EXHIBIT 99.1
EXECUTION COPY
XXXXXX XXXXXXX CAPITAL I INC.
Depositor
XXXXX FARGO BANK, NATIONAL ASSOCIATION
Master Servicer and Securities Administrator
and
LASALLE BANK NATIONAL ASSOCIATION
Trustee and a Custodian
---------------------------
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 2006
---------------------------
XXXXXX XXXXXXX MORTGAGE LOAN TRUST 2006-1AR
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-1AR
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS ............................................................................................................3
Section 1.01 Definitions......................................................................................................3
ARTICLE II DECLARATION OF TRUST; ISSUANCE OF CERTIFICATES........................................................................48
Section 2.01 Creation and Declaration of Trust Fund; Conveyance of Mortgage Loans............................................48
Section 2.02 Acceptance of Trust Fund by Trustee; Review of Documentation for Trust Fund.....................................51
Section 2.03 Representations and Warranties of the Depositor.................................................................52
Section 2.04 Representations and Warranties of the Depositor and the Seller as to the Mortgage Loans.........................54
Section 2.05 Representations and Warranties of the Seller; Discovery of Breach; Repurchase or Substitution of Mortgage Loans.54
Section 2.06 Grant Clause....................................................................................................58
Section 2.07 Release of Mortgage Documents for Servicing.....................................................................59
ARTICLE III THE CERTIFICATES.....................................................................................................59
Section 3.01 The Certificates................................................................................................59
Section 3.02 Registration....................................................................................................60
Section 3.03 Transfer and Exchange of Certificates...........................................................................60
Section 3.04 Cancellation of Certificates....................................................................................64
Section 3.05 Replacement of Certificates.....................................................................................64
Section 3.06 Persons Deemed Owners...........................................................................................65
Section 3.07 Temporary Certificates..........................................................................................65
Section 3.08 Appointment of Paying Agent.....................................................................................65
Section 3.09 Book-Entry Certificates.........................................................................................66
ARTICLE IV ADMINISTRATION OF THE TRUST FUND......................................................................................67
Section 4.01 Custodial Accounts; Distribution Account........................................................................67
Section 4.02 Permitted Withdrawals from the Custodial Accounts and the Distribution Account..................................68
Section 4.03 [Reserved]......................................................................................................70
Section 4.04 [Reserved]......................................................................................................70
Section 4.05 Reports to Trustee and Certificateholders.......................................................................70
ARTICLE V DISTRIBUTIONS TO HOLDERS OF CERTIFICATES...............................................................................72
Section 5.01 Distributions Generally.........................................................................................72
Section 5.02 Priorities of Distribution......................................................................................73
Section 5.03 [Reserved]......................................................................................................82
Section 5.04 Allocation of Losses............................................................................................82
i
Section 5.05 Advances by the Master Servicer.................................................................................84
Section 5.06 Compensating Interest Payments..................................................................................84
Section 5.07 [Reserved]......................................................................................................84
Section 5.08 Cross-Collateralization; Adjustments to Available Funds.........................................................84
Section 5.09 Determination of Pass-Through Rates for LIBOR Certificates......................................................86
Section 5.10 Reserve Fund....................................................................................................87
Section 5.11 The Corridor Contracts..........................................................................................89
ARTICLE VI CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR; EVENTS OF DEFAULT............................................91
Section 6.01 Duties of Trustee and the Securities Administrator..............................................................91
Section 6.02 Certain Matters Affecting the Trustee and the Securities Administrator..........................................94
Section 6.03 Trustee and Securities Administrator Not Liable for Certificates................................................95
Section 6.04 Trustee and the Securities Administrator May Own Certificates...................................................96
Section 6.05 Eligibility Requirements for Trustee............................................................................96
Section 6.06 Resignation and Removal of Trustee and the Securities Administrator.............................................96
Section 6.07 Successor Trustee and Successor Securities Administrator........................................................99
Section 6.08 Merger or Consolidation of Trustee or the Securities Administrator.............................................100
Section 6.09 Appointment of Co-Trustee, Separate Trustee or Custodian.......................................................101
Section 6.10 Authenticating Agents..........................................................................................102
Section 6.11 Indemnification of the Trustee and the Securities Administrator................................................103
Section 6.12 Fees and Expenses of the Master Servicer, the Securities Administrator, the Trustee and the Custodians.........104
Section 6.13 Collection of Monies...........................................................................................104
Section 6.14 Events of Default; Trustee To Act; Appointment of Successor....................................................104
Section 6.15 Additional Remedies of Trustee Upon Event of Default...........................................................109
Section 6.16 Waiver of Defaults.............................................................................................110
Section 6.17 Notification to Holders........................................................................................110
Section 6.18 Directions by Certificateholders and Duties of Trustee During Event of Default.................................110
Section 6.19 Action Upon Certain Failures of the Master Servicer and Upon Event of Default..................................111
Section 6.20 Preparation of Tax Returns and Other Reports...................................................................111
Section 6.21 Certain Matters Regarding any Custodian Appointed Hereunder....................................................111
ARTICLE VII PURCHASE OF MORTGAGE LOANS AND TERMINATION OF THE TRUST FUND........................................................112
Section 7.01 Purchase of Mortgage Loans; Termination of Trust Fund Upon Purchase or Liquidation of All Mortgage Loans.......112
Section 7.02 Procedure Upon Redemption of Trust Fund........................................................................113
Section 7.03 Additional Trust Fund Termination Requirements.................................................................115
ARTICLE VIII RIGHTS OF CERTIFICATEHOLDERS.......................................................................................116
Section 8.01 Limitation on Rights of Holders................................................................................116
Section 8.02 Access to List of Holders......................................................................................117
ii
Section 8.03 Acts of Holders of Certificates................................................................................117
ARTICLE IX ADMINISTRATION AND SERVICING OF MORTGAGE LOANS BY THE MASTER SERVICER................................................118
Section 9.01 Duties of the Master Servicer; Enforcement of Servicers' and Master Servicer's Obligations.....................118
Section 9.02 Assumption of Master Servicing by Trustee......................................................................121
Section 9.03 Representations and Warranties of the Master Servicer..........................................................121
Section 9.04 Compensation to the Master Servicer............................................................................123
Section 9.05 Merger or Consolidation........................................................................................124
Section 9.06 Resignation of Master Servicer and Securities Administrator....................................................124
Section 9.07 Assignment or Delegation of Duties by the Master Servicer and Securities Administrator.........................125
Section 9.08 Limitation on Liability of the Master Servicer and Others......................................................125
Section 9.09 Indemnification; Third-Party Claims............................................................................126
Section 9.10 Eligibility Requirements for Securities Administrator..........................................................126
Section 9.11 Annual Statement as to Compliance..............................................................................127
ARTICLE X REMIC ADMINISTRATION..................................................................................................128
Section 10.01 REMIC Administration...........................................................................................128
Section 10.02 Prohibited Transactions and Activities.........................................................................130
Section 10.03 Indemnification with Respect to Prohibited Transactions or Loss of REMIC Status................................131
Section 10.04 REO Property...................................................................................................131
Section 10.05 Fidelity.......................................................................................................132
ARTICLE XI MISCELLANEOUS PROVISIONS.............................................................................................132
Section 11.01 Binding Nature of Agreement; Assignment........................................................................132
Section 11.02 Entire Agreement...............................................................................................132
Section 11.03 Amendment......................................................................................................132
Section 11.04 Voting Rights..................................................................................................134
Section 11.05 Provision of Information.......................................................................................134
Section 11.06 Governing Law..................................................................................................134
Section 11.07 Notices........................................................................................................134
Section 11.08 Severability of Provisions.....................................................................................135
Section 11.09 Indulgences; No Waivers........................................................................................135
Section 11.10 Headings Not To Affect Interpretation..........................................................................135
Section 11.11 Benefits of Agreement..........................................................................................135
Section 11.12 Special Notices to the Rating Agencies.........................................................................135
Section 11.13 Conflicts......................................................................................................136
Section 11.14 Counterparts...................................................................................................136
Section 11.15 No Petitions...................................................................................................136
Section 11.16 Indemnification by Trust.......................................................................................137
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ARTICLE XII ....................................................................................................................137
EXCHANGE ACT REPORTING .........................................................................................................137
Section 12.01 Filing Obligations.............................................................................................137
Section 12.02 Form 10-D Reporting............................................................................................139
Section 12.03 Form 8-K Reporting.............................................................................................140
Section 12.04 Form 10-K Reporting............................................................................................141
Section 12.05 Xxxxxxxx-Xxxxx Certification...................................................................................142
Section 12.06 Reports on Assessment of Compliance and Attestation............................................................143
Section 12.07 Use of Subcontractors..........................................................................................144
Section 12.08 Indemnification by the Master Servicer and the Securities Administrator........................................145
Section 12.09 Indemnification by the Custodian...............................................................................146
iv
ATTACHMENTS
Exhibit A Forms of Certificates
Exhibit B Form of Residual Certificate Transfer Affidavit (Transferee)
Exhibit C Form of Residual Certificate Transfer Affidavit (Transferor)
Exhibit D Form of Swap Agreement
Exhibit E List of Purchase and Servicing Agreements
Exhibit F List of Custodial Agreements
Exhibit G Assignment and Notice of Transfer with respect to each Additional Collateral Mortgage Loan
Exhibit H Form of Rule 144A Transfer Certificate
Exhibit I Form of Purchaser's Letter for Institutional Accredited Investors
Exhibit J Form of ERISA Transfer Affidavit
Exhibit K Form of Letter of Representations with the Depository Trust Company
Exhibit L-1 Form of Initial Custodian Certification
Exhibit L-2 Form of Final Custodian Certification
Exhibit M Assignment and Notice of Transfer with respect to each Additional Collateral Mortgage Loan
Exhibit N Additional Disclosure Required Under Regulation AB
Exhibit O Form of Servicing Criteria to be Addressed in Assessment of Compliance Statement
Exhibit P [Reserved]
Exhibit Q Glossary of Terms for Standard & Poor's LEVELS(R) Version 5.7 File Format
Exhibit R Form of Lost Note Affidavit
Schedule A Mortgage Loan Schedule
Schedule B Principal Balances Schedule
v
This POOLING AND SERVICING AGREEMENT, dated as of January 1, 2006 (the
"Agreement"), by and among XXXXXX XXXXXXX CAPITAL I INC., a Delaware
corporation, as depositor (the "Depositor"), LASALLE BANK NATIONAL
ASSOCIATION, a national banking association, as trustee (the "Trustee"), and
as a custodian (a "Custodian") and XXXXX FARGO BANK, NATIONAL ASSOCIATION, in
its separate capacities as master servicer (the "Master Servicer"), as
securities administrator (the "Securities Administrator") and, in its capacity
as Securities Administrator, as auction administrator (the "Auction
Administrator") and acknowledged by XXXXXX XXXXXXX MORTGAGE CAPITAL INC., a
New York corporation, as seller (the "Seller"), for purposes of Section 2.05.
WITNESSETH THAT
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby
conveyed to the Trustee in return for the Certificates. As provided herein,
the Trustee will make multiple elections to treat segregated pools of assets
subject to this Agreement for federal income tax purposes (other than the
rights of the Class C Certificates in respect of any Auction Excess Proceeds,
any Additional Collateral, the Corridor Contracts and the assets held in the
Reserve Fund) as the following four separate real estate mortgage investment
conduits (each, a "REMIC"): REMIC 1A, REMIC 1B, REMIC 2 and the Master REMIC.
REMIC 1A will consist of Loan Group 1, excluding any rights of the Class C
Certificates in respect of any Auction Excess Proceeds, any rights of the
Trust Fund in respect of the Corridor Contract Agreements and the Reserve
Fund. REMIC 1B will consist of Loan Group 2, Loan Group 3, Loan Group 4 and
Loan Group 5, excluding any rights of the Class C Certificates in respect of
any Auction Excess Proceeds. REMIC 1A and REMIC 1B will issue uncertificated
REMIC regular interests (collectively, the "REMIC 1 Regular Interests"). The
REMIC 1 Regular Interests will represent the "regular interests" in each of
REMIC 1A and REMIC 1B. The Class R-1A Interest will represent the single Class
of "residual interest" in REMIC 1A and the Class R-1B Interest will represent
the single Class of "residual interest" in REMIC 1B. The rights of the Class C
Certificates in respect of any Auction Excess Proceeds will be treated as a
grantor trust for federal income tax purposes.
The Trustee will hold the REMIC 1 Regular Interests for the
benefit of REMIC 2. REMIC 2 will consist of the REMIC 1 Interests and will be
evidenced by the REMIC 2 Interests, which (other than the Class R-2 Interests)
will constitute the regular interests in REMIC 2 (the "REMIC 2 Regular
Interests") and the Class R-2 Interest, which will represent the single Class
of "residual interest" in REMIC 2. The Trustee will hold the REMIC 2 Regular
Interests for the benefit of the Master REMIC. The Master REMIC will consist
of REMIC 2 Interests and will be evidenced by the Certificates, which (other
than the Class C and Class A-R Certificates) will constitute the regular
interests in the Master REMIC (the "Regular Certificates") and the Class R-3
Interest, which will represent the single Class of "residual interest" in the
Master REMIC. The Class A-R Certificates will represent the beneficial
ownership of each of the Class R-1A, Class R-1B, Class R-2 and Class R-3
Interests. The "latest possible maturity date" for federal
vi
income tax purposes of all regular and residual interests created hereunder
will be the Latest Possible Maturity Date.
REMIC 1A
--------
The REMIC 1A Interests, each of which (except for the Class R-1A
Interests) is hereby designated as a REMIC regular interest for federal income
tax purposes, will have the principal balances, pass-through rates and
Corresponding Loan Groups as set forth in the following table:
Subsidiary REMIC 1A Pass-Through Corresponding
Interests Initial Balance Rate Certificate
--------------------- --------------- -------------- -------------------
1A-A-1 (1) (2) 1-A-1
1A-A-2 (1) (2) 1-A-2
1A-A-3 (1) (2) 1-A-3
1A-M-1 (1) (2) 1-M-1
1A-M-2 (1) (2) 1-M-2
1A-M-3 (1) (2) 1-M-3
1A-M-4 (1) (2) 1-M-4
1A-M-5 (1) (2) 1-M-5
1A-M-6 (1) (2) 1-M-6
1A-B-1 (1) (2) 1-B-1
1A-B-1 (1) (2) 1-B-1
1A-B-2 (1) (2) 1-B-2
1A-B-3 (1) (2) 1-B-3
1A-B-4 (1) (2) 1-B-4
1A-B-5 (1) (2) 1-B-5
1A-B-6 (1) (2) 1-B-6
Class 1A-P1 $50 (3) N/A
R-1A $0 N/A (4) N/A
---------------
(1) The Class 1A-A-1, Class 1A-A-2, , Class 1A-A-3, Class 1A-M-1, Class
1A-M-2, Class 1A-M-3, Class 1A-M-4, Class 1A-M-5, Class 1A-M-6, Class
1A-B-1, Class 1A-B-2, Class 1A-B-3, Class 1A-B-4, Class 1A-B-5 and Class
1A-B-6 Interests will have the same principal balance on the Closing
Date as their Corresponding Certificates. On each Distribution Date, any
distributions of scheduled principal and prepayments and Realized Losses
will be allocated to the REMIC 1A Interests in the same manner as they
are allocated to their Corresponding Certificates.
(2) The Group 1 Net WAC.
(3) The Class SR-P1 Interest will not be entitled to any interest, but will
be entitled to 100% of any prepayment premiums paid on the Group 1
Mortgage Loans.
(4) The Class R-1A Interest is the sole class of residual interest in REMIC
1A and will not be entitled to distributions of principal or interest.
vii
REMIC 1B
--------
The REMIC 1B Interests, each of which (except for the Class R-1B
Interests) is hereby designated as a REMIC regular interest for federal income
tax purposes, will have the principal balances, pass-through rates and
corresponding Loan Groups as set forth in the following table:
A-2 (0.9% of Subordinated Portion Group 2).... (1) (2) 2
B-2 (0.1% of Subordinated Portion Group 2) (1) (2) 2
C-2 (Excess of Group 2) (1) (2) 2
A-3 (0.9% of Subordinated Portion Group 3).... (1) (2) 3
B-3 (0.1% of Subordinated Portion Group 3) (1) (2) 3
C-3 (Excess of Group 3) (1) (2) 3
A-4 (0.9% of Subordinated Portion Group 4).... (1) (2) 4
B-4 (0.1% of Subordinated Portion Group 4) (1) (2) 4
C-4 (Excess of Group 4). (1) (2) 4
Class 1B-P2 $50 (3) N/A
R-1B $0 N/A (4) N/A
---------------
(1) Each Class A Interest will have a principal balance initially equal to
0.9% of the Subordinated Portion of its corresponding Loan Group. Each
Class B Interest will have a principal balance initially equal to 0.1%
of the Subordinated Portion of its corresponding Loan Group. The initial
principal balance of each Class C Interest will equal the excess of the
principal balance of its corresponding Loan Group over the initial
aggregate principal balances of the Class A and Class B Interests
corresponding to such Loan Group.
(2) The Weighted Average Net Mortgage Rate in respect of the corresponding
Loan Group.
(3) (3) The Class SR-P2 Interest will not be entitled to any interest, but
will be entitled to 100% of any prepayment premiums paid on the Group 2,
Group 3 and Group 4 Mortgage Loans.
(4) The Class R-1B Interest is the sole class of residual interest in REMIC
1B and will not be entitled to distributions of principal or interest.
On any Distribution Date:
(1) If no Cross-Over Situation exists with respect to any Class of
Interests, then Principal Reductions arising with respect to each Loan Group
will be allocated first to cause the Loan Group's corresponding Class A and
Class B Interests to equal, respectively, 0.9% and 0.1% of
viii
the Subordinated Portion as of such Distribution Date, and second to the Loan
Group's corresponding Class C Interest;
(2) If a Cross-Over Situation exists then:
(a) if the Calculation Rate in respect of the outstanding Class A and
and Class B Interests is less than the Pass Through Rate in respect of the
Aggregate Group II Subordinate Certificates, Principal Relocation Payments
will be made proportionately to the outstanding Class A Interests prior to any
other Principal Distributions from each such Loan Group; and
(b) if the Calculation Rate in respect of the outstanding Class A and
Class B Interests is greater than the Pass Through Rate in respect of the
Aggregate Group II Subordinate Certificates, Principal Relocation Payments
will be made proportionately to the outstanding Class B Interests prior to any
other Principal Distributions from each such Loan Group.
In each case, Principal Relocation Payments will be made so as to cause
the Calculation Rate in respect of the outstanding Class A and Class B
Interests to equal the Pass Through Rate in respect of the Aggregate Group II
Subordinate Certificates. With respect to each Loan Group, if (and to the
extent that) the sum of (a) the principal payments comprising the Principal
Remittance Amount received during the Due Period and (b) the Realized Losses,
are insufficient to make the necessary reductions of principal on the Class A
and Class B Interests, then interest will be added to the Loan Group's other
Interests that are not receiving Principal Relocation Payments, in proportion
to their principal balances.
(c) The outstanding aggregate Class A and Class B Interests will not be
reduced below 1 percent of the excess of (i) the aggregate outstanding
Principal Balances of the Mortgage Loans in Loan Group 2, Loan Group 3 and
Loan Group 4 as of the end of any Due Period over (ii) the Certificate Balance
of the related Senior Certificates as of the related Distribution Date (after
taking into account distributions of principal on such Distribution Date).
If (and to the extent that) the limitation in paragraph (c) prevents the
distribution of principal to any of the Class A and Class B Interests, and if
the Loan Group's Class C Interest has already been reduced to zero, then the
excess principal from that Loan Group will be paid to the Class C Interests of
any other Loan Group whose aggregate corresponding Class A and Class B
Interests are less than one percent of their corresponding Subordinated
Portion. If any Loan Group corresponding to a Class C Interest that receives
such payment has a Weighted Average Net Mortgage Rate below the Weighted
Average Net Mortgage Rate of the Loan Group making such payment, then the
payment will be treated by REMIC 1B as a Realized Loss. Conversely, if the
Loan Group of the Class C Interest or Interests that receive such payment has
a Weighted Average Net Mortgage Rate above the Weighted Average Net Mortgage
Rate of the Loan Group making the payment, then the payment will be treated by
REMIC 1B as a reimbursement for prior Realized Losses.
REMIC 2
-------
The REMIC 2 Interests, each of which (except for the Class R-2
Interests) is hereby designated as a REMIC regular interest for federal income
tax purposes, will have the
ix
principal balances, pass-through rates and corresponding Certificate as set
forth in the following table:
========================= ============================ =============================== =====================================
Pass-Through
Rate
Class Designation Class Principal Balance (per annum) Corresponding Certificate
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-1-A-1 (1) (2) Class 1-A-1
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-1-A-2 (1) (2) Class 1-A-2
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-1-A-3 (1) (2) Class 1-A-3
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-2-A (1) (3) Class 2-A
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-3-A-1 (1) (4) Class 3-A-1
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-4-A-1 (1) (4) Class 4-A-1
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-4-A-2 (1) (4) Class 4-A-2
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-$100 (1) (5) Class A-R
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-1-M-1 (1) (2) Class 1-M-1
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-1-M-2 (1) (2) Class 1-M-2
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-1-M-3 (1) (2) Class 1-M-3
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-1-M-4 (1) (2) Class 1-M-4
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-1-M-5 (1) (2) Class 1-M-5
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-1-M-6 (1) (2) Class 1-M-6
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-1-B-1 (1) (2) Class 1-B-1
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-1-B-2 (1) (2) Class 1-B-2
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-1-B-3 (1) (2) Class 1-B-3
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-1-B-4 (1) (2) Class 1-B-4
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-1-B-5 (1) (2) Class 1-B-5
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-1-B-6 (1) (2) Class 1-B-6
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-B-1 (1) (6) Class B-1
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-B-2 (1) (6) Class B-2
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-B-3 (1) (6) Class B-3
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-B-4 (1) (6) Class B-4
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-B-5 (1) (6) Class B-5
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-B-6 (1) (6) Class B-6
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-P-1 (1) (7) Class P-1
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class 2-P-2 (1) (7) Class P-2
------------------------- ---------------------------- ------------------------------- -------------------------------------
Class R-2 N/A(8) N/A(8) N/A
========================= ============================ =============================== =====================================
---------
(1) The Class 2-1-A, Class 2-1-B-1, Class 2-1-B-2, Class 2-1-B-3, Class
2-1-B-4, Class 2-1-B-5, Class 2-1-B-6, Class 2-2-A, Class 2-3-A, Class 2-$100,
Class 2-B-1, Class 2-B-2, Class 2-B-3, Class 2-B-4, Class 2-B-5, Class 2-B-6
Interests will have the same principal balance on the Closing Date as their
Corresponding Certificates. On each Distribution Date, any distributions of
scheduled principal and prepayments and Realized Losses will be allocated to
the REMIC 2 Interests in the same manner as they are allocated (in the
aggregate) to their Corresponding Certificates.
(2) For each Distribution Date, the Group 1 Net WAC for such Distribution
Date.
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(3) For each Distribution Date, the Group 2 Net WAC for such Distribution
Date.
(4) For each Distribution Date, the Group 3 Net WAC for such Distribution
Date.
(5) For each Distribution Date, the Class A-R Pass-Through Rate for such
Distribution Date.
(6) For each Distribution Date, the Calculation Rate for such Distribution
Date.
(7) The Class 2-P-1 and Class 2-P-2 Interests will not be entitled to any
interest, but will be entitled to 100% of any prepayment premiums paid on the
Group 1 Mortgage Loans and the Aggregate Group II Mortgage Loans,
respectively.
(8) The Class R-2 Interest is the sole class of residual interest in REMIC 2
and will not be entitled to distributions of principal or interest.
The Master REMIC
----------------
The following table sets forth characteristics of the Master REMIC
Certificates, together with the minimum denominations and integral multiples
in excess thereof in which such Classes shall be issuable (except that one
Certificate of each Class of Certificates may be issued in a different amount
and, in addition, one Residual Certificate representing the Tax Matters Person
Certificate may be issued in a different amount):
=================== =========================== ======================== ================== ==================
Integral
Pass-Through Multiples in
Class Initial Class Principal Rate Minimum Excess of
Designation Balance (per annum) Denomination Minimum
------------------- --------------------------- ------------------------ ------------------ ------------------
Class 1-A-1 $393,746,000.00 (1) $25,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
Class 1-A-2 $37,000,000.00 (1) $25,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
Class 1-A-3 $3,000,000.00 (2) $25,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
Class 1-A-X (3) (4) $100,000.00(5) $1,000.00(5)
------------------- --------------------------- ------------------------ ------------------ ------------------
Class 2-A $62,231,100.00 (6) $25,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
Class 3-A $34,587,000.00 (7) $25,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
Class 4-A-1 $29,312,000.00 (8) $25,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
Class 4-A-2 $6,365,000.00 (9) $25,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
Class 4-A-3 (3) 0.65% $100,000.00(5) $1,000.00(5)
------------------- --------------------------- ------------------------ ------------------ ------------------
Class A-R (19) $100.00 (6) (10) (10)
------------------- --------------------------- ------------------------ ------------------ ------------------
Class 1-M-X (3) (11) $100,000.00(5) $1,000.00(5)
------------------- --------------------------- ------------------------ ------------------ ------------------
Class 1-M-1 $6,796,000.00 (12) $25,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
Class 1-M-2 $5,155,000.00 (13) $25,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
Class 1-M-3 $4,218,000.00 (14) $25,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
Class 1-M-4 $2,109,000.00 (15) $25,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
Class 1-M-5 $1,875,000.00 (16) $25,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
Class 1-M-6 $1,874,000.00 (17) $25,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
Class 1-B-1 $1,641,000.00 (18) $25,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
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------------------- --------------------------- ------------------------ ------------------ ------------------
Class 1-B-2 $1,406,000.00 (19) $25,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
Class 1-B-3 $937,000.00 (20) $25,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
Class 1-B-4 $3,984,000.00 (21) $100,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
Class 1-B-5 $2,812,000.00 (21) $100,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
Class 1-B-6 $2,109,166.78 (21) $100,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
Class B-1 $3,657,000.00 (22) $25,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
Class B-2 $2,581,000.00 (22) $25,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
Class B-3 $1,434,000.00 (22) $25,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
Class B-4 $1,577,000.00 (22) $100,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
Class B-5 $932,000.00 (22) $100,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
Class B-6 $717,829.49 (22) $100,000.00 $1,000.00
------------------- --------------------------- ------------------------ ------------------ ------------------
Class P-1 $100.00 (23), (24) $100.00 N/A
------------------- --------------------------- ------------------------ ------------------ ------------------
Class P-2 $100.00 (23), (24) $100.00 N/A
------------------- --------------------------- ------------------------ ------------------ ------------------
Class C $100.00 (25) $100.00 N/A
=================== =========================== ======================== ================== ==================
---------
(1) The Pass-Through Rate for the Class 1-A-1 and Class 1-A-2 Certificates
for the Interest Accrual Period related to any Distribution Date will be
a per annum rate equal to one-month LIBOR + 0.28%, subject to a maximum
Pass-Through Rate of the lesser of (i) 11.50% per annum and (ii) the
Group 1 Net WAC for such Distribution Date. The Pass-Through Rate for
the Class 1-A-1 and Class 1-A-2 Certificates for the Interest Accrual
Period related to the first Distribution Date will be a per annum rate
of 4.810%.
(2) The Pass-Through Rate for the Class 1-A-3 Certificates for the Interest
Accrual Period related to any Distribution Date will be a per annum rate
equal to one-month LIBOR + 0.42%, subject to a maximum Pass-Through Rate
of the lesser of (i) 11.50% per annum and (ii) the Group 1 Net WAC for
such Distribution Date. The Pass-Through Rate for the Class 1-A-3
Certificates for the Interest Accrual Period related to the first
Distribution Date will be a per annum rate of 4.950%.
(3) The Class 1-A-X, Class 4-A-3 and Class 1-M-X Certificates will be
Notional Amount Certificates, will have no Class Principal Balances and
will bear interest on their respective Notional Amounts (initially,
$433,746,000, $6,365,000 and $26,011,000, respectively).
(4) The Pass-Through Rate for the Class 1-A-X Certificates for the Interest
Accrual Period related to any Distribution Date will be a per annum rate
equal to the excess, if any, of (i) the Group 1 Net WAC over (ii) the
weighted average of the Pass-Through Rates for the Class 1-A-1, Class
1-A-2, Class 1-A-3 Certificates for the Interest Accrual Period related
to that Distribution Date. The Pass-Through Rate for the Class 1-A-X
Certificates for the Interest Accrual Period related to the first
Distribution Date will be a per annum rate of 1.176%.
(5) Minimum denomination is based on the Notional Amount of such Class.
(6) The Pass-Through Rate for the Class 2-A and Class A-R Certificates for
any Distribution Date will be a per annum rate equal to the Weighted
Average Net Mortgage Rate on the Group 2 Mortgage Loans. The
Pass-Through Rate for the Class 2-A and Class A-R Certificates for the
Interest Accrual Period related to the first Distribution Date will be a
per annum rate of 6.045%.
(7) The Pass-Through Rate for the Class 3-A Certificates for any
Distribution Date will be a per annum rate equal to the Weighted Average
Net Mortgage Rate on the Group 3 Mortgage Loans. The Pass-
xii
Through Rate for the Class 3-A Certificates for the Interest Accrual
Period related to the first Distribution Date will be a per annum rate
of 5.852%.
(8) The Pass-Through Rate for the Class 4-A-1 Certificates for any
Distribution Date will be a per annum rate equal to the Weighted Average
Net Mortgage Rate on the Group 4 Mortgage Loans. The Pass-Through Rate
for the Class 4-A-1 Certificates for the Interest Accrual Period related
to the first Distribution Date will be a per annum rate of 6.310%.
(9) The Pass-Through Rate for the Class 4-A-2 Certificates for any
Distribution Date will be a per annum rate equal to the Weighted Average
Net Mortgage Rate on the Group 4 Mortgage Loans minus 0.65%. The
Pass-Through Rate for the Class 4-A-2 Certificates for the Interest
Accrual Period related to the first Distribution Date will be a per
annum rate of 5.660%.
(10) The Class A-R Certificate shall be issued as two separate certificates,
one with an initial Certificate Balance of $99.99 and the Tax Matters
Person Certificate with an initial Certificate Balance of $0.01.
(11) The Pass-Through Rate for the Class 1-M-X Certificates for the Interest
Accrual Period related to any Distribution Date will be a per annum rate
equal to the excess, if any, of (i) the Group 1 Net WAC over (ii) the
weighted average of the Pass-Through Rates for the Class 1-M-1, Class
1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-M-6, Class 1-B-1,
Class 1-B-2 and Class 1-B-3 Certificates for the Interest Accrual Period
related to that Distribution Date. The Pass-Through Rate for the Class
1-M-X Certificates for the Interest Accrual Period related to the first
Distribution Date will be a per annum rate of 0.834%.
(12) The Pass-Through Rate for the Class 1-M-1 Certificates for the Interest
Accrual Period related to any Distribution Date will be a per annum rate
equal to one-month LIBOR + 0.43%, subject to a maximum Pass-Through Rate
of the lesser of (i) 11.50% per annum and (ii) the Group 1 Net WAC for
such Distribution Date. The Pass-Through Rate for the Class 1-M-1
Certificates for the Interest Accrual Period related to the first
Distribution Date will be a per annum rate of 4.960%.
(13) The Pass-Through Rate for the Class 1-M-2 Certificates for the Interest
Accrual Period related to any Distribution Date will be a per annum rate
equal to one-month LIBOR + 0.45%, subject to a maximum Pass-Through Rate
of the lesser of (i) 11.50% per annum and (ii) the Group 1 Net WAC for
such Distribution Date. The Pass-Through Rate for the Class 1-M-2
Certificates for the Interest Accrual Period related to the first
Distribution Date will be a per annum rate of 4.980%.
(14) The Pass-Through Rate for the Class 1-M-3 Certificates for the Interest
Accrual Period related to any Distribution Date will be a per annum rate
equal to one-month LIBOR + 0.47%, subject to a maximum Pass-Through Rate
of the lesser of (i) 11.50% per annum and (ii) the Group 1 Net WAC for
such Distribution Date. The Pass-Through Rate for the Class 1-M-3
Certificates for the Interest Accrual Period related to the first
Distribution Date will be a per annum rate of 5.000%.
(15) The Pass-Through Rate for the Class 1-M-4 Certificates for the Interest
Accrual Period related to any Distribution Date will be a per annum rate
equal to one-month LIBOR + 0.57%, subject to a maximum Pass-Through Rate
of the lesser of (i) 11.50% per annum and (ii) the Group 1 Net WAC for
such Distribution Date. The Pass-Through Rate for the Class 1-M-4
Certificates for the Interest Accrual Period related to the first
Distribution Date will be a per annum rate of 5.100%.
(16) The Pass-Through Rate for the Class 1-M-5 Certificates for the Interest
Accrual Period related to any Distribution Date will be a per annum rate
equal to one-month LIBOR + 0.60%, subject to a
xiii
maximum Pass-Through Rate of the lesser of (i) 11.50% per annum and (ii)
the Group 1 Net WAC for such Distribution Date. The Pass-Through Rate
for the Class 1-M-5 Certificates for the Interest Accrual Period related
to the first Distribution Date will be a per annum rate of 5.130%.
(17) The Pass-Through Rate for the Class 1-M-6 Certificates for the Interest
Accrual Period related to any Distribution Date will be a per annum rate
equal to one-month LIBOR + 0.70%, subject to a maximum Pass-Through Rate
of the lesser of (i) 11.50% per annum and (ii) the Group 1 Net WAC for
such Distribution Date. The Pass-Through Rate for the Class 1-M-6
Certificates for the Interest Accrual Period related to the first
Distribution Date will be a per annum rate of 5.230%.
(18) The Pass-Through Rate for the Class 1-B-1 Certificates for the Interest
Accrual Period related to any Distribution Date will be a per annum rate
equal to one-month LIBOR + 1.25%, subject to a maximum Pass-Through Rate
of the lesser of (i) 11.50% per annum and (ii) the Group 1 Net WAC for
such Distribution Date. The Pass-Through Rate for the Class 1-B-1
Certificates for the Interest Accrual Period related to the first
Distribution Date will be a per annum rate of 5.780%.
(19) The Pass-Through Rate for the Class 1-B-2 Certificates for the Interest
Accrual Period related to any Distribution Date will be a per annum rate
equal to one-month LIBOR + 1.40%, subject to a maximum Pass-Through Rate
of the lesser of (i) 11.50% per annum and (ii) the Group 1 Net WAC for
such Distribution Date. The Pass-Through Rate for the Class 1-B-2
Certificates for the Interest Accrual Period related to the first
Distribution Date will be a per annum rate of 5.930%.
(20) The Pass-Through Rate for the Class 1-B-3 Certificates for the Interest
Accrual Period related to any Distribution Date will be a per annum rate
equal to one-month LIBOR + 1.40%, subject to a maximum Pass-Through Rate
of the lesser of (i) 11.50% per annum and (ii) the Group 1 Net WAC for
such Distribution Date. The Pass-Through Rate for the Class 1-B-3
Certificates for the Interest Accrual Period related to the first
Distribution Date will be a per annum rate of 5.930%.
(21) The Pass-Through Rate for the Class 1-B-4, Class 1-B-5 and Class 1-B-6
Certificates for any Distribution Date will be a per annum rate equal to
the Group 1 Net WAC. The Pass-Through Rate for the Class 1-B-4, Class
1-B-5 and Class 1-B-6 Certificates for the Interest Accrual Period
related to the first Distribution Date will be a per annum rate of
5.987%.
(22) The Pass-Through Rate for each Class of Aggregate Group II Subordinated
Certificates for any Distribution Date will be a per annum rate equal to
the sum of: (1) the Weighted Average Net Mortgage Rate on the Group 2
Mortgage Loans multiplied by the excess of the aggregate Stated
Principal Balance of the Group 2 Mortgage Loans as of the Due Date in
the month preceding the month of that Distribution Date (after giving
effect to prepayments received in the Prepayment Period related to such
prior Due Date) over the aggregate of the Class Principal Balances of
the Group 2 Senior Certificates immediately prior to that Distribution
Date, (2) the Weighted Average Net Mortgage Rate on the Group 3 Mortgage
Loans multiplied by the excess of the aggregate Stated Principal Balance
of the Group 3 Mortgage Loans as of the Due Date in the month preceding
the month of that Distribution Date (after giving effect to prepayments
received in the Prepayment Period related to such prior Due Date) over
the aggregate of the Class Principal Balances of the Group 3 Senior
Certificates immediately prior to that Distribution Date and (3) the
Weighted Average Net Mortgage Rate on the Group 4 Mortgage Loans
multiplied by the excess of the aggregate Stated Principal Balance of
the Group 4 Mortgage Loans as of the Due Date in the month preceding the
month of that Distribution Date (after giving effect to prepayments
received in the Prepayment Period related to such prior Due Date) over
the aggregate of the Class Principal Balances of the Group 4 Senior
Certificates immediately prior to that Distribution Date, divided by the
aggregate of the Class Principal Balances of the Aggregate Group II
Subordinated Certificates immediately prior to that
xiv
Distribution Date. The Pass-Through Rate for each Class of Aggregate
Group II Subordinated Certificates for the Interest Accrual Period
related to the first Distribution Date will be a per annum rate of
6.066%.
(23) The Class P-1 and Class P-2 Certificates will not be entitled to any
interest, but will be entitled to 100% of any prepayment premiums paid
on the Group 1 Mortgage Loans and the Aggregate Group II Mortgage Loans,
respectively. For the federal income tax purposes, the Class P-1 and
Class P-2 Certificates will be entitled to 100% of the Class MP Regular
Interest cash flow.
(24) The Class P-1 Certificates will receive all payments in respect of
prepayment penalties on all of the Mortgage Loans in Loan Group 1 and
are not entitled to receive any distributions of interest. The Class P-2
Certificates will receive all payments in respect of prepayment
penalties on all of the Mortgage Loans in Loan Group 2, Loan Group 3 and
Loan Group 4 and are not entitled to receive any distributions of
interest.
(25) The Class C Certificates will not be entitled to payments of interest
but will be entitled to receive any Auction Excess Proceeds in
connection with any Successful Auction conducted pursuant to the terms
hereof. The Class C Certificates will be issued as a single certificate
with an initial Certificate Balance of $100.00. The Class C Certificates
will be treated as an interest in a grantor trust for federal income tax
purposes and not as a regular interest in the Master REMIC for federal
income tax purposes.
The foregoing provisions in the Preliminary Statement are intended to
cause net interest and principal collections in respect of the Mortgage Loans
to be distributed from each Subsidiary REMIC to the Master REMIC and from the
Master REMIC to each Class of Certificates. The Preliminary Statement will be
interpreted and applied consistently with such intent.
For any purpose for which the Pass-Through Rates are calculated, the
interest rate on the Mortgage Loans shall be appropriately adjusted to account
for the difference between the monthly day count convention of the Mortgage
Loans and the monthly day count convention of the regular interests issued by
each of the REMICs. For purposes of calculating the Pass-Through Rates for
each of the interests issued by each REMIC created hereunder (other than the
Master REMIC) such rates shall be adjusted to equal a monthly day count
convention based on a 30 day month for each Due Period and a 360-day year so
that the Mortgage Loans and all regular interests will be using the same
monthly day count convention.
The fiscal year of each REMIC will end on December 31.
xv
Set forth below are designations of Classes or Components of Certificates and
other defined terms to the categories used herein:
Accretion Directed Certificates.......................... None.
Accretion Directed Components............................ None.
Accrual Certificates..................................... None.
Accrual Components....................................... None.
Aggregate Certificate Group.............................. Each of the Group 1 Certificates and Aggregate Group II Certificates.
Group 1 Certificates..................................... Group 1 Senior Certificates and Group 1 Subordinated Certificates.
Group 1 Senior
Certificates............................................. Class 1-A and Class 1-X Certificates.
Group 1 Subordinated
Certificates............................................. Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5,
Class 1-M-6, Class 1-B-1, Class 1-B-2, Class 1-B-3, Class 1-B-4,
Class 1-B-5 and Class 1-B-6 Certificates.
Group 2 Certificates..................................... Group 2 Senior Certificates and the portions of the Aggregate Group
II Subordinated Certificates related to Loan Group 2.
Group 2 Senior Certificates.............................. Class 2-A and Class A-R Certificates.
Group 3 Certificates..................................... Group 3 Senior Certificates and the portions of the Aggregate Group
II Subordinated Certificates related to Loan Group 3.
Group 3 Senior Certificates.............................. Class 3-A Certificates.
Group 4 Certificates..................................... Group 4 Senior Certificates and the portions of the Aggregate Group
II Subordinated Certificates related to Loan Group 4.
Group 4 Senior Certificates.............................. Class 4-A-1, Class 4-A-2 and Class 4-A-3 Certificates.
Aggregate Group II Certificates.......................... Aggregate Group II Senior Certificates and Aggregate Group II
Subordinated Certificates.
Aggregate Group II Senior
Certificates............................................. Group 2 Senior Certificates, Group 3 Senior Certificates and Group 4
Senior Certificates.
Aggregate Group II Subordinated
Certificates............................................. Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6
Certificates.
1
Book-Entry Certificates.................................. All Classes of Certificates other than the Definitive Certificates.
Combined Certificates.................................... None.
Component Certificates................................... None.
Components............................................... For purposes of calculating distributions of principal and/or
interest, the Component Certificates, if any, will be comprised of
multiple payment components having the designations, Initial
Component Balances or Notional Amounts, as applicable, and
Pass-Through Rates set forth below:
Initial Component
Designation Principal Balance Pass-Through Rate
----------- ----------------- -----------------
N/A N/A N/A
Delay Certificates....................................... All interest-bearing Classes of Certificates other than the
Non-Delay Certificates, if any.
ERISA-Restricted Certificates............................ The Residual Certificates and Private Certificates; and any
Certificate of a Class that ceases to satisfy the applicable rating
requirement under the Underwriter's Exemption.
Floating Rate Certificates............................... Class 1-A-1, Class 1-A-2, Class 1-A-3, Class 1-M-1, Class 1-M-2,
Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-M-6, Class 1-B-1,
Class 1-B-2 and Class 1-B-3 Certificates.
Inverse Floating Rate Certificates....................... None.
LIBOR Certificates....................................... Floating Rate Certificates and Inverse Floating Rate Certificates.
Non-Delay Certificates................................... The LIBOR Certificates.
Notional Amount Certificates............................. Class 1-A-X and Class 1-M-X Certificates.
Notional Amount Components............................... None.
Offered Certificates..................................... All Classes of Certificates other than the Private Certificates.
Definitive Certificates.................................. Private Certificates and the Residual Certificates.
Planned Principal Classes................................ None.
Principal Only Certificates.............................. None.
Private Certificates..................................... Class P-1, Class P-2, Class C, Class 1-B-4, Class B-4, Class 1-B-5,
Class B-5, Class 1-B-6 and Class B-6 Certificates.
Rating Agencies.......................................... S&P and Xxxxx'x.
2
Regular Certificates..................................... All Classes of Certificates, other than the Residual Certificates.
Residual Certificates.................................... Class A-R Certificates.
Scheduled Principal Classes.............................. None.
Senior Certificate Group................................. The Group 1 Senior Certificates, the Group 2 Senior Certificates,
the Group 3 Senior Certificates and the Group 4 Senior Certificates,
as applicable.
Senior Certificates...................................... Class 1-A-1, Class 1-A-2, Class 1-A-3, Class 1-A-X, Class 2-A, Class
3-A, Class 4-A-1, Class 4-A-2, Class 4-A-3 and Class A-R
Certificates.
Subordinated Certificate Group........................... Group 1 Subordinated Certificates and Aggregate Group II
Subordinated Certificates.
Subordinated Certificates................................ Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5,
Class 1-M-6, Class 1-B-1, Class B-1, Class 1-B-2, Class B-2, Class
1-B-3, Class B-3, Class 1-B-4, Class B-4, Class 1-B-5, Class B-5,
Class 1-B-6 and Class B-6 Certificates.
Targeted Principal Classes............................... None.
Underwriter.............................................. Xxxxxx Xxxxxxx & Co. Incorporated.
With respect to any of the foregoing designations as to which the
corresponding reference is "None," all defined terms and provisions herein
relating solely to such designations shall be of no force or effect, and any
calculations herein incorporating references to such designations shall be
interpreted without reference to such designations and amounts. Defined terms
and provisions herein relating to statistical rating agencies not designated
above as Rating Agencies shall be of no force or effect.
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
The following words and phrases, unless the context otherwise requires,
shall have the following meanings:
Accountant: A Person engaged in the practice of accounting who (except
when this Agreement provides that an Accountant must be Independent) may be
employed by or affiliated with the Depositor or an Affiliate of the Depositor.
Acknowledgements: The Assignment, Assumption and Recognition Agreements,
each dated as of January 1, 2006, assigning rights under the Purchase and
Servicing Agreements from the Seller to the Depositor and from the Depositor
to the Trustee, for the benefit of the Certificateholders.
3
Accretion Directed Certificates: As specified in the Preliminary
Statement.
Accretion Direction Rule: Not applicable.
Accrual Amount: With respect to any Class of Accrual Certificates or any
Accrual Component and any Distribution Date, the amount allocable to interest
on such Class of Accrual Certificates or Accrual Component with respect to
such Distribution Date pursuant to Section 5.02(a)(1)(iii), 5.02(a)(2)(iii),
5.02(a)(3)(iii) or 5.02(a)(4)(iii), as applicable.
Accrual Certificates: As specified in the Preliminary Statement.
Accrual Components: As specified in the Preliminary Statement.
Accrual Termination Date: Not applicable.
Act: The Securities Act of 1933, as amended.
Additional Collateral: With respect to any Additional Collateral
Mortgage Loan, the marketable securities and other acceptable collateral
pledged as collateral pursuant to the related pledge agreements.
Additional Collateral Mortgage Loan: Each Mortgage Loan identified as
such in the Mortgage Loan Schedule.
Additional Form 10-D Disclosure: As defined in Section 12.02 hereof.
Additional Form 10-K Disclosure: As defined in Section 12.04 hereof.
Additional Servicer: means each affiliate of each Servicer that services
any of the Mortgage Loans and each Person who is not an affiliate of the any
Servicer, who services 10% or more of the Mortgage Loans. For clarification
purposes, the Master Servicer and the Securities Administrator are Additional
Servicers.
Adjustment Date: A date specified in each Mortgage Note as a date on
which the Mortgage Rate on the related Mortgage Loan will be adjusted.
Advance: With respect to a Mortgage Loan, the payments required to be
made by the Master Servicer or the applicable Servicer with respect to any
Distribution Date pursuant to this Agreement or the applicable Purchase and
Servicing Agreement, as applicable, the amount of any such payment being equal
to the aggregate of the payments of principal and interest (net of the
applicable Servicing Fee and net of any net income in the case of any REO
Property) on the Mortgage Loans that were due on the related Due Date and not
received as of the close of business on the related Determination Date, less
the aggregate amount of any such delinquent payments that the Master Servicer
or the applicable Servicer has determined would constitute Nonrecoverable
Advances if advanced.
Adverse REMIC Event: Either (i) loss of status as a REMIC, within the
meaning of Section 860D of the Code, for any group of assets identified as a
REMIC in the Preliminary
4
Statement to this Agreement, or (ii) imposition of any tax, including the tax
imposed under Section 860F(a)(1) on prohibited transactions, and the tax
imposed under Section 860G(d) on certain contributions to a REMIC, on any
REMIC created hereunder to the extent such tax would be payable from assets
held as part of the Trust Fund.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Certificate Group: The Group 1 Certificates or Aggregate Group
II Certificates as the context requires.
Aggregate Expense Rate: With respect to any Mortgage Loan, the
applicable Servicing Fee Rate and, with respect to any LPMI Mortgage Loan, the
interest premium charged by the mortgagee to obtain or maintain any Primary
Insurance Policy.
Aggregate Group II Certificates: As specified in the Preliminary
Statement.
Aggregate Group II Senior Certificates: As specified in the Preliminary
Statement.
Aggregate Group II Subordinated Certificates: As specified in the
Preliminary Statement.
Aggregate Group II Weighted Average Rate: For the Interest Accrual
Period related to each Distribution Date, a per annum rate equal to the sum of
the following for each of Loan Group 2, Loan Group 3 and Loan Group 4: the
product of (x) the Weighted Average Net Mortgage Rate of the Mortgage Loans in
the related Loan Group and (y) a fraction, the numerator of which is the
related Subordinated Portion immediately prior to that Distribution Date, and
the denominator of which is the aggregate Class Principal Balance of the
Aggregate Group II Subordinated Certificates, in each case immediately prior
to that Distribution Date.
Aggregate Loan Group: Loan Group 1 or Aggregate Loan Group II, as the
context requires.
Aggregate Loan Group II: Collectively, Loan Group 2, Loan Group 3 and
Loan Group 4.
Aggregate Planned Balance: With respect to any group of Planned
Principal Classes or Components and any Distribution Date, the amount set
forth for such group for such Distribution Date in Schedule B hereto.
Aggregate Subordinated Percentage: As to any Distribution Date and each
Aggregate Loan Group, the fraction, expressed as a percentage, the numerator
of which is equal to the aggregate Class Principal Balance of the Subordinated
Certificates in the related Aggregate Certificate Group immediately prior to
such Distribution Date and the denominator of which is
5
the aggregate Stated Principal Balance of all the Mortgage Loans as of the Due
Date in the month preceding the month of such Distribution Date.
Aggregate Targeted Balance: With respect to any group of Targeted
Principal Classes or Components and any Distribution Date, the amount set
forth for such group for such Distribution Date in Schedule B hereto.
Aggregate Voting Interests: The aggregate of the Voting Interests of all
the Certificates under this Agreement.
Agreement: This Pooling and Servicing Agreement and all amendments or
supplements hereto.
Allocable Share: As to any Distribution Date, any Mortgage Loan in a
Loan Group and any Class or Component of Certificates related to that Loan
Group, the ratio that the amount calculated with respect to such Distribution
Date (A) with respect to the Senior Certificates of the related Senior
Certificate Group and the Group I Subordinated Certificates, pursuant to
clause (i) of the definition of Class Optimal Interest Distribution Amount
(without giving effect to any reduction of such amount pursuant to Section
5.02(d)) and (B) with respect to the Group I Subordinated Certificates after a
related Senior Termination Date or the Aggregate Group II Subordinated
Certificates, the second related Senior Termination Date, as applicable,
pursuant to the definition of Assumed Interest Amount pursuant to clause (i)
of the definition of Class Optimal Interest Distribution Amount (without
giving effect to any reduction of such amount pursuant to Section 5.02(d))
bears to the amount calculated with respect to such Distribution Date for each
Class of Certificates pursuant to clause (i) of the definition of Class
Optimal Interest Distribution Amount (without giving effect to any reduction
of such amount pursuant to Section 5.02(d)) or the definition of Assumed
Interest Amount for such Loan Group and Class, as applicable).
Amount Held for Future Distribution: As to any Distribution Date and
Mortgage Loans in a Loan Group, the aggregate amount held in the Custodial
Accounts at the close of business on the related Determination Date on account
of (i) Principal Prepayments received after the related Prepayment Period and
Liquidation Proceeds and Subsequent Recoveries received in the month of such
Distribution Date relating to such Loan Group and (ii) all Scheduled Payments
due after the related Due Date relating to such Loan Group.
Applicable Credit Support Percentage: As defined in Section 5.02(e).
Appraised Value: With respect to any Mortgage Loan, the Appraised Value
of the related Mortgaged Property shall be: (i) with respect to a Mortgage
Loan other than a Refinancing Mortgage Loan, the lesser of (a) the value of
the Mortgaged Property based upon the appraisal made at the time of the
origination of such Mortgage Loan and (b) the sales price of the Mortgaged
Property at the time of the origination of such Mortgage Loan; and (ii) with
respect to a Refinancing Mortgage Loan, the value of the Mortgaged Property
based upon the appraisal made at the time of the origination of such
Refinancing Mortgage Loan.
Assets: As such term is used with respect to any Auction of the Group 1
Assets, as defined in Section 7.01(b) hereof.
6
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument, in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect the sale of the Mortgage to the Trustee, which assignment, notice of
transfer or equivalent instrument may be in the form of one or more blanket
assignments covering the Mortgage Loans secured by Mortgaged Properties
located in the same jurisdiction, if permitted by law; provided, however, that
the Trustee shall not be responsible for determining whether any such
assignment is in recordable form or sufficient under the laws of the
applicable jurisdiction to reflect the sale of the Mortgage to the Trustee.
Assignment of Proprietary Lease: With respect to a Cooperative Loan, an
assignment of the Proprietary Lease sufficient under the laws of the
jurisdiction wherein the related Cooperative Unit is located to reflect the
assignment of such Proprietary Lease; provided, however, that the Trustee
shall not be responsible for determining whether such assignment is sufficient
to reflect the assignment of the Proprietary Lease.
Assignment of Recognition Agreement: With respect to a Cooperative Loan,
an assignment of the Recognition Agreement sufficient under the laws of the
jurisdiction wherein the related Cooperative Unit is located to reflect the
assignment of such Recognition Agreement; provided, however, that the Trustee
shall not be responsible for determining whether such assignment is sufficient
to reflect the assignment of the Recognition Agreement.
Assumed Interest Amount: With respect to any Distribution Date and Class
of Subordinated Certificates, one month's interest accrued during the related
Interest Accrual Period at the Pass-Through Rate for such Class on the
applicable Subordinated Portion immediately prior to that Distribution Date.
Auction: As defined in Section 7.01(b).
Auction Administrator: The Securities Administrator, or any successor in
interest, or if any successor Auction Administrator shall be appointed as
herein provided, then such successor Auction Administrator.
Auction Date: As defined in Section 7.01(b).
Auction Excess Proceeds: With respect to an Auction Sale, the excess of
the Mortgage Loan Auction Price paid by the Auction Purchaser over the Minimum
Bid Price.
Auction Purchaser: As defined in Section 7.01(b). For the avoidance of
doubt, the Auction Purchaser cannot be the Seller or an Affiliate of the
Seller.
Auction Sale: As defined in Section 7.01(b).
Authenticating Agent: Any authenticating agent appointed pursuant to
Section 6.10 until any successor authenticating agent for the Certificates is
named, and thereafter "Authenticating Agent" shall mean any such successor.
The initial Authenticating Agent shall be the Securities Administrator under
this Agreement.
7
Authorized Officer: Any Person who may execute an Officer's Certificate
on behalf of the Depositor.
Available Funds: As to any Distribution Date and the Mortgage Loans in a
Loan Group, the sum, for that Loan Group, of (a) the aggregate amount held in
the Custodial Accounts at the close of business on the related Determination
Date, including any Subsequent Recoveries, in respect of such Mortgage Loans
net of the Amount Held for Future Distribution and net of amounts permitted to
be withdrawn from the Custodial Accounts pursuant to Section 4.02(a) in
respect of such Mortgage Loans and amounts permitted to be withdrawn from the
Distribution Account pursuant to clauses (i)-(v) inclusive of Section 4.02(b)
in respect of such Mortgage Loans, (b) the amount of all related Advances made
by the Servicers and the Master Servicer and all Compensating Interest
Payments or payments made in respect of Prepayment Interest Shortfalls paid by
the Servicers and the Master Servicer, (c) in connection with Defective
Mortgage Loans in such Loan Group, as applicable, the aggregate of the
Purchase Prices and Substitution Adjustment Amounts deposited on the related
Distribution Account Deposit Date and (d) in the case of a Loan Group in
Aggregate Loan Group II, the Transfer Payment Received plus interest thereon
as provided in Section 5.08 for such Loan Group less, in the case of a Loan
Group in Aggregate Loan Group II, the Transfer Payment Made plus interest
thereon as provided in Section 5.08 for such Loan Group; provided, however,
that, with respect to Aggregate Loan Group II after the second related Senior
Termination Date, Available Funds with respect to the Loan Group relating to
the remaining Senior Certificate Group in Aggregate Certificate Group II shall
include the Available Funds from the other Loan Groups in Aggregate Loan Group
II and on any Distribution Date thereafter, Available Funds shall be
calculated based upon all the Mortgage Loans in Aggregate Loan Group II, as
opposed to the Mortgage Loans in the related Loan Group, minus (e) all related
fees, charges and other amounts payable or reimbursable to the Master
Servicer, the Securities Administrator, the applicable Custodian or the
Trustee under this Agreement or the applicable Custodial Agreement, to the
Servicers under the Purchase and Servicing Agreements, or, if any amounts are
not specifically related to the Mortgage Loans in that Loan Group or the
related Certificate Group, then the applicable Loan Group Percentage for such
Loan Group for such Distribution Date of such amounts. The Holders of the
Class P-1 and Class P-2 Certificates will be entitled to all Prepayment
Penalties received on the Group 1 Mortgage Loans or the Aggregate Group II
Mortgage Loans, as applicable, and such amounts will not be available for
distribution to the Holders of any other Class of Certificates.
Bankruptcy: As to any Person, the making of an assignment for the
benefit of creditors, the filing of a voluntary petition in bankruptcy,
adjudication as a bankrupt or insolvent, the entry of an order for relief in a
bankruptcy or insolvency proceeding, the seeking of reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief, or seeking, consenting to or acquiescing in the appointment of a
trustee, receiver or liquidator, dissolution, or termination, as the case may
be, of such Person pursuant to the provisions of either the Bankruptcy Code or
any other similar state laws.
Bankruptcy Code: The United States Bankruptcy Code of 1986, as amended.
Bankruptcy Coverage Termination Date: The point in time at which the
Bankruptcy Loss Coverage Amount is reduced to zero.
8
Bankruptcy Loss: With respect to any Mortgage Loan, a Deficient
Valuation or Debt Service Reduction reported to the Master Servicer by the
related Servicer; provided, however, that a Bankruptcy Loss shall not be
deemed a Bankruptcy Loss hereunder so long as the related Servicer has
notified the Master Servicer in writing that the related Servicer is
diligently pursuing any remedies that may exist in connection with the related
Mortgage Loan and either (A) the related Mortgage Loan is not in default with
regard to payments due thereunder or (B) delinquent payments of principal and
interest under the related Mortgage Loan and any related escrow payments in
respect of such Mortgage Loan are being advanced on a current basis by the
Master Servicer or the related Servicer, in either case without giving effect
to any Debt Service Reduction or Deficient Valuation, as reported by the
related Servicer to the Master Servicer.
Bankruptcy Loss Coverage Amount: As of any date of determination, the
Bankruptcy Loss Coverage Amount shall equal the Initial Bankruptcy Coverage
Amount as reduced by (i) the aggregate amount of Bankruptcy Losses allocated
to the Certificates since the Cut-off Date and (ii) any permissible reductions
in the Bankruptcy Loss Coverage Amount as evidenced by a letter of each Rating
Agency to the Trustee and the Securities Administrator to the effect that any
such reduction will not result in a downgrading of the then current ratings
assigned to the Classes of Certificates rated by it.
Book-Entry Certificates: Beneficial interests in Certificates designated
as "Book-Entry Certificates" in this Agreement, ownership and transfers of
which shall be evidenced or made through book entries by a Clearing Agency as
described in Section 3.09; provided, that after the occurrence of a Book-Entry
Termination whereupon book-entry registration and transfer are no longer
permitted and Definitive Certificates are to be issued to Certificate Owners,
such Book-Entry Certificates shall no longer be "Book-Entry Certificates." The
Classes of Certificates that constitute "Book-Entry Certificates" as of the
Closing Date are set forth in the Preliminary Statement.
Book-Entry Termination: The date on which the Clearing Agency is no
longer willing or able to properly discharge its responsibilities with respect
to the Book Entry Certificates, and the Depositor is unable to locate a
qualified successor.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which banking institutions in New York, New York or, if other than New
York, the city in which the Corporate Trust Office of the Trustee is located,
or the States of Maryland or Minnesota, are authorized or obligated by law or
executive order to be closed.
Calculation Rate: For each Distribution Date: (a) the product of (i) 10
and (ii) the weighted average rate of the outstanding Class A and Class B
Interests, treating each Class A Interest as capped at zero or reduced by a
fixed percentage of 100% of the interest accruing on such Class.
Certificate: Any one of the certificates signed by the Trustee, or the
Securities Administrator on the Trustee's behalf, and authenticated by the
Securities Administrator as Authenticating Agent in substantially the forms
attached hereto as Exhibit A.
9
Certificate Balance: With respect to any Certificate at any date, the
maximum dollar amount of principal to which the Holder thereof is then
entitled hereunder, such amount being equal to the principal balance or
notional amount, as applicable, as of the Closing Date (A) plus any Subsequent
Recoveries added to the Certificate Balance of such Certificate pursuant to
Section 5.02, (B) minus the sum of (i) all distributions of principal
previously made with respect thereto and (ii) all Realized Losses allocated
thereto and, in the case of any Subordinated Certificates, all other
reductions in Certificate Balance previously allocated thereto pursuant to
Section 5.04 and (C) in the case of any Class of Accrual Certificates,
increased by the Accrual Amount added to the Class Principal Balance of such
Class prior to such date.
Certificate Group: As specified in the Preliminary Statement.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
who is the owner of such Book-Entry Certificate, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly or as an indirect participant, in accordance
with the rules of such Clearing Agency).
Certificate Register and Certificate Registrar: The register maintained
and the registrar appointed pursuant to Section 3.02. The initial Certificate
Registrar is the Securities Administrator under this Agreement.
Certificateholder: The meaning provided in the definition of "Holder."
Certification Party: As defined in Section 12.05.
Certifying Person: As defined in Section 12.05.
Class: All Certificates bearing the same Class designation as set forth
in the Preliminary Statement.
Class 1-A-1 and Class 1-A-2 Corridor Contract: The ISDA Master Agreement
(including the Schedule thereto and the transaction evidenced by the related
Confirmation by and between the Securities Administrator on behalf of the
Trustee and the Corridor Contract Counterparty), for the benefit of the Class
1-A-1 and Class 1-A-2 Certificates.
Class 1-A-1 and Class 1-A-2 Corridor Contract Payment: On each
Distribution Date prior to the related Corridor Contract Termination Date, the
amount required to be paid by the Corridor Contract Counterparty on behalf of
Class 1-A-1 and Class 1-A-2 Certificates under the Class 1-A-1 and Class 1-A-2
Corridor Contract on that Distribution Date.
Class 1-A-3 Corridor Contract: The ISDA Master Agreement (including the
Schedule thereto and the transaction evidenced by the related Confirmation by
and between the Securities Administrator on behalf of the Trustee and the
Corridor Contract Counterparty), for the benefit of the Class 1-A-3
Certificates.
Class 1-A-3 Corridor Contract Payment: On each Distribution Date prior
to the related Corridor Contract Termination Date, the amount required to be
paid by the Corridor Contract
10
Counterparty on behalf of Class 1-A-3 Certificates under the Class 1-A-3
Corridor Contract on that Distribution Date.
Class 1-A-X Required Reserve Fund Deposit: For any Distribution Date an
amount equal to the lesser of (i) the Current Interest for the Class 1-A-X
Certificates for such Distribution Date and (ii) the amount required to bring
the balance on deposit in the Class 1-A-X Sub Account up to an amount equal to
the sum of (a) the Net WAC Shortfalls for the Class 1-A-1, Class 1-A-2 and
Class 1-A-3 Certificates for such Distribution Date remaining unpaid after
application of payments under the related Corridor Contracts and (b) $6,500.
For any Distribution Date, the Securities Administrator will deposit into the
Reserve Fund any Required Reserve Fund Deposit for such date.
Class 1-A-X Sub Account: As defined in Section 5.10(b).
Class 1-M-X Required Reserve Fund Deposit: For any Distribution Date an
amount equal to the lesser of (i) the Current Interest for the Class 1-M-X
Certificates for such Distribution Date and (ii) the amount required to bring
the balance on deposit in the Class 1-M-X Sub Account up to an amount equal to
the sum of (a) the aggregate Net WAC Shortfalls for the Class 1-M-1, Class
1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-M-6, Class 1-B-1, Class
1-B-2 and Class 1-B-3 Certificates for such Distribution Date remaining unpaid
after application of payments under the Corridor Contract and (b) $2,500. For
any Distribution Date, the Securities Administrator will deposit into the
Reserve Fund any Required Reserve Fund Deposit for such date.
Class 1-M-X Sub Account: As defined in Section 5.10(b).
Class Interest Shortfall: As to any Distribution Date and Class, the
amount by which the amount described in clause (i) of the definition of Class
Optimal Interest Distribution Amount for such Class exceeds the amount of
interest actually distributed on such Class on such Distribution Date pursuant
to such clause (i).
Class Optimal Interest Distribution Amount: With respect to any
Distribution Date and interest bearing Class or, with respect to any interest
bearing Component, the sum of (i) one month's interest accrued during the
related Interest Accrual Period at the Pass-Through Rate for such Class on the
related Class Principal Balance, Component Balance, Notional Amount or
Component Notional Amount, as applicable, immediately prior to such
Distribution Date, subject to reduction as provided in Section 5.02(d) and
(ii) any Class Unpaid Interest Amounts for such Class or Component.
Class Principal Balance: With respect to any Class and as to any date of
determination, the aggregate of the Certificate Balances of all Certificates
of such Class as of such date.
Class Subordination Percentage: With respect to any Distribution Date
and each Class of Group 1 Subordinated Certificates, the quotient (expressed
as a percentage) of (a) the Class Principal Balance of such Class of Group 1
Subordinated Certificates immediately prior to such Distribution Date, divided
by (b) the aggregate of the Class Principal Balances of all Classes of Group 1
Certificates (other than the related Notional Amount Certificates) immediately
prior to such Distribution Date. With respect to any Distribution Date and
each Class of Aggregate
11
Group II Subordinated Certificates, the quotient (expressed as a percentage)
of (a) the Class Principal Balance of such Class of Aggregate Group II
Subordinated Certificates immediately prior to such Distribution Date, divided
by (b) the aggregate of the Class Principal Balances of all Classes of
Aggregate Group II Certificates (other than the related Notional Amount
Certificates) immediately prior to such Distribution Date.
Class Unpaid Interest Amounts: As to any Distribution Date and Class of
interest bearing Certificates, the amount by which the aggregate Class
Interest Shortfalls for such Class on prior Distribution Dates exceeds the
amount distributed on such Class on prior Distribution Dates pursuant to
clause (ii) of the definition of Class Optimal Interest Distribution Amount.
Clearing Agency: An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. As
of the Closing Date, the Clearing Agency shall be The Depository Trust
Company.
Clearing Agency Participant: A broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency
effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
Closing Date: January 31, 2006.
Code: The Internal Revenue Code of 1986, as amended, and as it may be
further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
Commission: The U.S. Securities and Exchange Commission.
Compensating Interest Payment: As to any Distribution Date, an amount
equal to the lesser of (i) the Prepayment Interest Shortfall on the Mortgage
Loans serviced by such Servicer with respect to such Distribution Date and
(ii) the portion of the applicable Servicing Fee that the related Servicer is
required to remit to the Trust as compensation therefor in accordance with the
terms of the related Purchase and Servicing Agreement.
Component: As specified in the Preliminary Statement.
Component Balance: With respect to any Component and any Distribution
Date, the Initial Component Balance thereof on the Closing Date, (A) plus any
Subsequent Recoveries added to the Component Balance of such Component
pursuant to Section 5.02, (B) minus the sum of all amounts applied in
reduction of the principal balance of such Component and Realized Losses
allocated thereto on previous Distribution Dates.
Component Certificates: As specified in the Preliminary Statement.
Component Notional Amount: Not applicable.
Confirmation: With respect to each Corridor Contract, the related
Confirmation dated January 31, 2006, evidencing the transaction between the
Counterparty and the Securities Administrator on behalf of the Trust Fund.
12
Consent: A document executed by the Cooperative Corporation (i)
consenting to the sale of the Cooperative Unit to the Mortgagor and (ii)
certifying that all maintenance charges relating to the Cooperative Unit have
been paid.
Controlling Person: With respect to any Person, any other Person who
"controls" such Person within the meaning of the Securities Act.
Cooperative Corporation: The entity that holds title (fee or an
acceptable leasehold estate) to the real property and improvements
constituting the Cooperative Property and which governs the Cooperative
Property, which Cooperative Corporation must qualify as a Cooperative Housing
Corporation under Section 216 of the Code. Cooperative Loan: A Mortgage Loan
secured by Cooperative Shares and a Proprietary Lease, if any.
Cooperative Property: The real property and improvements owned by the
Cooperative Corporation, that includes the allocation of individual dwelling
units to the holders of the shares of the Cooperative Corporation.
Cooperative Shares: Shares issued by a Cooperative Corporation.
Cooperative Unit: With respect to any Cooperative Loan, a specific unit
in a Cooperative Property.
Corporate Trust Office: With respect to the Trustee, the designated
office of the Trustee in the State of Illinois at which at any particular time
its corporate trust business with respect to this Agreement is administered,
which office at the date of the execution of this Agreement is located at 000
Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attn: Global
Securities and Trust Services-MSM 2006-1AR, and which is the address to which
notices to and correspondence with the Trustee should be directed, or at such
other address as the Trustee may designate from time to time by notice to the
Certificateholders, the Depositor, the Master Servicer and the Securities
Administrator or the principal corporate trust office of any successor
Trustee. With respect to the Certificate Registrar and presentment of
Certificates for registration of transfer, exchange or final payment, Xxxxx
Fargo Bank, National Association, Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Corporate Trust, Xxxxxx Xxxxxxx
Mortgage Loan Trust 2006-1AR, and for all other purposes, X.X. Xxx 00,
Xxxxxxxx, Xxxxxxxx 00000 (or for overnight deliveries, 0000 Xxx Xxxxxxxxx
Xxxx, Xxxxxxxx, Xxxxxxxx 00000), Attention: Corporate Trust, Xxxxxx Xxxxxxx
Mortgage Loan Trust 2006-1AR.
Corridor Contract Counterparty: Xxxxxx Xxxxxxx Capital Services Inc.
Corridor Contract Termination Date: With respect to each Corridor
Contract the related Distribution Date set forth on the notional balance
schedule therein, after any required payment is made.
Corridor Contracts: Collectively, the Class 1-A-1 and Class 1-A-2
Corridor Contract, the Class 1-A-3 Corridor Contract and the Junior LIBOR
Corridor Contract.
13
Countrywide Purchase and Servicing Agreement: The Mortgage Loan Sale and
Servicing Agreement listed in Exhibit E hereto among the Seller, Countrywide
Home Loans, Inc. and Countrywide Home Loans Servicing, LP.
Countrywide Serviced Mortgage Loan: Each Mortgage Loan originated and
serviced by Countrywide Home Loans, Inc. and listed on the Mortgage Loan
Schedule.
Cross-Over Situation: For any Distribution Date and for each Loan Group
(after taking into account principal distributions on such Distribution Date)
with respect to the Class A and Class B Interests, the Class A and Class B
Interests corresponding to any Loan Group are in the aggregate less than 1% of
the Subordinated Portion of the Loan Group to which they correspond.
Current Interest: For any Distribution Date and any Class of
Certificates, the interest accrued during the related Interest Accrual Period
at the Pass-Through Rate for such Class of Certificates on the related Class
Principal Balance immediately prior to such Distribution Date.
Custodial Account: Each custodial account (other than an Escrow Account)
established and maintained by a Servicer pursuant to a Purchase and Servicing
Agreement.
Custodial Agreement: The Custodial Agreements, listed in Exhibit F
hereof, as each such agreement may be amended or supplemented from time to
time as permitted hereunder.
Custodial Certification: As defined in Section 2.01.
Custodial Delivery Failure: With respect to any Custodian appointed
hereunder, as defined in Section 6.21 hereof.
Custodian: A Person who is at anytime appointed by the Depositor as a
custodian of the Mortgage Documents and the Trustee Mortgage Files. The
initial Custodians are LaSalle Bank, National Association and X.X. Xxxxxx
Trust Company, National Association. "Custodian" shall refer to each Custodian
or all Custodians, as the context requires.
Cut-off Date: January 1, 2006.
Cut-off Date Pool Principal Balance: $612,056,096.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction
by a court of competent jurisdiction in a proceeding under the Bankruptcy Code
in the Scheduled Payment for such Mortgage Loan which became final and
non-appealable, except such a reduction resulting from a Deficient Valuation
or any reduction that results in a permanent forgiveness of principal.
Deceased Holder: Not applicable.
Defective Mortgage Loan: The meaning specified in Section 2.05(a).
Deficient Valuation: With respect to any Mortgage Loan, a valuation of
the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding indebtedness under the Mortgage Loan, or
any reduction in the amount of principal
14
to be paid in connection with any Scheduled Payment that results in a
permanent forgiveness of principal, which valuation or reduction results from
an order of such court which is final and non-appealable in a proceeding under
the Bankruptcy Code.
Definitive Certificate: A Certificate of any Class issued in definitive,
fully registered, certificated form. As of the Closing Date the Classes of
Certificates being issued as "Definitive Certificates" are set forth in the
Preliminary Statement.
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased, or replaced
or to be replaced with a Replacement Mortgage Loan.
Delinquent: Any Mortgage Loan with respect to which the Scheduled
Payment due on a Due Date is not received.
Depositor: Xxxxxx Xxxxxxx Capital I Inc., a Delaware corporation having
its principal place of business in New York, or its successors in interest.
Depository: Cede & Co., or any other organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of
the Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code
of the State of New York.
Determination Date: With respect to each Servicer, the "Determination
Date" set forth in the related Purchase and Servicing Agreement.
Disqualified Organization: A "disqualified organization" as defined in
Section 860E(e)(5) of the Code.
Distribution Account: The separate Eligible Account created and
maintained by the Securities Administrator, on behalf of the Trustee, pursuant
to Section 4.01. Funds in the Distribution Account (exclusive of any earnings
on investments made with funds deposited in the Distribution Account) shall be
held in trust for the Trustee and the Certificateholders for the uses and
purposes set forth in this Agreement.
Distribution Account Deposit Date: With respect to each Servicer, not
later than 1:00 p.m., New York time, on 18th day of each calendar month after
the initial issuance of the Certificates or, if such 18th day is not a
Business Day, either the immediately preceding or immediately following
Business Day, as set forth in the related Acknowledgement, commencing in
February 2006.
Distribution Date: The 25th day of each month or, if such 25th day is
not a Business Day, the next succeeding Business Day, commencing in February
2006.
Due Date: With respect to any Distribution Date, the first day of the
month in which such Distribution Date occurs. With respect to any Mortgage
Loan, the date on which a
15
Scheduled Payment is due under the related Mortgage Note as indicated in the
applicable Purchase and Servicing Agreement.
Due Period: As to any Distribution Date, the period beginning on the
second day of the month preceding the month of such Distribution Date, and
ending on the first day of the month of such Distribution Date.
XXXXX: The Commission's Electronic Data Gathering, Analysis and
Retrieval system.
Eligible Account: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a
depository institution or trust company that is the principal subsidiary of a
holding company, the debt obligations of such holding company) have the
highest short-term ratings of each Rating Agency at the time any amounts are
held on deposit therein, or (ii) an account or accounts in a depository
institution or trust company in which such accounts are insured by the FDIC or
the SAIF (to the limits established by the FDIC or the SAIF) and the uninsured
deposits in which accounts are otherwise secured such that, as evidenced by an
Opinion of Counsel delivered to the Trustee and to each Rating Agency, the
Certificateholders have a claim with respect to the funds in such account or a
perfected first priority security interest against any collateral (which shall
be limited to Permitted Investments) securing such funds that is superior to
claims of any other depositors or creditors of the depository institution or
trust company in which such account is maintained, or (iii) a trust account or
accounts maintained with the trust department of a federal or state chartered
depository institution or trust company, acting in its fiduciary capacity or
(iv) any other account acceptable to each Rating Agency, as evidenced by a
signed writing delivered by each Rating Agency. Eligible Accounts may bear
interest, and may include, if otherwise qualified under this definition,
accounts maintained with the Trustee, the Paying Agent, the Securities
Administrator or the Master Servicer.
Eligible Institution: An institution having the highest short-term debt
rating, and one of the two highest long-term debt ratings of the Rating
Agencies or the approval of the Rating Agencies.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of an
Underwriter's Exemption.
ERISA-Restricted Certificate: As specified in the Preliminary Statement.
Escrow Account: With respect to each Mortgage Loan, as defined in
Article I of the related Purchase and Servicing Agreement.
Estoppel Letter: A document executed by the Cooperative Corporation
certifying, with respect to a Cooperative Unit, (i) the appurtenant
Proprietary Lease will be in full force and effect as of the date of issuance
thereof, (ii) the related stock certificate was registered in the Mortgagor's
name and the Cooperative Corporation has not been notified of any lien upon,
pledge of, levy of execution on or disposition of such stock certificate, and
(iii) the Mortgagor is
16
not in default under the appurtenant Proprietary Lease and all charges due the
Cooperative Corporation have been paid.
Event of Default: Any one of the conditions or circumstances enumerated
in Section 6.14.
Excess Loss: With respect to the Group 1 Certificates and the Aggregate
Group II Certificates, the amount of any (i) Fraud Loss on a Mortgage Loan in
any Loan Group in the related Aggregate Loan Group realized after the related
Fraud Loss Coverage Termination Date, (ii) Special Hazard Loss on a Mortgage
Loan in any Loan Group in the related Aggregate Loan Group realized after the
related Special Hazard Coverage Termination Date or (iii) Bankruptcy Loss on a
Mortgage Loan in any Loan Group in the related Aggregate Loan Group realized
after the related Bankruptcy Coverage Termination Date.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
Exchange Act Reports: Any reports on Form 10-D, Form 8-K and Form 10-K
required to be filed with respect to the Trust Fund under the Exchange Act.
Xxxxxx Xxx: The entity formerly known as the Federal National Mortgage
Association, a federally chartered and privately owned corporation organized
and existing under the Federal National Mortgage Association Charter Act, or
any successor thereto.
FDIC: The Federal Deposit Insurance Corporation or any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of
the Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Final Custodian Certification: As defined in Section 2.02.
Fiscal Agent: Not applicable.
Fitch: Fitch, Inc., or any successor thereto. If Fitch is designated as
a Rating Agency in the Preliminary Statement, for purposes of Section 11.07
the address for notices to Fitch shall be Fitch, Inc., Xxx Xxxxx Xxxxxx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage Surveillance Group,
or such other address as Fitch may hereafter furnish to the Depositor, the
Trustee and the Master Servicer.
FNBN Mortgage Loan: Each Mortgage Loan originated by First National Bank
of Nevada and listed on the Mortgage Loan Schedule.
FNBN Purchase Agreement: The Mortgage Loan Purchase Agreement listed in
Exhibit E hereto between the Seller and First National Bank of Nevada.
Form 8-K Disclosure: As defined in Section 12.03 hereof.
17
Fraud Loan: A Liquidated Mortgage Loan as to which a Fraud Loss has
occurred, as reported by the related Servicer to the Master Servicer.
Fraud Loss Coverage Amount: As of the Closing Date, (x) $14,059,865,
with respect to the Group 1 Certificates and (y) $4,301,818, with respect to
the Aggregate Group II Certificates, in each case, subject to reduction from
time to time, by the amount of Fraud Losses allocated to the Certificates. The
respective Fraud Loss Coverage Amounts for the Group 1 Mortgage Loans and the
Aggregate Group II Mortgage Loans will be reduced, from time to time, by the
amount of Fraud Losses allocated to the related Certificates. In addition,
respective Fraud Loss Coverage Amounts for the Group 1 Mortgage Loans and the
Aggregate Group II Mortgage Loans will be reduced on the fifth anniversary of
the Cut-off Date, to zero and on the first, second, third and fourth
anniversaries of the Cut-off Date, to an amount equal to the lesser of (x) 2%,
in the case of the first anniversary, and 1%, in the case of the second, third
and fourth anniversaries, of the then current aggregate Stated Principal
Balance of the Group 1 Mortgage Loans or the Aggregate Group II Mortgage
Loans, as applicable, and (y) the excess of the respective Fraud Loss Coverage
Amount as of the preceding anniversary of the Cut-off Date over the cumulative
amount of Fraud Losses allocated to the related Certificate Group since the
preceding anniversary.
Fraud Loss Coverage Termination Date: With respect to each Aggregate
Certificate Group the point in time at which the related Fraud Loss Coverage
Amount is reduced to zero.
Fraud Losses: Realized Losses on Mortgage Loans as to which a loss is
sustained by reason of a default arising from fraud, dishonesty or
misrepresentation in connection with the related Mortgage Loan, including a
loss by reason of the denial of coverage under any related Primary Mortgage
Insurance Policy because of such fraud, dishonesty or misrepresentation.
Global Securities: The global certificates representing the Book-Entry
Certificates.
GMAC Serviced Mortgage Loan: Each Mortgage Loan serviced by GMAC
Mortgage Corporation and listed on the Mortgage Loan Schedule.
GMAC Servicing Agreement: The Servicing Agreement listed in Exhibit E
hereto between the Seller and GMAC Mortgage Corporation.
GreenPoint Serviced Mortgage Loan: Each Mortgage Loan originated and
serviced by GreenPoint Mortgage Funding, Inc. and listed on the Mortgage Loan
Schedule.
GreenPoint Purchase Agreement: The Mortgage Loan Purchase Agreement
listed in Exhibit E hereto between the Seller and GreenPoint Mortgage Funding,
Inc.
GreenPoint Purchase and Servicing Agreement: The Mortgage Loan Sale
Servicing Agreement listed in Exhibit E hereto between the Seller and
GreenPoint Mortgage Funding, Inc.
Group 1 Certificates: As specified in the Preliminary Statement.
Group 1 Mortgage Loans: The Mortgage Loans in Loan Group 1.
18
Group 1 Senior Certificates: As specified in the Preliminary Statement.
Group 1 Subordinated Certificates: As specified in the Preliminary
Statement.
Group 1 Net WAC: For the LIBOR Certificates and any Distribution Date, a
per annum rate equal to the Weighted Average Net Mortgage Rate of the Group 1
Mortgage Loans as of the first day of the month preceding the month in which
such Distribution Date occurs.
Group 2 Senior Certificates: As specified in the Preliminary Statement.
Group 2 Mortgage Loans: The Mortgage Loans in Loan Group 2.
Group 3 Senior Certificates: As specified in the Preliminary Statement.
Group 3 Mortgage Loans: The Mortgage Loans in Loan Group 3.
Group 4 Senior Certificates: As specified in the Preliminary Statement.
Group 4 Mortgage Loans: The Mortgage Loans in Loan Group 4.
Hemisphere Mortgage Loan: Each Mortgage Loan originated by The
Hemisphere National Bank and listed on the Mortgage Loan Schedule.
Hemisphere Purchase Agreement: The Mortgage Loan Purchase and Warranties
Agreement listed in Exhibit E hereto between the Seller and The Hemisphere
National Bank.
Hemisphere Serviced Mortgage Loan: Each Mortgage Loan serviced by The
Hemisphere National Bank and listed on the Mortgage Loan Schedule.
Hemisphere Servicing Agreement: The Servicing Agreement listed in
Exhibit E hereto between the Seller and The Hemisphere National Bank.
Holder: The registered owner of any Certificate as recorded on the books
of the Certificate Registrar except that, solely for the purposes of taking
any action or giving any consent pursuant to this Agreement, any Certificate
registered in the name of the Depositor, the Trustee, the Master Servicer, the
Securities Administrator and any Servicer, or any Affiliate thereof shall be
deemed not to be outstanding in determining whether the requisite percentage
necessary to effect any such consent has been obtained, except that, in
determining whether the Trustee or the Securities Administrator shall be
protected in relying upon any such consent, only Certificates that a
Responsible Officer of the Trustee or the Securities Administrator,
respectively, knows to be so owned shall be disregarded. The Trustee or the
Securities Administrator may request and conclusively rely on certifications
by the Depositor, the Master Servicer, the Securities Administrator or any
Servicer in determining whether any Certificates are registered to an
Affiliate of the Depositor, the Master Servicer, the Securities Administrator
or any Servicer.
HSBC Serviced Mortgage Loan: Each Mortgage Loan serviced by HSBC
Mortgage Corporation (USA) and listed on the Mortgage Loan Schedule.
19
HSBC Servicing Agreement: The Servicing Agreement listed in Exhibit E
hereto between the Seller and HSBC Mortgage Corporation (USA).
HUD: The United States Department of Housing and Urban Development, or
any successor thereto.
Indemnifying Party: As specified in Section 12.08 hereof.
Independent: When used with respect to any Accountants, a Person who is
"independent" within the meaning of Rule 2-01(b) of the Securities and
Exchange Commission's Regulation S-X. When used with respect to any other
Person, a Person who (a) is in fact independent of another specified Person
and any Affiliate of such other Person, (b) does not have any material direct
financial interest in such other Person or any Affiliate of such other Person,
and (c) is not connected with such other Person or any Affiliate of such other
Person as an officer, employee, promoter, underwriter, trustee, partner,
director or Person performing similar functions.
Index: As to each Mortgage Loan, the index from time to time in effect
for adjustment of the Mortgage Rate as set forth as such on the related
Mortgage Note.
Initial Bankruptcy Coverage Amount: With respect to the Group 1
Certificates, $150,000. With respect to the Aggregate Group II Certificates,
$150,000.
Initial Component Balance: As specified in the Preliminary Statement.
Initial Custodian Certification: As defined in Section 2.02.
Initial Optional Termination Date: With respect to the Group 1 Mortgage
Loans, the first Distribution Date following the date on which the aggregate
Stated Principal Balance of the Group 1 Mortgage Loans is equal to or less
than 10% of the aggregate Stated Principal Balance thereof as of the Cut-off
Date. With respect to the Aggregate Group II Mortgage Loans, the first
Distribution Date following the date on which the aggregate Stated Principal
Balance of the Aggregate Group II Mortgage Loans is equal to or less than 1%
of the aggregate Stated Principal Balance thereof as of the Cut-off Date.
Insurance Policy: With respect to any Mortgage Loan, any insurance
policy, including all names and endorsements thereto in effect, including any
replacement policy or policies for any Insurance Policies.
Insurance Proceeds: Proceeds paid by any Insurance Policy (excluding
proceeds required to be applied to the restoration and repair of the related
Mortgaged Property or released to the Mortgagor), in each case other than any
amount included in such Insurance Proceeds in respect of Insured Expenses and
the proceeds from any Limited Purpose Surety Bond.
Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
20
Interest Accrual Period: With respect to each Class of Delay
Certificates, its corresponding Subsidiary REMIC Regular Interest and any
Distribution Date, the calendar month prior to the month of such Distribution
Date. With respect to any Class of Non-Delay Certificates, its corresponding
Subsidiary REMIC Regular Interest and any Distribution Date, the one month
period commencing on the 25th day of the month preceding the month in which
such Distribution Date occurs and ending on the 24th day of the month in which
such Distribution Date occurs.
Interest Determination Date: With respect to any Interest Accrual Period
for any Class of LIBOR Certificates, the second Business Day prior to the
first day of such Interest Accrual Period.
Junior LIBOR Corridor Contract: The ISDA Master Agreement (including the
Schedule thereto and the transaction evidenced by the related Confirmation by
and between the Securities Administrator on behalf of the Trustee and the
Corridor Contract Counterparty), for the benefit of the Class 1-M-1, Class
1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-M-6, Class 1-B-1, Class
1-B-2 and Class 1-B-3 Certificates.
Junior LIBOR Corridor Contract Payment: On each Distribution Date prior
to the related Corridor Contract Termination Date, the amount required to be
paid by the Corridor Contract Counterparty on behalf of the Class 1-M-1, Class
1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-M-6, Class 1-B-1, Class
1-B-2 and Class 1-B-3 Certificates under the Junior LIBOR Corridor Contract on
that Distribution Date.
Last Scheduled Distribution Date: The Distribution Date in February
2036.
Latest Possible Maturity Date: The Distribution Date occurring in
February 2036.
LIBOR: The London interbank offered rate for one-month United States
dollar deposits calculated in the manner described in Section 5.09.
LIBOR Business Day: Any day on which banks in London, England and The
City of New York are open and conducting transactions in foreign currency and
exchange.
LIBOR Certificates: As specified in the Preliminary Statement.
Limited Purpose Surety Bond: Collectively, Ambac Assurance Corporation
Surety Bond No. AB0039BE and any other Limited Purpose Surety Bond securing an
Additional Collateral Mortgage Loan.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in
the calendar month preceding the month of such Distribution Date and as to
which the related Servicer has certified (in accordance with its Purchase and
Servicing Agreement) that it has received all amounts it expects to receive in
connection with the liquidation of such Mortgage Loan including the final
disposition of an REO Property.
21
Liquidation Proceeds: Amounts, including Insurance Proceeds, received in
connection with the partial or complete liquidation of defaulted Mortgage
Loans, whether through trustee's sale, foreclosure sale or otherwise or
amounts received in connection with any condemnation or partial release of a
Mortgaged Property and any other proceeds received in connection with an REO
Property.
Living Holders: Not applicable.
Loan Group: Any of Loan Group 1, Loan Group 2, Loan Group 3 and Loan
Group 4, as applicable.
Loan Group 1: All Mortgage Loans identified as Group 1 Mortgage Loans on
the Mortgage Loan Schedule.
Loan Group 2: All Mortgage Loans identified as Group 2 Mortgage Loans on
the Mortgage Loan Schedule.
Loan Group 3: All Mortgage Loans identified as Group 3 Mortgage Loans on
the Mortgage Loan Schedule.
Loan Group 4: All Mortgage Loans identified as Group 4 Mortgage Loans on
the Mortgage Loan Schedule.
Loan Group Percentage: As to any Loan Group and any Distribution Date,
the fraction, expressed as a percentage, the numerator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans in that Loan
Group as of the related Due Date, and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans as of that Due
Date.
Loan Group Principal Balance: As to any Distribution Date and Loan
Group, the aggregate Stated Principal Balance of the Mortgage Loans in that
Loan Group outstanding on the Due Date in the month preceding the month of the
Distribution Date (after giving effect to prepayments received in the
Prepayment Period related to such prior Due Date).
Loan-To-Value Ratio: With respect to any Mortgage Loan and as to any
date of determination, the fraction (expressed as a percentage) the numerator
of which is the principal balance of the related Mortgage Loan at such date of
determination and the denominator of which is the Appraised Value of the
related Mortgaged Property.
LPMI Mortgage Loan: Certain Mortgage Loans as to which the lender
(rather than the borrower) acquires the Primary Mortgage Insurance Policy and
charges the related borrower an interest premium.
Master REMIC: As described in the Preliminary Statement.
Master Servicer: Xxxxx Fargo Bank, National Association, a national
banking association organized under the laws of the United States in its
capacity as Master Servicer and any Person succeeding as Master Servicer
hereunder or any successor in interest, or if any successor master servicer
shall be appointed as herein provided, then such successor master servicer.
22
Master Servicer Compensation: With respect to any Master Servicer that
is a successor to Xxxxx Fargo Bank, National Association as Master Servicer,
the portion of the earnings on the funds on deposit in the Distribution
Account payable on each Distribution Date pursuant to Section 4.02(b)(ii)
hereof agreed to by and between such successor Master Servicer and the
successor securities administrator; provided, that the sum of such Master
Servicer Compensation and the Securities Administrator Compensation payable on
each Distribution Date shall not exceed the total earnings on funds in the
Distribution Account payable pursuant to Section 4.02(b)(ii) hereof earned
since the prior Distribution Date.
Memorandum: The private placement memorandum dated January 31, 2006,
relating to the Private Certificates.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any
successor to Mortgage Electronic Registration Systems, Inc.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the
MERS(R) System.
MERS(R) System: The system of recording transfers of mortgages
electronically maintained by MERS.
Middle REMIC: As specified in the Preliminary Statement.
Middle REMIC Interest: As specified in the Preliminary Statement.
Middle REMIC Regular Interest: As specified in the Preliminary
Statement.
MIN: The mortgage identification number for any MERS Mortgage Loan.
Minimum Auction Price: With respect to any Distribution Date on which an
Auction is being held, an amount equal to the sum of (a) 100% of the current
aggregate Stated Principal Balance of the Group 1 Mortgage Loans, plus accrued
interest thereon, (b) the fair market value of any related REO Property in the
Trust Fund and all other property related to Loan Group 1 in the Trust Fund
being purchased, (c) any unreimbursed Servicing Advances related to the Group
1 Mortgage Loans and (d) any expenses incurred by the Auction Administrator in
the Auction process.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
Moody's: Xxxxx'x Investors Service, Inc., or any successor thereto. If
Xxxxx'x is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 11.07 the address for notices to Moody's shall be Xxxxx'x
Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Residential Pass-Through Monitoring, or such other address as
Moody's may hereafter furnish to the Depositor or the Master Servicer.
23
Mortgage: A mortgage, deed of trust or other instrument encumbering a
fee simple interest in real property securing a Mortgage Note, together with
improvements thereto.
Mortgage Documents: With respect to each Mortgage Loan, the mortgage
documents required to be delivered to the Custodian pursuant to each Custodial
Agreement.
Mortgage Loan: A Mortgage and the related notes or other evidences of
indebtedness secured by each such Mortgage conveyed, transferred, sold,
assigned to or deposited with the Trustee pursuant to Section 2.01 (including
any REO Property), including without limitation, each Mortgage Loan listed on
the Mortgage Loan Schedule, as amended from time to time.
Mortgage Loan Auction Price: The price, calculated as set forth in
Section 7.01(b), to be paid in connection with the purchase of the Group 1
Mortgage Loans by the Auction Purchaser.
Mortgage Loan Schedule: The schedule attached hereto as Schedule A,
which shall identify each Mortgage Loan, as such schedule may be amended by
the Depositor or a Servicer from time to time to reflect the addition of
Replacement Mortgage Loans to, or the deletion of Deleted Mortgage Loans from,
the Trust Fund. Such schedule shall, among other things (i) designate the
Servicer servicing such Mortgage Loan and the applicable Servicing Fee Rate;
(ii) identify the designated Loan Group in which such Mortgage Loan is
included, (iii) identify any LPMI Mortgage Loan and designate the rate at
which the premium for such insurance is calculated and (iv) separately
identify the Additional Collateral Mortgage Loans, if any.
Mortgage Note: The original executed note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage under a Mortgage Loan.
Mortgage Rate: As to any Mortgage Loan, the annual rate of interest
borne by the related Mortgage Notes.
Mortgaged Property: The underlying property, including any Additional
Collateral, securing a Mortgage Loan which, with respect to a Cooperative
Loan, is the related Cooperative Shares and Proprietary Lease.
MortgageIT Mortgage Loan: Each Mortgage Loan originated by MortgageIT,
Inc. and listed on the Mortgage Loan Schedule.
MortgageIT Purchase Agreement: The Mortgage Loan Purchase Agreement
listed in Exhibit E hereto between the Seller and MortgageIT, Inc.
Mortgagor: The obligor on a Mortgage Note.
MSMCI Mortgage Loan: A Mortgage Loan sold by the Seller to the Depositor
pursuant to the MSMCI Purchase Agreement.
MSMCI Purchase Agreement: The Mortgage Loan Purchase Agreement listed in
Exhibit E hereto between the Seller and the Depositor.
24
Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan
or any other disposition of related Mortgaged Property, the related
Liquidation Proceeds net of Advances, Servicer Advances, Servicing Fees and
any other accrued and unpaid servicing fees received and retained in
connection with the liquidation of such Mortgage Loan or Mortgaged Property.
Net Mortgage Rate: With respect to any Mortgage Loan and any
Distribution Date, the related Mortgage Rate as of the Due Date in the month
preceding the month of such Distribution Date reduced by the Aggregate Expense
Rate for such Mortgage Loan.
Net Prepayment Interest Shortfalls: As to any Distribution Date and Loan
Group, the amount by which the aggregate of Prepayment Interest Shortfalls for
that Loan Group exceeds the Compensating Interest Payments for that Loan Group
and Distribution Date. Each Class' pro rata share of the Net Interest
Shortfalls on the related Mortgage Loans shall be based on the amount of
interest the Class otherwise would have been entitled to receive on such
Distribution Date.
Net WAC Shortfall: With respect to any Class of LIBOR Certificates and
any Distribution Date on which the Pass-Through Rate for that Class of
Certificates is limited to the Group 1 Net WAC, an amount equal to the sum of
(i) the excess of (x) the amount of interest such Class of Certificates would
have been entitled to receive on such Distribution Date if the Group 1 Net WAC
had not been applicable to such Class on such Distribution Date, subject to a
maximum rate of 11.50% per annum over (y) the amount of interest accrued on
such Distribution Date at the Group 1 Net WAC plus (ii) the related Net WAC
Shortfall for previous Distribution Dates remaining unpaid, together with
interest thereon at a rate equal to the related Pass-Through Rate for such
Class of Certificates for the most recently ended Interest Accrual Period
(determined without regard to the Group 1 Net WAC, but subject to a maximum
per annum Pass-Through Rate of 11.50%).
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
Certificate.
Non-Delay Certificates: As specified in the Preliminary Statement.
Non-permitted Foreign Holder: As defined in Section 3.03(f).
Non-U.S. Person: Any person other than a "United States person" within
the meaning of Section 7701(a)(30) of the Code.
Nonrecoverable Advance: Any portion of an Advance or Servicer Advance
previously made or proposed to be made by the Master Servicer and/or a
Servicer (as certified in an Officer's Certificate of such Servicer), which in
the good faith judgment of such party, shall not be ultimately recoverable by
such party from the related Mortgagor, related Liquidation Proceeds or
otherwise.
Notional Amount: With respect to the Class 1-A-X Certificates and any
Distribution Date an amount equal to the aggregate Class Principal Balance of
the Class 1-A-1, Class 1-A-2 and Class 1-A-3 Certificates immediately prior to
the Distribution Date. With respect to the Class 1-M-X Certificates and any
Distribution Date an amount equal to the aggregate Class Principal Balance of
the Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5,
25
Class 1-M-6, Class 1-B-1, Class 1-B-2 and Class 1-B-3 Certificates immediately
prior to the Distribution Date. With respect to the Class 4-A-3 Certificates,
the Class Principal Balance of the Class 4-A-2 Certificates immediately prior
to that Distribution Date.
Notional Amount Certificates: As specified in the Preliminary Statement.
Offered Certificates: As specified in the Preliminary Statement.
Offering Document: The Prospectus or the Memorandum, as applicable.
Officer's Certificate: A certificate signed by two Authorized Officers
of the Depositor or the Chairman of the Board, any Vice Chairman, the
President, any Vice President or any Assistant Vice President of the Master
Servicer or the Securities Administrator or in the case of any other Person,
signed by an authorized officer of such Person, and in each case delivered to
the Trustee or the Securities Administrator, as applicable or in the case of
any other Person, signed by an authorized officer of that Person.
Officer's Certificate of a Servicer: A certificate (i) signed by the
Chairman of the Board, the Vice Chairman of the Board, the President, a
Managing Director, a Vice President (however denominated), an Assistant Vice
President, the Treasurer, the Secretary, or one of the Assistant Treasurers or
Assistant Secretaries of a Servicer, or (ii) if provided for herein, signed by
a Servicing Officer, as the case may be, and delivered to the Trustee, the
Securities Administrator or the Master Servicer, as required hereby.
Opinion of Counsel: A written opinion of counsel, reasonably acceptable
in form and substance to the Trustee, the Securities Administrator or the
Master Servicer, as required hereby, and who may be in-house or outside
counsel to the Depositor, the Master Servicer, the Securities Administrator or
the Trustee but which must be Independent outside counsel with respect to any
such opinion of counsel concerning the transfer of any Residual Certificate or
concerning certain matters with respect to ERISA, or the taxation, or the
federal income tax status, of each REMIC.
Original Applicable Credit Support Percentage: With respect to each of
the following Classes of Subordinated Certificates in an Aggregate Certificate
Group, the corresponding percentage described below, as of the Closing Date:
26
Group 1
Subordinated Certificates
----------------------------
Class 1-M-1............7.45%
Class 1-M-2............6.00%
Class 1-M-3............4.90%
Class 1-M-4............4.00%
Class 1-M-5............3.55%
Class 1-M-6............3.15%
Class 1-B-1............2.75%
Class 1-B-2............2.40%
Class 1-B-3............2.10%
Class 1-B-4............1.90%
Class 1-B-5............1.05%
Class 1-B-6............0.45%
Aggregate Group II
Subordinated Certificates
----------------------------
Class B-1..............7.60%
Class B-2..............5.05%
Class B-3..............3.25%
Class B-4..............2.25%
Class B-5..............1.15%
Class B-6..............0.50%
Original Subordinate Principal Balance: For the Group 1 Certificates and
the Group 1 Mortgage Loans, the aggregate Class Principal Balance of the Group
1 Subordinated Certificates as of the Closing Date. For the Aggregate Group II
Certificates and any related Loan Group, on or prior to the second related
Senior Termination Date, the Subordinated Portion for that Loan Group, in each
case as of the Cut-off Date or, if such date is after the second related
Senior Termination Date, the aggregate Class Principal Balance of the
Aggregate Group II Subordinated Certificates as of the Closing Date.
Originator: Any one of Countrywide Home Loans, Inc., First National Bank
of Nevada, GreenPoint Mortgage Funding, Inc., The Hemisphere National Bank,
HSBC Mortgage Corporation (USA), MortgageIT, Inc. or Xxxxx Fargo Bank,
National Association, as applicable.
Overcollateralized Group: As defined in Section 5.08 hereof.
Pass-Through Rate: For any interest bearing Class of Certificates or
Component, the per annum rate set forth or calculated in the manner described
in the Preliminary Statement.
Paying Agent: Any paying agent appointed pursuant to Section 3.08. The
initial Paying Agent shall be the Securities Administrator under this
Agreement.
PCOAB: The Public Company Accounting Oversight Board.
27
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the initial principal balance or notional
amount, as applicable, of such Certificate by the aggregate of the Class
Principal Balance or Notional Amount, as applicable, of all Certificates of
the same Class.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof,
provided that such obligations are backed by the full faith and credit
of the United States;
(ii) general obligations of or obligations guaranteed by any state
of the United States or the District of Columbia receiving the highest
long-term debt rating of each Rating Agency, or such lower rating as
shall not result in the downgrading or withdrawal of the ratings then
assigned to the Certificates by the Rating Agencies, as evidenced by a
signed writing delivered by each Rating Agency;
(iii) commercial or finance company paper which is then receiving
the highest commercial or finance company paper rating of each Rating
Agency rating such paper, or such lower rating as shall not result in
the downgrading or withdrawal of the ratings then assigned to the
Certificates by the Rating Agencies, as evidenced by a signed writing
delivered by each Rating Agency;
(iv) certificates of deposit, demand or time deposits, or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States or of any state thereof
and subject to supervision and examination by federal and/or state
banking authorities, provided that the commercial paper and/or long-term
unsecured debt obligations of such depository institution or trust
company (or in the case of the principal depository institution in a
holding company system, the commercial paper or long-term unsecured debt
obligations of such holding company, but only if Xxxxx'x is not the
applicable Rating Agency) are then rated one of the two highest
long-term and the highest short-term ratings of each Rating Agency for
such securities, or such lower ratings as shall not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by the Rating Agencies, as evidenced by a signed writing
delivered by each Rating Agency;
(v) demand or time deposits or certificates of deposit issued by
any bank or trust company or savings institution to the extent that such
deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation acceptable to the Rating Agencies
at the time of the issuance of such agreements, as evidenced by a signed
writing delivered by each Rating Agency;
28
(vii) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered into
with a depository institution or trust company (acting as principal)
described in clause (iv) above;
(viii) securities (other than stripped bonds, stripped coupons or
instruments sold at a purchase price in excess of 115% of the face
amount thereof) bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any
state thereof which, at the time of such investment, have one of the two
highest ratings of each Rating Agency (except if the Rating Agency is
Moody's, such rating shall be the highest commercial paper rating of
Moody's for any such series), or such lower rating as shall not result
in the downgrading or withdrawal of the ratings then assigned to the
Certificates by the Rating Agencies, as evidenced by a signed writing
delivered by each Rating Agency;
(ix) interests in any money market fund which at the date of
acquisition of the interests in such fund and throughout the time such
interests are held in such fund has the highest applicable rating by
each Rating Agency rating such fund or such lower rating as shall not
result in a change in the rating then assigned to the Certificates by
each Rating Agency, as evidenced by a signed writing delivered by each
Rating Agency, including funds for which the Trustee, the Master
Servicer, the Securities Administrator or any of its Affiliates is
investment manager or adviser;
(x) short-term investment funds sponsored by any trust company or
national banking association incorporated under the laws of the United
States or any state thereof which on the date of acquisition has been
rated by each applicable Rating Agency in their respective highest
applicable rating category or such lower rating as shall not result in a
change in the rating then specified stated maturity and bearing interest
or sold at a discount acceptable to each Rating Agency as shall not
result in the downgrading or withdrawal of the ratings then assigned to
the Certificates by the Rating Agencies, as evidenced by a signed
writing delivered by each Rating Agency; and
(xi) such other investments having a specified stated maturity and
bearing interest or sold at a discount acceptable to the Rating Agencies
as shall not result in the downgrading or withdrawal of the ratings then
assigned to the Certificates by the Rating Agencies, as evidenced by a
signed writing delivered by each Rating Agency;
provided, that no such instrument shall be a Permitted Investment if (i) such
instrument evidences the right to receive interest only payments with respect
to the obligations underlying such instrument or (ii) such instrument would
require the Depositor to register as an investment company under the
Investment Company Act of 1940, as amended.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Plan: Any employee benefit plan or other plan or arrangement subject to
Section 406 of ERISA or Section 4975 of the Code, including individual
retirement accounts and annuities,
29
Xxxxx plans and collective investment funds and separate accounts in which
such plans, accounts or arrangements are invested.
Plan Asset Regulations: The Department of Labor regulations set forth in
29 C.F.R. ss.2510.3-101.
Planned Balance: With respect to any group of Planned Principal Classes
or Components in the aggregate and any Distribution Date appearing in Schedule
B hereto, the Aggregate Planned Balance for such group and Distribution Date.
With respect to any other Planned Principal Class or Component and any
Distribution Date appearing in Schedule B hereto, the applicable amount
appearing opposite such Distribution Date for such Class or Component.
Planned Principal Classes: As specified in the Preliminary Statement.
Prepayment Interest Shortfall: With respect to each Mortgage Loan, the
amount of the shortfall in interest payable on such Mortgage Loan that occurs
as a result of the prepayment by the related Mortgagor of such Mortgage Loan
calculated in accordance with formula set forth in the related Purchase and
Servicing Agreement.
Prepayment Penalty: As to a Mortgage Loan, any penalty payable by a
Mortgagor in connection with certain partial prepayments and all prepayments
in full made within the related Prepayment Penalty Period, the Prepayment
Penalties with respect to each applicable Mortgage Loan so held by the Trust
Fund being identified in the Prepayment Penalty Schedule.
Prepayment Penalty Period: As to any Mortgage Loan, the period of time
during which a Prepayment Penalty may be imposed.
Prepayment Penalty Schedule: As of any date, the list of Prepayment
Penalties included in the Trust Fund on that date (including the Prepayment
Penalty summary attached thereto). The Prepayment Penalty Schedule shall set
forth the following information with respect to each Prepayment Penalty:
o the Mortgage Loan account number;
o a code indicating the type of Prepayment Penalty;
o the state of origination in which the related Mortgage Property is
located;
o the first date on which a monthly payment is or was due under the
related Mortgage Note;
o the term of the Prepayment Penalty;
o the original principal amount of the related Mortgage Loan; and
o the Cut-off Date Principal Balance of the related Mortgage Loan.
30
The Prepayment Penalty Schedule shall be amended from time to time by
the Seller in accordance with this Agreement.
Prepayment Period: With respect to any Mortgage Loan and any
Distribution Date, the calendar month preceding that Distribution Date.
Prepayment Shift Percentage: Not applicable.
Primary Mortgage Insurance Policy: Each policy of primary mortgage
guaranty insurance or any replacement policy therefor with respect to any
Mortgage Loan.
Principal Amount: As to any Distribution Date and Loan Group, the sum of
(a) the principal portion of each Scheduled Payment (without giving effect,
prior to the Bankruptcy Coverage Termination Date, to any reductions thereof
caused by any Debt Service Reductions or Deficient Valuations) due on each
Mortgage Loan in the related Loan Group on the related Due Date, (b) the
Stated Principal Balance of each Mortgage Loan in the related Loan Group that
was repurchased by the Seller or an Originator or purchased by the Master
Servicer pursuant to this Agreement as of such Distribution Date, (c) the
Substitution Adjustment Amount in connection with any Deleted Mortgage Loan in
such Loan Group received with respect to such Distribution Date, (d) any
Insurance Proceeds or Liquidation Proceeds allocable to recoveries of
principal of Mortgage Loans in the related Loan Group that are not yet
Liquidated Mortgage Loans received during the calendar month preceding the
month of such Distribution Date, (e) with respect to each Mortgage Loan in a
Loan Group that became a Liquidated Mortgage Loan during the calendar month
preceding the month of such Distribution Date, the amount of the Liquidation
Proceeds allocable to principal and, if such Liquidated Mortgage Loan is an
Additional Collateral Mortgage Loan, the proceeds of any Additional Collateral
from the related Additional Collateral Mortgage Loan, in each case received
during the calendar month preceding the month of such Distribution Date with
respect to such Mortgage Loan, (f) all Principal Prepayments for such Loan
Group received during the related Prepayment Period, (g) any Subsequent
Recoveries for such Loan Group received during the calendar month preceding
the month of such Distribution Date and (h) in the case of a Loan Group in
Aggregate Loan Group II, any Transfer Payments Received for such Loan Group
and Distribution Date less, in the case of a Loan Group in Aggregate Loan
Group II, any Transfer Payments Made for such Loan Group and Distribution
Date.
Principal Prepayment: Any payment of principal by a Mortgagor on a
Mortgage Loan that is received in advance of its scheduled Due Date and is not
accompanied by an amount representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Reductions: For each Loan Group, the sum of the Principal
Amount and any Realized Losses.
Principal Relocation Payment: A payment from any Loan Group to a
Subsidiary REMIC Regular Interest other than a Regular Interest corresponding
to that Loan Group as provided in
31
the Preliminary Statement. Principal Relocation Payments shall be made of
principal allocations comprising the Principal Amount from a Loan Group and
shall include a proportionate allocation of Realized Losses from the Mortgage
Loans of such Loan Group.
Priority Amount: Not applicable.
Priority Percentage: Not applicable.
Private Certificate: As specified in the Preliminary Statement.
Pro Rata Share: As to any Distribution Date, the Subordinated Principal
Distribution Amount for an Aggregate Loan Group and any related Class of
Subordinated Certificates, the portion of the related Subordinated Principal
Distribution Amount allocable to such Class, equal to the product of the
related Subordinated Principal Distribution Amount on such Distribution Date
and a fraction, the numerator of which is the related Class Principal Balance
thereof and the denominator of which is the aggregate of the Class Principal
Balances of the Group 1 Subordinated Certificates or Aggregate Group II
Subordinated Certificates, as applicable.
Pro Rata Subordinated Percentage: As to any Distribution Date and Loan
Group, 100% minus the related Senior Percentage for such Distribution Date.
Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
Proprietary Lease: With respect to any Cooperative Property, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Cooperative Shares.
Prospectus: The prospectus supplement dated January 27, 2006, together
with the accompanying prospectus dated July 27, 2005, relating to the
Certificates.
Purchase and Servicing Agreements: Collectively, the mortgage loan
purchase and servicing agreements, each as amended by the related
Acknowledgement, listed in Exhibit E hereto, as each such agreement may be
amended or supplemented from time to time as permitted hereunder.
Purchase Date: As defined in Section 7.01(c).
Purchase Price: With respect to any Mortgage Loan required or permitted
to be purchased by the Seller or Depositor pursuant to this Agreement, or by
the related Originator or Servicer pursuant to the related Purchase and
Servicing Agreement, an amount equal to the sum of (i) 100% of the unpaid
principal balance of the Mortgage Loan on the date of such purchase and (ii)
accrued interest thereon at the applicable Net Mortgage Rate from the date
through which interest was last paid by the Mortgagor to the Due Date in the
month in which the Purchase Price is to be distributed to Certificateholders,
or such other amount as may be specified in the related Purchase and Servicing
Agreement and (iii) costs and damages incurred by the Trust Fund in connection
with a repurchase pursuant to Section 2.05 hereof that arises out of a
violation of any predatory or abusive lending law with respect to the related
Mortgage Loan.
32
Rating Agency: Each of the Rating Agencies specified in the Preliminary
Statement. If any such organization or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating
organization, or other comparable Person, as is designated by the Depositor,
notice of which designation shall be given to the Trustee. References herein
to a given rating category of a Rating Agency shall mean such rating category
without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan, an amount
(not less than zero or more than the Stated Principal Balance of the related
Mortgage Loan) as of the date of such liquidation, equal to (i) the Stated
Principal Balance of the Liquidated Mortgage Loan as of the date of such
liquidation, plus (ii) interest at the Net Mortgage Rate from the Due Date as
to which interest was last paid or advanced (and not reimbursed) to
Certificateholders up to the Due Date in the month in which Liquidation
Proceeds are required to be distributed on the Stated Principal Balance of
such Liquidated Mortgage Loan from time to time, minus (iii) the Liquidation
Proceeds, if any, received during the month in which such liquidation
occurred, to the extent applied as recoveries of interest at the Net Mortgage
Rate and to principal of the Liquidated Mortgage Loan. With respect to each
Mortgage Loan which has become the subject of a Deficient Valuation, if the
principal amount due under the related Mortgage Note has been reduced, the
difference between the principal balance of the Mortgage Loan outstanding
immediately prior to such Deficient Valuation and the principal balance of the
Mortgage Loan as reduced by the Deficient Valuation. With respect to each
Mortgage Loan which has become the subject of a Debt Service Reduction and any
Distribution Date, the amount, if any, by which the principal portion of the
related Scheduled Payment has been reduced.
To the extent the Master Servicer or a Servicer receives Subsequent
Recoveries with respect to any Mortgage Loan, the amount of the Realized Loss
with respect to that Mortgage Loan will be reduced by such Subsequent
Recoveries.
Recognition Agreement: An agreement among a Cooperative Corporation, a
lender and a Mortgagor with respect to a Cooperative Loan whereby such parties
(i) acknowledge that such lender may make, or intends to make, such
Cooperative Loan, and (ii) make certain agreements with respect to such
Cooperative Loan.
Record Date: As to any Distribution Date (i) with respect to the
Non-Delay Certificates, the last Business Day preceding such Distribution Date
(or the Closing Date, in the case of the first Distribution Date) unless such
Certificates shall no longer be Book-Entry Certificates, in which case the
Record Date shall be the last Business Day of the month preceding the month of
such Distribution Date and (ii) in the case of the Delay Certificates
(including the Non-Delay Certificates that are subsequently reissued as
Definitive Certificates), the last Business Day of the month preceding the
month of each Distribution Date.
Redemption Price: With respect to any Class of Certificates to be
redeemed, an amount equal to 100% of the related Class Principal Balance of
the Certificates to be so redeemed, together with interest on such amount at
the applicable Pass-Through Rate through the related Accrual Period (as
increased by any Class Unpaid Interest Amounts), and including, in the case of
the Redemption Price payable in connection with the redemption and retirement
of all of the Certificates, the payment of all amounts (including, without
limitation, all previously
33
unreimbursed Advances and Servicer Advances and accrued and unpaid Servicing
Fees) payable or reimbursable to the Trustee, the Securities Administrator,
the Master Servicer, the Servicers or the Custodian pursuant to this Agreement,
the Purchase and Servicing Agreements, or the Custodial Agreements (to the
extent such amounts are not paid to the Custodian by the Seller).
Refinancing Mortgage Loan: Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.
Regular Certificates: As specified in the Preliminary Statement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005))
or by the staff of the Commission, or as may be provided by the Commission or
its staff from time to time.
Relevant Servicing Criteria: The Servicing Criteria applicable to the
various parties, as set forth on Exhibit O attached hereto. For clarification
purposes, multiple parties can have responsibility for the same Relevant
Servicing Criteria. With respect to a Servicing Function Participant engaged
by the Master Servicer, the Securities Administrator, any Servicer or any
Custodian, the term "Relevant Servicing Criteria" may refer to a portion of
the Relevant Servicing Criteria applicable to such parties.
Relief Act: The Servicemembers' Civil Relief Act (formerly known as the
Soldiers' and Sailors' Civil Relief Act of 1940), as amended, and any similar
state laws.
Relief Act Reduction: A reduction in the amount of the monthly interest
payment on a Mortgage Loan pursuant to the Servicemembers' Civil Relief Act.
Relief Act Shortfalls: With respect to any Distribution Date and any
Mortgage Loan as to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended calendar month as a result of
the application of the Relief Act, the amount, if any, by which (i) interest
collectible on such Mortgage Loan for the most recently ended calendar month
is less than (ii) interest accrued thereon for such month pursuant to the
Mortgage Note.
REMIC: Each pool of assets in the Trust Fund designated as a REMIC as
described in the Preliminary Statement.
REMIC Provisions: The provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Sections 860A
through 860G of the Code, and related provisions, and regulations, including
proposed regulations and rulings, and administrative pronouncements
promulgated thereunder, as the foregoing may be in effect from time to time.
34
REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan or otherwise treated as having been acquired pursuant to the
REMIC Provisions.
Replacement Mortgage Loan: A mortgage loan substituted by an Originator
or the Seller for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in a Request for Release, substantially in the form
attached to the related Custodial Agreement, (i) have a Stated Principal
Balance, after deduction of all Scheduled Payments due in the month of
substitution, not in excess of the Stated Principal Balance of the Deleted
Mortgage Loan, (ii) have a Mortgage Rate not less than (and not more than two
percentage points greater than) the mortgage rate of the Deleted Mortgage
Loan, (iii) have a Loan-to-Value Ratio equal to or less than that of the
Deleted Mortgage Loan, (iv) have a remaining term to maturity not greater than
(and not more than one year less than) that of the Deleted Mortgage Loan, (v)
is otherwise acceptable to the Seller, (vi) have the same adjustment date as
that of the Deleted Mortgage Loan, (vii) have a minimum Mortgage Rate not less
than that of the Deleted Mortgage Loan, (viii) have the same Index as that of
the Deleted Mortgage Loan, (ix) comply with all of the representations and
warranties set forth in the related underlying servicing agreement, as
modified by any related assignment thereof, and (x) shall be accompanied by an
Opinion of Counsel that such Replacement Mortgage Loan would not adversely
affect the REMIC status of any REMIC created hereunder or would not otherwise
be prohibited by this Pooling and Servicing Agreement.
Reportable Event: As defined in Section 12.03 hereof.
Reporting Party: The Depositor, any Originator, the Master Servicer, any
Custodian, any Servicer, any originator identified in the Prospectus
Supplement, the Corridor Contract Counterparty, any credit enhancement
provider described herein and any other material transaction party as may be
mutually agreed between the Depositor and the Master Servicer from time to
time for the purpose of complying with the requirements of the Commission.
Reporting Subcontractor: With respect to the Master Servicer, the
Securities Administrator or any Custodian, any Subcontractor determined by
such Person pursuant to Section 12.08(b) to be "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB. References to a
Reporting Subcontractor shall refer only to the Subcontractor of such Person
and shall not refer to Subcontractors generally.
Request for Release: The Request for Release submitted by the applicable
Servicer to the Trustee or the applicable Custodian, as applicable,
substantially in the form of Exhibit M or the equivalent form under the
applicable Custodial Agreement.
Required Reserve Fund Deposit: Each of the Class 1-A-X Required Reserve
Fund Deposit and the Class 1-M-X Required Reserve Fund Deposit.
Reserve Fund: A fund created as part of the Trust Fund pursuant to
Section 5.10 of this Agreement but which is not an asset of any of the REMICs
consisting of the Class 1-A-X Sub Account and the Class 1-M-X Sub Account.
Residual Certificate: The Class A-R Certificates.
Responsible Officer: With respect to the Trustee, any officer in the
corporate trust department or similar group of the Trustee with direct
responsibility for the administration of this Agreement and also, with respect
to a particular corporate trust matter, any other officer to whom
35
such matter is referred because of his or her knowledge of and familiarity
with the particular subject. With respect to the Master Servicer, any officer
in its master servicing operations with direct responsibility for the
Administration of this Agreement. With respect to the Securities
Administrator, any officer in the corporate trust department or similar group
of the Securities Administrator with direct responsibility for the
administration of this Agreement and also, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his or her knowledge of and familiarity with the particular
subject.
Restricted Classes: As defined in Section 5.02(e).
Restricted Global Security: As defined in Section 3.01(c).
Rule 144A: Rule 144A under the Securities Act.
SAIF: The Saving's Association Insurance Fund, or any successor thereto.
Xxxxxxxx-Xxxxx Act: The Xxxxxxxx-Xxxxx Act of 2002 and the rules and
regulations of the Commission promulgated thereunder (including any
interpretations thereof by the Commission's staff).
Xxxxxxxx-Xxxxx Certification: A written certification covering the
activities of all Servicing Function Participants and signed by a senior
officer of the Master Servicer in charge of the master servicing function that
complies with (i) the Xxxxxxxx-Xxxxx Act of 2002, as amended from time to
time, and (ii) Exchange Act Rules 13a-14(d) and 15d-14(d), as in effect from
time to time.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc. If
S&P is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 11.07 the address for notices to S&P shall be Standard &
Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Mortgage
Surveillance Monitoring, or such other address as S&P may hereafter furnish to
the Depositor and the Master Servicer.
Scheduled Balances: Not applicable.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due
on any Due Date allocable to principal and/or interest on such Mortgage Loan
which, unless otherwise specified in the related Purchase and Servicing
Agreement, shall give effect to any related Debt Service Reduction and any
Deficient Valuation that affects the amount of the monthly payment due on such
Mortgage Loan.
Scheduled Principal Classes: As specified in the Preliminary Statement.
Scheduled Principal Distribution Amount: Not applicable.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations thereunder.
36
Securities Administrator: Xxxxx Fargo Bank, National Association, not in
its individual capacity but solely as Securities Administrator, or any
successor in interest, or if any successor Securities Administrator shall be
appointed as herein provided, then such successor Securities Administrator.
Securities Administrator Compensation: With respect to any Securities
Administrator that is a successor to Xxxxx Fargo Bank, National Association as
Securities Administrator, the portion of the earnings on the funds on deposit
in the Distribution Account payable on each Distribution Date pursuant to
Section 4.02(b)(ii) hereof agreed to by and between such Securities
Administrator and the successor master servicer; provided, that (x) such
Securities Administrator Compensation payable on each Distribution Date shall
equal at least one day's earnings accrued since the prior Distribution Date
and (y) the sum of such Securities Administrator Compensation and the Master
Servicer Compensation payable on each Distribution Date shall not exceed the
total earnings on the funds on deposit in the Distribution Account payable on
each Distribution Date pursuant to Section 4.02(b)(ii) hereof earned since the
prior Distribution Date.
Seller: Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York corporation.
Senior Certificate Group: As specified in the Preliminary Statement.
Senior Certificates: As specified in the Preliminary Statement.
Senior Credit Support Depletion Date: With respect to the Group 1 Senior
Certificates and the Aggregate Group II Senior Certificates, as applicable,
the date on which the aggregate Class Principal Balance of the Group 1
Subordinated Certificates or Aggregate Group II Subordinated Certificates,
respectively, have been reduced to zero.
Senior Percentage: As to any Senior Certificate Group and Distribution
Date, the percentage equivalent of a fraction the numerator of which is the
aggregate Class Principal Balance of each Class of Senior Certificates of such
Senior Certificate Group (other than the related Notional Amount Certificates)
immediately prior to such Distribution Date, and the denominator of which is
the aggregate Stated Principal Balance of each Mortgage Loan in the related
Loan Group as of the Due Date occurring in the month prior to the month of
such Distribution Date (after giving effect to prepayments received in the
Prepayment Period related to such prior Due Date); provided, however, that,
with respect to the Aggregate Group II Senior Certificates, on any
Distribution Date after the second related Senior Termination Date, the Senior
Percentage for the Senior Certificates of the related remaining Senior
Certificate Group in Aggregate Certificate Group II is the percentage
equivalent of a fraction, the numerator of which is the aggregate of the Class
Principal Balances of each such Class of Senior Certificates (other than the
related Notional Amount Certificates) of such remaining Senior Certificate
Group immediately prior to such Distribution Date, and the denominator of
which is the aggregate of the Class Principal Balances of all Classes of
Aggregate Group II Certificates (other than the related Notional Amount
Certificates) immediately prior to such Distribution Date. In no event will
any Senior Percentage be greater than 100%.
Senior Prepayment Percentage: As to the Group 1 Senior Certificates and
any Distribution Date during the seven years beginning on the first
Distribution Date, 100%. The
37
Senior Prepayment Percentage for any Distribution Date occurring on or after
the seventh anniversary of the first Distribution Date will, except as
provided herein, be as follows: for any Distribution Date in the first year
thereafter, the related Senior Percentage plus 70% of the related Subordinated
Percentage for such Distribution Date; for any Distribution Date in the second
year thereafter, the related Senior Percentage plus 60% of the related
Subordinated Percentage for such Distribution Date; for any Distribution Date
in the third year thereafter, the related Senior Percentage plus 40% of the
related Subordinated Percentage for such Distribution Date; for any
Distribution Date in the fourth year thereafter, the related Senior Percentage
plus 20% of the related Subordinated Percentage for such Distribution Date;
and for any Distribution Date thereafter, the related Senior Percentage for
such Distribution Date (unless on any Distribution Date the related Senior
Percentage exceeds the Senior Percentage of such Senior Certificate Group as
of the Closing Date, in which case the Senior Prepayment Percentage for such
Distribution Date will once again equal 100%). Notwithstanding the foregoing,
no decrease in any Senior Prepayment Percentage related to Loan Group 1 will
occur unless (i) both of the Senior Step Down Conditions are satisfied with
respect to Loan Group 1 and (ii) if the Two Times Test is satisfied on a
Distribution Date, (a) on or before the Distribution Date in January 2009, the
related Senior Prepayment Percentage for Loan Group 1 will equal the related
Senior Percentage plus 50% of the Pro Rata Subordinated Percentage and (b)
after the Distribution Date in January 2009, the related Senior Prepayment
Percentage for Loan Group 1 will equal the related Senior Percentage.
As to the Aggregate Group II Senior Certificates and any Distribution
Date during the seven years beginning on the first Distribution Date, 100%.
The related Senior Prepayment Percentage for any Distribution Date occurring
on or after the seventh anniversary of the first Distribution Date will,
except as provided in this Agreement, be as follows: for any Distribution Date
in the first year thereafter, the related Senior Percentage plus 70% of the
related Subordinated Percentage for such Distribution Date; for any
Distribution Date in the second year thereafter, the related Senior Percentage
plus 60% of the related Subordinated Percentage for such Distribution Date;
for any Distribution Date in the third year thereafter, the related Senior
Percentage plus 40% of the related Subordinated Percentage for such
Distribution Date; for any Distribution Date in the fourth year thereafter,
the related Senior Percentage plus 20% of the related Subordinated Percentage
for such Distribution Date; and for any Distribution Date thereafter, the
related Senior Percentage for such Distribution Date (unless on any
Distribution Date the related Senior Percentage exceeds the Senior Percentage
of such Senior Certificate Group as of the Closing Date, in which case the
related Senior Prepayment Percentage for such Distribution Date will once
again equal 100%). Notwithstanding the foregoing, no decrease in any Senior
Prepayment Percentage related to Aggregate Loan Group II will occur unless
both of the Senior Step Down Conditions are satisfied with respect to each
Loan Group in Aggregate Loan Group II. Notwithstanding the foregoing, if the
Two Times Test is satisfied with respect to the Aggregate Group II
Certificates on a Distribution Date (x) on or before the Distribution Date in
January 2009, the related Senior Prepayment Percentage for each Loan Group in
Aggregate Loan Group II will equal the related Senior Percentage for that
Distribution Date plus 50% of the amount equal to the related Pro Rata
Subordinated Percentage and (y) after the Distribution Date in January 2009,
the related Senior Prepayment Percentage for each Loan Group in Aggregate Loan
Group II will equal the related Senior Percentage.
38
Senior Principal Distribution Amount: As to any Distribution Date and
Senior Certificate Group, the sum of (i) the sum, not less than zero, of the
related Senior Percentage of all amounts described in clauses (a) through (d)
of the definition of Principal Amount with respect to the related Loan Group
for such Distribution Date, (ii) with respect to any Mortgage Loan in the
related Loan Group that became a Liquidated Mortgage Loan during the calendar
month preceding the month of such Distribution Date, the lesser of (x) the
related Senior Percentage of the Stated Principal Balance of such Mortgage
Loan and (y) either (A) the related Senior Prepayment Percentage of the amount
of the Liquidation Proceeds allocable to principal received on the Mortgage
Loan, or (B) if an Excess Loss was sustained with respect to such Liquidated
Mortgage Loan during such prior calendar month, the related Senior Percentage,
of the amount of the Liquidation Proceeds allocable to principal received with
respect to such Mortgage Loan, and (iii) the sum of (x) the related Senior
Prepayment Percentage of the amounts described in clause (f) of the definition
of Principal Amount with respect to the related Loan Group for such
Distribution Date plus (y) the related Senior Prepayment Percentage of any
Subsequent Recoveries described in clause (g) of the definition of Principal
Amount for such Distribution Date; provided, however, that if a Bankruptcy
Loss that is an Excess Loss is sustained on a Mortgage Loan in the related
Loan Group that is not a Liquidated Mortgage Loan, the Senior Principal
Distribution Amount will be reduced on the related Distribution Date by the
related Senior Percentage of the principal portion of such Bankruptcy Loss;
provided further, however, on any Distribution Date after the second related
Senior Termination Date, in the case of the Aggregate Group II Certificates,
the Senior Principal Distribution Amount for the remaining Senior Certificate
Group in Aggregate Certificate Group II will be calculated pursuant to the
above formula based on all the Mortgage Loans in Aggregate Loan Group II, as
opposed to only the Mortgage Loans in the related Loan Group and, if such
Distribution Date is after the second related Senior Termination Date, shall
be reduced by the amount of the principal distribution made pursuant to (a) if
the Group 1 Senior Certificates are reduced to zero on such date, Section
5.02(a)(1)(iv)(y), (b) if the Group 2 Senior Certificates are reduced to zero
on such date, Section 5.02(a)(2)(iv)(y), (c) if the Group 3 Senior
Certificates are reduced to zero on such date, Section 5.02(a)(3)(iv)(y) or
(d) if the Group 4 Senior Certificates are reduced to zero on such date,
Section 5.02(a)(4)(iv)(y).
Senior Step Down Conditions: With respect to Loan Group 1: (i) the
outstanding principal balance of all Mortgage Loans in Loan Group 1 delinquent
60 days or more (including any related Mortgage Loans in foreclosure, REO
Property and Mortgage Loans the mortgagors of which are in bankruptcy)
(averaged over the preceding six month period), as a percentage of the
aggregate Class Principal Balance of the Group 1 Subordinated Certificates,
does not equal or exceed 50%, and (ii) cumulative Realized Losses on the
Mortgage Loans in Loan Group 1 do not exceed: (a) commencing with the
Distribution Date on the seventh anniversary of the first Distribution Date,
30% of the Original Subordinate Principal Balance, (b) commencing with the
Distribution Date on the eighth anniversary of the first Distribution Date,
35% of the Original Subordinate Principal Balance, (c) commencing with the
Distribution Date on the ninth anniversary of the first Distribution Date, 40%
of the Original Subordinate Principal Balance, (d) commencing with the
Distribution Date on the tenth anniversary of the first Distribution Date, 45%
of the Original Subordinate Principal Balance, and (e) commencing with the
Distribution Date on the eleventh anniversary of the first Distribution Date,
50% of the Original Subordinate Principal Balance.
39
With respect to each Loan Group in Aggregate Loan Group II: (i) the
outstanding principal balance of all Mortgage Loans in a Loan Group in
Aggregate Loan Group II delinquent 60 days or more (including any related
Mortgage Loans in foreclosure, REO Property and Mortgage Loans the Mortgagors
of which are in bankruptcy) (averaged over the preceding six month period), as
a percentage of (a) if such date is on or prior to the second related Senior
Termination Date, the Subordinated Percentage for such Loan Group of the
aggregate Stated Principal Balances of the Mortgage Loans in that Loan Group,
or (b) if such date is after the second related Senior Termination Date, the
aggregate Class Principal Balance of the Group 1 Subordinated Certificates for
such Distribution Date does not equal or exceed 50%, and (ii) cumulative
Realized Losses on all the Mortgage Loans in Aggregate Loan Group II do not
exceed: (a) commencing with the Distribution Date on the seventh anniversary
of the first Distribution Date, 30% of the related Original Subordinate
Principal Balance, (b) commencing with the Distribution Date on the eighth
anniversary of the first Distribution Date, 35% of the related Original
Subordinate Principal Balance, (c) commencing with the Distribution Date on
the ninth anniversary of the first Distribution Date, 40% of the related
Original Subordinate Principal Balance, (d) commencing with the Distribution
Date on the tenth anniversary of the first Distribution Date, 45% of the
related Original Subordinate Principal Balance and (e) commencing with the
Distribution Date on the eleventh anniversary of the first Distribution Date,
50% of the related Original Subordinate Principal Balance.
Senior Termination Date: For each Senior Certificate Group, the
Distribution Date on which the aggregate Class Principal Balance of the Senior
Certificates in that Senior Certificate Group has been reduced to zero.
Servicer: Each Servicer under a Purchase and Servicing Agreement, and
its respective successors and assigns. As of the Closing Date, the Servicers
of the Mortgage Loans shall be Countrywide Home Loan Servicing LP, GMAC
Mortgage Corporation, GreenPoint Mortgage Funding, Inc., The Hemisphere
National Bank, HSBC Mortgage Corporation (USA), and Xxxxx Fargo Bank, National
Association.
Servicer Advance: A "Servicer Advance" or "Servicing Advance" as defined
in the applicable Purchase and Servicing Agreement.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d)
of Regulation AB, as the same may be amended from time to time.
Servicing Fee: As to any Distribution Date and each Mortgage Loan, an
amount equal to the product of (a) one-twelfth of the related Servicing Fee
Rate and (b) the Stated Principal Balance of such Mortgage Loan as of the
first day of the related Due Period.
Servicing Fee Rate: With respect to each Mortgage Loan and any
Distribution Date, the per annum rate specified in the related Purchase and
Servicing Agreement.
Servicing Function Participant: means any Sub-Servicer, Subcontractor or
any other Person, other than each Servicer, the Master Servicer, the Trustee,
the Securities Administrator and any Custodian, that is performing activities
addressed by the Servicing Criteria.
40
Servicing Officer: Any officer of the related Servicer involved in, or
responsible for, the administration and servicing of the related Mortgage
Loans whose name and facsimile signature appear on a list of servicing
officers furnished to the Master Servicer by the related Servicer on the
Closing Date pursuant to the related Purchase and Servicing Agreement, as such
list may from time to time be amended.
Shift Percentage: Not applicable.
Similar Law: As defined in Section 3.03(d) hereof.
Special Hazard Coverage Termination Date: With respect to each Aggregate
Certificate Group the point in time at which the related Special Hazard Loss
Coverage Amount is reduced to zero.
Special Hazard Loss: Any Realized Loss suffered by a Mortgaged Property
on account of direct physical loss, as reported by the related Servicer to the
Master Servicer, but not including (i) any loss of a type covered by a hazard
insurance policy or a flood insurance policy required to be maintained with
respect to such Mortgaged Property to the extent of the amount of such loss
covered thereby, or (ii) any loss caused by or resulting from:
(a) normal wear and tear;
(b) fraud, conversion or other dishonest act on the part of the
Trustee, the Master Servicer or any of their agents or employees
(without regard to any portion of the loss not covered by any errors and
omissions policy);
(c) errors in design, faulty workmanship or faulty materials,
unless the collapse of the property or a part thereof ensues and then
only for the ensuing loss;
(d) nuclear or chemical reaction or nuclear radiation or
radioactive or chemical contamination, all whether controlled or
uncontrolled, and whether such loss be direct or indirect, proximate or
remote or be in whole or in part caused by, contributed to or aggravated
by a peril covered by the definition of the term "Special Hazard Loss;"
(e) hostile or warlike action in time of peace and war, including
action in hindering, combating or defending against an actual, impending
or expected attack:
1. by any government or sovereign power, de jure or de
facto, or by any authority maintaining or using military, naval or
air forces; or
2. by military, naval or air forces; or
3. by an agent of any such government, power, authority or
forces;
(f) any weapon of war employing nuclear fission, fusion or other
radioactive force, whether in time of peace or war; or
41
(g) insurrection, rebellion, revolution, civil war, usurped power
or action taken by governmental authority in hindering, combating or
defending against such an occurrence, seizure or destruction under
quarantine or customs regulations, confiscation by order of any
government or public authority or risks of contraband or illegal
transportation or trade.
Special Hazard Loss Coverage Amount: With respect to the first
Distribution Date and (a) the Group 1 Certificates, $4,686,622, and (b) the
Aggregate Group II Certificates, $3,985,620. With respect to any Distribution
Date after the first Distribution Date, the lesser of (a) the greatest of (i)
1% of the aggregate of the principal balances of the Mortgage Loans in the
applicable Aggregate Loan Group, (ii) twice the principal balance of the
largest Mortgage Loan in the applicable Aggregate Loan Group and (iii) the
aggregate of the principal balances of all Mortgage Loans in the applicable
Aggregate Loan Group secured by Mortgaged Properties located in the single
California postal zip code area having the highest aggregate principal balance
of any such zip code area and (b) the related Special Hazard Loss Coverage
Amount as of the Closing Date less the amount, if any, of Special Hazard
Losses allocated to the Certificates in the related Aggregate Certificate
Group since the Closing Date. All principal balances for the purpose of this
definition will be calculated as of the first day of the calendar month
preceding the month of such Distribution Date after giving effect to Scheduled
Payments on the Mortgage Loans then due, whether or not paid.
Special Hazard Mortgage Loan: A Liquidated Mortgage Loan as to which a
Special Hazard Loss has occurred.
Startup Day: The day designated as such pursuant to Section 10.01(b)
hereof.
Stated Principal Balance: As to any Mortgage Loan and Due Date, the
unpaid principal balance of such Mortgage Loan as of such Due Date as
specified in the amortization schedule at the time relating thereto (before
any adjustment to such amortization schedule by reason of any moratorium or
similar waiver or grace period) after giving effect to any previous partial
Principal Prepayments and Liquidation Proceeds allocable to principal (other
than with respect to any Liquidated Mortgage Loan) and to the payment of
principal due on such Due Date and irrespective of any delinquency in payment
by the related Mortgagor.
Sub Account: Each of the Class 1-A-X Sub Account and the Class 1-M-X Sub
Account, constituting the Reserve Fund.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood
by participants in the mortgage-backed securities market) of Mortgage Loans
but performs one or more discrete functions identified in Item 1122(d) of
Regulation AB with respect to Mortgage Loans under the direction or authority
of any Servicer (including a Sub-Servicer of any Servicer), the Securities
Administrator, the Master Servicer, the Trustee or any Custodian, as the case
may be.
Subordinated Certificates: As specified in the Preliminary Statement.
Subordinated Percentage: As to any Distribution Date on or prior to a
related Senior Termination Date, in the case of the Group 1 Certificates or
after the second related Senior
42
Termination Date, in the case of the Aggregate Group II Certificates, and the
portion of (x) the Group 1 Subordinated Certificates relating to Loan Group 1
and (y) the Aggregate Group II Subordinated Certificates relating to Loan
Group 2, Loan Group 3 or Loan Group 4, as applicable, in each case, 100% minus
the Senior Percentage for the Senior Certificate Group relating to such Loan
Group for such Distribution Date. As to any Distribution Date on or prior to a
related Senior Termination Date, in the case of the Group 1 Certificates or
after the second related Senior Termination Date, in the case of the Aggregate
Group II Certificates, and the entire interest of (x) the Group 1 Subordinated
Certificates in Group 1 and (y) the Aggregate Group II Subordinated
Certificates in Aggregate Group II after the second related Senior Termination
Date and, 100% minus the Senior Percentage for the Group 1 Senior Certificates
and Aggregate Group II Senior Certificates, respectively, for such
Distribution Date.
Subordinated Portion: For any Distribution Date, an amount equal to the
aggregate Stated Principal Balance of the Mortgage Loans in the related Loan
Group in Aggregate Loan Group II as of the end of the Prepayment Period
related to the immediately preceding Distribution Date, minus the aggregate
Class Principal Balance of the Senior Certificates in the related Senior
Certificate Group in Aggregate Certificate Group II immediately prior to such
Distribution Date.
Subordinated Prepayment Percentage: As to any Distribution Date and Loan
Group, 100% minus the related Senior Prepayment Percentage for such
Distribution Date.
Subordinated Principal Distribution Amount: With respect to any
Distribution Date and the Group 1 Subordinated Certificates, the sum of the
following amounts for Loan Group 1: an amount equal to the sum of (i) the
Subordinated Percentage for Loan Group 1 of all amounts described in clauses
(a) through (d) of the definition of "Principal Amount" for Loan Group 1 and
that Distribution Date, (ii) with respect to each Mortgage Loan in Loan Group
1 that became a Liquidated Mortgage Loan during the calendar month preceding
the month of such Distribution Date, the amount of the Liquidation Proceeds
allocated to principal received with respect thereto remaining after
application thereof pursuant to clause (ii) of the definition of "Senior
Principal Distribution Amount", up to the Subordinated Percentage for Loan
Group 1 of the Stated Principal Balance of that Mortgage Loan, and (iii) the
sum of the Subordinated Prepayment Percentage for Loan Group 1 of all amounts
described in clause (f) of the definition of "Principal Amount" for Loan Group
1 and Distribution Date, and (iv) the Subordinated Prepayment Percentage of
any Subsequent Recoveries described in clause (g) of the definition of
Principal Amount for such Distribution Date.
With respect to any Distribution Date and the Aggregate Group II
Subordinated Certificates, the sum of the following amounts for each Loan
Group in Aggregate Loan Group II, an amount equal to the excess of (A) the sum
of (i) the Subordinated Percentage for such Loan Group of all amounts
described in clauses (a) through (d) of the definition of "Principal Amount"
for that Loan Group and that Distribution Date, (ii) with respect to each
Mortgage Loan in that Loan Group that became a Liquidated Mortgage Loan during
the calendar month preceding the month of such Distribution Date, the amount
of the Liquidation Proceeds allocated to principal received with respect
thereto remaining after application thereof pursuant to clause (ii) of the
definition of "Senior Principal Distribution Amount", up to the Subordinated
Percentage for such Loan Group of the Stated Principal Balance of that
Mortgage Loan, and (iii) the sum of the
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Subordinated Prepayment Percentage for that Loan Group of all amounts
described in clause (f) of the definition of "Principal Amount" for such Loan
Group and Distribution Date," and (iv) the Subordinated Prepayment Percentage
of any Subsequent Recoveries described in clause (g) of the definition of
Principal Amount for such Distribution Date over (B) any Transfer Payments
Made for such Loan Group; provided, however, that on any Distribution Date
after the second related Senior Termination Date, the Subordinated Principal
Distribution Amount will not be calculated by Loan Group but will equal the
amount calculated pursuant to the formula set forth above based on the
applicable Subordinated Percentage and Subordinated Prepayment Percentage for
the Aggregate Group II Subordinated Certificates for such Distribution Date
with respect to all of the Mortgage Loans in Aggregate Loan Group II as
opposed to the Mortgage Loans only in the related Loan Group.
Subsequent Recoveries: As to any Distribution Date, with respect to a
Liquidated Mortgage Loan that resulted in a Realized Loss in a prior calendar
month, amounts received by the Securities Administrator from the related
Servicer (net of any related expenses permitted to be reimbursed pursuant to
Section 4.02) specifically related to such Liquidated Mortgage Loan.
Sub-Servicer: Any Person that (i) is considered to be a Servicing
Function Participant, (ii) services Mortgage Loans on behalf of any Servicer,
and (iii) is responsible for the performance (whether directly or through
sub-servicers or Subcontractors) of Servicing functions required to be
performed under this Agreement, any related Servicing Agreement or any
sub-servicing agreement that are identified in Item 1122(d) of Regulation AB.
Subsidiary REMIC 1: As specified in the Preliminary Statement.
Subsidiary REMIC 1 Interest: As specified in the Preliminary Statement.
Subsidiary REMIC 1 Regular Interest: As specified in the Preliminary
Statement.
Subsidiary REMIC 2: As specified in the Preliminary Statement.
Subsidiary REMIC 2 Interest: As specified in the Preliminary Statement.
Subsidiary REMIC 2 Regular Interest: As specified in the Preliminary
Statement.
Substitution Adjustment Amount: As defined in the second paragraph of
Section 2.05(b).
Targeted Balance: With respect to any group of Targeted Principal
Classes or Components in the aggregate and any Distribution Date appearing in
Schedule B hereto, the Aggregate Targeted Balance for such group and
Distribution Date. With respect to any other Targeted Principal Class or
Component and any Distribution Date appearing in Schedule B hereto, the
applicable amount appearing opposite such Distribution Date for such Class or
Component.
Tax Matters Person: The person designated as "tax matters person" in the
manner provided under Treasury regulation ss. 1.860F-4(d) and temporary
Treasury regulation ss.301.6231(a)(7)1T. Initially, the Tax Matters Person
shall be the Securities Administrator.
44
Tax Matters Person Certificate: The Class A-R Certificate with a
Denomination of $0.01.
Transaction Documents: This Agreement, each Assignment, Assumption and
Recognition Agreement, each Corridor Contract, each Custodial Agreement and
any other document or agreement entered into in connection with the Trust
Fund, the Certificates or the Mortgage Loans.
Transfer Payment: Either or both of a Transfer Payment Made or a
Transfer Payment Received.
Transfer Payment Made: As defined in Section 5.08.
Transfer Payment Received: As defined in Section 5.08.
Trust: Xxxxxx Xxxxxxx Mortgage Loan Trust 2006-1AR.
Trust Fund: The corpus of the trust created pursuant to this Agreement
consisting of (i) the Mortgage Loans and all interest and principal received
on or with respect thereto after the Cut-off Date (other than Scheduled
Payments due on or prior to the Cut-off Date) to the extent not applied in
computing the Cut-off Date Principal Balance thereof; (ii) all cash,
instruments or property held or required to be held in the Custodial Accounts
and the Distribution Account and all amounts deposited therein pursuant to the
applicable provisions of this Agreement; (iii) property that secured a
Mortgage Loan and has been acquired by foreclosure, deed-in-lieu of
foreclosure or otherwise; (iv) the Depositor's rights assigned to the Trustee
under the Purchase and Servicing Agreements, as modified by the
Acknowledgements and the Custodial Agreements; (v) the pledge, control and
guaranty agreements and the Limited Purpose Surety Bond relating to the
Additional Collateral Mortgage Loans; (vi) the Corridor Contracts and the
amounts on deposit in the Reserve Fund; (vii) all insurance policies related
to the Mortgage Loans and any insurance proceeds; and (viii) all proceeds of
the conversion, voluntary or involuntary, of any of the foregoing.
Trustee: LaSalle Bank National Association, a national banking
association, organized under the laws of the United States and any Person
succeeding the Trustee hereunder, or if any successor trustee or any
co-trustee shall be appointed as herein provided, then such successor trustee
and such co-trustee, as the case may be.
Trustee Mortgage Files: With respect to each Mortgage Loan, the Mortgage
Documents to be retained in the custody and possession of the Trustee or
Custodian on behalf of the Trustee, identified in Section 2.01(a) hereof.
Two Times Test: As to any Distribution Date and the Group 1 Subordinated
Certificates, if (i) the Aggregate Subordinated Percentage for the Group 1
Subordinated Certificates is at least 200% of the related Aggregate
Subordinated Percentage as of the Closing Date, (ii) the outstanding aggregate
Stated Principal Balance of all Mortgage Loans in Loan Group 1 delinquent 60
days or more (averaged over the preceding six month period), as a percentage
of the aggregate Class Principal Balance of the Group 1 Subordinated
Certificates, does not equal or exceed 50% and (ii) the cumulative Realized
Losses on all the Mortgage Loans in Loan Group 1 do not exceed (x) with
respect to any Distribution Date on or prior to January 2009, 20% of the
45
related Original Subordinate Principal Balance or (y) with respect to any
Distribution Date after January 2009, 30% of the related Original Subordinate
Principal Balance.
As to any Distribution Date and the Aggregate Group II Subordinated
Certificates, if (i) the Aggregate Subordinated Percentage for the Aggregate
Group II Subordinated Certificates is at least 200% of the related Aggregate
Subordinated Percentage as of the Closing Date, (ii) the outstanding aggregate
Stated Principal Balance of all Mortgage Loans in Aggregate Loan Group II
delinquent 60 days or more (averaged over the preceding six month period), as
a percentage of the aggregate Class Principal Balance of the Aggregate Group
II Subordinated Certificates, does not equal or exceed 50% and (ii) the
cumulative Realized Losses on all the Mortgage Loans in Aggregate Loan Group
II do not exceed (x) with respect to any Distribution Date on or prior to
January 2009, 20% of the related Original Subordinate Principal Balance or (y)
with respect to any Distribution Date after January 2009, 30% of the related
Original Subordinate Principal Balance.
UCC: The Uniform Commercial Code as enacted in the relevant
jurisdiction.
Undercollateralized Group: As defined in Section 5.08 hereof.
Underwriter's Exemption: Prohibited Transaction Exemption 2002-41, 67
Fed. Reg. 54487 (2002), as amended (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department
of Labor.
Underwriter: As specified in the Preliminary Statement.
Underwriting Agreement: The Underwriting Agreement, dated January 27,
2006, among the Seller, the Depositor and the Underwriter.
Unscheduled Principal Distribution Amount: Not applicable.
Uniform Commercial Code: The Uniform Commercial Code as in effect in any
applicable jurisdiction from time to time.
Voting Interests: The portion of the voting rights of all the
Certificates that is allocated to any Certificate for purposes of the voting
provisions of this Agreement. At all times during the term of this Agreement,
1.00% of all Voting Interests shall be allocated to each Class of Notional
Amount Certificates and the Class A-R Certificates. Voting Interests shall be
allocated among all other Classes of Certificates pro rata based on Class
Principal Balances for each Class then outstanding. Voting Interests shall be
allocated among the Certificates within each such Class in proportion to their
Certificate Balances or Percentage Interests.
Weighted Average Net Mortgage Rate: As to any Distribution Date and Loan
Group, the average of the Net Mortgage Rate of each Mortgage Loan in that Loan
Group, weighted on the basis of its Stated Principal Balance as of the end of
the Prepayment Period related to the immediately preceding Distribution Date
46
WF Purchase and Servicing Agreement: The Seller's Warranties and
Servicing Agreement listed in Exhibit E hereto between the Seller and Xxxxx
Fargo Bank, N.A., as originator.
WF Serviced Mortgage Loan: Each Mortgage Loan serviced by Xxxxx Fargo
Bank, N.A. and listed on the Mortgage Loan Schedule.
47
ARTICLE II
DECLARATION OF TRUST;
ISSUANCE OF CERTIFICATES
Section 2.01 Creation and Declaration of Trust Fund; Conveyance of
Mortgage Loans.
(a) Concurrently with the execution and delivery of this Agreement, the
Depositor does hereby transfer, assign, set over, deposit with and otherwise
convey to the Trustee, without recourse, subject to Sections 2.02 and 2.05, in
trust, all the right, title and interest of the Depositor in and to the Trust
Fund. Such conveyance includes, without limitation, (i) the Mortgage Loans,
including the right to all payments of principal and interest received on or
with respect to the Mortgage Loans on and after the Cut-off Date (other than
Scheduled Payments due on or before such date), and all such payments due
after such date but received prior to such date and intended by the related
Mortgagors to be applied after such date; (ii) all of the Depositor's right,
title and interest in and to all amounts from time to time credited to and the
proceeds of the Distribution Account, any Custodial Accounts or any Escrow
Account established with respect to the Mortgage Loans; (iii) all of the
rights and obligations of the Depositor as assignee of the Seller with respect
to the Seller's rights and obligations under the Purchase and Servicing
Agreements pursuant to the Acknowledgements; (iv) all of the Depositor's
right, title or interest in REO Property and the proceeds thereof; (v) all of
the Depositor's rights under any Insurance Policies related to the Mortgage
Loans; (vi) $300 (which amount has been delivered by the Depositor to the
Securities Administrator to be held in the Distribution Account until
distributed to the Holders of the Class P-1, Class P-2 and Class C
Certificates pursuant to Section 5.02(a)); and (vii) if applicable, the
Depositor's security interest in any collateral pledged to secure the Mortgage
Loans, including the Mortgaged Properties and any Additional Collateral
relating to the Additional Collateral Mortgage Loans, including, but not
limited to, the pledge, control and guaranty agreements and the Limited
Purpose Surety Bond, to have and to hold, in trust; and the Trustee declares
that, subject to the review provided for in Section 2.02, it has received and
shall hold the Trust Fund, as trustee, in trust, for the benefit and use of
the Holders of the Certificates and for the purposes and subject to the terms
and conditions set forth in this Agreement, and, concurrently with such
receipt, has caused to be executed, authenticated and delivered to or upon the
order of the Depositor, in exchange for the Trust Fund, Certificates in the
authorized denominations evidencing the entire ownership of the Trust Fund.
The foregoing sale, transfer, assignment, set-over, deposit and
conveyance does not and is not intended to result in the creation or
assumption by the Trustee of any obligation of the Depositor, the Seller or
any other Person in connection with the Mortgage Loans or any other agreement
or instrument relating thereto except as specifically set forth therein.
In connection with such transfer and assignment of the Mortgage Loans,
the Depositor shall cause to be delivered and the Custodian acting on the
Trustee's behalf will continue to hold the documents or instruments listed
below with respect to each Mortgage Loan (each, a "Trustee Mortgage File") so
transferred and assigned:
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(i) with respect to each Mortgage Loan, the original Mortgage Note
endorsed without recourse in proper form to the order of the "LaSalle Bank
National Association, as Trustee of Xxxxxx Xxxxxxx Mortgage Loan Trust
2006-1AR, Mortgage Pass-Through Certificates without recourse", or in blank
(in each case, with all necessary intervening endorsements, as applicable);
(ii) with respect to each Mortgage Loan (other than a Cooperative Loan)
that is not a MERS Mortgage Loan, the original Mortgage with evidence of
recording thereon, or if the original Mortgage has not yet been returned from
the recording office, a copy of such Mortgage certified by the applicable
Originator, title company, escrow agent or closing attorney to be a true copy
of the original of the Mortgage which has been sent for recording in the
appropriate jurisdiction in which the Mortgaged Property is located, and in
the case of the each MERS Mortgage Loan, the original Mortgage, noting the
presence of the MIN of the Mortgage Loans and either language indicating that
the Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM Loan or if the
Mortgage Loan was not a MOM Loan at origination, the original Mortgage and the
assignment thereof to MERS, with evidence of recording indicated thereon;
(iii) with respect to each Mortgage Loan (other than a Cooperative Loan)
that is not a MERS Mortgage Loan, the Assignment of Mortgage in form and
substance acceptable for recording in the relevant jurisdiction, such
assignment being either (A) in blank, without recourse, or (B) endorsed to
"LaSalle Bank National Association, as Trustee of Xxxxxx Xxxxxxx Mortgage Loan
Trust 2006-1AR, Mortgage Pass-Through Certificates, without recourse";
(iv) with respect to each Mortgage Loan (other than a Cooperative Loan)
that is not a MERS Mortgage Loan, the originals of all intervening assignments
of the Mortgage, if any, with evidence of recording thereon, or if the
original intervening assignment has not yet been returned from the recording
office, a copy of such assignment certified by the applicable Originator,
title company, escrow agent or closing attorney to be a true copy of the
original of the assignment which has been sent for recording in the
appropriate jurisdiction in which the Mortgaged Property is located;
(v) with respect to each Mortgage Loan (other than a Cooperative Loan),
the originals of all assumption, modification, consolidation or extension
agreements, if any, with evidence of recording thereon;
(vi) if any, with respect to each Mortgage Loan (other than a
Cooperative Loan), the original policy of title insurance (or a true copy
thereof) with respect to any such Mortgage Loan, or, if such policy has not
yet been delivered by the insurer, the title commitment or title binder to
issue same;
(vii) if any, with respect to each Mortgage Loan (other than a
Cooperative Loan), the original power of attorney and guaranty agreement with
respect to such Mortgage Loan;
(viii) [reserved];
(ix) with respect to each Mortgage Loan which constitutes a Cooperative
Loan:
(a) the original of any security agreement or similar document executed
in connection with the Cooperative Loan;
49
(b) the original Recognition Agreement and the original Assignment of
Recognition Agreement;
(c) UCC-1 financing statements with recording information thereon from
the appropriate governmental recording offices if necessary to perfect the
security interest of the Cooperative Loan under the Uniform Commercial Code in
the jurisdiction in which the Cooperative Property is located, accompanied by
UCC-3 financing statements executed in blank for recordation of the change in
the secured party thereunder;
(d) an Estoppel Letter and/or Consent;
(e) a search for (i) federal tax liens, mechanics' liens, lis pendens,
judgments of record or otherwise against (x) the Cooperative Corporation and
(y) the seller of the Cooperative Unit, (ii) filings of financing statements
and (iii) the deed of the cooperative project into the Cooperative
Corporation;
(f) the guaranty of the Mortgage Note and Cooperative Loan, if any;
(g) the original Proprietary Lease and the Assignment of Proprietary
Lease executed by the Mortgagor in blank or if the Proprietary Lease has been
assigned by the Mortgagor to the Seller, then the Seller must execute an
assignment of the Assignment of Proprietary Lease in blank; and
(h) if any, the original or certified copy of the certificates
evidencing ownership of the Cooperative Shares issued by the Cooperative
Corporation and related assignment of such certificates or an assignment of
such Cooperative Shares, in blank, executed by the Mortgagor with such
signature guaranteed;
(x) [reserved]; and
(xi) any other document or instruments required to be delivered under
the related Custodial Agreement.
In addition, in connection with the assignment of any MERS Mortgage
Loan, it is understood that the related Originator will cause the MERS(R)
System to indicate that such Mortgage Loans have been assigned by the related
Originator to the Trustee in accordance with this Agreement for the benefit of
the Certificateholders by including (or deleting, in the case of Mortgage
Loans which are repurchased in accordance with this Agreement) in such
computer files the information required by the MERS(R) System to identify the
series of Certificates issued in connection with such Mortgage Loans. It is
further understood that the related Originator will not, and the Master
Servicer hereby agrees that it will not, alter the information referenced in
this paragraph with respect to any Mortgage Loan during the term of this
Agreement unless and until such Mortgage Loan is repurchased in accordance
with the terms of this Agreement.
On or prior to the Closing Date, the Depositor shall cause to be
delivered to the Master Servicer, the Trustee and the Custodian an electronic
copy of the Mortgage Loan Schedule in a form acceptable to the Master
Servicer, the Depositor, the Trustee and the Custodian.
(b) As soon as is practicable after the Closing Date, the Depositor
shall cause the Servicer of any Additional Collateral Mortgage Loan to deliver
to the applicable Custodian the Assignment and Notice of Transfer with respect
to each Additional Collateral Mortgage Loan as
50
well as the assignments of any rights with respect to each Additional
Collateral Mortgage Loan under any Limited Purpose Surety Bond.
(c) In instances where a title insurance policy is required to be
delivered to the applicable Custodian on behalf of the Trustee and is not so
delivered, the Depositor will provide a copy of such title insurance policy to
the applicable Custodian on behalf of the Trustee, as promptly as practicable
after the execution and delivery hereof, but in any case within 180 days of
the Closing Date.
(d) For Mortgage Loans (if any) that have been prepaid in full after the
Cut-off Date and prior to the Closing Date, the Depositor, in lieu of
delivering the above documents, herewith delivers such amount to the
Securities Administrator, and delivers to the Securities Administrator, the
Trustee, and the applicable Custodian, an Officer's Certificate which shall
include a statement to the effect that all amounts received in connection with
such prepayment that are required to be deposited in the Distribution Account
pursuant to Section 4.01 have been so deposited. All original documents that
are not delivered to the applicable Custodian on behalf of the Trustee shall
be held by the Master Servicer or the related Servicer in trust for the
benefit of the Trustee and the Certificateholders.
(e) Neither the Depositor nor the Trust will acquire or hold any
Mortgage Loan that would violate the representations made by the Seller set
forth in clauses (iv) through (ix) of Section 2.05(b) hereof.
Section 2.02 Acceptance of Trust Fund by Trustee; Review of
Documentation for Trust Fund.
(a) The Trustee, by execution and delivery hereof, acknowledges receipt
by it of notice from each of the Custodians that each holds the documents
identified in the Initial Custodial Certification in the form annexed hereto
as Exhibit L-1 (the "Initial Custodial Certification") pertaining to the
Mortgage Loans listed on the Mortgage Loan Schedule.
(b) Nothing in this Agreement shall be construed to constitute an
assumption by the Trust Fund, the Trustee, any Custodian or the
Certificateholders of any unsatisfied duty, claim or other liability on any
Mortgage Loan or to any Mortgagor.
(c) Each of the parties hereto acknowledges that (i) the Custodian has
delivered to the Depositor, the Master Servicer and the Trustee, the Initial
Custodial Certification, in the form annexed hereto as Exhibit L-1, stating
that it has performed the applicable review of the Mortgage Loans as required
herein and in the Custodial Agreements on the Closing Date and (ii)
thereafter, if applicable, the Custodian shall perform the applicable review
of the Mortgage Loans and deliver the further certifications (including but
not limited to the Final Custodial Certification) as provided herein and in
the applicable Custodial Agreements.
With respect to the MSMCI Mortgage Loans only, not later than 180 days
after the Closing Date, the Trustee shall enforce the related Custodian's
obligation to the extent required by the related Custodial Agreement to
deliver to the Depositor, the Master Servicer and the Trustee a Final
Custodial Certification in the form annexed hereto as Exhibit L-2 (the "Final
Custodial Certification"), with any applicable exceptions noted thereon. To
the extent that a
51
Custodian must deliver a Final Certification under the related Custodial
Agreement, the Trustee shall enforce the related Custodian's obligation to
make available, upon request of any Certificateholder, a copy of any
exceptions noted on the related Initial Custodial Certification or the related
Final Custodial Certification.
(d) Upon execution of this Agreement, the Depositor hereby delivers to
the Trustee (with a copy to the Master Servicer) and the Trustee acknowledges
receipt of the Acknowledgements, together with the related Purchase and
Servicing Agreements.
(e) Neither the Trustee nor the Custodian shall make any representation
as to: (i) the validity, legality, sufficiency, enforceability or genuineness
of any of the documents contained in the Trustee Mortgage File of any of the
Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, perfection, priority, effectiveness or
suitability of any such Mortgage Loan. Except as specifically required
hereunder, neither the Trustee nor the Custodian shall be responsible to
verify the validity, sufficiency or genuiness of any document in the Trustee
Mortgage File.
Section 2.03 Representations and Warranties of the Depositor.
(a) The Depositor hereby represents and warrants to the Trustee, for the
benefit of the Certificateholders, and to the Master Servicer and the
Securities Administrator as of the Closing Date or such other date as is
specified, that:
(i) the Depositor is a corporation duly organized, validly
existing and in good standing under the laws governing its creation and
existence and has full corporate power and authority to own its
property, to carry on its business as presently conducted, to enter into
and perform its obligations under this Agreement, and to create the
trust pursuant hereto;
(ii) the execution and delivery by the Depositor of this Agreement
have been duly authorized by all necessary corporate action on the part
of the Depositor; neither the execution and delivery of this Agreement,
nor the consummation of the transactions herein contemplated, nor
compliance with the provisions hereof, will conflict with or result in a
breach of, or constitute a default under, any of the provisions of any
law, governmental rule, regulation, judgment, decree or order binding on
the Depositor or its properties or the certificate of incorporation or
bylaws of the Depositor;
(iii) the execution, delivery and performance by the Depositor of
this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice
to, the registration with, or the taking of any other action in respect
of, any state, federal or other governmental authority or agency, except
such as has been obtained, given, effected or taken prior to the date
hereof;
(iv) this Agreement has been duly executed and delivered by the
Depositor and, assuming due authorization, execution and delivery by the
Trustee, the Master Servicer and the Securities Administrator,
constitutes a valid and binding obligation of the Depositor enforceable
against it in accordance with its terms except as such enforceability
may be subject to (A) applicable bankruptcy and insolvency laws and
other similar laws affecting the enforcement of the rights of creditors
generally and (B) general principles of equity regardless of whether
such enforcement is considered in a proceeding in equity or at law;
(v) there are no actions, suits or proceedings pending or, to the
knowledge of the Depositor, threatened or likely to be asserted against
or affecting the Depositor, before or by any court, administrative
agency, arbitrator or governmental body (A) with
52
respect to any of the transactions contemplated by this Agreement or (B)
with respect to any other matter which in the judgment of the Depositor
will be determined adversely to the Depositor and will if determined
adversely to the Depositor materially and adversely affect it or its
business, assets, operations or condition, financial or otherwise, or
adversely affect its ability to perform its obligations under this
Agreement;
(vi) immediately prior to the transfer and assignment of the
Mortgage Loans to the Trustee, the Depositor was the sole owner of
record and holder of each Mortgage Loan, and the Depositor had good and
marketable title thereto, and had full right to transfer and sell each
Mortgage Loan to the Trustee free and clear, subject only to (1) liens
of current real property taxes and assessments not yet due and payable
and, if the related Mortgaged Property is a condominium unit, any lien
for common charges permitted by statute, (2) covenants, conditions and
restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage acceptable to
mortgage lending institutions in the area in which the related Mortgaged
Property is located and specifically referred to in the lender's title
insurance policy or attorney's opinion of title and abstract of title
delivered to the originator of such Mortgage Loan, and (3) such other
matters to which like properties are commonly subject which do not,
individually or in the aggregate, materially interfere with the benefits
of the security intended to be provided by the Mortgage, of any
encumbrance, equity, participation interest, lien, pledge, charge, claim
or security interest, and had full right and authority, subject to no
interest or participation of, or agreement with, any other party, to
sell and assign each Mortgage Loan pursuant to this Agreement;
(vii) This Agreement creates a valid and continuing security
interest (as defined in the applicable Uniform Commercial Code (the
"UCC"), in the Mortgage Loans in favor of the Trustee, which security
interest is prior to all other liens, and is enforceable as such against
creditors of and purchasers from the Depositor;
(viii) The Mortgage Loans constitute "instruments" within the
meaning of the applicable UCC;
(ix) Other than the security interest granted to the Trustee
pursuant to this Agreement, the Depositor has not pledged, assigned,
sold, granted a security interest in, or otherwise conveyed any of the
Mortgage Loans. The Depositor has not authorized the filing of and is
not aware of any financing statement against the Depositor that includes
a description of the collateral covering the Mortgage Loans other than a
financing statement relating to the security interest granted to the
Trustee hereunder or that has been terminated. The Depositor is not
aware of any judgment or tax lien filings against the Depositor;
(x) None of the Mortgage Loans have any marks or notations
indicating that such Mortgage Loans have been pledged, assigned or
otherwise conveyed to any Person other than the Trustee; and
(xi) The Depositor has received all consents and approvals
required by the terms of the Mortgage Loans to convey the Mortgage Loans
hereunder to the Trustee.
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The foregoing representations made in this Section 2.03 shall survive
the termination of this Agreement and shall not be waived by any party hereto.
Section 2.04 Representations and Warranties of the Depositor and the
Seller as to the Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee with respect
to the Mortgage Loans or each Mortgage Loan, as the case may be, as of the
date hereof or such other date set forth herein that as of the Closing Date:
(a) Immediately prior to the transfer and assignment contemplated
herein, the Depositor was the sole owner and holder of the Mortgage Loans. The
Mortgage Loans were not assigned or pledged by the Depositor and the Depositor
had good and marketable title thereto, and the Depositor had full right to
transfer and sell the Mortgage Loans to the Trustee, for the benefit of the
Certificateholders, free and clear of any encumbrance, participation interest,
lien, equity, pledge, claim or security interest and had full right and
authority subject to no interest or participation in, or agreement with any
other party to sell or otherwise transfer the Mortgage Loans.
(b) As of the Closing Date, the Depositor has transferred all right,
title and interest in the Mortgage Loans to the Trustee on behalf of the
Trust.
(c) As of the Closing Date, the Depositor has not transferred the
Mortgage Loans to the Trustee on behalf of the Trust with any intent to
hinder, delay or defraud an of its creditors.
It is understood and agreed that the representations and warranties set
forth in this Section 2.04 shall survive delivery of the respective Mortgage
Files to the Trustee or the Custodian and shall inure to the benefit of the
Trustee, notwithstanding any restrictive or qualified endorsement or
assignment.
Section 2.05 Representations and Warranties of the Seller; Discovery of
Breach; Repurchase or Substitution of Mortgage Loans.
(a) With respect to the MSMCI Mortgage Loans the Seller hereby makes the
representations and warranties contained in Section 3.01 of the MSMCI Purchase
Agreement to and for the benefit of the Depositor, the Trustee and the Trust
Fund.
The Seller hereby represents and warrants that no Mortgage Loan contains
a provision whereby the related mortgagor is permitted to convert the Mortgage
Rate from an adjustable rate to a fixed rate.
With respect to the FNBN Mortgage Loans the Seller hereby makes the
representations and warranties contained in Section 9.02 of the FNBN Purchase
Agreement (other than the representation contained in Section 9.02(b) of the
FNBN Purchase Agreement) to and for the benefit of the Depositor, the Trustee
and the Trust Fund. With respect to the FNBN Mortgage Loans the Seller hereby
represents and warrants to and for the benefit of the Depositor, the Trustee
and the Trust Fund that all payments due on or prior to the Cut-off Date for
each FNBN Mortgage Loan have been made as of the Closing Date, such FNBN
Mortgage Loan is not
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delinquent thirty (30) days or more in payment and has not been dishonored;
there are no material defaults under the terms of such FNBN Mortgage Loan; the
Seller has not advanced funds, or induced, solicited or knowingly received any
advance of funds from a party other than the owner of the Mortgaged Property
subject to the Mortgage, directly or indirectly, for the payment of any amount
required by any FNBN Mortgage Loan; as to each FNBN Mortgage Loan, there has
been no more than one thirty (30) day delinquency during the immediately
preceding thirty-day period. The Seller agrees to comply with the provisions
of this Section 2.05 in respect of a breach of any of such representations and
warranties.
With respect to the WF Serviced Mortgage Loans originated by WF
Servicer, the Seller hereby makes the representations and warranties contained
in Section 3.02 of the WF Purchase and Servicing Agreement, other than 3.02(b)
with respect to each of the WF Serviced Mortgage Loans originated by WF
Servicer to and for the benefit of the Depositor, the Trustee and the Trust
Fund. The Seller agrees to comply with the provisions of Section 3.03 of the
WF Purchase and Servicing Agreement in respect of a breach of any of such
representations and warranties. In addition, with respect to the WF Serviced
Mortgage Loans originated by WF Servicer, the Seller hereby represents and
warrants that (i) each such Mortgage Loan is a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code and (ii) there has been no more than
one thirty (30) day delinquency on such Mortgage Loan during the immediately
preceding thirty-day period.
The Seller agrees to comply with the provisions of this Section 2.05 in
respect of a breach of any of such representations and warranties.
The Seller hereby represents and warrants to the Trustee with respect to
the Mortgage Loans as of the date hereof or such other date set forth herein
that as of the Closing Date:
(i) Each Mortgage Loan at origination complied in all material
respects with applicable predatory and abusive lending laws and
consummation of the transactions contemplated by this Agreement will not
involve the violation of any such laws.
(ii) All of the Mortgage Loans were originated in compliance with
all applicable laws, including, but not limited to, all applicable
anti-predatory and abusive lending laws.
(iii) None of the Mortgage Loans is covered by the Home Ownership
and Equity Protection Act of 1994 ("HOEPA").
(iv) None of the Mortgage Loans is a "high cost" loan as defined
by applicable predatory and abusive lending laws.
(v) No Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable, and with respect to the foregoing, the terms "High Cost
Loan" and "Covered Loan" have the meaning assigned to them in the then
current version of Standard & Poor's LEVELS(R), which is now Version
5.6c Glossary Revised, Appendix E which is attached hereto as Exhibit Q
(the "Glossary") where (x) a "High Cost Loan" is each loan identified in
the column "Category under applicable anti-predatory lending law" of the
table entitled "Standard & Poor's High Cost Loan Categorization" in the
Glossary as each such loan is
55
defined in the applicable anti-predatory lending law of the State or
jurisdiction specified in such table and (y) a "Covered Loan" is each
loan identified in the column "Category under applicable anti-predatory
lending law" of the table entitled "Standard & Poor's High Covered Loan
Categorization" in the Glossary as each such loan is defined in the
applicable anti-predatory lending law of the State or jurisdiction
specified in such table.
(vi) No Mortgage Loan originated on or after October 1, 2002
through March 6, 2003 is governed by the Georgia Fair Lending Act.
Upon discovery by the Depositor, the Seller or the related Originator or
receipt of written notice of any materially defective document in, or,
following the date of delivery to the Trustee of the Custodian's
certifications as required under the related Custodial Agreements, that a
document is missing from, a Trustee Mortgage File, or discovery by the
Trustee, the Depositor, the Seller or the related Originator of the breach by
such Originator or Seller of any representation or warranty under the related
Purchase and Servicing Agreement, as modified by the Acknowledgement, in the
case of the Originator, or under this Agreement, in the case of the Seller, in
respect of any Mortgage Loan which materially adversely affects the value of
that Mortgage Loan or the interest therein of the Certificateholders (a
"Defective Mortgage Loan") (each of the Depositor, the Seller and the related
Originator hereby agreeing to give written notice thereof to the Trustee and
the other of such parties), the Trustee, or its designee, shall promptly
notify the Depositor and the Seller or the related Originator, as applicable,
in writing of such nonconforming or missing document or breach and request
that the Seller or related Originator deliver such missing document or cure or
cause the cure of such defect or breach within a period of time specified in
the related Purchase and Servicing Agreement, and if the Seller or related
Originator, as applicable, does not deliver such missing document or cure such
defect or breach in all material respects during such period, the Trustee,
shall enforce the obligations of the related Originator under the related
Purchase and Servicing Agreement, as modified by the Acknowledgement, or the
Seller under this Agreement, as applicable, and cause the related Originator
or the Seller, as the case may be, to repurchase that Mortgage Loan from the
Trust Fund at the Purchase Price on or prior to the Determination Date
following the expiration of such specified period (subject to Section 2.05(c)
below); provided, however, that, in connection with any such breach that could
not reasonably have been cured within such specified period (unless permitted
a greater period of time to cure under the related Purchase and Servicing
Agreement), subject to Section 2.05(c) below, if the related Originator or the
Seller, as applicable, shall have commenced to cure such breach within such
specified period, the related Originator or the Seller shall be permitted to
proceed thereafter diligently and expeditiously to cure the same within such
additional time as is reasonably necessary to cure such breach. To the extent
that the amount by which the Purchase Price (as defined in this Agreement)
exceeds the repurchase price payable by the related Originator under the
related Purchase and Servicing Agreement, including any costs and damages that
are incurred by the Trust Fund as a result of any violation of any applicable
federal, state, or local predatory or abusive lending law arising from or in
connection with the origination of any Mortgage Loan repurchased by the
related Originator or the Seller, the payment of such excess shall be borne by
the Seller. With respect to a breach of a representation or warranty of a
Hemisphere Serviced Mortgage Loan by the related Originator under the related
Purchase and Servicing Agreement, if that Originator fails to cure the breach
or repurchase the affected Mortgage Loan within the time period required by
that Purchase and Servicing Agreement, the Seller hereby agrees to honor that
Originator's cure
56
obligations. The Purchase Price for the repurchased Mortgage Loan shall be
deposited in the related Distribution Account, and the Trustee, or its
designee, upon receipt of written certification from the Securities
Administrator of such deposit, shall release or cause the Custodian to release
to the related Originator or the Seller, as applicable, the related Trustee
Mortgage File and shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, representation or warranties, as
either party shall furnish to it and as shall be necessary to vest in such
party any Mortgage Loan released pursuant hereto and the Trustee, or its
designee, shall have no further responsibility with regard to such Trustee
Mortgage File (it being understood that the Trustee shall have no
responsibility for determining the sufficiency of such assignment for its
intended purpose). If pursuant to the foregoing provisions the related
Originator or the Seller repurchases a Mortgage Loan that is a MERS Mortgage
Loan, the related Servicer shall cause MERS to designate on the MERS(R) System
the related Originator or the Seller, as applicable, as the beneficial holder
of such Mortgage Loan.
In lieu of repurchasing any such Mortgage Loan as provided above, either
party may cause such Mortgage Loan to be removed from the Trust Fund (in which
case it shall become a Deleted Mortgage Loan) and substitute one or more
Replacement Mortgage Loans in the manner and subject to the limitations set
forth in Section 2.05(b) below. It is understood and agreed that the
obligations of the Originators and the Seller to cure or to repurchase (or to
substitute for) any related Mortgage Loan as to which a document is missing, a
material defect in a constituent document exists or as to which such a breach
has occurred and is continuing shall constitute the sole remedy against the
such party respecting such omission, defect or breach available to the Trustee
on behalf of the Certificateholders.
(b) Any substitution of Replacement Mortgage Loans for Deleted Mortgage
Loans made pursuant to Section 2.05(a) above must be effected prior to the
last Business Day that is within two years after the Closing Date. As to any
Deleted Mortgage Loan for which the related Originator or the Seller
substitutes a Replacement Mortgage Loan or Loans, such substitution shall be
effected by delivering to the Custodian, on behalf of the Trustee, for such
Replacement Mortgage Loan or Loans, the Mortgage Note, the Mortgage, any
related assignment thereof and the Acknowledgement to the Trustee, and such
other documents and agreements, with all necessary endorsements thereon,
together with an Officers' Certificate stating that each such Replacement
Mortgage Loan satisfies the definition thereof and specifying the Substitution
Adjustment Amount (as described below), if any, in connection with such
substitution. Monthly Payments due with respect to Replacement Mortgage Loans
in the month of substitution shall not be included as part of the Trust Fund
and shall be retained by the related Originator or the Seller, as applicable.
For the month of substitution, distributions to the Certificateholders shall
reflect the collections and recoveries in respect of such Deleted Mortgage in
the Due Period preceding the month of substitution and the related Originator
or the Seller, as applicable, shall thereafter be entitled to retain all
amounts subsequently received in respect of such Deleted Mortgage Loan. Upon
such substitution, such Replacement Mortgage Loan shall constitute part of the
Trust Fund and shall be subject in all respects to the terms of this Agreement
and the related Purchase and Servicing Agreement, as modified by the related
Acknowledgement, including all representations and warranties thereof included
in such Purchase and Servicing Agreement, as modified by the Acknowledgement,
in each case as of the date of substitution.
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For any month in which an Originator or the Seller substitutes one or
more Replacement Mortgage Loans for one or more Deleted Mortgage Loans, the
related Servicer shall determine the excess (each, a "Substitution Adjustment
Amount"), if any, by which the aggregate Purchase Price of all such Deleted
Mortgage Loans exceeds the aggregate Stated Principal Balance of the
Replacement Mortgage Loans replacing such Deleted Mortgage Loans, together
with one month's interest on such excess amount at the applicable Net Mortgage
Rate. On the date of such substitution, the related Originator or Seller, as
applicable, shall deliver or cause to be delivered to the related Servicer for
deposit in the related Custodial Account an amount equal to the related
Substitution Adjustment Amount, if any, and the Custodian, on behalf of the
Trustee, upon receipt of the related Replacement Mortgage Loan or Loans and
Request for Release and certification by such Servicer of such deposit, shall
release to the related Originator or the Seller, as applicable, the related
Trustee Mortgage File or Files and the Trustee or the Custodian, as
applicable, shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, as the related Originator or Seller
shall deliver to it and as shall be necessary to vest therein any Deleted
Mortgage Loan released pursuant hereto.
In addition, the related Originator or the Seller, as applicable, shall
obtain at its own expense and deliver to the Trustee and the Securities
Administrator an Opinion of Counsel to the effect that such substitution
(either specifically or as a class of transactions) shall not cause an Adverse
REMIC Event. If such Opinion of Counsel cannot be delivered, then such
substitution may only be effected at such time as the required Opinion of
Counsel can be given.
(c) Upon discovery by the related Originator, the Seller, the Master
Servicer, the Depositor or the Trustee that any Mortgage Loan does not
constitute a "qualified mortgage" within the meaning of Section 860G(a)(3) of
the Code, the party discovering such fact shall within two Business Days give
written notice thereof to the other parties. In connection therewith, the
applicable party shall repurchase or, subject to the limitations set forth in
Section 2.05(b), substitute one or more Replacement Mortgage Loans for the
affected Mortgage Loan within 90 days of the earlier of discovery or receipt
of such notice with respect to such affected Mortgage Loan. Any such
repurchase or substitution shall be made in the same manner as set forth in
Section 2.05(a) above and/or in accordance with this Section 2.05(c). The
Trustee shall re-convey to the related Originator or the Seller, as
applicable, the Mortgage Loan to be released pursuant hereto in the same
manner, and on the same terms and conditions, as it would a Mortgage Loan
repurchased for breach of a representation or warranty.
Section 2.06 Grant Clause.
(a) It is intended that the conveyance of the Depositor's right, title
and interest in and to property constituting the Trust Fund pursuant to this
Agreement shall constitute, and shall be construed as, a sale of such property
and not a grant of a security interest to secure a loan. However, if such
conveyance is deemed to be in respect of a loan, it is intended that: (1) the
rights and obligations of the parties shall be established pursuant to the
terms of this Agreement; (2) the Depositor hereby grants to the Trustee for
the benefit of the Holders of the Certificates a first priority security
interest in all of the Depositor's right, title and interest in, to and under,
whether now owned or hereafter acquired, the Trust Fund and all proceeds of
any and all property constituting the Trust Fund to secure payment of the
Certificates; and (3) this Agreement shall constitute a security agreement
under applicable law. If such conveyance is deemed to be in respect of a loan
and the trust created by this Agreement terminates prior to the
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satisfaction of the claims of any Person holding any Certificate, the security
interest created hereby shall continue in full force and effect and the
Trustee shall be deemed to be the collateral agent for the benefit of such
Person, and all proceeds shall be distributed as herein provided.
(b) The Depositor shall, to the extent consistent with this Agreement,
take such reasonable actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans and
the other property described above, such security interest would be deemed to
be a perfected security interest of first priority under applicable law and
will be maintained as such throughout the term of this Agreement. The
Depositor will, at its own expense, make all initial filings on or about the
Closing Date and shall forward a copy of such filing or filings to the
Trustee. Without limiting the generality of the foregoing, the Depositor shall
prepare and forward for filing, or shall cause to be forwarded for filing, at
the expense of the Depositor, all filings necessary to maintain the
effectiveness of any original filings necessary under the relevant UCC to
perfect the Trustee's security interest in or lien on the Mortgage Loans,
including without limitation (x) continuation statements, and (y) such other
statements as may be occasioned by (1) any change of name of an Originator,
the Depositor or the Trustee, (2) any change of location of the place of
business or the chief executive office of the Seller or the Depositor, (3) any
transfer of any interest of an Originator or the Depositor in any Mortgage
Loan or (4) any change under the relevant UCC or other applicable laws.
Neither the Originators nor the Depositor shall organize under the law of any
jurisdiction other than the State under which each is organized as of the
Closing Date (whether changing its jurisdiction of organization or organizing
under an additional jurisdiction) without giving 30 days prior written notice
of such action to its immediate and intermediate transferee, including the
Trustee. Before effecting such change, any Originator or the Depositor
proposing to change its jurisdiction of organization shall prepare and file in
the appropriate filing office any financing statements or other statements
necessary to continue the perfection of the interests of its immediate and
intermediate transferees, including the Trustee, in the Mortgage Loans. In
connection with the transactions contemplated by this Agreement, each of the
Originators and the Depositor authorizes its immediate or intermediate
transferee (but not the Trustee) to file in any filing office any initial
financing statements, any amendments to financing statements, any continuation
statements, or any other statements or filings described in this paragraph
(b).
Section 2.07. Release of Mortgage Documents for Servicing
(a) From time to time and as appropriate for the foreclosure or
servicing of any of the Mortgage Loans, the Custodian shall, upon receipt in
writing, facsimile or electronic transmission from the Master Servicer or a
Servicer of a Request for Release release to the Master Servicer or such
Servicer the Mortgage Documents set forth in such Request for Release. All
Mortgage Documents released by the Custodian to the Master Servicer or a
Servicer pursuant to this Section 2.07 shall be held by the Master Servicer or
such Servicer in trust for the benefit of the Trust pursuant to the applicable
Purchase and Servicing Agreement. Upon the repurchase of any Mortgage Loan or
upon the payment in full of any Mortgage Loan, and upon receipt by the
Custodian of (i) the Request for Release (which Request for Release shall
include a statement to the effect that all amounts payable to the Trust in
connection with a repurchase have been deposited in the related Custodial
Account or the Collection Account or (ii) direction of the Depositor or the
Trustee, as applicable, the Custodian shall promptly release the related
Mortgage Documents in accordance with such Request for Release or direction.
ARTICLE III
THE CERTIFICATES
Section 3.01 The Certificates.
(a) The Certificates shall be issuable in registered form only and shall
be securities governed by Article 8 of the New York Uniform Commercial Code.
The Book-Entry Certificates will be evidenced by one or more certificates,
beneficial ownership of which will be held in the dollar denominations in
Certificate Balance, or Notional Amount, as applicable, or in the Percentage
Interests, specified herein. Each Class of Certificates will be issued in the
minimum denominations and integral multiples thereof of the initial
Certificate Balance (or Notional Amount) specified in the Preliminary
Statement hereto.
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(b) The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer of the Trustee or of the
Securities Administrator on the Trustee's behalf. Each Certificate shall, on
original issue, be authenticated by the Authenticating Agent upon the order of
the Depositor upon receipt by the Trustee of the Trustee Mortgage Files
described in Section 2.01. No Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there appears on
such Certificate a certificate of authentication substantially in the form
provided for herein, executed by an authorized officer of the Authenticating
Agent, by manual signature, and such certification upon any Certificate shall
be conclusive evidence, and the only evidence, that such Certificate has been
duly authenticated and delivered hereunder. All Certificates shall be dated
the date of their authentication. At any time and from time to time after the
execution and delivery of this Agreement, the Depositor may deliver
Certificates executed by or on behalf of the Trustee to the Authenticating
Agent for authentication and the Authenticating Agent shall authenticate and
deliver such Certificates as in this Agreement provided and not otherwise.
(c) The Class C, Class 1-B-4, Class B-4, Class 1-B-5, Class B-5, Class
1-B-6, Class B-6, Class P-1, Class P-2 and Class A-R Certificates offered and
sold in reliance on the exemption from registration under Rule 144A under the
Act shall be issued initially in definitive, fully registered form without
interest coupons with the applicable legends set forth in Exhibit A added to
the forms of such Certificates (each, a "Restricted Global Security").
Section 3.02 Registration.
The Securities Administrator is hereby appointed, and the Securities
Administrator hereby accepts its appointment as, initial Certificate Registrar
in respect of the Certificates and shall maintain books for the registration
and for the transfer of Certificates (the "Certificate Register"). The Trustee
may appoint a bank or trust company to act as successor Certificate Registrar.
A registration book shall be maintained for the Certificates collectively. The
Certificate Registrar may resign or be discharged or removed and a new
successor may be appointed in accordance with the procedures and requirements
set forth in Sections 6.06 and 6.07 hereof with respect to the resignation,
discharge or removal of the Securities Administrator and the appointment of a
successor Securities Administrator. The Certificate Registrar may appoint, by
a written instrument delivered to the Holders and the Master Servicer, any
bank or trust company to act as co-registrar under such conditions as the
Certificate Registrar may prescribe; provided, however, that the Certificate
Registrar shall not be relieved of any of its duties or responsibilities
hereunder by reason of such appointment.
Section 3.03 Transfer and Exchange of Certificates.
(a) A Certificate (other than Book-Entry Certificates which shall be
subject to Section 3.09 hereof) may be transferred by the Holder thereof only
upon presentation and surrender of such Certificate at the office of the
Certificate Registrar duly endorsed or accompanied by an assignment duly
executed by such Holder or his duly authorized attorney in such form as shall
be satisfactory to the Certificate Registrar. Upon the transfer of any
Certificate in accordance with the preceding sentence, the Securities
Administrator on behalf of the Trustee shall execute, and the Authenticating
Agent shall authenticate and deliver to the transferee, one or more new
Certificates of the same Class and evidencing, in the aggregate, the
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same aggregate Certificate Balance (or Notional Amount) as the Certificate
being transferred. No service charge shall be made to a Certificateholder for
any registration of transfer of Certificates, but the Certificate Registrar
may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any registration of transfer of
Certificates.
(b) A Certificate may be exchanged by the Holder thereof for any number
of new Certificates of the same Class, in authorized denominations,
representing in the aggregate the same Certificate Balance (or Notional
Amount) as the Certificate surrendered, upon surrender of the Certificate to
be exchanged at the office of the Certificate Registrar duly endorsed or
accompanied by a written instrument of transfer duly executed by such Holder
or his duly authorized attorney in such form as is satisfactory to the
Certificate Registrar. Certificates delivered upon any such exchange will
evidence the same obligations, and will be entitled to the same rights and
privileges, as the Certificates surrendered. No service charge shall be made
to a Certificateholder for any exchange of Certificates, but the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any exchange of
Certificates. Whenever any Certificates are so surrendered for exchange, the
Securities Administrator on behalf of the Trustee shall execute, and the
Authenticating Agent shall authenticate, date and deliver the Certificates
which the Certificateholder making the exchange is entitled to receive.
(c) By acceptance of a Restricted Certificate, whether upon original
issuance or subsequent transfer, each Holder of such a Certificate
acknowledges the restrictions on the transfer of such Certificate set forth
thereon and agrees that it will transfer such a Certificate only as provided
herein.
The following restrictions shall apply with respect to the transfer and
registration of transfer of a Restricted Certificate to a transferee that
takes delivery in the form of a Definitive Certificate:
(i) The Certificate Registrar shall register the transfer of a
Restricted Certificate if the requested transfer is (x) to the Depositor
or an affiliate (as defined in Rule 405 under the 0000 Xxx) of the
Depositor or (y) being made to a "qualified institutional buyer" (a
"QIB") as defined in Rule 144A under the Securities Act of 1933, as
amended (the "Act") by a transferor that has provided the Certificate
Registrar with a certificate in the form of Exhibit H hereto; and
(ii) The Certificate Registrar shall register the transfer of a
Restricted Certificate if the requested transfer is being made to an
"accredited investor" under Rule 501(a)(1), (2), (3) or (7) under the
Act, or to any Person all of the equity owners in which are such
accredited investors, by a transferor who furnishes to the Certificate
Registrar a letter of the transferee substantially in the form of
Exhibit I hereto.
(d) No transfer of an ERISA-Restricted Certificate in the form of a
Definitive Certificate shall be made to any Person or shall be effective
unless the Certificate Registrar, on behalf of the Trustee, has received (A) a
certificate substantially in the form of Exhibit J hereto (or Exhibit B, in
the case of a Residual Certificate) from such transferee or (B) an Opinion of
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Counsel satisfactory to the Certificate Registrar and the Securities
Administrator to the effect that the purchase and holding of such a
Certificate will not constitute or result in any nonexempt prohibited
transactions under Title I of ERISA or Section 4975 of the Code or any
Federal, state or local law ("Similar Law") materially similar to the
foregoing provisions of ERISA or the Code and will not subject the Certificate
Registrar, the Trustee, the Master Servicer, the Depositor or the Securities
Administrator to any obligation in addition to those undertaken in the
Agreement; provided, however, that the Certificate Registrar will not require
such certificate or opinion in the event that, as a result of a change of law
or otherwise, counsel satisfactory to the Certificate Registrar has rendered
an opinion to the effect that the purchase and holding of an ERISA-Restricted
Certificate by a Plan or a Person that is purchasing or holding such a
Certificate with the assets of a Plan will not constitute or result in a
prohibited transaction under Title I of ERISA or Section 4975 of the Code and
will not subject the Certificate Registrar, the Trustee, the Master Servicer,
the Depositor or the Securities Administrator to any obligation in addition to
those undertaken in this Agreement. Each Transferee of an ERISA-Restricted
Certificate that is a Book-Entry Certificate shall be deemed to have made the
appropriate representation set forth in paragraph 2 and the representation set
forth in paragraph 3 of Exhibit J. The preparation and delivery of the
certificate and opinions referred to above shall not be an expense of the
Trust Fund, the Certificate Registrar, the Trustee, the Master Servicer, the
Depositor or the Securities Administrator.
Notwithstanding the foregoing, no opinion or certificate shall be
required for the initial issuance of the ERISA-Restricted Certificates to the
Underwriter. The Certificate Registrar shall have no obligation to monitor
transfers of Book-Entry Certificates that are ERISA-Restricted Certificates
and shall have no liability for transfers of such Certificates in violation of
the transfer restrictions. The Certificate Registrar shall be under no
liability to any Person for any registration of transfer of any
ERISA-Restricted Certificate that is in fact not permitted by this Section
3.03(d) and neither the Securities Administrator nor the Paying Agent shall
have any liability for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder under
the provisions of this Agreement so long as the transfer was registered by the
Certificate Registrar in accordance with the foregoing requirements. The
Securities Administrator, on behalf of the Trustee, shall be entitled, but not
obligated, to recover from any Holder of any ERISA-Restricted Certificate that
was in fact a Plan or a Person acting on behalf of a Plan any payments made on
such ERISA-Restricted Certificate at and after such time. Any such payments so
recovered by the Securities Administrator, on behalf of the Trustee, shall be
paid and delivered by the Securities Administrator, on behalf of the Trustee,
to the last preceding Holder of such Certificate that is not such a Plan or
Person acting on behalf of a Plan.
(e) As a condition of the registration of transfer or exchange of any
Certificate, the Certificate Registrar may require the certified taxpayer
identification number of the owner of the Certificate and the payment of a sum
sufficient to cover any tax or other governmental charge imposed in connection
therewith; provided, however, that the Certificate Registrar shall have no
obligation to require such payment or to determine whether or not any such tax
or charge may be applicable. No service charge shall be made to the
Certificateholder for any registration, transfer or exchange of a Certificate.
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(f) Notwithstanding anything to the contrary contained herein, no
Residual Certificate may be owned, pledged or transferred, directly or
indirectly, by or to (i) a Disqualified Organization or (ii) an individual,
corporation or partnership or other person unless such person (A) is not a
Non-U.S. Person or (B) is a Non-U.S. Person that holds a Residual Certificate
in connection with the conduct of a trade or business within the United States
and has furnished the transferor and the Certificate Registrar with an
effective Internal Revenue Service Form W-8ECI or successor form at the time
and in the manner required by the Code (any such person who is not covered by
clause (A) or (B) above is referred to herein as a "Non-permitted Foreign
Holder").
Prior to and as a condition of the registration of any transfer, sale or
other disposition of a Residual Certificate, the proposed transferee shall
deliver to the Certificate Registrar an affidavit in substantially the form
attached hereto as Exhibit B representing and warranting, among other things,
that such transferee is neither a Disqualified Organization, an agent or
nominee acting on behalf of a Disqualified Organization, nor a Non-permitted
Foreign Holder (any such transferee, a "Permitted Transferee"), and the
proposed transferor shall deliver to the Trustee and the Certificate Registrar
an affidavit in substantially the form attached hereto as Exhibit C. In
addition, the Trustee or the Certificate Registrar may (but shall have no
obligation to) require, prior to and as a condition of any such transfer, the
delivery by the proposed transferee of an Opinion of Counsel, addressed to the
Trustee and the Certificate Registrar, that such proposed transferee or, if
the proposed transferee is an agent or nominee, the proposed beneficial owner,
is not a Disqualified Organization, agent or nominee thereof, or a
Non-permitted Foreign Holder. Notwithstanding the registration in the
Certificate Register of any transfer, sale, or other disposition of a Residual
Certificate to a Disqualified Organization, an agent or nominee thereof, or
Non-permitted Foreign Holder, such registration shall be deemed to be of no
legal force or effect whatsoever and such Disqualified Organization, agent or
nominee thereof, or Non-permitted Foreign Holder shall not be deemed to be a
Certificateholder for any purpose hereunder, including, but not limited to,
the receipt of distributions on such Residual Certificate. The Depositor and
the Certificate Registrar shall be under no liability to any Person for any
registration or transfer of a Residual Certificate to a Disqualified
Organization, agent or nominee thereof or Non-permitted Foreign Holder or for
the Paying Agent making any payments due on such Residual Certificate to the
Holder thereof or for taking any other action with respect to such Holder
under the provisions of the Agreement, so long as the transfer was effected in
accordance with this Section 3.03(f), unless the Certificate Registrar shall
have actual knowledge at the time of such transfer or the time of such payment
or other action that the transferee is a Disqualified Organization, or an
agent or nominee thereof, or Non-permitted Foreign Holder. The Certificate
Registrar shall be entitled to recover from any Holder of a Residual
Certificate that was a Disqualified Organization, agent or nominee thereof, or
Non-permitted Foreign Holder at the time it became a Holder or any subsequent
time it became a Disqualified Organization, agent or nominee thereof, or
Non-permitted Foreign Holder, all payments made on such Residual Certificate
at and after either such times (and all costs and expenses, including but not
limited to attorneys' fees, incurred in connection therewith). Any payment
(not including any such costs and expenses) so recovered by the Certificate
Registrar shall be paid and delivered to the last preceding Holder of such
Residual Certificate.
If any purported transferee shall become a registered Holder of a
Residual Certificate in violation of the provisions of this Section 3.03(f),
then upon receipt of written notice to the
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Trustee or the Certificate Registrar that the registration of transfer of such
Residual Certificate was not in fact permitted by this Section 3.03(f), the
last preceding Permitted Transferee shall be restored to all rights as Holder
thereof retroactive to the date of such registration of transfer of such
Residual Certificate. The Depositor, the Certificate Registrar and the Trustee
shall be under no liability to any Person for any registration of transfer of
a Residual Certificate that is in fact not permitted by this Section 3.03(f),
or for the Paying Agent making any payment due on such Certificate to the
registered Holder thereof or for taking any other action with respect to such
Holder under the provisions of this Agreement so long as the transfer was
registered upon receipt of the affidavit described in the preceding paragraph
of this Section 3.03(f).
(g) Each Holder or Certificate Owner of a Restricted Certificate,
ERISA-Restricted Certificate or Residual Certificate, or an interest therein,
by such Holder's or Owner's acceptance thereof, shall be deemed for all
purposes to have consented to the provisions of this section.
Section 3.04 Cancellation of Certificates.
Any Certificate surrendered for registration of transfer or exchange
shall be cancelled and retained in accordance with normal retention policies
with respect to cancelled certificates maintained by the Certificate
Registrar.
Section 3.05 Replacement of Certificates.
If (i) any Certificate is mutilated and is surrendered to the Trustee or
the Certificate Registrar or (ii) the Certificate Registrar receives evidence
to its satisfaction of the destruction, loss or theft of any Certificate, and
there is delivered to the Trustee and the Certificate Registrar such security
or indemnity as may be required by them to save each of them harmless, then,
in the absence of notice to the Depositor, the Trustee or the Certificate
Registrar that such destroyed, lost or stolen Certificate has been acquired by
a protected purchaser, the Securities Administrator on behalf of the Trustee
shall execute and the Authenticating Agent shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor and Certificate Balance. Upon the
issuance of any new Certificate under this Section 3.05, the Trustee, the
Depositor or the Certificate Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee, the Depositor or the Certificate Registrar) connected therewith.
Any replacement Certificate issued pursuant to this Section 3.05 shall
constitute complete and indefeasible evidence of ownership in the applicable
Trust Fund, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
If after the delivery of such new Certificate, a protected purchaser of
the original Certificate in lieu of which such new Certificate was issued
presents for payment such original Certificate, the Depositor, the Certificate
Registrar and the Trustee or any agent shall be entitled to recover such new
Certificate from the Person to whom it was delivered or any Person taking
therefrom, except a protected purchaser, and shall be entitled to recover upon
the security or indemnity provided therefor to the extent of any loss, damage,
cost or expenses incurred by the Depositor, the Certificate Registrar, the
Trustee or any agent in connection therewith.
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Section 3.06 Persons Deemed Owners.
Subject to the provisions of Section 3.09 with respect to Book-Entry
Certificates, the Depositor, the Master Servicer, the Securities
Administrator, the Trustee, the Certificate Registrar, the Paying Agent and
any agent of any of them shall treat the Person in whose name any Certificate
is registered upon the books of the Certificate Registrar as the owner of such
Certificate for the purpose of receiving distributions pursuant to Sections
5.01 and 5.02 and for all other purposes whatsoever, and neither the
Depositor, the Master Servicer, the Securities Administrator, the Trustee, the
Certificate Registrar, the Paying Agent nor any agent of any of them shall be
affected by notice to the contrary.
Section 3.07 Temporary Certificates.
(a) Pending the preparation of definitive Certificates, upon the order
of the Depositor, the Securities Administrator on behalf of the Trustee shall
execute and the Authenticating Agent shall authenticate and deliver temporary
Certificates that are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Certificates in lieu of which they are issued and with such
variations as the authorized officers executing such Certificates may
determine, as evidenced by their execution of such Certificates.
(b) If temporary Certificates are issued, the Depositor will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office or agency of the Certificate Registrar without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Certificates, the Securities Administrator on behalf of the Trustee
shall execute and the Authenticating Agent shall authenticate and deliver in
exchange therefor a like aggregate Certificate Balance of definitive
Certificates of the same Class in the authorized denominations. Until so
exchanged, the temporary Certificates shall in all respects be entitled to the
same benefits under this Agreement as definitive Certificates of the same
Class.
Section 3.08 Appointment of Paying Agent.
The Securities Administrator is hereby appointed as the initial Paying
Agent. The Trustee may appoint a successor Paying Agent (which may be the
Trustee) for the purpose of making distributions to the Certificateholders
hereunder. The Trustee shall cause any Paying Agent, other than the Securities
Administrator, to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee that such Paying Agent will
hold all sums held by it for the payment to the Certificateholders in an
Eligible Account (which shall be the Distribution Account) in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be
paid to the Certificateholders. All funds remitted by the Securities
Administrator to any such Paying Agent for the purpose of making distributions
shall be paid to the Certificateholders on each Distribution Date and any
amounts not so paid shall be returned on such Distribution Date to the
Securities Administrator. If the Paying Agent is not the Trustee or the
Securities Administrator, the Securities Administrator shall cause to be
remitted to the Paying Agent on or before the Business Day prior to each
Distribution Date, by wire transfer in
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immediately available funds, the funds to be distributed on such Distribution
Date. Any Paying Agent shall be either a bank or trust company or otherwise
authorized under law to exercise corporate trust powers.
Section 3.09 Book-Entry Certificates.
(a) Each Class of Book-Entry Certificates, upon original issuance, shall
be issued in the form of one or more typewritten Certificates representing the
Book-Entry Certificates. The Book-Entry Certificates shall initially be
registered on the Certificate Register in the name of the nominee of the
Clearing Agency, and no Certificate Owner will receive a definitive
certificate representing such Certificate Owner's interest in the Book-Entry
Certificates, except as provided in Section 3.09(c). Unless Definitive
Certificates have been issued to Certificate Owners of Book-Entry Certificates
pursuant to Section 3.09(c):
(i) the provisions of this Section 3.09 shall be in full force and
effect;
(ii) the Certificate Registrar, the Paying Agent and the Trustee
shall deal with the Clearing Agency for all purposes (including the
making of distributions on the Book-Entry Certificates) as the
authorized representatives of the Certificate Owners and the Clearing
Agency and shall be responsible for crediting the amount of such
distributions to the accounts of such Persons entitled thereto, in
accordance with the Clearing Agency's normal procedures;
(iii) to the extent that the provisions of this Section 3.09
conflict with any other provisions of this Agreement, the provisions of
this Section 3.09 shall control; and
(iv) the rights of Certificate Owners shall be exercised only
through the Clearing Agency and the Clearing Agency Participants and
shall be limited to those established by law and agreements between such
Certificate Owners and the Clearing Agency and/or the Clearing Agency
Participants. Unless and until Definitive Certificates are issued
pursuant to Section 3.09(c), the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and receive
and transmit distributions of principal of and interest on the
Book-Entry Certificates to such Clearing Agency Participants.
(b) Whenever notice or other communication to the Certificateholders is
required under this Agreement, unless and until Definitive Certificates shall
have been issued to Certificate Owners pursuant to Section 3.09(c), the
Securities Administrator shall give all such notices and communications
specified herein to be given to Holders of the Book-Entry Certificates to the
Clearing Agency.
(c) If (i) (A) the Clearing Agency or the Depositor advises the
Certificate Registrar in writing that the Clearing Agency is no longer willing
or able to discharge properly its responsibilities with respect to the
Book-Entry Certificates, and (B) the Depositor is unable to locate a qualified
successor satisfactory to the Depositor and the Certificate Registrar or, (ii)
after the occurrence of an Event of Default, Certificate Owners representing
beneficial interests aggregating not less than 50% of the Class Principal
Balance of a Class of Book-Entry Certificates advise the Paying Agent and the
Clearing Agency through the Clearing Agency
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Participants in writing that the continuation of a book-entry system through
the Clearing Agency is no longer in the best interests of the Certificate
Owners of a Class of Book-Entry Certificates, the Certificate Registrar shall
notify the Clearing Agency to effect notification to all Certificate Owners,
through the Clearing Agency, of the occurrence of any such event and of the
availability of Definitive Certificates to Certificate Owners requesting the
same. Upon surrender to the Certificate Registrar of the Book-Entry
Certificates by the Clearing Agency, accompanied by registration instructions
from the Clearing Agency for registration, the Certificate Registrar shall
issue the Definitive Certificates. Neither the Depositor, the Certificate
Registrar nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying
on, such instructions. Upon the issuance of Definitive Certificates all
references herein to obligations imposed upon or to be performed by the
Clearing Agency shall be deemed to be imposed upon and performed by the
Certificate Registrar, to the extent applicable, with respect to such
Definitive Certificates and the Certificate Registrar shall recognize the
holders of the Definitive Certificates as Certificateholders hereunder.
Notwithstanding the foregoing, the Certificate Registrar, upon the instruction
of the Depositor, shall have the right to issue Definitive Certificates on the
Closing Date in connection with credit enhancement programs.
ARTICLE IV
ADMINISTRATION OF THE TRUST FUND
Section 4.01 Custodial Accounts; Distribution Account.
(a) On or prior to the Closing Date, the Master Servicer shall have
caused each Servicer to establish and maintain one or more Custodial Accounts,
as provided in the related Purchase and Servicing Agreement, into which all
Scheduled Payments and unscheduled payments with respect to the related
Mortgage Loans, net of any deductions or reimbursements permitted under the
related Purchase and Servicing Agreement, shall be deposited. On each
Distribution Account Deposit Date, the Servicers shall remit to the Securities
Administrator for deposit into the Distribution Account, all amounts so
required to be deposited into such account in accordance with the terms of the
related Purchase and Servicing Agreements.
(b) The Securities Administrator, as Paying Agent for the Trust, shall
establish and maintain an Eligible Account entitled "Distribution Account of
LaSalle Bank National Association, as Trustee for the benefit of Xxxxxx
Xxxxxxx Mortgage Loan Trust 2006-1AR, Holders of Mortgage Pass-Through
Certificates." The Securities Administrator shall, promptly upon receipt from
the Servicers on each related Distribution Account Deposit Date, deposit into
the Distribution Account and retain on deposit until the related Distribution
Date the following amounts:
(i) the aggregate of collections with respect to the Mortgage
Loans remitted by the Servicers from the related Custodial Accounts in
accordance with the Purchase and Servicing Agreements;
(ii) any amounts required to be deposited by the Master Servicer
with respect to the Mortgage Loans for the related Due Period pursuant
to this Agreement, including
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the amount of any Advances or Compensating Interest Payments with
respect to the Mortgage Loans not paid by the Servicers; and
(iii) any other amounts so required to be deposited in the
Distribution Account in the related Due Period pursuant to this
Agreement.
(c) In the event the Master Servicer or a Servicer has remitted in error
to the Distribution Account any amount not required to be remitted in
accordance with the definition of Available Funds, it may at any time direct
the Securities Administrator to withdraw such amount from the Distribution
Account for repayment to the Master Servicer or Servicer, as applicable, by
delivery of an Officer's Certificate to the Securities Administrator and the
Trustee which describes the amount deposited in error.
(d) On each Distribution Date and Initial Optional Termination Date, the
Securities Administrator, as Paying Agent, shall withdraw from funds available
in the Distribution Account and distribute the Available Funds to the
Certificateholders and any other parties entitled thereto in the amounts and
priorities set forth in Section 5.02. The Securities Administrator may from
time to time withdraw from the Distribution Account and pay the Master
Servicer, the Trustee, the Custodians, the Securities Administrator or any
Servicer any amounts permitted to be paid or reimbursed to such Person from
funds in the Distribution Account pursuant to this Agreement, any Purchase and
Servicing Agreement or any Custodial Agreement.
(e) Funds in the Distribution Account may be invested in Permitted
Investments selected by and at the written direction of the Securities
Administrator, which shall mature not later than one Business Day prior to the
Distribution Date (except that if such Permitted Investment is an obligation
of the Securities Administrator or any of its Affiliates, or is managed or
advised by the Securities Administrator or any Affiliate, then such Permitted
Investment shall mature not later than such applicable Distribution Date) and
any such Permitted Investment shall not be sold or disposed of prior to its
maturity. All such Permitted Investments shall be made in the name of the
Trustee (in its capacity as such) or its nominee. All income and gain realized
from any Permitted Investment of amounts on deposit in the Distribution
Account shall be for the benefit of the Securities Administrator, as
additional compensation for its duties hereunder, and shall be subject to its
withdrawal or order from time to time, and shall not be part of the Trust
Fund; provided, however, that if Xxxxx Fargo Bank, National Association is no
longer the Master Servicer and the Securities Administrator, any such income
and gain shall be used to pay the successor Master Servicer and the successor
Securities Administrator, the Master Servicer Compensation and the Securities
Administrator Compensation, respectively. The amount of any losses incurred in
respect of any such investments shall be deposited in such Distribution
Account by the Securities Administrator out of its own funds, without any
right of reimbursement therefor, immediately as realized.
Section 4.02 Permitted Withdrawals from the Custodial Accounts and the
Distribution Account.
(a) Each Servicer may from time to time make withdrawals from its
Custodial Account for the following purposes:
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(i) to reimburse itself for unreimbursed Advances made by it, such
right of reimbursement pursuant to this subclause (i) being limited to
amounts received on the Mortgage Loan(s) in respect of which any such
Advance was made;
(ii) to reimburse itself for any Nonrecoverable Advance previously
made by it;
(iii) to reimburse itself for unreimbursed Servicer Advances, each
Servicer's right to reimbursement pursuant to this clause (a) with
respect to any Mortgage Loan being limited to amounts received on such
Mortgage Loan(s) which represent late recoveries of the payments for
which such advances were made pursuant to the related Purchase and
Servicing Agreement;
(iv) to reimburse itself for expenses incurred by it and
reimbursable pursuant to the related Purchase and Servicing Agreement;
and
(v) to withdraw any amount deposited in the Custodial Account and
not required to be deposited therein.
To the extent required by the related Purchase and Servicing Agreement
each Servicer shall keep and maintain separate accounting, on a Mortgage Loan
by Mortgage Loan basis, for the purpose of justifying any withdrawal from its
Custodial Account pursuant to such subclauses (i), (ii), (iii), (iv) and (v).
Prior to making any withdrawal from its Custodial Account pursuant to
subclause (ii), the related Servicer shall deliver to the Master Servicer an
Officer's Certificate of a Servicing Officer indicating the amount of any
previous Advance determined by the Servicer to be a Nonrecoverable Advance and
identifying the related Mortgage Loans(s), and their respective portions of
such Nonrecoverable Advance.
(b) The Securities Administrator shall withdraw funds from the
Distribution Account for distributions to Certificateholders in the manner
specified in this Agreement (and to withhold from the amounts so withdrawn,
the amount of any taxes that it is authorized to withhold pursuant to Section
10.01). In addition, the Securities Administrator may from time to time make
withdrawals from the Distribution Account for the following purposes:
(i) to pay all costs and expenses described in clause (e) of the
definition of "Available Funds";
(ii) (x) for so long as Xxxxx Fargo Bank, National Association is
the Master Servicer and the Securities Administrator, to pay to the
Master Servicer the investment earnings on the Distribution Account as
its compensation for the related Distribution Date and (y) thereafter,
concurrently, to the Master Servicer and the Securities Administrator,
the Master Servicer Compensation and the Securities Administrator
Compensation, respectively;
(iii) to withdraw and return to the Master Servicer any amount
deposited in the Distribution Account and not required to be deposited
therein; and
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(iv) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 7.01 hereof.
(v) [Reserved].
Section 4.03 [Reserved].
Section 4.04 [Reserved].
Section 4.05 Reports to Trustee and Certificateholders.
On each Distribution Date, the Securities Administrator shall have
prepared and shall make available to the Trustee, the Depositor, the Rating
Agencies and each Certificateholder a written report setting forth the
following information (on the basis of Mortgage Loan level information
obtained from the Master Servicer and the Servicers):
(a) the amount of the distributions, separately identified, with respect
to each Class of Certificates;
(b) the amount of the distributions set forth in the clause (a)
allocable to principal, separately identifying the aggregate amount of any
Principal Prepayments, liquidation proceeds or other unscheduled recoveries of
principal included in that amount;
(c) the amount of the distributions set forth in the clause (a)
allocable to interest and how it was calculated;
(d) the amount of any unpaid Class Interest Shortfall, both distributed
and remaining unpaid, and the related accrued interest thereon, with respect
to each Class of Certificates, and with respect to the Floating Rate
Certificates, the amount paid under the respective Corridor Contract;
(e) the Class Principal Balance or Notional Amount of each Class of
Certificates after giving effect to the distribution of principal on that
Distribution Date;
(f) the aggregate Stated Principal Balance of the Mortgage Loans in each
Loan Group and in each Aggregate Loan Group at the end of the related
Prepayment Period, and the applicable Weighted Average Net Mortgage Rate of
each Loan Group, each Aggregate Loan Group and the Mortgage Pool at the
beginning of the related Due Period and the weighted average remaining term to
maturity of each Loan Group, the Mortgage Pool and each Aggregate Loan Group;
(g) the Senior Percentage and the Subordinated Percentage for each Loan
Group and for each Aggregate Loan Group for the following Distribution Date;
(h) the Senior Prepayment Percentage and Subordinate Prepayment
Percentage for each Loan Group for the following Distribution Date;
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(i) in the aggregate and with respect to each Loan Group, the amount of
the Servicing Fee paid to or retained by the Master Servicer and by each
Servicer, respectively, and in the aggregate with respect to each Loan Group;
(j) in the aggregate and with respect to each Loan Group, the amount of
Monthly Advances for the related Due Period;
(k) in the aggregate and with respect to each Loan Group, the number and
Stated Principal Balance of the Mortgage Loans that were (A) Delinquent using
the MBA Method (exclusive of Mortgage Loans in foreclosure) (1) 30 to 59 days,
(2) 60 to 89 days and (3) 90 or more days, (B) in foreclosure and Delinquent
(1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or more days and (C) in
bankruptcy as of the close of business on the last day of the calendar month
preceding that Distribution Date;
(l) in the aggregate and with respect to each Loan Group, the total
number and principal balance of any REO properties as of the close of business
on the last day of the preceding Due Period;
(m) in the aggregate and with respect to each Loan Group, the amount of
Realized Losses incurred during the preceding calendar month;
(n) in the aggregate and with respect to each Loan Group, the cumulative
amount of Realized Losses incurred since the Closing Date;
(o) the Realized Losses, if any, allocated to each Class of Certificates
on that Distribution Date;
(p) the Class Principal Balance or Notional Amount, as applicable, of
each Class of Certificates after giving effect to the distribution of
principal on the Distribution Date;
(q) the Special Hazard Loss Coverage Amount, the Fraud Loss Coverage
Amount and the Bankruptcy Loss Coverage Amount, in each case as of the related
Determination Date;
(r) the Pass-Through Rate for each Class of Certificates for that
Distribution Date;
(s) the amount of any Transfer Payment Received paid to an
Undercollateralized Group or Transfer Payment Made by an Overcollateralized
Group pursuant to Section 5.08 hereof; and the amount received by the
Securities Administrator pursuant to each Corridor Contract from the Corridor
Contract Counterparty with respect to that Distribution Date;
(t) the amount received by the Securities Administrator pursuant to each
Corridor Contract from the Corridor Contract Counterparty with respect to that
Distribution Date;
(u) the total amount of Prepayment Penalties collected and due to the
Trust Fund, as reported by the Servicers; and
(v) the Record Date for each Class of Certificates for such Distribution
Date.
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The Securities Administrator shall make such reports available each
month via its website at xxxx://xxx.xxxxxxx.xxx. Assistance in using the
website may be obtained by calling the Securities Administrator's customer
service desk at (000) 000-0000. Certificateholders and other parties that are
unable to use the website are entitled to have a paper copy mailed to them via
first class mail by contacting the Securities Administrator and indicating
such. In preparing or furnishing the foregoing reports, the Securities
Administrator shall be entitled to rely conclusively on the accuracy of the
information or data regarding the Mortgage Loans and the related REO
Properties that has been provided to the Securities Administrator by the
Master Servicer and the Servicers, and neither the Trustee nor the Securities
Administrator shall be obligated to verify, recompute, reconcile or
recalculate any such information or data.
Upon the reasonable advance written request of any Certificateholder
that is a savings and loan, bank or insurance company, which request, if
received by the Trustee or any agent thereof, shall be promptly forwarded to
the Securities Administrator, the Securities Administrator shall provide, or
cause to be provided, (or, to the extent that such information or
documentation is not required to be provided by a Servicer under the
applicable Purchase and Servicing Agreement, shall use reasonable efforts to
obtain such information and documentation from such Servicer, and provide) to
such Certificateholders such reports and access to information and
documentation regarding the Mortgage Loans as such Certificateholders may
reasonably deem necessary to comply with applicable regulations of the Office
of Thrift Supervision or its successor or other regulatory authorities with
respect to an investment in the Certificates; provided, however, that the
Securities Administrator shall be entitled to be reimbursed by such
Certificateholders for the Securities Administrator's actual expenses incurred
in providing such reports and access.
ARTICLE V
DISTRIBUTIONS TO HOLDERS OF CERTIFICATES
Section 5.01 Distributions Generally.
(a) Subject to Section 7.01 respecting the final distribution on the
Certificates, on each Distribution Date the Securities Administrator or the
Paying Agent shall make all distributions in accordance with this Article V.
Such distributions shall be made by check mailed to each Certificateholder's
address as it appears on the Certificate Register of the Certificate Registrar
or, upon written request made to the Securities Administrator at least five
Business Days prior to the related Record Date by any Certificateholder owning
an aggregate initial Certificate Balance of at least $1,000,000, or in the
case of a Class of Notional Amount Certificates or Residual Certificate, a
Percentage Interest of not less than 100%, by wire transfer in immediately
available funds to an account specified in the request and at the expense of
such Certificateholder; provided, however, that the final distribution in
respect of any Certificate shall be made only upon presentation and surrender
of such Certificate at the Certificate Registrar's Corporate Trust Office;
provided, further, that the foregoing provisions shall not apply to any Class
of Certificates as long as such Certificate remains a Book-Entry Certificate
in which case all payments made shall be made through the Clearing Agency and
its Clearing Agency Participants. Notwithstanding the reduction of the Class
Principal Balance of any Class of Certificates to zero, such Class will be
outstanding hereunder (solely for the purpose of receiving
72
distributions and not for any other purpose) until the termination of the
respective obligations and responsibilities of the Depositor, the Master
Servicer, the Securities Administrator and the Trustee hereunder in accordance
with Article VII. Wire transfers will be made at the expense of the Holder
requesting such wire transfer by deducting a wire transfer fee from the
related distribution. Notwithstanding such final payment of principal of any
of the Certificates, each Residual Certificate will remain outstanding until
the termination of each REMIC and the payment in full of all other amounts due
with respect to the Residual Certificates and at such time such final payment
in retirement of any Residual Certificate will be made only upon presentation
and surrender of such Certificate at the Certificate Registrar's Corporate
Trust Office. If any payment required to be made on the Certificates is to be
made on a day that is not a Business Day, then such payment will be made on
the next succeeding Business Day.
(b) All distributions or allocations made with respect to the
Certificateholders within each Class on each Distribution Date shall be
allocated among the outstanding Certificates in such Class equally in
proportion to their respective initial Class Principal Balances or initial
Class Notional Amounts (or Percentage Interests).
Section 5.02 Priorities of Distribution.
(a) (1) With respect to Available Funds for Loan Group 1, on each
Distribution Date, the Securities Administrator shall withdraw the Available
Funds from the funds available therefor in the Distribution Account and apply
such funds to distributions on the specified Classes of Group 1 Senior
Certificates in the following order and priority and, in each case, to the
extent of Available Funds remaining:
(i) [Reserved];
(ii) concurrently, to each interest-bearing Class of Group 1
Senior Certificates, an amount allocable to interest equal to the
related Class Optimal Interest Distribution Amount, any shortfall being
allocated among such Classes in proportion to the amount of the Class
Optimal Interest Distribution Amount that would have been distributed in
the absence of such shortfall; provided that prior to an Accrual
Termination Date, the related Accrual Amount shall be distributed as
provided in Section 5.02(a)(1)(iii);
(iii) the Accrual Amount shall be distributed in accordance with
the Accretion Direction Rule;
(iv) to each Class of Group 1 Senior Certificates, concurrently as
follows:
(x) [Reserved]; and
(y) on each Distribution Date prior to the Senior Credit
Support Depletion Date the related Principal Amount up to the
amount of the Senior Principal Distribution Amount for Loan Group
1 for such Distribution Date will be distributed, concurrently, to
the Class 1-A-1, Class 1-A-2 and Class 1-A-3 Certificates, pro
rata, until their respective Class Principal Balances are reduced
to zero; and
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(v) [Reserved];
(2) With respect to the Available Funds for Loan Group 2 on each
Distribution Date, the Securities Administrator shall withdraw such Available
Funds from the funds available therefor in the Distribution Account and apply
such funds to distributions on the specified Classes of Group 2 Senior
Certificates in the following order and priority and, in each case, to the
extent of such Available Funds remaining:
(i) [Reserved];
(ii) concurrently, to each interest-bearing Class of Group 2
Senior Certificates, an amount allocable to interest equal to the
related Class Optimal Interest Distribution Amount, any shortfall being
allocated among such Classes in proportion to the amount of the Class
Optimal Interest Distribution Amount, with respect to the Group 2 Senior
Certificates that would have been distributed in the absence of such
shortfall; provided that prior to an Accrual Termination Date, the
related Accrual Amount shall be distributed as provided in Section
5.02(a)(2)(iii);
(iii) [Reserved];
(iv) to each Class of Group 2 Senior Certificates, concurrently as
follows:
(x) [Reserved]; and
(y) the related Principal Amount, up to the amount of the
Senior Principal Distribution Amount for Loan Group 2 for such
Distribution Date, will be distributed sequentially, to the Class
A-R and Class 2-A Certificates, in that order, until their
respective Class Principal Balances are reduced to zero;
(v) [Reserved];
(3) With respect to the Available Funds for Loan Group 3 on each
Distribution Date, the Securities Administrator shall withdraw such Available
Funds from the funds available therefor in the Distribution Account and apply
such funds to distributions on the specified Classes of Group 3 Senior
Certificates in the following order and priority and, in each case, to the
extent of such Available Funds remaining:
(i) [Reserved];
(ii) concurrently, to each interest-bearing Class of Group 3
Senior Certificates, an amount allocable to interest equal to the
related Class Optimal Interest Distribution Amount, any shortfall being
allocated among such Classes in proportion to the amount of the Class
Optimal Interest Distribution Amount, with respect to the Group 3 Senior
Certificates that would have been distributed in the absence of such
shortfall; provided that prior to an Accrual Termination Date, the
related Accrual Amount shall be distributed as provided in Section
5.02(a)(3)(iii);
(iii) [Reserved];
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(iv) to each Class of Group 3 Senior Certificates, concurrently as
follows:
(x) [Reserved]; and
(y) the related Principal Amount, up to the amount of the
Senior Principal Distribution Amount for Loan Group 3 for such
Distribution Date, will be distributed to the Class 3-A
Certificates, until its Class Principal Balance is reduced to
zero; and
(v) [Reserved];
(4) With respect to the Available Funds for Loan Group 4 on each
Distribution Date, the Securities Administrator shall withdraw such Available
Funds from the funds available therefor in the Distribution Account and apply
such funds to distributions on the specified Classes of Group 4 Senior
Certificates in the following order and priority and, in each case, to the
extent of such Available Funds remaining:
(i) [Reserved];
(ii) concurrently, to each interest-bearing Class of Group 4
Senior Certificates, an amount allocable to interest equal to the
related Class Optimal Interest Distribution Amount, any shortfall being
allocated among such Classes in proportion to the amount of the Class
Optimal Interest Distribution Amount, with respect to the Group 4 Senior
Certificates that would have been distributed in the absence of such
shortfall; provided that prior to an Accrual Termination Date, the
related Accrual Amount shall be distributed as provided in Section
5.02(a)(4)(iii);
(iii) [Reserved];
(iv) to each Class of Group 4 Senior Certificates, concurrently as
follows:
(x) [Reserved]; and
(y) the related Principal Amount, up to the amount of the
Senior Principal Distribution Amount for Loan Group 4 for such
Distribution Date, will be distributed sequentially, to the Class
4-A-1 and Class 4-A-2 Certificates, in that order, until their
respective Class Principal Balances are reduced to zero; and
(5) On each Distribution Date, after making the distributions described
in Section 5.02(a)(2), Section 5.02(a)(3) and Section 5.02(a)(4), Available
Funds from each Loan Group in Aggregate Loan Group II after making the
distributions described in Section 5.02(a)(2), Section 5.02(a)(3) and Section
5.02(a)(4), will be distributed to the Aggregate Group II Senior Certificates
to the extent provided in Section 5.08 hereof.
(6) I. On each Distribution Date, Available Funds from Loan Group 1
remaining after making the distributions described in Section 5.02(a)(1) above
will be distributed to the Group 1 Subordinated Certificates, the Class P-1
Certificates, the Class C Certificates and the Class A-R
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Certificates in the following order and priority and, in each case, to the
extent of such funds remaining:
(A) to the Class 1-M-1 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution Amount
for such Class for such Distribution Date;
(B) to the Class 1-M-1 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date
until the Class Principal Balance thereof is reduced to zero;
(C) to the Class 1-M-2 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution Amount
for such Class for such Distribution Date;
(D) to the Class 1-M-2 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date
until the Class Principal Balance thereof is reduced to zero;
(E) to the Class 1-M-3 Certificates, an amount allocable to
interest equal to the amount of the Class Optimal Interest
Distribution Amount for such Class for such Distribution Date;
(F) to the Class 1-M-3 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date
until the Class Principal Balance thereof is reduced to zero;
(G) to the Class 1-M-4 Certificates, an amount allocable to
interest equal to the amount of the Class Optimal Interest
Distribution Amount for such Class for such Distribution Date;
(H) to the Class 1-M-4 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date
until the Class Principal Balance thereof is reduced to zero;
(I) to the Class 1-M-5 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution Amount
for such Class for such Distribution Date;
(J) to the Class 1-M-5 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date
until the Class Principal Balance thereof is reduced to zero;
(K) to the Class 1-M-6 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution Amount
for such Class for such Distribution Date; and
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(L) to the Class 1-M-6 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date
until the Class Principal Balance thereof is reduced to zero;
(M) to the Class 1-B-1 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution Amount
for such Class for such Distribution Date;
(N) to the Class 1-B-1 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date
until the Class Principal Balance thereof is reduced to zero;
(O) to the Class 1-B-2 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution Amount
for such Class for such Distribution Date;
(P) to the Class 1-B-2 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date
until the Class Principal Balance thereof is reduced to zero;
(Q) to the Class 1-B-3 Certificates, an amount allocable to
interest equal to the amount of the Class Optimal Interest
Distribution Amount for such Class for such Distribution Date;
(R) to the Class 1-B-3 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date
until the Class Principal Balance thereof is reduced to zero;
(S) to the Class 1-B-4 Certificates, an amount allocable to
interest equal to the amount of the Class Optimal Interest
Distribution Amount for such Class for such Distribution Date;
(T) to the Class 1-B-4 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date
until the Class Principal Balance thereof is reduced to zero;
(U) to the Class 1-B-5 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution Amount
for such Class for such Distribution Date;
(V) to the Class 1-B-5 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date
until the Class Principal Balance thereof is reduced to zero;
(W) to the Class 1-B-6 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution Amount
for such Class for such Distribution Date; and
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(X) to the Class 1-B-6 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date
until the Class Principal Balance thereof is reduced to zero;
(Y) on the first Distribution Date following an Auction of
the Group 1 Mortgage Loans pursuant to Section 7.01 hereof, to the
Class C Certificates, any Auction Excess Proceeds; and
(Z) to the Class A-R Certificates, any remaining funds in
the Trust Fund; provided, that such amounts shall not include the
$100 held in trust for the Class P-1 Certificates or the $100 held
in trust for the Class C Certificates.
II. On each Distribution Date, Available Funds from all of the Loan
Groups in Aggregate Loan Group II remaining after making the distributions
described in Section 5.02(a)(2), Section 5.02(a)(3), 5.02(a)(4) and Section
5.02(a)(5) above, will be distributed to the Group II Subordinated
Certificates, the Class P-2 Certificates and the Class A-R Certificates in the
following order and priority and, in each case, to the extent of such funds
remaining:
(A) to the Class B-1 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution Amount
for such Class for such Distribution Date;
(B) to the Class B-1 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date
until the Class Principal Balance thereof is reduced to zero;
(C) to the Class B-2 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution Amount
for such Class for such Distribution Date;
(D) to the Class B-2 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date
until the Class Principal Balance thereof is reduced to zero;
(E) to the Class B-3 Certificates, an amount allocable to
interest equal to the amount of the Class Optimal Interest
Distribution Amount for such Class for such Distribution Date;
(F) to the Class B-3 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date
until the Class Principal Balance thereof is reduced to zero;
(G) to the Class B-4 Certificates, an amount allocable to
interest equal to the amount of the Class Optimal Interest
Distribution Amount for such Class for such Distribution Date;
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(H) to the Class B-4 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date
until the Class Principal Balance thereof is reduced to zero;
(I) to the Class B-5 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution Amount
for such Class for such Distribution Date;
(J) to the Class B-5 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date
until the Class Principal Balance thereof is reduced to zero;
(K) to the Class B-6 Certificates, an amount allocable to
interest equal to the Class Optimal Interest Distribution Amount
for such Class for such Distribution Date; and
(L) to the Class B-6 Certificates, an amount allocable to
principal equal to its Pro Rata Share for such Distribution Date
until the Class Principal Balance thereof is reduced to zero;
(M) [Reserved]; and
(N) to the Class A-R Certificates, any remaining funds in
the Trust Fund; provided, that such amounts shall not include the
$100 held in trust for the Class P-2 Certificates.
On each Distribution Date, all amounts representing Prepayment Penalties
on the Group 1 Mortgage Loans received by the Securities Administrator with
respect to the related Prepayment Period will be distributed to the holders of
the Class P-1 Certificates. On each Distribution Date, all amounts
representing Prepayment Penalties on the Aggregate Group II Mortgage Loans
received by the Securities Administrator with respect to the related
Prepayment Period will be distributed to the holders of the Class P-2
Certificates. On the Distribution Date in (x) July 2011 with respect to the
Class P-1 Certificates and (y) July 2011 with respect to the Class P-2
Certificates, the $100 held in trust for each of the Class P-1 and Class P-2
Certificates will be distributed to the holders of the Class P-1 and Class P-2
Certificates, respectively.
(b) On each Distribution Date with respect to each Class or Component of
Accrual Certificates, the Accrual Amount for such Class or Component for such
Distribution Date shall not (except as provided in the second to last sentence
in this paragraph) be distributed as interest with respect to such Class or
Component of Accrual Certificates, but shall instead be added to the related
Class Principal Balance of such Class on the related Distribution Date. With
respect to any Distribution Date on which principal payments on any Class or
Component of Accrual Certificates are distributed pursuant to Section
5.02(a)(1)(iv)(y), Section 5.02(a)(2)(iv)(y), Section 5.02(a)(3)(iv)(y) and
Section 5.02(a)(4)(iv)(y), as applicable, the related Accrual Amount shall be
deemed to have been added on such Distribution Date to the related Class
Principal Balance or Component Balance (and included in the amount
distributable on the related Class or Classes or Component of Accretion
Directed Certificates pursuant to Section 5.02(a)(1)(iii), Section
5.02(a)(2)(iii), Section 5.02(a)(3)(iii) and Section 5.02(a)(4)(iii), as
79
applicable, for such Distribution Date) and the related distribution thereon
shall be deemed to have been applied concurrently towards the reduction of all
or a portion of the amount so added and, to the extent of any excess, towards
the reduction of the Class Principal Balance or Component Balance of such
Class or Component of Accrual Certificates immediately prior to such
Distribution Date.
(c) On each Distribution Date on or after the Senior Credit Support
Depletion Date for the Aggregate Group II Certificates, notwithstanding the
allocations and priorities set forth in Section 5.02(a)(4)(iv)(y), the portion
of Available Funds available to be distributed as principal of the Group 4
Senior Certificates, shall be distributed concurrently, as principal, on such
Classes, pro rata, on the basis of their respective Class Principal Balances,
until the Class Principal Balances thereof are reduced to zero.
(d) On each Distribution Date, the amount referred to in clause (i) of
the definition of Class Optimal Interest Distribution Amount for each Class of
Certificates or Component thereof for such Distribution Date shall be reduced
for each Class or Component of Senior Certificates of a Senior Certificate
Group, each related Class of Subordinated Certificates by (i) the related
Class' pro rata share of the Net Prepayment Interest Shortfalls for the
related Loan Group based (x) with respect to a Class of Senior Certificates or
Component thereof, on the related Class Optimal Interest Distribution Amount
for such Distribution Date, and (y) (1) with respect to the Group 1
Subordinated Certificates, the related Class Optimal Interest Distribution
Amount for such Distribution Date in the absence of such Net Prepayment
Interest Shortfalls and (2) with respect to the Group II Subordinated
Certificates on and prior to the second related Senior Termination Date on the
Assumed Interest Amount or after such related Senior Termination Date, the
related Class Optimal Interest Distribution Amount for such Distribution Date
in the absence of such Net Prepayment Interest Shortfalls, and (ii) the
related Class' Allocable Share of (A) after the related Special Hazard
Coverage Termination Date, with respect to each Mortgage Loan in the related
Loan Group (or after the related Senior Credit Support Depletion Date, any
Mortgage Loan in Loan Group 1 or any Mortgage Loan in Aggregate Loan Group II,
as applicable) that became a Special Hazard Mortgage Loan during the calendar
month preceding the month of such Distribution Date, the excess of one month's
interest at the related Adjusted Net Mortgage Rate on the Stated Principal
Balance of such Mortgage Loan as of the first day of the related Due Period in
such month over the amount of Liquidation Proceeds applied as interest on such
Mortgage Loan with respect to such month, (B) after the related Bankruptcy
Coverage Termination Date, with respect to each Mortgage Loan in the related
Loan Group (or after the related Senior Credit Support Depletion Date, any
Mortgage Loan in Loan Group 1 or any Mortgage Loan in Aggregate Loan Group II,
as applicable) that became subject to a Bankruptcy Loss during the calendar
month preceding the month of such Distribution Date, the interest portion of
the related Debt Service Reduction or Deficient Valuation, (C) each Relief Act
Reduction for the Mortgage Loans in the related Loan Group (or after the
related Senior Credit Support Depletion Date, any Mortgage Loan in Loan Group
1 or any Mortgage Loan in Aggregate Loan Group II, as applicable) incurred
during the calendar month preceding the month of such Distribution Date and
(D) after the related Fraud Loss Coverage Termination Date, with respect to
each Mortgage Loan in the related Loan Group (or after the related Senior
Credit Support Depletion Date, any Mortgage Loan in Loan Group 1 or any
Mortgage Loan in Aggregate Loan Group II, as applicable) that became a Fraud
Loan during the calendar month preceding the month of such Distribution Date,
the excess of one month's interest at the related
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Adjusted Net Mortgage Rate on the Stated Principal Balance of such Mortgage
Loan as of the related Due Period in such month over the amount of Liquidation
Proceeds applied as interest on such Mortgage Loan with respect to such month.
(e) Notwithstanding the priority and allocation contained in Section
5.02(a)(6)I., if, on any Distribution Date, with respect to any Class of Group
1 Subordinated Certificates, the sum of the related Class Subordination
Percentages of such Class and of all Classes of Group 1 Subordinated
Certificates which have a higher numerical Class designation than such Class
(the "Applicable Credit Support Percentage") is less than the Original
Applicable Credit Support Percentage for such Class, no distribution of
Principal Prepayments will be made to any such Classes (the "Restricted
Classes") and the amount of such Principal Prepayments otherwise distributable
to the Restricted Classes shall be distributed to the outstanding Classes of
Group 1 Subordinated Certificates having lower numerical Class designations
than such Class, pro rata, based on their respective Class Principal Balances
immediately prior to such Distribution Date and shall be distributed in the
sequential order provided in Section 5.02(a)(6)I. Notwithstanding anything in
this Agreement to the contrary, the Class of Group 1 Subordinated Certificates
then outstanding with the highest distribution priority shall not be a
Restricted Class.
(f) Notwithstanding the priority and allocation contained in Section
5.02(a)(6)II., if, on any Distribution Date, with respect to any Class of
Group II Subordinated Certificates, the Applicable Credit Support Percentage
for a Class of Group II Subordinated Certificates is less than the Original
Applicable Credit Support Percentage for such Class, no distribution of
Principal Prepayments will be made to any such Classes (the "Restricted
Classes") and the amount of such Principal Prepayments otherwise distributable
to the Restricted Classes shall be distributed to the outstanding Classes of
Group II Subordinated Certificates having lower numerical Class designations
than such Class, pro rata, based on their respective Class Principal Balances
immediately prior to such Distribution Date and shall be distributed in the
sequential order provided in Section 5.02(a)(6)II. Notwithstanding anything in
this Agreement to the contrary, the Class of Group II Subordinated
Certificates then outstanding with the highest distribution priority shall not
be a Restricted Class.
(g) If Subsequent Recoveries have been received with respect to a
Liquidated Mortgage Loan in an Aggregate Loan Group, the amount of such
Subsequent Recoveries will be applied sequentially, in the order of payment
priority, to increase the Class Principal Balance or Component Principal
Balance of each Class of Certificates or Component thereof related to that
Aggregate Loan Group to which Realized Losses have been allocated, but in each
case by not more than the amount of Realized Losses previously allocated to
that Class of Certificates or Component pursuant to Section 5.02. Holders of
such Certificates will not be entitled to any payment in respect of the Class
Optimal Interest Distribution Amount on the amount of such increases for any
Interest Accrual Period preceding the Distribution Date on which such increase
occurs. Any such increases shall be applied pro rata to the Certificate
Balance or Component Balance of each Certificate of such Class or Component
thereof.
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Section 5.03 [Reserved].
Section 5.04 Allocation of Losses.
(a) On or prior to each Distribution Date, the Securities Administrator
shall aggregate the information provided by each Servicer with respect to the
total amount of Realized Losses, including Excess Losses, experienced on the
Mortgage Loans for the related Distribution Date.
(b) Realized Losses with respect to the Mortgage Loans in any Loan Group
on any Distribution Date shall be allocated as follows:
(ii) [Reserved]; and
(iii) (A) any Realized Loss with respect to Loan Group 1 (other than
an Excess Loss) shall be allocated first to the Group 1 Subordinated
Certificates in reverse order of their respective numerical Class
designations (beginning with the Class of Group 1 Subordinated
Certificates then outstanding with the highest numerical Class
designation) until the respective Class Principal Balance of each such
Class is reduced to zero, and second to the Senior Certificates (other
than any Notional Amount Certificates, if applicable), pro rata on the
basis of their respective Class Principal Balances or, in the case of any
Class of Accrual Certificates or Accrual Component, on the basis of the
lesser of their Class Principal Balance or Component Balance, as
applicable, and their initial Class Principal Balance or Component
Balance, as applicable, in each case immediately prior to the related
Distribution Date until the respective Class Principal Balance of each
such Class is reduced to zero; provided, that any Realized Losses on the
Group 1 Mortgage Loans that would otherwise be allocated to the Class
1-A-2 Certificates will instead be allocated to the Class 1-A-3
Certificates, until its Class Principal Balance is reduced to zero;
(B) any Excess Losses on the Mortgage Loans in Loan Group 1 shall be
allocated to the Classes of Certificates of the related Senior
Certificate Group (other than any Notional Amount Certificates) and the
Group 1 Subordinated Certificates on the basis of their respective
initial Class Principal Balances or Component Balances, as applicable, or
in the case of any or in the case of any Class of Accrual Certificates or
Accrual Component, on the basis of the lesser of their respective Class
Principal Balance and their respective initial Class Principal Balance or
their respective Component Balance or their respective initial Component
Balance, as the case may be, in each case immediately prior to the
related Distribution Date;
(C) any Realized Loss with respect to any Loan Group in Aggregate
Loan Group II (other than an Excess Loss) shall be allocated first to the
Aggregate Group II Subordinated Certificates in reverse order of their
respective numerical Class designations (beginning with the Class of
Aggregate Group II Subordinated Certificates then outstanding with the
highest numerical Class designation) until the respective Class Principal
Balance of each such Class is reduced to zero, and second to the Senior
Certificates (other than any Notional Amount Certificates, if
applicable), pro rata on the basis of their respective Class Principal
Balances or, in the case of any Class of Accrual
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Certificates or Accrual Component, on the basis of the lesser of their
Class Principal Balance or Component Balance, as applicable, and their
initial Class Principal Balance or Component Balance, as applicable, in
each case immediately prior to the related Distribution Date until the
respective Class Principal Balance of each such Class is reduced to zero;
and
(D) any Excess Losses on the Mortgage Loans in a Loan Group in
Aggregate Loan Group II shall be allocated to the Classes of Certificates
of the related Senior Certificate Group (other than any Notional Amount
Certificates) and the Aggregate Group II Subordinated Certificates then
outstanding, pro rata, on the basis of, with respect to such Senior
Certificates, their respective Class Principal Balances, or in the case
of any Class of Accrual Certificates or Accrual Component, on the basis
of the lesser of their respective Class Principal Balance and their
respective initial Class Principal Balance or their respective Component
Balance or their respective initial Component Balance, as the case may
be, in each case immediately prior to the related Distribution Date and,
with respect to each Class of Aggregate Group II Subordinated
Certificates, the applicable Subordinated Portion for each such Class
relating to the Loan Group in Aggregate Loan Group II in which such
Excess Loss occurs; provided, however, on any Distribution Date after the
second related Senior Termination Date for a Senior Certificate Group in
Aggregate Certificate Group II, (i) any Bankruptcy Losses or Fraud Losses
on the Mortgage Loans in the related Loan Group shall be allocated pro
rata to all Classes and Components of Senior Certificates (other than any
Notional Amount Certificates, if applicable) in the related Senior
Certificate Group on the basis of their respective initial Class
Principal Balances or Component Balances, as applicable, or in the case
of any or in the case of any Class of Accrual Certificates or Accrual
Component, on the basis of the lesser of their respective Class Principal
Balance and their respective initial Class Principal Balance or their
respective Component Balance or their respective initial Component
Balance, as the case may be, in each case immediately prior to the
related Distribution Date, and (ii) any Excess Losses on the Mortgage
Loans in the related Loan Group shall be allocated pro rata to all
Classes and Components of Senior Certificates (other than any Notional
Amount Certificates, if applicable) in the related Senior Certificate
Group on the basis of their respective initial Class Principal Balances
or Component Balances, as applicable, or in the case of any or in the
case of any Class of Accrual Certificates or Accrual Component, on the
basis of the lesser of their respective Class Principal Balance and their
respective initial Class Principal Balance or their respective Component
Balance or their respective initial Component Balance, as the case may
be, in each case immediately prior to the related Distribution Date;
(c) The Class Principal Balance of the Class of Group 1 Subordinated
Certificates and Aggregate Group II Subordinated Certificates, as applicable,
then outstanding with the highest numerical Class designation shall be reduced
on each Distribution Date by the amount, if any, by which the aggregate of the
Class Principal Balances of all outstanding Classes of Group 1 Certificates or
Aggregate Group II Certificates, as applicable (after giving effect to the
distribution of principal and the allocation of Realized Losses on such
Distribution Date), exceeds the aggregate Stated Principal Balance of the
Mortgage Loans in the related Aggregate Loan Group for the following
Distribution Date.
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(d) Any Realized Loss allocated to a Class of Certificates or any
reduction in the Class Principal Balance of a Class of Certificates pursuant
to Section 5.04(b) above or Section 5.04(g) below shall be allocated among the
Certificates of such Class in proportion to their respective Certificate
Balances.
(e) Any allocation of Realized Losses to a Certificate or to any
Component or any reduction in the Certificate Balance of a Certificate,
pursuant to Section 5.04(b) above shall be accomplished by reducing the
Certificate Balance or Component Balance thereof, as applicable, immediately
following the distributions made on the related Distribution Date in
accordance with the definition of "Certificate Balance" or "Component
Balance," as the case may be. All Realized Losses or Excess Losses allocated
to a Class of Component Certificates will be allocated, pro rata, to the
related Components.
(f) For the avoidance of doubt, no Realized Losses on the Mortgage Loans
in any Loan Group shall be allocated to the Class P-1, Class P-2 or Class C
Certificates.
Section 5.05 Advances by the Master Servicer.
If any Servicer fails to remit any Advance required to be made under the
applicable Purchase and Servicing Agreement, the Master Servicer shall itself
make, or shall cause the successor Servicer to make, such Advance. If the
Master Servicer determines that an Advance is required, it shall on the
Business Day preceding the related Distribution Date immediately following
such Determination Date remit to the Securities Administrator from its own
funds (or funds advanced by the applicable Servicer) for deposit in the
Distribution Account immediately available funds in an amount equal to such
Advance. The Master Servicer and each Servicer shall be entitled to be
reimbursed for all Advances made by it. Notwithstanding anything to the
contrary herein, in the event the Master Servicer determines in its reasonable
judgment that an Advance is non-recoverable, the Master Servicer shall be
under no obligation to make such Advance. If the Master Servicer determines
that an Advance is non-recoverable, it shall, on or prior to the related
Distribution Date, deliver an Officer's Certificate to the Trustee and the
Securities Administrator to such effect.
Section 5.06 Compensating Interest Payments.
The amount of compensation payable to the Securities Administrator in
respect of the Mortgage Loans and any Distribution Date shall be reduced (but
not below zero) by the amount of any aggregate Compensating Interest Payment
from the Servicers for such Distribution Date, but only to the extent that
Prepayment Interest Shortfalls relating to such Distribution Date are required
to be paid by the Servicers pursuant to the Purchase and Servicing Agreements,
as amended by the Acknowledgements, but are not actually paid by the Servicer.
Such amount shall not be treated as an Advance and shall not be reimbursable.
Section 5.07 [Reserved].
Section 5.08 Cross-Collateralization; Adjustments to Available Funds.
(a) With respect to the Aggregate Group II Certificates, on each
Distribution Date after the first related Senior Termination Date but prior to
the earlier of the Senior Credit Support
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Depletion Date and the second related Senior Termination Date, the Securities
Administrator shall distribute the principal portion of Available Funds on the
Aggregate Group II Mortgage Loans relating to the Senior Certificates that
will have been paid in full to the holders of the Aggregate Group II Senior
Certificates of the other Certificate Groups in Aggregate Certificate Group
II, pro rata, based on Class Principal Balances, provided, however, that the
Securities Administrator shall not make such distribution on such Distribution
Date if (a) the Aggregate Subordinated Percentage for the Group II
Subordinated Certificates for such Distribution Date is greater than or equal
to 200% of such Aggregate Subordinated Percentage as of the Closing Date and
(b) the average aggregate Stated Principal Balance of the Aggregate Group II
Mortgage Loans delinquent 60 days or more over the last six months, as a
percentage of the Class Principal Balance of the Aggregate Group II
Subordinated Certificates, is less than 50%.
(b) If on any Distribution Date the aggregate Class Principal Balance of
Senior Certificates in a Senior Certificate Group in Aggregate Certificate
Group II is greater than the aggregate Stated Principal Balance of the
Mortgage Loans in the related Loan Group (the "Undercollateralized Group(s)")
at the end of the Prepayment Period related to the immediately preceding
Distribution Date, then the Securities Administrator shall apply the Available
Funds of the other Loan Group(s) in Aggregate Loan Group II that is not
undercollateralized (the "Overcollateralized Group"), as follows:
(ii) to add to the Available Funds of the Undercollateralized Group
an amount equal to the lesser of (a) one month's interest on the Transfer
Payment Received of the Undercollateralized Group at the Weighted Average
Mortgage Rate (minus the weighted average Expense Fee Rate) applicable to
the Undercollateralized Group and (b) Available Funds of the
Overcollateralized Group remaining after making distributions to the
Certificates of the Overcollateralized Group on such Distribution Date
pursuant to Section 5.02; and
(iii) to the Senior Certificates of each Undercollateralized Group
in Aggregate Certificate Group II, to the extent of the principal portion
of Available Funds of the Overcollateralized Group in Aggregate
Certificate Group II remaining after making distributions to the Senior
Certificates of the Overcollateralized Group on such Distribution Date
pursuant to Section 5.02, until the Class Principal Balance of the Senior
Certificates of such Undercollateralized Group in Aggregate Certificate
Group II equals the aggregate Stated Principal Balance of the Mortgage
Loans in the related Loan Group, any shortfall of such Available Funds to
be allocated among such Undercollateralized Group, pro rata, based upon
the respective Transfer Payments.
The payment received by the Undercollateralized Group is referred to as a
"Transfer Payment Received." The payment made by the Overcollateralized Group
is referred to as a "Transfer Payment Made."
(c) If more than one Overcollateralized Group exists on any Distribution
Date, reductions in the Available Funds of such Loan Groups to make the
payments required to be made pursuant to Section 5.08(b) on such Distribution
Date shall be made pro rata, based on the Class Principal Balance of the
related Senior Certificates.
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Section 5.09 Determination of Pass-Through Rates for LIBOR Certificates.
(a) On each Interest Determination Date after the initial Interest
Determination Date and for so long as any LIBOR Certificates are outstanding,
the Securities Administrator will determine LIBOR on the basis of the British
Bankers' Association ("BBA") "Interest Settlement Rate" for one-month deposits
in U.S. dollars as found on Telerate page 3750 as of 11:00 a.m. London time on
each LIBOR Determination Date. "Telerate Page 3750" means the display page
currently so designated on the Moneyline Telerate Service (formerly the Dow
Xxxxx Markets) (or such other page as may replace that page on that service
for the purpose of displaying comparable rates or prices).
(b) If on any Interest Determination Date, LIBOR cannot be determined as
provided in paragraph (a) of this Section 5.09, the Securities Administrator
shall either (i) request each Reference Bank to inform the Securities
Administrator of the quotation offered by its principal London office for
making one-month United States dollar deposits in leading banks in the London
interbank market, as of 11:00 a.m. (London time) on such Interest
Determination Date or (ii) in lieu of making any such request, rely on such
Reference Bank quotations that appear at such time on the Reuters Screen LIBO
Page (as defined in the International Swap Dealers Association Inc. Code of
Standard Wording, Assumptions and Provisions for Swaps, 1986 Edition), to the
extent available. LIBOR for the next Interest Accrual Period will be
established by the Securities Administrator on each interest Determination
Date as follows:
(i) If on any Interest Determination Date two or more Reference
Banks provide such offered quotations, LIBOR for the next applicable
Interest Accrual Period shall be the arithmetic mean of such offered
quotations (rounding such arithmetic mean upwards if necessary to the
nearest whole multiple of 1/32%).
(ii) If on any Interest Determination Date only one or none of the
Reference Banks provides such offered quotations, LIBOR for the next
Interest Accrual Period shall be whichever is the higher of (i) LIBOR as
determined on the previous Interest Determination Date or (ii) the
Reserve Interest Rate. The "Reserve Interest Rate" shall be the rate per
annum which the Securities Administrator determines to be either (i) the
arithmetic mean (rounded upwards if necessary to the nearest whole
multiple of 1/32%) of the one-month United States dollar lending rates
that New York City banks selected by the Securities Administrator are
quoting, on the relevant Interest Determination Date, to the principal
London offices of at least two of the Reference Banks to which such
quotations are, in the opinion of the Securities Administrator, being so
made, or (ii) in the event that the Securities Administrator can
determine no such arithmetic mean, the lowest one-month United States
dollar lending rate which New York City banks selected by the Securities
Administrator are quoting on such Interest Determination Date to leading
European banks.
(iii) (A) If on any Interest Determination Date the Securities
Administrator is required but is unable to determine the Reserve Interest
Rate in the manner provided in paragraph (b) above, LIBOR for the related
Classes of Certificates shall be LIBOR as determined on the preceding
applicable Interest Determination Date or (B) in the case of the first
Interest Determination Date, LIBOR shall be 4.530%.
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Until all of the LIBOR Certificates are paid in full, the Securities
Administrator will at all times retain at least four Reference Banks for the
purpose of determining LIBOR with respect to each Interest Determination Date.
The Securities Administrator initially shall designate the Reference Banks.
Each "Reference Bank" shall be a leading bank engaged in transactions in
Eurodollar deposits in the international Eurocurrency market, shall not
control, be controlled by, or be under common control with, the Securities
Administrator and shall have an established place of business in London. If
any such Reference Bank should be unwilling or unable to act as such or if the
Master Servicer should terminate its appointment as Reference Bank, the
Securities Administrator shall promptly appoint or cause to be appointed
another Reference Bank. The Securities Administrator shall have no liability
or responsibility to any Person for (i) the selection of any Reference Bank
for purposes of determining LIBOR or (ii) any inability to retain at least
four Reference Banks which is caused by circumstances beyond its reasonable
control.
(c) The Pass-Through Rate for each Class of LIBOR Certificates for each
Interest Accrual Period shall be determined by the Securities Administrator on
each Interest Determination Date so long as the LIBOR Certificates are
outstanding on the basis of LIBOR and the respective formulae appearing in
footnotes corresponding to the LIBOR Certificates in the table relating to the
Certificates in the Preliminary Statement.
(d) In determining LIBOR, any Pass-Through Rate for the LIBOR
Certificates, any Interest Settlement Rate, or any Reserve Interest Rate, the
Securities Administrator may conclusively rely and shall be protected in
relying upon the offered quotations (whether written, oral or on the Dow Xxxxx
Markets) from the BBA designated banks, the Reference Banks or the New York
City banks as to LIBOR, the Interest Settlement Rate or the Reserve Interest
Rate, as appropriate, in effect from time to time. The Securities
Administrator shall not have any liability or responsibility to any Person for
(i) the selection of New York City banks for purposes of determining any
Reserve Interest Rate or (ii) its inability, following a good-faith reasonable
effort, to obtain such quotations from, the BBA designated banks, the
Reference Banks or the New York City banks or to determine such arithmetic
mean, all as provided for in this Section 5.09.
(e) The establishment of LIBOR and each Pass-Through Rate for the LIBOR
Certificates by the Securities Administrator shall (in the absence of manifest
error) be final, conclusive and binding upon each Holder of a Certificate and
the Securities Administrator.
Section 5.10 Reserve Fund.
(a) On the Closing Date, the Securities Administrator shall establish and
maintain in the Trustee's name, in trust for the benefit of the holders of the
LIBOR Certificates and the Notional Amount Certificates, a Reserve Fund, into
which the Depositor shall, on such date, deposit, in the aggregate, $9,000 of
which $6,500 shall be deposited into the Class 1-A-X Sub Account and $2,500
shall be deposited into the Class 1-M-X Sub Account. The Reserve Fund shall be
an Eligible Account, and funds on deposit therein shall be held separate and
apart from, and shall not be commingled with, any other moneys, including,
without limitation, other moneys of the Trustee held pursuant to this
Agreement. The Reserve Fund shall not be an asset of any REMIC established
hereby.
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(b) The Reserve Fund will be comprised of two Sub Accounts: "Class 1-A-X
Sub Account" and "Class 1-M-X Sub Account". On each Distribution Date, (i)
Current Interest that would otherwise be distributable with respect to the
Class 1-A-X Certificates will be deposited instead in the Class 1-A-X Sub
Account and (ii) Current Interest that would otherwise be distributable with
respect to the Class 1-M-X Certificates will be deposited instead in the Class
1-M-X Sub Account, in each case, to the extent of the applicable Required
Reserve Fund Deposit for such Class.
(c) On any Distribution Date for which a Net WAC Shortfall exists with
respect to the Class 1-A-1, Class 1-A-2 or Class 1-A-3 Certificates remaining
unpaid after application of the amounts received in respect of the Class 1-A-1
and Class 1-A-2 Corridor Contract and the Class 1-A-3 Corridor Contract,
respectively, the Securities Administrator shall withdraw, to the extent of
available funds therein, from the Class 1-A-X Sub Account, the amount of such
Net WAC Shortfall for distribution on such Distribution Date pursuant to
Section 5.10(e) hereof.
(d) On any Distribution Date for which a Net WAC Shortfall exists with
respect to the Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class
1-M-5, Class 1-M-6, Class 1-B-1, Class 1-B-2 or Class 1-B-3 Certificates
remaining unpaid after application of the amounts received in respect of the
Junior LIBOR Corridor Contract, the Securities Administrator shall withdraw,
to the extent of available funds therein, from the Class 1-M-X Sub Account the
amount of such Net WAC Shortfall for distribution on such Distribution Date
pursuant to Section 5.10(f) hereof.
(e) (i) On any Distribution Date for which a Net WAC Shortfall exists
with respect to the Class 1-A-1, Class 1-A-2 and Class 1-A-3 Certificates
remaining unpaid after application of payments received under the related
Corridor Contract pursuant to Section 5.11(d) hereof, the Securities
Administrator will withdraw the amounts on deposit in the Class 1-A-X Sub
Account, and distribute them to the holders of the Class 1-A-1, Class 1-A-2
and Class 1-A-3 Certificates, first, pro rata, based upon their respective
Class Principal Balances and then, pro rata, to the extent of any Net WAC
Shortfalls remaining unpaid after giving effect to clause first, of this
Section 5.10(e)(i).
(ii) On any Distribution Date for which a Net WAC Shortfall exists with
respect to the Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class
1-M-5, Class 1-M-6, Class 1-B-1, Class 1-B-2 and Class 1-B-3 Certificates
remaining unpaid after application of payments received under the related
Corridor Contract pursuant to Section 5.11(d) hereof, the Securities
Administrator will withdraw the amounts on deposit in the Class 1-M-X Sub
Account and distribute them sequentially, to the holders of the Class 1-M-1,
Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-M-6, Class 1-B-1,
Class 1-B-2 and Class 1-B-3 Certificates, in that order, in an amount up to
their remaining respective accrued and unpaid Net WAC Shortfalls.
(f) Funds in each of the Sub Accounts shall be invested in Permitted
Investments as directed in writing by the applicable Notional Amount
Certificateholder. Any earnings on amounts in the Class 1-A-X Sub Account
shall be for the benefit of the Class 1-A-X Certificateholders; and any
earnings on amounts in the Class 1-M-X Sub Account shall be for the benefit of
the Class 1-M-X Certificateholders. The Notional Amount Certificates shall
evidence ownership of the related Sub Account for federal income tax purposes
and the Holders thereof
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shall direct the Securities Administrator, in writing, as to investment of
amounts on deposit therein. The applicable Notional Amount
Certificateholder(s) shall be liable for any losses incurred on such
investments. In the absence of written instructions from the applicable
Notional Amount Certificateholder to the Securities Administrator as to
investment of funds on deposit in the related Sub Account, such funds shall be
invested in the Xxxxx Fargo Advantage Prime Investment Money Market Fund. For
all Federal income tax purposes, amounts transferred by the Master REMIC to
the Reserve Fund shall be treated as amounts distributed by the Master REMIC
to the applicable Notional Amount Certificateholders.
(g) If, immediately after any Distribution Date, the amount on deposit in
any Sub Account of the Reserve Fund exceeds the initial deposit therein, the
Securities Administrator will distribute such excess to the Holders of the
Certificates that deposited such amounts in the relevant Sub Account pursuant
to Section 5.10(b).
Upon termination of the Trust Fund any amounts remaining in the related
Sub Account shall be distributed to Xxxxxx Xxxxxxx & Co. Incorporated.
Section 5.11 The Corridor Contracts.
(a) The Depositor hereby directs the Securities Administrator, solely in
its capacity as Securities Administrator hereunder and not in its individual
capacity, to execute and deliver each of the Corridor Contracts concurrently
with the execution and delivery of this Agreement. Except as may be directed
in writing by the Depositor or by a majority in interest of the Holders of a
Class of Certificates that have the benefit of a Corridor Contract, the
Securities Administrator shall have no duty or responsibility to enter into
any other interest rate cap contract or agreement upon the expiration or
termination of any of the Corridor Contracts. The Corridor Contracts will be
assets of the Trust Fund but will not be assets of any REMIC. The Securities
Administrator shall deposit any amounts received from the Corridor Contract
Counterparty with respect to the Corridor Contracts into the Reserve Fund.
(b) The Securities Administrator will prepare and deliver any notices
required to be delivered to the Corridor Contract Counterparty under any
Corridor Contract.
(c) The Securities Administrator, on behalf of the Trustee shall
terminate the Corridor Contract Counterparty upon the occurrence of an event
of default under any Corridor Contract of which a Responsible Officer of the
Securities Administrator has actual knowledge. Upon such a termination, the
Corridor Contract Counterparty may be required to pay an amount to the
Securities Administrator, on behalf of the Trustee, in respect of market
quotations for the replacement cost of the related Corridor Contract.
(d) On each Distribution Date, following the distribution of any amounts
in respect of interest pursuant to Section 5.02(a)(1)(iii), with respect to
the Group 1 Senior Certificates and Section 5.02(a)(6)I.(A), Section
5.02(a)(6)I.(C), Section 5.02(a)(6)I.(E), Section 5.02(a)(6)I.(G), Section
5.02(a)(6)I.(I), Section 5.02(a)(6)I.(K), Section 5.02(a)(6)I.(M), Section
5.02(a)(6)I.(O) and Section 5.02(a)(6)I.(Q) with respect to the Class 1-M-1,
Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-M-6, Class 1-B-1,
Class 1-B-2 and Class 1-B-3 Certificates, respectively, the Securities
Administrator shall distribute amounts on deposit in the Reserve
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Fund from (a) the Class 1-A-1 and Class 1-A-2 Corridor Contract, to the
holders of the Class 1-A-1 and Class 1-A-2 Certificates, (b) the Class 1-A-3
Corridor Contract, to the holders of the Class 1-A-3 Certificates and (c) the
Junior LIBOR Corridor Contract to the holders of the Class 1-M-1, Class 1-M-2,
Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-M-6, Class 1-B-1, Class 1-B-2
and Class 1-B-3 Certificates, in each case to the extent of any Net WAC
Shortfalls allocated to such Classes of Certificates. Amounts withdrawn from
the Reserve Fund shall be distributed sequentially as follows:
(i) from any Class 1-A-1 and Class 1-A-2 Corridor Contract Payment
on deposit in the Reserve Fund with respect to that Distribution Date, an
amount equal to any unpaid remaining Net WAC Shortfall with respect to
the Class 1-A-1 and Class 1-A-2 Certificates for that Distribution Date,
to the holders of the Class 1-A-1 and Class 1-A-2 Certificates, , first,
pro rata, based upon their respective class principal balances and then,
pro rata, to the extent of any Net WAC Shortfalls remaining unpaid after
giving effect to clause first, above.
(ii) from any Class 1-A-3 Corridor Contract Payment on deposit in
the Reserve Fund with respect to that Distribution Date, an amount equal
to any unpaid remaining Net WAC Shortfall with respect to the Class 1-A-3
Certificates for that Distribution Date, to the Class 1-A-3 Certificates;
and
(iii) from any Junior LIBOR Corridor Contract Payment on deposit in
the Reserve Fund with respect to that Distribution Date, an amount equal
to any unpaid remaining Net WAC Shortfall with respect to the Class
1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-M-6,
Class 1-B-1, Class 1-B-2 and Class 1-B-3 Certificates for that
Distribution Date, to the Class 1-M-1, Class 1-M-2, Class 1-M-3, Class
1-M-4, Class 1-M-5, Class 1-M-6, Class 1-B-1, Class 1-B-2 and Class 1-B-3
Certificates, , first, pro rata, based upon their respective class
principal balances and then, pro rata, to the extent of any Net WAC
Shortfalls remaining unpaid after giving effect to clause first, above;
To the extent that a Class of Group 1 Certificates receives interest in
excess of the Group 1 Net WAC, such interest shall be deemed to have been paid
to the Reserve Fund and then paid by the Reserve Fund to those
Certificateholders. For purposes of the Code, amounts deemed deposited in the
Reserve Fund shall be deemed to have first been distributed to the Class 1-A-X
and Class 1-M-X Certificates.
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ARTICLE VI
CONCERNING THE TRUSTEE AND
THE SECURITIES ADMINISTRATOR; EVENTS OF DEFAULT
Section 6.01 Duties of Trustee and the Securities Administrator.
(a) The Trustee, except during the continuance of an Event of Default,
and the Securities Administrator undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement. Any permissive
right of the Trustee or the Securities Administrator provided for in this
Agreement shall not be construed as a duty of the Trustee or the Securities
Administrator. If an Event of Default has occurred and has not otherwise been
cured or waived, the Trustee or the Securities Administrator shall exercise
such of the rights and powers vested in it by this Agreement and use the same
degree of care and skill in their exercise as a prudent Person would exercise
or use under the circumstances in the conduct of such Person's own affairs,
unless the Trustee is acting as master servicer, in which case it shall use
the same degree of care and skill (in its capacity as successor Master
Servicer) as a master servicer hereunder.
(b) Each of the Trustee and the Securities Administrator, upon receipt of
all resolutions, certificates, statements, opinions, reports, documents,
orders or other instruments furnished to the Trustee or the Securities
Administrator which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they are
in the form required by this Agreement; provided, however, that neither the
Trustee nor the Securities Administrator shall be responsible for the accuracy
or content of any such resolution, certificate, statement, opinion, report,
document, order or other instrument furnished by the Master Servicer or any
Servicer to the Trustee or the Securities Administrator pursuant to this
Agreement, and shall not be required to recalculate or verify any numerical
information furnished to the Trustee or the Securities Administrator pursuant
to this Agreement. Subject to the immediately preceding sentence, if any such
resolution, certificate, statement, opinion, report, document, order or other
instrument is found not to conform to the form required by this Agreement in a
material manner the Securities Administrator shall take such action as it
deems appropriate to cause the instrument to be corrected, and if the
instrument is not corrected to the Securities Administrator 's satisfaction,
the Securities Administrator will provide notice thereof to the
Certificateholders and will, at the expense of the Trust Fund, which expense
shall be reasonable given the scope and nature of the required action, take
such further action as directed by the Certificateholders.
(c) Neither the Trustee nor the Securities Administrator shall have any
liability arising out of or in connection with this Agreement, except for its
respective negligence or willful misconduct. Notwithstanding anything in this
Agreement to the contrary, neither the Trustee nor the Securities
Administrator shall be liable for special, indirect or consequential losses or
damages of any kind whatsoever (including, but not limited to, lost profits).
No provision of this Agreement shall be construed to relieve the Trustee or
the Securities Administrator from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct; provided, however,
that:
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(i) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Holders of Certificates as provided in
Section 6.18 hereof;
(ii) For all purposes under this Agreement, the Trustee shall not be
deemed to have notice of any Event of Default unless a Responsible
Officer of the Trustee has actual knowledge thereof or unless written
notice of any event which is in fact such a default is received by the
Trustee at the Corporate Trust Office of the Trustee, and such notice
references the Holders of the Certificates and this Agreement;
(iii) For all purposes under this Agreement, the Securities
Administrator shall not be deemed to have notice of any Event of Default
(other than resulting from a failure by the Master Servicer (i) to remit
funds (or to make Advances) or (ii) to furnish information to the
Securities Administrator when required to do so) unless a Responsible
Officer of the Securities Administrator has actual knowledge thereof or
unless written notice of any event which is in fact such a default is
received by the Securities Administrator at the address provided in
Section 11.07, and such notice references the Holders of the Certificates
and this Agreement;
(iv) No provision of this Agreement shall require the Trustee or the
Securities Administrator to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that repayment of such funds or
indemnity reasonably satisfactory to it against such risk or liability is
not reasonably assured to it; and none of the provisions contained in
this Agreement shall in any event require the Trustee or the Securities
Administrator to perform, or be responsible for the manner of performance
of, any of the obligations of the Master Servicer under this Agreement;
(v) Neither the Trustee nor the Securities Administrator shall be
responsible for any act or omission of each other or the Master Servicer,
the Depositor, the Seller, any Servicer or any Custodian.
(d) The Trustee shall have no duty hereunder with respect to any
complaint, claim, demand, notice or other document it may receive or which may
be alleged to have been delivered to or served upon it by the parties as a
consequence of the assignment of any Mortgage Loan hereunder; provided,
however, that the Trustee shall promptly remit to the Master Servicer, upon
receipt any such complaint, claim, demand, notice or other document (i) which
is delivered to the Corporate Trust Office of the Trustee, (ii) of which a
Responsible Officer has actual knowledge, and (iii) which contains information
sufficient to permit the Trustee to make a determination that the real
property to which such document relates is a Mortgaged Property related to a
Mortgage Loan.
(e) Neither the Trustee nor the Securities Administrator shall be
personally liable with respect to any action taken, suffered or omitted to be
taken by it in good faith in accordance with the direction of the
Certificateholders of any Class holding Certificates which evidence, as to
such Class, Percentage Interests aggregating not less than 25% as to the time,
method and
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place of conducting any proceeding for any remedy available to the Trustee or
the Securities Administrator or exercising any trust or power conferred upon
the Trustee or the Securities Administrator, as applicable, under this
Agreement or the Acknowledgements.
(f) Neither the Trustee nor the Securities Administrator shall be
required to perform services under this Agreement, or to expend or risk its
own funds or otherwise incur financial liability for the performance of any of
its duties hereunder or the exercise of any of its rights or powers if there
is reasonable ground for believing that the timely payment of its fees and
expenses or the repayment of such funds or indemnity reasonably satisfactory
to it against such risk or liability is not reasonably assured to it, and none
of the provisions contained in this Agreement shall in any event require the
Trustee or the Securities Administrator, as applicable, to perform, or be
responsible for the manner of performance of, any of the obligations of the
Master Servicer or any Servicer under this Agreement or any Purchase and
Servicing Agreement except during such time, if any, as the Trustee shall be
the successor to, and be vested with the rights, duties, powers and privileges
of, the Master Servicer in accordance with the terms of this Agreement.
(g) The Trustee shall not be held liable by reason of any insufficiency
in the Distribution Account resulting from any investment loss on any
Permitted Investment included therein (except to the extent that the Trustee
is the obligor and has defaulted thereon).
(h) Neither the Trustee nor, except as otherwise provided herein, the
Securities Administrator shall have any duty (A) to see to any recording,
filing, or depositing of this Agreement or any agreement referred to herein or
any financing statement or continuation statement evidencing a security
interest, or to see to the maintenance of any such recording or filing or
depositing or to any rerecording, refiling or redepositing of any thereof, (B)
to see to any insurance, (C) to see to the payment or discharge of any tax,
assessment, or other governmental charge or any lien or encumbrance of any
kind owing with respect to, assessed or levied against, any part of the Trust
Fund other than from funds available in the Distribution Account, or (D) to
confirm or verify the contents of any reports or certificates of the Master
Servicer or any Servicer delivered to the Trustee or the Securities
Administrator pursuant to this Agreement believed by the Trustee or the
Securities Administrator, as applicable, to be genuine and to have been signed
or presented by the proper party or parties.
(i) Neither the Securities Administrator nor the Trustee shall be liable
in its individual capacity for an error of judgment made in good faith by a
Responsible Officer or other officers of the Trustee or the Securities
Administrator, as applicable, unless it shall be proved that the Trustee or
the Securities Administrator, as applicable, was negligent in ascertaining the
pertinent facts.
(j) Notwithstanding anything in this Agreement to the contrary, neither
the Securities Administrator nor the Trustee shall be liable for special,
indirect or consequential losses or damages of any kind whatsoever (including,
but not limited to, lost profits), even if the Trustee or the Securities
Administrator, as applicable, has been advised of the likelihood of such loss
or damage and regardless of the form of action.
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(k) Neither the Securities Administrator nor the Trustee shall be
responsible for the acts or omissions of the other, it being understood that
this Agreement shall not be construed to render them agents of one another, or
of any Servicer.
Section 6.02 Certain Matters Affecting the Trustee and the Securities
Administrator.
Except as otherwise provided in Section 6.01:
(i) Each of the Trustee and the Securities Administrator may
request, and may rely and shall be protected in acting or refraining from
acting upon any resolution, Officer's Certificate, certificate of
auditors or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) Each of the Trustee and the Securities Administrator may
consult with counsel and any advice of its counsel or Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(iii) Neither the Trustee nor the Securities Administrator shall be
personally liable for any action taken, suffered or omitted by it in good
faith and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(iv) Unless an Event of Default shall have occurred and be
continuing, neither the Trustee nor the Securities Administrator shall be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document,
unless requested in writing to do so by the Holders of at least a
majority in Class Principal Balance (or Percentage Interest) of each
Class of Certificates; provided, however, that, if the payment within a
reasonable time to the Trustee or the Securities Administrator, as
applicable, of the costs, expenses or liabilities likely to be incurred
by it in the making of such investigation is, in the opinion of the
Trustee or the Securities Administrator, as applicable, not reasonably
assured to the Trustee or the Securities Administrator by the security
afforded to it by the terms of this Agreement, the Trustee or the
Securities Administrator, as applicable, may require indemnity reasonably
satisfactory to it against such expense or liability or payment of such
estimated expenses from the Certificateholders as a condition to
proceeding. The reasonable expense thereof shall be paid by the party
requesting such investigation and if not reimbursed by the requesting
party shall be reimbursed to the Trustee or the Securities Administrator,
as applicable, by the Trust Fund;
(v) Each of the Trustee and the Securities Administrator may execute
any of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, custodians or attorneys, which
agents, custodians or attorneys shall have any and all of the rights,
powers, duties and obligations of the Trustee and the Securities
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Administrator conferred on them by such appointment, provided that each
of the Trustee and the Securities Administrator shall continue to be
responsible for its duties and obligations hereunder to the extent
provided herein, and provided further that neither the Trustee nor the
Securities Administrator shall be responsible for any misconduct or
negligence on the part of any such agent or attorney appointed with due
care by the Trustee or the Securities Administrator, as applicable;
(vi) Neither the Trustee nor the Securities Administrator shall be
under any obligation to exercise any of the trusts or powers vested in it
by this Agreement or the Acknowledgements or to institute, conduct or
defend any litigation hereunder or in relation hereto, in each case at
the request, order or direction of any of the Certificateholders pursuant
to the provisions of this Agreement, unless such Certificateholders shall
have offered to the Trustee or the Securities Administrator, as
applicable, security or indemnity reasonably satisfactory to it against
the costs, expenses and liabilities which may be incurred therein or
thereby;
(vii) The right of the Trustee and the Securities Administrator to
perform any discretionary act enumerated in this Agreement shall not be
construed as a duty, and neither the Trustee nor the Securities
Administrator shall be answerable for other than its negligence or
willful misconduct in the performance of such act; and
(viii) Neither the Trustee nor the Securities Administrator shall be
required to give any bond or surety in respect of the execution of the
Trust Fund created hereby or the powers granted hereunder.
Section 6.03 Trustee and Securities Administrator Not Liable for
Certificates.
The Trustee and the Securities Administrator make no representations as
to the validity or sufficiency of this Agreement, any Purchase and Servicing
Agreement or Acknowledgement, any Corridor Contract or of the Certificates
(other than, in the case of the Securities Administrator, the certificate of
authentication on the Certificates) or of any Mortgage Loan, or related
document save that the Trustee and the Securities Administrator represent
that, assuming due execution and delivery by the other parties hereto, this
Agreement has been duly authorized, executed and delivered by it and
constitutes its valid and binding obligation, enforceable against it in
accordance with its terms except that such enforceability may be subject to
(A) applicable bankruptcy and insolvency laws and other similar laws affecting
the enforcement of the rights of creditors generally, and (B) general
principles of equity regardless of whether such enforcement is considered in a
proceeding in equity or at law. The Trustee and the Securities Administrator
shall not be accountable for the use or application by the Depositor of funds
paid to the Depositor in consideration of the assignment of the Mortgage Loans
to the Trust Fund by the Depositor or for the use or application of any funds
deposited into the Distribution Account or any other fund or account
maintained with respect to the Certificates. The Trustee and the Securities
Administrator shall not be responsible for the legality or validity of this
Agreement or any other document or agreement described in this Section 6.03 or
the validity, priority, perfection or sufficiency of the security for the
Certificates issued or intended to be issued hereunder. Neither the Trustee
nor, except as otherwise provided herein, the Securities Administrator shall
have any responsibility for filing any financing or continuation statement in
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any public office at any time or to otherwise perfect or maintain the
perfection of any security interest or lien granted to it hereunder or to
record this Agreement.
Section 6.04 Trustee and the Securities Administrator May Own
Certificates.
The Trustee and the Securities Administrator and any Affiliate or agent
of either of them in its individual or any other capacity may become the owner
or pledgee of Certificates and may transact banking and trust business with
the other parties hereto and their Affiliates with the same rights it would
have if it were not Trustee, Securities Administrator or such agent.
Section 6.05 Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be (i) an institution whose
accounts are insured by the FDIC, (ii) a corporation or national banking
association, organized and doing business under the laws of any State or the
United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by federal or state
authority and (iii) not an Affiliate of the Master Servicer or any Servicer.
If such corporation or national banking association publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then, for the purposes of this
Section, the combined capital and surplus of such corporation or national
banking association shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any
time the Trustee shall cease to be eligible in accordance with provisions of
this Section, the Trustee shall resign immediately in the manner and with the
effect specified in Section 6.06.
Section 6.06 Resignation and Removal of Trustee and the Securities
Administrator.
(a) The Trustee may at any time resign and be discharged from the trust
hereby created by giving written notice thereof to the Securities
Administrator, the Depositor and the Master Servicer. Upon receiving such
notice of resignation, the Depositor will promptly appoint a successor
trustee, by written instrument, one copy of which instrument shall be
delivered to the resigning Trustee, one copy to the successor trustee, one
copy to the Securities Administrator and one copy to the Master Servicer. If
no successor trustee shall have been so appointed and shall have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
At least 15 calendar days prior to the effective date of such
resignation, the Trustee shall provide (x) written notice to the Depositor and
the Master Servicer of any successor pursuant to this Section (other than a
successor appointed by the Depositor in accordance with the preceding
paragraph) and (y) in writing and in form and substance reasonably
satisfactory to the Depositor, all information reasonably requested by the
Depositor in order to comply with its reporting obligation under Item 6.02 of
Form 8-K with respect to the resignation of the Trustee.
(b) If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 6.05 and shall fail to resign after
written request therefor by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged a bankrupt or insolvent, or
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a receiver of the Trustee of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of either of their
property or affairs for the purpose of rehabilitation, conservation or
liquidation, (iii)(A) a tax is imposed or threatened with respect to the Trust
Fund by any state in which the Trustee or the Trust Fund held by the Trustee
is located due to the location of the Trustee, (B) the imposition of such tax
would be avoided by the appointment of a different trustee and (C) the Trustee
fails to indemnify the Trust Fund against such tax (iv) the continued use of
the Trustee would result in a downgrading of the rating by any Rating Agency
of any Class of Certificates with a rating or (v) the Trustee fails to comply
with its obligations under the penultimate paragraph of Section 6.14(a), in
the preceding paragraph or Article XII and such failure is not remedied within
the lesser of 10 calendar days or such period in which the applicable Exchange
Act Report can be filed timely (without taking into account any extensions),
then, in the case of clauses (i) through (iv), the Depositor shall remove the
Trustee and the Depositor shall appoint a successor trustee, acceptable to the
Master Servicer by written instrument, one copy of which instrument shall be
delivered to the Trustee so removed, one copy to the successor trustee, one
copy to the Securities Administrator and one copy to the Master Servicer.
(c) The Holders of more than 50% of the Class Principal Balance (or
Percentage Interest) of each Class of Certificates may at any time upon 30
days' written notice to the Trustee and to the Depositor remove the Trustee by
such written instrument, signed by such Holders or their attorney-in-fact duly
authorized, one copy of which instrument shall be delivered to the Depositor,
one copy to the Trustee, one copy to the Securities Administrator and one copy
to the Master Servicer; the Depositor shall thereupon appoint a successor
trustee in accordance with this Section.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall
become effective upon acceptance of appointment by the successor trustee, as
provided in Section 6.07. If no successor trustee shall have been so appointed
and shall have accepted appointment within 30 days after such notice of
dismissal, the Trustee who received such notice of dismissal may petition any
court of competent jurisdiction for the appointment of a successor trustee.
(e) The Securities Administrator shall not resign except in accordance
with the provisions of Sections 9.06 and 9.07 hereof, to the same extent that
the Master Servicer is entitled to resign or assign or delegate, as
applicable, its duties hereunder.
(f) If at any time the Securities Administrator shall cease to be
eligible in accordance with the provisions of Section 9.10 hereof and shall
fail to resign after written request thereto by the Depositor, or if at any
time the Securities Administrator shall become incapable of acting, or shall
be adjudged as bankrupt or insolvent, or a receiver of the Securities
Administrator or of its property shall be appointed, or any public officer
shall take charge or control of the Securities Administrator or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, or a tax is imposed with respect to the Trust Fund by any state
in which the Securities Administrator or the Trust Fund is located and the
imposition of such tax would be avoided by the appointment of a different
Securities Administrator, then the Depositor or the Trustee may remove the
Securities Administrator and appoint a successor securities administrator by
written instrument, in triplicate, one copy of which instrument shall be
delivered to the Securities Administrator so removed, one copy of which shall
be
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delivered to the Master Servicer and one copy to the successor securities
administrator.
(g) If no successor securities administrator shall have been appointed
and shall have accepted appointment within 60 days after Xxxxx Fargo Bank,
N.A., as Securities Administrator, ceases to be the securities administrator
pursuant to this Section 6.06, then the Trustee (as successor Securities
Administrator) shall perform the duties of the Securities Administrator
pursuant to this Agreement. The Trustee shall notify the Rating Agencies of
any change of the Securities Administrator. In such event, the Trustee shall
assume all of the rights and obligations of the Securities Administrator
hereunder arising thereafter except that the Trustee shall not be (i) liable
for losses of the predecessor Securities Administrator or any acts or
omissions of the predecessor Securities Administrator hereunder, (ii) deemed
to have made any representations and warranties of the Securities
Administrator made herein and (iii) subject to the same resignation
limitations as set forth in Section 9.06 hereof; provided, however, that the
Trustee (as successor securities administrator) shall not resign until a
successor securities administrator has accepted appointment pursuant to
Section 6.07 hereof. The Trustee shall not be accountable, shall have no
liability and makes no representation as to any acts or omissions hereunder of
the Securities Administrator until such time as the Trustee may be required to
act as successor Securities Administrator pursuant to this Section 6.06 and
thereupon only for the acts or omissions of the Trustee as successor
Securities Administrator. If the Trustee is unwilling, or unable, to act as
successor Securities Administrator, then, in such event, the Trustee may
appoint, or petition a court of competent jurisdiction to appoint a successor
Securities Administrator meeting the criteria set forth in Section 9.10
hereof. Such successor Securities Administrator shall be entitled to the
Securities Administrator Compensation.
(h) The Trustee as successor securities administrator shall be entitled
to be reimbursed for all reasonable costs and expenses associated with the
transfer of the duties of the Securities Administrator by the predecessor
Securities Administrator, including, without limitation, any costs or expenses
associated with the complete transfer of all securities administrator data and
the completion, correction or manipulation of such securities administrator
data as may be required by the Trustee as successor securities administrator
to correct any errors or insufficiencies in such securities administrator data
or otherwise to enable the Trustee or successor securities administrator to
perform the duties of the Securities Administrator properly and effectively;
provided, however, that the predecessor Securities Administrator shall not be
obligated to make any such reimbursements if such Securities Administrator was
terminated or removed without cause or if such termination or removal was a
result of the imposition of any tax on the Trust Estate by any state in which
the Securities Administrator or the Trust Fund is located. If such costs are
not paid by the predecessor Securities Administrator, the Trustee shall pay
such costs from the Trust Fund.
(i) The Trustee, as successor Securities Administrator, as compensation
for its activities hereunder as successor Securities Administrator, shall be
entitled to retain or withdraw from the Distribution Account an amount equal
to the Securities Administrator Compensation.
(j) The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Securities Administrator and appoint a
successor securities administrator by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys-in-fact
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duly authorized, one complete set of which instruments shall be delivered by
the successor Securities Administrator to the Trustee, one complete set to the
Securities Administrator so removed and one complete set to the successor so
appointed. Notice of any removal of the Securities Administrator shall be
given to each Rating Agency by the successor securities administrator.
(k) Any resignation or removal of the Securities Administrator and
appointment of a successor securities administrator pursuant to any of the
provisions of this Section 6.06 or Section 9.06 shall become effective upon
acceptance by the successor securities administrator of appointment as
provided in Section 6.07 hereof.
(l) If the Securities Administrator and the Master Servicer are the same
Person, any removal of the Master Servicer pursuant to an Event of Default
shall also result in the removal of the Securities Administrator and require
the appointment of a successor pursuant to this Section and Section 6.07.
(m) The Securities Administrator shall cooperate with the Trustee and any
successor securities administrator in effecting the termination of the
Securities Administrator's responsibilities and rights hereunder, providing to
the Trustee and successor securities administrator all documents and records
in electronic or other form reasonably requested by it to enable it to assume
the Securities Administrator's functions hereunder and for the transfer to the
Trustee or successor Securities Administrator of all amounts in the
Distribution Account or any other account or fund maintained by the Securities
Administrator with respect to the Trust Fund. Neither the Trustee nor the
Master Servicer, as applicable, nor any other successor, as applicable, shall
be deemed to be in default hereunder by reason of any failure to make, or any
delay in making, any distribution hereunder or any portion thereof caused by
(i) the failure of the predecessor Securities Administrator to deliver, or any
delay in delivering, cash, documents or records to it, (ii) the failure of the
predecessor Securities Administrator to cooperate as required by this
Agreement, (iii) the failure of the predecessor Securities Administrator to
deliver the related Mortgage Loan data as required by this Agreement or (iv)
restrictions imposed by any regulatory authority having jurisdiction over the
predecessor Securities Administrator. No successor securities administrator
shall be deemed to be in default hereunder by reason of any failure to make,
or any delay in making, any distribution hereunder or any portion thereof
caused by (i) the failure of the Master Servicer to deliver, or any delay in
delivering cash, documents or records to it related to such distribution, or
(ii) the failure of Trustee or the Master Servicer to cooperate as required by
this Agreement.
Section 6.07 Successor Trustee and Successor Securities Administrator.
(a) Any successor trustee or successor securities administrator appointed
as provided in Section 6.06 shall execute, acknowledge and deliver to the
Depositor and to its predecessor trustee or predecessor securities
administrator, as applicable, an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
or predecessor securities administrator, as applicable, shall become effective
and such successor trustee or successor securities administrator, as
applicable, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as trustee or securities
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administrator, as applicable, herein. The predecessor trustee or predecessor
securities administrator, as applicable, shall deliver to the successor
trustee or successor securities administrator, as applicable, all Trustee
Mortgage Files and documents and statements related to each Trustee Mortgage
File held by it hereunder, and shall duly assign, transfer, deliver and pay
over to the successor trustee the entire Trust Fund, together with all
necessary instruments of transfer and assignment or other documents properly
executed necessary to effect such transfer and such of the records or copies
thereof maintained by the predecessor trustee in the administration hereof as
may be requested by the successor trustee and shall thereupon be discharged
from all duties and responsibilities under this Agreement. In addition, the
Depositor and the predecessor trustee or predecessor securities administrator,
as applicable, shall execute and deliver such other instruments and do such
other things as may reasonably be required to more fully and certainly vest
and confirm in the successor trustee or successor securities administrator, as
applicable, all such rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in this
Section unless at the time of such appointment such successor trustee shall be
eligible under the provisions of Section 6.05 and has provided to the
Depositor in writing and in form and substance reasonably satisfactory to the
Depositor, all information reasonably requested by the Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect
to a replacement Trustee.
(c) Upon acceptance of appointment by a successor trustee or successor
securities administrator, as applicable, as provided in this Section, the
Master Servicer shall mail notice of the succession of such trustee or
securities administrator, as applicable, hereunder to all Holders of
Certificates at their addresses as shown in the Certificate Register and to
any Rating Agency. The costs of such mailing shall be borne by the Master
Servicer.
(d) Any successor securities administrator shall also either serve as
auction administrator pursuant to Section 7.01(b) hereof or select an
investment bank to act as auction administrator at the expense of the Trust
Fund.
Section 6.08 Merger or Consolidation of Trustee or the Securities
Administrator.
Any Person into which the Trustee or Securities Administrator may be
merged or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Trustee or Securities
Administrator shall be a party, or any Persons succeeding to the business of
the Trustee or Securities Administrator, shall be the successor to the Trustee
or Securities Administrator hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding, provided that, in the case of the
Trustee, such Person shall be eligible under the provisions of Section 6.05.
At least 15 calendar days prior to the effective date of any succession
by merger or consolidation of the Trustee or the Securities Administrator, the
Trustee or the Securities Administrator, as applicable, shall provide (x)
written notice to the Depositor of any successor pursuant to this Section and
(y) in writing and in form and substance reasonably satisfactory to the
Depositor, all information reasonably requested by the Depositor in order to
comply with its
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reporting obligation under Item 6.02 of Form 8-K with respect to a replacement
Trustee or the Securities Administrator, as applicable.
Section 6.09 Appointment of Co-Trustee, Separate Trustee or Custodian.
(a) Notwithstanding any other provisions hereof, at any time, the
Trustee, the Depositor or the Certificateholders evidencing more than 50% of
the Class Principal Balance (or Percentage Interest) of every Class of
Certificates shall have the power from time to time to appoint one or more
Persons, approved by the Trustee, to act either as co-trustees jointly with
the Trustee, or as separate trustees, or as custodians, for the purpose of
holding title to, foreclosing or otherwise taking action with respect to any
Mortgage Loan outside the state where the Trustee has its principal place of
business where such separate trustee or co-trustee is necessary or advisable
(or the Trustee has been advised by the Master Servicer that such separate
trustee or co-trustee is necessary or advisable) under the laws of any state
in which a property securing a Mortgage Loan is located or for the purpose of
otherwise conforming to any legal requirement, restriction or condition in any
state in which a property securing a Mortgage Loan is located or in any state
in which any portion of the Trust Fund is located. The separate Trustees,
co-trustees, or custodians so appointed shall be trustees or custodians for
the benefit of all the Certificateholders and shall have such powers, rights
and remedies as shall be specified in the instrument of appointment; provided,
however, that no such appointment shall, or shall be deemed to, constitute the
appointee an agent of the Trustee. The obligation of the Master Servicer to
make Advances pursuant to Section 5.05 hereof shall not be affected or
assigned by the appointment of a co-trustee.
(b) Every separate trustee, co-trustee, and custodian shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all powers, duties, obligations and rights conferred upon the
Trustee in respect of the receipt, custody and payment of moneys shall be
exercised solely by the Trustee;
(ii) all other rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised
or performed by the Trustee and such separate trustee, co-trustee, or
custodian jointly, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed the
Trustee shall be incompetent or unqualified to perform such act or acts,
in which event such rights, powers, duties and obligations, including the
holding of title to the Trust Fund or any portion thereof in any such
jurisdiction, shall be exercised and performed by such separate trustee,
co-trustee, or custodian;
(iii) no trustee or custodian hereunder shall be personally liable
by reason of any act or omission of any other trustee or custodian
hereunder; and
(iv) the Trustee may at any time, by an instrument in writing
executed by it, with the concurrence of the Depositor, accept the
resignation of or remove any separate trustee, co-trustee or custodian,
so appointed by it or them, if such resignation or removal does not
violate the other terms of this Agreement.
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(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee, co-trustee or custodian shall refer to this
Agreement and the conditions of this Article VI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision
of this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed
with the Trustee and a copy given to the Master Servicer.
(d) Any separate trustee, co-trustee or custodian may, at any time,
constitute the Trustee its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Agreement on its behalf and in its name. If any separate
trustee, co-trustee or custodian shall die, become incapable of acting, resign
or be removed, all of its estates, properties, rights, remedies and trusts
shall vest in and be exercised by the Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
(e) No separate trustee, co-trustee or custodian hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
6.05 hereunder and no notice to the Certificateholders of the appointment
shall be required under Section 6.07 hereof.
(f) The Securities Administrator on behalf of the Trustee agrees to
instruct the co-trustees, if any, to the extent necessary to fulfill the
Trustee's obligations hereunder.
(g) The Trust shall pay the reasonable compensation of the co-trustees
(which compensation shall not reduce any compensation payable to the Trustee
under such Section).
Section 6.10 Authenticating Agents.
(a) The Trustee may appoint one or more Authenticating Agents which shall
be authorized to act on behalf of the Trustee in authenticating Certificates.
The Securities Administrator is hereby appointed as initial Authenticating
Agent, and the Securities Administrator accepts such appointment. Wherever
reference is made in this Agreement to the authentication of Certificates by
the Trustee or the Trustee's certificate of authentication, such reference
shall be deemed to include authentication on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent must be a
corporation organized and doing business under the laws of the United States
of America or of any state, having a combined capital and surplus of at least
$15,000,000, authorized under such laws to do a trust business and subject to
supervision or examination by federal or state authorities.
(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any Person succeeding to the corporate agency business of
any Authenticating Agent, shall continue to be the
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Authenticating Agent without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at least 30
days' advance written notice of resignation to the Trustee and the Depositor.
The Trustee may at any time terminate the agency of any Authenticating Agent
by giving written notice of termination to such Authenticating Agent and the
Depositor. Upon receiving a notice of resignation or upon such a termination,
or in case at any time any Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 6.10, the Trustee may appoint a
successor authenticating agent, shall give written notice of such appointment
to the Depositor and shall mail notice of such appointment to all Holders of
Certificates. Any successor authenticating agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. No successor authenticating agent
shall be appointed unless eligible under the provisions of this Section 6.10.
No Authenticating Agent shall have responsibility or liability for any action
taken by it as such at the direction of the Trustee.
Section 6.11 Indemnification of the Trustee and the Securities
Administrator.
The Trustee (in its individual corporate capacity and in its
representative capacity as Trustee hereunder) and the Securities Administrator
and their respective directors, officers, employees and agents shall be
entitled to indemnification from the Trust Fund for any loss, liability or
expense (including the reasonable compensation and the expenses and
disbursements of its agents or counsel), incurred without negligence or
willful misconduct on their part, arising out of, or in connection with, the
acceptance or administration of the trusts created hereunder or under the
Purchase and Servicing Agreements, the Acknowledgements, the Custodial
Agreements or the Corridor Contracts or in connection with the performance of
their duties hereunder or thereunder including the costs and expenses of
defending themselves against any claim in connection with the exercise or
performance of any of their powers or duties hereunder or thereunder, provided
that:
(ii) with respect to any such claim, the Trustee or the Securities
Administrator, as applicable, shall have given the Depositor written
notice thereof promptly after the Trustee, the Securities Administrator,
as applicable, shall have knowledge thereof;
(iii) while maintaining control over its own defense, the Trustee or
the Securities Administrator, as applicable, shall cooperate and consult
fully with the Depositor in preparing such defense; and
(iv) notwithstanding anything to the contrary in this Section 6.11,
the Trust Fund shall not be liable for settlement of any such claim by
the Trustee or the Securities Administrator, as applicable, entered into
without the prior consent of the Depositor, which consent shall not be
unreasonably withheld.
The provisions of this Section 6.11 shall survive any termination of this
Agreement and the resignation or removal of the Trustee, the Securities
Administrator or the Custodian, as
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applicable, and shall be construed to include, but not be limited to any loss,
liability or expense under any environmental law.
Section 6.12 Fees and Expenses of the Master Servicer, the Securities
Administrator, the Trustee and the Custodians.
(a) For so long as Xxxxx Fargo Bank, National Association is the Master
Servicer and the Securities Administrator, the Securities Administrator shall
be entitled to be paid by the Master Servicer reasonable compensation for the
Securities Administrator's services hereunder in an amount to be agreed upon
between the Master Servicer and the Securities Administrator. Should Xxxxx
Fargo Bank, National Association no longer be both the Master Servicer and the
Securities Administrator, the Securities Administrator shall be entitled to
receive the Securities Administrator Compensation payable pursuant to Section
4.02(b)(ii) hereof. The Securities Administrator shall be entitled to all
disbursements and advancements incurred or made by the Securities
Administrator in accordance with this Agreement (including fees and expenses
of its counsel and all persons not regularly in its employment), except any
such expenses arising from its negligence, bad faith or willful misconduct.
(b) As compensation for its services hereunder, the Trustee and each
Custodian shall each be entitled to receive a fee (which, in the case of the
Trustee, shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) which shall be paid by the
Master Servicer pursuant to a separate agreement between the Trustee, the
Custodians and the Master Servicer. Any expenses incurred by the Trustee or
the Custodians shall be reimbursed in accordance with Section 6.11.
Notwithstanding any provision in any Custodial Agreement to the contrary, the
parties hereto acknowledge and agree that (i) the Master Servicer shall only
be obligated to pay to each Custodian the fee agreed to by such Custodian and
the Master Servicer in the separate fee agreement referred to above, and (ii)
except as may be expressly set forth therein with respect to the Master
Servicer, in no event shall the Master Servicer have any responsibility or
liability for the payment of any other fees or any expenses or other amounts,
if any, that may be payable to a Custodian under the related Custodial
Agreement, all of which shall be payable in accordance with the terms and
conditions of such Custodial Agreement.
Section 6.13 Collection of Monies.
Except as otherwise expressly provided in this Agreement, the Securities
Administrator on behalf of the Trustee may demand payment or delivery of, and
shall receive and collect, all money and other property payable to or
receivable by the Securities Administrator on behalf of the Trustee pursuant
to this Agreement. The Securities Administrator on behalf of the Trustee shall
hold all such money and property received by it as part of the Trust Fund and
shall distribute it as provided in this Agreement.
Section 6.14 Events of Default; Trustee To Act; Appointment of Successor.
(a) The occurrence of any one or more of the following events shall
constitute an "Event of Default" with respect to the Master Servicer:
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(i) Any failure by the Master Servicer to furnish the Securities
Administrator the Mortgage Loan data on the Mortgage Loans sufficient to
prepare the reports described in Section 4.05 which continues unremedied
for a period of one Business Day after the date upon which written notice
of such failure shall have been given to the Master Servicer by the
Trustee or the Securities Administrator or to the Master Servicer, the
Securities Administrator and the Trustee by the Holders of not less than
25% of the Class Principal Balance of each Class of Certificates affected
thereby; or
(ii) Any failure on the part of the Master Servicer duly to observe
or perform in any material respect any other of the covenants or
agreements (other than those referred to in (vii) and (ix) below) on the
part of the Master Servicer contained in this Agreement (including any
obligation to enforce any Purchase and Servicing Agreement) or any
representation or warranty of the Master Servicer shall prove to be
untrue in any material respect, which failure or breach continues
unremedied for a period of 60 days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been given
to the Master Servicer by the Trustee or the Securities Administrator, or
to the Master Servicer, the Securities Administrator and the Trustee by
the Holders of more than 50% of the Aggregate Voting Interests of the
Certificates; provided that the sixty-day cure period shall not apply so
long as the Depositor is required to file Exchange Act Reports with
respect to the Trust Fund, the failure to comply with the requirements
set forth in Section 9.11, Section 9.05 and Section 9.06 (with respect to
notice and information to be provided to the Depositor) or Article XII,
for which the grace period shall not exceed the lesser of 10 calendar
days or such period in which the applicable Exchange Act Report can be
filed timely (without taking into account any extensions); or
(iii) A decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Master Servicer, and such decree or order shall have remained in
force undischarged or unstayed for a period of 60 days or any Rating
Agency reduces or withdraws or threatens to reduce or withdraw the rating
of the Certificates because of the financial condition or loan servicing
capability of such Master Servicer; or
(iv) The Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities, voluntary liquidation or
similar proceedings of or relating to the Master Servicer or of or
relating to all or substantially all of its property; or
(v) The Master Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage
of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend
payment of its obligations; or
(vi) The Master Servicer shall be dissolved, or shall dispose of all
or substantially all of its assets, or consolidate with or merge into
another entity or shall
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permit another entity to consolidate or merge into it, such that the
resulting entity does not meet the criteria for a successor servicer as
specified in Section 9.05 hereof; or
(vii) If a representation or warranty set forth in Section 9.03
hereof shall prove to be incorrect as of the time made in any respect
that materially and adversely affects the interests of the
Certificateholders, and the circumstance or condition in respect of which
such representation or warranty was incorrect shall not have been
eliminated or cured within 90 days after the date on which written notice
of such incorrect representation or warranty shall have been given to the
Master Servicer by the Trustee or the Securities Administrator, or to the
Master Servicer, the Securities Administrator and the Trustee by the
Holders of more than 50% of the Aggregate Voting Interests of the
Certificates; or
(viii) A sale or pledge of any of the rights of the Master Servicer
hereunder or an assignment of this Agreement by the Master Servicer or a
delegation of the rights or duties of the Master Servicer hereunder shall
have occurred in any manner not otherwise permitted hereunder and without
the prior written consent of the Trustee and Certificateholders holding
more than 50% of the Aggregate Voting Interests of the Certificates; or
(ix) After receipt of notice from the Trustee or the Securities
Administrator, any failure of the Master Servicer to make any Advances
required to be made by it hereunder; or
(x) (a) Any failure by the Master Servicer to deposit in the
Distribution Account or remit to the Securities Administrator any payment
required to be made by the Master Servicer under the terms of this
Agreement (other than an Advance required pursuant to Section 5.05
hereof), which failure shall continue unremedied for three Business Days
after the date upon which written notice of such failure shall have been
given to the Master Servicer by the Securities Administrator, Trustee or
the Depositor or to the Master Servicer and the Trustee by the Holders of
Certificates having not less than 25% of the Voting Rights evidenced by
the Certificates or (b) any failure by the Master Servicer to deposit in
the Distribution Account or remit to the Securities Administrator any
Advance required to be made by the Master Servicer under Section 5.05
hereof, which failure shall continue unremedied for one Business Day
after the date upon which written notice of such failure shall have been
given to the Master Servicer by the Securities Administrator, Trustee or
the Depositor or to the Master Servicer and the Trustee by the Holders of
Certificates having not less than 25% of the Voting Rights evidenced by
the Certificates; or
(xi) If the Master Servicer and the Securities Administrator are the
same Person, any removal of the Securities Administrator pursuant to
Section 6.06.
If an Event of Default described in clauses (i) through (ix) or (xi) of
this Section shall occur with respect to the Master Servicer, then, in each
and every case, subject to applicable law, so long as any such Event of
Default shall not have been remedied within any period of time prescribed by
this Section, the Trustee, by notice in writing to the Master Servicer may,
and, if so directed by (a) Certificateholders evidencing more than 50% of the
Class Principal Balance of
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each Class of Certificates or (b) the Depositor, in the case of a failure
related to a filing obligation triggered by a Reportable Event; the Trustee
shall by notice in writing to the Master Servicer (with a copy to each Rating
Agency and the Depositor), terminate all of the respective rights and
obligations of the Master Servicer hereunder and in and to the Mortgage Loans
and the proceeds thereof. Subject to Section 6.01(c)(ii), if an Event of
Default described in clause (x) of this Section shall occur with respect to
the Master Servicer, then, in each and every case, subject to applicable law,
so long as any such Event of Default shall not have been remedied within any
period of time prescribed by this Section, the Trustee shall by notice in
writing to the Master Servicer terminate all of the respective rights and
obligations of the Master Servicer hereunder and in and to the Mortgage Loans
and the proceeds thereof. On or after the receipt by the Master Servicer of
such written notice, all authority and power of the Master Servicer, and with
respect to the Master Servicer only in its capacity as Master Servicer under
this Agreement, whether with respect to the Mortgage Loans or otherwise, shall
pass to and be vested in the Trustee; and the Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the defaulting Master Servicer
as attorney-in-fact or otherwise, any and all documents and other instruments,
and to do or accomplish all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, whether to complete the
transfer and endorsement or assignment of the affected Mortgage Loans and
related documents or otherwise. The defaulting Master Servicer agrees to
cooperate with the Trustee and the Securities Administrator in effecting the
termination of the defaulting Master Servicer's responsibilities and rights
hereunder as Master Servicer which includes, without limitation, notifying the
Servicers of the assignment of the master servicing function and providing the
Trustee or its designee all documents and records in electronic or other form
reasonably requested by it to enable the Trustee or its designee to assume the
defaulting Master Servicer's functions hereunder and the transfer to the
Trustee for administration by it of all amounts which shall at the time be or
should have been deposited by the defaulting Master Servicer in the
Distribution Account, any related Custodial Account and any other account or
fund maintained with respect to the Certificates or thereafter received with
respect to the affected Mortgage Loans. The Master Servicer being terminated
shall bear all costs of the transfer of the master servicing to the successor
master servicer, including but not limited to those of the Trustee or
Securities Administrator reasonably allocable to specific employees and
overhead, legal fees and expenses, accounting and financial consulting fees
and expenses, and costs of amending the Agreement, if necessary. If such costs
are not paid by the terminated Master Servicer, the Trustee shall pay such
costs from the Trust Fund.
Notwithstanding the termination of its activities as Master Servicer, any
terminated Master Servicer shall continue to be entitled to reimbursement
under this Agreement to the extent such reimbursement relates to the period
prior to such Master Servicer's termination.
The Securities Administrator and the Master Servicer shall promptly
notify the Responsible Officers of the Trustee and the Depositor of the
occurrence and continuance of an Event of Default. If any Event of Default
shall occur, the Trustee, upon a Responsible Officer of the Trustee becoming
aware of the occurrence thereof, shall promptly notify each Rating Agency of
the nature and extent of such Event of Default. The Securities Administrator
shall immediately give written notice to the Master Servicer upon the failure
of the Master Servicer to make Advances as required under this Agreement with
a copy to the Trustee.
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Upon the occurrence of an Event of Default, the Trustee shall provide the
Depositor in writing and in form and substance reasonably satisfactory to the
Depositor, all information reasonably requested by the Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect
to a successor master servicer in the event the Trustee should succeed to the
duties of the Master Servicer as set forth herein.
In order to comply with applicable Form 8-K reporting requirements under
Regulation AB, at least 15 calendar days prior to the effective date of such
appointment, (x) the Trustee shall provide written notice to the Depositor of
such successor pursuant to this Section 6.14 and (y) such successor Master
Servicer shall provide to the Depositor in writing and in form and substance
reasonably satisfactory to the Depositor, all information reasonably requested
by the Depositor in order to comply with its reporting obligation under Item
6.02 of Form 8-K with respect to a replacement master servicer.
(b) On and after the time the Master Servicer receives a notice of
termination from the Trustee or the Securities Administrator, as applicable,
pursuant to Section 6.14(a) or the Trustee or the Securities Administrator, as
applicable, receives the resignation of the Master Servicer evidenced by an
Opinion of Counsel pursuant to Section 9.06, the Trustee, unless another
master servicer shall have been appointed, shall be the successor in all
respects to the Master Servicer, in its capacity as such under this Agreement
and the transactions set forth or provided for herein and shall have all the
rights and powers and be subject to all the responsibilities, duties and
liabilities relating thereto and arising thereafter placed on the Master
Servicer, hereunder, including the obligation to make Advances; provided,
however, that any failure to perform such duties or responsibilities caused by
the failure of the Master Servicer to provide information required by this
Agreement shall not be considered a default by the Trustee or the Securities
Administrator, as applicable, hereunder. In addition, neither the Trustee nor
the Securities Administrator, as applicable, shall have any responsibility for
any act or omission of the Master Servicer prior to the issuance of any notice
of termination. The Trustee shall have no liability relating to the
representations and warranties of the Master Servicer set forth in Section
9.03. In the capacity as such successor, the Trustee shall have the same
limitations on liability herein granted to the Master Servicer. As
compensation for being the successor master servicer, the Trustee shall be
entitled to receive all compensation payable to the Master Servicer under this
Agreement. Any successor to the Master Servicer hereunder also may assume the
obligations of the Securities Administrator hereunder as successor in such
capacity shall be entitled to the compensation payable to the Securities
Administrator pursuant to Section 4.02 hereof from and after the date of such
assumption.
(c) Notwithstanding the above, the Trustee may, if it shall be unwilling
to continue to so act, or shall, if it is unable to so act, petition a court
of competent jurisdiction to appoint, or appoint on its own behalf any
established housing and home finance institution servicer, master servicer,
servicing or mortgage servicing institution having a net worth of not less
than $15,000,000 and meeting such other standards for a successor master
servicer, as are set forth in this Agreement, as the successor to such Master
Servicer in the assumption of all of the respective responsibilities, duties
or liabilities of a master servicer, like the Master Servicer. Any entity
designated by the Trustee, may be an Affiliate of the Trustee; provided,
however, that, unless such Affiliate meets the net worth requirements and
other standards set forth herein for a successor master servicer, the Trustee,
in its individual capacity shall agree, at the time of such
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designation, to be and remain liable to the Trust Fund for such Affiliate's
actions and omissions in performing its duties hereunder. In connection with
such appointment and assumption, the Trustee may make such arrangements for
the compensation of such successor out of payments on the Mortgage Loans as it
and such successor shall agree; provided, however, that no such compensation
shall be in excess of that permitted to the Master Servicer hereunder. The
Trustee and such successor shall take such actions, consistent with this
Agreement, as shall be necessary to effectuate any such succession and may
make other arrangements with respect to the master servicing to be conducted
hereunder which are not inconsistent herewith. The Master Servicer shall
cooperate with the Trustee and any successor master servicer in effecting the
termination of the Master Servicer's responsibilities and rights hereunder
including, without limitation, notifying the Servicers of the assignment of
the master servicing functions and providing the Trustee and successor master
servicer all documents and records in electronic or other form reasonably
requested by it to enable it to assume the Master Servicer's functions
hereunder and the transfer to the Trustee or such successor all amounts which
shall at the time be or should have been deposited by the Master Servicer in
the Distribution Account, any Custodial Account, or any other account or fund
maintained with respect to the Certificates or thereafter be received with
respect to the Mortgage Loans. Neither the Trustee nor the Securities
Administrator, as applicable, nor any other successor, as applicable, shall be
deemed to be in default hereunder by reason of any failure to make, or any
delay in making, any distribution hereunder or any portion thereof caused by
(i) the failure of the Master Servicer to deliver, or any delay in delivering,
cash, documents or records to it, (ii) the failure of the Master Servicer to
cooperate as required by this Agreement, (iii) the failure of the Master
Servicer to deliver the related Mortgage Loan data as required by this
Agreement or (iv) restrictions imposed by any regulatory authority having
jurisdiction over the Master Servicer. No successor master servicer shall be
deemed to be in default hereunder by reason of any failure to make, or any
delay in making, any distribution hereunder or any portion thereof caused by
(i) the failure of the Securities Administrator to deliver, or any delay in
delivering cash, documents or records to it related to such distribution, or
(ii) the failure of Trustee or the Securities Administrator to cooperate as
required by this Agreement.
Section 6.15 Additional Remedies of Trustee Upon Event of Default.
During the continuance of any Event of Default, so long as such Event of
Default shall not have been remedied, the Trustee, in addition to the rights
specified in Section 6.14, shall have the right, in its own name and as
trustee of the Trust Fund, to take all actions now or hereafter existing at
law, in equity or by statute to enforce its rights and remedies and to protect
the interests, and enforce the rights and remedies, of the Certificateholders
(including the institution and prosecution of all judicial, administrative and
other proceedings and the filings of proofs of claim and debt in connection
therewith). Except as otherwise expressly provided in this Agreement, no
remedy provided for by this Agreement shall be exclusive of any other remedy,
and each and every remedy shall be cumulative and in addition to any other
remedy, and no delay or omission to exercise any right or remedy shall impair
any such right or remedy or shall be deemed to be a waiver of any Event of
Default.
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Section 6.16 Waiver of Defaults.
More than 50% of the Aggregate Voting Interests of the Certificateholders
may waive any default or Event of Default by the Master Servicer in the
performance of its obligations hereunder, except that a default in the making
of any required deposit to the Distribution Account that would result in a
failure of the Securities Administrator or the Paying Agent to make any
required payment of principal of or interest on the Certificates may only be
waived with the consent of 100% of the affected Certificateholders. Upon any
such waiver of a past default, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon except to the extent
expressly so waived.
Section 6.17 Notification to Holders.
Upon termination of the Master Servicer or appointment of a successor to
the Master Servicer, in each case as provided herein, the Trustee shall
promptly mail notice thereof by first class mail to the Securities
Administrator and the Certificateholders at their respective addresses
appearing on the Certificate Register. The Trustee shall also, within 45 days
after the occurrence of any Event of Default known to the Trustee, give
written notice thereof to the Securities Administrator and the
Certificateholders, unless such Event of Default shall have been cured or
waived prior to the issuance of such notice and within such 45-day period.
Section 6.18 Directions by Certificateholders and Duties of Trustee
During Event of Default.
Subject to the provisions of Section 8.01 hereof, during the continuance
of any Event of Default, Holders of Certificates evidencing not less than 25%
of the Class Principal Balance (or Percentage Interest) of each Class of
Certificates affected thereby may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement; provided, however, that the Trustee shall be under no obligation to
pursue any such remedy, or to exercise any of the trusts or powers vested in
it by this Agreement (including, without limitation, (i) the conducting or
defending of any administrative action or litigation hereunder or in relation
hereto and (ii) the terminating of the Master Servicer or any successor master
servicer from its rights and duties as master servicer hereunder) at the
request, order or direction of any of the Certificateholders, unless such
Certificateholders shall have offered to the Trustee security or indemnity
reasonably satisfactory to it against the cost, expenses and liabilities which
may be incurred therein or thereby; and, provided further, that, subject to
the provisions of Section 8.01, the Trustee shall have the right to decline to
follow any such direction if the Trustee, in accordance with an Opinion of
Counsel, determines that the action or proceeding so directed may not lawfully
be taken or if the Trustee in good faith determines that the action or
proceeding so directed would involve it in personal liability for which it is
not indemnified to its satisfaction.
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Section 6.19 Action Upon Certain Failures of the Master Servicer and Upon
Event of Default.
In the event that a Responsible Officer of the Trustee shall have actual
knowledge or written notice of any action or inaction of the Master Servicer
that would become an Event of Default upon the Master Servicer's failure to
remedy the same after notice, the Trustee shall give notice thereof to the
Master Servicer.
Section 6.20 Preparation of Tax Returns and Other Reports.
(a) The Securities Administrator shall prepare or cause to be prepared on
behalf of the Trust Fund, based upon information calculated in accordance with
this Agreement pursuant to instructions given by the Depositor, and the
Securities Administrator shall file federal tax returns, all in accordance
with Article X hereof. If the Securities Administrator is notified in writing
that a state tax return or other return is required, then, at the sole expense
of the Trust Fund, the Securities Administrator shall prepare and file such
state income tax returns and such other returns as may be required by
applicable law relating to the Trust Fund, and, if required by state law,
shall file any other documents to the extent required by applicable state tax
law (to the extent such documents are in the Securities Administrator's
possession). The Securities Administrator shall forward copies to the
Depositor of all such returns and Form 1099 supplemental tax information and
such other information within the control of the Securities Administrator as
the Depositor may reasonably request in writing, and shall forward to each
Certificateholder such forms and furnish such information within the control
of the Securities Administrator as are required by the Code and the REMIC
Provisions to be furnished to them, and will prepare and forward to
Certificateholders Form 1099 (supplemental tax information) (or otherwise
furnish information within the control of the Securities Administrator) to the
extent required by applicable law. The Master Servicer will indemnify the
Securities Administrator and the Trustee for any liability of or assessment
against the Securities Administrator or the Trustee, as applicable, resulting
from any error in any of such tax or information returns directly resulting
from errors in the information provided by such Master Servicer except to the
extent that such information was provided in reasonable reliance upon
information from any Servicer.
(b) The Securities Administrator shall prepare and file with the Internal
Revenue Service ("IRS"), on behalf of the Trust Fund and each REMIC created
hereunder, an application for an employer identification number on IRS Form
SS-4 or by any other acceptable method. The Securities Administrator shall
also file a Form 8811 as required. The Securities Administrator, upon receipt
from the IRS of the Notice of Taxpayer Identification Number Assigned, shall
upon request promptly forward a copy of such notice to the Trustee and the
Depositor. The Securities Administrator shall furnish any other information
that is required by the Code and regulations thereunder to be made available
to the Certificateholders. The Master Servicer agrees that it shall cause each
Servicer to, provide the Securities Administrator with such information
related to the Mortgage Loans in the possession of such Servicer, as may
reasonably be required for the Securities Administrator to prepare such
reports.
Section 6.21. Certain Matters Regarding any Custodian Appointed
Hereunder
(a) The Custodian shall maintain continuous custody of all items
constituting the Trustee Mortgage Files in secure facilities in accordance
with customary standards for such custody and shall reflect in its records the
interest of the Trustee for the benefit of the Certificateholders therein.
Each Mortgage Note (and Assignment of Mortgage) shall be maintained in fire
resistant facilities.
(b) With respect to the documents constituting each Trustee Mortgage
File relating to a Mortgage Loan listed on the Mortgage Loan Schedule, the
Custodian shall (i) act exclusively as the custodian for the Trustee, (ii)
hold all documents constituting such Trustee Mortgage File received by it for
the exclusive use and benefit of the Trust, and (iii) make disposition thereof
only in accordance with the terms of this Agreement.
(c) In the event that (i) the Trustee, a Servicer, the Securities
Administrator, the Master Servicer or the Custodian shall be served by a third
party with any type of levy, attachment, writ or court order with respect to
any Trustee Mortgage File or any document included within a Trustee Mortgage
File or (ii) a third party shall institute any court proceeding by which any
Trustee Mortgage File or a document included within a Trustee Mortgage File
shall be required to be delivered otherwise than in accordance with the
provisions of this Agreement, the party receiving such service shall promptly
deliver or cause to be delivered to the other parties to this Agreement copies
of all court papers, orders, documents and other materials concerning such
proceedings. The Custodian shall, to the extent permitted by law, continue to
hold and maintain all the Trustee Mortgage Files that are the subject of such
proceedings pending a final, nonappealable order of a court of competent
jurisdiction permitting or directing disposition thereof. Upon final
determination of such court, the Custodian shall dispose of such Trustee
Mortgage File or any document included within such Trustee Mortgage File as
directed by the Trustee which shall give a direction consistent with such
determination. Expenses and fees (including reasonable attorney's fees) of the
Custodian incurred as a result of such proceedings shall be borne by the Trust
Fund.
(d) The Custodian shall provide access to the Mortgage Loan Documents in
its possession regarding the related Mortgage Loans and REO Property and the
servicing thereof to the Trustee, the Master Servicer, the Securities
Administrator, the related Servicer, the Certificateholders, the FDIC, and the
supervisory agents and examiners of the FDIC, such access being afforded only
upon reasonable prior written request and during normal business hours at the
office of the Custodian. The Custodian shall allow representatives of the
above entities to photocopy any of the records and documentation and shall
provide equipment for that purpose at the expense of the person requesting
such access.
(e) The Custodian shall have no duties or responsibilities except those
that are specifically set forth herein, or as subsequently agreed in writing
by the parties hereto, and no implied covenants or obligations shall be read
into this Agreement against the Custodian.
(f) The Custodian shall have no responsibility nor duty with respect to
any Trustee Mortgage Files while not in its possession.
(g) The Custodian shall be under no obligation to make any investigation
into the facts or matters stated in any resolution, exhibit, request,
representation, opinion, certificate, statement, acknowledgement, consent,
order or document in the Trustee Mortgage File.
(h) If the Trustee and a Custodian are the same Person, any removal or
resignation of that Person in either capacity shall also result in the removal
of the Person in its other capacity.
(i) In the event that the Custodian fails to produce a Mortgage Note,
Assignment of Mortgage or any other document related to a Mortgage Loan that
was in its possession pursuant to Section 2.01 within five (5) Business Days
after required or requested by the Depositor, the Trustee, the Master Servicer
or the related Servicer, and provided, that (i) Custodian previously delivered
to the Trustee an Initial Certification or a Final Certification with respect
to such document; (ii) such document is not outstanding pursuant to a Request
for Release; and (iii) such document was held by the Custodian on behalf of
the Trustee (a "Custodial Delivery Failure"), then the Custodian shall (a)
with respect to any missing Mortgage Note, promptly deliver to the Depositor,
the Trustee, the Master Servicer or the Servicer upon request, a Lost Note
Affidavit in the form of Exhibit R annexed hereto and (b) with respect to any
missing document related to such Mortgage Loan including but not limited to, a
missing Mortgage Note, indemnify the Depositor, Trustee, the Master Servicer
or the Servicer in accordance with the succeeding paragraph of this Section
6.21(i).
The Custodian appointed hereunder agrees to indemnify and hold the
Depositor, the Trustee, the Master Servicer and the Servicer and their
respective employees, officers, directors and agents harmless against any and
all direct liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements, including reasonable
attorney's fees, that may be imposed on, incurred by, or asserted against it
or them in any way relating to or arising out of such Custodial Delivery
Failure. The foregoing indemnification shall survive any termination or
assignment of this Agreement or the removal or resignation of the Custodian
hereunder.
For the avoidance of doubt, if the entity serving as Trustee is also
serving as a Custodian, such entity in its capacity as Custodian shall have
the same rights, protections and indemnities as are afforded to the Trustee
hereunder provided that such Custodian shall not be indemnified by the Trust
Fund for any liability, obligation, loss, damage, penalty, action, judgment,
suit, cost, expense or disbursement imposed on, incurred by or asserted
against the Custodian because of the breach by the Custodian of its
obligations hereunder, which breach was caused by negligence, lack of good
faith or willful misconduct on the part of the Custodian or any of its
directors, officers, agents or employees.
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ARTICLE VII
PURCHASE OF MORTGAGE LOANS AND
TERMINATION OF THE TRUST FUND
Section 7.01 Purchase of Mortgage Loans; Termination of Trust Fund Upon
Purchase or Liquidation of All Mortgage Loans.
(a) The respective obligations and responsibilities of the Trustee, the
Securities Administrator and the Master Servicer created hereby (other than
the obligation of the Securities Administrator to make payments to the
Certificateholders as set forth in Section 7.02), shall terminate on the
earliest of (i) the final payment or other liquidation of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property, (ii)
the sale or auction of the property held by the Trust Fund in accordance with
both (x) Section 7.01(b) or 7.01(c)(ii) and (iii) the Latest Possible Maturity
Date; provided, however, that in no event shall the Trust Fund created hereby
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the United
States to the Court of St. James's, living on the date hereof. Any termination
of the Trust Fund shall be carried out in such a manner so that the
termination of each REMIC included therein shall qualify as a "qualified
liquidation" under the REMIC Provisions.
(b) On the Initial Optional Termination date related to the Group 1
Mortgage Loans, the Auction Administrator shall solicit bids for the Group 1
Assets from at least three institutions that are regular purchasers and/or
sellers in the secondary market of residential whole mortgage loans similar to
the Mortgage Loans. If the Auction Administrator receives at least three bids
for the Group 1 Assets, and one of such bids is equal to or greater than the
Minimum Auction Price, the Auction Administrator shall sell (such sale, an
"Auction") the related Group 1 Assets to the highest bidder (the "Auction
Purchaser") at the price offered by the Auction Purchaser (the "Mortgage Loan
Auction Price"). If the Auction Administrator receives less than three bids,
or does not receive any bid that is at least equal to the Minimum Auction
Price, the Auction Administrator shall, on each six-month anniversary of the
Initial Optional Termination Date for the Group 1 Mortgage Loans, repeat these
auction procedures until the Auction Administrator receives a bid that is at
least equal to the Minimum Auction Price, at which time the Auction
Administrator shall sell the Group 1 Assets to the Auction Purchaser at that
Mortgage Loan Auction Price; provided, however, that the Auction Administrator
shall not be required to repeat these auction procedures on any Distribution
Date for any six-month anniversary of the Initial Optional Termination Date
unless the Auction Administrator reasonably believes that there is a
reasonable likelihood of receiving a bid of at least the Minimum Auction
Price. The Auction Administrator shall give notice to the Rating Agencies and
each Servicer that is servicing any of the Group 1 Mortgage Loans of the sale
of the related Group 1 Assets pursuant to this Section 7.01(b) (an "Auction
Sale") and of the Auction Date.
(c) In the event that the Master Servicer chooses to exercise its
optional termination rights it shall do so in accordance with the following:
(i) Optional Termination Related to the Group 1 Mortgage Loans. On
any Distribution Date occurring after the Initial Optional Termination
Date related to the
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Group 1 Mortgage Loans, the Master Servicer has the option to cause the
Trust Fund to adopt a plan of complete liquidation of the Group 1
Mortgage Loans pursuant to Sections 7.02 and 7.03 hereof to sell all of
the property related thereto. If the Master Servicer elects to exercise
such option, it shall no later than 30 days prior to the Distribution
Date selected for purchase of the Group 1 Mortgage Loans and all other
assets of the Trust Fund related to the Group 1 Certificates (with
respect to the Group 1 Certificates, the "Purchase Date") deliver written
notice to the Trustee and the Securities Administrator and either (a)
deposit in the Distribution Account the related Redemption Price or (b)
state in such notice that the Redemption Price shall be deposited in the
Distribution Account not later than 10:00 a.m., New York City time, on
the applicable Purchase Date. Upon exercise of such option, the Group 1
Assets shall be sold to the Master Servicer at a price equal to the
related Redemption Price.
(ii) Optional Termination Related to the Aggregate Group II Mortgage
Loans. On any Distribution Date occurring on or after the Initial
Optional Termination Date related to the Aggregate Group II Mortgage
Loans, the Master Servicer has the option to cause the Trust to adopt a
plan of complete liquidation of the Aggregate Group II Mortgage Loans
pursuant to Sections 7.02 and 7.03 hereof to sell all of the property
related thereto. If the Master Servicer elects to exercise such option,
it shall no later than 30 days prior to the Distribution Date selected
for purchase of the Aggregate Group II Mortgage Loans and all other
assets of the Trust related to the Aggregate Group II Certificates (with
respect to the Aggregate Group II Certificates, the "Purchase Date")
deliver written notice to the Trustee and the Securities Administrator
and either (a) deposit in the Distribution Account the related aggregate
Redemption Price or (b) state in such notice that the Redemption Price
shall be deposited in the Distribution Account not later than 10:00 a.m.,
New York City time, on the applicable Purchase Date. Upon exercise of
such option, the property of the Trust related to the Aggregate Group II
Certificates shall be sold to the Master Servicer at a price equal to the
aggregate Redemption Price for the Aggregate Group II Certificates.
(d) The Depositor, the Master Servicer, each Servicer, the Securities
Administrator, the Trustee and the Custodian shall be reimbursed from the
Redemption Price for any Advances, Servicer Advances, accrued and unpaid
Servicing Fees or other amounts with respect to the Mortgage Loans and any
related assets being purchased pursuant to Section 7.01(b) or (c) above that
are reimbursable to such parties (and such other amounts which, if not related
to the Mortgage Loans and other assets of the Trust Fund not being purchased,
that are then due and owing to any such Person) under this Agreement and the
related Purchase and Servicing Agreement or the related Custodial Agreement.
Section 7.02 Procedure Upon Redemption of Trust Fund.
(a) Notice of any termination pursuant to the provisions of Section 7.01,
specifying the Distribution Date upon which the final distribution shall be
made or the purchase of the Trust's assets related to the Group 1 Certificates
or the Aggregate Group II Certificates, as applicable, will occur, shall be
given promptly by the Securities Administrator by first class mail to the
related Certificateholders mailed in the case of a redemption of the related
Certificates, no later than (i) the first day of the month in which the
Distribution Date selected for redemption of
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such Certificates shall occur or (ii) upon (x) the sale of all of the property
of the Trust Fund by the Securities Administrator or in the case of a sale of
assets of the Trust Fund, or (y) upon the final payment or other liquidation
of the last Mortgage Loan or REO Property in the Trust Fund. Such notice shall
specify (A) the Initial Optional Termination Date, Distribution Date upon
which final distribution on the related Certificates of all amounts required
to be distributed to Certificateholders pursuant to Section 5.02 will be made
upon presentation and surrender of the Certificates at the Certificate
Registrar's Corporate Trust Office, and (B) that the Record Date otherwise
applicable to such Distribution Date is not applicable, distribution being
made only upon presentation and surrender of the Certificates at the office or
agency of the Securities Administrator therein specified. The Securities
Administrator shall give such notice to the Trustee, the Master Servicer and
the Certificate Registrar at the time such notice is given to Holders of the
Certificates. Upon any such termination, the duties of the Certificate
Registrar with respect to the affected Certificates shall terminate and, in
the event that such termination is the second termination pursuant to Section
7.01, the Securities Administrator shall terminate the Distribution Account
and any other account or fund maintained with respect to the Certificates,
subject to the Securities Administrator's obligation hereunder to hold all
amounts payable to Certificateholders in trust without interest pending such
payment.
(b) In the event that all of the Holders do not surrender their
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, the Securities Administrator shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice any Certificates shall not
have been surrendered for cancellation, the Securities Administrator may take
appropriate steps to contact the remaining Certificateholders concerning
surrender of such Certificates, and the cost thereof shall be paid out of the
amounts distributable to such Holders. If within two years after the second
notice any Certificates shall not have been surrendered for cancellation, the
Securities Administrator shall deliver any remaining funds being held by it to
the Holder of the Class A-R Certificates and the Holder of the Class A-R
Certificates shall, subject to applicable state law relating to escheatment,
hold all amounts distributable to such Holders for the benefit of such
Holders. No interest shall accrue on any amount held by the Securities
Administrator and not distributed to a Certificateholder due to such
Certificateholder's failure to surrender its Certificate(s) for payment of the
final distribution thereon in accordance with this Section. The foregoing
provisions are intended to distribute to each Class of Certificates any
accrued and unpaid interest and/or principal to which they are entitled based
on their Pass-Through Rates and Class Certificate Balances or Notional Amounts
set forth in the Preliminary Statement upon liquidation of the Trust Fund.
(c) Any reasonable expenses incurred by the Securities Administrator in
connection with any purchase or termination or liquidation of the portion of
the Trust Fund related to the Group 1 Certificates or the Aggregate Group II
Certificates, as applicable, shall be reimbursed from proceeds received from
the liquidation of the Trust Fund.
(d) Any purchase of the Group 1 Assets by the related Auction Purchaser
shall be made on an Auction Date by receipt of the Auction Administrator of
the related Mortgage Loan Auction Price from the Auction Purchaser, and
deposit of the such Mortgage Loan Auction Price into the Distribution Account
by the Auction Administrator before the Distribution Date on
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which such purchase is effected. Upon deposit of such purchase price into the
Distribution Account, the Trustee and the Securities Administrator, shall,
upon request and at the expense of the Auction Purchaser, execute and deliver
all such instruments of transfer or assignment, in each case without recourse,
as shall be reasonably requested by the Auction Purchaser to vest title in the
Auction Purchaser in the Group 1 Assets so purchased and shall transfer or
deliver to the Auction Purchaser the purchased Group 1 Assets.
Section 7.03 Additional Trust Fund Termination Requirements.
(a) On the termination of the Trust Fund under Section 7.01 (a), upon an
Auction Sale pursuant to Section 7.01(b) or upon the exercise of the right to
purchase all of the Group 1 Mortgage Loans or the Aggregate Group II Mortgage
Loans, as applicable, pursuant to Section 7.01(c), the Securities
Administrator, on behalf of the Trustee, shall comply with requirements of
this Section 7.03 with respect to each Lower Tier REMIC relating to the assets
to be sold (the "Affected REMIC") and with respect to the Certificates
corresponding to the Affected REMIC (the "Corresponding Certificates"), unless
the party having the right to purchase the assets of the Affected REMIC (the
"Purchaser") delivers to the Trustee and the Securities Administrator, an
Opinion of Counsel (at the Master Servicer's expense), addressed to the
Trustee and the Securities Administrator to the effect that the failure of the
Trustee and the Securities Administrator to comply with the requirements of
this Section 7.03 will not result in an Adverse REMIC Event:
(ii) Within 89 days prior to the time of making the final payment on
the Corresponding Certificates, (and upon notification by (1) the Auction
Administrator in the case of a purchase under Section 7.01(b) or (2) the
Master Servicer in the case of a purchase under Section 7.01(c)(i) or
Section 7.01(c)(ii), as applicable) the Securities Administrator on
behalf of the Trustee shall adopt on behalf of the Affected REMIC, a plan
of complete liquidation, meeting the requirements of a qualified
liquidation under the REMIC Provisions;
(iii) Any sale of the assets of the Affected REMIC shall be for cash
and shall occur at or after the time the plan of complete liquidation is
adopted and prior to the time the final payments on the Corresponding
Certificates are made;
(iv) On the date specified for final payment of the Corresponding
Certificates, the Securities Administrator shall make final distributions
of principal and interest on the Corresponding Certificates in accordance
with Section 5.02 and, after payment of, or provision for any outstanding
expenses, distribute or credit, or cause to be distributed or credited,
to the Holders of the Residual Certificates all cash on hand after such
final payment (other than cash retained to meet claims), and the portion
of the Trust Fund (and the Affected REMIC) shall terminate at that time;
and
(v) In no event may the final payment on the Corresponding
Certificates or the final distribution or credit to the Holders of the
Residual Certificates be made after the 89th day from the date on which
the plan of complete liquidation is adopted.
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(b) By its acceptance of a Residual Certificate, each Holder thereof
hereby agrees to accept the plan of complete liquidation adopted by the
Securities Administrator on behalf of the Trustee under this Section and to
take such other action in connection therewith as may be reasonably requested
by the Trustee, the Securities Administrator or any Servicer.
ARTICLE VIII
RIGHTS OF CERTIFICATEHOLDERS
Section 8.01 Limitation on Rights of Holders.
(a) The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or this Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or
take any action or proceeding in any court for a partition or winding up of
this Trust Fund, nor otherwise affect the rights, obligations and liabilities
of the parties hereto or any of them. Except as otherwise expressly provided
herein, no Certificateholder, solely by virtue of its status as a
Certificateholder, shall have any right to vote or in any manner otherwise
control the Master Servicer or the operation and management of the Trust Fund,
or the obligations of the parties hereto, nor shall anything herein set forth,
or contained in the terms of the Certificates, be construed so as to
constitute the Certificateholders from time to time as partners or members of
an association, nor shall any Certificateholder be under any liability to any
third person by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
(b) No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of the continuance thereof, as hereinbefore provided, and
unless also the Holders of Certificates evidencing not less than 25% of the
Class Principal Amount or Class Notional Amount (or Percentage Interest) of
Certificates of each Class affected thereby shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name
as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the cost, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for sixty days after its receipt
of such notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding and no direction
inconsistent with such written request has been given such Trustee during such
sixty-day period by such Certificateholders; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder, the Securities Administrator and the Trustee, that no one
or more Holders of Certificates shall have any right in any manner whatever by
virtue or by availing of any provision of this Agreement to affect, disturb or
prejudice the rights of the Holders of any other of such Certificates, or to
obtain or seek to obtain priority over or preference to any other such Holder,
or to enforce any right under this Agreement, except in the manner herein
provided and for the benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
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Section 8.02 Access to List of Holders.
(a) If the Trustee is not acting as Certificate Registrar, the
Certificate Registrar will furnish or cause to be furnished to the Trustee,
within fifteen days after receipt by the Certificate Registrar of a request by
the Trustee in writing, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Certificateholders of each Class as
of the most recent Record Date.
(b) If three or more Holders or Certificate Owners (hereinafter referred
to as "Applicants") apply in writing to the Certificate Registrar, and such
application states that the Applicants desire to communicate with other
Holders with respect to their rights under this Agreement or under the
Certificates and is accompanied by a copy of the communication which such
Applicants propose to transmit, then the Certificate Registrar shall, within
five Business Days after the receipt of such application, afford such
Applicants reasonable access during the normal business hours of the
Certificate Registrar to the most recent list of Certificateholders held by
the Certificate Registrar or shall, as an alternative, send, at the
Applicants' expense, the written communication proffered by the Applicants to
all Certificateholders at their addresses as they appear in the Certificate
Register.
(c) Every Holder or Certificate Owner, if the Holder is a Clearing
Agency, by receiving and holding a Certificate, agrees with the Depositor, the
Master Servicer, the Securities Administrator, the Certificate Registrar and
the Trustee that none of the Depositor, the Master Servicer, the Securities
Administrator, the Certificate Registrar nor the Trustee shall be held
accountable by reason of the disclosure of any such information as to the
names and addresses of the Certificateholders hereunder, regardless of the
source from which such information was derived.
Section 8.03 Acts of Holders of Certificates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders or Certificate Owners, if the Holder is a Clearing Agency, may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and
the Securities Administrator and, where expressly required herein, to the
Master Servicer. Such instrument or instruments (as the action embodies
therein and evidenced thereby) are herein sometimes referred to as an "Act" of
the Holders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agents shall be sufficient
for any purpose of this Agreement and conclusive in favor of the Trustee, the
Securities Administrator and the Master Servicer, if made in the manner
provided in this Section. Each of the Trustee, the Securities Administrator
and the Master Servicer shall promptly notify the others of receipt of any
such instrument by it, and shall promptly forward a copy of such instrument to
the others.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any
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notary public or other officer authorized by law to take acknowledgments or
deeds, certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Whenever such execution is by an
officer of a corporation or a member of a partnership on behalf of such
corporation or partnership, such certificate or affidavit shall also
constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the
individual executing the same, may also be proved in any other manner which
the Trustee deems sufficient.
(c) The ownership of Certificates (whether or not such Certificates shall
be overdue and notwithstanding any notation of ownership or other writing
thereon made by anyone other than the Trustee) shall be proved by the
Certificate Register, and none of the Trustee, the Securities Administrator,
the Master Servicer or the Depositor shall be affected by any notice to the
contrary.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Certificate shall bind every
future Holder of the same Certificate and the Holder of every Certificate
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by
the Trustee or the Master Servicer in reliance thereon, whether or not
notation of such action is made upon such Certificate.
ARTICLE IX
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of Servicers' and
Master Servicer's Obligations.
(a) The Master Servicer, on behalf of the Trustee, the Depositor and the
Certificateholders shall monitor the performance of the Servicers under the
Purchase and Servicing Agreements, and shall use its reasonable good faith
efforts to cause the Servicers duly and punctually to perform all of their
respective duties and obligations thereunder. Upon the occurrence of a default
of which a Responsible Officer of the Master Servicer has actual knowledge
under a Purchase and Servicing Agreement, the Master Servicer shall promptly
notify the Trustee thereof, and shall specify in such notice the action, if
any, the Master Servicer is taking in respect of such default. So long as any
such default shall be continuing, the Master Servicer may, and shall if it
determines such action to be in the best interests of Certificateholders, (i)
terminate all of the rights and powers of such Servicer pursuant to the
applicable provisions of the related Purchase and Servicing Agreement; (ii)
exercise any rights it may have to enforce the related Purchase and Servicing
Agreement against such Servicer; and/or (iii) waive any such default under the
related Purchase and Servicing Agreement or take any other action with respect
to such default as is permitted thereunder. Notwithstanding anything to the
contrary in this Agreement, with respect to any Additional Collateral Mortgage
Loan, the Master Servicer will have no duty or obligation to supervise,
monitor or oversee the activities of the related Servicer under any Purchase
and Servicing Agreement with respect to any Additional Collateral or under any
agreement relating to the pledge of, or the perfection of a pledge or
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security interest in, any Additional Collateral except upon the occurrence of
the following events (i) in the case of a final liquidation of any Mortgaged
Property secured by Additional Collateral, the Master Servicer shall enforce
the obligation of the Servicer under the related Servicing Agreement to
liquidate such Additional Collateral as required by such Servicing Agreement,
and (ii) if the Master Servicer assumes the obligations of such Servicer as
successor Servicer under the related Servicing Agreement pursuant to this
Section 9.01, as successor Servicer, it shall be bound to service and
administer the Additional Collateral in accordance with the provisions of such
Servicing Agreement.
(b) Upon any termination by the Master Servicer of a Servicer's rights
and powers pursuant to its Purchase and Servicing Agreement, the rights and
powers of such Servicer with respect to the related Mortgage Loans shall vest
in the Master Servicer and the Master Servicer shall be the successor in all
respects to such Servicer in its capacity as Servicer with respect to such
Mortgage Loans under the related Purchase and Servicing Agreement, unless or
until the Master Servicer shall have appointed (and the Trustee shall have
acknowledged), with the consent of the Rating Agencies and in accordance with
the applicable provisions of the related Purchase and Servicing Agreement, a
new Xxxxxx Xxx- or FHLMC-approved Person to serve as successor to the
Servicer; provided, however, that it is understood and agreed by the parties
hereto that there will be a period of transition (not to exceed 90 days)
before the actual servicing functions can be fully transferred to a successor
servicer (including the Master Servicer). With such letter from the Rating
Agencies, the Master Servicer may elect to continue to serve as successor
servicer under the Purchase and Servicing Agreement. Upon appointment of a
successor servicer, as authorized under this Section 9.01(b), unless the
successor servicer shall have assumed the obligations of the terminated
Servicer under such Purchase and Servicing Agreement, the Master Servicer and
such successor servicer shall enter into a servicing agreement in a form
substantially similar to the affected Purchase and Servicing Agreement, and
the Trustee shall acknowledge such servicing agreement. In connection with any
such appointment, the Master Servicer may make such arrangements for the
compensation of such successor servicer as it and such successor servicer
shall agree, but in no event shall such compensation of any successor servicer
(including the Master Servicer) be in excess of that payable to the Servicer
under the affected Purchase and Servicing Agreement.
The Master Servicer shall pay the costs of such enforcement (including
the termination of a Servicer, the appointment of a successor servicer or the
transfer and assumption of the servicing by the Master Servicer) at its own
expense and shall be reimbursed therefor initially (i) by the terminated
Servicer, (ii) from a general recovery resulting from such enforcement only to
the extent, if any, that such recovery exceeds all amounts due in respect of
the related Mortgage Loans, (iii) from a specific recovery of costs, expenses
or attorney's fees against the party against whom such enforcement is
directed, or (iv) to the extent that such amounts described in (i)-(iii) above
are insufficient to reimburse the Master Servicer for such costs of
enforcement, from the Trust Fund, as provided in Section 9.04.
If the Master Servicer assumes the servicing with respect to any of the
Mortgage Loans, it will not assume liability for the representations and
warranties of any Servicer it replaces or for the errors or omissions of such
Servicer.
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If the Seller is the owner of the servicing rights and the Seller chooses
to terminate that Servicer with or without cause and sell those servicing
rights to a successor servicer, then the Depositor shall (i) cause the Seller
to give reasonable prior written notice to the Master Servicer, and (ii)
obtain a letter from the Rating Agencies indicating that the appointment of
the proposed successor servicer will not result in a downgrade or withdrawal
of the rating of any of the Certificates, and a New Xxxxxx Mae- or
FHLMC-approved Person reasonably acceptable to the Master Servicer shall be
chosen by the Seller and appointed as successor servicer with the
acknowledgment of the Master Servicer and the Trustee; provided, however, that
the Seller shall not be required to get a no-downgrade letter from the Rating
Agencies if: (i) the Rating Agencies received prior written notice of the
transfer of the servicing rights and the name of the successor Servicer, (ii)
such successor Servicer has a servicing rating in the highest category of
Fitch or Xxxxx'x to the extent that Fitch or Xxxxx'x, respectively, is a
Rating Agency, and such successor Servicer has a servicer evaluation ranking
in one of the two highest categories of S&P to the extent that S&P is a Rating
Agency, and (iii) such successor Servicer shall service the related Mortgage
Loans under either the Purchase and Servicing Agreement together with the
related Assignment Agreement under which such Mortgage Loans are currently
being serviced or under another Servicing Agreement together with a related
Assignment Agreement that have already been reviewed and approved by the
Rating Agencies. The Depositor shall cause the costs of such transfer
including any costs of such transfer (including any costs of the Master
Servicer) to be borne by the Seller.
At least 15 calendar days prior to the effective date of such
termination, (x) the Depositor shall provide written notice to the Master
Servicer and all information reasonably requested by the Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect
to a replacement servicer.
(c) Upon any termination of a Servicer's rights and powers pursuant to
its Purchase and Servicing Agreement, the Master Servicer shall promptly
notify the Trustee and the Rating Agencies, specifying in such notice that the
Master Servicer or any successor servicer, as the case may be, has succeeded
such Servicer under the related Purchase and Servicing Agreement, or under any
other servicing agreement reasonably satisfactory to the Master Servicer and
the Rating Agencies, which notice shall also specify the name and address of
any such successor servicer.
(d) The Depositor shall not consent to the assignment by any Servicer of
such Servicer's rights and obligations under the related Purchase and
Servicing Agreement without the prior written consent of the Master Servicer,
which consent shall not be unreasonably withheld.
(e) The Trustee shall execute and deliver, at the written request of the
Master Servicer or any Servicer, and furnish to the Master Servicer and any
Servicer, at the expense of the requesting party, a power of attorney in the
standard form provided by the Trustee to take title to the Mortgaged
Properties after foreclosure in the name of and on behalf of the Trustee in
its capacity as Trustee hereunder and for the purposes described herein to the
extent necessary or desirable to enable the Master Servicer or any Servicer to
perform its respective duties. The Trustee shall not be liable for the actions
of the Master Servicer or any Servicer under such powers of attorney.
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Section 9.02 Assumption of Master Servicing by Trustee.
(a) In the event the Master Servicer shall for any reason no longer be
the Master Servicer (including by reason of any Event of Default by the Master
Servicer under this Agreement), the Trustee shall thereupon assume all of the
rights and obligations of such Master Servicer hereunder and under each
Purchase and Servicing Agreement entered into with respect to the Mortgage
Loans or shall appoint or petition a court to appoint a Xxxxxx-Xxx or
FHLMC-approved servicer as successor servicer that is acceptable to the
Depositor and the Rating Agencies. The Trustee, as successor master servicer,
its designee or any successor master servicer appointed by the Trustee shall
be deemed to have assumed all of the Master Servicer's interest herein and
therein to the same extent as if such Purchase and Servicing Agreements had
been assigned to the assuming party, except that the Master Servicer shall not
thereby be relieved of any liability or obligations of the Master Servicer
under such Purchase and Servicing Agreement accruing prior to its replacement
as Master Servicer, and shall be liable to the Trustee, and hereby agrees to
indemnify and hold harmless the Trustee (in its individual corporate capacity
and as Trustee hereunder) from and against all costs, damages, expenses and
liabilities (including reasonable attorneys' fees) incurred by the Trustee as
a result of such liability or obligations of the Master Servicer and in
connection with the Trustee's assumption (but not its performance, except to
the extent that costs or liability of the Trustee are created or increased as
a result of negligent or wrongful acts or omissions of the Master Servicer
prior to its replacement as Master Servicer) of the Master Servicer's
obligations, duties or responsibilities thereunder. To the extent that the
costs and expenses of the Trustee described in this Section are not timely
reimbursed by the Master Servicer, the Trustee shall be entitled to
reimbursement from the Distribution Account and the Master Servicer is hereby
obligated to reimburse the Trust promptly for such amounts by deposit thereof
in the Distribution Account.
(b) The Master Servicer that has been terminated shall, upon request of
the Trustee but at the expense of such Master Servicer, deliver to the
assuming party all documents and records relating to each Purchase and
Servicing Agreement, this Agreement and the related Mortgage Loans and an
accounting of amounts collected and held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of each Purchase and
Servicing Agreement and this Agreement to the assuming party.
Section 9.03 Representations and Warranties of the Master Servicer.
The Master Servicer hereby represents and warrants to the Depositor, the
Securities Administrator and the Trustee, for the benefit of the
Certificateholders, as of the Closing Date that:
(i) it is validly existing and in good standing under the laws of
the United States of America as a national banking association, and as
Master Servicer has full power and authority to transact any and all
business contemplated by this Agreement and to execute, deliver and
comply with its obligations under the terms of this Agreement, the
execution, delivery and performance of which have been duly authorized by
all necessary corporate action on the part of the Master Servicer;
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(ii) the execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not (A) violate the Master Servicer's charter or bylaws,
(B) violate any law or regulation or any administrative decree or order
to which it is subject or (C) constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a default) under,
or result in the breach of, any material contract, agreement or other
instrument to which the Master Servicer is a party or by which it is
bound or to which any of its assets are subject, which violation, default
or breach would materially and adversely affect the Master Servicer's
ability to perform its obligations under this Agreement;
(iii) this Agreement constitutes, assuming due authorization,
execution and delivery hereof by the other respective parties hereto, a
legal, valid and binding obligation of the Master Servicer, enforceable
against it in accordance with the terms hereof, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors' rights
in general, and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law);
(iv) the Master Servicer is not in default with respect to any order
or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency to the extent that any such default
would materially and adversely affect its performance hereunder;
(v) the Master Servicer is not a party to or bound by any agreement
or instrument or subject to any charter provision, bylaw or any other
corporate restriction or any judgment, order, writ, injunction, decree,
law or regulation that may materially and adversely affect its ability as
Master Servicer to perform its obligations under this Agreement or that
requires the consent of any third person to the execution of this
Agreement or the performance by the Master Servicer of its obligations
under this Agreement;
(vi) no litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which would
prohibit its entering into this Agreement or performing its obligations
under this Agreement;
(vii) the Master Servicer, or an affiliate thereof the primary
business of which is the servicing of conventional residential mortgage
loans, is a Xxxxxx Mae- or FHLMC-approved seller/servicer;
(viii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of or compliance by the Master
Servicer with this Agreement or the consummation of the transactions
contemplated by this Agreement, except for such consents, approvals,
authorizations and orders (if any) as have been obtained; and
(ix) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer.
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It is understood and agreed that the representations and warranties set
forth in this Section shall survive the execution and delivery of this
Agreement. The Master Servicer shall indemnify the Depositor, the Securities
Administrator and the Trustee and hold them harmless against any loss,
damages, penalties, fines, forfeitures, legal fees and related costs,
judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a material
breach of the Master Servicer's representations and warranties contained in
this Section 9.03. It is understood and agreed that the enforcement of the
obligation of the Master Servicer set forth in this Section to indemnify the
Depositor, the Securities Administrator and the Trustee as provided in this
Section constitutes the sole remedy (other than as set forth in Section 6.14)
of the Depositor, the Securities Administrator and the Trustee, respecting a
breach of the foregoing representations and warranties. Such indemnification
shall survive any termination of the Master Servicer as Master Servicer
hereunder, the resignation or removal of the Trustee and any termination of
this Agreement.
Any cause of action against the Master Servicer relating to or arising
out of the breach of any representations and warranties made in this Section
shall accrue upon discovery of such breach by either the Depositor, the Master
Servicer or the Trustee or notice thereof by any one of such parties to the
other parties.
Section 9.04 Compensation to the Master Servicer.
The Master Servicer shall be compensated for its duties hereunder
pursuant to Section 4.02(b) hereof. The Master Servicer shall either retain or
withdraw from the Distribution Account (i) amounts necessary to reimburse
itself for any previously unreimbursed Advances, Servicer Advances and
Nonrecoverable Advances with respect to the Mortgage Loans in accordance with
the definition of "Available Funds" and (ii) amounts representing assumption
fees, late payment charges or other ancillary income not included in the
definition of "Available Funds" and which are not required to be remitted by
the Servicers to the Securities Administrator or deposited by the Securities
Administrator into the Distribution Account and (iii) any amounts to which the
Master Servicer is entitled pursuant to 4.01(e) hereof. The Master Servicer
shall be required to pay all expenses incurred by it in connection with its
activities hereunder and shall not be entitled to reimbursement therefor
except as provided in this Agreement.
In addition, the Master Servicer shall be entitled to reimbursement from
the Distribution Account for all reasonable expenses, disbursements and
advances incurred or made by the Master Servicer in connection with the
performance of its duties hereunder and under the Purchase and Servicing
Agreements, as modified by the Acknowledgements (including the reasonable
compensation and the expenses and disbursements of its agents and counsel), to
the extent not otherwise reimbursed pursuant to this Agreement, except any
such expense, disbursement or advance as may be attributable to its willful
misfeasance, bad faith or negligence.
The Master Servicer and any director, officer, employee or agent of the
Master Servicer shall be indemnified by the Trust and held harmless thereby
against any loss, liability or expense (including reasonable legal fees and
disbursements of counsel) incurred on their part that may be sustained in
connection with, arising out of, or related to, any claim or legal action
(including any pending or threatened claim or legal action) relating to this
Agreement, the Purchase and
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Servicing Agreements or the Certificates, other than any loss, liability or
expense resulting from the Master Servicer's failure to perform its duties
hereunder or thereunder or incurred by reason of the Master Servicer's
negligence, willful misfeasance or bad faith.
Section 9.05 Merger or Consolidation.
Any Person into which the Master Servicer may be merged or consolidated,
or any Person resulting from any merger, conversion, other change in form or
consolidation to which the Master Servicer shall be a party, or any Person
succeeding to the business of the Master Servicer shall be the successor to
the Master Servicer hereunder, without the execution or filing of any paper or
any further act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding; provided, however, that the successor or
resulting Person to the Master Servicer shall be a Person that shall be
qualified and approved to service mortgage loans for Xxxxxx Xxx or FHLMC and
shall have a net worth of not less than $15,000,000.
As a condition to the effectiveness of any merger or consolidation, at
least 15 calendar days prior to the effective date of any merger or
consolidation of the Master Servicer, the Master Servicer shall provide (x)
written notice to the Depositor of any successor pursuant to this Section and
(y) in writing and in form and substance reasonably satisfactory to the
Depositor, all information reasonably requested by the Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect
to a replacement Master Servicer.
Section 9.06 Resignation of Master Servicer and Securities Administrator.
Except as otherwise provided in Sections 9.05, 9.07 and 9.10 hereof,
neither the Master Servicer nor the Securities Administrator shall resign from
the obligations and duties hereby imposed on it unless the duties of the
Master Servicer or the Securities Administrator, as applicable, hereunder are
no longer permissible under applicable law or are in material conflict by
reason of applicable law with any other activities carried on by it and cannot
be cured. Any such determination permitting the resignation of the Master
Servicer or the Securities Administrator shall be evidenced by an Opinion of
Counsel that shall be Independent to such effect delivered to the Trustee. No
resignation of the Master Servicer or the Securities Administrator shall
become effective until the Trustee shall have assumed, or a successor master
servicer or successor securities administrator, as applicable, shall have been
appointed pursuant to Section 6.07 or 9.02, as applicable, and until such
successor shall have assumed, such Master Servicer's or Securities
Administrator's responsibilities and obligations under this Agreement. Notice
of any such resignation shall be given promptly by the Master Servicer or the
Securities Administrator, as applicable, to the Depositor and the Trustee.
If, at any time, the Master Servicer resigns under this Section 9.06, or
transfers or assigns its rights and obligations under Section 9.07, or is
removed as Master Servicer pursuant to Section 6.14, then at such time Xxxxx
Fargo Bank, National Association (or any successor thereto) also shall resign
or be removed, as applicable, as Securities Administrator, Auction
Administrator, Paying Agent, Authenticating Agent and Certificate Registrar
under this Agreement. In such event, the obligations of the Master Servicer
and the Securities Administrator shall be assumed by the Trustee as successor
or by such other successor master
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servicer and/or securities administrator, as applicable, appointed by the
Trustee (subject to the provisions of Sections 6.07 and 9.02(a)).
As a condition to the effectiveness of any such resignation, at least 15
calendar days prior to the effective date of such resignation, the Master
Servicer shall provide (x) written notice to the Depositor of any successor
pursuant to this Section and (y) in writing and in form and substance
reasonably satisfactory to the Depositor, all information reasonably requested
by the Depositor in order to comply with its reporting obligation under Item
6.02 of Form 8-K with respect to the resignation of the Master Servicer.
Section 9.07 Assignment or Delegation of Duties by the Master Servicer
and Securities Administrator.
Except as expressly provided herein, neither the Master Servicer nor the
Securities Administrator shall assign or transfer any of their respective
rights, benefits or privileges hereunder to any other Person, or delegate to
or subcontract with, or authorize or appoint any other Person to perform any
of the respective duties, covenants or obligations to be performed by the
Master Servicer or Securities Administrator, as applicable, hereunder;
provided, however, that the Master Servicer and the Securities Administrator
shall each have the right with the prior written consent of the Trustee and
the Depositor (which consent shall not be unreasonably withheld), and upon
delivery to the Trustee and the Depositor of a letter from each Rating Agency
to the effect that such action shall not result in a downgrading of the
Certificates, to delegate or assign to or subcontract with or authorize or
appoint any qualified Person to perform and carry out any of the respective
duties, covenants or obligations to be performed and carried out by the Master
Servicer or the Securities Administrator, as applicable, hereunder. Notice of
such permitted assignment shall be given promptly by the Master Servicer or
the Securities Administrator, as applicable, to the Depositor and the Trustee.
If, pursuant to any provision hereof, the respective duties of the Master
Servicer or the Securities Administrator are transferred to a successor master
servicer or successor securities administrator, as applicable, the entire
amount of the compensation payable to the Master Servicer or Securities
Administrator pursuant hereto shall thereafter be payable to such successor
master servicer or successor securities administrator. Such successor Master
Servicer shall also pay the fees of the Trustee, as provided herein.
Section 9.08 Limitation on Liability of the Master Servicer and Others.
(a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Trustee or the Certificateholders for any action taken or for refraining from
the taking of any action in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect
the Master Servicer or any such person against any liability that would
otherwise be imposed by reason of willful misfeasance, bad faith or negligence
in its performance of its duties or by reason of reckless disregard for its
obligations and duties under this Agreement. The Master Servicer and any
director, officer, employee or agent of the Master Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted
by any Person respecting any matters arising hereunder. The Master Servicer
shall be under no obligation to appear in, prosecute or defend any legal
action that is not incidental to its duties to master service
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the Mortgage Loans in accordance with this Agreement and that in its opinion
may involve it in any expenses or liability; provided, however, that the
Master Servicer may in its sole discretion undertake any such action that it
may deem necessary or desirable in respect to this Agreement and the rights
and duties of the parties hereto and the interests of the Certificateholders
hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust Fund and the Master Servicer shall be entitled to be reimbursed therefor
out of the Distribution Account.
The Master Servicer shall not be liable for any acts or omissions of the
Servicers except to the extent that damages or expenses are incurred as a
result of such act or omissions and such damages and expenses would not have
been incurred but for the negligence, willful misfeasance, bad faith or
recklessness of the Master Servicer in supervising, monitoring and overseeing
the obligations of the Servicers in this Agreement and the Purchase and
Servicing Agreements.
Section 9.09 Indemnification; Third-Party Claims.
The Master Servicer agrees to indemnify the Depositor, the
Securities Administrator and the Trustee, and hold them harmless against any
and all claims, losses, penalties, fines, forfeitures, legal fees and related
costs, judgments, and any other costs, liability, fees and expenses that the
Depositor, the Securities Administrator or the Trustee may sustain as a result
of the Master Servicer's willful misfeasance, bad faith or negligence in the
performance of its duties hereunder or by reason of its reckless disregard for
its obligations and duties under this Agreement, the Acknowledgements and the
related Purchase and Servicing Agreements. The Depositor, the Securities
Administrator and the Trustee shall immediately notify the Master Servicer if
a claim is made by a third party with respect to this Agreement or the
Mortgage Loans entitling the Depositor, the Securities Administrator or the
Trustee to indemnification under this Section 9.09, whereupon the Master
Servicer shall assume the defense of any such claim and pay all expenses in
connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or them in
respect of such claim.
Section 9.10 Eligibility Requirements for Securities Administrator.
The Securities Administrator hereunder shall at all times be a
corporation or association organized and doing business under the laws the
United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000, subject to supervision or examination by federal or state
authority and with a credit rating of at least investment grade or at least
"A/F1" by Fitch if Fitch is a Rating Agency. If such corporation or
association publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section 9.10 the combined capital and surplus of
such corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Securities Administrator shall cease to be eligible in
accordance with the provisions of this Section 9.10, the Securities
Administrator shall resign immediately in the manner and with the effect
specified in Section 6.06 hereof. The entity serving as Securities
Administrator may have normal banking and trust relationships with the
Depositor, the Seller, the Master Servicer, any Custodian or the Trustee and
their respective affiliates.
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The Securities Administrator (i) may not be an Originator, Master
Servicer, Servicer, the Depositor or an affiliate of the Depositor unless the
Securities Administrator is in an institutional trust department, (ii) must be
authorized to exercise corporate trust powers under the laws of its
jurisdiction of organization, and (iii) must be rated at least "A/F1" by
Fitch, if Fitch is a Rating Agency, or the equivalent rating by S&P or Xxxxx'x
(or such rating acceptable to Fitch pursuant to a written confirmation). If at
any time the Securities Administrator shall cease to be eligible in accordance
with the provisions of this Section 9.10, the Securities Administrator shall
resign in the manner and with the effect specified in Section 6.06 hereof. If
no successor Securities Administrator shall have been appointed and shall have
accepted appointment within 60 days after the Securities Administrator ceases
to be the Securities Administrator pursuant to this Section 9.10, then the
Trustee shall become the successor Securities Administrator and shall, in
accordance with Article VI hereof and in such capacity, perform the duties of
the Securities Administrator pursuant to this Agreement. The Trustee shall
notify the Rating Agencies of any change of Securities Administrator.
Section 9.11 Annual Statement as to Compliance.
The Master Servicer and the Securities Administrator shall deliver
(and the Master Servicer and the Securities Administrator shall cause any
Additional Servicer engaged by it to, deliver) or otherwise make available to
the Depositor and the Securities Administrator on or before March 15 of each
year, commencing in March 2007, an Officer's Certificate stating, as to the
signer thereof, that (A) a review of such party's activities during the
preceding calendar year or portion thereof and of such party's performance
under this Agreement, or such other applicable agreement in the case of an
Additional Servicer, has been made under such officer's supervision, (B) to
the best of such officer's knowledge, based on such review, such party has
fulfilled all its obligations under this Agreement, or such other applicable
agreement in the case of an Additional Servicer, in all material respects
throughout such year or portion thereof, or, if there has been a failure to
fulfill any such obligation in any material respect, specifying each such
failure known to such officer and the nature and status thereof and (C) in the
case of the Master Servicer, to the best of such officer's knowledge, each
Servicer has fulfilled all its obligations under its Servicing Agreement in
all material respects throughout such year, or, if there has been a failure to
fulfill any such obligation in any material respect specifying each such
failure known to such officer and the nature and status thereof.
The Master Servicer shall enforce any obligation of the Servicers,
to the extent set forth in the related Servicing Agreement, to deliver to the
Master Servicer and to the Depositor an annual statement of compliance and all
reports and other information required from the Servicers under Regulation AB
within the time frame set forth in, and in such form and substance as may be
required pursuant to, the related Servicing Agreement The Master Servicer
shall include such annual statements of compliance with its own annual
statement of compliance to be submitted to the Securities Administrator
pursuant to this Section.
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ARTICLE X
REMIC ADMINISTRATION
Section 10.01 REMIC Administration.
(a) REMIC elections as set forth in the Preliminary Statement shall be
made on Forms 1066 or other appropriate federal tax or information return for
the taxable year ending on the last day of the calendar year in which the
Certificates are issued. The regular interests and residual interest in each
REMIC shall be as designated in the Preliminary Statement.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of section 860G(a)(9) of the Code. The latest
possible maturity date for purposes of Treasury Regulation 1.860G-1(a)(4) will
be the Latest Possible Maturity Date.
(c) The Securities Administrator shall represent the Trust Fund in any
administrative or judicial proceeding relating to an examination or audit by
any governmental taxing authority with respect thereto. The Securities
Administrator shall pay any and all tax related expenses (not including taxes)
of each REMIC, including but not limited to any professional fees or expenses
related to audits or any administrative or judicial proceedings with respect
to such REMIC that involve the Internal Revenue Service or state tax
authorities, but only to the extent that (i) such expenses are ordinary or
routine expenses, including expenses of a routine audit but not expenses of
litigation (except as described in (ii)); or (ii) such expenses or liabilities
(including taxes and penalties) are attributable to the negligence or willful
misconduct of the Securities Administrator in fulfilling its duties hereunder
(including its duties as tax return preparer). The Securities Administrator
shall be entitled to reimbursement of expenses to the extent provided in
clause (i) above from the Distribution Account, provided, however, the
Securities Administrator shall not be entitled to reimbursement for expenses
incurred in connection with the preparation of tax returns and other reports
as required by Section 6.20 and this Section.
(d) The Securities Administrator shall prepare, the Trustee shall sign
and the Securities Administrator shall file all of each REMIC's federal and
appropriate state tax and information returns as such REMIC's direct
representative. The expenses of preparing and filing such returns shall be
borne by the Securities Administrator. In preparing such returns, the
Securities Administrator shall, with respect to each REMIC other than the
Master REMIC: (i) treat the accrual period for interests in such REMIC as the
calendar month; (ii) account for distributions made from each REMIC other than
the Master REMIC as made on the first day of each succeeding calendar month;
(iii) account for income under the all-OID method at the weighted average of
the Net Mortgage Rates; (iv) use the aggregation method provided in Treasury
Regulation section 1.1275-2(c); and (v) account for income and expenses
related to each REMIC other than the Master REMIC in the manner resulting in
the lowest amount of excess inclusion income possible accruing to the Holder
of the residual interest in each such REMIC.
(e) The Securities Administrator or its designee shall perform on behalf
of each REMIC all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions, or other
compliance guidance issued by the Internal
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Revenue Service or any state or local taxing authority. Among its other
duties, if required by the Code, the REMIC Provisions, or other such guidance,
the Securities Administrator shall provide, upon receipt of additional
reasonable compensation, (i) to the Treasury or other governmental authority
such information as is necessary for the application of any tax relating to
the transfer of a Residual Certificate to any disqualified person or
organization pursuant to Treasury Regulation 1.860E-2(a)(5) and any person
designated in Section 860E(e)(3) of the Code and (ii) to the
Certificateholders and the Trustee such information or reports as are required
by the Code or REMIC Provisions.
(f) To the extent within their control, the Trustee, the Securities
Administrator, the Master Servicer and the Holders of Certificates shall take
any action or cause any REMIC to take any action necessary to maintain the
status of any REMIC as a REMIC under the REMIC Provisions and shall assist
each other as necessary to create or maintain such status. None of the
Trustee, the Securities Administrator, the Master Servicer, nor the Holder of
any Residual Certificate shall knowingly take any action, cause any REMIC to
take any action or fail to take (or fail to cause to be taken) any action
that, under the REMIC Provisions, if taken or not taken, as the case may be,
could result in an Adverse REMIC Event unless the Trustee, the Securities
Administrator and the Master Servicer have received an Opinion of Counsel (at
the expense of the party seeking to take such action) to the effect that the
contemplated action will not endanger such status or result in the imposition
of such a tax. In addition, prior to taking any action with respect to any
REMIC or the assets therein, or causing any REMIC to take any action, which is
not expressly permitted under the terms of this Agreement, any Holder of a
Residual Certificate will consult with the Trustee, the Securities
Administrator, the Master Servicer or their respective designees, in writing,
with respect to whether such action could cause an Adverse REMIC Event to
occur with respect to any REMIC, and no such Person shall take any such action
or cause any REMIC to take any such action as to which the Trustee, the
Securities Administrator or the Master Servicer has advised it in writing that
an Adverse REMIC Event could occur; provided, however, that if no Adverse
REMIC Event would occur but such action could result in the imposition of
additional taxes on the Residual Certificateholders, no such Person shall take
any such action, or cause any REMIC to take any such action without the
written consent of the Residual Certificateholders.
(g) Each Holder of a Residual Certificate shall pay when due any and all
taxes imposed on the related REMIC by federal or state governmental
authorities. To the extent that such taxes are not paid by a Residual
Certificateholder, the Paying Agent shall pay any remaining REMIC taxes out of
current or future amounts otherwise distributable to the Holder of the
Residual Certificate in any such REMIC or, if no such amounts are available,
(A) out of other amounts held in the Distribution Account, and shall reduce
amounts otherwise payable to holders of regular interests in any such REMIC or
(B) to the extent that any such taxes are imposed on the REMIC as a result of
the breach of any representation, warranty or covenant of the Master Servicer,
the Securities Administrator or any Servicer, then the Master Servicer, the
Securities Administrator, or that Servicer, as applicable, shall pay when due
any and all such taxes.
(h) The Securities Administrator shall, for federal income tax purposes,
maintain books and records with respect to each REMIC on a calendar year and
on an accrual basis.
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(i) No additional contributions of assets shall be made to any REMIC,
except as expressly provided in this Agreement.
(j) Neither the Securities Administrator nor the Master Servicer shall
enter into any arrangement by which any REMIC will receive a fee or other
compensation for services.
(k) [Reserved].
(l) The Class A-R Holder shall act as "tax matters person" with respect
to each REMIC created hereunder and the Securities Administrator shall act as
agent for the Class A-R Holder in such roles, unless and until another party
is so designated by the Class A-R Holder.
(m) The Trustee shall treat the Reserve Fund as an outside reserve fund
within the meaning of Treasury Regulation 1.860G-2(h) which is owned by the
LIBOR Certificates, and that is not an asset of any REMIC created hereunder.
The LIBOR Certificates shall be treated as representing ownership of a Master
REMIC regular interest and a position in an interest rate cap contract (the
Corridor Contract). The Trustee shall assume that the position of the Class
1-A-1 and Class 1-A-2 Corridor Contract has a value of $1,600,000, the
position of the Class 1-A-3 Corridor Contract has a value of $25,000 and the
position of the Junior LIBOR Corridor Contract has a value of $100,000.
Section 10.02 Prohibited Transactions and Activities.
Neither the Depositor, the Master Servicer nor the Trustee shall sell,
dispose of, or substitute for any of the Mortgage Loans, except in a
disposition pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the
bankruptcy of the Trust Fund, (iii) the termination of each REMIC pursuant to
Article VII of this Agreement, (iv) a substitution pursuant to Article II of
this Agreement or (v) a repurchase of Mortgage Loans pursuant to Article II of
this Agreement, nor acquire any assets for any REMIC, nor sell or dispose of
any investments in the Distribution Account for gain, nor accept any
contributions to any REMIC after the Closing Date, unless it has received an
Opinion of Counsel (at the expense of the party causing such sale,
disposition, substitution or acceptance) that such disposition, acquisition,
substitution, or acceptance will not result in an Adverse REMIC Event, (b)
affect the distribution of interest or principal on the Certificates or (c)
result in the encumbrance of the assets transferred or assigned to the Trust
Fund (except pursuant to the provisions of this Agreement).
The Master Servicer with respect to the Mortgage Loans shall not consent
to any modification of any such Mortgage Loan for which the consent of the
Master Servicer is required under the applicable Purchase and Servicing
Agreement under which such Mortgage Loan is serviced, that would (i) increase
the interest rate in respect of such Mortgage, defer for a period in excess of
six months or forgive the payment of any principal or interest, reduce the
outstanding principal amount (except for actual payments of principal),
increase the Servicing Fee on such Mortgage Loan or extend the final maturity
date on such Mortgage Loan, or (ii) result in a substitution or release of
collateral or in the provision of additional collateral for the Mortgage Loan,
unless the applicable Mortgage Loan is in default or default is reasonably
foreseeable in respect of such Mortgage Loan, or the Master Servicer has
received an Opinion of
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Counsel (at the expense of the party requesting consent for such modification)
that such modification will not result in an Adverse REMIC Event.
Section 10.03 Indemnification with Respect to Prohibited Transactions or
Loss of REMIC Status.
Upon the occurrence of an Adverse REMIC Event due to the negligent
performance by the Securities Administrator of its duties and obligations set
forth herein, the Securities Administrator shall indemnify the
Certificateholders of the related Residual Certificate against any and all
losses, claims, damages, liabilities or expenses ("Losses") resulting from
such negligence; provided, however, that the Securities Administrator shall
not be liable for any such Losses attributable to the action or inaction of
the Depositor, the Trustee or the Holder of the Residual Certificate, nor for
any such Losses resulting from misinformation provided by any of the foregoing
parties on which the Securities Administrator has relied. Notwithstanding the
foregoing, however, in no event shall the Securities Administrator have any
liability (1) for any action or omission that is taken in accordance with and
in compliance with the express terms of, or which is expressly permitted by
the terms of, this Agreement or under any Purchase and Servicing Agreements or
under any Acknowledgement, (2) for any Losses other than arising out of
malfeasance, willful misconduct or negligent performance by the Service
Administrator of its duties and obligations set forth herein, and (3) for any
special or consequential damages to Certificateholders of the related Residual
Certificate (in addition to payment of principal and interest on the
Certificates).
Section 10.04 REO Property.
(a) Notwithstanding any other provision of this Agreement, the Master
Servicer, acting on behalf of the Trustee hereunder, shall not, except to the
extent provided in the applicable Purchase and Servicing Agreement, knowingly
permit any Servicer to, rent, lease, or otherwise earn income on behalf of any
REMIC with respect to any REO Property which might cause an Adverse REMIC
Event unless the applicable Servicer has provided to the Trustee and the
Securities Administrator an Opinion of Counsel concluding that, under the
REMIC Provisions, such action would not adversely affect the status of any
REMIC as a REMIC and any income generated for any REMIC by the REO Property
would not result in an Adverse REMIC Event.
(b) The Depositor shall cause the applicable Servicer (to the extent
provided in its Purchase and Servicing Agreement) to make reasonable efforts
to sell any REO Property for its fair market value. In any event, however, the
Depositor shall, or shall cause the applicable Servicer (to the extent
provided in its Purchase and Servicing Agreement) to, dispose of any REO
Property within three years of its acquisition by the Trust Fund unless the
Depositor or the applicable Servicer (on behalf of the Trust Fund) has
received a grant of extension from the Internal Revenue Service to the effect
that, under the REMIC Provisions and any relevant proposed legislation and
under applicable state law, the REMIC may hold REO Property for a longer
period without causing an Adverse REMIC Event. If such an extension has been
received, then the Depositor, acting on behalf of the Trustee hereunder,
shall, or shall cause the applicable Servicer to, continue to attempt to sell
the REO Property for its fair market value for such period longer than three
years as such extension permits (the "Extended Period"). If such
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an extension has not been received and the Depositor or the applicable
Servicer, acting on behalf of the Trust Fund hereunder, is unable to sell the
REO Property within 33 months after its acquisition by the Trust Fund or if
such an extension, has been received and the Depositor or the applicable
Servicer is unable to sell the REO Property within the period ending three
months before the close of the Extended Period, the Depositor shall cause the
applicable Servicer, before the end of the three year period or the Extended
Period, as applicable, to (i) purchase such REO Property at a price equal to
the REO Property's fair market value or (ii) auction the REO Property to the
highest bidder (which may be the applicable Servicer) in an auction reasonably
designed to produce a fair price prior to the expiration of the three-year
period or the Extended Period, as the case may be.
Section 10.05 Fidelity.
The Master Servicer, at its expense, shall maintain in effect a blanket
fidelity bond and an errors and omissions insurance policy, affording coverage
with respect to all directors, officers, employees and other Persons acting on
such Master Servicer's behalf, and covering errors and omissions in the
performance of the Master Servicer's obligations hereunder. The errors and
omissions insurance policy and the fidelity bond shall be in such form and
amount generally acceptable for entities serving as master servicers and
trustees.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Binding Nature of Agreement; Assignment.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
Section 11.02 Entire Agreement.
This Agreement contains the entire agreement and understanding among the
parties hereto with respect to the subject matter hereof, and supersedes all
prior and contemporaneous agreements, understandings, inducements and
conditions, express or implied, oral or written, of any nature whatsoever with
respect to the subject matter hereof. The express terms hereof control and
supersede any course of performance and/or usage of the trade inconsistent
with any of the terms hereof.
Section 11.03 Amendment.
(a) This Agreement (other than the provisions of Article XII hereof) may
be amended from time to time by the Depositor, the Master Servicer, the
Securities Administrator, and the Trustee, without notice to or the consent of
any of the Holders, (i) to cure any ambiguity or mistake, (ii) to cause the
provisions herein to conform to or be consistent with or in furtherance of the
statements made with respect to the Certificates, the Trust Fund or this
Agreement in any Offering Document, or to correct or supplement any provision
herein which may be inconsistent with any other provisions herein or with the
provisions of any Purchase and Servicing Agreement, (iii) to make any other
provisions with respect to matters or questions arising under
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this Agreement or (iv) to add, delete, or amend any provisions to the extent
necessary or desirable to comply with any requirements imposed by the Code and
the REMIC Provisions. No such amendment effected pursuant to the preceding
sentence shall, as evidenced by an Opinion of Counsel, result in an Adverse
REMIC Event, nor shall such amendment effected pursuant to clause (iii) of
such sentence adversely affect in any material respect the interests of any
Holder. Prior to entering into any amendment without the consent of Holders
pursuant to this paragraph, the Trustee shall be provided with an Opinion of
Counsel (at the expense of the party requesting such amendment) to the effect
that such amendment is permitted under this Section. Any such amendment shall
be deemed not to adversely affect in any material respect any Holder, if the
Trustee receives written confirmation from each Rating Agency that such
amendment will not cause such Rating Agency to reduce the then current rating
assigned to the Certificates.
(b) This Agreement (other than the provisions of Article XII hereof) may
also be amended from time to time by the Depositor, the Master Servicer, the
Securities Administrator and the Trustee, with the consent of the Holders of
not less than 66-2/3% of the Class Principal Balance (or Percentage Interest)
of each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Holders;
provided, however, that no such amendment shall be made unless the Trustee
receives an Opinion of Counsel, at the expense of the party requesting the
change, that such change will not cause an Adverse REMIC Event; and provided
further, that no such amendment may (i) reduce in any manner the amount of, or
delay the timing of, payments received on Mortgage Loans which are required to
be distributed on any Certificate, without the consent of the Holder of such
Certificate or (ii) reduce the aforesaid percentages of Class Principal
Balance or Class Notional Amount (or Percentage Interest) of Certificates of
each Class, the Holders of which are required to consent to any such amendment
without the consent of the Holders of 100% of the Class Principal Balance or
Class Notional Amount (or Percentage Interest) of each Class of Certificates
affected thereby. For purposes of this paragraph, references to "Holder" or
"Holders" shall be deemed to include, in the case of any Class of Book-Entry
Certificates, the related Certificate Owners.
(c) In the event the parties to this Agreement desire to further clarify
or amend any provision of Article XII hereof, this Agreement shall be amended
to reflect the new agreement between the parties covering matters in Article
XII, which amendment shall not require any Opinion of Counsel or Rating Agency
confirmations or the consent of any Certificateholder.
(d) Promptly after the execution of any such amendment, the Securities
Administrator shall furnish written notification of the substance of such
amendment to each Holder, the Depositor and the Rating Agencies.
(e) It shall not be necessary for the consent of Holders under this
Section 11.03 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Holders shall be subject to such reasonable regulations
as the Trustee may prescribe.
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Section 11.04 Voting Rights.
Except to the extent that the consent of all affected Certificateholders
is required pursuant to this Agreement, with respect to any provision of this
Agreement requiring the consent of Certificateholders representing specified
percentages of aggregate outstanding Certificate Balance or Class Notional
Amount (or Percentage Interest), Certificates owned by the Depositor, the
Master Servicer, the Securities Administrator, the Trustee, any Servicer or
any Affiliates thereof are not to be counted so long as such Certificates are
owned by the Depositor, the Master Servicer, the Securities Administrator, the
Trustee, any Servicer or any Affiliate thereof.
Section 11.05 Provision of Information.
(a) For so long as any of the Certificates of any Class are "restricted
securities" within the meaning of Rule 144(a)(3) under the Act, each of the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
(upon instruction from the Depositor) agree to cooperate with each other to
provide to any Certificateholders and to any prospective purchaser of
Certificates designated by such holder, upon the request of such holder or
prospective purchaser, any information required to be provided to such holder
or prospective purchaser to satisfy the condition set forth in Rule 144A(d)(4)
under the Act. Any reasonable, out-of-pocket expenses incurred by the Trustee,
the Master Servicer or the Securities Administrator in providing such
information shall be reimbursed by the Depositor.
(b) The Securities Administrator shall provide to any person to whom a
Prospectus was delivered, upon the request of such person specifying the
document or documents requested, a copy (excluding exhibits) of any report on
Form 8-K or Form 10-K filed with the Securities and Exchange Commission
pursuant to Section 6.20(b). Any reasonable out-of-pocket expenses incurred by
the Securities Administrator in providing copies of such documents shall be
reimbursed by the Depositor.
Section 11.06 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK (OTHER THAN SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW).
Section 11.07 Notices.
All requests, demands, notices, authorizations, directions, consents,
waivers and communications hereunder shall be in writing and shall be deemed
to have been duly given when received by (a) in the case of the Depositor,
Xxxxxx Xxxxxxx Capital I Inc., 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
telephone number (000) 000-0000, Attention: Xxxxxx Xxxxxxx Mortgage Loan Trust
2006-1AR, (b) in the case of the Seller, Xxxxxx Xxxxxxx Mortgage Capital Inc.,
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx
Xxxxxxx Mortgage Loan Trust 2006-1AR, (c) in the case of the Master Servicer
or the Securities Administrator, Xxxxx Fargo Bank, National Association, X.X.
Xxx 00, Xxxxxxxx, Xxxxxxxx
000
00000 (or, for overnight deliveries, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx 00000), telecopy number (000) 000-0000, Attention: Xxxxxx Xxxxxxx
Mortgage Loan Trust 2006-1AR, (d) with respect to the Trustee or the
Certificate Registrar, its respective Corporate Trust Office and (e) in the
case of the Rating Agencies, the address specified therefor in the definition
corresponding to the name of such Rating Agency, or as to each party such
other address as may hereafter be furnished by such party to the other parties
in writing. All demands, notices and communications to a party hereunder shall
be in writing and shall be deemed to have been duly given when delivered to
such party at the relevant address, facsimile number or electronic mail
address set forth above or at such other address, facsimile number or
electronic mail address as such party may designate from time to time by
written notice in accordance with this Section 11.07.
Section 11.08 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.09 Indulgences; No Waivers.
Neither the failure nor any delay on the part of a party to exercise any
right, remedy, power or privilege under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
power or privilege preclude any other or further exercise of the same or of
any other right, remedy, power or privilege, nor shall any waiver of any
right, remedy, power or privilege with respect to any occurrence be construed
as a waiver of such right, remedy, power or privilege with respect to any
other occurrence. No waiver shall be effective unless it is in writing and is
signed by the party asserted to have granted such waiver.
Section 11.10 Headings Not To Affect Interpretation.
The headings contained in this Agreement are for convenience of reference
only, and they shall not be used in the interpretation hereof.
Section 11.11 Benefits of Agreement.
Nothing in this Agreement or in the Certificates, express or implied,
shall give to any Person, other than the parties to this Agreement and their
successors hereunder and the Holders of the Certificates, any benefit or any
legal or equitable right, power, remedy or claim under this Agreement, except
to the extent specified in Section 11.15.
Section 11.12 Special Notices to the Rating Agencies.
(a) The Depositor shall give prompt notice to the Rating Agencies of the
occurrence of any of the following events of which it has notice:
(i) any amendment to this Agreement pursuant to Section 11.03;
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(ii) any assignment by the Master Servicer of its rights hereunder
or delegation of its duties hereunder;
(iii) the occurrence of any Event of Default described in Section
6.14;
(iv) any notice of termination given to the Master Servicer pursuant
to Section 6.14 and any resignation of the Master Servicer hereunder;
(v) the appointment of any successor to any Master Servicer pursuant
to Section 6.14;
(vi) the making of a final payment pursuant to Section 7.02; and
(vii) any termination of the rights and obligations of any Servicer
under the applicable Purchase and Servicing Agreement.
(b) All notices to the Rating Agencies provided for this Section shall be
in writing and sent by first class mail, telecopy or overnight courier, to the
address specified therefor in the definition corresponding to the name of such
Rating Agency.
(c) The Securities Administrator shall provide or make available to the
Rating Agencies reports prepared pursuant to Section 4.05. In addition, the
Securities Administrator shall, at the expense of the Trust Fund, make
available to each Rating Agency such information as such Rating Agency may
reasonably request regarding the Certificates or the Trust Fund, to the extent
that such information is reasonably available to the Securities Administrator.
(d) The Depositor hereby represents to S&P that, to the Depositor's
knowledge, the information provided to such Rating Agency, including the loan
level detail, is true and correct according to such Rating Agency's
requirements.
Section 11.13 Conflicts.
To the extent that the terms of this Agreement conflict with the terms of
any Purchase and Servicing Agreement, the related Purchase and Servicing
Agreement shall govern.
Section 11.14 Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original, and all of which together shall constitute
one and the same instrument.
Section 11.15 No Petitions.
The Trustee and the Master Servicer (not in its individual corporate
capacity, but solely as Master Servicer hereunder), by entering into this
Agreement, hereby covenant and agree that they shall not at any time institute
against the Depositor, or join in any institution against the Depositor of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to this
Agreement or any of the documents
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entered into by the Depositor in connection with the transactions contemplated
by this Agreement, except that the Trustee shall not be prohibited from filing
a proof of claim in any such proceeding.
Section 11.16 Indemnification by Trust.
Pursuant to the Purchase and Servicing Agreements, each of the
Originators and Servicers shall be indemnified by the Trust to the extent
specified in the related Purchase and Servicing Agreement.
Pursuant to the Custodial Agreements, each of the Custodians shall be
indemnified by the Trust to the extent specified in the related Custodial
Agreement.
ARTICLE XII
EXCHANGE ACT REPORTING
Section 12.01 Filing Obligations.
(a) The Master Servicer, the Securities Administrator, the Trustee and
each Custodian shall reasonably cooperate with the Depositor in connection
with the satisfaction of the Depositor's reporting requirements under the
Exchange Act with respect to the Trust Fund. In addition to the information
specified below, if so requested by the Depositor for the purpose of
satisfying its reporting obligation under the Exchange Act, the Master
Servicer, the Securities Administrator, the Trustee and each Custodian shall
(and the Master Servicer shall cause each Servicer, to the extent required by
the related Servicing Agreement, to) provide the Depositor with (a) such
information which is available to such Person without unreasonable effort or
expense and within such timeframe as may be reasonably requested by the
Depositor to comply with the Depositor's reporting obligations under the
Exchange Act and (b) to the extent such Person is a party (and the Depositor
is not a party) to any agreement or amendment required to be filed, copies of
such agreement or amendment in XXXXX-compatible form. Each of the Master
Servicer (and the Master Servicer shall cause any Servicer to notify promptly,
to the extent required by the related Servicing Agreement), the Securities
Administrator, each Custodian and the Trustee shall promptly notify the
Depositor and the Master Servicer (if the notifying party is not the Master
Servicer), but in no event later than two (2) Business Days after its
occurrence, of any Reportable Event either (i) with respect to itself or any
Affiliate of it or (ii) with respect to any Reporting Party, to the extent
that it has received notice thereof.
(b) On or prior to January 30 of the first year in which the Securities
Administrator is able to do so under applicable law, the Securities
Administrator shall prepare and file a Form 15 relating to the automatic
suspension of reporting in respect of the Trust under the Exchange Act.
(c) In the event that the Securities Administrator is unable to file
timely with the Commission all or any required portion of any Form 8-K, Form
10-D or Form 10-K required to be filed by this Agreement because required
disclosure information was either not delivered to it or delivered to it after
the delivery deadlines set forth in this Agreement or for any other reason,
the Securities Administrator will immediately notify the Depositor. In the
case of Form 10-D and Form 10-K, the parties to this Agreement will (and the
Master Servicer shall cause each
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Servicer to cooperate) prepare and file a Form 12b-25 and a Form 10-DA and
Form 10-KA as applicable, pursuant to Rule 12b-25 of the Exchange Act. In the
case of Form 8-K, the Securities Administrator will, upon receipt of all
required Form 8-K Disclosure Information shall include such disclosure
information in the next Form 10-D unless directed by the Depositor to file a
Form 8-K with such Form 8-K Disclosure Information. In the event that any
previously filed Form 8-K, Form 10-D or Form 10-K needs to be amended, and
such amendment includes any Additional Form 10-D Disclosure, any Additional
Form 10-K Disclosure or any Form 8-K Disclosure Information or an amendment to
any such disclosure, the Securities Administrator will notify the Depositor
and each Servicer affected by such amendment (unless such amendment is solely
for the purpose of restating the monthly statement referred to in Section 4.05
hereof) and such parties will cooperate to prepare any necessary Form 8-KA,
Form 10-DA or Form 10-KA. Any Form 15, Form 12b-25 or any amendment to a Form
8-K or a Form 10-D shall be signed by a duly authorized representative of the
Master Servicer. Any amendment to a Form 10-K shall be signed by a senior
officer of the Master Servicer in charge of the master servicing function. The
parties to this Agreement acknowledge that the performance by the Master
Servicer and the Securities Administrator of its duties under this Article XII
related to the timely preparation and filing of a Form 15, Form 12b-25 or any
amendment to a Form 8-K, Form 10-D or Form 10-K is contingent upon each such
party performing its duties under this Section. Neither the Master Servicer
nor the Securities Administrator shall have any liability for any loss,
expense, damage, claim arising out of or with respect to any failure to
properly prepare, execute and/or timely file any such Form 15, Form 12b-25 or
any amendments to a Form 8-K, Form 10-D or Form 10-K, where such failure
results from the Securities Administrator's inability or failure to obtain or
receive, on a timely basis, any information from any other party hereto needed
to prepare, arrange for execution or file such Form 15, Form 12b-25 or any
amendments to Form 8-K, Form 10-D or Form 10-K, not resulting from their own
respective negligence, bad faith or willful misconduct.
(d) All items under this Article XII to be reviewed by the Depositor
should be forwarded electronically to xxxxxxxxxxxxxx@xxxxxxxxxxxxx.xxx. In
addition, for purposes of this Article XII, if the Securities Administrator or
the Master Servicer is required to provide any information or documentation to
such other party, for so long as Xxxxx Fargo Bank, National Association is
both Securities Administrator and Master Servicer, that delivery will be
automatically deemed to have been made.
(e) Each of Form 10-D and Form 10-K requires the registrant to indicate
(by checking "yes" or "no") that it "(1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the preceding 12
months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days." The Depositor shall notify the Securities Administration in
writing, no later than the fifth calendar day after the related Distribution
Date with respect to the filing of a report on Form 10-D and no later than
March 15th with respect to the filing of a report on Form 10-K, if the answer
to the questions should be "no." In the absence of such notification by the
Depositor to the Securities Administrator, the Securities Administrator shall
be entitled to assume that the answer to the questions on Form 10-D and Form
10-K should be "yes". The Securities Administrator shall be entitled to rely
on such representations in preparing, executing and/or filing any such report.
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Section 12.02 Form 10-D Reporting.
(a) No later than 5:00 p.m., New York time, on the 15th calendar day
after each Distribution Date (subject to permitted extensions under the
Exchange Act), the Securities Administrator shall prepare and file on behalf
of the Trust any Form 10-D required by the Exchange Act, in form and substance
as required by the Exchange Act. The Securities Administrator shall file each
Form 10-D with a copy of the related Monthly Statement attached thereto. Any
disclosure in addition to the Monthly Statement that is required to be
included on Form 10-D ("Additional Form 10-D Disclosure") shall be prepared
and filed by the Securities Administrator pursuant to the following paragraph
and the Securities Administrator will have no duty or liability for any
failure hereunder to determine any Additional Form 10-D Disclosure, except as
set forth in the next paragraph.
(b) In accordance with the respective reporting obligations set forth on
Exhibit N-1 hereto, within 5 calendar days after the related Distribution
Date, the Master Servicer and any other Reporting Party shall be required to
provide to the Securities Administrator and the Depositor in XXXXX-compatible
form, or in such other form as otherwise agreed upon by the Securities
Administrator and such party, the form and substance of any Additional Form
10-D Disclosure, if applicable, together with notification of the additional
disclosure. The Securities Administrator shall notify the Depositor of any
Additional Form 10-D Disclosure with respect to itself or any of its
Affiliates and any other Additional Form 10-D Disclosure received by it.
Within one (1) Business Day of such notification, the Depositor will approve
or disapprove, as the case may be, the inclusion of the Additional Form 10-D
Disclosure on Form 10-D. The Depositor will be responsible for any reasonable
additional fees and expenses assessed or incurred by the Securities
Administrator in connection with including any Additional Form 10-D Disclosure
on Form 10-D pursuant to this paragraph.
(c) After preparing the Form 10-D, and no later than the close of
business on the 11th calendar day after the Distribution Date, the Securities
Administrator shall forward electronically a draft copy of the Form 10-D to
the Master Servicer and to the Depositor for review. No later than the 13th
calendar day after the Distribution Date, the Depositor shall notify the
Securities Administrator in writing (which may be provided electronically) of
any changes to or approve the filing of such Form 10-D. In the absence of
receipt of any written changes or approval, or if the Depositor does not
request a copy of a Form 10-D, the Securities Administrator shall be entitled
to assume that such Form 10-D is in final form and the Securities
Administrator may proceed with the execution and filing of the Form 10-D. A
duly authorized representative of the Master Servicer shall sign the Form 10-D
and return an electronic or fax copy of such signed Form 10-D (with an
original executed hard copy to follow by overnight mail) to the Securities
Administrator. If a Form 10-D cannot be filed on time or if a previously filed
Form 10-D needs to be amended, the Securities Administrator will follow the
procedures set forth in Section 12.01(c) hereof. Promptly (but no later than 1
Business Day) after filing with the Commission, the Securities Administrator
will make available on its internet website a final executed copy of each Form
10-D prepared and filed by the Securities Administrator. The signing party at
the Master Servicer can be contacted by e-mail at
xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx or by facsimile (000) 000-0000. Each
party to this Agreement acknowledges that the performance by the Securities
Administrator and the Master Servicer of its duties under this Section 12.02
related to the timely preparation, execution and filing of Form 10-D is
contingent upon such parties
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strictly observing all applicable deadlines in the performance of their duties
under this Section 12.02. Neither the Securities Administrator nor the Master
Servicer shall have any liability for any loss, expense, damage, claim arising
out of or with respect to any failure to properly prepare, execute and/or
timely file such Form 10-D, where such failure results from the Securities
Administrator's inability or failure to obtain or receive, on a timely basis,
any information from any other party hereto (other than an Affiliate thereof)
needed to prepare, arrange for execution or file such Form 10-D, not resulting
from their respective negligence, bad faith or willful misconduct.
Section 12.03 Form 8-K Reporting.
(a) As directed by the Depositor, within four (4) Business Days after the
occurrence of an event requiring disclosure on Form 8-K (each such event, a
"Reportable Event"), the Securities Administrator shall prepare and file on
behalf of the Trust any Form 8-K, as required by the Exchange Act, provided
that the Depositor shall file the initial Form 8-K (operative agreements) in
connection with the issuance of the Certificates. Any disclosure or
information related to a Reportable Event or that is otherwise required to be
included on Form 8-K ("Form 8-K Disclosure Information") shall be prepared by
the Securities Administrator pursuant to the following paragraph and the
Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Form 8-K Disclosure Information or any
Form 8-K, except as set forth in the next paragraph.
(b) In accordance with the respective reporting obligations set forth on
Exhibit N-3 hereto, no later than the close of business on the second Business
Day immediately following the occurrence of a Reportable Event, each of the
Securities Administrator, the Custodian, the Trustee, the Master Servicer and
the Depositor shall be required to provide to the Securities Administrator and
the Depositor, as applicable, in XXXXX-compatible form, or in such other form
as otherwise agreed upon by the Securities Administrator and such party, the
form and substance of any Additional Form 8-K Disclosure, if applicable,
together with notification of the additional disclosure. The Securities
Administrator shall notify the Depositor of any Form 8-K Disclosure
Information with respect to itself or any of its Affiliates and any other Form
8-K Disclosure Information received by it. The Depositor will approve or
disapprove, as the case may be, the inclusion of the Form 8-K Disclosure
Information on Form 8-K. The Depositor will be responsible for any reasonable
additional fees and expenses assessed or incurred by the Securities
Administrator in connection with including any Form 8-K Disclosure Information
on Form 8-K pursuant to this paragraph.
(c) After preparing the Form 8-K, the Securities Administrator shall
forward electronically a draft copy of the Form 8-K to the Depositor and the
Master Servicer for review no later than 12:00 p.m., New York time, on the
third Business Day following the Reportable Event. The Depositor shall notify
the Securities Administrator in writing (which may be provided electronically)
of any changes to or approval of such Form 8-K no later than the close of
business on the third Business Day following the Reportable Event. In the
absence of receipt of any written changes or approval, the Securities
Administrator shall be entitled to assume that such Form 8-K is in final form
and the Securities Administrator may proceed with the execution and filing of
the Form 8-K. By 12:00 p.m., New York time, on the fourth Business Day after
the occurrence of the Reportable Event, a duly authorized representative of
the Master Servicer shall sign the Form 8-K, then return an electronic or fax
copy of such signed Form 8-K (with an
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original executed hard copy to follow by overnight mail) to the Securities
Administrator. If a Form 8-K cannot be filed on time or if a previously filed
Form 8-K needs to be amended, the Securities Administrator will follow the
procedures set forth in Section 12.01(c). With respect to each Form 8-K
prepared and filed by the Securities Administrator, promptly (but no later
than 1 Business Day) after filing with the Commission, the Securities
Administrator will, make available on its internet website a final executed
copy thereof. The parties to this Agreement acknowledge that the performance
by the Master Servicer and the Securities Administrator of its duties under
this Section 12.03 related to the timely preparation, execution and filing of
Form 8-K is contingent upon such parties strictly observing all applicable
deadlines in the performance of their duties under this Section 12.03. Neither
the Securities Administrator nor the Master Servicer shall have any liability
for any loss, expense, damage, claim arising out of or with respect to any
failure to properly prepare, execute and/or timely file such Form 8-K, where
such failure results from the Securities Administrator's inability or failure
to obtain or receive, on a timely basis, any information from any other party
hereto (other than an Affiliate thereof) needed to prepare, arrange for
execution or file such Form 8-K, not resulting from their respective
negligence, bad faith or willful misconduct.
Section 12.04 Form 10-K Reporting.
(a) Within 90 days (including the 90th day) after the end of each fiscal
year of the Trust or such earlier date as may be required by the Exchange Act
(the "10-K Filing Deadline"), commencing in March 2007 and continuing until
the Trust has been deregistered with the Commission, the Securities
Administrator shall prepare and file on behalf of the Trust a Form 10-K, in
form and substance as required by the Exchange Act. Each such Form 10-K shall
include the following items, in each case to the extent they have been
delivered to the Securities Administrator within the applicable time frames
set forth in this Agreement and the related Servicing Agreement, (i) an annual
compliance statement for each Servicer, each Additional Servicer, the Master
Servicer, each Custodian and the Securities Administrator (each such party and
each Custodian, a "Reporting Servicer") as described under Section 9.11,
(ii)(A) the annual reports on assessment of compliance with servicing criteria
for each Reporting Servicer, as described under Section 12.06, and (B) if each
Reporting Servicer's report on assessment of compliance with servicing
criteria described under Section 12.06 identifies any material instance of
noncompliance, disclosure identifying such instance of noncompliance, or if
each Reporting Servicer's report on assessment of compliance with servicing
criteria described under Section 12.06 is not included as an exhibit to such
Form 10-K, disclosure that such report is not included and an explanation why
such report is not included, (iii)(A) the registered public accounting firm
attestation report for each Reporting Servicer, as described under Section
12.06, and (B) if any registered public accounting firm attestation report
described under Section 12.06 identifies any material instance of
noncompliance, disclosure identifying such instance of noncompliance, or if
any such registered public accounting firm attestation report is not included
as an exhibit to such Form 10-K, disclosure that such report is not included
and an explanation why such report is not included, and (iv) a Xxxxxxxx-Xxxxx
Certification as described in Section 12.05. Any disclosure or information in
addition to (i) through (iv) above that is required to be included on Form
10-K ("Additional Form 10-K Disclosure") shall be determined and prepared by
and at the direction of the Depositor pursuant to the following paragraph and
the Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-K Disclosure, except
as set forth in the next paragraph.
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(b) In accordance with the respective reporting obligations set forth on
Exhibit N-2 hereto, no later than March 15 of each year that the Trust is
subject to the Exchange Act reporting requirements, commencing in 2007 and
continuing until the Trust has been deregistered with the Commission, the
Master Servicer and any other Reporting Party shall be required to provide to
the Securities Administrator and the Depositor, in XXXXX-compatible form, or
in such other form as otherwise agreed upon by the Securities Administrator
and such party, the form and substance of any Additional Form 10-K Disclosure,
if applicable, together with notification of the additional disclosure. The
Securities Administrator shall notify the Depositor of any Additional Form
10-K Disclosure with respect to itself or any of its Affiliates and any other
Additional Form 10-K Disclosure received by it. Within one (1) Business Day of
such notification, the Depositor will approve or disapprove, as the case may
be, the inclusion of the Additional Form 10-K Disclosure on Form 10-K. The
Depositor will be responsible for any reasonable additional fees and expenses
assessed or incurred by the Securities Administrator in connection with
including any Additional Form 10-K Disclosure on Form 10-K pursuant to this
paragraph.
(c) After preparing the Form 10-K, the Securities Administrator shall
forward electronically a draft copy of the Form 10-K to the Master Servicer
and, upon request, to the Depositor for review. No later than the earlier of:
(x) three (3) Business Days following the receipt by the Depositor and (y)
March 25th, the Depositor and the Master Servicer shall notify the Securities
Administrator in writing (which may be provided electronically) of any changes
to or approve the filing of such Form 10-K. In the absence of receipt of any
written changes or approval, or if the Depositor does not request a copy of a
Form 10-K, the Securities Administrator shall be entitled to assume that such
Form 10-K is in final form and the Securities Administrator may proceed with
the execution and filing of the Form 10-K. A senior officer of the Master
Servicer in charge of the master servicing function shall sign the Form 10-K
and return an electronic or fax copy of such signed Form 10-K (with an
original executed hard copy to follow by overnight mail) to the Securities
Administrator. If a Form 10-K cannot be filed on time or if a previously filed
Form 10-K needs to be amended, the Securities Administrator will follow the
procedures set forth in Section 12.01(c). Promptly (but no later than 1
Business Day) after filing with the Commission, the Securities Administrator
will make available on its internet website a final executed copy of each Form
10-K prepared and filed by the Securities Administrator. The parties to this
Agreement acknowledge that the performance by the Master Servicer and the
Securities Administrator of its duties under this Section 12.04 related to the
timely preparation, execution and filing of Form 10-K is contingent upon such
parties (and any Additional Servicer or Servicing Function Participant)
strictly observing all applicable deadlines in the performance of their duties
under this Section 12.04, Section 9.11 Section 12.05 and Section 12.06.
Neither the Master Servicer nor the Securities Administrator shall have any
liability for any loss, expense, damage, claim arising out of or with respect
to any failure to properly prepare, execute and/or timely file such Form 10-K,
where such failure results from the Master Servicer's or the Securities
Administrator's inability or failure to obtain or receive, on a timely basis,
any information from any other party hereto needed to prepare, arrange for
execution or file such Form 10-K, not resulting from their own respective
negligence, bad faith or willful misconduct.
Section 12.05 Xxxxxxxx-Xxxxx Certification.
142
Each Form 10-K shall include a Xxxxxxxx-Xxxxx Certification required to
be included therewith pursuant to the Xxxxxxxx-Xxxxx Act. The senior officer
of the Master Servicer in charge of the master servicing function shall sign
the Xxxxxxxx-Xxxxx Certification and shall serve as the Certifying Person on
behalf of the Trust.
The respective parties hereto agree to cooperate with all reasonable
requests made by any Certifying Person or Certification Party in connection
with such Person's attempt to conduct any due diligence that such Person
reasonably believes to be appropriate in order to allow it to deliver any
Xxxxxxxx-Xxxxx Certification or portion thereof with respect to the Trust
Fund.
Section 12.06 Reports on Assessment of Compliance and Attestation.
(a) By March 15 of each year (such date includes the expiration of any
applicable grace period), commencing in March 2007, the Master Servicer, the
Securities Administrator, each Custodian (for so long as a Form 10-K will be
filed on behalf of the Trust for the preceding calendar year) and each other
Reporting Party, each at its own expense, shall furnish or otherwise make
available, and each such party shall cause any Servicing Function Participant
engaged by it to furnish, each at its own expense, to the Securities
Administrator and the Depositor, a report on an assessment of compliance with
the Relevant Servicing Criteria that contains (A) a statement by such party of
its responsibility for assessing compliance with the Relevant Servicing
Criteria, (B) a statement that such party used the Relevant Servicing Criteria
to assess compliance with the Relevant Servicing Criteria, (C) such party's
assessment of compliance with the Relevant Servicing Criteria as of and for
the fiscal year covered by the Form 10-K required to be filed pursuant to
Section 12.04, including, if there has been any material instance of
noncompliance with the Relevant Servicing Criteria, a discussion of each such
failure and the nature and status thereof, and (D) a statement that a
registered public accounting firm has issued an attestation report on such
party's assessment of compliance with the Relevant Servicing Criteria as of
and for such period.
No later than the end of each fiscal year for the Trust for which a 10-K
is required to be filed, the Master Servicer and each Custodian shall each
forward to the Securities Administrator the name of each Servicing Function
Participant engaged by it and what Relevant Servicing Criteria will be
addressed in the report on assessment of compliance prepared by such Servicing
Function Participant; however if the Master Servicer and the Securities
Administrator are the same entity, then the Master Servicer is not required to
forward to the Securities Administrator its assessment of compliance with the
Relevant Servicing Criteria as of and for the fiscal year covered by the Form
10-K required to be filed pursuant to Section 12.04. When the Master Servicer
and the Securities Administrator (or any Servicing Function Participant
engaged by them) submit their assessments to the Securities Administrator,
such parties will also at such time include the assessment (and attestation
pursuant to Section 12.06(b) of each Servicing Function Participant engaged by
it.
Promptly after receipt of each such report on assessment of compliance,
(i) the Depositor shall review each such report and, if applicable, consult
with the Master Servicer, the Securities Administrator, each Custodian and any
Servicing Function Participant engaged by such parties as to the nature of any
material instance of noncompliance with the Relevant Servicing Criteria by
each such party, and (ii) the Securities Administrator shall confirm that the
assessments, taken
143
as a whole, address all of the Servicing Criteria and taken individually
address the Relevant Servicing Criteria for each party as set forth on Exhibit
O and on any similar exhibit set forth in each Servicing Agreement in respect
of each Servicer and notify the Depositor of any exceptions.
(b) By March 15 of each year, commencing in March 2007, the Master
Servicer, the Securities Administrator, each Custodian (for so long as a Form
10-K will be filed in respect of the Trust for the preceding calendar year)
and each other Reporting Party, each at its own expense, shall cause, and each
such party shall cause any Servicing Function Participant engaged by it to
cause, each at its own expense, a registered public accounting firm (which may
also render other services to the Master Servicer, the Trustee, the Custodian,
the Securities Administrator, or such other Servicing Function Participants,
as the case may be) and that is a member of the American Institute of
Certified Public Accountants to furnish a report to the Securities
Administrator and the Depositor, to the effect that (i) it has obtained a
representation regarding certain matters from the management of such party,
which includes an assertion that such party has complied with the Relevant
Servicing Criteria, and (ii) on the basis of an examination conducted by such
firm in accordance with standards for attestation engagements issued or
adopted by the PCAOB, it is expressing an opinion as to whether such party's
compliance with the Relevant Servicing Criteria was fairly stated in all
material respects, or it cannot express an overall opinion regarding such
party's assessment of compliance with the Relevant Servicing Criteria. In the
event that an overall opinion cannot be expressed, such registered public
accounting firm shall state in such report why it was unable to express such
an opinion. Such report must be available for general use and not contain
restricted use language.
Promptly after receipt of such report from the Master Servicer, the
Securities Administrator, each Custodian or any Servicing Function Participant
engaged by such parties, (i) the Depositor shall review the report and, if
applicable, consult with such parties as to the nature of any defaults by such
parties, in the fulfillment of any of each such party's obligations hereunder
or under any other applicable agreement, and (ii) the Securities Administrator
shall confirm that each assessment submitted pursuant to Section 12.06(a) is
coupled with an attestation meeting the requirements of this Section 12.06(b)
and notify the Depositor of any exceptions.
Section 12.07 Use of Subcontractors.
The Master Servicer shall cause any Subcontractor used by the Master
Servicer for the benefit of the Depositor to comply with the provisions of
Section 9.11 and this Article XII to the same extent as if such Subcontractor
were the Master Servicer (except with respect to the Master Servicer's duties
with respect to preparing and filing any Exchange Act Reports or as the
Certifying Person). The Master Servicer shall be responsible for obtaining
from each Subcontractor and delivering to the Depositor any servicer
compliance statement required to be delivered by such Subcontractor under
Section 9.11, any assessment of compliance and attestation required to be
delivered by such Subcontractor under Section 12.07 and any certification
required to be delivered to the Certifying Person under Section 12.05 as and
when required to be delivered. As a condition to the succession to any
Subcontractor as subservicer under this Agreement by any Person (i) into which
such Subcontractor may be merged or consolidated, or (ii) which may be
appointed as a successor to any Subcontractor, the Master
144
Servicer shall provide to the Depositor, at least 15 calendar days prior to
the effective date of such succession or appointment, (x) written notice to
the Depositor of such succession or appointment and (y) in writing and in form
and substance reasonably satisfactory to the Depositor, all information
reasonably requested by the Depositor in order to comply with its reporting
obligation under Item 6.02 of Form 8-K.
It shall not be necessary for the Master Servicer or the Trustee to seek
the consent of the Depositor or any other party hereto to the utilization of
any Subcontractor. The Master Servicer or the Trustee, as applicable, shall
promptly upon request provide to the Depositor (or any designee of the
Depositor, such as the Master Servicer or administrator) a written description
(in form and substance satisfactory to the Depositor) of the role and function
of each Subcontractor utilized by such Person, specifying (i) the identity of
each such Subcontractor, (ii) which (if any) of such Subcontractors are
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, and (iii) which elements of the Servicing Criteria will be
addressed in assessments of compliance provided by each Subcontractor
identified pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor determined to be a
Reporting Subcontractor, the Master Servicer or the Trustee, as applicable,
shall cause any such Subcontractor used by such Person for the benefit of the
Depositor to comply with the provisions of Sections 12.07 and 12.09 of this
Agreement to the same extent as if such Subcontractor were the Master Servicer
(except with respect to the Master Servicer's duties with respect to preparing
and filing any Exchange Act Reports or as the Certifying Person) or the
Trustee, as applicable. The Master Servicer or the Trustee, as applicable,
shall be responsible for obtaining from each Subcontractor and delivering to
the Depositor and the Master Servicer, any assessment of compliance and
attestation required to be delivered by such Subcontractor under Section
12.07, in each case as and when required to be delivered.
Section 12.08 Indemnification by the Master Servicer and the Securities
Administrator.
(a) The Master Servicer and the Securities Administrator (each, an
"Indemnifying Party"), shall, severally and not jointly, indemnify the
Depositor and the Seller for the preparation, execution or filing of any
report required to be filed with the Commission with respect to the Trust
Fund, or for execution of a certification pursuant to Rule 13a-14(d) or Rule
15d-14(d) under the Exchange Act with respect to the Trust Fund; and the
respective present and former directors, officers, employees and agents of
each of the foregoing and shall hold each of them harmless from and against
any losses, damages, penalties, fines, forfeitures, legal fees and expenses
and related costs, judgments, and any other costs, fees and expenses that any
of them may sustain arising out of or based upon:
(i) any untrue statement of a material fact contained or alleged to
be contained in or the omission or alleged omission to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading in (A) any compliance certificate delivered by
it, or by any Servicing Function Participant engaged by it, pursuant to
this Agreement, (B) any assessment or attestation delivered by or on
behalf of it, or by any Servicing Function Participant engaged by it,
pursuant to this Agreement, or
145
(C) any Additional Form 10-D Disclosure, Additional Form 10-K Disclosure
or Form 8-K Disclosure Information concerning the Securities
Administrator or the Master Servicer and provided by either of them;
(ii) any failure by the Indemnifying Party to perform its
obligations when and as required under this Article XII; or
(iii) any negligence, bad faith or willful misconduct by the
Indemnifying Party.
In the case of any failure of performance described in clause (a)(ii) of
this Section, the Indemnifying Party shall promptly reimburse the Seller or
the Depositor, as applicable, and each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission
with respect to such Securitization Transaction, or for execution of a
certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange
Act with respect to the Trust, for all costs reasonably incurred by each such
party in order to obtain the information, report, certification, accountants'
letter or other material not delivered as required by the Indemnifying Party
or any Subservicer or Subcontractor of the Indemnifying Party.
(b) (i) Any failure by the Indemnifying Party or any Subservicer or any
Subcontractor of the Indemnifying Party to deliver any information, report,
certification or accountants' letter when and as required under this Article
XII, including (except as provided below) any failure by the Indemnifying
Party to identify pursuant to Section 12.07 any Subcontractor "participating
in the servicing function" within the meaning of Item 1122 of Regulation AB,
which continues unremedied for ten calendar days after the date on which such
information, report, certification or accountants' letter was required to be
delivered shall constitute an Event of Default with respect to the
Indemnifying Party under this Agreement, and shall entitle the Seller or
Depositor, as applicable, in its sole discretion to terminate the rights and
obligations of the Indemnifying Party under this Agreement without payment
(notwithstanding anything in this Agreement to the contrary) of any
compensation to the Indemnifying Party; provided that to the extent that any
provision of this Agreement and/or any applicable Reconstitution Agreement
expressly provides for the survival of certain rights or obligations following
termination of the Master Servicer as servicer, such provision shall be given
effect.
Neither the Seller nor any Depositor shall be entitled to terminate the
rights and obligations of an Indemnifying Party pursuant to this subparagraph
(b)(ii) if a failure of the Master Servicer to identify a Subcontractor
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB was attributable solely to the role or functions of such
Subcontractor with respect to mortgage loans other than the Mortgage Loans.
(ii) The Indemnifying Party shall promptly reimburse the Seller and
any Depositor for all reasonable expenses incurred by them, in connection
with the termination of the Indemnifying Party and the transfer of their
duties to a successor. The provisions of this paragraph shall not limit
whatever rights the Seller or the Depositor may have under other
provisions of this Agreement or otherwise, whether in equity or at law,
such as an action for damages, specific performance or injunctive relief.
Section 12.09. Indemnification by the Trustee and the Custodian.
(a) If the entity serving as Trustee is also serving as a Custodian,
such entity in its capacity as Custodian shall indemnify the Depositor, each
affiliate of the Depositor, the Master Servicer and each Person who controls
any of such parties (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act); and the respective directors, officers,
and employees of each of the foregoing (each, an "Indemnified Party"), and
shall hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, legal fees and expenses and related costs,
judgments, and any other costs, fees and expenses that any of them may sustain
directly relating to:
(i) (A) any untrue statement of a material fact contained or
alleged to be contained in any information, compliance assessment or
other material it is required to provide or cause to be provided under
this Article XII (collectively, the "Custodian Information"), or (B) the
omission or alleged omission to state in the Custodian Information a
material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; or
(ii) any failure to deliver or cause to be delivered any
information, report, certification, accountants' attestation or other
material when and as required under this Article XII.
If the indemnification provided for herein is unavailable or
insufficient to hold harmless an Indemnified Party, then the Custodian agrees
that it shall contribute to the amount paid or payable by such Indemnified
Party as a result of any claims, losses, damages or liabilities incurred by
such Indemnified Party in such proportion as is appropriate to reflect the
relative fault of such Indemnified Party on the one hand and the Custodian on
the other.
(b) In the case of any failure of performance described in clause (a) of
this Section 12.09, the Custodian shall promptly reimburse the Indemnified
Party responsible for the preparation, execution or filing of any report
required to be filed with the Commission with respect to such Securitization
Transaction, or for execution of a certification pursuant to Rule 13a-14(d) or
Rule 15d-14(d) under the Exchange Act with respect to the Trust, for all costs
reasonably incurred by each such party in order to obtain the information,
report, certification, accountants' letter or other material not delivered as
required.
(c) This indemnification shall survive the termination of this Agreement
or the termination of any party to this Agreement.
146
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers hereunto duly authorized as of the
day and year first above written.
XXXXXX XXXXXXX CAPITAL I INC.,
as Depositor
By: /s/ Xxxxxx Xxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
LASALLE BANK NATIONAL ASSOCIATION,
as Trustee and a Custodian
By: /s/ Xxxxxxxxxxx Xxxxx
-------------------------------
Name: Xxxxxxxxxxx Xxxxx
Title: Assistant Vice President
By: /s/ Xxxxxxxxxxx Xxxxx
------------------------------
Name: Xxxxxxxxxxx Xxxxx
Title: Assistant Vice President
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Master Servicer
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Assistant Vice President
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Securities Administrator
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Assistant Vice President
Solely for purposes of Section 2.05
accepted and agreed to by:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By: /s/ Xxxxxx Xxxxxxx
-----------------------
Name: Xxxxxx Xxxxxxx
Title: Executive Director
2
EXHIBIT A
FORMS OF CERTIFICATES
A-1
EXHIBIT B
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEREE)
STATE OF )
) ss.:
COUNTY OF )
[NAME OF OFFICER], _________________ being first duly sworn, deposes and
says:
1. That he [she] is [title of officer] ________________________ of
[name of Purchaser] _________________________________________ (the
"Purchaser"), a _______________________ [description of type of
entity] duly organized and existing under the laws of the [State
of __________] [United States], on behalf of which he [she] makes
this affidavit.
2. That the Purchaser's Taxpayer Identification Number is [ ].
3. That the Purchaser is not a "disqualified organization" within the
meaning of Section 860E(e)(5) of the Internal Revenue Code of
1986, as amended (the "Code") and will not be a "disqualified
organization" as of [date of transfer], and that the Purchaser is
not acquiring a Residual Certificate (as defined in the Agreement)
for the account of, or as agent (including a broker, nominee, or
other middleman) for, any person or entity from which it has not
received an affidavit substantially in the form of this affidavit.
For these purposes, a "disqualified organization" means the United
States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or
instrumentality of any of the foregoing (other than an
instrumentality if all of its activities are subject to tax and a
majority of its board of directors is not selected by such
governmental entity), any cooperative organization furnishing
electric energy or providing telephone service to persons in rural
areas as described in Code Section 1381(a)(2)(C), any "electing
large partnership" within the meaning of Section 775 of the Code,
or any organization (other than a farmers' cooperative described
in Code Section 521) that is exempt from federal income tax unless
such organization is subject to the tax on unrelated business
income imposed by Code Section 511.
4. That the Purchaser either (x) is not, and on __________________
[date of transfer] will not be, an employee benefit plan or other
retirement arrangement subject to Section 406 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or
Section 4975 of the Code ("Code"), (collectively, a "Plan") or a
person acting on behalf of any such Plan or investing the assets
of any such Plan to acquire a Residual Certificate; (y) is an
insurance company that is purchasing the Certificate with funds
contained in an "insurance company general account" as defined in
Section V(e) of Prohibited Transaction Class Exemption ("PTCE")
95-60 and the purchase and holding of the Certificate satisfy the
requirements for exemptive relief under Sections I and III of XXXX
X-0
95-60; or (z) herewith delivers to the Certificate Registrar an
opinion of counsel satisfactory to the Certificate Registrar and
the Securities Administrator and upon which the Certificate
Registrar, the Trustee, the Master Servicer, the Depositor and
Securities Administrator shall be entitled to rely, to the effect
that the purchase or holding of such Residual Certificate by the
Investor will not result in any non-exempt prohibited transactions
under Title I of ERISA or Section 4975 of the Code and will not
subject the Certificate Registrar, the Trustee, the Depositor, the
Master Servicer or the Securities Administrator to any obligation
in addition to those undertaken by such entities in the Pooling
and Servicing Agreement, which opinion of counsel shall not be an
expense of the Trust Fund or any of the above parties.
5. That the Purchaser hereby acknowledges that under the terms of the
Pooling and Servicing Agreement, dated as of January 1, 2006 (the
"Agreement"), by and among Xxxxxx Xxxxxxx Capital I Inc., as
Depositor, Xxxxx Fargo Bank, National Association, as Master
Servicer and as Administrator and LaSalle Bank National
Association, as Trustee with respect to Xxxxxx Xxxxxxx Mortgage
Loan Trust 2006-1AR, Mortgage Pass-Through Certificates, no
transfer of the Residual Certificates shall be permitted to be
made to any person unless the Certificate Registrar has received a
certificate from such transferee containing the representations in
paragraphs 3 and 4 hereof. That the Purchaser does not hold REMIC
residual securities as nominee to facilitate the clearance and
settlement of such securities through electronic book-entry
changes in accounts of participating organizations (such entity, a
"Book-Entry Nominee").
6. That the Purchaser does not have the intention to impede the
assessment or collection of any federal, state or local taxes
legally required to be paid with respect to such Residual
Certificate.
7. That the Purchaser will not transfer a Residual Certificate to any
person or entity (i) as to which the Purchaser has actual
knowledge that the requirements set forth in paragraph 3,
paragraph 6 or paragraph 10 hereof are not satisfied or that the
Purchaser has reason to believe does not satisfy the requirements
set forth in paragraph 7 hereof, and (ii) without obtaining from
the prospective Purchaser an affidavit substantially in this form
and providing to the Certificate Registrar a written statement
substantially in the form of Exhibit C to the Agreement.
8. That the Purchaser understands that, as the holder of a Residual
Certificate, the Purchaser may incur tax liabilities in excess of
any cash flows generated by the interest and that it intends to
pay taxes associated with holding such Residual Certificate as
they become due.
9. That the Purchaser (i) is not a Non-U.S. Person or (ii) is a
Non-U.S. Person that holds a Residual Certificate in connection
with the conduct of a trade or business within the United States
and has furnished the transferor the Certificate Registrar with an
effective Internal Revenue Service Form W-8ECI (Certificate of
Foreign Person's Claim for Exemption From Withholding on Income
Effectively
B-2
Connected With the Conduct of a Trade or Business in the United
States) or successor form at the time and in the manner required
by the Code or (iii) is a Non-U.S. Person that has delivered to
the transferor, the Trustee and the Certificate Registrar an
opinion of a nationally recognized tax counsel to the effect that
the transfer of such Residual Certificate to it is in accordance
with the requirements of the Code and the regulations promulgated
thereunder and that such transfer of a Residual Certificate will
not be disregarded for federal income tax purposes. "Non-U.S.
Person" means an individual, corporation, partnership or other
person other than (i) a citizen or resident of the United States;
(ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or any state
thereof, including for this purpose, the District of Columbia;
(iii) an estate that is subject to U.S. federal income tax
regardless of the source of its income; (iv) a trust if a court
within the United States is able to exercise primary supervision
over the administration of the trust and one or more United States
trustees have authority to control all substantial decisions of
the trust; and, (v) to the extent provided in Treasury
regulations, certain trusts in existence on August 20, 1996 that
are treated as United States persons prior to such date and elect
to continue to be treated as United States persons.
10. The Purchaser will not cause income from the Residual Certificate
to be attributable to a foreign permanent establishment or fixed
base of the Purchaser or another U.S. taxpayer.
11. That the Purchaser agrees to such amendments of the Pooling and
Servicing Agreement as may be required to further effectuate the
restrictions on transfer of any Residual Certificate to such a
"disqualified organization," an agent thereof, a Book-Entry
Nominee, or a person that does not satisfy the requirements of
paragraph 7 and paragraph 10 hereof.
12. That the Purchaser consents to the designation of the Securities
Administrator to act as agent for the "tax matters person" of each
REMIC created by the Trust Fund pursuant to the Pooling and
Servicing Agreement.
B-3
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by
its [title of officer] this _____ day of __________ 20__.
_________________________________
[name of Purchaser]
By:______________________________
Name:
Title:
Personally appeared before me the above-named [name of officer]
________________, known or proved to me to be the same person who executed the
foregoing instrument and to be the [title of officer] _________________ of the
Purchaser, and acknowledged to me that he [she] executed the same as his [her]
free act and deed and the free act and deed of the Purchaser.
Subscribed and sworn before me this _____ day of __________ 20__.
NOTARY PUBLIC
_____________________________
COUNTY OF ___________________
STATE OF ____________________
My commission expires the _____ day of __________ 20__.
B-4
EXHIBIT C
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEROR)
____________________________
Date
Re: Xxxxxx Xxxxxxx Mortgage Loan Trust 2006-1AR
Mortgage Pass-Through Certificates
_______________________ (the "Transferor") has reviewed the attached
affidavit of _____________________________ (the "Transferee"), and has no
actual knowledge that such affidavit is not true and has no reason to believe
that the information contained in paragraph 7 thereof is not true, and has no
reason to believe that the Transferee has the intention to impede the
assessment or collection of any federal, state or local taxes legally required
to be paid with respect to a Residual Certificate. In addition, the Transferor
has conducted a reasonable investigation at the time of the transfer and found
that the Transferee had historically paid its debts as they came due and found
no significant evidence to indicate that the Transferee will not continue to
pay its debts as they become due.
Very truly yours,
_____________________________
Name:
Title:
X-0
XXXXXXX X
XXXX XX XXXXXXXX CONTRACT
D-1
EXHIBIT E
LIST OF PURCHASE AND SERVICING AGREEMENTS
1. Second Amended and Restated Mortgage Loan Sale And Servicing Agreement, dated
as of September 1, 2005, between Countrywide Home Loans, Inc., as seller, and
Countrywide Home Loans Servicing LP, as servicer and Xxxxxx Xxxxxxx Mortgage
Capital Inc., as purchaser;
2. Amendment Regulation AB, dated as of January 26, 2006, between Countrywide
Home Loans, Inc., as seller, and Countrywide Home Loans Servicing LP, as
servicer and Xxxxxx Xxxxxxx Mortgage Capital Inc., as purchaser;
3. First Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of October 1, 2005, between First National Bank of Nevada, as seller
and Xxxxxx Xxxxxxx Mortgage Capital Inc.;
4. First Amended and Restated Servicing Agreement, dated as of January 1, 2006,
between GMAC Mortgage Corporation, as servicer and Xxxxxx Xxxxxxx Mortgage
Capital Inc., as purchaser;
5. Mortgage Loan Purchase and Warranties Agreement, dated as of May 1, 2005,
between GreenPoint Mortgage Funding, Inc., as seller and Xxxxxx Xxxxxxx Mortgage
Capital Inc., as purchaser;
6. Fourth Amended and Restated Mortgage Loan Sale And Servicing Agreement, dated
as of December 1, 2005, between GreenPoint Mortgage Funding, Inc., as seller and
servicer and Xxxxxx Xxxxxxx Mortgage Capital Inc.;
7. Mortgage Loan Sale And Servicing Agreement, dated as of August 1, 2005,
between HSBC Mortgage Corporation (USA), as seller and servicer and Xxxxxx
Xxxxxxx Mortgage Capital Inc., as Purchaser;
8. Mortgage Loan Sale and Servicing Agreement dated as of December 1, 2005,
between The Hemisphere National Bank, as seller and servicer and Xxxxxx Xxxxxxx
Mortgage Capital Inc., as purchaser;
9. Amended and Restated Mortgage Loan Purchase And Warranties Agreement, dated
as of May 1, 2005, between MortgageIT, as seller and Xxxxxx Xxxxxxx Mortgage
Capital Inc., as purchaser.
10. Seller's Warranties and Servicing Agreement, dated as of December 1, 2005,
between Xxxxx Fargo Bank, National Association, as seller and servicer and
Xxxxxx Xxxxxxx Mortgage Capital Inc., as purchaser.
E-1
EXHIBIT F
1. Custodial Agreement, dated as of January 1, 2006, among Countrywide Home
Loans, Inc., as seller, Countrywide Home Loans Servicing LP, as servicer,
GreenPoint Mortgage Funding, Inc., as seller and servicer, The Hemisphere
National Bank, as seller and servicer, HSBC Mortgage Corporation (USA), as
seller and servicer, Xxxxx Fargo Bank, National Association, as seller and
servicer, Xxxxxx Xxxxxxx Mortgage Capital Inc., as purchaser, LaSalle Bank
National Association, as trustee, Xxxxx Fargo Bank, National Association, as
securities administrator and master servicer and X.X. Xxxxxx Trust Company, as
custodian.
F-1
EXHIBIT G
ASSIGNMENT AND NOTICE OF TRANSFER WITH RESPECT TO ADDITIONAL
COLLATERAL MORTGAGE LOANS
G-1
EXHIBIT H
FORM OF RULE 144A TRANSFER CERTIFICATE
Re: Xxxxxx Xxxxxxx Mortgage Loan Trust 2006-1AR,
Mortgage Pass-Through Certificates
Reference is hereby made to the Pooling and Servicing Agreement, dated
as of January 1, 2006 (the "Pooling and Servicing Agreement"), by and among
Xxxxxx Xxxxxxx Capital I Inc., as Depositor, Xxxxx Fargo Bank, National
Association, as Master Servicer, as Securities Administrator and, in its
capacity as Securities Administrator, as Auction Administrator, LaSalle Bank
National Association, as Trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the Pooling and Servicing
Agreement.
This letter relates to $__________ initial Certificate Balance of Class
_____ Certificates which are held in the form of Definitive Certificates
registered in the name of ______________ (the "Transferor"). The Transferor
has requested a transfer of such Definitive Certificates for Definitive
Certificates of such Class registered in the name of [insert name of
transferee].
In connection with such request, and in respect of such Certificates,
the Transferor hereby certifies that such Certificates are being transferred
in accordance with (i) the transfer restrictions set forth in the Pooling and
Servicing Agreement and the Certificates and (ii) Rule 144A under the
Securities Act to a purchaser that the Transferor reasonably believes is a
"qualified institutional buyer" within the meaning of Rule 144A purchasing for
its own account or for the account of a "qualified institutional buyer," which
purchaser is aware that the sale to it is being made in reliance upon Rule
144A, in a transaction meeting the requirements of Rule 144A and in accordance
with any applicable securities laws of any state of the United States or any
other applicable jurisdiction.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Underwriter, the Certificate Registrar and the
Depositor.
__________________________________
[Name of Transferor]
By: ______________________________
Name:
Title:
Dated: ___________, ____
H-1
EXHIBIT I
FORM OF PURCHASER'S LETTER FOR
INSTITUTIONAL ACCREDITED INVESTOR
Date
Dear Sirs:
In connection with our proposed purchase of $______________ principal
amount of Xxxxxx Xxxxxxx Mortgage Loan Trust 2006-1AR, Mortgage Pass-Through
Certificates (the "Privately Offered Certificates") of Xxxxxx Xxxxxxx Capital
I Inc. (the "Depositor"), we confirm that:
(1) We understand that the Privately Offered Certificates have not been, and
will not be, registered under the Securities Act of 1933, as amended
(the "Securities Act"), and may not be sold except as permitted in the
following sentence. We agree, on our own behalf and on behalf of any
accounts for which we are acting as hereinafter stated, that if we
should sell any Privately Offered Certificates within two years of the
later of the date of original issuance of the Privately Offered
Certificates or the last day on which such Privately Offered
Certificates are owned by the Depositor or any affiliate of the
Depositor we will do so only (A) to the Depositor, (B) to "qualified
institutional buyers" (within the meaning of Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act
("QIBs"), (C) pursuant to the exemption from registration provided by
Rule 144 under the Securities Act, or (D) to an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the Securities Act that is not a QIB (an
"Institutional Accredited Investor") which, prior to such transfer,
delivers to the Certificate Registrar under the Pooling and Servicing
Agreement, dated as of January 1, 2006 (the "Pooling and Servicing
Agreement"), by and among Xxxxxx Xxxxxxx Capital I Inc., as Depositor,
Xxxxx Fargo Bank, National Association, as Master Servicer, as
Securities Administrator and, in its capacity as Securities
Administrator, as Auction Administrator and LaSalle Bank National
Association, as Trustee, a signed letter in the form of this letter; and
we further agree, in the capacities stated above, to provide to any
person purchasing any of the Privately Offered Certificates from us a
notice advising such purchaser that resales of the Privately Offered
Certificates are restricted as stated herein.
(2) We understand that, in connection with any proposed resale of any
Privately Offered Certificates to an Institutional Accredited Investor,
we will be required to furnish to the Certificate Registrar a
certification from such transferee in the form hereof to confirm that
the proposed sale is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act. We further understand that the Privately Offered
Certificates purchased by us will bear a legend to the foregoing effect.
I-1
(3) We are acquiring the Privately Offered Certificates for investment
purposes and not with a view to, or for offer or sale in connection
with, any distribution in violation of the Securities Act. We have such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the
Privately Offered Certificates, and we and any account for which we are
acting are each able to bear the economic risk of such investment.
(4) We are an Institutional Accredited Investor and we are acquiring the
Privately Offered Certificates purchased by us for our own account or
for one or more accounts (each of which is an Institutional Accredited
Investor) as to each of which we exercise sole investment discretion.
(5) We have received such information as we deem necessary in order to make
our investment decision.
(6) If we are acquiring ERISA-Restricted Certificates, we understand that in
accordance with ERISA, the Code and the Exemption, no Plan and no person
acting on behalf of such a Plan may acquire such Certificate except in
accordance with Section 3.03(d) of the Pooling and Servicing Agreement.
Terms used in this letter which are not otherwise defined herein have
the respective meanings assigned thereto in the Pooling and Servicing
Agreement.
I-2
You and the Certificate Registrar are entitled to rely upon this letter
and are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
____________________________
[Purchaser]
By:_________________________
Name:
Title:
I-3
EXHIBIT J
FORM OF ERISA TRANSFER AFFIDAVIT
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is the ______________________ of ______________ (the
"Investor"), a [corporation duly organized] and existing under the laws of
__________, on behalf of which he makes this affidavit.
2. The Investor either (x) is not, and on ___________ [date of transfer]
will not be, an employee benefit plan or other plan or arrangement subject to
Section 406 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as amended
(the "Code"), (collectively, a "Plan") or a person acting on behalf of any
such Plan or investing the assets of any such Plan; (y) if the Certificate has
been the subject of an ERISA-Qualifying Underwriting, is an insurance company
that is purchasing the Certificate with funds contained in an "insurance
company general account" as defined in Section V(e) of Prohibited Transaction
Class Exemption ("PTCE") 95-60 and the purchase and holding of the Certificate
satisfy the requirements for exemptive relief under Sections I and III of PTCE
95-60; or (z) herewith delivers to the Certificate Registrar an opinion of
counsel satisfactory to the Certificate Registrar and the Securities
Administrator and upon which the Certificate Registrar, the Trustee, the
Master Servicer, the Depositor and the Securities Administrator shall be
entitled to rely, to the effect that the purchase and holding of such
Certificate by the Investor will not constitute or result in any non-exempt
prohibited transactions under Title I of ERISA or Section 4975 of the Code and
will not subject the Certificate Registrar, the Trustee, the Master Servicer,
the Depositor or the Securities Administrator to any obligation in addition to
those undertaken by such entities in the Pooling and Servicing Agreement,
which opinion of counsel shall not be an expense of the Trust Fund or the
above parties.
3. The Investor hereby acknowledges that under the terms of the Pooling
and Servicing Agreement, dated as of January 1, 2006 (the "Pooling and
Servicing Agreement"), by and among Xxxxxx Xxxxxxx Capital I Inc., as
Depositor, Xxxxx Fargo Bank, National Association, as Master Servicer, as
Securities Administrator and, in its capacity as Securities Administrator, as
Auction Administrator and LaSalle Bank National Association, as Trustee, no
transfer of the ERISA-Restricted Certificates shall be permitted to be made to
any person unless the Certificate Registrar has received a certificate from
such transferee in the form hereof.
J-1
IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to proper authority, by its duly authorized
officer, duly attested, this ____ day of _______________ 20___.
_______________________________
[Investor]
By: ___________________________
Name:
Title:
ATTEST:
______________________
STATE OF )
) ss.:
COUNTY OF )
Personally appeared before me the above-named ________________, known or
proved to me to be the same person who executed the foregoing instrument and
to be the ____________________ of the Investor, and acknowledged that he
executed the same as his free act and deed and the free act and deed of the
Investor.
Subscribed and sworn before me this _____ day of _________ 20___.
_______________________________
NOTARY PUBLIC
My commission expires the
_____ day of __________ 20___.
J-2
EXHIBIT K
FORM OF LETTER OF REPRESENTATIONS
WITH THE DEPOSITORY TRUST COMPANY
[On File with Securities Administrator]
K-1
EXHIBIT L-1
FORM OF INITIAL CUSTODIAL CERTIFICATION
January 31, 2006
Xxxxxx Xxxxxxx Capital I Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, National Association
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
LaSalle Bank National Association, as Trustee
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Trust Administration-MSM 2006-1AR
Re: Pooling and Servicing Agreement ("Pooling and Servicing Agreement")
-------------------------------------------------------------------
relating to Xxxxxx Xxxxxxx Mortgage Loan Trust 2006-1AR, Mortgage
-----------------------------------------------------------------
Pass-Through Certificates, Series 2006-1AR
------------------------------------------
Ladies and Gentlemen:
In accordance with and subject to the provisions of Section 2.02 of
the Pooling and Servicing Agreement, the undersigned, as Custodian, hereby
certifies that, except for the exceptions noted on the schedule attached hereto,
(a) all documents required to be delivered to the Custodian pursuant to Sections
2.01(a)(i) through (iv) and (ix)(b), (c) (solely to the extent of the UCC-1),
(g) and (h), and if delivered to it, the documents identified in Section
2.01(a)(v) through (vii) and (ix)(c) (solely to the extent of the UCC-3) and (f)
of the Pooling and Servicing Agreement are in its possession, (b) such documents
have been reviewed by it and have not been mutilated, damaged, defaced, torn or
otherwise physically altered, and such documents relate to such Mortgage Loan,
(c) based on its review and examination and only as to the foregoing documents,
such documents appear regular on their face and related to such Mortgage Loan
and (d) each Mortgage Note has been endorsed and each assignment of Mortgage has
been delivered as provided in Section 2.01 of the Pooling and Servicing
Agreement. The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically mentioned above.
The Custodian makes no representations as to: (i) the validity, legality,
sufficiency, enforceability or genuineness of any of the documents delivered in
accordance with Section 2.01 of the Pooling and Servicing Agreement or any of
the Mortgage Loans identified in the Mortgage Loan Schedule, or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.
The Custodian acknowledges receipt of notice that the Depositor has
granted to the Trustee for the benefit of the Certificateholders a security
interest in all of the Depositor's right, title and interest in and to the
Mortgage Loans.
L-1-1
Capitalized terms used herein without definition shall have the meaning assigned
to them in the Pooling and Servicing Agreement.
[X.X. XXXXXX TRUST COMPANY, NATIONAL
ASSOCIATION, as Custodian]
[LASALLE BANK NATIONAL ASSOCIATION,]
as Custodian
By: ____________________________
Authorized Representative
X-0-0
XXXXXXX X-0
FORM OF FINAL CUSTODIAL CERTIFICATION
January 31, 2006
Xxxxxx Xxxxxxx Capital I Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, National Association
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
LaSalle Bank National Association, as Trustee
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Trust Administration-MSM 2006-1AR
Re: Pooling and Servicing Agreement ("Pooling and Servicing Agreement")
-------------------------------------------------------------------
relating to Xxxxxx Xxxxxxx Mortgage Loan Trust 2006-1AR, Mortgage
-----------------------------------------------------------------
Pass-Through Certificates, Series 2006-1AR
------------------------------------------
Ladies and Gentlemen:
In accordance with and subject to the provisions of Section 2.02 of
the Pooling and Servicing Agreement, the undersigned, as Custodian, hereby
certifies that, except for the exceptions noted on the schedule attached hereto,
(a) all documents required to be delivered to the Custodian pursuant to Sections
2.01(a)(i) through (iv) and (ix)(b), (c) (solely to the extent of the UCC-1),
(g) and (h), and if delivered to it, the documents identified in Section
2.01(a)(v) through (vii) and (ix)(c) (solely to the extent of the UCC-3) and (f)
of the Pooling and Servicing Agreement are in its possession, (b) such documents
have been reviewed by it and have not been mutilated, damaged, defaced, torn or
otherwise physically altered, and such documents relate to such Mortgage Loan,
(c) based on its examination and only as to the foregoing documents, these
documents with respect to each Mortgage Loan accurately reflect the information
contained in the Mortgage Note and Mortgage and (d) each Mortgage Note has been
endorsed and each assignment of Mortgage has been delivered as provided in
Section 2.01 of the Pooling and Servicing Agreement. The Custodian has made no
independent examination of any documents contained in each Mortgage File beyond
the review specifically mentioned above. The Custodian makes no representations
as to: (i) the validity, legality, sufficiency, enforceability or genuineness of
any of the documents delivered in accordance with Section 2.01 of the Pooling
and Servicing Agreement or any of the Mortgage Loans identified in the Mortgage
Loan Schedule, or (ii) the collectibility, insurability, effectiveness or
suitability of any such Mortgage Loan.
The Custodian acknowledges receipt of notice that the Depositor has
granted to the Trustee for the benefit of the Certificateholders a security
interest in all of the Depositor's right, title and interest in and to the
Mortgage Loans.
L-2-1
Capitalized terms used herein without definition shall have the meaning assigned
to them in the Pooling and Servicing Agreement.
[X.X. XXXXXX TRUST COMPANY, NATIONAL
ASSOCIATION,
as Custodian]
[LASALLE BANK NATIONAL ASSOCIATION,]
as Custodian
By: ____________________________
Authorized Representative
L-2-2
EXHIBIT M
REQUEST FOR RELEASE OF DOCUMENTS
[Name and Address of appropriate Custodian]
Re: Pooling and Servicing Agreement ("Pooling and Servicing Agreement")
-------------------------------------------------------------------
relating to Xxxxxx Xxxxxxx Mortgage Loan Trust 2006-1AR, Mortgage
-----------------------------------------------------------------
Pass-Through Certificates, Series 2006-1AR and Custodial Agreement
------------------------------------------------------------------
relating to Xxxxxx Xxxxxxx Mortgage Loan Trust 2006-1AR
-------------------------------------------------------
In connection with the administration of the Mortgage Loans in the
Trust created by the above-captioned Pooling and Servicing Agreement and that
are held by you as Custodian pursuant to the above-captioned Custodial
Agreement, we request the release, and hereby acknowledge receipt, of the
Mortgage File for the Mortgage Loan described below, for the reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
__________ 1. Mortgage Paid in Full
__________ 2. Foreclosure
__________ 3. Substitution
__________ 4. Other Liquidation (Repurchases, etc.)
__________ 5. Nonliquidation
Reason: ______________________
Address to which Custodian should
Deliver the Mortgage File:
_____________________________________________
_____________________________________________
_____________________________________________
By:_______________________________________
(authorized signer)
Issuer:_____________________________________
Address: _____________________________________
_____________________________________
Date: _____________________________________
M-1
Custodian
-----------
[insert name of appropriate Custodian]
Please acknowledge the execution of the above request by your signature and date
below:
------------------------------------
Signature
---------------------
Date
Documents returned to Custodian:
------------------------------------
Signature
---------------------
Date
M-2
EXHIBIT N-1
Additional Form 10-D Disclosure
----------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-D DISCLOSURE
------------------------------------------------ ---------------------------------------------
Item on Form 10-D Responsible Party
------------------------------------------------ ---------------------------------------------
Item 1: Distribution and Pool
Performance Information
------------------------------------------------ ---------------------------------------------
Information included in the [Monthly Statement] Servicer, Master Servicer and Securities
Administrator
------------------------------------------------ ---------------------------------------------
Any information required by 1121 which is NOT Depositor
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 proceedings
known to be contemplated by governmental
authorities:
------------------------------------------------ ---------------------------------------------
o Issuing Entity (Trust Fund) Trustee, Master Servicer, Securities
Administrator and Depositor
------------------------------------------------ ---------------------------------------------
o Sponsor (Seller) Seller (if a party to the Pooling and
Servicing Agreement) or Depositor
------------------------------------------------ ---------------------------------------------
o Depositor Depositor
------------------------------------------------ ---------------------------------------------
o Trustee Trustee
------------------------------------------------ ---------------------------------------------
o Securities Administrator Securities Administrator
------------------------------------------------ ---------------------------------------------
o Master Servicer Master Servicer
------------------------------------------------ ---------------------------------------------
o Custodian Custodian
------------------------------------------------ ---------------------------------------------
o 1110(b) Originator Depositor
------------------------------------------------ ---------------------------------------------
o Any 1108(a)(2) Servicer (other than the Servicer
Master Servicer or Securities Administrator)
------------------------------------------------ ---------------------------------------------
o Any other party contemplated by 1100(d)(1) Depositor
------------------------------------------------ ---------------------------------------------
Item 3: Sale of Securities and Use of (i) Depositor (with respect to the Closing
Proceeds Date) and (ii) Master Servicer
Information from Item 2(a) of Part II of Form
10-Q:
With respect to any sale of securities by the
sponsor, depositor or issuing entity, that are
backed by the same asset pool or are otherwise
issued by the issuing entity, whether or not
registered, provide the sales and use of
proceeds information in Item 701 of Regulation
S-K. Pricing information can be omitted if
securities
------------------------------------------------ ---------------------------------------------
N-1-1
----------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-D DISCLOSURE
------------------------------------------------ ---------------------------------------------
Item on Form 10-D Responsible Party
------------------------------------------------ ---------------------------------------------
were not registered.
------------------------------------------------ ---------------------------------------------
Item 4: Defaults Upon Senior Securities Securities Administrator and Trustee
Information from Item 3 of Part II of Form
10-Q:
Report the occurrence of any Event of Default
(after expiration of any grace
period and provision of any required notice)
------------------------------------------------ ---------------------------------------------
Item 5: Submission of Matters to a Vote of Securities Administrator and
Security Holders Trustee
Information from Item 4 of Part II of Form 10-Q
------------------------------------------------ ---------------------------------------------
Item 6: Significant Obligors of Pool Assets Depositor
Item 1112(b) - Significant Obligor Financial
Information*
------------------------------------------------ ---------------------------------------------
*This information need only be reported on the
Form 10-D for the distribution period in which
updated information is required pursuant to
the Item.
------------------------------------------------ ---------------------------------------------
Item 7: Significant Enhancement
Provider Information
Item 1114(b)(2) - Credit Enhancement Provider
Financial Information*
------------------------------------------------ ---------------------------------------------
o Determining applicable disclosure threshold Depositor
------------------------------------------------ ---------------------------------------------
o Requesting required financial information Depositor
(including any required accountants' consent
to the use thereof) or effecting incorporation
by reference
------------------------------------------------ ---------------------------------------------
Item 1115(b) - Derivative Counterparty
Financial Information*
------------------------------------------------ ---------------------------------------------
o Determining current maximum probable exposure Depositor
------------------------------------------------ ---------------------------------------------
o Determining current significance percentage Depositor
------------------------------------------------ ---------------------------------------------
o Requesting required financial information Depositor
(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.
------------------------------------------------ ---------------------------------------------
Item 8: Other Information Any responsible party for the applicable
Form 8-K Disclosure item
------------------------------------------------ ---------------------------------------------
N-1-2
----------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-D DISCLOSURE
------------------------------------------------ ---------------------------------------------
Item on Form 10-D Responsible Party
------------------------------------------------ ---------------------------------------------
Disclose any information required to be
reported on Form 8-K during the period covered
by the Form 10-D but not reported
------------------------------------------------ ---------------------------------------------
Item 9: Exhibits
------------------------------------------------ ---------------------------------------------
Monthly Statement to Certificateholders Securities Administrator
------------------------------------------------ ---------------------------------------------
Exhibits required by Item 601 of Regulation Depositor
S-K, such as material agreements
------------------------------------------------ ---------------------------------------------
N-1-3
EXHIBIT N-2
Additional Form 10-K Disclosure
----------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-K DISCLOSURE
------------------------------------------------ ---------------------------------------------
Item on Form 10-K Responsible Party
------------------------------------------------ ---------------------------------------------
Item 1B: Unresolved Staff Comments Depositor
------------------------------------------------ ---------------------------------------------
Item 9B: Other Information Any responsible party for disclosure items
Disclose any information required to be on Form 8-K
reported on Form 8-K during the fourth quarter
covered by the Form 10-K but not reported
------------------------------------------------ ---------------------------------------------
Item 15: Exhibits, Financial Statement (i) As to agreements, Securities
Schedules Administrator/Depositor and (ii) as to
financial statements, Reporting Parties (as
to themselves)
------------------------------------------------ ---------------------------------------------
Reg AB Item 1112(b): Significant
Obligors of Pool Assets
------------------------------------------------ ---------------------------------------------
Significant Obligor Financial Information* Depositor
------------------------------------------------ ---------------------------------------------
*This information need only be reported on the
Form 10-D for the distribution period in which
updated information is required pursuant to
the Item.
------------------------------------------------ ---------------------------------------------
Reg AB Item 1114(b)(2): Credit Enhancement
Provider Financial Information
------------------------------------------------ ---------------------------------------------
o Determining applicable disclosure threshold Depositor
------------------------------------------------ ---------------------------------------------
o Requesting required financial information Depositor
(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.
------------------------------------------------ ---------------------------------------------
Reg AB Item 1115(b): Derivative Counterparty
Financial Information
------------------------------------------------ ---------------------------------------------
o Determining current maximum probable exposure Depositor
------------------------------------------------ ---------------------------------------------
o Determining current significance percentage Depositor
------------------------------------------------ ---------------------------------------------
o Requesting required financial information Depositor
(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.
------------------------------------------------ ---------------------------------------------
Reg AB Item 1117: Legal Proceedings
------------------------------------------------ ---------------------------------------------
N-2-1
----------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-K DISCLOSURE
------------------------------------------------ ---------------------------------------------
Item on Form 10-K Responsible Party
------------------------------------------------ ---------------------------------------------
Any legal proceeding pending against the
following entities or their respective
property, that is material to
Certificateholders, including any proceedings
known to be contemplated by governmental
authorities:
------------------------------------------------ ---------------------------------------------
o Issuing Entity (Trust Fund) Trustee, Master Servicer, Securities
Administrator and Depositor
------------------------------------------------ ---------------------------------------------
o Sponsor (Seller) Seller (if a party to the Pooling and
Servicing Agreement) or Depositor
------------------------------------------------ ---------------------------------------------
o Depositor Depositor
------------------------------------------------ ---------------------------------------------
o Trustee Trustee
------------------------------------------------ ---------------------------------------------
o Securities Administrator Securities Administrator
------------------------------------------------ ---------------------------------------------
o Master Servicer Master Servicer
------------------------------------------------ ---------------------------------------------
o Custodian Custodian
------------------------------------------------ ---------------------------------------------
o 1110(b) Originator Depositor
------------------------------------------------ ---------------------------------------------
o Any 1108(a)(2) Servicer (other than the Servicer
Master Servicer or Securities Administrator)
------------------------------------------------ ---------------------------------------------
o Any other party contemplated by 1100(d)(1) Depositor
------------------------------------------------ ---------------------------------------------
Reg AB Item 1119: Affiliations and
Relationships
------------------------------------------------ ---------------------------------------------
Whether (a) the Sponsor (Seller), Depositor or Depositor as to (a)
Issuing Entity is an affiliate of the Sponsor/Seller as to (a)
following parties, and (b) to the extent known
and material, any of the following parties are
affiliated with one another:
------------------------------------------------ ---------------------------------------------
o Master Servicer Master Servicer
------------------------------------------------ ---------------------------------------------
o Securities Administrator Securities Administrator
------------------------------------------------ ---------------------------------------------
o Trustee Trustee
------------------------------------------------ ---------------------------------------------
o Any other 1108(a)(3) servicer Servicer
------------------------------------------------ ---------------------------------------------
o Any 1110 Originator Depositor/Sponsor
------------------------------------------------ ---------------------------------------------
o Any 1112(b) Significant Obligor Depositor/Sponsor
------------------------------------------------ ---------------------------------------------
o Any 1114 Credit Enhancement Provider Depositor/Sponsor
------------------------------------------------ ---------------------------------------------
o Any 1115 Derivate Counterparty Provider Depositor/Sponsor
------------------------------------------------ ---------------------------------------------
o Any other 1101(d)(1) material party Depositor/Sponsor
------------------------------------------------ ---------------------------------------------
Whether there are any "outside the ordinary Depositor as to (a)
course business arrangements" other than would Sponsor/Seller as to (a)
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:
------------------------------------------------ ---------------------------------------------
N-2-2
----------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-K DISCLOSURE
------------------------------------------------ ---------------------------------------------
Item on Form 10-K Responsible Party
------------------------------------------------ ---------------------------------------------
o Master Servicer Master Servicer
------------------------------------------------ ---------------------------------------------
o Securities Administrator Securities Administrator
------------------------------------------------ ---------------------------------------------
o Trustee Trustee
------------------------------------------------ ---------------------------------------------
o Any other 1108(a)(3) servicer Servicer
------------------------------------------------ ---------------------------------------------
o Any 1110 Originator Depositor/Sponsor
------------------------------------------------ ---------------------------------------------
o Any 1112(b) Significant Obligor Depositor/Sponsor
------------------------------------------------ ---------------------------------------------
o Any 1114 Credit Enhancement Provider Depositor/Sponsor
------------------------------------------------ ---------------------------------------------
o Any 1115 Derivate Counterparty Provider Depositor/Sponsor
------------------------------------------------ ---------------------------------------------
o Any other 1101(d)(1) material party Depositor/Sponsor
------------------------------------------------ ---------------------------------------------
Whether there are any specific relationships Depositor as to (a)
involving the transaction or the pool assets Sponsor/Seller as to (a)
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:
------------------------------------------------ ---------------------------------------------
o Master Servicer Master Servicer
------------------------------------------------ ---------------------------------------------
o Securities Administrator Securities Administrator
------------------------------------------------ ---------------------------------------------
o Trustee Trustee
------------------------------------------------ ---------------------------------------------
o Any other 1108(a)(3) servicer Servicer
------------------------------------------------ ---------------------------------------------
o Any 1110 Originator Depositor/Sponsor
------------------------------------------------ ---------------------------------------------
o Any 1112(b) Significant Obligor Depositor/Sponsor
------------------------------------------------ ---------------------------------------------
o Any 1114 Credit Enhancement Provider Depositor/Sponsor
------------------------------------------------ ---------------------------------------------
o Any 1115 Derivate Counterparty Provider Depositor/Sponsor
------------------------------------------------ ---------------------------------------------
o Any other 1101(d)(1) material party Depositor/Sponsor
------------------------------------------------ ---------------------------------------------
N-2-3
EXHIBIT N-3
Form 8-K Disclosure Information
----------------------------------------------------------------------------------------------
FORM 8-K DISCLOSURE INFORMATION
------------------------------------------------ ---------------------------------------------
Item on Form 8-K Responsible Party
------------------------------------------------ ---------------------------------------------
Item 1.01- Entry into a Material Definitive All parties (with respect to any agreement
Agreement entered into by such party)
Disclosure is required regarding entry into or
amendment of any definitive agreement that is
material to the securitization, even if
depositor is not a party.
Examples: servicing agreement, custodial
agreement.
Note: disclosure not required as to definitive
agreements that are fully disclosed in the
prospectus
------------------------------------------------ ---------------------------------------------
Item 1.02- Termination of a Material All parties (with respect to any agreement
Definitive Agreement entered into by such party)
Disclosure is required regarding termination
of any definitive agreement that is material
to the securitization (other than expiration
in accordance with its terms), even if
depositor is not a party.
Examples: servicing agreement, custodial
agreement.
------------------------------------------------ ---------------------------------------------
Item 1.03- Bankruptcy or Receivership
Disclosure is required regarding the
bankruptcy or receivership, with respect to
any of the following:
------------------------------------------------ ---------------------------------------------
o Sponsor (Seller) Depositor/Sponsor (Seller)
------------------------------------------------ ---------------------------------------------
o Depositor Depositor
------------------------------------------------ ---------------------------------------------
o Master Servicer Master Servicer
------------------------------------------------ ---------------------------------------------
o Affiliated Servicer Servicer
------------------------------------------------ ---------------------------------------------
o Other Servicer servicing 20% or more of the Servicer
pool assets at the time of the report
------------------------------------------------ ---------------------------------------------
o Other material servicers Servicer
------------------------------------------------ ---------------------------------------------
o Trustee Trustee
------------------------------------------------ ---------------------------------------------
o Securities Administrator Securities Administrator
------------------------------------------------ ---------------------------------------------
o Significant Obligor Depositor
------------------------------------------------ ---------------------------------------------
o Credit Enhancer (10% or more) Depositor
------------------------------------------------ ---------------------------------------------
o Derivative Counterparty Depositor
------------------------------------------------ ---------------------------------------------
o Custodian Custodian
------------------------------------------------ ---------------------------------------------
N-3-1
----------------------------------------------------------------------------------------------
FORM 8-K DISCLOSURE INFORMATION
------------------------------------------------ ---------------------------------------------
Item on Form 8-K Responsible Party
------------------------------------------------ ---------------------------------------------
Item 2.04- Triggering Events that Accelerate Master Servicer/Securities Administrator/
or Increase a Direct Financial Obligation or Depositor (with respect to any agreement to
an Obligation under an Off-Balance Sheet which neither the Master Servicer nor the
Arrangement Securities Administrator is a party)
Includes an early amortization, performance
trigger or other event, including event of
default, that would materially alter the
payment priority/distribution of cash
flows/amortization schedule.
Disclosure will be made of events other than
waterfall triggers which are disclosed in the
monthly statements to the certificateholders.
------------------------------------------------ ---------------------------------------------
Item 3.03- Material Modification to Rights of Securities Administrator
Security Holders
Disclosure is required of any material
modification to documents defining the rights
of Certificateholders, including the Pooling
and Servicing Agreement.
------------------------------------------------ ---------------------------------------------
Item 5.03- Amendments of Articles of Securities Administrator and Depositor
Incorporation or Bylaws; Change of Fiscal Year
Disclosure is required of any amendment "to
the governing documents of the issuing entity".
------------------------------------------------ ---------------------------------------------
Item 6.01- ABS Informational and Depositor
Computational Material
------------------------------------------------ ---------------------------------------------
Item 6.02- Change of Servicer or Trustee Master Servicer/Securities Administrator/
Servicer/Depositor/Trustee (as to
Requires disclosure of any removal, itself)/Successor Trustee
replacement, substitution or addition of any
master servicer, affiliated servicer, other
servicer servicing 10% or more of pool assets
at time of report, other material servicers or
trustee.
------------------------------------------------ ---------------------------------------------
Reg AB disclosure about any new servicer or Servicer/Master Servicer/Depositor
master servicer is also required.
------------------------------------------------ ---------------------------------------------
Reg AB disclosure about any new Trustee is Successor Trustee
also required.
------------------------------------------------ ---------------------------------------------
Item 6.03- Change in Credit Enhancement or Depositor/Securities Administrator/Trustee
External Support (to the extent action is required by the
Covers termination of any enhancement in Trustee in connection with any amendment or
manner other than by its terms, the addition modification therewith)
of an enhancement, or a material change in the
enhancement provided. Applies to external
------------------------------------------------ ---------------------------------------------
N-3-2
----------------------------------------------------------------------------------------------
FORM 8-K DISCLOSURE INFORMATION
------------------------------------------------ ---------------------------------------------
Item on Form 8-K Responsible Party
------------------------------------------------ ---------------------------------------------
credit enhancements as well as derivatives.
------------------------------------------------ ---------------------------------------------
Reg AB disclosure about any new enhancement Depositor
provider is also required.
------------------------------------------------ ---------------------------------------------
Item 6.04- Failure to Make a Required Securities Administrator/Trustee (to the
Distribution extent the Trustee has knowledge
thereof)/Depositor (to the extent the
Depositor has knowledge thereof)
------------------------------------------------ ---------------------------------------------
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 originators Depositor
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 reporting/disclosing
Exhibits the financial statement or exhibit
------------------------------------------------ ---------------------------------------------
N-3-3
EXHIBIT O
[FORM OF]
SERVICING CRITERIA TO BE ADDRESSED IN
ASSESSMENT OF COMPLIANCE STATEMENT
The assessment of compliance to be delivered by each party listed
below shall address, at a minimum, the criteria identified as below as
"Applicable Servicing Criteria":
-------------------------------------------------------------------------- ------------------
Applicable
Servicing Criteria/
Servicing Criteria Responsible Party
-------------------------------------------------------------------------- ------------------
Reference Criteria
------------------ ------------------------------------------------------- ------------------
General Servicing Considerations
------------------ ------------------
1122(d)(1)(i) Policies and procedures are instituted to monitor any
performance or other triggers and events of default in S, MS, SA
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 S, MS, SA
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 N/A
are maintained.
------------------ ------------------
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in
effect on the party participating in the servicing
function throughout the reporting period in the
amount of coverage required by and otherwise in S, MS, SA
accordance with the terms of the transaction
agreements.
------------------ ------------------
Cash Collection and Administration
------------------ ------------------
1122(d)(2)(i) Payments on mortgage loans are deposited into the
appropriate custodial bank accounts and related bank
clearing accounts no more than two business days S, MS, SA
following receipt, or such other number of days
specified in the transaction agreements.
------------------ ------------------
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an
obligor or to an investor are made only by authorized S, MS, SA
personnel.
------------------ ------------------
1122(d)(2)(iii) Advances of funds or guarantees regarding collections,
cash flows or distributions, and any interest or other S, MS
fees charged for such advances, are made, reviewed
and approved as specified in the transaction agreements.
------------------ ------------------
O-1
-------------------------------------------------------------------------- ------------------
Applicable
Servicing Criteria/
Servicing Criteria Responsible Party
-------------------------------------------------------------------------- ------------------
Reference Criteria
------------------ ------------------------------------------------------- ------------------
1122(d)(2)(iv) The related accounts for the transaction, such as S, MS, SA
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 S, MS, SA
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 S, MS, SA
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 S, MS, SA
someone other than the person who prepared the
reconciliation; and (D) contain explanations for
reconciling items. These reconciling items are
resolved within 90 calendar days of their original
identification, or such other number of days
specified in the transaction agreements.
------------------ ------------------
Investor Remittances and Reporting
------------------ ------------------
1122(d)(3)(i) Reports to investors, including those to be filed
with the Commission, are maintained in accordance
with the transaction agreements and applicable
Commission requirements. Specifically, such reports
(A) are prepared in accordance with timeframes and
other terms set forth in the transaction agreements;
(B) provide information calculated in accordance with S, MS, SA
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 S, MS, SA
other terms set forth in the transaction agreements.
------------------ ------------------
O-2
-------------------------------------------------------------------------- ------------------
Applicable
Servicing Criteria/
Servicing Criteria Responsible Party
-------------------------------------------------------------------------- ------------------
Reference Criteria
------------------ ------------------------------------------------------- ------------------
1122(d)(3)(iii) Disbursements made to an investor are posted within S, MS, SA
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 S, MS, SA
payment, or custodial bank statements.
------------------ ------------------
Pool Asset Administration
------------------ ------------------
1122(d)(4)(i) Collateral or security on mortgage loans is
maintained as required by the transaction agreements S, C
or related mortgage loan documents.
------------------ ------------------
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded S, C
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 S
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 S
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 S
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 S
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 S
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 S
monitoring delinquent mortgage loans
O-3
-------------------------------------------------------------------------- ------------------
Applicable
Servicing Criteria/
Servicing Criteria Responsible Party
-------------------------------------------------------------------------- ------------------
Reference Criteria
------------------ ------------------------------------------------------- ------------------
including, for example, phone calls, letters and
payment rescheduling plans in cases where delinquency
is deemed temporary (e.g., illness or unemployment).
------------------ ------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return for
mortgage loans with variable rates are computed based S
on the related mortgage loan documents.
------------------ ------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor
(such as escrow accounts): (A) such funds are
analyzed, in accordance with the obligor's mortgage
loan documents, on at least an annual basis, or such
other period specified in the transaction agreements;
(B) interest on such funds is paid, or credited, to
obligors in accordance with applicable mortgage loan S
documents and state laws; and (C) such funds are
returned to the obligor within 30 calendar days of
full repayment of the related mortgage loans, or such
other number of days specified in the transaction
agreements.
------------------ ------------------
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments,
provided that such support has been received by the S
servicer at least 30 calendar days prior to these
dates, or such other number of days specified in the
transaction agreements.
------------------ ------------------
1122(d)(4)(xii) Any late payment penalties in connection with any
payment to be made on behalf of an obligor are paid
from the servicer's funds and not charged to the S
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 S
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 S, MS
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 SA
transaction agreements.
------------------ ------------------------------------------------------- ------------------
------------------ ------------------------------------------------------- ------------------
O-4
[NAME OF REPORTING PARTY]
Date: _________________________
By: ____________________________
Name:
Title:
Key:
S = each Servicer
MS = Master Servicer
SA = Securities Administrator
C = Custodian
O-5
EXHIBIT P
[Reserved]
P-1
EXHIBIT Q
GLOSSARY of TERMS for STANDARD & POOR'S LEVELS(R) VERSION 5.7 FILE
FORMAT
APPENDIX E - Standard & Poor's Predatory Lending Categories
------------------------------------------------------------
Standard & Poor's has categorized loans governed by anti-predatory lending
laws in the Jurisdictions listed below into three categories based upon a
combination of factors that include (a) the risk exposure associated with the
assignee liability and (b) the tests and thresholds set forth in those laws.
Note that certain loans classified by the relevant statute as Covered are
included in Standard & Poor's High Cost Loan Category because they included
thresholds and tests that are typical of what is generally considered High
Cost by the industry.
Standard & Poor's High Cost Loan Categorization
-----------------------------------------------
------------------------------------------------------------------------------------------------
State/Jurisdiction Name of Anti-Predatory Lending Category under
------------------ ------------------------------ --------------
Law/Effective Date Applicable Anti-
------------------ ----------------
Predatory Lending Law
---------------------
---------------------------- ---------------------------------------- --------------------------
Arkansas Arkansas Home Loan Protection Act, High Cost Home Loan
Ark. Code Xxx. xx.xx. 00-00-000 et seq.
Effective July 16, 2003
---------------------------- ---------------------------------------- --------------------------
Cleveland Heights, OH Ordinance No. 72-2003 (PSH), Mun. Code Covered Loan
xx.xx. 757.01 et seq.
Effective June 2, 2003
---------------------------- ---------------------------------------- --------------------------
Colorado Consumer Equity Protection, Colo. Covered Loan
Stat. Xxx. xx.xx. 5-3.5-101 et seq.
Effective for covered loans offered
or entered into on or after
January 1, 2003. Other provisions of
the Act took effect on June 7, 2002
---------------------------- ---------------------------------------- --------------------------
Connecticut Connecticut Abusive Home Loan Lending High Cost Home Loan
Practices Act, Conn. Gen. Stat. xx.xx.
36a-746 et seq.
Effective October 1, 2001
---------------------------- ---------------------------------------- --------------------------
District of Columbia Home Loan Protection Act, D.C. Code Covered Loan
xx.xx. 26-1151.01 et seq.
Effective for loans closed on or after
January 28, 2003
---------------------------- ---------------------------------------- --------------------------
Florida Fair Lending Act, Fla. Stat. Xxx. High Cost Home Loan
xx.xx. 494.0078 et seq.
Effective October 2, 2002
---------------------------- ---------------------------------------- --------------------------
Q-1
Standard & Poor's High Cost Loan Categorization
-----------------------------------------------
------------------------------------------------------------------------------------------------
State/Jurisdiction Name of Anti-Predatory Lending Category under
------------------ ------------------------------ --------------
Law/Effective Date Applicable Anti-
------------------ ----------------
Predatory Lending Law
---------------------
---------------------------- ---------------------------------------- --------------------------
Georgia (Oct. 1, 0000 - Xxxxxxx Xxxx Xxxxxxx Xxx, Xx. Code High Cost Home Loan
Mar. 6, 2003) Xxx. xx.xx. 7-6A-1 et seq.
Effective October 1, 2002 - March 6,
2003
---------------------------- ---------------------------------------- --------------------------
Georgia as amended (Mar. Georgia Fair Lending Act, Ga. Code High Cost Home Loan
7, 2003 - current) Xxx. xx.xx. 7-6A-1 et seq.
Effective for loans closed on or after
March 7, 2003
---------------------------- ---------------------------------------- --------------------------
HOEPA Section 32 Home Ownership and Equity Protection High Cost Loan
Act of 1994, 15 U.S.C. ss. 1639, 12
C.F.R. xx.xx. 226.32 and 226.34
Effective October 1, 1995, amendments
October 1, 2002
---------------------------- ---------------------------------------- --------------------------
Illinois High Risk Home Loan Act, Ill. Comp. High Risk Home Loan
Stat. tit. 815, xx.xx. 137/5 et seq.
Effective January 1, 2004 (prior to this
date, regulations under Residential
Mortgage License Act effective from
May 14, 2001)
---------------------------- ---------------------------------------- --------------------------
Kansas Consumer Credit Code, Kan. Stat. Xxx. High Loan to Value
xx.xx. 16a-1-101 et seq. Consumer Loan (id. ss.
16a-3-207) and;
Sections 16a-1-301 and 16a-3-207 --------------------------
became effective April 14, 1999; High APR Consumer Loan
Section 16a-3-308a became effective (id. ss. 16a-3-308a)
July 1, 1999
---------------------------- ---------------------------------------- --------------------------
Kentucky 2003 KY H.B. 287 - High Cost Home Loan High Cost Home Loan
Act, Ky. Rev. Stat. xx.xx. 360.100
et seq.
Effective June 24, 2003
---------------------------- ---------------------------------------- --------------------------
Maine Truth in Lending, Me. Rev. Stat. tit. High Rate High Fee
9-A, xx.xx. 8-101 et seq. Mortgage
Effective September 29, 1995 and as
amended from time to time
---------------------------- ---------------------------------------- --------------------------
Massachusetts Part 40 and Part 32, 209 C.M.R. xx.xx. High Cost Home Loan
32.00 et seq. and 209 C.M.R. xx.xx.
40.01 et seq.
---------------------------- ---------------------------------------- --------------------------
Q-2
Standard & Poor's High Cost Loan Categorization
-----------------------------------------------
------------------------------------------------------------------------------------------------
State/Jurisdiction Name of Anti-Predatory Lending Category under
------------------ ------------------------------ --------------
Law/Effective Date Applicable Anti-
------------------ ----------------
Predatory Lending Law
---------------------
---------------------------- ---------------------------------------- --------------------------
Effective March 22, 2001 and amended
from time to time
---------------------------- ---------------------------------------- --------------------------
Nevada Assembly Xxxx No. 284, Nev. Rev. Stat. Home Loan
xx.xx. 598D.010 et seq.
Effective October 1, 2003
---------------------------- ---------------------------------------- --------------------------
New Jersey New Jersey Home Ownership Security Act High Cost Home Loan
of 2002, N.J. Rev. Stat. xx.xx.
46:10B-22 et seq.
Effective for loans closed on or after
November 27, 2003
---------------------------- ---------------------------------------- --------------------------
New Mexico Home Loan Protection Act, N.M. Rev. High Cost Home Loan
Stat. xx.xx. 58-21A-1 et seq.
Effective as of January 1, 2004;
Revised as of February 26, 2004
---------------------------- ---------------------------------------- --------------------------
New York N.Y. Banking Law Article 6-l High Cost Home Loan
Effective for applications made on or
after April 1, 2003
---------------------------- ---------------------------------------- --------------------------
North Carolina Restrictions and Limitations on High High Cost Home Loan
Cost Home Loans, N.C. Gen. Stat. xx.xx.
24-1.1E et seq.
Effective July 1, 2000; amended
October 1, 2003 (adding open-end lines
of credit)
---------------------------- ---------------------------------------- --------------------------
Ohio H.B. 386 (codified in various sections Covered Loan
of the Ohio Code), Ohio Rev. Code Xxx.
xx.xx. 1349.25 et seq.
Effective May 24, 2002
---------------------------- ---------------------------------------- --------------------------
Oklahoma Consumer Credit Code (codified in Subsection 10 Mortgage
various sections of Title 14A)
Effective July 1, 2000; amended
effective January 1, 2004
---------------------------- ---------------------------------------- --------------------------
South Carolina South Carolina High Cost and Consumer High Cost Home Loan
Home Loans Act, S.C. Code Xxx. xx.xx.
37-23-10 et seq.
Effective for loans taken on or after
January 1, 2004
---------------------------- ---------------------------------------- --------------------------
Q-3
Standard & Poor's Covered Loan Categorization
---------------------------------------------
------------------------------------------------------------------------------------------------
State/Jurisdiction Name of Anti-Predatory Lending Category under
------------------ ------------------------------ --------------
Law/Effective Date Applicable Anti-
------------------ ----------------
Predatory Lending Law
---------------------
---------------------------- ---------------------------------------- --------------------------
West Virginia West Virginia Residential Mortgage West Virginia Mortgage
Lender, Broker and Servicer Act, W. Loan Act Loan
Va. Code Xxx. xx.xx. 31-17-1 et seq.
Effective June 5, 2002
---------------------------- ---------------------------------------- --------------------------
Standard & Poor's High Cost Loan Categorization
-----------------------------------------------
------------------------------------------------------------------------------------------------
State/Jurisdiction Name of Anti-Predatory Lending Category under
------------------ ------------------------------ --------------
Law/Effective Date Applicable Anti-
------------------ ----------------
Predatory Lending Law
---------------------
---------------------------- ---------------------------------------- --------------------------
Georgia (Oct. 1, 2002 - Georgia Fair Lending Act, Ga. Code Covered Loan
Mar. 6, 2003) Xxx. xx.xx. 7-6A-1 et seq.
Effective October 1, 2002 - March 6,
2003
---------------------------- ---------------------------------------- --------------------------
New Jersey New Jersey Home Ownership Security Act Covered Home Loan
of 2002, N.J. Rev. Stat. xx.xx. 46:10B-22
et seq.
Effective November 27, 2003 - July 5,
2004
---------------------------- ---------------------------------------- --------------------------
Standard & Poor's Home Loan Categorization
------------------------------------------
------------------------------------------------------------------------------------------------
State/Jurisdiction Name of Anti-Predatory Lending Category under
------------------ ------------------------------ --------------
Law/Effective Date Applicable Anti-
------------------ ----------------
Predatory Lending Law
---------------------
---------------------------- ---------------------------------------- --------------------------
Georgia (Oct. 1, 2002 - Georgia Fair Lending Act, Ga. Code Home Loan
Mar. 6, 2003) Xxx. xx.xx. 7-6A-1 et seq.
Effective October 1, 2002 - March 6,
2003
---------------------------- ---------------------------------------- --------------------------
New Jersey New Jersey Home Ownership Security Act Home Loan
of 2002, N.J. Rev. Stat. xx.xx. 46:10B-22
et seq.
Effective for loans closed on or after
November 27, 2003
---------------------------- ---------------------------------------- --------------------------
New Mexico Home Loan Protection Act, N.M. Rev. Home Loan
---------------------------- ---------------------------------------- --------------------------
Q-4
Standard & Poor's Home Loan Categorization
------------------------------------------
------------------------------------------------------------------------------------------------
State/Jurisdiction Name of Anti-Predatory Lending Category under
------------------ ------------------------------ --------------
Law/Effective Date Applicable Anti-
------------------ ----------------
Predatory Lending Law
---------------------
---------------------------- ---------------------------------------- --------------------------
Stat. xx.xx. 58-21A-1 et seq.
Effective as of January 1, 2004;
Revised as of February 26, 2004
---------------------------- ---------------------------------------- --------------------------
North Carolina Restrictions and Limitations on High Consumer Home Loan
Cost Home Loans, N.C. Gen. Stat. xx.xx.
24-1.1E et seq.
Effective July 1, 2000; amended
October 1, 2003 (adding open-end lines
of credit)
---------------------------- ---------------------------------------- --------------------------
South Carolina South Carolina High Cost and Consumer Consumer Home Loan
Home Loans Act, S.C. Code Xxx. xx.xx.
37-23-10 et seq.
Effective for loans taken on or after
January 1, 2004
---------------------------- ---------------------------------------- --------------------------
Q-5
EXHIBIT R
FORM OF LOST NOTE AFFIDAVIT - LA SALLE AS CUSTODIAN
I, as _________________________ (title) of ________ (the "Custodian"),
am authorized to make this Lost Note Affidavit on behalf of __________. In
connection with the administration of the Mortgage Loans held by
_______________ as Custodian on behalf of ____________ ("____") or the Trust
of such mortgage loans, as the case may be (the "Investor"), I (hereinafter
called "Deponent"), being duly sworn, depose and say that:
Custodian's address is:
[CUSTODIAN'S Address]
Custodian previously delivered to the Investor a signed Trust Receipt
with respect to the Mortgage Note referred to below;
Such Mortgage Note was endorsed or sold to the Investor by
_________________________ pursuant to the terms and provisions of a
____________________ Agreement dated and effective as of _________ ______,
____;
Such Mortgage Note is not outstanding pursuant to a Request for Release
of Documents;
Such Mortgage Note (hereinafter called the "Original") has been lost;
Deponent has made or has caused to be made diligent search for Original
and has been unable to find or recover same;
The Custodian was the Custodian of the Original at the time of loss; and
Deponent agrees that, if the Original should ever come into Custodian's
possession, custody or power, Custodian will immediately and without
consideration surrender Original to the Investor.
Attached hereto is a true and correct copy of the (i) Mortgage Note,
endorsed in blank by the Mortgagee, and (ii) [Mortgage][Deed of Trust] with
evidence of recording thereon which secures the Mortgage Note.
Deponent hereby agrees that the Custodian shall indemnify and hold
harmless the Purchaser, the Trust, the Servicer of the related Mortgage Loan
and their respective employees, officers, directors and agents against any
loss, liability or damage, including reasonable attorney's fees, resulting
from the unavailability of the Mortgage Note, including but not limited to any
loss, liability or damage arising from (i) any false statement contained in
this Lost Note Affidavit, (ii) any claim of any party that it has already
purchased a mortgage loan evidenced by the lost Mortgage Note or any interest
in such mortgage loan, (iii) any claim of any borrower with respect to the
existence of terms of a Mortgage Loan evidenced by the lost Mortgage Note,
(iv) the issuance of new instrument in lieu thereof and (v) any claim whether
or not based upon or arising from honoring or refusing to honor the Original
when presented by anyone (items (i) through (iv) above are hereinafter
referred to as the "Losses") and (b) if required by any Rating Agency in
connection with placing such lost Mortgage Note into a securitization
transaction, shall obtain a surety bond from an insurer acceptable to the
applicable Rating Agency in an amount acceptable to such Rating Agency to
cover any Losses with respect to such lost Mortgage Note.
Capitalized terms used herein but not defined herein have the meanings
given them in the Custodial Agreement, dated as of July 1, 2006, between
Xxxxxx Xxxxxxx Mortgage Capital Inc. and the Custodian.
This Lost Note Affidavit is intended to be relied on by the Investor,
its successors, and assigns and _______________________ represents and
warrants that it has the authority to perform its obligations under this Lost
Note Affidavit.
IN WITNESS WHEREOF, the Custodian has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by
its [title of officer] this _____ day of __________ 20__.
---------------------------------
[LA SALLE BANK NATIONAL ASSOCIATION]
By:
------------------------------------------
Name:
Title:
On this _________ day of _______________________, ____, before me
appeared ____________________________________________, to me personally known,
who being duly sworn did say that she/he is the ______________________________
of ______________________, and that said Lost Note Affidavit was signed and
sealed on behalf of such corporation and said _____________________________
acknowledged this instrument to be the free act and deed of said corporation.
Subscribed and sworn before me this _____ day of __________ 20__.
NOTARY PUBLIC
----------------------------
COUNTY OF ________________
STATE OF __________________
My commission expires the _____ day of __________ 20__.
Signature
Typed Name
SCHEDULE A
MORTGAGE LOAN SCHEDULE
[On File with the Trustee and the Securities Administrator]
S-A-1
SCHEDULE B
PRINCIPAL BALANCES SCHEDULE
[Attached to Prospectus Supplement, if applicable]
S-B-1
