Exhibit 4.1
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.,
Depositor
XXXXX FARGO BANK, N.A.,
Master Servicer and Securities Administrator
and
HSBC BANK USA, NATIONAL ASSOCIATION,
Trustee
STACK I POOLING AND SERVICING TERMS,
constituting,
along with the Stack II Pooling and Servicing Terms, the
POOLING AND SERVICING AGREEMENT
Dated as of October 1, 2006
----------
Mortgage Pass-Through Certificates, MLMI Series 2006-AF2
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.................................................... 7
Section 1.02 Accounting.............................................. 51
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES.......................................................... 52
Section 2.01 Conveyance of Mortgage Loans to Trustee................. 52
Section 2.02 Acceptance of Mortgage Loans by Trustee................. 55
Section 2.03 Assignment of Interest in the Mortgage Loan
Purchase Agreement................................... 58
Section 2.04 Substitution of Mortgage Loans.......................... 59
Section 2.05 Issuance of Certificates................................ 61
Section 2.06 Representations and Warranties Concerning
the Depositor........................................ 61
Section 2.07 Representations and Warranties Concerning the Master
Servicer and Securities Administrator................ 62
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS............... 64
Section 3.01 Master Servicer......................................... 64
Section 3.02 REMIC-Related Covenants................................. 65
Section 3.03 Monitoring of Servicer.................................. 65
Section 3.04 Fidelity Bond........................................... 66
Section 3.05 Power to Act; Procedures................................ 66
Section 3.06 Due-on-Sale Clauses; Assumption Agreements.............. 67
Section 3.07 Release of Mortgage Files............................... 67
Section 3.08 Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee...................... 68
Section 3.09 Standard Hazard Insurance and Flood Insurance Policies.. 69
Section 3.10 Presentment of Claims and Collection of Proceeds........ 69
Section 3.11 Maintenance of the Primary Mortgage Insurance Policies.. 70
Section 3.12 Trustee to Retain Possession of Certain Insurance
Policies and Documents............................... 70
Section 3.13 Realization Upon Defaulted Mortgage Loans............... 71
Section 3.14 Compensation for the Master Servicer.................... 71
Section 3.15 REO Property............................................ 71
Section 3.16 Annual Statement as to Compliance....................... 72
Section 3.17 Reports on Assessment of Compliance and Attestation..... 73
Section 3.18 Periodic Filings........................................ 75
Section 3.19 Compliance with Regulation AB........................... 82
ARTICLE IV ACCOUNTS...................................................... 83
Section 4.01 Protected Accounts...................................... 83
Section 4.02 Master Servicer Collection Account...................... 84
Section 4.03 Permitted Withdrawals and Transfers from the Master
Servicer Collection Account.......................... 85
Section 4.04 Distribution Account.................................... 86
Section 4.05 Permitted Withdrawals and Transfers from the
Distribution Account................................. 86
Section 4.06 [Reserved].............................................. 88
ARTICLE V CERTIFICATES................................................... 90
Section 5.01 The Certificates........................................ 90
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates............................. 90
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates....... 94
Section 5.04 Persons Deemed Owners................................... 95
Section 5.05 Access to List of Certificateholders' Names and
Addresses............................................ 95
Section 5.06 Book-Entry Certificates................................. 95
Section 5.07 Notices to Depository................................... 96
Section 5.08 Definitive Certificates................................. 96
Section 5.09 Maintenance of Office or Agency......................... 97
ARTICLE VI PAYMENTS TO CERTIFICATEHOLDERS................................ 98
Section 6.01 Distributions on the Certificates....................... 98
Section 6.02 Allocation of Losses.................................... 103
Section 6.03 Payments................................................ 104
Section 6.04 Statements to Certificateholders........................ 104
Section 6.05 Monthly Advances........................................ 107
Section 6.06 Compensating Interest Payments.......................... 107
ARTICLE VII THE MASTER SERVICER AND THE DEPOSITOR........................ 108
Section 7.01 Liabilities of the Master Servicer...................... 108
Section 7.02 Merger or Consolidation of the Master Servicer.......... 108
Section 7.03 Indemnification from the Master Servicer and
the Depositor........................................ 108
Section 7.04 Limitations on Liability of the Master Servicer
and Others........................................... 109
Section 7.05 Master Servicer Not to Resign........................... 110
Section 7.06 Successor Master Servicer............................... 110
Section 7.07 Sale and Assignment of Master Servicing................. 110
ARTICLE VIII DEFAULT..................................................... 112
Section 8.01 Events of Default....................................... 112
Section 8.02 Trustee to Act; Appointment of Successor................ 113
Section 8.03 Notification to Certificateholders...................... 114
Section 8.04 Waiver of Defaults...................................... 114
Section 8.05 List of Certificateholders.............................. 115
ARTICLE IX CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR....... 116
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Section 9.01 Duties of Trustee....................................... 116
Section 9.02 Certain Matters Affecting the Trustee and the
Securities Administrator............................. 118
Section 9.03 Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans....................... 120
Section 9.04 Trustee and Securities Administrator May Own
Certificates......................................... 120
Section 9.05 Trustee's and Securities Administrator's Fees
and Expenses......................................... 120
Section 9.06 Eligibility Requirements for Trustee and Securities
Administrator........................................ 121
Section 9.07 Insurance............................................... 122
Section 9.08 Resignation and Removal of the Trustee and Securities
Administrator........................................ 122
Section 9.09 Successor Trustee and Successor Securities
Administrator........................................ 123
Section 9.10 Merger or Consolidation of Trustee or Securities
Administrator........................................ 123
Section 9.11 Appointment of Co-Trustee or Separate Trustee........... 124
Section 9.12 Federal Information Returns and Reports to
Certificateholders; REMIC Administration............. 125
ARTICLE X TERMINATION.................................................... 130
Section 10.01 Termination upon Liquidation or Repurchase of all
Mortgage Loans....................................... 130
Section 10.02 Final Distribution on the Certificates.................. 131
Section 10.03 Additional Termination Requirements..................... 132
ARTICLE XI MISCELLANEOUS PROVISIONS...................................... 134
Section 11.01 Intent of Parties....................................... 134
Section 11.02 Amendment............................................... 134
Section 11.03 Recordation of Agreement................................ 136
Section 11.04 Limitation on Rights of Certificateholders.............. 136
Section 11.05 Acts of Certificateholders.............................. 136
Section 11.06 Governing Law........................................... 138
Section 11.07 Notices................................................. 138
Section 11.08 Severability of Provisions.............................. 139
Section 11.09 Successors and Assigns.................................. 139
Section 11.10 Article and Section Headings............................ 139
Section 11.11 Counterparts............................................ 139
Section 11.12 Notice to Rating Agencies............................... 139
ARTICLE XII REMIC ADMINISTRATION......................................... 140
Section 12.01 REMIC Administration.................................... 140
Section 12.02 Prohibited Transactions and Activities.................. 140
Section 12.03 Indemnification with Respect to Prohibited Transactions
or Loss of REMIC Status.............................. 140
Section 12.04 REO Property............................................ 141
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EXHIBITS
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Exhibit A-1 - Form of Class A and Class M Certificates
Exhibit A-2 - Form of Class B Certificates
Exhibit B - Mortgage Loan Schedule
Exhibit C - [Reserved]
Exhibit D - Request for Release of Documents
Exhibit E-1 - Form of Transferee's Letter and Affidavit
Exhibit E-2 - Form of Transferor Certificate
Exhibit F-1 - Form of Transferor Representation Letter
Exhibit F-2 - Form of Investor Representation Letter
Exhibit F-3 - Form of Rule 144A Letter
Exhibit G - Form of Custodial Agreement
Exhibit H - [Reserved]
Exhibit I - Transfer Agreement
Exhibit J - Mortgage Loan Purchase Agreement
Exhibit K - Servicing Criteria To Be Addressed in Assessment of Compliance
Exhibit L - Form of Xxxxxxxx-Xxxxx Certification
Exhibit M - Form of Back-up Xxxxxxxx-Xxxxx Certification
Exhibit N - [Reserved]
Exhibit O - Additional Disclosure Notification
Exhibit P - Form of Item 1123 Certification of Servicer
Exhibit Q-1 - Additional Form 10-D Disclosure
Exhibit Q-2 - Additional Form 10-K Disclosure
Exhibit Q-3 - Form 8-K Disclosure Information
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STACK I POOLING AND SERVICING TERMS
These Stack I Pooling and Servicing Terms are dated as of October 1, 2006
(the "Agreement," and, together with the Stack II Pooling and Servicing Terms
(the "Stack II Agreement") dated as of October 1, 2006, the "Pooling and
Servicing Agreement"), among XXXXXXX XXXXX MORTGAGE INVESTORS, INC., as
depositor (the "Depositor"), XXXXX FARGO BANK, N.A., as master servicer (in such
capacity, the "Master Servicer") and as securities administrator (in such
capacity, the "Securities Administrator") and HSBC BANK USA, NATIONAL
ASSOCIATION, as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor has acquired the Mortgage Loans from the Seller and at the
Closing Date is the owner of the Mortgage Loans and the other related property
being conveyed by the Depositor to the Trustee hereunder on behalf of the
Issuing Entity for inclusion in the Trust Fund. On the Closing Date, the
Depositor will acquire the Certificates from the Securities Administrator as
consideration for the Depositor's transfer to the Issuing Entity of the Mortgage
Loans and the other related property constituting that portion of the Trust Fund
relating to the Certificates. The Depositor has duly authorized the execution
and delivery of this Agreement to provide for the conveyance to the Issuing
Entity of the Mortgage Loans and the other related property constituting that
portion of the Trust Fund relating to the Certificates. All covenants and
agreements made by the Transferor in the Transfer Agreement, the Seller in the
Mortgage Loan Purchase Agreement and in this Agreement and all covenants and
agreements made by the Depositor, the Trustee, the Securities Administrator and
the Master Servicer herein with respect to the Mortgage Loans and the other
related property constituting the portion of the Trust Fund relating to the
Certificates are for the benefit of the Holders from time to time of the
Certificates. The Depositor, the Trustee, the Securities Administrator and the
Master Servicer are entering into this Agreement, and the Trustee on behalf of
the Issuing Entity is accepting the Trust Fund created hereby, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
In conjunction herewith, the Depositor has acquired the Stack II Mortgage
Loans from the Seller and at the Closing Date is the owner of the Stack II
Mortgage Loans and the other related property being conveyed by the Depositor to
the Trustee under the Stack II Agreement on behalf of the Issuing Entity for
inclusion in the Trust Fund. On the Closing Date, the Depositor will acquire the
Stack II Certificates from the Securities Administrator as consideration for the
Depositor's transfer to the Issuing Entity of the Stack II Mortgage Loans and
the other related property constituting that portion of the Trust Fund relating
to the Stack II Certificates. The Depositor has duly authorized the execution
and delivery of the Stack II Agreement to provide for the conveyance to the
Issuing Entity of the Stack II Mortgage Loans and the other related property
constituting that portion of the Trust Fund relating to the Stack II
Certificates. The terms and conditions relating to the issuance of the Stack II
Certificates are set forth in the Stack II Agreement.
As provided herein, the Securities Administrator shall elect that that
portion of the Trust Fund relating to Stack I be treated for federal income tax
purposes as comprising a real estate mortgage investment conduit (a "REMIC" or,
in the alternative, the "Upper Tier REMIC,"
respectively). The Certificates created under this Agreement shall represent
ownership of regular interests in the Upper Tier REMIC.
The Upper Tier REMIC shall hold as its assets the property of the Trust
Fund relating to Stack I.
Each Upper Tier REMIC Regular Interest is hereby designated as a regular
interest in the Upper Tier REMIC for purposes of the REMIC Provisions.
The Class UT-R Interest is hereby designated as the sole class of residual
interest in the Upper Tier REMIC for purposes of the REMIC Provisions. The Class
A-R Certificate shall represent the Class UT-R Interest and the residual
interest in any REMIC created under the Stack II Agreement.
THE CERTIFICATES
The following table sets forth (or describes) the Class designation,
Certificate Rate, initial Class Certificate Balance or initial notional amount,
and minimum denomination for each Class of Certificates comprising interests in
the Trust Fund created hereunder.
Initial Class
Certificate Balance
Class Certificate or Initial Notional Minimum Denominations
Designation Rate Amount or Percentage Interest
----------- ----------- -------------------- ----------------------
Class AF-1 6.25% $186,440,000 $25,000.00
Class AF-2 6.25% $100,000,000 $25,000.00
Class AF-3 6.25% $ 4,221,000 $25,000.00
Class IO (1) (2) $25,000.00
Class PO (3) $ 2,289,228
Class MF-1 6.25% $ 4,580,000 $25,000.00
Class MF-2 6.25% $ 2,900,000 $25,000.00
Class MF-3 6.25% $ 1,527,000 $25,000.00
Class BF-1 6.25% $ 1,527,000 $25,000.00
Class BF-2 6.25% $ 1,069,000 $25,000.00
Class BF-3 6.25% $ 762,360 $25,000.00
(1) The Certificate Rate with respect to any Distribution Date (and the related
Accrual Period) will be 6.25%.
(2) The Class IO Certificates are interest-only certificates. The Class IO
Certificates will accrue interest on their class notional amount.
(3) The Class PO Certificates are principal-only certificates and are not
entitled to payments of interest.
With respect to the first Distribution Date, the notional amount of the
Class IO Certificates will be $12,453,303.
As of the Cut-off Date, the Mortgage Loans had an aggregate Principal
Balance of $305,315,588.57.
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In consideration of the mutual agreements herein contained, the Depositor,
the Trustee, Securities Administrator and the Master Servicer hereby agree as
follows:
ARTICLE I.
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
otherwise expressly provided or unless the context otherwise requires, shall
have the meanings specified in this Article.
10-K Filing Deadline: As defined in Section 3.18(h)
ABN AMRO: ABN AMRO Mortgage Group, Inc.
ABN AMRO Loans: The Mortgage Loans serviced by ABN AMRO and sold to MLML
pursuant to the ABN AMRO Sale and Servicing Agreement.
ABN AMRO Sale and Servicing Agreement: The Master Mortgage Loan Sale and
Servicing Agreement dated as of October 1, 2006, between ABN AMRO as seller and
MLML as purchaser, as at any time in effect.
Accepted Master Servicing Practices: With respect to any Mortgage Loan, as
applicable, either (x) those customary mortgage master servicing practices of
prudent mortgage servicing institutions that master service mortgage loans of
the same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the Trustee
or the Master Servicer (except in its capacity as successor to the Servicer), or
(y) as provided in the Servicing Agreement, to the extent applicable to the
Servicer, but in no event below the standard set forth in clause (x).
Account: The Master Servicer Collection Account, Distribution Account and
any Protected Account as the context may require.
Accountant's Attestation: As defined in Section 3.17.
Accrual Period: With respect to any Distribution Date, the calendar month
immediately preceding the month in which the related Distribution Date occurs.
Interest shall accrue on all Classes of Certificates and REMIC 1 Regular
Interests on the basis of a 360-day year consisting of twelve 30-day months.
Accrued Certificate Interest: With respect to each Class of Certificates,
an amount equal to the interest accrued during the related Accrual Period on the
Class Certificate Balance thereof at the then-applicable Certificate Rate.
Accrued Certificate Interest on any Class of Certificates will be reduced by the
amount of (i) Prepayment Interest Shortfalls (to the extent not offset by the
Servicer or Master Servicer with a payment of Compensating Interest as provided
in Section 6.06), (ii) the interest portion of Realized Losses allocated to such
Class of Certificates pursuant to Section 6.02 and (iii) any other interest
shortfalls not covered by the subordination provided by the Class M Certificates
and Class B Certificates, including shortfalls as a result of the Relief
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Act or similar legislation or regulations, with all such reductions allocated
among all of the Certificates in proportion to their respective amounts of
Accrued Certificate Interest payable on such Distribution Date which would have
resulted absent such reductions.
Additional Disclosure Notification: As defined in Section 3.18(b).
Additional Form 10-D Disclosure: As defined in Section 3.18(e).
Additional Form 10-K Disclosure: As defined in Section 3.18(h).
Adverse REMIC Event: As defined in Section 9.12(g).
Affiliate: As to any Person, any other Person controlling, controlled by or
under common control with such Person. "Control" means the power to direct the
management and policies of a Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise. "Controlled" and
"Controlling" have meanings correlative to the foregoing. The Master Servicer
may conclusively presume that a Person is not an Affiliate of another Person
unless a Responsible Officer of the Master Servicer has actual knowledge to the
contrary.
Aggregate Subordinated Percentage: Not applicable.
Agreement: This Stack I Pooling and Servicing Terms, including the exhibits
hereto, and all amendments hereof and supplements hereto.
Applicable Credit Rating: For any long-term deposit or security, a credit
rating of AAA in the case of S&P or Aaa in the case of Xxxxx'x. For any
short-term deposit or security, a rating of A-l+ in the case of S&P or P-1 in
the case of Xxxxx'x.
Appraised Value: For any Mortgaged Property related to a Mortgage Loan, the
amount set forth as the appraised value of such Mortgaged Property in an
appraisal made for the mortgage originator in connection with its origination of
the related Mortgage Loan.
Assessment of Compliance: As defined in Section 3.17.
Assignment: An assignment of the Mortgage, notice of transfer or equivalent
instrument, in recordable form, sufficient under the laws of the jurisdiction
wherein the related Mortgaged Property is located to reflect of record the sale
of the Mortgage Loan to the Trustee for the benefit of Certificateholders, which
assignment, notice of transfer or equivalent instrument may be in the form of
one or more blanket assignments covering Mortgages secured by Mortgaged
Properties located in the same county, if permitted by law and accompanied by an
Opinion of Counsel to that effect.
Auction: The one-time auction conducted by the Securities Administrator, as
described in Section 10.01(b) hereof.
Available Distribution Amount: On any Distribution Date, an amount equal to
the amount on deposit in the Master Servicer Collection Account 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:
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(a) amounts received on particular Mortgage Loans 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 4.03 from, or not required
to be deposited in, the Master Servicer Collection Account;
(c) amounts representing the Servicing Fee with respect to such
Distribution Date;
(d) amounts representing all or part of a Monthly Payment with respect to a
Mortgage Loan 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 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 Master Servicer
Collection Account for the account of the Master Servicer.
Back-Up Certification: As defined in Section 3.18(k).
Bankruptcy Code: The United States Bankruptcy Code, as amended as codified
in 11 U.S.C. Sections 101-1330.
Book-Entry Certificates: Any of the Certificates that shall be registered
in the name of the Depository or its nominee, the ownership of which is
reflected on the books of the Depository or on the books of a Person maintaining
an account with the Depository (directly, as a Depository Participant, or
indirectly, as an indirect participant in accordance with the rules of the
Depository and as described in Section 5.06 hereof). On the Closing Date, the
Certificates (other than the Private Certificates) shall be Book-Entry
Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a day
on which the New York Stock Exchange or Federal Reserve is closed or on which
banking institutions in the jurisdiction in which the Trustee, the Master
Servicer, the Servicer or the Securities Administrator are authorized or
obligated by law or executive order to be closed.
Carry-Over Subordinated Principal Amount: As of any Distribution Date, with
respect to any Class of Subordinate 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.
Certificate: Any mortgage pass-through certificate issued pursuant to this
Agreement, evidencing a beneficial ownership interest in that portion of the
Trust Fund related to the Mortgage Loans, signed and countersigned by the
Securities Administrator. For the avoidance of doubt, as defined below, the term
"Stack II Certificate" shall be used to refer to any mortgage pass-through
certificate issued pursuant to the Stack II Agreement, evidencing a beneficial
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ownership interest in that portion of the Trust Fund related to the Stack II
Mortgage Loans, signed and countersigned by the Securities Administrator.
Certificate Owner: With respect to each Book-Entry Certificate, any
beneficial owner thereof.
Certificate Rate: The per annum rate of interest borne by each Class of
Certificates (other than the Class PO Certificates), which will be 6.25%.
Certificate Register: The register maintained pursuant to Section 5.02
hereof.
Certificateholder or Holder: The Person in whose name a Regular Certificate
is registered in the Certificate Register, except that a Disqualified
Organization or non-U.S. Person shall not be a Holder of the Class A-R
Certificate for any purpose hereof.
Certification Parties: As defined in Section 3.18(k).
Certifying Person: As defined in Section 3.18(k).
Class: Collectively, Certificates which have the same priority of payment
and bear the same class designation and the form of which is identical except
for variation in the Percentage Interest evidenced thereby.
Class A Certificate: Any of the Class AF-1, Class AF-2, Class AF-3, Class
IO or Class PO Certificates as designated on the face thereof substantially in
the form annexed hereto as Exhibits A-1, executed by the Securities
Administrator and authenticated and delivered by the Securities Administrator,
representing the right to distributions as set forth herein and therein.
Class A Certificateholder: Any Holder of a Class A Certificate.
Class AF-1 Certificate: Any one of the Class AF-1 Certificates, executed by
the Securities Administrator and authenticated and delivered by the Securities
Administrator, 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 A-1 hereto.
Class AF-1 Interest Accrual Amount: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Class Certificate Balance of
the Class AF-1 Certificates minus (i) any Compensating Interest Shortfall
allocated to the Class AF-1 Certificates on such Distribution Date pursuant to
Section 6.08(a), (ii) any Realized Loss Interest Shortfall allocated to the
Class AF-1 Certificates on such Distribution Date pursuant to Section 6.08(b),
and (iii) any interest shortfall resulting from the Relief Act allocated to the
Class AF-1 Certificates on such Distribution Date pursuant to Section 6.08(c).
Class AF-1 Shortfall: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class AF-1 Interest Accrual Amount over the
amount actually distributed to the Class AF-1 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i).
Class AF-2 Certificate: Any one of the Class AF-2 Certificates, executed by
the Securities Administrator and authenticated and delivered by the Securities
Administrator, senior
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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 A-1 hereto.
Class AF-2 Interest Accrual Amount: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Class Certificate Balance of
the Class AF-2 Certificates minus (i) any Compensating Interest Shortfall
allocated to the Class AF-2 Certificates on such Distribution Date pursuant to
Section 6.08(a), (ii) any Realized Loss Interest Shortfall allocated to the
Class AF-2 Certificates on such Distribution Date pursuant to Section 6.08(b),
and (iii) any interest shortfall resulting from the Relief Act allocated to the
Class AF-2 Certificates on such Distribution Date pursuant to Section 6.08(c).
Class AF-2 Shortfall: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class AF-2 Interest Accrual Amount over the
amount actually distributed to the Class AF-2 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i).
Class AF-3 Certificate: Any one of the Class AF-3 Certificates, executed by
the Securities Administrator and authenticated and delivered by the Securities
Administrator, 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 A-1 hereto.
Class AF-3 Interest Accrual Amount: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Class Certificate Balance of
the Class AF-3 Certificates minus (i) any Compensating Interest Shortfall
allocated to the Class AF-3 Certificates on such Distribution Date pursuant to
Section 6.08(a), (ii) any Realized Loss Interest Shortfall allocated to the
Class AF-3 Certificates on such Distribution Date pursuant to Section 6.08(b),
and (iii) any interest shortfall resulting from the Relief Act allocated to the
Class AF-3 Certificates on such Distribution Date pursuant to Section 6.08(c).
Class AF-3 Shortfall: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class AF-3 Interest Accrual Amount over the
amount actually distributed to the Class AF-3 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i).
Class A-R Certificate: The Class A-R Certificate created and issued under
the Stack II Agreement.
Class B Certificate: Any one of the Class BF-1, Class BF-2 or Class BF-3
Certificates as designated on the face thereof substantially in the form annexed
hereto as Exhibit A-2, executed by the Securities Administrator and
authenticated and delivered by the Securities Administrator, representing the
right to distributions as set forth herein and therein.
Class B Certificateholder: Any Holder of a Class B Certificate.
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 BF-1 Certificate: Any one of the Class BF-1 Certificates executed by
the Securities Administrator and authenticated and delivered by the Securities
Administrator, subordinated in
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right of payment to the Class A and Class M Certificates, substantially in the
form of the Class B Certificate set forth in Exhibit A-2 hereto.
Class BF-1 Interest Accrual Amount: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Class Certificate Balance of
the Class BF-1 Certificates minus (i) any Compensating Interest Shortfall
allocated to the Class BF-1 Certificates on such Distribution Date pursuant to
Section 6.08(a), (ii) any Realized Loss Interest Shortfall allocated to the
Class BF-1 Certificates on such Distribution Date pursuant to Section 6.08(b)
and (iii) any interest shortfall resulting from the Relief Act allocated to the
Class BF-1 Certificates on such Distribution Date pursuant to Section 6.08(c).
Class BF-1 Shortfall: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class BF-1 Interest Accrual Amount over the
amount actually distributed to the Class BF-1 Certificates on such Distribution
Date pursuant to Section 6.01(I)(d)(i).
Class BF-2 Certificate: Any one of the Class BF-2 Certificates executed by
the Securities Administrator and authenticated and delivered by the Securities
Administrator, subordinated in right of payment to the Class A, Class M and
Class BF-1 Certificates, substantially in the form of the Class B Certificate
set forth in Exhibit A-2 hereto.
Class BF-2 Interest Accrual Amount: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Class Certificate Balance of
the Class BF-2 Certificates minus (i) any Compensating Interest Shortfall
allocated to the Class BF-2 Certificates on such Distribution Date pursuant to
Section 6.08(a), (ii) any Realized Loss Interest Shortfall allocated to the
Class BF-2 Certificates on such Distribution Date pursuant to Section 6.08(b)
and (iii) any interest shortfall resulting from the Relief Act allocated to the
Class BF-2 Certificates on such Distribution Date pursuant to Section 6.08(c).
Class BF-2 Shortfall: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class BF-2 Interest Accrual Amount over the
amount actually distributed to the Class BF-2 Certificates on such Distribution
Date pursuant to Section 6.01(I)(d)(ii).
Class BF-3 Certificate: Any one of the Class BF-3 Certificates executed by
the Securities Administrator and authenticated and delivered by the Securities
Administrator, subordinated in right of payment to the Class A, Class M, Class
BF-1 and Class BF-2 Certificates, substantially in the form of the Class B
Certificate set forth in Exhibit A-2 hereto.
Class BF-3 Interest Accrual Amount: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Class Certificate Balance of
the Class BF-3 Certificates minus (i) any Compensating Interest Shortfall
allocated to the Class BF-3 Certificates on such Distribution Date pursuant to
Section 6.08(a), (ii) any Realized Loss Interest Shortfall allocated to the
Class BF-3 Certificates on such Distribution Date pursuant to Section 6.08(b)
and (iii) any interest shortfall resulting from the Relief Act allocated to the
Class BF-3 Certificates on such Distribution Date pursuant to Section 6.08(c).
Class BF-3 Shortfall: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class BF-3 Interest Accrual Amount over the
amount actually distributed to the Class BF-3 Certificates on such Distribution
Date pursuant to Section 6.01(I)(d)(iii).
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Class Certificate Balance: With respect to any Certificate (other than the
Class IO Certificates) as of any date of determination, the Class Certificate
Balance of such Certificate on the Distribution Date immediately prior to such
date of determination, plus any Subsequent Recoveries added to the Class
Certificate Balance of such Certificate, and reduced by the aggregate of (a) all
distributions of principal made thereon on such immediately prior Distribution
Date and (b) without duplication of amounts described in clause (a) above,
reductions in the Class Certificate Balance thereof in connection with
allocations thereto of Realized Losses on the Mortgage Loans and Extraordinary
Trust Fund Expenses on such immediately prior Distribution Date (or, in the case
of any date of determination up to and including the initial Distribution Date,
the initial Class Certificate Balance of such Certificate, as stated on the face
thereof); provided, however, that the Class Certificate Balance of each
Subordinate Certificate of the Class of Subordinate Certificates outstanding
with the highest numerical designation at any given time shall be calculated to
equal the Percentage Interest evidenced by such Certificate multiplied by the
excess, if any, of (A) the then aggregate Principal Balance of the Mortgage
Loans over (B) the then aggregate Class Certificate Balance of all other Classes
of Certificates then outstanding.
Class IO Certificate: Any one of the Class IO Certificates, executed by the
Securities Administrator and authenticated and delivered by the Securities
Administrator, 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 A-1 hereto.
Class IO Interest Accrual Amount: With respect to any Distribution Date,
one month's interest at the Class IO Certificate Rate on the Class IO Notional
Amount minus (i) any Compensating Interest Shortfall allocated to Class IO on
such Distribution Date pursuant to Section 6.08(a), (ii) any Realized Loss
Interest Shortfall allocated to Class IO on such Distribution Date pursuant to
Section 6.08(b) and (iii) any interest shortfall resulting from the
Servicemembers Civil Relief Act allocated to the Class IO on such Distribution
Date pursuant to Section 6.08(c).
Class IO Notional Amount: With respect to any Distribution Date, an amount
equal to the product of the aggregate Principal Balance of the Non-Discount
Mortgage Loans and a fraction the numerator of which is the Stripped Interest
Rate and the denominator of which is 6.25%. The Class IO Notional Amount for the
first Distribution Date will be $12,453,303.
Class IO Shortfall: With respect to any Distribution Date the amount equal
to the excess, if any, of the Class IO Interest Accrual Amount over the amount
actually distributed to the Class IO Certificateholders on such Distribution
Date pursuant to Section 6.01(I)(b)(i).
Class M Certificate: Any one of the Class MF-1, Class MF-2 or Class MF-3
Certificates as designated on the face thereof substantially in the form annexed
hereto as Exhibit A-1, executed by the Securities Administrator and
authenticated and delivered by the Securities Administrator, representing the
right to distributions as set forth herein and therein.
Class M Certificateholder: Any Holder of a Class M Certificate.
Class M Interest Accrual Amount: With respect to any Distribution Date, one
(1) month's interest at the Certificate Rate on the Class Certificate Balance of
the Class M
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Certificates minus (i) any Compensating Interest Shortfall allocated to the
Class M Certificates on such Distribution Date pursuant to Section 6.08(a), (ii)
any Realized Loss Interest Shortfall allocated to the Class M Certificates on
such Distribution Date pursuant to Section 6.08(b) and (iii) any interest
shortfall resulting from the Relief Act allocated to the Class M Certificates on
such Distribution Date pursuant to Section 6.08(c).
Class M Percentage: The Class MF-1 Percentage, Class MF-2 Percentage or
Class MF-3 Percentage.
Class M Principal Balance: As of any Distribution Date, (a) the Class M
Principal Balance for the immediately preceding Distribution Date less (b)
amounts distributed to the Class M Certificateholders on such preceding
Distribution Date allocable to principal (including the principal portion of
Advances of the Servicer made pursuant to Section 6.06 and Realized Losses
allocated to the Class M Certificates pursuant to Section 6.02); provided that
the Class M Principal Balance on the first Distribution Date shall be the
Original Class M Principal Balance, and provided further that if the aggregate
Class Certificate Balance of the Class B Certificates has been reduced to zero,
as of any Distribution Date, the Class 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 MF-1 Percentage: With respect to any Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Class Certificate Balance of the Class MF-1 Certificates immediately
prior to such date and the denominator of which is the aggregate Principal
Balance of all of the Mortgage Loans (or related REO Properties) immediately
prior to such Distribution Date.
Class MF-2 Percentage: With respect to any Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Class Certificate Balance of the Class MF-2 Certificates immediately
prior to such date and the denominator of which is the aggregate Principal
Balance of all of the Mortgage Loans (or related REO Properties) immediately
prior to such Distribution Date.
Class MF-3 Percentage: With respect to any Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Class Certificate Balance of the Class MF-3 Certificates immediately
prior to such date and the denominator of which is the aggregate Principal
Balance of all of the Mortgage Loans (or related REO Properties) immediately
prior to such Distribution Date.
Class PO Amount: With respect to any Distribution Date, the 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 PO Certificate: Any one of the Class PO Certificates, executed by the
Securities Administrator and authenticated and delivered by the Securities
Administrator, senior in right of
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payment to the Class M and Class B Certificates, substantially in the form of
the Class A Certificate set forth in Exhibit A-1 hereto.
Class PO 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 (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 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 PO
Certificateholders.
Class Subordination Percentage: With respect to any Distribution Date and
each Class of Subordinate Certificates, the fraction (expressed as a percentage)
the numerator of which is the Class Certificate Balance of such Class of
Subordinate Certificates immediately prior to such Distribution Date and the
denominator of which is the aggregate of the Class Certificate Balances of all
Classes of Certificates immediately prior to such Distribution Date.
Class UT-R Interest: The sole class of residual interest in the Upper Tier
REMIC for purposes of the REMIC Provisions. The Class UT-R Interest shall have
neither a principal amount nor an interest rate. The Class UT-R Interest shall
be represented by the Class A-R Certificate.
Closing Date: October 31, 2006.
Code: The Internal Revenue Code of 1986, as amended.
Commission: The Securities and Exchange Commission.
Compensating Interest Payments: As defined in Section 6.07.
Compensating Interest Shortfall: As defined in Section 6.08(a).
Cooperative: A corporation that has been formed for the purpose of
cooperative apartment ownership.
Cooperative Assets: Shares issued by Cooperatives, the related Cooperative
Lease and any other collateral securing the Cooperative Loans.
Cooperative Lease: With respect to a Cooperative Loan, the proprietary
lease or occupancy agreement with respect to the cooperative apartment occupied
by the Mortgagor and relating to the related Cooperative Assets, which lease or
agreement confers an exclusive right to the holder of such Cooperative Assets to
occupy such apartment.
Cooperative Loan: The indebtedness of a Mortgagor evidenced by a Mortgage
Note which is secured by Cooperative Assets and which is being sold to the
Depositor pursuant to this Agreement, the Mortgage Loans so sold being
identified in the Mortgage Loan Schedule.
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Cooperative Stock: With respect to a Cooperative Loan, the single
outstanding class of stock, partnership interest or other ownership instrument
in the related Cooperative.
Corporate Trust Office: With respect to the Trustee, the principal
corporate trust office of the Trustee at which at any particular time its
corporate trust business in connection with this Agreement shall be
administered, which office at the date of the execution of this instrument is
located at HSBC Bank USA, National Association, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Issuer Services - Xxxxxxx Xxxxx Mortgage Investors, Inc.,
MLMI Series 2006-AF2, or at such other address as the Trustee may designate from
time to time by notice to the Certificateholders, the Depositor and the Master
Servicer and with respect to the Securities Administrator, for Certificate
transfer purposes, Xxxxx Fargo Center, Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000, Attn: Client Service Manager - MLMI 2006-AF2, and
for all other purposes, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx, 00000,
Attn: Corporate Trust Services - MLMI 2006-AF2.
Corresponding Class or Classes of Certificates: With respect to each REMIC
2 Regular Interest, the Class or Classes of Certificates appearing opposite such
REMIC 2 Regular Interest as described in the Preliminary Statement hereto.
Credit Support: With respect to each Class of Subordinate Certificates
(other than the Class BF-3 Certificates), the level of credit support supporting
such Class, expressed as a percentage of the aggregate outstanding Class
Certificate Balance of all Classes of Certificates. 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 Class Certificate Balance immediately prior to such
Distribution Date of all Classes of Subordinate Certificates having higher
numerical Class designations than such Class by the aggregate outstanding Class
Certificate Balance of all Classes of Certificates immediately prior to such
Distribution Date. For purposes of this defined term, the Class B Certificates
shall be considered as having higher numerical Class designations than the Class
M Certificates.
Credit Support Depletion Date: The first Distribution Date on which the
aggregate Class Certificate Balance of the Subordinate Certificates is reduced
to zero.
Curtailment: Any Principal Prepayment made by a Mortgagor which is not a
Principal Prepayment in Full.
Custodial Agreement: An agreement, dated as of the Closing Date among the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
the Custodian in substantially the form of Exhibit G hereto.
Custodian: Xxxxx Fargo Bank, N.A., including any successors in interest, or
any successor custodian appointed pursuant to the provisions hereof and of the
Custodial Agreement.
Cut-off Date: October 1, 2006.
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Debt Service Reduction: Any reduction of the Monthly Payments which a
Mortgagor is obligated to pay with respect to a Mortgage Loan as a result of any
proceeding under the Bankruptcy Code or any other similar state law or other
proceeding.
Defective Mortgage Loan: A Mortgage Loan replaced or to be replaced by one
or more Substitute Mortgage Loans.
Deficient Valuation: With respect to any Mortgage Loan, a valuation of the
related Mortgaged Property by a court of competent jurisdiction in an amount
less than the then outstanding principal balance of the Mortgage Loan, which
valuation results from a proceeding initiated under the Bankruptcy Code.
Definitive Certificates: As defined in Section 5.06.
Depositor: Xxxxxxx Xxxxx Mortgage Investors, Inc., a Delaware corporation,
or any successor in interest.
Depository: The Depository Trust Company, the nominee of which is Cede &
Co., or any successor thereto.
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.
Designated Depository Institution: A depository institution (commercial
bank, federal savings bank, mutual savings bank or savings and loan association)
or trust company (which may include the Trustee), the deposits of which are
fully insured by the FDIC to the extent provided by law.
Determination Date: With respect to each Mortgage Loan, the Determination
Date as defined in the Servicing Agreement.
Discount Mortgage Loan: A Mortgage Loan having a Net Mortgage Rate less
than the Remittance Rate.
Disqualified Organization: A "disqualified organization" as defined in
Section 860 E(e)(5) of the Code.
Distribution Account: The trust account or accounts created and maintained
pursuant to Section 4.04, which shall be denominated "Xxxxx Fargo Bank, National
Association, as Securities Administrator for HSBC Bank USA, National
Association, as Trustee f/b/o holders of Xxxxxxx Xxxxx Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, MLMI Series 2006-AF2 - Distribution Account
(Stack I)." The Distribution Account shall be an Eligible Account.
Distribution Account Deposit Date: The Business Day prior to each
Distribution Date.
Distribution Date: The 25th day of any month, beginning in November 2006,
or, if such 25th day is not a Business Day, the Business Day immediately
following.
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Due Date: With respect to each Mortgage Loan, the date in each month on
which its Monthly Payment is due if such due date is the first day of a month
and otherwise is deemed to be the first day of the following month or such other
date specified in the Servicing Agreement.
Due Period: With respect to any Distribution Date and each Mortgage Loan,
the period commencing on the second day of the month preceding the month in
which the Distribution Date occurs and ending at the close of business on the
first day of the month in which the Distribution Date occurs.
Eligible Account: Any of (i) a segregated account maintained with a federal
or state chartered depository institution (A) the short-term obligations of
which are rated A-1 or better by S&P and P-1 by Xxxxx'x at the time of any
deposit therein or (B) insured by the FDIC (to the limits established by such
Corporation), the uninsured deposits (as evidenced in writing by the Rating
Agencies that use of any such account as the Distribution Account will not have
an adverse effect on the then-current ratings assigned to the Classes of
Certificates then rated by the Rating Agencies) in which account are otherwise
secured such that, as evidenced by an Opinion of Counsel (obtained by the Person
requesting that the account be held pursuant to this clause (i)) delivered to
the Securities Administrator prior to the establishment of such account, the
Certificateholders will have a claim with respect to the funds in such account
and a perfected first priority security interest against any collateral (which
shall be limited to Permitted Investments, each of which shall mature not later
than the Business Day immediately preceding the Distribution Date next following
the date of investment in such collateral or the Distribution Date if such
Permitted Investment is an obligation of the institution that maintains the
Distribution Account) securing such funds that is superior to claims of any
other depositors or general creditors of the depository institution with which
such account is maintained, (ii) a segregated trust account or accounts
maintained with a federal or state chartered depository institution or trust
company with trust powers acting in its fiduciary capacity or (iii) a segregated
account or accounts of a depository institution acceptable to the Rating
Agencies (as evidenced in writing by the Rating Agencies that use of any such
account as the Distribution Account will not have an adverse effect on the
then-current ratings assigned to the Classes of the Certificates then rated by
the Rating Agencies). Eligible Accounts may bear interest.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that would satisfy the requirements of
Prohibited Transaction Exemption 90-29, Exemption Application No. D-8012, 55
Fed. Reg. 21459 (1990), as amended, granted to the Underwriter by the United
States Department of Labor (or any other applicable underwriter's exemption
granted by the United States Department of Labor), 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 Certificates: Any of the Class BF-1, Class BF-2 or Class
BF-3 Certificates, and any other Certificate, as long as the acquisition and
holding of such Certificate is not covered by and exempt under an underwriter's
exemption.
Event of Default: An event of default described in Section 8.01.
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Excess Liquidation Proceeds: To the extent that such amount is not required
by law to be paid to the related Mortgagor, the amount, if any, by which
Liquidation Proceeds with respect to a Liquidated Mortgage Loan exceed the sum
of (i) the Outstanding Principal Balance of such Mortgage Loan and accrued but
unpaid interest at the related Mortgage Interest Rate through the last day of
the month in which the related Liquidation Date occurs, plus (ii) related
Liquidation Expenses.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Extended Period: As defined in Section 12.04(b).
Extraordinary Loss: Any Realized Loss or portion thereof caused by or
resulting from:
(i) nuclear or chemical reaction or nuclear radiation or
radioactive or chemical contamination, all whether controlled or uncontrolled
and whether such loss be direct or indirect, proximate or remote;
(ii) hostile or warlike action in time of peace or war, including
action in hindering, combating or defending against an actual, impending or
expected attack by any government or sovereign power, de jure or de facto, or by
any authority maintaining or using military, naval or air forces, or by
military, naval or air forces, or by an agent of any such government, power,
authority or forces;
(iii) any weapon of war employing atomic fission or radioactive
forces whether in time of peace or war, and
(iv) insurrection, rebellion, revolution, civil war, usurped
power or action taken by governmental authority in hindering, combating or
defending against such an occurrence, seizure or destruction under quarantine or
customs regulations, confiscation by order of any government or public
authority, or risks of contraband or illegal transactions or trade.
Extraordinary Trust Fund Expenses: Any amounts reimbursable to the Master
Servicer or the Depositor pursuant to this Agreement, including but not limited
to Sections 4.03, 4.05 and 7.04, any amounts reimbursable to the Trustee and the
Securities Administrator from the Trust Fund pursuant to this Agreement,
including but not limited to Section 9.05, and any other costs, expenses,
liabilities and losses borne by the Trust Fund (exclusive of any cost, expense,
liability or loss that is specific to a particular Mortgage Loan or REO Property
and is taken into account in calculating a Realized Loss in respect thereof) for
which the Trust Fund has not and, in the reasonable good faith judgment of the
Securities Administrator, shall not, obtain reimbursement or indemnification
from any other Person.
Xxxxxx Xxx: Federal National Mortgage Association or any successor thereto.
FDIC: Federal Deposit Insurance Corporation or any successor thereto.
Final Certification: The certification substantially in the form of Exhibit
Two to the Custodial Agreement.
Fitch: Fitch Ratings or its successor in interest.
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Form 8-K Disclosure Information: As defined in Section 3.18(a).
Xxxxxxx Mac: Xxxxxxx Mac, formerly the Federal Home Loan Mortgage
Corporation, or any successor thereto.
Global Certificate: Any Private Certificate registered in the name of the
Depository or its nominee, beneficial interests in which are reflected on the
books of the Depository or on the books of a Person maintaining an account with
such Depository (directly or as an indirect participant in accordance with the
rules of such depository).
Highest Priority: As of any date of determination, the Class of Subordinate
Certificates then outstanding with the earliest priority for payments pursuant
to Section 6.01, in the following order: Class MF-1, Class MF-2, Class MF-3,
Class BF-1, Class BF-2 and Class BF-3 Certificates.
Indemnified Persons: The Trustee, the Master Servicer, the Depositor and
the Securities Administrator and their officers, directors, agents and employees
and, with respect to the Trustee, any separate co-trustee and its officers,
directors, agents and employees.
Independent: When used with respect to any specified Person, any such
Person who (a) is in fact independent of the Depositor, the Master Servicer and
their respective Affiliates, (b) does not have any direct financial interest in
or any material indirect financial interest in the Depositor or the Master
Servicer or any Affiliate thereof, and (c) is not connected with the Depositor
or the Master Servicer or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar
functions; provided, however, that a Person shall not fail to be Independent of
the Depositor or the Master Servicer or any Affiliate thereof merely because
such Person is the beneficial owner of 1% or less of any class of securities
issued by the Depositor or the Master Servicer or any Affiliate thereof, as the
case may be.
Index: The index, if any, specified in a Mortgage Note by reference to
which the related Mortgage Interest Rate will be adjusted from time to time.
Individual Certificate: Any Private Certificate registered in the name of
the Holder other than the Depository or its nominee.
Initial Certification: The certification substantially in the form of
Exhibit One to the Custodial Agreement.
Initial Class Certificate Balance: With respect to any Regular Certificate,
the amount designated "Initial Class Certificate Balance" on the face thereof.
Initial Optional Termination Date: The first Distribution Date following
the date on which the aggregate Principal Balance of the Mortgage Loans is less
than 10% of the aggregate Principal Balance of the Mortgage Loans as of the
Cut-off Date.
Initial Subordinated Class Percentage: With respect to each Class of
Subordinate Certificates, an amount which is equal to the initial aggregate
Class Certificate Balance of such
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Class of Subordinate Certificates divided by the aggregate Principal Balance of
all the Mortgage Loans as of the Cut-off Date as follows:
Class MF-1: 1.50%
Class MF-2: 0.95%
Class MF-3: 0.50%
Class BF-1: 0.50%
Class BF-2: 0.35%
Class BF-3: 0.25%
Insurance Policy: With respect to any Mortgage Loan, any standard hazard
insurance policy, flood insurance policy or title insurance policy.
Insurance Proceeds: Amounts paid by the insurer under any Insurance Policy
covering any Mortgage Loan or Mortgaged Property other than amounts required to
be paid over to the Mortgagor pursuant to law or the related Mortgage Note or
Security Instrument and other than amounts used to repair or restore the
Mortgaged Property or to reimburse insured expenses.
Interest Adjustment Date: With respect to a Mortgage Loan, the date, if
any, specified in the related Mortgage Note on which the Mortgage Interest Rate
is subject to adjustment.
Investor Representation Letter: As defined in Section 5.02(b).
IRS: As defined in Section 9.12(i).
Issuing Entity: Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-AF2.
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, 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.
Latest Possible Maturity Date: With respect to the Certificates, the
Distribution Date in October 2036.
Liquidated Mortgage Loan: Any defaulted Mortgage Loan (including any REO
Property) as to which the Servicer has determined that all amounts it expects to
recover from or on account of such Mortgage Loan have been recovered.
Liquidation Date: With respect to any Liquidated Mortgage Loan, the date on
which the Servicer has certified that such Mortgage Loan has become a Liquidated
Mortgage Loan.
Liquidation Expenses: With respect to a Mortgage Loan in liquidation,
unreimbursed expenses paid or incurred by or for the account of the Master
Servicer or the Servicer in connection with the liquidation of such Mortgage
Loan and the related Mortgaged Property, such expenses including (a) property
protection expenses, (b) property sales expenses, (c) foreclosure
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and sale costs, including court costs and reasonable attorneys' fees, and (d)
similar expenses reasonably paid or incurred in connection with liquidation.
Liquidation Proceeds: With respect to any Mortgage Loan, cash received in
connection with the liquidation of a defaulted Mortgage Loan, whether through
trustee's sale, foreclosure sale or otherwise, and amounts received through
Insurance Proceeds and condemnation proceeds.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the original principal
balance of the related Mortgage Loan and the denominator of which is the
Original Value of the related Mortgaged Property.
Losses: As defined in Section 12.03.
Lost Notes: The original Mortgage Notes that have been lost, as indicated
on the Mortgage Loan Schedule.
Lower Priority: As of any date of determination and with respect to any
Class of Subordinate Certificates, any other Class of Subordinate Certificates
then outstanding with a later priority for payments pursuant to Section 6.01.
Lower Tier Regular Interests: Any of the REMIC 1 Regular Interests or the
REMIC 2 Regular Interests.
Lower Tier REMIC Interests: Any of the REMIC 1 Interests or the REMIC 2
Interests.
Lowest Priority: As of any date of determination, the Class of Subordinate
Certificates then outstanding with the latest priority for payments pursuant to
Section 6.01, in the following order: Class BF-3, Class BF-2, Class BF-1, Class
MF-3, Class MF-2 and Class MF-1 Certificates.
Majority Certificateholders: The Holders of Certificates evidencing at
least 51% of the Voting Rights.
Master Servicer: Xxxxx Fargo Bank, N.A. including any successors in
interest who meet the qualifications for a master servicer set forth in this
Agreement, and any successor master servicer appointed hereunder.
Master Servicer Collection Account: The trust account or accounts created
and maintained pursuant to Section 4.02, which shall be denominated "Xxxxx Fargo
Bank, National Association as Master Servicer for HSBC Bank USA, National
Association, as Trustee f/b/o holders of Xxxxxxx Xxxxx Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, MLMI Series 2006-AF2 - Master Servicer
Collection Account (Stack I)." The Master Servicer Collection Account shall be
an Eligible Account.
Master Servicing Compensation: The meaning specified in Section 3.14.
Maximum Lifetime Mortgage Rate: The maximum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.
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Minimum Lifetime Mortgage Rate: The minimum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.
MLML: Xxxxxxx Xxxxx Mortgage Lending, Inc., a Delaware corporation, or any
successor in interest.
Monthly Advance: An advance of principal or interest required to be made by
the Servicer pursuant to the Servicing Agreement or the Master Servicer pursuant
to Section 6.06.
Monthly Payment: With respect to any Mortgage Loan, the scheduled monthly
payment of principal and interest on such Mortgage Loan which is payable by the
related Mortgagor from time to time under the related Mortgage Note, determined:
(a) after giving effect to (i) any Deficient Valuation and/or Debt Service
Reduction with respect to such Mortgage Loan and (ii) any reduction in the
amount of interest collectible from the related Mortgagor pursuant to the Relief
Act; (b) without giving effect to any extension granted or agreed to by the
Servicer pursuant to Servicing Agreement; and (c) on the assumption that all
other amounts, if any, due under such Mortgage Loan are paid when due.
Monthly Principal: The principal portion of any Monthly Payment.
Monthly Statement: The statement distributed to Certificateholders pursuant
to Section 6.05.
Moody's: Xxxxx'x Investors Service, Inc. or its successor in interest.
Mortgage: The mortgage, deed of trust or other instrument creating a first
lien on, or first priority security interest in, a Mortgaged Property securing a
Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01(b) pertaining
to a particular Mortgage Loan and any additional documents required to be added
to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate at which interest accrues from time
to time on any Mortgage Loan pursuant to the related Mortgage Note, which rate
is equal to the "Mortgage Interest Rate" set forth with respect thereto on the
Mortgage Loan Schedule.
Mortgage Loan: A mortgage loan transferred and assigned to the Trustee
pursuant to Section 2.01 or Section 2.04 and held as a part of the Trust Fund,
as identified in the Mortgage Loan Schedule, including a mortgage loan the
property securing which has become an REO Property. For the avoidance of doubt,
as defined below, the term "Stack II Mortgage Loan" shall be used within this
Agreement to refer to a mortgage loan transferred and assigned to the Trustee
pursuant to Section 2.01 or Section 2.04 of the Stack II Agreement and held as a
part of the Trust Fund, as identified in the Stack II Mortgage Loan Schedule,
including a mortgage loan the property securing which has become an REO
Property.
Mortgage Loan Purchase Agreement: The Mortgage Loan Sale and Assignment
Agreement dated as of October 1, 2006, between the Seller and the Depositor, as
purchaser, and all amendments thereof and supplements thereto, attached hereto
as Exhibit J.
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Mortgage Loan Schedule: The schedule, attached hereto as Exhibit B with
respect to the Mortgage Loans and as amended from time to time to reflect the
repurchase or substitution of Mortgage Loans pursuant to this Agreement.
Mortgage Note: The originally executed note or other evidence of the
indebtedness of a Mortgagor under the related Mortgage Loan.
Mortgage Pool: The pool of Mortgage Loans, identified on Exhibit B from
time to time, and any REO Properties acquired in respect thereof.
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 a Monthly Advance has not been made.
Mortgaged Property: Land and improvements securing the indebtedness of a
Mortgagor under the related Mortgage Loan or, in the case of REO Property, such
REO Property.
Mortgagor: The obligor on a Mortgage Note.
Net Liquidation Proceeds: As to any Liquidated Mortgage Loan, Liquidation
Proceeds net of (i) Liquidation Expenses which are payable therefrom by the
Servicer or the Master Servicer in accordance with the Servicing Agreement or
this Agreement and (ii) unreimbursed advances by the Servicer or the Master
Servicer and Monthly Advances.
Net Mortgage Rate: With respect to each Mortgage Loan, the Mortgage
Interest Rate in effect from time to time less the Servicing Fee Rate (expressed
as a per annum rate).
Non-Discount Mortgage Loan: A Mortgage Loan having a Net Mortgage Rate
greater than or equal to the Remittance Rate.
Non-PO Allocated Amount: At the time of any determination, the amount
derived by (i) multiplying the outstanding Principal Balance of each Mortgage
Loan on such date of determination by the Non-PO Percentage with respect to such
Mortgage Loan and (ii) summing the results.
Non-PO Senior Optimal Principal Amount: With respect to any Distribution
Date, the lesser of (a) the Non-PO Senior Principal Balance and (b) the sum of:
(i) the Non-PO Senior 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 the Mortgage Loans which were outstanding
during such Due Period;
(ii) the Non-PO Senior 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
Non-PO Senior Percentage of the applicable Non-PO Percentage of the principal
portion of all Insurance
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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
Master Servicer Collection Account and which were received during the related
Principal Prepayment Period with respect to a 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 Mortgage Loan which has become a Liquidated
Mortgage Loan during the related Principal Prepayment Period, the lesser of (A)
the Non-PO Senior 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 Senior 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 Mortgage Loan repurchased during the related
Principal Prepayment Period, an amount equal to the Non-PO Senior 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 Senior Certificateholders);
(vi) on or after the Credit Support Depletion Date, the excess of the
Non-PO Senior 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 Non-PO Allocated Amount, as of the preceding Distribution
Date; and
(vii) Subsequent Recoveries.
Non-PO Senior 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 Senior Principal Balance and the denominator of which is the
Non-PO Allocated Amount as of the immediately preceding Due Date.
Non-PO Senior Prepayment Percentage: As of any Distribution Date up to and
including the Distribution Date in October 2011, 100%; as of any Distribution
Date in the first year thereafter, the Non-PO Senior Percentage plus 70% of the
Subordinated Percentage for such Distribution Date; as of any Distribution Date
in the second year thereafter, the Non-PO Senior Percentage plus 60% of the
Subordinated Percentage for such Distribution Date; as of any Distribution Date
in the third year thereafter, the Non-PO Senior Percentage plus 40% of the
Subordinated Percentage for such Distribution Date; as of any Distribution Date
in the fourth year thereafter, the Non-PO Senior Percentage plus 20% of the
Subordinated Percentage for such Distribution Date; and as of any Distribution
Date after the fourth year thereafter, the Non-PO Senior Percentage; provided
that, if the Non-PO Senior Percentage as of any such Distribution Date is
greater than the Non-PO Senior Percentage on the first Distribution Date, the
Non-PO Senior Prepayment Percentage shall be 100%; and provided further,
however, that whenever the Non-PO Senior Percentage equals 0%, the Non-PO Senior
Prepayment Percentage shall equal 0%; and provided further that no reduction of
the Non-PO Senior Prepayment Percentage below the level in effect for the most
recent period shall occur with respect to any
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Distribution Date unless, as of the last day of the month preceding such
Distribution Date, (i) the aggregate outstanding Principal Balance of Mortgage
Loans 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 Subordinated Percentage of the Mortgage Pool Principal
Balance as of such date and (ii) cumulative Realized, do not exceed (a) 30% of
the related Subordinated Percentage of the Mortgage Pool Principal Balance as of
the date of issuance of the Certificates (the related Original Subordinated
Principal Balance) if such Distribution Date occurs between and including
November 2011 and October 2012, (b) 35% of the related Original Subordinated
Principal Balance if such Distribution Date occurs between and including
November 2012 and October 2013, (c) 40% of the related Original Subordinated
Principal Balance if such Distribution Date occurs between and including
November 2013 and October 2014, (d) 45% of the related Original Subordinated
Principal Balance if such Distribution Date occurs between and including
November 2014 and October 2015, and (e) 50% of the related Original Subordinated
Principal Balance if such Distribution Date occurs during or after November
2015.
Non-PO Senior Principal Balance: As of any Distribution Date, (a) the
Non-PO Senior Principal Balance for the immediately preceding Distribution Date
less (b) amounts distributed (or deemed distributed) to the Non-PO Senior
Certificates on such preceding Distribution Date allocable to principal
(including the principal portion of Advances of the Servicer made pursuant to
Section 6.06 and Realized Losses allocated to the Non-PO Senior Certificates
pursuant to Section 6.02); provided that the Non-PO Senior Principal Balance on
the first Distribution Date shall be the Original Non-PO Senior Principal
Balance.
Non-PO Senior Principal Payment Rules: With respect to any Distribution
Date, distributions to the Class AF-1, Class AF-2 and Class AF-3 Certificates
pursuant to Section 6.01(I)(b)(ii) shall be made to the Class AF-1, Class AF-2
and Class AF-3 Certificates pro rata, until the Class Certificate Balance of
such class has been reduced to zero.
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
Principal Balance of such Mortgage Loan and, in the case of a Discount Mortgage
Loan, the product of (i) the Principal Balance of such Mortgage Loan and (ii)
the Non-PO Percentage for such Mortgage Loan.
Nonrecoverable Advance: With respect to any Mortgage Loan any advance or
Monthly Advance (i) which was previously made or is proposed to be made by the
Servicer, or the Master Servicer as successor Servicer, or the Trustee as
successor Master Servicer and (ii) which, in the good faith judgment of the
Servicer, the Master Servicer or the Trustee, will not or, in the case of a
proposed advance or Monthly Advance, would not, be ultimately recoverable by the
Servicer, the Master Servicer or the Trustee (as successor Master Servicer) from
Liquidation Proceeds, Insurance Proceeds or future payments on the Mortgage Loan
for which such advance or Monthly Advance was made.
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Offered Certificate: Any Senior Certificate or Offered Subordinate
Certificate issued hereunder, along with the Class AV-1, Class AV-2A, Class
AV-2B, Class AV-2C, Class AV-2D, Class A-R, Class MV-1, Class MV-2, Class MV-3,
Class MV-4, Class MV-5, Class MV-6, Class BV-1, Class BV-2, Class BV-3
Certificates defined and issued pursuant to the terms and conditions of the
Stack II Agreement.
Offered Subordinate Certificates: The Class M Certificates.
Officer's Certificate: A certificate signed by the Chairman of the Board,
the Vice Chairman of the Board, the President or a Vice President or Assistant
Vice President or other authorized officer of the Master Servicer or the
Depositor, as applicable, and delivered to the Trustee, as required by this
Agreement.
Opinion of Counsel: A written opinion of counsel who is or are acceptable
to the Trustee and who, unless required to be Independent (an "Opinion of
Independent Counsel"), may be internal counsel for the Master Servicer or the
Depositor.
Optional Termination: The termination hereunder of that portion of the
Trust Fund related to the Certificates pursuant to Section 10.01(b) hereof.
Optional Termination Amount: The amount received by the Securities
Administrator in connection with any purchase of all of the Mortgage Loans and
REO Properties pursuant to Section 10.01(b) hereof.
Optional Termination Price: On any date after the Initial Optional
Termination Date, an amount equal to the sum of (A) the aggregate Principal
Balance of each Mortgage Loan (other than any Mortgage Loan that has become an
REO Property) as of the Distribution Date on which the proceeds of the Optional
Termination are distributed to the Certificateholders, plus accrued interest
thereon at the applicable Mortgage Interest Rate as of the Due Date preceding
the Distribution Date on which the proceeds of the Optional Termination are
distributed to Certificateholders and the fair market value of any REO Property,
plus accrued interest thereon as of the Distribution Date on which the proceeds
of the Optional Termination are distributed to Certificateholders, (B) any
unreimbursed out-of-pocket costs and expenses owed to the Master Servicer, the
Trustee or the Securities Administrator (including any amounts incurred by the
Securities Administrator in connection with conducting the Auction), the
Servicer or the Master Servicer and any unpaid or unreimbursed Servicing Fees,
Monthly Advances and Servicing Advances, (C) any unreimbursed costs, penalties
and/or damages incurred by the Trust Fund in connection with any violation
relating to any of the Mortgage Loans of any predatory or abusive lending law
and (D) in the event an Auction has been conducted, all reasonable fees and
expenses incurred by the Securities Administrator to conduct the Auction.
Original Class IO Notional Amount: The Class Certificate Balance of the
Class IO Certificates on the Closing Date, as set forth opposite such Class in
the Preliminary Statement.
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Original Credit Support: With respect to any Class of Subordinate
Certificates (other than the Class BF-3 Certificates), the level of Credit
Support indicated below:
Class A: 4.05%
Class MF-1: 2.55%
Class MF-2: 1.60%
Class MF-3: 1.10%
Class BF-1: 0.60%
Class BF-2: 0.25%
Original Subordinated Principal Balance: The sum of the aggregate Class
Certificate Balances of each Class of Subordinate Certificates as of the Closing
Date.
Original Value: The lesser of (i) the Appraised Value or (ii) the sales
price of a Mortgaged Property at the time of origination of a Mortgage Loan,
except in instances where either clauses (i) or (ii) is unavailable, the other
may be used to determine the Original Value, or if both clauses (i) and (ii) are
unavailable, Original Value may be determined from other sources reasonably
acceptable to the Depositor.
Outstanding Mortgage Loan: With respect to any Due Date, a Mortgage Loan
which, prior to such Due Date, was not the subject of a Principal Prepayment in
Full, did not become a Liquidated Mortgage Loan and was not purchased or
replaced.
Outstanding Principal Balance: As of the time of any determination, the
principal balance of a Mortgage Loan remaining to be paid by the Mortgagor, or,
in the case of an REO Property, the principal balance of the related Mortgage
Loan remaining to be paid by the Mortgagor at the time such property was
acquired by the Trust Fund less any Net Liquidation Proceeds with respect
thereto to the extent applied to principal.
Ownership Interest: As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
Paying Agent: The Securities Administrator or any successor Paying Agent
appointed by the Securities Administrator.
Percentage Interest: With respect to any Certificate, a fraction, expressed
as a percentage, the numerator of which is the Initial Class Certificate Balance
(or Class IO Notional Amount in the case of the Class IO Certificates)
represented by such Certificate and the denominator of which is the Initial
Class Certificate Balance (or Class IO Notional Amount in the case of the Class
IO Certificates) of the related Class.
Permitted Investments: Any one or more of the following obligations or
securities held in the name of the Trustee for the benefit of the
Certificateholders (provided that such obligation or security must be a
"permitted investment" within the meaning of such term as provided for in
Section 860G(a)(5) of the Code):
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(i) direct obligations of, and obligations the timely payment of
which are fully guaranteed by the United States of America or any agency or
instrumentality of the United States of America the obligations of which are
backed by the full faith and credit of the United States of America;
(ii) (a) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust company incorporated
under the laws of the United States of America or any state thereof (including
the Trustee or the Master Servicer or its Affiliates acting in its commercial
banking capacity) and subject to supervision and examination by federal and/or
state banking authorities, provided that the commercial paper and/or the
short-term debt rating and/or the long-term unsecured debt obligations of such
depository institution or trust company at the time of such investment or
contractual commitment providing for such investment have the Applicable Credit
Rating or better from each Rating Agency and (b) any other demand or time
deposit or certificate of deposit that is fully insured by the Federal Deposit
Insurance Corporation;
(iii) repurchase obligations with respect to (a) any security
described in clause (i) above or (b) any other security issued or guaranteed by
an agency or instrumentality of the United States of America, the obligations of
which are backed by the full faith and credit of the United States of America,
in either case entered into with a depository institution or trust company
(acting as principal) described in clause (ii)(a) above where the Trustee holds
the security therefor;
(iv) securities bearing interest or sold at a discount issued by
any corporation (including the Trustee, the Securities Administrator or the
Master Servicer or its Affiliates) incorporated under the laws of the United
States of America or any state thereof that have the Applicable Credit Rating or
better from each Rating Agency at the time of such investment or contractual
commitment providing for such investment; provided, however, that securities
issued by any particular corporation will not be Permitted Investments to the
extent that investments therein will cause the then outstanding principal amount
of securities issued by such corporation and held as part of the Issuing Entity
to exceed 10% of the aggregate Outstanding Principal Balances of all the
Mortgage Loans and Permitted Investments held as part of the Issuing Entity;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand or on a
specified date not more than one year after the date of issuance thereof) having
the Applicable Credit Rating or better from each Rating Agency at the time of
such investment;
(vi) a Reinvestment Agreement issued by any bank, insurance
company or other corporation or entity;
(vii) any other demand, money market or time deposit, obligation,
security or investment as may be acceptable to either Rating Agency as evidenced
in writing by each Rating Agency to the Trustee, the Securities Administrator or
Master Servicer;
(viii) any money market or common trust fund having the
Applicable Credit Rating or better from each Rating Agency (if such fund is
rated by each Rating Agency),
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including any such fund for which the Trustee, the Securities Administrator or
Master Servicer or any affiliate of the Trustee, the Securities Administrator or
Master Servicer acts as a manager or an advisor; provided, however, that no
instrument or security shall be a Permitted Investment if such instrument or
security evidences a right to receive only interest payments with respect to the
obligations underlying such instrument or if such security provides for payment
of both principal and interest with a yield to maturity in excess of 120% of the
yield to maturity at par or if such instrument or security is purchased at a
price greater than par; and
(ix) units of a taxable money-market portfolio having the highest
rating assigned by each Rating Agency (except if S&P is a Rating Agency, "AAAm"
or "AAAM-G" by S&P) and restricted to obligations issued or guaranteed by the
United States of America or entities whose obligations are backed by the full
faith and credit of the United States of America and repurchase agreements
collateralized by such obligations.
Permitted Transferee: Any Person other than a Disqualified Organization or
an "electing large partnership" (as defined by Section 775 of the Code).
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
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.
Physical Certificate: The Residual Certificate.
Plan: As defined in Section 5.02(b).
Pooling and Servicing Agreement: The Pooling and Servicing Agreement
relating to the Mortgage Pass-Through Certificates, MLMI Series 2006-AF2,
jointly comprised of the Stack II Agreement and this Agreement.
Prepayment Assumption: A rate or rates of prepayment, as described in the
Prospectus Supplement related to the Offered Certificates.
Prepayment Interest Shortfall: As to any Distribution Date and any Mortgage
Loan (other than a Mortgage Loan relating to an REO Property) that was the
subject of (a) a Principal Prepayment in full or part during the related
Prepayment Period, an amount equal to the excess of one month's interest at the
Net Mortgage Rate on the Principal Balance of such Mortgage Loan over the amount
of interest (adjusted to the Net Mortgage Rate) paid by the Mortgagor for such
Prepayment Period to the date of such Principal Prepayment in full or part or
(b) a Curtailment during the prior calendar month, an amount equal to one
month's interest at the Net Mortgage Rate on the amount of such Curtailment. The
obligations of the Master Servicer in respect of any Prepayment Interest
Shortfall are set forth in Section 6.06.
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Prepayment Penalty: With respect to any Prepayment Period, any prepayment
premium, charge or penalty payable by a Mortgagor in connection with any
Principal Prepayment on the Prepayment Penalty Mortgage Loans.
Prepayment Penalty Mortgage Loans: Any of the Mortgage Loans that are
subject to existing prepayment premiums.
Prepayment Period: With respect to any Mortgage Loan and any Distribution
Date, the calendar month preceding the month in which such Distribution Date
occurs.
Primary Mortgage Insurance Policy: Any primary mortgage guaranty insurance
policy issued in connection with a Mortgage Loan which provides compensation to
a Mortgage Note holder in the event of default by the obligor under such
Mortgage Note or the related Security Instrument, if any or any replacement
policy therefor through the related Accrual Period for such Class relating to a
Distribution Date.
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 the Mortgage Loan Purchase Agreement or
Section 2.04, 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 6.06).
Principal Prepayment: Any Principal Prepayment in full or Curtailment or
other recovery of principal on a Mortgage Loan which is received in advance of
its scheduled Due Date to the extent that it is not accompanied by an amount as
to interest representing scheduled interest due on any date or dates in any
month or months subsequent to the month of prepayment, including Insurance
Proceeds and Repurchase Proceeds, but excluding the principal portion of Net
Liquidation Proceeds.
Principal Prepayment in Full: Any Principal Prepayment made by a Mortgagor
of the entire unpaid principal balance of the Mortgage Loan.
Private Certificates: Any of the Class B Certificates.
Prospectus Supplement: The Prospectus Supplement dated October 30, 2006,
relating to the public offering of the Offered Certificates.
Protected Account: An account established and maintained for the benefit of
Certificateholders by the Servicer with respect to the related Mortgage Loans
and with respect to REO Property pursuant to the respective Servicing Agreement.
The Protected Account shall be an Eligible Account.
PTCE: As defined in Section 5.02(b).
Purchase Price: With respect to any Mortgage Loan or REO Property to be
purchased pursuant to or as contemplated by Section 2.03 or 10.02, and as
confirmed by an Officers'
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Certificate from the Master Servicer to the Trustee, an amount equal to the sum
of (i) 100% of the Principal Balance thereof as of the date of purchase (or such
other price as provided in Section 10.02), (ii) accrued interest on such
Principal Balance at the applicable Mortgage Interest Rate in effect from time
to time from the Due Date as to which interest was last covered by a payment by
the Mortgagor or an advance by the Servicer or Master Servicer, which payment or
advance had as of the date of purchase been distributed to Certificateholders,
through the end of the calendar month in which the purchase is to be effected
less any unreimbursed Monthly Advances and any unpaid Servicing Fees payable to
the purchaser of the Mortgage Loan and (iii) any costs and damages incurred by
the Issuing Entity in connection with any violation by such Mortgage Loan or REO
Property of any predatory or abusive-lending law.
Qualified Insurer: Any insurance company duly qualified as such under the
laws of the state or states in which the related Mortgaged Property or Mortgaged
Properties is or are located, duly authorized and licensed in such state or
states to transact the type of insurance business in which it is engaged and
approved as an insurer by the Master Servicer, so long as the claims paying
ability of which is acceptable to the Rating Agencies for pass-through
certificates having the same rating as the Certificates rated by the Rating
Agencies as of the Closing Date.
Rating Agencies: Xxxxx'x and S&P.
Realized Loss: With respect to a Liquidated Mortgage Loan, the amount by
which the remaining unpaid principal balance of the Mortgage Loan exceeds the
amount of Liquidation Proceeds applied to the principal balance of the related
Mortgage Loan. To the extent the Master Servicer receives Subsequent Recoveries
with respect to any Mortgage Loan, the amount of the Realized Loss with respect
to that Mortgage Loan will be reduced to the extent such recoveries are applied
to reduce the Class Certificate Balance of any Class of Certificates on any
Distribution Date.
Realized Loss Interest Shortfall: As defined in Section 6.08(b).
Record Date: With respect to each Distribution Date and each class of
Offered Certificates, the close of business on the last Business Day of the
month immediately preceding the month in which the related Distribution Date
occurs.
Reference Banks: Those banks (i) with an established place of business in
London, England, (ii) not controlling, under the control of or under common
control with the Depositor or the Securities Administrator, (iii) that have been
designated as such by the Securities Administrator and (iv) that are engaged in
transactions in the London interbank market.
Refinanced Mortgage Loan: Any Mortgage Loan the proceeds of which were not
used to purchase the related Mortgaged Property.
Regular Certificates: Any of the Class AF-1, Class AF-2, Class AF-3, Class
IO, Class PO, Class MF-1, Class MF-2, Class MF-3, Class BF-1, Class BF-2 or
Class BF-3 Certificates.
Regulation AB: Subpart 22.1100 - 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
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(Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed Reg.
1,506-1,631 (January 7, 2005) or by the staff of the Commission, or as may be
provided by the Commission or its staff from time to time.
Reinvestment Agreements: One or more reinvestment agreements, acceptable to
each of the Rating Agencies, from a bank, insurance company or other corporation
or entity (including the Trustee).
Relevant Servicing Criteria: The Servicing Criteria applicable to the
various parties, as set forth on Exhibit K hereto. For clarification purposes,
multiple parties can have responsibility for the same Relevant Servicing
Criteria. With respect to a Servicing Function Participant engaged by the Master
Servicer, the Securities Administrator, the Trustee, the Custodian or the
Servicer, the term "Relevant Servicing Criteria" may refer to one or more
discrete functions specified in the Relevant Servicing Criteria applicable to
such parties.
Relief Act: The Servicemembers Civil Relief Act, as amended.
Relief Act Mortgage Loan: Any Mortgage Loan as to which the Monthly Payment
thereof has been reduced due to the application of the Relief Act.
REMIC: Each pool of assets in the Trust Fund designated as a REMIC as
described in the Preliminary Statement.
REMIC Interests: Any regular or residual interest in any of REMIC 1, REMIC
2 or the Upper Tier REMIC, as described in the Preliminary Statement.
REMIC Opinion: An Opinion of Counsel to the effect that a contemplated
action will neither adversely affect the status as a REMIC of any REMIC created
hereunder nor subject any such REMIC to any tax under the REMIC Provisions.
REMIC Provisions: The provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations, including proposed regulations and rulings, and administrative
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
REMIC 1: Not applicable.
REMIC 1 Interest: Not applicable.
REMIC 1 Regular Interest: Not applicable.
REMIC 1 Subordinate Balance Ratio: Not applicable.
REMIC 2: Not applicable.
REMIC 2 Interest: Not applicable.
REMIC 2 Regular Interest: Not applicable.
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Remittance Rate: 6.25% per annum.
REO Property: A Mortgaged Property acquired by the Servicer or Master
Servicer on behalf of the Trust Fund through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.15 in connection with a defaulted
Mortgage Loan.
Reportable Event: As defined in Section 3.18(a).
Reporting Servicer: As defined in Section 3.18(h).
Repurchase Proceeds: The repurchase price in connection with any repurchase
of a Mortgage Loan by the Seller and any cash deposit in connection with the
substitution of a Mortgage Loan.
Request for Release: A request for release in the form attached hereto as
Exhibit D.
Required Insurance Policy: With respect to any Mortgage Loan, any insurance
policy which is required to be maintained from time to time under this Agreement
with respect to such Mortgage Loan.
Residual Certificate: The Class A-R Certificate.
Residual Interest: Not applicable.
Responsible Officer: Any officer assigned to the Corporate Trust Office (or
any successor thereto), including any Vice President, Assistant Vice President,
Trust Officer, any Assistant Secretary, any trust officer or any other officer
of the Trustee or Securities Administrator customarily performing functions
similar to those performed by any of the above designated officers and having
direct responsibility for the administration of this Agreement, and any other
officer of the Trustee or Securities Administrator to whom a matter arising
hereunder may be referred because of such officers familiarity with the subject
matter thereof.
Rule 144A Letter: The certificate to be furnished, pursuant to Section
5.02(b), by each purchaser of a Private Certificate (which is also a Physical
Certificate) which is a Qualified Institutional Buyer as defined under Rule 144A
promulgated under the Securities Act, substantially in the form set forth as
Exhibit F-3 hereto.
Xxxxxxxx-Xxxxx Act: The Xxxxxxxx-Xxxxx Act of 2002 and the rules and
regulations of the Commission promulgated thereunder (including any
interpretations thereof by the Commission's staff).
Xxxxxxxx-Xxxxx Certification: A written certification signed by an officer
of the Master Servicer that complies with (i) the Xxxxxxxx-Xxxxx Act, and (ii)
Exchange Act Rules 13a-14(d) and 15d-14(d), as in effect from time to time;
provided that if, after the Closing Date (a) the Xxxxxxxx-Xxxxx Act is amended,
(b) the Rules referred to in clause (ii) are modified or superseded by any
subsequent statement, rule or regulation of the Commission or any statement of a
division thereof, or (c) any future releases, rules and regulations are
published by the Commission from time to time pursuant to the Xxxxxxxx-Xxxxx
Act, which in any such case affects the form or substance of the required
certification and results in the required certification
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being, in the reasonable judgment of the Master Servicer, materially more
onerous that then form of the required certification as of the Closing Date, the
Xxxxxxxx-Xxxxx Certification shall be as agreed to by the Master Servicer and
the Depositor following a negotiation in good faith to determine how to comply
with any such new requirements.
S&P: Standard and Poor's, a division of The XxXxxx-Xxxx Companies, Inc. or
its successor in interest.
Scheduled Payment: With respect to any Mortgage Loan and any month, the
scheduled payment or payments of principal and interest due during such month on
such Mortgage Loan which either is payable by a Mortgagor in such month under
the related Mortgage Note or, in the case of REO Property, would otherwise have
been payable under the related Mortgage Note.
Scheduled Principal: The principal portion of any Scheduled Payment.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Xxxxx Fargo Bank, N.A., or any successor in
interest, or any successor securities administrator appointed as herein
provided.
Security Agreement: With respect to a Cooperative Loan, the agreement
creating a security interest in favor of the originator in the related
Cooperative Stock.
Security Instrument: A written instrument creating a valid first lien on a
Mortgaged Property securing a Mortgage Note, which may be any applicable form of
mortgage, deed of trust, deed to secure debt or security deed, including any
riders or addenda thereto.
Seller: Xxxxxxx Xxxxx Mortgage Lending, Inc., a Delaware corporation, or
any successor in interest.
Senior Certificates: The Class AF-1, Class AF-2, Class AF-3, Class IO and
Class PO Certificates.
Servicer: With respect to each Mortgage Loan, ABN AMRO and its successors
and assigns as specified on the Mortgage Loan Schedule.
Servicer Remittance Date: With respect to each Mortgage Loan, the date set
forth in the Servicing Agreement.
Servicing Advances: With respect to any Mortgage Loan, all customary,
reasonable and necessary "out-of-pocket" costs and expenses incurred by the
Servicer in the performance of its servicing obligations, including, but not
limited to, the cost of (i) preservation, restoration, protection and repair of
a Mortgaged Property or Cooperative Unit, as applicable, (ii) any enforcement or
judicial proceedings with respect to a Mortgage Loan, including foreclosure
actions and (iii) the management and liquidation of REO Property.
Servicing Agreement: The ABN AMRO Sale and Servicing Agreement.
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Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing Fee: As to any Mortgage Loan and Distribution Date, an amount
equal to the product of (i) the Principal Balance of such Mortgage Loan as of
the Due Date in the preceding calendar month and (ii) the Servicing Fee Rate.
Such fee shall be payable monthly, computed on the basis of the same principal
amount and period respectively which any related interest payment on a Mortgage
Loan is computed.
Servicing Fee Rate: As to any Mortgage Loan, a per annum rate as set forth
in the Mortgage Loan Schedule.
Servicing Function Participant: Any Sub-Servicer, Subcontractor or any
other Person, engaged by the Servicer, the Custodian, the Master Servicer, the
Paying Agent, the Securities Administrator and the Trustee.
Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
names and specimen signatures appear on a list of servicing officers furnished
to the Trustee by the Master Servicer, as such list may be amended from time to
time.
Similar Law: As defined in Section 5.02(b).
Stack I: That portion of the Trust Fund transferred and assigned pursuant
to the terms of this Agreement.
Stack II Agreement: The Stack II Pooling and Servicing Terms dated as of
October 1, 2006.
Stack II Certificate: Any mortgage pass-through certificate issued pursuant
to the Stack II Agreement, evidencing a beneficial ownership interest in that
portion of the Trust Fund related to the Stack II Mortgage Loans set forth on
the Stack II Mortgage Loan Schedule, signed and countersigned by the Securities
Administrator.
Stack II Mortgage Loan: A mortgage loan transferred and assigned to the
Trustee pursuant to Section 2.01 or Section 2.04 of the Stack II Agreement and
held as a part of the Trust Fund, as identified in the Stack II Mortgage Loan
Schedule, including a mortgage loan the property securing which has become an
REO Property.
Stack II Mortgage Loan Schedule: The schedule, attached to the Stack II
Agreement as Exhibit B with respect to the Stack II Mortgage Loans and as
amended from time to time to reflect the repurchase or substitution of Stack II
Mortgage Loans pursuant to the Stack II Agreement.
Startup Day: The Closing Date.
Stripped Interest Rate: The excess of the weighted average Net Mortgage
Rate of the Mortgage Loans that are Non-Discount Mortgage Loans over the
Remittance Rate.
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Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing of Mortgage Loans but performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with respect to
Mortgage Loans under the direction or authority of the Servicer (or a
Sub-Servicer of the Servicer), the Master Servicer, the Trustee, the Custodian
or the Securities Administrator.
Subordinate Certificates: The Class MF-1, Class MF-2, Class MF-3, Class
BF-1, Class BF-2 and Class BF-3 Certificates.
Subordinated Amount: For any Distribution Date, the excess of the 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 Class Certificate Principal Balance of the Class 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).
Subordinated Optimal Principal Amount: Generally as of any Distribution
Date, an amount, not in excess of the aggregate outstanding principal balance of
the Subordinate Certificates, equal to (1) the sum of (a) an amount equal to the
applicable Subordinated Percentage of the applicable Non-PO Percentage of the
principal portion of all Scheduled Payments whether or not received, which were
due on the related Due Date on outstanding Mortgage Loans as of such Due Date;
(b) an amount equal to the applicable Subordinated Prepayment Percentage of the
applicable Non-PO Percentage of all principal prepayments received during the
related principal Prepayment Period; (c) with respect to each Mortgage Loan not
described in (d) below, an amount equal to the applicable Subordinated
Percentage of the applicable Non-PO Percentage of the sum of the principal
portion of all insurance proceeds, condemnation awards and any other cash
proceeds from a source other than the Mortgagor, to the extent required to be
deposited in the Master Servicer Collection Account, 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 Mortgage Loan,
constitutes a late collection with respect to which an Advance has previously
been made; (d) 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
Liquidated Mortgage Loan (net of any unreimbursed Advances) that was not
included in the Class PO Certificate Distribution Amount or the Non-PO Senior
Optimal Principal Amount with respect to such Distribution Date; (e) Subsequent
Recoveries; and (f) with respect to each Mortgage Loan repurchased during the
related principal Prepayment Period, an amount equal to the applicable
Subordinated Prepayment Percentage of the applicable Non-PO Percentage of the
principal portion of the purchase price thereof (net of amounts with respect to
which a distribution has previously been made to the Subordinate
Certificateholders), minus (2) the Class PO Shortfall Amount with respect to
such Distribution Date.
Subordinated Percentage: As of any Distribution Date, the difference
between 100% and the Non-PO Senior Percentage.
Subordinated Prepayment Percentage: As of any Distribution Date, the
difference between 100% and the Non-PO Senior Prepayment Percentage.
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Subsequent Recoveries: Any amount recovered by the Servicer or the Master
Servicer (net of reimbursable expenses) with respect to a Liquidated Mortgage
Loan with respect to which a Realized Loss was incurred after the liquidation or
disposition of such Mortgage Loan.
Sub-Servicer: Any Person that services Mortgage Loans on behalf of the
Servicer, and is responsible for the performance (whether directly or through
sub-servicers or Subcontractors) of servicing functions required to be performed
under this Agreement, the Servicing Agreement or any sub-servicing agreement
that are identified in Item 1122(d) of Regulation AB.
Substitute Mortgage Loan: With respect to any Mortgage Loan, which is
tendered to the Trustee pursuant to the Servicing Agreement, the Mortgage Loan
Purchase Agreement or Section 2.04 of this Agreement, as applicable, in each
case, (i) which has an Outstanding Principal Balance not greater nor materially
less than the Mortgage Loan for which it is to be substituted; (ii) which has a
Mortgage Interest Rate and Net Rate not less than, and not materially greater
than, such Mortgage Loan; (iii) which has a maturity date not materially earlier
or later than such Mortgage Loan and not later than the latest maturity date of
any Mortgage Loan; (iv) which is of the same property type and occupancy type as
such Mortgage Loan; (v) which has a Loan-to-Value Ratio not greater than the
Loan-to-Value Ratio of such Mortgage Loan; (vi) which is current in payment of
principal and interest as of the date of substitution; and (vii) as to which the
payment terms do not vary in any material respect from the payment terms of the
Mortgage Loan for which it is to be substituted.
Tax Matters Person: The Securities Administrator or any successor thereto
or assignee thereof shall serve as tax administrator hereunder and as agent for
the Tax Matters Person. The Holder of the Residual Certificates shall be the Tax
Matters Person for the related REMIC, as more particularly set forth in Section
9.12 hereof.
Transfer: Any direct or indirect transfer or sale of any Ownership Interest
in a certificate.
Transfer Agreement: The Assignment, Assumption and Recognition Agreement,
dated as of October 1, 2006, among ABN AMRO, the Depositor and the Seller
pursuant to which the ABN AMRO Sale and Servicing Agreement and the rights of
the Seller thereunder were assigned to the Depositor for the benefit of the
Certificateholders, and which is attached hereto as Exhibit I.
Transferor: ABN AMRO and its successors and assigns under the Transfer
Agreement.
Transferor Representation Letter: As defined in Section 5.02(b).
Trustee: HSBC Bank USA, National Association, or its successor in interest,
or any successor trustee appointed as herein provided.
Trust Fund: The corpus of the Issuing Entity created pursuant to Article II
of this Agreement and Article II of the Stack II Agreement.
Undercollateralized Senior Certificates: Not applicable.
Underlying Seller: With respect to each Mortgage Loan, ABN AMRO, as
indicated on the Mortgage Loan Schedule.
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Uninsured Cause: Any cause of damage to a Mortgaged Property or related REO
Property such that the complete restoration of such Mortgaged Property or
related REO Property is not fully reimbursable by the hazard insurance policies
required to be maintained pursuant the Servicing Agreement, without regard to
whether or not such policy is maintained.
United States Person: A citizen or resident of the United States, a
corporation or partnership (including an entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States or any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations),
provided that, for purposes solely of the Class A-R Certificate, no partnership
or other entity treated as a partnership for United States federal income tax
purposes shall be treated as a United States Person unless all persons that own
an interest in such partnership either directly or through any entity that is
not a corporation for United States federal income tax purposes are United
States Persons, or an estate whose income is subject to United 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 the
trust and one or more such United States Persons have the authority to control
all substantial decisions of the trust. To the extent prescribed in regulations
by the Secretary of the Treasury, which have not yet been issued, a trust which
was in existence on August 20, 1996 (other than a trust treated as owned by the
grantor under subpart E of part I of subchapter J of chapter 1 of the Code), and
which was treated as a United States person on August 20, 1996 may elect to
continue to be treated as a United States person notwithstanding the previous
sentence.
Upper Tier REMIC: As described in the Preliminary Statement.
Upper Tier REMIC Regular Interest: Each class of the Class A Certificates,
Class M Certificates and Class B Certificates.
Voting Rights: The portion of the voting rights of all of the Certificates
which is allocated to any Certificate. The Voting Rights allocated among Holders
of such Certificates outstanding shall be the fraction, expressed as a
percentage, the numerator of which is the aggregate Class Certificate Balance of
all the Certificates of such Class then outstanding and the denominator of which
is the aggregate Class Certificate Balance of all the Certificates then
outstanding. 100.00% of all Voting Rights will be allocated among all holders of
the Certificates in proportion to their then outstanding Class Certificate
Balances; provided, however, that any Certificate registered in the name of the
Master Servicer, the Depositor or the Securities Administrator or any of their
respective affiliates shall not be included in the calculation of Voting Rights.
Xxxxx Fargo: Xxxxx Fargo Bank, N.A., or any successor thereto.
Section 1.02. Accounting. Unless otherwise specified herein, for the
purpose of any definition or calculation, whenever amounts are required to be
netted, subtracted or added or any distributions are taken into account such
definition or calculation and any related definitions or calculations shall be
determined without duplication of such functions.
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ARTICLE II.
CONVEYANCE OF MORTGAGE
LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans to Trustee.
(a) The Depositor concurrently with the execution and delivery of this
Agreement, sells, transfers and assigns to the Issuing Entity without recourse
all its right, title and interest in and to (i) the Mortgage Loans identified in
the Mortgage Loan Schedule, including all interest and principal due with
respect to the Mortgage Loans after the Cut-off Date, but excluding any payments
of principal and interest due on or prior to the Cut-off Date; (ii) such assets
as shall from time to time be credited or are required by the terms of this
Agreement to be credited to the Master Servicer Collection Account, (iii) such
assets relating to the Mortgage Loans as from time to time may be held by the
Servicer in Protected Accounts, the Master Servicer in the Master Servicer
Collection Account and the Securities Administrator in the Distribution Account
for the benefit of the Trustee on behalf of the Certificateholders, (iv) any REO
Property, (v) the Required Insurance Policies and any amounts paid or payable by
the insurer under any Insurance Policy (to the extent the mortgagee has a claim
thereto), (vi) the Mortgage Loan Purchase Agreement to the extent provided in
Subsection 2.03(a), (vii) the rights with respect to the Servicing Agreement as
assigned to the Depositor on behalf of the Certificateholders by the Transfer
Agreement, (viii) the rights of the Depositor under the Transfer Agreement, and
(ix) any proceeds of the foregoing. Although it is the intent of the parties to
this Agreement that the conveyance of the Depositor's right, title and interest
in and to the Mortgage Loans and other assets in the Trust Fund pursuant to this
Agreement shall constitute a purchase and sale and not a loan, in the event that
such conveyance is deemed to be a loan, it is the intent of the parties to this
Agreement that the Depositor shall be deemed to have granted to the Trustee a
first priority perfected security interest in all of the Depositor's right,
title and interest in, to and under the Mortgage Loans and other assets in the
Trust Fund, and that this Agreement shall constitute a security agreement under
applicable law.
(b) In connection with the above transfer and assignment, the
Depositor hereby deposits with the Trustee or the Custodian, as its agent, the
following documents or instruments with respect to each Mortgage Loan, other
than a Cooperative Loan:
(i) the original Mortgage Note, endorsed in the following form:
"Pay to the order of HSBC Bank USA, National Association, as Trustee for the
registered holders of the Xxxxxxx Xxxxx Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 2006-AF2, without recourse," with all prior
and intervening endorsements showing a complete chain of endorsement from the
originator to the Person so endorsing to the Trustee;
(ii) the original recorded Mortgage or a copy of the Mortgage
certified by the public recording office in which such Mortgage has been
recorded;
(iii) an original Assignment of the Mortgage executed in the
following form: "HSBC Bank USA, National Association, as Trustee for the
registered holders of the Xxxxxxx Xxxxx Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 2006-AF2."
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(iv) the original recorded Assignment or Assignments of the
Mortgage showing a complete chain of assignment from the originator to the
Person assigning the Mortgage to the Trustee as contemplated by the immediately
preceding clause (iii), if applicable and only to the extent available to the
Depositor with evidence of recording thereon;
(v) the originals of all assumption, modification, consolidation
or extension agreements, with evidence of recording thereon, if any;
(vi) the original of any guarantee executed in connection with
the Mortgage Note;
(vii) the original mortgagee title insurance policy;
(viii) the original of any security agreement, chattel mortgage
or equivalent document executed in connection with the Mortgage; and
(ix) the original power of attorney, if applicable.
and (II) with respect to each Mortgage Loan that is a Cooperative Loan:
(x) the original Mortgage Note, endorsed in the following form:
"Pay to the order of HSBC Bank USA, National Association, as Trustee for the
registered holders of the Xxxxxxx Xxxxx Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 2006-AF2, without recourse," with all prior
and intervening endorsements showing a complete chain of endorsement from the
originator to the Person so endorsing to the Trustee;
(xi) the original duly executed assignment of Security Agreement
to the Trustee;
(xii) the acknowledgment copy of the original executed Form UCC-1
(or certified copy thereof) with respect to the Security Agreement, and any
required continuation statements;
(xiii) the acknowledgment copy of the original executed Form
UCC-3 with respect to the Security Agreement, indicating the Trustee as the
assignee of the secured party;
(xiv) the stock certificate representing the Cooperative Assets
allocated to the cooperative unit, with a stock power in blank attached;
(xv) the original collateral assignment of the proprietary lease
by Mortgagor to the originator;
(xvi) a copy of the recognition agreement;
(xvii) if applicable and to the extent available, the original
intervening assignments, including warehousing assignments, if any, showing, to
the extent available, an unbroken chain of the related Mortgage Loan to the
Trustee, together with a copy of the related Form UCC-3 with evidence of filing
thereon; and
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(xviii) the originals of each assumption, modification or
substitution agreement, if any, relating to the Mortgage Loan;
provided, however, that in lieu of the foregoing, the Depositor may deliver the
following documents, under the circumstances set forth below: (w) the Depositor
may deliver a Mortgage Note pursuant to (a)(i) and (b)(i) endorsed in blank,
provided that the endorsement is completed within 60 days of the Closing Date;
(x) in lieu of the original Mortgage, assignments to the Trustee or its
Custodian, as applicable, or intervening assignments thereof which have been
delivered, are being delivered or will, upon receipt of recording information
relating to the Mortgage required to be included thereon, be delivered to
recording offices for recording and have not been returned to the Depositor in
time to permit their delivery as specified above, the Depositor may deliver a
true copy thereof with a certification by the Depositor on the face of such
copy, substantially as follows: "Certified to be a true and correct copy of the
original, which has been transmitted for recording"; and (y) in lieu of the
Mortgage, assignment to the Trustee or intervening assignments thereof, if the
applicable jurisdiction retains the originals of such documents (as evidenced by
a certification from the Depositor or the Master Servicer, to such effect) the
Depositor may deliver photocopies of such documents containing an original
certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; and provided, further, however,
that in the case of Mortgage Loans which have been prepaid in full after the
Cut-off Date and prior to the Closing Date, the Depositor, in lieu of delivering
the above documents, may deliver to the Trustee or its Custodian, as applicable,
a certification to such effect and shall deposit all amounts paid in respect of
such Mortgage Loans in the Distribution Account on the Closing Date. The
Depositor shall deliver such original documents (including any original
documents as to which certified copies had previously been delivered) to the
Trustee or its Custodian, as applicable, promptly after they are received. As of
the date hereof, recordation of the assignment of the Mortgage Loans to the
Trustee or the Custodian, as applicable, is not required in any state by either
Rating Agency to obtain the initial rating on the Certificates (upon which
statement the Master Servicer, the Trustee and the Custodian may each
conclusively rely).
If any original Mortgage Note referred to in Section 2.01(b)(i) above
cannot be located, the obligations of the Depositor to deliver such documents
shall be deemed to be satisfied upon delivery to the Trustee or its Custodian,
as applicable, of a photocopy of such Mortgage Note, if available, with a lost
note affidavit. If any of the original Mortgage Notes for which a lost note
affidavit was delivered to the Trustee or its Custodian, as applicable, is
subsequently located, such original Mortgage Note shall be delivered to the
Trustee or its Custodian, as applicable, within three Business Days.
(c) The parties hereto agree that it is not intended that any mortgage
loan be included in the Trust Fund that is, without limitation, a "High Cost
Loan" as defined by the Home Ownership and Equity Protection Act of 1994 or any
other applicable anti-predatory lending laws, including but not limited to (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.
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(d) Notwithstanding anything to the contrary contained herein, the
parties hereto acknowledge that the functions of the Trustee with respect to the
custody, acceptance, inspection and release of Mortgage Files, including but not
limited to certain insurance policies and documents contemplated by Section 3.12
of this Agreement, and preparation and delivery of the certifications shall be
performed by the Custodian(s) pursuant to the terms and conditions of the
Custodial Agreement(s).
Section 2.02. Acceptance of Mortgage Loans by Trustee.
(a) The Trustee acknowledges the sale, transfer and assignment of the
Trust Fund to it by the Depositor and its receipt thereof, subject to further
review and the exceptions which may be noted pursuant to the procedures
described below, and declares that it, or the Custodian on its behalf, holds the
documents (or certified copies thereof) delivered to it pursuant to Section
2.01, and declares that it will continue to hold those documents and any
amendments, replacements or supplements thereto and all other assets of the
Trust Fund delivered to it as Trustee in trust for the use and benefit of all
present and future Holders of the Certificates. On or before the Closing Date
(or, with respect to any Substitute Mortgage Loan, within five Business Days
after the receipt by the Trustee or Custodian thereof), the Trustee agrees, for
the benefit of the Certificateholders, to review or cause to be reviewed by the
Custodian on its behalf (under the Custodial Agreement), each Mortgage File
delivered to it and to execute and deliver, or cause to be executed and
delivered, to the Depositor on the Closing Date an Initial Certification. In
conducting such review, the Trustee or Custodian will certify as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or any Mortgage Loan specifically identified in the exception
report annexed thereto as not being covered by such certification), (i) all
documents constituting part of such Mortgage File (other than such documents
described in Section 2.01(b)(iii)) required to be delivered to it pursuant to
this Agreement are in its possession, provided that with respect to the
documents described in Section 2.01(b)(v), (vi), (viii) and (ix) to the extent
the Trustee or the Custodian on its behalf has actual knowledge that such
documents exist, (ii) such documents have been reviewed by it and are not torn,
mutilated, defaced or otherwise altered (except if initialed by the obligor) and
appear to relate on their face to such Mortgage Loan, (iii) based on its
examination and only as to the foregoing, the information set forth in the
Mortgage Loan Schedule corresponding to the loan number for the Mortgage Loan,
the Mortgagor's name, including the street address but excluding the zip code,
the Mortgage Interest Rate and the original principal balance of the Mortgage
Loan accurately reflects information set forth in the Mortgage File and (iv)
with respect to Mortgage Loans with a Mortgage Interest Rate subject to
adjustment, the gross margin, the lifetime cap and the periodic cap for such
Mortgage Loan. In performing any such review, the Trustee, or the Custodian, as
its agent, may conclusively rely on the purported due execution and genuineness
of any such document and on the purported genuineness of any signature thereon.
Notwithstanding anything to the contrary in this Agreement, it is herein
acknowledged that, in conducting such review, the Trustee or the Custodian on
its behalf is under no duty or obligation to inspect, review or examine any such
documents, instruments, certificates or other papers to determine whether they
are genuine, enforceable, or appropriate for the represented purpose or whether
they have actually been recorded or that they are other than what they purport
to be on their face, or to determine whether any Person executing any documents
is authorized to do so or whether any signature is genuine.
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(b) If the Trustee or the Custodian, as its agent, finds any document
constituting part of the Mortgage File not to have been executed or received, or
to be unrelated to the Mortgage Loans identified in Exhibit B or to appear to be
defective on its face, the Trustee or the Custodian, as its agent, shall
promptly notify the Seller. In accordance with the Transfer Agreement, the
Transferor shall correct or cure any such defect within ninety (90) days from
the date of notice from the Trustee or the Custodian, as its agent, of the
defect and if the Transferor fails to correct or cure the defect within such
period, and such defect materially and adversely affects the interests of the
Certificateholders in the related Mortgage Loan, the Trustee, shall enforce the
Transferor's obligation pursuant to the Transfer Agreement, within 90 days from
the Trustee's or the Custodian's notification, to purchase such Mortgage Loan at
the Purchase Price; provided that, if such defect would cause the Mortgage Loan
to be other than a "qualified mortgage" as defined in Section 860G(a)(3) of the
Code, any such cure or repurchase must occur within 90 days from the date such
breach was discovered; provided, however, that if such defect relates solely to
the inability of the Transferor to deliver the original Security Instrument or
intervening assignments thereof, or a certified copy because the originals of
such documents, or a certified copy have not been returned by the applicable
jurisdiction, the Transferor shall not be required to purchase such Mortgage
Loan if the Transferor delivers such original documents or certified copy
promptly upon receipt, but in no event later than 360 days after the Closing
Date. The foregoing repurchase obligation shall not apply in the event that the
Transferor cannot deliver such original or copy of any document submitted for
recording to the appropriate recording office in the applicable jurisdiction
because such document has not been returned by such office; provided that the
Transferor shall instead deliver a recording receipt of such recording office
or, if such receipt is not available, a certificate confirming that such
documents have been accepted for recording, and delivery to the Trustee or the
Custodian, as its agent, shall be effected by the Transferor within thirty days
of its receipt of the original recorded document.
(c) No later than 180 days after the Closing Date, the Trustee or the
Custodian, as its agent, will review, for the benefit of the Certificateholders,
the Mortgage Files delivered to it and will execute and deliver or cause to be
executed and delivered to the Depositor a Final Certification. In conducting
such review, the Trustee or the Custodian, as its agent, will certify as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or any Mortgage Loan specifically identified in the exception
report annexed thereto as not being covered by such certification), that (i) all
documents constituting part of such Mortgage File (other than such documents
described in Section 2.01(b)(v) and (ix)) required to be delivered to it
pursuant to this Agreement are in its possession, provided that with respect to
the documents described in Section 2.01(b)(v), (vi), (viii) and (ix) to the
extent the Trustee or the Custodian on its behalf has actual knowledge that such
documents exist, (ii) such documents have been reviewed by it and are not torn,
mutilated, defaced or otherwise altered (except if initialed by the obligor) and
appear regular on their face and relate to such Mortgage Loan, (iii) based on
its examination and only as to the foregoing, the information set forth in the
Mortgage Loan Schedule corresponding to the loan number for the Mortgage Loan,
the Mortgagor's name, including the street address but excluding the zip code,
the Mortgage Interest Rate and the original principal balance of the Mortgage
Loan accurately reflects information set forth in the Mortgage File. In
performing any such review, the Trustee, or the Custodian, as its agent, may
conclusively rely on the purported due execution and genuineness of any such
document and on the purported genuineness of any signature thereon.
Notwithstanding anything to the contrary in this Agreement, it is herein
acknowledged that, in
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conducting such review, the Trustee or the Custodian on its behalf is under no
duty or obligation (i) to inspect, review or examine any such documents,
instruments, certificates or other papers to determine whether they are genuine,
enforceable, or appropriate for the represented purpose or whether they have
actually been recorded or that they are other than what they purport to be on
their face, or to determine whether any Person executing any documents is
authorized to do so or whether any signature is genuine. If the Trustee or the
Custodian, as its agent, finds any document constituting part of the Mortgage
File not to have been executed or received, or to be unrelated to the Mortgage
Loans identified in Exhibit B or to appear to be defective on its face, the
Trustee or the Custodian, as its agent, shall promptly notify the Transferor. In
accordance with the Transfer Agreement, the Transferor shall correct or cure any
such defect within 90 days from the date of notice from the Trustee of the
defect and if the Transferor is unable to cure such defect within such period,
and if such defect materially and adversely affects the interests of the
Certificateholders in the related Mortgage Loan, the Trustee shall enforce the
Transferor's obligation under the Transfer Agreement to purchase such Mortgage
Loan at the Purchase Price, provided, however, that if such defect relates
solely to the inability of the Transferor to deliver the original Security
Instrument or intervening assignments thereof, or a certified copy, because the
originals of such documents, or a certified copy, have not been returned by the
applicable jurisdiction, the Transferor shall not be required to purchase such
Mortgage Loan, if the Transferor delivers such original documents or certified
copy promptly upon receipt, but in no event later than 360 days after the
Closing Date.
(d) In the event that a Mortgage Loan is purchased by the Transferor
in accordance with Subsections 2.02(a) or (b) above, the Transferor shall remit
to the Master Servicer the Purchase Price for deposit in the Master Servicer
Collection Account and the Transferor shall provide to the Trustee written
notification detailing the components of the Purchase Price. Upon deposit of the
Purchase Price in the Master Servicer Collection Account, the Depositor shall
give written notice thereof to the Trustee and the Custodian and the Trustee or
the Custodian, as its agent (upon receipt of a Request for Release in the form
of Exhibit D attached hereto with respect to such Mortgage Loan), shall release
to the Transferor the related Mortgage File and the Trustee shall execute and
deliver all instruments of transfer or assignment, without recourse, furnished
to it by the Transferor as are necessary to vest in the Transferor title to and
rights under the Mortgage Loan. Such purchase shall be deemed to have occurred
on the date on which the Purchase Price in available funds is received by the
Trustee. The Depositor or Master Servicer shall amend the Mortgage Loan
Schedule, to reflect such repurchase and shall promptly notify the Rating
Agencies and the Master Servicer of such amendment. The obligation of the
Transferor to repurchase any Mortgage Loan as to which such a defect in a
constituent document exists shall be the sole remedy respecting such defect
available to the Certificateholders or to the Trustee on their behalf.
Section 2.03. Assignment of Interest in the Mortgage Loan Purchase
Agreement.
(a) The Depositor hereby assigns to the Trustee, on behalf of the
Certificateholders, all of its right, title and interest in the Mortgage Loan
Purchase Agreement, including but not limited to Depositor's rights pursuant to
the Servicing Agreement (noting that the Seller has retained the right in the
event of breach of the representations, warranties and covenants, if any, with
respect to the related Mortgage Loans of the Servicer under the Servicing
Agreement to enforce the provisions thereof and to seek all or any available
remedies). The
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obligations of the Transferor to substitute or repurchase, as applicable, a
Mortgage Loan shall be the Trustee's and the Certificateholders' sole remedy for
any breach thereof. At the request of the Trustee, the Depositor shall take such
actions as may be necessary to enforce the above right, title and interest on
behalf of the Trustee and the Certificateholders or shall execute such further
documents as the Trustee may reasonably require in order to enable the Trustee
to carry out such enforcement. With respect to the representations and
warranties described in the Mortgage Loan Purchase Agreement that are made to
the best of the Transferor's knowledge, if it is discovered by any of the
Depositor, the Transferor, the Master Servicer, the Securities Administrator or
the Trustee that the substance of such representation and warranty is inaccurate
and such inaccuracy materially and adversely affects the value of the related
Mortgage Loan, then notwithstanding the Transferor's lack of knowledge with
respect to the substance of such representation and warranty, such inaccuracy
shall be deemed a breach of the applicable representation or warranty.
(b) If the Depositor, the Master Servicer, Securities Administrator or
the Trustee discovers a breach of any of the representations and warranties set
forth in the Mortgage Loan Purchase Agreement, which breach materially and
adversely affects the value of the interests of Certificateholders or the
Trustee in the related Mortgage Loan, the party discovering the breach shall
give prompt written notice of the breach to the other parties. The Transferor,
within 90 days of its discovery or receipt of notice that such breach has
occurred (whichever occurs earlier), shall cure the breach in all material
respects or, subject to the Mortgage Loan Purchase Agreement or Section 2.04 of
this Agreement, as applicable, shall purchase the Mortgage Loan or any property
acquired with respect thereto from the Trustee; provided, however, that if there
is a breach of any representation set forth in the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, and the Mortgage
Loan or the related property acquired with respect thereto has been sold, then
the Transferor shall pay, in lieu of the Purchase Price, any excess of the
Purchase Price over the Net Liquidation Proceeds received upon such sale. (If
the Net Liquidation Proceeds exceed the Purchase Price, any excess shall be paid
to the Transferor to the extent not required by law to be paid to the borrower.)
Any such purchase by the Transferor shall be made by providing an amount equal
to the Purchase Price to the Master Servicer for deposit in the Master Servicer
Collection Account and written notification detailing the components of such
Purchase Price. The Depositor shall notify the Trustee in writing of the deposit
of the Purchase Price and submit to the Trustee or the Custodian, as its agent,
a Request for Release, and the Trustee shall release, or the Trustee shall cause
the Custodian to release, to the Transferor the related Mortgage File and the
Trustee shall execute and deliver all instruments of transfer or assignment
furnished to it by the Transferor, without recourse, as are necessary to vest in
the Transferor title to and rights under the Mortgage Loan or any property
acquired with respect thereto. Such purchase shall be deemed to have occurred on
the date on which the Purchase Price in available funds is received by the
Master Servicer. The Depositor or the Master Servicer shall amend the Mortgage
Loan Schedule to reflect such repurchase and shall promptly notify the Master
Servicer and the Rating Agencies of such amendment. Enforcement of the
obligation of the Transferor to purchase (or substitute a Substitute Mortgage
Loan for) any Mortgage Loan or any property acquired with respect thereto (or
pay the Purchase Price as set forth in the above proviso) as to which a breach
has occurred and is continuing shall constitute the sole remedy respecting such
breach available to the Certificateholders or the Trustee on their behalf.
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Section 2.04. Substitution of Mortgage Loans. Notwithstanding anything to
the contrary in this Agreement, in lieu of purchasing a Mortgage Loan pursuant
to the Mortgage Loan Purchase Agreement or Sections 2.02 or 2.03 of this
Agreement, the Transferor may, no later than the date by which such purchase by
the Transferor would otherwise be required, tender to the Trustee a Substitute
Mortgage Loan accompanied by a certificate of an authorized officer of the
Transferor that such Substitute Mortgage Loan conforms to the requirements set
forth in the definition of "Substitute Mortgage Loan" in the Mortgage Loan
Purchase Agreement or this Agreement, as applicable; provided, however, that
substitution pursuant to the Mortgage Loan Purchase Agreement or Section 2.04 of
this Agreement, as applicable, in lieu of purchase shall not be permitted after
the termination of the two-year period beginning on the Startup Day; provided,
further, that if the breach would cause the Mortgage Loan to be other than a
"qualified mortgage" as defined in Section 860G(a)(3) of the Code, any such cure
or substitution must occur within 90 days from the date the breach was
discovered. The Trustee or the Custodian, as its agent, shall examine the
Mortgage File for any Substitute Mortgage Loan in the manner set forth in
Section 2.02(a) and the Trustee or the Custodian, as its agent, shall notify the
Transferor, in writing, within five Business Days after receipt, whether or not
the documents relating to the Substitute Mortgage Loan satisfy the requirements
of the fourth sentence of Subsection 2.02(a). Within two Business Days after
such notification, the Transferor shall provide to the Securities Administrator
for deposit in the Distribution Account the amount, if any, by which the
Outstanding Principal Balance as of the next preceding Due Date of the Mortgage
Loan for which substitution is being made, after giving effect to Scheduled
Principal due on such date, exceeds the Outstanding Principal Balance as of such
date of the Substitute Mortgage Loan, after giving effect to Scheduled Principal
due on such date, which amount shall be treated for the purposes of this
Agreement as if it were the payment by the Transferor of the Purchase Price for
the purchase of a Mortgage Loan by the Transferor. After such notification to
the Transferor and, if any such excess exists, upon written notification of the
receipt of such deposit, the Trustee shall accept such Substitute Mortgage Loan
which shall thereafter be deemed to be a Mortgage Loan hereunder. 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 Issuing Entity and
accrued interest for such month on the Mortgage Loan for which the substitution
is made and any Principal Prepayments made thereon during such month shall be
the property of the Transferor. The Scheduled Principal on a Substitute Mortgage
Loan due on the Due Date in the month of substitution shall be the property of
the Transferor and the Scheduled Principal on the Mortgage Loan for which the
substitution is made due on such Due Date shall be the property of the Issuing
Entity. Upon acceptance of the Substitute Mortgage Loan (and delivery to the
Trustee or Custodian of a Request for Release for such Mortgage Loan), the
Trustee shall release to the Transferor the related Mortgage File related to any
Mortgage Loan released pursuant to the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable, and shall execute and deliver all
instruments of transfer or assignment, without recourse, in form as provided to
it as are necessary to vest in the Transferor title to and rights under any
Mortgage Loan released pursuant to the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable. The Transferor shall deliver the
documents related to the Substitute Mortgage Loan in accordance with the
provisions of the Mortgage Loan Purchase Agreement or Subsections 2.01(b) and
2.02(b) of this Agreement, as applicable, with the date of acceptance of the
Substitute Mortgage Loan deemed to be the Closing Date for purposes of the time
periods set forth in those Subsections. The representations and warranties set
forth in the Mortgage Loan
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Purchase Agreement shall be deemed to have been made by the Transferor with
respect to each Substitute Mortgage Loan as of the date of acceptance of such
Mortgage Loan by the Trustee. The Master Servicer shall amend the Mortgage Loan
Schedule to reflect such substitution and shall provide a copy of such amended
Mortgage Loan Schedule to the Trustee and the Rating Agencies.
Notwithstanding any other provision of this Agreement, the right to
substitute Mortgage Loans pursuant to this Article II shall be subject to the
additional limitations that no substitution of a Mortgage Loan shall be made
unless the Securities Administrator and the Trustee shall have received an
Opinion of Counsel (at the expense of the party seeking to make the
substitution) that, under current law, such substitution will not (A) affect
adversely the status of any REMIC established hereunder as a REMIC, or of the
related "regular interests" as "regular interests" in any such REMIC, or (B)
cause any such REMIC to engage in a "prohibited transaction" or prohibited
contribution pursuant to the REMIC provisions.
Section 2.05. Issuance of Certificates. The Trustee acknowledges the
assignment to it on behalf of the Issuing Entity of the Mortgage Loans and the
other assets comprising the Trust Fund and, concurrently therewith, the
Securities Administrator has signed, and countersigned and delivered to the
Depositor, in exchange therefor, Certificates in such authorized denominations
representing such Percentage Interests as the Depositor has requested. The
Trustee agrees that it will hold the Mortgage Loans and such other assets as may
from time to time be delivered to it segregated on the books of the Trustee in
trust for the benefit of the Certificateholders.
Section 2.06. Representations and Warranties Concerning the Depositor. The
Depositor hereby represents and warrants to the Trustee, the Master Servicer and
the Securities Administrator as follows:
(i) the Depositor (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and (b) is
qualified and in good standing as a foreign corporation to do business in each
jurisdiction where such qualification is necessary, except where the failure so
to qualify would not reasonably be expected to have a material adverse effect on
the Depositor's business as presently conducted or on the Depositor's ability to
enter into this Agreement and to consummate the transactions contemplated
hereby;
(ii) the Depositor has full corporate power to own its property,
to carry on its business as presently conducted and to enter into and perform
its obligations under this Agreement;
(iii) the execution and delivery by the Depositor of this
Agreement have been duly authorized by all necessary corporate action on the
part of the Depositor; and neither the execution and delivery of this Agreement,
nor the consummation of the transactions herein contemplated, nor compliance
with the provisions hereof, will conflict with or result in a breach of, or
constitute a default under, any of the provisions of any law, governmental rule,
regulation, judgment, decree or order binding on the Depositor or its properties
or the articles of incorporation or by-laws of the Depositor, except those
conflicts, breaches or defaults which would not reasonably be expected to have a
material adverse effect on the Depositor's ability to enter into this Agreement
and to consummate the transactions contemplated hereby;
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(iv) the execution, delivery and performance by the Depositor of
this Agreement and the consummation of the transactions contemplated hereby do
not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any state,
federal or other governmental authority or agency, except those consents,
approvals, notices, registrations or other actions as have already been
obtained, given or made;
(v) this Agreement has been duly executed and delivered by the
Depositor and, assuming due authorization, execution and delivery by the other
parties hereto, constitutes a valid and binding obligation of the Depositor
enforceable against it in accordance with its terms (subject to applicable
bankruptcy and insolvency laws and other similar laws affecting the enforcement
of the rights of creditors generally);
(vi) there are no actions, suits or proceedings pending or, to
the knowledge of the Depositor, threatened against the Depositor, before or by
any court, administrative agency, arbitrator or governmental body (i) with
respect to any of the transactions contemplated by this Agreement or (ii) with
respect to any other matter which in the judgment of the Depositor will be
determined adversely to the Depositor and will if determined adversely to the
Depositor materially and adversely affect the Depositor's ability to enter into
this Agreement or perform its obligations under this Agreement; and the
Depositor is not in default with respect to any order of any court,
administrative agency, arbitrator or governmental body so as to materially and
adversely affect the transactions contemplated by this Agreement; and
(vii) immediately prior to the transfer and assignment to the
Trustee, each Mortgage Note and each 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 such Mortgage Loan to the
Trustee free and clear of any encumbrance, equity, lien, pledge, charge, claim
or security interest.
Section 2.07. Representations and Warranties Concerning the Master Servicer
and Securities Administrator. Xxxxx Fargo Bank, N.A., in its capacity as Master
Servicer and Securities Administrator hereby represents and warrants to the
Seller, the Depositor and the Trustee as follows, as of the Closing Date:
(i) It is a national banking association duly formed, validly
existing and in good standing under the laws of the United States of America and
is duly authorized and qualified to transact any and all business contemplated
by this Agreement to be conducted by the Master Servicer and the Securities
Administrator, to the extent necessary to ensure its ability to master service
the Mortgage Loans in accordance with the terms of this Agreement and to perform
any of its other obligations under this Agreement in accordance with the terms
hereof;
(ii) It has the full corporate power and authority to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary
corporate action on its part the execution, delivery and performance of this
Agreement; and this Agreement, assuming the due authorization, execution and
delivery hereof by the other parties hereto, constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms, except
that (a) the enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to
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creditors' rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
(iii) The execution and delivery of this Agreement by it, the
consummation of any other of the transactions contemplated by this Agreement,
and the fulfillment of or compliance with the terms hereof are in its ordinary
course of business and will not (A) result in a material breach of any term or
provision of its charter or by-laws or (B) materially conflict with, result in a
material breach, violation or acceleration of, or result in a material default
under, the terms of any other material agreement or instrument to which it is a
party or by which it may be bound, or (C) constitute a material violation of any
statute, order or regulation applicable to it of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it; and it
is not in breach or violation of any material indenture or other material
agreement or instrument, or in violation of any statute, order or regulation of
any court, regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or violation may materially impair its ability
to perform or meet any of its obligations under this Agreement.
(iv) No litigation is pending or, to the best of its knowledge,
threatened, against it that would materially and adversely affect the execution,
delivery or enforceability of this Agreement or its ability to perform any of
its other obligations under this Agreement in accordance with the terms hereof.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for its execution, delivery and
performance of, or compliance with, this Agreement or the consummation of the
transactions contemplated hereby, or if any such consent, approval,
authorization or order is required, it has obtained the same.
ARTICLE III.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Master Servicer. The Master Servicer shall supervise, monitor
and oversee the obligation of the Servicer to service and administer the
Mortgage Loans in accordance with the terms of the Servicing Agreement and shall
have full power and authority to do any and all things which it may deem
necessary or desirable in connection with such master servicing and
administration. In performing its obligations hereunder, the Master Servicer
shall act in a manner consistent with Accepted Master Servicing Practices.
Furthermore, the Master Servicer shall oversee and consult with the Servicer as
necessary from time-to-time to carry out the Master Servicer's obligations
hereunder, shall receive, review and evaluate all reports, information and other
data provided to the Master Servicer by the Servicer and shall cause the
Servicer to perform and observe the covenants, obligations and conditions to be
performed or observed by such Servicer under the Servicing Agreement. The Master
Servicer shall independently and separately monitor the Servicer's servicing
activities with respect to each related Mortgage Loan, reconcile the results of
such monitoring with such information provided in the previous sentence on a
monthly basis and coordinate corrective adjustments to the Servicer's and Master
Servicer's records, and based on such reconciled and corrected information, the
Master Servicer shall provide such information to the Securities Administrator
as shall be necessary in order for it to prepare the statements specified in
Section 6.05, and
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prepare any other information and statements required to be forwarded by the
Master Servicer hereunder. The Master Servicer shall reconcile the results of
its monitoring with the actual remittances of the Servicer to the Master
Servicer Collection Account pursuant to the Servicing Agreement.
If the Master Servicer and the Securities Administrator are the same
entity, then at any time the Master Servicer is terminated as Master Servicer,
the Securities Administrator shall likewise be removed as securities
administrator.
The Trustee shall furnish the Servicer and the Master Servicer with any
limited powers of attorney and other documents in form acceptable to it
necessary or appropriate to enable the Servicer and the Master Servicer to
service and administer the related Mortgage Loans and REO Property. The Trustee
shall have no liability with respect to the use of any such limited power of
attorney.
The Trustee or the Custodian shall provide access to the records and
documentation in possession of the Trustee or the Custodian regarding the
related Mortgage Loans and REO Property and the servicing thereof to the
Certificateholders, the FDIC, and the supervisory agents and examiners of the
FDIC, such access being afforded only upon reasonable prior written request and
during normal business hours at the office of the Trustee or the Custodian;
provided, however, that, unless otherwise required by law, the Trustee or the
Custodian shall not be required to provide access to such records and
documentation if the provision thereof would violate the legal right to privacy
of any Mortgagor. The Trustee or the Custodian shall allow representatives of
the above entities to photocopy any of the records and documentation and shall
provide equipment for that purpose at a charge that covers the Trustee's or the
Custodian's actual costs.
The Trustee shall execute and deliver to the Servicer and the Master
Servicer upon request any court pleadings, requests for trustee's sale or other
documents necessary or desirable to (i) the foreclosure or trustee's sale with
respect to a Mortgaged Property; (ii) any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Security Instrument;
(iii) obtain a deficiency judgment against the Mortgagor; or (iv) enforce any
other rights or remedies provided by the Mortgage Note or Security Instrument or
otherwise available at law or equity.
Section 3.02. REMIC-Related Covenants. For as long as each REMIC shall
exist, the Trustee and the Securities Administrator shall act in accordance
herewith to assure continuing treatment of such REMIC as a REMIC, and the
Trustee and the Securities Administrator shall comply with any directions of the
Depositor, the Servicer or the Master Servicer to assure such continuing
treatment. In particular, the Trustee shall not (a) sell or permit the sale of
all or any portion of the Mortgage Loans or of any investment of deposits in an
Account unless such sale is as a result of a repurchase of the Mortgage Loans
pursuant to this Agreement or the Trustee and the Securities Administrator has
received a REMIC Opinion prepared at the expense of the Issuing Entity; and (b)
other than with respect to a substitution pursuant to the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, accept any
contribution to any REMIC after the Startup Day without receipt of a REMIC
Opinion.
Section 3.03. Monitoring of Servicer.
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(a) The Master Servicer shall be responsible for reporting to the
Trustee and the Depositor the compliance by the Servicer with its duties under
the Servicing Agreement. In the review of the Servicer's activities, the Master
Servicer may rely upon an officer's certificate of the Servicer with regard to
such Servicer's compliance with the terms of the Servicing Agreement. In the
event that the Master Servicer, in its judgment, determines that the Servicer
should be terminated in accordance with its Servicing Agreement, or that a
notice should be sent pursuant to such Servicing Agreement with respect to the
occurrence of an event that, unless cured, would constitute grounds for such
termination, the Master Servicer shall notify the Depositor and the Trustee
thereof and the Master Servicer shall issue such notice or take such other
action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of the Servicer under the
Servicing Agreement, and shall, in the event that the Servicer fails to perform
its obligations in accordance with the Servicing Agreement, subject to the
preceding paragraph, terminate the rights and obligations of such Servicer
thereunder and act as servicer of the related Mortgage Loans or, if the Master
Servicer is unwilling or unable to act as the Servicer, the Master Servicer
shall cause the Trustee to enter in to a new Servicing Agreement with a
successor Servicer selected by the Master Servicer that is eligible in
accordance with the criteria specified in this Agreement; provided, however, it
is understood and acknowledged by the parties hereto that there will be a period
of transition (not to exceed 90 days) before the actual servicing functions can
be fully transferred to such successor servicer. In either event, such
enforcement, including, without limitation, the legal prosecution of claims,
termination of the Servicing Agreement and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense subject to Section 3.03(c),
provided that the Master Servicer shall not be required to prosecute or defend
any legal action except to the extent that the Master Servicer shall have
received reasonable indemnity for its costs and expenses in pursuing such
action.
(c) To the extent that the costs and expenses of the Master Servicer
related to any termination of the Servicer, appointment of a successor Servicer
or the transfer and assumption of servicing by the Master Servicer with respect
to the Servicing Agreement (including, without limitation, (i) all legal costs
and expenses and all due diligence costs and expenses associated with an
evaluation of the potential termination of the Servicer as a result of an event
of default by such Servicer and (ii) all costs and expenses associated with the
complete transfer of servicing, including all servicing files and all servicing
data and the completion, correction or manipulation of such servicing data as
may be required by the successor servicer to correct any errors or
insufficiencies in the servicing data or otherwise to enable the successor
service to service the Mortgage Loans in accordance with the Servicing
Agreement) are not fully and timely reimbursed by the terminated Servicer, the
Master Servicer shall be entitled to reimbursement of such costs and expenses
from the Master Servicer Collection Account pursuant to Section 4.03(b).
(d) The Master Servicer shall require the Servicer to comply with the
remittance requirements and other obligations set forth in the Servicing
Agreement.
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(e) If the Master Servicer acts as Servicer, it will not assume
liability for the representations and warranties of such Servicer, if any, that
it replaces.
Section 3.04. Fidelity Bond. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions insurance
policy, affording coverage with respect to all directors, officers, employees
and other Persons acting on such Master Servicer's behalf, and covering errors
and omissions in the performance of the Master Servicer's obligations hereunder.
The errors and omissions insurance policy and the fidelity bond shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees.
Section 3.05. Power to Act; Procedures. The Master Servicer shall master
service the Mortgage Loans and shall have full power and authority, subject to
the REMIC Provisions and the provisions of Article X hereof, to do any and all
things that it may deem necessary or desirable in connection with the master
servicing and administration of the Mortgage Loans, including but not limited to
the power and authority (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages, (iii) to
collect any Insurance Proceeds and Liquidation Proceeds, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan, in each case, in accordance with the provisions of
this Agreement and the Servicing Agreement, as applicable; provided, however,
that the Master Servicer shall not (and, consistent with its responsibilities
under Section 3.03, shall not permit the Servicer to) knowingly or intentionally
take any action, or fail to take (or fail to cause to be taken) any action
reasonably within its control and the scope of duties more specifically set
forth herein, that, under the REMIC Provisions, if taken or not taken, as the
case may be, would cause any REMIC created hereunder to fail to qualify as a
REMIC or result in the imposition of a tax upon the Issuing Entity (including
but not limited to the tax on prohibited transactions as defined in Section
860F(a)(2) of the Code and the tax on contributions to a REMIC set forth in
Section 860G(d) of the Code) unless the Master Servicer has received an Opinion
of Counsel (but not at the expense of the Master Servicer) to the effect that
the contemplated action will not would cause any REMIC created hereunder to fail
to qualify as a REMIC or result in the imposition of a tax upon any REMIC
created hereunder. The Trustee shall furnish the Master Servicer, upon written
request from a Servicing Officer, with any limited powers of attorney (in form
acceptable to the Trustee) empowering the Master Servicer or the Servicer to
execute and deliver instruments of satisfaction or cancellation, or of partial
or full release or discharge, and to foreclose upon or otherwise liquidate
Mortgaged Property, and to appeal, prosecute or defend in any court action
relating to the Mortgage Loans or the Mortgaged Property, in accordance with the
Servicing Agreement and this Agreement, and the Trustee shall execute and
deliver such other documents, as the Master Servicer may request, to enable the
Master Servicer to master service and administer the Mortgage Loans and carry
out its duties hereunder, in each case in accordance with Accepted Master
Servicing Practices (and the Trustee shall have no liability for misuse of any
such powers of attorney by the Master Servicer or the Servicer). If the Master
Servicer or the Trustee has been advised that it is likely that the laws of the
state in which action is to be taken prohibit such action if taken in the name
of the Trustee or that the Trustee would be adversely affected under the "doing
business" or tax laws of such state if such action is taken in its name, the
Master Servicer shall join with the Trustee in the appointment of a co-trustee
pursuant to Section 9.11 hereof. In the performance of its duties
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hereunder, the Master Servicer shall be an independent contractor and shall not,
except in those instances where it is taking action in the name of the Trustee,
be deemed to be the agent of the Trustee.
Section 3.06. Due-on-Sale Clauses; Assumption Agreements. To the extent
provided in the Servicing Agreement, to the extent Mortgage Loans contain
enforceable due-on-sale clauses, the Master Servicer shall cause the Servicer to
enforce such clauses in accordance with the Servicing Agreement. If applicable
law prohibits the enforcement of a due-on-sale clause or such clause is
otherwise not enforced in accordance with the Servicing Agreement, and, as a
consequence, a Mortgage Loan is assumed, the original Mortgagor may be released
from liability in accordance with the Servicing Agreement.
Section 3.07. Release of Mortgage Files.
(a) Upon becoming aware of the payment in full of any Mortgage Loan,
or the receipt by the Servicer of a notification that payment in full has been
escrowed in a manner customary for such purposes for payment to
Certificateholders on the next Distribution Date, the Servicer or the Master
Servicer will, if required under the Servicing Agreement, promptly furnish to
the Custodian, on behalf of the Trustee, two copies of a certification
substantially in the form of Exhibit D hereto signed by a Servicing Officer or
in a mutually agreeable electronic format which will, in lieu of a signature on
its face, originate from a Servicing Officer (which certification shall include
a statement to the effect that all amounts received in connection with such
payment that are required to be deposited in the Protected Account maintained by
the Servicer pursuant to its Servicing Agreement have been or will be so
deposited) and shall request that the Custodian, on behalf of the Trustee,
deliver to the Servicer the related Mortgage File. Upon receipt of such
certification and request, the Custodian, on behalf of the Trustee, shall no
later than five Business Days (or, to the extent that the Servicer notifies the
Seller that a document is not in the Servicer's possession as part of the
servicing file which is needed for purposes of the Servicer complying with any
applicable law, within such shorter period as may be necessary to enable the
Servicer to comply with such law), release the related Mortgage File to the
Servicer and the Trustee and Custodian shall have no further responsibility with
regard to such Mortgage File. Upon any such payment in full, the Servicer is
authorized, to give, as agent for the Trustee, as the mortgagee under the
Mortgage that secured the Mortgage Loan, an instrument of satisfaction (or
assignment of mortgage without recourse) regarding the Mortgaged Property
subject to the Mortgage, which instrument of satisfaction or assignment, as the
case may be, shall be delivered to the Person or Persons entitled thereto
against receipt therefor of such payment, it being understood and agreed that no
expenses incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the Protected Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in accordance with the Servicing Agreement,
the Trustee shall execute such documents as requested and as shall be prepared
and furnished to the Trustee by the Servicer or the Master Servicer and as are
necessary to the prosecution of any such proceedings. In connection with the
foregoing, the Custodian, on behalf of the Trustee, shall, upon the request of
the Servicer or the Master Servicer, and delivery to the Custodian, on behalf of
the Trustee, of two copies of a Request for Release signed by a Servicing
Officer substantially in the form of Exhibit D (or in a mutually agreeable
electronic format which will, in lieu of a signature on its
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face, originate from a Servicing Officer), release the related Mortgage File
held in its possession or control to the Servicer or the Master Servicer, as
applicable. Such trust receipt shall obligate the Servicer or the Master
Servicer to return the Mortgage File to the Custodian on behalf of the Trustee,
when the need therefor by the Servicer or the Master Servicer no longer exists
unless the Mortgage Loan shall be liquidated, in which case, upon receipt of a
certificate of a Servicing Officer similar to that hereinabove specified, the
Mortgage File shall be released by the Custodian, on behalf of the Trustee, to
the Servicer or the Master Servicer.
Section 3.08. Documents, Records and Funds in Possession of Master Servicer
To Be Held for Trustee.
(a) The Master Servicer shall transmit and the Servicer (to the extent
required by the Servicing Agreement) shall transmit to the Trustee or Custodian
such documents and instruments coming into the possession of the Master Servicer
or such Servicer from time to time as are required by the terms hereof, or in
the case of the Servicer, the Servicing Agreement, to be delivered to the
Trustee or Custodian. Any funds received by the Master Servicer or by the
Servicer in respect of any Mortgage Loan or which otherwise are collected by the
Master Servicer or by the Servicer as Liquidation Proceeds or Insurance Proceeds
in respect of any Mortgage Loan shall be held for the benefit of the Trustee and
the Certificateholders subject to the Master Servicer's right to retain or
withdraw from the Master Servicer Collection Account the Master Servicing
Compensation and other amounts provided in this Agreement, and to the right of
the Servicer to retain its Servicing Fee and other amounts as provided in the
Servicing Agreement. The Master Servicer shall, and (to the extent provided in
the Servicing Agreement) shall cause the Servicer to, provide access to
information and documentation regarding the Mortgage Loans to the Trustee, its
agents and accountants at any time upon reasonable request and during normal
business hours, and to Certificateholders that are savings and loan
associations, banks or insurance companies, the Office of Thrift Supervision,
the FDIC and the supervisory agents and examiners of such Office and Corporation
or examiners of any other federal or state banking or insurance regulatory
authority if so required by applicable regulations of the Office of Thrift
Supervision or other regulatory authority, such access to be afforded without
charge but only upon reasonable request in writing and during normal business
hours at the offices of the Master Servicer designated by it. In fulfilling such
a request, the Master Servicer shall not be responsible for determining the
sufficiency of such information.
(b) All Mortgage Files and funds collected or held by, or under the
control of, the Master Servicer, in respect of any Mortgage Loans, whether from
the collection of principal and interest payments or from Liquidation Proceeds
or Insurance Proceeds, shall be held by the Master Servicer for and on behalf of
the Trustee and the Certificateholders and shall be and remain the sole and
exclusive property of the Trustee; provided, however, that the Master Servicer
and the Servicer shall be entitled to setoff against, and deduct from, any such
funds any amounts that are properly due and payable to the Master Servicer or
the Servicer under this Agreement or the Servicing Agreement.
Section 3.09. Standard Hazard Insurance and Flood Insurance Policies.
(a) For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Servicer under the Servicing Agreement to maintain or cause to
be maintained standard fire and casualty insurance and, where applicable, flood
insurance, all in accordance with the
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provisions of the Servicing Agreement. It is understood and agreed that such
insurance shall be with insurers meeting the eligibility requirements set forth
in the Servicing Agreement and that no earthquake or other additional insurance
is to be required of any Mortgagor or to be maintained on property acquired in
respect of a defaulted 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.
(b) Pursuant to Sections 4.01 and 4.02, any amounts collected by the
Servicer or the Master Servicer, under any insurance policies (other than
amounts to be applied to the restoration or repair of the property subject to
the related Mortgage or released to the Mortgagor in accordance with the
Servicing Agreement) shall be deposited into the Master Servicer Collection
Account, subject to withdrawal pursuant to Sections 4.02 and 4.03 in accordance
with the terms and conditions of the Servicing Agreement. Any cost incurred by
the Master Servicer or the Servicer in maintaining any such insurance if the
Mortgagor defaults in its obligation to do so shall be added to the amount owing
under the Mortgage Loan where the terms of the Mortgage Loan so permit;
provided, however, that the addition of any such cost shall not be taken into
account for purposes of calculating the distributions to be made to
Certificateholders and shall be recoverable by the Master Servicer or the
Servicer pursuant to Sections 4.02 and 4.03.
Section 3.10. Presentment of Claims and Collection of Proceeds. The Master
Servicer shall (to the extent provided in the Servicing Agreement) cause the
Servicer to, prepare and present on behalf of the Trustee and the
Certificateholders all claims under the Insurance Policies and take such actions
(including the negotiation, settlement, compromise or enforcement of the
insured's claim) as shall be necessary to realize recovery under such policies.
Any proceeds disbursed to the Master Servicer (or disbursed to the Servicer and
remitted to the Master Servicer) in respect of such policies, bonds or contracts
shall be promptly deposited in the Master Servicer Collection Account upon
receipt, except that any amounts realized that are to be applied to the repair
or restoration of the related Mortgaged Property as a condition precedent to the
presentation of claims on the related Mortgage Loan to the insurer under any
applicable Insurance Policy need not be so deposited (or remitted).
Section 3.11. Maintenance of the Primary Mortgage Insurance Policies.
(a) The Master Servicer shall not take, or permit the Servicer (to the
extent such action is prohibited under the Servicing Agreement) to take, any
action that would result in noncoverage under any applicable Primary Mortgage
Insurance Policy of any loss which, but for the actions of such Master Servicer
or Servicer, would have been covered thereunder. The Master Servicer shall use
its best reasonable efforts to cause the Servicer (to the extent required under
the Servicing Agreement) to keep in force and effect (to the extent that the
Mortgage Loan requires the Mortgagor to maintain such insurance), primary
mortgage insurance applicable to each Mortgage Loan in accordance with the
provisions of this Agreement and the Servicing Agreement, as applicable. The
Master Servicer shall not, and shall not permit the Servicer (to the extent
required under the Servicing Agreement) to, cancel or refuse to renew any such
Primary Mortgage Insurance Policy that is in effect at the date of the initial
issuance of the Mortgage Note and is required to be kept in force hereunder
except in accordance with the provisions of this Agreement and the Servicing
Agreement, as applicable.
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(b) The Master Servicer agrees to present, or to cause the Servicer
(to the extent required under the Servicing Agreement) to present, on behalf of
the Trustee and the Certificateholders, claims to the insurer under any Primary
Mortgage Insurance Policies and, in this regard, to take such reasonable action
as shall be necessary to permit recovery under any Primary Mortgage Insurance
Policies respecting defaulted Mortgage Loans. Pursuant to Section 4.02, any
amounts collected by the Master Servicer or the Servicer under any Primary
Mortgage Insurance Policies shall be deposited in the Master Servicer Collection
Account, subject to withdrawal pursuant to Section 4.03.
Section 3.12. Trustee to Retain Possession of Certain Insurance Policies
and Documents. The Trustee or the Custodian shall retain possession and custody
of the originals (to the extent available) of any Primary Mortgage Insurance
Policies, or certificate of insurance if applicable, and any certificates of
renewal as to the foregoing as may be issued from time to time as contemplated
by this Agreement. Until all amounts distributable in respect of the
Certificates have been distributed in full and the Master Servicer otherwise has
fulfilled its obligations under this Agreement, the Trustee or its Custodian
shall also retain possession and custody of each Mortgage File in accordance
with and subject to the terms and conditions of this Agreement. The Master
Servicer shall promptly deliver or cause to be delivered to the Trustee or the
Custodian upon the execution or receipt thereof the originals of any Primary
Mortgage Insurance Policies, any certificates of renewal, and such other
documents or instruments that constitute portions of the Mortgage File that come
into the possession of the Master Servicer from time to time.
Section 3.13. Realization Upon Defaulted Mortgage Loans. The Master
Servicer shall cause the Servicer (to the extent required under the Servicing
Agreement) to foreclose upon, repossess or otherwise comparably convert the
ownership of Mortgaged Properties 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, all in accordance with the terms and
conditions of the Servicing Agreement.
Section 3.14. Compensation for the Master Servicer. The Master Servicer
will be entitled to all income and gain realized from any investment of funds in
the Master Servicer Collection Account, pursuant to Article IV, for the
performance of its activities hereunder. Servicing compensation in the form of
assumption fees, if any, late payment charges, as collected, if any, or
otherwise (but not including any prepayment premium or penalty) shall be
retained by the Servicer and shall not be deposited in the Protected Account.
The Master Servicer shall be required to pay all expenses incurred by it in
connection with its activities hereunder and shall not be entitled to
reimbursement therefor except as provided in this Agreement.
Section 3.15. REO Property.
(a) In the event the Issuing Entity acquires ownership of any REO
Property in respect of any related Mortgage Loan, the deed or certificate of
sale shall be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in the
Servicing Agreement, cause the Servicer to sell, any REO Property as
expeditiously as possible and in accordance with the provisions of this
Agreement and the Servicing Agreement, as applicable. Pursuant to its efforts to
sell such REO Property, the Master
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Servicer shall cause the Servicer to protect and conserve, such REO Property in
the manner and to the extent required by the Servicing Agreement, in accordance
with the REMIC Provisions and in a manner that does not result in a tax on "net
income from foreclosure property" or cause such REO Property to fail to qualify
as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code.
(b) The Master Servicer shall, to the extent required by the Servicing
Agreement, cause the Servicer to deposit all funds collected and received in
connection with the operation of any REO Property in the Protected Account.
(c) The Master Servicer and the Servicer, upon the final disposition
of any REO Property, shall be entitled to reimbursement for any related
unreimbursed Monthly Advances and other unreimbursed advances as well as any
unpaid Servicing Fees from Liquidation Proceeds received in connection with the
final disposition of such REO Property; provided, that any such unreimbursed
Monthly Advances as well as any unpaid Servicing Fees may be reimbursed or paid,
as the case may be, prior to final disposition, out of any net rental income or
other net amounts derived from such REO Property.
(d) To the extent provided in the Servicing Agreement, the Liquidation
Proceeds from the final disposition of the REO Property, net of any payment to
the Master Servicer and the Servicer as provided above shall be deposited in the
Protected Account on or prior to the Determination Date in the month following
receipt thereof and be remitted by wire transfer in immediately available funds
to the Master Servicer for deposit into the related Master Servicer Collection
Account on the next succeeding Servicer Remittance Date.
Section 3.16. Annual Statement as to Compliance.
Not later than March 1 of each calendar year (other than the calendar year
during which the Closing Date occurs), the Servicer shall deliver (or otherwise
make available) and the Servicer shall cause any Servicing Function Participant
engaged by it to deliver to the Master Servicer, the Securities Administrator
and the Depositor, an Officer's Certificate in the form attached hereto as
Exhibit P stating, as to each signatory thereof, that (i) a review of the
activities of such signatory during the preceding calendar year, or portion
thereof, and of the performance of such signatory under the Servicing Agreement
or such other applicable agreement in the case of a Servicing Function
Participant has been made under such officer's supervision, and (ii) to the best
of such officer's knowledge, based on such review, such signatory has fulfilled
all its obligations under this Agreement, the Servicing Agreement or such other
applicable 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.
The Master Servicer and the Securities Administrator shall deliver (or
otherwise make available) (and the Master Servicer and Securities Administrator
shall cause any Servicing Function Participant engaged by it to deliver) to the
Depositor and the Securities Administrator on or before March 1 (with a
ten-calendar day cure period) of each year, commencing in March 2007, an
Officer's Certificate stating, as to the signer thereof, that (A) a review of
such party's activities during the preceding calendar year or portion thereof
and of such party's performance under this Agreement, or such other applicable
agreement in the case of a Servicing Function
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Participant, has been made under such officer's supervision and (B) to the best
of such officer's knowledge, based on such review, such party has fulfilled all
its obligations under this Agreement, or such other applicable agreement in the
case of a Servicing Function Participant, in all material respects throughout
such year or portion thereof, or, if there has been a failure to fulfill any
such obligation in any material respect, specifying each such failure known to
such officer and the nature and status thereof.
The Master Servicer shall include all annual statements of compliance
received by it from the Servicer with its own annual statement of compliance to
be submitted to the Securities Administrator pursuant to this Section. For the
avoidance of doubt, the Master Servicer and the Securities Administrator may
satisfy the requirements of this Section 3.16 and Section 3.16 of the Stack II
Agreement by each delivering a single annual statement of compliance containing
all of the information required pursuant to this Section 3.16 and Section 3.16
of the Stack II Agreement.
In the event the Master Servicer, the Securities Administrator or any
Servicing Function Participant engaged by any such party is terminated, assigns
its rights and obligations under or resigns pursuant to the terms of this
Agreement, or such other applicable agreement in the case of a Servicing
Function Participant, as the case may be, such party shall provide, an annual
statement of compliance pursuant to this Section 3.16 or to such applicable
agreement, as the case may be, notwithstanding any such termination, assignment
or resignation.
Section 3.17. Reports on Assessment of Compliance and Attestation.
(a) Not later than March 1 of each calendar year (other than the
calendar year during which the Closing Date occurs) the Servicer at its own
expense, shall furnish, and shall cause any Servicing Function Participant
engaged by it to furnish (unless in the case of a Subcontractor, the Servicer
has notified the Depositor and the Master Servicer in writing that such
compliance statement is not required for the Subcontractor) to the Master
Servicer, the Securities Administrator and the Depositor an officer's assessment
of its compliance with the Relevant 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 assessment
shall contain (A) a statement by such party of its responsibility for assessing
compliance with the Relevant Servicing Criteria, (B) a statement that such party
used the Relevant Servicing Criteria to assess compliance with the Relevant
Servicing Criteria, (C) such party's assessment of compliance with the Relevant
Servicing Criteria as of and for the fiscal year covered by the Form 10-K
required to be filed pursuant to Section 3.18, including, if there has been any
material instance of noncompliance with the Relevant Servicing Criteria, a
discussion of each such failure and the nature and status thereof, which
assessment shall be based on the activities it performs with respect to
asset-backed securities transactions taken as a whole involving such party that
are backed by the same asset type as the Mortgage Loans, and (D) a statement
that a registered public accounting firm has issued an attestation report on
such party's assessment of compliance with the Relevant Servicing Criteria as of
and for such period.
By March 1 (with a ten-calendar day cure period) of each year, commencing
in March 2007, the Master Servicer, the Securities Administrator and the
Custodian each at its own expense, shall furnish or otherwise make available,
and each such party shall cause any Servicing Function Participant engaged by it
to furnish, each at its own expense, to the Securities
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Administrator and the Depositor, a report on an assessment of compliance with
the Relevant Servicing Criteria that contains (A) a statement by such party of
its responsibility for assessing compliance with the Relevant Servicing
Criteria, (B) a statement that such party used the Relevant Servicing Criteria
to assess compliance with the Relevant Servicing Criteria, (C) such party's
assessment of compliance with the Relevant Servicing Criteria as of and for the
fiscal year covered by the Form 10-K required to be filed pursuant to Sections
3.18(h), (i), (j) and (k), including, if there has been any material instance of
noncompliance with the Relevant Servicing Criteria, a discussion of each such
failure and the nature and status thereof, and (D) a statement that a registered
public accounting firm has issued an attestation report on such party's
assessment of compliance with the Relevant Servicing Criteria as of and for such
period.
No later than the end of each fiscal year for the Issuing Entity for which
a 10-K is required to be filed, the Master Servicer and the Custodian shall each
forward to the Securities Administrator and the Depositor the name of each
Servicing Function Participant engaged by it and what Relevant Servicing
Criteria will be addressed in the report on assessment of compliance prepared by
such Servicing Function Participant (provided, however, that the Master Servicer
need not provide such information to the Securities Administrator so long as the
Master Servicer and the Securities Administrator are the same Person). When the
Master Servicer, and the Securities Administrator (or any Servicing Function
Participant engaged by them) submit their assessments to the Securities
Administrator, such parties will also at such time include the assessment and
attestation pursuant to this Section 3.17 of each Servicing Function Participant
engaged by it.
Promptly after receipt of each report on assessment of compliance, (i) the
Depositor shall review each such report and, if applicable, consult with the
Servicer, the Master Servicer, the Securities Administrator and any Servicing
Function Participant engaged by any such party as to the nature of any material
instance of noncompliance with the Relevant Servicing Criteria by the Servicer
by each such party, and (ii) the Securities Administrator shall confirm that the
assessments individually address the Relevant Servicing Criteria for each party
as set forth on Exhibit K or any similar exhibit set forth in the Servicing
Agreement in respect of the Servicer and notify the Depositor of any exceptions.
The Master Servicer shall include all annual reports on assessment of
compliance received by it from the Servicer with its own assessment of
compliance to be submitted to the Securities Administrator pursuant to this
Section. For the avoidance of doubt, the Master Servicer and the Securities
Administrator may satisfy the requirements of this Section 3.17 and Section 3.17
of the Stack II Agreement relating to reports on assessment of compliance by
each delivering a single annual report on assessment of compliance containing
all of the information required pursuant to this Section 3.17 and Section 3.17
of the Stack II Agreement.
In the event the Master Servicer, the Securities Administrator or any
Servicing Function Participant engaged by any such party is terminated, assigns
its rights and obligations under or resigns pursuant to the terms of this
Agreement, or any other applicable agreement, as the case may be, such party
shall provide, an assessment of compliance pursuant to this Section 3.17,
coupled with an attestation as required in this Section 3.17, or such applicable
agreement notwithstanding any such termination, assignment or resignation.
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(b) Not later than March 1 of each calendar year (other than the
calendar year during which the Closing Date occurs) the Servicer at its own
expense, shall cause, and shall cause any Servicing Function Participant engaged
by it to cause (unless in the case of a Subcontractor, the Servicer has notified
the Depositor and the Master Servicer in writing that such report is not
required for the Subcontractor) a nationally or regionally recognized firm of
independent registered public accountants (who may also render other services to
the Servicer, the Master Servicer or any affiliate thereof) which is a member of
the American Institute of Certified Public Accountants to furnish a report (the
"Accountant's Attestation") to the Master Servicer, the Securities Administrator
and the Depositor to the effect that (i) it has obtained a representation
regarding certain matters from the management of such party, which includes an
assertion that such party has complied with the Relevant Servicing Criteria, and
(ii) on the basis of an examination conducted by such firm in accordance with
standards for attestation engagements issued or adopted by the Public Company
Accounting Oversight Board, it is expressing an opinion as to whether such
party's compliance with the Relevant Servicing Criteria was fairly stated in all
material respects, or it cannot express an overall opinion regarding such
party's assessment of compliance with the Relevant Servicing Criteria. In the
event that an overall opinion cannot be expressed, such registered public
accounting firm shall state in such report why it was unable to express such an
opinion. Such report must be available for general use and not contain
restricted use language. 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.
By March 1 (with a ten-calendar day cure period) of each year, commencing
in March 2007, the Master Servicer, the Securities Administrator and the
Custodian, each at its own expense, shall cause, and each such party shall cause
any Servicing Function Participant engaged by it to cause, each at its own
expense, a registered public accounting firm (which may also render other
services to the Master Servicer, the Trustee, the Securities Administrator, or
such other Servicing Function Participants, as the case may be) and that is a
member of the American Institute of Certified Public Accountants to furnish an
attestation report to the Securities Administrator and the Depositor, to the
effect that (i) it has obtained a representation regarding certain matters from
the management of such party, which includes an assertion that such party has
complied with the Relevant Servicing Criteria, and (ii) on the basis of an
examination conducted by such firm in accordance with standards for attestation
engagements issued or adopted by the Public Company Accounting Oversight Board,
it is expressing an opinion as to whether such party's compliance with the
Relevant Servicing Criteria was fairly stated in all material respects, or it
cannot express an overall opinion regarding such party's assessment of
compliance with the Relevant Servicing Criteria. In the event that an overall
opinion cannot be expressed, such registered public accounting firm shall state
in such report why it was unable to express such an opinion. Such report must be
available for general use and not contain restricted use language.
(c) Promptly after receipt of each assessment of compliance and
attestation report, the Securities Administrator shall confirm that each
assessment submitted pursuant to Section 3.17(a) is coupled with an attestation
meeting the requirements of Section 3.17(b) and notify the Depositor of any
exceptions.
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The Master Servicer shall include each such attestation furnished to it by
the Servicer with its own attestation to be submitted to the Securities
Administrator pursuant to this Section. For the avoidance of doubt, the Master
Servicer and the Securities Administrator may satisfy the requirements of this
Section 3.17 and Section 3.17 of the Stack II Agreement relating to attestations
by each delivering a single attestation containing all of the information
required pursuant to this Section 3.17 and Section 3.17 of the Stack II
Agreement.
In the event the Master Servicer, the Securities Administrator, the
Custodian, the Servicer or any Servicing Function Participant engaged by any
such party, is terminated, assigns its rights and duties under, or resigns
pursuant to the terms of, this Agreement, or any applicable Custodial Agreement,
Servicing Agreement or sub-servicing agreement, as the case may be, such party
shall cause a registered public accounting firm to provide an attestation
pursuant to this Section 3.17, or such other applicable agreement,
notwithstanding any such termination, assignment or resignation.
Section 3.18. Periodic Filings.
(a) Within four (4) Business Days after the occurrence of an event
requiring disclosure on Form 8-K (each such event, a "Reportable Event"), and if
requested by the Depositor, the Securities Administrator shall prepare and file
on behalf of the Issuing Entity a Form 8-K, as required by the Exchange Act,
provided that the Depositor shall file the initial Form 8-K in connection with
the issuance of the Certificates. Any disclosure or information related to a
Reportable Event or that is otherwise required to be included on Form 8-K (other
than the initial Form 8-K) ("Form 8-K Disclosure Information") shall be reported
by the parties set forth on Exhibit Q-3 to the Depositor and the Securities
Administrator and directed and approved by the Depositor, and the Securities
Administrator will have no duty or liability for any failure hereunder to
determine or prepare any Form 8-K Disclosure Information or any Form 8-K except
as set forth in the next paragraph.
(b) For so long as the Issuing Entity is subject to the reporting
requirements of the Exchange Act, following the occurrence of a Reportable Event
(A) each party listed on Exhibit Q-3 hereto shall use commercially reasonable
best efforts to provide immediate notice to the Master Servicer, the Securities
Administrator and the Depositor, by fax and by phone or by e-mail and by phone,
(B) each such party shall be required to provide to the Securities Administrator
and the Depositor, to the extent known, in XXXXX-compatible format or in such
other format as agreed upon by the Securities Administrator and such party, the
form and substance of any Form 8-K Disclosure Information if applicable,
together with the form set forth on Exhibit O (the "Additional Disclosure
Notification") by the close of business New York City time on the 2nd Business
Day following the occurrence of such Reportable Event and (C) the Depositor,
shall approve, as to form and substance, or disapprove, as the case may be, the
inclusion of the Form 8-K Disclosure Information on Form 8-K. The Securities
Administrator has no duty under this Agreement to monitor or enforce the
performance by the parties listed on Exhibit Q-3 of their duties under this
paragraph or proactively solicit or procure from such parties any Form 8-K
Disclosure Information. The Depositor will be responsible for any reasonable
fees and expenses assessed or incurred by the Securities Administrator in
connection with including any Form 8-K Disclosure Information on Form 8-K
pursuant to this paragraph.
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(c) After preparing the Form 8-K, the Securities Administrator shall,
upon request, forward electronically a copy of the Form 8-K to the Depositor.
Promptly, but no later than the close of business on the third Business Day
after the Reportable Event, the Depositor shall notify the Securities
Administrator in writing (which may be furnished electronically) of any changes
to or approval of such Form 8-K. In the absence of receipt of any written
changes or approval, or if the Depositor does not request a copy of a Form 8-K,
the Securities Administrator shall be entitled to assume that such Form 8-K is
in final form and the Securities Administrator may proceed with the process for
execution and filing of the Form 8-K. A duly authorized representative of the
Master Servicer shall sign each Form 8-K. If a Form 8-K cannot be filed on time
or if a previously filed Form 8-K needs to be amended, the Securities
Administrator will follow the procedures set forth in Section 3.18(n).
(d) Promptly (but no later than one Business Day) after filing with
the Commission, the Securities Administrator will make available on its internet
website a final executed copy of each Form 8-K prepared and filed by the
Securities Administrator. The parties to this Agreement acknowledge that the
performance by the Master Servicer and the Securities Administrator of its
duties under this Section 3.18 related to the timely preparation, execution and
filing of Form 8-K is contingent upon the other parties hereto strictly
observing all applicable deadlines in the performance of their duties under this
Section 3.18. The Depositor acknowledges that the performance by the Master
Servicer and the Securities Administrator of its duties under this Section 3.18
related to the timely preparation, execution and filing of Form 8-K is also
contingent upon the Servicer, the Custodian and any Servicing Function
Participant strictly observing deadlines no later than those set forth in this
paragraph that are applicable to the parties to this Agreement in the delivery
to the Securities Administrator of any necessary Form 8-K Disclosure Information
pursuant to the Servicing Agreement, the Custodial Agreement or any other
applicable agreement. Neither the Master Servicer nor the Securities
Administrator shall have any liability for any loss, expense, damage or claim
arising out of or with respect to any failure to properly prepare, execute
and/or timely file such Form 8-K, where such failure results from the Securities
Administrator's inability or failure to obtain or receive, on a timely basis,
any information from any other party hereto or the Servicer, Custodian or
Servicing Function Participant needed to prepare, arrange for execution or file
such Form 8-K.
(e) Within fifteen (15) days after each Distribution Date (subject to
permitted extensions under the Exchange Act), the Securities Administrator
shall, on behalf of the Issuing Entity and in accordance with industry
standards, prepare and file with the Commission via the Electronic Data
Gathering and Retrieval System (XXXXX), a Form 10-D with a copy of the Monthly
Statement for such Distribution Date as an exhibit thereto. Any disclosure in
addition to the Monthly Statement that is required to be included on Form 10-D
("Additional Form 10-D Disclosure") shall be reported by the parties set forth
on Exhibit Q-1 to the Depositor and the Securities Administrator and directed
and approved by the Depositor pursuant to the following paragraph, and the
Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-D Disclosure except as
set forth in the next paragraph.
(f) As set forth in Exhibit Q-1 hereto, for so long as the Issuing
Entity is subject to the reporting requirements of the Exchange Act, within five
(5) calendar days after the related Distribution Date (i) each party listed on
Exhibit Q-1 hereto shall be required to provide
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to the Depositor and the Securities Administrator, to the extent known, in
XXXXX-compatible format or in such other format as agreed upon by the Securities
Administrator and such party, the form and substance of any Additional Form 10-D
Disclosure if applicable together with an Additional Disclosure Notification,
and (ii) the Depositor will approve, as to form and substance, or disapprove, as
the case may be, the inclusion of the Additional Form 10-D Disclosure on Form
10-D. The Securities Administrator has no duty under this Agreement to monitor
or enforce the performance by the parties listed on Exhibit Q-1 of their duties
under this paragraph or proactively solicit or procure from such parties any
Additional Form 10-D Disclosure Information. The Depositor will be responsible
for any reasonable fees and expenses incurred by the Securities Administrator in
connection with including any Additional Form 10-D Disclosure on Form 10-D
pursuant to this paragraph.
(g) After preparing the Form 10-D, the Securities Administrator shall,
upon request, forward electronically a copy of the Form 10-D to the Depositor
(provided that such Form 10-D includes any Additional Form 10-D Disclosure).
Within two Business Days after receipt of such copy, but no later than the 12th
calendar day after the Distribution Date, the Depositor shall notify the
Securities Administrator in writing (which may be furnished electronically) of
any changes to or approval of such Form 10-D. In the absence of receipt of any
written changes or approval, or if the Depositor does not request a copy of a
Form 10-D, the Securities Administrator shall be entitled to assume that such
Form 10-D is in final form and the Securities Administrator may proceed with the
process for execution and filing of the Form 10-D. A duly authorized
representative of the Master Servicer shall sign each Form 10-D. If a Form 10-D
cannot be filed on time or if a previously filed Form 10-D needs to be amended,
the Securities Administrator will follow the procedures set forth in Section
3.18(n). Promptly (but not later than one Business Day) after filing with the
Commission, the Securities Administrator will make available on its internet
website a final executed copy of each Form 10-D prepared and filed by the
Securities Administrator. Form 10-D requires the registrant to indicate (by
checking "yes" or "no") that it "(1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days." The
Depositor hereby represents to the Securities Administrator that the Depositor
has filed all such required reports during the preceding 12 months and that it
has been subject to such filing requirement for the past 90 days. The Depositor
shall notify the Securities Administrator in writing, no later than the fifth
calendar day after the related Distribution Date with respect to the filing of a
report on Form 10-D, if the answer to the questions should be "no." The
Securities Administrator shall be entitled to rely on such representations in
preparing, executing and/or filing any such Form 10-D. The parties to this
Agreement acknowledge that the performance by the Master Servicer and the
Securities Administrator of its respective duties under this Section 3.18
related to the timely preparation, execution and filing of Form 10-D is
contingent upon the other parties hereto strictly observing all applicable
deadlines in the performance of their duties under this Section 3.18. The
Depositor acknowledges that the performance by the Master Servicer and the
Securities Administrator of its duties under this Section 3.18 related to the
timely preparation, execution and filing of Form 10-D is also contingent upon
the Servicer, the Custodian and any Servicing Function Participant strictly
observing deadlines no later than those set forth in this paragraph that are
applicable to the parties to this Agreement in the delivery to the Securities
Administrator of any necessary Additional Form 10-D Disclosure pursuant to the
Servicing Agreement, the Custodial Agreement or any other applicable agreement.
Neither the
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Master Servicer nor the Securities Administrator will have any liability for any
loss, expense, damage or claim arising out of or with respect to any failure to
properly prepare, execute and/or timely file such Form 10-D resulting from the
Securities Administrator's inability or failure to obtain or receive any
information needed to prepare, arrange for execution or file such Form 10-D on a
timely basis.
(h) On or prior to the 90th calendar day after the end of the fiscal
year for the Issuing Entity or such earlier date as may be required by the
Exchange Act (the "10-K Filing Deadline") (it being understood that the fiscal
year for the Issuing Entity ends on December 31st of each year) commencing in
March 2007, the Securities Administrator shall, on behalf of the Issuing Entity
and in accordance with industry standards, prepare and file with the Commission
via XXXXX a Form 10-K with respect to the Issuing Entity. Such Form 10-K shall
include the following items, in each case, as applicable, to the extent they
have been delivered to the Securities Administrator within the applicable time
frames set forth in this Agreement, the Servicing Agreement and Custodial
Agreement: (i) an annual compliance statement for the Master Servicer, the
Servicer, the Securities Administrator and any Servicing Function Participant
engaged by any such party (together with the Custodian, each a "Reporting
Servicer"), as described in Section 3.16 of this Agreement, the Servicing
Agreement and the Custodial Agreement; provided, however, that the Securities
Administrator, at its discretion, may omit from the Form 10-K any annual
compliance statement that is not required to be filed with such Form 10-K
pursuant to Regulation AB; (ii)(A) the annual reports on assessment of
compliance with Servicing Criteria for each Reporting Servicer (unless the
Depositor has determined that such compliance statement is not required by
Regulation AB), as described in Section 3.17 of this Agreement, the Servicing
Agreement and the Custodial Agreement, and (B) if any Reporting Servicer's
report on assessment of compliance with Servicing Criteria described in Section
3.17 identifies any material instance of noncompliance, disclosure identifying
such instance of noncompliance, or if any Reporting Servicer's report on
assessment of compliance with Servicing Criteria described in Section 3.17 of
this 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;
provided, however, that the Securities Administrator, at its discretion, may
omit from the Form 10-K any assessment of compliance or attestation report
described in clause (iii) below that is not required to be filed with such Form
10-K pursuant to Regulation AB; (iii)(A) the registered public accounting firm
attestation report for each Reporting Servicer, as described in Section 3.17 of
this Agreement, the Servicing Agreement and the Custodial Agreement, and (B) if
any registered public accounting firm attestation report described under Section
3.17 of this 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 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 L, executed by the senior officer in charge of
securitizations of the Master 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 reported by the parties as set
forth in Exhibit Q-2 to the Depositor and the Securities Administrator and
directed and approved by the Depositor pursuant to the following paragraph and
the Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-K Disclosure except or
set forth in the next paragraph.
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(i) As set forth in Exhibit Q-2 hereto, no later than March 1 (with a
ten calendar day cure period) of each year that the Issuing Entity is subject to
the Exchange Act reporting requirements, commencing in March 2007, (i) the
parties listed on Exhibit Q-2 hereto shall be required to provide to the
Depositor and the Securities Administrator, to the extent known, in
XXXXX-compatible format or in such other format as agreed upon by the Securities
Administrator and such party, the form and substance of any Additional Form 10-K
Disclosure, if applicable together with an Additional Disclosure Notification,
and (ii) the Depositor will approve, as to form and substance, or disapprove, as
the case may be, the inclusion of the Additional Form 10-K Disclosure and shall
forward such Additional Form 10-K Disclosure. The Securities Administrator has
no duty under this Agreement to monitor or enforce the performance by the
parties listed on Exhibit Q-2 of their duties under this paragraph or
proactively solicit or procure from such parties any Additional Form 10-K
Disclosure Information. The Depositor will be responsible for any reasonable
fees and expenses incurred by the Securities Administrator in connection with
including any Additional Form 10-K Disclosure on Form 10-K pursuant to this
paragraph.
(j) After preparing the Form 10-K, the Securities Administrator shall,
upon request, forward electronically a copy of the Form 10-K to the Depositor.
Within three Business Days after receipt of such copy, but no later than March
25th, the Depositor shall notify the Securities Administrator in writing (which
may be furnished electronically) of any changes to or approval of such Form
10-K. In the absence of receipt of any written changes or approval, or if the
Depositor does not request a copy of a Form 10-K, the Securities Administrator
shall be entitled to assume that such Form 10-K is in final form and the
Securities Administrator may proceed with the process for execution and filing
of the Form 10-K. A senior officer of the Master Servicer in charge of the
master servicing function shall sign the Form 10-K. If a Form 10-K cannot be
filed on time or if a previously filed Form 10-K needs to be amended, the
Securities Administrator will follow the procedures set forth in Section
3.18(n). Promptly (but no later than one Business Day) after filing with the
Commission, the Securities Administrator will make available on its internet
website a final executed copy of each Form 10-K prepared and filed by the
Securities Administrator. Form 10-K requires the registrant to indicate (by
checking "yes" or "no") that it "(1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days." The
Depositor hereby represents to the Securities Administrator that the Depositor
has filed all such required reports during the preceding 12 months and that it
has been subject to such filing requirement for the past 90 days. The Depositor
shall notify the Securities Administrator in writing, no later than the 15th
calendar day of March in any year in which the Trust is subject to the reporting
requirements of the Exchange Act, if the answer to the questions should be "no."
The Securities Administrator shall be entitled to rely on such representations
in preparing, executing and/or filing any such Form 10-D. The parties to this
Agreement acknowledge that the performance by the Master Servicer and the
Securities Administrator of its duties under this Section 3.18 related to the
timely preparation, execution and filing of Form 10-K is contingent upon such
parties (and any Servicing Function Participant) strictly observing all
applicable deadlines in the performance of their duties under this Section 3.18,
Section 3.16 and Section 3.17. The Depositor acknowledges that the performance
by the Master Servicer and the Securities Administrator of its duties under this
Section 3.18 related to the timely preparation, execution and filing of Form
10-K is also contingent upon the Servicer, the Custodian and any
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Servicing Function Participant strictly observing deadlines no later than those
set forth in this paragraph that are applicable to the parties to this Agreement
in the delivery to the Securities Administrator of any necessary Additional Form
10-K Disclosure, any annual statement of compliance and any assessment of
compliance and attestation pursuant to the Servicing Agreement, the Custodial
Agreement or any other applicable agreement. Neither the Master Servicer nor the
Securities Administrator shall have any liability for any loss, expense, damage
or claim arising out of or with respect to any failure to properly prepare,
execute and/or timely file such Form 10-K resulting from the Securities
Administrator's inability or failure to obtain or receive any information from
any other party hereto or the Servicer, Custodian or Servicing Function
Participant needed to prepare, execute or file such Form 10-K.
(k) Each Form 10-K shall include a Xxxxxxxx-Xxxxx Certification, which
shall be in the form attached hereto as Exhibit L. Each Servicer shall sign and
provide, and each of the Servicer, the Master Servicer and the Securities
Administrator shall cause any Servicing Function Participant engaged by it to
sign and provide, to the person who signs the Xxxxxxxx-Xxxxx Certification (the
"Certifying Person") by March 1 (with a ten day cure period) of each year in
which the Issuing Entity is subject to the reporting requirements of the
Exchange Act and otherwise within a reasonable period of time upon request, a
certification (a "Back-Up Certification") (in the form attached hereto as
Exhibit M) upon which the Certifying Person, the entity for which the Certifying
Person acts as an officer and such entity's officers, directors and affiliates
(collectively, with the Certifying Person, the "Certification Parties") can
reasonably rely. The senior officer of the Master Servicer in charge of the
master servicing function shall serve as the Certifying Person on behalf of the
Issuing Entity. Such officer of the Certifying Person can be contacted by e-mail
at xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx or by facsimile at 000-000-0000. In the
event any such party or Servicing Function Participant engaged by any such party
is terminated or resigns pursuant to the terms of this Agreement, or any other
applicable agreement, as the case may be, such party shall provide a Back-Up
Certification to the Master Servicer pursuant to this Section 3.18 with respect
to the period of time it was subject to this Agreement or any other applicable
agreement, as the case may be. Notwithstanding the foregoing, (i) the Master
Servicer and the Securities Administrator shall not be required to deliver a
Back-Up Certification to each other if both are the same Person and the Master
Servicer is the Certifying Person and (ii) the Master Servicer shall not be
obligated to sign the Xxxxxxxx-Xxxxx Certification in the event that it does not
receive any Back-Up Certification required to be furnished to it pursuant to
this section or the Servicing Agreement or Custodial Agreement.
(l) The Securities Administrator shall have no responsibility to file
any items with the Commission other than those specified in this section and the
Master Servicer shall execute any and all Form 10-Ds, 8-Ks and 10-Ks required
hereunder.
(m) On or prior to January 30 of the first year in which the
Securities Administrator is able to do so under applicable law, the Securities
Administrator shall prepare and file a Form 15 Suspension Notification relating
to the automatic suspension of reporting in respect of the Issuing Entity under
the Exchange Act.
(n) In the event that the Securities Administrator is unable to timely
file with the Commission all or any required portion of any Form 8-K, 10-D or
10-K required to be filed by this Agreement because required disclosure
information was either not delivered to it or delivered to it after the delivery
deadlines set forth in this Agreement or for any other reason, the
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Securities Administrator will promptly notify electronically the Depositor of
such inability to make a timely filing with the Commission. In the case of Form
10-D and 10-K, the parties to this Agreement will cooperate to prepare and file
a Form 12b-25 and a 10-D/A and 10K/A, as applicable, pursuant to Rule 12b-25 of
the Exchange Act. In the case of Form 8-K, the Securities Administrator will,
upon receipt of all required Form 8-K Disclosure Information and upon the
approval and direction of the Depositor, include such disclosure information on
the next succeeding Form 10-D to be filed for the Issuing Entity. In the event
that any previously filed Form 8-K, 10-D or 10-K needs to be amended, in
connection with any Additional Form 10-D Disclosure (other than, in the case of
Form 10-D, for the purpose of restating any Monthly Statement), Additional Form
10-K Disclosure or Form 8-K Disclosure Information, the Securities Administrator
will electronically notify the Depositor and such other parties to the
transaction as are affected by such amendment, and such parties will cooperate
to prepare any necessary 8-K/A, 10-D/A or 10-K/A. Any Form 15, Form 12b-25 or
any amendment to Form 8-K, 10-D or 10-K shall be signed by duly authorized
representative or a senior officer in charge of master servicing, as applicable,
of the Master Servicer. The parties to this Agreement acknowledge that the
performance by the Master Servicer of its duties under this Section 3.18 related
to the timely preparation, execution and filing of Form 15, a Form 12b-25 or any
amendment to Form 8-K, 10-D or 10-K is contingent upon each such party
performing its duties under this Section. Neither the Master Servicer nor the
Securities Administrator shall have any liability for any loss, expense, damage
or claim arising out of or with respect to any failure to properly prepare,
execute and/or timely file any such Form 15, Form 12b-25 or any amendments to
Forms 8-K, 10-D or 10-K, where such failure results from the Securities
Administrator's inability or failure to receive, on a timely basis, any
information from any other party hereto or the Servicer, any Custodian or any
Servicing Function Participant needed to prepare, arrange for execution or file
such Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K.
(o) The Depositor and the Securities Administrator agree to use their
good faith efforts to cooperate in complying with the requirements of this
Section 3.18.
(p) Each of the parties agrees to provide to the Securities
Administrator such additional information related to such party as the
Securities Administrator may reasonably request, including evidence of the
authorization of the person signing any certificate or statement, financial
information and reports, and such other information related to such party or its
performance hereunder.
(q) Any notice or notification required to be delivered by the
Securities Administrator or Master Servicer to the Depositor pursuant to this
Section 3.18, may be delivered via facsimile to (000) 000-0000, via email to
xxxx_xxxx@xx.xxx or telephonically by calling Xxxx Park at (000) 000-0000.
(r) For the avoidance of doubt, any filings or deliverables required
under this Section 3.18 and Section 3.18 of the Stack II Agreement, may be
prepared, delivered and filed in a consolidated manner. The Master Servicer, the
Securities Administrator and the Depositor may satisfy the requirements of this
Section 3.18 and Section 3.18 of the Stack II Agreement with a single set of
filings and deliverables addressing the requirements of both this Section 3.18
and Section 3.18 of the Stack II Agreement.
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Section 3.19. Compliance with Regulation AB. Each of the parties hereto
acknowledges and agrees that the purpose of Sections 3.16, 3.17 and 3.18 is to
facilitate compliance by 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 the
asset-backed securities markets, advice of counsel, or otherwise in respect of
the requirements of Regulation AB and the parties shall comply with requests
made by the Depositor for delivery of additional or different information as the
Depositor may determine in good faith is necessary to comply with the provisions
of Regulation AB. Any such supplementation or modification shall be made in
accordance with Section 11.02 without the consent of the Certificateholders, and
may result in a change in the reports filed by the Securities Administrator on
behalf of the Issuing Entity under the Exchange Act.
ARTICLE IV.
ACCOUNTS
Section 4.01. Protected Accounts.
(a) The Master Servicer shall enforce the obligation of the Servicer
to establish and maintain a Protected Account in accordance with the Servicing
Agreement, with records to be kept with respect thereto on a Mortgage Loan by
Mortgage Loan basis, into which accounts shall be deposited within two Business
Days (or as of such other time specified in the Servicing Agreement) of receipt
all collections of principal and interest on any Mortgage Loan and with respect
to any REO Property received by the Servicer, including Principal Prepayments,
Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries and advances
made from the Servicer's own funds (less servicing compensation as permitted by
the Servicing Agreement in the case of the Servicer) and all other amounts to be
deposited in the Protected Account. The Servicer is hereby authorized to make
withdrawals from and deposits to the related Protected Account for purposes
required or permitted by this Agreement. To the extent provided in the Servicing
Agreement, the Protected Account shall be held in a Designated Depository
Institution and segregated on the books of such institution in the name of the
Trustee for the benefit of Certificateholders.
(b) To the extent provided in the Servicing Agreement, amounts on
deposit in a Protected Account may be invested in Permitted Investments in the
name of the Trustee for the benefit of Certificateholders and, except as
provided in the preceding paragraph, not commingled with any other funds, such
Permitted Investments to mature, or to be subject to redemption or withdrawal,
no later than the date on which such funds are required to be withdrawn for
deposit in the Master Servicer Collection Account, and shall be held until
required for such deposit. The income earned from Permitted Investments made
pursuant to this Section 4.01 shall be paid to the Servicer under the Servicing
Agreement, and the risk of loss of moneys required to be distributed to the
Certificateholders resulting from such investments shall be borne by and be the
risk of the Servicer, as set forth in the Servicing Agreement. The Servicer (to
the extent provided in the Servicing Agreement) shall deposit the amount of any
such loss in the Protected Account within two Business Days of receipt of
notification of such loss but not later than the second Business Day prior to
the Distribution Date on which the moneys so invested are required to be
distributed to the Certificateholders.
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(c) To the extent provided in the Servicing Agreement and subject to
this Article IV, on or before the Servicer Remittance Date, the Servicer shall
withdraw or shall cause to be withdrawn from the Protected Accounts and shall
immediately deposit or cause to be deposited in the Master Servicer Collection
Account amounts representing the following collections and payments (other than
with respect to principal of or interest on the Mortgage Loans due on or before
the Cut-off Date):
(i) Monthly Payments on the Mortgage Loans received or any
related portion thereof advanced by the Servicer pursuant to the Servicing
Agreement which were due on or before the related Due Date, net of the amount
thereof comprising the Servicing Fees;
(ii) Principal Prepayments in Full and any Liquidation Proceeds
received by the Servicer with respect to such Mortgage Loans in the related
Prepayment Period, with interest to the date of prepayment or liquidation, net
of the amount thereof comprising the Servicing Fees;
(iii) Curtailments received by the Servicer for such Mortgage
Loans in the related Prepayment Period; and
(iv) Any amount to be used as a Monthly Advance.
(d) Withdrawals by the Master Servicer may be made from an Account
only to make remittances as provided in Section 4.01(c), 4.02 and 4.03; to
reimburse the Master Servicer or the Servicer for Monthly Advances which have
been recovered by subsequent collection from the related Mortgagor; to remove
amounts deposited in error; to remove fees, charges or other such amounts
deposited on a temporary basis; or to clear and terminate the account at the
termination of this Agreement in accordance with Section 10.01. As provided in
Sections 4.01(c) and 4.02(b) certain amounts otherwise due to the Servicer may
be retained by them as set forth in the Servicing Agreement and need not be
deposited in the Master Servicer Collection Account.
Section 4.02. Master Servicer Collection Account.
(a) The Master Servicer shall establish and maintain in the name of
the Trustee, for the benefit of the Certificateholders, the Master Servicer
Collection Account as a segregated trust account or accounts. The Master
Servicer Collection Account may be a sub-account of the Distribution Account.
The Master Servicer will deposit in the Master Servicer Collection Account as
identified by the Master Servicer and as received by the Master Servicer, the
following amounts:
(i) Any amounts withdrawn from a Protected Account or other
permitted account;
(ii) Any Monthly Advance and any Compensating Interest Payments;
(iii) Any Insurance Proceeds, Liquidation Proceeds or Subsequent
Recoveries received by or on behalf of the Master Servicer or which were not
deposited in a Protected Account or other permitted account;
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(iv) The repurchase price with respect to any Mortgage Loans
repurchased and all proceeds of any Mortgage Loans or property acquired in
connection with the optional termination of the trust;
(v) Any amounts required to be deposited with respect to losses
on investments of deposits in an Account; and
(vi) Any other amounts received by or on behalf of the Master
Servicer and required to be deposited in the Master Servicer Collection Account
pursuant to this Agreement.
(b) All amounts deposited to the Master Servicer Collection Account
shall be held by the Master Servicer in the name of the Trustee in trust for the
benefit of the Certificateholders in accordance with the terms and provisions of
this Agreement. The requirements for crediting the Master Servicer Collection
Account or the Distribution Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of (i) prepayment or late payment charges or assumption, tax service,
statement account or payoff, substitution, satisfaction, release and other like
fees and charges and (ii) the items enumerated in Subsections 4.05(a)(i), (ii),
(iii), (iv), (vi), (vii), (viii), (ix), (xi) and (xii) with respect to the
Securities Administrator, need not be credited by the Master Servicer or the
Servicer to the Distribution Account or the Master Servicer Collection Account,
as applicable. In the event that the Master Servicer shall deposit or cause to
be deposited to the Distribution Account any amount not required to be credited
thereto, the Securities Administrator, upon receipt of a written request
therefor signed by a Servicing Officer of the Master Servicer, shall promptly
transfer such amount to the Master Servicer from the Distribution Account, any
provision herein to the contrary notwithstanding.
(c) The amount at any time credited to the Master Servicer Collection
Account shall be invested, in the name of the Trustee, or its nominee, for the
benefit of the Certificateholders, in Permitted Investments as directed by
Master Servicer. All Permitted Investments shall mature or be subject to
redemption or withdrawal on or before, and shall be held until, the next
succeeding Distribution Account Deposit Date. Any and all investment earnings on
amounts on deposit in the Master Servicer Collection Account from time to time
shall be for the account of the Master Servicer. The Master Servicer from time
to time shall be permitted to withdraw or receive distribution of any and all
investment earnings from the Master Servicer Collection Account. The risk of
loss of moneys required to be distributed to the Certificateholders resulting
from such investments shall be borne by and be the risk of the Master Servicer.
The Master Servicer shall deposit the amount of any such loss in the Master
Servicer Collection Account within two Business Days of receipt of notification
of such loss but not later than the second Business Day prior to the
Distribution Date on which the moneys so invested are required to be distributed
to the Certificateholders.
(d) For the avoidance of doubt, it is agreed that the Master Servicer
shall establish and maintain in the name of the Trustee, for the benefit of the
holders of the Stack II Certificates, a separate segregated trust account or
accounts pursuant to Section 4.02 of the Stack II Agreement.
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Section 4.03. Permitted Withdrawals and Transfers from the Master Servicer
Collection Account.
(a) The Master Servicer will, from time to time on demand of the
Master Servicer, the Trustee or the Securities Administrator, make or cause to
be made such withdrawals or transfers from the Master Servicer Collection
Account as the Master Servicer has designated for such transfer or withdrawal
pursuant to the Servicing Agreement. The Master Servicer may clear and terminate
the Master Servicer Collection Account pursuant to Section 10.01 and remove
amounts from time to time deposited in error.
(b) On an ongoing basis, the Master Servicer shall withdraw from the
Master Servicer Collection Account (i) any expenses recoverable by the Trustee,
the Master Servicer or the Securities Administrator pursuant to this Agreement,
including but not limited to Sections 2.01(b), 3.03, 7.04 and 9.05 and (ii) any
amounts payable to the Master Servicer as set forth in Section 3.14.
(c) In addition, on or before each Distribution Account Deposit Date,
the Master Servicer shall deposit in the Distribution Account (or remit to the
Securities Administrator for deposit therein) any Monthly Advances required to
be made by the Master Servicer with respect to the Mortgage Loans.
(d) No later than 3:00 p.m. New York time on each Distribution Account
Deposit Date, the Master Servicer will transfer the Available Distribution
Amount on deposit in the Master Servicer Collection Account with respect to the
related Distribution Date to the Securities Administrator for deposit in the
Distribution Account.
Section 4.04. Distribution Account.
(a) The Securities Administrator shall establish and maintain in the
name of the Trustee, for the benefit of the Certificateholders, the Distribution
Account as a segregated trust account or accounts.
(b) All amounts deposited to the Distribution Account shall be held by
the Securities Administrator in the name of the Trustee in trust for the benefit
of the Certificateholders in accordance with the terms and provisions of this
Agreement.
(c) The Distribution Account shall constitute a trust account of the
Trust Fund segregated on the books of the Securities Administrator and held by
the Securities Administrator in trust in its Corporate Trust Office, and the
Distribution Account and the funds deposited therein shall not be subject to,
and shall be protected to the maximum extent permitted by applicable law from,
all claims, liens, and encumbrances of any creditors or depositors of the
Securities Administrator, the Trustee or the Master Servicer (whether made
directly, or indirectly through a liquidator or receiver of the Securities
Administrator, the Trustee or the Master Servicer). The Distribution Account
shall be an Eligible Account. The amount at any time credited to the
Distribution Account shall be (i) fully insured by the FDIC to the maximum
coverage provided thereby or (ii) invested in the name of the Trustee, in such
Permitted Investments selected by the Master Servicer or deposited in demand
deposits with such depository institutions as selected by the Master Servicer,
provided that time deposits of such
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depository institutions would be a Permitted Investment. All Permitted
Investments shall mature or be subject to redemption or withdrawal on or before,
and shall be held until, the next succeeding Distribution Date if the obligor
for such Permitted Investment is the Master Servicer or, if such obligor is any
other Person, the Business Day preceding such Distribution Date. All investment
earnings on amounts on deposit in the Distribution Account or benefit from funds
uninvested therein from time to time shall be for the account of the Securities
Administrator. The Securities Administrator shall be permitted to withdraw or
receive distribution of any and all investment earnings from the Distribution
Account on each Distribution Date. If there is any loss on a Permitted
Investment or demand deposit, the Securities Administrator shall deposit such
amount in the Distribution Account. With respect to the Distribution Account and
the funds deposited therein, the Securities Administrator shall take such action
as may be necessary to ensure that the Certificateholders shall be entitled to
the priorities afforded to such a trust account (in addition to a claim against
the estate of the Trust) as provided by 12 U.S.C. Section 92a(e), and applicable
regulations pursuant thereto, if applicable, or any applicable comparable state
statute applicable to state chartered banking corporations.
(d) For the avoidance of doubt, the Securities Administrator shall
establish and maintain in the name of the Trustee, for the benefit of the
holders of the Stack II Certificates, a separate segregated trust account or
accounts pursuant to Section 4.04 of the Stack II Agreement.
Section 4.05. Permitted Withdrawals and Transfers from the Distribution
Account.
(a) The Securities Administrator will, from time to time on demand of
the Master Servicer, make or cause to be made such withdrawals or transfers from
the Distribution Account as the Master Servicer has designated for such transfer
or withdrawal pursuant to the Servicing Agreement for the following purposes
(limited in the case of amounts due the Master Servicer to those not withdrawn
from the Master Servicer Collection Account in accordance with the terms of this
Agreement):
(i) to reimburse the Master Servicer or the Servicer for any
Monthly Advance of its own funds or any advance of the Servicer's own funds, the
right of the Master Servicer or the Servicer to reimbursement pursuant to this
subclause (i) being limited to amounts received on a particular Mortgage Loan
(including, for this purpose, the Purchase Price therefor, Insurance Proceeds
and Liquidation Proceeds) which represent late payments or recoveries of the
principal of or interest on such Mortgage Loan respecting which such Monthly
Advance or advance was made;
(ii) to reimburse the Master Servicer or the Servicer from
Insurance Proceeds or Liquidation Proceeds relating to a particular Mortgage
Loan for amounts expended by the Master Servicer or the Servicer in good faith
as a Servicing Advance in connection with the restoration of the related
Mortgaged Property which was damaged by an Uninsured Cause or in connection with
the liquidation of such Mortgage Loan;
(iii) to reimburse the Master Servicer or the Servicer from
Insurance Proceeds relating to a particular Mortgage Loan for insured expenses
incurred with respect to such Mortgage Loan and to reimburse the Master Servicer
or the Servicer from Liquidation Proceeds from a particular Mortgage Loan for
Liquidation Expenses incurred with respect to
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such Mortgage Loan; provided that the Master Servicer shall not be entitled to
reimbursement for Liquidation Expenses with respect to a Mortgage Loan to the
extent that (i) any amounts with respect to such Mortgage Loan were paid as
Excess Liquidation Proceeds pursuant to clause (xi) of this Subsection 4.05(a)
to the Master Servicer; and (ii) such Liquidation Expenses were not included in
the computation of such Excess Liquidation Proceeds;
(iv) to pay the Master Servicer or the Servicer, as appropriate,
from Liquidation Proceeds or Insurance Proceeds received in connection with the
liquidation of any Mortgage Loan, the amount which it or the Servicer would have
been entitled to receive under subclause (ix) of this Subsection 4.05(a) as
servicing compensation on account of each defaulted scheduled payment on such
Mortgage Loan if paid in a timely manner by the related Mortgagor;
(v) to pay the Master Servicer or the Servicer from the Purchase
Price for any Mortgage Loan, the amount which it or the Servicer would have been
entitled to receive under subclause (ix) of this Subsection 4.05(a) as servicing
compensation;
(vi) to reimburse the Master Servicer or the Servicer for
advances of funds pursuant to Sections, and the right to reimbursement pursuant
to this subclause being limited to amounts received on the related Mortgage Loan
(including, for this purpose, the Purchase Price therefor, Insurance Proceeds
and Liquidation Proceeds) which represent late recoveries of the payments for
which such advances were made;
(vii) to reimburse the Master Servicer or the Servicer for any
Monthly Advance or advance, after a Realized Loss has been allocated with
respect to the related Mortgage Loan, if the Monthly Advance or advance has not
been reimbursed pursuant to clauses (i) and (vi);
(viii) to pay the Master Servicer as set forth in Section 3.14;
(ix) to reimburse the Master Servicer for expenses, costs and
liabilities incurred by and reimbursable to it pursuant to this Agreement,
including but not limited to Sections 3.03, 7.04(c) and (d);
(x) to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds to the extent not retained by the
Servicer;
(xi) to reimburse or pay the Servicer any such amounts as are due
thereto under the Servicing Agreement and have not been retained by or paid to
the Servicer, to the extent provided in the Servicing Agreement;
(xii) to reimburse the Trustee or the Securities Administrator
for expenses, costs and liabilities incurred by or reimbursable to it pursuant
to this Agreement;
(xiii) to remove amounts deposited in error; and
(xiv) to clear and terminate the Distribution Account pursuant to
Section 9.01.
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(b) The Master Servicer shall keep and maintain separate accounting,
on a Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Distribution Account pursuant to subclauses (i) through
(vi), inclusive, and (viii) or with respect to any such amounts which would have
been covered by such subclauses had the amounts not been retained by the Master
Servicer without being deposited in the Distribution Account under Section
4.02(b).
(c) On each Distribution Date, the Securities Administrator shall
distribute the Available Distribution Amount to the Holders of the Certificates
in accordance with Section 6.01.
ARTICLE V.
CERTIFICATES
Section 5.01. The Certificates. The Certificates shall be executed by
manual or facsimile signature on behalf of the Securities Administrator by an
authorized officer. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures were affixed, authorized
to sign on behalf of the Securities Administrator shall bind the Issuing Entity,
notwithstanding that such individuals or any of them have ceased to be so
authorized prior to the authentication and delivery of such Certificates or did
not hold such offices at the date of such authentication and delivery. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form set forth as attached hereto executed
by the Securities Administrator by manual signature, and such certificate of
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. On
the Closing Date, the Securities Administrator shall authenticate the
Certificates to be issued at the written direction of the Depositor, or any
Affiliate thereof.
Section 5.02. Certificate Register; Registration of Transfer and Exchange
of Certificates.
(a) The Securities Administrator shall maintain, or cause to be
maintained in accordance with the provisions of Section 5.09 hereof, a
Certificate Register for the Trust Fund in which, subject to the provisions of
subsections (b) and (c) below and to such reasonable regulations as it may
prescribe, the Securities Administrator shall provide for the registration of
Certificates and of Transfers and exchanges of Certificates as herein provided.
Upon surrender for registration of Transfer of any Certificate, the Securities
Administrator shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same Class and of
like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Securities Administrator. Whenever any
Certificates are so surrendered for exchange, the Securities Administrator shall
execute, authenticate and deliver the Certificates that the Certificateholder
making the exchange is entitled to receive. Every Certificate presented or
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surrendered for registration of Transfer or exchange shall be accompanied by a
written instrument of Transfer in form satisfactory to the Securities
Administrator duly executed by the holder thereof or his attorney duly
authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required. All
Certificates surrendered for registration of Transfer or exchange shall be
canceled and subsequently destroyed by the Securities Administrator in
accordance with such Securities Administrator's customary procedures.
(b) No Transfer of a Class B Certificate shall be made unless such
Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a Transfer is to be made in reliance upon an exemption
from the Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
Transfer and such Certificateholder's prospective transferee shall (except with
respect to the initial transfer of a Class B Certificate by Xxxxxxx Xxxxx & Co.)
each certify to each Securities Administrator in writing the facts surrounding
the Transfer in substantially the form set forth in Exhibit F-1 (the "Transferor
Representation Letter") and (i) deliver a letter in substantially the form of
either Exhibit F-2 (the "Investor Representation Letter") or Exhibit F-3 (the
"Rule 144A Letter") or (ii) there shall be delivered to the Securities
Administrator an Opinion of Counsel that such Transfer may be made pursuant to
an exemption from the Securities Act, which Opinion of Counsel shall not be an
expense of the Depositor or the Securities Administrator. The Depositor shall
provide to any Holder of a Class B Certificate and any prospective transferee
designated by any such Holder, information regarding the related Certificates
and the Mortgage Loans and such other information as shall be necessary to
satisfy the condition to eligibility set forth in Rule 144A(d)(4) for Transfer
of any such Certificate without registration thereof under the Securities Act
pursuant to the registration exemption provided by Rule 144A. The Securities
Administrator shall cooperate with the Depositor in providing the Rule 144A
information referenced in the preceding sentence, including providing to the
Depositor such information in the possession of the Securities Administrator
regarding the Certificates, the Mortgage Loans and other matters regarding the
Trust Fund as the Depositor shall reasonably request to meet its obligation
under the preceding sentence. Each Holder of a Class B Certificate desiring to
effect such Transfer shall, and does hereby agree to, indemnify the Depositor
and the Securities Administrator against any liability that may result if the
Transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of an ERISA Restricted Certificate will be registered unless
the Securities Administrator has received (A) a representation 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 subject to any
state, local, federal, non-U.S. or other law substantively similar to the
foregoing provisions of ERISA or the Code ("Similar Law") (collectively, a
"Plan"), and is not directly or indirectly acquiring such Certificate for, on
behalf of, or with any assets of any such Plan, or (B) solely in the case of an
ERISA Restricted Certificate (I) if the Certificate has been the subject of an
ERISA-Qualifying Underwriting, a representation to the effect that such
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transferee is an insurance company that is acquiring the 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 (II) solely in the case of a Definitive Certificate, an
Opinion of Counsel satisfactory to the Securities Administrator, and upon which
the Securities Administrator shall be entitled to rely, to the effect that the
acquisition and holding of such Certificate will not constitute or result in a
nonexempt prohibited transaction under Title I of ERISA or Section 4975 of the
Code, or a violation of Similar Law, and will not subject the Securities
Administrator, the Master Servicer, the Trustee or the Depositor to any
obligation in addition to those expressly undertaken in this Agreement, which
Opinion of Counsel shall not be an expense of the Securities Administrator, the
Master Servicer, the Trustee or the Depositor.
Except in the case of a Definitive Certificate, the representations set
forth in the immediately preceding paragraph of this Subsection 5.02(b), other
than clause (B)(II) in the immediately preceding paragraph, shall be deemed to
have been made to the Securities Administrator by the transferee's acceptance of
an ERISA Restricted Certificate (or the acceptance by a Certificate Owner of the
beneficial interest in any Class of ERISA Restricted Certificates).
Notwithstanding any other provision herein to the contrary, any purported
transfer of an ERISA Restricted Certificate to or on behalf of a Plan without
the delivery to the Securities Administrator of a representation or an Opinion
of Counsel satisfactory to the Securities Administrator as described above shall
be void and of no effect. The Securities Administrator shall not be under any
liability to any Person for any registration or transfer of any ERISA Restricted
Certificate that is in fact not permitted by this Section 5.02(b), nor shall the
Trustee or the Securities Administrator 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 by the Securities Administrator in
accordance with the foregoing requirements. The Trustee or the Securities
Administrator shall be entitled, but not obligated, to recover from any Holder
of any ERISA Restricted Certificate that was in fact a Plan and that held such
Certificate in violation of this Section 5.02(b) all payments made on such ERISA
Restricted 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.
(c) [Reserved]
(d) [Reserved]
(e) The preparation and delivery of all certificates, opinions and
other writings referred to above in this Section 5.02 shall not be an expense of
the Issuing Entity, the Depositor or the Securities Administrator.
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates. If (a) any
mutilated Certificate is surrendered to the Securities Administrator or the
Securities Administrator receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and of the ownership thereof and
(b) there is delivered to the Securities Administrator such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the
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Securities Administrator that such Certificate has been acquired by a bona fide
purchaser, the Securities Administrator shall execute, authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like Class, tenor and Percentage Interest. In
connection with the issuance of any new Certificate under this Section 5.03, the
Securities Administrator may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Securities
Administrator) connected therewith. Any replacement Certificate issued pursuant
to this Section 5.03 shall constitute complete and indefeasible evidence of
ownership in the Trust Fund, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time. All Certificates
surrendered to the Securities Administrator under the terms of this Section 5.03
shall be canceled and destroyed by the Securities Administrator in accordance
with its standard procedures without liability on its part.
Section 5.04. Persons Deemed Owners. The Securities Administrator and any
agent of the Securities Administrator may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Securities Administrator, nor any agent of the
Securities Administrator shall be affected by any notice to the contrary.
Section 5.05. Access to List of Certificateholders' Names and Addresses. If
three or more Certificateholders (a) request such information in writing from
the Securities Administrator, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders propose to transmit or if the
Depositor shall request such information in writing from the Securities
Administrator, then the Securities Administrator shall, within ten Business Days
after the receipt of such request, provide the Depositor or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of the Trust Fund held by the Securities Administrator, if
any. The Depositor and every Certificateholder, by receiving and holding a
Certificate, agree that the Securities Administrator shall not be held
accountable by reason of the disclosure of any such information as to the list
of the Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 5.06. Book-Entry Certificates. The Regular Certificates, upon
original issuance, shall be issued in the form of one or more typewritten
Certificates representing the Book-Entry Certificates, to be delivered to the
Depository by or on behalf of the Depositor. The Book-Entry Certificates shall
initially be registered on the Certificate Register in the name of the
Depository or its nominee, and no Certificate Owner of a Book-Entry Certificate
will receive a definitive certificate representing such Certificate Owner's
interest in such Certificates, except as provided in Section 5.08. Unless and
until definitive, fully registered Certificates ("Definitive Certificates") have
been issued to the Certificate Owners of the Book-Entry Certificates pursuant to
Section 5.08:
(a) the provisions of this Section shall be in full force and effect;
(b) the Depositor and the Securities Administrator may deal with the
Depository and the Depository Participants for all purposes (including the
making of
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distributions) as the authorized representative of the respective Certificate
Owners of the Book-Entry Certificates;
(c) registration of the Book-Entry Certificates may not be transferred
by the Securities Administrator except to another Depository;
(d) the rights of the respective Certificate Owners of the Book-Entry
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of the Book-Entry Certificates and the Depository and/or the
Depository Participants. Pursuant to the Depository Agreement, unless and until
Definitive Certificates are issued pursuant to Section 5.08, the Depository will
make book-entry transfers among the Depository Participants and receive and
transmit distributions of principal and interest on the related Certificates to
such Depository Participants;
(e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;
(f) the Securities Administrator may rely and shall be fully protected
in relying upon information furnished by the Depository with respect to its
Depository Participants; and
(g) to the extent that the provisions of this Section conflict with
any other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of the aggregate unpaid principal amount of
any Class of Certificates, such direction or consent may be given by Certificate
Owners (acting through the Depository and the Depository Participants) owning
Book-Entry Certificates evidencing the requisite percentage of principal amount
of such Class of Certificates.
Section 5.07. Notices to Depository. Whenever any notice or other
communication is required to be given to Certificateholders of the Class with
respect to which Book-Entry Certificates have been issued, unless and until
Definitive Certificates shall have been issued to the related Certificate
Owners, the Securities Administrator shall give all such notices and
communications to the Depository.
Section 5.08. Definitive Certificates. If, after Book-Entry Certificates
have been issued with respect to any Certificates, (a) the Depository or the
Depositor advises the Securities Administrator that the Depository is no longer
willing, qualified or able to discharge properly its responsibilities under the
Depository Agreement with respect to such Certificates and the Securities
Administrator or the Depositor is unable to locate a qualified successor, (b)
the Depositor notifies the Securities Administrator and the Depository of its
intent to terminate the book-entry system through the Depository and, upon
receipt of notice of such intent from the Depository, the Certificate Owners of
the Book-Entry Certificates agree to initiate such termination or (c) after the
occurrence and continuation of an Event of Default, Certificate Owners of such
Book-Entry Certificates having not less than 51% of the Voting Rights
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evidenced by any Class of Book-Entry Certificates advise the Securities
Administrator and the Depository in writing through the Depository Participants
that the continuation of a book-entry system with respect to Certificates of
such Class through the Depository (or its successor) is no longer in the best
interests of the Certificate Owners of such Class, then the Securities
Administrator shall notify all Certificate Owners of such Book-Entry
Certificates, through the Depository, of the occurrence of any such event and of
the availability of Definitive Certificates to Certificate Owners of such Class
requesting the same. The Depositor shall provide the Securities Administrator
with an adequate inventory of certificates to facilitate the issuance and
transfer of Definitive Certificates. Upon surrender to the Securities
Administrator of any such Certificates by the Depository, accompanied by
registration instructions from the Depository for registration, the Securities
Administrator shall authenticate and deliver such Definitive Certificates.
Neither the Depositor nor the Securities Administrator shall be liable for any
delay in delivery of such instructions and each may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of such
Definitive Certificates, all references herein to obligations imposed upon or to
be performed by the Depository shall be deemed to be imposed upon and performed
by the Securities Administrator, to the extent applicable with respect to such
Definitive Certificates and the Securities Administrator shall recognize the
Holders of such Definitive Certificates as Certificateholders hereunder.
Section 5.09. Maintenance of Office or Agency. The Securities Administrator
will maintain or cause to be maintained at its expense an office or offices or
agency or agencies where Certificates may be surrendered for registration of
transfer or exchange. The Securities Administrator initially designates its
offices at Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000,
Attention: Corporate Trust Services - Xxxxxxx Xxxxx Mortgage Investors Trust,
Series 2006-AF2 as offices for such purposes. The Securities Administrator will
give prompt written notice to the Certificateholders of any change in such
location of any such office or agency. For the avoidance of doubt, the
Securities Administrator may satisfy the requirements of both this Section 5.09
and Section 5.09 of the Stack II Agreement by maintaining a single office or
agency.
ARTICLE VI.
PAYMENTS TO CERTIFICATEHOLDERS
Section 6.01. Distributions. Interest and principal on the Certificates
will be distributed by the Securities Administrator monthly on each Distribution
Date, commencing in November 2006, as instructed by the Master Servicer, in an
aggregate amount equal to the sum of the Available Distribution Amount for such
Distribution Date.
(I) Prior to the Credit Support Depletion Date, the Available Distribution
Amount shall be applied as follows:
(a) On each Distribution Date, the Securities Administrator shall
apply an amount equal to the Available Distribution Amount in the following
order of priority:
(i) Concurrently to the Class AF-1, Class AF-2, Class AF-3 and
the Class IO Certificates, all amounts distributable pursuant to (I)(b)(i) and
(I)(b)(iv);
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(ii) the balance, if any, of the Available Distribution Amount
shall be distributed concurrently, (A) to the Class AF-1, Class AF-2, Class AF-3
and Class IO Certificates in the amounts distributable pursuant to (I)(b)(ii)
below, up to the Non-PO Senior Optimal Principal Amount and (B) to Class PO
Certificates, the Class PO Amount pursuant to (I)(b)(ii) below;
(iii) to the Class PO Certificates, the Class PO Shortfall
Amount, in accordance with paragraph (I)(b)(iii) below;
(iv) 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 (iii) above,
in accordance with, and up to the amount calculated pursuant to, Section
6.01(I)(c) below;
(v) 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 (iv)
above, in accordance with, and up to the amounts calculated pursuant to, Section
6.01(I)(d) below; and
(vi) 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 (v) 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:
(1) to the Class AF-1 Certificateholders, (1) the Class AF-1
Interest Accrual Amount plus (2) the Class AF-1 Shortfall from the preceding
Distribution Date;
(2) to the Class AF-2 Certificateholders, (1) the Class AF-2
Interest Accrual Amount plus (2) the Class AF-2 Shortfall from the preceding
Distribution Date;
(3) to the Class AF-3 Certificateholders, (1) the Class AF-1
Interest Accrual Amount plus (2) the Class AF-3 Shortfall from the preceding
Distribution Date; and;
(4) to the Class IO Certificateholders, the sum of (a) the
Class IO Interest Accrual Amount plus (b) the Class IO Shortfall from the
preceding Distribution Date;
(ii) concurrently, (A) to the Class AF-1, Class AF-2, Class AF-3
and Class IO Certificates, up to the Non-PO Senior Optimal Principal Amount,
allocated among the Class AF-1, Class AF-2, Class AF-3 and Class IO Certificates
in accordance with the Non-PO Senior Principal Payment Rules and (B) to the
Class PO Certificates, the Class PO Amount ;
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(iii) to the Class PO Certificateholders the Class PO Shortfall
Amount provided, however, that any amount distributed pursuant to this Section
6.01(I)(b)(iii) shall not cause a further reduction in the principal balance of
the Class PO Certificates; and
(iv) If the Available Distribution Amount is insufficient to make
the distributions set forth in paragraphs (I)(b)(i) above, the Securities
Administrator shall distribute the Available Distribution Amount to the Class
AF-1, Class AF-2, Class AF-3 and Class IO Certificates pro rata in accordance
with the amounts otherwise distributable to them pursuant to paragraph (I)(b)(i)
above.
(c) Amounts payable on any Distribution Date to the Class M
Certificateholders pursuant to Section 6.01(I)(a)(iv) shall be distributed in
the following priority:
(i) first, to the Class MF-1 Certificateholders, up to an amount
equal to (A) the Class MF-1 Interest Accrual Amount plus (B) the Class MF-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 MF-1
Certificates in accordance with Section 6.01(I)(e) plus (D) any Carry-over
Subordinated Principal Amounts with respect to the Class MF-1 Certificates;
(ii) second, to the Class MF-2 Certificateholders, up to an
amount equal to (A) the Class MF-2 Interest Accrual Amount plus (B) the Class
MF-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 MF-2 Certificates in accordance with Section 6.01(I)(e) plus (D) any
Carry-over Subordinated Principal Amounts with respect to the Class MF-2
Certificates plus (E) any portion of the Subordinated Optimal Principal Amount
allocated to the Class MF-1 Certificates in excess of the Class Certificate
Balance of such Class;
(iii) third, to the Class MF-3 Certificateholders, up to an
amount equal to (A) the Class MF-3 Interest Accrual Amount plus (B) the Class
MF-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 MF-3 Certificates in accordance with Section 6.01(I)(e) plus (D) any
Carry-over Subordinated Principal Amounts with respect to the Class MF-3
Certificates plus (E) any portion of the Subordinated Optimal Principal Amount
allocated to the Class MF-2 Certificates in excess of the Class Certificate
Balance of such Class;
(d) Amounts payable on any Distribution Date to the Class B
Certificateholders pursuant to Section 6.01(I)(a)(v) shall be distributed in the
following priority:
(i) first, to the Class BF-1 Certificateholders, up to an amount
equal to (A) the Class BF-1 Interest Accrual Amount plus (B) the Class BF-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 BF-1
Certificates in accordance with Section 6.01(I)(e) plus (D) any Carry-over
Subordinated Principal Amounts with respect to the Class BF-1 Certificates plus
(E) any portion of the Subordinated Optimal Principal Amount allocated to the
Class M Certificates in excess of the Class Certificate Balance of such Class;
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(ii) second, to the Class BF-2 Certificateholders, up to an
amount equal to (A) the Class BF-2 Interest Accrual Amount plus (B) the Class
BF-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 BF-2 Certificates in accordance with Section 6.01(I)(e) plus (D) any
Carry-over Subordinated Principal Amounts with respect to the Class BF-2
Certificates plus (E) any portion of the Subordinated Optimal Principal Amount
allocated to the Class BF-1 Certificates in excess of the Class Certificate
Balance of such Class; and
(iii) third, to the Class BF-3 Certificateholders, up to an
amount equal to (A) the Class BF-3 Interest Accrual Amount plus (B) the Class
BF-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 BF-3 Certificates in accordance with Section 6.01(I)(e) plus (D) any
Carry-over Subordinated Principal Amounts with respect to the Class BF-3
Certificates plus (E) any portion of the Subordinated Optimal Principal Amount
allocated to the Class BF-2 Certificates in excess of the Class Certificate
Balance of such Class.
(e) On each Distribution Date, the Subordinated Optimal Principal
Amount shall be allocated among the Classes of Subordinate Certificates
entitled, pursuant to the next succeeding sentence, to an allocation of
principal on such Distribution Date, pro rata based upon the Class Certificate
Balances of all such Classes so entitled. With respect to the Subordinate
Certificates, on each Distribution Date, principal shall be distributable to (1)
any Class of Subordinate 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 Subordinate Certificates which does not meet the
criteria in (1) above; and (3) the Class BF-3 Certificates if all other
outstanding Classes of Subordinate Certificates meet the criteria in (1) above
or if no other Class of Subordinate Certificates is outstanding; provided,
however, that no Class of Subordinate Certificates shall receive any
distributions of principal if any Class of Subordinate Certificates having a
lower numerical class designation than such Class fails to meet the criteria in
(1) above. For purposes of this paragraph, the Class M Certificates shall be
deemed to have a lower numerical class designation than each Class of Class B
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), second, in respect of principal to each Class of the
Class A Certificates, pro rata, based upon their respective outstanding
balances, and, third, the balance remaining after such distributions, if any, to
the Class A-R Certificate.
Section 6.02. 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; and (ii) the respective portions of such Realized
Losses allocable to interest and to principal.
(b) The principal portion of any Realized Losses shall be allocated as
follows: first, to the Class BF-3 Certificates until the Class Certificate
Balance of the Class BF-3 Certificates has been reduced to zero; second, to the
Class BF-2 Certificates until the Class
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Certificate Balance of the Class BF-2 Certificates has been reduced to zero;
third, to Class BF-1 Certificates until the Class Certificate Balance of the
Class BF-1 Certificates has been reduced to zero; fourth, to the Class MF-3
Certificates until the Class Certificate Balance of the Class MF-3 Certificates
has been reduced to zero; fifth, to the Class MF-2 Certificates until the Class
Certificate Balance of the Class MF-2 Certificates has been reduced to zero;
sixth, to the Class MF-1 Certificates until the Class Certificate Balance of the
Class MF-1 Certificates has been reduced to zero; and seventh, to the Senior
Certificates (other than the PO Certificates), on a pro rata basis based on
their outstanding Certificate Balance (i) to the Class AF-1 Certificates and
(ii) first, to the Class AF-3 Certificates, until the Class Certificate Balance
of the Class AF-3 Certificates has been reduced to zero; and then to the Class
AF-2 Certificates, until the Class Certificate Balance of such class 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 PO
Certificates and (b) the remainder of such Realized Loss will be allocated as
described above.
(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 Class Certificate Balances 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.
(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 Master Servicer Collection Account and distributed on the
applicable Distribution Date.
Section 6.03. 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 Certificateholders to receive
distributions in respect of the Class 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
BF-1 Certificateholders to receive distributions in respect of the Class BF-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 BF-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 Class MF-1 Certificateholders to receive distributions in respect of the
Class MF-1 Certificates on any Distribution Date shall be subordinate to the
rights of the Class A Certificateholders to receive distributions in respect of
such Class A Certificates. Each Class of Class M Certificates (other than the
Class MF-1 Certificates) is subordinated to the Class A Certificates and each
Class of Class M Certificates having a lower numerical class designation than
such Class of Class M Certificates.
Section 6.04. Payments.
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(a) On each Distribution Date, other than the final Distribution Date,
the Securities Administrator shall distribute to each Certificateholder of
record on the directly preceding Record Date the Certificateholder's pro rata
share of its Class (based on the aggregate Percentage Interest represented by
such Holder's Certificates) of all amounts required to be distributed on such
Distribution Date to such Class, based solely on information provided to the
Securities Administrator by the Master Servicer. The Securities Administrator
shall calculate the amount to be distributed to each Class and, based on such
amounts, the Securities Administrator shall determine the amount to be
distributed to each Certificateholder. All of the Securities Administrator's
calculations of payments shall be based solely on information provided to the
Securities Administrator by the Master Servicer or the Servicer. The Securities
Administrator shall not be required to confirm, verify or recompute any such
information but shall be entitled to rely conclusively on such information.
(b) Payment of the above amounts to each Certificateholder shall be
made (i) by check mailed to each Certificateholder entitled thereto at the
address appearing in the Certificate Register or (ii) upon receipt by the
Securities Administrator on or before the fifth Business Day preceding the
Record Date of written instructions from a Certificateholder by wire transfer to
a United States dollar account maintained by the payee at any United States
depository institution with appropriate facilities for receiving such a wire
transfer; provided, however, that the final payment in respect of each Class of
Certificates will be made only upon presentation and surrender of such
respective Certificates at the office or agency of the Securities Administrator
specified in the notice to Certificateholders of such final payment.
Section 6.05. Statements to Certificateholders.
(a) Concurrently with each distribution to Certificateholders, the
Securities Administrator shall make available to the parties hereto and each
Certificateholder via the Securities Administrator's internet website as set
forth below, the following information (such information the "Monthly
Statement"):
(i) the amount of the distribution made on such Distribution Date
to the Holders of each Class of Certificates, separately identified;
(ii) the amount of distributions made on such Distribution Date
allocable to principal, separately identifying the aggregate amount of any
Principal Prepayment or other unscheduled receivers of principal included in
that amount the amount of the distribution made on such Distribution Date to the
Holders of each Class of Certificates allocable to interest, separately
identified;
(iii) the amount the Servicing Fee during the related Due Period
;
(iv) the amount of Monthly Advances for the related Due Period;
(v) the aggregate Principal Balance at the close of business at
the end of the related Due Period;
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(vi) the number, Principal Balance, weighted average remaining
term to maturity and weighted average Mortgage Interest Rate of the Mortgage
Loans as of the related Due Date;
(vii) the number and aggregate unpaid principal balance of the
Mortgage Loans (a) one month, two months or three months delinquent on a
contractual basis, (b) as to which foreclosure proceedings have been commenced
and (c) in bankruptcy as of the close of business on the last day of the
calendar month preceding such Distribution Date determined in accordance with
the MBA method;
(viii) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number and the Principal
Balance of such Mortgage Loan as of the last day of the related Due Period and
the date of acquisition of the REO Property;
(ix) the book value of any REO Property as of the close of
business on the last Business Day of the calendar month preceding the
Distribution Date, and, cumulatively, the total number and cumulative principal
balance of all REO Properties as of the close of business of the last day of the
preceding Due Period;
(x) the aggregate amount of Principal Prepayments made during the
related Prepayment Period;
(xi) the amount of Realized Losses incurred during the related
Due Period and the cumulative amount of Realized Losses since the Closing Date;
(xii) the amount of Realized Losses, if any, allocated to each
class of Certificates on that Distribution Date;
(xiii) the aggregate amount of Extraordinary Trust Fund Expenses
withdrawn from the Master Servicer Collection Account for such Distribution
Date;
(xiv) the Class Certificate Balance or Notional Amount, as
applicable, of each Class of Certificates, after giving effect to the
distributions made on such Distribution Date;
(xv) the amount of any Prepayment Interest Shortfalls for such
Distribution Date to the extent not covered by Compensating Interest Payments by
the Servicer or the Master Servicer pursuant to the Servicing Agreement or
Section 6.06 and the related accrued interest thereon, with respect to each
Class of Certificates;
(xvi) the Available Distribution Amount;
(xvii) the Certificate Rate for each Class of Certificates for
such Distribution Date; and
(xviii) the Pro Rata Senior Percentage, Senior Percentage and
Subordinate Percentage for the Mortgage Loans for the following Distribution
Date;
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(xix) the amount of compensating interest shortfalls, if any,
allocated to each Class of Certificates on such Distribution Date;
(xx) the aggregate Principal Balance of Mortgage Loans from
purchased by the Seller during the related Due Period and indicating the Section
of this Agreement requiring or allowing the purchase of each such Mortgage Loan.
The information set forth above shall be calculated or reported, as the
case may be, by the Securities Administrator, based solely on, and to the extent
of, information provided to the Securities Administrator by the Master Servicer.
The Securities Administrator may conclusively rely on such information and shall
not be required to confirm, verify or recalculate any such information.
The Securities Administrator may make available each month, to any
interested party, the Monthly Statement to Certificateholders via the Securities
Administrator's website initially located at "xxx.xxxxxxx.xxx." Assistance in
using the website can be obtained by calling the Securities Administrator's
customer service desk at (000) 000-0000. Parties that are unable to use the
above distribution option are entitled to have a paper copy mailed to them via
first class mail by calling the customer service desk and indicating such. The
Securities Administrator shall have the right to change the way such reports are
distributed in order to make such distribution more convenient and/or more
accessible to the parties, and the Securities Administrator shall provide timely
and adequate notification to all parties regarding any such change.
(b) By January 30 of each year beginning in 2007, if so requested in
writing, the Securities Administrator will furnish such report to each Holder of
the Certificates of record at any time during the prior calendar year as to the
aggregate of amounts reported pursuant to subclauses (a)(ii) and (a)(v) above
with respect to the Certificates, plus information with respect to the amount of
servicing compensation and such other customary information as the Securities
Administrator may determine to be necessary and/or to be required by the
Internal Revenue Service or by a federal or state law or rules or regulations to
enable such Holders to prepare their tax returns for such calendar year. Such
obligations shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Securities
Administrator pursuant to the requirements of the Code.
(c) The Securities Administrator may satisfy the requirements of this
Section 6.05 and Section 6.03 of the Stack II Agreement via a single Monthly
Statement, provided that such Monthly Statement adequately addresses all of the
content and delivery requirements contained in both this Section 6.05 and
Section 6.03 of the Stack II Agreement.
Section 6.06. Monthly Advances. If the Monthly Payment on a Mortgage Loan
that was due on a related Due Date and is delinquent other than as a result of
application of the Relief Act and for which the Servicer was required to make an
advance pursuant to the Servicing Agreement exceeds the amount deposited in the
Master Servicer Collection Account that will be used for a Monthly Advance with
respect to such Mortgage Loan, the Master Servicer will deposit in the Master
Servicer Collection Account not later than the Distribution Account Deposit Date
immediately preceding the related Distribution Date an amount equal to such
deficiency, net of the Servicing Fee for such Mortgage Loan, except to the
extent the Master
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Servicer determines any such Monthly Advance to be nonrecoverable from
Liquidation Proceeds, Insurance Proceeds or future payments on the Mortgage Loan
for which such Monthly Advance was made. If the Master Servicer has not
deposited the amount described above as of the related Distribution Account
Deposit Date, the Trustee will, subject to applicable law and its determination
of recoverability, deposit in the Master Servicer Collection Account not later
than the related Distribution Date, an amount equal to the remaining deficiency
as of the Distribution Account Deposit Date. Subject to the foregoing, the
Master Servicer shall continue to make such Monthly Advances through the date
that the Servicer is required to do so under its Servicing Agreement. If
applicable, on the Distribution Account Deposit Date, the Master Servicer shall
present an Officer's Certificate to the Securities Administrator (i) stating
that the Master Servicer elects not to make a Monthly Advance in a stated amount
and (ii) detailing the reason it deems the advance to be nonrecoverable.
Section 6.07. Compensating Interest Payments. The Master Servicer shall
deposit in the Master Servicer Collection Account not later than each
Distribution Account Deposit Date an amount equal to the aggregate amounts
required to be paid by the Servicer under the Servicing Agreement with respect
to subclause (a) of the definition of Prepayment Interest Shortfall with respect
to the Mortgage Loans for the related Distribution Date, and not so paid by the
Servicer (such amount, the "Compensating Interest Payment"). The Master Servicer
shall not be entitled to any reimbursement of any Compensating Interest Payment;
provided, however, the aggregate compensating interest payments made by the
Master Servicer shall not exceed the Master Servicing Compensation.
Section 6.08. Allocation of Certain Interest Shortfalls.
(a) On any Distribution Date, the excess, if any, of (X) the aggregate
amounts required to be paid by the Servicer under the Servicing Agreement with
respect to subclause (a) of the definition of Prepayment Interest Shortfall with
respect to the Mortgage Loans for the related Distribution Date, and not so paid
by the Servicer over (Y) the Compensating Interest Payment actually paid into
the Master Servicer Collection Account pursuant to Section 6.06 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 to which each
such Class would otherwise be paid on such Distribution Date had there been no
such Compensating Interest Shortfall.
(b) On any Distribution Date, the interest portion of any Realized
Losses ("Realized Loss Interest Shortfall") shall be allocated to the Class of
Subordinate Certificates then outstanding having the highest numerical class
designation or, if no Class of Subordinate Certificates is then outstanding, to
the Class A Certificates (other than the Class PO Certificates) pro rata among
the outstanding Classes of Class A Certificates (other than the Class PO
Certificates) based on the amount of interest to which each such Class would
otherwise be entitled on such Distribution Date had there been no such Realized
Loss Interest Shortfall.
(c) Any interest shortfall resulting from the Relief Act or any
similar state legislation, as amended shall be allocated pro rata among the
outstanding Classes of Certificates based upon the amount of interest to which
each such Class would otherwise be paid on such Distribution Date.
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ARTICLE VII.
THE MASTER SERVICER AND THE DEPOSITOR
Section 7.01. Liabilities of the Master Servicer. The Master Servicer shall
be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by the Master Servicer, as the case may
be, herein. The Depositor shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by the
Depositor.
Section 7.02. Merger or Consolidation of the Master Servicer.
(a) Each of the Master Servicer and the Depositor will keep in full
force and effect its existence, rights and franchises as a corporation under the
laws of the state of its incorporation, 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.
(b) Any Person into which the Master Servicer or the Depositor may be
merged or consolidated, or any corporation resulting from any merger or
consolidation to which the Master Servicer shall be a party, or any Person
succeeding to the business of the Master Servicer, shall be the successor of the
Master Servicer hereunder, without the execution or filing of any paper or
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 7.03. Indemnification from the Master Servicer and the Depositor.
(a) The Master Servicer agrees to indemnify the Indemnified Persons
for, and to hold them harmless against, any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on their
part that may be sustained in connection with, arising out of, or relating to,
any claim or legal action (including any pending or threatened claim or legal
action) relating to this Agreement or the Certificates (i) related to the Master
Servicer's failure to perform its duties in compliance with this Agreement
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) or (ii) incurred by reason of the Master Servicer's
willful misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder, provided, in each case, that with respect to any such claim or legal
action (or pending or threatened claim or legal action), the Trustee or the
Securities Administrator shall have given the Master Servicer and the Depositor
written notice of such claim or legal action promptly after the Trustee or the
Securities Administrator shall have received knowledge thereof. This indemnity
shall survive the resignation or removal of the Trustee, Master Servicer or the
Securities Administrator and the termination of this Agreement.
(b) The Depositor will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise referred to in
Subsection (a) above.
Section 7.04. Limitations on Liability of the Master Servicer and Others.
Subject to the obligation of the Master Servicer to indemnify the Indemnified
Persons pursuant to Section 7.03:
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(a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Indemnified Persons, the Depositor, the Issuing Entity or the Certificateholders
for taking any action or for refraining from taking any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Master Servicer or any such Person against
any breach of warranties or representations made herein or any liability which
would otherwise be imposed by reason of such Person's willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder.
(b) The Master Servicer and any director, officer, employee or agent
of the Master Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder.
(c) The Master Servicer, the Custodian and any director, officer,
employee or agent of the Master Servicer or the Custodian shall be indemnified
by the Issuing Entity and held harmless thereby against any loss, liability or
expense (including reasonable legal fees and disbursements of counsel) incurred
on their part that may be sustained in connection with, arising out of, or
related to, any claim or legal action (including any pending or threatened claim
or legal action) relating to this Agreement, the Certificates or the Servicing
Agreement (except to the extent that the Master Servicer or the Custodian, as
the case may be, is indemnified by the Servicer thereunder), other than (i) any
such loss, liability or expense related to the Master Servicer's failure to
perform its duties in compliance with this Agreement (except as any such loss,
liability or expense shall be otherwise reimbursable pursuant to this
Agreement), or to the Custodian's failure to perform its duties under the
Custodial Agreement, respectively, or (ii) any such loss, liability or expense
incurred by reason of the Master Servicer's or the Custodian's willful
misfeasance, bad faith or gross negligence in the performance of duties
hereunder or under the Custodial Agreement, as applicable, or by reason of
reckless disregard of obligations and duties hereunder or under the Custodial
Agreement, as applicable.
(d) The Master Servicer shall not be under any obligation to appear
in, prosecute or defend any legal action that is not incidental to its duties
under this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, the Master Servicer may in its discretion,
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 and the
interests of the Certificateholders hereunder. In such event, the legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Issuing Entity, and the Master Servicer
shall be entitled to be reimbursed therefor out of the Master Servicer
Collection Account as provided by Section 4.03. Nothing in this Subsection
7.04(d) shall affect the Master Servicer's obligation to supervise, or to take
such actions as are necessary to ensure, the servicing and administration of the
Mortgage Loans pursuant to Section 3.01.
(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Master Servicer shall not be required to investigate or make recommendations
concerning potential liabilities which the Issuing Entity might incur as a
result of such course of action by reason of the condition of the Mortgaged
Properties but shall give notice to the Trustee if it has notice of such
potential liabilities.
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(f) The Master Servicer shall not be liable for any acts or omissions
of the Servicer, except as otherwise expressly provided herein.
Section 7.05. Master Servicer Not to Resign. Except as provided in Section
7.07, the Master Servicer shall not resign from the obligations and duties
hereby imposed on it except upon a determination that any such duties hereunder
are no longer permissible under applicable law and such impermissibility cannot
be cured. Any such determination permitting the resignation of the Master
Servicer shall be evidenced by an Opinion of Independent Counsel to such effect
delivered to the Trustee. No such resignation by the Master Servicer shall
become effective until MLML or the Trustee or a successor to the Master Servicer
reasonably satisfactory to the Trustee shall have assumed the responsibilities
and obligations of the Master Servicer in accordance with Section 8.02 hereof.
The Trustee shall notify the Rating Agencies of the resignation of the Master
Servicer. If the Master Servicer and the Securities Administrator are the same
entity, then at any time the Master Servicer is terminated as master servicer,
the Securities Administrator shall likewise be removed as securities
administrator.
Section 7.06. Successor Master Servicer. In connection with the appointment
of any successor Master Servicer or the assumption of the duties of the Master
Servicer, MLML or the Trustee may make such arrangements for the compensation of
such successor master servicer out of payments on the Mortgage Loans as MLML or
the Trustee and such successor master servicer shall agree. If the successor
master servicer does not agree that such market value is a fair price, such
successor master servicer shall obtain two quotations of market value from third
parties actively engaged in the servicing of single-family mortgage loans.
Notwithstanding anything herein to the contrary, in no event shall the
Trustee be liable for any Servicing Fee or master servicing fee or for any
differential in the amount of the Servicing Fee or master servicing fee paid
hereunder and the amount necessary to induce any successor servicer or successor
master servicer to act as successor servicer or successor master servicer, as
applicable, under this Agreement and the transactions set forth or provided for
herein.
Section 7.07. Sale and Assignment of Master Servicing. The Master Servicer
may sell and assign its rights and delegate its duties and obligations in its
entirety as Master Servicer under this Agreement; provided, however, that: (i)
the purchaser or transferee accepting such assignment and delegation (a) shall
be a Person which shall be qualified to service mortgage loans for Xxxxxx Xxx or
Xxxxxxx Mac; (b) shall have a net worth of not less than $10,000,000 (unless
otherwise approved by each Rating Agency pursuant to clause (ii) below); (c)
shall be reasonably satisfactory to the Trustee (as evidenced in a writing
signed by the Trustee); and (d) shall execute and deliver to the Trustee an
agreement, in form and substance reasonably satisfactory to 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 it as
master servicer under this Agreement, any custodial agreement from and after the
effective date of such agreement; (ii) each Rating Agency shall be given prior
written notice of the identity of the proposed successor to the Master Servicer
and each Rating Agency's rating of the Certificates in effect immediately prior
to such assignment, sale and delegation will not be downgraded, qualified or
withdrawn as a result of such assignment, sale and delegation, as evidenced by a
letter to such effect delivered to the Master Servicer and the Trustee; and
(iii) the Master Servicer assigning and selling the master servicing shall
deliver to the Trustee an Officer's Certificate and
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an Opinion of Independent Counsel, each stating that all conditions precedent to
such action under this Agreement have been completed and such action is
permitted by and complies with the terms of this Agreement. No such assignment
or delegation shall affect any liability of the Master Servicer arising prior to
the effective date thereof.
ARTICLE VIII.
DEFAULT
Section 8.01. Events of Default. "Event of Default," wherever used herein,
means any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body) and
only with respect to the defaulting Master Servicer:
(i) The Master Servicer fails to cause to be deposited in the
Distribution Account any amount so required to be deposited pursuant to this
Agreement, and such failure continues unremedied for a period of three Business
Days after the date upon which written notice of such failure, requiring the
same to be remedied, shall have been given to the Master Servicer; or
(ii) The Master Servicer fails to observe or perform in any
material respect any other material covenants and agreements set forth in this
Agreement to be performed by it, which covenants and agreements materially
affect the rights of Certificateholders, and such failure continues unremedied
for a period of 60 days after the date on which written notice of such failure,
properly requiring the same to be remedied, shall have been given to the Master
Servicer by the Trustee or to the Master Servicer and the Trustee by the Holders
of Certificates evidencing Percentage Interests aggregating not less than 25% of
the Trust Fund; or
(iii) There is entered against the Master Servicer a decree or
order by a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding up or liquidation of its affairs, and
the continuance of any such decree or order is unstayed and in effect for a
period of 60 consecutive days, or an involuntary case is commenced against the
Master Servicer under any applicable insolvency or reorganization statute and
the petition is not dismissed within 60 days after the commencement of the case;
or
(iv) The Master Servicer consents to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Master Servicer or substantially all of its property; or the Master Servicer
admits in writing its inability to pay its debts generally as they become due,
files a petition to take advantage of any applicable insolvency or
reorganization statute, makes an assignment for the benefit of its creditors, or
voluntarily suspends payment of its obligations; or
(v) The Master Servicer assigns or delegates its duties or rights
under this Agreement in contravention of the provisions permitting such
assignment or delegation under Sections 7.05 or 7.07.
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In each and every such case, so long as such Event of Default with respect to
the Master Servicer shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 66 2/3% of the Class Certificate Balance of the Certificates, by notice in
writing to the Master Servicer (and to the Trustee if given by such
Certificateholders), with a copy to the Rating Agencies, and with the consent of
the Seller, may terminate all of the rights and obligations (but not the
liabilities) of the Master Servicer under this Agreement and in and to the
Mortgage Loans and/or the REO Property serviced by the Master Servicer and the
proceeds thereof. Upon the receipt by the Master Servicer of the written notice,
all authority and power of the Master Servicer under this Agreement, whether
with respect to the Certificates, the Mortgage Loans, REO Property or under any
other related agreements (but only to the extent that such other agreements
relate to the Mortgage Loans or related REO Property) shall, subject to Section
8.02, automatically and without further action pass to and be vested in the
Trustee pursuant to this Section 8.01; and, without limitation, the Trustee is
hereby authorized and empowered to execute and deliver, on behalf of the Master
Servicer as attorney-in-fact or otherwise, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees to cooperate with
the Trustee in effecting the termination of the Master Servicer's rights and
obligations hereunder, including, without limitation, the transfer to the
Trustee of (i) the property and amounts which are then or should be part of the
Issuing Entity or which thereafter become part of the Issuing Entity; and (ii)
originals or copies of all documents of the Master Servicer reasonably requested
by the Trustee to enable it to assume the Master Servicer's duties thereunder.
In addition to any other amounts which are then, or, notwithstanding the
termination of its activities under this Agreement, may become payable to the
Master Servicer under this Agreement, the Master Servicer shall be entitled to
receive, out of any amount received on account of a Mortgage Loan or related REO
Property, that portion of such payments which it would have received as
reimbursement under this Agreement if notice of termination had not been given.
The termination of the rights and obligations of the Master Servicer shall not
affect any obligations incurred by the Master Servicer prior to such
termination.
Section 8.02. Trustee to Act; Appointment of Successor.
(a) Upon the receipt by the Master Servicer of a notice of termination
pursuant to Section 8.01 or an Opinion of Independent Counsel pursuant to
Section 7.05 to the effect that the Master Servicer is legally unable to act or
to delegate its duties to a Person which is legally able to act, the Trustee
shall automatically become the successor in all respects to the Master Servicer
in its capacity under this Agreement and the transactions set forth or provided
for herein and shall thereafter be subject to all the responsibilities, duties,
liabilities and limitations on liabilities relating thereto placed on the Master
Servicer by the terms and provisions hereof; provided, however, that MLML shall
have the right to either (a) immediately assume the duties of the Master
Servicer or (b) select a successor master servicer; provided further, however,
that the Trustee shall have no obligation whatsoever with respect to any
liability (other than advances deemed recoverable and not previously made)
incurred by the Master Servicer at or prior to the time of termination. As
compensation therefor, the Trustee shall be entitled to all funds relating to
the Mortgage Loans which the Master Servicer would have been entitled to retain
if the Master Servicer had continued to act hereunder, except for
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those amounts due the Master Servicer as reimbursement permitted under this
Agreement for advances previously made or expenses previously incurred.
Notwithstanding the above, or anything herein to the contrary, the Trustee, if
it becomes Master Servicer, shall have no responsibility or obligation (i) to
repurchase or substitute any Mortgage Loan, (ii) for any representation or
warranty of the Master Servicer hereunder, and (iii) for any act or omission of
either a predecessor or successor Master Servicer other than the Trustee. The
Trustee may conduct any activity required of it as Master Servicer hereunder
through an Affiliate or through an agent. Neither the Trustee (as successor
Master Servicer) nor any other successor Master Servicer shall be deemed to be
in default hereunder due to any act or omission of a predecessor Master
Servicer, including but not limited to failure to timely deliver to the Trustee
distribution instructions, any funds required to be deposited to the Trust Fund,
or any breach of its duty to cooperate with a transfer of master servicing.
Neither the Trustee nor any other successor Master Servicer shall be deemed to
be in default hereunder by reason of any failure to make, or any delay in
making, any distribution hereunder or any portion thereof or any failure to
perform, or any delay in performing, any duties or responsibilities hereunder,
in either case caused solely by the failure of the Master Servicer to deliver or
provide, or any delay in delivering or providing, any cash, information,
documents or records required to be provided to it by the Master Servicer.
Notwithstanding the above, the Trustee may, if it shall be unwilling so to act,
or shall, if it is legally unable so to act, appoint or petition a court of
competent jurisdiction to appoint, any established housing and home finance
institution which is a Xxxxxx Xxx- or Xxxxxxx Mac-approved servicer, and with
respect to a successor to the Master Servicer only, having a net worth of not
less than $10,000,000 and meeting such other standards for a successor Master
Servicer as are set forth in this Agreement, as the successor to the Master
Servicer hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Master Servicer hereunder. Pending appointment of a
successor to the Master Servicer hereunder, the Trustee shall act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of such
successor out of payments on the Mortgage Loans as it and such successor shall
agree; provided, however, in the event that the provisions of Section 7.06 shall
apply, no such compensation shall be in excess of that permitted the Trustee
under this Subsection 8.02(a), and that such successor shall undertake and
assume the obligations of the Trustee to pay compensation to any third Person
acting as an agent or independent contractor in the performance of master
servicing responsibilities hereunder. The Trustee and such successor shall take
such action, consistent with this Agreement, as shall be necessary to effectuate
any such succession.
(b) If the Trustee shall succeed to any duties of the Master Servicer
respecting the Mortgage Loans as provided herein, it shall do so in a separate
capacity and not in its capacity as Trustee and, accordingly, the provisions of
Article IX shall be inapplicable to the Trustee in its duties as the successor
to the Master Servicer in the servicing of the Mortgage Loans (although such
provisions shall continue to apply to the Trustee in its capacity as Trustee);
the provisions of Article VII, however, shall apply to it in its capacity as
successor master servicer.
Section 8.03. Notification to Certificateholders. Upon any termination or
appointment of a successor to the Master Servicer, the Trustee shall give prompt
written notice thereof to Certificateholders at their respective addresses
appearing in the Certificate Register and to the Rating Agencies.
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Section 8.04. Waiver of Defaults. The Trustee shall transmit by mail to all
Certificateholders, within 60 days after the occurrence of any Event of Default
known to the Trustee, unless such Event of Default shall have been cured, notice
of each such Event of Default hereunder known to the Trustee. The Holders of
Certificates evidencing Percentage Interests aggregating not less than 66 2/3%
of the Class Certificate Balance of the Certificates may, on behalf of all
Certificateholders, waive any default by the Master Servicer in the performance
of its obligations hereunder and the consequences thereof, except a default in
the making of or the causing to be made any required distribution on the
Certificates. Upon any such waiver of a past default, such default shall be
deemed to cease to exist, and any Event of Default arising therefrom shall be
deemed to have been timely 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. The Trustee shall
give notice of any such waiver to the Rating Agencies.
Section 8.05. List of Certificateholders. Upon reasonable, prior written
request of three or more Certificateholders of record, for purposes of
communicating with other Certificateholders with respect to their rights under
this Agreement, the Trustee will afford such Certificateholders access during
business hours to the most recent list of Certificateholders held by the
Trustee.
ARTICLE IX.
CONCERNING THE TRUSTEE AND
THE SECURITIES ADMINISTRATOR
Section 9.01. Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default and
after the curing or waiver of all Events of Default which may have occurred, and
the Securities Administrator each undertake to perform such duties and only such
duties as are specifically set forth in this Agreement as duties of the Trustee
and the Securities Administrator, respectively. If an Event of Default has
occurred and has not been cured or waived, the Trustee shall exercise such of
the rights and powers vested in it by this Agreement, and subject to Section
8.02(b) use the same degree of care and skill in their exercise, as a prudent
person would exercise under the circumstances in the conduct of his own affairs.
(b) Upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments which are specifically
required to be furnished to the Trustee and the Securities Administrator
pursuant to any provision of this Agreement, the Trustee and the Securities
Administrator, respectively, shall examine them to determine whether they are in
the form required by this Agreement; provided, however, that neither the Trustee
nor the Securities Administrator shall be responsible for the accuracy or
content of any resolution, certificate, statement, opinion, report, document,
order or other instrument furnished by the Master Servicer; provided, further,
that neither the Trustee nor the Securities Administrator shall be responsible
for the accuracy or verification of any calculation provided to it pursuant to
this Agreement. If any such instrument is found not to conform to the
requirements of this Agreement in a material manner, the Trustee shall take such
action as it deems appropriate to have the instrument corrected and if the
instrument is not corrected to its satisfaction, the Trustee
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will provide notice thereof to the Certificateholders and take such further
action as directed by the Certificateholders.
(c) On each Distribution Date, the Securities Administrator shall make
monthly distributions and the final distribution to the Certificateholders from
funds in the Distribution Account as provided in Sections 6.01 and 10.01 herein
based solely on the report of the Master Servicer and the Servicer.
(d) No provision of this Agreement shall be construed to relieve the
Trustee or the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct;
provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing or waiver of all such Events of Default which may have occurred, the
duties and obligations of the Trustee and the Securities Administrator shall be
determined solely by the express provisions of this Agreement, neither the
Trustee nor the Securities Administrator shall be liable except for the
performance of their respective 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 or the Securities Administrator and, in the
absence of bad faith on the part of the Trustee or the Securities Administrator,
respectively, the Trustee or the Securities Administrator, respectively, 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 or the Securities Administrator, respectively, and conforming to the
requirements of this Agreement;
(ii) Neither the Trustee nor the Securities Administrator shall
be liable in its individual capacity for an error of judgment made in good faith
by a Responsible Officer or Responsible Officers of the Trustee or an officer of
the Securities Administrator, respectively, unless it shall be proved that the
Trustee or the Securities Administrator, respectively, was negligent in
ascertaining the pertinent facts;
(iii) Neither the Trustee nor the Securities Administrator shall
be liable with respect to any action taken, suffered or omitted to be taken by
it in good faith in accordance with the directions of the Holders of
Certificates evidencing Percentage Interests aggregating not less than 25% of
the Class Certificate Balance of the Certificates, if such action or non-action
relates to the time, method and place of conducting any proceeding for any
remedy available to the Trustee or the Securities Administrator, respectively,
or exercising any trust or other power conferred upon the Trustee or the
Securities Administrator, respectively, under this Agreement;
(iv) The Trustee shall not be required to take notice or be
deemed to have notice or knowledge of any default or Event of Default unless a
Responsible Officer of the Trustee's Corporate Trust Office shall have actual
knowledge thereof. In the absence of such notice, the Trustee may conclusively
assume there is no such default or Event of Default;
(v) The Trustee shall not in any way be liable by reason of any
insufficiency in any Account held by or in the name of Trustee unless it is
determined by a court of competent jurisdiction that the Trustee's gross
negligence or willful misconduct was the primary cause of such insufficiency
(except to the extent that the Trustee is obligor and has defaulted thereon);
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(vi) Anything in this Agreement to the contrary notwithstanding,
in no event shall the Trustee or the Securities Administrator be liable for
special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Trustee or the
Securities Administrator, respectively, has been advised of the likelihood of
such loss or damage and regardless of the form of action; and
(vii) None of the Securities Administrator, the Depositor, the
Master Servicer, the Servicer or the Trustee shall be responsible for the acts
or omissions of the other, it being understood that this Agreement shall not be
construed to render them partners, joint venturers or agents of one another.
Neither the Trustee nor the Securities Administrator shall be required to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there is reasonable ground for believing that the repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in this Agreement
shall in any event require the Trustee or the Securities Administrator to
perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer hereunder or under the Servicing Agreement,
except during such time, if any, as the Trustee shall be the successor to, and
be vested with the rights, duties, powers and privileges of, the Master Servicer
in accordance with the terms of this Agreement.
(e) All funds received by the Master Servicer and the Securities
Administrator and required to be deposited in the Master Servicer Collection
Account or Distribution Account pursuant to this Agreement will be promptly so
deposited by the Master Servicer and the Securities Administrator.
(f) Except for those actions that the Trustee or the Securities
Administrator is required to take hereunder, neither the Trustee nor the
Securities Administrator shall have any obligation or liability to take any
action or to refrain from taking any action hereunder in the absence of written
direction as provided hereunder.
Section 9.02. Certain Matters Affecting the Trustee and the Securities
Administrator. Except as otherwise provided in Section 9.01:
(i) The Trustee and the Securities Administrator may rely and
shall be protected in acting or refraining from acting in reliance on any
resolution, certificate of a Depositor, Master Servicer or Servicer, certificate
of auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(ii) The Trustee and the Securities Administrator may consult
with counsel and any advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection with respect to any action taken
or suffered or omitted by it hereunder in good faith and in accordance with such
advice or Opinion of Counsel;
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(iii) Neither the Trustee nor the Securities Administrator shall
be under any obligation to exercise any of the trusts or powers vested in it by
this Agreement, other than its obligation to give notices pursuant to 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. Nothing contained herein shall, however, relieve the Trustee
of the obligation, upon the occurrence of an Event of Default of which a
Responsible Officer of the Trustee's Corporate Trust Office has actual knowledge
(which has not been cured or waived), subject to Section 8.02(b), to exercise
such of the rights and powers vested in it by this Agreement, and to use the
same degree of care and skill in their exercise, as a prudent person would
exercise under the circumstances in the conduct of his own affairs;
(iv) Prior to the occurrence of an Event of Default hereunder and
after the curing or waiver of all Events of Default which may have occurred,
neither the Trustee nor the Securities Administrator shall be liable in its
individual capacity for any action taken, suffered or omitted by it in good
faith and believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(v) Neither the Trustee nor the Securities Administrator shall be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing to do so by Holders of Certificates evidencing Percentage
Interests aggregating not less than 25% of the Class Certificate Balance of the
Certificates and provided that the payment within a reasonable time to the
Trustee or the Securities Administrator, as applicable, of the costs, expenses
or liabilities likely to be incurred by it in the making of such investigation
is, in the opinion of the Trustee or the Securities Administrator, as
applicable, reasonably assured to the Trustee or the Securities Administrator,
as applicable, by the security afforded to it by the terms of this Agreement.
The Trustee or the Securities Administrator may require reasonable indemnity
against such expense or liability as a condition to taking any such action. The
reasonable expense of every such examination shall be paid by the
Certificateholders requesting the investigation;
(vi) The Trustee and the Securities Administrator may execute any
of the trusts or powers hereunder or perform any duties hereunder either
directly or through Affiliates, agents or attorneys; provided, however, that the
Trustee may not appoint any agent to perform its custodial functions with
respect to the Mortgage Files or paying agent functions under this Agreement
without the express written consent of the Securities Administrator, which
consent will not be unreasonably withheld. Neither the Trustee nor the
Securities Administrator shall be liable or responsible for the misconduct or
negligence of any of the Trustee's or the Securities Administrator's agents or
attorneys or a custodian or paying agent appointed hereunder by the Trustee or
the Securities Administrator with due care and, when required, with the consent
of the Securities Administrator;
(vii) Should the Trustee or the Securities Administrator deem the
nature of any action required on its part, other than a payment or transfer
under Subsection 4.01(b) or Section 4.02, to be unclear, the Trustee or the
Securities Administrator, respectively, may require prior to such action that it
be provided by the Depositor with reasonable further instructions;
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(viii) The right of the Trustee or the Securities Administrator
to perform any discretionary act enumerated in this Agreement shall not be
construed as a duty, and neither the Trustee nor the Securities Administrator
shall be accountable for other than its negligence or willful misconduct in the
performance of any such act;
(ix) Neither the Trustee nor the Securities Administrator shall
be required to give any bond or surety with respect to the execution of the
trust created hereby or the powers granted hereunder, except as provided in
Subsection 9.07; and
(x) Neither the Trustee nor the Securities Administrator shall
have any duty to conduct any affirmative investigation as to the occurrence of
any condition requiring the repurchase of any Mortgage Loan by the Seller
pursuant to this Agreement or the Mortgage Loan Purchase Agreement, as
applicable, or the eligibility of any Mortgage Loan for purposes of this
Agreement.
(xi) Any permissive right of the Trustee or Securities
Administrator hereunder shall not be construed as a duty.
Section 9.03. Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans. The recitals contained herein and in the
Certificates (other than the signature and countersignature of the Securities
Administrator on the Certificates) shall be taken as the statements of the
Depositor, and neither the Trustee nor the Securities Administrator shall have
any responsibility for their correctness. Neither the Trustee nor the Securities
Administrator makes any representation as to the validity or sufficiency of the
Certificates (other than the signature and countersignature of the Securities
Administrator on the Certificates) or of any Mortgage Loan except as expressly
provided in Sections 2.02 and 2.05 hereof; provided, however, that the foregoing
shall not relieve the Trustee or the Custodian of the obligation to review the
Mortgage Files pursuant to Sections 2.02 and 2.04. The Securities
Administrator's signature and countersignature (or countersignature of its
agent) on the Certificates shall be solely in its capacity as Securities
Administrator of the Trust Fund and shall not constitute the Certificates an
obligation of the Securities Administrator in any other capacity. Neither the
Trustee or the Securities Administrator shall be accountable for the use or
application by the Depositor of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to the
Depositor with respect to the Mortgage Loans. Subject to the provisions of
Section 2.05, neither the Trustee nor the Securities Administrator shall be
responsible for the legality or validity of this Agreement or any document or
instrument relating to this Agreement, the validity of the execution of this
Agreement or of any supplement hereto or instrument of further assurance, or the
validity, priority, perfection or sufficiency of the security for the
Certificates issued hereunder or intended to be issued hereunder. Neither the
Trustee nor the Securities Administrator shall at any time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Mortgage or any Mortgage Loan, or the perfection and
priority of any Mortgage or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Trust Fund or its ability to
generate the payments to be distributed to Certificateholders, under this
Agreement. Neither the Trustee nor the Securities Administrator shall have any
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to record this Agreement.
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Section 9.04. Trustee and Securities Administrator May Own Certificates.
The Trustee and the Securities Administrator in its individual capacity or in
any capacity other than as Trustee or Securities Administrator hereunder may
become the owner or pledgee of any Certificates with the same rights it would
have if it were not Trustee or the Securities Administrator, as applicable, and
may otherwise deal with the parties hereto.
Section 9.05. Trustee's and Securities Administrator's Fees and Expenses.
The fees and expenses of the Trustee and the Securities Administrator shall be
paid by the Master Servicer in accordance with a side letter agreement. In
addition, the Trustee and the Securities Administrator will be entitled to
recover from the Master Servicer Collection Account pursuant to Section 4.03(b)
all reasonable out-of-pocket expenses, disbursements and advances and the
expenses of the Trustee and the Securities Administrator, respectively, in
connection with any Event of Default, any breach of this Agreement or any claim
or legal action (including any pending or threatened claim or legal action)
incurred or made by the Trustee or the Securities Administrator, respectively,
in the administration of the trusts hereunder (including the reasonable
compensation, expenses and disbursements of its counsel) except any such
expense, disbursement or advance as may arise from its negligence or intentional
misconduct or which is the responsibility of the Certificateholders or the Trust
Fund hereunder. If funds in the Master Servicer Collection Account are
insufficient therefor, the Trustee and the Securities Administrator shall
recover such expenses from the Depositor. Such compensation and reimbursement
obligation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust.
Section 9.06. Eligibility Requirements for Trustee and Securities
Administrator.
(a) The Trustee and any successor Trustee and the Securities
Administrator and any successor Securities Administrator shall during the entire
duration of this Agreement be a state bank or trust company or a national
banking association organized and doing business under the laws of such state or
the United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus and undivided profits of at
least $40,000,000 or, in the case of a successor Trustee, $50,000,000, subject
to supervision or examination by federal or state authority and, in the case of
the Trustee, rated "BBB" or higher by S&P and "Aaa1" or higher by Moody's with
respect to their long-term rating and rated "BBB" or higher by S&P and "Baa1" or
higher by Moody's with respect to any outstanding long-term unsecured
unsubordinated debt, and, in the case of a successor Trustee or successor
Securities Administrator other than pursuant to Section 9.10, rated in one of
the two highest long-term debt categories of, or otherwise acceptable to, each
of the Rating Agencies. If the Trustee publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section 9.06 the combined
capital and surplus of such corporation shall be deemed to be its total equity
capital (combined capital and surplus) as set forth in its most recent report of
condition so published. In case at any time the Trustee or the Securities
Administrator shall cease to be eligible in accordance with the provisions of
this Section 9.06, the Trustee or the Securities Administrator shall resign
immediately in the manner and with the effect specified in Section 9.08.
(b) In addition, the Securities Administrator (i) may not be an
originator, Master Servicer, Servicer, the Depositor or an affiliate of the
Depositor unless the Securities Administrator is in an institutional trust
department of the relevant entity, (ii) must be authorized
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to exercise corporate trust powers under the laws of its jurisdiction of
organization, and (iii) must be rated at least "A" by S&P or "A" Moody's. If no
successor Securities Administrator shall have been appointed and shall have
accepted appointment within 60 days after the Securities Administrator ceases to
be the Securities Administrator pursuant to Section 9.08, then the Trustee shall
either (i) perform the duties of the Securities Administrator pursuant to this
Agreement until such time as a new Securities Administrator is appointed or (ii)
petition a court of competent jurisdiction to appoint a successor securities
administrator. The Trustee shall notify the Rating Agencies of any change of
Securities Administrator.
Section 9.07. Insurance. The Securities Administrator, at its own expense,
shall at all times maintain and keep in full force and effect: (i) fidelity
insurance, (ii) theft of documents insurance and (iii) forgery insurance (which
may be collectively satisfied by a "Financial Institution Bond" and/or a
"Bankers' Blanket Bond"). All such insurance shall be in amounts, with standard
coverage and subject to deductibles, as are customary for insurance typically
maintained by banks or their affiliates which act as custodians for
investor-owned mortgage pools. A certificate of an officer of the Securities
Administrator as to the Securities Administrator's compliance with this Section
9.07 shall be furnished to any Certificateholder upon reasonable written
request.
Section 9.08. Resignation and Removal of the Trustee and Securities
Administrator.
(a) The Trustee and the Securities Administrator may at any time
resign and be discharged from the trust hereby created by giving written notice
thereof to the Depositor and the Master Servicer, with a copy to the Rating
Agencies. Upon receiving such notice of resignation, the Depositor shall
promptly appoint a successor Trustee or successor Securities Administrator, as
applicable, by written instrument, in triplicate, one copy of which instrument
shall be delivered to each of the resigning Trustee or Securities Administrator,
as applicable, the successor Trustee or Securities Administrator, as applicable.
If no successor Trustee or Securities Administrator shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee or Securities Administrator may petition any
court of competent jurisdiction for the appointment of a successor Trustee or
Securities Administrator. If the Securities Administrator and the Master
Servicer are the same entity, then at any time the Securities Administrator
resigns or is removed as Securities Administrator, the Master Servicer shall
likewise be terminated as Master Servicer.
(b) If at any time the Trustee or the Securities Administrator shall
cease to be eligible in accordance with the provisions of Section 9.06 and shall
fail to resign after written request therefor by the Depositor or if at any time
the Trustee or the Securities Administrator shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or the
Securities Administrator, as applicable, or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or the
Securities Administrator, as applicable, or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Depositor shall
promptly remove the Trustee, or shall be entitled to remove the Securities
Administrator, as applicable, and appoint a successor Trustee or Securities
Administrator, as applicable, by written instrument, in triplicate, one copy of
which instrument shall be delivered to each of the Trustee or Securities
Administrator, as applicable, so removed, the successor Trustee or Securities
Administrator, as applicable.
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(c) The Holders of Certificates evidencing Percentage Interests
aggregating not less than 66 2/3% of the Trust Fund may at any time remove the
Trustee or the Securities Administrator and appoint a successor Trustee or
Securities Administrator by written instrument or instruments, in quadruplicate,
signed by such Holders or their attorneys-in-fact duly authorized, one complete
set of which instruments shall be delivered to the Depositor, the Trustee, the
Securities Administrator (if the Trustee is removed), the Trustee (if the
Securities Administrator is removed), and the Trustee or Securities
Administrator so removed and the successor so appointed.
(d) No resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor Trustee or Securities Administrator
pursuant to any of the provisions of this Section 9.08 shall become effective
except upon appointment of and acceptance of such appointment by the successor
Trustee or Securities Administrator as provided in Section 9.09.
Section 9.09. Successor Trustee and Successor Securities Administrator.
(a) Any successor Trustee or Securities Administrator appointed as
provided in Section 9.08 shall execute, acknowledge and deliver to the
Depositor, the Master Servicer and its predecessor Trustee or Securities
Administrator an instrument accepting such appointment hereunder. The
resignation or removal of the predecessor Trustee or Securities Administrator
shall then become effective and such successor Trustee or Securities
Administrator, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as Trustee or Securities
Administrator herein. The predecessor Trustee or Securities Administrator shall
after payment of its outstanding fees and expenses promptly deliver to the
successor Trustee or Securities Administrator, as applicable, all assets and
records of the Trust held by it hereunder, and the Depositor and the predecessor
Trustee or Securities Administrator, as applicable, 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 or
Securities Administrator, as applicable, all such rights, powers, duties and
obligations.
(b) No successor Trustee or Securities Administrator shall accept
appointment as provided in this Section 9.09 unless at the time of such
acceptance such successor Trustee or Securities Administrator shall be eligible
under the provisions of Section 9.06.
(c) Upon acceptance of appointment by a successor Trustee or
Securities Administrator as provided in this Section 9.09, the successor Trustee
or Securities Administrator shall mail notice of the succession of such Trustee
or Securities Administrator hereunder to all Certificateholders at their
addresses as shown in the Certificate Register and to the Rating Agencies. The
Depositor shall pay the cost of any mailing by the successor Trustee or
Securities Administrator.
Section 9.10. Merger or Consolidation of Trustee or Securities
Administrator. Any state bank or trust company or national banking association
into which the Trustee or the Securities Administrator may be merged or
converted or with which it may be consolidated or any state bank or trust
company or national banking association resulting from any merger, conversion or
consolidation to which the Trustee or the Securities Administrator,
respectively, shall be a party,
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or any state bank or trust company or national banking association succeeding to
all or substantially all of the corporate trust business of the Trustee or the
Securities Administrator, respectively, shall be the successor of the Trustee or
the Securities Administrator, respectively, hereunder, provided such state bank
or trust company or national banking association shall be eligible under the
provisions of Section 9.06. Such succession shall be valid without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.
Section 9.11. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or property constituting the same may at the time be located, the
Depositor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee and the Depositor to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust, and to vest in such Person or Persons, in such capacity, such title to
the Trust, or any part thereof, and, subject to the other provisions of this
Section 9.11, such powers, duties, obligations, rights and trusts as the
Depositor and the Trustee may consider necessary or desirable.
(b) If the Depositor shall not have joined in such appointment within
15 days after the receipt by it of a written request so to do, the Trustee shall
have the power to make such appointment without the Depositor.
(c) No co-Master Servicer or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
9.06 hereunder and no notice to Certificateholders of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.08
hereof.
(d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred on such
co-trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly, 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 Master
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 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.
(e) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. 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
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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.
(f) To the extent not prohibited by law, any separate trustee or
co-trustee may, at any time, request the Trustee, its agent or attorney-in-fact,
with full power and authority, to do any lawful act under or with respect to
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
(g) No Trustee under this Agreement shall be personally liable by
reason of any act or omission of another Trustee under this Agreement. The
Depositor and the Trustee acting jointly may at any time accept the resignation
of or remove any separate trustee or co-trustee.
Section 9.12. Federal Information Returns and Reports to
Certificateholders; REMIC Administration.
(a) REMIC elections as set forth in the Preliminary Statement shall be
made on Forms 1066 or other appropriate federal tax or information return for
the taxable year ending on the last day of the calendar year in which the
Certificates are issued. The regular interests and residual interest in each
REMIC shall be as designated in the Preliminary Statement.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of section 860G(a)(9) of the Code. The latest possible
maturity date for purposes of Treasury Regulation 1.860G-1(a)(4) will be the
Latest Possible Maturity Date.
(c) The Securities Administrator shall, for federal income tax
purposes, maintain books and records with respect to each REMIC on a calendar
year and on an accrual basis.
(d) The Securities Administrator shall represent the Trust Fund in any
administrative or judicial proceeding relating to an examination or audit by any
governmental taxing authority with respect thereto. The Securities Administrator
shall pay any and all tax-related expenses (not including taxes) of each REMIC,
including but not limited to any professional fees or expenses related to audits
or any administrative or judicial proceedings with respect to such REMIC that
involve the Internal Revenue Service or state tax authorities, but only to the
extent that (i) such expenses are ordinary or routine expenses, including
expenses of a routine audit but not expenses of litigation (except as described
in (ii)); or (ii) such expenses or liabilities (including taxes and penalties)
are attributable to the negligence or willful misconduct of the Securities
Administrator in fulfilling its duties hereunder (including its duties as tax
return preparer). The Securities Administrator shall be entitled to
reimbursement of expenses to the extent provided in clause (i) above from the
Distribution Account, provided, however, the Securities Administrator shall not
be entitled to reimbursement for expenses incurred in connection with the
preparation of tax returns and other reports as required by this Section.
(e) The Securities Administrator shall prepare and file, and the
Trustee shall sign, all of each REMIC's and the Trust Fund's federal and
appropriate state tax and information
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returns as such REMIC's direct representative. The expenses of preparing and
filing such returns shall be borne by the Securities Administrator.
(f) The Securities Administrator or its designee shall perform on
behalf of each REMIC all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions, or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, if required by the Code, the REMIC
Provisions, or other such guidance, the Securities Administrator shall provide,
upon receipt of additional reasonable compensation, to the Treasury or other
governmental authority such information as is necessary for the application of
any tax relating to the transfer of a Residual Certificate to any disqualified
person or organization pursuant to Treasury Regulation 1.860E-2(a)(5) and any
person designated in Section 860E(e)(3) of the Code.
(g) The Securities Administrator and the Holders of Certificates shall
take any action or cause any REMIC to take any action necessary to create or
maintain the status of any REMIC as a REMIC under the REMIC Provisions and shall
assist each other as necessary to create or maintain such status. Neither the
Securities Administrator nor the Holder of any Residual Certificate shall
knowingly take any action, cause any REMIC to take any action or fail to take
(or fail to cause to be taken) any action that, under the REMIC Provisions, if
taken or not taken, as the case may be, could (i) endanger the status of any
REMIC as a REMIC or (ii) result in the imposition of a tax upon any REMIC
(including but not limited to the tax on prohibited transactions as defined in
Code Section 860F(a)(2) and the tax on prohibited contributions set forth on
Section 860G(d) of the Code) (either such event, an "Adverse REMIC Event")
unless the Securities Administrator has received a REMIC Opinion (at the expense
of the party seeking to take such action) to the effect that the contemplated
action will not endanger such status or result in the imposition of such a tax.
In addition, prior to taking any action with respect to any REMIC or the assets
therein, or causing any REMIC to take any action, which is not expressly
permitted under the terms of this Agreement, any Holder of a Residual
Certificate will consult with the Securities Administrator, in writing, with
respect to whether such action could cause an Adverse REMIC Event to occur with
respect to any REMIC, and no such Person shall take any such action or cause any
REMIC to take any such action as to which the Securities Administrator has
advised it in writing that an Adverse REMIC Event could occur; provided,
however, that if no Adverse REMIC Event would occur but such action could result
in the imposition of additional taxes on the Residual Certificateholders, no
such Person shall take any such action, or cause any REMIC to take any such
action without the written consent of the Residual Certificateholders.
(h) Each Holder of a Residual Certificate shall pay when due any and
all taxes imposed on the related REMIC by federal or state governmental
authorities. To the extent that such taxes are not paid by a Residual
Certificateholder, the Securities Administrator shall pay any remaining REMIC
taxes out of current or future amounts otherwise distributable to the Holder of
the Residual Certificate in any such REMIC or, if no such amounts are available,
out of other amounts held in the Distribution Account, and shall reduce amounts
otherwise payable to holders of regular interests in any such REMIC, as the case
may be.
(i) The Securities Administrator shall prepare and file with the
Internal Revenue Service ("IRS"), on behalf of each REMIC, an application for an
employer
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identification number on IRS Form SS-4 or by any other acceptable method. The
Securities Administrator shall also file a Form 8811 as required. The Securities
Administrator, upon receipt from the IRS of the Notice of Taxpayer
Identification Number Assigned, shall upon request promptly forward a copy of
such notice to the Depositor. The Securities Administrator shall furnish any
other information that is required by the Code and regulations thereunder to be
made available to Certificateholders. The Depositor shall cause the Servicer to
provide the Securities Administrator with such information as is necessary for
the Securities Administrator to prepare such reports.
(j) No additional contributions of assets shall be made to any REMIC,
except as expressly provided in this Agreement.
(k) The Securities Administrator shall not enter into any arrangement
by which any REMIC will receive a fee or other compensation for services.
(l) The Class A-R Holder shall act as "tax matters person" with
respect to each REMIC and irrevocably appoints the Securities Administrator to
act as its agent in such roles.
(m) The Securities Administrator shall prepare or cause to be prepared
on behalf of the Trust Fund, based upon information calculated in accordance
with this Agreement pursuant to instructions given by the Depositor, the Trustee
shall sign, and the Securities Administrator shall file federal tax returns, all
in accordance with this Section 9.12. The Securities Administrator shall prepare
and file, and the Trustee shall sign, such state income tax returns and such
other returns as may be required by applicable law relating to the Trust Fund,
and, if required by state law, and shall file any other documents to the extent
required by applicable state tax law (to the extent such documents are in the
Securities Administrator's possession). The Securities Administrator shall
forward copies to the Depositor of all such returns and Form 1099 supplemental
tax information and such other information within the control of the Securities
Administrator as the Depositor may reasonably request in writing, and shall
distribute to each Certificateholder such forms and furnish such information
within the control of the Securities Administrator as are required by the Code
and the REMIC Provisions to be furnished to them, and will prepare and
distribute to Certificateholders Form 1099 (supplemental tax information) (or
otherwise furnish information within the control of the Securities
Administrator) to the extent required by applicable law.
(n) None of the Securities Administrator, the Trustee or the
Depositor, as assignees under this Agreement, shall provide any consent pursuant
to this Agreement or knowingly take any action under this Agreement that would
conflict with or violate the provisions of this Section 9.12.
(o) [Reserved]
(p) Notwithstanding any other provision of this Agreement, the Trustee
and the Securities Administrator shall comply with all federal withholding
requirements respecting payments to Certificateholders of interest or original
issue discount on the Mortgage Loans, that the Trustee or the Securities
Administrator reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
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Trustee or the Securities Administrator withholds any amount from interest or
original issue discount payments or advances thereof to any Certificateholder
pursuant to federal withholding requirements, the Trustee or the Securities
Administrator shall, together with its monthly report to such
Certificateholders, indicate such amount withheld.
(q) The Trustee and the Securities Administrator agree to indemnify
the Trust Fund and the Depositor for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by the Trust
Fund, the Depositor or the Trustee, as a result of a breach of the Trustee's
covenants and the Securities Administrator's covenants, respectively, set forth
in this Section 9.12; provided, however, such liability and obligation to
indemnify in this paragraph shall not be joint and several and neither the
Trustee nor the Securities Administrator shall be liable or be obligated to
indemnify the Trust Fund for the failure by the other to perform any duty under
this Agreement or the breach by the other of any covenant in this Agreement.
(r) The Securities Administrator covenants and agrees that it shall
act as agent (and the Securities Administrator is hereby appointed to act as
agent) of the Tax Matters Person on behalf of each of the REMICs provided for
herein and that in such capacity it shall: (a) to the extent that they are under
its control conduct the affairs of each of the REMICs provided for herein at all
times that any Certificates are outstanding so as to maintain the status of each
of the REMICs provided for herein as a REMIC under the REMIC Provisions; (b) not
knowingly or intentionally take any action or omit to take any action that would
cause the termination of the REMIC status of any of the REMICs provided for
herein or result in the imposition of tax upon any such REMIC; (c) not knowingly
or intentionally take any action or omit to take any action that would cause the
termination of the grantor trust status under Subpart E, Part I of Subchapter J
of the Code of any of the grantor trusts provided for herein or result in the
imposition of tax upon any such grantor trust; and (d) as and when necessary and
appropriate, represent each of the REMICs provided for herein in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of any of the REMICs provided for herein, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of any of the REMICs provided for herein,
and otherwise act on behalf of each of the REMICs provided for herein in
relation to any tax matter involving any of such REMICs or any controversy
involving the Trust Fund.
(s) Each of the Depositor, the Master Servicer, the Securities
Administrator and the Trustee agrees not to take or omit to take knowingly or
intentionally, any action or omit to take any action that would cause the
termination of the REMIC status of any of the REMICs provided for herein or
result in the imposition of a tax upon any of the REMICs provided for herein.
(t) For the avoidance of doubt, any returns, records, reports or
filings required under this Section 9.12 and Section 9.12 of the Stack II
Agreement, may be prepared, maintained and filed in a consolidated manner that
addresses the requirements of the Pooling and Servicing Agreement taken as a
whole.
ARTICLE X.
TERMINATION
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Section 10.01. Termination upon Liquidation or Repurchase of all Mortgage
Loans.
(a) Subject to Section 10.03, the obligations and responsibilities of
the Depositor, the Master Servicer, the Securities Administrator and the Trustee
created hereby with respect to that portion of the Trust Fund relating to the
Certificates shall terminate upon the earlier of (a) an Optional Termination and
(b) the later of (i) the maturity or other liquidation of the last Mortgage Loan
remaining in the Trust Fund (or any Monthly Advance with respect thereto) and
the disposition of all REO Property and (ii) the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
this Agreement, as applicable. In no event shall the trusts created hereby
continue beyond the earlier of (i) 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 and
(ii) the Latest Possible Maturity Date.
(b) On or before the Determination Date following the Initial Optional
Termination Date, the Securities Administrator shall attempt to terminate that
portion of the Trust Fund relating to the Certificates by conducting an auction
of all of the Mortgage Loans and REO Properties via a solicitation of bids from
at least three (3) bidders, each of which shall be a nationally recognized
participant in mortgage finance (the "Auction"). The Depositor and the
Securities Administrator agree to work in good faith to develop bid procedures
in advance of the Initial Optional Termination Date to govern the operation of
the Auction. The Securities Administrator shall be entitled to retain an
investment banking firm and/or other agents in connection with the Auction, the
cost of which shall be included in the Optional Termination Price (unless an
Optional Termination does not occur in which case such costs shall be an expense
of the Issuing Entity). The Securities Administrator shall accept the highest
bid received at the Auction; provided that the amount of such bid equals or
exceeds the Optional Termination Price. The Securities Administrator shall
determine the Optional Termination Price based upon information provided by (i)
the Master Servicer with respect to the amounts described in clauses (A) and (B)
of the definition of "Optional Termination Price" (other than Securities
Administrator's expenses) and (ii) the Depositor with respect to the information
described in clause (C) of the definition of "Optional Termination Price." The
Securities Administrator may conclusively rely upon the information provided to
it in accordance with the immediately preceding sentence and shall not have any
liability for the failure of any party to provide such information.
If an Optional Termination does not occur as a result of the Auction's
failure to achieve the Optional Termination Price, the Master Servicer may, on
any Distribution Date following such Auction, at its option, terminate that
portion of the Trust Fund relating to the Certificates by purchasing all of the
Mortgage Loans and REO Properties at a price equal to the Optional Termination
Price. In connection with such termination, the Optional Termination Price shall
be delivered to the Securities Administrator no later than the Business Day
immediately preceding the related Distribution Date. Notwithstanding anything to
the contrary herein, the Optional Termination Amount paid to the Securities
Administrator by the winning bidder at the Auction or by the Master Servicer
shall be deposited by the Securities Administrator directly into the
Distribution Account immediately upon receipt. Upon any termination as a result
of an Auction, the Securities Administrator shall, out of the Optional
Termination Amount deposited into the Distribution Account, (x) pay the
Securities Administrator its costs and expenses necessary to
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conduct the Auction and any other unreimbursed amounts owing to it and (y) pay
to the Master Servicer or Servicer, the aggregate amount of any unreimbursed
out-of-pocket costs and expenses owed to the Master Servicer or Servicer and any
unpaid or unreimbursed Servicing Fees, Monthly Advances and Servicing Advances.
(c) Notwithstanding anything to the contrary in clause (b) above, in
the event that the Securities Administrator and the Trustee receive the written
opinion of a nationally recognized participant in mortgage finance acceptable to
the Seller that the Mortgage Loans and REO Properties to be included in the
Auction will not be saleable at a price sufficient to achieve the Optional
Termination Price, the Securities Administrator need not conduct the Auction. In
such event, the Master Servicer shall have the option to purchase the Mortgage
Loans and REO Properties at the Optional Termination Price as of the Initial
Optional Termination Date.
(d) For the avoidance of doubt, the obligations and responsibilities
of the Depositor, the Master Servicer, the Securities Administrator and the
Trustee created pursuant to the Stack II Agreement shall survive any termination
pursuant to this Section 10.01.
Section 10.02. Final Distribution on the Certificates.
If on any Determination Date, (i) the Securities Administrator determines
that there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund relating to the Mortgage Loans other than the funds in the Master
Servicer Collection Account, the Securities Administrator shall send a final
distribution notice promptly to each Certificateholder or (ii) the Securities
Administrator determines that a Class of Certificates shall be retired after a
final distribution on such Class, the Securities Administrator shall notify the
Certificateholders within seven (7) Business Days after such Determination Date
that the final distribution in retirement of such Class of Certificates is
scheduled to be made on the immediately following Distribution Date. Any final
distribution made pursuant to the immediately preceding sentence will be made
only upon presentation and surrender of the Certificates at the office of the
Securities Administrator.
Notice of any partial termination of the Issuing Entity, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Securities Administrator by letter to Certificateholders mailed no later
than the last calendar day of the month immediately preceding the month of such
final distribution (or with respect to an Auction, mailed no later than one
Business Day following completion of such Auction). Any such notice shall
specify (a) the Distribution Date upon which final distribution on the
Certificates will be made upon presentation and surrender of Certificates at the
office therein designated, (b) the location of the office or agency at which
such presentation and surrender must be made, and (c) that the Record Date
otherwise applicable to such Distribution Date is not applicable, distributions
being made only upon presentation and surrender of the Certificates at the
office therein specified. The Securities Administrator will give such notice to
each Rating Agency at the time such notice is given to Certificateholders.
In the event such notice is given, the Master Servicer shall cause all
funds in the Master Servicer Collection Account to be deposited in the
Distribution Account on the Business Day prior to the applicable Distribution
Date in an amount equal to the final distribution in respect of
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the Certificates. Upon receipt of written notice of such final deposit with
respect to the Issuing Entity and the receipt by the Trustee, or its Custodian,
of a Request for Release therefor, the Trustee, or its Custodian, shall promptly
release to the Securities Administrator or the Master Servicer, as applicable,
the Mortgage Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Securities
Administrator shall cause to be distributed to Certificateholders of each Class
the amounts allocable to such Certificates held in the Distribution Account in
the order and priority set forth in Section 6.01 hereof on the final
Distribution Date and in proportion to their respective Percentage Interests.
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above-mentioned written notice, the Securities Administrator shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Securities
Administrator may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets that remain a part of the Issuing Entity. If within one
year after the second notice all Certificates shall not have been surrendered
for cancellation, the Class A-R Certificateholders shall be entitled to all
unclaimed funds and other assets of the Issuing Entity that remain subject
hereto. Upon payment to the Class A-R Certificateholders of such funds and
assets, the Securities Administrator shall have no further duties or obligations
with respect thereto.
Section 10.03. Additional Termination Requirements.
(a) In the event the Securities Administrator or the Master Servicer
exercises its purchase option as provided in Section 10.01, that portion of the
Trust Fund relating to the Mortgage Loans shall be terminated in accordance with
the following additional requirements, unless the Securities Administrator shall
have been furnished with an Opinion of Counsel to the effect that the failure of
the Issuing Entity to comply with the requirements of this Section will not (i)
result in the imposition of taxes on "prohibited transactions" of the Issuing
Entity as defined in Section 860F of the Code or (ii) cause any REMIC
constituting part of the Issuing Entity to fail to qualify as a REMIC at any
time that any Certificates are outstanding:
(i) Within 90 days prior to the final Distribution Date, the
Securities Administrator shall adopt and sign a plan of complete liquidation of
the Issuing Entity as provided to it by the terminating purchaser, meeting the
requirements of a "qualified liquidation" under Section 860F of the Code and any
regulations thereunder; and
(ii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Distribution Date, the Securities
Administrator shall sell all of the assets of the Issuing Entity for cash
pursuant to the terms of the plan of complete liquidation.
(b) By their acceptance of Certificates, the Holders thereof hereby
agree to appoint the Securities Administrator as their attorney in fact to: (i)
adopt such a plan of complete liquidation (and the Certificateholders hereby
appoint the Securities Administrator as their
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attorney in fact to sign such plan) as appropriate and (ii) to take such other
action in connection therewith as may be reasonably required to carry out such
plan of complete liquidation all in accordance with the terms hereof.
ARTICLE XI.
MISCELLANEOUS PROVISIONS
Section 11.01. Intent of Parties. The parties intend that each REMIC shall
be treated as a REMIC for federal income tax purposes and that the provisions of
this Agreement should be construed in furtherance of this intent.
Section 11.02. Amendment.
(a) This Agreement may be amended from time to time by the Depositor,
the Master Servicer, the Securities Administrator and the Trustee, and without
the consent of any of the Certificateholders to:
(i) to cure any ambiguity or correct any mistake,
(ii) to correct, modify or supplement any provision herein which
may be inconsistent with any other provision herein,
(iii) to add any other provisions with respect to matters or
questions arising under this Agreement, or
(iv) to modify, alter, amend, add to or rescind any of the terms
or provisions contained in this Agreement; provided, however, that, in the
case of clauses (iii) and (iv), such amendment will not, as evidenced by an
Opinion of Counsel addressed to the Securities Administrator to such
effect, adversely affect in any material respect the interests of any
Certificateholder; provided, further, however, that such amendment will be
deemed to not adversely affect in any material respect the interest of any
Holder if the Person requesting such amendment obtains a letter from each
Rating Agency stating that such amendment will not result in a reduction or
withdrawal of its rating of any Class of the Certificates, it being
understood and agreed that any such letter in and of itself will not
represent a determination as to the materiality of any such amendment and
will represent a determination only as to the credit issues affecting any
such rating.
Notwithstanding the foregoing, without the consent of the
Certificateholders, the Depositor, the Master Servicer, the Securities
Administrator and the Trustee may at any time and from time to time amend this
Agreement to modify, eliminate or add to any of its provisions to such extent as
shall be necessary or appropriate to maintain the qualification of any of the
REMICs provided for herein as REMICs under the Code or to avoid or minimize the
risk of the imposition of any tax on the Issuing Entity or any of the REMICs
provided for herein pursuant to the Code that would be a claim against the
Issuing Entity at any time prior to the final redemption of the Certificates,
provided that the Trustee and the Securities Administrator shall have been
provided an Opinion of Counsel addressed to the Trustee and the Securities
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Administrator, which opinion shall be an expense of the party requesting such
amendment but in any case shall not be an expense of the Trustee and the
Securities Administrator, to the effect that such action is necessary or
appropriate to maintain such qualification or to avoid or minimize the risk of
the imposition of such a tax.
(b) This Agreement may also be amended from time to time by the Master
Servicer, the Depositor, the Securities Administrator and the Trustee, and the
Transfer Agreement may also be amended from time to time by the Transferor, the
Master Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing Percentage Interests aggregating not less than 66 2/3% of the Class
Certificate Balance of the Certificates or of the applicable Class or Classes,
if such amendment affects only such Class or Classes, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall (i) reduce
in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Regular Certificate
without the consent of the Holder of such Regular Certificate, or (ii) reduce
the aforesaid percentage of Certificates the Holders of which are required to
consent to any such amendment, without the consent of the Holders of all
Certificates then outstanding. Notwithstanding any contrary provision of this
Agreement, the Trustee shall not consent to any amendment to this Agreement
unless it shall have first received an Opinion of Counsel addressed to the
Trustee, which opinion shall be an expense of the party requesting such
amendment but in any case shall not be an expense of the Trustee, to the effect
that such amendment is permitted hereunder and will not cause the imposition of
any tax on the Issuing Entity, any of the REMICs provided for herein or the
Certificateholders or cause any of the REMICs provided for herein to fail to
qualify as a REMIC at any time that any Certificates are outstanding.
(c) Promptly after the execution of any such amendment, the Securities
Administrator shall furnish a copy of such amendment or written notification of
the substance of such amendment to each Certificateholder, with a copy to the
Rating Agencies.
(d) In the case of an amendment under Subsection 11.02(b) above, it
shall not be necessary for the Certificateholders to approve the particular form
of such an amendment. Rather, it shall be sufficient if the Certificateholders
approve the substance of the amendment. The manner of obtaining such consents
and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as the
Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement and will not adversely affect the status of any REMIC created
hereunder. The Trustee and the Securities Administrator may, but shall not be
obligated to, enter into any such amendment which affects the Trustee's or the
Securities Administrator's own respective rights, duties or immunities under
this Agreement.
Section 11.03. Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere. The
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Depositor shall effect such recordation, at the expense of the Issuing Entity
upon the request in writing of a Certificateholder, but only if such direction
is accompanied by an Opinion of Counsel (provided at the expense of the
Certificateholder requesting recordation) to the effect that such recordation
would materially and beneficially affect the interests of the Certificateholders
or is required by law.
Section 11.04. Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall not
terminate this Agreement or the Issuing Entity, 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
Issuing Entity, nor otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
(b) Except as expressly provided in this Agreement, no
Certificateholders shall have any right to vote or in any manner otherwise
control the operation and management of the Issuing Entity, or the obligations
of the parties hereto, nor shall anything herein set forth, or contained in the
terms of the Certificates, be construed so as to establish the
Certificateholders from time to time as partners or members of an association;
nor shall any Certificateholders be under any liability to any third Person by
reason of any action taken by the parties to this Agreement pursuant to any
provision hereof.
(c) No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon, under or with respect to this Agreement against the
Depositor, the Securities Administrator, the Master Servicer or any successor to
any such parties unless (i) such Certificateholder previously shall have given
to the Trustee a written notice of a continuing default, as herein provided,
(ii) the Holders of Certificates evidencing Percentage Interests aggregating not
less than 66 2/3% of the Trust Fund shall have made written request upon the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs and expenses and liabilities to be incurred
therein or thereby, and (iii) the Trustee, for 60 days after its receipt of such
notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding.
(d) No one or more Certificateholders shall have any right by virtue
of any provision of this Agreement to affect the rights of any other
Certificateholders or to obtain or seek to obtain priority or preference over
any other such Certificateholder, or to enforce any right under this Agreement,
except in the manner herein provided and for the equal, ratable and common
benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section 11.04, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 11.05. Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by
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such Certificateholders in person or by an agent duly appointed in writing.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is expressly required, to the Depositor. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee and the
Depositor, if made in the manner provided in this Section 11.05.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his or her authority. The fact and date of the execution of any such
instrument or writing, or the authority of the individual executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing on such Certificates, except an endorsement in
accordance with Section 5.02 made on a Regular Certificate presented in
accordance with Section 5.04) shall be proved by the Certificate Register, and
neither the Trustee, the Securities Administrator, the Depositor, the Master
Servicer nor any successor to any such parties shall be affected by any notice
to the contrary.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action of the holder of any Regular Certificate shall bind every
future holder of the same Regular Certificate and the holder of every Regular
Certificate issued upon the registration of transfer or exchange thereof, if
applicable, or in lieu thereof with respect to anything done, omitted or
suffered to be done by the Trustee, the Securities Administrator, the Depositor,
the Master Servicer or any successor to any such party in reliance thereon,
whether or not notation of such action is made upon such Certificates.
(e) In determining whether the Holders of the requisite percentage of
Certificates evidencing Percentage Interests have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Certificates
owned by the Trustee, the Securities Administrator, the Depositor, the Master
Servicer or any Affiliate thereof shall be disregarded, except as otherwise
provided in Section 11.02(b) and except that, in determining whether the
Securities Administrator or the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Certificates which a Responsible Officer of the Trustee knows to be so owned
shall be so disregarded. Certificates which have been pledged in good faith to
the Trustee, the Securities Administrator, the Depositor, the Master Servicer or
any Affiliate thereof may be regarded as outstanding if the pledgor establishes
to the satisfaction of the Securities Administrator the pledgor's right to act
with respect to such Certificates and that the pledgor is not an Affiliate of
the Trustee, the Securities Administrator, the Depositor, or the Master
Servicer, as the case may be.
Section 11.06. Governing Law. THIS AGREEMENT AND THE CERTIFICATES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
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YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAWS RULES AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
Section 11.07. Notices. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at (including delivery by
facsimile) or mailed by registered mail, return receipt requested, postage
prepaid, or by recognized overnight courier, to (i) in the case of the
Depositor, 0 Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Vice
President-Servicing, telecopier number: (000) 000-0000, or to such other address
as may hereafter be furnished to the other parties hereto in writing; (ii) in
the case of the Trustee, at its Corporate Trust Office, or such other address as
may hereafter be furnished to the other parties hereto in writing; (iii) in the
case of the Master Servicer or Securities Administrator, Xxxxx Fargo Bank, N.A.,
X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000, Attention: Client Service Manager MLMI
Series 2006-AF2, or, in the case of overnight deliveries, 0000 Xxx Xxxxxxxxx
Xxxx, Xxxxxxxx, Xxxxxxxx 00000-0000, Attention: Client Service Manager MLMI
Series 2006-AF2, facsimile no.: (000) 000-0000, or such other address as may
hereafter be furnished to the other parties hereto in writing; (iv) in the case
of the Custodian, Xxxxx Fargo Bank, N.A., 0000 00xx Xxxxxx Xxxxxxxxx, XX 0031,
Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: MLMI Series 2006-AF2; or such other
address as may hereafter be furnished to the other parties hereto in writing; or
(v) in the case of the Rating Agencies, Xxxxx'x Investors Service, Inc., 00
Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 and Standard & Poor's, a
division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000. Any notice delivered to the Depositor, the Trustee, the Securities
Administrator or the Master Servicer under this Agreement shall be effective
only upon receipt. Any notice required or permitted to be mailed to a
Certificateholder, unless otherwise provided herein, shall be given by
first-class mail, postage prepaid, at the address of such Certificateholder as
shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given when mailed, whether or not the Certificateholder receives such notice.
Section 11.08. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severed from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
Section 11.09. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the respective successors and
assigns of the parties hereto.
Section 11.10. Article and Section Headings. The article and section
headings herein are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof.
Section 11.11. Counterparts. This Agreement may be executed in two or more
counterparts each of which when so executed and delivered shall be an original
but all of which together shall constitute one and the same instrument.
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Section 11.12. Notice to Rating Agencies. The article and section headings
herein are for convenience of reference only, and shall not limited or otherwise
affect the meaning hereof. The Trustee shall promptly provide notice to each
Rating Agency with respect to each of the following of which it has actual
knowledge:
1. Any material change or amendment to this Agreement or the Servicing
Agreements;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Trustee, the Master Servicer or
the Securities Administrator;
4. The repurchase or substitution of Mortgage Loans;
5. The final payment to Certificateholders; and
6. Any change in the location of the Master Servicer Collection Account or
the Distribution Account.
ARTICLE XII.
REMIC ADMINISTRATION
Section 12.01. [Reserved].
Section 12.02. Prohibited Transactions and Activities. Neither the
Depositor nor the Securities Administrator shall sell, dispose of, or substitute
for any of the Mortgage Loans, except in a disposition pursuant to (i) the
foreclosure of a Mortgage Loan, (ii) the bankruptcy of the Trust Fund, (iii) the
termination of each REMIC pursuant to Article X of this Agreement, (iv) a
substitution pursuant to Article II of this Agreement or (v) a repurchase of
Mortgage Loans pursuant to Article II of this Agreement, nor acquire any assets
for any REMIC, nor sell or dispose of any investments in the Distribution
Account for gain, nor accept any contributions to any REMIC after the Closing
Date, unless it has received an Opinion of Counsel (at the expense of the party
causing such sale, disposition, or substitution) that such disposition,
acquisition, substitution, or acceptance will not (a) affect adversely the
status of any such REMIC as a REMIC or of the interests therein other than the
Residual Certificate as the regular interests therein, (b) affect the
distribution of interest or principal on the Certificates, (c) result in the
encumbrance of the assets transferred or assigned to the Trust Fund (except
pursuant to the provisions of this Agreement) or (d) cause any such REMIC to be
subject to any tax including a tax on prohibited transactions or prohibited
contributions pursuant to the REMIC Provisions.
Section 12.03. Indemnification with Respect to Prohibited Transactions or
Loss of REMIC Status. In the event that a REMIC fails to qualify as a REMIC,
loses its status as a REMIC, or incurs federal, state or local taxes as a result
of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Securities Administrator of
its duties and obligations set forth herein, the Securities Administrator shall
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indemnify the Certificateholders of the related Residual Certificate against any
and all losses, claims, damages, liabilities or expenses ("Losses") resulting
from such negligence; provided, however, that the Securities Administrator shall
not be liable for any such Losses attributable to the action or inaction of the
Depositor or the Holder of the Residual Certificate, nor for any such Losses
resulting from misinformation provided by any of the foregoing parties on which
the Securities Administrator has relied. Notwithstanding the foregoing, however,
in no event shall the Trustee or the Securities Administrator have any liability
(1) for any action or omission that is taken in accordance with and in
compliance with the express terms of, or which is expressly permitted by the
terms of, this Agreement or the Mortgage Loan Purchase Agreement, (2) for any
Losses other than arising out of malfeasance, willful misconduct or negligent
performance by the Securities Administrator with respect to its duties and
obligations set forth herein, and (3) for any special or consequential damages
to Certificateholders of the related Residual Certificate (in addition to
payment of principal and interest on the Certificates).
Section 12.04. REO Property.
(a) Notwithstanding any other provision of this Agreement, the
Securities Administrator shall not, except to the extent provided in this
Agreement for which the Securities Administrator is obligated to perform,
knowingly permit the Servicer to rent, lease, otherwise earn income or take any
other action on behalf of any REMIC with respect to any REO Property which might
cause such REO Property to fail to qualify as "foreclosure property" within the
meaning of section 860G(a)(8) of the Code or result in the receipt by any REMIC
of any "income from non-permitted assets" within the meaning of section
860F(a)(2) of the Code or any "net income from foreclosure property" which is
subject to tax under the REMIC Provisions unless the Servicer has provided to
the Securities Administrator an Opinion of Counsel concluding that, under the
REMIC Provisions, such action would not adversely affect the status of any REMIC
as a REMIC and any income generated for any REMIC by the REO Property would not
result in the imposition of a tax upon such REMIC.
(b) The Depositor shall cause the Servicer (to the extent provided in
the Servicing Agreement) to make reasonable efforts to sell any REO Property for
its fair market value. In any event, however, the Depositor shall, or shall
cause the Servicer (to the extent provided in this Agreement) to, dispose of any
REO Property within three years of its acquisition by the Issuing Entity unless
the Depositor or the Servicer (on behalf of the Issuing Entity) has received a
grant of extension from the Internal Revenue Service to the effect that, under
the REMIC Provisions and any relevant proposed legislation and under applicable
state law, the REMIC may hold REO Property for a longer period without adversely
affecting the REMIC status of such REMIC or causing the imposition of a Federal
or state tax upon such REMIC. If such an extension has been received, then the
Depositor, acting on behalf of the Trustee hereunder, shall, or shall cause the
Servicer to, continue to attempt to sell the REO Property for its fair market
value for such period longer than three years as such extension permits (the
"Extended Period"). If such an extension has not been received and the Depositor
or the Servicer, acting on behalf of the Issuing Entity hereunder, is unable to
sell the REO Property within 33 months after its acquisition by the Issuing
Entity or if such an extension, has been received and the Depositor or the
Servicer is unable to sell the REO Property within the period ending three
months before the close of the Extended Period, the Depositor shall cause the
Servicer, before the end of the three year period or the Extended Period, as
applicable, to (i)
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purchase such REO Property at a price equal to the REO Property's fair market
value or (ii) auction the REO Property to the highest bidder (which may be the
Servicer) in an auction reasonably designed to produce a fair price prior to the
expiration of the three-year period or the Extended Period, as the case may be.
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IN WITNESS WHEREOF, the Depositor, the Trustee, the Master Servicer and the
Securities Administrator have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first above
written.
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.,
as Depositor
By:
------------------------------------
Name: Xxxx Park
Title: Authorized Signatory
HSBC BANK USA, NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXX FARGO BANK, N.A.,
as Master Servicer
By:
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
XXXXX FARGO BANK, N.A.,
as Securities Administrator
By:
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.,
Depositor
XXXXX FARGO BANK, N.A.,
Master Servicer and Securities Administrator
and
HSBC BANK USA, NATIONAL ASSOCIATION,
Trustee
STACK II POOLING AND SERVICING TERMS,
Constituting,
Along with the Stack I Pooling and Servicing Terms, the
POOLING AND SERVICING AGREEMENT
Dated as of October 1, 2006
----------
Mortgage Pass-Through Certificates, MLMI Series 2006-AF2
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS.................................................... 7
Section 1.02 Accounting.............................................. 51
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES.................................................. 52
Section 2.01 Conveyance of Mortgage Loans to Trustee................. 52
Section 2.02 Acceptance of Mortgage Loans by Trustee................. 55
Section 2.03 Assignment of Interest in the Stack II Mortgage Loan
Purchase Agreement...................................... 58
Section 2.04 Substitution of Mortgage Loans.......................... 59
Section 2.05 Issuance of Certificates................................ 61
Section 2.06 Representations and Warranties Concerning the
Depositor............................................... 61
Section 2.07 Representations and Warranties Concerning the Master
Servicer and Securities Administrator................... 62
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS............... 64
Section 3.01 Master Servicer......................................... 64
Section 3.02 REMIC-Related Covenants................................. 65
Section 3.03 Monitoring of Servicers................................. 65
Section 3.04 Fidelity Bond........................................... 66
Section 3.05 Power to Act; Procedures................................ 66
Section 3.06 Due-on-Sale Clauses; Assumption Agreements.............. 67
Section 3.07 Release of Mortgage Files............................... 67
Section 3.08 Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee......................... 68
Section 3.09 Standard Hazard Insurance and Flood Insurance Policies.. 69
Section 3.10 Presentment of Claims and Collection of Proceeds........ 69
Section 3.11 Maintenance of the Primary Mortgage Insurance Policies.. 70
Section 3.12 Trustee to Retain Possession of Certain Insurance
Policies and Documents.................................. 70
Section 3.13 Realization Upon Defaulted Mortgage Loans............... 71
Section 3.14 Compensation for the Master Servicer.................... 71
Section 3.15 REO Property............................................ 71
Section 3.16 Annual Statement as to Compliance....................... 72
Section 3.17 Reports on Assessment of Compliance and Attestation..... 73
Section 3.18 Periodic Filings........................................ 75
Section 3.19 Compliance with Regulation AB........................... 82
ARTICLE IV ACCOUNTS...................................................... 83
Section 4.01 Protected Accounts...................................... 83
Section 4.02 Master Servicer Collection Account...................... 84
Section 4.03 Permitted Withdrawals and Transfers from the Master
Servicer Collection Account............................. 85
Section 4.04 Distribution Account.................................... 86
Section 4.05 Permitted Withdrawals and Transfers from the
Distribution Account.................................... 86
Section 4.06 [Reserved.]............................................. 88
ARTICLE V CERTIFICATES................................................... 90
Section 5.01 The Certificates........................................ 90
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates................................ 90
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates....... 94
Section 5.04 Persons Deemed Owners................................... 95
Section 5.05 Access to List of Certificateholders' Names and
Addresses............................................... 95
Section 5.06 Book-Entry Certificates................................. 95
Section 5.07 Notices to Depository................................... 96
Section 5.08 Definitive Certificates................................. 96
Section 5.09 Maintenance of Office or Agency......................... 97
ARTICLE VI PAYMENTS TO CERTIFICATEHOLDERS................................ 98
Section 6.01 Distributions on the Certificates....................... 98
Section 6.02 Allocation of Losses.................................... 103
Section 6.03 Payments................................................ 104
Section 6.04 Statements to Certificateholders........................ 104
Section 6.05 Monthly Advances........................................ 107
Section 6.06 Compensating Interest Payments.......................... 107
ARTICLE VII THE MASTER SERVICER AND THE DEPOSITOR........................ 108
Section 7.01 Liabilities of the Master Servicer...................... 108
Section 7.02 Merger or Consolidation of the Master Servicer.......... 108
Section 7.03 Indemnification from the Master Servicer and the
Depositor............................................... 108
Section 7.04 Limitations on Liability of the Master Servicer and
Others.................................................. 109
Section 7.05 Master Servicer Not to Resign........................... 110
Section 7.06 Successor Master Servicer............................... 110
Section 7.07 Sale and Assignment of Master Servicing................. 110
ARTICLE VIII DEFAULT..................................................... 112
Section 8.01 Events of Default....................................... 112
Section 8.02 Trustee to Act; Appointment of Successor................ 113
Section 8.03 Notification to Certificateholders...................... 114
Section 8.04 Waiver of Defaults...................................... 114
Section 8.05 List of Certificateholders.............................. 115
ARTICLE IX CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR....... 116
iii
Section 9.01 Duties of Trustee....................................... 116
Section 9.02 Certain Matters Affecting the Trustee and the
Securities Administrator................................ 118
Section 9.03 Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans.......................... 120
Section 9.04 Trustee and Securities Administrator May Own
Certificates............................................ 120
Section 9.05 Trustee's and Securities Administrator's Fees and
Expenses................................................ 120
Section 9.06 Eligibility Requirements for Trustee and Securities
Administrator........................................... 121
Section 9.07 Insurance............................................... 122
Section 9.08 Resignation and Removal of the Trustee and Securities
Administrator........................................... 122
Section 9.09 Successor Trustee and Successor Securities
Administrator........................................... 123
Section 9.10 Merger or Consolidation of Trustee or Securities
Administrator........................................... 123
Section 9.11 Appointment of Co-Trustee or Separate Trustee........... 124
Section 9.12 Federal Information Returns and Reports to
Certificateholders; REMIC Administration................ 125
ARTICLE X TERMINATION.................................................... 130
Section 10.01 Termination upon Liquidation or Repurchase of all
Mortgage Loans.......................................... 130
Section 10.02 Final Distribution on the Certificates.................. 131
Section 10.03 Additional Termination Requirements..................... 132
ARTICLE XI MISCELLANEOUS PROVISIONS...................................... 134
Section 11.01 Intent of Parties....................................... 134
Section 11.02 Amendment............................................... 134
Section 11.03 Recordation of Agreement................................ 136
Section 11.04 Limitation on Rights of Certificateholders.............. 136
Section 11.05 Acts of Certificateholders.............................. 136
Section 11.06 Governing Law........................................... 138
Section 11.07 Notices................................................. 138
Section 11.08 Severability of Provisions.............................. 139
Section 11.09 Successors and Assigns.................................. 139
Section 11.10 Article and Section Headings............................ 139
Section 11.11 Counterparts............................................ 139
Section 11.12 Notice to Rating Agencies............................... 139
ARTICLE XII REMIC ADMINISTRATION......................................... 140
Section 12.01 REMIC Administration.................................... 140
Section 12.02 Prohibited Transactions and Activities.................. 140
Section 12.03 Indemnification with Respect to Prohibited Transactions
or Loss of REMIC Status................................. 140
Section 12.04 REO Property............................................ 141
iv
EXHIBITS
Exhibit A-1 - Form of Class AV and Class MV Certificates
Exhibit A-2 - Form of Class BV Certificates
Exhibit A-3 - Form of Class A-R Certificate
Exhibit A-4 - Form of Class P Certificate
Exhibit A-5 - Form of Class C Certificate
Exhibit B-1 - Stack I Mortgage Loan Schedule
Exhibit B-2 - Stack II Mortgage Loan Schedule
Exhibit C - [Reserved]
Exhibit D - Request for Release of Documents
Exhibit E-1 - Form of Transferee's Letter
Exhibit E-2 - Form of Transferor Certificate
Exhibit F-1 - Form of Transferor Representation Letter
Exhibit F-2 - Form of Investor Representation Letter
Exhibit F-3 - Form of Rule 144A Letter
Exhibit G - Form of Custodial Agreement
Exhibit H-1 - Class AV-1 One-Month LIBOR Cap Table
Exhibit H-2 - Class AV-2 One-Month LIBOR Cap Table
Exhibit H-3 - Stack II Subordinate Certificate One-Month LIBOR Cap Table
Exhibit I-1 to I-3 - Assignment Agreements
Exhibit J-1 - Stack I Mortgage Loan Purchase Agreement
Exhibit J-2 - Stack II Mortgage Loan Purchase Agreement
Exhibit K - Servicing Criteria To Be Addressed in Assessment of
Compliance
Exhibit L - Form of Xxxxxxxx-Xxxxx Certification
Exhibit M - Form of Back-up Xxxxxxxx-Xxxxx Certification
Exhibit N-1 - Form of Class AV-1 Cap Contract
Exhibit N-2 - Form of Class AV-2 Cap Contract
Exhibit N-3 - Form of Stack II Subordinate Certificate Cap Contract
Exhibit O - Additional Disclosure Notification
Exhibit P - Form of Item 1123 Certification of Servicer
Exhibit Q-1 - Additional Form 10-D Disclosure
Exhibit Q-2 - Additional Form 10-K Disclosure
Exhibit Q-3 - Form 8-K Disclosure Information
v
STACK II POOLING AND SERVICING TERMS
These Stack II Pooling and Servicing Terms, dated as of October 1, 2006
(the "Agreement," and, together with the Stack I Pooling and Servicing Terms
(the "Stack I Agreement"), dated as of October 1, 2006, the "Pooling and
Servicing Agreement"), among XXXXXXX XXXXX MORTGAGE INVESTORS, INC., as
depositor (the "Depositor"), XXXXX FARGO BANK, N.A., as master servicer (in such
capacity, the "Master Servicer") and as securities administrator (in such
capacity, the "Securities Administrator"), and HSBC BANK USA, NATIONAL
ASSOCIATION, as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor has acquired the Mortgage Loans from the Sponsor and at the
Closing Date is the owner of the Mortgage Loans and the other related property
being conveyed by the Depositor to the Trustee hereunder on behalf of the
Issuing Entity for inclusion in the Trust Fund. On the Closing Date, the
Depositor will acquire the Certificates from the Trustee as consideration for
the Depositor's transfer to the Issuing Entity of the Mortgage Loans and the
other related property constituting that portion of the Trust Fund relating to
the Certificates. The Depositor has duly authorized the execution and delivery
of this Agreement to provide for the conveyance to the Issuing Entity of the
Mortgage Loans and the other related property constituting that portion of the
Trust Fund relating to the Certificates. All covenants and agreements made by
the Sponsor in the Stack II Mortgage Loan Purchase Agreement and in this
Agreement and all covenants and agreements made by the Depositor, the Trustee,
the Securities Administrator and the Master Servicer herein with respect to the
Mortgage Loans and the other related property constituting that portion of the
Trust Fund relating to the Certificates are for the benefit of the Holders from
time to time of the Certificates. The Depositor, the Trustee, the Securities
Administrator and the Master Servicer are entering into this Agreement, and the
Trustee on behalf of the Issuing Entity is accepting the Trust Fund created
hereby, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged.
In conjunction herewith, the Depositor has acquired the Stack I Mortgage
Loans from the Sponsor and at the Closing Date is the owner of the Stack I
Mortgage Loans and the other related property being conveyed by the Depositor to
the Trustee under the Stack I Agreement on behalf of the Issuing Entity for
inclusion in the Trust Fund. On the Closing Date, the Depositor will acquire the
Stack I Certificates from the Securities Administrator as consideration for the
Depositor's transfer to the Issuing Entity of the Stack I Mortgage Loans and the
other related property constituting that portion of the Trust Fund relating to
the Stack I Certificates. The Depositor has duly authorized the execution and
delivery of the Stack I Agreement to provide for the conveyance to the Issuing
Entity of the Stack I Mortgage Loans and the other related property constituting
that portion of the Trust Fund relating to the Stack I Certificates. The terms
and conditions relating to the issuance of the Stack I Certificates are set
forth in the Stack I Agreement.
As provided herein, the Securities Administrator shall elect that the
portion of the Trust Fund relating to Loan Group 2 and Loan Group 3 be treated
for federal income tax purposes as consisting of (i) two real estate mortgage
investment conduits, (ii) the right to receive payments distributable to the
Class P Certificates, (iii) the Cap Contracts and the Cap Contract Account and
(iv) the grantor trusts described in Section 9.12 hereof. The Lower Tier REMIC
will consist of all of
the assets constituting the Trust Fund relating to Loan Group 2 and Loan Group 3
(other than the assets described in clauses (ii), (iii) and (iv) above and other
than the Lower Tier REMIC Regular Interests), and will be evidenced by the Lower
Tier REMIC Regular Interests (which will be uncertificated and will represent
the "regular interests" in the Lower Tier REMIC) and the Class LTR Interest as
the single "residual interest" in the Lower Tier REMIC. The Trustee will hold
the Lower Tier REMIC Regular Interests. The Upper Tier REMIC will consist of the
Lower Tier REMIC Regular Interests and will be evidenced by the REMIC Regular
Interests (which will represent the "regular interests" in the Upper Tier REMIC)
and the Residual Interest as the single "residual interest" in the Upper Tier
REMIC. The Class A-R Certificate will represent beneficial ownership of the
Class LTR Interest and the Residual Interest as well as the residual interest in
any REMIC created under the Stack I Agreement. The "latest possible maturity
date" for federal income tax purposes of all interests created hereby will be
the Latest Possible Maturity Date.
THE CERTIFICATES
The following table sets forth (or describes) the Class designation,
initial Class Certificate Balance or initial notional amount, integral dollar
multiples in excess thereof (except that one Certificate of each Class may be
issued in a different amount which must be in excess of the applicable minimum
dollar denomination) and minimum denomination for each Class of Certificates
comprising interests in the Trust Fund created hereunder.
Class Initial Class Certificate Balance Integral Multiples in Minimum Denominations
Designation or Initial Notional Amount Excess of Minimum or Percentage Interest
----------- --------------------------------- --------------------- ----------------------
Class AV-1 $125,408,000 $1.00 $25,000.00
Class AV-2A $117,005,000 $1.00 $25,000.00
Class AV-2B $ 35,183,000 $1.00 $25,000.00
Class AV-2C $ 41,336,000 $1.00 $25,000.00
Class AV-2D $ 18,676,000 $1.00 $25,000.00
Class A-R $ 100 N/A $ 100
Class MV-1 $ 7,589,000 $1.00 $25,000.00
Class MV-2 $ 4,442,000 $1.00 $25,000.00
Class MV-3 $ 2,776,000 $1.00 $25,000.00
Class MV-4 $ 2,406,000 $1.00 $25,000.00
Class MV-5 $ 1,851,000 $1.00 $25,000.00
Class MV-6 $ 1,851,000 $1.00 $25,000.00
Class BV-1 $ 1,851,000 $1.00 $25,000.00
Class BV-2 $ 1,851,000 $1.00 $25,000.00
Class BV-3 $ 1,851,000 $1.00 $25,000.00
Class P N/A(1) 1% 100%
Class C (2) 1% (2)
----------
(1) The Class P Certificates shall not have minimum dollar denominations or
Class Certificate Balance and shall be issued in a minimum percentage
interest of 10% and an aggregate percentage interest of 100%. The Class P
Certificates will be entitled to receive Prepayment Penalties on the
Prepayment Penalty Mortgage Loans.
(2) The Class C Certificates shall not have minimum dollar denominations as the
Class Certificate Balance thereof shall vary over time as described herein
and shall be issued in a minimum percentage interest of 10% and an
aggregate percentage interest of 100%.
-2-
As of the Cut-off Date, the Mortgage Loans had an aggregate Stated
Principal Balance of $370,217,348.
In consideration of the mutual agreements herein contained, the Depositor,
the Trustee, Securities Administrator and the Master Servicer hereby agree as
follows:
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ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
otherwise expressly provided or unless the context otherwise requires, shall
have the meanings specified in this Article.
Accepted Master Servicing Practices: With respect to any Mortgage Loan, as
applicable, either (x) those customary mortgage master servicing practices of
prudent mortgage servicing institutions that master service mortgage loans of
the same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the Trustee
or the Master Servicer (except in its capacity as successor to a Servicer), or
(y) as provided in the applicable Servicing Agreement, to the extent applicable
to any Servicer, but in no event below the standard set forth in clause (x).
Account: The Master Servicer Collection Account, Distribution Account and
any Protected Account as the context may require.
Accountant's Attestation: As defined in Section 3.17.
Accrual Period: Means, with respect to the Stack II Certificates and the Lower
Tier REMIC Interests and a Distribution Date, the period from and including the
preceding Distribution Date (or from the Closing Date in the case of the first
Distribution Date) to and including the day prior to such Distribution Date. All
calculations of interest with respect to the Stack II Certificates and the Lower
Tier REMIC Interests will be made on the basis of the actual number of days
elapsed in the related Accrual Period and a 360 day year.
Additional Disclosure Notification: As defined in Section 3.18(b).
Additional Form 10-D Disclosure: As defined in Section 3.18(e).
Additional Form 10-K Disclosure: As defined in Section 3.18(h).
Adjustment Date: means, with respect to a Stack II Mortgage Loan, generally
the first day of the month or months specified in the related mortgage note.
Adverse REMIC Event: As defined in Section 9.12(g).
Affiliate: As to any Person, any other Person controlling, controlled by or
under common control with such Person. "Control" means the power to direct the
management and policies of a Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise. "Controlled" and
"Controlling" have meanings correlative to the foregoing. The Master Servicer
may conclusively presume that a Person is not an Affiliate of another Person
unless a Responsible Officer of the Master Servicer has actual knowledge to the
contrary.
Agreement: These Stack II Pooling and Servicing Terms, dated as of October
1, 2006, by and among the Depositor, the Master Servicer, the Securities
Administrator and the Trustee, including the exhibits hereto, and all amendments
hereof and supplements hereto.
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Applicable Credit Rating: For any long-term deposit or security, a credit
rating of "AAA" in the case of S&P or "Aaa" in the case of Xxxxx'x. For any
short-term deposit or security, a rating of "A-l+" in the case of S&P or "P-1"
in the case of Xxxxx'x.
Applied Realized Loss Amount: With respect to any class of Stack II
Subordinate Certificates and as to any Distribution Date, the sum of the
Realized Losses with respect to the Stack II Mortgage Loans which have been
applied in reduction of the Class Certificate Balance of such class.
Appraised Value: For any Mortgaged Property related to a Mortgage Loan, the
amount set forth as the appraised value of such Mortgaged Property in an
appraisal made for the mortgage originator in connection with its origination of
the related Mortgage Loan.
Assessment of Compliance: As defined in Section 3.17.
Assignment: An assignment of the Mortgage, notice of transfer or equivalent
instrument, in recordable form, sufficient under the laws of the jurisdiction
wherein the related Mortgaged Property is located to reflect of record the sale
of the Mortgage Loan to the Trustee for the benefit of Certificateholders, which
assignment, notice of transfer or equivalent instrument may be in the form of
one or more blanket assignments covering Mortgages secured by Mortgaged
Properties located in the same county, if permitted by law and accompanied by an
Opinion of Counsel to that effect.
Assignment Agreements: The Citi Assignment Agreement and the PHH Assignment
Agreement, which are attached hereto as Exhibits I-2 and I-3, respectively.
Auction: The one-time auction conducted by the Securities Administrator, as
described in Section 10.01(b) hereof.
Available Funds Cap: means any of the Class AV-1 Available Funds Cap, the
Class AV-2 Available Funds Cap or the Weighted Average Available Funds Cap.
Back-Up Certification: As defined in Section 3.18(k).
Bankruptcy Code: The United States Bankruptcy Code, as amended as codified
in 11 U.S.C. Sections 101-1330.
Book-Entry Certificates: Any of the Certificates that shall be registered
in the name of the Depository or its nominee, the ownership of which is
reflected on the books of the Depository or on the books of a Person maintaining
an account with the Depository (directly, as a Depository Participant, or
indirectly, as an indirect participant in accordance with the rules of the
Depository and as described in Section 5.02 hereof). On the Closing Date, the
Certificates (other than the Class A-R Certificate) shall be Book-Entry
Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a day
on which the New York Stock Exchange or Federal Reserve is closed or on which
banking institutions in the jurisdiction in which the Trustee, the Master
Servicer, any Servicer or the Securities Administrator are authorized or
obligated by law or executive order to be closed.
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Cap Contract: Any of the Class AV-1 Cap Contract, the Class AV-2 Cap
Contract or the Subordinate Certificates Cap Contract.
Cap Contract Account: The separate Eligible Account created and maintained
by the Securities Administrator pursuant to Section 6.01(l) in the name of the
Securities Administrator for the benefit of the Issuing Entity and designated
"Xxxxx Fargo Bank, National Association, as Securities Administrator for HSBC
Bank USA, National Association, as Trustee f/b/o holders of Xxxxxxx Xxxxx
Mortgage Investors, Inc., Mortgage Pass-Through Certificates, MLMI Series
2006-AF2 - Cap Contract Account (Stack II)." Funds in the Cap Contract Account
shall be held in trust for the Issuing Entity for the uses and purposes set
forth in this Agreement.
Cap Contract Counterparty: Royal Bank of Scotland plc with whom the
Securities Administrator, on behalf of the Issuing Entity, entered into each of
the Cap Contracts.
Cap Contract Notional Balance: Any of the Class AV-1 Cap Contract Notional
Balance, the Class AV-2 Cap Contract Notional Balance or Subordinate
Certificates Cap Contract Notional Balance.
Cap Contract Termination Date: Each of the Class AV-1 Cap Contract
Termination Date, the Class AV-2 Cap Contract Termination Date and the Stack II
Subordinate Certificates Cap Contract Termination Date.
Certificate: Any mortgage pass-through certificate issued pursuant to this
Agreement evidencing a beneficial ownership interest in that portion of the
Trust Fund related to the Mortgage Loans, signed and countersigned by the
Securities Administrator. For the avoidance of doubt, as defined below, the term
"Stack I Certificate" shall be used to refer to any mortgage pass-through
certificate issued pursuant to the Stack I Agreement, evidencing a beneficial
ownership interest in that portion of the Trust Fund related to the Stack I
Mortgage Loans, signed and countersigned by the Securities Administrator.
Certificate Group: Each of the Group 2 Certificates and the Group 3
Certificates.
Certificate Margin: Means the Class AV-1 Certificate Margin, the Class
AV-2A Certificate Margin, the Class AV-2B Certificate Margin, the Class AV-2C
Certificate Margin, the Class AV-2D Certificate Margin, the Class MV-1
Certificate Margin, the Class MV-2 Certificate Margin, the Class MV-3
Certificate Margin, the Class MV-4 Certificate Margin, the Class MV-5
Certificate Margin, the Class MV-6 Certificate Margin, the Class BV-1
Certificate Margin, the Class BV-2 Certificate Margin, the Class BV-3
Certificate Margin, and the Class A-R Certificate Margin.
Certificate Owner: With respect to each Book-Entry Certificate, any
beneficial owner thereof.
Certificate Rate: Means, with respect to any class of the LIBOR
Certificates on any Distribution Date, the lesser of (1) One-Month LIBOR plus
the related Certificate Margin for such class of Stack II Certificates, (2) the
related Available Funds Cap and (3) the related Maximum Rate Cap.
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Certificate Register: The register maintained pursuant to Section 5.02
hereof.
Certificateholder or Holder: The Person in whose name a Regular Certificate
is registered in the Certificate Register, except that a Disqualified
Organization or non-U.S. Person shall not be a Holder of the Class A-R
Certificate for any purpose hereof.
Certification Parties: As defined in Section 3.18(k).
Certifying Person: As defined in Section 3.18(k).
CitiMortgage: CitiMortgage, Inc., or any successor thereto.
CitiMortgage Assignment Agreement: The Assignment, Assumption and
Recognition Agreement, dated as of October 1, 2006, among CitiMortgage, the
Depositor and the Sponsor pursuant to which the CitiMortgage Servicing
Agreements and the rights of the Sponsor thereunder (other than the rights to
enforce the representations and warranties with respect to the CitiMortgage
Loans) were assigned to the Depositor for the benefit of the Certificateholders.
CitiMortgage Loans: The Mortgage Loans serviced by CitiMortgage pursuant to
the CitiMortgage Servicing Agreement.
CitiMortgage Servicing Agreements: Each of (i) the Mortgage Servicing
Purchase and Sale Agreement, dated as of September 1, 2006, between the Sponsor
and CitiMortgage; (i) the Mortgage Servicing Purchase and Sale Agreement, dated
as of February 27, 2006, between the Sponsor and CitiMortgage; and (iii) the
Mortgage Servicing Purchase and Sale Agreement, dated as of May 31, 2006,
between the Sponsor and CitiMortgage.
Class: Collectively, Certificates which have the same priority of payment
and bear the same class designation and the form of which is identical except
for variation in the Percentage Interest evidenced thereby.
Class A-R Certificate: The Class A-R Certificate executed, authenticated
and delivered by the Securities Administrator substantially in the form annexed
hereto as Exhibit A-3 and evidencing the ownership of the Class LTR Interest,
the residual interest in the Upper Tier REMIC and the residual interest in any
REMIC created under the Stack I Agreement.
Class A-R Class Certificate Balance: As of any date of determination, the
aggregate Class Certificate Balance of the Class A-R Certificate.
Class A-R Certificate Rate: For the first Distribution Date, 5.4800% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class A-R Margin, (2) the Class AV-1 Available Funds Cap for such
Distribution Date and (3) the Class AV-1 Maximum Rate Cap for such Distribution
Date.
Class A-R Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-R Certificate Rate on
the Class A-R Class Certificate Balance as of such Distribution Date plus the
portion of any previous distributions on such Class in respect of Current
Interest or a Class A-R Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Prepayment Interest
Shortfalls
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allocated on such Distribution Date to the Class A-R Certificate. For purposes
of calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class A-R Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class A-R Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
A-R Certificate with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class A-R Certificate Rate for the related Accrual Period.
Class A-R Margin: With respect to any Distribution Date, (i) on or before
the Initial Optional Termination Date, 0.160%, and (ii) after the Initial
Optional Termination Date, 0.320%.
Class AV-1 Available Funds Cap: With respect to a Distribution Date, the
per annum rate equal to the product of (i) 12, (ii) the quotient of (x) the
total scheduled interest on the Mortgage Loans in Group 2 based on the Net
Mortgage Rates in effect on the related Due Date, divided by (y) the aggregate
Stated Principal Balance of the Mortgage Loans in Group 2 as of the first day of
the related Accrual Period (or, in the case of the first Distribution Date, as
of the Cut-off Date) and (iii) a fraction, the numerator of which is 30, and the
denominator of which is the actual number of days in the related Accrual Period.
Class AV-1 Cap Contract: The confirmation and agreement between the
Securities Administrator on behalf of the Issuing Entity and the Cap Contract
Counterparty (in the form of Exhibit N-1 hereto).
Class AV-1 Cap Contract Notional Balance: With respect to any Distribution
Date, the Class AV-1 Cap Contract Notional Balance set forth for such
Distribution Date in the Class AV-1 One-Month LIBOR Cap Table attached hereto as
Exhibit H-1.
Class AV-1 Cap Contract Termination Date: The Distribution Date in June
2011.
Class AV-1 Certificate: Any Certificate designated as a "Class AV-1
Certificate" on the face thereof substantially in the form annexed hereto as
Exhibit A-1, executed by the Securities Administrator and authenticated and
delivered by the Securities Administrator, representing the right to
distributions as set forth herein and therein.
Class AV-1 Certificate Rate: For the first Distribution Date, 5.4800% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class AV-1 Margin, (2) the Class AV-1 Available Funds Cap for such
Distribution Date and (3) the Class AV-1 Maximum Rate Cap for such Distribution
Date.
Class AV-1 Class Certificate Balance: As of any date of determination, the
aggregate Class Certificate Balance of the Class AV-1 Certificates.
Class AV-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class AV-1 Certificate Rate on
the Class AV-1 Class Certificate
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Balance as of such Distribution Date plus the portion of any previous
distributions on such Class in respect of Current Interest or a Class AV-1
Interest Carry Forward Amount that is recovered as a voidable preference by a
trustee in bankruptcy, less any Prepayment Interest Shortfalls allocated on such
Distribution Date to the Class AV-1 Certificates.
Class AV-1 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class AV-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
AV-1 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class AV-1 Certificate Rate for the related Accrual Period.
Class AV-1 Lower Collar: With respect to each Distribution Date, the
applicable per annum rate set forth under the heading "1ML Strike Lower Collar"
in the Class AV-1 One-Month LIBOR Cap Table (set forth on Exhibit H-1).
Class AV-1 Margin: As of any Distribution Date, (i) on or before the
Initial Optional Termination Date, 0.160% per annum, and (ii) after the Initial
Optional Termination Date, 0.320% per annum.
Class AV-1 Maximum Rate Cap: With respect to a Distribution Date, the per
annum rate equal to the product of (i) 12, (ii) the quotient of (x) the total
scheduled interest that would have been due on the Group 2 Mortgage Loans had
the Stack II Mortgage Loans provided for interest at their maximum lifetime Net
Mortgage Rates, divided by (y) the aggregate Stated Principal Balance of the
Group 2 Mortgage Loans as of the first day of the related Accrual Period and
(iii) a fraction, the numerator of which is 30 and the denominator of which is
the actual number of days in the related Accrual Period.
Class AV-1 Upper Collar: With respect to each Distribution Date with
respect to which payments are received on the Class AV-1 Cap Contract, a rate
equal to the lesser of One-Month LIBOR and 10.840% per annum.
Class AV-2 Available Funds Cap: With respect to a Distribution Date, the
per annum rate equal to the product of (i) 12, (ii) the quotient of (x) the
total scheduled interest on the Mortgage Loans in Group 3 based on the Net
Mortgage Rates in effect on the related Due Date, divided by (y) the aggregate
Stated Principal Balance of the Mortgage Loans in Group 3 as of the first day of
the related Accrual Period (or, in the case of the first Distribution Date, as
of the Cut-off Date) and (iii) a fraction, the numerator of which is 30, and the
denominator of which is the actual number of days in the related Accrual Period.
Class AV-2 Cap Contract: The confirmation and agreement between the
Securities Administrator on behalf of the Issuing Entity and the Cap Contract
Counterparty (in the form of Exhibit N-2 hereto).
Class AV-2 Cap Contract Notional Balance: With respect to any Distribution
Date, the Class AV-2 Cap Contract Notional Balance set forth for such
Distribution Date in the Class AV-2 One-Month LIBOR Cap Table attached hereto as
Exhibit H-2.
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Class AV-2 Cap Contract Termination Date: The Distribution Date in May
2011.
Class AV-2 Certificate: Any one of the Class AV-2A, Class AV-2B, Class
AV-2C and Class AV-2D Certificates as designated on the face thereof
substantially in the form annexed hereto as Exhibit A-1, executed by the
Securities Administrator and authenticated and delivered by the Securities
Administrator, representing the right to distributions as set forth herein and
therein.
Class AV-2 Lower Collar: With respect to each Distribution Date, the
applicable per annum rate set forth under the heading "1ML Strike Lower Collar"
in the Class AV-2 One-Month LIBOR Cap Table (set forth on Exhibit H-2).
Class AV-2 Maximum Rate Cap: With respect to a Distribution Date, the per
annum rate equal to the product of (i) 12, (ii) the quotient of (x) the total
scheduled interest that would have been due on the Group 3 Mortgage Loans had
the Stack II Mortgage Loans provided for interest at their maximum lifetime Net
Mortgage Rates, divided by (y) the aggregate Stated Principal Balance of the
Group 3 Mortgage Loans as of the first day of the related Accrual Period and
(iii) a fraction, the numerator of which is 30 and the denominator of which is
the actual number of days in the related Accrual Period.
Class AV-2 Upper Collar: With respect to each Distribution Date with
respect to which payments are received on the Class AV-2 Cap Contract, a rate
equal to the lesser of One-Month LIBOR and 9.330% per annum.
Class AV-2A Certificate: Any Certificate designated as a "Class AV-2A
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to distributions as set forth herein.
Class AV-2A Certificate Rate: For the first Distribution Date, 5.3800% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class AV-2A Margin, (2) the Class AV-2 Available Funds Cap for such
Distribution Date and (3) the Class AV-2 Maximum Rate Cap for such Distribution
Date.
Class AV-2A Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class AV-2A Certificate Rate on
the Class AV-2A Class Certificate Balance as of such Distribution Date plus the
portion of any previous distributions on such Class in respect of Current
Interest or a Class AV-2A Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Prepayment Interest
Shortfalls allocated on such Distribution Date to the Class AV-2A Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class AV-2A Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class AV-2A Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
AV-2A Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class AV-2A Certificate Rate for the related Accrual Period.
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Class AV-2A Margin: As of any Distribution Date, (i) on or before the
Initial Optional Termination Date, 0.060% per annum, and (ii) after the Initial
Optional Termination Date, 0.120% per annum.
Class AV-2B Certificate: Any Certificate designated as a "Class AV-2B
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to distributions as set forth herein.
Class AV-2B Certificate Rate: For the first Distribution Date, 5.4700% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class AV-2B Margin, (2) the Class AV-2 Available Funds Cap for such
Distribution Date and (3) the Class AV-2 Maximum Rate Cap for such Distribution
Date.
Class AV-2B Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class AV-2B Certificate Rate on
the Class AV-2B Class Certificate Balance as of such Distribution Date plus the
portion of any previous distributions on such Class in respect of Current
Interest or a Class AV-2B Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Non-Supported Interest
Shortfall allocated on such Distribution Date to the Class AV-2B Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class AV-2B Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class AV-2B Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
AV-2B Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class AV-2B Certificate Rate for the related Accrual Period.
Class AV-2B Margin: As of any Distribution Date, (i) on or before the
Initial Optional Termination Date, 0.150% per annum, and (ii) after the Initial
Optional Termination Date, 0.300% per annum.
Class AV-2C Certificate: Any Certificate designated as a "Class AV-2C
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to distributions as set forth herein.
Class AV-2C Certificate Rate: For the first Distribution Date, 5.5500% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class AV-2C Margin, (2) the Class AV-2 Available Funds Cap for such
Distribution Date and (3) the Class AV-2 Maximum Rate Cap for such Distribution
Date.
Class AV-2C Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class AV-2C Certificate Rate on
the Class AV-2C Class Certificate Balance as of such Distribution Date plus the
portion of any previous distributions on such Class in respect of Current
Interest or a Class AV-2C Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Prepayment Interest
Shortfalls allocated on such Distribution Date to the Class AV-2C Certificates.
For purposes of
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calculating interest, principal distributions on a Distribution Date will be
deemed to have been made on the first day of the Accrual Period in which such
Distribution Date occurs.
Class AV-2C Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class AV-2C Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
AV-2C Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class AV-2C Certificate Rate for the related Accrual Period.
Class AV-2C Margin: As of any Distribution Date, (i) on or before the
Initial Optional Termination Date, 0.230% per annum, and (ii) after the Initial
Optional Termination Date, 0.460% per annum.
Class AV-2D Certificate: Any Certificate designated as a "Class AV-2D
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to distributions as set forth herein.
Class AV-2D Certificate Rate: For the first Distribution Date, 5.5400% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class AV-2D Margin, (2) the Class AV-2 Available Funds Cap for such
Distribution Date and (3) the Class AV-2 Maximum Rate Cap for such Distribution
Date
Class AV-2D Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class AV-2D Certificate Rate on
the Class AV-2D Class Certificate Balance as of such Distribution Date plus the
portion of any previous distributions on such Class in respect of Current
Interest or a Class AV-2D Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Prepayment Interest
Shortfalls allocated on such Distribution Date to the Class AV-2D Certificates.
For purposes of calculating interest, principal distributions on a Distribution
Date will be deemed to have been made on the first day of the Accrual Period in
which such Distribution Date occurs.
Class AV-2D Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class AV-2D Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
AV-2D Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class AV-2D Certificate Rate for the related Accrual Period.
Class AV-2D Margin: As of any Distribution Date, (i) on or before the
Initial Optional Termination Date, 0.220% per annum, and (ii) after the Initial
Optional Termination Date, 0.440% per annum.
Class BV Certificate: Any one of the Class BV-1, Class BV-2 or Class BV-3
Certificates as designated on the face thereof substantially in the form annexed
hereto as Exhibit A-2, executed by the Securities Administrator and
authenticated and delivered by the Securities Administrator, representing the
right to distributions as set forth herein and therein.
Class BV Certificateholder: Any Holder of a Class BV Certificate.
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Class BV-1 Certificate: Any Certificate designated as "Class BV-1
Certificate "on the face thereof in the form of Exhibit A-2 hereto, representing
the right to distributions as set forth herein.
Class BV-1 Certificate Rate: For the first Distribution Date, 6.1200% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class BV-1 Margin, (2) the Weighted Average Available Funds Cap for
such Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
Class BV-1 Class Certificate Balance: As of any date of determination, the
aggregate Class Certificate Balance of the Class BV-1 Certificates.
Class BV-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class BV-1 Certificate Rate on
the Class BV-1 Class Certificate Balance as of such Distribution Date plus the
portion of any previous distributions on such Class in respect of Current
Interest or Class BV-1 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Prepayment Interest
Shortfalls allocated on such Distribution Date to the Class BV-1 Certificates.
Class BV-1 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class BV-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
BV-1 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class BV-1 Certificate Rate for the related Accrual Period.
Class BV-1 Margin: As of any Distribution Date, (i) on or before the
Initial Optional Termination Date, 0.800% per annum, and (ii) after the Initial
Optional Termination Date, 1.200% per annum.
Class BV-1 Principal Distribution Amount: means, with respect to any
Distribution Date on or after the Stepdown Date, 100% of the Stack II Principal
Distribution Amount if the aggregate Class Certificate Balance of the Class AV
and Class MV Certificates has been reduced to zero and a Stepdown Trigger Event
exists, or, as long as a Stepdown Trigger Event does not exist, the excess of
(1) the sum of (A) the Class Certificate Balance of the Stack II Senior
Certificates (after taking into account distributions of the Stack II Senior
Principal Distribution Amount to the Stack II Senior Certificates for such
Distribution Date), (B) the Class Certificate Balance of the Class MV-1
Certificates (after taking into account distributions of the Class MV-1
Principal Distribution Amount to the Class MV-1 Certificates for such
Distribution Date), (C) the Class Certificate Balance of the Class MV-2
Certificates (after taking into account distributions of the Class MV-2
Principal Distribution Amount to the Class MV-2 Certificates for such
Distribution Date), (D) the Class Certificate Balance of the Class MV-3
Certificates (after taking into account distributions of the Class MV-3
Principal Distribution Amount to the Class MV-3 Certificates for such
Distribution Date), (E) the Class Certificate Balance of the Class MV-4
Certificates (after taking into account distributions of the Class MV-4
Principal Distribution Amount to the Class MV-4 Certificates for such
Distribution Date), (F) the Class Certificate Balance of the Class MV-5
Certificates (after taking into account distributions of the Class MV-5
Principal Distribution Amount to the Class MV-5 Certificates for such
Distribution Date), (G) the Class Certificate Balance of the Class MV-6
Certificates (after taking into account
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distributions of the Class MV-6 Principal Distribution Amount to the Class MV-6
Certificates for such Distribution Date) and (H) the Class Certificate Balance
of the Class BV-1 Certificates immediately prior to such Distribution Date over
(2) the lesser of (A) 94.70% of the aggregate Stated Principal Balance of the
Stack II Mortgage Loans as of such Distribution Date and (B) the excess of the
aggregate Stated Principal Balance of the Stack II Mortgage Loans as of as of
such Distribution Date over the Minimum Required Overcollateralization Amount.
Notwithstanding the above, (1) on any Distribution Date prior to the Stepdown
Date on which the aggregate Class Certificate Balance of the Class AV and Class
MV Certificates has been reduced to zero, the Class BV-1 Principal Distribution
Amount will equal the lesser of (A) the outstanding Class Certificate Balance of
the Class BV-1 Certificates and (B) 100% of the Stack II Principal Distribution
Amount remaining after any distributions on the Class AV and Class MV
Certificates and (2) in no event will the Class BV-1 Principal Distribution
Amount with respect to any Distribution Date exceed the Class Certificate
Balance of the Class BV-1 Certificates.
Class BV-2 Certificate: Any Certificate designated as "Class BV-2
Certificate "on the face thereof in the form of Exhibit A-2 hereto, representing
the right to distributions as set forth herein.
Class BV-2 Certificate Rate: For the first Distribution Date, 6.3200% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class BV-2 Margin, (2) the Weighted Average Available Funds Cap for
such Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
Class BV-2 Class Certificate Balance: As of any date of determination, the
aggregate Class Certificate Balance of the Class BV-2 Certificates.
Class BV-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class BV-2 Certificate Rate on
the Class BV-2 Class Certificate Balance as of such Distribution Date plus the
portion of any previous distributions on such Class in respect of Current
Interest or Class BV-2 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Prepayment Interest
Shortfalls allocated on such Distribution Date to the Class BV-2 Certificates.
Class BV-2 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class BV-2 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
BV-2 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class BV-2 Certificate Rate for the related Accrual Period.
Class BV-2 Margin: As of any Distribution Date, (i) on or before the
Initial Optional Termination Date, 1.000% per annum, and (ii) after the Initial
Optional Termination Date, 1.500% per annum.
Class BV-2 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Stack II Principal Distribution
Amount if the aggregate Class Certificate Balance of the Class AV, Class MV and
Class BV-1 Certificates has been reduced to zero and a Stepdown Trigger Event
exists, or, as long as a Stepdown Trigger Event does not exist, the excess of
(1) the sum of (A) the Class Certificate Balance of the Stack II
-14-
Senior Certificates (after taking into account distributions of the Stack II
Senior Principal Distribution Amount to the Stack II Senior Certificates for
such Distribution Date), (B) the Class Certificate Balance of the Class MV-1
Certificates (after taking into account distributions of the Class MV-1
Principal Distribution Amount to the Class MV-1 Certificates for such
Distribution Date), (C) the Class Certificate Balance of the Class MV-2
Certificates (after taking into account distributions of the Class MV-2
Principal Distribution Amount to the Class MV-2 Certificates for such
Distribution Date), (D) the Class Certificate Balance of the Class MV-3
Certificates (after taking into account distributions of Class MV-3 Principal
Distribution Amount to the Class MV-3 Certificates for such Distribution Date),
(E) the Class Certificate Balance of the Class MV-4 Certificates (after taking
into account distributions of the Class MV-4 Principal Distribution Amount to
the Class MV-4 Certificates for such Distribution Date), (F) the Class
Certificate Balance of the Class MV-5 Certificates (after taking into account
distributions of the Class MV-5 Principal Distribution Amount to the Class MV-5
Certificates for such Distribution Date), (G) the Class Certificate Balance of
the Class MV-6 Certificates (after taking into account distributions of the
Class MV-6 Principal Distribution Amount to the Class MV-6 Certificates for such
Distribution Date), (H) the Class Certificate Balance of the Class BV-1
Certificates (after taking into account distributions of the Class BV-1
Principal Distribution Amount to the Class BV-1 Certificates for such
Distribution Date), and (I) the Class Certificate Balance of the Class BV-2
Certificates immediately prior to such Distribution Date over (2) the lesser of
(A) 95.70% of the aggregate Stated Principal Balance of the Stack II Mortgage
Loans as of such Distribution Date and (B) the excess of the aggregate Stated
Principal Balance of the Stack II Mortgage Loans as of such Distribution Date
over the Minimum Required Overcollateralization Amount. Notwithstanding the
above, (1) on any Distribution Date prior to the Stepdown Date on which the
aggregate Class Certificate Balance of the Class AV, Class MV and Class BV-1
Certificates has been reduced to zero, the Class BV-2 Principal Distribution
Amount will equal the lesser of (A) the outstanding Class Certificate Balance of
the Class BV-2 Certificates and (B) 100% of the Stack II Principal Distribution
Amount remaining after any distributions on the Class AV, Class MV and Class
BV-1 Certificates and (2) in no event will the Class BV-2 Principal Distribution
Amount with respect to any Distribution Date exceed the Class Certificate
Balance of the Class BV-2 Certificates.
Class BV-3 Certificate: Any Certificate designated as "Class BV-3
Certificate "on the face thereof in the form of Exhibit A-2 hereto, representing
the right to distributions as set forth herein.
Class BV-3 Certificate Rate: For the first Distribution Date, 7.3200% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class BV-3 Margin, (2) the Weighted Average Available Funds Cap for
such Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
Class BV-3 Class Certificate Balance: As of any date of determination, the
aggregate Class Certificate Balance of the Class BV-3 Certificates.
Class BV-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class BV-3 Certificate Rate on
the Class BV-3 Class Certificate Balance as of such Distribution Date plus the
portion of any previous distributions on such Class in respect of Current
Interest or Class BV-3 Interest Carry Forward Amount that is recovered as
-15-
a voidable preference by a trustee in bankruptcy, less any Prepayment Interest
Shortfalls allocated on such Distribution Date to the Class BV-3 Certificates.
Class BV-3 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class BV-3 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
BV-3 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class BV-3 Certificate Rate for the related Accrual Period.
Class BV-3 Margin: As of any Distribution Date, (i) on or before the
Initial Optional Termination Date, 2.000% per annum, and (ii) after the Initial
Optional Termination Date, 3.000% per annum.
Class BV-3 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Stack II Principal Distribution
Amount if the aggregate Class Certificate Balance of the Class AV, Class MV,
Class BV-1 and Class BV-2 Certificates has been reduced to zero and a Stepdown
Trigger Event exists, or, as long as a Stepdown Trigger Event does not exist,
the excess of (1) the sum of (A) the Class Certificate Balance of the Stack II
Senior Certificates (after taking into account distributions of the Stack II
Senior Principal Distribution Amount to the Stack II Senior Certificates for
such Distribution Date), (B) the Class Certificate Balance of the Class MV-1
Certificates (after taking into account distributions of the Class MV-1
Principal Distribution Amount to the Class MV-1 Certificates for such
Distribution Date), (C) the Class Certificate Balance of the Class MV-2
Certificates (after taking into account distributions of the Class MV-2
Principal Distribution Amount to the Class MV-2 Certificates for such
Distribution Date), (D) the Class Certificate Balance of the Class MV-3
Certificates (after taking into account distributions of Class MV-3 Principal
Distribution Amount to the Class MV-3 Certificates for such Distribution Date),
(E) the Class Certificate Balance of the Class MV-4 Certificates (after taking
into account distributions of the Class MV-4 Principal Distribution Amount to
the Class MV-4 Certificates for such Distribution Date), (F) the Class
Certificate Balance of the Class MV-5 Certificates (after taking into account
distributions of the Class MV-5 Principal Distribution Amount to the Class MV-5
Certificates for such Distribution Date), (G) the Class Certificate Balance of
the Class MV-6 Certificates (after taking into account distributions of the
Class MV-6 Principal Distribution Amount to the Class MV-6 Certificates for such
Distribution Date), (H) the Class Certificate Balance of the Class BV-1
Certificates (after taking into account distributions of the Class BV-1
Principal Distribution Amount to the Class BV-1 Certificates for such
Distribution Date), (I) the Class Certificate Balance of the Class BV-2
Certificates (after taking into account distributions of the Class BV-2
Principal Distribution Amount to the Class BV-2 Certificates for such
Distribution Date), and (J) the Class Certificate Balance of the Class BV-3
Certificates immediately prior to such Distribution Date over (2) the lesser of
(A) 96.70% of the aggregate Stated Principal Balance of the Stack II Mortgage
Loans as of such Distribution Date and (B) the excess of the aggregate Stated
Principal Balance of the Stack II Mortgage Loans as of such Distribution Date
over the Minimum Required Overcollateralization Amount. Notwithstanding the
above, (1) on any Distribution Date prior to the Stepdown Date on which the
aggregate Class Certificate Balance of the Class AV, Class MV, Class BV-1 and
Class BV-2 Certificates has been reduced to zero, the Class BV-3 Principal
Distribution Amount will equal the lesser of (A) the outstanding Class
Certificate Balance of the Class BV-3 Certificates and (B) 100% of the Stack II
Principal Distribution
-16-
Amount remaining after any distributions on the Class AV, Class MV, Class BV-1
and Class BV-2 Certificates and (2) in no event will the Class BV-3 Principal
Distribution Amount with respect to any Distribution Date exceed the Class
Certificate Balance of the Class BV-3 Certificates.
Class C Applied Realized Loss Amount: As of any Distribution Date, the sum
of all Applied Realized Loss Amounts with respect to the Stack II Mortgage Loans
which have been applied to the reduction of the Class Certificate Balance of the
Class C Certificates.
Class C Certificate: Any Certificate designated as a "Class C Certificate"
on the face thereof, in the form of Exhibit A-5 hereto, representing the right
to distributions as set forth herein.
Class C Class Certificate Balance: As of any date of determination, the
aggregate Class Certificate Balance of the Class C Certificates.
Class C Current Interest: As of any Distribution Date, the interest accrued
during the related Accrual Period at the Class C Distributable Interest Rate on
a notional amount equal to the aggregate principal balance of the Lower Tier
REMIC Regular Interests immediately prior to such Distribution Date, plus the
interest portion of any previous distributions on such Class that is recovered
as a voidable preference by a trustee in bankruptcy, less any Prepayment
Interest Shortfalls allocated on such Distribution Date to the Class C
Certificates.
Class C Distributable Interest Rate: The excess, if any, of (a) the
weighted average of the interest rates on the Lower Tier REMIC Regular Interests
over (b) two times the weighted average of the interest rates on the Lower Tier
REMIC I Marker Interests and the Class LTIX Interest (treating for purposes of
this clause (b) the interest rate on each of the Lower Tier REMIC I Marker
Interests as being subject to a cap and a floor equal to the interest rate of
the Corresponding Certificates (as adjusted, if necessary, to reflect the length
of the Accrual Period for the LIBOR Certificates) and treating the Class LTIX
Interest as being capped at zero). The averages described in the preceding
sentence shall be weighted on the basis of the respective principal balances of
the Lower Tier REMIC Regular Interests immediately prior to any date of
determination.
Class C Interest Carry Forward Amount: As of any Distribution Date, the
excess of (A) the Class C Current Interest with respect to prior Distribution
Dates over (B) the amount actually distributed to the Class C Certificates with
respect to interest on such prior Distribution Dates or added to the aggregate
Class Certificate Balance of the Class C Certificates (other than amounts so
added attributable to Subsequent Recoveries).
Class C Unpaid Realized Loss Amount: As of any Distribution Date, the
excess of (1) the Class C Applied Realized Loss Amount over (2) the sum of (x)
all distributions in reduction of the Class C Unpaid Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Class Certificate
Balance of such Class C Certificates pursuant to the last sentence of the
definition of "Class Certificate Balance."
Class Certificate Balance: As to any Certificate and as of any Distribution
Date, the Initial Class Certificate Balance of such Certificate less the sum of
(1) all amounts distributed
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with respect to such Certificate in reduction of the Class Certificate Balance
thereof on previous Distribution Dates pursuant to Section 6.01, and (2) any
Realized Loss Amounts allocated to such Certificate on previous Distribution
Dates pursuant to Section 6.01(j). On each Distribution Date, after all
distributions of principal on such Distribution Date, a portion of the Class C
Interest Carry Forward Amount in an amount equal to the excess of the
Overcollateralization Amount on such Distribution Date over the
Overcollateralization Amount as of the preceding Distribution Date (or, in the
case of the first Distribution Date, the initial Overcollateralization Amount
(based on the Stated Principal Balance of the Mortgage Loans as of the Cut-Off
Date)) will be added to the aggregate Class Certificate Balance of the Class C
Certificates (on a pro rata basis). Notwithstanding the foregoing on any
Distribution Date relating to a Due Period in which a Subsequent Recovery has
been received by the related Servicer, the Class Certificate Balance of any
Class of Certificates then outstanding for which any Realized Loss Amount has
been allocated will be increased, in order of seniority, by an amount equal to
the lesser of (i) the Unpaid Realized Loss Amount for such Class of Certificates
and (ii) the total of any Subsequent Recovery distributed on such date to the
Certificateholders (reduced by the amount of the increase in the Class
Certificate Balance of any more senior Class of Certificates pursuant to this
sentence on such Distribution Date).
Class LTAV-1 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificates and an interest rate equal to the Net
Rate.
Class LTAV-2A Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.
Class LTAV-2B Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.
Class LTAV-2C Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.
Class LTAV-2D Interest: An uncertificated regular interest in the Lower
Tier REMIC with an initial principal balance equal to 1/4 of the initial
principal balance of its Corresponding Certificate and an interest rate equal to
the Net Rate.
Class LTBV-1 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTBV-2 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTBV-3 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
-18-
Class LTIX Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to the excess of (i) 50% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date
over (ii) the initial principal balance of the Lower Tier REMIC I Marker
Interests, and with an interest rate equal to the Net Rate.
Class LTIIX Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to the excess of (i) 50% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date
over (ii) the initial principal balance of the Lower Tier REMIC II Marker
Interests, and with an interest rate equal to the Net Rate.
Class LTII2A Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 0.05% of the excess of (i) the
aggregate Stated Principal Balance of the Group 2 Mortgage Loans as of the
Cut-off Date over (ii) the aggregate of the initial Class Certificate Balances
of the Group 2 Certificates, and with an interest rate equal to the Net Rate.
Class LTII2B Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 0.05% of the aggregate Stated
Principal Balance of the Group 2 Mortgage Loans as of the Cut-off Date, and with
an interest rate equal to the Class AV-1 Available Funds Cap.
Class LTII3A Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 0.05% of the excess of (i) the
aggregate Stated Principal Balance of the Group 3 Mortgage Loans as of the
Cut-off Date over (ii) the aggregate of the initial Class Certificate Balances
of the Group 3 Certificates, and with an interest rate equal to the Net Rate.
Class LTII3B Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 0.05% of the aggregate Stated
Principal Balance of the Group 3 Mortgage Loans as of the Cut-off Date, and with
an interest rate equal to the Class AV-2 Available Funds Cap.
Class LTMV-1 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTMV-2 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTMV-3 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTMV-4 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
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Class LTMV-5 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTMV-6 Interest: An uncertificated regular interest in the Lower Tier
REMIC with an initial principal balance equal to 1/4 of the initial principal
balance of its Corresponding Certificate and an interest rate equal to the Net
Rate.
Class LTR Interest: The sole class of "residual interest" in the Lower Tier
REMIC.
Class MV Certificate: Any one of the Class MV-1, Class MV-2, Class MV-3,
Class MV-4, Class MV-5 and Class MV-6 Certificates as designated on the face
thereof substantially in the form annexed hereto as Exhibit A-1, executed by the
Securities Administrator and authenticated and delivered by the Securities
Administrator, representing the right to distributions as set forth herein and
therein.
Class MV Certificateholder: Any Holder of a Class MV Certificate.
Class MV-1 Certificate: Any Certificate designated as a "Class MV-1
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class MV-1 Certificate Rate: For the first Distribution Date, 5.6300% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class MV-1 Margin, (2) the Weighted Average Available Funds Cap for
such Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
Class MV-1 Class Certificate Balance: As of any date of determination, the
aggregate Class Certificate Balance of the Class MV-1 Certificates.
Class MV-1 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class MV-1 Certificate Rate on
the Class MV-1 Class Certificate Balance as of such Distribution Date plus the
portion of any previous distributions on such Class in respect of Current
Interest or Class MV-1 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Prepayment Interest
Shortfalls allocated on such Distribution Date to the Class MV-1 Certificates.
Class MV-1 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class MV-1 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
MV-1 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class MV-1 Certificate Rate for the related Accrual Period.
Class MV-1 Margin: As of any Distribution Date, (i) on or before the
Initial Optional Termination Date, 0.310% per annum, and (ii) after the Initial
Optional Termination Date, 0.465% per annum.
Class MV-1 Principal Distribution Amount: with respect to any Distribution
Date on or after the Stepdown Date, 100% of the Stack II Principal Distribution
Amount if the aggregate
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Class Certificate Balance of the Stack II Senior Certificates has been reduced
to zero and a Stepdown Trigger Event exists, or, as long as a Stepdown Trigger
Event does not exist, the excess of (1) the sum of (A) the aggregate Class
Certificate Balance of the Stack II Senior Certificates (after taking into
account distributions of the Stack II Senior Principal Distribution Amount to
the Stack II Senior Certificates for such Distribution Date) and (B) the Class
Certificate Balance of the Class MV-1 Certificates immediately prior to such
Distribution Date over (2) the lesser of (A) 86.50% of the aggregate Stated
Principal Balance of the Stack II Mortgage Loans as of such Distribution Date
and (B) the excess of the aggregate Stated Principal Balance of the Stack II
Mortgage Loans as of such Distribution Date over the Minimum Required
Overcollateralization Amount. Notwithstanding the above, (1) on any Distribution
Date prior to the Stepdown Date on which the aggregate Class Certificate Balance
of the Stack II Senior Certificates has been reduced to zero, the Class MV-1
Principal Distribution Amount will equal the lesser of (A) the outstanding Class
Certificate Balance of the Class MV-1 Certificates and (B) 100% of the Stack II
Principal Distribution Amount remaining after any distributions on the Stack II
Senior Certificates and (2) in no event will the Class MV-1 Principal
Distribution Amount with respect to any Distribution Date exceed the Class
Certificate Balance of the Class MV-1 Certificates.
Class MV-2 Certificate: Any Certificate designated as a "Class MV-2
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class MV-2 Certificate Rate: For the first Distribution Date, 5.6400% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class MV-2 Margin, (2) the Weighted Average Available Funds Cap for
such Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
Class MV-2 Class Certificate Balance: As of any date of determination, the
aggregate Class Certificate Balance of the Class MV-2 Certificates.
Class MV-2 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class MV-2 Certificate Rate on
the Class MV-2 Class Certificate Balance as of such Distribution Date plus the
portion of any previous distributions on such Class in respect of Current
Interest or Class MV-2 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Prepayment Interest
Shortfalls allocated on such Distribution Date to the Class MV-2 Certificates.
Class MV-2 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class MV-2 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
MV-2 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class MV-2 Certificate Rate for the related Accrual Period.
Class MV-2 Margin: As of any Distribution Date, (i) on or before the
Initial Optional Termination Date, 0.320% per annum, and (ii) after the Initial
Optional Termination Date, 0.480% per annum.
-00-
Xxxxx XX-0 Xxxxxxxxx Xxxxxxxxxxxx Xxxxxx: with respect to any Distribution
Date on or after the Stepdown Date, 100% of the Stack II Principal Distribution
Amount if the Class Certificate Balance of each class of Class AV and Class MV-1
Certificates has been reduced to zero and a Stepdown Trigger Event exists, or,
as long as a Stepdown Trigger Event does not exist, the excess of (1) the sum of
(A) the aggregate Class Certificate Balance of the Stack II Senior Certificates
(after taking into account distributions of the Stack II Senior Principal
Distribution Amount to the Stack II Senior Certificates for such Distribution
Date), (B) the Class Certificate Balance of the Class MV-1 Certificates (after
taking into account distributions of the Class MV-1 Principal Distribution
Amount to the Class MV-1 Certificates for such Distribution Date) and (C) the
Class Certificate Balance of the Class MV-2 Certificates immediately prior to
such Distribution Date over (2) the lesser of (A) 88.90% of the aggregate Stated
Principal Balance of the Stack II Mortgage Loans as of such Distribution Date
and (B) the excess of the aggregate Stated Principal Balance of the Stack II
Mortgage Loans as of such Distribution Date over the Minimum Required
Overcollateralization Amount. Notwithstanding the above, (1) on any Distribution
Date prior to the Stepdown Date on which the aggregate Class Certificate Balance
of the Stack II Senior Certificates and the Class MV-1 Certificates has been
reduced to zero, the Class MV-2 Principal Distribution Amount will equal the
lesser of (A) the outstanding Class Certificate Balance of the Class MV-2
Certificates and (B) 100% of the Stack II Principal Distribution Amount
remaining after any distributions on the Class AV and Class MV-1 Certificates
and (2) in no event will the Class MV-2 Principal Distribution Amount with
respect to any Distribution Date exceed the Class Certificate Balance of the
Class MV-2 Certificates
Class MV-3 Certificate: Any Certificate designated as a "Class MV-3
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class MV-3 Certificate Rate: For the first Distribution Date, 5.6600% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class MV-3 Margin, (2) the Weighted Average Available Funds Cap for
such Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
Class MV-3 Class Certificate Balance: As of any date of determination, the
aggregate Class Certificate Balance of the Class MV-3 Certificates.
Class MV-3 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class MV-3 Certificate Rate on
the Class MV-3 Class Certificate Balance as of such Distribution Date plus the
portion of any previous distributions on such Class in respect of Current
Interest or Class MV-3 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Prepayment Interest
Shortfalls allocated on such Distribution Date to the Class MV-3 Certificates.
Class MV-3 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class MV-3 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
MV-3 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class MV-3 Certificate Rate for the related Accrual Period.
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Class MV-3 Margin: As of any Distribution Date, (i) on or before the
Initial Optional Termination Date, 0.340% per annum, and (ii) after the Initial
Optional Termination Date, 0.510% per annum.
Class MV-3 Principal Distribution Amount: with respect to any Distribution
Date on or after the Stepdown Date, 100% of the Stack II Principal Distribution
Amount if the Class Certificate Balance of each class of Class AV, Class MV-1
and Class MV-2 Certificates has been reduced to zero and a Stepdown Trigger
Event exists, or, as long as a Stepdown Trigger Event does not exist, the excess
of (1) the sum of (A) the aggregate Class Certificate Balance of the Stack II
Senior Certificates (after taking into account distributions of the Stack II
Senior Principal Distribution Amount to the Stack II Senior Certificates for
such Distribution Date), (B) the Class Certificate Balance of the Class MV-1
Certificates (after taking into account distributions of the Class MV-1
Principal Distribution Amount to the Class MV-1 Certificates for such
Distribution Date), (C) the Class Certificate Balance of the Class MV-2
Certificates (after taking into account distributions of the Class MV-2
Principal Distribution Amount to the Class MV-2 Certificates for such
Distribution Date) and (D) the Class Certificate Balance of the Class MV-3
Certificates immediately prior to such Distribution Date over (2) the lesser of
(A) 90.40% of the aggregate Stated Principal Balance of the Stack II Mortgage
Loans as of such Distribution Date and (B) the excess of the aggregate Stated
Principal Balance of the Stack II Mortgage Loans as of such Distribution Date
over the Minimum Required Overcollateralization Amount. Notwithstanding the
above, (1) on any Distribution Date prior to the Stepdown Date on which the
aggregate Class Certificate Balance of the Class AV, Class MV-1 and Class MV-2
Certificates has been reduced to zero, the Class MV-3 Principal Distribution
Amount will equal the lesser of (A) the outstanding Class Certificate Balance of
the Class MV-3 Certificates and (B) 100% of the Stack II Principal Distribution
Amount remaining after any distributions on the Class AV, Class MV-1 and Class
MV-2 Certificates and (2) in no event will the Class MV-3 Principal Distribution
Amount with respect to any Distribution Date exceed the Class Certificate
Balance of the Class MV-3 Certificates.
Class MV-4 Certificate: Any Certificate designated as a "Class MV-4
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class MV-4 Certificate Rate: For the first Distribution Date, 5.7100% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class MV-4 Margin, (2) the Weighted Average Available Funds Cap for
such Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
Class MV-4 Class Certificate Balance: As of any date of determination, the
aggregate Class Certificate Balance of the Class MV-4 Certificates.
Class MV-4 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class MV-4 Certificate Rate on
the Class MV-4 Class Certificate Balance as of such Distribution Date plus the
portion of any previous distributions on such Class in respect of Current
Interest or Class MV-4 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Prepayment Interest
Shortfalls allocated on such Distribution Date to the Class MV-4 Certificates.
-00-
Xxxxx XX-0 Xxxxxxxx Xxxxx Xxxxxxx Xxxxxx: As of any Distribution Date, the
sum of (1) the excess of (A) the Class MV-4 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
MV-4 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class MV-4 Certificate Rate for the related Accrual Period.
Class MV-4 Margin: As of any Distribution Date, (i) on or before the
Initial Optional Termination Date, 0.390% per annum, and (ii) after the Initial
Optional Termination Date, 0.585% per annum.
Class MV-4 Principal Distribution Amount: with respect to any Distribution
Date on or after the Stepdown Date, 100% of the Stack II Principal Distribution
Amount if the Class Certificate Balance of each class of Class AV, Class MV-1,
Class MV-2 and Class MV-3 Certificates has been reduced to zero and a Stepdown
Trigger Event exists, or, as long as a Stepdown Trigger Event does not exist,
the excess of (1) the sum of (A) the aggregate Class Certificate Balance of the
Stack II Senior Certificates (after taking into account distributions of the
Stack II Senior Principal Distribution Amount to the Stack II Senior
Certificates for such Distribution Date), (B) the Class Certificate Balance of
the Class MV-1 Certificates (after taking into account distributions of the
Class MV-1 Principal Distribution Amount to the Class MV-1 Certificates for such
Distribution Date), (C) the Class Certificate Balance of the Class MV-2
Certificates (after taking into account distributions of the Class MV-2
Principal Distribution Amount to the Class MV-2 Certificates for such
Distribution Date), (D) the Class Certificate Balance of the Class MV-3
Certificates (after taking into account distributions of the Class MV-3
Principal Distribution Amount to the Class MV-3 Certificates for such
Distribution Date) and (E) the Class Certificate Balance of the Class MV-4
Certificates immediately prior to such Distribution Date over (2) the lesser of
(A) 91.70% of the aggregate Stated Principal Balance of the Stack II Mortgage
Loans as of such Distribution Date and (B) the excess of the aggregate Stated
Principal Balance of the Stack II Mortgage Loans as of such Distribution Date
over the Minimum Required Overcollateralization Amount. Notwithstanding the
above, (1) on any Distribution Date prior to the Stepdown Date on which the
aggregate Class Certificate Balance of the Class AV, Class MV-1, Class MV-2 and
Class MV-3 Certificates has been reduced to zero, the Class MV-4 Principal
Distribution Amount will equal the lesser of (A) the outstanding Class
Certificate Balance of the Class MV-4 Certificates and (B) 100% of the Stack II
Principal Distribution Amount remaining after any distributions on the Class AV,
Class MV-1, Class MV-2 and Class MV-3 Certificates and (2) in no event will the
Class MV-4 Principal Distribution Amount with respect to any Distribution Date
exceed the Class Certificate Balance of the Class MV-4 Certificates.
Class MV-5 Certificate: Any Certificate designated as a "Class MV-5
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class MV-5 Certificate Rate: For the first Distribution Date, 5.7300% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class MV-5 Margin, (2) the Weighted Average Available Funds Cap for
such Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
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Class MV-5 Class Certificate Balance: As of any date of determination, the
aggregate Class Certificate Balance of the Class MV-5 Certificates.
Class MV-5 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class MV-5 Certificate Rate on
the Class MV-5 Class Certificate Balance as of such Distribution Date plus the
portion of any previous distributions on such Class in respect of Current
Interest or Class MV-5 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Prepayment Interest
Shortfalls allocated on such Distribution Date to the Class MV-5 Certificates.
Class MV-5 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class MV-5 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
MV-5 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class MV-5 Certificate Rate for the related Accrual Period.
Class MV-5 Margin: Means As of any Distribution Date, (i) on or before the
Initial Optional Termination Date, 0.410% per annum, and (ii) after the Initial
Optional Termination Date, 0.615% per annum.
Class MV-5 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date, 100% of the Stack II Principal Distribution
Amount if the Class Certificate Balance of each class of Class AV, Class MV-1,
Class MV-2, Class MV-3 and Class MV-4 Certificates has been reduced to zero and
a Stepdown Trigger Event exists, or, as long as a Stepdown Trigger Event does
not exist, the excess of (1) the sum of (A) the aggregate Class Certificate
Balance of the Stack II Senior Certificates (after taking into account
distributions of the Stack II Senior Principal Distribution Amount to the Stack
II Senior Certificates for such Distribution Date), (B) the Class Certificate
Balance of the Class MV-1 Certificates (after taking into account distributions
of the Class MV-1 Principal Distribution Amount to the Class MV-1 Certificates
for such Distribution Date), (C) the Class Certificate Balance of the Class MV-2
Certificates (after taking into account distributions of the Class MV-2
Principal Distribution Amount to the Class MV-2 Certificates for such
Distribution Date), (D) the Class Certificate Balance of the Class MV-3
Certificates (after taking into account distributions of the Class MV-3
Principal Distribution Amount to the Class MV-3 Certificates for such
Distribution Date), (E) the Class Certificate Balance of the Class MV-4
Certificates (after taking into account distributions of the Class MV-4
Principal Distribution Amount to the Class MV-4 Certificates for such
Distribution Date) and (F) the Class Certificate Balance of the Class MV-5
Certificates immediately prior to such Distribution Date over (2) the lesser of
(A) 92.70% of the aggregate Stated Principal Balance of the Stack II Mortgage
Loans as of such Distribution Date and (B) the excess of the aggregate Stated
Principal Balance of the Stack II Mortgage Loans as of such Distribution Date
over the Minimum Required Overcollateralization Amount. Notwithstanding the
above, (1) on any Distribution Date prior to the Stepdown Date on which the
aggregate Class Certificate Balance of the Class AV, Class MV-1, Class MV-2,
Class MV-3 and Class MV-4 Certificates has been reduced to zero, the Class MV-5
Principal Distribution Amount will equal the lesser of (A) the outstanding Class
Certificate Balance of the Class MV-5 Certificates and (B) 100% of the Stack II
Principal Distribution Amount remaining after any distributions on the Class AV,
Class MV-1, Class MV-2, Class MV-3 and Class MV-4 Certificates and (2) in no
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event will the Class MV-5 Principal Distribution Amount with respect to any
Distribution Date exceed the Class Certificate Balance of the Class MV-5
Certificates.
Class MV-6 Certificate: Any Certificate designated as a "Class MV-6
Certificate" on the face thereof, in the form of Exhibit A hereto, representing
the right to distributions as set forth herein.
Class MV-6 Certificate Rate: For the first Distribution Date, 5.8000% per
annum. As of any Distribution Date thereafter, the least of (1) One-Month LIBOR
plus the Class MV-6 Margin, (2) the Weighted Average Available Funds Cap for
such Distribution Date and (3) the Weighted Average Maximum Rate Cap for such
Distribution Date.
Class MV-6 Class Certificate Balance: As of any date of determination, the
aggregate Class Certificate Balance of the Class MV-6 Certificates.
Class MV-6 Current Interest: As of any Distribution Date, the interest
accrued during the related Accrual Period at the Class MV-6 Certificate Rate on
the Class MV-6 Class Certificate Balance as of such Distribution Date plus the
portion of any previous distributions on such Class in respect of Current
Interest or Class MV-6 Interest Carry Forward Amount that is recovered as a
voidable preference by a trustee in bankruptcy, less any Prepayment Interest
Shortfalls allocated on such Distribution Date to the Class MV-6 Certificates.
Class MV-6 Interest Carry Forward Amount: As of any Distribution Date, the
sum of (1) the excess of (A) the Class MV-6 Current Interest with respect to
prior Distribution Dates over (B) the amount actually distributed to the Class
MV-6 Certificates with respect to interest on such prior Distribution Dates and
(2) interest on such excess (to the extent permitted by applicable law) at the
Class MV-6 Certificate Rate for the related Accrual Period.
Class MV-6 Margin: As of any Distribution Date, (i) on or before the
Initial Optional Termination Date, 0.480% per annum, and (ii) after the Initial
Optional Termination Date, 0.720% per annum.
Class MV-6 Principal Distribution Amount: with respect to any Distribution
Date on or after the Stepdown Date, 100% of the Stack II Principal Distribution
Amount if the Class Certificate Balance of each class of Class AV, Class MV-1,
Class MV-2, Class MV-3, Class MV-4 and Class MV-5 Certificates has been reduced
to zero and a Stepdown Trigger Event exists, or, as long as a Stepdown Trigger
Event does not exist, the excess of (1) the sum of (A) the aggregate Class
Certificate Balance of the Stack II Senior Certificates (after taking into
account distributions of the Stack II Principal Distribution Amount to the Stack
II Senior Certificates for such Distribution Date), (B) the Class Certificate
Balance of the Class MV-1 Certificates (after taking into account distributions
of the Class MV-1 Principal Distribution Amount to the Class MV-1 Certificates
for such Distribution Date), (C) the Class Certificate Balance of the Class MV-2
Certificates (after taking into account distributions of the Class MV-2
Principal Distribution Amount to the Class MV-2 Certificates for such
Distribution Date), (D) the Class Certificate Balance of the Class MV-3
Certificates (after taking into account distributions of the Class MV-3
Principal Distribution Amount to the Class MV-3 Certificates for such
Distribution Date), (E) the Class Certificate Balance of the Class MV-4
Certificates (after taking into account distributions of the Class MV-4
Principal Distribution Amount to the
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Class MV-4 Certificates for such Distribution Date), (F) the Class Certificate
Balance of the Class MV-5 Certificates (after taking into account distributions
of the Class MV-5 Principal Distribution Amount to the Class MV-5 Certificates
for such Distribution Date) and (G) the Class Certificate Balance of the Class
MV-6 Certificates immediately prior to such Distribution Date over (2) the
lesser of (A) 82.40% of the aggregate Stated Principal Balance of the Stack II
Mortgage Loans as of such Distribution Date and (B) the excess of the aggregate
Stated Principal Balance of the Stack II Mortgage Loans as of such Distribution
Date over the Minimum Required Overcollateralization Amount. Notwithstanding the
above, (1) on any Distribution Date prior to the Stepdown Date on which the
aggregate Class Certificate Balance of the Class AV, Class MV-1, Class MV-2,
Class MV-3, Class MV-4 and Class MV-5 Certificates has been reduced to zero, the
Class MV-6 Principal Distribution Amount will equal the lesser of (A) the
outstanding Class Certificate Balance of the Class MV-6 Certificates and (B)
100% of the Stack II Principal Distribution Amount remaining after any
distributions on the Class AV, Class MV-1, Class MV-2, Class MV-3, Class MV-4
and Class MV-5 Certificates and (2) in no event will the Class MV-6 Principal
Distribution Amount with respect to any Distribution Date exceed the Class
Certificate Balance of the Class MV-6 Certificates.
Class P Certificate: Any one of the Class P Certificates as designated on
the face thereof substantially in the forum of annexed hereto as Exhibit A-4,
executed by the Securities Administrator and authenticated and delivered by the
Securities Administrator representing the right to distributions of Prepayment
Penalties received on the Prepayment Penalty Mortgage Loans as set forth herein.
Class Subordination Percentage: With respect to any Distribution Date and
each Class of Subordinate Certificates, the fraction (expressed as a percentage)
the numerator of which is the Class Certificate Balance of such Class of
Subordinate Certificates immediately prior to such Distribution Date and the
denominator of which is the aggregate of the Class Certificate Balances of all
Classes of Certificates immediately prior to such Distribution Date.
Closing Date: October 31, 2006.
Code: The Internal Revenue Code of 1986, as amended.
Commission: The Securities and Exchange Commission.
Compensating Interest Payment: As defined in Section 6.05.
Cooperative: A corporation that has been formed for the purpose of
cooperative apartment ownership.
Cooperative Assets: Shares issued by Cooperatives, the related Cooperative
Lease and any other collateral securing the Cooperative Loans.
Cooperative Lease: With respect to a Cooperative Loan, the proprietary
lease or occupancy agreement with respect to the cooperative apartment occupied
by the Mortgagor and relating to the related Cooperative Assets, which lease or
agreement confers an exclusive right to the holder of such Cooperative Assets to
occupy such apartment.
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Cooperative Loan: The indebtedness of a Mortgagor evidenced by a Mortgage
Note which is secured by Cooperative Assets and which is being sold to the
Depositor pursuant to this Agreement, the Mortgage Loans so sold being
identified in the Mortgage Loan Schedule.
Cooperative Stock: With respect to a Cooperative Loan, the single
outstanding class of stock, partnership interest or other ownership instrument
in the related Cooperative.
Corporate Trust Office: With respect to the Trustee, the principal
corporate trust office of the Trustee at which at any particular time its
corporate trust business in connection with this Agreement shall be
administered, which office at the date of the execution of this instrument is
located at HSBC Bank USA, National Association, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Issuer Services - Xxxxxxx Xxxxx Mortgage Investors, Inc.,
MLMI Series 2006-AF2, or at such other address as the Trustee may designate from
time to time by notice to the Certificateholders, the Depositor and the Master
Servicer and with respect to the Securities Administrator, for Certificate
transfer purposes, Xxxxx Fargo Center, Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000, Attn: Corporate Trust Services - MLMI 2006-AF2,
and for all other purposes, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx, 00000,
Attn: Client Service Manager - MLMI 2006-AF2.
Corresponding Certificates: With respect to the Class LTAV-1 Interest, the
Class AV-1 and Class A-R Certificates. With respect to the Class LTAV-2A
Interest, the Class AV-2A Certificates. With respect to the Class LTAV-2B
Interest, the Class AV-2B Certificates. With respect to the Class LTAV-2C
Interest, the Class AV-2C Certificates. With respect to the Class LTAV-2D
Interest, the Class AV-2D Certificates. With respect to the Class LTMV-1
Interest, the Class MV-1 Certificates. With respect to the Class LTMV-2
Interest, the Class MV-2 Certificates. With respect to the Class LTMV-3
Interest, the Class MV-3 Certificates. With respect to the Class LTMV-4
Interest, the Class MV-4 Certificates. With respect to the Class LTMV-5
Interest, the Class MV-5 Certificates. With respect to the Class LTMV-6
Interest, the Class MV-6 Certificates. With respect to the Class LTBV-1
Interest, the Class BV-1 Certificates. With respect to the Class LTBV-2
Interest, the Class BV-2 Certificates. With respect to the Class LTBV-3
Interest, the Class BV-3 Certificates.
Current Interest: Any of the Class AV-1 Current Interest, the Class AV-2A
Current Interest, the Class AV-2B Current Interest, the Class AV-2C Current
Interest, the Class AV-2D Current Interest, the Class A-R Current Interest, the
Class MV-1 Current Interest, the Class MV-2 Current Interest, the Class MV-3
Current Interest, the Class MV-4 Current Interest, the Class MV-5 Current
Interest, the Class MV-6 Current Interest, the Class BV-1 Current Interest, the
Class BV-2 Current Interest, the Class BV-3 Current Interest and the Class C
Current Interest.
Curtailment: Any Principal Prepayment made by a Mortgagor which is not a
Principal Prepayment in Full.
Custodial Agreement: An agreement, dated as of the Closing Date among the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
the Custodian in substantially the form of Exhibit G hereto.
Custodian: Xxxxx Fargo Bank, N.A., including any successors in interest, or
any successor custodian appointed pursuant to the provisions hereof and of the
Custodial Agreement.
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Cut-off Date: October 1, 2006.
Debt Service Reduction: Any reduction of the Monthly Payments which a
Mortgagor is obligated to pay with respect to a Mortgage Loan as a result of any
proceeding under the Bankruptcy Code or any other similar state law or other
proceeding.
Defective Mortgage Loan: A Mortgage Loan replaced or to be replaced by one
or more Substitute Mortgage Loans.
Deficient Valuation: With respect to any Mortgage Loan, a valuation of the
related Mortgaged Property by a court of competent jurisdiction in an amount
less than the then outstanding principal balance of the Mortgage Loan, which
valuation results from a proceeding initiated under the Bankruptcy Code.
Definitive Certificates: As defined in Section 5.06.
Depositor: Xxxxxxx Xxxxx Mortgage Investors, Inc., a Delaware corporation,
or any successor in interest.
Depository: The Depository Trust Company, the nominee of which is Cede &
Co., or any successor thereto.
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.
Designated Depository Institution: A depository institution (commercial
bank, federal savings bank, mutual savings bank or savings and loan association)
or trust company (which may include the Trustee), the deposits of which are
fully insured by the FDIC to the extent provided by law.
Determination Date: With respect to each Mortgage Loan, the Determination
Date as defined in the related Servicing Agreement.
Disqualified Organization: A "disqualified organization" as defined in
Section 860 E(e)(5) of the Code.
Distribution Account: The trust account or accounts created and maintained
pursuant to Section 4.04, which shall be denominated "Xxxxx Fargo Bank, National
Association, as Securities Administrator for HSBC Bank USA, National
Association, as Trustee f/b/o holders of Xxxxxxx Xxxxx Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, MLMI Series 2006-AF2 - Distribution Account
(Stack II)." The Distribution Account shall be an Eligible Account.
Distribution Account Deposit Date: The Business Day prior to each
Distribution Date.
Distribution Date: The 25th day of any month, beginning in November 2006,
or, if such 25th day is not a Business Day, the Business Day immediately
following.
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Due Date: With respect to each Mortgage Loan, the date in each month on
which its Monthly Payment is due if such due date is the first day of a month
and otherwise is deemed to be the first day of the following month or such other
date specified in the related Servicing Agreement.
Due Period: With respect to any Distribution Date and each Mortgage Loan,
the period commencing on the second day of the month preceding the month in
which the Distribution Date occurs and ending at the close of business on the
first day of the month in which the Distribution Date occurs.
Eligible Account: Any of (i) a segregated account maintained with a federal
or state chartered depository institution (A) the short-term obligations of
which are rated A-1 or better by S&P and P-1 by Moody's at the time of any
deposit therein or (B) insured by the FDIC (to the limits established by such
Corporation), the uninsured deposits (as evidenced in writing by the Rating
Agencies that use of any such account as the Distribution Account will not have
an adverse effect on the then-current ratings assigned to the Classes of
Certificates then rated by the Rating Agencies) in which account are otherwise
secured such that, as evidenced by an Opinion of Counsel (obtained by the Person
requesting that the account be held pursuant to this clause (i)) delivered to
the Securities Administrator prior to the establishment of such account, the
Certificateholders will have a claim with respect to the funds in such account
and a perfected first priority security interest against any collateral (which
shall be limited to Permitted Investments, each of which shall mature not later
than the Business Day immediately preceding the Distribution Date next following
the date of investment in such collateral or the Distribution Date if such
Permitted Investment is an obligation of the institution that maintains the
Distribution Account) securing such funds that is superior to claims of any
other depositors or general creditors of the depository institution with which
such account is maintained, (ii) a segregated trust account or accounts
maintained with a federal or state chartered depository institution or trust
company with trust powers acting in its fiduciary capacity or (iii) a segregated
account or accounts of a depository institution acceptable to the Rating
Agencies (as evidenced in writing by the Rating Agencies that use of any such
account as the Distribution Account will not have an adverse effect on the
then-current ratings assigned to the Classes of the Certificates then rated by
the Rating Agencies). Eligible Accounts may bear interest.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA Restricted Certificates: The Class C and the Class P Certificates and
any other Certificate, as long as the acquisition and holding of such
Certificate is not covered by and exempt under an underwriter's exemption.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that would satisfy the requirements of
Prohibited Transaction Exemption 90-29, Exemption Application No. D-8012, 55
Fed. Reg. 21459 (1990), as amended, granted to the underwriter by the United
States Department of Labor (or any other applicable underwriter's exemption
granted by the United States Department of Labor), 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.
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Event of Default: An event of default described in Section 8.01.
Excess Interest: On any Distribution Date, for the Stack II Senior
Certificates, Class MV and Class BV Certificates, the excess, if any, of (1) the
amount of interest such Class of Certificates is entitled to receive on such
Distribution Date over (2) the amount of interest such Class of Certificates
would have been entitled to receive on such Distribution Date at an interest
rate equal to the REMIC Pass-Through Rate.
Excess Liquidation Proceeds: To the extent that such amount is not required
by law to be paid to the related Mortgagor, the amount, if any, by which
Liquidation Proceeds with respect to a Liquidated Mortgage Loan exceed the sum
of (i) the Outstanding Principal Balance of such Mortgage Loan and accrued but
unpaid interest at the related Mortgage Interest Rate through the last day of
the month in which the related Liquidation Date occurs, plus (ii) related
Liquidation Expenses.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Extraordinary Trust Fund Expenses: Any amounts reimbursable to the Master
Servicer or the Depositor pursuant to this Agreement, including but not limited
to Sections 4.03, 4.05 and 7.04, any amounts reimbursable to the Trustee and the
Securities Administrator from the Trust Fund pursuant to this Agreement,
including but not limited to Section 9.05, and any other costs, expenses,
liabilities and losses borne by the Trust Fund (exclusive of any cost, expense,
liability or loss that is specific to a particular Mortgage Loan or REO Property
and is taken into account in calculating a Realized Loss in respect thereof) for
which the Trust Fund has not and, in the reasonable good faith judgment of the
Securities Administrator, shall not, obtain reimbursement or indemnification
from any other Person.
Xxxxxx Xxx: Federal National Mortgage Association or any successor thereto.
FDIC: Federal Deposit Insurance Corporation or any successor thereto.
Final Certification: The certification substantially in the form of Exhibit
Two to the Custodial Agreement.
Fitch: Fitch Ratings or its successor in interest.
Floating Rate Certificate Carryover: With respect to a Distribution Date,
in the event that the Certificate Rate for a class of Stack II Senior, Class MV
or Class BV Certificates is based upon the related Available Funds Cap or the
related Maximum Rate Cap, the sum of (A) the excess of (1) the amount of
interest that such Class would have been entitled to receive on such
Distribution Date had the Certificate Rate for that Class not been calculated
based on the related Available Funds Cap or the related Maximum Rate Cap, up to
but not exceeding the greater of (a) the related Maximum Rate Cap or (b) the sum
of (i) the related Available Funds Cap and (ii) the product of (AA) a fraction,
the numerator of which is 360 and the denominator of which is the actual number
of days in the related Accrual Period and (BB) the quotient of (I) an amount
equal to the proceeds, if any, payable under the related Cap Contract with
respect to such Distribution Date and (II) the aggregate Class Certificate
Balance of each of the Classes of Certificates to which such Cap Contract
relates for such Distribution Date over (2) the amount of
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interest such class was entitled to receive on such Distribution Date based on
the related Available Funds Cap, (B) the unpaid portion of any such excess from
prior Distribution Dates (and interest accrued thereon at the then applicable
Certificate Rate for such class, without giving effect to the related Available
Funds Cap or the related Maximum Rate Cap) and (C) any amount previously
distributed with respect to Floating Rate Certificate Carryover for such class
that is recovered as a voidable preference by a trustee in bankruptcy.
Form 8-K Disclosure Information: As defined in Section 3.18(a).
Xxxxxxx Mac: Xxxxxxx Mac, formerly the Federal Home Loan Mortgage
Corporation, or any successor thereto.
Gross Margin: As to each Mortgage Loan, the fixed percentage set forth in
the related Mortgage Note and indicated on the Mortgage Loan Schedule which
percentage is added to the related Index on each Interest Adjustment Date to
determine (subject to rounding, the minimum and maximum Mortgage Interest Rate
and the Periodic Rate Cap) the Mortgage Interest Rate until the next Interest
Adjustment Date.
Group 2 Certificates: The Class AV-1 and Class A-R Certificates.
Group 2 Mortgage Loans: The Mortgage Loans identified as such on the Stack
II Mortgage Loan Schedule.
Group 2 Principal Distribution Amount: As of any Distribution Date, the
amount equal to the lesser of (i) the aggregate Class Certificate Balance of the
Class AV-1 and Class A-R Certificates and (ii) the product of (x) the Group 2
Principal Distribution Percentage and (y) the Stack II Senior Principal
Distribution Amount; provided, however, that (A) with respect to any
Distribution Date on which the Class AV-1 and Class A-R Certificates are
outstanding and the Class Certificate Balances of the Class AV-2 Certificates is
reduced to zero, the Group 3 Principal Distribution Amount in excess of the
amount necessary to reduce the Class Certificate Balance of the Class AV-2
Certificates to zero will be applied to increase the Group 2 Principal
Distribution Amount and (B) with respect to any Distribution Date thereafter,
the Group 2 Principal Distribution Amount will equal the Stack II Senior
Principal Distribution Amount.
Group 2 Principal Distribution Percentage: With respect to any Distribution
Date, a fraction expressed as a percentage, the numerator of which is the amount
of Stack II Principal Funds received with respect to the Group 2 Mortgage Loans
and the denominator of which is the amount of Stack II Principal Funds received
from all of the Stack II Mortgage Loans.
Group 3 Certificates: The Class AV-2A, Class AV-2B, Class AV-2C and Class
AV-2D Certificates.
Group 3 Mortgage Loans: The Mortgage Loans identified as such on the Stack
II Mortgage Loan Schedule.
Group 3 Principal Distribution Amount: As of any Distribution Date, the
amount equal to the lesser of (i) the aggregate Class Certificate Balance of the
Class AV-2 Certificates and (ii) the product of (x) the Group 3 Principal
Distribution Percentage and (y) the Stack II Senior
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Principal Distribution Amount; provided, however, that (A) with respect to any
Distribution Date on which the Class AV-2 Certificates are outstanding and the
Class Certificate Balances of the Class AV-1 and Class A-R Certificates is
reduced to zero, the Group 2 Principal Distribution Amount in excess of the
amount necessary to reduce the Class Certificate Balance of the Class AV-1
Certificates and Class A-R Certificates to zero will be applied to increase the
Group 3 Principal Distribution Amount and (B) with respect to any Distribution
Date thereafter, the Group 3 Principal Distribution Amount will equal the Stack
II Senior Principal Distribution Amount.
Group 3 Principal Distribution Percentage: With respect to any Distribution
Date, a fraction expressed as a percentage, the numerator of which is the amount
of Stack II Principal Funds received with respect to the Group 3 Mortgage Loans
and the denominator of which is the amount of Stack II Principal Funds received
from all of the Stack II Mortgage Loans.
Indemnified Persons: The Trustee, the Master Servicer, the Depositor and
the Securities Administrator and their officers, directors, agents and employees
and, with respect to the Trustee, any separate co-trustee and its officers,
directors, agents and employees.
Independent: When used with respect to any specified Person, any such
Person who (a) is in fact independent of the Depositor, the Master Servicer and
their respective Affiliates, (b) does not have any direct financial interest in
or any material indirect financial interest in the Depositor or the Master
Servicer or any Affiliate thereof, and (c) is not connected with the Depositor
or the Master Servicer or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar
functions; provided, however, that a Person shall not fail to be Independent of
the Depositor or the Master Servicer or any Affiliate thereof merely because
such Person is the beneficial owner of 1% or less of any class of securities
issued by the Depositor or the Master Servicer or any Affiliate thereof, as the
case may be.
Index: The index, if any, specified in a Mortgage Note by reference to
which the related Mortgage Interest Rate will be adjusted from time to time.
Initial Class Certificate Balance: With respect to any Regular Certificate,
the amount designated "Initial Class Certificate Balance" on the face thereof.
Initial Optional Termination Date: The first Distribution Date following
the date on which the aggregate Stated Principal Balance of the Mortgage Loans
is less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date.
Insurance Policy: With respect to any Mortgage Loan, any standard hazard
insurance policy, flood insurance policy or title insurance policy.
Insurance Proceeds: Amounts paid by the insurer under any Insurance Policy
covering any Mortgage Loan or Mortgaged Property other than amounts required to
be paid over to the Mortgagor pursuant to law or the related Mortgage Note or
Security Instrument and other than amounts used to repair or restore the
Mortgaged Property or to reimburse insured expenses.
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Interest Adjustment Date: With respect to a Mortgage Loan, the date, if
any, specified in the related Mortgage Note on which the Mortgage Interest Rate
is subject to adjustment.
Interest Carry Forward Amount: Any of the Class AV-1 Interest Carry Forward
Amount, the Class AV-2A Interest Carry Forward Amount, the Class AV-2B Interest
Carry Forward Amount, the Class AV-2C Interest Carry Forward Amount, the Class
AV-2D Interest Carry Forward Amount, the Class A-R Interest Carry Forward
Amount, the Class MV-1 Interest Carry Forward Amount, the Class MV-2 Interest
Carry Forward Amount, the Class MV-3 Interest Carry Forward Amount, the Class
MV-4 Interest Carry Forward Amount, the Class MV-5 Interest Carry Forward
Amount, the Class MV-6 Interest Carry Forward Amount, the Class BV-1 Interest
Carry Forward Amount, the Class BV-2 Interest Carry Forward Amount, the Class
BV-3 Interest Carry Forward Amount or the Class C Interest Carry Forward Amount,
as the case may be.
Interest Determination Date: Each date that is the second LIBOR Business
Day preceding the commencement of each Accrual Period for the Stack II
Certificates.
Investor Representation Letter: As defined in Section 5.02(b).
Issuing Entity: Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-AF2.
Latest Possible Maturity Date: With respect to the Certificates, the
Distribution Date in September 2037.
LIBOR Business Day: Any day on which banks in the City of London, England
and New York City, U.S.A. are open and conducting transactions in foreign
currency and exchange.
LIBOR Certificates: Any of the Stack II Certificates (other than the Class
C and Class P Certificates).
Liquidated Mortgage Loan: Any defaulted Mortgage Loan (including any REO
Property) as to which the related Servicer has determined that all amounts it
expects to recover from or on account of such Mortgage Loan have been recovered.
Liquidation Date: With respect to any Liquidated Mortgage Loan, the date on
which the related Servicer has certified that such Mortgage Loan has become a
Liquidated Mortgage Loan.
Liquidation Expenses: With respect to a Mortgage Loan in liquidation,
unreimbursed expenses paid or incurred by or for the account of the Master
Servicer or the related Servicer in connection with the liquidation of such
Mortgage Loan and the related Mortgaged Property, such expenses including (a)
property protection expenses, (b) property sales expenses, (c) foreclosure and
sale costs, including court costs and reasonable attorneys' fees, and (d)
similar expenses reasonably paid or incurred in connection with liquidation.
Liquidation Proceeds: With respect to any Mortgage Loan, cash received in
connection with the liquidation of a defaulted Mortgage Loan, whether through
trustee's sale, foreclosure sale or otherwise, and amounts received through
Insurance Proceeds and condemnation proceeds.
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Loan Group: Loan Group 2 or Loan Group 3, as applicable.
Loan Group 2: The group of Mortgage Loans designated as belonging to Loan
Group 2 on the Stack II Mortgage Loan Schedule.
Loan Group 3: The group of Mortgage Loans designated as belonging to Loan
Group 3 on the Stack II Mortgage Loan Schedule.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the original principal
balance of the related Mortgage Loan and the denominator of which is the
Original Value of the related Mortgaged Property.
Lower Tier REMIC: As described in the Preliminary Statement and Section
9.12.
Lower Tier REMIC Interests: Each of the Class LTAV-1 Interest, the Class
LTAV-2A Interest, the Class LTAV-2B Interest, the Class LTAV-2C Interest, the
Class LTAV-2D Interest, the Class LTMV-1 Interest, the Class LTMV-2 Interest,
the Class LTMV-3 Interest, the Class LTMV-4 Interest, the Class LTMV-5 Interest,
the Class LTMV-6 Interest, the Class LTBV-1 Interest, the Class LTBV-2 Interest,
the Class LTBV-3 Interest, the Class LTIX Interest, the Class LTIIX Interest,
the Class LTII2A Interest, the Class LTII2B Interest, the Class LTII3A Interest,
the Class LTII3B Interest and the Class LTR Interest.
Lower Tier REMIC I Marker Interests: Each of the classes of Lower Tier
REMIC Regular Interests other than the Class LTIX Interest, the Class LTIIX
Interest, the Class LTII2A Interest, the Class LTII2B Interest, the Class LTII3A
Interest and the Class LTII3B Interest.
Lower Tier REMIC II Marker Interests: Each of the Class LTII2A Interest,
the Class LTII2B Interest, the Class LTII3A Interest and the Class LTII3B
Interest.
Lower Tier REMIC Regular Interests: Each of the Lower Tier REMIC Interests
other than the Class LTR Interest.
Lower Tier REMIC Subordinated Balance Ratio: The ratio of (i) the principal
balance of the Class LTII2A Interest to (ii) the principal balance of the Class
LTII3A Interest that is equal to the ratio of (i) the excess of (A) the
aggregate Stated Principal Balance of the Group 2 Mortgage Loans over (B) the
current Class Certificate Balance of the Class AV-1 and Class A-R Certificates
to (ii) the excess of (A) the aggregate Stated Principal Balance of the Group 3
Mortgage Loans over (B) the current Class Certificate Balance of the Class AV-2
Certificates.
Master Servicer: Xxxxx Fargo Bank, N.A. including any successors in
interest who meet the qualifications for a master servicer set forth in this
Agreement, and any successor master servicer appointed hereunder.
Master Servicer Collection Account: The trust account or accounts created
and maintained pursuant to Section 4.02, which shall be denominated "Xxxxx Fargo
Bank, National Association as Master Servicer for HSBC Bank USA, National
Association, as Trustee f/b/o holders of Xxxxxxx Xxxxx Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, MLMI Series 2006-AF2 - Master Servicer
Collection Account (Stack II)." The Master Servicer Collection Account shall be
an Eligible Account.
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Master Servicing Compensation: The meaning specified in Section 3.14.
Maximum Lifetime Mortgage Rate: The maximum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.
Maximum Rate Cap: Any of the Class AV-1 Maximum Rate Cap, Class AV-2
Maximum Rate Cap or the Weighted Average Maximum Rate Cap.
Minimum Lifetime Mortgage Rate: The minimum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.
Minimum Required Overcollateralization Amount: An amount equal to the
product of (x) 0.50% and (y) the Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date.
MLML: Xxxxxxx Xxxxx Mortgage Lending, Inc., a Delaware corporation, or any
successor in interest.
Monthly Advance: An advance of principal or interest required to be made by
the applicable Servicer pursuant to the related Servicing Agreement or the
Master Servicer pursuant to Section 6.04.
Monthly Payment: With respect to any Mortgage Loan, the scheduled monthly
payment of principal and interest on such Mortgage Loan which is payable by the
related Mortgagor from time to time under the related Mortgage Note, determined:
(a) after giving effect to (i) any Deficient Valuation and/or Debt Service
Reduction with respect to such Mortgage Loan and (ii) any reduction in the
amount of interest collectible from the related Mortgagor pursuant to the Relief
Act; (b) without giving effect to any extension granted or agreed to by the
related Servicer pursuant to related Servicing Agreement; and (c) on the
assumption that all other amounts, if any, due under such Mortgage Loan are paid
when due.
Monthly Statement: The statement distributed to Certificateholders pursuant
to Section 6.03.
Moody's: Xxxxx'x Investors Service, Inc. or its successor in interest.
Mortgage: The mortgage, deed of trust or other instrument creating a first
lien on, or first priority security interest in, a Mortgaged Property securing a
Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01(b) pertaining
to a particular Mortgage Loan and any additional documents required to be added
to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate at which interest accrues from time
to time on any Mortgage Loan pursuant to the related Mortgage Note, which rate
is equal to the "Mortgage Interest Rate" set forth with respect thereto on the
Mortgage Loan Schedule.
Mortgage Loan: A mortgage loan transferred and assigned to the Trustee
pursuant to Section 2.01 or Section 2.04 and held as a part of the Trust Fund,
as identified in the Mortgage Loan Schedule, including a mortgage loan the
property securing which has become an REO
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Property. For the avoidance of doubt, as defined below, the term "Stack I
Mortgage Loan" shall be used within this Agreement to refer to a mortgage loan
transferred and assigned to the Trustee pursuant to Section 2.01 or Section 2.04
of the Stack I Agreement, including a mortgage loan the property securing which
has become a REO Property.
Mortgage Loan Schedule: Any of the Stack I Mortgage Loan Schedule or the
Stack II Mortgage Loan Schedule, attached hereto as Exhibits B-1 and B-2,
respectively, with respect to the Mortgage Loans and as amended from time to
time to reflect the repurchase or substitution of Mortgage Loans pursuant to the
Stack I Agreement and this Agreement, respectively.
Mortgage Note: The originally executed note or other evidence of the
indebtedness of a Mortgagor under the related Mortgage Loan.
Mortgage Pool: The pool of Mortgage Loans, identified on Exhibits B-1 and
B-2 from time to time, and any REO Properties acquired in respect thereof.
Mortgaged Property: Land and improvements securing the indebtedness of a
Mortgagor under the related Mortgage Loan or, in the case of REO Property, such
REO Property.
Mortgagor: The obligor on a Mortgage Note.
Net Excess Cashflow: Any Stack II Interest Funds and Stack II Principal
Funds not otherwise required to be distributed with respect to principal of and
interest on the Stack II Certificates and not otherwise required to be
distributed to the Class P Certificates.
Net Liquidation Proceeds: As to any Liquidated Mortgage Loan, Liquidation
Proceeds net of (i) Liquidation Expenses which are payable therefrom by the
related Servicer or the Master Servicer in accordance with the related Servicing
Agreement or this Agreement and (ii) unreimbursed advances by the related
Servicer or the Master Servicer and Monthly Advances.
Net Mortgage Rate: With respect to each Mortgage Loan, the Mortgage
Interest Rate in effect from time to time less the Servicing Fee Rate (expressed
as a per annum rate).
Net Rate: With respect to any Distribution Date, the product of (x) the
weighted average Net Mortgage Rate for the Mortgage Loans calculated based on
the respective Net Mortgage Rates and the Stated Principal Balances of such
Mortgage Loans as of the preceding Distribution Date (or, in the case of the
first Distribution Date, as of the Cut-off Date) and (y) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days in the related Accrual Period.
Offered Certificate: Any Stack II Senior Certificate or Stack II
Subordinate Certificate issued hereunder, along with the Class AF-1, Class PO,
Class IO, Class MF-1, Class MF-2 or Class MF-3 defined and issued pursuant to
the terms and conditions of the Stack I Agreement.
Officer's Certificate: A certificate signed by the Chairman of the Board,
the Vice Chairman of the Board, the President or a Vice President or Assistant
Vice President or other authorized officer of the Master Servicer or the
Depositor, as applicable, and delivered to the Trustee, as required by this
Agreement.
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One-Month LIBOR: With respect to any Accrual Period, the rate determined by
the Securities Administrator on the related Interest Determination Date on the
basis of (a) the offered rates for one-month United States dollar deposits, as
such rates appear on Telerate page 3750, as of 11:00 a.m. (London time) on such
Interest Determination Date or (b) if such rate does not appear on Telerate Page
3750 as of 11:00 a.m. (London time), the offered rates of the Reference Banks
for one-month United States dollar deposits, as such rates appear on the Reuters
Screen LIBO Page, as of 11:00 a.m. (London time) on such Interest Determination
Date. If One-Month LIBOR is determined pursuant to clause (b) above, on each
Interest Determination Date, One-Month LIBOR for the related Accrual Period will
be established by the Securities Administrator as follows:
(i) If on such Interest Determination Date two or more Reference Banks
provide such offered quotations, One-Month LIBOR for the related Accrual
Period shall be the arithmetic mean of such offered quotations (rounded
upwards if necessary to the nearest whole multiple of 0.03125%).
(ii) If on such Interest Determination Date fewer than two Reference
Banks provide such offered quotations, One-Month LIBOR for the related
Accrual Period shall be the higher of (i) One-Month LIBOR as determined on
the previous Interest Determination Date and (ii) the Reserve Interest
Rate.
Opinion of Counsel: A written opinion of counsel who is or are acceptable
to the Trustee and who, unless required to be Independent (an "Opinion of
Independent Counsel"), may be internal counsel for the Master Servicer or the
Depositor.
Optional Termination: The termination hereunder of that portion of the
Trust Fund related to the Certificates pursuant to Section 10.01(a) hereof.
Optional Termination Amount: The amount received by the Securities
Administrator in connection with any purchase of all of the Mortgage Loans and
REO Properties pursuant to Section 10.01(b) hereof.
Optional Termination Price: On any date after the Initial Optional
Termination Date, an amount equal to the sum of (A) the aggregate Stated
Principal Balance of each Mortgage Loan (other than any Mortgage Loan that has
become an REO Property) as of the Distribution Date on which the proceeds of the
Optional Termination are distributed to the Certificateholders, plus accrued
interest thereon at the applicable Mortgage Rate as of the Due Date preceding
the Distribution Date on which the proceeds of the Optional Termination are
distributed to Certificateholders and the fair market value of any REO Property,
plus accrued interest thereon as of the Distribution Date on which the proceeds
of the Optional Termination are distributed to Certificateholders, (B) any
unreimbursed out-of-pocket costs and expenses owed to the Master Servicer, the
Trustee or the Securities Administrator (including any amounts incurred by the
Securities Administrator in connection with conducting the Auction), a Servicer
or the Master Servicer and any unpaid or unreimbursed Servicing Fees, Monthly
Advances and Servicing Advances, (C) any unreimbursed costs, penalties and/or
damages incurred by the Trust Fund in connection with any violation relating to
any of the Mortgage Loans of any predatory or abusive lending law and (D) in the
event an Auction has been conducted, all reasonable fees and expenses incurred
by the Securities Administrator to conduct the Auction.
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Original Value: The lesser of (i) the Appraised Value or (ii) the sales
price of a Mortgaged Property at the time of origination of a Mortgage Loan,
except in instances where either clauses (i) or (ii) is unavailable, the other
may be used to determine the Original Value, or if both clauses (i) and (ii) are
unavailable, Original Value may be determined from other sources reasonably
acceptable to the Depositor.
Outstanding Mortgage Loan: With respect to any Due Date, a Mortgage Loan
which, prior to such Due Date, was not the subject of a Principal Prepayment in
Full, did not become a Liquidated Mortgage Loan and was not purchased or
replaced.
Outstanding Principal Balance: As of the time of any determination, the
principal balance of a Mortgage Loan remaining to be paid by the Mortgagor, or,
in the case of an REO Property, the principal balance of the related Mortgage
Loan remaining to be paid by the Mortgagor at the time such property was
acquired by the Trust Fund less any Net Liquidation Proceeds with respect
thereto to the extent applied to principal.
Overcollateralization Amount: As of any date of determination, the excess
of (1) the Stated Principal Balance of the Mortgage Loans over (2) the Class
Certificate Balance of the Certificates (other than the Class P Certificates and
the Class C Certificates).
Ownership Interest: As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
PHH: PHH, Inc., or any successor thereto.
PHH Assignment Agreement: The Assignment, Assumption and Recognition
Agreement, dated as of October 1, 2006, among PHH, the Depositor and the Sponsor
pursuant to which the PHH Servicing Agreement and the rights of the Sponsor
thereunder (other than the rights to enforce the representations and warranties
with respect to the PHH Loans) were assigned to the Depositor for the benefit of
the Certificateholders.
PHH Loans: The Mortgage Loans serviced by PHH pursuant to the PHH Servicing
Agreement.
PHH MLMC Assignment Agreement: The Assignment, Assumption and Recognition
Agreement, dated as of October 1, 2006, among Xxxxxxx Xxxxx Mortgage Capital,
Inc., the Sponsor and PHH.
PHH Servicing Agreement: The Mortgage Servicing Purchase and Sale
Agreement, dated as of September 1, 2006, between Xxxxxxx Xxxxx Mortgage
Capital, Inc. and PHH.
Percentage Interest: With respect to any Certificate (other than the Class
A-R and Class P Certificates), a fraction, expressed as a percentage, the
numerator of which is the Initial Class Certificate Balance represented by such
Certificate and the denominator of which is the Initial Class Certificate
Balance of the related Class. With respect to the Class A-R and Class P
Certificates, the Percentage Interest evidenced thereby shall be as specified on
the face thereof, or otherwise, be equal to 100%.
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Periodic Rate Cap: With respect to each Mortgage Loan, the maximum
adjustment that can be made to the Mortgage Interest Rate on each Interest
Adjustment Date in accordance with its terms, regardless of changes in the
applicable Index.
Permitted Investments: Any one or more of the following obligations or
securities held in the name of the Trustee for the benefit of the
Certificateholders (provided that such obligation or security must be a
"permitted investment" within the meaning of such term as provided for in
Section 860G(a)(5) of the Code):
(i) direct obligations of, and obligations the timely payment of which
are fully guaranteed by the United States of America or any agency or
instrumentality of the United States of America the obligations of which
are backed by the full faith and credit of the United States of America;
(ii) (a) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States of America or any state
thereof (including the Trustee or the Master Servicer or its Affiliates
acting in its commercial banking capacity) and subject to supervision and
examination by federal and/or state banking authorities, provided that the
commercial paper and/or the short-term debt rating and/or the long-term
unsecured debt obligations of such depository institution or trust company
at the time of such investment or contractual commitment providing for such
investment have the Applicable Credit Rating or better from each Rating
Agency and (b) any other demand or time deposit or certificate of deposit
that is fully insured by the Federal Deposit Insurance Corporation;
(iii) repurchase obligations with respect to (a) any security
described in clause (i) above or (b) any other security issued or
guaranteed by an agency or instrumentality of the United States of America,
the obligations of which are backed by the full faith and credit of the
United States of America, in either case entered into with a depository
institution or trust company (acting as principal) described in clause
(ii)(a) above where the Trustee holds the security therefor;
(iv) securities bearing interest or sold at a discount issued by any
corporation (including the Trustee, the Securities Administrator or the
Master Servicer or its Affiliates) incorporated under the laws of the
United States of America or any state thereof that have the Applicable
Credit Rating or better from each Rating Agency at the time of such
investment or contractual commitment providing for such investment;
provided, however, that securities issued by any particular corporation
will not be Permitted Investments to the extent that investments therein
will cause the then outstanding principal amount of securities issued by
such corporation and held as part of the Issuing Entity to exceed 10% of
the aggregate Outstanding Principal Balances of all the Mortgage Loans and
Permitted Investments held as part of the Issuing Entity;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than one year after the date of issuance thereof)
having the Applicable Credit Rating or better from each Rating Agency at
the time of such investment;
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(vi) a Reinvestment Agreement issued by any bank, insurance company or
other corporation or entity;
(vii) any other demand, money market or time deposit, obligation,
security or investment as may be acceptable to either Rating Agency as
evidenced in writing by each Rating Agency to the Trustee, the Securities
Administrator or Master Servicer;
(viii) any money market or common trust fund having the Applicable
Credit Rating or better from each Rating Agency (if such fund is rated by
each Rating Agency), including any such fund for which the Trustee,
Securities Administrator or Master Servicer or any affiliate of the
Trustee, Securities Administrator or Master Servicer acts as a manager or
an advisor; provided, however, that no instrument or security shall be a
Permitted Investment if such instrument or security evidences a right to
receive only interest payments with respect to the obligations underlying
such instrument or if such security provides for payment of both principal
and interest with a yield to maturity in excess of 120% of the yield to
maturity at par or if such instrument or security is purchased at a price
greater than par; and
(ix) units of a taxable money-market portfolio having the highest
rating assigned by each Rating Agency (except if S&P is a Rating Agency,
"AAAm" or "AAAM-G" by S&P) and restricted to obligations issued or
guaranteed by the United States of America or entities whose obligations
are backed by the full faith and credit of the United States of America and
repurchase agreements collateralized by such obligations.
Permitted Transferee: Any Person other than a Disqualified Organization or
an "electing large partnership" (as defined by Section 775 of the Code).
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Physical Certificate: The Residual Certificate.
Pooling and Servicing Agreement: The Pooling and Servicing Agreement
relating to the Mortgage Pass-Through Certificates, MLMI Series 2006-AF2,
jointly comprised of the Stack I Agreement and this Agreement.
Prepayment Interest Shortfall: As to any Distribution Date and any Mortgage
Loan (other than a Mortgage Loan relating to an REO Property) that was the
subject of (a) a Principal Prepayment in Full during the related Prepayment
Period, an amount equal to the excess of one month's interest at the Net
Mortgage Rate on the Stated Principal Balance of such Mortgage Loan over the
amount of interest (adjusted to the Net Mortgage Rate) paid by the Mortgagor for
such Prepayment Period to the date of such Principal Prepayment in Full or (b) a
Curtailment during the prior calendar month, an amount equal to one month's
interest at the Net Mortgage Rate on the amount of such Curtailment. The
obligations of the Master Servicer in respect of any Prepayment Interest
Shortfall are set forth in Section 6.05.
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Prepayment Penalty: With respect to any Prepayment Period, any prepayment
premium, charge or penalty payable by a Mortgagor in connection with any
Principal Prepayment on the Prepayment Penalty Mortgage Loans.
Prepayment Penalty Mortgage Loans: Any of the Mortgage Loans that are
subject to existing prepayment premiums.
Prepayment Period: With respect to any Mortgage Loan and any Distribution
Date, the calendar month preceding the month in which such Distribution Date
occurs.
Primary Mortgage Insurance Policy: Any primary mortgage guaranty insurance
policy issued in connection with a Mortgage Loan which provides compensation to
a Mortgage Note holder in the event of default by the obligor under such
Mortgage Note or the related Security Instrument, if any or any replacement
policy therefor through the related Accrual Period for such Class relating to a
Distribution Date.
Principal Prepayment: Any Principal Prepayment in Full or Curtailment or
other recovery of principal on a Mortgage Loan which is received in advance of
its scheduled Due Date to the extent that it is not accompanied by an amount as
to interest representing scheduled interest due on any date or dates in any
month or months subsequent to the month of prepayment, including Insurance
Proceeds and Repurchase Proceeds, but excluding the principal portion of Net
Liquidation Proceeds.
Principal Prepayment in Full: Any Principal Prepayment made by a Mortgagor
of the entire unpaid principal balance of the Mortgage Loan.
Prospectus Supplement: The Prospectus Supplement dated October 30, 2006,
relating to the public offering of the Offered Certificates.
Protected Account: An account established and maintained for the benefit of
Certificateholders by each Servicer with respect to the related Mortgage Loans
and with respect to REO Property pursuant to the respective Servicing Agreement.
The Protected Account shall be an Eligible Account.
Purchase Price: With respect to any Mortgage Loan or REO Property to be
purchased pursuant to or as contemplated by Section 2.03 or 10.01, and as
confirmed by an Officers' Certificate from the Master Servicer to the Trustee,
an amount equal to the sum of (i) 100% of the Stated Principal Balance thereof
as of the date of purchase (or such other price as provided in Section 10.01),
(ii) accrued interest on such Stated Principal Balance at the applicable
Mortgage Interest Rate in effect from time to time from the Due Date as to which
interest was last covered by a payment by the Mortgagor or an advance by the
related Servicer or Master Servicer, which payment or advance had as of the date
of purchase been distributed to Certificateholders, through the end of the
calendar month in which the purchase is to be effected less any unreimbursed
Monthly Advances and any unpaid Servicing Fees payable to the purchaser of the
Mortgage Loan and (iii) any costs and damages incurred by the Issuing Entity in
connection with any violation by such Mortgage Loan or REO Property of any
predatory or abusive-lending law.
Rating Agencies: Xxxxx'x and S&P.
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Realized Loss: With respect to a Liquidated Mortgage Loan, the amount by
which the remaining unpaid principal balance of the Mortgage Loan exceeds the
amount of Liquidation Proceeds applied to the principal balance of the related
Mortgage Loan. To the extent the Master Servicer receives Subsequent Recoveries
with respect to any Mortgage Loan, the amount of the Realized Loss with respect
to that Mortgage Loan will be reduced to the extent such recoveries are applied
to reduce the Class Certificate Balance of any Class of Certificates on any
Distribution Date.
Realized Loss Amount: With respect to any Distribution Date, the amount, if
any, by which the aggregate Class Certificate Balance of the Stack II
Certificates after distributions of principal on such Distribution Date exceeds
the aggregate Stated Principal Balance of the Stack II Mortgage Loans as of such
Distribution Date.
Record Date: With respect to each Distribution Date and each class of
Offered Certificates, the close of business on the last Business Day of the
month immediately preceding the month in which the related Distribution Date
occurs.
Regular Certificates: Any of the Class AV-1, Class AV-2A, Class AV-2B,
Class AV-2C, Class AV-2D, Class MV-1, Class MV-2, Class MV-3, Class MV-4, Class
MV-5, Class MV-6, Class BV-1, Class BV-2 or Class BV-3 Certificates.
Regulation AB: Subpart 22.1100 - 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. 1,506-1,631 (January 7, 2005) or by the staff
of the Commission, or as may be provided by the Commission or its staff from
time to time.
Reinvestment Agreements: One or more reinvestment agreements, acceptable to
each of the Rating Agencies, from a bank, insurance company or other corporation
or entity (including the Trustee).
Relevant Servicing Criteria: The Servicing Criteria applicable to the
various parties, as set forth on Exhibit K hereto. For clarification purposes,
multiple parties can have responsibility for the same Relevant Servicing
Criteria. With respect to a Servicing Function Participant engaged by the Master
Servicer, the Securities Administrator, the Trustee, the Custodian or a
Servicer, the term "Relevant Servicing Criteria" may refer to one or more
discrete functions specified in the Relevant Servicing Criteria applicable to
such parties.
Relief Act: The Servicemembers Civil Relief Act, as amended.
Relief Act Mortgage Loan: Any Mortgage Loan as to which the Monthly Payment
thereof has been reduced due to the application of the Relief Act.
REMIC: Each pool of assets in the Trust Fund designated as a REMIC as
described in the Preliminary Statement and Section 9.12.
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REMIC Opinion: An Opinion of Counsel to the effect that a contemplated
action will neither adversely affect the status as a REMIC of any REMIC created
hereunder nor subject any such REMIC to any tax under the REMIC Provisions.
REMIC Pass-Through Rate: The Class AV-1 Available Funds Cap (in the case of
a Class included in the Group 2 Certificates), the Class AV-2 Available Funds
Cap (in the case of a Class included in the Group 3 Certificates) or the
Weighted Average Available Funds Cap (in the case of a Class included in the
Stack II Subordinate Certificates).
REMIC Provisions: The provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations, including proposed regulations and rulings, and administrative
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
REMIC Regular Interests: (i) any of the rights under any of the
Certificates (other than the Class P Certificates, the Class A-R Certificate and
the Class C Certificates) other than the rights in interest rate cap contracts
described in Section 9.12 and (ii) the Uncertificated Class C Interest.
REMIC 1: Not applicable.
REMIC 1 Interest: Not applicable.
REMIC 1 Regular Interest: Not applicable.
REMIC 1 Subordinate Balance Ratio: Not applicable.
REMIC 2: Not applicable.
REMIC 2 Interest: Not applicable.
REMIC 2 Regular Interest: Not applicable.
REO Property: A Mortgaged Property acquired by the Servicer or Master
Servicer on behalf of the Trust Fund through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.15 in connection with a defaulted
Mortgage Loan.
Reportable Event: As defined in Section 3.18(a).
Reporting Servicer: As defined in Section 3.18(h).
Repurchase Proceeds: The Repurchase Price in connection with any repurchase
of a Mortgage Loan by the Sponsor and any cash deposit in connection with the
substitution of a Mortgage Loan.
Request for Release: A request for release in the form attached hereto as
Exhibit D.
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Required Insurance Policy: With respect to any Mortgage Loan, any insurance
policy which is required to be maintained from time to time under this Agreement
with respect to such Mortgage Loan.
Required Percentage: With respect to a Distribution Date, the quotient of
(x) the excess of (1) the aggregate Stated Principal Balance of the Stack II
Mortgage Loans over (2) the Class Certificate Balance of the most senior class
of Stack II Certificates outstanding as of such Distribution Date, prior to
giving effect to distributions to be made on such Distribution Date, and (y) the
Stated Principal Balances of the Stack II Mortgage Loans. As used herein, the
Class Certificate Balance of the most senior class of Stack II Certificates will
equal the aggregate Class Certificate Balance of the Stack II Senior
Certificates as of such date of calculation.
Reserve Interest Rate: The rate per annum that the Securities Administrator
determines to be either (1) the arithmetic mean (rounded upwards if necessary to
the nearest whole multiple of 0.03125%) of the one-month United States dollar
lending rates which New York City banks selected by the Securities Administrator
are quoting on the relevant Interest Determination Date to the principal London
offices of leading banks in the London interbank market or (2) in the event that
the Securities Administrator can determine no such arithmetic mean, the lowest
one-month United States dollar lending rate which New York City banks selected
by the Securities Administrator are quoting on such Interest Determination Date
to leading European banks.
Residual Certificate: The Class A-R Certificate.
Residual Interest: An interest in the Upper Tier REMIC that is entitled to
all distributions of principal and interest on the Class A-R Certificate other
than (i) distributions in respect of the Class LTR Interest or the residual
interest in any REMIC created under the Stack I Agreement and (ii) distributions
on the Class A-R Certificate in respect of Excess Interest.
Responsible Officer: Any officer assigned to the Corporate Trust Office (or
any successor thereto), including any Vice President, Assistant Vice President,
Trust Officer, any Assistant Secretary, any trust officer or any other officer
of the Trustee or Securities Administrator customarily performing functions
similar to those performed by any of the above designated officers and having
direct responsibility for the administration of this Agreement, and any other
officer of the Trustee or Securities Administrator to whom a matter arising
hereunder may be referred because of such officers familiarity with the subject
matter thereof.
Reuter's Screen LIBO Page: means the display designated as page "LIBO" on
the Reuters Monitor Money Rates Service (or such other page as may replace the
LIBO page on that service for the purpose of displaying London interbank offered
rates of major banks).
Xxxxxxxx-Xxxxx Act: The Xxxxxxxx-Xxxxx Act of 2002 and the rules and
regulations of the Commission promulgated thereunder (including any
interpretations thereof by the Commission's staff).
Xxxxxxxx-Xxxxx Certification: A written certification signed by an officer
of the Master Servicer that complies with (i) the Xxxxxxxx-Xxxxx Act, and (ii)
Exchange Act Rules 13a-14(d) and 15d-14(d), as in effect from time to time;
provided that if, after the Closing Date (a) the Xxxxxxxx-Xxxxx Act is amended,
(b) the Rules referred to in clause (ii) are modified or
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superseded by any subsequent statement, rule or regulation of the Commission or
any statement of a division thereof, or (c) any future releases, rules and
regulations are published by the Commission from time to time pursuant to the
Xxxxxxxx-Xxxxx Act, which in any such case affects the form or substance of the
required certification and results in the required certification being, in the
reasonable judgment of the Master Servicer, materially more onerous that then
form of the required certification as of the Closing Date, the Xxxxxxxx-Xxxxx
Certification shall be as agreed to by the Master Servicer and the Depositor
following a negotiation in good faith to determine how to comply with any such
new requirements.
S&P: Standard and Poor's, a division of The XxXxxx-Xxxx Companies, Inc. or
its successor in interest.
Scheduled Payment: With respect to any Mortgage Loan and any month, the
scheduled payment or payments of principal and interest due during such month on
such Mortgage Loan which either is payable by a Mortgagor in such month under
the related Mortgage Note or, in the case of REO Property, would otherwise have
been payable under the related Mortgage Note.
Scheduled Principal: The principal portion of any Scheduled Payment.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Xxxxx Fargo Bank, N.A., or any successor in
interest, or any successor securities administrator appointed as herein
provided.
Security Agreement: With respect to a Cooperative Loan, the agreement
creating a security interest in favor of the originator in the related
Cooperative Stock.
Security Instrument: A written instrument creating a valid first lien on a
Mortgaged Property securing a Mortgage Note, which may be any applicable form of
mortgage, deed of trust, deed to secure debt or security deed, including any
riders or addenda thereto.
Servicer: With respect to each Mortgage Loan, CitiMortgage or PHH, as
applicable and as specified on the Stack II Mortgage Loan Schedule.
Servicer Remittance Date: With respect to each Mortgage Loan, the date set
forth in the related Servicing Agreement.
Servicing Advances: With respect to any Mortgage Loan, all customary,
reasonable and necessary "out-of-pocket" costs and expenses incurred by the
Servicer in the performance of its servicing obligations, including, but not
limited to, the cost of (i) preservation, restoration, protection and repair of
a Mortgaged Property or cooperative unit, as applicable, (ii) any enforcement or
judicial proceedings with respect to a Mortgage Loan, including foreclosure
actions and (iii) the management and liquidation of REO Property.
Servicing Agreements: The CitiMortgage Servicing Agreements and the PHH
Servicing Agreement.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.
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Servicing Fee: As to any Mortgage Loan and Distribution Date, an amount
equal to the product of (i) the Stated Principal Balance of such Mortgage Loan
as of the Due Date in the preceding calendar month and (ii) the applicable
Servicing Fee Rate. Such fee shall be payable monthly, computed on the basis of
the same principal amount and period respectively which any related interest
payment on a Mortgage Loan is computed. If the Index and/or Gross Margin are
adjusted as provided in the related Mortgage Note, the Servicing Fee shall be
the rate per annum in effect immediately prior to such adjustment.
Servicing Fee Rate: As to any Stack II Mortgage Loan, a per annum rate as
set forth in the Stack II Mortgage Loan Schedule.
Servicing Function Participant: Any Sub-Servicer, Subcontractor or any
other Person engaged by a Servicer, the Custodian, the Master Servicer, the
Paying Agent, the Securities Administrator and the Trustee.
Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
names and specimen signatures appear on a list of servicing officers furnished
to the Trustee by the Master Servicer, as such list may be amended from time to
time.
Servicing Rights Owner: With respect to the PHH Mortgage Loans, MLML, or
its transferee or assignee, in its capacity as owner of the servicing rights.
Sponsor: Xxxxxxx Xxxxx Mortgage Lending, Inc., a Delaware corporation, or
any successor in interest.
Stack I Agreement: The Stack I Pooling and Servicing Terms, dated as of
October 1, 2006, by and among the Depositor, the Master Servicer, the Securities
Administrator and the Trustee, including the exhibits thereto, and all
amendments thereof and supplements thereto.
Stack I Certificate: Any mortgage pass-through certificate issued pursuant
to the Stack I Agreement, evidencing a beneficial ownership interest in that
portion of the Trust Fund related to the Stack I Mortgage Loans set forth on the
Stack I Mortgage Loan Schedule, signed and countersigned by the Securities
Administrator.
Stack I Mortgage Loan: A mortgage loan transferred and assigned to the
Trustee pursuant to Section 2.01 or Section 2.04 of the Stack I Agreement and
held as a part of the Trust Fund, as identified in the Stack I Mortgage Loan
Schedule, including a mortgage loan the property securing which has become an
REO Property.
Stack I Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase
Agreement, dated as of October 1, 2006, between the Sponsor and the Depositor,
as purchaser, and all amendments thereof and supplements thereto, attached
hereto as Exhibit J-1.
Stack I Mortgage Loan Schedule: The schedule, attached to the Stack I
Agreement as Exhibit B with respect to the Stack I Mortgage Loans and as amended
from time to time to reflect the repurchase or substitution of Stack I Mortgage
Loans pursuant to the Stack I Agreement.
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Stack II Certificates: Any mortgage pass-through certificate issued
pursuant to the this Agreement, evidencing a beneficial ownership interest in
that portion of the Trust Fund related to the Stack II Mortgage Loans set forth
on the Stack II Mortgage Loan Schedule, signed and countersigned by the
Securities Administrator.
Stack II Certificateholders: Any holder of a Stack II Certificate.
Stack II Extra Principal Distribution Amount: With respect to any
Distribution Date, (1) prior to the Stepdown Date, the excess, if any, of (A)
the sum of (x) the aggregate Class Certificate Balance of the Stack II
Certificates (other than the Class C Certificates) reduced by the Stack II
Principal Funds with respect to such Distribution Date and (y) $6,108,586 over
(B) the aggregate Stated Principal Balance of the Stack II Mortgage Loans as of
such Distribution Date and (2) on and after the Stepdown Date, the excess, if
any, of (A) the sum of (x) the aggregate Class Certificate Balance of the Stack
II Certificates (other than the Class C Certificates) reduced by the Stack II
Principal Funds with respect to such Distribution Date and (y) the greater of
(a) 3.307% of the aggregate Stated Principal Balance of the Stack II Mortgage
Loans as of such Distribution Date and (b) the Minimum Required
Overcollateralization Amount less (B) the aggregate Stated Principal Balance of
the Stack II Mortgage Loans; provided, however, that if on any Distribution Date
a Stepdown Trigger Event is in effect, the Stack II Extra Principal Distribution
Amount will not be reduced to the applicable percentage of then-current
aggregate Stated Principal Balance of the Stack II Mortgage Loans (and will
remain fixed at the applicable percentage of the aggregate Stated Principal
Balance of the Stack II Mortgage Loans as of the Due Date immediately prior to
the Stepdown Trigger Event) until the next Distribution Date on which the
Stepdown Trigger Event is not in effect.
Stack II Initial Certification: The certification substantially in the form
of Exhibit One to the Custodial Agreement.
Stack II Interest Funds: With respect to any Distribution Date and the
Stack II Mortgage Loans, the sum, without duplication, of (1) all scheduled
interest due during the related Due Period that is received before the related
Servicer Remittance Date or advanced on or before the related Servicer
Remittance Date less the Servicing Fee, (2) all Advances relating to interest,
(3) all Compensating Interest Payments, (4) liquidation proceeds collected
during the related Prepayment Period (to the extent such liquidation proceeds
relate to interest), (5) proceeds of any Stack II Mortgage Loan purchased by the
Depositor or any transferor under the Pooling and Servicing Agreement during the
related Prepayment Period for document defects, breach of a representation or
warranty, realization upon default or optional termination (to the extent such
proceeds relate to interest) and (6) Prepayment Penalties received with respect
to the related Stack II Mortgage Loans, less all non-recoverable Advances
relating to interest and certain indemnification amounts, expenses reimbursed to
the Trustee, Securities Administrator, Master Servicer and the Servicer.
Stack II Mortgage Loan: A mortgage loan transferred and assigned to the
Trustee pursuant to Section 2.01 or Section 2.04 of this Agreement and held as a
part of the Trust Fund, as identified in the Stack II Mortgage Loan Schedule,
including a mortgage loan the property securing which has become an REO
Property.
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Stack II Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase
Agreement, dated as of October 1, 2006, between the Sponsor and the Depositor,
as purchaser, and all amendments thereof and supplements thereto, attached
hereto as Exhibit J-2.
Stack II Mortgage Loan Schedule: The schedule, attached hereto as Exhibit B
with respect to the Stack II Mortgage Loans and as amended from time to time to
reflect the repurchase or substitution of Stack II Mortgage Loans pursuant to
this Agreement.
Stack II Principal Distribution Amount: with respect to each Distribution
Date, the sum of (1) the Stack II Principal Funds for such Distribution Date and
(2) any Stack II Extra Principal Distribution Amount for such Distribution Date.
Stack II Principal Funds: means, with respect to any Distribution Date and
the Stack II Mortgage Loans, the sum, without duplication, of (1) the scheduled
principal due during the related Due Period and received before the related
Servicer Remittance Date or advanced on or before the related Servicer
Remittance Date, (2) prepayments of principal collected in the related
Prepayment Period, (3) the Stated Principal Balance of each Stack II Mortgage
Loan that was purchased by the Depositor or the Servicer during the related
Prepayment Period or, in the case of a purchase in connection with an optional
termination, on the Business Day prior to such Distribution Date, (4) the
amount, if any, by which the aggregate unpaid principal balance of any
replacement Stack II Mortgage Loans is less than the aggregate unpaid principal
balance of any Stack II Mortgage Loans delivered by the Sponsor in connection
with a substitution of a Stack II Mortgage Loan, (5) all liquidation proceeds
collected during the related Prepayment Period (to the extent such liquidation
proceeds related to principal), (6) all Subsequent Recoveries received during
the related Due Period and (7) all other collections and recoveries in respect
of principal during the related Prepayment Period less (A) all non-recoverable
Advances relating to principal and all non-recoverable servicing advances
reimbursed during the related Prepayment Period and (B) indemnification amounts
and expenses reimbursable to the Trustee, Securities Administrator, Master
Servicer and the Servicer hereunder.
Stack II Senior Class Certificate Balance: As of any date of determination,
the sum of the Class AV-1 Class Certificate Balance, the Class AV-2A Class
Certificate Balance, the Class AV-2B Class Certificate Balance, the Class AV-2C
Class Certificate Balance, the Class AV-2D Class Certificate Balance and the
Class A-R Class Certificate Balance.
Stack II Senior Certificates: Any of the Class AV-1 Certificates, the Class
AV-2 Certificates and the Class A-R Certificates.
Stack II Senior Principal Distribution Amount: with respect to any
Distribution Date prior to the related Stepdown Date or as to which a Stepdown
Trigger Event exists, 100% of the Stack II Principal Distribution Amount for
such Distribution Date and (2) with respect to any Distribution Date on or after
the Stepdown Date and as to which a Stepdown Trigger Event does not exist, the
excess of (A) the Class Certificate Balance of the Stack II Senior Certificates
immediately prior to such Distribution Date over (B) the lesser of (1) 82.40% of
the aggregate Stated Principal Balance of the Stack II Mortgage Loans as of the
end of the immediately preceding Due Period and (2) the excess of the aggregate
Stated Principal Balance of the Stack II Mortgage Loans as of the end of the
immediately preceding Due Period over the Minimum Required Overcollateralization
Amount; provided, however, that in no event will the Stack II
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Senior Principal Distribution Amount with respect to any Distribution Date
exceed the aggregate Class Certificate Balance of the Stack II Senior
Certificates.
Stack II Subordinate Certificates: Any of the Class MV and the Class BV
Certificates.
Stack II Subordinate Certificates Cap Contract Termination Date: The
Distribution Date in May 2011.
Startup Day: The Closing Date.
Stated Principal Balance: With respect to any Mortgage Loan and Due Date,
the unpaid principal balance of such Mortgage Loan as of such Due Date, as
specified in the amortization schedule at the time relating thereto (before any
adjustment to such amortization schedule by reason of any moratorium or similar
waiver or grace period), after giving effect to any previous partial prepayments
and Liquidation Proceeds received and to the payment of principal due on such
Due date and irrespective of any delinquency in payment by the related
Mortgagor.
Stepdown Date: The earlier of: (A) the first Distribution Date on which the
aggregate Class Certificate Balance of the Stack II Senior Certificates has been
reduced to zero; and (B) the later to occur of (1) the Distribution Date in
November 2009 or (2) the first Distribution Date on which the Class Certificate
Balance of the Stack II Senior Certificates (after giving effect to
distributions of the Stack II Principal Funds amount for such Distribution Date)
is less than or equal to 82.40% of the aggregate Stated Principal Balances of
the Stack II Mortgage Loans.
Stepdown Required Loss Percentage: means, for any Distribution Date, the
applicable percentage for such Distribution Date set forth in the following
table:
DISTRIBUTION DATE STEPDOWN REQUIRED
OCCURRING IN LOSS PERCENTAGE
----------------- -----------------
November 2008 -- October 2009 0.25% with respect to November 2008, plus an
additional 1/12th of 0.40% for each month
thereafter
November 2009 -- October 2010 0.65% with respect to November 2009, plus an
additional 1/12th of 0.50% for each month
thereafter
November 2010 -- October 2011 1.15% with respect to November 2010, plus an
additional 1/12th of 0.50% for each month
thereafter
November 2011 -- October 2012 1.65% with respect to November 2011, plus an
additional 1/12th of 0.30% for each month
thereafter
November 2012 and thereafter 1.95%
Stepdown Trigger Event: The situation that exists with respect to any
Distribution Date on or after the Stepdown Date, if (a) the quotient of (1) the
aggregate Stated Principal Balance of
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all Stack II Mortgage Loans 60 or more days delinquent, measured on a rolling
three-month basis (including Stack II Mortgage Loans in foreclosure, REO
Properties and Stack II Mortgage Loans with respect to which the applicable
mortgagor is in bankruptcy) and (2) the Stated Principal Balance of all of the
Stack II Mortgage Loans as of the preceding Servicer Remittance Date, equals or
exceeds the product of (i) 39.77% and (ii) the Required Percentage or (b) the
quotient (expressed as a percentage) of (1) the aggregate Realized Losses
incurred from the Cut-off Date through the last day of the calendar month
preceding such Distribution Date and (2) the aggregate principal balance of the
Stack II Mortgage Loans as of the Cut-off Date exceeds the Stepdown Required
Loss Percentage.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing of Mortgage Loans but performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with respect to
Mortgage Loans under the direction or authority of any Servicer (or a
Sub-Servicer of any Servicer), the Master Servicer, the Trustee, the Custodian
or the Securities Administrator.
Subordinate Certificate Cap Contract: means a confirmation and agreement
between the Securities Administrator and the Cap Contract Counterparty for the
benefit of the Stack II Subordinate Certificates.
Subordinate Certificate Cap Contract Notional Balance: With respect to any
Distribution Date, the Subordinate Certificate Cap Contract Notional Balance set
forth for such Distribution Date in the Subordinate Certificate One-Month LIBOR
Cap Table attached hereto as Exhibit H-3.
Subordinate Certificates Lower Collar: With respect to each Distribution
Date, the applicable per annum rate set forth under the heading "1ML Strike
Lower Collar" in the Subordinate Certificate One-Month LIBOR Cap Table (set
forth on Exhibit H-3).
Subordinate Certificates Upper Collar: With respect to each Distribution
Date with respect to which payments are received on the Subordinate Certificate
Cap Contract, a rate equal to the lesser of One-Month LIBOR and 8.970% per
annum.
Subsequent Recoveries: Any amount recovered by a Servicer or the Master
Servicer (net of reimbursable expenses) with respect to a Liquidated Mortgage
Loan with respect to which a Realized Loss was incurred after the liquidation or
disposition of such Mortgage Loan.
Sub-Servicer: Any Person that services Mortgage Loans on behalf of a
Servicer, and is responsible for the performance (whether directly or through
sub-servicers or Subcontractors) of servicing functions required to be performed
under this Agreement, any related Servicing Agreement or any sub-servicing
agreement that are identified in Item 1122(d) of Regulation AB.
Substitute Mortgage Loan: With respect to any Mortgage Loan, which is
tendered to the Trustee pursuant to the related Servicing Agreement, the related
Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable, in each case, (i) which has an Outstanding Principal Balance not
greater nor materially less than the Mortgage Loan for which it is to be
substituted; (ii) which has a Mortgage Interest Rate and Net Rate not less than,
and not materially greater than, such Mortgage Loan; (iii) which has a maturity
date not materially
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earlier or later than such Mortgage Loan and not later than the latest maturity
date of any Mortgage Loan; (iv) which is of the same property type and occupancy
type as such Mortgage Loan; (v) which has a Loan-to-Value Ratio not greater than
the Loan-to-Value Ratio of such Mortgage Loan; (vi) which is current in payment
of principal and interest as of the date of substitution; (vii) as to which the
payment terms do not vary in any material respect from the payment terms of the
Mortgage Loan for which it is to be substituted and (viii) which has a Gross
Margin, Periodic Rate Cap and Maximum Lifetime Mortgage Rate no less than those
of such Mortgage Loan, has the same Index and interval between Interest
Adjustment Dates as such Mortgage Loan, and a Minimum Lifetime Mortgage Rate no
lower than that of such Mortgage Loan.
Tax Matters Person: The Securities Administrator or any successor thereto
or assignee thereof shall serve as tax administrator hereunder and as agent for
the Tax Matters Person. The Holder of the Residual Certificates shall be the Tax
Matters Person for the related REMIC, as more particularly set forth in Section
9.12 hereof.
Transfer: Any direct or indirect transfer or sale of any Ownership Interest
in a certificate.
Transferor Representation Letter: As defined in Section 5.02(b).
Trust Fund: The corpus of the Issuing Entity created pursuant to Article II
of this Agreement and Article II of the Stack I Agreement.
Trustee: HSBC Bank USA, National Association, or its successor in interest,
or any successor trustee appointed as herein provided.
Uncertificated Class C Interest: An uncertificated regular interest in the
Upper Tier REMIC with an initial principal amount equal to the initial
Overcollateralization Amount having (i) the same rights to payments as the Class
C Certificates, other than the rights to payments of amounts with respect to the
Cap Contracts, and (ii) the rights to the payments treated as distributed to the
Class C Certificates under Section 9.12(w), provided, however, that such
interest shall have no obligation to make any payments treated as paid by the
Class C Certificates pursuant to interest rate cap agreements under Section
9.12(w).
Underlying Seller: With respect to each Stack II Mortgage Loan,
CitiMortgage or PHH, as indicated on the Stack II Mortgage Loan Schedule.
Uninsured Cause: Any cause of damage to a Mortgaged Property or related REO
Property such that the complete restoration of such Mortgaged Property or
related REO Property is not fully reimbursable by the hazard insurance policies
required to be maintained pursuant the related Servicing Agreement, without
regard to whether or not such policy is maintained.
United States Person: A citizen or resident of the United States, a
corporation or partnership (including an entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States or any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations),
provided that, for purposes solely of the Class A-R Certificate, no partnership
or other entity treated as a partnership for United States federal income tax
purposes shall be treated
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as a United States Person unless all persons that own an interest in such
partnership either directly or through any entity that is not a corporation for
United States federal income tax purposes are United States Persons, or an
estate whose income is subject to United 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 the trust and one or more such
United States Persons have the authority to control all substantial decisions of
the trust. To the extent prescribed in regulations by the Secretary of the
Treasury, which have not yet been issued, a trust which was in existence on
August 20, 1996 (other than a trust treated as owned by the grantor under
subpart E of part I of subchapter J of chapter 1 of the Code), and which was
treated as a United States person on August 20, 1996 may elect to continue to be
treated as a United States person notwithstanding the previous sentence.
Unpaid Realized Loss Amount: With respect to any class of the Stack II
Subordinate Certificates and as to any Distribution Date, the excess of (1)
Applied Realized Loss Amounts with respect to such class over (2) the sum of (x)
all distributions in reduction of the Unpaid Applied Realized Loss Amounts on
all previous Distribution Dates and (y) all increases in the Class Certificate
Balance of such class pursuant to the last sentence of the definition of "Class
Certificate Balance." Any amounts distributed to a class of Subordinate
Certificates in respect of any Unpaid Realized Loss Amount will not be applied
to reduce the Class Certificate Balance of such class.
Upper Collar: Any of the Class AV-1 Upper Collar, the Class AV-2 Upper
Collar or the Subordinate Certificates Upper Collar.
Upper Tier REMIC: As described in the Preliminary Statement and Section
9.12.
Voting Rights: The portion of the voting rights of all of the Certificates
which is allocated to any Certificate. The Voting Rights allocated among Holders
of such Certificates outstanding shall be the fraction, expressed as a
percentage, the numerator of which is the aggregate Class Certificate Balance of
all the Certificates of such Class then outstanding and the denominator of which
is the aggregate Class Certificate Balance of all the Certificates then
outstanding (other than the Class A-R Certificate). 99.00% of all Voting Rights
will be allocated among all holders of the Certificates (other than the Class
A-R Certificate) in proportion to their then outstanding Class Certificate
Balances, and 1.00% of the Voting Rights shall be allocated to the Class A-R
Certificate; provided, however, that any Certificate registered in the name of
the Master Servicer, the Depositor or the Securities Administrator or any of
their respective affiliates shall not be included in the calculation of Voting
Rights. The Class P Certificates shall have no voting rights.
Weighted Average Available Funds Cap: With respect to a Distribution Date,
the per annum rate equal to the weighted average of the Class AV-1 Available
Funds Cap and the Class AV-2 Available Funds Cap (weighted in proportion to the
results of subtracting from the aggregate Stated Principal Balance of the
related Mortgage Group, the current Class Certificate Balance of the Class AV-1
and Class A-R certificates, in the case of Group 2, or the Class AV-2
Certificates, in the case of Group 3).
Weighted Average Maximum Rate Cap: With respect to a Distribution Date, the
per annum rate equal to the weighted average (weighted in proportion to the
results of subtracting
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from the aggregate Stated Principal Balance of the related Mortgage Group, the
current Class Certificate Balance of the Class AV-1 and Class A-R Certificates,
in the case of Group 2, or the Class AV-2 Certificates, in the case of Group 3)
of the Class AV-1 Maximum Rate Cap and the Class AV-2 Maximum Rate Cap.
Section 1.02 Accounting.
Unless otherwise specified herein, for the purpose of any definition or
calculation, whenever amounts are required to be netted, subtracted or added or
any distributions are taken into account such definition or calculation and any
related definitions or calculations shall be determined without duplication of
such functions.
ARTICLE II
CONVEYANCE OF MORTGAGE
LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans to Trustee.
(a) The Depositor concurrently with the execution and delivery of this
Agreement, sells, transfers and assigns to the Issuing Entity without recourse
all its right, title and interest in and to (i) the Mortgage Loans identified in
the Mortgage Loan Schedule, including all interest and principal due with
respect to the Mortgage Loans after the Cut-off Date, but excluding any payments
of principal and interest due on or prior to the Cut-off Date; (ii) such assets
as shall from time to time be credited or are required by the terms of this
Agreement to be credited to the Master Servicer Collection Account, (iii) such
assets relating to the Mortgage Loans as from time to time may be held by the
Servicers in Protected Accounts, the Master Servicer in the Master Servicer
Collection Account and the Securities Administrator in the Distribution Account
for the benefit of the Trustee on behalf of the Certificateholders, (iv) any REO
Property, (v) the Required Insurance Policies and any amounts paid or payable by
the insurer under any Insurance Policy (to the extent the mortgagee has a claim
thereto), (vi) the Stack II Mortgage Loan Purchase Agreement to the extent
provided in Subsection 2.03(a), (vii) the rights with respect to the Servicing
Agreements as assigned to the Depositor on behalf of the Certificateholders by
the Assignment Agreements, (viii) the Cap Contracts and Cap Contract Accounts
and (ix) any proceeds of the foregoing. Although it is the intent of the parties
to this Agreement that the conveyance of the Depositor's right, title and
interest in and to the Mortgage Loans and other assets in the Trust Fund
pursuant to this Agreement shall constitute a purchase and sale and not a loan,
in the event that such conveyance is deemed to be a loan, it is the intent of
the parties to this Agreement that the Depositor shall be deemed to have granted
to the Trustee a first priority perfected security interest in all of the
Depositor's right, title and interest in, to and under the Mortgage Loans and
other assets in the Trust Fund, and that this Agreement shall constitute a
security agreement under applicable law.
(b) In connection with the above transfer and assignment, the Depositor
hereby deposits with the Trustee or the Custodian, as its agent, the following
documents or instruments
(I) with respect to each Mortgage Loan, other than a Cooperative Loan:
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(i) the original Mortgage Note, endorsed in the following form: "Pay
to the order of HSBC Bank USA, National Association, as Trustee for the
registered holders of the Xxxxxxx Xxxxx Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 2006-AF2, without recourse," with all
prior and intervening endorsements showing a complete chain of endorsement
from the originator to the Person so endorsing to the Trustee;
(ii) the original recorded Mortgage or a copy of the Mortgage
certified by the public recording office in which such Mortgage has been
recorded;
(iii) an original Assignment of the Mortgage executed in the following
form: "HSBC Bank USA, National Association, as Trustee for the registered
holders of the Xxxxxxx Xxxxx Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 2006-AF2.
(iv) the original recorded Assignment or Assignments of the Mortgage
showing a complete chain of assignment from the originator to the Person
assigning the Mortgage to the Trustee as contemplated by the immediately
preceding clause (iii), if applicable and only to the extent available to
the Depositor with evidence of recording thereon;
(v) the originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon, if any;
(vi) the original of any guarantee executed in connection with the
Mortgage Note;
(vii) the original mortgagee title insurance policy;
(viii) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage; and
(ix) the original power of attorney, if applicable.
and (II) with respect to each Mortgage Loan that is a Cooperative Loan:
(x) the original Mortgage Note, endorsed in the following form: "Pay
to the order of HSBC Bank USA, National Association, as Trustee for the
registered holders of the Xxxxxxx Xxxxx Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 2006-AF2, without recourse," with all
prior and intervening endorsements showing a complete chain of endorsement
from the originator to the Person so endorsing to the Trustee;
(xi) the original duly executed assignment of Security Agreement to
the Trustee;
(xii) the acknowledgment copy of the original executed Form UCC-1 (or
certified copy thereof) with respect to the Security Agreement, and any
required continuation statements;
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(xiii) the acknowledgment copy of the original executed Form UCC-3
with respect to the Security Agreement, indicating the Trustee as the
assignee of the secured party;
(xiv) the stock certificate representing the Cooperative Assets
allocated to the cooperative unit, with a stock power in blank attached;
(xv) the original collateral assignment of the proprietary lease by
Mortgagor to the originator;
(xvi) a copy of the recognition agreement;
(xvii) if applicable and to the extent available, the original
intervening assignments, including warehousing assignments, if any,
showing, to the extent available, an unbroken chain of the related Mortgage
Loan to the Trustee, together with a copy of the related Form UCC-3 with
evidence of filing thereon; and
(xviii) the originals of each assumption, modification or substitution
agreement, if any, relating to the Mortgage Loan;
provided, however, that in lieu of the foregoing, the Depositor may deliver the
following documents, under the circumstances set forth below: (w) the Depositor
may deliver a Mortgage Note pursuant to (a)(i) and (b)(i) endorsed in blank,
provided that the endorsement is completed within 60 days of the Closing Date;
(x) in lieu of the original Mortgage, assignments to the Trustee or its
Custodian, as applicable, or intervening assignments thereof which have been
delivered, are being delivered or will, upon receipt of recording information
relating to the Mortgage required to be included thereon, be delivered to
recording offices for recording and have not been returned to the Depositor in
time to permit their delivery as specified above, the Depositor may deliver a
true copy thereof with a certification by the Depositor on the face of such
copy, substantially as follows: "Certified to be a true and correct copy of the
original, which has been transmitted for recording"; and (y) in lieu of the
Mortgage, assignment to the Trustee or intervening assignments thereof, if the
applicable jurisdiction retains the originals of such documents (as evidenced by
a certification from the Depositor or the Master Servicer, to such effect) the
Depositor may deliver photocopies of such documents containing an original
certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; and provided, further, however,
that in the case of Mortgage Loans which have been prepaid in full after the
Cut-off Date and prior to the Closing Date, the Depositor, in lieu of delivering
the above documents, may deliver to the Trustee or its Custodian, as applicable,
a certification to such effect and shall deposit all amounts paid in respect of
such Mortgage Loans in the Distribution Account on the Closing Date. The
Depositor shall deliver such original documents (including any original
documents as to which certified copies had previously been delivered) to the
Trustee or its Custodian, as applicable, promptly after they are received. As of
the date hereof, recordation of the assignment of the Mortgage Loans to the
Trustee or the Custodian, as applicable, is not required in any state by either
Rating Agency to obtain the initial rating on the Certificates (upon which
statement the Master Servicer, the Trustee and the Custodian may each
conclusively rely).
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If any original Mortgage Note referred to in Section 2.01(b)(I)(i) or
2.01(b)(II)(i) above cannot be located, the obligations of the Depositor to
deliver such documents shall be deemed to be satisfied upon delivery to the
Trustee or its Custodian, as applicable, of a photocopy of such Mortgage Note,
if available, with a lost note affidavit. If any of the original Mortgage Notes
for which a lost note affidavit was delivered to the Trustee or its Custodian,
as applicable, is subsequently located, such original Mortgage Note shall be
delivered to the Trustee or its Custodian, as applicable, within three Business
Days.
(c) The parties hereto agree that it is not intended that any mortgage loan
be included in the Trust Fund that is, without limitation, a "High Cost Loan" as
defined by the Home Ownership and Equity Protection Act of 1994 or any other
applicable anti-predatory lending laws, including but not limited to (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.
(d) Notwithstanding anything to the contrary contained herein, the parties
hereto acknowledge that the functions of the Trustee with respect to the
custody, acceptance, inspection and release of Mortgage Files, including but not
limited to certain insurance policies and documents contemplated by Section 3.12
of this Agreement, and preparation and delivery of the certifications shall be
performed by the Custodian(s) pursuant to the terms and conditions of the
Custodial Agreement(s).
Section 2.02 Acceptance of Mortgage Loans by Trustee.
(a) The Trustee acknowledges the sale, transfer and assignment of the Trust
Fund to it by the Depositor and its receipt thereof, subject to further review
and the exceptions which may be noted pursuant to the procedures described
below, and declares that it, or the Custodian on its behalf, holds the documents
(or certified copies thereof) delivered to it pursuant to Section 2.01,
including three Cap Contracts (forms of which are attached hereto as Exhibits
N-1, N-2 and N-3), and declares that it will continue to hold those documents
and any amendments, replacements or supplements thereto and all other assets of
the Trust Fund delivered to it as Trustee in trust for the use and benefit of
all present and future Holders of the Certificates. On or before the Closing
Date (or, with respect to any Substitute Mortgage Loan, within five Business
Days after the receipt by the Trustee or Custodian thereof), the Trustee agrees,
for the benefit of the Certificateholders, to review or cause to be reviewed by
the Custodian on its behalf (under the Custodial Agreement), each Mortgage File
delivered to it and to execute and deliver, or cause to be executed and
delivered, to the Depositor on the Closing Date a Stack II Initial
Certification. In conducting such review, the Trustee or Custodian will certify
as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan specifically identified in the
exception report annexed thereto as not being covered by such certification),
(i) all documents constituting part of such Mortgage File (other than such
documents described in Section 2.01(b)(I)(iii)) required to be delivered to it
pursuant to this Agreement are in its possession, provided that with respect to
the documents described in Section 2.01(b)(I)(v), (vi), (viii) and (ix) and
2.01(b)(II)(viii) and (ix) to the extent the Trustee or the Custodian on its
behalf has actual knowledge that such documents exist, (ii) such documents
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have been reviewed by it and are not torn, mutilated, defaced or otherwise
altered (except if initialed by the obligor) and appear to relate on their face
to such Mortgage Loan, (iii) based on its examination and only as to the
foregoing, the information set forth in the Mortgage Loan Schedule corresponding
to the loan number for the Mortgage Loan, the Mortgagor's name, including the
street address but excluding the zip code, the Mortgage Interest Rate and the
original principal balance of the Mortgage Loan accurately reflects information
set forth in the Mortgage File and (iv) with respect to Mortgage Loans with a
Mortgage Interest Rate subject to adjustment, the Gross Margin, the lifetime cap
and the periodic cap for such Mortgage Loan. In performing any such review, the
Trustee, or the Custodian, as its agent, may conclusively rely on the purported
due execution and genuineness of any such document and on the purported
genuineness of any signature thereon. Notwithstanding anything to the contrary
in this Agreement, it is herein acknowledged that, in conducting such review,
the Trustee or the Custodian on its behalf is under no duty or obligation to
inspect, review or examine any such documents, instruments, certificates or
other papers to determine whether they are genuine, enforceable, or appropriate
for the represented purpose or whether they have actually been recorded or that
they are other than what they purport to be on their face, or to determine
whether any Person executing any documents is authorized to do so or whether any
signature is genuine.
If the Trustee or the Custodian, as its agent, finds any document
constituting part of the Mortgage File not to have been executed or received, or
to be unrelated to the Mortgage Loans identified in Exhibit B or to appear to be
defective on its face, the Trustee or the Custodian, as its agent, shall
promptly notify the Sponsor. In accordance with the Stack II Mortgage Loan
Purchase Agreement, the Sponsor shall correct or cure any such defect within
ninety (90) days from the date of notice from the Trustee or the Custodian, as
its agent, of the defect and if the Sponsor fails to correct or cure the defect
within such period, and such defect materially and adversely affects the
interests of the Certificateholders in the related Mortgage Loan, the Trustee,
shall enforce the Sponsor's obligation pursuant to the Stack II Mortgage Loan
Purchase Agreement, within 90 days from the Trustee's or the Custodian's
notification, to purchase such Mortgage Loan at the Purchase Price; provided
that, if such defect would cause the Mortgage Loan to be other than a "qualified
mortgage" as defined in Section 860G(a)(3) of the Code, any such cure or
repurchase must occur within 90 days from the date such breach was discovered;
provided, however, that if such defect relates solely to the inability of the
Sponsor to deliver the original Security Instrument or intervening assignments
thereof, or a certified copy because the originals of such documents, or a
certified copy have not been returned by the applicable jurisdiction, the
Sponsor shall not be required to purchase such Mortgage Loan if the Sponsor
delivers such original documents or certified copy promptly upon receipt, but in
no event later than 360 days after the Closing Date. The foregoing repurchase
obligation shall not apply in the event that the Sponsor cannot deliver such
original or copy of any document submitted for recording to the appropriate
recording office in the applicable jurisdiction because such document has not
been returned by such office; provided that the Sponsor shall instead deliver a
recording receipt of such recording office or, if such receipt is not available,
a certificate confirming that such documents have been accepted for recording,
and delivery to the Trustee or the Custodian, as its agent, shall be effected by
the Sponsor within thirty days of its receipt of the original recorded document.
(b) No later than 180 days after the Closing Date, the Trustee or the
Custodian, as its agent, will review, for the benefit of the Certificateholders,
the Mortgage Files delivered to it and
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will execute and deliver or cause to be executed and delivered to the Depositor
a Final Certification. In conducting such review, the Trustee or the Custodian,
as its agent, will certify as to each Mortgage Loan listed in the Mortgage Loan
Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan
specifically identified in the exception report annexed thereto as not being
covered by such certification), that (i) all documents constituting part of such
Mortgage File (other than such documents described in Section 2.01(b)(I)(v) and
(ix)) required to be delivered to it pursuant to this Agreement are in its
possession, provided that with respect to the documents described in Section
2.01(b)(I)(v), (vi), (viii) and (ix) and 2.01(b)(II)(viii) and (ix) to the
extent the Trustee or the Custodian on its behalf has actual knowledge that such
documents exist, (ii) such documents have been reviewed by it and are not torn,
mutilated, defaced or otherwise altered (except if initialed by the obligor) and
appear regular on their face and relate to such Mortgage Loan, (iii) based on
its examination and only as to the foregoing, the information set forth in the
Mortgage Loan Schedule corresponding to the loan number for the Mortgage Loan,
the Mortgagor's name, including the street address but excluding the zip code,
the Mortgage Interest Rate and the original principal balance of the Mortgage
Loan accurately reflects information set forth in the Mortgage File. In
performing any such review, the Trustee, or the Custodian, as its agent, may
conclusively rely on the purported due execution and genuineness of any such
document and on the purported genuineness of any signature thereon.
Notwithstanding anything to the contrary in this Agreement, it is herein
acknowledged that, in conducting such review, the Trustee or the Custodian on
its behalf is under no duty or obligation (i) to inspect, review or examine any
such documents, instruments, certificates or other papers to determine whether
they are genuine, enforceable, or appropriate for the represented purpose or
whether they have actually been recorded or that they are other than what they
purport to be on their face, or to determine whether any Person executing any
documents is authorized to do so or whether any signature is genuine. If the
Trustee or the Custodian, as its agent, finds any document constituting part of
the Mortgage File not to have been executed or received, or to be unrelated to
the Mortgage Loans identified in Exhibit B or to appear to be defective on its
face, the Trustee or the Custodian, as its agent, shall promptly notify the
Sponsor. In accordance with the Stack II Mortgage Loan Purchase Agreement, the
Sponsor shall correct or cure any such defect within 90 days from the date of
notice from the Trustee of the defect and if the Sponsor is unable to cure such
defect within such period, and if such defect materially and adversely affects
the interests of the Certificateholders in the related Mortgage Loan, the
Trustee shall enforce the Sponsor's obligation under the Stack II Mortgage Loan
Purchase Agreement to purchase such Mortgage Loan at the Purchase Price,
provided, however, that if such defect relates solely to the inability of the
Sponsor to deliver the original Security Instrument or intervening assignments
thereof, or a certified copy, because the originals of such documents, or a
certified copy, have not been returned by the applicable jurisdiction, the
Sponsor shall not be required to purchase such Mortgage Loan, if the Sponsor
delivers such original documents or certified copy promptly upon receipt, but in
no event later than 360 days after the Closing Date.
(c) In the event that a Mortgage Loan is purchased by the Sponsor in
accordance with Subsections 2.02(a) or (b) above, the Sponsor shall remit to the
Master Servicer the Purchase Price for deposit in the Master Servicer Collection
Account and the Sponsor shall provide to the Trustee written notification
detailing the components of the Purchase Price. Upon deposit of the Purchase
Price in the Master Servicer Collection Account, the Depositor shall give
written notice thereof to the Trustee and the Custodian and the Trustee or the
Custodian, as its agent (upon receipt of a Request for Release in the form of
Exhibit D attached hereto with respect to such
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Mortgage Loan), shall release to the Sponsor the related Mortgage File and the
Trustee shall execute and deliver all instruments of transfer or assignment,
without recourse, furnished to it by the Sponsor as are necessary to vest in the
Sponsor title to and rights under the Mortgage Loan. Such purchase shall be
deemed to have occurred on the date on which the Purchase Price in available
funds is received by the Trustee. The Depositor or Master Servicer shall amend
the Mortgage Loan Schedule, to reflect such repurchase and shall promptly notify
the Rating Agencies and the Master Servicer of such amendment. The obligation of
the Sponsor to repurchase any Mortgage Loan as to which such a defect in a
constituent document exists shall be the sole remedy respecting such defect
available to the Certificateholders or to the Trustee on their behalf.
Section 2.03 Assignment of Interest in the Stack II Mortgage Loan Purchase
Agreement.
(a) The Depositor hereby assigns to the Trustee, on behalf of the
Certificateholders, all of its right, title and interest in the Stack II
Mortgage Loan Purchase Agreement, including but not limited to Depositor's
rights pursuant to the Servicing Agreements (noting that the Sponsor has
retained the right in the event of breach of the representations, warranties and
covenants, if any, with respect to the related Mortgage Loans of the related
Servicer under the related Servicing Agreement to enforce the provisions thereof
and to seek all or any available remedies). The obligations of the Sponsor to
substitute or repurchase, as applicable, a Mortgage Loan shall be the Trustee's
and the Certificateholders' sole remedy for any breach thereof. At the request
of the Trustee, the Depositor shall take such actions as may be necessary to
enforce the above right, title and interest on behalf of the Trustee and the
Certificateholders or shall execute such further documents as the Trustee may
reasonably require in order to enable the Trustee to carry out such enforcement.
With respect to the representations and warranties described in the Stack II
Mortgage Loan Purchase Agreement that are made to the best of the Sponsor's
knowledge, if it is discovered by any of the Depositor, the Sponsor, the Master
Servicer, the Securities Administrator or the Trustee that the substance of such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan, then notwithstanding
the Sponsor's lack of knowledge with respect to the substance of such
representation and warranty, such inaccuracy shall be deemed a breach of the
applicable representation or warranty.
(b) If the Depositor, the Master Servicer, Securities Administrator or the
Trustee discovers a breach of any of the representations and warranties set
forth in the Stack II Mortgage Loan Purchase Agreement, which breach materially
and adversely affects the value of the interests of Certificateholders or the
Trustee in the related Mortgage Loan, the party discovering the breach shall
give prompt written notice of the breach to the other parties. The Sponsor,
within 90 days of its discovery or receipt of notice that such breach has
occurred (whichever occurs earlier), shall cure the breach in all material
respects or, subject to the Stack II Mortgage Loan Purchase Agreement or Section
2.04 of this Agreement, as applicable, shall purchase the Mortgage Loan or any
property acquired with respect thereto from the Trustee; provided, however, that
if there is a breach of any representation set forth in the Stack II Mortgage
Loan Purchase Agreement or Section 2.04 of this Agreement, as applicable, and
the Mortgage Loan or the related property acquired with respect thereto has been
sold, then the Sponsor shall pay, in lieu of the Purchase Price, any excess of
the Purchase Price over the Net Liquidation Proceeds
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received upon such sale. (If the Net Liquidation Proceeds exceed the Purchase
Price, any excess shall be paid to the Sponsor to the extent not required by law
to be paid to the borrower.) Any such purchase by the Sponsor shall be made by
providing an amount equal to the Purchase Price to the Master Servicer for
deposit in the Master Servicer Collection Account and written notification
detailing the components of such Purchase Price. The Depositor shall notify the
Trustee in writing of the deposit of the Purchase Price and submit to the
Trustee or the Custodian, as its agent, a Request for Release, and the Trustee
shall release, or the Trustee shall cause the Custodian to release, to the
Sponsor the related Mortgage File and the Trustee shall execute and deliver all
instruments of transfer or assignment furnished to it by the Sponsor, without
recourse, as are necessary to vest in the Sponsor title to and rights under the
Mortgage Loan or any property acquired with respect thereto. Such purchase shall
be deemed to have occurred on the date on which the Purchase Price in available
funds is received by the Master Servicer. The Depositor or the Master Servicer
shall amend the Mortgage Loan Schedule to reflect such repurchase and shall
promptly notify the Master Servicer and the Rating Agencies of such amendment.
Enforcement of the obligation of the Sponsor to purchase (or substitute a
Substitute Mortgage Loan for) any Mortgage Loan or any property acquired with
respect thereto (or pay the Purchase Price as set forth in the above proviso) as
to which a breach has occurred and is continuing shall constitute the sole
remedy respecting such breach available to the Certificateholders or the Trustee
on their behalf.
Section 2.04 Substitution of Mortgage Loans. Notwithstanding anything to
the contrary in this Agreement, in lieu of purchasing a Mortgage Loan pursuant
to the Stack II Mortgage Loan Purchase Agreement or Sections 2.02 or 2.03 of
this Agreement, the Sponsor may, no later than the date by which such purchase
by the Sponsor would otherwise be required, tender to the Trustee a Substitute
Mortgage Loan accompanied by a certificate of an authorized officer of the
Sponsor that such Substitute Mortgage Loan conforms to the requirements set
forth in the definition of "Substitute Mortgage Loan" in the Stack II Mortgage
Loan Purchase Agreement or this Agreement, as applicable; provided, however,
that substitution pursuant to the Stack II Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable, in lieu of purchase shall not be
permitted after the termination of the two-year period beginning on the Startup
Day; provided, further, that if the breach would cause the Mortgage Loan to be
other than a "qualified mortgage" as defined in Section 860G(a)(3) of the Code,
any such cure or substitution must occur within 90 days from the date the breach
was discovered. The Trustee or the Custodian, as its agent, shall examine the
Mortgage File for any Substitute Mortgage Loan in the manner set forth in
Section 2.02(a) and the Trustee or the Custodian, as its agent, shall notify the
Sponsor, in writing, within five Business Days after receipt, whether or not the
documents relating to the Substitute Mortgage Loan satisfy the requirements of
the fourth sentence of Subsection 2.02(a). Within two Business Days after such
notification, the Sponsor shall provide to the Securities Administrator for
deposit in the Distribution Account the amount, if any, by which the Outstanding
Principal Balance as of the next preceding Due Date of the Mortgage Loan for
which substitution is being made, after giving effect to Scheduled Principal due
on such date, exceeds the Outstanding Principal Balance as of such date of the
Substitute Mortgage Loan, after giving effect to Scheduled Principal due on such
date, which amount shall be treated for the purposes of this Agreement as if it
were the payment by the Sponsor of the Purchase Price for the purchase of a
Mortgage Loan by the Sponsor. After such notification to the Sponsor and, if any
such excess exists, upon written notification of the receipt of such deposit,
the Trustee shall accept such Substitute Mortgage Loan which shall thereafter be
deemed to be a Mortgage Loan
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hereunder. 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 Issuing Entity and accrued interest for such month on the Mortgage Loan for
which the substitution is made and any Principal Prepayments made thereon during
such month shall be the property of the Sponsor. The Scheduled Principal on a
Substitute Mortgage Loan due on the Due Date in the month of substitution shall
be the property of the Sponsor and the Scheduled Principal on the Mortgage Loan
for which the substitution is made due on such Due Date shall be the property of
the Issuing Entity. Upon acceptance of the Substitute Mortgage Loan (and
delivery to the Trustee or Custodian of a Request for Release for such Mortgage
Loan), the Trustee shall release to the Sponsor the related Mortgage File
related to any Mortgage Loan released pursuant to the Stack II Mortgage Loan
Purchase Agreement or Section 2.04 of this Agreement, as applicable, and shall
execute and deliver all instruments of transfer or assignment, without recourse,
in form as provided to it as are necessary to vest in the Sponsor title to and
rights under any Mortgage Loan released pursuant to the Stack II Mortgage Loan
Purchase Agreement or Section 2.04 of this Agreement, as applicable. The Sponsor
shall deliver the documents related to the Substitute Mortgage Loan in
accordance with the provisions of the Stack II Mortgage Loan Purchase Agreement
or Subsections 2.01(b) and 2.02(b) of this Agreement, as applicable, with the
date of acceptance of the Substitute Mortgage Loan deemed to be the Closing Date
for purposes of the time periods set forth in those Subsections. The
representations and warranties set forth in the Stack II Mortgage Loan Purchase
Agreement shall be deemed to have been made by the Sponsor with respect to each
Substitute Mortgage Loan as of the date of acceptance of such Mortgage Loan by
the Trustee. The Master Servicer shall amend the Mortgage Loan Schedule to
reflect such substitution and shall provide a copy of such amended Mortgage Loan
Schedule to the Trustee and the Rating Agencies.
Notwithstanding any other provision of this Agreement, the right to
substitute Mortgage Loans pursuant to this Article II shall be subject to the
additional limitations that no substitution of a Mortgage Loan shall be made
unless the Securities Administrator and the Trustee shall have received an
Opinion of Counsel (at the expense of the party seeking to make the
substitution) that, under current law, such substitution will not (A) affect
adversely the status of any REMIC established hereunder as a REMIC, or of the
related "regular interests" as "regular interests" in any such REMIC, or (B)
cause any such REMIC to engage in a "prohibited transaction" or prohibited
contribution pursuant to the REMIC provisions.
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Section 2.05 Issuance of Certificates. The Trustee acknowledges the
assignment to it on behalf of the Issuing Entity of the Mortgage Loans and the
other assets comprising the Trust Fund and, concurrently therewith, the
Securities Administrator has signed, and countersigned and delivered to the
Depositor, in exchange therefor, Certificates in such authorized denominations
representing such Percentage Interests as the Depositor has requested. The
Trustee agrees that it will hold the Mortgage Loans and such other assets as may
from time to time be delivered to it segregated on the books of the Trustee in
trust for the benefit of the Certificateholders.
Section 2.06 Representations and Warranties Concerning the Depositor. The
Depositor hereby represents and warrants to the Trustee, the Master Servicer and
the Securities Administrator as follows:
(i) the Depositor (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and
(b) is qualified and in good standing as a foreign corporation to do
business in each jurisdiction where such qualification is necessary, except
where the failure so to qualify would not reasonably be expected to have a
material adverse effect on the Depositor's business as presently conducted
or on the Depositor's ability to enter into this Agreement and to
consummate the transactions contemplated hereby;
(ii) the Depositor has full corporate power to own its property, to
carry on its business as presently conducted and to enter into and perform
its obligations under this Agreement;
(iii) the execution and delivery by the Depositor of this Agreement
have been duly authorized by all necessary corporate action on the part of
the Depositor; and neither the execution and delivery of this Agreement,
nor the consummation of the transactions herein contemplated, nor
compliance with the provisions hereof, will conflict with or result in a
breach of, or constitute a default under, any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on the
Depositor or its properties or the articles of incorporation or by-laws of
the Depositor, except those conflicts, breaches or defaults which would not
reasonably be expected to have a material adverse effect on the Depositor's
ability to enter into this Agreement and to consummate the transactions
contemplated hereby;
(iv) the execution, delivery and performance by the Depositor of this
Agreement and the consummation of the transactions contemplated hereby do
not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any
state, federal or other governmental authority or agency, except those
consents, approvals, notices, registrations or other actions as have
already been obtained, given or made;
(v) this Agreement has been duly executed and delivered by the
Depositor and, assuming due authorization, execution and delivery by the
other parties hereto, constitutes a valid and binding obligation of the
Depositor enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws affecting
the enforcement of the rights of creditors generally);
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(vi) there are no actions, suits or proceedings pending or, to the
knowledge of the Depositor, threatened against the Depositor, before or by
any court, administrative agency, arbitrator or governmental body (i) with
respect to any of the transactions contemplated by this Agreement or (ii)
with respect to any other matter which in the judgment of the Depositor
will be determined adversely to the Depositor and will if determined
adversely to the Depositor materially and adversely affect the Depositor's
ability to enter into this Agreement or perform its obligations under this
Agreement; and the Depositor is not in default with respect to any order of
any court, administrative agency, arbitrator or governmental body so as to
materially and adversely affect the transactions contemplated by this
Agreement; and
(vii) immediately prior to the transfer and assignment to the Trustee,
each Mortgage Note and each 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 such Mortgage Loan to
the Trustee free and clear of any encumbrance, equity, lien, pledge,
charge, claim or security interest.
Section 2.07 Representations and Warranties Concerning the Master Servicer
and Securities Administrator. Xxxxx Fargo Bank, N.A., in its capacity as Master
Servicer and Securities Administrator hereby represents and warrants to the
Sponsor, the Depositor and the Trustee as follows, as of the Closing Date:
(i) It is a national banking association duly formed, validly existing
and in good standing under the laws of the United States of America and is
duly authorized and qualified to transact any and all business contemplated
by this Agreement to be conducted by the Master Servicer and the Securities
Administrator, to the extent necessary to ensure its ability to master
service the Mortgage Loans in accordance with the terms of this Agreement
and to perform any of its other obligations under this Agreement in
accordance with the terms hereof;
(ii) It has the full corporate power and authority to execute, deliver
and perform, and to enter into and consummate the transactions contemplated
by this Agreement and has duly authorized by all necessary corporate action
on its part the execution, delivery and performance of this Agreement; and
this Agreement, assuming the due authorization, execution and delivery
hereof by the other parties hereto, constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms,
except that (a) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought.
(iii) The execution and delivery of this Agreement by it, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof are
in its ordinary course of business and will not (A) result in a material
breach of any term or provision of its charter or by-laws or (B) materially
conflict with, result in a material breach, violation or acceleration of,
or result in a material default under, the terms of any other material
agreement or instrument to
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which it is a party or by which it may be bound, or (C) constitute a
material violation of any statute, order or regulation applicable to it of
any court, regulatory body, administrative agency or governmental body
having jurisdiction over it; and it is not in breach or violation of any
material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction over
it which breach or violation may materially impair its ability to perform
or meet any of its obligations under this Agreement.
(iv) No litigation is pending or, to the best of its knowledge,
threatened, against it that would materially and adversely affect the
execution, delivery or enforceability of this Agreement or its ability to
perform any of its other obligations under this Agreement in accordance
with the terms hereof.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for its execution, delivery and
performance of, or compliance with, this Agreement or the consummation of
the transactions contemplated hereby, or if any such consent, approval,
authorization or order is required, it has obtained the same.
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master Servicer. The Master Servicer shall supervise, monitor
and oversee the obligation of the Servicers to service and administer their
respective Mortgage Loans in accordance with the terms of the applicable
Servicing Agreement and shall have full power and authority to do any and all
things which it may deem necessary or desirable in connection with such master
servicing and administration. In performing its obligations hereunder, the
Master Servicer shall act in a manner consistent with Accepted Master Servicing
Practices. Furthermore, the Master Servicer shall oversee and consult with each
Servicer as necessary from time-to-time to carry out the Master Servicer's
obligations hereunder, shall receive, review and evaluate all reports,
information and other data provided to the Master Servicer by each Servicer and
shall cause each Servicer to perform and observe the covenants, obligations and
conditions to be performed or observed by such Servicer under the applicable
Servicing Agreement. The Master Servicer shall independently and separately
monitor each Servicer's servicing activities with respect to each related
Mortgage Loan, reconcile the results of such monitoring with such information
provided in the previous sentence on a monthly basis and coordinate corrective
adjustments to the Servicers' and Master Servicer's records, and based on such
reconciled and corrected information, the Master Servicer shall provide such
information to the Securities Administrator as shall be necessary in order for
it to prepare the statements specified in Section 6.03, and prepare any other
information and statements required to be forwarded by the Master Servicer
hereunder. The Master Servicer shall reconcile the results of its monitoring
with the actual remittances of the Servicers to the Master Servicer Collection
Account pursuant to the applicable Servicing Agreements.
If the Master Servicer and the Securities Administrator are the same
entity, then at any time the Master Servicer is terminated as Master Servicer,
the Securities Administrator shall likewise be removed as securities
administrator.
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The Trustee shall furnish the Servicers and the Master Servicer with any
limited powers of attorney and other documents in form acceptable to it
necessary or appropriate to enable the Servicers and the Master Servicer to
service and administer the related Mortgage Loans and REO Property. The Trustee
shall have no liability with respect to the use of any such limited power of
attorney.
The Trustee or the Custodian shall provide access to the records and
documentation in possession of the Trustee or the Custodian regarding the
related Mortgage Loans and REO Property and the servicing thereof to the
Certificateholders, the FDIC, and the supervisory agents and examiners of the
FDIC, such access being afforded only upon reasonable prior written request and
during normal business hours at the office of the Trustee or the Custodian;
provided, however, that, unless otherwise required by law, the Trustee or the
Custodian shall not be required to provide access to such records and
documentation if the provision thereof would violate the legal right to privacy
of any Mortgagor. The Trustee or the Custodian shall allow representatives of
the above entities to photocopy any of the records and documentation and shall
provide equipment for that purpose at a charge that covers the Trustee's or the
Custodian's actual costs.
The Trustee shall execute and deliver to the related Servicer and the
Master Servicer upon request any court pleadings, requests for trustee's sale or
other documents necessary or desirable to (i) the foreclosure or trustee's sale
with respect to a Mortgaged Property; (ii) any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Security Instrument;
(iii) obtain a deficiency judgment against the Mortgagor; or (iv) enforce any
other rights or remedies provided by the Mortgage Note or Security Instrument or
otherwise available at law or equity.
Section 3.02 REMIC-Related Covenants. For as long as each REMIC shall
exist, the Trustee and the Securities Administrator shall act in accordance
herewith to assure continuing treatment of such REMIC as a REMIC, and the
Trustee and the Securities Administrator shall comply with any directions of the
Depositor, the related Servicer or the Master Servicer to assure such continuing
treatment. In particular, the Trustee shall not (a) sell or permit the sale of
all or any portion of the Mortgage Loans or of any investment of deposits in an
Account unless such sale is as a result of a repurchase of the Mortgage Loans
pursuant to this Agreement or the Trustee and Securities Administrator have
received a REMIC Opinion prepared at the expense of the Issuing Entity; and (b)
other than with respect to a substitution pursuant to the Stack II Mortgage Loan
Purchase Agreement or Section 2.04 of this Agreement, as applicable, accept any
contribution to any REMIC after the Startup Day without receipt of a REMIC
Opinion.
Section 3.03 Monitoring of Servicers.
(a) The Master Servicer shall be responsible for reporting to the Trustee,
Securities Administrator and the Depositor the compliance by each Servicer with
its duties under the related Servicing Agreement. In the review of each
Servicer's activities, the Master Servicer may rely upon an officer's
certificate of the Servicer with regard to such Servicer's compliance with the
terms of its Servicing Agreement. In the event that the Master Servicer, in its
judgment, determines that a Servicer should be terminated in accordance with its
Servicing Agreement, or that a notice should be sent pursuant to such Servicing
Agreement with respect to the occurrence of an event that, unless cured, would
constitute grounds for such termination, the Master Servicer
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shall notify the Depositor, Securities Administrator and the Trustee thereof and
the Master Servicer shall issue such notice or take such other action as it
deems appropriate.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
subject to the preceding paragraph, terminate the rights and obligations of such
Servicer thereunder and act as servicer of the related Mortgage Loans or, if the
Master Servicer is unwilling or unable to act as a Servicer, the Master Servicer
shall cause the Trustee to enter in to a new Servicing Agreement with a
successor servicer selected by the Master Servicer that is eligible in
accordance with the criteria specified in this Agreement; provided, however, it
is understood and acknowledged by the parties hereto that there will be a period
of transition (not to exceed 90 days) before the actual servicing functions can
be fully transferred to such successor servicer. In either event, such
enforcement, including, without limitation, the legal prosecution of claims,
termination of the Servicing Agreements and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense subject to Section 3.03(c),
provided that the Master Servicer shall not be required to prosecute or defend
any legal action except to the extent that the Master Servicer shall have
received reasonable indemnity for its costs and expenses in pursuing such
action.
(c) To the extent that the costs and expenses of the Master Servicer
related to any termination of a Servicer, appointment of a successor Servicer or
the transfer and assumption of servicing by the Master Servicer with respect to
any Servicing Agreement (including, without limitation, (i) all legal costs and
expenses and all due diligence costs and expenses associated with an evaluation
of the potential termination of a Servicer as a result of an event of default by
such Servicer and (ii) all costs and expenses associated with the complete
transfer of servicing, including all servicing files and all servicing data and
the completion, correction or manipulation of such servicing data as may be
required by the successor servicer to correct any errors or insufficiencies in
the servicing data or otherwise to enable the successor service to service the
Mortgage Loans in accordance with the related Servicing Agreement) are not fully
and timely reimbursed by the terminated Servicer, the Master Servicer shall be
entitled to reimbursement of such costs and expenses from the Master Servicer
Collection Account pursuant to Section 4.03(b).
(d) The Master Servicer shall require each Servicer to comply with the
remittance requirements and other obligations set forth in the related Servicing
Agreement.
(e) If the Master Servicer acts as Servicer, it will not assume liability
for the representations and warranties of such Servicer, if any, that it
replaces.
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Section 3.04 Fidelity Bond. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions insurance
policy, affording coverage with respect to all directors, officers, employees
and other Persons acting on such Master Servicer's behalf, and covering errors
and omissions in the performance of the Master Servicer's obligations hereunder.
The errors and omissions insurance policy and the fidelity bond shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees.
Section 3.05 Power to Act; Procedures. The Master Servicer shall master
service the Mortgage Loans and shall have full power and authority, subject to
the REMIC Provisions and the provisions of Article X hereof, to do any and all
things that it may deem necessary or desirable in connection with the master
servicing and administration of the Mortgage Loans, including but not limited to
the power and authority (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages, (iii) to
collect any Insurance Proceeds and Liquidation Proceeds, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan, in each case, in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable; provided,
however, that the Master Servicer shall not (and, consistent with its
responsibilities under Section 3.03, shall not permit any Servicer to) knowingly
or intentionally take any action, or fail to take (or fail to cause to be taken)
any action reasonably within its control and the scope of duties more
specifically set forth herein, that, under the REMIC Provisions, if taken or not
taken, as the case may be, would cause any REMIC created hereunder to fail to
qualify as a REMIC or result in the imposition of a tax upon the Issuing Entity
(including but not limited to the tax on prohibited transactions as defined in
Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set forth
in Section 860G(d) of the Code) unless the Master Servicer has received an
Opinion of Counsel (but not at the expense of the Master Servicer) to the effect
that the contemplated action will not would cause any REMIC created hereunder to
fail to qualify as a REMIC or result in the imposition of a tax upon any REMIC
created hereunder. The Trustee shall furnish the Master Servicer, upon written
request from a Servicing Officer, with any limited powers of attorney (in form
acceptable to the Trustee) empowering the Master Servicer or any Servicer to
execute and deliver instruments of satisfaction or cancellation, or of partial
or full release or discharge, and to foreclose upon or otherwise liquidate
Mortgaged Property, and to appeal, prosecute or defend in any court action
relating to the Mortgage Loans or the Mortgaged Property, in accordance with the
applicable Servicing Agreement and this Agreement, and the Trustee shall execute
and deliver such other documents, as the Master Servicer may request, to enable
the Master Servicer to master service and administer the Mortgage Loans and
carry out its duties hereunder, in each case in accordance with Accepted Master
Servicing Practices (and the Trustee shall have no liability for misuse of any
such powers of attorney by the Master Servicer or any Servicer). If the Master
Servicer or the Trustee has been advised that it is likely that the laws of the
state in which action is to be taken prohibit such action if taken in the name
of the Trustee or that the Trustee would be adversely affected under the "doing
business" or tax laws of such state if such action is taken in its name, the
Master Servicer shall join with the Trustee in the appointment of a co-trustee
pursuant to Section 9.11 hereof. In the performance of its duties hereunder, the
Master Servicer shall be an independent contractor and shall not, except in
those instances where it is taking action in the name of the Trustee, be deemed
to be the agent of the Trustee.
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Section 3.06 Due-on-Sale Clauses; Assumption Agreements. To the extent
provided in the applicable Servicing Agreement, to the extent Mortgage Loans
contain enforceable due-on-sale clauses, the Master Servicer shall cause the
Servicers to enforce such clauses in accordance with the applicable Servicing
Agreement. If applicable law prohibits the enforcement of a due-on-sale clause
or such clause is otherwise not enforced in accordance with the applicable
Servicing Agreement, and, as a consequence, a Mortgage Loan is assumed, the
original Mortgagor may be released from liability in accordance with the
applicable Servicing Agreement.
Section 3.07 Release of Mortgage Files.
(a) Upon becoming aware of the payment in full of any Mortgage Loan, or the
receipt by any Servicer of a notification that payment in full has been escrowed
in a manner customary for such purposes for payment to Certificateholders on the
next Distribution Date, the Servicers or the Master Servicer will, if required
under the applicable Servicing Agreement, promptly furnish to the Custodian, on
behalf of the Trustee, two copies of a certification substantially in the form
of Exhibit D hereto signed by a Servicing Officer or in a mutually agreeable
electronic format which will, in lieu of a signature on its face, originate from
a Servicing Officer (which certification shall include a statement to the effect
that all amounts received in connection with such payment that are required to
be deposited in the Protected Account maintained by the applicable Servicer
pursuant to its Servicing Agreement have been or will be so deposited) and shall
request that the Custodian, on behalf of the Trustee, deliver to the applicable
Servicer the related Mortgage File. Upon receipt of such certification and
request, the Custodian, on behalf of the Trustee, shall no later than five
Business Days (or, to the extent that the applicable Servicer notifies the
Sponsor that a document is not in the Servicer's possession as part of the
Servicing File which is needed for purposes of the Servicer complying with any
applicable law, within such shorter period as may be necessary to enable the
Servicer to comply with such law), release the related Mortgage File to the
applicable Servicer and the Trustee and Custodian shall have no further
responsibility with regard to such Mortgage File. Upon any such payment in full,
each Servicer is authorized, to give, as agent for the Trustee, as the mortgagee
under the Mortgage that secured the Mortgage Loan, an instrument of satisfaction
(or assignment of mortgage without recourse) regarding the Mortgaged Property
subject to the Mortgage, which instrument of satisfaction or assignment, as the
case may be, shall be delivered to the Person or Persons entitled thereto
against receipt therefor of such payment, it being understood and agreed that no
expenses incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the Protected Account.
(b) From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan and in accordance with the applicable Servicing Agreement,
the Trustee shall execute such documents as requested and as shall be prepared
and furnished to the Trustee by a Servicer or the Master Servicer and as are
necessary to the prosecution of any such proceedings. In connection with the
foregoing, the Custodian, on behalf of the Trustee, shall, upon the request of a
Servicer or the Master Servicer, and delivery to the Custodian, on behalf of the
Trustee, of two copies of a Request for Release signed by a Servicing Officer
substantially in the form of Exhibit D (or in a mutually agreeable electronic
format which will, in lieu of a signature on its face, originate from a
Servicing Officer), release the related Mortgage File held in its possession or
control to the related Servicer or the Master Servicer, as applicable. Such
trust receipt shall
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obligate the related Servicer or the Master Servicer to return the Mortgage File
to the Custodian on behalf of the Trustee, when the need therefor by the
Servicer or the Master Servicer no longer exists unless the Mortgage Loan shall
be liquidated, in which case, upon receipt of a certificate of a Servicing
Officer similar to that hereinabove specified, the Mortgage File shall be
released by the Custodian, on behalf of the Trustee, to the related Servicer or
the Master Servicer.
Section 3.08 Documents, Records and Funds in Possession of Master Servicer
To Be Held for Trustee.
(a) The Master Servicer shall transmit and each Servicer (to the extent
required by the related Servicing Agreement) shall transmit to the Trustee or
Custodian such documents and instruments coming into the possession of the
Master Servicer or such Servicer from time to time as are required by the terms
hereof, or in the case of the Servicers, the applicable Servicing Agreement, to
be delivered to the Trustee or Custodian. Any funds received by the Master
Servicer or by a Servicer in respect of any Mortgage Loan or which otherwise are
collected by the Master Servicer or by a Servicer as Liquidation Proceeds or
Insurance Proceeds in respect of any Mortgage Loan shall be held for the benefit
of the Trustee and the Certificateholders subject to the Master Servicer's right
to retain or withdraw from the Master Servicer Collection Account the Master
Servicing Compensation and other amounts provided in this Agreement, and to the
right of each Servicer to retain its Servicing Fee and other amounts as provided
in the applicable Servicing Agreement. The Master Servicer shall, and (to the
extent provided in the applicable Servicing Agreement) shall cause each Servicer
to, provide access to information and documentation regarding the Mortgage Loans
to the Trustee, its agents and accountants at any time upon reasonable request
and during normal business hours, and to Certificateholders that are savings and
loan associations, banks or insurance companies, the Office of Thrift
Supervision, the FDIC and the supervisory agents and examiners of such Office
and Corporation or examiners of any other federal or state banking or insurance
regulatory authority if so required by applicable regulations of the Office of
Thrift Supervision or other regulatory authority, such access to be afforded
without charge but only upon reasonable request in writing and during normal
business hours at the offices of the Master Servicer designated by it. In
fulfilling such a request, the Master Servicer shall not be responsible for
determining the sufficiency of such information.
(b) All Mortgage Files and funds collected or held by, or under the control
of, the Master Servicer, in respect of any Mortgage Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds or
Insurance Proceeds, shall be held by the Master Servicer for and on behalf of
the Trustee and the Certificateholders and shall be and remain the sole and
exclusive property of the Trustee; provided, however, that the Master Servicer
and each Servicer shall be entitled to setoff against, and deduct from, any such
funds any amounts that are properly due and payable to the Master Servicer or
such Servicer under this Agreement or the applicable Servicing Agreement.
Section 3.09 Standard Hazard Insurance and Flood Insurance Policies.
(a) For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Servicers under the related Servicing Agreements to maintain
or cause to be maintained standard fire and casualty insurance and, where
applicable, flood insurance, all in accordance with the provisions of the
related Servicing Agreements. It is understood and agreed that such insurance
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shall be with insurers meeting the eligibility requirements set forth in the
applicable Servicing Agreement and that no earthquake or other additional
insurance is to be required of any Mortgagor or to be maintained on property
acquired in respect of a defaulted 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.
(b) Pursuant to Sections 4.01 and 4.02, any amounts collected by the
Servicers or the Master Servicer, under any insurance policies (other than
amounts to be applied to the restoration or repair of the property subject to
the related Mortgage or released to the Mortgagor in accordance with the
applicable Servicing Agreement) shall be deposited into the Master Servicer
Collection Account, subject to withdrawal pursuant to Sections 4.02 and 4.03 in
accordance with the terms and conditions of the related Servicing Agreement. Any
cost incurred by the Master Servicer or any Servicer in maintaining any such
insurance if the Mortgagor defaults in its obligation to do so shall be added to
the amount owing under the Mortgage Loan where the terms of the Mortgage Loan so
permit; provided, however, that the addition of any such cost shall not be taken
into account for purposes of calculating the distributions to be made to
Certificateholders and shall be recoverable by the Master Servicer or such
Servicer pursuant to Sections 4.02 and 4.03.
Section 3.10 Presentment of Claims and Collection of Proceeds. The Master
Servicer shall (to the extent provided in the applicable Servicing Agreement)
cause the related Servicer to, prepare and present on behalf of the Trustee and
the Certificateholders all claims under the Insurance Policies and take such
actions (including the negotiation, settlement, compromise or enforcement of the
insured's claim) as shall be necessary to realize recovery under such policies.
Any proceeds disbursed to the Master Servicer (or disbursed to a Servicer and
remitted to the Master Servicer) in respect of such policies, bonds or contracts
shall be promptly deposited in the Master Servicer Collection Account upon
receipt, except that any amounts realized that are to be applied to the repair
or restoration of the related Mortgaged Property as a condition precedent to the
presentation of claims on the related Mortgage Loan to the insurer under any
applicable Insurance Policy need not be so deposited (or remitted).
Section 3.11 Maintenance of the Primary Mortgage Insurance Policies.
(a) The Master Servicer shall not take, or permit any Servicer (to the
extent such action is prohibited under the applicable Servicing Agreement) to
take, any action that would result in noncoverage under any applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of such Master
Servicer or Servicer, would have been covered thereunder. The Master Servicer
shall use its best reasonable efforts to cause each Servicer (to the extent
required under the related Servicing Agreement) to keep in force and effect (to
the extent that the Mortgage Loan requires the Mortgagor to maintain such
insurance), primary mortgage insurance applicable to each Mortgage Loan in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable. The Master Servicer shall not, and shall not permit
any Servicer (to the extent required under the related Servicing Agreement) to,
cancel or refuse to renew any such Primary Mortgage Insurance Policy that is in
effect at the date of the initial issuance of the Mortgage Note and is required
to be kept in force hereunder except in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable.
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(b) The Master Servicer agrees to present, or to cause each Servicer (to
the extent required under the related Servicing Agreement) to present, on behalf
of the Trustee and the Certificateholders, claims to the insurer under any
Primary Mortgage Insurance Policies and, in this regard, to take such reasonable
action as shall be necessary to permit recovery under any Primary Mortgage
Insurance Policies respecting defaulted Mortgage Loans. Pursuant to Section 4.01
and 4.02, any amounts collected by the Master Servicer or any Servicer under any
Primary Mortgage Insurance Policies shall be deposited in the Master Servicer
Collection Account, subject to withdrawal pursuant to Section 4.03.
Section 3.12 Trustee to Retain Possession of Certain Insurance Policies and
Documents. The Trustee or the Custodian shall retain possession and custody of
the originals (to the extent available) of any Primary Mortgage Insurance
Policies, or certificate of insurance if applicable, and any certificates of
renewal as to the foregoing as may be issued from time to time as contemplated
by this Agreement. Until all amounts distributable in respect of the
Certificates have been distributed in full and the Master Servicer otherwise has
fulfilled its obligations under this Agreement, the Trustee or its Custodian
shall also retain possession and custody of each Mortgage File in accordance
with and subject to the terms and conditions of this Agreement. The Master
Servicer shall promptly deliver or cause to be delivered to the Trustee or the
Custodian upon the execution or receipt thereof the originals of any Primary
Mortgage Insurance Policies, any certificates of renewal, and such other
documents or instruments that constitute portions of the Mortgage File that come
into the possession of the Master Servicer from time to time.
Section 3.13 Realization Upon Defaulted Mortgage Loans. The Master Servicer
shall cause each Servicer (to the extent required under the related Servicing
Agreement) to foreclose upon, repossess or otherwise comparably convert the
ownership of Mortgaged Properties 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, all in accordance with the terms and
conditions of the applicable Servicing Agreement.
Section 3.14 Compensation for the Master Servicer. The Master Servicer will
be entitled to all income and gain realized from any investment of funds in the
Master Servicer Collection Account, pursuant to Article IV, for the performance
of its activities hereunder. Servicing compensation in the form of assumption
fees, if any, late payment charges, as collected, if any, or otherwise (but not
including any prepayment premium or penalty) shall be retained by the applicable
Servicer and shall not be deposited in the Protected Account. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its activities hereunder and shall not be entitled to reimbursement therefor
except as provided in this Agreement.
Section 3.15 REO Property.
(a) In the event the Issuing Entity acquires ownership of any REO Property
in respect of any related Mortgage Loan, the deed or certificate of sale shall
be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in the
applicable Servicing Agreement, cause the applicable Servicer to sell, any REO
Property as expeditiously as possible and in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable. Pursuant to
its efforts to sell such REO
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Property, the Master Servicer shall cause the applicable Servicer to protect and
conserve, such REO Property in the manner and to the extent required by the
applicable Servicing Agreement, in accordance with the REMIC Provisions and in a
manner that does not result in a tax on "net income from foreclosure property"
or cause such REO Property to fail to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code.
(b) The Master Servicer shall, to the extent required by the related
Servicing Agreement, cause the applicable Servicer to deposit all funds
collected and received in connection with the operation of any REO Property in
the Protected Account.
(c) The Master Servicer and the applicable Servicer, upon the final
disposition of any REO Property, shall be entitled to reimbursement for any
related unreimbursed Monthly Advances and other unreimbursed advances as well as
any unpaid Servicing Fees from Liquidation Proceeds received in connection with
the final disposition of such REO Property; provided, that any such unreimbursed
Monthly Advances as well as any unpaid Servicing Fees may be reimbursed or paid,
as the case may be, prior to final disposition, out of any net rental income or
other net amounts derived from such REO Property.
(d) To the extent provided in the related Servicing Agreement, the
Liquidation Proceeds from the final disposition of the REO Property, net of any
payment to the Master Servicer and the applicable Servicer as provided above
shall be deposited in the Protected Account on or prior to the Determination
Date in the month following receipt thereof and be remitted by wire transfer in
immediately available funds to the Master Servicer for deposit into the related
Master Servicer Collection Account on the next succeeding Servicer Remittance
Date.
Section 3.16 Annual Statement as to Compliance.
Not later than March 1 of each calendar year (other than the calendar year
during which the Closing Date occurs), each Servicer shall deliver (or otherwise
make available) and each Servicer shall cause any Servicing Function Participant
engaged by it to deliver to the Master Servicer, the Securities Administrator
and the Depositor, an Officer's Certificate in the form attached hereto as
Exhibit P stating, as to each signatory thereof, that (i) a review of the
activities of such signatory during the preceding calendar year, or portion
thereof, and of the performance of such signatory under the related Servicing
Agreement or such other applicable agreement in the case of a Servicing Function
Participant has been made under such officer's supervision, and (ii) to the best
of such officer's knowledge, based on such review, such signatory has fulfilled
all its obligations under this Agreement, the related Servicing Agreement or
such other applicable 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.
The Master Servicer and the Securities Administrator shall deliver (or
otherwise make available) (and the Master Servicer and Securities Administrator
shall cause any Servicing Function Participant engaged by it to deliver) to the
Depositor and the Securities Administrator on or before March 1 (with a
ten-calendar day cure period) of each year, commencing in March 2007, an
Officer's Certificate stating, as to the signer thereof, that (A) a review of
such party's activities during the preceding calendar year or portion thereof
and of such party's performance
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under this Agreement, or such other applicable agreement in the case of a
Servicing Function Participant, has been made under such officer's supervision
and (B) to the best of such officer's knowledge, based on such review, such
party has fulfilled all its obligations under this Agreement, or such other
applicable agreement in the case of a Servicing Function Participant, in all
material respects throughout such year or portion thereof, or, if there has been
a failure to fulfill any such obligation in any material respect, specifying
each such failure known to such officer and the nature and status thereof.
The Master Servicer shall include all annual statements of compliance
received by it from each Servicer with its own annual statement of compliance to
be submitted to the Securities Administrator pursuant to this Section. For the
avoidance of doubt, the Master Servicer and the Securities Administrator may
satisfy the requirements of this Section 3.16 and Section 3.16 of the Stack I
Agreement by each delivering a single annual statement of compliance containing
all of the information required pursuant to this Section 3.16 and Section 3.16
of the Stack I Agreement.
In the event the Master Servicer, the Securities Administrator or any
Servicing Function Participant engaged by any such party is terminated, assigns
its rights and obligations under or resigns pursuant to the terms of this
Agreement, or such other applicable agreement in the case of a Servicing
Function Participant, as the case may be, such party shall provide, an annual
statement of compliance pursuant to this Section 3.16 or to such applicable
agreement, as the case may be, notwithstanding any such termination, assignment
or resignation.
Section 3.17 Reports on Assessment of Compliance and Attestation.
(a) Not later than March 1 of each calendar year (other than the calendar
year during which the Closing Date occurs) each Servicer at its own expense,
shall furnish, and shall cause any Servicing Function Participant engaged by it
to furnish (unless in the case of a Subcontractor, such Servicer has notified
the Depositor and the Master Servicer in writing that such compliance statement
is not required for the Subcontractor) to the Master Servicer, the Securities
Administrator and the Depositor an officer's assessment of its compliance with
the Relevant 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 assessment shall contain (A) a statement
by such party of its responsibility for assessing compliance with the Relevant
Servicing Criteria, (B) a statement that such party used the Relevant Servicing
Criteria to assess compliance with the Relevant Servicing Criteria, (C) such
party's assessment of compliance with the Relevant Servicing Criteria as of and
for the fiscal year covered by the Form 10-K required to be filed pursuant to
Section 3.18, including, if there has been any material instance of
noncompliance with the Relevant Servicing Criteria, a discussion of each such
failure and the nature and status thereof, which assessment shall be based on
the activities it performs with respect to asset-backed securities transactions
taken as a whole involving such party that are backed by the same asset type as
the Mortgage Loans, and (D) a statement that a registered public accounting firm
has issued an attestation report on such party's assessment of compliance with
the Relevant Servicing Criteria as of and for such period.
By March 1 (with a ten-calendar day cure period) of each year, commencing
in March 2007, the Master Servicer, the Securities Administrator and the
Custodian each at its own expense, shall furnish or otherwise make available,
and each such party shall cause any Servicing
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Function Participant engaged by it to furnish, each at its own expense, to the
Securities Administrator and the Depositor, a report on an assessment of
compliance with the Relevant Servicing Criteria that contains (A) a statement by
such party of its responsibility for assessing compliance with the Relevant
Servicing Criteria, (B) a statement that such party used the Relevant Servicing
Criteria to assess compliance with the Relevant Servicing Criteria, (C) such
party's assessment of compliance with the Relevant Servicing Criteria as of and
for the fiscal year covered by the Form 10-K required to be filed pursuant to
Sections 3.18(h), (i), (j) and (k), including, if there has been any material
instance of noncompliance with the Relevant Servicing Criteria, a discussion of
each such failure and the nature and status thereof, and (D) a statement that a
registered public accounting firm has issued an attestation report on such
party's assessment of compliance with the Relevant Servicing Criteria as of and
for such period.
No later than the end of each fiscal year for the Issuing Entity for which
a 10-K is required to be filed, the Master Servicer and the Custodian shall each
forward to the Securities Administrator and the Depositor the name of each
Servicing Function Participant engaged by it and what Relevant Servicing
Criteria will be addressed in the report on assessment of compliance prepared by
such Servicing Function Participant (provided, however, that the Master Servicer
need not provide such information to the Securities Administrator so long as the
Master Servicer and the Securities Administrator are the same Person). When the
Master Servicer, and the Securities Administrator (or any Servicing Function
Participant engaged by them) submit their assessments to the Securities
Administrator, such parties will also at such time include the assessment and
attestation pursuant to this Section 3.17 of each Servicing Function Participant
engaged by it.
Promptly after receipt of each report on assessment of compliance, (i) the
Depositor shall review each such report and, if applicable, consult with such
Servicer, the Master Servicer, the Securities Administrator and any Servicing
Function Participant engaged by any such party as to the nature of any material
instance of noncompliance with the Relevant Servicing Criteria by such Servicer
by each such party, and (ii) the Securities Administrator shall confirm that the
assessments individually address the Relevant Servicing Criteria for each party
as set forth on Exhibit K or any similar exhibit set forth in each Servicing
Agreement in respect of each Servicer and notify the Depositor of any
exceptions.
The Master Servicer shall include all annual reports on assessment of
compliance received by it from the Servicers with its own assessment of
compliance to be submitted to the Securities Administrator pursuant to this
Section. For the avoidance of doubt, the Master Servicer and the Securities
Administrator may satisfy the requirements of this Section 3.17 and Section 3.17
of the Stack II Agreement relating to reports on assessment of compliance by
each delivering a single annual report on assessment of compliance containing
all of the information required pursuant to Section 3.17 of the Stack I
Agreement relating to reports on assessment of compliance.
In the event the Master Servicer, the Securities Administrator or any
Servicing Function Participant engaged by any such party is terminated, assigns
its rights and obligations under or resigns pursuant to the terms of this
Agreement, or any other applicable agreement, as the case may be, such party
shall provide, an assessment of compliance pursuant to this Section 3.17,
coupled with an attestation as required in this Section 3.17, or such applicable
agreement notwithstanding any such termination, assignment or resignation.
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(b) Not later than March 1 of each calendar year (other than the calendar
year during which the Closing Date occurs) each Servicer at its own expense,
shall cause, and shall cause any Servicing Function Participant engaged by it to
cause (unless in the case of a Subcontractor, such Servicer has notified the
Depositor and the Master Servicer in writing that such report is not required
for the Subcontractor) a nationally or regionally recognized firm of independent
registered public accountants (who may also render other services to such
Servicer, the Master Servicer or any affiliate thereof) which is a member of the
American Institute of Certified Public Accountants to furnish a report (the
"Accountant's Attestation") to the Master Servicer, the Securities Administrator
and the Depositor to the effect that (i) it has obtained a representation
regarding certain matters from the management of such party, which includes an
assertion that such party has complied with the Relevant Servicing Criteria, and
(ii) on the basis of an examination conducted by such firm in accordance with
standards for attestation engagements issued or adopted by the Public Company
Accounting Oversight Board, it is expressing an opinion as to whether such
party's compliance with the Relevant Servicing Criteria was fairly stated in all
material respects, or it cannot express an overall opinion regarding such
party's assessment of compliance with the Relevant Servicing Criteria. In the
event that an overall opinion cannot be expressed, such registered public
accounting firm shall state in such report why it was unable to express such an
opinion. Such report must be available for general use and not contain
restricted use language. 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.
By March 1 (with a ten-calendar day cure period) of each year, commencing
in March 2007, the Master Servicer, the Securities Administrator and the
Custodian, each at its own expense, shall cause, and each such party shall cause
any Servicing Function Participant engaged by it to cause, each at its own
expense, a registered public accounting firm (which may also render other
services to the Master Servicer, the Trustee, the Securities Administrator, or
such other Servicing Function Participants, as the case may be) and that is a
member of the American Institute of Certified Public Accountants to furnish an
attestation report to the Securities Administrator and the Depositor, to the
effect that (i) it has obtained a representation regarding certain matters from
the management of such party, which includes an assertion that such party has
complied with the Relevant Servicing Criteria, and (ii) on the basis of an
examination conducted by such firm in accordance with standards for attestation
engagements issued or adopted by the Public Company Accounting Oversight Board,
it is expressing an opinion as to whether such party's compliance with the
Relevant Servicing Criteria was fairly stated in all material respects, or it
cannot express an overall opinion regarding such party's assessment of
compliance with the Relevant Servicing Criteria. In the event that an overall
opinion cannot be expressed, such registered public accounting firm shall state
in such report why it was unable to express such an opinion. Such report must be
available for general use and not contain restricted use language.
(c) Promptly after receipt of each assessment of compliance and attestation
report, the Securities Administrator shall confirm that each assessment
submitted pursuant to Section 3.17(a) is coupled with an attestation meeting the
requirements of Section 3.17(b) and notify the Depositor of any exceptions.
The Master Servicer shall include each such attestation furnished to it by
the Servicers with its own attestation to be submitted to the Securities
Administrator pursuant to this Section.
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For the avoidance of doubt, the Master Servicer and the Securities Administrator
may satisfy the requirements of this Section 3.17 and Section 3.17 of the Stack
I Agreement relating to attestations by each delivering a single attestation
containing all of the information required pursuant to this Section 3.17 and
Section 3.17 of the Stack I Agreement relating to attestations.
In the event the Master Servicer, the Securities Administrator, the
Custodian, any Servicer or any Servicing Function Participant engaged by any
such party, is terminated, assigns its rights and duties under, or resigns
pursuant to the terms of, this Agreement, or any applicable Custodial Agreement,
Servicing Agreement or sub-servicing agreement, as the case may be, such party
shall cause a registered public accounting firm to provide an attestation
pursuant to this Section 3.17, or such other applicable agreement,
notwithstanding any such termination, assignment or resignation.
Section 3.18 Periodic Filings.
(a) Within four (4) Business Days after the occurrence of an event
requiring disclosure on Form 8-K (each such event, a "Reportable Event"), and if
requested by the Depositor, the Securities Administrator shall prepare and file
on behalf of the Issuing Entity a Form 8-K, as required by the Exchange Act,
provided that the Depositor shall file the initial Form 8-K in connection with
the issuance of the Certificates. Any disclosure or information related to a
Reportable Event or that is otherwise required to be included on Form 8-K (other
than the initial Form 8-K) ("Form 8-K Disclosure Information") shall be reported
by the parties set forth on Exhibit Q-3 to the Depositor and the Securities
Administrator and directed and approved by the Depositor, and the Securities
Administrator will have no duty or liability for any failure hereunder to
determine or prepare any Form 8-K Disclosure Information or any Form 8-K except
as set forth in the next paragraph.
(b) For so long as the Issuing Entity is subject to the reporting
requirements of the Exchange Act, following the occurrence of a Reportable Event
(A) each party listed on Exhibit Q-3 hereto shall use commercially reasonable
best efforts to provide immediate notice to the Master Servicer, the Securities
Administrator and the Depositor, by fax and by phone or by e-mail and by phone,
(B) each such party shall be required to provide to the Securities Administrator
and the Depositor, to the extent known, in XXXXX-compatible format or in such
other format as agreed upon by the Securities Administrator and such party, the
form and substance of any Form 8-K Disclosure Information if applicable,
together with the form set forth on Exhibit O (the "Additional Disclosure
Notification") by the close of business New York City time on the 2nd Business
Day following the occurrence of such Reportable Event and (C) the Depositor,
shall approve, as to form and substance, or disapprove, as the case may be, the
inclusion of the Form 8-K Disclosure Information on Form 8-K. The Securities
Administrator has no duty under this Agreement to monitor or enforce the
performance by the parties listed on Exhibit Q-3 of their duties under this
paragraph or proactively solicit or procure from such parties any Form 8-K
Disclosure Information. The Depositor will be responsible for any reasonable
fees and expenses assessed or incurred by the Securities Administrator in
connection with including any Form 8-K Disclosure Information on Form 8-K
pursuant to this paragraph.
(c) After preparing the Form 8-K, the Securities Administrator shall, upon
request, forward electronically a copy of the Form 8-K to the Depositor.
Promptly, but no later than the close of business on the third Business Day
after the Reportable Event, the Depositor shall notify
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the Securities Administrator in writing (which may be furnished electronically)
of any changes to or approval of such Form 8-K. In the absence of receipt of any
written changes or approval, or if the Depositor does not request a copy of a
Form 8-K, the Securities Administrator shall be entitled to assume that such
Form 8-K is in final form and the Securities Administrator may proceed with the
process for execution and filing of the Form 8-K. A duly authorized
representative of the Master Servicer shall sign each Form 8-K. If a Form 8-K
cannot be filed on time or if a previously filed Form 8-K needs to be amended,
the Securities Administrator will follow the procedures set forth in Section
3.18(n).
(d) Promptly (but no later than one Business Day) after filing with the
Commission, the Securities Administrator will make available on its internet
website a final executed copy of each Form 8-K prepared and filed by the
Securities Administrator. The parties to this Agreement acknowledge that the
performance by the Master Servicer and the Securities Administrator of its
duties under this Section 3.18 related to the timely preparation, execution and
filing of Form 8-K is contingent upon the other parties hereto strictly
observing all applicable deadlines in the performance of their duties under this
Section 3.18. The Depositor acknowledges that the performance by the Master
Servicer and the Securities Administrator of its duties under this Section 3.18
related to the timely preparation, execution and filing of Form 8-K is also
contingent upon the Servicers, the Custodian and any Servicing Function
Participant strictly observing deadlines no later than those set forth in this
paragraph that are applicable to the parties to this Agreement in the delivery
to the Securities Administrator of any necessary Form 8-K Disclosure Information
pursuant to the related Servicing Agreements, the Custodial Agreement or any
other applicable agreement. Neither the Master Servicer nor the Securities
Administrator shall have any liability for any loss, expense, damage or claim
arising out of or with respect to any failure to properly prepare, execute
and/or timely file such Form 8-K, where such failure results from the Securities
Administrator's inability or failure to obtain or receive, on a timely basis,
any information from any other party hereto or any Servicer, Custodian or
Servicing Function Participant needed to prepare, arrange for execution or file
such Form 8-K.
(e) Within fifteen (15) days after each Distribution Date (subject to
permitted extensions under the Exchange Act), the Securities Administrator
shall, on behalf of the Issuing Entity and in accordance with industry
standards, prepare and file with the Commission via the Electronic Data
Gathering and Retrieval System (XXXXX), a Form 10-D with a copy of the Monthly
Statement for such Distribution Date as an exhibit thereto. Any disclosure in
addition to the Monthly Statement that is required to be included on Form 10-D
("Additional Form 10-D Disclosure") shall be reported by the parties set forth
on Exhibit Q-1 to the Depositor and the Securities Administrator and directed
and approved by the Depositor pursuant to the following paragraph, and the
Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-D Disclosure except as
set forth in the next paragraph.
(f) As set forth in Exhibit Q-1 hereto, for so long as the Issuing Entity
is subject to the reporting requirements of the Exchange Act, within five (5)
calendar days after the related Distribution Date (i) each party listed on
Exhibit Q-1 hereto shall be required to provide to the Depositor and the
Securities Administrator, to the extent known, in XXXXX-compatible format or in
such other format as agreed upon by the Securities Administrator and such party,
the form and substance of any Additional Form 10-D Disclosure if applicable
together with an Additional
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Disclosure Notification, and (ii) the Depositor will approve, as to form and
substance, or disapprove, as the case may be, the inclusion of the Additional
Form 10-D Disclosure on Form 10-D. The Securities Administrator has no duty
under this Agreement to monitor or enforce the performance by the parties listed
on Exhibit Q-1 of their duties under this paragraph or proactively solicit or
procure from such parties any Additional Form 10-D Disclosure Information. The
Depositor will be responsible for any reasonable fees and expenses incurred by
the Securities Administrator in connection with including any Additional Form
10-D Disclosure on Form 10-D pursuant to this paragraph.
(g) After preparing the Form 10-D, the Securities Administrator shall, upon
request, forward electronically a copy of the Form 10-D to the Depositor
(provided that such Form 10-D includes any Additional Form 10-D Disclosure).
Within two Business Days after receipt of such copy, but no later than the 12th
calendar day after the Distribution Date, the Depositor shall notify the
Securities Administrator in writing (which may be furnished electronically) of
any changes to or approval of such Form 10-D. In the absence of receipt of any
written changes or approval, or if the Depositor does not request a copy of a
Form 10-D, the Securities Administrator shall be entitled to assume that such
Form 10-D is in final form and the Securities Administrator may proceed with the
process for execution and filing of the Form 10-D. A duly authorized
representative of the Master Servicer shall sign each Form 10-D. If a Form 10-D
cannot be filed on time or if a previously filed Form 10-D needs to be amended,
the Securities Administrator will follow the procedures set forth in Section
3.18(n). Promptly (but not later than one Business Day) after filing with the
Commission, the Securities Administrator will make available on its internet
website a final executed copy of each Form 10-D prepared and filed by the
Securities Administrator. Form 10-D requires the registrant to indicate (by
checking "yes" or "no") that it "(1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days." The
Depositor hereby represents to the Securities Administrator that the Depositor
has filed all such required reports during the preceding 12 months and that it
has been subject to such filing requirement for the past 90 days. The Depositor
shall notify the Securities Administrator in writing, no later than the fifth
calendar day after the related Distribution Date with respect to the filing of a
report on Form 10-D, if the answer to the questions should be "no." The
Securities Administrator shall be entitled to rely on such representations in
preparing, executing and/or filing any such Form 10-D. The parties to this
Agreement acknowledge that the performance by the Master Servicer and the
Securities Administrator of its respective duties under this Section 3.18
related to the timely preparation, execution and filing of Form 10-D is
contingent upon the other parties hereto strictly observing all applicable
deadlines in the performance of their duties under this Section 3.18. The
Depositor acknowledges that the performance by the Master Servicer and the
Securities Administrator of its duties under this Section 3.18 related to the
timely preparation, execution and filing of Form 10-D is also contingent upon
the Servicers, the Custodian and any Servicing Function Participant strictly
observing deadlines no later than those set forth in this paragraph that are
applicable to the parties to this Agreement in the delivery to the Securities
Administrator of any necessary Additional Form 10-D Disclosure pursuant to the
related Servicing Agreements, the Custodial Agreement or any other applicable
agreement. Neither the Master Servicer nor the Securities Administrator will
have any liability for any loss, expense, damage or claim arising out of or with
respect to any failure to properly prepare, execute and/or timely file such Form
10-D resulting from the Securities Administrator's inability
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or failure to obtain or receive any information needed to prepare, arrange for
execution or file such Form 10-D on a timely basis.
(h) On or prior to the 90th calendar day after the end of the fiscal year
for the Issuing Entity or such earlier date as may be required by the Exchange
Act (the "10-K Filing Deadline") (it being understood that the fiscal year for
the Issuing Entity ends on December 31st of each year) commencing in March 2007,
the Securities Administrator shall, on behalf of the Issuing Entity and in
accordance with industry standards, prepare and file with the Commission via
XXXXX a Form 10-K with respect to the Issuing Entity. Such Form 10-K shall
include the following items, in each case, as applicable, to the extent they
have been delivered to the Securities Administrator within the applicable time
frames set forth in this Agreement, the related Servicing Agreements and
Custodial Agreement: (i) an annual compliance statement for the Master Servicer,
each Servicer, the Securities Administrator and any Servicing Function
Participant engaged by any such party (together with the Custodian, each a
"Reporting Servicer"), as described in Section 3.16 of this Agreement, the
related Servicing Agreement and the Custodial Agreement; provided, however, that
the Securities Administrator, at its discretion, may omit from the Form 10-K any
annual compliance statement that is not required to be filed with such Form 10-K
pursuant to Regulation AB; (ii)(A) the annual reports on assessment of
compliance with Servicing Criteria for each Reporting Servicer (unless the
Depositor has determined that such compliance statement is not required by
Regulation AB), as described in Section 3.17 of this Agreement, the related
Servicing Agreement and the Custodial Agreement, and (B) if any Reporting
Servicer's report on assessment of compliance with Servicing Criteria described
in Section 3.17 identifies any material instance of noncompliance, disclosure
identifying such instance of noncompliance, or if any Reporting Servicer's
report on assessment of compliance with Servicing Criteria described in Section
3.17 of this 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; provided, however, that the Securities Administrator, at its
discretion, may omit from the Form 10-K any assessment of compliance or
attestation report described in clause (iii) below that is not required to be
filed with such Form 10-K pursuant to Regulation AB; (iii)(A) the registered
public accounting firm attestation report for each Reporting Servicer, as
described in Section 3.17 of this Agreement, the related Servicing Agreement and
the Custodial Agreement, and (B) if any registered public accounting firm
attestation report described under Section 3.17 of this 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 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 L,
executed by the senior officer in charge of securitizations of the Master
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 reported by the parties as set forth in Exhibit Q-2 to the Depositor
and the Securities Administrator and directed and approved by the Depositor
pursuant to the following paragraph and the Securities Administrator will have
no duty or liability for any failure hereunder to determine or prepare any
Additional Form 10-K Disclosure except or set forth in the next paragraph.
(i) As set forth in Exhibit Q-2 hereto, no later than March 1 (with a ten
calendar day cure period) of each year that the Issuing Entity is subject to the
Exchange Act reporting
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requirements, commencing in March 2007, (i) the parties listed on Exhibit Q-2
hereto shall be required to provide to the Depositor and the Securities
Administrator, to the extent known, in XXXXX-compatible format or in such other
format as agreed upon by the Securities Administrator and such party, the form
and substance of any Additional Form 10-K Disclosure, if applicable together
with an Additional Disclosure Notification, and (ii) the Depositor will approve,
as to form and substance, or disapprove, as the case may be, the inclusion of
the Additional Form 10-K Disclosure and shall forward such Additional Form 10-K
Disclosure. The Securities Administrator has no duty under this Agreement to
monitor or enforce the performance by the parties listed on Exhibit Q-2 of their
duties under this paragraph or proactively solicit or procure from such parties
any Additional Form 10-K Disclosure Information. The Depositor will be
responsible for any reasonable fees and expenses incurred by the Securities
Administrator in connection with including any Additional Form 10-K Disclosure
on Form 10-K pursuant to this paragraph.
(j) After preparing the Form 10-K, the Securities Administrator shall, upon
request, forward electronically a copy of the Form 10-K to the Depositor. Within
three Business Days after receipt of such copy, but no later than March 25th,
the Depositor shall notify the Securities Administrator in writing (which may be
furnished electronically) of any changes to or approval of such Form 10-K. In
the absence of receipt of any written changes or approval, or if the Depositor
does not request a copy of a Form 10-K, the Securities Administrator shall be
entitled to assume that such Form 10-K is in final form and the Securities
Administrator may proceed with the process for execution and filing of the Form
10-K. A senior officer of the Master Servicer in charge of the master servicing
function shall sign the Form 10-K. If a Form 10-K cannot be filed on time or if
a previously filed Form 10-K needs to be amended, the Securities Administrator
will follow the procedures set forth in Section 3.18(n). Promptly (but no later
than one Business Day) after filing with the Commission, the Securities
Administrator will make available on its internet website a final executed copy
of each Form 10-K prepared and filed by the Securities Administrator. Form 10-K
requires the registrant to indicate (by checking "yes" or "no") that it "(1) has
filed all reports required to be filed by Section 13 or 15(d) of the Exchange
Act during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days." The Depositor hereby represents to
the Securities Administrator that the Depositor has filed all such required
reports during the preceding 12 months and that it has been subject to such
filing requirement for the past 90 days. The Depositor shall notify the
Securities Administrator in writing, no later than the 15th calendar day of
March in any year in which the Trust is subject to the reporting requirements of
the Exchange Act, if the answer to the questions should be "no." The Securities
Administrator shall be entitled to rely on such representations in preparing,
executing and/or filing any such Form 10-D. The parties to this Agreement
acknowledge that the performance by the Master Servicer and the Securities
Administrator of its duties under this Section 3.18 related to the timely
preparation, execution and filing of Form 10-K is contingent upon such parties
(and any Servicing Function Participant) strictly observing all applicable
deadlines in the performance of their duties under this Section 3.18, Section
3.16 and Section 3.17. The Depositor acknowledges that the performance by the
Master Servicer and the Securities Administrator of its duties under this
Section 3.18 related to the timely preparation, execution and filing of Form
10-K is also contingent upon the Servicers, the Custodian and any Servicing
Function Participant strictly observing deadlines no later than those set forth
in this paragraph that are applicable to the parties to this Agreement in the
delivery to the Securities
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Administrator of any necessary Additional Form 10-K Disclosure, any annual
statement of compliance and any assessment of compliance and attestation
pursuant to the related Servicing Agreement, the Custodial Agreement or any
other applicable agreement. Neither the Master Servicer nor the Securities
Administrator shall have any liability for any loss, expense, damage or claim
arising out of or with respect to any failure to properly prepare, execute
and/or timely file such Form 10-K resulting from the Securities Administrator's
inability or failure to obtain or receive any information from any other party
hereto or any Servicer, Custodian or Servicing Function Participant needed to
prepare, execute or file such Form 10-K.
(k) Each Form 10-K shall include a Xxxxxxxx-Xxxxx Certification, which
shall be in the form attached hereto as Exhibit L. Each Servicer shall sign and
provide, and each of the Servicers, the Master Servicer and the Securities
Administrator shall cause any Servicing Function Participant engaged by it to
sign and provide, to the person who signs the Xxxxxxxx-Xxxxx Certification (the
"Certifying Person") by March 1 (with a ten day cure period) of each year in
which the Issuing Entity is subject to the reporting requirements of the
Exchange Act and otherwise within a reasonable period of time upon request, a
certification (a "Back-Up Certification") (in the form attached hereto as
Exhibit M) upon which the Certifying Person, the entity for which the Certifying
Person acts as an officer and such entity's officers, directors and affiliates
(collectively, with the Certifying Person, the "Certification Parties") can
reasonably rely. The senior officer of the Master Servicer in charge of the
master servicing function shall serve as the Certifying Person on behalf of the
Issuing Entity. Such officer of the Certifying Person can be contacted by e-mail
at xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx or by facsimile at 000-000-0000. In the
event any such party or Servicing Function Participant engaged by any such party
is terminated or resigns pursuant to the terms of this Agreement, or any other
applicable agreement, as the case may be, such party shall provide a Back-Up
Certification to the Master Servicer pursuant to this Section 3.18 with respect
to the period of time it was subject to this Agreement or any other applicable
agreement, as the case may be. Notwithstanding the foregoing, (i) the Master
Servicer and the Securities Administrator shall not be required to deliver a
Back-Up Certification to each other if both are the same Person and the Master
Servicer is the Certifying Person and (ii) the Master Servicer shall not be
obligated to sign the Xxxxxxxx-Xxxxx Certification in the event that it does not
receive any Back-Up Certification required to be furnished to it pursuant to
this section or any Servicing Agreement or Custodial Agreement.
(l) The Securities Administrator shall have no responsibility to file any
items with the Commission other than those specified in this section and the
Master Servicer shall execute any and all Form 10-Ds, 8-Ks and 10-Ks required
hereunder.
(m) On or prior to January 30 of the first year in which the Securities
Administrator is able to do so under applicable law, the Securities
Administrator shall prepare and file a Form 15 Suspension Notification relating
to the automatic suspension of reporting in respect of the Issuing Entity under
the Exchange Act.
(n) In the event that the Securities Administrator is unable to timely file
with the Commission all or any required portion of any Form 8-K, 10-D or 10-K
required to be filed by this Agreement because required disclosure information
was either not delivered to it or delivered to it after the delivery deadlines
set forth in this Agreement or for any other reason, the Securities
Administrator will promptly notify electronically the Depositor of such
inability to
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make a timely filing with the Commission. In the case of Form 10-D and 10-K, the
parties to this Agreement will cooperate to prepare and file a Form 12b-25 and a
10-D/A and 10K/A, as applicable, pursuant to Rule 12b-25 of the Exchange Act. In
the case of Form 8-K, the Securities Administrator will, upon receipt of all
required Form 8-K Disclosure Information and upon the approval and direction of
the Depositor, include such disclosure information on the next succeeding Form
10-D to be filed for the Issuing Entity. In the event that any previously filed
Form 8-K, 10-D or 10-K needs to be amended, in connection with any Additional
Form 10-D Disclosure (other than, in the case of Form 10-D, for the purpose of
restating any Monthly Statement), Additional Form 10-K Disclosure or Form 8-K
Disclosure Information, the Securities Administrator will electronically notify
the Depositor and such other parties to the transaction as are affected by such
amendment, and such parties will cooperate to prepare any necessary 8-K/A,
10-D/A or 10-K/A. Any Form 15, Form 12b-25 or any amendment to Form 8-K, 10-D or
10-K shall be signed by duly authorized representative or a senior officer in
charge of master servicing, as applicable, of the Master Servicer. The parties
to this Agreement acknowledge that the performance by the Master Servicer of its
duties under this Section 3.18 related to the timely preparation, execution and
filing of Form 15, a Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K is
contingent upon each such party performing its duties under this Section.
Neither the Master Servicer nor the Securities Administrator shall have any
liability for any loss, expense, damage or claim arising out of or with respect
to any failure to properly prepare, execute and/or timely file any such Form 15,
Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K, where such failure
results from the Securities Administrator's inability or failure to receive, on
a timely basis, any information from any other party hereto or any Servicer, any
Custodian or any Servicing Function Participant needed to prepare, arrange for
execution or file such Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D
or 10-K.
(o) The Depositor and the Securities Administrator agree to use their good
faith efforts to cooperate in complying with the requirements of this Section
3.18.
(p) Each of the parties agrees to provide to the Securities Administrator
such additional information related to such party as the Securities
Administrator may reasonably request, including evidence of the authorization of
the person signing any certificate or statement, financial information and
reports, and such other information related to such party or its performance
hereunder.
(q) Any notice or notification required to be delivered by the Securities
Administrator or Master Servicer to the Depositor pursuant to this Section 3.18,
may be delivered via facsimile to (000) 000-0000, via email to xxxx_xxxx@xx.xxx
or telephonically by calling Xxxx Park at (000) 000-0000.
(r) For the avoidance of doubt, any filing or deliverables required under
this Section 3.18 and Section 3.18 of the Stack I Agreement may be prepared,
delivered and filed in a consolidated manner. The Master Servicer, the
Securities Administrator and the Depositor may satisfy the requirements of this
Section 3.18 and Section 3.18 of the Stack I Agreement with a single set of
filings and deliverables addressing the requirements of both this Section 3.18
and Section 3.18 of the Stack I Agreement.
Section 3.19 Compliance with Regulation AB. Each of the parties hereto
acknowledges and agrees that the purpose of Sections 3.16, 3.17 and 3.18 is to
facilitate
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compliance by 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 the asset-backed
securities markets, advice of counsel, or otherwise in respect of the
requirements of Regulation AB and the parties shall comply with requests made by
the Depositor for delivery of additional or different information as the
Depositor may determine in good faith is necessary to comply with the provisions
of Regulation AB. Any such supplementation or modification shall be made in
accordance with Section 11.02 without the consent of the Certificateholders, and
may result in a change in the reports filed by the Securities Administrator on
behalf of the Issuing Entity under the Exchange Act.
Section 3.20 Servicing Rights Owner. At the Servicing Rights Owner's
Request, PHH shall resign as Servicer of the PHH Mortgage Loans upon the
selection and appointment of a successor servicer by the Servicer Rights Owner;
provided that the Servicing Rights Owner delivers to the Master Servicer, the
Trustee and the Securities Administrator a letter indicating that such successor
servicer designated by the Servicing Rights Owner meets the eligibility
requirements for a successor servicer, including that such successor servicer is
a "Qualified Servicer." Upon such appointment, at the date specified in such
letter such successor servicer will become the servicer pursuant to the terms of
this Agreement.
ARTICLE IV
ACCOUNTS
Section 4.01 Protected Accounts.
(a) The Master Servicer shall enforce the obligation of each Servicer to
establish and maintain a Protected Account in accordance with the applicable
Servicing Agreement, with records to be kept with respect thereto on a Mortgage
Loan by Mortgage Loan basis, into which accounts shall be deposited within two
Business Days (or as of such other time specified in the related Servicing
Agreement) of receipt all collections of principal and interest on any Mortgage
Loan and with respect to any REO Property received by a Servicer, including
Principal Prepayments, Insurance Proceeds, Liquidation Proceeds, Subsequent
Recoveries and advances made from the Servicer's own funds (less servicing
compensation as permitted by the applicable Servicing Agreement in the case of
the Servicer) and all other amounts to be deposited in the Protected Account.
The Servicer is hereby authorized to make withdrawals from and deposits to the
related Protected Account for purposes required or permitted by this Agreement.
To the extent provided in the related Servicing Agreement, the Protected Account
shall be held in a Designated Depository Institution and segregated on the books
of such institution in the name of the Trustee for the benefit of
Certificateholders.
(b) To the extent provided in the related Servicing Agreement, amounts on
deposit in a Protected Account may be invested in Permitted Investments in the
name of the Trustee for the benefit of Certificateholders and, except as
provided in the preceding paragraph, not commingled with any other funds, such
Permitted Investments to mature, or to be subject to redemption or withdrawal,
no later than the date on which such funds are required to be withdrawn for
deposit in the Master Servicer Collection Account, and shall be held until
required for such deposit. The income earned from Permitted Investments made
pursuant to this Section 4.01 shall be paid to
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the related Servicer under the applicable Servicing Agreement, and the risk of
loss of moneys required to be distributed to the Certificateholders resulting
from such investments shall be borne by and be the risk of the related Servicer,
as set forth in the applicable Servicing Agreement. The related Servicer (to the
extent provided in the related Servicing Agreement) shall deposit the amount of
any such loss in the Protected Account within two Business Days of receipt of
notification of such loss but not later than the second Business Day prior to
the Distribution Date on which the moneys so invested are required to be
distributed to the Certificateholders.
(c) To the extent provided in the related Servicing Agreement and subject
to this Article IV, on or before each Servicer Remittance Date, the related
Servicer shall withdraw or shall cause to be withdrawn from the Protected
Accounts and shall immediately deposit or cause to be deposited in the Master
Servicer Collection Account amounts representing the following collections and
payments (other than with respect to principal of or interest on the Mortgage
Loans due on or before the Cut-off Date) with respect to each Loan Group:
(i) Monthly Payments on the Mortgage Loans received or any related
portion thereof advanced by such Servicer pursuant to the related Servicing
Agreement which were due on or before the related Due Date, net of the
amount thereof comprising the Servicing Fees;
(ii) Principal Prepayments in Full and any Liquidation Proceeds
received by such Servicer with respect to such Mortgage Loans in the
related Prepayment Period, with interest to the date of prepayment or
liquidation, net of the amount thereof comprising the Servicing Fees;
(iii) Curtailments received by such Servicer for such Mortgage Loans
in the related Prepayment Period; and
(iv) Any amount to be used as a Monthly Advance.
(d) Withdrawals by the Master Servicer may be made from an Account only to
make remittances as provided in Section 4.01(c), 4.02 and 4.03; to reimburse the
Master Servicer or a Servicer for Monthly Advances which have been recovered by
subsequent collection from the related Mortgagor; to remove amounts deposited in
error; to remove fees, charges or other such amounts deposited on a temporary
basis; or to clear and terminate the account at the termination of this
Agreement in accordance with Section 10.01. As provided in Sections 4.01(c) and
4.02(b) certain amounts otherwise due to the Servicers may be retained by them
as set forth in the related Servicing Agreements and need not be deposited in
the Master Servicer Collection Account.
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Section 4.02 Master Servicer Collection Account.
(a) The Master Servicer shall establish and maintain in the name of the
Trustee, for the benefit of the Certificateholders, the Master Servicer
Collection Account as a segregated trust account or accounts. The Master
Servicer Collection Account may be a sub-account of the Distribution Account.
The Master Servicer will deposit in the Master Servicer Collection Account as
identified by the Master Servicer and as received by the Master Servicer, the
following amounts:
(i) Any amounts withdrawn from a Protected Account or other permitted
account;
(ii) Any Monthly Advance and any Compensating Interest Payments;
(iii) Any Insurance Proceeds, Liquidation Proceeds or Subsequent
Recoveries received by or on behalf of the Master Servicer or which were
not deposited in a Protected Account or other permitted account;
(iv) The repurchase price with respect to any Mortgage Loans
repurchased and all proceeds of any Mortgage Loans or property acquired in
connection with the optional termination of the trust;
(v) Any amounts required to be deposited with respect to losses on
investments of deposits in an Account; and
(vi) Any other amounts received by or on behalf of the Master Servicer
and required to be deposited in the Master Servicer Collection Account
pursuant to this Agreement.
(b) All amounts deposited to the Master Servicer Collection Account shall
be held by the Master Servicer in the name of the Trustee in trust for the
benefit of the Certificateholders in accordance with the terms and provisions of
this Agreement. The requirements for crediting the Master Servicer Collection
Account or the Distribution Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of (i) prepayment or late payment charges or assumption, tax service,
statement account or payoff, substitution, satisfaction, release and other like
fees and charges and (ii) the items enumerated in Subsections 4.05(a)(i), (ii),
(iii), (iv), (vi), (vii), (viii), (ix), (xi) and (xii) with respect to the
Securities Administrator, need not be credited by the Master Servicer or the
related Servicer to the Distribution Account or the Master Servicer Collection
Account, as applicable. In the event that the Master Servicer shall deposit or
cause to be deposited to the Distribution Account any amount not required to be
credited thereto, the Securities Administrator, upon receipt of a written
request therefor signed by a Servicing Officer of the Master Servicer, shall
promptly transfer such amount to the Master Servicer from the Distribution
Account, any provision herein to the contrary notwithstanding.
(c) The amount at any time credited to the Master Servicer Collection
Account shall be invested, in the name of the Trustee, or its nominee, for the
benefit of the Certificateholders, in Permitted Investments as directed by
Master Servicer. All Permitted Investments shall mature
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or be subject to redemption or withdrawal on or before, and shall be held until,
the next succeeding Distribution Account Deposit Date. Any and all investment
earnings on amounts on deposit in the Master Servicer Collection Account from
time to time shall be for the account of the Master Servicer. The Master
Servicer from time to time shall be permitted to withdraw or receive
distribution of any and all investment earnings from the Master Servicer
Collection Account. The risk of loss of moneys required to be distributed to the
Certificateholders resulting from such investments shall be borne by and be the
risk of the Master Servicer. The Master Servicer shall deposit the amount of any
such loss in the Master Servicer Collection Account within two Business Days of
receipt of notification of such loss but not later than the second Business Day
prior to the Distribution Date on which the moneys so invested are required to
be distributed to the Certificateholders.
(d) For the avoidance of doubt, it is agreed that the Master Servicer shall
establish and maintain in the name of the Trustee, for the benefit of the
holders of the Stack I Certificates, a separate segregated trust account or
accounts pursuant to Section 4.02 of the Stack I Agreement.
Section 4.03 Permitted Withdrawals and Transfers from the Master Servicer
Collection Account.
(a) The Master Servicer will, from time to time on demand of the Master
Servicer, the Trustee or the Securities Administrator, make or cause to be made
such withdrawals or transfers from the Master Servicer Collection Account as the
Master Servicer has designated for such transfer or withdrawal pursuant to the
Servicing Agreements. The Master Servicer may clear and terminate the Master
Servicer Collection Account pursuant to Section 10.01 and remove amounts from
time to time deposited in error.
(b) On an ongoing basis, the Master Servicer shall withdraw from the Master
Servicer Collection Account (i) any expenses recoverable by the Trustee, the
Master Servicer or the Securities Administrator pursuant to this Agreement,
including but not limited to Sections 2.01(b), 3.03, 7.04 and 9.05 and (ii) any
amounts payable to the Master Servicer as set forth in Section 3.14.
(c) In addition, on or before each Distribution Account Deposit Date, the
Master Servicer shall deposit in the Distribution Account (or remit to the
Securities Administrator for deposit therein) any Monthly Advances required to
be made by the Master Servicer with respect to the Mortgage Loans.
(d) No later than 3:00 p.m. New York time on each Distribution Account
Deposit Date, the Master Servicer will transfer all Available Funds on deposit
in the Master Servicer Collection Account with respect to the related
Distribution Date to the Securities Administrator for deposit in the
Distribution Account.
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Section 4.04 Distribution Account.
(a) The Securities Administrator shall establish and maintain in the name
of the Trustee, for the benefit of the Certificateholders, the Distribution
Account as a segregated trust account or accounts.
(b) All amounts deposited to the Distribution Account shall be held by the
Securities Administrator in the name of the Trustee in trust for the benefit of
the Certificateholders in accordance with the terms and provisions of this
Agreement.
(c) The Distribution Account shall constitute a trust account of the Trust
Fund segregated on the books of the Securities Administrator and held by the
Securities Administrator in trust in its Corporate Trust Office, and the
Distribution Account and the funds deposited therein shall not be subject to,
and shall be protected to the maximum extent permitted by applicable law from,
all claims, liens, and encumbrances of any creditors or depositors of the
Securities Administrator, the Trustee or the Master Servicer (whether made
directly, or indirectly through a liquidator or receiver of the Securities
Administrator, the Trustee or the Master Servicer). The Distribution Account
shall be an Eligible Account. The amount at any time credited to the
Distribution Account shall be (i) fully insured by the FDIC to the maximum
coverage provided thereby or (ii) invested in the name of the Trustee, in such
Permitted Investments selected by the Master Servicer or deposited in demand
deposits with such depository institutions as selected by the Master Servicer,
provided that time deposits of such depository institutions would be a Permitted
Investment. All Permitted Investments shall mature or be subject to redemption
or withdrawal on or before, and shall be held until, the next succeeding
Distribution Date if the obligor for such Permitted Investment is the Master
Servicer or, if such obligor is any other Person, the Business Day preceding
such Distribution Date. All investment earnings on amounts on deposit in the
Distribution Account or benefit from funds uninvested therein from time to time
shall be for the account of the Securities Administrator. The Securities
Administrator shall be permitted to withdraw or receive distribution of any and
all investment earnings from the Distribution Account on each Distribution Date.
If there is any loss on a Permitted Investment or demand deposit, the Securities
Administrator shall deposit such amount in the Distribution Account. With
respect to the Distribution Account and the funds deposited therein, the
Securities Administrator shall take such action as may be necessary to ensure
that the Certificateholders shall be entitled to the priorities afforded to such
a trust account (in addition to a claim against the estate of the Trust) as
provided by 12 U.S.C. Section 92a(e), and applicable regulations pursuant
thereto, if applicable, or any applicable comparable state statute applicable to
state chartered banking corporations.
(d) For the avoidance of doubt, the Securities Administrator shall
establish and maintain in the name of the Trustee, for the benefit of the
holders of the Stack I Certificates, a separate segregated trust account or
accounts pursuant to Section 4.04 of the Stack I Agreement.
Section 4.05 Permitted Withdrawals and Transfers from the Distribution
Account.
(a) The Securities Administrator will, from time to time on demand of the
Master Servicer, make or cause to be made such withdrawals or transfers from the
Distribution Account as the Master Servicer has designated for such transfer or
withdrawal pursuant to the Servicing Agreements for the following purposes
(limited in the case of amounts due the Master Servicer
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to those not withdrawn from the Master Servicer Collection Account in accordance
with the terms of this Agreement):
(i) to reimburse the Master Servicer or any Servicer for any Monthly
Advance of its own funds or any advance of such Servicer's own funds, the
right of the Master Servicer or a Servicer to reimbursement pursuant to
this subclause (i) being limited to amounts received on a particular
Mortgage Loan (including, for this purpose, the Purchase Price therefor,
Insurance Proceeds and Liquidation Proceeds) which represent late payments
or recoveries of the principal of or interest on such Mortgage Loan
respecting which such Monthly Advance or advance was made;
(ii) to reimburse the Master Servicer or any Servicer from Insurance
Proceeds or Liquidation Proceeds relating to a particular Mortgage Loan for
amounts expended by the Master Servicer or such Servicer in good faith as a
Servicing Advance in connection with the restoration of the related
Mortgaged Property which was damaged by an Uninsured Cause or in connection
with the liquidation of such Mortgage Loan;
(iii) to reimburse the Master Servicer or any Servicer from Insurance
Proceeds relating to a particular Mortgage Loan for insured expenses
incurred with respect to such Mortgage Loan and to reimburse the Master
Servicer or such Servicer from Liquidation Proceeds from a particular
Mortgage Loan for Liquidation Expenses incurred with respect to such
Mortgage Loan; provided that the Master Servicer shall not be entitled to
reimbursement for Liquidation Expenses with respect to a Mortgage Loan to
the extent that (i) any amounts with respect to such Mortgage Loan were
paid as Excess Liquidation Proceeds pursuant to clause (xi) of this
Subsection 4.03 (a) to the Master Servicer; and (ii) such Liquidation
Expenses were not included in the computation of such Excess Liquidation
Proceeds;
(iv) to pay the Master Servicer or any Servicer, as appropriate, from
Liquidation Proceeds or Insurance Proceeds received in connection with the
liquidation of any Mortgage Loan, the amount which it or such Servicer
would have been entitled to receive under subclause (ix) of this Subsection
4.03(a) as servicing compensation on account of each defaulted scheduled
payment on such Mortgage Loan if paid in a timely manner by the related
Mortgagor;
(v) to pay the Master Servicer or any Servicer from the Purchase Price
for any Mortgage Loan, the amount which it or such Servicer would have been
entitled to receive under subclause (ix) of this Subsection 4.03 (a) as
servicing compensation;
(vi) to reimburse the Master Servicer or any Servicer for advances of
funds pursuant to Sections, and the right to reimbursement pursuant to this
subclause being limited to amounts received on the related Mortgage Loan
(including, for this purpose, the Purchase Price therefor, Insurance
Proceeds and Liquidation Proceeds) which represent late recoveries of the
payments for which such advances were made;
(vii) to reimburse the Master Servicer or any Servicer for any Monthly
Advance or advance, after a Realized Loss has been allocated with respect
to the related
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Mortgage Loan if the Monthly Advance or advance has not been reimbursed
pursuant to clauses (i) and (vi);
(viii) to pay the Master Servicer as set forth in Section 3.14;
(ix) to reimburse the Master Servicer for expenses, costs and
liabilities incurred by and reimbursable to it pursuant to this Agreement,
including but not limited to Sections 3.03, 7.04(c) and (d);
(x) to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds to the extent not retained by
the related Servicer;
(xi) to reimburse or pay any Servicer any such amounts as are due
thereto under the applicable Servicing Agreement and have not been retained
by or paid to the Servicer, to the extent provided in the related Servicing
Agreement;
(xii) to reimburse the Trustee or the Securities Administrator for
expenses, costs and liabilities incurred by or reimbursable to it pursuant
to this Agreement;
(xiii) to remove amounts deposited in error; and
(xiv) to clear and terminate the Distribution Account pursuant to
Section 9.01.
(b) The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Distribution Account pursuant to subclauses (i) through
(vi), inclusive, and (viii) or with respect to any such amounts which would have
been covered by such subclauses had the amounts not been retained by the Master
Servicer without being deposited in the Distribution Account under Section
4.02(b).
(c) On each Distribution Date, the Securities Administrator shall
distribute the Available Funds for each Loan Group to the Holders of the
Certificates in accordance with Section 6.01.
ARTICLE V
CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be executed by manual
or facsimile signature on behalf of the Securities Administrator by an
authorized officer. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures were affixed, authorized
to sign on behalf of the Securities Administrator shall bind the Issuing Entity,
notwithstanding that such individuals or any of them have ceased to be so
authorized prior to the authentication and delivery of such Certificates or did
not hold such offices at the date of such authentication and delivery. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form set forth as attached hereto executed
by the Securities Administrator by manual signature, and such certificate of
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
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authentication. On the Closing Date, the Securities Administrator shall
authenticate the Certificates to be issued at the written direction of the
Depositor, or any Affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer and Exchange of
Certificates.
(a) The Securities Administrator shall maintain, or cause to be maintained
in accordance with the provisions of Section 5.09 hereof, a Certificate Register
for the Trust Fund in which, subject to the provisions of subsections (b) and
(c) below and to such reasonable regulations as it may prescribe, the Securities
Administrator shall provide for the registration of Certificates and of
Transfers and exchanges of Certificates as herein provided. Upon surrender for
registration of Transfer of any Certificate, the Securities Administrator shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same Class and of like
aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Securities Administrator. Whenever any
Certificates are so surrendered for exchange, the Securities Administrator shall
execute, authenticate and deliver the Certificates that the Certificateholder
making the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of Transfer or exchange shall be accompanied by a
written instrument of Transfer in form satisfactory to the Securities
Administrator duly executed by the holder thereof or his attorney duly
authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required. All
Certificates surrendered for registration of Transfer or exchange shall be
canceled and subsequently destroyed by the Securities Administrator in
accordance with such Securities Administrator's customary procedures.
(b) No Transfer of a Class C or Class P Certificate shall be made unless
such Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a Transfer is to be made in reliance upon an exemption
from the Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
Transfer and such Certificateholder's prospective transferee shall (except with
respect to the initial transfer of a Class C or Class P Certificate by Xxxxxxx
Xxxxx & Co.) each certify to each Securities Administrator in writing the facts
surrounding the Transfer in substantially the form set forth in Exhibit F-1 (the
"Transferor Representation Letter") and (i) deliver a letter in substantially
the form of either Exhibit F-2 (the "Investor Representation Letter") or Exhibit
F-3 (the "Rule 144A Letter") or (ii) there shall be delivered to the Securities
Administrator an Opinion of Counsel that such Transfer may be made pursuant to
an exemption from the Securities Act, which Opinion of Counsel shall not be an
expense of the Depositor or the Securities Administrator. The Depositor shall
provide to any Holder of a Class C or Class P Certificate and any prospective
transferee designated by any such Holder, information regarding the related
Certificates and the Mortgage Loans and such other information as shall be
necessary to satisfy the condition to eligibility set
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forth in Rule 144A(d)(4) for Transfer of any such Certificate without
registration thereof under the Securities Act pursuant to the registration
exemption provided by Rule 144A. The Securities Administrator shall cooperate
with the Depositor in providing the Rule 144A information referenced in the
preceding sentence, including providing to the Depositor such information in the
possession of the Securities Administrator regarding the Certificates, the
Mortgage Loans and other matters regarding the Trust Fund as the Depositor shall
reasonably request to meet its obligation under the preceding sentence. Each
Holder of a Class C or Class P Certificate desiring to effect such Transfer
shall, and does hereby agree to, indemnify the Depositor and the Securities
Administrator against any liability that may result if the Transfer is not so
exempt or is not made in accordance with such federal and state laws.
No transfer of an ERISA Restricted Certificate or a Class A-R Certificate
will be registered unless the Securities Administrator has received (A) a
representation 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 subject to any state, local, federal, non-U.S. or other law substantively
similar to the foregoing provisions of ERISA or the Code ("Similar Law")
(collectively, a "Plan"), and is not directly or indirectly acquiring such
Certificate for, on behalf of, or with any assets of any such Plan, or (B)
solely in the case of an ERISA Restricted Certificate (I) if the Certificate has
been the subject of an ERISA-Qualifying Underwriting, a representation to the
effect that such transferee is an insurance company that is acquiring the
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 (II) solely in the case of a
Definitive Certificate, an Opinion of Counsel satisfactory to the Securities
Administrator, and upon which the Securities Administrator shall be entitled to
rely, to the effect that the acquisition and holding of such Certificate will
not constitute or result in a nonexempt prohibited transaction under Title I of
ERISA or Section 4975 of the Code, or a violation of Similar Law, and will not
subject the Securities Administrator, the Master Servicer, the Trustee or the
Depositor to any obligation in addition to those expressly undertaken in this
Agreement, which Opinion of Counsel shall not be an expense of the Securities
Administrator, the Master Servicer, the Trustee or the Depositor.
Except in the case of a Definitive Certificate, the representations set
forth in the immediately preceding paragraph of this Subsection 5.02(b), other
than clause (B)(II) in the immediately preceding paragraph, shall be deemed to
have been made to the Securities Administrator 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 Securities Administrator of a
representation or an Opinion of Counsel satisfactory to the Securities
Administrator as described above shall be void and of no effect. The Securities
Administrator shall not be under any liability to any Person for any
registration or transfer of any ERISA Restricted Certificate or a Class A-R
Certificate that is in fact not permitted by this Section 5.02(b), nor shall the
Trustee or the Securities Administrator be under any liability for making any
payments due on such Certificate to the Holder thereof or taking any other
action
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with respect to such Holder under the provisions of this Agreement so long as
the transfer was registered by the Securities Administrator in accordance with
the foregoing requirements. The Trustee or the Securities Administrator shall be
entitled, but not obligated, to recover from any Holder of any ERISA Restricted
Certificate or Class A-R Certificate that was in fact a Plan and that held such
Certificate in violation of this Section 5.02(b) all payments made on such ERISA
Restricted Certificate or a 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.
(c) Each Person who has or who acquires any Ownership Interest in a Class
A-R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class A-R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a Class
A-R Certificate shall be a Permitted Transferee and shall promptly notify
the Securities Administrator of any change or impending change in its
status as a Permitted Transferee.
(ii) No Ownership Interest in a Class A-R Certificate may be
purchased, transferred or sold, directly or indirectly, except in
accordance with the provisions hereof. No Ownership Interest in a Class A-R
Certificate may be registered on the Closing Date or thereafter
transferred, and the Securities Administrator shall not register the
Transfer of any Class A-R Certificate unless, in addition to the
certificates required to be delivered to the Securities Administrator under
subparagraph (b) above, the Securities Administrator shall have been
furnished with an affidavit (a "Transferee's Letter") of the initial owner
or the proposed transferee in the form attached hereto as Exhibit E-1 and
an affidavit (a "Transferor Certificate") of the proposed transferor in the
form attached hereto as Exhibit E-2. In the absence of a contrary
instruction from the transferor of a Class A-R Certificate, declaration
(11) in Appendix A of the Transferee's Letter may be left blank. If the
transferor requests by written notice to the Securities Administrator prior
to the date of the proposed transfer that one of the two other forms of
declaration (11) in Appendix A of the Transferee's Letter be used, then the
requirements of this Section 5.02(c)(ii) shall not have been satisfied
unless the Transferee's Letter includes such other form of declaration.
(iii) Each Person holding or acquiring any Ownership Interest in a
Class A-R Certificate shall agree (A) to obtain a Transferee's Letter from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Class A-R Certificate, (B) to obtain a Transferee's Letter
from any Person for whom such Person is acting as nominee, trustee or agent
in connection with any Transfer of a Class A-R Certificate and (C) not to
Transfer its Ownership Interest in a Class A-R Certificate or to cause the
Transfer of an Ownership Interest in a Class A-R Certificate to any other
Person if it has actual knowledge that such Person is not a Permitted
Transferee. Further, no transfer, sale or other disposition of any
Ownership Interest in a Class A-R Certificate may be made to a person who
is not a U.S. Person (within the meaning of Section 7701 of the Code)
unless such person furnishes the transferor and the Securities
Administrator with a duly completed and effective Internal Revenue Service
Form W-8ECI (or any successor
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thereto) and the Securities Administrator consents to such transfer, sale
or other disposition in writing.
(iv) Any attempted or purported Transfer of any Ownership Interest in
a Class A-R Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Class A-R Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Class A-R Certificate. The Securities Administrator shall
be under no liability to any Person for any registration of Transfer of a
Class A-R Certificate that is in fact not permitted by Section 5.02(b) and
this Section 5.02(c) or for making any payments due on such Certificate to
the Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transferee's Letter. The Securities
Administrator shall be entitled but not obligated to recover from any
Holder of a Class A-R Certificate that was in fact not a Permitted
Transferee at the time it became a Holder or, at such subsequent time as it
became other than a Permitted Transferee, all payments made on such Class
A-R Certificate at and after either such time. Any such payments so
recovered by the Securities Administrator shall be paid and delivered by
the Securities Administrator to the last preceding Permitted Transferee of
such Certificate.
(v) At the option of the Holder of the Class A-R Certificate, the
Class LTR Interest, the Residual Interest and the residual interest in any
REMIC created under the Stack I Agreement may be severed and represented by
separate certificates (with the separate certificate that represents the
Residual Interest also representing all rights of the Class A-R Certificate
to distributions attributable to an interest rate on the Class A-R
Certificate in excess of the REMIC Pass-Through Rate); provided, however,
that such separate certification may not occur until the Securities
Administrator receives a REMIC Opinion to the effect that separate
certification in the form and manner proposed would not result in the
imposition of federal tax upon the Issuing Entity or any of the REMICs
provided for herein or provided for under the Stack I Agreement or cause
any of the REMICs provided for herein or provided for under the Stack I
Agreement to fail to qualify as a REMIC; and provided further, that the
provisions of Sections 5.02(b) and (c) will apply to each such separate
certificate as if the separate certificate were a Class A-R Certificate.
If, as evidenced by a REMIC Opinion, it is necessary to preserve the REMIC
status of any of the REMICs provided for herein or provided for under the
Stack I Agreement, the Class LTR Interest, the Residual Interest and the
residual interest in any REMIC created under the Stack I Agreement shall be
severed and represented by separate Certificates (with the separate
certificate that represents the Residual Interest also representing all
rights of the Class A-R Certificate to distributions attributable to an
interest rate on the Class A-R Certificate in excess of the REMIC
Pass-Through Rate).
The restrictions on Transfers of a Class A-R Certificate set forth in this
Section 5.02(c) shall cease to apply (and the applicable portions of the legend
on a Class A-R Certificate may be deleted) with respect to Transfers occurring
after delivery to the Securities Administrator of an Opinion of Counsel, which
Opinion of Counsel shall not be an expense of the Securities
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Administrator or the Depositor, to the effect that the elimination of such
restrictions will not cause any of the REMICs provided for herein to fail to
qualify as a REMIC at any time that the Certificates are outstanding or result
in the imposition of any tax on the Issuing Entity, any REMIC provided for
herein, a Certificateholder or another Person. Each Person holding or acquiring
any Ownership Interest in a Class A-R Certificate hereby consents to any
amendment of this Agreement that, based on an Opinion of Counsel furnished to
the Securities Administrator, is reasonably necessary (a) to ensure that the
record ownership of, or any beneficial interest in, a Class A-R Certificate is
not transferred, directly or indirectly, to a Person that is not a Permitted
Transferee and (b) to provide for a means to compel the Transfer of a Class A-R
Certificate that is held by a Person that is not a Permitted Transferee to a
Holder that is a Permitted Transferee.
(d) The transferor of the Class A-R Certificate shall notify the Securities
Administrator in writing upon the transfer of the Class A-R Certificate.
(e) The preparation and delivery of all certificates, opinions and other
writings referred to above in this Section 5.02 shall not be an expense of the
Issuing Entity, the Depositor or the Securities Administrator.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If (a) any
mutilated Certificate is surrendered to the Securities Administrator or the
Securities Administrator receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and of the ownership thereof and
(b) there is delivered to the Securities Administrator such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Securities Administrator that such Certificate has been
acquired by a bona fide purchaser, the Securities Administrator shall execute,
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like Class, tenor
and Percentage Interest. In connection with the issuance of any new Certificate
under this Section 5.03, the Securities Administrator may require the payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Securities Administrator) connected therewith. Any replacement
Certificate issued pursuant to this Section 5.03 shall constitute complete and
indefeasible evidence of ownership in the Trust Fund, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time. All Certificates surrendered to the Securities Administrator under the
terms of this Section 5.03 shall be canceled and destroyed by the Securities
Administrator in accordance with its standard procedures without liability on
its part.
Section 5.04 Persons Deemed Owners. The Securities Administrator and any
agent of the Securities Administrator may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Securities Administrator, nor any agent of the
Securities Administrator shall be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and Addresses. If
three or more Certificateholders (a) request such information in writing from
the Securities Administrator, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and
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(c) provide a copy of the communication that such Certificateholders propose to
transmit or if the Depositor shall request such information in writing from the
Securities Administrator, then the Securities Administrator shall, within ten
Business Days after the receipt of such request, provide the Depositor or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of the Trust Fund held by the Securities Administrator, if
any. The Depositor and every Certificateholder, by receiving and holding a
Certificate, agree that the Securities Administrator shall not be held
accountable by reason of the disclosure of any such information as to the list
of the Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 5.06 Book-Entry Certificates. The Regular Certificates, upon
original issuance, shall be issued in the form of one or more typewritten
Certificates representing the Book-Entry Certificates, to be delivered to the
Depository by or on behalf of the Depositor. The Book-Entry Certificates shall
initially be registered on the Certificate Register in the name of the
Depository or its nominee, and no Certificate Owner of a Book-Entry Certificate
will receive a definitive certificate representing such Certificate Owner's
interest in such Certificates, except as provided in Section 5.08. Unless and
until definitive, fully registered Certificates ("Definitive Certificates") have
been issued to the Certificate Owners of the Book-Entry Certificates pursuant to
Section 5.08:
(a) the provisions of this Section shall be in full force and effect;
(b) the Depositor and the Securities Administrator may deal with the
Depository and the Depository Participants for all purposes (including the
making of distributions) as the authorized representative of the respective
Certificate Owners of the Book-Entry Certificates;
(c) registration of the Book-Entry Certificates may not be transferred by
the Securities Administrator except to another Depository;
(d) the rights of the respective Certificate Owners of the Book-Entry
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of the Book-Entry Certificates and the Depository and/or the
Depository Participants. Pursuant to the Depository Agreement, unless and until
Definitive Certificates are issued pursuant to Section 5.08, the Depository will
make book-entry transfers among the Depository Participants and receive and
transmit distributions of principal and interest on the related Certificates to
such Depository Participants;
(e) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants;
(f) the Securities Administrator may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to its
Depository Participants; and
(g) to the extent that the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of the
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aggregate unpaid principal amount of any Class of Certificates, such direction
or consent may be given by Certificate Owners (acting through the Depository and
the Depository Participants) owning Book-Entry Certificates evidencing the
requisite percentage of principal amount of such Class of Certificates.
Section 5.07 Notices to Depository. Whenever any notice or other
communication is required to be given to Certificateholders of the Class with
respect to which Book-Entry Certificates have been issued, unless and until
Definitive Certificates shall have been issued to the related Certificate
Owners, the Securities Administrator shall give all such notices and
communications to the Depository.
Section 5.08 Definitive Certificates. If, after Book-Entry Certificates
have been issued with respect to any Certificates, (a) the Depository or the
Depositor advises the Securities Administrator that the Depository is no longer
willing, qualified or able to discharge properly its responsibilities under the
Depository Agreement with respect to such Certificates and the Securities
Administrator or the Depositor is unable to locate a qualified successor, (b)
the Depositor notifies the Securities Administrator and the Depository of its
intent to terminate the book-entry system through the Depository and, upon
receipt of notice of such intent from the Depository, the Certificate Owners of
the Book-Entry Certificates agree to initiate such termination or (c) after the
occurrence and continuation of an Event of Default, Certificate Owners of such
Book-Entry Certificates having not less than 51% of the Voting Rights evidenced
by any Class of Book-Entry Certificates advise the Securities Administrator and
the Depository in writing through the Depository Participants that the
continuation of a book-entry system with respect to Certificates of such Class
through the Depository (or its successor) is no longer in the best interests of
the Certificate Owners of such Class, then the Securities Administrator shall
notify all Certificate Owners of such Book-Entry Certificates, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners of such Class requesting the same.
The Depositor shall provide the Securities Administrator with an adequate
inventory of certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon surrender to the Securities Administrator of any such
Certificates by the Depository, accompanied by registration instructions from
the Depository for registration, the Securities Administrator shall authenticate
and deliver such Definitive Certificates. Neither the Depositor nor the
Securities Administrator shall be liable for any delay in delivery of such
instructions and each may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of such Definitive
Certificates, all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed by
the Securities Administrator, to the extent applicable with respect to such
Definitive Certificates and the Securities Administrator shall recognize the
Holders of such Definitive Certificates as Certificateholders hereunder.
Section 5.09 Maintenance of Office or Agency. The Securities Administrator
will maintain or cause to be maintained at its expense an office or offices or
agency or agencies where Certificates may be surrendered for registration of
transfer or exchange. The Securities Administrator initially designates its
offices at Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000,
Attention: Client Service Manager - Xxxxxxx Xxxxx Mortgage Investors Trust,
Series 2006-AF2 as offices for such purposes. The Securities Administrator will
give prompt written notice to the Certificateholders of any change in such
location of any such office or
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agency. For the avoidance of doubt, the Securities Administrator may satisfy the
requirements of both this Section 5.09 and Section 5.09 of the Stack I Agreement
by maintaining a single office or agency.
ARTICLE VI
PAYMENTS TO CERTIFICATEHOLDERS
Section 6.01 Distributions on the Stack II Certificates.
(a) [Reserved]
(b) On each Distribution Date, amounts on deposit in the Distribution
Account shall be treated for federal income tax purposes as applied to
distributions on the interests in the Lower Tier REMIC in an amount sufficient
to make the distributions on the respective Certificates on such Distribution
Date in accordance with the provisions of this Section 6.01.
On each Distribution Date, the interest distributable with respect to the
Stack II Certificates is the interest which has accrued thereon at the then
applicable related Certificate Rate during the related Accrual Period less
applicable related Prepayment Interest Shortfalls, if any.
All calculations of interest on the Stack II Certificates will be made on
the basis of a 360-day year and the actual number of days elapsed in the
applicable Accrual Period.
(c) On each Distribution Date, the Stack II Interest Funds for such
Distribution Date are required to be distributed in the following order of
priority, until such Stack II Interest Funds have been fully distributed:
(i) to the Class P Certificates, any Prepayment Penalties
collected on the Prepayment Penalty Mortgage Loans and (A) any amounts
paid by the Sponsor or the related Servicer in respect of Prepayment
Penalties pursuant to this Agreement or the related Servicing
Agreement and (B) any amounts received in respect of any
indemnification paid as a result of a Prepayment Penalty being
unenforceable in breach of the representations and warranties set
forth in the Stack II Mortgage Loan Purchase Agreement received during
the related Prepayment Period;
(ii) concurrently, to each class of the Stack II Senior
Certificates, the Current Interest and any Interest Carry Forward
Amount with respect to each such class; provided, however, that if
Stack II Interest Funds are insufficient to make a full distribution
of the aggregate Current Interest and the aggregate Interest Carry
Forward Amount to the Stack II Senior Certificates, Stack II Interest
Funds will be distributed pro rata among each class of the Stack II
Senior Certificates based upon the ratio of (x) the Current Interest
and Interest Carry Forward Amount for each class of the Stack II
Senior Certificates to (y) the total amount of Current Interest and
any Interest Carry Forward Amount for the Stack II Senior Certificates
in the aggregate;
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(iii) to the Class MV-1 Certificates, the Current Interest for
such class and any Interest Carry Forward Amount with respect to such
class;
(iv) to the Class MV-2 Certificates, the Current Interest for
such class and any Interest Carry Forward Amount with respect to such
class;
(v) to the Class MV-3 Certificates, the Current Interest for such
class and any Interest Carry Forward Amount with respect to such
class;
(vi) to the Class MV-4 Certificates, the Current Interest for
such class and any Interest Carry Forward Amount with respect to such
class;
(vii) to the Class MV-5 Certificates, the Current Interest for
such class and any Interest Carry Forward Amount with respect to such
class;
(viii) to the Class MV-6 Certificates, the Current Interest for
such class and any Interest Carry Forward Amount with respect to such
class;
(ix) to the Class BV-1 Certificates, the Current Interest for
each such class and any Interest Carry Forward Amount with respect to
each such class;
(x) to the Class BV-2 Certificates, the Current Interest for each
such class and any Interest Carry Forward Amount with respect to each
such class;
(xi) to the Class BV-3 Certificates, the Current Interest for
each such class and any Interest Carry Forward Amount with respect to
each such class; and
(xii) any remainder pursuant to Section 6.01(g) hereof.
On each Distribution Date, subject to the proviso in (ii) above, the Stack
II Interest Funds received on the Group 2 Mortgage Loans will be deemed to be
distributed to the Class A-R and Class AV-1 Certificates and Stack II Interest
Funds received on the Group 3 Mortgage Loans will be deemed to be distributed to
the Class AV-2 Certificates, in each case, until the related Current Interest
and Interest Carry Forward Amount of each such class or classes of Stack II
Senior Certificates for such Distribution Date has been paid in full.
Thereafter, Stack II Interest Funds not required for such distributions are
available to be applied to if necessary, to the class or classes of Stack II
Senior Certificates that are not related to such group of Mortgage Loans.
With respect to any Distribution Date, to the extent that the Prepayment
Interest Shortfall exceeds the Compensating Interest Payment payable by the
Servicers or the Master Servicer, such amount shall reduce the Current Interest
with respect to each Class of Certificates, pro rata, based upon the amount of
interest each such Class would otherwise be entitled to receive on such
Distribution Date.
(d) [RESERVED]
(e) On each Distribution Date, the Securities Administrator shall, to the
extent of funds then available, make the following distributions from the
Distribution Account of an amount equal to the Stack II Principal Distribution
Amount in the following order of priority,
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and each such distribution shall be made only after all distributions pursuant
to Section 6.01(c) above shall have been made until such amount shall have been
fully distributed for such Distribution Date:
(i) to the Stack II Senior Certificates, the Stack II Senior
Principal Distribution Amount shall be distributed as follows:
(1) the Group 2 Principal Distribution Amount shall be
distributed as follows: (I) first, to the Class A-R Certificate until
its Class Certificate Balance has been reduced to zero, and second, to
the Class AV-1 Certificates, until the Class Certificate Balance of
such Class has been reduced to zero; and
(2) the Group 3 Principal Distribution Amount will be
distributed, pro rata, based on the Class Certificate Balance for each
Class of the Class AV-2 Certificates, (A) sequentially, to the Class
AV-2A Certificates until the Class Certificate Balance thereof has
been reduced to zero, then to the Class AV-2B Certificates until the
Class Certificate Balance thereof has been reduced to zero, and then
to the Class AV-2C Certificates until the Class Certificate Balance
thereof has been reduced to zero and (B) to the Class AV-2D
Certificates; provided, however, that on and after the Distribution
Date on which the aggregate Class Certificate Balance of the Class MV,
Class BV and Class C Certificates has been reduced to zero and the
Stated Principal Balance of the Mortgage Loans is equal to or less
than the aggregate Class Certificate Balance of the Stack II Senior
Certificates, any principal distributions allocated first to the Class
AV-2A, Class AV-2B, Class AV-2C are required to be allocated pro rata,
among such classes, based on their respective Class Certificate
Balances, until their Class Certificate Balances have been reduced to
zero, and then to the Class AV-2D Certificates, until its Class
Certificate Balance is reduced to zero;
(ii) to the Class MV-1 Certificates, the Class MV-1 Principal
Distribution Amount;
(iii) to the Class MV-2 Certificates, the Class MV-2 Principal
Distribution Amount;
(iv) to the Class MV-3 Certificates, the Class MV-3 Principal
Distribution Amount;
(v) to the Class MV-4 Certificates, the Class MV-4 Principal
Distribution Amount;
(vi) to the Class MV-5 Certificates, the Class MV-5 Principal
Distribution Amount;
(vii) to the Class MV-6 Certificates, the Class MV-6 Principal
Distribution Amount;
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(viii) to the Class BV-1 Certificates, the Class BV-1 Principal
Distribution Amount;
(ix) to the Class BV-2 Certificates, the Class BV-2 Principal
Distribution Amount;
(x) to the Class BV-3 Certificates, the Class BV-3 Principal
Distribution Amount; and
(xi) any remainder pursuant to Section 6.01(g) hereof.
(f) [RESERVED]
(g) On each Distribution Date, the Securities Administrator shall, to the
extent of Stack II Interest Funds and Stack II Principal Funds then available,
make the following distributions up to the following amounts from the
Distribution Account of the remainders pursuant to Section 6.01(c)(xii) and
(e)(xi) hereof and each such distribution shall be made only after all
distributions pursuant to Sections 6.01(c) and (e) above shall have been made
until such remainders shall have been fully distributed for such Distribution
Date:
(i) to the Stack II Senior Certificates, any amounts due as
described in the same order of priority as set forth in Section
6.01(c)(ii) to the extent unpaid by Stack II Interest Funds;
(ii) to the Stack II Subordinate Certificates, any amounts due as
described in the same order of priority as set forth in Section
6.01(c)(iii) through (x) to the extent unpaid by Stack II Interest
Funds;
(iii) the Stack II Extra Principal Distribution Amount;
(iv) to the Class MV-1 Certificates, any Unpaid Realized Loss
Amount for such class;
(v) to the Class MV-2 Certificates, any Unpaid Realized Loss
Amount for such class;
(vi) to the Class MV-3 Certificates, any Unpaid Realized Loss
Amount for such class;
(vii) to the Class MV-4 Certificates, any Unpaid Realized Loss
Amount for such class;
(viii) to the Class MV-5 Certificates, any Unpaid Realized Loss
Amount for such class;
(ix) to the Class MV-6 Certificates, any Unpaid Realized Loss
Amount for such class;
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(x) to the Class BV-1 Certificates, any Unpaid Realized Loss
Amount for such class;
(xi) to the Class BV-2 Certificates, any Unpaid Realized Loss
Amount for such class;
(xii) to the Class BV-3 Certificates, any Unpaid Realized Loss
Amount for such class;
(xiii) to the Stack II Certificates, on a pro rata basis, based
upon outstanding Floating Rate Certificate Carryover for each such
Class, the Floating Rate Certificate Carryover for each such Class;
and
(xiv) the remainder pursuant to Section 6.01(h) hereof.
(h) on each Distribution Date, the Securities Administrator shall allocate
the remainders pursuant to Section 6.01(g)(xiv) as follows:
(i) to the Class C Certificates in the following order of
priority, (I) the Class C Current Interest, (II) the Class C Interest
Carry Forward Amount, (III) as principal on the Class C Certificate
until the Class Certificate Balance of the Class C Certificates has
been reduced to zero and (IV) the Class C Unpaid Realized Loss Amount;
and
(ii) the remainder pursuant to Section 6.01(i) hereof.
(i) On each Distribution Date, the Securities Administrator shall allocate
the remainder pursuant to Section 6.01(h)(ii) hereof (i) to the Securities
Administrator to reimburse amounts or pay indemnification amounts owing to the
Securities Administrator from the Issuing Entity pursuant to Section 7.03 and
(ii) to the Class A-R Certificate and such distributions shall be made only
after all preceding distributions shall have been made until such remainder
shall have been fully distributed.
(j) On each Distribution Date, after giving effect to distributions on such
Distribution Date, the Securities Administrator shall allocate the Realized Loss
Amount for the Certificates to reduce the Class Certificate Balances of the
Class C Certificates and the Stack II Subordinate Certificates in the following
order of priority:
(i) to the Class C Certificates, until the Class C Class
Certificate Balance is reduced to zero;
(ii) to the Class BV-3 Certificates until the Class BV-3 Class
Certificate Balance is reduced to zero;
(iii) to the Class BV-2 Certificates until the Class BV-2 Class
Certificate Balance is reduced to zero;
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(iv) to the Class BV-1 Certificates until the Class BV-1 Class
Certificate Balance is reduced to zero;
(v) to the Class MV-6 Certificates until the Class MV-6 Class
Certificate Balance is reduced to zero;
(vi) to the Class MV-5 Certificates until the Class MV-5 Class
Certificate Balance is reduced to zero;
(vii) to the Class MV-4 Certificates until the Class MV-4 Class
Certificate Balance is reduced to zero;
(viii) to the Class MV-3 Certificates until the Class MV-3 Class
Certificate Balance is reduced to zero;
(ix) to the Class MV-2 Certificates until the Class MV-2 Class
Certificate Balance is reduced to zero; and
(x) to the Class MV-1 Certificates until the Class MV-1 Class
Certificate Balance is reduced to zero.
(k) Subject to Section 10.02 hereof respecting the final distribution, on
each Distribution Date the Securities Administrator shall make distributions to
each Certificateholder of record on the preceding Record Date either by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor, if such Holder has so
notified the Securities Administrator at least five (5) Business Days prior to
the related Record Date or, if not, by check mailed by first class mail to such
Certificateholder at the address of such holder appearing in the Certificate
Register. Notwithstanding the foregoing, but subject to Section 10.02 hereof
respecting the final distribution, distributions with respect to Certificates
registered in the name of a Depository shall be made to such Depository in
immediately available funds.
In accordance with this Agreement, the Master Servicer shall prepare and
deliver an electronic report (the "Remittance Report") to the Securities
Administrator (or by such other means as the Master Servicer and the Securities
Administrator may agree from time to time) containing such data and information
as to permit the Securities Administrator to prepare the Monthly Statement to
Certificateholders and make the required distributions for the related
Distribution Date. The Securities Administrator will prepare the Monthly Report
based solely upon the information received from the Master Servicer, which in
turn shall be based on information from the Servicers and the Cap Contract
Counterparty.
(l) The Securities Administrator is hereby directed by the Depositor to
execute the Cap Contracts on behalf of the Issuing Entity in the form presented
to it by the Depositor and shall have no responsibility for the contents of such
Cap Contract, including, without limitation, the representations and warranties
contained therein. Any funds payable by the Issuing Entity under the Cap
Contracts at closing shall be paid by the Depositor. Notwithstanding anything to
the contrary contained herein or in any Cap Contract, except as set forth in
Section 4(f) of each Cap Contract, the Issuing Entity shall not be required to
make any payments to the counterparty
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under any Cap Contract. Any payments received under the terms of the related Cap
Contract will be available to pay the holders of the related Class AV-1 and
Class A-R Certificates, Class AV-2 Certificates and Stack II Subordinate
Certificates up to the amount of any Floating Rate Certificate Carryovers
remaining after all other distributions required under this Section 6.01 are
made on such Distribution Date, other than Floating Rate Certificate Carryovers
attributable to the fact that Realized Loss Amounts are not allocated to the
Stack II Senior Certificates. Any amounts received under the terms of any Cap
Contract on a Distribution Date that are not used to pay such Floating Rate
Certificate Carryovers will be distributed to the holders of the Class C
Certificates. Payments in respect of such Floating Rate Certificate Carryovers
from proceeds of a Cap Contract shall be paid to the related Classes of Class
AV-1 and Class A-R Certificates, Class AV-2 Certificates and Stack II
Subordinate Certificates, pro rata based upon such Floating Rate Certificate
Carryovers for each such class of Class AV-1 and Class A-R Certificates, Class
AV-2 Certificates and Stack II Subordinate Certificates. Amounts received on the
Class AV-1 Cap Contract will only be available to make payments on the Class
AV-1 and Class A-R Certificates, amounts received on the Class AV-2 Cap Contract
will only be available to make payments on the Class AV-2 Certificates, amounts
received on the Stack II Subordinate Certificates Cap Contract will only be
available to make payments on the Stack II Subordinate Certificates.
(i) The Securities Administrator shall establish and maintain,
for the benefit of the Issuing Entity and the Certificateholders, the
Cap Contract Account. On or prior to the related Cap Contract
Termination Date, amounts, if any, received by the Securities
Administrator for the benefit of the Trust Fund in respect of the
related Cap Contract shall be deposited by the Securities
Administrator into the Cap Contract Account and will be used to pay
Floating Rate Certificate Carryovers on the related Class AV-1 and
Class A-R Certificates, Class AV-2 Certificates and Stack II
Subordinate Certificates to the extent provided in the immediately
preceding paragraph. With respect to any Distribution Date on or prior
to the related Cap Contract Termination Date, the amount, if any,
payable by the Cap Contract Counterparty under the related Cap
Contract will equal the product of (i) the excess of (x) One-Month
LIBOR (as determined by the Cap Contract Counterparty and subject to a
cap equal to the rate with respect to such Distribution Date as shown
under the heading "1ML Upper Collar" in the schedule to the related
Cap Contract), over (y) the rate with respect to such Distribution
Date as shown under the heading "1ML Strike Lower Collar" in the
schedule to the related Cap Contract, (ii) an amount equal to the
lesser of (x) the related Cap Contract Notional Balance for such
Distribution Date and (y) the outstanding Class Certificate Balance of
the related classes of Certificates and (iii) the number of days in
such Accrual Period, divided by 360. If a payment is made to the
Issuing Entity under a Cap Contract and the Securities Administrator
is required to distribute excess amounts to the holders of the Class C
Certificates as described above, information regarding such
distribution will be included in the monthly statement made available
on the Securities Administrator's website pursuant to Section 6.03
hereof.
(ii) Amounts on deposit in the Cap Contract Account will remain
uninvested pending distribution to Certificateholders.
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(iii) Each Cap Contract is scheduled to remain in effect until
the related Cap Contract Termination Date and will be subject to early
termination only in limited circumstances. Such circumstances include
certain insolvency or bankruptcy events in relation to the Cap
Contract Counterparty (after a grace period of three Local Business
Days, as defined in the related Cap Contract, after notice of such
failure is received by the Cap Contract Counterparty) to make a
payment due under the related Cap Contract, the failure by the Cap
Contract Counterparty (after a cure period of 20 days after notice of
such failure is received) to perform any other agreement made by it
under the related Cap Contract, the termination of the Trust Fund and
the related Cap Contract becoming illegal or subject to certain kinds
of taxation.
Section 6.02 Distributions.
(a) On each Distribution Date, other than the final Distribution Date, the
Securities Administrator shall distribute to each Certificateholder of record on
the directly preceding Record Date the Certificateholder's pro rata share of its
Class (based on the aggregate Percentage Interest represented by such Holder's
Certificates) of all amounts required to be distributed on such Distribution
Date to such Class, based solely on information provided to the Securities
Administrator by the Master Servicer. The Securities Administrator shall
calculate the amount to be distributed to each Class and, based on such amounts,
the Securities Administrator shall determine the amount to be distributed to
each Certificateholder. All of the Securities Administrator's calculations of
payments shall be based solely on information provided to the Securities
Administrator by the Master Servicer or the applicable Servicer. The Securities
Administrator shall not be required to confirm, verify or recompute any such
information but shall be entitled to rely conclusively on such information.
(b) Payment of the above amounts to each Certificateholder shall be made
(i) by check mailed to each Certificateholder entitled thereto at the address
appearing in the Certificate Register or (ii) upon receipt by the Securities
Administrator on or before the fifth Business Day preceding the Record Date of
written instructions from a Certificateholder by wire transfer to a United
States dollar account maintained by the payee at any United States depository
institution with appropriate facilities for receiving such a wire transfer;
provided, however, that the final payment in respect of each Class of
Certificates will be made only upon presentation and surrender of such
respective Certificates at the office or agency of the Securities Administrator
specified in the notice to Certificateholders of such final payment.
Section 6.03 Statements to Certificateholders.
(a) On each Distribution Date, the Securities Administrator will make
available to each Stack II Certificateholder and any other interested party a
statement (the "Monthly Statement"), based solely on information provided by the
Master Servicer and the Servicers generally setting forth among other
information with respect to the Stack II Certificates and Stack II Mortgage
Loans:
(1) the amount of the related distribution to holders of each class of
certificates allocable to principal, separately identifying (A) the
aggregate amount of any
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principal prepayments included therein, (B) the aggregate amount of
all scheduled payments of principal included therein and (C) any Stack
II Extra Principal Distribution Amount, in the aggregate and with
respect to the Group 2 Mortgage Loans and Group 3 Mortgage Loans;
(2) the amount of such distribution to holders of each class of Stack II
Certificates allocable to interest;
(3) the Interest Carry Forward Amount for each class of Stack II
Certificates;
(4) the Class Certificate Balance of each class of Stack II Certificates
after giving effect to the distribution of principal on such
Distribution Date;
(5) the aggregate outstanding principal balance of each class of Stack II
Certificates for the following Distribution Date;
(6) the amount of the Servicing Fee paid to or retained by the Servicers
and any amounts constituting reimbursement or indemnification of the
Servicers, the Master Servicer, the Trustee or the Securities
Administrator;
(7) the Certificate Rate for each class of Stack II Certificates for such
Distribution Date;
(8) the amount of Monthly Advances on Stack II Mortgage Loans included in
the distribution on such Distribution Date;
(9) the cumulative amount of (A) Realized Losses and (B) Applied Realized
Loss Amounts to date, in the aggregate and with respect to the Group 2
Mortgage Loans and the Group 3 Mortgage Loans;
(10) the amount of (A) Realized Losses and (B) Applied Realized Loss
Amounts with respect to such Distribution Date, in the aggregate and
with respect to the Group 2 Mortgage Loans and the Group 3 Mortgage
Loans;
(11) the number and aggregate principal amounts of Stack II Mortgage Loans
(A) delinquent (exclusive of Mortgage Loans in foreclosure) (1) 31 to
60 days, (2) 61 to 90 days and (3) 91 or more days, (B) in foreclosure
and delinquent (1) 31 to 60 days, (2) 61 to 90 days and (3) 91 or more
days, and (C) in bankruptcy (determined in accordance with the MBA
method), in each case as of the close of business on the last day of
the calendar month preceding such Distribution Date, in the aggregate
and with respect to the Group 2 Mortgage Loans and Group 3 Mortgage
Loans;
(12) with respect to any Stack II Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number and Stated
Principal Balance of such Mortgage Loan as of the close of business on
the Determination Date and the date of acquisition thereof, in the
aggregate;
(13) whether a Stepdown Trigger Event has occurred and is in effect;
(14) the total number and principal balance of any REO Properties in Stack
II as of the close of business on the related Determination Date, in
the aggregate;
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(15) any Floating Rate Certificate Carryover paid and all Floating Rate
Certificate Carryover remaining on each class of the Stack II
Certificates on such Distribution Date;
(16) the number and amount of Prepayment Penalties and the amount of late
payment fees received during the related Prepayment Period in the
aggregate;
(17) as of each Distribution Date, the amount, if any, received pursuant to
each Cap Contract and the amount thereof to be paid to each class of
Stack II Certificates;
(18) the number of Stack II Mortgage Loans with respect to which (i) a
reduction in the Mortgage Rate has occurred or (ii) the related
borrower's obligation to repay interest on a monthly basis has been
suspended or reduced pursuant to the Servicemembers Civil Relief Act
or the California Military and Veterans Code, as amended; and 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 in the aggregate and with respect to the Group 2 Mortgage
Loans and the Group 3 Mortgage Loans;
(19) the amounts distributed as interest in respect of the portion of each
class of Stack II Certificates that represents a regular or residual
interest in a REMIC and the amount of distributions on each class of
certificates not treated as distributions on a regular or residual
interest in a REMIC;
(20) the aggregate amount of all Advances with respect to the Stack II
Mortgage Loans recovered during the related Due Period:
(21) the allocation to each Class of Stack II Certificates of any Realized
Losses during the related Due Period:
(22) with respect to each Class of Stack II Certificates, the amount of any
Prepayment Interest Shortfalls on such Distribution Date; and
(23) information regarding 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 pool asset
substitutions and repurchases (and purchase rates, if applicable).
The Securities Administrator may make available each month, to any
interested party, the monthly statement for Stack II via the Securities
Administrator's website. The Securities Administrator will also make available
on its website any reports on Form 10-D, 10-K and 8-K that have been prepared
and filed by the Securities Administrator with respect to the Issuing Entity
promptly after such material is electronically filed with, or furnished to, the
Securities and Exchange Commission. The Securities Administrator's website will
be located at xxx.xxxxxxx.xxx, and assistance in using the website can be
obtained by calling the Securities Administrator's customer service desk at
(000) 000-0000. Parties that are unable to use the above distribution option are
entitled to have a paper copy mailed to them via first class mail by notifying
the Securities Administrator at the following address: Xxxxx Fargo Bank, N.A.,
0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Client Manager -
MLMI 2006-
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AF2. The Securities Administrator will have the right to change the way such
reports are distributed in order to make such distributions more convenient
and/or more accessible, and the Securities Administrator will provide timely and
adequate notification to such parties regarding any such changes.
In addition, within a reasonable period of time after the end of each
calendar year, the Securities Administrator will, upon request, prepare and
deliver to each Holder of a Certificate of record during the previous calendar
year a statement containing information necessary to enable Holders of the
Certificates to prepare their tax returns. These statements will not have been
examined and reported upon by an independent public accountant.
(b) By January 30 of each year beginning in 2007, if so requested in
writing, the Securities Administrator will furnish such report to each Holder of
the Certificates of record at any time during the prior calendar year as to the
aggregate of amounts reported pursuant to subclauses (a)(ii) and (a)(v) above
with respect to the Certificates, plus information with respect to the amount of
servicing compensation and such other customary information as the Securities
Administrator may determine to be necessary and/or to be required by the
Internal Revenue Service or by a federal or state law or rules or regulations to
enable such Holders to prepare their tax returns for such calendar year. Such
obligations shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Securities
Administrator pursuant to the requirements of the Code.
(c) The Securities Administrator may satisfy the requirements of this
Section 6.03 and Section 6.05 of the Stack I Agreement via a single Monthly
Statement, provided that such Monthly Statement adequately addresses all of the
content and delivery requirements contained in both this Section 6.03 and
Section 6.05 of the Stack I Agreement.
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Section 6.04 Monthly Advances. If the Monthly Payment on a Mortgage Loan
that was due on a related Due Date and is delinquent other than as a result of
application of the Relief Act and for which the related Servicer was required to
make an advance pursuant to the related Servicing Agreement exceeds the amount
deposited in the Master Servicer Collection Account that will be used for a
Monthly Advance with respect to such Mortgage Loan, the Master Servicer will
deposit in the Master Servicer Collection Account not later than the
Distribution Account Deposit Date immediately preceding the related Distribution
Date an amount equal to such deficiency, net of the Servicing Fee for such
Mortgage Loan, except to the extent the Master Servicer determines any such
Monthly Advance to be nonrecoverable from Liquidation Proceeds, Insurance
Proceeds or future payments on the Mortgage Loan for which such Monthly Advance
was made. If the Master Servicer has not deposited the amount described above as
of the related Distribution Account Deposit Date, the Trustee will, subject to
applicable law and its determination of recoverability, deposit in the Master
Servicer Collection Account not later than the related Distribution Date, an
amount equal to the remaining deficiency as of the Distribution Account Deposit
Date. Subject to the foregoing, the Master Servicer shall continue to make such
Monthly Advances through the date that the related Servicer is required to do so
under its Servicing Agreement. If applicable, on the Distribution Account
Deposit Date, the Master Servicer shall present an Officer's Certificate to the
Securities Administrator (i) stating that the Master Servicer elects not to make
a Monthly Advance in a stated amount and (ii) detailing the reason it deems the
advance to be nonrecoverable.
Section 6.05 Compensating Interest Payments. The Master Servicer shall
deposit in the Master Servicer Collection Account not later than each
Distribution Account Deposit Date an amount equal to the aggregate amounts
required to be paid by the Servicers under the Servicing Agreements with respect
to subclause (a) of the definition of Prepayment Interest Shortfall with respect
to the Mortgage Loans for the related Distribution Date, and not so paid by the
related Servicers (such amount, the "Compensating Interest Payment"). The Master
Servicer shall not be entitled to any reimbursement of any Compensating Interest
Payment; provided, however, the aggregate compensating interest payments made by
the Master Servicer shall not exceed the Master Servicing Compensation.
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ARTICLE VII
THE MASTER SERVICER AND THE DEPOSITOR
Section 7.01 Liabilities of the Master Servicer. The Master Servicer shall
be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by the Master Servicer, as the case may
be, herein. The Depositor shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by the
Depositor.
Section 7.02 Merger or Consolidation of the Master Servicer.
(a) Each of the Master Servicer and the Depositor will keep in full force
and effect its existence, rights and franchises as a corporation under the laws
of the state of its incorporation, 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.
(b) Any Person into which the Master Servicer or the Depositor may be
merged or consolidated, or any corporation resulting from any merger or
consolidation to which the Master Servicer shall be a party, or any Person
succeeding to the business of the Master Servicer, shall be the successor of the
Master Servicer hereunder, without the execution or filing of any paper or
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 7.03 Indemnification from the Master Servicer and the Depositor.
(a) The Master Servicer agrees to indemnify the Indemnified Persons for,
and to hold them harmless against, any loss, liability or expense (including
reasonable legal fees and disbursements of counsel) incurred on their part that
may be sustained in connection with, arising out of, or relating to, any claim
or legal action (including any pending or threatened claim or legal action)
relating to this Agreement or the Certificates (i) related to the Master
Servicer's failure to perform its duties in compliance with this Agreement
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) or (ii) incurred by reason of the Master Servicer's
willful misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder, provided, in each case, that with respect to any such claim or legal
action (or pending or threatened claim or legal action), the Trustee or the
Securities Administrator shall have given the Master Servicer and the Depositor
written notice of such claim or legal action promptly after the Trustee or the
Securities Administrator shall have received knowledge thereof. This indemnity
shall survive the resignation or removal of the Trustee, Master Servicer or the
Securities Administrator and the termination of this Agreement.
(b) The Depositor will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise referred to in
Subsection (a) above.
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Section 7.04 Limitations on Liability of the Master Servicer and Others.
Subject to the obligation of the Master Servicer to indemnify the Indemnified
Persons pursuant to Section 7.03:
(a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Indemnified Persons, the Depositor, the Issuing Entity or the Certificateholders
for taking any action or for refraining from taking any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Master Servicer or any such Person against
any breach of warranties or representations made herein or any liability which
would otherwise be imposed by reason of such Person's willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder.
(b) The Master Servicer and any director, officer, employee or agent of the
Master Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder.
(c) The Master Servicer, the Custodian and any director, officer, employee
or agent of the Master Servicer or the Custodian shall be indemnified by the
Issuing Entity and held harmless thereby against any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on their
part that may be sustained in connection with, arising out of, or related to,
any claim or legal action (including any pending or threatened claim or legal
action) relating to this Agreement, the Certificates or any Servicing Agreement
(except to the extent that the Master Servicer or the Custodian, as the case may
be, is indemnified by a Servicer thereunder), other than (i) any such loss,
liability or expense related to the Master Servicer's failure to perform its
duties in compliance with this Agreement (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement), or to the
Custodian's failure to perform its duties under the Custodial Agreement,
respectively, or (ii) any such loss, liability or expense incurred by reason of
the Master Servicer's or the Custodian's willful misfeasance, bad faith or gross
negligence in the performance of duties hereunder or under the Custodial
Agreement, as applicable, or by reason of reckless disregard of obligations and
duties hereunder or under the Custodial Agreement, as applicable.
(d) The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties under
this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, the Master Servicer may in its discretion,
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 and the
interests of the Certificateholders hereunder. In such event, the legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Issuing Entity, and the Master Servicer
shall be entitled to be reimbursed therefor out of the Master Servicer
Collection Account as provided by Section 4.03. Nothing in this Subsection
7.04(d) shall affect the Master Servicer's obligation to supervise, or to take
such actions as are necessary to ensure, the servicing and administration of the
Mortgage Loans pursuant to Subsection 3.01(a).
(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Master Servicer shall not be required to investigate or make recommendations
concerning potential liabilities which the Issuing Entity might incur as a
result of such course of action by reason of the condition of the
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Mortgaged Properties but shall give notice to the Trustee if it has notice of
such potential liabilities.
(f) The Master Servicer shall not be liable for any acts or omissions of
any Servicer, except as otherwise expressly provided herein.
Section 7.05 Master Servicer Not to Resign. Except as provided in Section
7.07, the Master Servicer shall not resign from the obligations and duties
hereby imposed on it except upon a determination that any such duties hereunder
are no longer permissible under applicable law and such impermissibility cannot
be cured. Any such determination permitting the resignation of the Master
Servicer shall be evidenced by an Opinion of Independent Counsel to such effect
delivered to the Trustee. No such resignation by the Master Servicer shall
become effective until MLML or the Trustee or a successor to the Master Servicer
reasonably satisfactory to the Trustee shall have assumed the responsibilities
and obligations of the Master Servicer in accordance with Section 8.02 hereof.
The Trustee shall notify the Rating Agencies of the resignation of the Master
Servicer. If the Master Servicer and the Securities Administrator are the same
entity, then at any time the Master Servicer is terminated as master servicer,
the Securities Administrator shall likewise be removed as securities
administrator.
Section 7.06 Successor Master Servicer. In connection with the appointment
of any successor Master Servicer or the assumption of the duties of the Master
Servicer, MLML or the Trustee may make such arrangements for the compensation of
such successor master servicer out of payments on the Mortgage Loans as MLML or
the Trustee and such successor master servicer shall agree. If the successor
master servicer does not agree that such market value is a fair price, such
successor master servicer shall obtain two quotations of market value from third
parties actively engaged in the servicing of single-family mortgage loans.
Notwithstanding anything herein to the contrary, in no event shall the
Trustee be liable for any Servicing Fee or Master Servicing Compensation or for
any differential in the amount of the Servicing Fee or Master Servicing
Compensation paid hereunder and the amount necessary to induce any successor
servicer or successor master servicer to act as successor servicer or successor
master servicer, as applicable, under this Agreement and the transactions set
forth or provided for herein.
Section 7.07 Sale and Assignment of Master Servicing. The Master Servicer
may sell and assign its rights and delegate its duties and obligations in its
entirety as Master Servicer under this Agreement; provided, however, that: (i)
the purchaser or transferee accepting such assignment and delegation (a) shall
be a Person which shall be qualified to service mortgage loans for Xxxxxx Xxx or
Xxxxxxx Mac; (b) shall have a net worth of not less than $10,000,000 (unless
otherwise approved by each Rating Agency pursuant to clause (ii) below); (c)
shall be reasonably satisfactory to the Trustee (as evidenced in a writing
signed by the Trustee); and (d) shall execute and deliver to the Trustee an
agreement, in form and substance reasonably satisfactory to 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 it as
master servicer under this Agreement, any custodial agreement from and after the
effective date of such agreement; (ii) each Rating Agency shall be given prior
written notice of the identity of the proposed successor to the Master Servicer
and each Rating Agency's rating of the Certificates in effect immediately prior
to such assignment, sale and delegation will not be downgraded,
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qualified or withdrawn as a result of such assignment, sale and delegation, as
evidenced by a letter to such effect delivered to the Master Servicer and the
Trustee; and (iii) the Master Servicer assigning and selling the master
servicing shall deliver to the Trustee an Officer's Certificate and an Opinion
of Independent Counsel, each stating that all conditions precedent to such
action under this Agreement have been completed and such action is permitted by
and complies with the terms of this Agreement. No such assignment or delegation
shall affect any liability of the Master Servicer arising prior to the effective
date thereof.
ARTICLE VIII
DEFAULT
Section 8.01 Events of Default. "Event of Default," wherever used herein,
means any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body) and
only with respect to the defaulting Master Servicer:
(i) The Master Servicer fails to cause to be deposited in the
Distribution Account any amount so required to be deposited pursuant to
this Agreement, and such failure continues unremedied for a period of three
Business Days after the date upon which written notice of such failure,
requiring the same to be remedied, shall have been given to the Master
Servicer; or
(ii) The Master Servicer fails to observe or perform in any material
respect any other material covenants and agreements set forth in this
Agreement to be performed by it, which covenants and agreements materially
affect the rights of Certificateholders, and such failure continues
unremedied for a period of 60 days after the date on which written notice
of such failure, properly requiring the same to be remedied, shall have
been given to the Master Servicer by the Trustee or to the Master Servicer
and the Trustee by the Holders of Certificates evidencing Percentage
Interests aggregating not less than 25% of the Trust Fund; or
(iii) There is entered against the Master Servicer a decree or order
by a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver or liquidator in
any insolvency, readjustment of debt, marshaling of assets and liabilities
or similar proceedings, or for the winding up or liquidation of its
affairs, and the continuance of any such decree or order is unstayed and in
effect for a period of 60 consecutive days, or an involuntary case is
commenced against the Master Servicer under any applicable insolvency or
reorganization statute and the petition is not dismissed within 60 days
after the commencement of the case; or
(iv) The Master Servicer consents to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating
to the Master Servicer or substantially all of its property; or the Master
Servicer admits in writing its inability to pay its debts generally as they
become due, files a petition to take advantage of any applicable insolvency
or reorganization statute, makes an assignment for the benefit of its
creditors, or voluntarily suspends payment of its obligations; or
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(v) The Master Servicer assigns or delegates its duties or rights
under this Agreement in contravention of the provisions permitting such
assignment or delegation under Sections 7.05 or 7.07.
In each and every such case, so long as such Event of Default with respect to
the Master Servicer shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 51% of the Class Certificate Balance of the Certificates, by notice in
writing to the Master Servicer (and to the Trustee if given by such
Certificateholders), with a copy to the Rating Agencies, and with the consent of
the Sponsor, may terminate all of the rights and obligations (but not the
liabilities) of the Master Servicer under this Agreement and in and to the
Mortgage Loans and/or the REO Property serviced by the Master Servicer and the
proceeds thereof. Upon the receipt by the Master Servicer of the written notice,
all authority and power of the Master Servicer under this Agreement, whether
with respect to the Certificates, the Mortgage Loans, REO Property or under any
other related agreements (but only to the extent that such other agreements
relate to the Mortgage Loans or related REO Property) shall, subject to Section
8.02, automatically and without further action pass to and be vested in the
Trustee pursuant to this Section 8.01; and, without limitation, the Trustee is
hereby authorized and empowered to execute and deliver, on behalf of the Master
Servicer as attorney-in-fact or otherwise, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees to cooperate with
the Trustee in effecting the termination of the Master Servicer's rights and
obligations hereunder, including, without limitation, the transfer to the
Trustee of (i) the property and amounts which are then or should be part of the
Issuing Entity or which thereafter become part of the Issuing Entity; and (ii)
originals or copies of all documents of the Master Servicer reasonably requested
by the Trustee to enable it to assume the Master Servicer's duties thereunder.
In addition to any other amounts which are then, or, notwithstanding the
termination of its activities under this Agreement, may become payable to the
Master Servicer under this Agreement, the Master Servicer shall be entitled to
receive, out of any amount received on account of a Mortgage Loan or related REO
Property, that portion of such payments which it would have received as
reimbursement under this Agreement if notice of termination had not been given.
The termination of the rights and obligations of the Master Servicer shall not
affect any obligations incurred by the Master Servicer prior to such
termination.
Section 8.02 Trustee to Act; Appointment of Successor.
(a) Upon the receipt by the Master Servicer of a notice of termination
pursuant to Section 8.01 or an Opinion of Independent Counsel pursuant to
Section 7.05 to the effect that the Master Servicer is legally unable to act or
to delegate its duties to a Person which is legally able to act, the Trustee
shall automatically become the successor in all respects to the Master Servicer
in its capacity under this Agreement and the transactions set forth or provided
for herein and shall thereafter be subject to all the responsibilities, duties,
liabilities and limitations on liabilities relating thereto placed on the Master
Servicer by the terms and provisions hereof; provided, however, that MLML shall
have the right to either (a) immediately assume the duties of the Master
Servicer or (b) select a successor master servicer; provided further, however,
that the Trustee shall have no obligation whatsoever with respect to any
liability (other than advances
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deemed recoverable and not previously made) incurred by the Master Servicer at
or prior to the time of termination. As compensation therefor, the Trustee shall
be entitled to all funds relating to the Mortgage Loans which the Master
Servicer would have been entitled to retain if the Master Servicer had continued
to act hereunder, except for those amounts due the Master Servicer as
reimbursement permitted under this Agreement for advances previously made or
expenses previously incurred. Notwithstanding the above, or anything herein to
the contrary, the Trustee, if it becomes Master Servicer, shall have no
responsibility or obligation (i) to repurchase or substitute any Mortgage Loan,
(ii) for any representation or warranty of the Master Servicer hereunder, and
(iii) for any act or omission of either a predecessor or successor Master
Servicer other than the Trustee. The Trustee may conduct any activity required
of it as Master Servicer hereunder through an Affiliate or through an agent.
Neither the Trustee (as successor Master Servicer) nor any other successor
Master Servicer shall be deemed to be in default hereunder due to any act or
omission of a predecessor Master Servicer, including but not limited to failure
to timely deliver to the Trustee distribution instructions, any funds required
to be deposited to the Trust Fund, or any breach of its duty to cooperate with a
transfer of master servicing. Neither the Trustee nor any other successor Master
Servicer shall be deemed to be in default hereunder by reason of any failure to
make, or any delay in making, any distribution hereunder or any portion thereof
or any failure to perform, or any delay in performing, any duties or
responsibilities hereunder, in either case caused solely by the failure of the
Master Servicer to deliver or provide, or any delay in delivering or providing,
any cash, information, documents or records required to be provided to it by the
Master Servicer. Notwithstanding the above, the Trustee may, if it shall be
unwilling so to act, or shall, if it is legally unable so to act, appoint or
petition a court of competent jurisdiction to appoint, any established housing
and home finance institution which is a Xxxxxx Xxx- or Xxxxxxx Mac-approved
servicer, and with respect to a successor to the Master Servicer only, having a
net worth of not less than $10,000,000 and meeting such other standards for a
successor Master Servicer as are set forth in this Agreement, as the successor
to the Master Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer hereunder.
Pending appointment of a successor to the Master Servicer hereunder, the Trustee
shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on the Mortgage Loans as it and
such successor shall agree; provided, however, in the event that the provisions
of Section 7.06 shall apply, no such compensation shall be in excess of that
permitted the Trustee under this Subsection 8.02(a), and that such successor
shall undertake and assume the obligations of the Trustee to pay compensation to
any third Person acting as an agent or independent contractor in the performance
of master servicing responsibilities hereunder. The Trustee and such successor
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession.
(b) If the Trustee shall succeed to any duties of the Master Servicer
respecting the Mortgage Loans as provided herein, it shall do so in a separate
capacity and not in its capacity as Trustee and, accordingly, the provisions of
Article IX shall be inapplicable to the Trustee in its duties as the successor
to the Master Servicer in the servicing of the Mortgage Loans (although such
provisions shall continue to apply to the Trustee in its capacity as Trustee);
the provisions of Article VII, however, shall apply to it in its capacity as
successor master servicer.
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Section 8.03 Notification to Certificateholders. Upon any termination or
appointment of a successor to the Master Servicer, the Trustee shall give prompt
written notice thereof to Certificateholders at their respective addresses
appearing in the Certificate Register and to the Rating Agencies.
Section 8.04 Waiver of Defaults. The Trustee shall transmit by mail to all
Certificateholders, within 60 days after the occurrence of any Event of Default
known to the Trustee, unless such Event of Default shall have been cured, notice
of each such Event of Default hereunder known to the Trustee. The Holders of
Certificates evidencing Percentage Interests aggregating not less than 51% of
the Class Certificate Balance of the Certificates may, on behalf of all
Certificateholders, waive any default by the Master Servicer in the performance
of its obligations hereunder and the consequences thereof, except a default in
the making of or the causing to be made any required distribution on the
Certificates. Upon any such waiver of a past default, such default shall be
deemed to cease to exist, and any Event of Default arising therefrom shall be
deemed to have been timely 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. The Trustee shall
give notice of any such waiver to the Rating Agencies.
Section 8.05 List of Certificateholders. Upon reasonable, prior written
request of three or more Certificateholders of record, for purposes of
communicating with other Certificateholders with respect to their rights under
this Agreement, the Trustee will afford such Certificateholders access during
business hours to the most recent list of Certificateholders held by the
Trustee.
ARTICLE IX
CONCERNING THE TRUSTEE AND
THE SECURITIES ADMINISTRATOR
Section 9.01 Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default and after
the curing or waiver of all Events of Default which may have occurred, and the
Securities Administrator each undertake to perform such duties and only such
duties as are specifically set forth in this Agreement as duties of the Trustee
and the Securities Administrator, respectively. If an Event of Default has
occurred and has not been cured or waived, the Trustee shall exercise such of
the rights and powers vested in it by this Agreement, and subject to Section
8.02(b) use the same degree of care and skill in their exercise, as a prudent
person would exercise under the circumstances in the conduct of his own affairs.
(b) Upon receipt of all resolutions, certificates, statements, opinions,
reports, documents, orders or other instruments which are specifically required
to be furnished to the Trustee and the Securities Administrator pursuant to any
provision of this Agreement, the Trustee and the Securities Administrator,
respectively, shall examine them to determine whether they are in the form
required by this Agreement; provided, however, that neither the Trustee nor the
Securities Administrator shall be responsible for the accuracy or content of any
resolution, certificate, statement, opinion, report, document, order or other
instrument furnished by the
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Master Servicer; provided, further, that neither the Trustee nor the Securities
Administrator shall be responsible for the accuracy or verification of any
calculation provided to it pursuant to this Agreement. If any such instrument is
found not to conform to the requirements of this Agreement in a material manner,
the Trustee shall take such action as it deems appropriate to have the
instrument corrected and if the instrument is not corrected to its satisfaction,
the Trustee will provide notice thereof to the Certificateholders and take such
further action as directed by the Certificateholders.
(c) On each Distribution Date, the Securities Administrator shall make
monthly distributions and the final distribution to the Certificateholders from
funds in the Distribution Account as provided in Sections 6.01 and 10.01 herein
based solely on the report of the Master Servicer or the Servicers.
(d) No provision of this Agreement shall be construed to relieve the
Trustee or the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct;
provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing or waiver of all such Events of Default which may have occurred, the
duties and obligations of the Trustee and the Securities Administrator
shall be determined solely by the express provisions of this Agreement,
neither the Trustee nor the Securities Administrator shall be liable except
for the performance of their respective 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 or the
Securities Administrator and, in the absence of bad faith on the part of
the Trustee or the Securities Administrator, respectively, the Trustee or
the Securities Administrator, respectively, 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 or the
Securities Administrator, respectively, and conforming to the requirements
of this Agreement;
(ii) Neither the Trustee nor the Securities Administrator shall be
liable in its individual capacity for an error of judgment made in good
faith by a Responsible Officer or Responsible Officers of the Trustee or an
officer of the Securities Administrator, respectively, unless it shall be
proved that the Trustee or the Securities Administrator, respectively, was
negligent in ascertaining the pertinent facts;
(iii) Neither the Trustee nor the Securities Administrator shall be
liable with respect to any action taken, suffered or omitted to be taken by
it in good faith in accordance with the directions of the Holders of
Certificates evidencing Percentage Interests aggregating not less than 25%
of the Class Certificate Balance of the Certificates, if such action or
non-action relates to the time, method and place of conducting any
proceeding for any remedy available to the Trustee or the Securities
Administrator, respectively, or exercising any trust or other power
conferred upon the Trustee or the Securities Administrator, respectively,
under this Agreement;
(iv) The Trustee shall not be required to take notice or be deemed to
have notice or knowledge of any default or Event of Default unless a
Responsible Officer of the Trustee's Corporate Trust Office shall have
actual knowledge thereof. In the absence
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of such notice, the Trustee may conclusively assume there is no such
default or Event of Default;
(v) The Trustee shall not in any way be liable by reason of any
insufficiency in any Account held by or in the name of Trustee unless it is
determined by a court of competent jurisdiction that the Trustee's gross
negligence or willful misconduct was the primary cause of such
insufficiency (except to the extent that the Trustee is obligor and has
defaulted thereon);
(vi) Anything in this Agreement to the contrary notwithstanding, in no
event shall the Trustee or the Securities Administrator be liable for
special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Trustee or the
Securities Administrator, respectively, has been advised of the likelihood
of such loss or damage and regardless of the form of action; and
(vii) None of the Securities Administrator, the Depositor, the Master
Servicer, any Servicer or the Trustee shall be responsible for the acts or
omissions of the other, it being understood that this Agreement shall not
be construed to render them partners, joint venturers or agents of one
another.
Neither the Trustee nor the Securities Administrator shall be required to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there is reasonable ground for believing that the repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in this Agreement
shall in any event require the Trustee or the Securities Administrator to
perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer hereunder or under the Servicing Agreements,
except during such time, if any, as the Trustee shall be the successor to, and
be vested with the rights, duties, powers and privileges of, the Master Servicer
in accordance with the terms of this Agreement.
(e) All funds received by the Master Servicer and the Securities
Administrator and required to be deposited in the Master Servicer Collection
Account or Distribution Account pursuant to this Agreement will be promptly so
deposited by the Master Servicer and the Securities Administrator.
(f) The Issuing Entity hereby authorizes and directs the Securities
Administrator to enter into the three Cap Contracts on behalf of the Issuing
Entity and to perform the duties and obligations of the Issuing Entity under the
Cap Contracts and any other agreement or instrument related thereto, in each
case in such form as the Depositor shall direct or shall approve in writing, the
execution and delivery of any such agreement by the Depositor to be conclusive
evidence of its approval thereof.
(g) Except for those actions that the Trustee or the Securities
Administrator is required to take hereunder, neither the Trustee nor the
Securities Administrator shall have any obligation or liability to take any
action or to refrain from taking any action hereunder in the absence of written
direction as provided hereunder.
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Section 9.02 Certain Matters Affecting the Trustee and the Securities
Administrator. Except as otherwise provided in Section 9.01:
(i) The Trustee and the Securities Administrator may rely and shall be
protected in acting or refraining from acting in reliance on any
resolution, certificate of a Depositor, Master Servicer or Servicer,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) The Trustee and the Securities Administrator may consult with
counsel and any advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection with respect to any action
taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(iii) Neither the Trustee nor the Securities Administrator shall be
under any obligation to exercise any of the trusts or powers vested in it
by this Agreement, other than its obligation to give notices pursuant to
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. Nothing contained herein shall, however,
relieve the Trustee of the obligation, upon the occurrence of an Event of
Default of which a Responsible Officer of the Trustee's Corporate Trust
Office has actual knowledge (which has not been cured or waived), subject
to Section 8.02(b), to exercise such of the rights and powers vested in it
by this Agreement, and to use the same degree of care and skill in their
exercise, as a prudent person would exercise under the circumstances in the
conduct of his own affairs;
(iv) Prior to the occurrence of an Event of Default hereunder and
after the curing or waiver of all Events of Default which may have
occurred, neither the Trustee nor the Securities Administrator shall be
liable in its individual capacity for any action taken, suffered or omitted
by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(v) Neither the Trustee nor the Securities Administrator shall be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing to do so by Holders of Certificates evidencing
Percentage Interests aggregating not less than 25% of the Class Certificate
Balance of the Certificates and provided that the payment within a
reasonable time to the Trustee or the Securities Administrator, as
applicable, of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the Trustee or
the Securities Administrator, as applicable, reasonably assured to the
Trustee or the Securities Administrator, as applicable, by the security
afforded to it by the terms of this Agreement. The Trustee or the
Securities Administrator may require reasonable indemnity against such
expense or liability as a condition to taking any such action. The
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reasonable expense of every such examination shall be paid by the
Certificateholders requesting the investigation;
(vi) The Trustee and the Securities Administrator may execute any of
the trusts or powers hereunder or perform any duties hereunder either
directly or through Affiliates, agents or attorneys; provided, however,
that the Trustee may not appoint any agent to perform its custodial
functions with respect to the Mortgage Files or paying agent functions
under this Agreement without the express written consent of the Securities
Administrator, which consent will not be unreasonably withheld. Neither the
Trustee nor the Securities Administrator shall be liable or responsible for
the misconduct or negligence of any of the Trustee's or the Securities
Administrator's agents or attorneys or a custodian or paying agent
appointed hereunder by the Trustee or the Securities Administrator with due
care and, when required, with the consent of the Securities Administrator;
(vii) Should the Trustee or the Securities Administrator deem the
nature of any action required on its part, other than a payment or transfer
under Subsection 4.01(b) or Section 4.02, to be unclear, the Trustee or the
Securities Administrator, respectively, may require prior to such action
that it be provided by the Depositor with reasonable further instructions;
(viii) The right of the Trustee or the Securities Administrator to
perform any discretionary act enumerated in this Agreement shall not be
construed as a duty, and neither the Trustee nor the Securities
Administrator shall be accountable for other than its negligence or willful
misconduct in the performance of any such act;
(ix) Neither the Trustee nor the Securities Administrator shall be
required to give any bond or surety with respect to the execution of the
trust created hereby or the powers granted hereunder, except as provided in
Subsection 9.07; and
(x) Neither the Trustee nor the Securities Administrator shall have
any duty to conduct any affirmative investigation as to the occurrence of
any condition requiring the repurchase of any Mortgage Loan by the Sponsor
pursuant to this Agreement or the Stack II Mortgage Loan Purchase
Agreement, as applicable, or the eligibility of any Mortgage Loan for
purposes of this Agreement.
(xi) Any permissive right of the Trustee hereunder shall not be
construed as a duty.
Section 9.03 Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans. The recitals contained herein and in the
Certificates (other than the signature and countersignature of the Securities
Administrator on the Certificates) shall be taken as the statements of the
Depositor, and neither the Trustee nor the Securities Administrator shall have
any responsibility for their correctness. Neither the Trustee nor the Securities
Administrator makes any representation as to the validity or sufficiency of the
Certificates (other than the signature and countersignature of the Securities
Administrator on the Certificates) or of any Mortgage Loan except as expressly
provided in Sections 2.02 and 2.05 hereof; provided, however, that the foregoing
shall not relieve the Trustee or the Custodian of the obligation to
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review the Mortgage Files pursuant to Sections 2.02 and 2.04. The Securities
Administrator's signature and countersignature (or countersignature of its
agent) on the Certificates shall be solely in its capacity as Securities
Administrator of the Trust Fund and shall not constitute the Certificates an
obligation of the Securities Administrator in any other capacity. Neither the
Trustee or the Securities Administrator shall be accountable for the use or
application by the Depositor of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to the
Depositor with respect to the Mortgage Loans. Subject to the provisions of
Section 2.05, neither the Trustee nor the Securities Administrator shall be
responsible for the legality or validity of this Agreement or any document or
instrument relating to this Agreement, the validity of the execution of this
Agreement or of any supplement hereto or instrument of further assurance, or the
validity, priority, perfection or sufficiency of the security for the
Certificates issued hereunder or intended to be issued hereunder. Neither the
Trustee nor the Securities Administrator shall at any time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Mortgage or any Mortgage Loan, or the perfection and
priority of any Mortgage or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Trust Fund or its ability to
generate the payments to be distributed to Certificateholders, under this
Agreement. Neither the Trustee nor the Securities Administrator shall have any
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to record this Agreement.
Section 9.04 Trustee and Securities Administrator May Own Certificates. The
Trustee and the Securities Administrator in its individual capacity or in any
capacity other than as Trustee hereunder may become the owner or pledgee of any
Certificates with the same rights it would have if it were not Trustee or the
Securities Administrator, as applicable, and may otherwise deal with the parties
hereto.
Section 9.05 Trustee's and Securities Administrator's Fees and Expenses.
The fees and expenses of the Trustee and the Securities Administrator shall be
paid by the Master Servicer in accordance with a side letter agreement. In
addition, the Trustee and the Securities Administrator will be entitled to
recover from the Master Servicer Collection Account pursuant to Section 4.03(b)
all reasonable out-of-pocket expenses, disbursements and advances and the
expenses of the Trustee and the Securities Administrator, respectively, in
connection with any Event of Default, any breach of this Agreement or any claim
or legal action (including any pending or threatened claim or legal action)
incurred or made by the Trustee or the Securities Administrator, respectively,
in the administration of the trusts hereunder (including the reasonable
compensation, expenses and disbursements of its counsel) except any such
expense, disbursement or advance as may arise from its negligence or intentional
misconduct or which is the responsibility of the Certificateholders or the Trust
Fund hereunder. If funds in the Master Servicer Collection Account are
insufficient therefor, the Trustee and the Securities Administrator shall
recover such expenses from the Depositor. Such compensation and reimbursement
obligation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust.
Section 9.06 Eligibility Requirements for Trustee and Securities
Administrator.
(a) The Trustee and any successor Trustee and the Securities Administrator
and any successor Securities Administrator shall during the entire duration of
this Agreement be a state
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bank or trust company or a national banking association organized and doing
business under the laws of such state or the United States of America,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus and undivided profits of at least $40,000,000 or, in the
case of a successor Trustee, $50,000,000, subject to supervision or examination
by federal or state authority and, in the case of the Trustee, rated "BBB" or
higher by S&P and "Aaa1" or higher by Moody's with respect to their long-term
rating and rated "BBB" or higher by S&P and "Baa1" or higher by Moody's with
respect to any outstanding long-term unsecured unsubordinated debt, and, in the
case of a successor Trustee or successor Securities Administrator other than
pursuant to Section 9.10, rated in one of the two highest long-term debt
categories of, or otherwise acceptable to, each of the Rating Agencies. If the
Trustee publishes reports of condition at least annually, pursuant to law or to
the requirements of the aforesaid supervising or examining authority, then for
the purposes of this Section 9.06 the combined capital and surplus of such
corporation shall be deemed to be its total equity capital (combined capital and
surplus) as set forth in its most recent report of condition so published. In
case at any time the Trustee or the Securities Administrator shall cease to be
eligible in accordance with the provisions of this Section 9.06, the Trustee or
the Securities Administrator shall resign immediately in the manner and with the
effect specified in Section 9.08.
(b) In addition, the Securities Administrator (i) may not be an Originator,
Master Servicer, Servicer, the Depositor or an affiliate of the Depositor unless
the Securities Administrator is in an institutional trust department of the
relevant entity, (ii) must be authorized to exercise corporate trust powers
under the laws of its jurisdiction of organization, and (iii) must be rated at
least "A" by S&P or "A" Moody's. If no successor Securities Administrator shall
have been appointed and shall have accepted appointment within 60 days after the
Securities Administrator ceases to be the Securities Administrator pursuant to
Section 9.08, then the Trustee shall either (i) perform the duties of the
Securities Administrator pursuant to this Agreement until such time as a new
Securities Administrator is appointed or (ii) petition a court of competent
jurisdiction to appoint a successor securities administrator. The Trustee shall
notify the Rating Agencies of any change of Securities Administrator.
Section 9.07 Insurance. The Securities Administrator, at its own expense,
shall at all times maintain and keep in full force and effect: (i) fidelity
insurance, (ii) theft of documents insurance and (iii) forgery insurance (which
may be collectively satisfied by a "Financial Institution Bond" and/or a
"Bankers' Blanket Bond"). All such insurance shall be in amounts, with standard
coverage and subject to deductibles, as are customary for insurance typically
maintained by banks or their affiliates which act as custodians for
investor-owned mortgage pools. A certificate of an officer of the Securities
Administrator as to the Securities Administrator's compliance with this Section
9.07 shall be furnished to any Certificateholder upon reasonable written
request.
Section 9.08 Resignation and Removal of the Trustee and Securities
Administrator.
(a) The Trustee and the Securities Administrator may at any time resign and
be discharged from the trust hereby created by giving written notice thereof to
the Depositor and the Master Servicer, with a copy to the Rating Agencies. Upon
receiving such notice of resignation, the Depositor shall promptly appoint a
successor Trustee or successor Securities Administrator, as applicable, by
written instrument, in triplicate, one copy of which instrument shall be
delivered to each of the resigning Trustee or Securities Administrator, as
applicable, the
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successor Trustee or Securities Administrator, as applicable. If no successor
Trustee or Securities Administrator shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee or Securities Administrator may petition any
court of competent jurisdiction for the appointment of a successor Trustee or
Securities Administrator. If the Securities Administrator and the Master
Servicer are the same entity, then at any time the Securities Administrator
resigns or is removed as Securities Administrator, the Master Servicer shall
likewise be terminated as Master Servicer.
(b) If at any time the Trustee or the Securities Administrator shall cease
to be eligible in accordance with the provisions of Section 9.06 and shall fail
to resign after written request therefor by the Depositor or if at any time the
Trustee or the Securities Administrator shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or the
Securities Administrator, as applicable, or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or the
Securities Administrator, as applicable, or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Depositor shall
promptly remove the Trustee, or shall be entitled to remove the Securities
Administrator, as applicable, and appoint a successor Trustee or Securities
Administrator, as applicable, by written instrument, in triplicate, one copy of
which instrument shall be delivered to each of the Trustee or Securities
Administrator, as applicable, so removed, the successor Trustee or Securities
Administrator, as applicable.
(c) The Holders of Certificates evidencing Percentage Interests aggregating
not less than 51% of the Trust Fund may at any time remove the Trustee or the
Securities Administrator and appoint a successor Trustee or Securities
Administrator by written instrument or instruments, in quadruplicate, signed by
such Holders or their attorneys-in-fact duly authorized, one complete set of
which instruments shall be delivered to the Depositor, the Trustee, the
Securities Administrator (if the Trustee is removed), the Trustee (if the
Securities Administrator is removed), and the Trustee or Securities
Administrator so removed and the successor so appointed.
(d) No resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor Trustee or Securities Administrator
pursuant to any of the provisions of this Section 9.08 shall become effective
except upon appointment of and acceptance of such appointment by the successor
Trustee or Securities Administrator as provided in Section 9.09.
Section 9.09 Successor Trustee and Successor Securities Administrator.
(a) Any successor Trustee or Securities Administrator appointed as provided
in Section 9.08 shall execute, acknowledge and deliver to the Depositor, the
Master Servicer and its predecessor Trustee or Securities Administrator an
instrument accepting such appointment hereunder. The resignation or removal of
the predecessor Trustee or Securities Administrator shall then become effective
and such successor Trustee or Securities Administrator, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with like effect as if
originally named as Trustee or Securities Administrator herein. The predecessor
Trustee or Securities Administrator shall after payment of its outstanding fees
and expenses promptly deliver to the successor Trustee or Securities
Administrator, as applicable, all assets and records of the Trust held by it
hereunder, and the Depositor and the predecessor Trustee or Securities
Administrator, as applicable, shall
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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 or Securities Administrator, as applicable, all such rights, powers,
duties and obligations.
(b) No successor Trustee or Securities Administrator shall accept
appointment as provided in this Section 9.09 unless at the time of such
acceptance such successor Trustee or Securities Administrator shall be eligible
under the provisions of Section 9.06.
(c) Upon acceptance of appointment by a successor Trustee or Securities
Administrator as provided in this Section 9.09, the successor Trustee or
Securities Administrator shall mail notice of the succession of such Trustee or
Securities Administrator hereunder to all Certificateholders at their addresses
as shown in the Certificate Register and to the Rating Agencies. The Depositor
shall pay the cost of any mailing by the successor Trustee or Securities
Administrator.
Section 9.10 Merger or Consolidation of Trustee or Securities
Administrator. Any state bank or trust company or national banking association
into which the Trustee or the Securities Administrator may be merged or
converted or with which it may be consolidated or any state bank or trust
company or national banking association resulting from any merger, conversion or
consolidation to which the Trustee or the Securities Administrator,
respectively, shall be a party, or any state bank or trust company or national
banking association succeeding to all or substantially all of the corporate
trust business of the Trustee or the Securities Administrator, respectively,
shall be the successor of the Trustee or the Securities Administrator,
respectively, hereunder, provided such state bank or trust company or national
banking association shall be eligible under the provisions of Section 9.06. Such
succession shall be valid without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 9.11 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or property constituting the same may at the time be located, the
Depositor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee and the Depositor to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust, and to vest in such Person or Persons, in such capacity, such title to
the Trust, or any part thereof, and, subject to the other provisions of this
Section 9.11, such powers, duties, obligations, rights and trusts as the
Depositor and the Trustee may consider necessary or desirable.
(b) If the Depositor shall not have joined in such appointment within 15
days after the receipt by it of a written request so to do, the Trustee shall
have the power to make such appointment without the Depositor.
(c) No co-Master Servicer or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 9.06
hereunder and no notice to Certificateholders of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.08
hereof.
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(d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred on such
co-trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly, 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 Master
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 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.
(e) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. 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.
(f) To the extent not prohibited by law, any separate trustee or co-trustee
may, at any time, request the Trustee, its agent or attorney-in-fact, with full
power and authority, to do any lawful act under or with respect to this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor Trustee.
(g) No Trustee under this Agreement shall be personally liable by reason of
any act or omission of another Trustee under this Agreement. The Depositor and
the Trustee acting jointly may at any time accept the resignation of or remove
any separate trustee or co-trustee.
Section 9.12 Federal Information Returns and Reports to Certificateholders;
REMIC Administration.
(a) REMIC elections as set forth in the Preliminary Statement and this
Section 9.12 shall be made on Forms 1066 or other appropriate federal tax or
information return for the taxable year ending on the last day of the calendar
year in which the Certificates are issued. The regular interests and residual
interest in each REMIC shall be as designated in the Preliminary Statement and
this Section 9.12.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of section 860G(a)(9) of the Code. The latest possible
maturity date for purposes of Treasury Regulation 1.860G-1(a)(4) will be the
Latest Possible Maturity Date.
(c) The Securities Administrator shall, for federal income tax purposes,
maintain books and records with respect to each REMIC on a calendar year and on
an accrual basis.
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(d) The Securities Administrator shall represent the Trust Fund in any
administrative or judicial proceeding relating to an examination or audit by any
governmental taxing authority with respect thereto. The Securities Administrator
shall pay any and all tax-related expenses (not including taxes) of each REMIC,
including but not limited to any professional fees or expenses related to audits
or any administrative or judicial proceedings with respect to such REMIC that
involve the Internal Revenue Service or state tax authorities, but only to the
extent that (i) such expenses are ordinary or routine expenses, including
expenses of a routine audit but not expenses of litigation (except as described
in (ii)); or (ii) such expenses or liabilities (including taxes and penalties)
are attributable to the negligence or willful misconduct of the Securities
Administrator in fulfilling its duties hereunder (including its duties as tax
return preparer). The Securities Administrator shall be entitled to
reimbursement of expenses to the extent provided in clause (i) above from the
Distribution Account, provided, however, the Securities Administrator shall not
be entitled to reimbursement for expenses incurred in connection with the
preparation of tax returns and other reports as required by this Section.
(e) The Securities Administrator shall prepare and file, and the Trustee
shall sign, all of each REMIC's and the Trust Fund's federal and appropriate
state tax and information returns as such REMIC's direct representative. The
expenses of preparing and filing such returns shall be borne by the Securities
Administrator.
(f) The Securities Administrator or its designee shall perform on behalf of
each REMIC all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions, or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, if required by the Code, the REMIC
Provisions, or other such guidance, the Securities Administrator shall provide,
upon receipt of additional reasonable compensation, to the Treasury or other
governmental authority such information as is necessary for the application of
any tax relating to the transfer of a Residual Certificate to any disqualified
person or organization pursuant to Treasury Regulation 1.860E-2(a)(5) and any
person designated in Section 860E(e)(3) of the Code.
(g) The Securities Administrator and the Holders of Certificates shall take
any action or cause any REMIC to take any action necessary to create or maintain
the status of any REMIC as a REMIC under the REMIC Provisions and shall assist
each other as necessary to create or maintain such status. Neither the
Securities Administrator nor the Holder of any Residual Certificate shall
knowingly take any action, cause any REMIC to take any action or fail to take
(or fail to cause to be taken) any action that, under the REMIC Provisions, if
taken or not taken, as the case may be, could (i) endanger the status of any
REMIC as a REMIC or (ii) result in the imposition of a tax upon any REMIC
(including but not limited to the tax on prohibited transactions as defined in
Code Section 860F(a)(2) and the tax on prohibited contributions set forth on
Section 860G(d) of the Code) (either such event, an "Adverse REMIC Event")
unless the Securities Administrator has received a REMIC Opinion (at the expense
of the party seeking to take such action) to the effect that the contemplated
action will not endanger such status or result in the imposition of such a tax.
In addition, prior to taking any action with respect to any REMIC or the assets
therein, or causing any REMIC to take any action, which is not expressly
permitted under the terms of this Agreement, any Holder of a Residual
Certificate will consult with the Securities Administrator, in writing, with
respect to whether such action could cause an Adverse REMIC Event to occur with
respect to any REMIC, and no such Person shall take any
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such action or cause any REMIC to take any such action as to which the
Securities Administrator has advised it in writing that an Adverse REMIC Event
could occur; provided, however, that if no Adverse REMIC Event would occur but
such action could result in the imposition of additional taxes on the Residual
Certificateholders, no such Person shall take any such action, or cause any
REMIC to take any such action without the written consent of the Residual
Certificateholders.
(h) Each Holder of a Residual Certificate shall pay when due any and all
taxes imposed on the related REMIC by federal or state governmental authorities.
To the extent that such taxes are not paid by a Residual Certificateholder, the
Securities Administrator shall pay any remaining REMIC taxes out of current or
future amounts otherwise distributable to the Holder of the Residual Certificate
in any such REMIC or, if no such amounts are available, out of other amounts
held in the Distribution Account, and shall reduce amounts otherwise payable to
holders of regular interests in any such REMIC, as the case may be.
(i) The Securities Administrator shall prepare and file with the Internal
Revenue Service ("IRS"), on behalf of each REMIC created hereunder, an
application for an employer identification number on IRS Form SS-4 or by any
other acceptable method. The Securities Administrator shall also file a Form
8811 as required. The Securities Administrator, upon receipt from the IRS of the
Notice of Taxpayer Identification Number Assigned, shall upon request promptly
forward a copy of such notice to the Depositor. The Securities Administrator
shall furnish any other information that is required by the Code and regulations
thereunder to be made available to Certificateholders. The Depositor shall cause
each Servicer to provide the Securities Administrator with such information as
is necessary for the Securities Administrator to prepare such reports.
(j) No additional contributions of assets shall be made to any REMIC,
except as expressly provided in this Agreement.
(k) The Securities Administrator shall not enter into any arrangement by
which any REMIC will receive a fee or other compensation for services.
(l) The Class A-R Holder shall act as "tax matters person" with respect to
each REMIC and irrevocably appoints the Securities Administrator to act as its
agent in such roles.
(m) The Securities Administrator shall prepare or cause to be prepared on
behalf of the Trust Fund, based upon information calculated in accordance with
this Agreement pursuant to instructions given by the Depositor, the Trustee
shall sign, and the Securities Administrator shall file federal tax returns, all
in accordance with Section 9.12 hereof. The Securities Administrator shall
prepare and file, and the Trustee shall sign, such state income tax returns and
such other returns as may be required by applicable law relating to the Trust
Fund, and, if required by state law, and shall file any other documents to the
extent required by applicable state tax law (to the extent such documents are in
the Securities Administrator's possession). The Securities Administrator shall
forward copies to the Depositor of all such returns and Form 1099 supplemental
tax information and such other information within the control of the Securities
Administrator as the Depositor may reasonably request in writing, and shall
distribute to each Certificateholder such forms and furnish such information
within the control of the Securities Administrator as are required by the Code
and the REMIC Provisions to be furnished
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to them, and will prepare and distribute to Certificateholders Form 1099
(supplemental tax information) (or otherwise furnish information within the
control of the Securities Administrator) to the extent required by applicable
law.
(n) None of the Securities Administrator, the Trustee or the Depositor, as
assignees under this Agreement, shall provide any consent pursuant to this
Agreement or knowingly take any action under this Agreement that would conflict
with or violate the provisions of this Section 9.12.
(o) The parties intend that the portion of the Trust Fund consisting of the
right to receive the payments distributable to the Class P Certificates shall be
treated as a "grantor trust" under the Code, for the benefit of the holders of
the Class P Certificates, and the provisions hereof shall be interpreted
consistently with this intention. In furtherance of such intention, the
Securities Administrator shall (i) furnish or cause to be furnished to the
holders of the Class P Certificates information regarding their allocable share
of the income with respect to such grantor trust and (ii) file or cause to be
filed with the Internal Revenue Service, and the Trustee shall sign, Form 1041
(together with any necessary attachments) and such other forms as may be
applicable.
(p) Notwithstanding any other provision of this Agreement, the Trustee and
the Securities Administrator shall comply with all federal withholding
requirements respecting payments to Certificateholders of interest or original
issue discount on the Mortgage Loans, that the Trustee or the Securities
Administrator reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee or the Securities Administrator withholds any amount from interest or
original issue discount payments or advances thereof to any Certificateholder
pursuant to federal withholding requirements, the Trustee or the Securities
Administrator shall, together with its monthly report to such
Certificateholders, indicate such amount withheld.
(q) The Trustee and the Securities Administrator agree to indemnify the
Trust Fund and the Depositor for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by the Trust
Fund, the Depositor or the Trustee, as a result of a breach of the Trustee's
covenants and the Securities Administrator's covenants, respectively, set forth
in this Section 9.12; provided, however, such liability and obligation to
indemnify in this paragraph shall not be joint and several and neither the
Trustee nor the Securities Administrator shall be liable or be obligated to
indemnify the Trust Fund for the failure by the other to perform any duty under
this Agreement or the breach by the other of any covenant in this Agreement.
(r) The Securities Administrator covenants and agrees that it shall act as
agent (and the Securities Administrator is hereby appointed to act as agent) of
the Tax Matters Person on behalf of each of the REMICs provided for herein and
that in such capacity it shall: (a) to the extent that they are under its
control conduct the affairs of each of the REMICs provided for herein at all
times that any Certificates are outstanding so as to maintain the status of each
of the REMICs provided for herein as a REMIC under the REMIC Provisions; (b) not
knowingly or intentionally take any action or omit to take any action that would
cause the termination of the REMIC status of any of the REMICs provided for
herein or result in the imposition of tax upon any such REMIC; (c) not knowingly
or intentionally take any action or omit to take any action that would cause the
termination of the grantor trust status under Subpart E, Part I of Subchapter
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J of the Code of any of the grantor trusts provided for herein or result in the
imposition of tax upon any such grantor trust; and (d) as and when necessary and
appropriate, represent each of the REMICs provided for herein in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of any of the REMICs provided for herein, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of any of the REMICs provided for herein,
and otherwise act on behalf of each of the REMICs provided for herein in
relation to any tax matter involving any of such REMICs or any controversy
involving the Trust Fund.
(s) Each of the Depositor, the Master Servicer, the Securities
Administrator and the Trustee agrees not to take or omit to take knowingly or
intentionally, any action or omit to take any action that would cause the
termination of the REMIC status of any of the REMICs provided for herein or
result in the imposition of a tax upon any of the REMICs provided for herein.
(t) For the avoidance of doubt, any returns, records, reports or filings
required under this Section 9.12 and Section 9.12 of the Stack I Agreement, may
be prepared, maintained and filed in a consolidated manner that addresses the
requirements of the Pooling and Servicing Agreement taken as a whole.
(u) The Depositor hereby instructs and authorizes the Securities
Administrator to make an appropriate election to treat each of the Upper Tier
REMIC and the Lower Tier REMIC as a REMIC. The Trustee shall sign the returns
providing for such elections and such other tax or information returns which are
provided to it. This Agreement shall be construed so as to carry out the
intention of the parties that each of the Upper Tier REMIC and the Lower Tier
REMIC be treated as a REMIC at all times prior to the date on which the Trust
Fund is terminated.
(v) The Lower Tier REMIC shall consist of all of the assets of the Trust
Fund relating to the Stack II Mortgage Loans, other than (i) amounts
distributable to the Class P Certificates, (ii) the interests issued by the
Lower Tier REMIC, (iii) the grantor trusts described in this Section 9.12 and
(iv) each Cap Contract and the Cap Contract Account. The Lower Tier REMIC shall
issue the Lower Tier REMIC Regular Interests which shall be designated as
regular interests of such REMIC and shall issue the Class LTR Interest that
shall be designated as the sole class of residual interest in the Lower Tier
REMIC. Each of the Lower Tier REMIC Regular Interests shall have the
characteristics set forth in its definition.
The assets of the Upper Tier REMIC shall be the Lower Tier REMIC
Regular Interests. The REMIC Regular Interests shall be designated as the
regular interests in the Upper Tier REMIC and the Residual Interest shall be
designated as the sole class of residual interest in the Upper Tier REMIC. For
federal income tax purposes, (i) the pass-through rate on the REMIC Regular
Interests represented by the Class AV-1 Certificates and on the sole class of
residual interest in the Upper Tier REMIC shall be subject to a cap equal to the
Class AV-1 Available Funds Cap; (ii) the pass-through rate on the REMIC Regular
Interests represented by the Class AV-2 Certificates shall be subject to a cap
equal to the Class AV-2 Available Funds Cap; and (iii) the pass-through rate on
the REMIC Regular Interests represented by the Stack II Subordinate Certificates
shall be subject to a cap equal to the Weighted Average Available Funds Cap.
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The beneficial ownership of the Class LTR Interest and the Residual
Interest shall be represented by the Class A-R Certificate. The Class LTR
Interest shall not have a principal balance or bear interest.
(w) It is intended that the rights of each Class of the Stack II
Certificates (other than the Class C and Class P Certificates) to receive
payments in respect of Excess Interest shall be treated as a right in interest
rate cap contracts written by the Class C Certificateholders in favor of the
holders of each Class of the Stack II Certificates (other than the Class C and
Class P Certificates) 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 Stack II Senior Certificates (other than the Class A-R Certificate),
Class MV Certificates, Class BV Certificates and the residual interest in the
Upper Tier REMIC held by the holder of the Class A-R Certificate. For
information reporting requirements, the rights of the Stack II Certificates
(other than the Class C and Class P Certificates) to receive payments in respect
of Excess Interest shall be assumed to have zero or a de minimis value. 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. On each Distribution Date, to the extent that any of the Stack
II Certificates (other than the Class C and Class P Certificates) receive
payments in respect of Excess Interest, such amounts, to the extent not derived
from payments on the Cap Contracts, will be treated as distributed by the Upper
Tier REMIC to the Class C Certificates pro rata in payment of the amounts
specified in Section 6.01(h) and then paid to the relevant Class of Certificates
pursuant to the related interest rate cap agreement.
(x) The parties intend that the portion of the Trust Fund consisting of the
Uncertificated Class C Interest, the Cap Contracts, the Cap Contract Account,
and the obligation of the holders of the Class C Certificates to pay amounts in
respect of Excess Interest to the holders of the Stack II Certificates (other
than the Class C and Class P Certificates) shall be treated as a "grantor trust"
under the Code, for the benefit of the holders of the Class C Certificates, and
the provisions hereof shall be interpreted consistently with this intention. In
furtherance of such intention, the Securities Administrator shall (i) furnish or
cause to be furnished to the holders of the Class C Certificates information
regarding their allocable share, if any, of the income with respect to such
grantor trust, (ii) file or cause to be filed with the Internal Revenue Service
Form 1041 (together with any necessary attachments) and such other forms as may
be applicable and (iii) comply with such information reporting obligations with
respect to payments from such grantor trust to the holders of Stack II
Certificates (other than the Class P Certificates) as may be applicable under
the Code.
(y) The parties intend that the portion of the Trust Fund consisting of the
right to receive amounts distributable to the Class P Certificates shall be
treated as a "grantor trust" under the Code, for the benefit of the holders of
the Class P Certificates, and the provisions hereof shall be interpreted
consistently with this intention. In furtherance of such intention, the
Securities Administrator shall (i) furnish or cause to be furnished to the
holders of the Class P Certificates information regarding their allocable share
of the income with respect to such grantor trust and (ii) file or cause to be
filed with the Internal Revenue Service Form 1041 (together with any necessary
attachments) and such other forms as may be applicable.
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(z) All payments of principal and interest at the Net Mortgage Rate on each
of the Mortgage Loans (other than amounts distributable to the Class P
Certificates) received from the Mortgage Loans shall be paid to the Lower Tier
REMIC Regular Interests until the principal balance of all such interests have
been reduced to zero and any losses allocated to such interests have been
reimbursed. Any excess amounts shall be distributed to the Class LTR Interest.
On each Distribution Date, payments and losses shall be allocated among the
Lower Tier REMIC Regular Interests so that (i) each of the Lower Tier REMIC I
Marker Interests shall have a principal balance equal to 25% of the principal
balance of the Corresponding Certificates, (ii) the Class LTIX Interest has a
principal balance equal to the excess of (x) 50% of the remaining principal
balance of the Mortgage Loans over (y) the aggregate principal balance of the
Lower Tier REMIC I Marker Interests (if necessary to reflect an increase in
overcollateralization, accrued and unpaid interest on the Class LTIX interest
may be added to its principal amount to achieve this result) and (iii) the
aggregate principal amount of the Class LTII2A Interest, Class LTII2B Interest,
Class LTII3A Interest, Class LTII3B Interest and the Class LTIIX Interest shall
equal 50% of the remaining principal balance of the Mortgage Loans.
Distributions and losses allocated to the Lower Tier REMIC Regular Interests
described in clause (iii) of the preceding sentence will be allocated among such
Lower Tier REMIC Regular Interests in the following manner: (x) such
distributions shall be deemed made to such Lower Tier REMIC Regular Interests
first, so as to keep the principal balance of the each such Lower Tier REMIC
Regular Interest with "B" at the end of its designation equal to 0.05% of the
aggregate scheduled principal balance of the Mortgage Loans in the related Loan
Group and second, to such Lower Tier REMIC Regular Interests with "A" at the end
of its designation so that the uncertificated principal balance of each such
Lower Tier REMIC Regular Interest is equal to 0.05% of the excess of (I) the
aggregate scheduled principal balance of the Mortgage Loans in the related Loan
Group over (II) the aggregate principal balance of the Group 2 Certificates, in
the case of the Class LTII2A Interest, or the Group 3 Certificates, in the case
of the Class LTII3A Interest (except that if 0.05% of any such excess is greater
than the principal amount of the related Lower Tier REMIC II Marker Interest
with "A" at the end of its designation, the least amount of principal shall be
distributed to each Lower Tier REMIC II Marker Interest with "A" at the end of
its designation such that the Lower Tier REMIC Subordinated Balance Ratio is
maintained) and finally, any remaining distributions of principal to the Class
LTIIX Interest and (y) such losses shall be allocated among the Lower Tier REMIC
Regular Interests described in clause (iii) of the preceding sentence first, so
as to keep the principal balance of the each such Lower Tier REMIC Regular
Interest with "B" at the end of its designation equal to 0.05% of the aggregate
scheduled principal balance of the Mortgage Loans in the related Loan Group;
second, to such Lower Tier REMIC Regular Interests with "A" at the end of its
designation so that the uncertificated principal balance of each such Lower Tier
REMIC Regular Interest is equal to 0.05% of the excess of (I) the aggregate
scheduled principal balance of the Mortgage Loans in the related Loan Group over
(II) the aggregate principal balance of the Group 2 Certificates, in the case of
the Class LTII2A Interest, or the Group 3 Certificates, in the case of the Class
LTII3A Interest (except that if 0.05% of any such excess is greater than the
principal amount of the related Lower Tier REMIC II Marker Interest with "A" at
the end of its designation, the least amount of losses shall be allocated to
each Lower REMIC II Marker Interest with "A" at the end of its designation such
that the Lower Tier REMIC Subordinated Balance Ratio is maintained) and finally,
any remaining losses to the Class LTIIX Interest. Notwithstanding the preceding
two sentences, however, losses not allocated to any Class of Certificates will
not be allocated to
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any Lower Tier REMIC Regular Interests. All computations with respect to the
Lower Tier REMIC Regular Interests shall be taken out to ten decimal places.
Any available funds remaining in the Lower Tier REMIC on a
Distribution Date after distributions to the Lower Tier REMIC Regular Interests
shall be distributed to the Class A-R Certificates in respect of the Class LTR
Interest.
If on any Distribution Date the Class Certificate Balance of any Class
of Certificates is increased pursuant to the last sentence of the definition of
"Class Certificate Balance", then there shall be an equivalent increase in the
principal amounts of the Lower Tier REMIC Regular Interests, with such increase
allocated (before the making of distributions and the allocation of losses on
the Lower Tier REMIC Regular Interests on such Distribution Date) among the
Lower Tier REMIC Regular Interests so that, to the greatest extent possible, (i)
each of the Lower Tier REMIC I Marker Interests has a principal balance equal to
25% of the principal balance of the Corresponding Certificates, (ii) the Class
LTIX Interest has a principal balance equal to the excess of (x) 50% of the
remaining principal balance of the Mortgage Loans over (y) the aggregate
principal balance of the Lower Tier REMIC I Marker Interests and (iii) the
aggregate principal amount of the Lower Tier REMIC II Marker Interests and the
Class LTIIX Interest shall equal 50% of the remaining principal balance of the
Mortgage Loans. Allocations in connection with clause (iii) shall be made so
that, to the greatest extent possible, (a) the principal balance of each Lower
Tier REMIC II Marker Interest with "B" at the end of its designation equals
0.05% of the aggregate scheduled principal balance of the Mortgage Loans in
related Loan Group, (b) the principal balance of each Lower Tier REMIC II Marker
Interest with "A" at the end of its designation equals 0.05% of the excess of
(x) the aggregate scheduled principal balance of the Mortgage Loans in related
Loan Group over (y) the aggregate principal balance of the Group 2 Certificates
in the case of the Class LTII2A Interest, or the Group 3 Certificates in the
case of the Class LTII3A Interest and (c) any remaining allocations are made to
the Class LTIIX Interest.
For purposes of this Section 9.12, (i) the Class LTII2A Interest and
Class LTII2B Interest shall be related to Loan Group 2, and (ii) the Class
LTII3A Interest and Class LTII3B Interest shall be related to Loan Group 3.
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ARTICLE X
TERMINATION
Section 10.01 Termination upon Liquidation or Repurchase of all Mortgage
Loans.
(a) Subject to Section 10.03, the obligations and responsibilities of the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
created hereby with respect to that portion of the Trust Fund relating to the
Certificates shall terminate upon the earlier of (a) an Optional Termination and
(b) the later of (i) the maturity or other liquidation of the last Mortgage Loan
remaining in the Trust Fund (or any Monthly Advance with respect thereto) and
the disposition of all REO Property and (ii) the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
this Agreement, as applicable. In no event shall the trusts created hereby
continue beyond the earlier of (i) 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 and
(ii) the Latest Possible Maturity Date.
(b) On or before the Determination Date following the Initial Optional
Termination Date, the Securities Administrator shall attempt to terminate that
portion of the Trust Fund relating to the Certificates by conducting an auction
of all of the Mortgage Loans and REO Properties via a solicitation of bids from
at least three (3) bidders, each of which shall be a nationally recognized
participant in mortgage finance (the "Auction"). The Depositor and the
Securities Administrator agree to work in good faith to develop bid procedures
in advance of the Initial Optional Termination Date to govern the operation of
the Auction. The Securities Administrator shall be entitled to retain an
investment banking firm and/or other agents in connection with the Auction, the
cost of which shall be included in the Optional Termination Price (unless an
Optional Termination does not occur in which case such costs shall be an expense
of the Issuing Entity). The Securities Administrator shall accept the highest
bid received at the Auction; provided that the amount of such bid equals or
exceeds the Optional Termination Price. The Securities Administrator shall
determine the Optional Termination Price based upon information provided by (i)
the Master Servicer with respect to the amounts described in clauses (A) and (B)
of the definition of "Optional Termination Price" (other than Securities
Administrator's expenses) and (ii) the Depositor with respect to the information
described in clause (C) of the definition of "Optional Termination Price." The
Securities Administrator may conclusively rely upon the information provided to
it in accordance with the immediately preceding sentence and shall not have any
liability for the failure of any party to provide such information.
If an Optional Termination does not occur as a result of the Auction's
failure to achieve the Optional Termination Price, the Master Servicer may, on
any Distribution Date following such Auction, at its option, terminate that
portion of the Trust Fund relating to the Certificates by purchasing all of the
Mortgage Loans and REO Properties at a price equal to the Optional Termination
Price. In connection with such termination, the Optional Termination Price shall
be delivered to the Securities Administrator no later than the Business Day
immediately preceding the related Distribution Date. Notwithstanding anything to
the contrary herein, the Optional Termination Amount paid to the Securities
Administrator by the winning bidder at the Auction or by the Master Servicer
shall be deposited by the Securities Administrator directly into the
Distribution Account immediately upon receipt. Upon any termination as a result
of an Auction,
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the Securities Administrator shall, out of the Optional Termination Amount
deposited into the Distribution Account, (x) pay the Securities Administrator
its costs and expenses necessary to conduct the Auction and any other
unreimbursed amounts owing to it and (y) pay to the Master Servicer or Servicer,
the aggregate amount of any unreimbursed out-of-pocket costs and expenses owed
to the Master Servicer or Servicer and any unpaid or unreimbursed Servicing
Fees, Monthly Advances and Servicing Advances.
(c) Notwithstanding anything to the contrary in clause (b) above, in the
event that the Securities Administrator and the Trustee receive the written
opinion of a nationally recognized participant in mortgage finance acceptable to
the Sponsor that the Mortgage Loans and REO Properties to be included in the
Auction will not be saleable at a price sufficient to achieve the Optional
Termination Price, the Securities Administrator need not conduct the Auction. In
such event, the Master Servicer shall have the option to purchase the Mortgage
Loans and REO Properties at the Optional Termination Price as of the Initial
Optional Termination Date.
(d) For the avoidance of doubt, the obligations and responsibilities of the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
created pursuant to the Stack I Agreement shall survive any termination pursuant
to this Section 10.01.
Section 10.02 Final Distribution on the Certificates.
If on any Determination Date, (i) the Securities Administrator determines
that there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund relating to the Mortgage Loans other than the funds in the Master
Servicer Collection Account, the Securities Administrator shall send a final
distribution notice promptly to each Certificateholder or (ii) the Securities
Administrator determines that a Class of Certificates shall be retired after a
final distribution on such Class, the Securities Administrator shall notify the
Certificateholders within seven (7) Business Days after such Determination Date
that the final distribution in retirement of such Class of Certificates is
scheduled to be made on the immediately following Distribution Date. Any final
distribution made pursuant to the immediately preceding sentence will be made
only upon presentation and surrender of the Certificates at the office of the
Securities Administrator.
Notice of any partial termination of the Issuing Entity, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Securities Administrator by letter to Certificateholders mailed no later
than the last calendar day of the month immediately preceding the month of such
final distribution (or with respect to an Auction, mailed no later than one
Business Day following completion of such Auction). Any such notice shall
specify (a) the Distribution Date upon which final distribution on the
Certificates will be made upon presentation and surrender of Certificates at the
office therein designated, (b) the location of the office or agency at which
such presentation and surrender must be made, and (c) that the Record Date
otherwise applicable to such Distribution Date is not applicable, distributions
being made only upon presentation and surrender of the Certificates at the
office therein specified. The Securities Administrator will give such notice to
each Rating Agency at the time such notice is given to Certificateholders.
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In the event such notice is given, the Master Servicer shall cause all
funds in the Master Servicer Collection Account to be deposited in the
Distribution Account on the Business Day prior to the applicable Distribution
Date in an amount equal to the final distribution in respect of the
Certificates. Upon receipt of written notice of such final deposit with respect
to the Issuing Entity and the receipt by the Trustee, or its Custodian, of a
Request for Release therefor, the Trustee, or its Custodian, shall promptly
release to the Securities Administrator or the Master Servicer, as applicable,
the Mortgage Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Securities
Administrator shall cause to be distributed to Certificateholders of each Class
the amounts allocable to such Certificates held in the Distribution Account in
the order and priority set forth in Section 6.01 hereof on the final
Distribution Date and in proportion to their respective Percentage Interests.
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above-mentioned written notice, the Securities Administrator shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Securities
Administrator may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets that remain a part of the Issuing Entity. If within one
year after the second notice all Certificates shall not have been surrendered
for cancellation, the Class A-R Certificateholders shall be entitled to all
unclaimed funds and other assets of the Issuing Entity that remain subject
hereto. Upon payment to the Class A-R Certificateholders of such funds and
assets, the Securities Administrator shall have no further duties or obligations
with respect thereto.
Section 10.03 Additional Termination Requirements.
(a) In the event the Securities Administrator or the Master Servicer
exercises its purchase option as provided in Section 10.01, that portion of the
Trust Fund relating to the Mortgage Loans shall be terminated in accordance with
the following additional requirements, unless the Securities Administrator shall
have been furnished with an Opinion of Counsel to the effect that the failure of
the Issuing Entity to comply with the requirements of this Section will not (i)
result in the imposition of taxes on "prohibited transactions" of the Issuing
Entity as defined in Section 860F of the Code or (ii) cause any REMIC
constituting part of the Issuing Entity to fail to qualify as a REMIC at any
time that any Certificates are outstanding:
(i) Within 90 days prior to the final Distribution Date, the
Securities Administrator shall adopt and sign a plan of complete
liquidation of the Issuing Entity as provided to it by the terminating
purchaser, meeting the requirements of a "qualified liquidation" under
Section 860F of the Code and any regulations thereunder; and
(ii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Distribution Date, the Securities
Administrator shall sell all of the assets of the Issuing Entity for cash
pursuant to the terms of the plan of complete liquidation.
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(b) By their acceptance of Certificates, the Holders thereof hereby agree
to appoint the Securities Administrator as their attorney in fact to: (i) adopt
such a plan of complete liquidation (and the Certificateholders hereby appoint
the Securities Administrator as their attorney in fact to sign such plan) as
appropriate and (ii) to take such other action in connection therewith as may be
reasonably required to carry out such plan of complete liquidation all in
accordance with the terms hereof.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Intent of Parties. The parties intend that each REMIC shall
be treated as a REMIC for federal income tax purposes and that the provisions of
this Agreement should be construed in furtherance of this intent.
Section 11.02 Amendment.
(a) This Agreement may be amended from time to time by the Depositor, the
Master Servicer, the Securities Administrator and the Trustee, and without the
consent of any of the Certificateholders to:
(i) to cure any ambiguity or correct any mistake,
(ii) to correct, modify or supplement any provision herein which
may be inconsistent with any other provision herein,
(iii) to add any other provisions with respect to matters or
questions arising under this Agreement, or
(iv) to modify, alter, amend, add to or rescind any of the terms
or provisions contained in this Agreement; provided, however, that, in the
case of clauses (iii) and (iv), such amendment will not, as evidenced by an
Opinion of Counsel addressed to the Securities Administrator to such
effect, adversely affect in any material respect the interests of any
Certificateholder; provided, further, however, that such amendment will be
deemed to not adversely affect in any material respect the interest of any
Holder if the Person requesting such amendment obtains a letter from each
Rating Agency stating that such amendment will not result in a reduction or
withdrawal of its rating of any Class of the Certificates, it being
understood and agreed that any such letter in and of itself will not
represent a determination as to the materiality of any such amendment and
will represent a determination only as to the credit issues affecting any
such rating.
Notwithstanding the foregoing, without the consent of the
Certificateholders, the Depositor, the Master Servicer, the Securities
Administrator and the Trustee may at any time and from time to time amend this
Agreement to modify, eliminate or add to any of its provisions to such extent as
shall be necessary or appropriate to maintain the qualification of any of the
REMICs provided for herein as REMICs under the Code or to avoid or minimize the
risk of the imposition of any tax on the Issuing Entity or any of the REMICs
provided for herein pursuant to
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the Code that would be a claim against the Issuing Entity at any time prior to
the final redemption of the Certificates, provided that the Trustee and the
Securities Administrator shall have been provided an Opinion of Counsel
addressed to the Trustee and the Securities Administrator, which opinion shall
be an expense of the party requesting such amendment but in any case shall not
be an expense of the Trustee and the Securities Administrator, to the effect
that such action is necessary or appropriate to maintain such qualification or
to avoid or minimize the risk of the imposition of such a tax.
(b) This Agreement may also be amended from time to time by the Master
Servicer, the Depositor, the Securities Administrator and the Trustee, and the
Assignment Agreements may also be amended from time to time by the Master
Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing Percentage Interests aggregating not less than 51% of the Class
Certificate Balance of the Certificates or of the applicable Class or Classes,
if such amendment affects only such Class or Classes, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall (i) reduce
in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Regular Certificate
without the consent of the Holder of such Regular Certificate, or (ii) reduce
the aforesaid percentage of Certificates the Holders of which are required to
consent to any such amendment, without the consent of the Holders of all
Certificates then outstanding. Notwithstanding any contrary provision of this
Agreement, the Trustee shall not consent to any amendment to this Agreement
unless it shall have first received an Opinion of Counsel addressed to the
Trustee, which opinion shall be an expense of the party requesting such
amendment but in any case shall not be an expense of the Trustee, to the effect
that such amendment is permitted hereunder and will not cause the imposition of
any tax on the Issuing Entity, any of the REMICs provided for herein or the
Certificateholders or cause any of the REMICs provided for herein to fail to
qualify as a REMIC at any time that any Certificates are outstanding.
(c) Promptly after the execution of any such amendment, the Securities
Administrator shall furnish a copy of such amendment or written notification of
the substance of such amendment to each Certificateholder, with a copy to the
Rating Agencies.
(d) In the case of an amendment under Subsection 11.02(b) above, it shall
not be necessary for the Certificateholders to approve the particular form of
such an amendment. Rather, it shall be sufficient if the Certificateholders
approve the substance of the amendment. The manner of obtaining such consents
and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as the
Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel stating that
the execution of such amendment is authorized or permitted by this Agreement and
will not adversely affect the status of any REMIC created hereunder. The Trustee
and the Securities Administrator may, but shall not be obligated to, enter into
any such amendment which affects the Trustee's or the Securities Administrator's
own respective rights, duties or immunities under this Agreement.
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Section 11.03 Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere. The Depositor
shall effect such recordation, at the expense of the Issuing Entity upon the
request in writing of a Certificateholder, but only if such direction is
accompanied by an Opinion of Counsel (provided at the expense of the
Certificateholder requesting recordation) to the effect that such recordation
would materially and beneficially affect the interests of the Certificateholders
or is required by law.
Section 11.04 Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall not terminate
this Agreement or the Issuing Entity, 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 Issuing Entity, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
(b) Except as expressly provided in this Agreement, no Certificateholders
shall have any right to vote or in any manner otherwise control the operation
and management of the Issuing Entity, or the obligations of the parties hereto,
nor shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to establish the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholders be under any liability to any third Person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon, under or with respect to this Agreement against the Depositor, the
Securities Administrator, the Master Servicer or any successor to any such
parties unless (i) such Certificateholder previously shall have given to the
Trustee a written notice of a continuing default, as herein provided, (ii) the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 51% of the Trust Fund shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs and expenses and liabilities to be incurred therein or
thereby, and (iii) the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused to institute any
such action, suit or proceeding.
(d) No one or more Certificateholders shall have any right by virtue of any
provision of this Agreement to affect the rights of any other Certificateholders
or to obtain or seek to obtain priority or preference over any other such
Certificateholder, or to enforce any right under this Agreement, except in the
manner herein provided and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of this
Section 11.04, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
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Section 11.05 Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
an agent duly appointed in writing. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is expressly required, to the
Depositor. Proof of execution of any such instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Agreement and
conclusive in favor of the Trustee and the Depositor, if made in the manner
provided in this Section 11.05.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his or her individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his or her
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the individual executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing on such Certificates, except an endorsement in
accordance with Section 5.02 made on a Regular Certificate presented in
accordance with Section 5.04) shall be proved by the Certificate Register, and
neither the Trustee, the Securities Administrator, the Depositor, the Master
Servicer nor any successor to any such parties shall be affected by any notice
to the contrary.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action of the holder of any Regular Certificate shall bind every future
holder of the same Regular Certificate and the holder of every Regular
Certificate issued upon the registration of transfer or exchange thereof, if
applicable, or in lieu thereof with respect to anything done, omitted or
suffered to be done by the Trustee, the Securities Administrator, the Depositor,
the Master Servicer or any successor to any such party in reliance thereon,
whether or not notation of such action is made upon such Certificates.
(e) In determining whether the Holders of the requisite percentage of
Certificates evidencing Percentage Interests have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Certificates
owned by the Trustee, the Securities Administrator, the Depositor, the Master
Servicer or any Affiliate thereof shall be disregarded, except as otherwise
provided in Section 11.02(b) and except that, in determining whether the
Securities Administrator or the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Certificates which a Responsible Officer of the Trustee knows to be so owned
shall be so disregarded. Certificates which have been pledged in good faith to
the Trustee, the Securities Administrator, the Depositor, the Master Servicer or
any Affiliate thereof may be regarded as outstanding if the pledgor establishes
to the satisfaction of the Securities Administrator the pledgor's right to act
with respect to such
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Certificates and that the pledgor is not an Affiliate of the Trustee, the
Securities Administrator, the Depositor, or the Master Servicer, as the case may
be.
Section 11.06 Governing Law. THIS AGREEMENT AND THE CERTIFICATES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO ITS CONFLICT OF LAWS RULES AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.07 Notices. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at (including delivery by
facsimile) or mailed by registered mail, return receipt requested, postage
prepaid, or by recognized overnight courier, to (i) in the case of the
Depositor, 0 Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Vice
President-Servicing, telecopier number: (000) 000-0000, or to such other address
as may hereafter be furnished to the other parties hereto in writing; (ii) in
the case of the Trustee, at its Corporate Trust Office, or such other address as
may hereafter be furnished to the other parties hereto in writing; (iii) in the
case of the Master Servicer or Securities Administrator, Xxxxx Fargo Bank, N.A.,
X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000, Attention: Client Service Manager MLMI
Series 2006-AF2, or, in the case of overnight deliveries, 0000 Xxx Xxxxxxxxx
Xxxx, Xxxxxxxx, Xxxxxxxx 00000-0000, Attention: Client Service Manager MLMI
Series 2006-AF2, facsimile no.: (000) 000-0000, or such other address as may
hereafter be furnished to the other parties hereto in writing; (iv) in the case
of the Custodian, Xxxxx Fargo Bank, N.A., 0000 00xx Xxxxxx Xxxxxxxxx, XX 0031,
Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: MLMI Series 2006-AF2; or such other
address as may hereafter be furnished to the other parties hereto in writing;
(v) in the case of the Rating Agencies, Xxxxx'x Investors Service, Inc., 00
Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 and Standard & Poor's, a
division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000; or (vi) in the case of the Cap Contract Counterparty, The Royal Bank of
Scotland plc, 000 Xxxxxxxxxxx, Xxxxxx XX0X 0XX, Attention: Legal
Department--Derivatives Documentation, telephone no. (000) 000-0000, facsimile
no. (000) 000-0000, with a copy to Greenwich Capital Markets, Inc., 000
Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000, Attention: Legal Department -
Derivatives Documentation. Any notice delivered to the Depositor, the Trustee,
the Securities Administrator or the Master Servicer under this Agreement shall
be effective only upon receipt. Any notice required or permitted to be mailed to
a Certificateholder, unless otherwise provided herein, shall be given by
first-class mail, postage prepaid, at the address of such Certificateholder as
shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given when mailed, whether or not the Certificateholder receives such notice.
Section 11.08 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severed from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
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Section 11.09 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the respective successors and
assigns of the parties hereto.
Section 11.10 Article and Section Headings. The article and section
headings herein are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof.
Section 11.11 Counterparts. This Agreement may be executed in two or more
counterparts each of which when so executed and delivered shall be an original
but all of which together shall constitute one and the same instrument.
Section 11.12 Notice to Rating Agencies. The article and section headings
herein are for convenience of reference only, and shall not limited or otherwise
affect the meaning hereof. The Trustee shall promptly provide notice to each
Rating Agency with respect to each of the following of which it has actual
knowledge:
1. Any material change or amendment to this Agreement or the Servicing
Agreements;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Trustee, the Master Servicer or
the Securities Administrator;
4. The repurchase or substitution of Mortgage Loans;
5. The final payment to Certificateholders; and
6. Any change in the location of the Master Servicer Collection Account or
the Distribution Account.
ARTICLE XII
REMIC ADMINISTRATION
Section 12.01 [Reserved].
Section 12.02 Prohibited Transactions and Activities. Neither the Depositor
nor the Securities Administrator shall sell, dispose of, or substitute for any
of the Mortgage Loans, except in a disposition pursuant to (i) the foreclosure
of a Mortgage Loan, (ii) the bankruptcy of the Trust Fund, (iii) the termination
of each REMIC pursuant to Article X of this Agreement, (iv) a substitution
pursuant to Article II of this Agreement or (v) a repurchase of Mortgage Loans
pursuant to Article II of this Agreement, nor acquire any assets for any REMIC,
nor sell or dispose of any investments in the Distribution Account for gain, nor
accept any contributions to any REMIC after the Closing Date, unless it has
received an Opinion of Counsel (at the expense of the party causing such sale,
disposition, or substitution) that such disposition, acquisition, substitution,
or acceptance will not (a) affect adversely the status of any such REMIC as a
REMIC or of the interests therein other than the Residual Certificate as the
regular interests
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therein, (b) affect the distribution of interest or principal on the
Certificates, (c) result in the encumbrance of the assets transferred or
assigned to the Trust Fund (except pursuant to the provisions of this Agreement)
or (d) cause any such REMIC to be subject to any tax including a tax on
prohibited transactions or prohibited contributions pursuant to the REMIC
Provisions.
Section 12.03 Indemnification with Respect to Prohibited Transactions or
Loss of REMIC Status. In the event that a REMIC fails to qualify as a REMIC,
loses its status as a REMIC, or incurs federal, state or local taxes as a result
of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Securities Administrator of
its duties and obligations set forth herein, the Securities Administrator shall
indemnify the Certificateholders of the related Residual Certificate against any
and all losses, claims, damages, liabilities or expenses ("Losses") resulting
from such negligence; provided, however, that the Securities Administrator shall
not be liable for any such Losses attributable to the action or inaction of the
Depositor or the Holder of the Residual Certificate, nor for any such Losses
resulting from misinformation provided by any of the foregoing parties on which
the Securities Administrator has relied. Notwithstanding the foregoing, however,
in no event shall the Trustee or the Securities Administrator have any liability
(1) for any action or omission that is taken in accordance with and in
compliance with the express terms of, or which is expressly permitted by the
terms of, this Agreement or the Stack II Mortgage Loan Purchase Agreement, (2)
for any Losses other than arising out of malfeasance, willful misconduct or
negligent performance by the Securities Administrator with respect to its duties
and obligations set forth herein, and (3) for any special or consequential
damages to Certificateholders of the related Residual Certificate (in addition
to payment of principal and interest on the Certificates).
Section 12.04 REO Property.
(a) Notwithstanding any other provision of this Agreement, the Securities
Administrator shall not, except to the extent provided in this Agreement for
which the Securities Administrator is obligated to perform, knowingly permit any
Servicer to rent, lease, otherwise earn income or take any other action on
behalf of any REMIC with respect to any REO Property which might cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
section 860G(a)(8) of the Code or result in the receipt by any REMIC of any
"income from non-permitted assets" within the meaning of section 860F(a)(2) of
the Code or any "net income from foreclosure property" which is subject to tax
under the REMIC Provisions unless the Servicer has provided to the Securities
Administrator an Opinion of Counsel concluding that, under the REMIC Provisions,
such action would not adversely affect the status of any REMIC as a REMIC and
any income generated for any REMIC by the REO Property would not result in the
imposition of a tax upon such REMIC.
(b) The Depositor shall cause each Servicer (to the extent provided in the
applicable Servicing Agreement) to make reasonable efforts to sell any REO
Property for its fair market value. In any event, however, the Depositor shall,
or shall cause the Servicer (to the extent provided in this Agreement) to,
dispose of any REO Property within three years of its acquisition by the Issuing
Entity unless the Depositor or such Servicer (on behalf of the Issuing Entity)
has received a grant of extension from the Internal Revenue Service to the
effect that, under the REMIC Provisions and any relevant proposed legislation
and under applicable state law, the REMIC may hold REO Property for a longer
period without adversely affecting the REMIC status of such REMIC or causing the
imposition of a Federal or state tax upon such REMIC. If
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such an extension has been received, then the Depositor, acting on behalf of the
Trustee hereunder, shall, or shall cause the Servicer to, continue to attempt to
sell the REO Property for its fair market value for such period longer than
three years as such extension permits (the "Extended Period"). If such an
extension has not been received and the Depositor or the Servicer, acting on
behalf of the Issuing Entity hereunder, is unable to sell the REO Property
within 33 months after its acquisition by the Issuing Entity or if such an
extension, has been received and the Depositor or the Servicer is unable to sell
the REO Property within the period ending three months before the close of the
Extended Period, the Depositor shall cause the Servicer, before the end of the
three year period or the Extended Period, as applicable, to (i) purchase such
REO Property at a price equal to the REO Property's fair market value or (ii)
auction the REO Property to the highest bidder (which may be the Servicer) in an
auction reasonably designed to produce a fair price prior to the expiration of
the three-year period or the Extended Period, as the case may be.
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IN WITNESS WHEREOF, the Depositor, the Trustee, the Master Servicer and the
Securities Administrator have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first above
written.
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.,
as Depositor
By:
------------------------------------
Name: Xxxx Park
Title: Authorized Signatory
HSBC BANK USA, NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXX FARGO BANK, N.A.,
as Master Servicer
By:
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Assistant Vice President
XXXXX FARGO BANK, N.A.,
as Securities Administrator
By:
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Assistant Vice President
EXHIBIT A-1
FORM OF CLASS [A -_] [M-_][BF- ] CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER OR THE SECURITIES ADMINISTRATOR
REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NONE OF THIS CERTIFICATE, THE
REMIC REGULAR INTEREST REPRESENTED HEREBY OR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED OR INSURED BY THE DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, THE
SECURITIES ADMINISTRATOR 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 MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE SECURITIES ADMINISTRATOR.
[THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES [, THE CLASS M
CERTIFICATES] AND THE RESIDUAL CERTIFICATES TO THE EXTENT DESCRIBED IN THE
AGREEMENT REFERRED TO HEREIN.]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
IF ANY BOOK-ENTRY CERTIFICATE (OR ANY INTEREST THEREIN) IS ACQUIRED OR HELD IN
VIOLATION OF THE PROVISIONS OF SECTION 5.02(B) OF THE POOLING AND SERVICING
AGREEMENT, THEN THE LAST PRECEDING TRANSFEREE THAT IS IN COMPLIANCE WITH SUCH
PROVISIONS SHALL BE RESTORED, TO THE EXTENT PERMITTED BY LAW, TO ALL RIGHTS AND
OBLIGATIONS AS CERTIFICATE OWNER THEREOF RETROACTIVE TO THE DATE OF SUCH
TRANSFER OF SUCH CERTIFICATE. NEITHER THE TRUSTEE NOR THE SECURITIES
ADMINISTRATOR SHALL BE UNDER ANY LIABILITY TO
A-1-1
ANY PERSON FOR MAKING ANY PAYMENTS DUE ON SUCH CERTIFICATE TO SUCH PRECEDING
TRANSFEREE.
ANY PURPORTED CERTIFICATE OWNER WHOSE ACQUISITION OR HOLDING OF ANY BOOK-ENTRY
CERTIFICATE (OR INTEREST THEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS
IN SECTION 5.02(B) OF THE AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE
DEPOSITOR, THE TRUSTEE, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER AND
THE TRUST FUND FROM AND AGAINST ANY AND ALL LIABILITIES, CLAIMS, COSTS OR
EXPENSES INCURRED BY SUCH PARTIES AS A RESULT OF SUCH ACQUISITION OR HOLDING.
A-1-2
MLMI Series 2006-AF2, Class [_] Aggregate Certificate Principal Balance
of the Class [_] Certificates as of the
Issue Date: $[__]
Pass-Through Rate: Variable1 Initial Certificate Principal Balance of
this Class [_] Certificate as of the
Issue Date: $[_]
Date of Agreement and Cut-off Date: Master Servicer and Securities
October 1, 2006 Administrator: Xxxxx Fargo Bank, N.A.
First Distribution Date: Trustee: HSBC Bank USA, National
November 25, 2006 Association
No. Issue Date: October 31, 2006
CUSIP:
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
MORTGAGE PASS-THROUGH CERTIFICATE
MLMI SERIES 2006-AF2
evidencing a beneficial ownership interest in a Trust Fund (the "Trust
Fund") consisting primarily of two separate stacks of conventional, one- to
four-family, fixed and adjustable-rate, fully amortizing mortgage loans secured
by first liens on residential property (the "Mortgage Loans") formed and sold by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
XXXXXXX XXXXX MORTGAGE INVESTORS, INC., THE MASTER SERVICER, THE
SECURITIES ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
----------
1 As described in the Pooling and Servicing Agreement referenced herein.
A-1-3
This certifies that CEDE & CO. is the registered owner of a Percentage
Interest obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class [_] Certificates as of the
Issue Date in that certain beneficial ownership interest evidenced by all the
Class [_] Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Xxxxxxx
Xxxxx Mortgage Investors, Inc., as depositor (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement),
Xxxxx Fargo Bank, N.A., as master servicer (in such capacity, the "Master
Servicer") and securities administrator (in such capacity, the "Securities
Administrator") and HSBC Bank USA, National Association, as trustee (the
"Trustee"). The Class [_] Certificates relate to stack [I][II] ("Stack [I][II}")
of the Trust Fund. A summary of certain of the pertinent provisions of the
Agreement relating to Stack [I][II] of the Trust Fund is set forth hereafter.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Interest on this Certificate will accrue during the period specified in
the Agreement on the Certificate Principal Balance hereof at a per annum rate
equal to the variable
Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Record Date, in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class [_] Certificates on such Distribution Date
pursuant to the Agreement.
All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by the Securities Administrator by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Securities Administrator in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Class [_] Certificates,
or otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Securities Administrator of the pendency of
such distribution and only upon the presentation and surrender of this
Certificate at the office or agency appointed by the Securities Administrator
for that purpose as provided in the Agreement.
If any Book-Entry Certificate (or any interest therein) is acquired or
held in violation of the provisions of Section 5.02(b) of the Agreement, then
the last preceding Transferee that is in compliance with such provisions shall
be restored, to the extent permitted by law, to all rights and obligations as
Certificate Owner thereof retroactive to the date of such Transfer of such
Certificate. Neither the Trustee nor the Securities Administrator shall be under
any liability to any Person for making any payments due on such Certificate to
such preceding Transferee.
A-1-4
Any purported Certificate Owner whose acquisition or holding of any
Book-Entry Certificate (or interest therein) was effected in violation of the
restrictions in Section 5.02(b) of the Agreement shall indemnify and hold
harmless the Depositor, the Trustee, the Securities Administrator, the Master
Servicer and the Trust Fund from and against any and all liabilities, claims,
costs or expenses incurred by such parties as a result of such acquisition or
holding.
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from the
Master Servicer Collection Account and the Distribution Account may be made from
time to time for purposes other than distributions to Holders of the
Certificates, such purposes including reimbursement of advances made, or certain
expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Securities Administrator, the Master Servicer
and the Trustee and the rights of the Holders of the Certificates under the
Agreement at any time by the Depositor, the Securities Administrator, the Master
Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing Percentage Interests aggregating not less than 66 2/3% of the Trust
Fund or of the applicable Class or Classes, if such amendment affects only such
Class or Classes, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Certificateholders. Any such consent by the Holder
of this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Securities Administrator as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Securities
Administrator duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are
A-1-5
exchangeable for new Certificates of the same Class in authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or
exchange of Certificates, but the Securities Administrator may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Securities Administrator, the Master Servicer and the
Trustee and any agent of the Depositor, the Securities Administrator, the Master
Servicer or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Securities Administrator, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.
This certificate shall be governed by and construed in accordance with the
laws of the state of New York.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by the Securities Administrator and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in the Trust Fund and (iii) the Optional Termination of the trust fund
according to the procedures described in the Agreement, which can occur on any
date after the first Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than 10% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed by the
Securities Administrator, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-1-6
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
XXXXX FARGO BANK, N.A.,
as Securities Administrator
..
By:
------------------------------------
AUTHORIZED SIGNATORY
Dated:
--------------
SECURITIES ADMINISTRATOR'S CERTIFICATE AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Pooling and
Servicing Agreement.
XXXXX FARGO BANK, N.A.,
as Authenticating Agent
By:
------------------------------------
AUTHORIZED SIGNATORY
Dated:
--------------
A-1-7
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts to
Minors Act
JT TEN - as joint tenants with right ______________
of survivorship and not (State)
as tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
--------------------------------------------------------------------------------
-------------------------------------------------------------------------------.
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the Mortgage Pass-Through Certificate
and hereby authorize(s) the registration of transfer of such interest to
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Securities Administrator to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
A-1-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds
to
-----------------------------------------------------------------------------,
for the account of
-------------------------------------------------------------,
account number___________, or, if mailed by check, to
--------------------------,
Applicable statements should be mailed to
--------------------------------------,
-------------------------------------------------------------------------------.
This information is provided by
----------------------------------------------,
the assignee named above, or
---------------------------------------------------,
as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS [BF-_] [RULE 144A] [REG S] CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER OR THE SECURITIES ADMINISTRATOR
REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NONE OF THIS CERTIFICATE, THE
REMIC REGULAR INTEREST REPRESENTED HEREBY OR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED OR INSURED BY THE DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, THE
SECURITIES ADMINISTRATOR 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 MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE SECURITIES ADMINISTRATOR.
THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES, THE CLASS M
CERTIFICATES AND THE RESIDUAL CERTIFICATES TO THE EXTENT DESCRIBED IN THE
AGREEMENT REFERRED TO HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
IF ANY BOOK-ENTRY CERTIFICATE (OR ANY INTEREST THEREIN) IS ACQUIRED OR HELD IN
VIOLATION OF THE PROVISIONS OF SECTION 5.02(B) OF THE POOLING AND SERVICING
AGREEMENT, THEN THE LAST PRECEDING TRANSFEREE THAT IS IN COMPLIANCE WITH SUCH
PROVISIONS SHALL BE RESTORED, TO THE EXTENT PERMITTED BY LAW, TO ALL RIGHTS AND
OBLIGATIONS AS CERTIFICATE OWNER THEREOF RETROACTIVE TO THE DATE OF SUCH
TRANSFER OF SUCH CERTIFICATE. NEITHER THE TRUSTEE
A-2-1
NOR THE SECURITIES ADMINISTRATOR SHALL BE UNDER ANY LIABILITY TO ANY PERSON FOR
MAKING ANY PAYMENTS DUE ON SUCH CERTIFICATE TO SUCH PRECEDING TRANSFEREE.
ANY PURPORTED CERTIFICATE OWNER WHOSE ACQUISITION OR HOLDING OF ANY BOOK-ENTRY
CERTIFICATE (OR INTEREST THEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS
IN SECTION 5.02(B) OF THE AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE
DEPOSITOR, THE TRUSTEE, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER AND
THE TRUST FUND FROM AND AGAINST ANY AND ALL LIABILITIES, CLAIMS, COSTS OR
EXPENSES INCURRED BY SUCH PARTIES AS A RESULT OF SUCH ACQUISITION OR HOLDING.
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE SECURITIES ADMINISTRATOR WITH (A) A REPRESENTATION THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENT 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 PROVISION 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 THIS
CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING, A
REPRESENTATION THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY THAT IS ACQUIRING
THIS 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 THIS 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 SECURITIES ADMINISTRATOR,
AND UPON WHICH THE SECURITIES ADMINISTRATOR 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 SECURITIES ADMINISTRATOR, THE CERTIFICATE REGISTRAR, THE MASTER
SERVICER, ANY SERVICER OR THE DEPOSITOR 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 SECURITIES
ADMINISTRATOR, THE CERTIFICATE REGISTRAR, THE MASTER SERVICER, ANY SERVICER OR
THE DEPOSITOR. IF THE CERTIFICATE IS NOT
A-2-2
A DEFINITIVE CERTIFICATE, THE TRANSFEREE IS DEEMED TO HAVE MADE THE
REPRESENTATION IN (A) OR (B) ABOVE.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF ANY STATE
AND MAY NOT BE RESOLD OR TRANSFERRED [WITHIN THE UNITED STATES (AS DEFINED IN
RULES 901 THROUGH 905 OF THE 1933 ACT ("REGULATION S")) OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, A U.S. PERSON (AS DEFINED IN REGULATION S),] UNLESS IT IS
REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN
TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER
APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 5.02 OF THE AGREEMENT.
A-2-3
MLMI Series 2006-AF2, Class BF-[_] Aggregate Certificate Principal Balance
(RULE 144A) of Class BF-[_] Certificates as of the
Issue Date: $[_]
Pass Through Rate: Variable (1) Initial Class Certificate Principal
Balance of this Class BF-[_] Certificate
as of the Issue Date: $[_]
Date of Agreement and Cut-off Date: Master Servicer and Securities
October 1, 2006 Administrator: Xxxxx Fargo Bank, N.A.
First Distribution Date: Trustee: HSBC Bank USA, National
November 25, 2006 Association
No. Issue Date: October 31, 2006
CUSIP:
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
MORTGAGE PASS-THROUGH CERTIFICATE
MLMI SERIES 2006-AF2
evidencing a beneficial ownership interest in a Trust Fund (the "Trust
Fund") consisting primarily of two separate stacks of conventional, one- to
four-family, fixed and adjustable-rate, fully amortizing mortgage loans secured
by first liens on residential property (the "Mortgage Loans") formed and sold by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.,
----------
1 As described in the Pooling and Servicing Agreement referenced herein.
A-2-4
THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE TRUSTEE OR ANY OF
THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING
MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES.
This certifies that CEDE & CO. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class BF-[_] Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class BF-[_] Certificates in the Trust Fund created pursuant to a Pooling
and Servicing Agreement, dated as specified above (the "Agreement"), among
Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement),
Xxxxx Fargo Bank, N.A., as master servicer (in such capacity, the "Master
Servicer") and securities administrator (in such capacity, the "Securities
Administrator") and HSBC Bank USA, National Association, as trustee (the
"Trustee"). The Class BF-[_] Certificates relate to stack I ("Stack I") of the
Trust Fund. A summary of certain of the pertinent provisions of the Agreement
relating to Stack I of the Trust Fund is set forth hereafter. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Interest on this Certificate will accrue during the period specified in
the Agreement on the Certificate Principal Balance hereof at a per annum rate
equal to the variable Pass-Through Rate described in the Agreement.
Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Record Date, in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class BF-[_] Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by the Securities Administrator by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Securities Administrator in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Class BF-[_]
Certificates, or otherwise by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon the presentation and surrender of
this Certificate at the office or agency appointed by the Securities
Administrator for that purpose as provided in the Agreement.
If any Book-Entry Certificate (or any interest therein) is acquired or
held in violation of the provisions of Section 5.02(b) of the Agreement, then
the last preceding
A-2-5
Transferee that is in compliance with such provisions shall be restored, to the
extent permitted by law, to all rights and obligations as Certificate Owner
thereof retroactive to the date of such Transfer of such Certificate. Neither
the Trustee nor the Securities Administrator shall be under any liability to any
Person for making any payments due on such Certificate to such preceding
Transferee.
Any purported Certificate Owner whose acquisition or holding of any
Book~Entry Certificate (or interest therein) was effected in violation of the
restrictions in Section 5.02(b) of the Agreement shall indemnify and hold
harmless the Depositor, the Trustee, the Securities Administrator, the Master
Servicer and the Trust Fund from and against any and all liabilities, claims,
costs or expenses incurred by such parties as a result of such acquisition or
holding.
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from the
Master Servicer Collection Account and the Distribution Account may be made from
time to time for purposes other than distributions to Holders of the
Certificates, such purposes including reimbursement of advances made, or certain
expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Securities Administrator, the Master Servicer
and the Trustee and the rights of the Holders of the Certificates under the
Agreement at any time by the Depositor, the Securities Administrator, the Master
Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing Percentage Interests aggregating not less than 66 2/3% of the Trust
Fund or of the applicable Class or Classes, if such amendment affects only such
Class or Classes, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Certificateholders. Any such consent by the Holder
of this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Securities Administrator as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Securities
Administrator duly executed by, the Holder hereof or such Holder's attorney duly
A-2-6
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless the transfer is made
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and any applicable state securities laws or
is exempt from the registration requirements under the 1933 Act and such state
securities laws. .In the event that a transfer is to be made in reliance upon an
exemption from the 1933 Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Securities Administrator in writing the facts surrounding
the transfer in a Transferor Representation Letter as described in the Agreement
and (i) deliver to the Securities Administrator an Investor Representation
Letter or Rule 144A Letter as described in the Agreement or (ii) have delivered
to the Securities Administrator an Opinion of Counsel that such transfer may be
made pursuant to an exemption from the Securities Act, which Opinion of Counsel
shall not be an expense of the Depositor or the Securities Administrator. Any
Certificateholder desiring to effect a transfer of this Certificate shall
indemnify the Securities Administrator and the Depositor against any liability
that may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
No service charge will be made for any such registration of transfer or
exchange of Certificates, but the Securities Administrator may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Securities Administrator, the Master Servicer and the
Trustee and any agent of the Depositor, the Securities Administrator, the Master
Servicer or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Securities Administrator, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.
This certificate shall be governed by and construed in accordance with the
laws of the state of New York.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all
amounts held by the Securities Administrator and required to be paid to them
pursuant to the Agreement following the earlier of (i) the Distribution Date on
which the Certificate Principal Balance of each Class of Certificates has been
reduced to zero, (ii) the final payment (or any advance with respect thereto) on
or other liquidation of the last Mortgage Loan remaining in the Trust Fund and
(iii) the Optional Termination of the trust fund according to the procedures
A-2-7
described in the Agreement, which can occur on any date after the first
Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans is less than 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed by the
Securities Administrator, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-2-8
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
XXXXX FARGO BANK, N.A.,
as Securities Administrator
By:
------------------------------------
AUTHORIZED SIGNATORY
Dated:
---------------------------------
SECURITIES ADMINISTRATOR'S CERTIFICATE AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Pooling and
Servicing Agreement.
XXXXX FARGO BANK, N.A.,
as Authenticating Agent
By:
------------------------------------
AUTHORIZED SIGNATORY
Dated:
---------------------------------
A-2-9
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts to
Minors Act
JT TEN - as joint tenants with right of ______________
survivorship and not (State)
as tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------------------------
-------------------------------------------------------------------------------.
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Securities Administrator to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
--------------------------------------------------------------------------------
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
A-2-10
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds
to
-----------------------------------------------------------------------------,
for the account of
-------------------------------------------------------------,
account number___________, or, if mailed by check, to
--------------------------,
Applicable statements should be mailed to
--------------------------------------,
-------------------------------------------------------------------------------.
This information is provided by
----------------------------------------------,
the assignee named above, or
---------------------------------------------------,
as its agent.
X-0-00
XXXXXXX X-0
FORM OF CLASS A-R CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE
"RESIDUAL INTEREST" IN ONE OR MORE "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.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER OR THE SECURITIES ADMINISTRATOR
REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NONE OF THIS CERTIFICATE, THE
REMIC RESIDUAL INTERESTS REPRESENTED HEREBY OR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED OR INSURED BY THE DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, THE
SECURITIES ADMINISTRATOR 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 MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE SECURITIES ADMINISTRATOR.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT IS MADE TO XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED, ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, XXXXXXX LYNCH, PIERCE, XXXXXX &
XXXXX INCORPORATED, HAS AN INTEREST HEREIN.
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE SECURITIES ADMINISTRATOR AND THE DEPOSITOR WITH A
REPRESENTATION 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
FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE
SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE, AND IS
NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON BEHALF OF, OR WITH
ANY ASSETS OF ANY SUCH PLAN. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
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CERTIFICATE MAY BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02
OF THE AGREEMENT REFERRED TO HEREIN.
IF ANY BOOK-ENTRY CERTIFICATE (OR ANY INTEREST THEREIN) IS ACQUIRED OR HELD IN
VIOLATION OF THE PROVISIONS OF SECTION 5.02(B) OF THE POOLING AND SERVICING
AGREEMENT, THEN THE LAST PRECEDING TRANSFEREE THAT IS IN COMPLIANCE WITH SUCH
PROVISIONS SHALL BE RESTORED, TO THE EXTENT PERMITTED BY LAW, TO ALL RIGHTS AND
OBLIGATIONS AS CERTIFICATE OWNER THEREOF RETROACTIVE TO THE DATE OF SUCH
TRANSFER OF SUCH CERTIFICATE. NEITHER THE TRUSTEE NOR THE SECURITIES
ADMINISTRATOR SHALL BE UNDER ANY LIABILITY TO ANY PERSON FOR MAKING ANY PAYMENTS
DUE ON SUCH CERTIFICATE TO SUCH PRECEDING TRANSFEREE.
ANY PURPORTED CERTIFICATE OWNER WHOSE ACQUISITION OR HOLDING OF ANY BOOK-ENTRY
CERTIFICATE (OR INTEREST THEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS
IN SECTION 5.02(B) OF THE AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE
DEPOSITOR, THE TRUSTEE, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER AND
THE TRUST FUND FROM AND AGAINST ANY AND ALL LIABILITIES, CLAIMS, COSTS OR
EXPENSES INCURRED BY SUCH PARTIES AS A RESULT OF SUCH ACQUISITION OR HOLDING.
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MLMI Series 2006-AF2, Class A-R Aggregate Certificate Principal
Balance of the Class A-R
Certificates as of the Issue
Date: $100
Pass-Through Rate: Variable 1 Initial Certificate Principal
Balance of this Class A-R
Certificate as of the Issue
Date: $100
Date of Agreement and Cut-off Date: Master Servicer and Securities
October 1, 2006 Administrator:
Xxxxx Fargo Bank, N.A.
First Distribution Date: November 25, 2006 Trustee: HSBC Bank USA, National
Association
No. Issue Date: October 31, 2006
CUSIP:
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT
ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION
OF THIS CERTIFICATE.
MORTGAGE PASS-THROUGH CERTIFICATE
MLMI SERIES 2006-AF2
evidencing a beneficial ownership interest in a Trust Fund (the
"Trust Fund") consisting primarily of two separate stacks of conventional, one-
to four-family, fixed and adjustable-rate, fully amortizing mortgage loans
secured by first liens on residential property (the "Mortgage Loans") formed and
sold by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
XXXXXXX XXXXX MORTGAGE INVESTORS, INC., THE MASTER SERVICER, THE
SECURITIES ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE
LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.
----------
1 As described in the Pooling and Servicing Agreement referenced herein.
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This certifies that XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED is the registered owner of a Percentage Interest obtained by
dividing the denomination of this Certificate by the aggregate Certificate
Principal Balance of the Class A-R Certificates as of the Issue Date in that
certain beneficial ownership interest evidenced by all the Class A-R
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Xxxxxxx Xxxxx
Mortgage Investors, Inc., as depositor (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), Xxxxx Fargo Bank,
N.A., as master servicer (in such capacity, the "Master Servicer") and
securities administrator (in such capacity, the "Securities Administrator") and
HSBC Bank USA, National Association, as trustee (the "Trustee"). The Class A-R
Certificates relate to stack II ("Stack II") of the Trust Fund. A summary of
certain of the pertinent provisions of the Agreement relating to Stack II of the
Trust Fund 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 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 such Holder is bound.
Interest on this Certificate will accrue during the period specified
in the Agreement on the Certificate Principal Balance hereof at a per annum rate
equal to the variable Pass-Through Rate described in the Agreement.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-R Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
A-R Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Securities Administrator
of the pendency of such distribution and only upon the presentation and
surrender of this Certificate at the office or agency appointed by the
Securities Administrator for that purpose as provided in the Agreement.
If any Book-Entry Certificate (or any interest therein) is acquired
or held in violation of the provisions of Section 5.02(b) of the Agreement, then
the last preceding Transferee that is in compliance with such provisions shall
be restored, to the extent permitted by law, to all rights and obligations as
Certificate Owner thereof retroactive to the date of such Transfer of such
Certificate. Neither the Trustee nor the Securities Administrator shall be under
any liability to any Person for making any payments due on such Certificate to
such preceding Transferee.
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Any purported Certificate Owner whose acquisition or holding of any
Book-Entry Certificate (or interest therein) was effected in violation of the
restrictions in Section 5.02(b) of the Agreement shall indemnify and hold
harmless the Depositor, the Trustee, the Securities Administrator, the Master
Servicer and the Trust Fund from and against any and all liabilities, claims,
costs or expenses incurred by such parties as a result of such acquisition or
holding.
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Master Servicer Collection Account and the
Distribution Account may be made from time to time for purposes other than
distributions to Holders of the Certificates, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Securities Administrator, the Master Servicer
and the Trustee and the rights of the Holders of the Certificates under the
Agreement at any time by the Depositor, the Securities Administrator, the Master
Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing Percentage Interests aggregating not less than 66 2/3% of the Trust
Fund or of the applicable Class or Classes, if such amendment affects only such
Class or Classes, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Certificateholders. Any such consent by the Holder
of this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
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No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Securities Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Securities Administrator, the Master Servicer and
the Trustee and any agent of the Depositor, the Securities Administrator, the
Master Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Securities Administrator, the Master Servicer, the Trustee nor
any such agent shall be affected by notice to the contrary.
This certificate shall be governed by and construed in accordance
with the laws of the state of New York.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by the Securities Administrator and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in the Trust Fund and (iii) the Optional Termination of the trust fund
according to the procedures described in the Agreement, which can occur on any
date after the first Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than 5% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed by
the Securities Administrator, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
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IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
XXXXX FARGO BANK, N.A.,
as Securities Administrator
By:______________________
AUTHORIZED SIGNATORY
Dated: _________________
SECURITIES ADMINISTRATOR'S CERTIFICATE AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Pooling and
Servicing Agreement.
XXXXX FARGO BANK, N.A.,
as Authenticating Agent
By:______________________
AUTHORIZED SIGNATORY
Dated: _________________
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
------------------------------------------------------------------------------------------------
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
------------------------------------------------------------------------------------------------
TEN ENT - as tenants by the entireties (Cust) (Minor)
------------------------------------------------------------------------------------------------
under Uniform Gifts to
Minors Act
------------------------------------------------------------------------------------------------
JT TEN - as joint tenants with right of
survivorship and not _________________
as tenants in common (State)
------------------------------------------------------------------------------------------------
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
_______________________________________________________________________________.
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Securities Administrator to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
_______________________________________________________________________________.
Dated:
__________________________________________
Signature by or on behalf of assignor
__________________________________________
Signature Guaranteed
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DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds
to ___________________________________________________________________________,
for the account of____________________________________________________________,
account number___________, or, if mailed by check, to_________________________,
Applicable statements should be mailed to_____________________________________,
______________________________________________________________________________.
This information is provided by_______________________________________________,
the assignee named above, or__________________________________________________,
as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS P CERTIFICATE
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE OR THE SERVICER REFERRED TO BELOW OR ANY OF THEIR
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED OR INSURED BY THE DEPOSITOR, THE TRUSTEE, THE SERVICER OR BY ANY OF
THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THIS CLASS P CERTIFICATE HAS NOT BEEN 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 5.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE TRUSTEE AND THE DEPOSITOR WITH (A) A REPRESENTATION 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 STATE, LOCAL,
FEDERAL, NON-U.S. OR OTHER LAW SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS
OF ERISA OR THE CODE ("SIMILAR LAW"), 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 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 TRUSTEE, AND
UPON WHICH THE TRUSTEE SHALL BE ENTITLED TO RELY, TO THE EFFECT THAT THE
ACQUISITION AND HOLDING OF SUCH 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 NIMS INSURER,
THE TRUSTEE, THE SERVICER OR THE DEPOSITOR 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 NIMS INSURER, THE TRUSTEE, THE
SERVICER OR THE DEPOSITOR.
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CLASS P CERTIFICATE
Number: Percentage Interest: 100%
Cut-off Date: October 1, 2006
First Distribution Date: November 25, 2006 CUSIP:
A-4-2
XXXXXXX XXXXX MORTGAGE INVESTORS TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATES,
Series 2006-AF2
evidencing a beneficial ownership interest in a Trust Fund (the "Trust
Fund") consisting primarily of five groups of conventional, one- to four-family,
fixed and adjustable-rate, fully amortizing mortgage loans secured by first
liens on residential property (the "Mortgage Loans") formed and sold by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
This certifies that Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, as
nominee for Xxxxxxx Xxxxx Funding Corp, 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 Initial
Certificate Balance of all Class P Certificates) in certain distributions with
respect to a pool of conventional, sub-prime mortgage loans (the "Mortgage
Loans") formed and sold by Xxxxxxx Xxxxx Mortgage Investors, Inc. (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 Xxxxx Fargo Bank, N.A. (the "Servicer") and are secured by
first or second lien mortgages on the Mortgaged Properties. The Trust Fund was
created pursuant to a pooling and servicing agreement (the "Agreement"), dated
as of October 1, 2006, among the Depositor, the Servicer and HSBC Bank USA,
National Association, as trustee (the "Trustee"). The Class A-R Certificates
relate to stack II ("Stack II") of the Trust Fund. A summary of certain of the
pertinent provisions of the Agreement relating to Stack II of the Trust Fund 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 Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2006-AF2, Class P (the "Class P 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.
The Class A Certificates, the Class M Certificates, the Class B
Certificates, the Class P Certificates, the Class C Certificates and the Class
A-R Certificate are collectively referred to herein as the "Certificates."
Pursuant to the terms of the Agreement, the Trustee will distribute from
funds in the Certificate Account the amounts described in the Agreement 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 in November
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, if such last day is
not a Business Day, the Business Day immediately preceding such last day.
Distributions on this Certificate will be made either by check mailed to
the address of the person entitled to distributions as it appears on the
Certificate Register or, in the case of any certificateholder that has so
notified the Trustee in writing in accordance with the Agreement, by wire
transfer in immediately available funds to the account of such certificateholder
at a bank or other depository institution having appropriate wire transfer
facilities; provided, however, that the final distribution in retirement of the
certificates will be made only upon presentation and surrender of this
Certificate at the office of the Trustee or such
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other address designated in writing by the Trustee. On each Distribution Date, a
holder of this Certificate will receive such holder's Percentage Interest of the
amounts required to be distributed with respect to the applicable Class of
Certificates.
The Trustee will maintain or cause to be maintained a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Trustee 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 Trustee, or, if an Authenticating
Agent has been appointed under the Agreement, the Authenticating Agent,
maintained for such purpose, the Trustee, 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 Trustee,
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee, 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.
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IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: XXXXX FARGO BANK, N.A., as Securities
------------------- Administrator
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Agreement.
XXXXX FARGO BANK, N.A.,
as Authenticating Agent
By:
-----------------------------------
Authorized Signatory
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REVERSE OF CERTIFICATE
XXXXXXX XXXXX MORTGAGE INVESTORS TRUST
MORTGAGE LOAN ASSET-BACKED CERTIFICATES,
Series 2006-AF2
This Certificate is one of a duly authorized issue of Certificates,
designated as Xxxxxxx Xxxxx Mortgage Investors Trust Mortgage Loan Asset-Backed
Certificates, Series 2006-AF2, issued in one or more Classes of Class A
Certificates, Class M Certificates, Class B Certificates, Class P Certificates
and Class C Certificates, each evidencing an interest in certain distributions
with respect to two separate stacks of conventional, sub-prime Mortgage Loans
formed and sold by the Depositor and certain other property conveyed by the
Depositor to the Trustee.
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 the Trustee is not 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.
No service charge will be made to the Holder for any transfer or exchange
of the Certificate, but the Trustee may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of the Certificate. Prior to due presentation of a
Certificate for registration of transfer, the Depositor 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 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 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.
The Agreement may also be amended from time to time by the Depositor, the
Servicer 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) adversely affect in any material respect the
interests of the Holders of any Class of Certificates in a manner other than as
described in clause (i), without the consent of the Holders of Certificates of
such Class evidencing 66 2/3% or more of the Voting Rights of such
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Class or (iii) change the percentage specified in clause (ii) of the third
paragraph of Section 10.01 of the Agreement, without the consent of the Holders
of all Certificates of such Class then outstanding.
For federal income tax purposes, the Trust Fund will include multiple
"real estate mortgage investment conduits" (each, a "REMIC"). The REMIC Regular
Interests will represent "regular interests" in one of the REMICs included in
the Trust Fund. The Class A-R Certificate will represent the sole class of
"residual interest" in each of the REMICs.
The obligations and responsibilities of the Depositor, the Servicer and
the Trustee under the Agreement shall terminate upon the earlier of (a) the
exercise by the Trustee of an Optional Termination; and (b) the later of (i) the
maturity or other liquidation (or any Advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Fund and the disposition of all REO
Property and (ii) the distribution to Certificateholders of all amounts required
to be distributed to them pursuant to this Agreement, as applicable. In no event
shall the trusts created under the Agreement continue beyond the earlier of (i)
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 and (ii) the Latest Possible
Maturity Date.
A-4-7
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.)
X-0-0
XXXXXXX X-0
FORM OF CLASS C CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN INTEREST
IN A GRANTOR TRUST THAT HOLDS 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 AND IS TREATED AS
HAVING ENTERED INTO CERTAIN NOTIONAL PRINCIPAL CONTRACTS.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER OR THE SECURITIES ADMINISTRATOR
REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NONE OF THIS CERTIFICATE, THE
REMIC REGULAR INTEREST REPRESENTED HEREBY OR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED OR INSURED BY THE DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, THE
SECURITIES ADMINISTRATOR OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL
AGENCY OR INSTRUMENTALITY.
THIS CLASS C CERTIFICATE HAS NOT BEEN 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 5.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE SECURITIES ADMINISTRATOR.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT IS MADE TO XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED, ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, XXXXXXX LYNCH, PIERCE, XXXXXX &
XXXXX INCORPORATED, HAS AN INTEREST HEREIN.
A-5-1
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE TRUSTEE AND THE DEPOSITOR WITH (A) A REPRESENTATION 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 STATE, LOCAL,
FEDERAL, NON-U.S. OR OTHER LAW SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS
OF ERISA OR THE CODE ("SIMILAR LAW"), 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 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 TRUSTEE, AND
UPON WHICH THE TRUSTEE SHALL BE ENTITLED TO RELY, TO THE EFFECT THAT THE
ACQUISITION AND HOLDING OF SUCH 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 NIMS INSURER,
THE TRUSTEE, THE SERVICER OR THE DEPOSITOR 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 NIMS INSURER, THE TRUSTEE, THE
SERVICER OR THE DEPOSITOR.
IF ANY BOOK-ENTRY CERTIFICATE (OR ANY INTEREST THEREIN) IS ACQUIRED OR HELD IN
VIOLATION OF THE PROVISIONS OF SECTION 5.02(B) OF THE POOLING AND SERVICING
AGREEMENT, THEN THE LAST PRECEDING TRANSFEREE THAT IS IN COMPLIANCE WITH SUCH
PROVISIONS SHALL BE RESTORED, TO THE EXTENT PERMITTED BY LAW, TO ALL RIGHTS AND
OBLIGATIONS AS CERTIFICATE OWNER THEREOF RETROACTIVE TO THE DATE OF SUCH
TRANSFER OF SUCH CERTIFICATE. NEITHER THE TRUSTEE NOR THE SECURITIES
ADMINISTRATOR SHALL BE UNDER ANY LIABILITY TO ANY PERSON FOR MAKING ANY PAYMENTS
DUE ON SUCH CERTIFICATE TO SUCH PRECEDING TRANSFEREE.
ANY PURPORTED CERTIFICATE OWNER WHOSE ACQUISITION OR HOLDING OF ANY BOOK-ENTRY
CERTIFICATE (OR INTEREST THEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS
IN SECTION 5.02(B) OF THE AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE
DEPOSITOR, THE TRUSTEE, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER AND
THE TRUST FUND FROM AND AGAINST ANY AND ALL LIABILITIES, CLAIMS, COSTS OR
EXPENSES INCURRED BY SUCH PARTIES AS A RESULT OF SUCH ACQUISITION OR HOLDING.
A-5-2
------------------------------------------ ---------------------------------------------
MLMI Series 2006-AF2, Class C Percentage Interest: 100%
------------------------------------------ ---------------------------------------------
Date of Agreement and Cut-off Date: Master Servicer and Securities Administrator:
October 1, 2006 Xxxxx Fargo Bank, N.A.
------------------------------------------ ---------------------------------------------
First Distribution Date: November 25, 2006 Trustee: HSBC Bank USA, National Association
------------------------------------------ ---------------------------------------------
No. Issue Date: October 31, 2006
------------------------------------------ ---------------------------------------------
Pass-Through Rate: Variable1 CUSIP:
------------------------------------------ ---------------------------------------------
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
MORTGAGE PASS-THROUGH CERTIFICATE
MLMI SERIES 2006-AF2
evidencing a beneficial ownership interest in a Trust Fund (the
"Trust Fund") consisting primarily of two separate stacks of conventional, one-
to four-family, fixed and adjustable-rate, fully amortizing mortgage loans
secured by first liens on residential property (the "Mortgage Loans") formed and
sold by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
XXXXXXX XXXXX MORTGAGE INVESTORS, INC., THE MASTER SERVICER, THE
SECURITIES ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED is the registered owner of a Percentage Interest obtained by
dividing the denomination of this Certificate by the aggregate Certificate
Principal Balance of the Class C
-------------
1 As described in the Pooling and Servicing Agreement referenced herein.
A-5-3
Certificates as of the Issue Date in that certain beneficial ownership interest
evidenced by all the Class C Certificates in the Trust Fund created pursuant to
a Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor (hereinafter called
the "Depositor," which term includes any successor entity under the Agreement),
Xxxxx Fargo Bank, N.A., as master servicer (in such capacity, the "Master
Servicer") and securities administrator (in such capacity, the "Securities
Administrator") and HSBC Bank USA, National Association, as trustee (the
"Trustee"). The Class C Certificates relate to stack II ("Stack II") of the
Trust Fund. A summary of certain of the pertinent provisions of the Agreement
relating to Stack II of the Trust Fund 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 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 such
Holder is bound.
Interest on this Certificate will accrue during the period specified
in the Agreement on the Certificate Principal Balance hereof at a per annum rate
equal to the variable Pass-Through Rate described in the Agreement.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class C Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
C Certificates, or otherwise by check mailed by first class mail to the address
of the Person entitled thereto, as such name and address shall appear on the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon the presentation and surrender of
this Certificate at the office or agency appointed by the Securities
Administrator for that purpose as provided in the Agreement.
If any Book-Entry Certificate (or any interest therein) is acquired
or held in violation of the provisions of Section 5.02(b) of the Agreement, then
the last preceding Transferee that is in compliance with such provisions shall
be restored, to the extent permitted by law, to all rights and obligations as
Certificate Owner thereof retroactive to the date of such Transfer of such
Certificate. Neither the Trustee nor the Securities Administrator shall be under
any liability to any Person for making any payments due on such Certificate to
such preceding Transferee.
A-5-4
Any purported Certificate Owner whose acquisition or holding of any
Book-Entry Certificate (or interest therein) was effected in violation of the
restrictions in Section 5.02(b) of the Agreement shall indemnify and hold
harmless the Depositor, the Trustee, the Securities Administrator, the Master
Servicer and the Trust Fund from and against any and all liabilities, claims,
costs or expenses incurred by such parties as a result of such acquisition or
holding.
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Master Servicer Collection Account and the
Distribution Account may be made from time to time for purposes other than
distributions to Holders of the Certificates, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Securities Administrator, the Master Servicer
and the Trustee and the rights of the Holders of the Certificates under the
Agreement at any time by the Depositor, the Securities Administrator, the Master
Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing Percentage Interests aggregating not less than 66 2/3% of the Trust
Fund or of the applicable Class or Classes, if such amendment affects only such
Class or Classes, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Certificateholders. Any such consent by the Holder
of this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are
A-5-5
exchangeable for new Certificates of the same Class in authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Securities Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Securities Administrator, the Master Servicer and
the Trustee and any agent of the Depositor, the Securities Administrator, the
Master Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Securities Administrator, the Master Servicer, the Trustee nor
any such agent shall be affected by notice to the contrary.
This certificate shall be governed by and construed in accordance
with the laws of the state of New York.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by the Securities Administrator and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in the Trust Fund and (iii) the Optional Termination of the trust fund
according to the procedures described in the Agreement, which can occur on any
date after the first Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than 5% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed by
the Securities Administrator, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-5-6
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
XXXXX FARGO BANK, N.A.,
as Securities Administrator
By:
------------------------------------
AUTHORIZED SIGNATORY
Dated:
-------------------
SECURITIES ADMINISTRATOR'S CERTIFICATE AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Pooling and
Servicing Agreement.
XXXXX FARGO BANK, N.A.,
as Authenticating Agent
By:
------------------------------------
AUTHORIZED SIGNATORY
Dated: ----------------------
A-5-7
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
---------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts to
Minors Act
JT TEN - as joint tenants with right of
survivorship and not as tenants ---------
in common (State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Securities Administrator to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
A-5-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds
to ,
------------------------------------------------------------------------------
for the account of ,
--------------------------------------------------------------
account number___________, or, if mailed by check, to ,
---------------------------
Applicable statements should be mailed to ,
---------------------------------------
.
--------------------------------------------------------------------------------
This information is provided by ,
-------------------------------------------------
the assignee named above, or ,
----------------------------------------------------
as its agent.
X-0-0
XXXXXXX X-0
STACK I MORTGAGE LOAN SCHEDULE
[INTENTIONALLY OMITTED]
B-1-1
EXHIBIT B-2
STACK II MORTGAGE LOAN SCHEDULE
[INTENTIONALLY OMITTED]
X-0-0
XXXXXXX X
[XXXXXXXX]
X-0
XXXXXXX X
REQUEST FOR RELEASE OF DOCUMENTS
To: Xxxxx Fargo Bank, N.A.
0000 00xx Xxxxxx X.X.
Xxxxxxxxxxx Xxxxxxxxx 00000
Attn: ______________________
Re: Custodial Agreement, dated as of October 31, 2006 among HSBC Bank USA,
National Association, Xxxxxxx Xxxxx Mortgage Investors, Inc. and Xxxxx
Fargo Bank, N.A.
In connection with the administration of the Mortgage Loans held by you as
Custodian for the Owner pursuant to the above-captioned Custodial Agreement, we
request the release, and hereby acknowledge receipt, of the Custodian's Mortgage
File for the Mortgage Loan described below, for the reason indicated.
Mortgage Loan Number: ________________________________________
Mortgagor Name, Address & Zip Code: __________________________
Reason for Requesting Documents (check one): _________________
___________ 1. Mortgage Paid in full
___________ 2. Foreclosure
___________ 3. Substitution
___________ 4. Other Liquidation (Repurchases, etc.)
___________ 5. Nonliquidation Reason: ________________________________
By:
------------------------------------
(authorized signer)
Issuer:
--------------------------------
Address:
-------------------------------
-------------------------------
Date:
----------------------------------
D-1
Custodian
Xxxxx Fargo Bank, N.A.
Please acknowledge the execution of the above request by your
signature and date below:
Please acknowledge the execution of the above request by your
signature and date below:
------------------------------------- ----------------------------------------
Signature Date
Documents returned to Custodian:
------------------------------------- ----------------------------------------
Custodian Date
D-2
EXHIBIT E-1
FORM OF TRANSFEREE'S LETTER
[DATE]
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - Xxxxxxx Xxxxx Mortgage Investors Trust,
Series 2006-AF2
Ladies and Gentlemen:
We propose to purchase Xxxxxxx Xxxxx Mortgage Investors Trust, Series
2006-AF2 Mortgage Pass-Through Certificates, Class A-R, described in the
Prospectus Supplement, dated October 30, 2006, and the Prospectus, dated
September 8, 2006. Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement, dated October
1, 2006 relating to this issuance of the Xxxxxxx Xxxxx Mortgage Investors Trust,
Series 2006-AF2 Mortgage Pass-Through Certificates (the "Pooling and servicing
Agreement").
1. We certify that (a) we are not a disqualified organization and (b)
we are not purchasing such Class A-R Certificate on behalf of a disqualified
organization; 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 (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, and (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.
E-1-1
3. We acknowledge that we will be the beneficial owner of the Class
A-R Certificate and:(1)
__________ 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.
4. 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 Code or a plan subject to
federal, state, local, non-U.S. or other law substantively similar to the
foregoing provisions of ERISA or the Code (each, a "Plan"), and are not directly
or indirectly acquiring the Class A-R Certificate on behalf of or with any
assets of a Plan.
5. We certify that (i) we are a U.S. person or (ii) we will hold the
Class A-R Certificate in connection with the conduct of a trade or business
within the United States and have furnished the transferor and the Securities
Administrator with a duly completed and effective Internal Revenue Service Form
W-8ECI or successor form at the time and in the manner required by the Code; 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 United States
federal income tax regardless of the source of its income, or a trust if a court
within the United States is able to exercise primary supervision over the
administration of the trust and one or more such U.S. persons have the authority
to control all substantial decisions of the 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 or
will hold the Class A-R Certificate in connection with the conduct of a trade or
business within the United States and will furnish us and the Securities
Administrator with a duly completed and effective Internal Revenue Service Form
W-8ECI or successor form at the time and in the manner required by the Code and
(iii) has delivered to the Securities Administrator a letter in the form of this
letter (including the affidavit appended hereto) and, we will provide the
Securities Administrator a written statement substantially in the form of
Exhibit E-2 to the Pooling and Servicing Agreement.
----------
(1) Check appropriate box and if necessary fill in the name of the Transferee's
nominee.
E-1-2
7. We hereby designate _______________________ as our fiduciary to act
as the tax matters person for each of the REMICs provided for in the Pooling and
Servicing Agreement in which the Class A-R Certificate represents the residual
interest.
Very truly yours,
[Purchaser]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Accepted as of __________ __, 200_
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
E-1-3
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
"Investor"),
2. the Investor's Employer Identification number is __________,
3. the Investor 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
Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-AF2 Mortgage
Pass-Through Certificates, Class A-R Certificate on behalf of a
disqualified organization or any other entity,
4. unless Xxxxxxx Xxxxx Mortgage Investors, Inc. ("MLMI") has
consented to the transfer to the Investor, the Investor 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 Investor has historically paid its debts as they became due,
7. the Investor intends, and believes that it will be able, to
continue to pay its debts as they become due in the future,
8. the Investor 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 Investor intends to pay any taxes associated with holding the
Class A-R Certificate as they become due,
10. the Investor consents to any amendment of the Pooling and
Servicing Agreement that shall be deemed necessary by MLMI (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
Investor, 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:
E-1-4
A. the present value of any consideration given to the Investor
to acquire such residual interest;
B. the present value of the expected future distributions on
such residual interest; and
C. the present value of the anticipated tax savings associated
with holding such residual interest as the related REMIC
generates losses.
For purposes of this declaration, (i) the Investor 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 Investor 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
Investor;]
[(11)(A) at the time of the transfer, and at the close of each of the
Investor's two fiscal years preceding the Investor's fiscal year of
transfer, the Investor's gross assets for financial reporting purposes
exceed $100 million and its net assets for financial reporting
purposes exceed $10 million; and
(B) the Investor is an eligible corporation as defined in Treasury
regulations 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, the gross and net assets of the Investor 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 Investor to make this
declaration or to satisfy the requirements of Treasury regulation Section
1.860E-1(c)(5)(i).]
(12) The Investor 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 Investor or another U.S.
taxpayer.
E-1-5
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 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).
E-1-6
IN WITNESS WHEREOF, the Investor has caused this instrument to be executed on
its behalf, pursuant to authority of its Board of Directors, by its
_____________ this ___ day of ______________, 20__.
[INVESTOR]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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 ______________, 20__.
NOTARY PUBLIC
-------------------------------------
COUNTY OF_____________________
STATE OF______________________
My commission expires the _____ day of __________ 20__.
E-1-7
EXHIBIT E-2
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Corporate Trust Services - Xxxxxxx Xxxxx Mortgage Investors Trust,
Series 2006-AF2
Re: Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-AF2
_______________________ (the "Transferor") has reviewed the attached
affidavit of _____________________________ (the "Transferee"), and has no actual
knowledge that such affidavit is not true, and has no reason to believe that the
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, the
Transferor has conducted a reasonable investigation at the time of the transfer
and found that the Transferee had historically paid its debts as they came due
and found no significant evidence to indicate that the Transferee will not
continue to pay its debts as they become due.
Very truly yours,
[Transferor]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
E-2-1
EXHIBIT F-1
FORM OF TRANSFEROR REPRESENTATION LETTER
______________, 200__
Xxxxxxx Xxxxx Mortgage Investors, Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Re: Xxxxxxx Xxxxx Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, Series 2006-AF2, Class [____]
Ladies and Gentlemen:
In connection with the sale by ___________ (the "Seller") to ________ (the
"Purchaser") of $_________ Initial Certificate Principal Balance of Mortgage
Pass-Through Certificates, Series 2006-AF2, Class _____ (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of October 1, 2006 among Xxxxxxx Xxxxx Mortgage
Investors, Inc., as depositor (the "Depositor"), Xxxxx Fargo Bank, N.A. as
master servicer (in such capacity, the "Master Servicer") and securities
administrator (in such capacity, the "Securities Administrator"), and HSBC Bank
USA, National Association, as trustee (the "Trustee"). The Seller hereby
certifies, represents and warrants to, and covenants with, the Depositor and the
Securities Administrator that:
Neither the Seller nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited 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) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the "Act"), that would render the disposition of any Certificate a violation of
Section 5 of the Act or any state securities law, or that would require
registration or qualification pursuant thereto. The Seller will not act in any
manner set forth in the foregoing sentence with respect to any Certificate. The
F-1-1
Seller has not and will not sell or otherwise transfer any of the Certificates,
except in compliance with the provisions of the Pooling and Servicing Agreement.
Very truly yours,
----------------------------------------
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
F-1-2
EXHIBIT F-2
FORM OF INVESTOR REPRESENTATION LETTER (NON-RULE 144A)
__________, 200__
Xxxxxxx Xxxxx Mortgage Investors, Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Re: Xxxxxxx Xxxxx Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, Series 2006-AF2, Class [___]
Ladies and Gentlemen:
In connection with our acquisition of the above 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 are an
institutional "accredited investor," as defined in Regulation D under the Act,
and 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 Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Certificates, (d) solely in the case of an ERISA
Restricted Certificate, we (i) are not an employee benefit plan or arrangement
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 foregoing provisions of ERISA or the Code ("Similar
Law") (collectively, a "Plan"), and are not directly or indirectly acquiring
this Certificate for, on behalf of or with any assets of any such Plan, (ii) 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 ("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
(iii) solely in the case of a Definitive Certificate, shall deliver herewith an
Opinion of Counsel satisfactory to the Securities Administrator, and upon which
the Securities Administrator shall be entitled to rely, to the effect that the
acquisition and holding of this certificate by the transferee will not result in
a nonexempt prohibited transaction under ERISA or the Code, or a violation of
Similar Law, and will not subject the Depositor, the Master Servicer, the
Securities Administrator or the Trustee to any obligation in addition to those
undertaken by such entities in the Pooling and Servicing Agreement, which
Opinion of Counsel
F-2-1
shall not be an expense of the Depositor, the Master Servicer, the Securities
Administrator or the Trustee, (e) we are acquiring the Certificates for
investment for our own account and not with a view to any distribution of such
Certificates (but without prejudice to our right at all times to sell or
otherwise dispose of the Certificates in accordance with clause (g) below), (f)
we have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, or taken any other action which would result in a
violation of Section 5 of the Act, and (g) we will not sell, transfer or
otherwise dispose of any Certificates unless (1) such sale, transfer or other
disposition is made pursuant to an effective registration statement under the
Act or is exempt from such registration requirements, and if requested, we will
at our expense provide an opinion of counsel satisfactory to the addressees of
this Certificate that such sale, transfer or other disposition may be made
pursuant to an exemption from the Act, (2) The purchaser or transferee of such
Certificate has executed and delivered to you a certificate to substantially the
same effect as this certificate, and (3) The purchaser or transferee has
otherwise complied with any conditions for transfer set forth in the Pooling and
Servicing Agreement.
Very truly yours,
----------------------------------------
Print Name of Transferee
By:
------------------------------------
Authorized Officer
F-2-2
EXHIBIT F-3
FORM OF RULE 144A LETTER
____________, 2006
Xxxxxxx Xxxxx Mortgage Investors, Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Re: Xxxxxxx Xxxxx Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, Series 2006-AF2, Class [___]
Ladies and Gentlemen:
In connection with our acquisition of the above 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 Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) solely in the case of an ERISA Restricted
Certificate, we (i) are not an employee benefit plan or arrangement 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 foregoing provisions of ERISA or the Code ("Similar Law")
(collectively, a "Plan"), and are not directly or indirectly acquiring this
Certificate for, on behalf of or with any assets of any such Plan, (ii) 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 ("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
(iii) solely in the case of a Definitive Certificate, shall deliver herewith an
Opinion of Counsel satisfactory to the Securities Administrator, and upon which
the Securities Administrator shall be entitled to rely, to the effect that the
acquisition and holding of this certificate by the transferee will not result in
a nonexempt prohibited transaction under ERISA or the Code, or a violation of
Similar Law, and will not subject the Depositor, the Master Servicer, the
Securities Administrator or the Trustee 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 Depositor, the Master
Servicer, the Securities Administrator or the
F-3-1
Trustee, (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 Act or that would render the
disposition of the Certificates a violation of Section 5 of the 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 Act ("Rule 144A") and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2, (g) we are
aware that the sale to us is being made in reliance on Rule 144A, and (h) we are
acquiring the 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 (A) to a person reasonably believed 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 (B) pursuant to another
exemption from registration under the Act.
Very truly yours,
----------------------------------------
Print Name of Transferee
By:
------------------------------------
Authorized Officer
F-3-2
ANNEX I TO EXHIBIT F-3
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 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 $___________(1) in securities (except for the
1 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 the 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 any such institutions 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.
----------
(1) 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.
F-3-3
___ 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 a 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.
___ Investment Advisor. The Buyer is an investment advisor registered under
the Investment Advisors Act of 1940.
___ 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.
___ Business Development Company. Buyer is a business development company
as defined in Section 202(a)(22) of the Investment Advisors Act of 1940.
3. The term "securities" as used herein does not include (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.
F-3-4
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 is provided above, The Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
----------------------------------------
Print Name of Buyer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
F-3-5
ANNEX II TO EXHIBIT F-3
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 SEC 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,
F-3-6
(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 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.
----------------------------------------
Print Name of Buyer or Adviser
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
IF AN ADVISER:
----------------------------------------
Print Name of Buyer
Date:
----------------------------------
F-3-7
EXHIBIT G
FORM OF CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT (as amended and supplemented from time to
time, the "Agreement"), dated as of October 1, 2006, by and among HSBC BANK USA,
NATIONAL ASSOCIATION, as trustee (including its successors under the Pooling and
Servicing Agreement defined below, the "Trustee"), XXXXXXX XXXXX MORTGAGE
INVESTORS, INC., as the company (together with any successor in interest, the
"Company"), XXXXX FARGO BANK, N.A., as securities administrator and master
servicer (together with any successor in interest or successor under the Pooling
and Servicing Agreement referred to below, the "Master Servicer") and XXXXX
FARGO BANK, N.A., as custodian (together with any successor in interest or any
successor appointed hereunder, the "Custodian").
WITNESSETH THAT:
WHEREAS, the Company, the Master Servicer and the Trustee have entered
into a Pooling and Servicing Agreement, dated as of October 1, 2006, relating to
the issuance of Xxxxxxx Xxxxx Mortgage Investors Trust., Series 2006-AF2
Mortgage Pass-Through Certificates, (as amended and supplemented from time to
time, the "Pooling and Servicing Agreement"); and
WHEREAS, the Custodian has agreed to act as agent for the Trustee for
the purposes of receiving and holding certain documents and other instruments
delivered by the Company or the Master Servicer under the Pooling and Servicing
Agreement and the Servicers under their respective Servicing Agreement, all upon
the terms and conditions and subject to the limitations hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the Trustee, the Company, the
Master Servicer and the Custodian hereby agree as follows:
I.
DEFINITIONS
Capitalized terms used in this Agreement and not defined herein shall
have the meanings assigned in the Pooling and Servicing Agreement, unless
otherwise required by the context herein.
II.
CUSTODY OF MORTGAGE DOCUMENTS
A. Custodian to Act as Agent: Acceptance of Mortgage Files,
Attestations and Assessments of Compliance.
1. The Custodian, as the duly appointed agent of the Trustee for these
purposes, acknowledges (subject to any exceptions noted in the Initial
Certification referred to in Section 2.3(a)) receipt of the Mortgage Files
relating to the Mortgage Loans identified on the schedule attached hereto (the
"Mortgage Files") and declares that it holds and will hold such Mortgage
G-1
Files as agent for the Trustee, in trust, for the use and benefit of all present
and future Certificateholders.
2. On or before March 1st of each calendar year, beginning with March
1, 2007, the Custodian shall, at its own expense, cause a firm of independent
public accountants (who may also render other services to Custodian), that is a
member of the American Institute of Certified Public Accountants, to furnish to
the Company and the Master Servicer a report to the effect that such firm
attests to, and reports on, the assessment made by such asserting party pursuant
to Section 2.01(c) below, which report shall be made in accordance with
standards for attestation engagements issued or adopted by the Public Company
Accounting Oversight Board.
3. On or before March 1st of each calendar year, beginning with March
1, 2007, the Custodian shall deliver to the Company and the Master Servicer a
report regarding its assessment of compliance with the servicing criteria
identified in Exhibit Three attached hereto, as of and for the period ending the
end of the fiscal year ending no later than December 31 of the year prior to the
year of delivery of the report, with respect to asset-backed security
transactions taken as a whole in which the Custodian is performing any of the
servicing criteria specified in Exhibit Three and that are backed by the same
asset type backing such asset-backed securities. Each such report shall include
(a) a statement of the party's responsibility for assessing compliance with the
servicing criteria applicable to such party, (b) a statement that such party
used the criteria identified in Item 1122(d) of Regulation AB (Section
229.1122(d)) to assess the compliance with the applicable servicing criteria,
(c) disclosure of any material instance of noncompliance identified by such
party, and (d) a statement that a registered public accounting firm has issued
an attestation report on such party's assessment of compliance with the
applicable servicing criteria, which report shall be delivered by the Custodian
as provided in this Section 2.01(c). However, the Custodian's obligation to
provide a report on assessment of compliance or an attestation with respect to
itself and with respect to any Subcontractor shall be suspended in any year in
which the Issuing Entity's reporting obligations under the Exchange Act are
suspended.
4. The Custodian has not and shall not engage any Subcontractor which
is "participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, unless such Subcontractor agrees to provide in any year in which
a Form 10-K will be filed by the Trust., no later than March 1st of such year,
an assessment and a statement of registered public accounting firm certifying
its compliance with the applicable servicing criteria in Item 1122(d) of
Regulation AB as of and for the period ending the end of the fiscal year ending
no later than December 31 of the year prior to the year of delivery of the
report. "Subcontractor" as used herein means 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
the Mortgage Loans but performs one or more discrete functions identified in
Item 1122(d) of Regulation AB with respect to the Mortgage Loans under the
direction or authority of the Custodian.
5. The Custodian agrees to indemnify the Company, the Master Servicer,
the Trust Fund and each of their respective directors, officers, employees and
agents and hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, legal fees and expenses and related costs,
judgments, and any other costs, fees and expenses that any of them
G-2
may sustain arising out of or based upon the engagement of any Subcontractor in
violation of Section 2.01(d) or any failure by the Custodian to deliver any
information, report, certification, accountants' letter or other material when
and as required under this Agreement, including any report under Sections
2.01(b) or 2.01(c).
B. Reserved.
C. Review of Mortgage Files.
1. On or prior to the Closing Date, the Custodian agrees, for the
benefit of Certificateholders, to review, in accordance with the provisions of
Section 2.02 of the Pooling and Servicing Agreement, each such document, and
shall deliver to the Trustee an Initial Certification in the form annexed hereto
as Exhibit One evidencing receipt (subject to any exceptions noted therein) of a
Mortgage File for each of the Mortgage Loans listed on the Schedule attached
hereto (the "Mortgage Loan Schedule") and certifying that all such documents
have been executed and received and that such documents relate to the Mortgage
Loans identified on the Mortgage Loan Schedule, except for any exceptions listed
on Schedule A attached to such Initial Certification. The Custodian shall be
under no duty or obligation to inspect, review or examine said documents,
instruments, certificates or other papers to determine that the same are
genuine, enforceable, or appropriate for the represented purpose or that they
have actually been recorded or that they are other than what they purport to be
on their face.
2. Not later than 180 days after the Closing Date, the Custodian shall
review the Mortgage Files as provided in Section 2.02 of the Pooling and
Servicing Agreement and deliver to the Trustee a Final Certification in the form
annexed hereto as Exhibit Two evidencing the completeness of the Mortgage Files
(subject to any exceptions noted therein).
3. In reviewing the Mortgage Files as provided herein and in the
Pooling and Servicing Agreement, the Custodian shall make no representation as
to and shall not be responsible to verify (i) the validity, legality,
enforceability, due authorization, recordability, sufficiency or genuineness of
any of the documents included in any Mortgage File or (ii) the collectibility,
insurability, effectiveness or suitability of any of the documents in any
Mortgage File.
Upon receipt of written request from the Trustee, the Custodian shall
as soon as practicable supply the Trustee with a list of all of the documents
relating to the Mortgage Loans then contained in the Mortgage Files.
D. Notification of Breaches of Representations and Warranties. Upon
discovery by the Custodian of a breach of any representation or warranty made by
the Company as set forth in the Pooling and Servicing Agreement with respect to
a Mortgage Loan relating to a Mortgage File, the Custodian shall give prompt
written notice to the Company, the related Servicer and the Trustee.
E. Custodian to Cooperate: Release of Mortgage Files. Upon receipt of
written notice from the Master Servicer that the Mortgage Loan Seller has
repurchased a Mortgage Loan pursuant to Article II of the Pooling and Servicing
Agreement, and that the purchase price therefor has been deposited in the Master
Servicer Collection Account or the Distribution
G-3
Account, then the Custodian agrees to promptly release to the Mortgage Loan
Seller the related Mortgage File.
Upon the Custodian's receipt of a request for release (a "Request for
Release") substantially in the form of Exhibit D to the Pooling and Servicing
Agreement signed by a Servicing Officer of the related Servicer stating that it
has received payment in full of a Mortgage Loan or that payment in full will be
escrowed in a manner customary for such purposes, the Custodian agrees promptly
to release to such Servicer the related Mortgage File. The Company shall deliver
to the Custodian and the Custodian agrees to accept the Mortgage Note and other
documents constituting the Mortgage File with respect to any Substitute Mortgage
Loan.
From time to time as is appropriate for the servicing or foreclosure
of any Mortgage Loan, including, for this purpose, collection under any Primary
Mortgage Insurance Policy, the related Servicer shall deliver to the Custodian a
Request for Release signed by a Servicing Officer requesting that possession of
all of the Mortgage File be released to such 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. Upon receipt of the foregoing, the Custodian shall deliver the
Mortgage File to such Servicer. The related Servicer shall cause each Mortgage
File or any document therein so released to be returned to the Custodian when
the need therefore by such Servicer no longer exists, unless (i) the Mortgage
Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the Master Servicer Collection Account or the
Distribution Account or (ii) the Mortgage File or such document 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 either judicially or
non-judicially, and the related Servicer has delivered to the Custodian a
certificate of a Servicing Officer certifying as to the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery.
At any time that a Servicer is required to deliver to the Custodian a
Request for Release, such Servicer shall deliver two copies of the Request for
Release if delivered in hard copy or such Servicer may furnish such Request for
Release electronically to the Custodian, in which event the Servicing Officer
transmitting the same shall be deemed to have signed the Request for Release. In
connection with any Request for Release of a Mortgage File because of a
repurchase of a Mortgage Loan, the related Servicer shall send to the Trustee an
assignment of mortgage, without recourse, representation or warranty from the
Trustee to the Mortgage Loan Seller and the related Mortgage Note which shall be
endorsed without recourse, representation or warranty by the Trustee and the
Trustee shall forward such documents to the Mortgage Loan Seller. In connection
with any Request for Release of a Mortgage File because of the payment in full
of a Mortgage Loan, the related Servicer shall send to the Trustee a certificate
of satisfaction or other similar instrument to be executed by or on behalf of
the Trustee and returned to such Servicer.
F. Assumption Agreements. In the event that any assumption agreement
or substitution of liability agreement is entered into with respect to any
Mortgage Loan subject to
G-4
this Agreement in accordance with the terms and provisions of the Pooling and
Servicing Agreement, the Master Servicer, to the extent provided in the related
Servicing Agreement, shall cause the related Servicer to notify the Custodian
that such assumption or substitution agreement has been completed by forwarding
to the Custodian the original of such assumption or substitution agreement,
which shall be added to the related Mortgage File and, for all purposes, shall
be considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting parts thereof.
III.
CONCERNING THE CUSTODIAN
A. Custodian a Bailee and Agent of the Trustee. With respect to each
Mortgage Note, Mortgage and other documents constituting each Mortgage File
which are delivered to the Custodian, the Custodian is exclusively the bailee
and agent of the Trustee and has no instructions to hold any Mortgage Note or
Mortgage for the benefit of any person other than the Trustee and the
Certificateholders and undertakes to perform such duties and only such duties as
are specifically set forth in this Agreement. Except upon compliance with the
provisions of Section 2.5 of this Agreement, no Mortgage Note, Mortgage or
Mortgage File shall be delivered by the Custodian to the Company, the Servicer
or the Master Servicer or otherwise released from the possession of the
Custodian.
B. Reserved.
C. Custodian May Own Certificates. The Custodian 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 Custodian.
D. Master Servicer to Pay Custodian's Fees and Expenses. The Master
Servicer covenants and agrees to pay to the Custodian from time to time, and the
Custodian shall be entitled to, reasonable compensation for all services
rendered by it in the exercise and performance of any of the powers and duties
hereunder of the Custodian, and the Master Servicer will pay or reimburse the
Custodian upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Custodian 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), except any such expense, disbursement or advance as may arise from
its negligence or bad faith or to the extent that such cost or expense is
indemnified by the Company pursuant to the Pooling and Servicing Agreement.
E. Custodian May Resign; Trustee May Remove Custodian. The Custodian
may resign from the obligations and duties hereby imposed upon it as such
obligations and duties relate to its acting as Custodian of the Mortgage Loans.
Upon receiving such notice of resignation, the Trustee shall either take custody
of the Mortgage Files itself and give prompt notice thereof to the Company, the
Master Servicer and the Custodian, or promptly appoint a successor Custodian by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Custodian and one copy to the successor Custodian. If
the Trustee shall not have taken custody of the Mortgage Files and no successor
Custodian shall have been so appointed and have accepted appointment within 30
days after the giving of such notice of
G-5
resignation, the resigning Custodian may petition any court of competent
jurisdiction for the appointment of a successor Custodian.
The Trustee may remove the Custodian at any time with the consent of
the Master Servicer. In such event, the Trustee shall appoint, or petition a
court of competent jurisdiction to appoint, a successor Custodian hereunder. Any
successor Custodian shall be a depository institution subject to supervision or
examination by federal or state authority, shall be able to satisfy the other
requirements contained in Section 3.7 and shall be unaffiliated with the
Servicer or the Company.
Any resignation or removal of the Custodian and appointment of a
successor Custodian pursuant to any of the provisions of this Section 3.5 shall
become effective upon acceptance of appointment by the successor Custodian. The
Trustee shall give prompt notice to the Company and the Master Servicer of the
appointment of any successor Custodian. No successor Custodian shall be
appointed by the Trustee without the prior approval of the Company and the
Master Servicer.
F. Merger or Consolidation of Custodian. Any Person into which the
Custodian may be merged or converted or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Custodian shall be a party, or any Person succeeding to the business of the
Custodian, shall be the successor of the Custodian 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.
G. Representations of the Custodian. The Custodian hereby represents
that it is a depository institution subject to supervision or examination by a
federal or state authority, has a combined capital and surplus of at least
$15,000,000 and is qualified to do business in the jurisdictions in which it
will hold any Mortgage File.
IV.
MISCELLANEOUS PROVISIONS
A. Notices. All notices, requests, consents, demands and other
communications required under this Agreement or pursuant to any other instrument
or document delivered hereunder shall be in writing and, unless otherwise
specifically provided, may be delivered personally, by telegram or telex, or by
registered or certified mail, postage prepaid, return receipt requested, at the
addresses specified on the signature page hereof (unless changed by the
particular party whose address is stated herein by similar notice in writing),
in which case the notice will be deemed delivered when received.
B. Amendments. No modification or amendment of or supplement to this
Agreement shall be valid or effective unless the same is in writing and signed
by all parties hereto, and neither the Company, the Master Servicer nor the
Trustee shall enter into any amendment hereof except as permitted by the Pooling
and Servicing Agreement. The Trustee shall give prompt notice to the Custodian
of any amendment or supplement to the Pooling and Servicing Agreement and
furnish the Custodian with written copies thereof.
G-6
C. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED A CONTRACT MADE UNDER
THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
D. Recordation of Agreement. To the extent permitted by applicable
law, this Agreement is subject to recordation in all appropriate public offices
for real property records in all the counties or other comparable jurisdictions
in which any or all of the properties subject to the Mortgages are situated, and
in any other appropriate public recording office or elsewhere, such recordation
to be effected by the Company and at the Trust's expense on direction by the
Trustee, but only upon direction accompanied by an Opinion of Counsel (which
shall be at the expense of the party requesting such recordation and in no event
at the expense of the Trustee) reasonably satisfactory to the Company to the
effect that the failure to effect such recordation is likely to materially and
adversely affect the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
E. Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
G-7
IN WITNESS WHEREOF, this Agreement is executed as of the date first
above written.
Address: HSBC BANK USA, NATIONAL ASSOCIATION, as
Trustee
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000 By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address: XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000 By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address: XXXXX FARGO BANK, N.A.,
as Master Servicer
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000-0000 By:
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Assistant Vice President
Address: XXXXX FARGO BANK, N.A.,
as Custodian
0000 00xx Xxxxxx Xxxxxxxxx, XX 0031
Xxxxxxxxxxx, XX 00000 By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
G-8
EXHIBIT ONE
FORM OF CUSTODIAN INITIAL CERTIFICATION
___________, 200__
Xxxxxxx Xxxxx Mortgage Investors, Inc.
4 World Financial Center, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
HSBC Bank USA, National Association
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: The Pooling and Servicing Agreement, dated as of October 1, 2006,
among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor, Xxxxx
Fargo Bank, N.A., as master servicer and securities administrator, and
HSBC Bank USA, National Association, as trustee,
Mortgage Pass-Through Certificates, Series 2006-AF2
Ladies and Gentlemen:
Attached is the Custodian's preliminary exception report delivered in
accordance with Section 2.02 of the referenced Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement"). Capitalized terms used but not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Custodian makes no representations as to
(i) the validity, legality, sufficiency, enforceability or genuineness of any of
the documents contained in the Mortgage File pertaining to the Mortgage Loans
identified on the Mortgage Loan Schedule, (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan or (iii) the existence of
any assumption, modification, written assurance, or substitution agreement, with
respect to any Mortgage File if no such documents appear in the Mortgage File
delivered to the Custodian.
XXXXX FARGO BANK, N.A.,
as Custodian
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
G-9
EXHIBIT TWO
FORM OF CUSTODIAN FINAL CERTIFICATION
____________, 2006
Xxxxxxx Xxxxx Mortgage Investors, Inc.
4 World Financial Center, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ____________________
HSBC Bank USA, National Association
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: The Pooling and Servicing Agreement, dated as of October 1, 2006, each
among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor, Xxxxx
Fargo Bank, N.A., as master servicer and securities administrator and
HSBC Bank USA, National Association, as trustee,
Mortgage Pass-Through Certificates, Series 2006-AF2
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, hereby certifies that, except as noted on
the Schedule of Exceptions attached hereto, for each Mortgage Loan listed on the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on
the attachment hereto), it has received a complete Mortgage File which includes
the documents required to be included in the Mortgage File as set forth in the
Pooling and Servicing Agreement.
The undersigned has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The undersigned makes no
representation as to: (i) the validity, legality, sufficiency, enforceability or
genuineness of any documents contained in any Mortgage File for any of the
Mortgage Loans listed on the Mortgage Loan Schedule to the Pooling and Servicing
Agreement, (ii) the collectability, insurability, effectiveness or suitability
of any such Mortgage Loan or (iii) whether any Mortgage File should include any
flood insurance policy, any rider, addends, surety or guaranty agreement, power
of attorney, buy down agreement, assumption agreement, modification agreement,
written assurance or substitution agreement.
G-10
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
XXXXX FARGO BANK, N.A.,
as Custodian
By:
------------------------------------
Name:
----------------------------------
G-11
EXHIBIT THREE
FORM OF CERTIFICATION REGARDING SERVICING CRITERIA TO BE ADDRESSED IN
REPORT ON ASSESSMENT COMPLIANCE
The assessment of compliance to be delivered by Xxxxx Fargo Bank shall address,
at a minimum, the criteria identified below as "Applicable Servicing Criteria":
APPLICABLE
SERVICING
SERVICING CRITERIA CRITERIA
------------------------------------------------------------------------- ----------
REFERENCE CRITERIA
--------- --------
GENERAL SERVICING CONSIDERATIONS
1122(d)(1)(i) Policies and procedures are instituted to monitor any
performance or other triggers and events of default in
accordance with the transaction agreements.
1122(d)(1)(ii) If any material servicing activities are outsourced to
third parties, policies and procedures are instituted
to monitor the third party's performance and
compliance with such servicing activities.
1122(d)(1)(iii) Any requirements in the transaction agreements to
maintain a back-up servicer for the mortgage loans are
maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in
effect on the party participating in the servicing
function throughout the reporting period in the amount
of coverage required by and otherwise in accordance
with the terms of the transaction agreements.
CASH COLLECTION AND ADMINISTRATION
1122(d)(2)(i) Payments on mortgage loans are deposited into the
appropriate custodial bank accounts and related bank
clearing accounts no more than two business days
following receipt, or such other number of days
specified in the transaction agreements.
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an
obligor or to an investor are made only by authorized
personnel.
1122(d)(2)(iii) Advances of funds or guarantees regarding collections,
cash flows or distributions, and any interest or other
fees charged for such advances, are made, reviewed and
approved as specified in the transaction agreements.
1122(d)(2)(iv) The related accounts for the transaction, such as cash
reserve accounts or accounts established as a form of
overcollateralization, are separately maintained
(e.g., with respect to commingling of cash) as set
forth in the transaction agreements.
1122(d)(2)(v) Each custodial account is maintained at a federally
insured depository institution as set forth in the
transaction agreements. For purposes of this
criterion, "federally insured depository institution"
with respect to a foreign financial institution means
a foreign financial institution that meets the
requirements of Rule 13k-1(b)(1) of the Securities
Exchange Act.
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent
unauthorized access.
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for
all asset-backed securities related bank accounts,
including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically
accurate; (B) prepared within 30 calendar days after
the bank statement cutoff date, or such other number
of days specified in the transaction agreements; (C)
reviewed and approved by someone other than the person
who prepared the reconciliation; and (D) contain
explanations for reconciling items. These reconciling
items are resolved within 90 calendar days of their
original identification, or such other number of days
specified in the transaction agreements.
G-12
APPLICABLE
SERVICING
SERVICING CRITERIA CRITERIA
------------------------------------------------------------------------- ----------
REFERENCE CRITERIA
--------- --------
INVESTOR REMITTANCES AND REPORTING
1122(d)(3)(i) Reports to investors, including those to be filed with
the Commission, are maintained in accordance with the
transaction agreements and applicable Commission
requirements. Specifically, such reports (A) are
prepared in accordance with timeframes and other terms
set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms
specified in the transaction agreements; (C) are filed
with the Commission as required by its rules and
regulations; and (D) agree with investors' or the
trustee's records as to the total unpaid principal
balance and number of mortgage loans serviced by the
Servicer.
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and
other terms set forth in the transaction agreements.
1122(d)(3)(iii) Disbursements made to an investor are posted within
two business days to the Servicer's investor records,
or such other number of days specified in the
transaction agreements.
1122(d)(3)(iv) Amounts remitted to investors per the investor reports
agree with cancelled checks, or other form of payment,
or custodial bank statements.
POOL ASSET ADMINISTRATION
1122(d)(4)(i) Collateral or security on mortgage loans is maintained X
as required by the transaction agreements or related
mortgage loan documents.
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as X
required by the transaction agreements.
1122(d)(4)(iii) Any additions, removals or substitutions to the asset
pool are made, reviewed and approved in accordance
with any conditions or requirements in the transaction
agreements.
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs,
made in accordance with the related mortgage loan
documents are posted to the Servicer's obligor records
maintained no more than two business days after
receipt, or such other number of days specified in the
transaction agreements, and allocated to principal,
interest or other items (e.g., escrow) in accordance
with the related mortgage loan documents.
1122(d)(4)(v) The Servicer's records regarding the mortgage loans
agree with the Servicer's records with respect to an
obligor's unpaid principal balance.
1122(d)(4)(vi) Changes with respect to the terms or status of an
obligor's mortgage loans (e.g., loan modifications or
re-agings) are made, reviewed and approved by
authorized personnel in accordance with the
transaction agreements and related pool asset
documents.
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance
plans, modifications and deeds in lieu of foreclosure,
foreclosures and repossessions, as applicable) are
initiated, conducted and concluded in accordance with
the timeframes or other requirements established by
the transaction agreements.
1122(d)(4)(viii) Records documenting collection efforts are maintained
during the period a mortgage loan is delinquent in
accordance with the transaction agreements. Such
records are maintained on at least a monthly basis, or
such other period specified in the transaction
agreements, and describe the entity's activities in
monitoring delinquent mortgage loans including, for
example, phone calls, letters and payment rescheduling
plans in cases where delinquency is deemed temporary
(e.g., illness or unemployment).
1122(d)(4)(ix) Adjustments to interest rates or rates of return for
mortgage loans with variable rates are computed based
on the related mortgage loan documents.
G-13
APPLICABLE
SERVICING
SERVICING CRITERIA CRITERIA
------------------------------------------------------------------------- ----------
REFERENCE CRITERIA
--------- --------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such
as escrow accounts): (A) such funds are analyzed, in
accordance with the obligor's mortgage loan documents,
on at least an annual basis, or such other period
specified in the transaction agreements; (B) interest
on such funds is paid, or credited, to obligors in
accordance with applicable mortgage loan documents and
state laws; and (C) such funds are returned to the
obligor within 30 calendar days of full repayment of
the related mortgage loans, or such other number of
days specified in the transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments,
provided that such support has been received by the
servicer at least 30 calendar days prior to these
dates, or such other number of days specified in the
transaction agreements.
1122(d)(4)(xii) Any late payment penalties in connection with any
payment to be made on behalf of an obligor are paid
from the servicer's funds and not charged to the
obligor, unless the late payment was due to the
obligor's error or omission.
1122(d)(4)(xiii) Disbursements made on behalf of an 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 uncollectible accounts
are recognized and recorded in accordance with the
transaction agreements.
1122(d)(4)(xv) Any external enhancement or other support, identified
in Item 1114(a)(1) through (3) or Item 1115 of
Regulation AB, is maintained as set forth in the
transaction agreements.
G-14
EXHIBIT H-1
CLASS AV-1 ONE-MONTH LIBOR CAP TABLE
BEGINNING ENDING NOTIONAL 1ML STRIKE 1ML STRIKE
PERIOD ACCRUAL ACCRUAL BALANCE ($) LOWER COLLAR(%) UPPER COLLAR (%)
------ --------- -------- ----------- --------------- ----------------
1 10/31/06 11/24/06 125,408,000 7.768 10.840
2 11/25/06 12/24/06 121,351,987 6.446 10.840
3 12/25/06 01/24/07 117,414,471 6.233 10.840
4 01/25/07 02/24/07 113,592,965 6.233 10.840
5 02/25/07 03/24/07 109,884,054 6.918 10.840
6 03/25/07 04/24/07 106,284,425 6.233 10.840
7 04/25/07 05/24/07 102,790,861 6.446 10.840
8 05/25/07 06/24/07 99,400,241 6.233 10.840
9 06/25/07 07/24/07 96,109,535 6.447 10.840
10 07/25/07 08/24/07 92,915,802 6.233 10.840
11 08/25/07 09/24/07 89,816,189 6.233 10.840
12 09/25/07 10/24/07 86,807,924 6.447 10.840
13 10/25/07 11/24/07 83,888,319 6.233 10.840
14 11/25/07 12/24/07 81,054,763 6.451 10.840
15 12/25/07 01/24/08 78,304,787 6.238 10.840
16 01/25/08 02/24/08 75,635,866 6.238 10.840
17 02/25/08 03/24/08 73,045,613 6.679 10.840
18 03/25/08 04/24/08 70,531,714 6.238 10.840
19 04/25/08 05/24/08 68,091,919 6.457 10.840
20 05/25/08 06/24/08 65,724,048 6.245 10.840
21 06/25/08 07/24/08 63,425,995 6.459 10.840
22 07/25/08 08/24/08 61,195,692 6.245 10.840
23 08/25/08 09/24/08 59,031,144 6.245 10.840
24 09/25/08 10/24/08 56,930,414 6.459 10.840
25 10/25/08 11/24/08 54,891,625 6.247 10.840
26 11/25/08 12/24/08 52,912,951 6.462 10.840
27 12/25/08 01/24/09 50,992,633 6.249 10.840
28 01/25/09 02/24/09 49,128,941 6.249 10.840
29 02/25/09 03/24/09 47,320,208 6.937 10.840
30 03/25/09 04/24/09 45,564,833 6.342 10.840
31 04/25/09 05/24/09 43,861,986 6.939 10.840
32 05/25/09 06/24/09 42,210,901 6.879 10.840
33 06/25/09 07/24/09 40,608,590 7.114 10.840
34 07/25/09 08/24/09 39,053,475 6.889 10.840
35 08/25/09 09/24/09 37,544,166 6.890 10.840
36 09/25/09 10/24/09 36,079,323 7.172 10.840
37 10/25/09 11/24/09 34,657,887 7.115 10.840
38 11/25/09 12/24/09 34,657,887 7.407 10.840
39 12/25/09 01/24/10 34,657,887 7.162 10.840
40 01/25/10 02/24/10 34,657,887 7.165 10.840
41 02/25/10 03/24/10 34,149,665 7.950 10.840
42 03/25/10 04/24/10 33,141,404 7.211 10.840
43 04/25/10 05/24/10 32,162,991 7.644 10.840
44 05/25/10 06/24/10 31,213,702 7.445 10.840
45 06/25/10 07/24/10 30,292,359 7.699 10.840
46 07/25/10 08/24/10 29,398,141 7.447 10.840
47 08/25/10 09/24/10 28,530,250 7.448 10.840
H-1-1
48 09/25/10 10/24/10 27,687,914 7.761 10.840
49 10/25/10 11/24/10 26,870,463 7.682 10.840
50 11/25/10 12/24/10 26,077,310 7.943 10.840
51 12/25/10 01/24/11 25,307,503 7.682 10.840
52 01/25/11 02/24/11 24,560,358 7.682 10.840
53 02/25/11 03/24/11 23,835,207 8.719 10.840
54 03/25/11 04/24/11 23,131,972 7.908 10.840
55 04/25/11 05/24/11 22,449,465 9.092 10.840
56 05/25/11 06/24/11 21,786,335 10.635 10.840
(1) With respect to any Distribution Date, if One-Month LIBOR (as determined by
the Cap Contract Counterparty and subject to a cap equal to 10.840%)
exceeds the Lower Collar, the Issuing Entity will receive payments pursuant
to the Class AV-1 Cap Contract.
X-0-0
XXXXXXX X-0
CLASS AV-2 ONE-MONTH LIBOR CAP TABLE
BEGINNING ENDING NOTIONAL 1ML STRIKE 1ML STRIKE
PERIOD ACCRUAL ACCRUAL BALANCE ($) LOWER COLLAR (%) UPPER COLLAR (%)
------ --------- -------- ----------- ---------------- ----------------
1 10/31/06 11/24/06 212,230,000 7.920 9.330
2 11/25/06 12/24/06 205,396,228 6.571 9.330
3 12/25/06 01/24/07 198,761,392 6.354 9.330
4 01/25/07 02/24/07 192,321,338 6.354 9.330
5 02/25/07 03/24/07 186,070,350 7.053 9.330
6 03/25/07 04/24/07 180,002,880 6.354 9.330
7 04/25/07 05/24/07 174,113,542 6.572 9.330
8 05/25/07 06/24/07 168,397,110 6.354 9.330
9 06/25/07 07/24/07 162,848,509 6.572 9.330
10 07/25/07 08/24/07 157,462,814 6.354 9.330
11 08/25/07 09/24/07 152,235,245 6.354 9.330
12 09/25/07 10/24/07 147,161,161 6.572 9.330
13 10/25/07 11/24/07 142,236,058 6.354 9.330
14 11/25/07 12/24/07 137,455,565 6.572 9.330
15 12/25/07 01/24/08 132,815,436 6.354 9.330
16 01/25/08 02/24/08 128,311,553 6.354 9.330
17 02/25/08 03/24/08 123,939,917 6.804 9.330
18 03/25/08 04/24/08 119,696,647 6.354 9.330
19 04/25/08 05/24/08 115,577,976 6.572 9.330
20 05/25/08 06/24/08 111,580,246 6.354 9.330
21 06/25/08 07/24/08 107,699,908 6.572 9.330
22 07/25/08 08/24/08 103,933,518 6.354 9.330
23 08/25/08 09/24/08 100,277,729 6.354 9.330
24 09/25/08 10/24/08 96,729,297 6.572 9.330
25 10/25/08 11/24/08 93,285,070 6.354 9.330
26 11/25/08 12/24/08 89,941,989 6.572 9.330
27 12/25/08 01/24/09 86,697,086 6.354 9.330
28 01/25/09 02/24/09 83,547,480 6.354 9.330
29 02/25/09 03/24/09 80,490,372 7.054 9.330
30 03/25/09 04/24/09 77,523,048 6.363 9.330
31 04/25/09 05/24/09 74,642,904 6.678 9.330
32 05/25/09 06/24/09 71,847,348 6.729 9.330
33 06/25/09 07/24/09 69,134,123 6.959 9.330
34 07/25/09 08/24/09 66,500,581 6.738 9.330
35 08/25/09 09/24/09 66,500,581 6.738 9.330
36 09/25/09 10/24/09 61,463,523 6.969 9.330
37 10/25/09 11/24/09 59,055,388 6.772 9.330
38 11/25/09 12/24/09 59,055,388 7.102 9.330
39 12/25/09 01/24/10 59,055,388 6.867 9.330
40 01/25/10 02/24/10 59,055,388 6.872 9.330
41 02/25/10 03/24/10 58,193,826 7.627 9.330
42 03/25/10 04/24/10 56,484,428 6.874 9.330
43 04/25/10 05/24/10 54,825,246 7.166 9.330
44 05/25/10 06/24/10 53,214,792 7.015 9.330
45 06/25/10 07/24/10 51,651,760 7.255 9.330
46 07/25/10 08/24/10 50,134,631 7.020 9.330
47 08/25/10 09/24/10 48,662,086 7.020 9.330
H-2-1
48 09/25/10 10/24/10 47,232,787 7.264 9.330
49 10/25/10 11/24/10 45,845,440 7.058 9.330
50 11/25/10 12/24/10 44,498,838 7.315 9.330
51 12/25/10 01/24/11 43,191,849 7.073 9.330
52Z 01/25/11 02/24/11 41,923,246 7.078 9.330
53 02/25/11 03/24/11 40,691,922 7.855 9.330
54 03/25/11 04/24/11 39,496,763 7.080 9.330
55 04/25/11 05/24/11 38,336,715 7.497 9.330
(1) With respect to any Distribution Date, if One-Month LIBOR (as determined by
the Cap Contract Counterparty and subject to a cap equal to 9.330%) exceeds
the Lower Collar, the Issuing Entity will receive payments pursuant to the
Class AV-2 Cap Contract.
H-2-2
EXHIBIT H-3
STACK II SUBORDINATE CERTIFICATE ONE-MONTH LIBOR CAP TABLE
BEGINNING ENDING NOTIONAL 1ML STRIKE 1ML STRIKE
PERIOD ACCRUAL ACCRUAL BALANCE ($) LOWER COLLAR (%) UPPER COLLAR (%)
------ --------- -------- ----------- ---------------- ----------------
1 10/31/06 11/24/06 26,468,000 7.499 8.970
2 11/25/06 12/24/06 26,468,000 6.161 8.970
3 12/25/06 01/24/07 26,468,000 5.945 8.970
4 01/25/07 02/24/07 26,468,000 5.945 8.970
5 02/25/07 03/24/07 26,468,000 6.639 8.970
6 03/25/07 04/24/07 26,468,000 5.945 8.970
7 04/25/07 05/24/07 26,468,000 6.161 8.970
8 05/25/07 06/24/07 26,468,000 5.946 8.970
9 06/25/07 07/24/07 26,468,000 6.161 8.970
10 07/25/07 08/24/07 26,468,000 5.946 8.970
11 08/25/07 09/24/07 26,468,000 5.946 8.970
12 09/25/07 10/24/07 26,468,000 6.161 8.970
13 10/25/07 11/24/07 26,468,000 5.946 8.970
14 11/25/07 12/24/07 26,468,000 6.163 8.970
15 12/25/07 01/24/08 26,468,000 5.947 8.970
16 01/25/08 02/24/08 26,468,000 5.947 8.970
17 02/25/08 03/24/08 26,468,000 6.394 8.970
18 03/25/08 04/24/08 26,468,000 5.947 8.970
19 04/25/08 05/24/08 26,468,000 6.166 8.970
20 05/25/08 06/24/08 26,468,000 5.950 8.970
21 06/25/08 07/24/08 26,468,000 6.166 8.970
22 07/25/08 08/24/08 26,468,000 5.950 8.970
23 08/25/08 09/24/08 26,468,000 5.950 8.970
24 09/25/08 10/24/08 26,468,000 6.166 8.970
25 10/25/08 11/24/08 26,468,000 5.951 8.970
26 11/25/08 12/24/08 26,468,000 6.168 8.970
27 12/25/08 01/24/09 26,468,000 5.951 8.970
28 01/25/09 02/24/09 26,468,000 5.952 8.970
29 02/25/09 03/24/09 26,468,000 6.647 8.970
30 03/25/09 04/24/09 26,468,000 5.992 8.970
31 04/25/09 05/24/09 26,468,000 6.411 8.970
32 05/25/09 06/24/09 26,468,000 6.421 8.970
33 06/25/09 07/24/09 26,468,000 6.652 8.970
34 07/25/09 08/24/09 26,468,000 6.431 8.970
35 08/25/09 09/24/09 26,468,000 6.431 8.970
36 09/25/09 10/24/09 26,468,000 6.680 8.970
37 10/25/09 11/24/09 26,468,000 6.536 8.970
38 11/25/09 12/24/09 24,815,203 6.851 8.970
39 12/25/09 01/24/10 21,327,204 6.613 8.970
40 01/25/10 02/24/10 17,941,740 6.617 8.970
41 02/25/10 03/24/10 16,025,630 7.383 8.970
42 03/25/10 04/24/10 15,553,997 6.636 8.970
43 04/25/10 05/24/10 15,096,259 6.980 8.970
44 05/25/10 06/24/10 14,652,032 6.811 8.970
45 06/25/10 07/24/10 14,220,885 7.056 8.970
46 07/25/10 08/24/10 13,802,411 6.815 8.970
47 08/25/10 09/24/10 13,396,243 6.815 8.970
H-3-1
48 09/25/10 10/24/10 13,002,015 7.085 8.970
49 10/25/10 11/24/10 12,619,386 6.926 8.970
50 11/25/10 12/24/10 12,248,045 7.185 8.970
51 12/25/10 01/24/11 11,887,630 6.936 8.970
52 01/25/11 02/24/11 11,537,810 6.939 8.970
53 02/25/11 03/24/11 11,198,276 7.812 8.970
54 03/25/11 04/24/11 10,868,822 7.024 8.970
55 04/25/11 05/24/11 10,549,058 7.727 8.970
(1) With respect to any Distribution Date, if One-Month LIBOR (as determined by
the Cap Contract Counterparty and subject to a cap equal to 8.970%) exceeds
the Lower Collar, the Issuing Entity will receive payments pursuant to the
Stack II Subordinate Certificates Cap Contract.
H-3-2
EXHIBIT I-1
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
ABN AMRO
[INTENTIONALLY OMITTED]
I-1-1
EXHIBIT I-2
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
CITIMORTGAGE, INC.
[INTENTIONALLY OMITTED]
I-2-1
EXHIBIT I-3
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
PHH MORTGAGE CORPORATION
[INTENTIONALLY OMITTED]
I-3-1
EXHIBIT J-1
FORM OF STACK I MORTGAGE LOAN PURCHASE AGREEMENT
ON FILE WITH DECHERT LLP
J-1-1
EXHIBIT J-2
FORM OF STACK II MORTGAGE LOAN PURCHASE AGREEMENT
ON FILE WITH DECHERT LLP
EXHIBIT K
SERVICING CRITERIA TO BE ADDRESSED
IN ASSESSMENT OF COMPLIANCE
(RMBS UNLESS OTHERWISE NOTED)
KEY: X - obligation
WHERE THERE ARE MULTIPLE CHECKS FOR CRITERIA THE ATTESTING PARTY WILL IDENTIFY
IN ITS MANAGEMENT ASSERTION THAT IT IS ATTESTING ONLY TO THE PORTION OF THE
DISTRIBUTION CHAIN IT IS RESPONSIBLE FOR IN THE RELATED TRANSACTION AGREEMENTS.
CAPITALIZED TERMS USED HEREIN BUT NOT DEFINED HEREIN SHALL HAVE THE MEANINGS
ASSIGNED TO THEM IN THE POOLING AND SERVICING AGREEMENT, DATED AS OF OCTOBER 1,
2006, AMONG XXXXXXX XXXXX MORTGAGE INVESTORS, INC., AS DEPOSITOR, XXXXX FARGO
BANK, N.A., AS MASTER SERVICER AND SECURITIES ADMINISTRATOR, AND HSBC BANK USA,
NATIONAL ASSOCIATION, AS TRUSTEE.
SECURITIES MASTER
REG AB REFERENCE SERVICING CRITERIA ADMINISTRATOR SERVICER
---------------- --------------------------------------------------- ------------- --------
GENERAL SERVICING CONSIDERATIONS
1122(d)(1)(i) Policies and procedures are instituted to monitor X X
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 outsourced X X
to third parties, policies and procedures are
instituted to monitor the third party's performance
and compliance with such servicing activities.
1122(d)(1)(iii) Any requirements in the transaction agreements to N/A N/A
maintain a back-up servicer for the Pool Assets are
maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is X
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
1122(d)(2)(i) Payments on pool assets are deposited into the X X
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 behalf of X X
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, such as X X
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.
K-1
SECURITIES MASTER
REG AB REFERENCE SERVICING CRITERIA ADMINISTRATOR SERVICER
---------------- --------------------------------------------------- ------------- --------
1122(d)(2)(v) Each custodial account is maintained at a federally X X
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 prevent
unauthorized access.
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for X X
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 number of days
specified in the transaction agreements.
INVESTOR REMITTANCES AND REPORTING
1122(d)(3)(i) Reports to investors, including those to be filed X X
with the Commission, are maintained in accordance
with the transaction agreements and applicable
Commission requirements. Specifically, such reports
(A) are prepared in accordance with timeframes and
other terms set forth in the transaction
agreements; (B) provide information calculated in
accordance with the terms specified in 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 and remitted X X
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 posted within X X
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 investor X X
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 maintained
as required by the transaction agreements or
related pool asset documents.
1122(d)(4)(ii) Pool assets and related documents are safeguarded
as required by the transaction agreements
1122(d)(4)(iii) Any additions, removals or substitutions to the
asset pool are made, reviewed and approved in
accordance with any conditions or requirements in
the transaction agreements.
K-2
SECURITIES MASTER
REG AB REFERENCE SERVICING CRITERIA ADMINISTRATOR SERVICER
---------------- --------------------------------------------------- ------------- --------
1122(d)(4)(iv) Payments on pool assets, including any payoffs,
made in accordance with the related pool asset
documents are posted to the Servicer's obligor
records maintained no more than two business 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 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 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 (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 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 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 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
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 (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 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.
K-3
SECURITIES MASTER
REG AB REFERENCE SERVICING CRITERIA ADMINISTRATOR SERVICER
---------------- --------------------------------------------------- ------------- --------
1122(d)(4)(xiii) Disbursements made on behalf of an 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 uncollectible X
accounts are recognized and recorded in accordance
with the transaction agreements.
1122(d)(4)(xv) Any external enhancement or other support,
identified in Item 1114(a)(1) through (3) or Item
1115 of Regulation AB, is maintained as set forth
in the transaction agreements.
K-4
EXHIBIT L
XXXXXXXX-XXXXX CERTIFICATION
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Center, 10th Floor
New York, New York 10080
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Re: Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-AF2
I, [identify the certifying individual], certify that:
1. 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 Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-AF2 (the
"Exchange Act periodic reports");
2. 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;
3. 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;
4. [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) in all material respects; and]
5. 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.
L-1
[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].]
Date:
--------------
----------------------------------------
[Signature]
----------------------------------------
[Title]
L-2
EXHIBIT M
FORM OF BACK-UP XXXXXXXX-XXXXX CERTIFICATION
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Center, 10th Floor
New York, New York 10080
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Re: Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-AF2
[_______], the [_______] of [_______] (the "Company") hereby certifies
to the Depositor, the Master Servicer and the Securities Administrator, and each
of their officers, directors and affiliates that:
(1) I have reviewed [the servicer compliance statement of the Company
provided in accordance with Item 1123 of Regulation AB (the "Compliance
Statement"),] the report on assessment of the Company's compliance with the
Servicing Criteria set forth in Item 1122(d) of Regulation AB (the "Servicing
Criteria"), provided in accordance with Rules 13a-18 and 15d-18 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and Item 1122
of Regulation AB (the "Servicing Assessment"), the registered public accounting
firm's attestation report provided in accordance with Rules 13a-18 and 15d-18
under the Exchange Act and Section 1122(b) of Regulation AB (the "Attestation
Report"), and all servicing reports, officer's certificates and other
information relating to the servicing of the Mortgage Loans by the Company
during 200[ ] that were delivered by the Company to any of the Depositor, the
Master Servicer and the Trustee pursuant to the Agreement (collectively, the
"Company Servicing Information");
(2) Based on my knowledge, the Company Servicing Information, taken as
a whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in the light of the
circumstances under which such statements were made, not misleading with respect
to the period of time covered by the Company Servicing Information;
(3) Based on my knowledge, all of the Company Servicing Information
required to be provided by the Company under the Agreement has been provided to
the Depositor, the Master Servicer and the Securities Administrator;
(4) I am responsible for reviewing the activities performed by
[_______] as [_______] under the [_______] (the "Agreement"), and based on my
knowledge [and the compliance review conducted in preparing the Compliance
Statement] and except as disclosed in [the Compliance Statement,] the Servicing
Assessment or the Attestation Report, the Company has fulfilled its obligations
under the Agreement in all material respects; and
M-1
(5) [The Compliance Statement required to be delivered by the Company
pursuant to the Agreement, and] [The] [the] Servicing Assessment and Attestation
Report required to be provided by the Company and [by any Subservicer or
Subcontractor] pursuant to the Agreement, have been provided to the Depositor,
the Master Servicer and the Securities Administrator. Any material instances of
noncompliance described in such reports have been disclosed to the Depositor,
the Master Servicer and the Securities Administrator. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such reports.
Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated as of October 1,
2006, among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor (the
"Depositor"), Xxxxx Fargo Bank, N.A., as master servicer (in such capacity, the
"Master Servicer") and securities administrator (in such capacity, the
"Securities Administrator") and HSBC Bank USA, National Association, as trustee
(the "Trustee").
[______________________________________]
as [___________________________________]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
M-2
EXHIBIT N-1
FORM OF CLASS AV-1 CAP CONTRACT
[INTENTIONALLY OMITTED]
N-1
FORM N-2
FORM OF CLASS AV-2 CAP CONTRACT
[INTENTIONALLY OMITTED]
N-2
EXHIBIT N-3
FORM OF STACK II SUBORDINATE CERTIFICATE CAP CONTRACT
[INTENTIONALLY OMITTED]
N-3
EXHIBIT O
ADDITIONAL DISCLOSURE NOTIFICATION
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Center, 10th Floor
New York, New York 10080
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
RE: Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-AF2
**Additional Form [10-D][10-K][8-K] Disclosure** Required
Ladies and Gentlemen:
In accordance with Section 3.18(b) of the Pooling and Servicing
Agreement, dated as of October 1, 2006, among Xxxxxxx Xxxxx Mortgage Investors,
Inc., as depositor, Xxxxx Fargo Bank, N.A., as master servicer and securities
administrator and HSBC Bank USA, National Association, as trustee, the
undersigned, as [__________], hereby notifies you that certain events have come
to our attention that [will] [may] need to be disclosed on Form
[10-D][10-K][8-K].
Description of Additional Form [10-D][10-K][8-K] Disclosure: _________________
List of any Attachments hereto to be included in the Additional Form
[10-D][10-K][8-K] Disclosure: ________________________________________________
Any inquiries related to this notification should be directed to
[__________], phone number: [__________]; email address:
[__________________________].
________________________________________
[NAME OF PARTY],
as [role]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
O-1
EXHIBIT P
FORM OF ITEM 1123 CERTIFICATION OF SERVICER
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Center, 10th Floor
New York, New York 10080
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Re: Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-AF2 Mortgage
Pass-Through Certificates
I, [identify name of certifying individual], [title of certifying individual] of
[name of servicing company] (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 [related
servicing agreement] (the "Servicing 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 related Servicing 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:
--------------
_______________________________________
[Servicer]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
P-1
EXHIBIT Q-1
ADDITIONAL FORM 10-D DISCLOSURE
ADDITIONAL FORM 10-D DISCLOSURE
ITEM ON FORM 10-D PARTY RESPONSIBLE
----------------- -----------------
ITEM 1: DISTRIBUTION AND POOL
PERFORMANCE INFORMATION
Information included in the Master Servicer
[Monthly Statement] Servicer
Securities Administrator
Any information required by 1121 Depositor
which is NOT included on the
[Monthly Statement]
ITEM 2: LEGAL PROCEEDINGS
Any legal proceeding pending against
the following entities or their
respective property, that is material
to Certificateholders, including any
proceeding known to be contemplated
by governmental authorities:
- Issuing Entity (Trust Fund) Trustee, Master Servicer, Securities
Administrator and Depositor
- Sponsor (Seller) Seller (if a party to the Pooling and
Servicing Agreement) or Depositor
- Depositor Depositor
- Trustee Trustee
- Securities Administrator Securities Administrator
- Master Servicer Master Servicer
- Custodian Custodian
- 1110(b) Originator Depositor
- Any 1108(a)(2) Servicer (other Servicer
than the Master Servicer or
Securities Administrator)
- Any other party contemplated by Depositor
1100(d)(1)
ITEM 3: SALE OF SECURITIES AND Depositor
USE OF PROCEEDS
Information from Item 2(a) of Part II
of Form 10-Q:
With respect to any sale of
securities by the sponsor, depositor
or issuing entity, that are backed by
the same asset pool or are otherwise
issued by the issuing entity, whether
or not registered, provide the sales
and use of proceeds information in
Item 701 of Regulation S-K. Pricing
information can be omitted if
securities were not registered.
Q-1-1
ADDITIONAL FORM 10-D DISCLOSURE
ITEM ON FORM 10-D PARTY RESPONSIBLE
----------------- -----------------
ITEM 4: DEFAULTS UPON SENIOR Securities Administrator
SECURITIES Trustee
Information from Item 3 of Part II of
Form 10-Q:
Report the occurrence of any Event of
Default (after expiration of any
grace period and provision of any
required notice)
ITEM 5: SUBMISSION OF MATTERS TO A Securities Administrator
VOTE OF SECURITY HOLDERS Trustee
Information from Item 4 of Part II of
Form 10-Q
ITEM 6: SIGNIFICANT OBLIGORS OF Depositor
POOL ASSETS
Item 1112(b) - Significant Obligor
Financial Information*
* This information need only be
reported on the Form 10-D for
the distribution period in which
updated information is required
pursuant to the Item.
ITEM 7: SIGNIFICANT ENHANCEMENT
PROVIDER INFORMATION
Item 1114(b)(2) - Credit Enhancement
Provider Financial Information*
- Determining applicable Depositor
disclosure threshold
- Requesting required financial Depositor
information (including any
required accountants' consent to
the use thereof) or effecting
incorporation by reference
Item 1115(b) - Derivative
Counterparty Financial Information*
- Determining current maximum Depositor
probable exposure
- Determining current significance Depositor
percentage
- Requesting required financial Depositor
information (including any
required accountants' consent to
the use thereof) or effecting
incorporation by reference
* This information need only be
reported on the Form 10-D for
the distribution period in which
updated information is required
pursuant to the Items.
Q-1-2
ADDITIONAL FORM 10-D DISCLOSURE
ITEM ON FORM 10-D PARTY RESPONSIBLE
----------------- -----------------
ITEM 8: OTHER INFORMATION Any party responsible for the applicable
Form 8-K Disclosure item
Disclose any information required to
be reported on Form 8-K during the
period covered by the Form 10-D but
not reported
ITEM 9: EXHIBITS
Monthly Statement to Securities Administrator
Certificateholders
Exhibits required by Item 601 of Depositor
Regulation S-K, such as material
agreements
Q-1-3
EXHIBIT Q-2
ADDITIONAL FORM 10-K DISCLOSURE
ADDITIONAL FORM 10-K DISCLOSURE
ITEM ON FORM 10-K PARTY RESPONSIBLE
----------------- -----------------
ITEM 1B: UNRESOLVED STAFF COMMENTS Depositor
ITEM 9B: OTHER INFORMATION Any party responsible for disclosure
items on Form 8-K
Disclose any information required to
be reported on Form 8-K during the
fourth quarter covered by the Form
10-K but not reported
ITEM 15: EXHIBITS, FINANCIAL Securities Administrator
STATEMENT SCHEDULES Depositor
REG AB ITEM 1112(B): SIGNIFICANT
OBLIGORS OF POOL ASSETS
Significant Obligor Financial Depositor
Information*
* This information need only be
reported on the Form 10-K if
updated information is required
pursuant to the Item.
REG AB ITEM 1114(B)(2): CREDIT
ENHANCEMENT PROVIDER FINANCIAL
INFORMATION
- Determining applicable Depositor
disclosure threshold
- Requesting required financial Depositor
information (including any
required accountants' consent to
the use thereof) or effecting
incorporation by reference
* This information need only be
reported on the Form 10-K if
updated information is required
pursuant to the Item.
REG AB ITEM 1115(B): DERIVATIVE
COUNTERPARTY FINANCIAL INFORMATION
- Determining current maximum Depositor
probable exposure
- Determining current significance Depositor
percentage
- Requesting required financial Depositor
information (including any
required accountants' consent to
the use thereof) or effecting
incorporation by reference
* This information need only be
reported on the Form 10-K if
updated information is required
pursuant to the Item.
REG AB ITEM 1117: LEGAL PROCEEDINGS
Any legal proceeding pending against
the following entities or their
respective property, that is material
to Certificateholders, including any
proceeding known to be contemplated
by
Q-2-1
ADDITIONAL FORM 10-K DISCLOSURE
ITEM ON FORM 10-K PARTY RESPONSIBLE
----------------- -----------------
governmental authorities:
- Issuing Entity (Trust Fund) Trustee, Master Servicer, Securities
Administrator and Depositor
- Sponsor (Seller) Seller (if a party to the Pooling and
Servicing Agreement) or Depositor
- Depositor Depositor
- Trustee Trustee
- Securities Administrator Securities Administrator
- Master Servicer Master Servicer
- Custodian Custodian
- 1110(b) Originator Depositor
- Any 1108(a)(2) Servicer (other Servicer
than the Master Servicer or
Securities Administrator)
- Any other party contemplated by Depositor
1100(d)(1)
REG AB ITEM 1119: AFFILIATIONS AND
RELATIONSHIPS
Whether (a) the Sponsor (Seller), Depositor as to (a)
Depositor or Issuing Entity is an Sponsor/Seller as to (a)
affiliate of the following parties,
and (b) to the extent known and
material, any of the following
parties are affiliated with one
another:
- Master Servicer Master Servicer
- Securities Administrator Securities Administrator
- Trustee Trustee
- Any other 1108(a)(3) servicer Servicer
- Any 1110 Originator Depositor/Sponsor
- Any 1112(b) Significant Obligor Depositor/Sponsor
- Any 1114 Credit Enhancement Depositor/Sponsor
Provider
- Any 1115 Derivate Counterparty Depositor/Sponsor
Provider
- Any other 1101(d)(1) material Depositor/Sponsor
party
Whether there are any "outside the Depositor as to (a)
ordinary course business Sponsor/Seller as to (a)
arrangements" other than would be
obtained in an arm's length
transaction between (a) the Sponsor
(Seller), Depositor or Issuing Entity
on the one hand, and (b) any of the
following parties (or their
affiliates) on the other hand, that
exist currently or within the past
two years and that are material to a
Certificateholder's understanding of
the Certificates:
- Master Servicer Master Servicer
- Securities Administrator Securities Administrator
- Trustee Depositor
- Any other 1108(a)(3) servicer Servicer
- Any 1110 Originator Depositor/Sponsor
- Any 1112(b) Significant Obligor Depositor/Sponsor
- Any 1114 Credit Enhancement Depositor/Sponsor
Provider
Q-2-2
ADDITIONAL FORM 10-K DISCLOSURE
ITEM ON FORM 10-K PARTY RESPONSIBLE
----------------- -----------------
- Any 1115 Derivate Counterparty Depositor/Sponsor
Provider
- Any other 1101(d)(1) material Depositor/Sponsor
party
Whether there are any specific Depositor as to (a)
relationships involving the Sponsor/Seller as to (a)
transaction or the pool assets
between (a) the Sponsor (Seller),
Depositor or Issuing Entity on the
one hand, and (b) any of the
following parties (or their
affiliates) on the other hand, that
exist currently or within the past
two years and that are material:
- Master Servicer Master Servicer
- Securities Administrator Securities Administrator
- Trustee Depositor
- Any other 1108(a)(3) servicer Servicer
- Any 1110 Originator Depositor/Sponsor
- Any 1112(b) Significant Obligor Depositor/Sponsor
- Any 1114 Credit Enhancement Depositor/Sponsor
Provider
- Any 1115 Derivate Counterparty Depositor/Sponsor
Provider
- Any other 1101(d)(1) material Depositor/Sponsor
party
Q-2-3
EXHIBIT Q-3
FORM 8-K DISCLOSURE INFORMATION
FORM 8-K DISCLOSURE INFORMATION
ITEM ON FORM 8-K PARTY RESPONSIBLE
---------------- -----------------
ITEM 1.01- ENTRY INTO A MATERIAL All parties
DEFINITIVE AGREEMENT
Disclosure is required regarding
entry into or amendment of any
definitive agreement that is material
to the securitization, even if
depositor is not a party.
Examples: servicing agreement,
custodial agreement.
Note: disclosure not required as to
definitive agreements that are fully
disclosed in the prospectus
ITEM 1.02- TERMINATION OF A MATERIAL All parties
DEFINITIVE AGREEMENT
Disclosure is required regarding
termination of any definitive
agreement that is material to the
securitization (other than expiration
in accordance with its terms), even
if depositor is not a party.
Examples: servicing agreement,
custodial agreement.
ITEM 1.03- BANKRUPTCY OR RECEIVERSHIP Depositor
Disclosure is required regarding the
bankruptcy or receivership, with
respect to any of the following:
- Sponsor (Seller) Depositor/Sponsor (Seller)
- Depositor Depositor
- Master Servicer Master Servicer
- Affiliated Servicer Servicer
- Other Servicer servicing 20% or Servicer
more of the pool assets at the
time of the report
- Other material servicers Servicer
- Trustee Trustee
- Securities Administrator Securities Administrator
- Significant Obligor Depositor
- Credit Enhancer (10% or more) Depositor
- Derivative Counterparty Depositor
- Custodian Custodian
Q-3-1
FORM 8-K DISCLOSURE INFORMATION
ITEM ON FORM 8-K PARTY RESPONSIBLE
---------------- -----------------
ITEM 2.04- TRIGGERING EVENTS THAT Depositor
ACCELERATE OR INCREASE A DIRECT Master Servicer
FINANCIAL OBLIGATION OR AN OBLIGATION Securities Administrator
UNDER AN OFF-BALANCE SHEET
ARRANGEMENT
Includes an early amortization,
performance trigger or other event,
including event of default, that
would materially alter the payment
priority/distribution of cash
flows/amortization schedule.
Disclosure will be made of events
other than waterfall triggers which
are disclosed in the monthly
statements to the certificateholders.
ITEM 3.03- MATERIAL MODIFICATION TO Securities Administrator
RIGHTS OF SECURITY HOLDERS Trustee
Depositor
Disclosure is required of any
material modification to documents
defining the rights of
Certificateholders, including the
Pooling and Servicing Agreement.
ITEM 5.03- AMENDMENTS OF ARTICLES OF Depositor
INCORPORATION OR BYLAWS; CHANGE OF
FISCAL YEAR
Disclosure is required of any
amendment "to the governing documents
of the issuing entity".
ITEM 6.01- ABS INFORMATIONAL AND Depositor
COMPUTATIONAL MATERIAL
ITEM 6.02- CHANGE OF SERVICER OR Master Servicer/Securities
SECURITIES ADMINISTRATOR Administrator/Depositor/
Servicer/Trustee
Requires disclosure of any removal,
replacement, substitution or addition
of any master servicer, affiliated
servicer, other servicer servicing
10% or more of pool assets at time of
report, other material servicers or
trustee.
Reg AB disclosure about any new Servicer/Master Servicer/Depositor
servicer or master servicer is also
required.
Reg AB disclosure about any new Trustee
Trustee is also required.
ITEM 6.03- CHANGE IN CREDIT Depositor/Securities Administrator
ENHANCEMENT OR EXTERNAL SUPPORT
Covers termination of any enhancement
in manner other than by its terms,
the addition of an enhancement, or a
material change in the enhancement
provided. Applies to external credit
enhancements as well as derivatives.
Q-3-2
FORM 8-K DISCLOSURE INFORMATION
ITEM ON FORM 8-K PARTY RESPONSIBLE
---------------- -----------------
Reg AB disclosure about any new Depositor
enhancement provider is also
required.
ITEM 6.04- FAILURE TO MAKE A REQUIRED Securities Administrator
DISTRIBUTION Trustee
ITEM 6.05- SECURITIES ACT UPDATING Depositor
DISCLOSURE
If any material pool characteristic
differs by 5% or more at the time of
issuance of the securities from the
description in the final prospectus,
provide updated Reg AB disclosure
about the actual asset pool.
If there are any new servicers or Depositor
originators required to be disclosed
under Regulation AB as a result of
the foregoing, provide the
information called for in Items 1108
and 1110 respectively.
ITEM 7.01- REG FD DISCLOSURE All parties
ITEM 8.01- OTHER EVENTS Depositor
Any event, with respect to which
information is not otherwise called
for in Form 8-K, that the registrant
deems of importance to
certificateholders.
ITEM 9.01- FINANCIAL STATEMENTS AND Responsible party for
EXHIBITS reporting/disclosing the financial
statement or exhibit
Q-3-3
