreement provides that the Trust Fund will elect to be treated as
one or more "real estate mortgage investment conduits" for federal income tax
purposes (each, a "REMIC"). The Class A Certificates (other than the Class A-R
Certificate), the Class M Certificates and the Class B Certificates will
constitute "regular interests" in a REMIC. The Class A-R Certificate will
constitute the sole class of "residual interest" in each of the REMICs.
The respective obligations and responsibilities of the Depositor, the
Servicer (except the duty to pay the Trustee's fees and expenses and
indemnification hereunder) and the Trustee shall terminate upon (i) the later of
the final payment or other liquidation (or any Advance with respect thereto) of
the last Mortgage Loan or the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due hereunder; or (ii) at the option of the Servicer, on
any Distribution Date which occurs in the month next following a Due Date on
which the aggregate unpaid Principal Balance of all Outstanding Mortgage Loans
is less than 5% of the aggregate unpaid Principal Balance of the Mortgage Loans
on the Cut-off Date, so long as the Servicer deposits or causes to be deposited
in the applicable Collection Account during the Principal Prepayment Period
related to such Distribution Date (and provides notice to the Trustee of its
intention to so deposit on or before the 20th day of such Principal Prepayment
Period) an amount equal to the Purchase Price for each Outstanding Mortgage
Loan, less any unreimbursed Advances made with respect to any Mortgage Loan
(which amount shall offset completely any unreimbursed Advances for which the
Servicer is otherwise entitled to reimbursement), and, with respect to all
property acquired in respect of any Mortgage Loan remaining in the Trust Fund,
an amount equal to the fair market value of such property, as determined by an
appraisal to be conducted by an appraiser selected by the Trustee, less
unreimbursed Advances made with respect to any Mortgage Loan with respect to
which property has been acquired; provided, however, that in no event shall the
trust created by the Agreement continue beyond the expiration of 21 years from
the death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the Court of St. James's, living on the date
hereof.
2
[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)
________________________________________________________________________________
________________________________________________________________________________
(Please Print or Type Name and Address of Assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint
________________________________________________Attorney to transfer the within
Certificate on the books kept for the registration thereof, with full power of
substitution in the premises.
Dated:
(Signature guaranty)
-------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within Certificate in
every particular, without alteration or
enlargement or any change whatever.
(*This information, which is voluntary, is being requested to ensure that the
assignee will not be subject to backup withholding under Section 3406 of the
Code.)
F-1
EXHIBIT G
FORM OF TRUSTEE CERTIFICATION
[DATE]
The Bank of New York, as trustee (the "Trustee") under the Pooling and
Servicing Agreement dated as of September 1, 2006 (the "Agreement") among Chase
Mortgage Finance Corporation (the "Company"), the Trustee, and JPMorgan Chase
Bank, N.A., regarding Chase Mortgage Finance Trust, Series 2006-S2, hereby
certifies that, except as noted in the Exception Report:
1. The Trustee or the Custodian on behalf of the Trustee took the
Mortgage Notes and other property in the Trust Fund in good faith for value and
without notice or knowledge (i) of any adverse claims, liens or encumbrances,
(ii) that any Mortgage Note was overdue or had been dishonored or subject to any
security interest or other right or interest therein, or (iii) of any defense
against or claim to the Mortgage Notes or other property in the Trust Fund on
the part of any entity;
2. The Trustee or the Custodian on behalf of the Trustee received
actual possession of the Mortgage Notes; and
3. The Trustee or the Custodian on behalf of the Trustee took
possession of the Mortgage Notes in the ordinary course of its business.
Capitalized words used herein shall have the respective meanings
assigned to them in the Agreement.
[SIGNATURE PAGE IMMEDIATELY FOLLOWS]
G-1
IN WITNESS WHEREOF, the undersigned executed this Trustee's
Certificate as of the 26th day of September, 2006.
THE BANK OF NEW YORK,
as Trustee
By:
---------------------------------------
Name:
Title:
G-2
EXHIBIT H
FORM OF INVESTMENT LETTER
(ACCREDITED INVESTOR)
[DATE]
JPMorgan Chase Bank, N.A.
0000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxx 00000
JPMorgan Chase Bank, N.A.
Global Trust Services
Four Xxx Xxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
The Bank of New York, as trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Corporate Trust Services/CMFT 2006-S2
Re: Chase Mortgage Finance Corporation Multi-Class Mortgage
Pass-Through Certificates, Series 2006-S2, [CLASS B- ]
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
________________ _________ (the "Transferor") $_______ by original principal
balance (the "Transferred Certificates") of Multi-Class Mortgage Pass-Through
Certificates, Series 2006-S2, [CLASS B- ] (the "Certificates"), issued pursuant
to a pooling and servicing agreement, dated as of September 1, 2006 (the
"Pooling and Servicing Agreement"), among Chase Mortgage Finance Corporation
(the "Depositor"), JPMorgan Chase Bank, N.A. ("Chase"), as servicer and
custodian, JPMorgan Chase Bank, N.A., as paying agent and The Bank of New York,
as trustee (the "Trustee"). [THE PURCHASER INTENDS TO REGISTER THE TRANSFERRED
CERTIFICATE IN THE NAME OF ____________________, AS NOMINEE FOR
__________________.] All terms used and not otherwise defined herein shall have
the meanings set forth in the Pooling and Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Purchaser certifies, represents and warrants
to, and covenants with, the Depositor and the Trustee that:
H-1
1. The Purchaser understands that (a) the Certificates have not been
registered or qualified under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state, (b) neither the
Depositor nor the Trustee is required, and neither of them intends, to so
register or qualify the Certificates, (c) the Certificates cannot be resold
unless (i) they are registered and qualified under the Securities Act and the
applicable state securities laws or (ii) an exemption from registration and
qualification is available and (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates.
2. The Certificates will bear a legend to the following effect:
THIS CLASS B CERTIFICATE HAS NOT AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS SOLD OR
TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT OR UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 4.02 OF THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
[THIS LEGEND WILL APPEAR ON THE CERTIFICATE ONLY IF SUCH CERTIFICATE
IS AN ERISA RESTRICTED CERTIFICATE.] NO TRANSFER OF THIS CERTIFICATE
SHALL BE MADE UNLESS THE DEPOSITOR SHALL HAVE RECEIVED (A) A
REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS CERTIFICATE TO THE
EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A PLAN SUBJECT TO
ANY PROVISIONS UNDER ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS
OR REGULATIONS THAT ARE SUBSTANTIVELY SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW") (COLLECTIVELY, A
"PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS CERTIFICATE
FOR, ON BEHALF OF OR WITH ANY ASSETS OF ANY SUCH PLAN, (B) IF THE
CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING,
A REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS AN
INSURANCE COMPANY THAT IS ACQUIRING THE CERTIFICATE WITH ASSETS OF AN
"INSURANCE COMPANY GENERAL ACCOUNT" AS DEFINED IN SECTION V(E) OF
PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60 AND THE
ACQUISITION AND HOLDING OF THE CERTIFICATE ARE COVERED AND EXEMPT
UNDER SECTIONS I AND III OF PTCE 95-60 OR (C) SOLELY IN THE CASE OF A
DEFINITIVE CERTIFICATE, AN OPINION OF COUNSEL SATISFACTORY TO THE
DEPOSITOR, AND UPON WHICH THE DEPOSITOR SHALL BE ENTITLED TO RELY, TO
THE EFFECT THAT THE ACQUISITION AND HOLDING OF THIS CERTIFICATE BY THE
PROSPECTIVE TRANSFEREE WILL NOT CONSTITUTE OR RESULT IN A NONEXEMPT
PROHIBITED TRANSACTION UNDER ERISA OR THE CODE OR A VIOLATION OF
SIMILAR LAW AND WILL NOT SUBJECT THE TRUSTEE, THE DEPOSITOR OR THE
SERVICER TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN BY SUCH
ENTITIES IN THE POOLING AND SERVICING AGREEMENT, WHICH
H-2
OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE
DEPOSITOR OR THE SERVICER.
3. The Purchaser is acquiring the Transferred Certificates for its own
account [for investment only]*/ and not with a view to or for sale or other
transfer in connection with any distribution of the Transferred Certificates in
any manner that would violate the Securities Act or any applicable state
securities laws, subject, nevertheless, to the understanding that disposition of
the Purchaser's property shall at all times be and remain within its control.
4. The Purchaser (a) is a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters,
and in particular in such matters related to securities similar to the
Certificates, such that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) is able to bear the economic risks of such
an investment and (c) is an "accredited investor" within the meaning of Rule
501(a) promulgated pursuant to the Securities Act.
5. The Purchaser will not nor has it authorized nor will it authorize
any Person to (a) offer, pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other similar security to
any Person in any manner, (b) solicit any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approach or negotiate with respect to any Certificate, any interest in
any Certificate or any other similar security with any person in any manner, (d)
make any general solicitation by means of general advertising or in any other
manner, or (e) take any other action, that would constitute a distribution of
any Certificate under the Securities Act or the Investment Company Act of 1940,
as amended (the "1940 Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Securities Act or any state
securities law, or that would require registration or qualification pursuant
thereto. Neither the Purchaser nor anyone acting on its behalf has offered the
Certificates for sale or made any general solicitation by means of general
advertising or in any other manner with respect to the Certificates. The
Purchaser will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing Agreement.
6. If the Purchaser is acquiring ERISA Restricted Certificates, the
Purchaser is not a Plan and is not acquiring the ERISA Restricted Certificates
for, on behalf of or with any assets of any such Plan, except as may be
permitted in accordance with Section 4.02(d) of the Pooling and Servicing
Agreement.
7. Prior to the sale or transfer by the Purchaser of any of the
Certificates, the Purchaser will obtain from any subsequent purchaser
substantially the same certifications, representations, warranties and covenants
contained in the foregoing paragraphs and in this letter or a letter
substantially in the form of Exhibit I to the Pooling and Servicing Agreement.
8. The Purchaser agrees to indemnify the Trustee, the Servicer and the
Depositor against any liability that may result from any misrepresentation made
herein.
9. The Purchaser has received such information as Purchaser deems
necessary in order to make its investment decision.
Very truly yours,
[PURCHASER]
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
----------
*/ Not required of a broker/dealer purchaser.
H-3
EXHIBIT I
FORM OF RULE 144A INVESTMENT LETTER
(QUALIFIED INSTITUTIONAL BUYER)
[DATE]
JPMorgan Chase Bank, N.A.
0000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxx 00000
JPMorgan Chase Bank, N.A.
Global Trust Services
Four Xxx Xxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
The Bank of New York, as trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Corporate Trust Services/CMFT 2006-S2
Re: Chase Mortgage Finance Corporation, Multi-Class Mortgage
Pass-Through Certificates, Series 2006-S2, [CLASS B-___]
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
_________________________ (the "Transferor") $_______ by original principal
balance (the "Transferred Certificates") of Multi-Class Mortgage Pass-Through
Certificates, Series 2006-S2, [CLASS B-] (the "Certificates"), issued pursuant
to a pooling and servicing agreement, dated as of September 1, 2006 (the
"Pooling and Servicing Agreement"), among Chase Mortgage Finance Corporation
(the "Depositor"), JPMorgan Chase Bank, N.A. ("Chase"), as servicer (the
"Servicer"), and The Bank of New York, as trustee (the "Trustee"). [THE
PURCHASER INTENDS TO REGISTER THE TRANSFERRED CERTIFICATE IN THE NAME OF
____________________, AS NOMINEE FOR __________________.] All terms used and not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Purchaser certifies, represents and warrants
to, and covenants with, the Depositor and the Trustee that:
I-1
In connection with our acquisition of the above Transferred Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Transferred Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Transferred Certificates, (d) solely with respect to an
ERISA Restricted Certificate, we (A) are not an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), a plan subject to Section 4975 of the Internal Revenue Code
of 1986, as amended (the "Code") or a plan subject to any provisions under any
federal, state, local, non-U.S. or other laws or regulations that are
substantively similar to the foregoing provisions of ERISA or the Code ("Similar
Law") (collectively, a "Plan"), and is not directly or indirectly acquiring the
Certificate for, on behalf of or with any assets of any such Plan, (B) if the
Certificate has been the subject of an ERISA-Qualifying Underwriting, are an
insurance company that is acquiring the Certificate with assets of an "insurance
company general account" as defined in Section V(e) of Prohibited Transaction
Class Exemption 95-60 ("PTCE 95-60"), and the acquisition and holding of the
Certificate are covered and exempt under Sections I and III of PTCE 95-60, or
(C) solely in the case of a Definitive Certificate, will deliver herewith an
Opinion of Counsel satisfactory to the Depositor and the Trustee, and upon which
the Depositor and the Trustee shall be entitled to rely, to the effect that the
acquisition and holding of this Certificate by the prospective transferee will
not constitute or result in a nonexempt prohibited transaction under ERISA or
the Code or a violation of Similar Law and will not subject the Trustee, the
Depositor or the Servicer to any obligation in addition to those undertaken by
such entities in the Pooling and Servicing Agreement, which Opinion of Counsel
shall not be an expense of the Trustee, the Depositor or the Servicer,(e) we
have not, nor has anyone acting on our behalf offered, transferred, pledged,
sold or otherwise disposed of the Certificates, any interest in the Certificates
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Certificates, any interest in the
Certificates or any other similar security from, or otherwise approached or
negotiated with respect to the Certificates, any interest in the Certificates or
any other similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Certificates under
the Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed one of the forms of certification to that effect attached
hereto as Annex 1 or Annex 2. We are aware that the sale of the Transferred
Certificates to us is being made in reliance on Rule 144A. We are acquiring the
Transferred Certificates for our own account or for resale pursuant to Rule 144A
and further understand that such Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed by us, based upon
certifications of such purchaser or information we have in our possession, to be
a qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the Securities Act. We
have received such information as we deem necessary in order to make our
investment decision.
I-2
We agree to indemnify the Trustee, the Servicer and the Depositor
against any liability that may result from any misrepresentation made herein.
Very truly yours,
[PURCHASER]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
I-3
ANNEX 1
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[FOR TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with the purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $____________*/ in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A)
and (ii) the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of
the Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking
institution organized under the laws of any State, territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by
Federal, State or territorial banking commission or similar
official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial statements, a
copy of which is attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative
bank, homestead association or similar institution, which is
supervised and examined by a State or Federal authority
having supervision over such institution or is a foreign
savings and loan association or equivalent institution and
(b) has an audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial statements, a
copy of which is attached hereto.
____ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934, as
amended.
----------
* Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own
and/or invest on a discretionary basis at least $10,000,000 in securities.
I-4
____ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by
insurance companies and which is subject to supervision by
the insurance commissioner or a similar official or agency
of the State, territory or the District of Columbia.
____ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income
Security Act of 1974, as amended.
____ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940, as
amended.
____ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958, as amended.
____ Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940, as amended.
3. The term "securities" as used for purposes of the calculation of
the dollar amount in paragraph 2 excludes: (i) securities of issuers that are
affiliated with the Buyer, (ii) securities that are part of an unsold allotment
to or subscription by the Buyer, if the Buyer is a dealer, (iii) securities
issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank
deposit notes and certificates of deposit, (v) loan participations, (vi)
repurchase agreements, (vii) securities owned but subject to a repurchase
agreement and (viii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan as
I-5
provided above, the Buyer agrees that it will furnish to such parties updated
annual financial statements promptly after they become available.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
I-6
ANNEX 2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[FOR TRANSFEREES THAT ARE REGISTERED INVESTMENT COMPANIES]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
____ The Buyer owned $___________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $__________ in securities (other than
the excluded securities referred to below) as of the end of
the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the
I-7
statements made herein because one or more sales to the Buyer will be in
reliance on Rule 144A. In addition, the Buyer will only purchase for the Buyer's
own account.
6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
IF AN ADVISER:
________________________________________
Print Name of Buyer
Date: __________________________________
I-8
EXHIBIT J
FORM OF SPECIAL SERVICING AND COLLATERAL FUND AGREEMENT
This SPECIAL SERVICING AND COLLATERAL FUND AGREEMENT (the "Agreement")
is made and entered into as of [DATE], between JPMorgan Chase Bank, N.A., (the
"Company") and _____________________ (the "Purchaser").
PRELIMINARY STATEMENT
__________________ (the "Owner") is the holder of the entire interest
in Chase Mortgage Finance Corporation Multi-Class Mortgage Pass-Through
Certificates, Series 2006-S2, Class B-5 (the "Class B-5 Certificates"). The
Class B-5 Certificates were issued pursuant to a Pooling and Servicing Agreement
dated as of September 1, 2006 (the "Pooling and Servicing Agreement") among
Chase Mortgage Finance Corporation, (the "Company"), JPMorgan Chase Bank, N.A.
as servicer thereunder (the "Servicer") and The Bank of New York, as trustee
(the "Trustee").
The Owner intends to resell all of the Class B-5 Certificates directly
to the Purchaser on or promptly after the date hereof.
In connection with such sale, the parties hereto have agreed that the
Company, as Servicer, will engage in certain special servicing procedures
relating to foreclosures for benefit of the Purchaser, and that the Purchaser
will deposit funds in a collateral fund to cover any losses attributable to such
procedures as well as all advances and costs in connection therewith, as set
forth herein.
In consideration of the mutual agreements herein contained, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Purchaser agree to the following:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which banking institutions in the State of New York are required or
authorized by law or executive order to be closed.
Collateral Fund: The fund established and maintained pursuant to
Section 3.01 hereof.
Collateral Fund Permitted Investments: Either: (i) obligations of, or
obligations fully guaranteed as to principal and interest by, the United States,
or any agency or instrumentality thereof, provided such obligations are backed
by the full faith and credit of the United States, (ii) a money market fund
rated in the highest rating category by a nationally recognized rating agency
selected by the Company, (iii) cash, (iv) mortgage pass-through certificates
issued or guaranteed by GNMA, FNMA or FHLMC, (v) commercial paper (including
both non-interest bearing discount obligations and interest bearing obligations
payable on demand or on a specified date), the issuer of which may be an
affiliate of the Company, having at the time of such investment a rating of at
least Prime-1 by Moody's Investors
J-1
Service, Inc. ("Moody's") or at least D-1 by Fitch Ratings and (vi) demand and
time deposits in, certificates of deposit of, any depository institution or
trust company (which may be an affiliate of the Company) incorporated under the
laws of the United States of America or any state thereof and subject to
supervision and examination by federal and/or state banking authorities, so long
as at the time of such investment either (x) the long-term debt obligations of
such depository institution or trust company have a rating of at least Aa by
Moody's or at least AA by Fitch Ratings or (y) the certificate of deposit or
other unsecured short-term debt obligations of such depository institution or
trust company have a rating of at least A-1 by Fitch Ratings or Prime-1 by
Moody's and, for each of the preceding clauses (i), (iv), (v) and (vi), the
maturity thereof shall be not later than the earlier to occur of (A) 30 days
from the date of the related investment and (B) the next succeeding Distribution
Date.
Commencement of Foreclosure: The first official action required under
local law in order to commence foreclosure proceedings or to schedule a
trustee's sale under a deed of trust, including (i) in the case of a mortgage,
any filing or service of process necessary to commence an action to foreclose,
or (ii) in the case of a deed of trust, the posting, publishing, filing or
delivery of a notice of sale, but not including in either case (x) any notice of
default, notice of intent to foreclose or sell or any other action prerequisite
to the actions specified in (i) or (ii) above and upon the consent of the
Purchaser which will be deemed given unless expressly withheld within two
Business Days of notification, (y) the acceptance of a deed-in-lieu of
foreclosure (whether in connection with a sale of the related property or
otherwise) or (z) initiation and completion of a short pay-off.
Current Appraisal: With respect to any Mortgage Loan as to which the
Purchaser has made an Election to Delay Foreclosure, an appraisal of the related
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan), obtained by the Purchaser at its expense from an appraiser (which shall
not be an affiliate of the Purchaser) acceptable to the Company as nearly
contemporaneously as practicable to the time of the Purchaser's election,
prepared based on the Company's customary requirements for such appraisals.
Election to Delay Foreclosure: Any election by the Purchaser to delay
the Commencement of Foreclosure, made in accordance with Section 2.02(b).
Election to Foreclose: Any election by the Purchaser to proceed with
the Commencement of Foreclosure, made in accordance with Section 2.03(a).
Required Collateral Fund Balance: As of any date of determination, an
amount equal to the aggregate of all amounts previously required to be deposited
in the Collateral Fund pursuant to Section 2.02(d) (after adjustment for all
withdrawals and deposits pursuant to Section 2.02(e)) and Section 2.03(b) (after
adjustment for all withdrawals and deposits pursuant to Section 2.03(c)) and
Section 3.03 to be reduced by all withdrawals therefrom pursuant to Section
2.02(g) and Section 2.03(d).
Section 1.02. Definitions Incorporated by Reference.
All capitalized terms not otherwise defined in this Agreement shall
have the meanings assigned in the Pooling and Servicing Agreement.
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ARTICLE II
SPECIAL SERVICING PROCEDURES
Section 2.01 Reports and Notices.
1. In connection with the performance of its duties under the Pooling
and Servicing Agreement relating to the realization upon defaulted Mortgage
Loans, the Company, as Servicer, shall provide to the Purchaser the following
notices and reports:
(a) Within five Business Days after each Distribution Date (or
included in or with the monthly statement to
Certificateholders pursuant to the Pooling and Servicing
Agreement), the Company shall provide to the Purchaser a
report indicating for the Trust the number of Mortgage Loans
that are (A) thirty days, (B) sixty days, (C) ninety days or
more delinquent or (D) in foreclosure, and indicating for
each such Mortgage Loan the outstanding principal balance.
(b) Prior to the Commencement of Foreclosure in connection with
any Mortgage Loan, the Company shall provide the Purchaser
with a notice (sent by telecopier) of such proposed and
imminent foreclosure, stating the loan number and the
aggregate amount owing under the Mortgage Loan.
2. If requested by the Purchaser, the Company shall make its servicing
personnel available (during their normal business hours) to respond to
reasonable inquiries by the Purchaser in connection with any Mortgage Loan
identified in a report under subsection (a)(i)(B), (a)(i)(C), (a)(i)(D) or
(a)(ii) which has been given to the Purchaser; provided, that (1) the Company
shall only be required to provide information that is readily accessible to its
servicing personnel and is non-confidential and (2) the Company shall not be
required to provide any written information under this subsection.
3. In addition to the foregoing, the Company shall provide to the
Purchaser such information as the Purchaser may reasonably request concerning
each Mortgage Loan that is at least sixty days delinquent and each Mortgage Loan
which has become real estate owned, through the final liquidation thereof;
provided that the Company shall only be required to provide information that is
readily accessible to its servicing personnel and is non-confidential.
(a) With respect to all Mortgage Loans which are serviced at any
time by the Company through a Subservicer, the Company shall
be entitled to rely for all purposes hereunder, including
for purposes of fulfilling its reporting obligations under
this Section 2.01 on the accuracy and completeness of any
information provided to it by the applicable Subservicer.
Section 2.02 Purchaser's Election to Delay Foreclosure Proceedings.
1. The Purchaser directs the Company that in the event that the
Company does not receive written notice of the Purchaser's election pursuant to
subsection (b) below within 24 hours (exclusive of any intervening non-Business
Days) of transmission of the notice provided by the Company under Section
2.01(a)(ii), subject to extension as set forth in Section 2.02(b), the Company
shall proceed with the Commencement of Foreclosure in respect of such Mortgage
Loan in accordance with its normal foreclosure policies without further notice
to the Purchaser. Any foreclosure that has been initiated may be discontinued
(i) without notice to the Purchaser, if the Mortgage Loan has been brought
current or if a refinancing or prepayment occurs with respect to the Mortgage
Loan (including by means of a short payoff approved by the Company) (ii) with
notice to the Purchaser if the Company has reached the terms of a forbearance
agreement with the borrower. In such latter case the Company may complete such
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forbearance agreement unless instructed otherwise by the Purchaser within one
Business Day of notification.
2. In connection with any Mortgage Loan with respect to which a notice
under Section 2.01(a)(ii) has been given to the Purchaser, the Purchaser may
elect, for reasonable cause as determined by the Purchaser, to instruct the
Company to delay the Commencement of Foreclosure until such term as the
Purchaser determines that the Company may proceed with the Commencement of
Foreclosure. Such election must be evidenced by written notice received within
24 hours (exclusive of any intervening non-Business Days) of transmission of the
notice provided by the Company under Section 2.01(a)(ii). Such 24 hour period
shall be extended for no longer than an additional four Business Days after the
receipt of the information if the Purchaser requests additional information
related to such foreclosure; provided, however that the Purchaser will have at
least one Business Day to respond to any requested additional information. Any
such additional information shall (i) not be confidential in nature and (ii) be
obtainable by the Company from existing reports, certificates or statements or
otherwise be readily accessible to its servicing personnel. The Purchaser agrees
that it has no right to deal with the Mortgagor. If the Company's normal
foreclosure policy includes acceptance of a deed-in-lieu of foreclosure or short
payoff, the Purchaser will be notified and given one Business Day to respond.
3. With respect to any Mortgage Loan as to which the Purchaser has
made an Election to Delay Foreclosure, the Purchaser shall obtain a Current
Appraisal as soon as practicable, and shall provide the Company with a copy of
such Current Appraisal.
4. Within two Business Days of making any Election to Delay
Foreclosure, the Purchaser shall remit by wire transfer to the Company, for
deposit in the Collateral Fund, an amount, as calculated by the Company, equal
to the sum of (i) 125% of the greater of the outstanding Principal Balance of
the Mortgage Loan and the value shown in the Current Appraisal referred to in
subsection (c) above (or, if such Current Appraisal has not yet been obtained,
the Company's estimate thereof, in which case the required deposit under this
subsection shall be adjusted upon obtaining of such Current Appraisal), and (ii)
three months' interest on the Mortgage Loan at the applicable Mortgage Rate. If
any Election to Delay Foreclosure extends for a period in excess of three months
(such excess period being referred to herein as the "Excess Period"), the
Purchaser shall remit by wire transfer in advance to the Company for deposit in
the Collateral Fund the amount, as calculated by the Company, equal to interest
on the Mortgage Loan at the applicable Mortgage Rate for the Excess Period. The
terms of this Agreement shall no longer apply to the servicing of any Mortgage
Loan upon the failure of the Purchaser to deposit the above amounts relating to
the Mortgage Loan within two Business Days of the Election to Delay Foreclosure.
5. With respect to any Mortgage Loan as to which the Purchaser has
made an Election to Delay Foreclosure, the Company may withdraw from the
Collateral Fund from time to time amounts necessary to reimburse the Company for
all Advances and Liquidation Expenses thereafter made by the Company as Servicer
in accordance with the Pooling and Servicing Agreement. To the extent that the
amount of any such Liquidation Expense is determined by the Company based on
estimated costs, and the actual costs are subsequently determined to be higher,
the Company may withdraw the additional amount from the Collateral Fund. In the
event that the Mortgage Loan is brought current by the Mortgagor and the
foreclosure action is discontinued, the amounts so withdrawn from the Collateral
Fund shall be redeposited therein as and to the extent that reimbursement
therefor from amounts paid by the Mortgagor is not prohibited pursuant to the
Pooling and Servicing Agreement. Except as provided in the preceding sentence,
amounts withdrawn from the Collateral Fund to cover Advances and Liquidation
Expenses shall not be redeposited therein or otherwise reimbursed to the
Purchaser. If and when any such Mortgage Loan is brought current by the
Mortgagor, all amounts remaining in the Collateral Fund in respect of such
J-4
Mortgage Loan (after adjustment for all withdrawals and deposits pursuant to
this subsection) shall be released to the Purchaser.
6. With respect to any Mortgage Loan as to which the Purchaser has
made an Election to Delay Foreclosure, the Company shall continue to service the
Mortgage Loan in accordance with its customary procedures (other than the delay
in Commencement of Foreclosure as provided herein). If and when the Purchaser
shall notify the Company that it believes that it is appropriate to do so, the
Company shall proceed with the Commencement of Foreclosure. In any event, if the
Mortgage Loan is not brought current by the Mortgagor by the time the loan
becomes 6 months delinquent, the Purchaser's election shall no longer be
effective and at the Purchaser's option, either (i) the Purchaser shall purchase
the Mortgage Loan from the Trust Fund at a purchase price equal to the fair
market value as shown on the Current Appraisal, to be paid by (x) applying any
balance in the Collateral Fund to such purchase price, and (y) to the extent of
any deficiency, by wire transfer of immediately available funds to the Company
or Trustee; or (ii) the Company shall proceed with the Commencement of
Foreclosure.
7. Upon the occurrence of a liquidation with respect to any Mortgage
Loan as to which the Purchaser made an Election to Delay Foreclosure and as to
which the Company proceeded with the Commencement of Foreclosure in accordance
with subsection (f) above, the Company shall calculate the amount, if any, by
which the value shown on the Current Appraisal obtained under subsection (c)
exceeds the actual sales price obtained for the related Mortgaged Property (or
stock allocated to a dwelling unit in the case of a Co-op Loan) (net of
Liquidation Expenses and accrued interest related to the extended foreclosure
period), and the Company shall withdraw the amount of such excess from the
Collateral Fund, shall remit the same to the Trust Fund and in its capacity as
Servicer shall apply such amount as additional Liquidation Proceeds pursuant to
the Pooling and Servicing Agreement. After making such withdrawal, all amounts
remaining in the Collateral Fund in respect of such Mortgage Loan (after
adjustment for all withdrawals and deposits pursuant to subsection (e)) shall be
released to the Purchaser.
Section 2.03 Purchaser's Election to Commence Foreclosure Proceedings.
1. In connection with any Mortgage Loan identified in a report under
Section 2.01(a)(i)(B), the Purchaser may elect, for reasonable cause as
determined by the Purchaser, to instruct the Company to proceed with the
Commencement of Foreclosure as soon as practicable. Such election must be
evidenced by written notice received by the Company by 5:00 p.m., New York City
time, on the third Business Day following the delivery of such report under
Section 2.01(a)(i).
2. Within two Business Days of making any Election to Foreclose, the
Purchaser shall remit to the Company, for deposit in the Collateral Fund, an
amount, as calculated by the Company, equal to 125% of the current Principal
Balance of the Mortgage Loan and three months' interest on the Mortgage Loan at
the applicable Mortgage Rate. If and when any such Mortgage Loan is brought
current by the Mortgagor, all amounts in the Collateral Fund in respect of such
Mortgage Loan shall be released to the Purchaser. The terms of this Agreement
shall no longer apply to the servicing of any Mortgage Loan upon the failure of
the Purchaser to deposit the above amounts relating to the Mortgage Loans within
two Business Days at the Election to Foreclose.
3. With respect to any Mortgage Loan as to which the Purchaser has
made an Election to Foreclose, the Company shall continue to service the
Mortgage Loan in accordance with its customary procedures (other than to proceed
with the Commencement of Foreclosure as provided herein). In connection
therewith, the Company shall have the same rights to make withdrawals for
Advances and Liquidation Expenses from the Collateral Fund as are provided under
Section 2.02(e), and the Company shall make reimbursements thereto to the
limited extent provided under such subsection. The Company shall not be required
to proceed with the Commencement of Foreclosure if (i) the same is stayed as a
result of the Mortgagor's bankruptcy or is otherwise barred by applicable law,
or to the extent that all
J-5
legal conditions precedent thereto have not yet been complied with or (ii) the
Company believes there is a breach of representation or warranties by the
Company, which may result in a repurchase or substitution of such Mortgage Loan,
or (iii) the Company reasonably believes the Mortgaged Property (or Underlying
Mortgaged Property, in the case of a Co-op Loan) may be contaminated with or
affected by hazardous wastes or hazardous substances (and the Company supplies
the Purchaser with information supporting such belief). The Company will
repurchase or substitute a Mortgage Loan pursuant to the preceding clause (ii)
within the time period specified in the Pooling and Servicing Agreement. Any
foreclosure that has been initiated may be discontinued (i) without notice to
the Purchaser if the Mortgage Loan has been brought current or if a refinancing
or prepayment occurs with respect to the Mortgage Loan (including by means of a
short payoff approved by the Company), or (ii) with notice to the Purchaser if
the Company has reached the terms of a forbearance agreement unless instructed
otherwise by the Purchaser within two Business Days of notification.
4. Upon the occurrence of a liquidation with respect to any Mortgage
Loan as to which the Purchaser made an Election to Foreclose and as to which the
Company proceeded with the Commencement of Foreclosure in accordance with
subsection (c) above, the Company shall calculate the amount, if any, by which
the Principal Balance of the Mortgage Loan at the time of liquidation (plus all
unreimbursed Advances and Liquidation Expenses in connection therewith other
than those paid from the Collateral Fund) exceeds the actual sales price
obtained for the related Mortgaged Property (or stock allocated to a dwelling
unit in the case of a Co-op Loan), and the Company shall withdraw the amount of
such excess from the Collateral Fund, shall remit the same to the Trust Fund and
in its capacity as Servicer shall apply such amount as additional Liquidation
Proceeds pursuant to the Pooling and Servicing Agreement. After making such
withdrawal, all amounts remaining in the Collateral Fund (after adjustment for
all withdrawals and deposits pursuant to subsection (c)) in respect of such
Mortgage Loan shall be released to the Purchaser.
Section 2.04 Termination.
1. With respect to all Mortgage Loans included in the Trust Fund, the
Purchaser's rights to make any Election to Delay Foreclosure or any Election to
Foreclose and the Company's obligations under Section 2.01 shall terminate (i)
at such time as the Outstanding Certificate Principal Balance of the Class B-5
Certificates has been reduced to zero, (ii) if the greater of (x) ___% (or such
lower or higher percentages that represents the Company's actual historical loss
experience with respect to the Mortgage Loans in the related pool) of the
aggregate principal balance of all Mortgage Loans that are in foreclosure or are
more than 90 days delinquent on a contractual basis and REO properties or if the
aggregate amount that the Company estimates will be required to be withdrawn
from the Collateral Fund with respect to Mortgage Loans as to which the
Purchaser has made an Election to Delay Foreclosure or an Election to Foreclose
exceeds (z) the Outstanding Certificate Principal Balance of the Class B-5
Certificates, or (iii) upon any transfer by the Purchaser of any interest (other
than the minority interest therein, but only if the transferee provides written
acknowledgment to the Company of the Purchaser's right hereunder and that such
transferee will have no rights hereunder) in the Class B-5 Certificates (whether
or not such transfer is registered under the Pooling and Servicing Agreement),
including any such transfer in connection with a termination of the Trust Fund.
Except as set forth above, this Agreement and the respective rights, obligations
and responsibilities of the Purchaser and the Company hereunder shall terminate
upon the later to occur of (i) the final liquidation of the last Mortgage Loan
as to which the Purchaser made any Election to Delay Foreclosure or any Election
to Foreclose and the withdrawal of all remaining amounts in the Collateral Fund
as provided herein and (ii) ten (10) Business Day's notice.
2. Purchaser's rights pursuant to Section 2.02 or 2.03 of this
Agreement shall terminate with respect to a Mortgage loan as to which the
Purchaser has exercised its rights under Section 2.02 or 2.03 hereof, upon
Purchaser's failure to deposit any amounts required pursuant to Section 2.02(d)
or 2.03(b).
J-6
3. Neither the Servicer nor any of its directors, officers, employees
or agents shall be under any liability for any action taken or for refraining
from the taking of any action in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect the
Servicer or any such Person against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Servicer and any director, officer, employee or agent
thereof may rely in good faith on any document of any kind prima facie properly
executed and submitted by an Person respecting any matters arising hereunder.
ARTICLE III
COLLATERAL FUND; SECURITY INTEREST
Section 3.01 Collateral Fund.
1. Upon receipt from the Purchaser of the initial amount required to
be deposited in the Collateral Fund pursuant to Article 11, the Company shall
establish and maintain with itself as a segregated account on its books and
records an account (the "Collateral Fund"), entitled "JPMorgan Chase Bank, N.A.,
as Servicer, for the benefit of registered holders of Chase Mortgage Finance
Corporation Multi-Class Mortgage Pass-Through Certificates, Series 2006-S2,
Class B-5." Amounts in the Collateral Fund shall continue to be the property of
the Purchaser, subject to the first priority security interest granted hereunder
for the benefit of the Certificate holders, until withdrawn from the Collateral
Fund pursuant to Section 2.02 or 2.03 hereof.
2. Upon the termination of this Agreement and the liquidation of all
Mortgage Loans as to which the Purchaser has made any Election to Delay
Foreclosure or any Election to Foreclose pursuant to Section 2.04 hereof, the
Company shall distribute to the Purchaser all amounts remaining in the
Collateral Fund together with any investment earnings thereon.
3. The Collateral Fund shall be an "outside reserve fund" within the
meaning of the REMIC Provisions, beneficially owned by the Purchaser, who shall
report all income, gain or loss with respect thereto. Any amounts transferred
from the Trust Fund to the Collateral Fund shall be deemed to be transferred to
the Purchaser, as beneficial owner of the Collateral Fund. In no event shall the
Purchaser (i) take or cause the Trustee or the Company to take any action that
could cause any REMIC established under the Trust Agreement to fail to qualify
as a REMIC or cause the imposition on any such REMIC of any "prohibited
transaction" or "prohibited contribution" taxes or (ii) cause the Trustee or the
Company to fail to take any action necessary to maintain the status of any such
REMIC as a REMIC.
Section 3.02. Collateral Fund Permitted Investments.
1. The Company shall, at the written direction of the Purchaser invest
the funds in the Collateral Fund in Collateral Fund Permitted Investments. Such
direction shall not be changed more frequently than quarterly. In the absence of
any direction, the Company shall select such investments in accordance with the
definition of Collateral Fund Permitted Investments in its discretion.
2. All income and gain realized from any investment as well as any
interest earned on deposits in the Collateral Fund (net of any losses on such
investments) and any payments of principal made in respect of any Collateral
Fund Permitted Investment shall be deposited in the Collateral Fund upon
receipt. All costs and realized losses associated with the purchase and sale of
Collateral Fund Permitted Investments shall be borne by the Purchaser and the
amount of net realized losses shall be deposited by the Purchaser in the
Collateral Fund. The Company shall periodically (but not more frequently than
monthly) distribute to the Purchaser upon request an amount of cash, to the
extent cash is
J-7
available therefor in the Collateral Fund, equal to the amount by which the
balance of the Collateral Fund, after giving effect to all other distributions
to be made from the Collateral Fund on such date, exceeds the Required
Collateral Fund Balance. Any amounts so distributed shall be released from the
lien and security interest of this Agreement.
Section 3.03 Grant of Security Interest.
1. The Purchaser grants to the Company and the Trustee for the benefit
of the Certificateholders a security interest in and lien on all of the
Purchaser's right, title and interest, whether now owned or hereafter acquired,
in and to: (1) the Collateral Fund, (2) all amounts deposited in the Collateral
Fund and Collateral Fund Permitted Investments in which such amounts are
invested (and the distributions and proceeds of such investments) and (3) all
cash and non-cash proceeds of any of the foregoing, including proceeds of the
voluntary or involuntary conversion thereof (all of the foregoing collectively,
the "Collateral").
2. The Purchaser acknowledges the lien on and security interest in the
Collateral for the benefit of the Certificateholders. The Purchaser shall take
all actions requested by the Company or the Trustee as may be reasonably
necessary to perfect the security interest created under this Agreement in the
Collateral and cause it to be prior to all other security interests and liens,
including the execution and delivery to the Company for filing of appropriate
financing statements in accordance with applicable law. The Company shall file
appropriate continuation statements, or appoint an agent on its behalf to file
such statements, in accordance with applicable law.
Section 3.04 Collateral Shortfalls.
In the event that amounts on deposit in the Collateral Fund at any
time are insufficient to cover any withdrawals therefrom that the Company or the
Trustee is then entitled to make hereunder, the Purchaser shall be obligated to
pay such amounts to the Company or the Trustee immediately upon demand. Such
obligation shall constitute a general corporate obligation of the Purchaser.
ARTICLE IV
MISCELLANEOUS PROVISIONS
Section 4.01 Amendment.
This Agreement may be amended from time to time by the Company and the
Purchaser by written agreement signed by the Company and the Purchaser.
Section 4.02 Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.
Section 4.03 Governing Law.
This Agreement shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
Section 4.04 Notices.
J-8
All demands, notices and direction hereunder shall be in writing or by
telecopy and shall be deemed effective upon receipt to:
in the case of the Company,
JPMorgan Chase Bank, N.A.
0000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxx 00000
such other address as may hereafter be furnished in writing by the Company, or
in the case of the Purchaser, with respect to notices pursuant to Section 2.01,
[PURCHASER]
----------------------------------------
[ADDRESS]
Attn:
----------------------------------
Phone:
---------------------------------
Fax:
-----------------------------------
with respect to all other notices pursuant to this Agreement,
----------------------------------------
[ADDRESS]
Attn:
----------------------------------
Phone:
---------------------------------
Fax:
-----------------------------------
or such other address as may hereafter be furnished in writing by the Purchaser.
Section 4.05 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever, including regulatory, held
invalid, then such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of this
Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Agreement.
Section 4.06 Successors and Assigns.
The provisions of this Agreement shall be binding upon and inure to
the benefit of the respective successors and assigns of the parties hereto, and
all such provisions shall inure to the benefit of the Certificateholders;
provided, however, that the rights under this Agreement cannot be assigned by
the Purchaser without the consent of the Company.
Section 4.07 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.
J-9
Section 4.08 Confidentiality.
The Purchaser agrees that all information supplied by or on behalf of
the Company pursuant to Sections 2.01 or 2.02, including individual account
information, is the property of the Company and the Purchaser agrees to hold
such information confidential and not to disclose such information.
J-10
IN WITNESS WHEREOF, the Company and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
JPMORGAN CHASE BANK, N.A.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
----------------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
J-11
EXHIBIT K
FORM OF CLASS A-R TRANSFEREE'S LETTER
CHASE MORTGAGE FINANCE CORPORATION SERIES 2006-S2
[DATE]
Chase Mortgage Finance Corporation
000 Xxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
JPMorgan Chase Bank, N.A.
Global Trust Services
Four Xxx Xxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
The Bank of New York, as trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Corporate Trust Services/CMFT 2006-S2
Ladies and Gentlemen:
We propose to purchase Chase Mortgage Finance Corporation's
Multi-Class Mortgage Pass-Through Certificates, Series 2006-S2, Class A-R,
described in the Prospectus Supplement, dated September 25, 2006 and Prospectus,
dated September 25, 2006.
1. We certify that (a) we are not a disqualified organization, (b) we
are not purchasing such Class A-R Certificate on behalf of a disqualified
organization and (c) we are not an entity that holds such Class A-R Certificate
as nominee to facilitate the clearance and settlement of such securities through
electronic book-entry changes in accounts of participating organizations; for
this purpose the term "disqualified organization" means the United States, any
state or political subdivision thereof, any foreign government, any
international organization, any agency or instrumentality of any of the
foregoing (except any entity treated as other than an instrumentality of the
foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code of
1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code. We
understand that any breach by us of this certification may cause us to be liable
for an excise tax imposed upon transfers to disqualified organizations.
2. We certify that we are not an employee benefit plan subject to
Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), a plan subject to Section 4975 of the Internal Revenue Code of 1986,
as amended (the "Code") or a plan or arrangement subject to any provisions under
any federal, state, local, non-U.S. or other laws or regulations that are
substantively similar to the
K-1
foregoing provisions of ERISA or the Code (collectively, a "Plan"), and are not
directly or indirectly acquiring the Class A-R Certificate for, on behalf of or
with any assets of any such Plan.
3. We certify that (a) we have historically paid our debts as they
became due, (b) we intend, and believe that we will be able, to continue to pay
our debts as they become due in the future, (c) we understand that, as
beneficial owner of the Class A-R Certificate, we may incur tax liabilities in
excess of any cash flows generated by the Class A-R Certificate, (d) we intend
to pay any taxes associated with holding the Class A-R Certificate as they
become due and (e) we will not cause income from the Class A-R Certificate to be
attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of ours or another U.S. taxpayer.
4. We acknowledge that we will be the beneficial owner of the Class
A-R Certificate and:*/
______ The Class A-R Certificate will be registered in our name.
______ The Class A-R Certificate will be held in the name of our
nominee, ____________________, which is not a disqualified
organization.
5. Unless Chase Mortgage Finance Corporation ("CMFC") has consented to
the transfer to us by executing the form of Consent affixed hereto as Appendix
B, we certify that we are a U.S. person; for this purpose the term "U.S. Person"
means a citizen or resident of the United States, a corporation or partnership
(unless, in the case of a partnership, Treasury regulations are adopted that
provide otherwise) created or organized in or under the laws of the United
States, any state thereof or the District of Columbia, including an entity
treated as a corporation or partnership for federal income tax purposes, an
estate whose income is subject to Unites States federal income tax regardless of
its source, or a trust if a court within the United States is able to exercise
primary supervision over the administration of such trust, and one or more such
U.S. Persons have the authority to control all substantial decisions of such
trust, (or, to the extent provided in applicable Treasury regulations, certain
trusts in existence on August 20, 1996 which are eligible to elect to be treated
as U.S. Persons). We agree that any breach by us of this certification shall
render the transfer of any interest in the Class A-R Certificate to us
absolutely null and void and shall cause no rights in the Class A-R Certificate
to vest in us.
6. We agree that in the event that at some future time we wish to
transfer any interest in the Class A-R Certificate, we will transfer such
interest in the Class A-R Certificate only (a) to a transferee that (i) is not a
disqualified organization and is not purchasing such interest in the Class A-R
Certificate on behalf of a disqualified organization, (ii) is a U.S. person and
(iii) has delivered to CMFC a letter in the form of this letter (including the
affidavit appended hereto) and, if requested by CMFC, an opinion of counsel (in
a form acceptable to CMFC) that the proposed transfer will not cause the
interest in the Class A-R Certificate to be held by a disqualified organization
or a person who is not a U.S. person or (b) with the written consent of CMFC.
7. We hereby designate JPMorgan Chase Bank, N.A. as our fiduciary to
act as the tax matters person for the Series 2006-S2 REMICs.
Very truly yours,
[PURCHASER]
----------
*/ Check appropriate box and if necessary fill in the name of the Transferee's
- nominee.
K-2
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Accepted as of , 200_
---------------
CHASE MORTGAGE FINANCE CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
K-3
APPENDIX A
Affidavit pursuant to (i) Section 860E(e)(4) of the Internal Revenue Code of
1986, as amended, and (ii) certain provisions of the Pooling and Servicing
Agreement
Under penalties of perjury, the undersigned declares that the
following is true:
(1) He or she is an officer of _________________________ (the
"Transferee"),
(2) the Transferee's Employee Identification number is __________,
(3) the Transferee is not a "disqualified organization" (as defined
below), has no plan or intention of becoming a disqualified
organization, and is not acquiring any of its interest in the
Chase Mortgage Finance Corporation, Multi-Class Mortgage
Pass-Through Certificates, Series 2006-S2, Class A-R on behalf of
a disqualified organization or any other entity,
(4) unless Chase Mortgage Finance Corporation ("CMFC") has consented
to the transfer to the Transferee by executing the form of
Consent affixed as Appendix B to the Transferee's Letter to which
this Certificate is affixed as Appendix A, the Transferee is a
"U.S. Person" (as defined below),
(5) that no purpose of the transfer is to avoid or impede the
assessment or collection of tax,
(6) the Transferee has historically paid its debts as they became
due,
(7) the Transferee intends, and believes that it will be able, to
continue to pay its debts as they become due in the future,
(8) the Transferee understands that, as beneficial owner of the Class
A-R Certificate, it may incur tax liabilities in excess of any
cash flows generated by the Class A-R Certificate,
(9) the Transferee intends to pay any taxes associated with holding
the Class A-R Certificate as they become due,
(10) the Transferee consents to any amendment of the Pooling and
Servicing Agreement that shall be deemed necessary by CMFC (upon
advice of counsel) to constitute a reasonable arrangement to
ensure that the Class A-R Certificate will not be owned directly
or indirectly by a disqualified organization, and
(11) IF BRACKETED, THE FOLLOWING CERTIFICATIONS ARE INAPPLICABLE [the
transfer is not a direct or indirect transfer of the Class A-R
Certificate to a foreign permanent establishment or fixed base
(within the meaning of an applicable income tax treaty) of the
Transferee, and as to each of the residual interests represented
by the Class A-R Certificate, the present value of the
anticipated tax liabilities associated with holding such residual
interest does not exceed the sum of:
the present value of any consideration given to the Transferee to
acquire such residual interest;
the present value of the expected future distributions on such
residual interest; and
the present value of the anticipated tax savings associated with
holding such residual interest as the related REMIC generates losses.
K-4
For purposes of this declaration, (i) the Transferee is assumed
to pay tax at a rate equal to the highest rate of tax specified
in Section 11(b)(1) of the Code, but the tax rate specified in
Section 55(b)(1)(B) of the Code may be used in lieu of the
highest rate specified in Section 11(b)(1) of the Code if the
Transferee has been subject to the alternative minimum tax under
Section 55 of the Code in the preceding two years and will
compute its taxable income in the current taxable year using the
alternative minimum tax rate, and (ii) present values are
computed using a discount rate equal to the Federal short-term
rate prescribed by Section 1274(d) of the Code for the month of
the transfer and the compounding period used by the Transferee;]
[Alternative (A) at the time of the transfer, and at the close of
(11) each of the Transferee's two fiscal years preceding the year of
transfer, the Transferee's gross assets for financial reporting
purposes exceed $100 million and its net assets for financial
reporting purposes exceed $10 million; and
(B) the Transferee is an eligible corporation as defined in Treasury
regulation Section 1.860E-1(c)(6)(i) and has agreed in writing
that any subsequent transfer of the Class A-R Certificate will be
to another eligible corporation in a transaction that satisfies
Treasury regulation Sections 1.860E-1(c)(4)(i),
1.860E-1(c)(4)(ii), 1.860E-1(c)(4)(iii) and 1.860E-1(c)(5) and
such transfer will not be a direct or indirect transfer to a
foreign permanent establishment (within the meaning of an
applicable income tax treaty) of a domestic corporation.
For purposes of this declaration, (i) the gross assets and net
assets of the Transferee do not include any obligation of any
related person (as defined in Treasury regulation section
1.860E-1(c)(6)(ii)) or any other asset if a principal purpose for
holding or acquiring the other asset is to permit the Transferee
to make this declaration or to satisfy the requirements of
Treasury regulation section 1.860E-1(c)(5)(i);]
[Alternative (11) Intentionally left blank;]
(12) the Transferee represents that it will not cause income from the
Class A-R Certificate to be attributable to a foreign permanent
establishment or fixed base (within the meaning of an applicable income tax
treaty) of the Transferee or another U.S. taxpayer;
For purpose of this affidavit, the term "disqualified
organization" means the United States, any state or political
subdivision thereof, any foreign government, any international
organization, any agency or instrumentality of any of the
foregoing (except any entity treated as other than an
instrumentality of the foregoing for purposes of Section
168(h)(2)(D) of the Internal Revenue Code of 1986, as amended
(the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from
taxation under the Code (unless such organization is subject to
tax on excess inclusions) and any organization that is described
in Section 1381(a)(2)(C) of the Code and the term "U.S. Person"
means a citizen or resident of the United States, a corporation
or partnership (unless, in the case of a partnership, Treasury
regulations are adopted that provide otherwise) created or
organized in or under the laws of the United States, any state
thereof or the District of Columbia, including an entity treated
as a corporation or partnership for federal income tax purposes,
an estate whose income is subject to Unites States federal income
tax regardless of its source, or a trust if a court within the
United States is able to exercise primary supervision over the
administration of such trust, and one or more such U.S. Persons
have the authority to control all substantial decisions of
K-5
such trust, (or, to the extent provided in applicable Treasury
regulations, certain trusts in existence on August 20, 1996 which
are eligible to elect to be treated as U.S. Persons).
K-6
-------------------------------------
By:
----------------------------------
-------------------------------------
Address of Investor for receipt of distribution:
Address of Investor for receipt of tax information:
(Corporate Seal)
Attest:
______________________________________
_____________________________________, Secretary
Personally appeared before me the above-named ______________, known or proved to
me to be the same person who executed the foregoing instrument and to be the
_______ of the Investor, and acknowledged to me that he executed the same as his
free act and deed and the free act and deed of the Investor.
Subscribed and sworn before me this ____ day of __________ , 200__.
Notary Public
County of
___________________________
State of
___________________________
My commission expires the ____ day of _______________
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Dated:
-------------------------------
K-7
APPENDIX B
CONSENT
(Transferee)
_____________________________________
_____________________________________
_____________________________________
_____________________________________
Ladies and Gentlemen:
Chase Mortgage Finance Corporation ("CMFC") hereby consents to the
transfer to, and registration in the name of, the Transferee (or, if applicable,
registration in the name of such Transferee's nominee of the Multi-Class
Mortgage Pass-Through Certificates, Series 2006-S2, Class A-R described in the
Transferee's Letter to which this Consent is appended, notwithstanding CMFC's
knowledge that the Transferee is not a U.S. Person (as defined in such
Transferee's Letter).
CHASE MORTGAGE FINANCE CORPORATION
By:
------------------------------------
Dated:
-------------------------------
K-8
EXHIBIT K-1
FORM OF CLASS A-R TRANSFEROR'S LETTER
CHASE MORTGAGE FINANCE CORPORATION SERIES 2006-S2
[DATE]
JPMorgan Chase Bank, N.A.
Global Trust Services
Four Xxx Xxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
The Bank of New York, as trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Corporate Trust Services/CMFT 2006-S2
We propose to transfer to ___________________ (the "Transferee") Chase
Mortgage Finance Corporation's Multi-Class Mortgage Pass-Through Certificates,
Series 2006-S2, Class A-R, described in the Prospectus Supplement, dated
September 25, 2006 and Prospectus, dated September 25, 2006. We have reviewed
the attached affidavit of the Transferee, and have no actual knowledge that such
affidavit is not true, and have no reason to believe that the Transferee has the
intention to impede the assessment or collection of any federal, state or local
taxes legally required to be paid with respect to the Class A-R Certificate
referred to in the attached affidavit. In addition, we have conducted a
reasonable investigation at the time of the transfer and found that the
Transferee has historically paid its debts as they came due and we found no
significant evidence to indicate that the Transferee will not continue to pay
its debts as they become due.
Very truly yours,
------------------------------
Name:
Title:
K-1-1
EXHIBIT L
REQUEST FOR RELEASE OF DOCUMENTS
To: JPMorgan Chase Bank, N.A.
0000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxx 00000
Re: Pooling and Servicing Agreement, dated as of September 1, 2006,
by and among Chase Mortgage Finance Corporation, JPMorgan Chase
Bank, N.A. and The Bank of New York relating to the issuance of
the Series 2006-S2 Multi-Class Mortgage Pass-Through Certificates
In connection with the administration of the Mortgage Loans held by
you, as Custodian on behalf of the Trustee, pursuant to the above-captioned
Pooling and Servicing Agreement, we request the release, and hereby acknowledge
receipt, of the Mortgage File for the Mortgage Loan described below, for the
reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
_______ 1. Mortgage Paid in Full
_______ 2. Foreclosure
_______ 3. Substitution
_______ 4. Other Liquidation
_______ 5. Nonliquidation Reason:
-------------------------------------------
By: ---------------------------------------
(authorized signatory)
Issuer:
-----------------------------------
Address:
----------------------------------
-------------------------------------------
Date:
-------------------------------------
L-1
Custodian
JPMorgan Chase Bank, N.A.
Please acknowledge the execution of the above request by your signature and date
below:
-------------------------------------------
Signature Date
Documents returned to Custodian:
-------------------------------------------
Custodian Date
L-2
EXHIBIT M
FORM OF TRANSFEREE ERISA REPRESENTATION LETTER
[DATE]
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Corporate Trust Services/CMFT 2006-S2
Chase Mortgage Finance Corporation
000 Xxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Re: Chase Mortgage Finance Corporation, Multi-Class Mortgage
Pass-Through Certificates, Series 2006-S2, [CLASS B- ]
Ladies and Gentlemen:
______________ (the "Purchaser") intends to purchase from
_________________________ (the "Transferor") $_______ by original principal
balance (the "Transferred Certificate") of Multi-Class Mortgage Pass-Through
Certificates, Series 2006-S2, [CLASS B-__] (the "Certificates"), issued pursuant
to a pooling and servicing agreement, dated as of September 1, 2006 (the
"Pooling and Servicing Agreement"), among Chase Mortgage Finance Corporation
(the "Depositor"), JPMorgan Chase Bank, N.A. ("Chase"), as servicer (the
"Servicer") and The Bank of New York, as trustee (the "Trustee"). [THE PURCHASER
INTENDS TO REGISTER THE TRANSFERRED CERTIFICATE IN THE NAME OF
____________________, AS NOMINEE FOR __________________.] All terms used and not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, we hereby certify, represent and warrant to, and
covenant with, the Depositor that we:
(A) are not an employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), a plan
subject to Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code") or a plan subject to any provisions under any federal, state, local,
non-U.S. or other laws or regulations that are substantively similar to the
foregoing provisions of ERISA or the Code ("Similar Law") (collectively, a
"Plan"), and is not directly or indirectly acquiring the Certificate for, on
behalf of or with any assets of any such Plan, (B) if the Certificate has been
the subject of an ERISA-Qualifying Underwriting, are an insurance company that
is acquiring the Certificate with assets of an "insurance company general
account" as defined in Section V(e) of Prohibited Transaction Class Exemption
95-60 ("PTCE 95-60"), and the acquisition and holding of the Certificate are
covered and exempt under Sections I and III of PTCE 95-60, or (C) solely in the
case of a Definitive Certificate, will deliver herewith an Opinion of Counsel
satisfactory to the Depositor, and upon which the Depositor shall be entitled to
rely, to the effect that the acquisition and holding of this Certificate by the
prospective transferee will not constitute or result in a nonexempt prohibited
transaction under ERISA or the Code or
M-1
a violation of Similar Law and will not subject the Trustee, the Depositor or
the Servicer to any obligation in addition to those undertaken by such entities
in the Pooling and Servicing Agreement, which Opinion of Counsel shall not be an
expense of the Trustee, the Depositor or the Servicer.
We agree to indemnify the Trustee, the Servicer and the Depositor
against any liability that may result from any misrepresentation made herein.
M-2
Very truly yours,
[PURCHASER]
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
M-3
EXHIBIT N
[RESERVED]
N-1
EXHIBIT O
FORM OF OFFICER'S CERTIFICATE (PAYING AGENT)
[DATE]
Chase Mortgage Finance Corporation
000 Xxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Reference is made to each pooling and servicing agreement listed on
Exhibit A hereto (each, an "Agreement") in which JPMorgan Chase Bank, N.A. has
been appointed the paying agent (the "Paying Agent"). JPMorgan Chase Bank, N.A.,
hereby certifies to you that:
1. I have reviewed the information contained in each monthly statement
to certificateholders, any information provided by the Paying Agent
with respect to the annual report on Form 10-K for the fiscal year
[2006] (the "Annual Report"), and any information provided by the
Paying Agent with respect to all reports on Form 8-K (if any) and on
Form 10-D required to be filed in respect of the period covered by the
Annual Report (collectively with the Annual Report, the "Reports"), of
the Trust;
2. Based on my knowledge, the information in these reports, taken as a
whole, does not contain any untrue statement of a material fact or
omit to state a material fact required by the respective pooling and
servicing agreement to be included therein and necessary to make the
statements made, in light of the circumstances under which such
statements were made, not misleading as of the last day of the period
covered by the annual reports; and
3. Based on my knowledge, the distribution or servicing information
required to be provided to the Paying Agent by the Servicer under each
Agreement for inclusion in the reports is included in the reports.
4. In compiling the distribution information, the Paying Agent has
relied upon information furnished to it by the Servicer under each
pooling and servicing agreement. The Paying Agent shall have no
responsibility or liability for any inaccuracy in such reports
resulting from information so provided by the Servicer.
JPMORGAN CHASE BANK, N.A.
By:
----------------------------------------
Name:
--------------------------------------
Title:
O-1
EXHIBIT P
LETTER OF REPRESENTATIONS
P-1
EXHIBIT Q
[RESERVED]
Q-1
EXHIBIT R
SERVICING CRITERIA TO BE ADDRESSED
IN ASSESSMENT OF COMPLIANCE
(RMBS unless otherwise noted)
[TO BE UPDATED]
DEFINITIONS KEY:
PRIMARY SERVICER - transaction party having borrower contact X - obligation
CUSTODIAN - safe keeper of certain pool assets
TRUSTEE - fiduciary of the transaction
PAYING AGENT - agent of the Trustee
WHERE THERE ARE MULTIPLE CHECKS FOR CRITERIA THE ATTESTING PARTY WILL IDENTIFY
IN THEIR MANAGEMENT ASSERTION THAT THEY ARE ATTESTING ONLY TO THE PORTION OF THE
DISTRIBUTION CHAIN THEY ARE RESPONSIBLE FOR IN THE RELATED TRANSACTION
AGREEMENTS.
JPMORGAN*
CHASE THE BANK JPMORGAN
BANK, N.A. JPMORGAN CHASE BANK, OF NEW YORK CHASE BANK,
REG AB REFERENCE SERVICING CRITERIA (SERVICER) N.A. (PAYING AGENT) (TRUSTEE) N.A. (CUSTODIAN)
---------------------------------------------------------------------------------------------------------------------------------
GENERAL SERVICING CONSIDERATIONS
1122(d)(1)(i) Policies and procedures are instituted to X X
monitor any performance or other triggers
and events of default in accordance with
the transaction agreements.
1122(d)(1)(ii) If any material servicing activities are X IF APPLICABLE FOR A IF APPLICABLE
outsourced to third parties, policies and TRANSACTION FOR A
procedures are instituted to monitor the PARTICIPANT TRANSACTION
third party's performance and compliance PARTICIPANT
with such servicing activities.
1122(d)(1)(iii) Any requirements in the transaction X N/A N/A
agreements to maintain a back-up servicer
for the Pool Assets are maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions X
policy is in effect on the party
participating in the servicing function
throughout the reporting period in the
amount of coverage required by and
otherwise in accordance with the terms of
the transaction agreements.
CASH COLLECTION AND ADMINISTRATION
R-1
JPMORGAN*
CHASE THE BANK JPMORGAN
BANK, N.A. JPMORGAN CHASE BANK, OF NEW YORK CHASE BANK,
REG AB REFERENCE SERVICING CRITERIA (SERVICER) N.A. (PAYING AGENT) (TRUSTEE) N.A. (CUSTODIAN)
---------------------------------------------------------------------------------------------------------------------------------
1122(d)(2)(i) Payments on pool assets are deposited X X
into the appropriate custodial bank
accounts and related bank clearing
accounts no more than two business days
following receipt, or such other number
of days specified in the transaction
agreements.
1122(d)(2)(ii) Disbursements made via wire transfer on X X
behalf of an obligor or to an investor
are made only by authorized personnel.
1122(d)(2)(iii) Advances of funds or guarantees regarding X
collections, cash flows or distributions,
and any interest or other fees charged
for such advances, are made, reviewed and
approved as specified in the transaction
agreements.
1122(d)(2)(iv) The related accounts for the transaction, X X
such as cash reserve accounts or accounts
established as a form of over
collateralization, are separately
maintained (e.g., with respect to
commingling of cash) as set forth in the
transaction agreements.
1122(d)(2)(v)** Each custodial account is maintained at a X X
federally insured depository institution
as set forth in the transaction
agreements. For purposes of this
criterion, "federally insured depository
institution" with respect to a foreign
financial institution means a foreign
financial institution that meets the
requirements of Rule 13k-1(b)(1) of the
Securities Exchange Act.
1122(d)(2)(vi) Unissued checks are safeguarded so as to X If applicable
prevent unauthorized access.
1122(d)(2)(vii) Reconciliations are prepared on a monthly X X
basis for all asset-backed securities
related bank accounts, including
custodial accounts and related bank
clearing accounts. These reconciliations
are (A) mathematically accurate; (B)
prepared within 30 calendar days after
the bank statement cutoff date, or such
other number of days specified in the
transaction agreements; (C) reviewed and
approved by someone other than the person
who prepared the reconciliation; and (D)
contain explanations for reconciling
items. These reconciling items are
resolved within 90 calendar days of their
original identification, or such other
R-2
JPMORGAN*
CHASE THE BANK JPMORGAN
BANK, N.A. JPMORGAN CHASE BANK, OF NEW YORK CHASE BANK,
REG AB REFERENCE SERVICING CRITERIA (SERVICER) N.A. (PAYING AGENT) (TRUSTEE) N.A. (CUSTODIAN)
---------------------------------------------------------------------------------------------------------------------------------
number of days specified in the
transaction agreements.
INVESTOR REMITTANCES AND REPORTING
1122(d)(3)(i) Reports to investors, including those to X X
be filed with the Commission, are (not
maintained in accordance with the including (c))
transaction agreements and applicable
Commission requirements. Specifically,
such reports (A) are prepared in
accordance with timeframes and other
terms set forth in the transaction
agreements; (B) provide information
calculated in accordance with the terms
specified in the transaction agreements;
(C) are filed with the Commission as
required by its rules and regulations;
and (D) agree with investors' or the
trustee's records as to the total unpaid
principal balance and number of Pool
Assets serviced by the Servicer.
1122(d)(3)(ii) Amounts due to investors are allocated X X
and remitted in accordance with
timeframes, distribution priority and
other terms set forth in the transaction
agreements.
1122(d)(3)(iii) Disbursements made to an investor are X X
posted within two business days to the
Servicer's investor records, or such
other number of days specified in the
transaction agreements.
1122(d)(3)(iv) Amounts remitted to investors per the X X
investor reports agree with cancelled
checks, or other form of payment, or
custodial bank statements.
POOL ASSET ADMINISTRATION
1122(d)(4)(i) Collateral or security on pool assets is X X
maintained as required by the transaction
agreements or related pool asset
documents.
1122(d)(4)(ii) Pool assets and related documents are X X
safeguarded as required by the
transaction agreements
1122(d)(4)(iii) Any additions, removals or substitutions X
to the asset pool are made, reviewed and
approved in accordance with any
conditions or requirements in the
transaction agreements.
1122(d)(4)(iv) Payments on pool assets, including any X
payoffs, made in accordance with the
related pool asset documents are posted
to the Servicer's obligor records
maintained no more than two business
R-3
JPMORGAN*
CHASE THE BANK JPMORGAN
BANK, N.A. JPMORGAN CHASE BANK, OF NEW YORK CHASE BANK,
REG AB REFERENCE SERVICING CRITERIA (SERVICER) N.A. (PAYING AGENT) (TRUSTEE) N.A. (CUSTODIAN)
---------------------------------------------------------------------------------------------------------------------------------
days after receipt, or such other number
of days specified in the transaction
agreements, and allocated to principal,
interest or other items (e.g., escrow) in
accordance with the related pool asset
documents.
1122(d)(4)(v) The Servicer's records regarding the pool X
assets agree with the Servicer's records
with respect to an obligor's unpaid
principal balance.
1122(d)(4)(vi) Changes with respect to the terms or X
status of an obligor's pool assets (e.g.,
loan modifications or re-agings) are
made, reviewed and approved by authorized
personnel in accordance with the
transaction agreements and related pool
asset documents.
1122(d)(4)(vii) Loss mitigation or recovery actions X
(e.g., forbearance plans, modifications
and deeds in lieu of foreclosure,
foreclosures and repossessions, as
applicable) are initiated, conducted and
concluded in accordance with the
timeframes or other requirements
established by the transaction
agreements.
1122(d)(4)(viii) Records documenting collection efforts X
are maintained during the period a pool
asset is delinquent in accordance with
the transaction agreements. Such records
are maintained on at least a monthly
basis, or such other period specified in
the transaction agreements, and describe
the entity's activities in monitoring
delinquent pool assets including, for
example, phone calls, letters and payment
rescheduling plans in cases where
delinquency is deemed temporary (e.g.,
illness or unemployment).
1122(d)(4)(ix) Adjustments to interest rates or rates of X
return for pool assets with variable
rates are computed based on the related
pool asset documents.
1122(d)(4)(x) Regarding any funds held in trust for an X
obligor (such as escrow accounts): (A)
such funds are analyzed, in accordance
with the obligor's pool asset documents,
on at least an annual basis, or such
other period specified in the transaction
agreements; (B) interest on such funds is
paid, or credited, to obligors in
accordance with applicable
R-4
JPMORGAN*
CHASE THE BANK JPMORGAN
BANK, N.A. JPMORGAN CHASE BANK, OF NEW YORK CHASE BANK,
REG AB REFERENCE SERVICING CRITERIA (SERVICER) N.A. (PAYING AGENT) (TRUSTEE) N.A. (CUSTODIAN)
---------------------------------------------------------------------------------------------------------------------------------
pool asset documents and state laws; and
(C) such funds are returned to the
obligor within 30 calendar days of full
repayment of the related pool assets, or
such other number of days specified in
the transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor X
(such as tax or insurance payments) are
made on or before the related penalty or
expiration dates, as indicated on the
appropriate bills or notices for such
payments, provided that such support has
been received by the servicer at least 30
calendar days prior to these dates, or
such other number of days specified in
the transaction agreements.
1122(d)(4)(xii) Any late payment penalties in connection X
with any payment to be made on behalf of
an obligor are paid from the Servicer's
funds and not charged to the obligor,
unless the late payment was due to the
obligor's error or omission.
1122(d)(4)(xiii) Disbursements made on behalf of an X
obligor are posted within two business
days to the obligor's records maintained
by the servicer, or such other number of
days specified in the transaction
agreements.
1122(d)(4)(xiv) Delinquencies, charge-offs and X
uncollectible accounts are recognized and
recorded in accordance with the
transaction agreements.
1122(d)(4)(xv) Any external enhancement or other X
support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation
AB, is maintained as set forth in the
transaction agreements.
* Certain obligations will be satisfied by Chase Home Finance LLC as
subservicer.
** Subject to further interpretation by the SEC.
R-5
EXHIBIT S
FORM OF XXXXXXXX-XXXXX CERTIFICATION
[DATE]
Chase Mortgage Finance Corporation
000 Xxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Re: Chase Mortgage Finance Corporation, Multi-Class Mortgage
Pass-Through Certificates, Series 2006-S2
I, [identify the certifying individual], certify that:
I have reviewed the report on Form 10-K and all reports on Form 10-D
required to be filed in respect of the period covered by this report on Form
10-K of [identify the issuing entity] (the "Exchange Act periodic reports");
1. Based on my knowledge, the Exchange Act periodic reports, taken as
a whole, do not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by this report;
2. Based on my knowledge, all of the distribution, servicing and other
information required to be provided under Form 10-D for the period covered by
this report is included in the Exchange Act periodic reports;
3. [I am responsible for reviewing the activities performed by the
servicer(s) and based on my knowledge and the compliance review(s) conducted in
preparing the servicer compliance statement(s) required in this report under
Item 1123 of Regulation AB, and except as disclosed in the Exchange Act periodic
reports, the servicer(s) [has/have] fulfilled [its/their] obligations under the
servicing agreement(s); and]
4. All of the reports on assessment of compliance with servicing
criteria for ABS and their related attestation reports on assessment of
compliance with servicing criteria for asset-backed securities required to be
included in this report in accordance with Item 1122 of Regulation AB and
Exchange Act Rules 13a-18 and 15d-18 have been included as an exhibit to this
report, except as otherwise disclosed in this report. Any material instances of
noncompliance described in such reports have been disclosed in this report on
Form 10-K.
[In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated parties [name of servicer,
sub-servicer, co-servicer, depositor or trustee].]
S-1
Date:
-----------------------
---------------------------------------
[Signature]
[Title]
S-2
EXHIBIT T
FORM OF ITEM 1123 CERTIFICATION OF SERVICER
[DATE]
Chase Mortgage Finance Corporation
000 Xxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Re: Chase Mortgage Finance Corporation, Multi-Class Mortgage
Pass-Through Certificates, Series 2006-S2
I, [identify name of certifying individual], [title of certifying individual] of
JPMorgan Chase Bank, N.A. (the "Servicer"), hereby certify that:
(1) A review of the activities of the Servicer during the preceding calendar
year and of the performance of the Servicer under the Agreement has been made
under my supervision; and
(2) To the best of my knowledge, based on such review, the Servicer has
fulfilled all its obligations under the Agreement in all material respects
throughout such year or a portion thereof[, or, if there has been a failure to
fulfill any such obligation in any material respect, I have specified below each
such failure known to me and the nature and status thereof].
Date:
JPMorgan Chase Bank, N.A.,
as Servicer
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
T-1
EXHIBIT U
FORM OF CLASS 1-A10 YIELD MAINTENANCE AGREEMENT
August 17, 2006
Rate Collar Transaction
Chase Mortgage Finance Trust Series 2006-S2
Attn: [______]
Re: Interest Rate Transaction No: [__________]
Ladies and Gentlemen:
The purpose of this letter agreement is to set forth the terms and conditions of
the rate collar transaction (the "Interest Rate Transaction") entered into
between JPMorgan Chase Bank, N.A. (the "Derivative Provider") and X.X. Xxxxxx
Xxxxx Bank, N.A., not in its individual capacity, but solely as Paying Agent on
behalf of Chase Mortgage Finance Trust Series 2006-S2 (the "Counterparty") on
August 17, 2006. This agreement constitutes a "Confirmation" as referred to in
and supplements, forms part of, and is subject to, the ISDA Master Agreement
between the parties hereto.
The particular Interest Rate Transaction to which this Confirmation relates is a
Rate Collar Transaction, the terms of which are set forth below.
The definitions and provisions contained in the 2000 ISDA Definitions, as
published by the International Swaps and Derivatives Association, Inc. are
incorporated into this Confirmation. In the event of any inconsistency between
those definitions and provisions and this Confirmation, this Confirmation will
govern. The Interest Rate Transaction relates to the Class 1A10 Certificates
issued pursuant to the Pooling and Servicing Agreement dated as of August 1,
2006 among Chase Mortgage Finance Corporation, as Depositor, U.S. Bank National
Association, as Trustee, and JPMorgan Chase Bank, N.A., as Servicer and Paying
Agent (the "Pooling and Servicing Agreement").
In consideration of the payment of the sum of USD $[____] (the "Premium") by
X.X. Xxxxxx Securities, Inc. on behalf of Chase Home Finance, LLC to the
Derivative Provider on August 17, 2006 and in consideration of the promise by
the Derivative Provider to make payments to the Counterparty in accordance with
Section 2 hereof, the parties hereto agree as follows
1. Definitions
a. "Ceiling Rate" means, with respect to any Calculation Period, the rate
set forth as the "Ceiling Rate" on the attached Schedule I.
b. "Floor Rate" means, with respect to any Calculation Period, the rate
set forth as the "Strike Rate" on the attached Schedule I.
c. "Business Day" means any day which is both a New York Business Day and
a London Business Day.
U-1
d. "Calculation Period" means, with respect to a Payment Date, the
period, as set forth on the attached Schedule I, from the Calculation
Period Start Date to but excluding the Calculation Period End Date,
and including such Payment Date.
e. "Designated Maturity" means 1 month(s).
f. "Effective Date" means the first Calculation Period Start Date.
g. "Floating Rate" means, with respect to a Payment Date, the rate
determined by the Derivative Provider to be (i) the per annum rate for
deposits in U.S. dollars for a period of the Designated Maturity which
appears on the Telerate Page 3750 Screen as of 11:00 a.m., London
time, on the day that is two London Business Days prior to the Reset
Date of the Calculation Period of such Payment Date (rounded upwards,
if necessary, to the nearest 1/100,000 of 1%); (ii) if such rate does
not appear on the Telerate Page 3750 Screen, the Floating Rate shall
be the arithmetic mean (rounded as aforesaid) of the offered
quotations obtained by the Derivative Provider from the Reference
Banks for deposits in U.S. dollars to leading banks in the London
interbank market as of approximately 11:00 a.m., London time, on the
day that is two London Business Days prior to the Reset Date of the
Calculation Period of such Payment Date; or (iii) if fewer than two
Reference Banks provide the Derivative Provider with such quotations,
the Floating Rate shall be the rate per annum which the Derivative
Provider determines to be the arithmetic mean (rounded as aforesaid)
of the offered quotations which leading banks in New York City
selected by the Derivative Provider are quoting in the New York
interbank market on the Reset Date of the Calculation Period of such
Payment Date for deposits in U.S. dollars to the Reference Banks or,
if fewer than two such quotations are available, to leading European
and Canadian Banks.
h. "London Business Day" means any day on which banks are open for
business in London and on which dealings in deposits in U.S. dollars
are transacted in the London interbank market.
i. "Maximum Derivative Payment Amount" means, for any Payment Date, an
amount which the Paying Agent shall calculate in accordance with the
Pooling and Servicing Agreement and provide to the Derivative Provider
no later than one Business Day prior to each Payment Date.
j. "New York Business Day" means any day on which banks are not required
or authorized by law to close in New York City.
k. "Notional Principal Amount" means, with respect to any Calculation
Period, the notional amount set forth in the attached Schedule I.
l. "Payment Date" means the day that is two New York business days prior
to each Calculation Period End Date, provided that if such Payment
Date is not a Business Day, such Payment Date shall be the next
preceding Business Day.
m. "Reference Banks" means four major banks in the London interbank
market selected by the Derivative Provider.
n. "Reset Date" means the first day of each Calculation Period.
U-2
o. "Telerate Page 3750 Screen" means the display designated as "Page
3750" on the Dow Xxxxx Telerate Service (or such other page as may
replace Page 3750 on that service or such other service as may be
nominated by the British Bankers' Association as the information
vendor for the purpose of displaying British Bankers' Association
Interest Settlement Rates for U.S. Dollar deposits).
p. "Termination Date" means the last Calculation Period End Date.
2. Payments
a. The Derivative Provider agrees, subject to the payment of the Premium,
to pay to the Counterparty, on each Payment Date on which the related
Floating Rate is determined to be greater than the Floor Rate and less
than the Ceiling Rate, an amount equal to the lesser of 1) the Maximum
Derivative Payment Amount for such Payment Date and 2) the product of
(x) the amount by which the Floating Rate exceeds the Floor Rate with
respect to the Calculation Period ending on or nearest such Payment
Date, (y) the Notional Principal Amount and (z) 30 divided by 360.
b. All payments to the Derivative Provider shall be made as follows.
Payments in USD
[___________]
[___________]
[___________]
[___________]
c. All payments to the Counterparty shall be made as follows:
Wire Transfer:
[___________]
[___________]
[___________]
[___________]
[___________]
3. Notices. Any notices hereunder 1) shall be in writing and hand-delivered or
sent by first-class mail, postage prepaid, return receipt requested, and
shall be addressed to the intended recipient at its address set forth on
the signature page hereof or at such other address as such party shall have
last specified by notice to the other party and 2) shall be effective (a)
if delivered by hand or sent by overnight courier, on the day it is
delivered, unless delivery is made after the close of business or on a day
that is not a Business Day, in which case such notice will be effective on
the next Business Day, or (b) if sent by certified or registered mail or
the equivalent (return receipt requested), three Business Days after
dispatch.
U-3
All notices and queries to the Derivative Provider should be sent to:
JPMorgan Chase Bank, N.A. Client Service Group
Telephone: (000 ) 0000000000
Facsimile: (000 ) 0000000000
Please quote the JPMorgan deal number(s): [__], [__]
All notices and queries to the Counterparty should be sent to:
JPMorgan Chase Bank
000 Xxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
4. Governing Law. This letter agreement shall be governed by and construed in
accordance with the laws of the State of New York.
5. Assignments. Neither party shall have the right to assign its rights or
obligations under this letter agreement without the prior written consent
of the other party.
6. Set-off; Counterclaim. All payments under this letter agreement will be
made without set-off or counterclaim, except that each party will have the
right to set-off, counterclaim or withhold payment in respect of any
default by the other party under this letter agreement or under any other
agreement between the parties.
7. Each Party's Reliance on its Own Judgment. Each party has entered into this
Rate Collar Transaction solely in reliance on its own judgment. Neither
party has any fiduciary obligation to the other party relating to this Rate
Collar Transaction. In addition, neither party has held itself out as
advising, or has held out any of its employees or agents as having the
authority to advise, the other party as to whether or not the other party
should enter into this Rate Collar Transaction, any subsequent actions
relating to this Rate Collar Transaction or any other matters relating to
this Rate Collar Transaction. Neither party shall have any responsibility
or liability whatsoever in respect of any advice of this nature given, or
views expressed, by it or any of such persons to the other party relating
to this Rate Collar Transaction, whether or not such advice is given or
such views are expressed at the request of the other party.
8. Waiver of Right to Trial by Jury. Each party hereby irrevocably waives any
and all rights to trial by jury with respect to any legal proceeding
arising out of or relating to this letter agreement or the Rate Collar
Transaction.
9. Limitation of Liability. It is expressly understood and agreed by the
parties hereto that (a) this Rate Collar Transaction is executed and
delivered by the Counterparty, not individually or personally but solely as
Paying Agent of the Trust, in the exercise of the powers and authority
conferred and vested in it under the Pooling and Servicing Agreement, (b)
each of the representations, undertakings and agreements herein made on the
part of the Trust is made and intended for the purpose of binding only the
Trust (c) nothing herein shall be construed as creating any liability on
the Counterparty, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any,
being expressly waived by the parties who are signatories to this letter
agreement and by any person claiming by, through or under such parties, and
(d) under no circumstances shall the Counterparty be personally liable for
the payment of any indebtedness or expenses of the Trust or be liable for
the breach or failure of any obligation, representation, warranty or
covenant made or undertaken by the Trust under this Rate Collar
Transaction.
U-4
10. Reporting. Counterparty agrees to deliver, promptly upon request by the
Derivative Provider, or with respect to any particular type of report or
other document as to which the Derivative Provider has previously made
request to receive all reports or documents of that type, promptly upon
delivery or receipt of such report or document by the Counterparty, any
report or other document required to be delivered by or to the Counterparty
under the terms of the Pooling and Servicing Agreement, other than those
required to be delivered directly by the Counterparty to the Derivative
Provider thereunder.
11. Written confirmation. No later than each Reset Date, the Derivative
Provider agrees to deliver to the Counterparty a written confirmation
containing the results of the Calculations performed on each Reset Date and
the amount which is to be paid to the Counterparty on the next Payment
Date.
12. Compliance with Regulation AB.
(i) If at any time after the date hereof for so long as the Counterparty
is required to file periodic reports under the Securities Exchange Act
of 1934, as amended (the "Exchange Act") with respect to the
Certificates, in the reasonable determination made in good faith of
Chase Mortgage Finance Corporation the aggregate "significance
percentage" (as defined in Regulation AB ("Regulation AB") under the
Securities Act of 1933, as amended, and the Exchange Act) of all
derivative instruments (contemplated by Item 1115 of Regulation AB)
provided by the Derivative Provider and any of its affiliates to the
Counterparty is at least 10% but less than 20%, the Derivative
Provider shall, subject to subparagraph [(iii)] below, within five (5)
Business Days following request therefor provide the financial
information required under Item 1115(b)(1) of Regulation AB for the
Derivative Provider (and for the group of affiliated entities, if
applicable) (the "Item 1115(b)(1) Information"). Any such Item
1115(b)(1) Information shall be in a form suitable for conversion to
the format required for filing by the Depositor with the Securities
and Exchange Commission via the Electronic Data Gathering and
Retrieval System (XXXXX).
(ii) If at any time after the date hereof for so long as the Counterparty
is required to file periodic reports under the Exchange Act with
respect to the Certificates, in the reasonable determination made in
good faith of Chase Mortgage Finance Corporation, the aggregate
"significance percentage" of all derivative instruments (contemplated
by Item 1115 of Regulation AB) provided by the Derivative Provider and
any of its affiliates to the Counterparty is at least 20%, the
Derivative Provider shall, subject to subparagraph [(iii)] below,
within five (5) Business Days following request therefor provide the
financial information required under Item 1115(b)(2) of Regulation AB
for the Derivative Provider (and for the group of affiliated entities,
if applicable) (the "Item 1115(b)(2) Information", and together with
the Item 1115(b)(1) Information, the "Additional Information"). Any
such Item 1115(b)(2) Information shall be in a form suitable for
conversion to the format required for filing by the Depositor with the
Securities and Exchange Commission via the Electronic Data Gathering
and Retrieval System (XXXXX). In addition, any such Item 1115(b)(2)
Information shall be accompanied by any necessary auditor's consents.
(iii) If the Derivative Provider is unable to provide any such Additional
Information if, as and when required, the Derivative Provider shall,
at its option, within ten (10) Business Days following request
therefor, (1) promptly post collateral satisfactory to Chase Mortgage
Finance Corporation in an amount which is reasonably determined in
good faith to be sufficient to reduce the aggregate "significance
percentage" to (x) in the case of subparagraph (A) above, below 10%,
and (y) in the case of subparagraph (B) above, provided the Derivative
Provider is able to meet the requirements of subparagraph (A) above,
below 20%, in each case pursuant to a [credit
U-5
support annex] or similar agreement reasonably satisfactory to the
Chase Mortgage Finance Corporation, or (2) at the sole expense of the
Derivative Provider, without any expense or liability to the
Counterparty, transfer or assign its obligations under this Agreement
to a substitute counterparty reasonably acceptable to the Counterparty
that (x) is able to provide such Additional Information if, as and
when required, and (y) enters into an agreement similar in form to
this Agreement pursuant to which such substitute counterparty agrees
to provide the Additional Information if, as and when required.
(iv) The Derivative Provider's obligation to provide any such Additional
Information shall terminate beginning in any such year in which the
Counterparty's obligation to file periodic reports under the Exchange
Act has terminated.
U-6
JPMorgan Chase Bank, N.A.
______________________________________________
Name: [___________]
Title: [___________]
Chase Mortgage Finance Trust Series 2006-S2
By: JPMorgan Chase Bank, N.A., not in its individual capacity, but solely as
Paying Agent on behalf of Chase Mortgage Finance Trust Series 2006-S2
Name:
Title:
U-7
Schedule I
CALCULATION PERIOD CALCULATION PERIOD
START DATE END DATE NOTIONAL STRIKE (%) CEILING (%)
------------------ ------------------ ------------- ---------- -----------
September 25, 2006 October 25, 2006 53,540,000.00 5.65 8.90
October 25, 2006 November 25, 2006 53,294,159.35 5.65 8.90
November 25, 2006 December 25, 2006 52,973,901.38 5.65 8.90
December 25, 2006 January 25, 2007 52,579,265.32 5.65 8.90
January 25, 2007 February 25, 2007 52,110,402.91 5.65 8.90
February 25, 2007 March 25, 2007 51,567,579.12 5.65 8.90
March 25, 2007 April 25, 2007 50,951,172.67 5.65 8.90
April 25, 2007 May 25, 2007 50,683,676.18 5.65 8.90
May 25, 2007 June 25, 2007 50,343,696.14 5.65 8.90
June 25, 2007 July 25, 2007 49,931,952.49 5.65 8.90
July 25, 2007 August 25, 2007 49,449,277.99 5.65 8.90
August 25, 2007 September 25, 2007 48,896,617.25 5.65 8.90
September 25, 2007 October 25, 2007 48,275,025.49 5.65 8.90
October 25, 2007 November 25, 2007 47,793,667.01 5.65 8.90
November 25, 2007 December 25, 2007 47,245,813.32 5.65 8.90
December 25, 2007 January 25, 2008 46,632,841.08 5.65 8.90
January 25, 2008 February 25, 2008 45,956,229.63 5.65 8.90
February 25, 2008 March 25, 2008 45,217,558.36 5.65 8.90
March 25, 2008 April 25, 2008 44,418,503.70 5.65 8.90
April 25, 2008 May 25, 2008 43,560,835.92 5.65 8.90
May 25, 2008 June 25, 2008 42,646,415.63 5.65 8.90
June 25, 2008 July 25, 2008 41,677,190.02 5.65 8.90
July 25, 2008 August 25, 2008 40,655,188.86 5.65 8.90
August 25, 2008 September 25, 2008 39,582,520.33 5.65 8.90
September 25, 2008 October 25, 2008 38,461,366.51 5.65 8.90
October 25, 2008 November 25, 2008 37,294,062.14 5.65 8.90
November 25, 2008 December 25, 2008 36,083,142.11 5.65 8.90
December 25, 2008 January 25, 2009 34,831,230.96 5.65 8.90
January 25, 2009 February 25, 2009 33,543,912.34 5.65 8.90
February 25, 2009 March 25, 2009 32,227,850.94 5.65 8.90
March 25, 2009 April 25, 2009 30,930,769.26 5.65 8.90
April 25, 2009 May 25, 2009 29,666,425.69 5.65 8.90
May 25, 2009 June 25, 2009 28,434,272.92 5.65 8.90
June 25, 2009 July 25, 2009 27,233,772.73 5.65 8.90
July 25, 2009 August 25, 2009 26,064,395.84 5.65 8.90
August 25, 2009 September 25, 2009 24,925,621.80 5.65 8.90
September 25, 2009 October 25, 2009 23,816,938.79 5.65 8.90
October 25, 2009 November 25, 2009 22,737,843.52 5.65 8.90
November 25, 2009 December 25, 2009 21,687,841.05 5.65 8.90
December 25, 2009 January 25, 2010 20,666,444.70 5.65 8.90
January 25, 2010 February 25, 2010 19,673,175.86 5.65 8.90
February 25, 2010 March 25, 2010 18,707,563.90 5.65 8.90
U-8
CALCULATION PERIOD CALCULATION PERIOD
START DATE END DATE NOTIONAL STRIKE (%) CEILING (%)
------------------ ------------------ ------------- ---------- -----------
March 25, 2010 April 25, 2010 17,769,146.03 5.65 8.90
April 25, 2010 May 25, 2010 16,857,467.13 5.65 8.90
May 25, 2010 June 25, 2010 15,972,079.69 5.65 8.90
June 25, 2010 July 25, 2010 15,112,543.62 5.65 8.90
July 25, 2010 August 25, 2010 14,278,426.18 5.65 8.90
August 25, 2010 September 25, 2010 13,469,301.81 5.65 8.90
September 25, 2010 October 25, 2010 12,684,752.05 5.65 8.90
October 25, 2010 November 25, 2010 11,924,365.41 5.65 8.90
November 25, 2010 December 25, 2010 11,187,737.24 5.65 8.90
December 25, 2010 January 25, 2011 10,474,469.64 5.65 8.90
January 25, 2011 February 25, 2011 9,784,171.34 5.65 8.90
February 25, 2011 March 25, 2011 9,116,457.56 5.65 8.90
March 25, 2011 April 25, 2011 8,470,949.98 5.65 8.90
April 25, 2011 May 25, 2011 7,847,276.53 5.65 8.90
May 25, 2011 June 25, 2011 7,245,071.37 5.65 8.90
June 25, 2011 July 25, 2011 6,663,974.76 5.65 8.90
July 25, 2011 August 25, 2011 6,103,632.93 5.65 8.90
August 25, 2011 September 25, 2011 5,563,698.04 5.65 8.90
September 25, 2011 October 25, 2011 5,043,828.02 5.65 8.90
October 25, 2011 November 25, 2011 4,733,551.44 5.65 8.90
November 25, 2011 December 25, 2011 4,441,758.64 5.65 8.90
December 25, 2011 January 25, 2012 4,168,129.12 5.65 8.90
January 25, 2012 February 25, 2012 3,912,347.81 5.65 8.90
February 25, 2012 March 25, 2012 3,674,104.94 5.65 8.90
March 25, 2012 April 25, 2012 3,453,095.96 5.65 8.90
April 25, 2012 May 25, 2012 3,249,021.49 5.65 8.90
May 25, 2012 June 25, 2012 3,061,587.17 5.65 8.90
June 25, 2012 July 25, 2012 2,890,503.63 5.65 8.90
July 25, 2012 August 25, 2012 2,735,486.38 5.65 8.90
August 25, 2012 September 25, 2012 2,596,255.76 5.65 8.90
September 25, 2012 October 25, 2012 2,472,536.81 5.65 8.90
October 25, 2012 November 25, 2012 2,421,857.83 5.65 8.90
November 25, 2012 December 25, 2012 2,385,407.41 5.65 8.90
December 25, 2012 January 25, 2013 2,362,930.10 5.65 8.90
January 25, 2013 February 25, 2013 2,354,174.80 5.65 8.90
February 25, 2013 March 25, 2013 2,345,951.73 5.65 8.90
March 25, 2013 April 25, 2013 2,337,991.98 5.65 8.90
April 25, 2013 May 25, 2013 2,330,290.82 5.65 8.90
May 25, 2013 June 25, 2013 2,322,843.59 5.65 8.90
June 25, 2013 July 25, 2013 2,005,079.90 5.65 8.90
July 25, 2013 August 25, 2013 1,651,619.43 5.65 8.90
August 25, 2013 September 25, 2013 1,310,239.71 5.65 8.90
September 25, 2013 October 25, 2013 980,722.07 5.65 8.90
October 25, 2013 November 25, 2013 766,043.59 5.65 8.90
U-9
November 25, 2013 December 25, 2013 560,863.55 5.65 8.90
December 25, 2013 January 25, 2014 364,998.48 5.65 8.90
January 25, 2014 February 25, 2014 178,268.20 5.65 8.90
February 25, 2014 March 25, 2014 495.78 5.65 8.90
March 25, 2014 April 25, 2014 0 5.65 8.90
U-10
EXHIBIT U-1
FORM OF CLASS 2-A8 YIELD MAINTENANCE AGREEMENT
August 17, 2006
Rate Collar Transaction
Chase Mortgage Finance Trust Series 2006-S2
Attn: [_______]
Re: Interest Rate Transaction No: [_________]
Ladies and Gentlemen:
The purpose of this letter agreement is to set forth the terms and conditions of
the rate collar transaction (the "Interest Rate Transaction") entered into
between JPMorgan Chase Bank, N.A. (the "Derivative Provider") and X.X. Xxxxxx
Xxxxx Bank, N.A., not in its individual capacity, but solely as Paying Agent on
behalf of Chase Mortgage Finance Trust Series 2006-S2 (the "Counterparty") on
August 17, 2006. This agreement constitutes a "Confirmation" as referred to in
and supplements, forms part of, and is subject to, the ISDA Master Agreement
between the parties hereto.
The particular Interest Rate Transaction to which this Confirmation relates is a
Rate Collar Transaction, the terms of which are set forth below.
The definitions and provisions contained in the 2000 ISDA Definitions, as
published by the International Swaps and Derivatives Association, Inc. are
incorporated into this Confirmation. In the event of any inconsistency between
those definitions and provisions and this Confirmation, this Confirmation will
govern. The Interest Rate Transaction relates to the Class 2A8 Certificates
issued pursuant to the Pooling and Servicing Agreement dated as of August 1,
2006 among Chase Mortgage Finance Corporation, as Depositor, U.S. Bank National
Association, as Trustee, and JPMorgan Chase Bank, N.A., as Servicer and Paying
Agent (the "Pooling and Servicing Agreement").
In consideration of the payment of the sum of USD $[_______] (the "Premium") by
X.X. Xxxxxx Securities, Inc. on behalf of Chase Home Finance, LLC to the
Derivative Provider on August 17, 2006 and in consideration of the promise by
the Derivative Provider to make payments to the Counterparty in accordance with
Section 2 hereof, the parties hereto agree as follows
13. Definitions
a. "Ceiling Rate" means, with respect to any Calculation Period, the rate
set forth as the "Ceiling Rate" on the attached Schedule I.
b. "Floor Rate" means, with respect to any Calculation Period, the rate
set forth as the "Strike Rate" on the attached Schedule I.
U-1-1
c. "Business Day" means any day which is both a New York Business Day and
a London Business Day.
d. "Calculation Period" means, with respect to a Payment Date, the
period, as set forth on the attached Schedule I, from the Calculation
Period Start Date to but excluding the Calculation Period End Date,
and including such Payment Date.
e. "Designated Maturity" means 1 month(s).
f. "Effective Date" means the first Calculation Period Start Date.
g. "Floating Rate" means, with respect to a Payment Date, the rate
determined by the Derivative Provider to be (i) the per annum rate for
deposits in U.S. dollars for a period of the Designated Maturity which
appears on the Telerate Page 3750 Screen as of 11:00 a.m., London
time, on the day that is two London Business Days prior to the Reset
Date of the Calculation Period of such Payment Date (rounded upwards,
if necessary, to the nearest 1/100,000 of 1%); (ii) if such rate does
not appear on the Telerate Page 3750 Screen, the Floating Rate shall
be the arithmetic mean (rounded as aforesaid) of the offered
quotations obtained by the Derivative Provider from the Reference
Banks for deposits in U.S. dollars to leading banks in the London
interbank market as of approximately 11:00 a.m., London time, on the
day that is two London Business Days prior to the Reset Date of the
Calculation Period of such Payment Date; or (iii) if fewer than two
Reference Banks provide the Derivative Provider with such quotations,
the Floating Rate shall be the rate per annum which the Derivative
Provider determines to be the arithmetic mean (rounded as aforesaid)
of the offered quotations which leading banks in New York City
selected by the Derivative Provider are quoting in the New York
interbank market on the Reset Date of the Calculation Period of such
Payment Date for deposits in U.S. dollars to the Reference Banks or,
if fewer than two such quotations are available, to leading European
and Canadian Banks.
h. "London Business Day" means any day on which banks are open for
business in London and on which dealings in deposits in U.S. dollars
are transacted in the London interbank market.
i. "Maximum Derivative Payment Amount" means, for any Payment Date, an
amount which the Paying Agent shall calculate in accordance with the
Pooling and Servicing Agreement and provide to the Derivative Provider
no later than one Business Day prior to each Payment Date.
j. "New York Business Day" means any day on which banks are not required
or authorized by law to close in New York City.
k. "Notional Principal Amount" means, with respect to any Calculation
Period, the notional amount set forth in the attached Schedule I.
l. "Payment Date" means the day that is two New York business days prior
to each Calculation Period End Date, provided that if such Payment
Date is not a Business Day, such Payment Date shall be the next
preceding Business Day.
m. "Reference Banks" means four major banks in the London interbank
market selected by the Derivative Provider.
U-1-2
n. "Reset Date" means the first day of each Calculation Period.
o. "Telerate Page 3750 Screen" means the display designated as "Page
3750" on the Dow Xxxxx Telerate Service (or such other page as may
replace Page 3750 on that service or such other service as may be
nominated by the British Bankers' Association as the information
vendor for the purpose of displaying British Bankers' Association
Interest Settlement Rates for U.S. Dollar deposits).
p. "Termination Date" means the last Calculation Period End Date.
14. Payments
a. The Derivative Provider agrees, subject to the payment of the Premium,
to pay to the Counterparty, on each Payment Date on which the related
Floating Rate is determined to be greater than the Floor Rate and less
than the Ceiling Rate, an amount equal to the lesser of 1) the Maximum
Derivative Payment Amount for such Payment Date and 2) the product of
(x) the amount by which the Floating Rate exceeds the Floor Rate with
respect to the Calculation Period ending on or nearest such Payment
Date, (y) the Notional Principal Amount and (z) 30 divided by 360.
b. All payments to the Derivative Provider shall be made as follows.
Payments in USD
[_______]
[_______]
[_______]
[_______]
c. All payments to the Counterparty shall be made as follows:
Wire Transfer:
[_______]
[_______]
[_______]
[_______]
[_______]
15. Notices. Any notices hereunder 1) shall be in writing and hand-delivered or
sent by first-class mail, postage prepaid, return receipt requested, and
shall be addressed to the intended recipient at its address set forth on
the signature page hereof or at such other address as such party shall have
last specified by notice to the other party and 2) shall be effective (a)
if delivered by hand or sent by overnight courier, on the day it is
delivered, unless delivery is made after the close of business or on a day
that is not a Business Day, in which case such notice will be effective on
the next Business Day,
U-1-3
or (b) if sent by certified or registered mail or the equivalent (return
receipt requested), three Business Days after dispatch.
All notices and queries to the Derivative Provider should be sent to:
JPMorgan Chase Bank, N.A. Client Service Group
Telephone: (000 ) 0000000000
Facsimile: (000 ) 0000000000
Please quote the JPMorgan deal number(s): [_], [_]
All notices and queries to the Counterparty should be sent to:
JPMorgan Chase Bank
000 Xxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
16. Governing Law. This letter agreement shall be governed by and construed in
accordance with the laws of the State of New York.
17. Assignments. Neither party shall have the right to assign its rights or
obligations under this letter agreement without the prior written consent
of the other party.
18. Set-off; Counterclaim. All payments under this letter agreement will be
made without set-off or counterclaim, except that each party will have the
right to set-off, counterclaim or withhold payment in respect of any
default by the other party under this letter agreement or under any other
agreement between the parties.
19. Each Party's Reliance on its Own Judgment. Each party has entered into this
Rate Collar Transaction solely in reliance on its own judgment. Neither
party has any fiduciary obligation to the other party relating to this Rate
Collar Transaction. In addition, neither party has held itself out as
advising, or has held out any of its employees or agents as having the
authority to advise, the other party as to whether or not the other party
should enter into this Rate Collar Transaction, any subsequent actions
relating to this Rate Collar Transaction or any other matters relating to
this Rate Collar Transaction. Neither party shall have any responsibility
or liability whatsoever in respect of any advice of this nature given, or
views expressed, by it or any of such persons to the other party relating
to this Rate Collar Transaction, whether or not such advice is given or
such views are expressed at the request of the other party.
20. Waiver of Right to Trial by Jury. Each party hereby irrevocably waives any
and all rights to trial by jury with respect to any legal proceeding
arising out of or relating to this letter agreement or the Rate Collar
Transaction.
21. Limitation of Liability. It is expressly understood and agreed by the
parties hereto that (a) this Rate Collar Transaction is executed and
delivered by the Counterparty, not individually or personally but solely as
Paying Agent of the Trust, in the exercise of the powers and authority
conferred and vested in it under the Pooling and Servicing Agreement, (b)
each of the representations, undertakings and agreements herein made on the
part of the Trust is made and intended for the purpose of binding only the
Trust (c) nothing herein shall be construed as creating any liability on
the Counterparty, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any,
being expressly waived by the parties who are signatories to this letter
agreement and by any person claiming by, through or under such parties, and
(d) under no
U-1-4
circumstances shall the Counterparty be personally liable for the payment
of any indebtedness or expenses of the Trust or be liable for the breach or
failure of any obligation, representation, warranty or covenant made or
undertaken by the Trust under this Rate Collar Transaction.
22. Reporting. Counterparty agrees to deliver, promptly upon request by the
Derivative Provider, or with respect to any particular type of report or
other document as to which the Derivative Provider has previously made
request to receive all reports or documents of that type, promptly upon
delivery or receipt of such report or document by the Counterparty, any
report or other document required to be delivered by or to the Counterparty
under the terms of the Pooling and Servicing Agreement, other than those
required to be delivered directly by the Counterparty to the Derivative
Provider thereunder.
23. Written confirmation. No later than each Reset Date, the Derivative
Provider agrees to deliver to the Counterparty a written confirmation
containing the results of the Calculations performed on each Reset Date and
the amount which is to be paid to the Counterparty on the next Payment
Date.
24. Compliance with Regulation AB.
(i) If at any time after the date hereof for so long as the Counterparty
is required to file periodic reports under the Securities Exchange Act
of 1934, as amended (the "Exchange Act") with respect to the
Certificates, in the reasonable determination made in good faith of
Chase Mortgage Finance Corporation the aggregate "significance
percentage" (as defined in Regulation AB ("Regulation AB") under the
Securities Act of 1933, as amended, and the Exchange Act) of all
derivative instruments (contemplated by Item 1115 of Regulation AB)
provided by the Derivative Provider and any of its affiliates to the
Counterparty is at least 10% but less than 20%, the Derivative
Provider shall, subject to subparagraph [(iii)] below, within five (5)
Business Days following request therefor provide the financial
information required under Item 1115(b)(1) of Regulation AB for the
Derivative Provider (and for the group of affiliated entities, if
applicable) (the "Item 1115(b)(1) Information"). Any such Item
1115(b)(1) Information shall be in a form suitable for conversion to
the format required for filing by the Depositor with the Securities
and Exchange Commission via the Electronic Data Gathering and
Retrieval System (XXXXX).
(ii) If at any time after the date hereof for so long as the Counterparty
is required to file periodic reports under the Exchange Act with
respect to the Certificates, in the reasonable determination made in
good faith of Chase Mortgage Finance Corporation, the aggregate
"significance percentage" of all derivative instruments (contemplated
by Item 1115 of Regulation AB) provided by the Derivative Provider and
any of its affiliates to the Counterparty is at least 20%, the
Derivative Provider shall, subject to subparagraph [(iii)] below,
within five (5) Business Days following request therefor provide the
financial information required under Item 1115(b)(2) of Regulation AB
for the Derivative Provider (and for the group of affiliated entities,
if applicable) (the "Item 1115(b)(2) Information", and together with
the Item 1115(b)(1) Information, the "Additional Information"). Any
such Item 1115(b)(2) Information shall be in a form suitable for
conversion to the format required for filing by the Depositor with the
Securities and Exchange Commission via the Electronic Data Gathering
and Retrieval System (XXXXX). In addition, any such Item 1115(b)(2)
Information shall be accompanied by any necessary auditor's consents.
(iii) If the Derivative Provider is unable to provide any such Additional
Information if, as and when required, the Derivative Provider shall,
at its option, within ten (10) Business Days following request
therefor, (1) promptly post collateral satisfactory to Chase Mortgage
Finance Corporation
U-1-5
in an amount which is reasonably determined in good faith to be
sufficient to reduce the aggregate "significance percentage" to (x) in
the case of subparagraph (A) above, below 10%, and (y) in the case of
subparagraph (B) above, provided the Derivative Provider is able to
meet the requirements of subparagraph (A) above, below 20%, in each
case pursuant to a [credit support annex] or similar agreement
reasonably satisfactory to the Chase Mortgage Finance Corporation, or
(2) at the sole expense of the Derivative Provider, without any
expense or liability to the Counterparty, transfer or assign its
obligations under this Agreement to a substitute counterparty
reasonably acceptable to the Counterparty that (x) is able to provide
such Additional Information if, as and when required, and (y) enters
into an agreement similar in form to this Agreement pursuant to which
such substitute counterparty agrees to provide the Additional
Information if, as and when required.
(iv) The Derivative Provider's obligation to provide any such Additional
Information shall terminate beginning in any such year in which the
Counterparty's obligation to file periodic reports under the Exchange
Act has terminated.
U-1-6
JPMorgan Chase Bank, N.A.
__________________________________
Name: [________]
Title: [________]
Chase Mortgage Finance Trust Series 2006-S2
By: JPMorgan Chase Bank, N.A., not in its individual capacity, but solely as
Paying Agent on behalf of Chase Mortgage Finance Trust Series 2006-S2
Name:
Title:
U-1-7
Schedule I
CALCULATION PERIOD START DATE CALCULATION PERIOD END DATE NOTIONAL STRIKE (%) CEILING (%)
----------------------------- --------------------------- -------------- ---------- -----------
September 25, 2006 October 25, 2006 101,372,000.00 5.50 9.00
October 25, 2006 November 25, 2006 100,827,245.57 5.50 9.00
November 25, 2006 December 25, 2006 100,215,469.80 5.50 9.00
December 25, 2006 January 25, 2007 99,536,817.62 5.50 9.00
January 25, 2007 February 25, 2007 98,791,468.17 5.50 9.00
February 25, 2007 March 25, 2007 97,979,634.82 5.50 9.00
March 25, 2007 April 25, 2007 97,101,565.06 5.50 9.00
April 25, 2007 May 25, 2007 96,157,540.44 5.50 9.00
May 25, 2007 June 25, 2007 95,147,876.41 5.50 9.00
June 25, 2007 July 25, 2007 94,072,922.23 5.50 9.00
July 25, 2007 August 25, 2007 92,933,060.73 5.50 9.00
August 25, 2007 September 25, 2007 ,728,708.15 5.50 9.00
September 25, 2007 October 25, 2007 90,460,313.87 5.50 9.00
October 25, 2007 November 25, 2007 89,128,360.17 5.50 9.00
November 25, 2007 December 25, 2007 87,733,361.91 5.50 9.00
December 25, 2007 January 25, 2008 86,275,866.23 5.50 9.00
January 25, 2008 February 25, 2008 84,756,452.18 5.50 9.00
February 25, 2008 March 25, 2008 83,175,730.37 5.50 9.00
March 25, 2008 April 25, 2008 81,534,342.52 5.50 9.00
April 25, 2008 May 25, 2008 79,832,961.05 5.50 9.00
May 25, 2008 June 25, 2008 78,072,288.64 5.50 9.00
U-1-8
CALCULATION PERIOD START DATE CALCULATION PERIOD END DATE NOTIONAL STRIKE (%) CEILING (%)
----------------------------- --------------------------- ------------- ---------- -----------
June 25, 2008 July 25, 2008 76,253,110.48 5.50 9.00
July 25, 2008 August 25, 2008 74,376,187.32 5.50 9.00
August 25, 2008 September 25, 2008 72,442,738.03 5.50 9.00
September 25, 2008 October 25, 2008 70,453,744.40 5.50 9.00
October 25, 2008 November 25, 2008 68,410,280.32 5.50 9.00
November 25, 2008 December 25, 2008 66,313,841.33 5.50 9.00
December 25, 2008 January 25, 2009 64,167,530.78 5.50 9.00
January 25, 2009 February 25, 2009 62,013,511.31 5.50 9.00
February 25, 2009 March 25, 2009 59,866,685.33 5.50 9.00
March 25, 2009 April 25, 2009 57,730,247.40 5.50 9.00
April 25, 2009 May 25, 2009 55,604,141.33 5.50 9.00
May 25, 2009 June 25, 2009 53,488,311.22 5.50 9.00
June 25, 2009 July 25, 2009 51,382,701.44 5.50 9.00
July 25, 2009 August 25, 2009 49,287,256.64 5.50 9.00
August 25, 2009 September 25, 2009 47,201,921.74 5.50 9.00
September 25, 2009 October 25, 2009 45,126,641.91 5.50 9.00
October 25, 2009 November 25, 2009 45,036,216.67 5.50 9.00
November 25, 2009 December 25, 2009 44,945,542.02 5.50 9.00
December 25, 2009 January 25, 2010 44,854,615.69 5.50 9.00
January 25, 2010 February 25, 2010 44,763,435.39 5.50 9.00
February 25, 2010 March 25, 2010 44,671,998.81 5.50 9.00
March 25, 2010 April 25, 2010 44,580,303.66 5.50 9.00
April 25, 2010 May 25, 2010 44,488,347.63 5.50 9.00
U-1-9
CALCULATION PERIOD START DATE CALCULATION PERIOD END DATE NOTIONAL STRIKE (%) CEILING (%)
----------------------------- --------------------------- ------------- ---------- -----------
May 25, 2010 June 25, 2010 44,396,128.40 5.50 9.00
June 25, 2010 July 25, 2010 44,303,643.64 5.50 9.00
July 25, 2010 August 25, 2010 44,210,891.04 5.50 9.00
August 25, 2010 September 25, 2010 44,117,868.26 5.50 9.00
September 25, 2010 October 25, 2010 44,024,572.95 5.50 9.00
October 25, 2010 November 25, 2010 43,949,561.38 5.50 9.00
November 25, 2010 December 25, 2010 43,874,176.66 5.50 9.00
December 25, 2010 January 25, 2011 43,798,416.92 5.50 9.00
January 25, 2011 February 25, 2011 43,722,280.26 5.50 9.00
February 25, 2011 March 25, 2011 43,645,764.79 5.50 9.00
March 25, 2011 April 25, 2011 43,568,868.62 5.50 9.00
April 25, 2011 May 25, 2011 43,491,589.83 5.50 9.00
May 25, 2011 June 25, 2011 43,413,926.48 5.50 9.00
June 25, 2011 July 25, 2011 43,335,876.66 5.50 9.00
July 25, 2011 August 25, 2011 43,257,438.42 5.50 9.00
August 25, 2011 September 25, 2011 43,178,609.81 5.50 9.00
September 25, 2011 October 25, 2011 43,099,388.87 5.50 9.00
October 25, 2011 November 25, 2011 43,019,948.19 5.50 9.00
November 25, 2011 December 25, 2011 42,940,110.32 5.50 9.00
December 25, 2011 January 25, 2012 42,859,873.28 5.50 9.00
January 25, 2012 February 25, 2012 42,779,235.07 5.50 9.00
February 25, 2012 March 25, 2012 42,698,193.68 5.50 9.00
March 25, 2012 April 25, 2012 42,616,747.11 5.50 9.00
U-1-10
CALCULATION PERIOD START DATE CALCULATION PERIOD END DATE NOTIONAL STRIKE (%) CEILING (%)
----------------------------- --------------------------- ------------- ---------- -----------
April 25, 2012 May 25, 2012 42,534,893.32 5.50 9.00
May 25, 2012 June 25, 2012 42,452,630.27 5.50 9.00
June 25, 2012 July 25, 2012 42,369,955.93 5.50 9.00
July 25, 2012 August 25, 2012 42,286,868.23 5.50 9.00
August 25, 2012 September 25, 2012 42,203,365.11 5.50 9.00
September 25, 2012 October 25, 2012 42,119,444.49 5.50 9.00
October 25, 2012 November 25, 2012 42,035,104.34 5.50 9.00
November 25, 2012 December 25, 2012 41,950,342.50 5.50 9.00
December 25, 2012 January 25, 2013 41,865,156.87 5.50 9.00
January 25, 2013 February 25, 2013 41,779,545.32 5.50 9.00
February 25, 2013 March 25, 2013 41,693,505.74 5.50 9.00
March 25, 2013 April 25, 2013 41,607,035.97 5.50 9.00
April 25, 2013 May 25, 2013 41,520,133.86 5.50 9.00
May 25, 2013 June 25, 2013 41,432,797.26 5.50 9.00
June 25, 2013 July 25, 2013 41,345,024.00 5.50 9.00
July 25, 2013 August 25, 2013 41,256,811.88 5.50 9.00
August 25, 2013 September 25, 2013 41,168,158.71 5.50 9.00
September 25, 2013 October 25, 2013 41,079,062.29 5.50 9.00
October 25, 2013 November 25, 2013 40,989,520.52 5.50 9.00
November 25, 2013 December 25, 2013 40,899,531.04 5.50 9.00
December 25, 2013 January 25, 2014 40,809,091.64 5.50 9.00
January 25, 2014 February 25, 2014 40,718,200.05 5.50 9.00
February 25, 2014 March 25, 2014 40,626,854.01 5.50 9.00
March 25, 2014 April 25, 2014 40,534,993.58 5.50 9.00
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EXHIBIT V
TARGETED PRINCIPAL BALANCES FOR THE CLASS 2-A8 CERTIFICATES
TARGETED
PRINCIPAL
DISTRIBUTION DATE BALANCE ($)
------------------- --------------
October 25, 2006 100,827,245.57
November 25, 2006 100,215,469.80
December 25, 2006 99,536,817.62
January 25, 2007 98,791,468.17
February 25, 2007 97,979,634.82
March 25, 2007 97,101,565.06
April 25, 2007 96,157,540.44
May 25, 2007 95,147,876.41
June 25, 2007 94,072,922.23
July 25, 2007 92,933,060.73
August 25, 2007 91,728,708.15
September 25, 2007 90,460,313.87
October 25, 2007 89,128,360.17
November 25, 2007 87,733,361.91
December 25, 2007 86,275,866.23
January 25, 2008 84,756,452.18
February 25, 2008 83,175,730.37
March 25, 2008 81,534,342.52
April 25, 2008 79,832,961.05
May 25, 2008 78,072,288.64
June 25, 2008 76,253,110.48
July 25, 2008 74,376,187.32
August 25, 2008 72,442,738.03
September 25, 2008 70,453,744.40
October 25, 2008 68,410,280.32
November 25, 2008 66,313,841.32
December 25, 2008 64,167,530.78
January 25, 2009 62,013,511.31
February 25, 2009 59,866,685.33
March 25, 2009 57,730,247.40
April 25, 2009 55,604,141.33
May 25, 2009 53,488,311.22
June 25, 2009 51,382,701.44
July 25, 2009 49,287,256.64
August 25, 2009 47,201,921.74
September 25, 2009 45,126,641.91
October 25, 2009 45,036,216.67
November 25, 2009 44,945,542.02
December 25, 2009 44,854,615.69
January 25, 2010 44,763,435.39
February 25, 2010 44,671,998.81
March 25, 2010 44,580,303.66
April 25, 2010 44,488,347.63
May 25, 2010 44,396,128.39
June 25, 2010 44,303,643.64
July 25, 2010 44,210,891.04
August 25, 2010 44,117,868.26
September 25, 2010 44,024,572.95
October 25, 2010 43,949,561.38
November 25, 2010 43,874,176.66
December 25, 2010 43,798,416.92
January 25, 2011 43,722,280.26
February 25, 2011 43,645,764.79
March 25, 2011 43,568,868.62
April 25, 2011 43,491,589.82
May 25, 2011 43,413,926.48
June 25, 2011 43,335,876.66
July 25, 2011 43,257,438.42
August 25, 2011 43,178,609.81
September 25, 2011 43,099,388.87
October 25, 2011 43,019,948.19
November 25, 2011 42,940,110.32
December 25, 2011 42,859,873.28
January 25, 2012 42,779,235.07
February 25, 2012 42,698,193.68
March 25, 2012 42,616,747.11
April 25, 2012 42,534,893.32
May 25, 2012 42,452,630.27
June 25, 2012 42,369,955.93
July 25, 2012 42,286,868.23
August 25, 2012 42,203,365.11
September 25, 2012 42,119,444.49
October 25, 2012 42,035,104.34
November 25, 2012 41,950,342.50
December 25, 2012 41,865,156.87
January 25, 2013 41,779,545.32
February 25, 2013 41,693,505.74
March 25, 2013 41,607,035.97
April 25, 2013 41,520,133.86
May 25, 2013 41,432,797.26
June 25, 2013 41,345,023.99
July 25, 2013 41,256,811.87
August 25, 2013 41,168,158.71
September 25, 2013 41,079,062.29
October 25, 2013 40,989,520.52
November 25, 2013 40,899,531.04
December 25, 2013 40,809,091.64
January 25, 2014 40,718,200.05
February 25, 2014 40,626,854.01
March 25, 2014 40,534,993.58
TARGETED
PRINCIPAL
DISTRIBUTION DATE BALANCE ($)
------------------- --------------
April 25, 2014 40,442,614.57
May 25, 2014 40,349,774.95
June 25, 2014 40,256,472.39
July 25, 2014 40,162,704.59
August 25, 2014 40,068,469.20
September 25, 2014 39,973,763.89
October 25, 2014 39,878,596.53
November 25, 2014 39,782,954.43
December 25, 2014 39,686,835.21
January 25, 2015 39,590,236.50
February 25, 2015 39,493,155.87
March 25, 2015 39,395,590.91
April 25, 2015 39,297,539.21
May 25, 2015 39,198,998.31
June 25, 2015 39,099,965.77
July 25, 2015 39,000,439.13
August 25, 2015 38,900,415.89
September 25, 2015 38,799,893.59
October 25, 2015 38,698,879.28
November 25, 2015 38,597,360.78
December 25, 2015 38,495,335.56
January 25, 2016 38,392,801.10
February 25, 2016 38,289,754.72
March 25, 2016 38,186,193.89
April 25, 2016 38,082,116.02
May 25, 2016 37,977,518.36
June 25, 2016 37,872,398.11
July 25, 2016 37,766,749.34
August 25, 2016 37,660,570.05
September 25, 2016 37,553,860.36
October 25, 2016 37,446,618.04
November 25, 2016 37,338,840.42
December 25, 2016 37,230,524.82
January 25, 2017 37,121,668.54
February 25, 2017 37,012,268.88
March 25, 2017 36,902,323.11
April 25, 2017 36,791,828.51
May 25, 2017 36,680,782.31
June 25, 2017 36,569,181.76
July 25, 2017 36,457,024.09
August 25, 2017 36,344,306.50
September 25, 2017 36,231,026.18
October 25, 2017 36,117,180.33
November 25, 2017 36,002,766.11
December 25, 2017 35,887,780.66
January 25, 2018 35,772,221.14
February 25, 2018 35,656,084.67
March 25, 2018 35,539,368.35
April 25, 2018 35,422,069.29
May 25, 2018 35,304,184.56
June 25, 2018 35,185,711.24
July 25, 2018 35,066,646.37
August 25, 2018 34,946,987.00
September 25, 2018 34,826,730.15
October 25, 2018 34,705,872.82
November 25, 2018 34,584,412.02
December 25, 2018 34,462,344.71
January 25, 2019 34,339,667.86
February 25, 2019 34,216,378.43
March 25, 2019 34,092,473.33
April 25, 2019 33,967,949.50
May 25, 2019 33,842,803.83
June 25, 2019 33,717,033.21
July 25, 2019 33,590,634.52
August 25, 2019 33,463,604.60
September 25, 2019 33,335,940.29
October 25, 2019 33,207,638.43
November 25, 2019 33,078,695.82
December 25, 2019 32,949,109.25
January 25, 2020 32,818,875.49
February 25, 2020 32,687,991.32
March 25, 2020 32,556,453.46
April 25, 2020 32,424,258.66
May 25, 2020 32,285,303.08
June 25, 2020 32,144,572.63
July 25, 2020 32,003,211.37
August 25, 2020 31,861,215.78
September 25, 2020 31,718,582.32
October 25, 2020 31,575,307.44
November 25, 2020 31,431,387.56
December 25, 2020 31,286,819.09
January 25, 2021 31,141,598.43
February 25, 2021 30,995,721.97
March 25, 2021 30,849,186.06
April 25, 2021 30,701,987.05
May 25, 2021 30,554,121.28
June 25, 2021 30,405,585.06
July 25, 2021 30,256,374.69
August 25, 2021 30,106,486.44
September 25, 2021 29,955,916.59
October 25, 2021 29,804,661.39
November 25, 2021 29,652,717.05
December 25, 2021 29,500,079.80
January 25, 2022 29,346,745.84
February 25, 2022 29,192,711.34
March 25, 2022 29,037,972.46
TARGETED
PRINCIPAL
DISTRIBUTION DATE BALANCE ($)
------------------- --------------
April 25, 2022 28,882,525.35
May 25, 2022 28,726,366.14
June 25, 2022 28,569,490.93
July 25, 2022 28,411,895.82
August 25, 2022 28,253,576.87
September 25, 2022 28,094,530.16
October 25, 2022 27,934,751.71
November 25, 2022 27,774,237.54
December 25, 2022 27,612,983.65
January 25, 2023 27,450,986.03
February 25, 2023 27,288,240.65
March 25, 2023 27,124,743.44
April 25, 2023 26,960,490.33
May 25, 2023 26,795,477.24
June 25, 2023 26,629,700.06
July 25, 2023 26,463,154.64
August 25, 2023 26,295,836.85
September 25, 2023 26,127,742.52
October 25, 2023 25,958,867.47
November 25, 2023 25,789,207.47
December 25, 2023 25,618,758.32
January 25, 2024 25,447,515.76
February 25, 2024 25,275,475.53
March 25, 2024 25,102,633.34
April 25, 2024 24,928,984.89
May 25, 2024 24,754,525.86
June 25, 2024 24,579,251.91
July 25, 2024 24,207,380.98
August 25, 2024 23,468,548.11
September 25, 2024 22,731,671.07
October 25, 2024 21,996,731.07
November 25, 2024 21,263,709.36
December 25, 2024 20,532,587.26
January 25, 2025 19,803,346.11
February 25, 2025 19,075,967.33
March 25, 2025 18,350,432.39
April 25, 2025 17,626,722.80
May 25, 2025 16,904,820.12
June 25, 2025 16,184,705.96
July 25, 2025 15,466,362.00
August 25, 2025 14,749,769.94
September 25, 2025 14,034,911.55
October 25, 2025 13,321,768.62
November 25, 2025 12,610,323.02
December 25, 2025 11,900,556.66
January 25, 2026 11,192,451.47
February 25, 2026 10,485,989.46
March 25, 2026 9,781,152.66
April 25, 2026 9,077,923.17
May 25, 2026 8,376,283.11
June 25, 2026 7,676,214.66
July 25, 2026 6,977,700.03
August 25, 2026 6,280,721.49
September 25, 2026 5,585,261.34
October 25, 2026 4,891,301.93
November 25, 2026 4,198,825.65
December 25, 2026 3,507,814.93
January 25, 2027 2,818,252.23
February 25, 2027 2,130,120.07
March 25, 2027 1,443,401.00
April 25, 2027 758,077.60
May 25, 2027 74,132.52
June 25, 2027 0.00
SCHEDULE X
ITEM ON FORM 8-K PARTY RESPONSIBLE
--------------------------------------- --------------------------------------
*Item 1.01- Entry into a Material All parties
Definitive Agreement
*Item 1.02- Termination of a Material All parties
Definitive Agreement
Item 1.03- Bankruptcy or Receivership Depositor
Item 2.04- Triggering Events that Depositor
Accelerate or Increase a Direct
Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement
*Item 3.03- Material Modification to Depositor, Servicer
Rights of Security Holders
Item 5.03- Amendments of Articles of Depositor
Incorporation or Bylaws; Change of
Fiscal Year
Item 6.01- ABS Informational and Depositor
Computational Material
*Item 6.02- Change of Servicer or Servicer, Trustee (as to change of
Trustee Trustee only), Paying Agent (as to
change of Paying Agent only)
*Item 6.03- Change in Credit Depositor
Enhancement or External Support
*Item 6.04- Failure to Make a Required Paying Agent
Distribution
Item 6.05- Securities Act Updating Depositor
Disclosure
Item 7.01- Reg FD Disclosure Depositor
Item 8.01 Depositor
Item 9.01 Depositor
X-1
SCHEDULE Y
ITEM ON FORM 10-D PARTY RESPONSIBLE
--------------------------------------- --------------------------------------
Item 1: Distribution and Pool Paying Agent through the Item 602
Performance Information statement based on information
provided to it by the Servicer
Plus any information required by Item Servicer
1121 which is NOT included on the
monthly statement to Certificateholders
Item 2: Legal Proceedings per Item 1117 All parties to the PSA (as to
of Reg AB themselves), the
depositor/trustee/paying
agent/servicer (to the extent known)
as to the issuing entity, the
depositor/servicer as to the sponsor,
1106(b) originator and any 1100(d)(1)
party
Item 3: Sale of Securities and Use of Depositor
Proceeds
Item 4: Defaults Upon Senior Securities Servicer, Paying Agent (except as to
9.01(b) or (d)) and Trustee (to the
extent of knowledge thereof)
Item 5: Submission of Matters to a Vote Depositor, Paying Agent (to the extent
of Security Holders it is submitting a matter to vote) and
the Trustee (to the extent it is
submitting a matter to vote)
Item 6: Significant Obligors of Pool Depositor/Sponsor/Mortgage Loan
Assets Seller/Servicer
Item 7: Significant Enhancement Depositor/Sponsor
Provider Information
Item 8: Other Information Servicer, Paying Agent and any other
party responsible for disclosure items
on Form 10-D
Item 9: Exhibits Servicer
Y-1
SCHEDULE Z
Item on Form 10-K Party Responsible
--------------------------------------- --------------------------------------
Item 1B: Unresolved Staff Comments Depositor
*Item 9B: Other Information Servicer, Paying Agent and any other
party responsible for disclosure items
on Form 8-K
*Item 15: Exhibits, Financial Statement Servicer/subservicers/Depositor
Schedules
*Additional Item: All parties to the PSA (as to
themselves), the
Disclosure per Item 1117 of Reg AB Depositor/Trustee/Paying
Agent/Servicer (to the extent known)
as to the issuing entity, the
depositor/servicer as to the sponsor,
1106(b) originator, any 1100(d)(1)
party
*Additional Item: All parties to the PSA, the sponsor,
Disclosure per Item 1119 of Reg AB originator, significant obligor,
enhancement or support provider
Additional Item: Depositor/Sponsor/Mortgage Loan
Disclosure per Item 1112(b) of Reg AB Seller/Servicer
Additional Item: Depositor/Sponsor
Disclosure per Items 1114(b) and
1115(b) of Reg AB
Z-1
