Exhibit 4.1
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.,
Depositor
XXXXX FARGO BANK, N.A.
Master Servicer and Securities Administrator
and
HSBC BANK USA, NATIONAL ASSOCIATION,
Trustee
POOLING AND SERVICING AGREEMENT
comprised of,
the Stack I Pooling and Servicing Terms
and the Stack II Pooling and Servicing Terms
Dated as of September 1, 2006
----------
Mortgage Pass-Through Certificates, MLMI Series 2006-AF1
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.,
Depositor
XXXXX FARGO BANK, N.A.
Master Servicer and Securities Administrator
and
HSBC BANK USA, NATIONAL ASSOCIATION,
Trustee
STACK I POOLING AND SERVICING TERMS,
constituting,
along with the Stack II Pooling and Servicing Terms, the
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2006
----------
Mortgage Pass-Through Certificates, MLMI Series 2006-AF1
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS.................................................... 7
Section 1.02 Accounting............................................ 51
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES.................................................. 52
Section 2.01 Conveyance of Mortgage Loans to Trustee............... 52
Section 2.02 Acceptance of Mortgage Loans by Trustee............... 55
Section 2.03 Assignment of Interest in the Mortgage Loan
Purchase Agreement.................................... 58
Section 2.04 Substitution of Mortgage Loans........................ 59
Section 2.05 Issuance of Certificates.............................. 61
Section 2.06 Representations and Warranties Concerning
the Depositor......................................... 61
Section 2.07 Representations and Warranties Concerning the
Master Servicer and Securities Administrator.......... 62
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS............... 64
Section 3.01 Master Servicer....................................... 64
Section 3.02 REMIC-Related Covenants............................... 65
Section 3.03 Monitoring of Servicers............................... 65
Section 3.04 Fidelity Bond......................................... 66
Section 3.05 Power to Act; Procedures.............................. 66
Section 3.06 Due-on-Sale Clauses; Assumption Agreements............ 67
Section 3.07 Release of Mortgage Files............................. 67
Section 3.08 Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee....................... 68
Section 3.09 Standard Hazard Insurance and Flood Insurance
Policies.............................................. 69
Section 3.10 Presentment of Claims and Collection of Proceeds...... 69
Section 3.11 Maintenance of the Primary Mortgage Insurance
Policies.............................................. 70
Section 3.12 Trustee to Retain Possession of Certain Insurance
Policies and Documents................................ 70
Section 3.13 Realization Upon Defaulted Mortgage Loans............. 71
Section 3.14 Compensation for the Master Servicer.................. 71
Section 3.15 REO Property.......................................... 71
Section 3.16 Annual Statement as to Compliance..................... 72
Section 3.17 Reports on Assessment of Compliance and Attestation... 73
Section 3.18 Periodic Filings...................................... 75
Section 3.19 Compliance with Regulation AB......................... 82
ARTICLE IV ACCOUNTS...................................................... 83
Section 4.01 Protected Accounts.................................... 83
Section 4.02 Master Servicer Collection Account.................... 84
Section 4.03 Permitted Withdrawals and Transfers from the Master
Servicer Collection Account........................... 85
Section 4.04 Distribution Account.................................. 86
Section 4.05 Permitted Withdrawals and Transfers from the
Distribution Account.................................. 86
Section 4.06 [Reserved]............................................ 88
ARTICLE V CERTIFICATES................................................... 90
Section 5.01 The Certificates...................................... 90
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates.............................. 90
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates..... 94
Section 5.04 Persons Deemed Owners................................. 95
Section 5.05 Access to List of Certificateholders' Names and
Addresses............................................. 95
Section 5.06 Book-Entry Certificates............................... 95
Section 5.07 Notices to Depository................................. 96
Section 5.08 Definitive Certificates............................... 96
Section 5.09 Maintenance of Office or Agency....................... 97
ARTICLE VI PAYMENTS TO CERTIFICATEHOLDERS................................ 98
Section 6.01 Distributions on the Certificates..................... 98
Section 6.02 Allocation of Losses.................................. 103
Section 6.03 Payments.............................................. 104
Section 6.04 Statements to Certificateholders...................... 104
Section 6.05 Monthly Advances...................................... 107
Section 6.06 Compensating Interest Payments........................ 107
ARTICLE VII THE MASTER SERVICER AND THE DEPOSITOR........................ 108
Section 7.01 Liabilities of the Master Servicer.................... 108
Section 7.02 Merger or Consolidation of the Master Servicer........ 108
Section 7.03 Indemnification from the Master Servicer
and the Depositor..................................... 108
Section 7.04 Limitations on Liability of the Master
Servicer and Others................................... 109
Section 7.05 Master Servicer Not to Resign......................... 110
Section 7.06 Successor Master Servicer............................. 110
Section 7.07 Sale and Assignment of Master Servicing............... 110
ARTICLE VIII DEFAULT..................................................... 112
Section 8.01 Events of Default..................................... 112
Section 8.02 Trustee to Act; Appointment of Successor.............. 113
Section 8.03 Notification to Certificateholders.................... 114
Section 8.04 Waiver of Defaults.................................... 114
Section 8.05 List of Certificateholders............................ 115
ARTICLE IX CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR....... 116
iii
Section 9.01 Duties of Trustee..................................... 116
Section 9.02 Certain Matters Affecting the Trustee and the
Securities Administrator.............................. 118
Section 9.03 Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans........................ 120
Section 9.04 Trustee and Securities Administrator May Own
Certificates.......................................... 120
Section 9.05 Trustee's and Securities Administrator's Fees and
Expenses.............................................. 120
Section 9.06 Eligibility Requirements for Trustee and Securities
Administrator......................................... 121
Section 9.07 Insurance............................................. 122
Section 9.08 Resignation and Removal of the Trustee and Securities
Administrator......................................... 122
Section 9.09 Successor Trustee and Successor Securities
Administrator......................................... 123
Section 9.10 Merger or Consolidation of Trustee or Securities
Administrator......................................... 123
Section 9.11 Appointment of Co-Trustee or Separate Trustee......... 124
Section 9.12 Federal Information Returns and Reports to
Certificateholders; REMIC Administration.............. 125
ARTICLE X TERMINATION.................................................... 130
Section 10.01 Termination upon Liquidation or Repurchase of all
Mortgage Loans........................................ 130
Section 10.02 Final Distribution on the Certificates................ 131
Section 10.03 Additional Termination Requirements................... 132
ARTICLE XI MISCELLANEOUS PROVISIONS...................................... 134
Section 11.01 Intent of Parties..................................... 134
Section 11.02 Amendment............................................. 134
Section 11.03 Recordation of Agreement.............................. 136
Section 11.04 Limitation on Rights of Certificateholders............ 136
Section 11.05 Acts of Certificateholders............................ 136
Section 11.06 Governing Law......................................... 138
Section 11.07 Notices............................................... 138
Section 11.08 Severability of Provisions............................ 139
Section 11.09 Successors and Assigns................................ 139
Section 11.10 Article and Section Headings.......................... 139
Section 11.11 Counterparts.......................................... 139
Section 11.12 Notice to Rating Agencies............................. 139
ARTICLE XII REMIC ADMINISTRATION......................................... 140
Section 12.01 REMIC Administration.................................. 140
Section 12.02 Prohibited Transactions and Activities................ 140
Section 12.03 Indemnification with Respect to Prohibited
Transactions or Loss of REMIC Status.................. 140
Section 12.04 REO Property.......................................... 141
iv
EXHIBITS
Exhibit A-1 - Form of Class A and Class M Certificates
Exhibit A-2 - Form of Class B Certificates
Exhibit A-3 - Form of Class A-R Certificate
Exhibit A-4 - Form of Class P Certificate
Exhibit B - Mortgage Loan Schedule
Exhibit C - [Reserved]
Exhibit D - Request for Release of Documents
Exhibit E-1 - Form of Transferee's Letter and Affidavit
Exhibit E-2 - Form of Transferor Certificate
Exhibit F-1 - Form of Transferor Representation Letter
Exhibit F-2 - Form of Investor Representation Letter
Exhibit F-3 - Form of Rule 144A Letter
Exhibit G - Form of Custodial Agreement
Exhibit H - [Reserved]
Exhibit I-1 to I-6 - Assignment Agreements
Exhibit J - Mortgage Loan Purchase Agreement
Exhibit K - Servicing Criteria To Be Addressed in Assessment
of Compliance
Exhibit L - Form of Xxxxxxxx-Xxxxx Certification
Exhibit M - Form of Back-up Xxxxxxxx-Xxxxx Certification
Exhibit N - [Reserved]
Exhibit O - Additional Disclosure Notification
Exhibit P - Form of Item 1123 Certification of Servicer
Exhibit Q-1 - Additional Form 10-D Disclosure
Exhibit Q-2 - Additional Form 10-K Disclosure
Exhibit Q-3 - Form 8-K Disclosure Information
v
STACK I POOLING AND SERVICING TERMS
These Stack I Pooling and Servicing Terms are dated as of September 1, 2006
(the "Agreement," and, together with the Stack II Pooling and Servicing Terms
(the "Stack II Agreement") dated as of September 1, 2006, the "Pooling and
Servicing Agreement"), among XXXXXXX XXXXX MORTGAGE INVESTORS, INC., as
depositor (the "Depositor"), XXXXX FARGO BANK, N.A., as master servicer (in such
capacity, the "Master Servicer") and as securities administrator (in such
capacity, the "Securities Administrator") and HSBC BANK USA, NATIONAL
ASSOCIATION, as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor has acquired the Mortgage Loans from the Seller and at the
Closing Date is the owner of the Mortgage Loans and the other related property
being conveyed by the Depositor to the Trustee hereunder on behalf of the
Issuing Entity for inclusion in the Trust Fund. On the Closing Date, the
Depositor will acquire the Certificates from the Securities Administrator as
consideration for the Depositor's transfer to the Issuing Entity of the Mortgage
Loans and the other related property constituting that portion of the Trust Fund
relating to the Certificates. The Depositor has duly authorized the execution
and delivery of this Agreement to provide for the conveyance to the Issuing
Entity of the Mortgage Loans and the other related property constituting that
portion of the Trust Fund relating to the Certificates. All covenants and
agreements made by the Seller in the Mortgage Loan Purchase Agreement and in
this Agreement and all covenants and agreements made by the Depositor, the
Trustee, the Securities Administrator and the Master Servicer herein with
respect to the Mortgage Loans and the other related property constituting the
portion of the Trust Fund relating to the Certificates are for the benefit of
the Holders from time to time of the Certificates. The Depositor, the Trustee,
the Securities Administrator and the Master Servicer are entering into this
Agreement, and the Trustee on behalf of the Issuing Entity is accepting the
Trust Fund created hereby, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged.
In conjunction herewith, the Depositor has acquired the Stack II Mortgage
Loans from the Seller and at the Closing Date is the owner of the Stack II
Mortgage Loans and the other related property being conveyed by the Depositor to
the Trustee under the Stack II Agreement on behalf of the Issuing Entity for
inclusion in the Trust Fund. On the Closing Date, the Depositor will acquire the
Stack II Certificates from the Securities Administrator as consideration for the
Depositor's transfer to the Issuing Entity of the Stack II Mortgage Loans and
the other related property constituting that portion of the Trust Fund relating
to the Stack II Certificates. The Depositor has duly authorized the execution
and delivery of the Stack II Agreement to provide for the conveyance to the
Issuing Entity of the Stack II Mortgage Loans and the other related property
constituting that portion of the Trust Fund relating to the Stack II
Certificates. The terms and conditions relating to the issuance of the Stack II
Certificates are set forth in the Stack II Agreement.
As provided herein, the Securities Administrator shall elect that that
portion of the Trust Fund relating to Mortgage Group One, Mortgage Group Two and
Mortgage Group Three be treated for federal income tax purposes as comprising
two real estate mortgage investment conduits (each a "REMIC" or, in the
alternative, "REMIC 1" and the "Upper Tier REMIC," respectively) in a tiered
structure. The Certificates created under this Agreement, other than the
Class A-R Certificate and the Class P Certificate, shall represent ownership of
regular interests in the Upper Tier REMIC. The Class A-R Certificate represents
the sole class of residual interest in each of REMIC 1, the Upper Tier REMIC and
any REMIC created under the Stack II Agreement.
The Upper Tier REMIC shall hold as its assets the several classes of
uncertificated REMIC 1 Regular Interests. REMIC 1 shall hold as its assets the
property of the Trust Fund relating to Mortgage Group One, Mortgage Group Two
and Mortgage Group Three other than (i) the REMIC 1 Interests and (ii) the
amounts payable to the Class P Certificates.
Each Upper Tier REMIC Regular Interest is hereby designated as a regular
interest in the Upper Tier REMIC for purposes of the REMIC Provisions. Each
REMIC 1 Regular Interest is hereby designated as a regular interest in REMIC 1
for purposes of the REMIC Provisions.
The Class LT1-R Interest is hereby designated as the sole class of residual
interest in REMIC 1 for purposes of the REMIC Provisions. The Class UT-R
Interest is hereby designated as the sole class of residual interest in the
Upper Tier REMIC for purposes of the REMIC Provisions. The Class A-R Certificate
shall represent the Class LT1-R Interest, the Class UT-R Interest and the
residual interest in any REMIC created under the Stack II Agreement.
THE REMIC 1 INTERESTS
The following table sets forth (or describes) the class designation, interest
rate, initial principal balance, and related group of Mortgage Loans for each
class of REMIC 1 Interests:
Principal Interest Related Mortgage groups
Class Designation Balance Rate or Mortgage Group
--------------------- --------- -------- -----------------------
LT11A (2) (9) Mortgage Group One
LT11B (3) (10) Mortgage Group One
LT12A (4) (9) Mortgage Group Two
LT12B (5) (11) Mortgage Group Two
LT13A (6) (9) Mortgage Group Three
LT13B (7) (12) Mortgage Group Three
LT1Z (8) (9) Mortgage Group One,
Mortgage Group Two and
Mortgage Group Three
LT1PO Component One (13) 0.00% Mortgage Group One
LT1PO Component Two (14) 0.00% Mortgage Group Two
LT1PO Component Three (15) 0.00% Mortgage Group Three
LT1IO Component One (16) 6.25% Mortgage Group One
LT1IO Component Two (17) 6.25% Mortgage Group Two
LT1IO Component Three (18) 6.25% Mortgage Group Three
LT1-R (1) (1) N/A
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(1) The Class LT1-R Interest represents the sole class of residual interest in
REMIC 1 and has neither a principal amount nor an interest rate. The Class
LT1-R Interest shall be represented by the Class A-R Certificate.
(2) The initial principal balance of the Class LT11A Interest shall equal 1% of
the excess of (x) the initial Group One Non-PO Allocated Amount over (y)
the initial principal balances of the Class AF-1 Certificates.
(3) The initial principal balance of the Class LT11B Interest shall equal 1% of
the initial Group One Non-PO Allocated
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Amount.
(4) The initial principal balance of the Class LT12A Interest shall equal 1% of
the excess of (x) the initial Group Two Non-PO Allocated Amount over (y)
the initial principal balances of the Class AF-2 Certificates.
(5) The initial principal balance of the Class LT12B Interest shall equal 1% of
the initial Group Two Non-PO Allocated Amount.
(6) The initial principal balance of the Class LT13A Interest shall equal 1% of
the excess of (x) the initial Group Three Non-PO Allocated Amount over (y)
the initial principal balances of the Class AF-3 Certificates.
(7) The initial principal balance of the Class LT13B Interest shall equal 1% of
the initial Group Three Non-PO Allocated Amount.
(8) The initial principal balance of the Class LT1Z Interest shall equal the
excess of (x) the sum of the initial Group One Non-PO Allocated Amount, the
initial Group Two Non-PO Allocated Amount and the initial Group Three
Non-PO Allocated Amount over (y) the sum of the initial principal amounts
of each of the REMIC 1 Regular Interests with a designation ending in "A"
or "B".
(9) The Class LT11A Interest, the Class LT12A Interest, the Class LT13A
Interest and the Class LT1Z Interest shall have an interest rate for each
Distribution Date (and the related Accrual Period) equal to the weighted
average of the Group One Remittance Rate, the Group Two Remittance Rate and
the Group Three Remittance Rate (weighted based on the Group One Non-PO
Allocated Amount, the Group Two Non-PO Allocated Amount and the Group Three
Non-PO Allocated Amount, respectively, at the beginning of the related Due
Period).
(10) The Class LT11B Interest shall have an interest rate for any Distribution
Date (and the related Accrual Period) equal to the Group One Remittance
Rate.
(11) The Class LT12B Interest shall have an interest rate for any Distribution
Date (and the related Accrual Period) equal to the Group Two Remittance
Rate.
(12) The Class LT13B Interest shall have an interest rate for any Distribution
Date (and the related Accrual Period) equal to the Group Three Remittance
Rate.
(13) The initial principal balance of the Class LT1PO Component One Interest
shall equal the initial principal amount of Class PO Component One.
(14) The initial principal balance of the Class LT1PO Component Two Interest
shall equal the initial principal amount of Class PO Component Two.
(15) The initial principal balance of the Class LT1PO Component Three Interest
shall equal the initial principal amount of Class PO Component Three.
(16) The Class LT1IO Component One Interest is an interest-only interest, has no
principal balance, is not entitled to payments of principal and will bear
interest on its notional amount. The notional amount of the Class LT1IO
Component One Interest shall equal the Class IO Component One Notional
Amount.
(17) The Class LT1IO Component Two Interest is an interest-only interest, has no
principal balance, is not entitled to payments of principal and will bear
interest on its notional amount. The notional amount of the Class LT1IO
Component Two Interest shall equal the Class IO Component Two Notional
Amount.
(18) The Class LT1IO Component Three Interest is an interest-only interest, has
no principal balance, is not entitled to payments of principal and will
bear interest on its notional amount. The notional amount of the Class
LT1IO Component Three Interest shall equal the Class IO Component Three
Notional Amount.
On each Distribution Date, the Securities Administrator shall first pay or
charge as an expense of REMIC 1 all expenses of the Issuing Entity relating to
Mortgage Group One, Mortgage Group Two and Mortgage Group Three for such
Distribution Date.
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Interest shall be payable to, and shortfalls and losses are allocable to,
the Class LT1IO Component One Interest as such amounts are payable or allocable
to Class IO Component One. Interest shall be payable to, and shortfalls and
losses are allocable to, the Class LT1IO Component Two Interest as such amounts
are payable or allocable to Class IO Component Two. Interest shall be payable
to, and shortfalls and losses are allocable to, the Class LT1IO Component Three
Interest as such amounts are payable or allocable to Class IO Component Three.
Principal shall be payable to, and shortfalls, losses, prepayments and
increases in principal amount related to Subsequent Recoveries are allocable to,
the Class LT1PO Component One Interest as such amounts are payable or allocable
to Class PO Component One. Principal shall be payable to, and shortfalls,
losses, prepayments and increases in principal amount related to Subsequent
Recoveries are allocable to, the Class LT1PO Component Two Interest as such
amounts are payable or allocable to Class PO Component Two. Principal shall be
payable to, and shortfalls, losses, prepayments and increases in principal
amount related to Subsequent Recoveries are allocable to, the Class LT1PO
Component Three Interest as such amounts are payable or allocable to Class PO
Component Three.
After the allocations and distributions are made pursuant to the two
immediately preceding paragraphs, principal distributions shall be deemed to be
made and Realized Losses shall be deemed allocated to the REMIC 1 Interests
first, so as to keep the uncertificated principal balance of each REMIC 1
Interest ending with the designation "A" equal to 1% of the excess of (x) the
Group One Non-PO Allocated Amount (in the case of the Class LT11A Interest), the
Group Two Non-PO Allocated Amount (in the case of the Class LT12A Interest) or
the Group Three Non-PO Allocated Amount (in the case of the Class LT13A
Interest) over (y) the aggregate class principal amounts of the Class AF-1
Certificates (in the case of the Class LT11A Interest), the Class AF-2
Certificates (in the case of the Class LT12A Interest) or the Class AF-3
Certificates (in the case of the Class LT13A Interest) (except that if 1% of any
such excess is greater than the principal amount of the corresponding REMIC 1
Interest ending with the designation "A", the least amount of principal and
Realized Losses shall be distributed and allocated to such REMIC 1 Interests
such that the REMIC 1 Subordinate Balance Ratio is maintained); second, to each
REMIC 1 Interest ending with the designation "B" so as to keep the
uncertificated principal balance of each such REMIC 1 Interest equal to 1% of
the Group One Non-PO Allocated Amount (in the case of the Class LT11B Interest),
Group Two Non-PO Allocated Amount (in the case of the Class LT12B Interest) or
Group Three Non-PO Allocated Amount (in the case of the Class LT13B Interest)
and finally, all remaining principal amounts and Realized Losses shall be
distributed and allocated in respect of the Class LT1Z Interest.
If on any Distribution Date the Class Certificate Balance of any Class of
Certificates (other than the Class PO Certificates) is increased due to
Subsequent Recoveries pursuant to the definition of "Class Certificate Balance",
then there shall be an equivalent aggregate increase in the principal amounts of
the REMIC 1 Regular Interests, with such increase allocated (before the making
of distributions and the allocation of losses on the REMIC 1 Regular Interests
on such Distribution Date) among the REMIC 1 Regular Interests as follows: (i)
first, to each REMIC 1 Interest ending with the designation "B" so as to keep
the uncertificated principal balance of each such REMIC 1 Interest equal to 1%
of the Group One Non-PO Allocated Amount (in the case of the Class LT11B
Interest), Group Two Non-PO Allocated Amount (in the case of the
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Class LT12B Interest) or Group Three Non-PO Allocated Amount (in the case of the
Class LT13B Interest), (ii) second, to each REMIC 1 Regular Interest ending with
the designation "A", so that the uncertificated principal balance of each REMIC
1 Regular Interest ending with the designation "A" is as close as possible to
(but does not exceed) 1% of the excess of (x) the Group One Non-PO Allocated
Amount (in the case of the Class LT11A Interest), the Group Two Non-PO Allocated
Amount (in the case of the Class LT12A Interest) or the Group Three Non-PO
Allocated Amount (in the case of the Class LT13A Interest) over (y) the
aggregate Class Certificate Balances of the Class AF-1 Certificates (in the case
of the Class LT11A Interest), the Class AF-2 Certificates (in the case of the
Class LT12A Interest) or the Class AF-3 Certificates (in the case of the Class
LT13A Interest); provided, however, that (a) the REMIC 1 Subordinate Balance
Ratio is maintained and (b) amounts allocated to any REMIC 1 Regular Interest
pursuant to this clause (ii) shall not exceed the amount of any previous
realized losses allocated to such REMIC 1 Regular Interest not previously offset
by distributions or increases in the principal amount of such REMIC 1 Regular
Interest and (iii) finally, all remaining amounts to the Class LT1Z Interest.
All computations with respect to the REMIC 1 Interests shall be computed to
eight decimal places.
THE CERTIFICATES
The following table sets forth (or describes) the Class designation,
Certificate Rate, initial Class Certificate Balance or initial notional amount,
and minimum denomination for each Class of Certificates comprising interests in
the Trust Fund created hereunder.
Initial Class
Certificate Balance
Class Certificate or Initial Notional Minimum Denominations
Designation Rate Amount or Percentage Interest
----------- ----------- ------------------- ----------------------
Class AF-1 5.75% $102,615,000 $25,000.00
Class AF-2A (1) $ 68,555,000 $25,000.00
Class AF-2B (1) $ 60,939,000 $25,000.00
Class AF-2C (1) $ 7,616,000 $25,000.00
Class AF-3A (1) $ 88,739,000 $25,000.00
Class AF-3B (1) $ 11,200,000 $25,000.00
Class IO (1) (2) $25,000.00
Class PO (3) $ 5,728,823
Class MF-1 (4) $ 7,513,000 $25,000.00
Class MF-2 (4) $ 4,397,000 $25,000.00
Class MF-3 (4) $ 2,748,000 $25,000.00
Class BF-1 (4) $ 2,748,000 $25,000.00
Class BF-2 (4) $ 2,015,000 $25,000.00
Class BF-3 (4) $ 1,651,245 $25,000.00
Class P N/A N/A (5) 100%
(1) The Certificate Rate with respect to any Distribution Date (and the related
Accrual Period) will be 6.25%.
(2) The class IO certificates are interest-only certificates. The class IO
certificates will accrue interest on their class notional amount.
(3) The class PO certificates are principal-only certificates and are not
entitled to payments of interest.
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(4) The Certificate Rate with respect to any Distribution Date (and the related
Accrual Period) will equal the fraction, expressed as a percentage, the
numerator of which will equal the sum of (A) the product of (x) the Group
One Remittance Rate and (y) the Group One Subordinated Amount, (B) the
product of (x) the Group Two Remittance Rate and (y) the Group Two
Subordinated Amount and (C) the product of (x) the Group Three Remittance
Rate and (y) the Group Three Subordinated Amount and the denominator of
which will equal the sum of the Group One Subordinated Amount, the Group
Two Subordinated Amount and the Group Three Subordinated Amount.
(5) The Class P Certificates will be entitled to receive Prepayment Penalties
on the Prepayment Penalty Mortgage Loans.
The Class IO Certificates consist of three components. With respect to the
first Distribution Date, the notional amount of the Class IO Component One will
be $9,843,605, the notional amount of the Class IO Component Two will be
$8,948,750 and the notional amount of the Class IO Component Three will be
$3,752,473.
The Class PO Certificates consist of three components, referred to herein
as the "Class PO Component One," "Class PO Component Two," and "Class PO
Component Three."
As of the Cut-off Date, the Mortgage Loans had an aggregate Stated
Principal Balance of $366,465,068.31.
In consideration of the mutual agreements herein contained, the Depositor,
the Trustee, Securities Administrator and the Master Servicer hereby agree as
follows:
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ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
otherwise expressly provided or unless the context otherwise requires, shall
have the meanings specified in this Article.
Accepted Master Servicing Practices: With respect to any Mortgage Loan, as
applicable, either (x) those customary mortgage master servicing practices of
prudent mortgage servicing institutions that master service mortgage loans of
the same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the Trustee
or the Master Servicer (except in its capacity as successor to a Servicer), or
(y) as provided in the applicable Servicing Agreement, to the extent applicable
to any Servicer, but in no event below the standard set forth in clause (x).
Account: The Master Servicer Collection Account, Distribution Account and
any Protected Account as the context may require.
Accountant's Attestation: As defined in Section 3.17.
Accrual Period: With respect to any Distribution Date, the calendar month
immediately preceding the month in which the related Distribution Date occurs.
Interest shall accrue on all Classes of Certificates and REMIC 1 Regular
Interests on the basis of a 360-day year consisting of twelve 30-day months.
Accrued Certificate Interest: With respect to each Class of Certificates,
an amount equal to the interest accrued during the related Accrual Period on the
Class Certificate Balance thereof at the then-applicable Certificate Rate.
Accrued Certificate Interest on any Class of Certificates will be reduced by the
amount of (i) Prepayment Interest Shortfalls (to the extent not offset by the
related Servicer or Master Servicer with a payment of Compensating Interest as
provided in Section 6.06), (ii) the interest portion of Realized Losses
allocated to such Class of Certificates pursuant to Section 6.02 and (iii) any
other interest shortfalls not covered by the subordination provided by the Class
M Certificates and Class B Certificates, including shortfalls as a result of the
Relief Act or similar legislation or regulations, with all such reductions
allocated among all of the Certificates in proportion to their respective
amounts of Accrued Certificate Interest payable on such Distribution Date which
would have resulted absent such reductions.
Additional Disclosure Notification: As defined in Section 3.18(b).
Additional Form 10-D Disclosure: As defined in Section 3.18(e).
Additional Form 10-K Disclosure: As defined in Section 3.18(h).
Adverse REMIC Event: As defined in Section 9.12(g).
Affiliate: As to any Person, any other Person controlling, controlled by or
under common control with such Person. "Control" means the power to direct the
management and policies of a Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise. "Controlled" and
"Controlling" have meanings correlative to the foregoing. The
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Master Servicer may conclusively presume that a Person is not an Affiliate of
another Person unless a Responsible Officer of the Master Servicer has actual
knowledge to the contrary.
Aggregate Subordinated Percentage: The meaning set forth in Section
6.01(I)(b)(viii)(A) hereof.
Agreement: This Stack I Pooling and Servicing Agreement, including the
exhibits hereto, and all amendments hereof and supplements hereto.
Applicable Credit Rating: For any long-term deposit or security, a credit
rating of AAA in the case of S&P or Aaa in the case of Xxxxx'x. For any
short-term deposit or security, a rating of A-l+ in the case of S&P or P-1 in
the case of Xxxxx'x.
Appraised Value: For any Mortgaged Property related to a Mortgage Loan, the
amount set forth as the appraised value of such Mortgaged Property in an
appraisal made for the mortgage originator in connection with its origination of
the related Mortgage Loan.
Assessment of Compliance: As defined in Section 3.17.
Assignment: An assignment of the Mortgage, notice of transfer or equivalent
instrument, in recordable form, sufficient under the laws of the jurisdiction
wherein the related Mortgaged Property is located to reflect of record the sale
of the Mortgage Loan to the Trustee for the benefit of Certificateholders, which
assignment, notice of transfer or equivalent instrument may be in the form of
one or more blanket assignments covering Mortgages secured by Mortgaged
Properties located in the same county, if permitted by law and accompanied by an
Opinion of Counsel to that effect.
Assignment Agreements: The CitiMortgage Assignment Agreement, the IndyMac
Assignment Agreement, and the PHH Assignment Agreement, which are attached
hereto as Exhibits I-1, I-2, and I-4, respectively.
Auction: The one-time auction conducted by the Securities Administrator, as
described in Section 10.01(b) hereof.
Available Distribution Amount: As to each Mortgage Group or, as the context
requires, all Mortgage Groups, on any Distribution Date, an amount equal to the
amount on deposit in the Master Servicer Collection Account with respect to such
Mortgage Group as of the close of business two Business Days immediately
preceding the related Distribution Date (but prior to making any deposits into
the Certificate Account on such date) except:
(a) amounts received on particular Mortgage Loans in such Mortgage Group as
late payments or other recoveries of principal or interest (including any
Subsequent Recoveries, Liquidation Proceeds, Insurance Proceeds and condemnation
awards) and respecting which the Servicer previously made an unreimbursed
Advance of such amounts;
(b) reimbursement for Nonrecoverable Advances and other amounts permitted
to be withdrawn by the Servicer pursuant to Section 5.09 from, or not required
to be deposited in, the Master Servicer Collection Account attributable, in each
case, to Mortgage Loans in such Mortgage Group;
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(c) amounts representing the Servicing Fee attributable in each case to the
Mortgage Loans in such Mortgage Group with respect to such Distribution Date;
(d) amounts representing all or part of a Monthly Payment with respect to a
Mortgage Loan in such Mortgage Group due (i) after the related Due Period or
(ii) on or prior to the Cut-off Date;
(e) all Repurchase Proceeds, Principal Prepayments, Liquidation Proceeds,
Insurance Proceeds, Subsequent Recoveries and condemnation awards with respect
to Mortgage Loans in such Mortgage Group received after the related Principal
Prepayment Period, and all related payments of interest representing interest
for any period of time after the last day of the related Due Period for such
Mortgage Loans; and
(f) all income from eligible investments held in the Master Servicer
Collection Account for the account of the Servicer.
Back-Up Certification: As defined in Section 3.18(k).
Bankruptcy Code: The United States Bankruptcy Code, as amended as codified
in 11 U.S.C. Sections 101-1330.
Book-Entry Certificates: Any of the Certificates that shall be registered
in the name of the Depository or its nominee, the ownership of which is
reflected on the books of the Depository or on the books of a Person maintaining
an account with the Depository (directly, as a "Depository Participant", or
indirectly, as an indirect participant in accordance with the rules of the
Depository and as described in Section 5.02 hereof). On the Closing Date, the
Certificates (other than the Class A-R Certificate and the Private Certificates)
shall be Book-Entry Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a day
on which the New York Stock Exchange or Federal Reserve is closed or on which
banking institutions in the jurisdiction in which the Trustee, the Master
Servicer, any Servicer or the Securities Administrator are authorized or
obligated by law or executive order to be closed.
Carry-Over Subordinated Principal Amount: As of any Distribution Date, with
respect to any Class of Subordinate Certificates, an amount, if any, equal to
the amount of principal distributable to such Class on any prior Distribution
Date that has not been so distributed.
Certificate: Any mortgage pass-through certificate issued pursuant to this
Agreement, evidencing a beneficial ownership interest in that portion of the
Trust Fund related to the Mortgage Loans, signed and countersigned by the
Securities Administrator. For the avoidance of doubt, as defined below, the term
"Stack II Certificate" shall be used to refer to any mortgage pass-through
certificate issued pursuant to the Stack II Agreement, evidencing a beneficial
ownership interest in that portion of the Trust Fund related to the Stack II
Mortgage Loans, signed and countersigned by the Securities Administrator.
Certificate Group: Each of the Class AF-1 Certificates, the Class AF-2
Certificates and the Class AF-3 Certificates.
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Certificate Owner: With respect to each Book-Entry Certificate, any
beneficial owner thereof.
Certificate Rate: The per annum rate of interest borne by each Class of
Certificates (other than the Class PO Certificates), which (i) in the case of
the Class AF-1 will be 5.75%, (ii) which in the case of the Class AF-2A, Class
AF-2B, Class AF-2C, Class AF-3A, Class AF-3B and Class IO Certificates will be
6.25% and (iii) with respect to each Class of Subordinate Certificates, will
equal the fraction, expressed as a percentage, the numerator of which will equal
the sum of (A) the product of (x) the Group One Remittance Rate and (y) the
Group One Subordinated Amount, (B) the product of (x) the Group Two Remittance
Rate and (y) the Group Two Subordinated Amount and (C) the product of (x) the
Group Three Remittance Rate and (y) the Group Three Subordinated Amount and the
denominator of which will equal the sum of the Group One Subordinated Amount,
the Group Two Subordinated Amount and the Group Three Subordinated Amount.
Certificate Register: The register maintained pursuant to Section 5.02
hereof.
Certificateholder or Holder: The Person in whose name a Regular Certificate
is registered in the Certificate Register, except that a Disqualified
Organization or non-U.S. Person shall not be a Holder of the Class A-R
Certificate for any purpose hereof.
Certification Parties: As defined in Section 3.18(k).
Certifying Person: As defined in Section 3.18(k).
CitiMortgage: CitiMortgage, Inc.
CitiMortgage Assignment Agreement: The Assignment, Assumption and
Recognition Agreement, dated as of September 1, 2006, among CitiMortgage, the
Depositor and the Seller pursuant to which the CitiMortgage Servicing Agreement
and the rights of the Seller thereunder (other than the rights to enforce the
representations and warranties with respect to the CitiMortgage Loans) were
assigned to the Depositor for the benefit of the Certificateholders.
CitiMortgage Loans: The Mortgage Loans serviced by CitiMortgage pursuant to
the CitiMortgage Servicing Agreement.
CitiMortgage Servicing Agreement: The Mortgage Servicing Purchase and Sale
Agreement dated as of September 1, 2006, between CitiMortgage as seller and MLML
as purchaser, as at any time in effect.
Class: Collectively, Certificates which have the same priority of payment
and bear the same class designation and the form of which is identical except
for variation in the Percentage Interest evidenced thereby.
Class A Certificate: Any of the Class AF-1, Class AF-2A, Class AF-2B, Class
AF-2C, Class AF-3A, Class AF-3B, Class IO or Class PO Certificates as designated
on the face thereof substantially in the form annexed (other than the Class A-R
Certificate) hereto as Exhibits A-1, executed by the Securities Administrator
and authenticated and delivered by the Securities Administrator, representing
the right to distributions as set forth herein and therein.
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Class A Certificateholder: Any Holder of a Class A Certificate.
Class A-R Certificate: The Class A-R Certificate created and issued under
the Stack II Agreement.
Class AF-1 Certificate: Any one of the Class AF-1 Certificates, executed by
the Securities Administrator and authenticated and delivered by the Securities
Administrator, senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit A-1 hereto.
Class AF-1 Interest Accrual Amount: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Class Certificate Balance of
the Class AF-1 Certificates minus (i) any Compensating Interest Shortfall
allocated to the Class AF-1 Certificates on such Distribution Date pursuant to
Section 6.07(a), (ii) any Realized Loss Interest Shortfall allocated to the
Class AF-1 Certificates on such Distribution Date pursuant to Section 6.07(b),
and (iii) any interest shortfall resulting from the Relief Act allocated to the
Class AF-1 Certificates on such Distribution Date pursuant to Section 6.07(c).
Class AF-1 Shortfall: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class AF-1 Interest Accrual Amount over the
amount actually distributed to the Class AF-1 Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(A).
Class AF-2 Certificate: The Class AF-2A, Class AF-2B and Class AF-2C
Certificates, referred to collectively.
Class AF-2A Certificate: Any one of the Class AF-2A Certificates, executed
by the Securities Administrator and authenticated and delivered by the
Securities Administrator, senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit A-1 hereto.
Class AF-2A Interest Accrual Amount: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Class Certificate Balance of
the Class AF-2A Certificates minus (i) any Compensating Interest Shortfall
allocated to the Class AF-2A Certificates on such Distribution Date pursuant to
Section 6.07(a), (ii) any Realized Loss Interest Shortfall allocated to the
Class AF-2A Certificates on such Distribution Date pursuant to Section 6.07(b),
and (iii) any interest shortfall resulting from the Relief Act allocated to the
Class AF-2A Certificates on such Distribution Date pursuant to Section 6.07(c).
Class AF-2A Shortfall: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class AF-2A Interest Accrual Amount over the
amount actually distributed to the Class AF-2A Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(B).
Class AF-2B Certificate: Any one of the Class AF-2B Certificates, executed
by the Securities Administrator and authenticated and delivered by the
Securities Administrator, senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit A-1 hereto.
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Class AF-2B Interest Accrual Amount: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Class Certificate Balance of
the Class AF-2B Certificates minus (i) any Compensating Interest Shortfall
allocated to the Class AF-2B Certificates on such Distribution Date pursuant to
Section 6.07(a), (ii) any Realized Loss Interest Shortfall allocated to the
Class AF-2B Certificates on such Distribution Date pursuant to Section 6.07(b),
and (iii) any interest shortfall resulting from the Relief Act allocated to the
Class AF-2B Certificates on such Distribution Date pursuant to Section 6.07(c).
Class AF-2B Shortfall: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class AF-2B Interest Accrual Amount over the
amount actually distributed to the Class AF-2B Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(C).
Class AF-2C Certificate: Any one of the Class AF-2C Certificates, executed
by the Securities Administrator and authenticated and delivered by the
Securities Administrator, senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit A-1 hereto.
Class AF-2C Interest Accrual Amount: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Class Certificate Balance of
the Class AF-2C Certificates minus (i) any Compensating Interest Shortfall
allocated to the Class AF-2C Certificates on such Distribution Date pursuant to
Section 6.07(a), (ii) any Realized Loss Interest Shortfall allocated to the
Class AF-2C Certificates on such Distribution Date pursuant to Section 6.07(b),
and (iii) any interest shortfall resulting from the Relief Act allocated to the
Class AF-2C Certificates on such Distribution Date pursuant to Section 6.07(c).
Class AF-2C Shortfall: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class AF-2C Interest Accrual Amount over the
amount actually distributed to the Class AF-2C Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(D).
Class AF-3 Certificate: The Class AF-3A and Class AF-3B Certificates,
referred to collectively.
Class AF-3A Certificate: Any one of the Class AF-3A Certificates, executed
by the Securities Administrator and authenticated and delivered by the
Securities Administrator, substantially in the form of the Class A Certificate
set forth in Exhibit A-1 hereto.
Class AF-3A Interest Accrual Amount: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Class Certificate Balance of
the Class AF-3A Certificates minus (i) any Compensating Interest Shortfall
allocated to the Class AF-3A Certificates on such Distribution Date pursuant to
Section 6.07(a), (ii) any Realized Loss Interest Shortfall allocated to the
Class AF-3A Certificates on such Distribution Date pursuant to Section 6.07(b),
and (iii) any interest shortfall resulting from the Relief Act allocated to the
Class AF-3A Certificates on such Distribution Date pursuant to Section 6.07(c).
Class AF-3A Shortfall: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class AF-3A Interest Accrual Amount over the
amount actually distributed
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to the Class AF-3A Certificateholders on such Distribution Date pursuant to
Section 6.01(I)(b)(i)(E).
Class AF-3B Certificate: Any one of the Class AF-3B Certificates, executed
by the Securities Administrator and authenticated and delivered by the
Securities Administrator, senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit A-1 hereto.
Class AF-3B Interest Accrual Amount: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Class Certificate Balance of
the Class AF-3B Certificates minus (i) any Compensating Interest Shortfall
allocated to the Class AF-3B Certificates on such Distribution Date pursuant to
Section 6.07(a), (ii) any Realized Loss Interest Shortfall allocated to the
Class AF-3B Certificates on such Distribution Date pursuant to Section 6.07(b),
and (iii) any interest shortfall resulting from the Relief Act allocated to the
Class AF-3B Certificates on such Distribution Date pursuant to Section 6.07(c).
Class AF-3B Shortfall: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class AF-3B Interest Accrual Amount over the
amount actually distributed to the Class AF-3B Certificateholders on such
Distribution Date pursuant to Section 6.01(I)(b)(i)(F).
Class B Certificate: Any one of the Class BF-1, Class BF-2 or Class BF-3
Certificates as designated on the face thereof substantially in the form annexed
hereto as Exhibit A-2, executed by the Securities Administrator and
authenticated and delivered by the Securities Administrator, representing the
right to distributions as set forth herein and therein.
Class B Certificateholder: Any Holder of a Class B Certificate.
Class B Percentage: As of any Distribution Date, the difference between
100% and the sum of (i) the Class A Percentage and (ii) the Class M Percentage
for such Distribution Date.
Class BF-1 Certificate: Any one of the Class BF-1 Certificates executed by
the Securities Administrator and authenticated and delivered by the Securities
Administrator, subordinated in right of payment to the Class A and Class M
Certificates, substantially in the form of the Class B Certificate set forth in
Exhibit A-2 hereto.
Class BF-1 Interest Accrual Amount: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Class Certificate Balance of
the Class BF-1 Certificates minus (i) any Compensating Interest Shortfall
allocated to the Class BF-1 Certificates on such Distribution Date pursuant to
Section 6.07(a), (ii) any Realized Loss Interest Shortfall allocated to the
Class BF-1 Certificates on such Distribution Date pursuant to Section 6.07(b)
and (iii) any interest shortfall resulting from the Relief Act allocated to the
Class BF-1 Certificates on such Distribution Date pursuant to Section 6.07(c).
Class BF-1 Shortfall: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class BF-1 Interest Accrual Amount over the
amount actually distributed to the Class BF-1 Certificates on such Distribution
Date pursuant to Section 6.01(I)(d)(i) (A) and (B).
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Class BF-2 Certificate: Any one of the Class BF-2 Certificates executed by
the Securities Administrator and authenticated and delivered by the Securities
Administrator, subordinated in right of payment to the Class A, Class M and
Class BF-1 Certificates, substantially in the form of the Class B Certificate
set forth in Exhibit A-2 hereto.
Class BF-2 Interest Accrual Amount: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Class Certificate Balance of
the Class BF-2 Certificates minus (i) any Compensating Interest Shortfall
allocated to the Class BF-2 Certificates on such Distribution Date pursuant to
Section 6.07(a), (ii) any Realized Loss Interest Shortfall allocated to the
Class BF-2 Certificates on such Distribution Date pursuant to Section 6.07(b)
and (iii) any interest shortfall resulting from the Relief Act allocated to the
Class BF-2 Certificates on such Distribution Date pursuant to Section 6.07(c).
Class BF-2 Shortfall: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class BF-2 Interest Accrual Amount over the
amount actually distributed to the Class BF-2 Certificates on such Distribution
Date pursuant to Section 6.01(I)(d)(ii) (A) and (B).
Class BF-3 Certificate: Any one of the Class BF-3 Certificates executed by
the Securities Administrator and authenticated and delivered by the Securities
Administrator, subordinated in right of payment to the Class A, Class M, Class
BF-1 and Class BF-2 Certificates, substantially in the form of the Class B
Certificate set forth in Exhibit A-2 hereto.
Class BF-3 Interest Accrual Amount: With respect to any Distribution Date,
one month's interest at the Certificate Rate on the Class Certificate Balance of
the Class BF-3 Certificates minus (i) any Compensating Interest Shortfall
allocated to the Class BF-3 Certificates on such Distribution Date pursuant to
Section 6.07(a), (ii) any Realized Loss Interest Shortfall allocated to the
Class BF-3 Certificates on such Distribution Date pursuant to Section 6.07(b)
and (iii) any interest shortfall resulting from the Relief Act allocated to the
Class BF-3 Certificates on such Distribution Date pursuant to Section 6.07(c).
Class BF-3 Shortfall: With respect to any Distribution Date, the amount
equal to the excess, if any, of the Class BF-3 Interest Accrual Amount over the
amount actually distributed to the Class BF-3 Certificates on such Distribution
Date pursuant to Section 6.01(I)(d)(iii) (A) and (B).
Class Certificate Balance: With respect to any Certificate (other than the
Class IO Certificates) as of any date of determination, the Class Certificate
Balance of such Certificate on the Distribution Date immediately prior to such
date of determination, plus any Subsequent Recoveries added to the Class
Certificate Balance of such Certificate pursuant to Section 6.01, and reduced by
the aggregate of (a) all distributions of principal made thereon on such
immediately prior Distribution Date and (b) without duplication of amounts
described in clause (a) above, reductions in the Class Certificate Balance
thereof in connection with allocations thereto of Realized Losses on the
Mortgage Loans and Extraordinary Trust Fund Expenses on such immediately prior
Distribution Date (or, in the case of any date of determination up to and
including the initial Distribution Date, the initial Class Certificate Balance
of such Certificate, as stated on the face thereof); provided, however, that the
Class Certificate Balance of each Subordinate Certificate of the Class of
Subordinate Certificates outstanding with the highest
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numerical designation at any given time shall be calculated to equal the
Percentage Interest evidenced by such Certificate multiplied by the excess, if
any, of (A) the then aggregate Stated Principal Balance of the Mortgage Loans
over (B) the then aggregate Class Certificate Balance of all other Classes of
Certificates then outstanding.
Class IO Certificate: Any one of the Class IO Certificates, executed by the
Securities Administrator and authenticated and delivered by the Securities
Administrator, senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit A-1 hereto.
Class IO Component One: The portion of the Class IO Certificate so
designated under the heading "The Certificates" in the Preliminary Statement
hereto.
Class IO Component One Interest Accrual Amount: With respect to any
Distribution Date, one month's interest at the Class IO Certificate Rate on the
Class IO Component One Notional Amount minus (i) any Compensating Interest
Shortfall allocated to Class IO Component One on such Distribution Date pursuant
to Section 6.07(a), (ii) any Realized Loss Interest Shortfall allocated to Class
IO Component One on such Distribution Date pursuant to Section 6.07(b) and (iii)
any interest shortfall resulting from the Servicemembers Civil Relief Act
allocated to the Class IO Component One on such Distribution Date pursuant to
Section 6.07(c).
Class IO Component One Notional Amount: With respect to any Distribution
Date, an amount equal to the product of the aggregate Stated Principal Balance
of the Non-Discount Mortgage Loans in Mortgage Group One and a fraction the
numerator of which is the Group One Stripped Interest Rate and the denominator
of which is 6.25%. The Class IO Component One Notional Amount for the first
Distribution Date will be $9,843,605.
Class IO Component One Shortfall: With respect to any Distribution Date the
amount equal to the excess, if any, of the Class IO Component One Interest
Accrual Amount over the amount actually distributed to the Class IO
Certificateholders on such Distribution Date pursuant to Section
6.01(I)(b)(i)(G)(1).
Class IO Component Two: The portion of the Class IO Certificate so
designated under the heading "The Certificates" in the Preliminary Statement
hereto.
Class IO Component Two Interest Accrual Amount: With respect to any
Distribution Date, one month's interest at the Class IO Certificate Rate on the
Class IO Component Two Notional Amount minus (i) any Compensating Interest
Shortfall allocated to Class IO Component Two on such Distribution Date pursuant
to Section 6.07(a), (ii) any Realized Loss Interest Shortfall allocated to Class
IO Component Two on such Distribution Date pursuant to Section 6.07(b) and (iii)
any interest shortfall resulting from the Servicemembers Civil Relief Act
allocated to the Class IO Component Two on such Distribution Date pursuant to
Section 6.07(c).
Class IO Component Two Notional Amount: With respect to any Distribution
Date, an amount equal to the product of the aggregate Stated Principal Balance
of the Non-Discount Mortgage Loans in Mortgage Group Two and a fraction the
numerator of which is the Group
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Two Stripped Interest Rate and the denominator of which is 6.25%. The Class IO
Component Two Notional Amount for the first Distribution Date will be
$8,948,750.
Class IO Component Two Shortfall: With respect to any Distribution Date the
amount equal to the excess, if any, of the Class IO Component Two Interest
Accrual Amount over the amount actually distributed to the Class IO
Certificateholders on such Distribution Date pursuant to Section
6.01(I)(b)(i)(G)(2).
Class IO Component Three: The portion of the Class IO Certificate so
designated under the heading "The Certificates" in the Preliminary Statement
hereto.
Class IO Component Three Interest Accrual Amount: With respect to any
Distribution Date, one month's interest at the Class IO Certificate Rate on the
Class IO Component Three Notional Amount minus (i) any Compensating Interest
Shortfall allocated to Class IO Component Three on such Distribution Date
pursuant to Section 6.07(a), (ii) any Realized Loss Interest Shortfall allocated
to Class IO Component Three on such Distribution Date pursuant to Section
6.07(b) and (iii) any interest shortfall resulting from the Servicemembers Civil
Relief Act allocated to the Class IO Component Three on such Distribution Date
pursuant to Section 6.07(c).
Class IO Component Three Notional Amount: With respect to any Distribution
Date, an amount equal to the product of the aggregate Stated Principal Balance
of the Non-Discount Mortgage Loans in Mortgage Group Three and a fraction the
numerator of which is the Group Three Stripped Interest Rate and the denominator
of which is 6.25%. The Class IO Component Three Notional Amount for the first
Distribution Date will be $3,752,473.
Class IO Component Three Shortfall: With respect to any Distribution Date
the amount equal to the excess, if any, of the Class IO Component Three Interest
Accrual Amount over the amount actually distributed to the Class IO
Certificateholders on such Distribution Date pursuant to Section
6.01(I)(b)(i)(G)(3).
Class IO Interest Accrual Amount: The sum of the Class IO Component One
Interest Accrual Amount, the Class IO Component Two Interest Accrual Amount and
the Class IO Component Three Interest Accrual Amount.
Class IO Notional Amount: With respect to any Distribution Date, an amount
equal to the sum of the Class IO Component One Notional Amount, Class IO
Component Two Notional Amount and the Class IO Component Three Notional Amount.
The Class IO Notional Amount for the first Distribution Date will be
$22,544,828.
Class IO Shortfall: The sum of the Class IO Component One Shortfall, the
Class IO Component Two Shortfall and the Class IO Component Three Shortfall.
Class M Certificate: Any one of the Class MF-1, Class MF-2 or Class MF-3
Certificates as designated on the face thereof substantially in the form annexed
hereto as Exhibit A-1, executed by the Securities Administrator and
authenticated and delivered by the Securities Administrator, representing the
right to distributions as set forth herein and therein.
Class M Certificateholder: Any Holder of a Class M Certificate.
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Class M Interest Accrual Amount: With respect to any Distribution Date, one
(1) month's interest at the Certificate Rate on the Class Certificate Balance of
the Class M Certificates minus (i) any Compensating Interest Shortfall allocated
to the Class M Certificates on such Distribution Date pursuant to Section
6.07(a), (ii) any Realized Loss Interest Shortfall allocated to the Class M
Certificates on such Distribution Date pursuant to Section 6.05(b) and (iii) any
interest shortfall resulting from the Relief Act allocated to the Class M
Certificates on such Distribution Date pursuant to Section 6.07(c)].
Class M Percentage: The Class MF-1 Percentage, Class MF-2 Percentage or
Class MF-3 Percentage.
Class M Principal Balance: As of any Distribution Date, (a) the Class M
Principal Balance for the immediately preceding Distribution Date less (b)
amounts distributed to the Class M Certificateholders on such preceding
Distribution Date allocable to principal (including the principal portion of
Advances of the Servicer made pursuant to Section 6.06 and Realized Losses
allocated to the Class M Certificates pursuant to Section 6.02); provided that
the Class M Principal Balance on the first Distribution Date shall be the
Original Class M Principal Balance, and provided further that if the aggregate
Class Certificate Balance of the Class B Certificates has been reduced to zero,
as of any Distribution Date, the Class M Principal Balance will equal the excess
of the Mortgage Pool Principal Balance (together with the portion of any Monthly
Payment due but not paid with respect to which an Advance has not been made)
over the Class A Principal Balance.
Class MF-1 Percentage: With respect to any Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Class Certificate Balance of the Class MF-1 Certificates immediately
prior to such date and the denominator of which is the aggregate Stated
Principal Balance of all of the Mortgage Loans (or related REO Properties)
immediately prior to such Distribution Date.
Class MF-2 Percentage: With respect to any Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Class Certificate Balance of the Class MF-2 Certificates immediately
prior to such date and the denominator of which is the aggregate Stated
Principal Balance of all of the Mortgage Loans (or related REO Properties)
immediately prior to such Distribution Date.
Class MF-3 Percentage: With respect to any Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Class Certificate Balance of the Class MF-3 Certificates immediately
prior to such date and the denominator of which is the aggregate Stated
Principal Balance of all of the Mortgage Loans (or related REO Properties)
immediately prior to such Distribution Date.
Class P Certificate: Any one of the Class P Certificates as designated on
the face thereof substantially in the forum of annexed hereto as Exhibit A-4,
executed by the Securities Administrator and authenticated and delivered by the
Securities Administrator representing the right to distributions of Prepayment
Penalties received on the Prepayment Penalty Mortgage Loans as set forth herein
and pursuant to the Stack II Agreement.
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Class PO Amount: With respect to any Distribution Date, the applicable PO
Percentage of (i) all principal received on or in respect of each Discount
Mortgage Loan (exclusive of any amounts in respect of any Monthly Payment)
during the related Principal Prepayment Period and (ii) all principal received
as part of a Monthly Payment on or in respect of a Discount Mortgage Loan during
the related Due Period.
Class PO Certificate: Any one of the Class PO Certificates, executed by the
Securities Administrator and authenticated and delivered by the Securities
Administrator, senior in right of payment to the Class M and Class B
Certificates, substantially in the form of the Class A Certificate set forth in
Exhibit A-1 hereto.
Class PO Component One: The portion of the Class PO Certificates so
designated under the heading "The Certificates" in the Preliminary Statement
hereto.
Class PO Component Two: The portion of the Class PO Certificates so
designated under the heading "The Certificates" in the Preliminary Statement
hereto.
Class PO Component Three: The portion of the Class PO Certificates so
designated under the heading "The Certificates" in the Preliminary Statement
hereto.
Class PO Shortfall Amount: With respect to any Distribution Date prior to
and including the Credit Support Depletion Date, to the extent of amounts
available to pay the Subordinated Optimal Principal Amount (without regard to
clause (b)(2) of the definition of such term), an amount equal to the sum of (i)
the applicable PO Percentage of the principal portion of any Realized Loss with
respect to a Discount Mortgage Loan and (ii) the sum of amounts, if any, by
which the amounts specified in clause (i) with respect to each prior
Distribution Date exceeded the amount actually distributed in respect thereof on
such prior Distribution Date and not subsequently distributed to the Class PO
Certificateholders.
Class Subordination Percentage: With respect to any Distribution Date and
each Class of Subordinate Certificates, the fraction (expressed as a percentage)
the numerator of which is the Class Certificate Balance of such Class of
Subordinate Certificates immediately prior to such Distribution Date and the
denominator of which is the aggregate of the Class Certificate Balances of all
Classes of Certificates immediately prior to such Distribution Date.
Class UT-R Interest: The sole class of residual interest in the Upper Tier
REMIC for purposes of the REMIC Provisions. The Class UT-R Interest shall have
neither a principal amount nor an interest rate. The Class UT-R Interest shall
be represented by the Class A-R Certificate.
Closing Date: September 29, 2006.
Code: The Internal Revenue Code of 1986, as amended.
Commission: The Securities and Exchange Commission.
Compensating Interest Shortfall: As defined in Section 6.07(a).
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Cooperative: A corporation that has been formed for the purpose of
cooperative apartment ownership.
Cooperative Assets: Shares issued by Cooperatives, the related Cooperative
Lease and any other collateral securing the Cooperative Loans.
Cooperative Lease: With respect to a Cooperative Loan, the proprietary
lease or occupancy agreement with respect to the cooperative apartment occupied
by the Mortgagor and relating to the related Cooperative Assets, which lease or
agreement confers an exclusive right to the holder of such Cooperative Assets to
occupy such apartment.
Cooperative Loan: The indebtedness of a Mortgagor evidenced by a Mortgage
Note which is secured by Cooperative Assets and which is being sold to the
Depositor pursuant to this Agreement, the Mortgage Loans so sold being
identified in the Mortgage Loan Schedule.
Cooperative Stock: With respect to a Cooperative Loan, the single
outstanding class of stock, partnership interest or other ownership instrument
in the related Cooperative.
Corporate Trust Office: With respect to the Trustee, the principal
corporate trust office of the Trustee at which at any particular time its
corporate trust business in connection with this Agreement shall be
administered, which office at the date of the execution of this instrument is
located at HSBC Bank USA, National Association, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Issuer Services - Xxxxxxx Xxxxx Mortgage Investors, Inc.,
MLMI Series 2006-AF1, or at such other address as the Trustee may designate from
time to time by notice to the Certificateholders, the Depositor and the Master
Servicer and with respect to the Securities Administrator, for Certificate
transfer purposes, Xxxxx Fargo Center, Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000, Attn: Client Service Manager - MLMI 2006-AF1, and
for all other purposes, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx, 00000,
Attn: Corporate Trust Services - MLMI 2006-AF1.
Corresponding Class or Classes of Certificates: With respect to each REMIC
2 Regular Interest, the Class or Classes of Certificates appearing opposite such
REMIC 2 Regular Interest as described in the Preliminary Statement hereto.
Credit Support: With respect to each Class of Subordinate Certificates
(other than the Class BF-3 Certificates), the level of credit support supporting
such Class, expressed as a percentage of the aggregate outstanding Class
Certificate Balance of all Classes of Certificates (other than the Class PO
Certificates). With respect to each Distribution Date, Credit Support for each
such Class will equal in each case the percentage, rounded to two decimal
places, obtained by dividing the aggregate outstanding Class Certificate Balance
immediately prior to such Distribution Date of all Classes of Subordinate
Certificates having higher numerical Class designations than such Class by the
aggregate outstanding Class Certificate Balance of all Classes of Certificates
(other than the Class PO Certificates) immediately prior to such Distribution
Date. For purposes of this defined term, the Class B Certificates shall be
considered as having higher numerical Class designations than the Class M
Certificates.
Credit Support Depletion Date: The first Distribution Date on which the
aggregate Class Certificate Balance of the Subordinate Certificates is reduced
to zero.
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Curtailment: Any Principal Prepayment made by a Mortgagor which is not a
Principal Prepayment in Full.
Custodial Agreement: An agreement, dated as of the Closing Date among the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
the Custodian in substantially the form of Exhibit G hereto.
Custodian: Xxxxx Fargo Bank, N.A., including any successors in interest, or
any successor custodian appointed pursuant to the provisions hereof and of the
Custodial Agreement.
Cut-off Date: September 1, 2006.
Debt Service Reduction: Any reduction of the Monthly Payments which a
Mortgagor is obligated to pay with respect to a Mortgage Loan as a result of any
proceeding under the Bankruptcy Code or any other similar state law or other
proceeding.
Defective Mortgage Loan: A Mortgage Loan replaced or to be replaced by one
or more Substitute Mortgage Loans.
Deficient Valuation: With respect to any Mortgage Loan, a valuation of the
related Mortgaged Property by a court of competent jurisdiction in an amount
less than the then outstanding principal balance of the Mortgage Loan, which
valuation results from a proceeding initiated under the Bankruptcy Code.
Definitive Certificates: As defined in Section 5.06.
Depositor: Xxxxxxx Xxxxx Mortgage Investors, Inc., a Delaware corporation,
or any successor in interest.
Depository: The Depository Trust Company, the nominee of which is Cede &
Co., or any successor thereto.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Designated Depository Institution: A depository institution (commercial
bank, federal savings bank, mutual savings bank or savings and loan association)
or trust company (which may include the Trustee), the deposits of which are
fully insured by the FDIC to the extent provided by law.
Determination Date: With respect to each Mortgage Loan, the Determination
Date as defined in the related Servicing Agreement.
Discount Mortgage Loan: A Mortgage Loan having a Net Mortgage Rate less
than the Remittance Rate.
Disqualified Organization: A "disqualified organization" as defined in
Section 860 E(e)(5) of the Code.
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Distribution Account: The trust account or accounts created and maintained
pursuant to Section 4.04, which shall be denominated "Xxxxx Fargo Bank, National
Association, as Securities Administrator for HSBC Bank USA, National
Association, as Trustee f/b/o holders of Xxxxxxx Xxxxx Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, MLMI Series 2006-AF1 - Distribution Account
(Stack I)." The Distribution Account shall be an Eligible Account.
Distribution Account Deposit Date: The Business Day prior to each
Distribution Date.
Distribution Date: The 25th day of any month, beginning in October 2006,
or, if such 25th day is not a Business Day, the Business Day immediately
following.
Due Date: With respect to each Mortgage Loan, the date in each month on
which its Monthly Payment is due if such due date is the first day of a month
and otherwise is deemed to be the first day of the following month or such other
date specified in the related Servicing Agreement.
Due Period: With respect to any Distribution Date and each Mortgage Loan,
the period commencing on the second day of the month preceding the month in
which the Distribution Date occurs and ending at the close of business on the
first day of the month in which the Distribution Date occurs.
Eligible Account: Any of (i) a segregated account maintained with a federal
or state chartered depository institution (A) the short-term obligations of
which are rated A-1 or better by S&P and P-1 by Xxxxx'x at the time of any
deposit therein or (B) insured by the FDIC (to the limits established by such
Corporation), the uninsured deposits (as evidenced in writing by the Rating
Agencies that use of any such account as the Distribution Account will not have
an adverse effect on the then-current ratings assigned to the Classes of
Certificates then rated by the Rating Agencies) in which account are otherwise
secured such that, as evidenced by an Opinion of Counsel (obtained by the Person
requesting that the account be held pursuant to this clause (i)) delivered to
the Securities Administrator prior to the establishment of such account, the
Certificateholders will have a claim with respect to the funds in such account
and a perfected first priority security interest against any collateral (which
shall be limited to Permitted Investments, each of which shall mature not later
than the Business Day immediately preceding the Distribution Date next following
the date of investment in such collateral or the Distribution Date if such
Permitted Investment is an obligation of the institution that maintains the
Distribution Account) securing such funds that is superior to claims of any
other depositors or general creditors of the depository institution with which
such account is maintained, (ii) a segregated trust account or accounts
maintained with a federal or state chartered depository institution or trust
company with trust powers acting in its fiduciary capacity or (iii) a segregated
account or accounts of a depository institution acceptable to the Rating
Agencies (as evidenced in writing by the Rating Agencies that use of any such
account as the Distribution Account will not have an adverse effect on the
then-current ratings assigned to the Classes of the Certificates then rated by
the Rating Agencies). Eligible Accounts may bear interest.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
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ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that would satisfy the requirements of
Prohibited Transaction Exemption 90-29, Exemption Application No. D-8012, 55
Fed. Reg. 21459 (1990), as amended, granted to the Underwriter by the United
States Department of Labor (or any other applicable underwriter's exemption
granted by the United States Department of Labor), except, in relevant part, for
the requirement that the certificates have received a rating at the time of
acquisition that is in one of the three (or four, in the case of a "designated
transaction") highest generic rating categories by at least one of the Rating
Agencies.
ERISA Restricted Certificates: Any of the Class BF-1, Class BF-2, Class
BF-3 or Class P Certificates, and any other Certificate, as long as the
acquisition and holding of such Certificate is not covered by and exempt under
an underwriter's exemption.
Event of Default: An event of default described in Section 8.01.
Excess Liquidation Proceeds: To the extent that such amount is not required
by law to be paid to the related Mortgagor, the amount, if any, by which
Liquidation Proceeds with respect to a Liquidated Mortgage Loan exceed the sum
of (i) the Outstanding Principal Balance of such Mortgage Loan and accrued but
unpaid interest at the related Mortgage Interest Rate through the last day of
the month in which the related Liquidation Date occurs, plus (ii) related
Liquidation Expenses.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Extraordinary Loss: Any Realized Loss or portion thereof caused by or
resulting from:
(i) nuclear or chemical reaction or nuclear radiation or radioactive
or chemical contamination, all whether controlled or uncontrolled and
whether such loss be direct or indirect, proximate or remote;
(ii) hostile or warlike action in time of peace or war, including
action in hindering, combating or defending against an actual, impending or
expected attack by any government or sovereign power, de jure or de facto,
or by any authority maintaining or using military, naval or air forces, or
by military, naval or air forces, or by an agent of any such government,
power, authority or forces;
(iii) any weapon of war employing atomic fission or radioactive forces
whether in time of peace or war, and
(iv) insurrection, rebellion, revolution, civil war, usurped power or
action taken by governmental authority in hindering, combating or defending
against such an occurrence, seizure or destruction under quarantine or
customs regulations, confiscation by order of any government or public
authority, or risks of contraband or illegal transactions or trade.
Extraordinary Trust Fund Expenses: Any amounts reimbursable to the Master
Servicer or the Depositor pursuant to this Agreement, including but not limited
to Sections 4.03, 4.05 and 7.04, any amounts reimbursable to the Trustee and the
Securities Administrator from the Trust
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Fund pursuant to this Agreement, including but not limited to Section 9.05, and
any other costs, expenses, liabilities and losses borne by the Trust Fund
(exclusive of any cost, expense, liability or loss that is specific to a
particular Mortgage Loan or REO Property and is taken into account in
calculating a Realized Loss in respect thereof) for which the Trust Fund has not
and, in the reasonable good faith judgment of the Securities Administrator,
shall not, obtain reimbursement or indemnification from any other Person.
Xxxxxx Xxx: Federal National Mortgage Association or any successor thereto.
FDIC: Federal Deposit Insurance Corporation or any successor thereto.
Final Certification: The certification substantially in the form of Exhibit
Two to the Custodial Agreement.
Fitch: Fitch Ratings or its successor in interest.
Form 8-K Disclosure Information: As defined in Section 3.18(a).
Xxxxxxx Mac: Xxxxxxx Mac, formerly the Federal Home Loan Mortgage
Corporation, or any successor thereto.
Global Certificate: Any Private Certificate registered in the name of the
Depository or its nominee, beneficial interests in which are reflected on the
books of the Depository or on the books of a Person maintaining an account with
such Depository (directly or as an indirect participant in accordance with the
rules of such depository).
Group One Class PO Amount: With respect to any Distribution Date, the
applicable PO Percentage of (i) all principal received on or in respect of each
Discount Mortgage Loan in Mortgage Group One (exclusive of any amounts in
respect of any Monthly Payment) during the related Principal Prepayment Period
and (ii) all principal received as part of a Monthly Payment on or in respect of
a Discount Mortgage Loan in Mortgage Group One during the related Due Period.
Group One Mortgage Loans: The Mortgage Loans in Mortgage Group One.
Group One Mortgage Pool Principal Balance: As of any date of determination,
the aggregate of the Principal Balances of each Outstanding Mortgage Loan in
Mortgage Group One on such date of determination less the principal portion of
any Monthly Payment due but not paid with respect to which an Advance has not
been made.
Group One Non-PO Allocated Amount: At the time of any determination, the
amount derived by (i) multiplying the outstanding Principal Balance of each
Mortgage Loan in Mortgage Group One on such date of determination by the Non-PO
Percentage with respect to such Mortgage Loan and (ii) summing the results.
Group One Remittance Rate: 5.75% per annum.
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Group One Stripped Interest Rate: The excess of the weighted average Net
Mortgage Rate of the Group One Mortgage Loans that are Non-Discount Mortgage
Loans over the Group One Remittance Rate.
Group One Subordinated Amount: For any Distribution Date, the excess of the
Group One Non-PO Allocated Amount immediately following the preceding
Distribution Date (or as of the Cut-off Date if there is no preceding
Distribution Date) over the aggregate outstanding Principal Balance of the Class
AF-1 Certificates (prior to giving effect to distributions to be made on such
Distribution Date and allocation of losses to be made on such Distribution
Date).
Group Two Class PO Amount: With respect to any Distribution Date, the
applicable PO Percentage of (i) all principal received on or in respect of each
Discount Mortgage Loan in Mortgage Group Two (exclusive of any amounts in
respect of any Monthly Payment) during the related Principal Prepayment Period
and (ii) all principal received as part of a Monthly Payment on or in respect of
a Discount Mortgage Loan in Mortgage Group Two during the related Due Period.
Group Two Mortgage Loans: The Mortgage Loans in Mortgage Group Two.
Group Two Mortgage Pool Principal Balance: As of any date of determination,
the aggregate of the Principal Balances of each Outstanding Mortgage Loan in
Mortgage Group Two on such date of determination less the principal portion of
any Monthly Payment due but not paid with respect to which an Advance has not
been made.
Group Two Non-PO Allocated Amount: At the time of any determination, the
amount derived by (i) multiplying the outstanding Principal Balance of each
Mortgage Loan in Mortgage Group Two on such date of determination by the Non-PO
Percentage with respect to such Mortgage Loan and (ii) summing the results.
Group Two Remittance Rate: 6.25% per annum.
Group Two Stripped Interest Rate: The excess of the weighted average Net
Mortgage Rate of the Group Two Mortgage Loans that are Non-Discount Mortgage
Loans over the Group Two Remittance Rate.
Group Two Subordinated Amount: For any Distribution Date, the excess of the
Group Two Non-PO Allocated Amount immediately following the preceding
Distribution Date (or as of the Cut-off Date, if there is no preceding
Distribution Date) over the aggregate outstanding Principal Balance of the Class
AF-2A, Class AF-2B and Class AF-2C Certificates (prior to giving effect to
distributions to be made on such Distribution Date and allocation of losses to
be made on such Distribution Date).
Group Three Class PO Amount: With respect to any Distribution Date, the
applicable PO Percentage of (i) all principal received on or in respect of each
Discount Mortgage Loan in Mortgage Group Three (exclusive of any amounts in
respect of any Monthly Payment) during the related Principal Prepayment Period
and (ii) all principal received as part of a Monthly Payment on or in respect of
a Discount Mortgage Loan in Mortgage Group Three during the related Due Period.
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Group Three Mortgage Loans: The Mortgage Loans in Mortgage Group Three.
Group Three Mortgage Pool Principal Balance: As of any date of
determination, the aggregate of the Principal Balances of each Outstanding
Mortgage Loan in Mortgage Group Three on such date of determination less the
principal portion of any Monthly Payment due but not paid with respect to which
an Advance has not been made.
Group Three Non-PO Allocated Amount: At the time of any determination, the
amount derived by (i) multiplying the outstanding Principal Balance of each
Mortgage Loan in Mortgage Group Three on such date of determination by the
Non-PO Percentage with respect to such Mortgage Loan and (ii) summing the
results.
Group Three Remittance Rate: 6.25% per annum.
Group Three Stripped Interest Rate: The excess of the weighted average Net
Mortgage Rate of the Group Three Mortgage Loans that are Non-Discount Mortgage
Loans over the Group Three Remittance Rate.
Group Three Subordinated Amount: For any Distribution Date, the excess of
the Group Three Non-PO Allocated Amount immediately following the preceding
Distribution Date (or as of the Cut-off Date, if there is no preceding
Distribution Date) over the aggregate outstanding Principal Balance of the Class
AF-3A and Class AF-3B Certificates (prior to giving effect to distributions to
be made on such Distribution Date and allocation of losses to be made on such
Distribution Date).
Highest Priority: As of any date of determination, the Class of Subordinate
Certificates then outstanding with the earliest priority for payments pursuant
to Section 6.01, in the following order: Class MF-1, Class MF-2, Class MF-3,
Class BF-1, Class BF-2 and Class BF-3 Certificates.
Indemnified Persons: The Trustee, the Master Servicer, the Depositor and
the Securities Administrator and their officers, directors, agents and employees
and, with respect to the Trustee, any separate co-trustee and its officers,
directors, agents and employees.
Independent: When used with respect to any specified Person, any such
Person who (a) is in fact independent of the Depositor, the Master Servicer and
their respective Affiliates, (b) does not have any direct financial interest in
or any material indirect financial interest in the Depositor or the Master
Servicer or any Affiliate thereof, and (c) is not connected with the Depositor
or the Master Servicer or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar
functions; provided, however, that a Person shall not fail to be Independent of
the Depositor or the Master Servicer or any Affiliate thereof merely because
such Person is the beneficial owner of 1% or less of any class of securities
issued by the Depositor or the Master Servicer or any Affiliate thereof, as the
case may be.
Index: The index, if any, specified in a Mortgage Note by reference to
which the related Mortgage Interest Rate will be adjusted from time to time.
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Individual Certificate: Any Private Certificate registered in the name of
the Holder other than the Depository or its nominee.
IndyMac: IndyMac Bank, F.S.B. or any successor thereto.
IndyMac Assignment Agreement: The Assignment, Assumption and Recognition
Agreement, dated as of September 1, 2006, among IndyMac, the Depositor and the
Seller pursuant to which the IndyMac Servicing Agreement and the rights of the
Seller thereunder (other than the rights to enforce the representations and
warranties with respect to the IndyMac Loans) were assigned to the Depositor for
the benefit of the Certificateholders.
IndyMac Loans: The Mortgage Loans serviced by IndyMac pursuant to the
IndyMac Servicing Agreement.
IndyMac Servicing Agreement: The Master Seller's Warranties and Servicing
Agreement dated as of May 1, 2006, between IndyMac Bank, F.S.B. as seller and
MLML as purchaser, as at any time in effect.
Initial Certification: The certification substantially in the form of
Exhibit One to the Custodial Agreement.
Initial Class Certificate Balance: With respect to any Regular Certificate,
the amount designated "Initial Class Certificate Balance" on the face thereof.
Initial Optional Termination Date: The first Distribution Date following
the date on which the aggregate Stated Principal Balance of the Mortgage Loans
is less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date.
Initial Subordinated Class Percentage: With respect to each Class of
Subordinate Certificates, an amount which is equal to the initial aggregate
Class Certificate Balance of such Class of Subordinate Certificates divided by
the aggregate Stated Principal Balance of all the Mortgage Loans as of the
Cut-off Date as follows:
Class MF-1: 2.05% Class BF-1: 0.75%
Class MF-2: 1.20% Class BF-2: 0.55%
Class MF-3: 0.75% Class BF-3: 0.45%
Insurance Policy: With respect to any Mortgage Loan, any standard hazard
insurance policy, flood insurance policy or title insurance policy.
Insurance Proceeds: Amounts paid by the insurer under any Insurance Policy
covering any Mortgage Loan or Mortgaged Property other than amounts required to
be paid over to the Mortgagor pursuant to law or the related Mortgage Note or
Security Instrument and other than amounts used to repair or restore the
Mortgaged Property or to reimburse insured expenses.
Interest Adjustment Date: With respect to a Mortgage Loan, the date, if
any, specified in the related Mortgage Note on which the Mortgage Interest Rate
is subject to adjustment.
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Investor Representation Letter: As defined in Section 5.02(b).
Issuing Entity: Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-AF1.
Late Collections: With respect to any Mortgage Loan, all amounts received
during any Due Period, whether as late payments of Monthly Payments or as
Liquidation Proceeds, condemnation proceeds, Insurance Proceeds, or with respect
to a disposition of a Mortgaged Property (or stock allocated to a dwelling unit,
in the case of a Co-op Loan) which has been acquired by foreclosure or deed in
lieu of foreclosure or otherwise, which represent late payments or collections
of Monthly Payments due but delinquent for a previous Due Period and not
previously recovered.
Latest Possible Maturity Date: With respect to the Certificates, the
Distribution Date in August 2036.
Liquidated Mortgage Loan: Any defaulted Mortgage Loan (including any REO
Property) as to which the related Servicer has determined that all amounts it
expects to recover from or on account of such Mortgage Loan have been recovered.
Liquidation Date: With respect to any Liquidated Mortgage Loan, the date on
which the related Servicer has certified that such Mortgage Loan has become a
Liquidated Mortgage Loan.
Liquidation Expenses: With respect to a Mortgage Loan in liquidation,
unreimbursed expenses paid or incurred by or for the account of the Master
Servicer or the related Servicer in connection with the liquidation of such
Mortgage Loan and the related Mortgaged Property, such expenses including (a)
property protection expenses, (b) property sales expenses, (c) foreclosure and
sale costs, including court costs and reasonable attorneys' fees, and (d)
similar expenses reasonably paid or incurred in connection with liquidation.
Liquidation Proceeds: With respect to any Mortgage Loan, cash received in
connection with the liquidation of a defaulted Mortgage Loan, whether through
trustee's sale, foreclosure sale or otherwise, and amounts received through
Insurance Proceeds and condemnation proceeds.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the original principal
balance of the related Mortgage Loan and the denominator of which is the
Original Value of the related Mortgaged Property.
Lower Priority: As of any date of determination and with respect to any
Class of Subordinate Certificates, any other Class of Subordinate Certificates
then outstanding with a later priority for payments pursuant to Section 6.01.
Lower Tier Regular Interests: Any of the REMIC 1 Regular Interests or the
REMIC 2 Regular Interests.
Lower Tier REMIC Interests: Any of the REMIC 1 Interests or the REMIC 2
Interests.
Lowest Priority: As of any date of determination, the Class of Subordinate
Certificates then outstanding with the latest priority for payments pursuant to
Section 6.01, in the following
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order: Class BF-3, Class BF-2, Class BF-1, Class MF-3, Class MF-2 and Class MF-1
Certificates.
Lost Notes: The original Mortgage Notes that have been lost, as indicated
on the Mortgage Loan Schedule.
Majority Certificateholders: The Holders of Certificates evidencing at
least 51% of the Voting Rights.
Master Servicer: Xxxxx Fargo Bank, N.A. including any successors in
interest who meet the qualifications of the Servicing Agreements and this
Agreement, and any successor master servicer appointed hereunder.
Master Servicer Collection Account: The trust account or accounts created
and maintained pursuant to Section 4.02, which shall be denominated "Xxxxx Fargo
Bank, National Association as Master Servicer for HSBC Bank USA, National
Association, as Trustee f/b/o holders of Xxxxxxx Xxxxx Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, MLMI Series 2006-AF1 - Master Servicer
Collection Account (Stack I)." The Master Servicer Collection Account shall be
an Eligible Account.
Master Servicing Compensation: The meaning specified in Section 3.14.
Maximum Lifetime Mortgage Rate: The maximum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.
Minimum Lifetime Mortgage Rate: The minimum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.
MLBUSA: Xxxxxxx Xxxxx Bank, USA.
MLML: Xxxxxxx Xxxxx Mortgage Lending, Inc., a Delaware corporation, or any
successor in interest.
Monthly Advance: An advance of principal or interest required to be made by
the applicable Servicer pursuant to the related Servicing Agreement or the
Master Servicer pursuant to Section 6.05.
Monthly Payment: With respect to any Mortgage Loan, the scheduled monthly
payment of principal and interest on such Mortgage Loan which is payable by the
related Mortgagor from time to time under the related Mortgage Note, determined:
(a) after giving effect to (i) any Deficient Valuation and/or Debt Service
Reduction with respect to such Mortgage Loan and (ii) any reduction in the
amount of interest collectible from the related Mortgagor pursuant to the Relief
Act; (b) without giving effect to any extension granted or agreed to by the
related Servicer pursuant to related Servicing Agreement; and (c) on the
assumption that all other amounts, if any, due under such Mortgage Loan are paid
when due.
Monthly Principal: The principal portion of any Monthly Payment.
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Monthly Statement: The statement distributed to Certificateholders pursuant
to Section 6.04.
Moody's: Xxxxx'x Investors Service, Inc. or its successor in interest.
Mortgage: The mortgage, deed of trust or other instrument creating a first
lien on, or first priority security interest in, a Mortgaged Property securing a
Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01(b) pertaining
to a particular Mortgage Loan and any additional documents required to be added
to the Mortgage File pursuant to this Agreement.
Mortgage Group: Pertaining to Mortgage Group One, Mortgage Group Two or
Mortgage Group Three, as the case may be.
Mortgage Group One: The Mortgage Loans in the Trust Fund that are
designated in the Mortgage Loan Schedule attached hereto as Exhibit B as
comprising Mortgage Group One.
Mortgage Group One Subordinated Percentage: As of any Distribution Date,
the difference between 100% and the Non-PO Class AF-1 Percentage.
Mortgage Group One Subordinated Prepayment Percentage: As of any
Distribution Date, the difference between 100% and the Non-PO Class AF-1
Prepayment Percentage.
Mortgage Group Two: The Mortgage Loans in the Trust Fund that are
designated in the Mortgage Loan Schedule attached hereto as Exhibit B as
comprising Mortgage Group Two.
Mortgage Group Two Subordinated Percentage: As of any Distribution Date,
the difference between 100% and the Non-PO Class AF-2 Percentage.
Mortgage Group Two Subordinated Prepayment Percentage: As of any
Distribution Date, the difference between 100% and the Non-PO Class AF-2
Prepayment Percentage.
Mortgage Group Three: The Mortgage Loans in the Trust Fund that are
designated in the Mortgage Loan Schedule attached hereto as Exhibit B as
comprising Mortgage Group Three.
Mortgage Group Three Subordinated Percentage: As of any Distribution Date,
the difference between 100% and the Non-PO Class AF-3 Percentage.
Mortgage Group Three Subordinated Prepayment Percentage: As of any
Distribution Date, the difference between 100% and the Non-PO Class AF-3
Prepayment Percentage.
Mortgage Interest Rate: The annual rate at which interest accrues from time
to time on any Mortgage Loan pursuant to the related Mortgage Note, which rate
is equal to the "Mortgage Interest Rate" set forth with respect thereto on the
Mortgage Loan Schedule.
Mortgage Loan: A mortgage loan transferred and assigned to the Trustee
pursuant to Section 2.01 or Section 2.04 and held as a part of the Trust Fund,
as identified in the Mortgage Loan Schedule, including a mortgage loan the
property securing which has become an REO
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Property. For the avoidance of doubt, as defined below, the term "Stack II
Mortgage Loan" shall be used within this Agreement to refer to a mortgage loan
transferred and assigned to the Trustee pursuant to Section 2.01 or Section 2.04
of the Stack II Agreement and held as a part of the Trust Fund, as identified in
the Stack II Mortgage Loan Schedule, including a mortgage loan the property
securing which has become an REO Property.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement
dated as of September 29, 2006, between the Seller and the Depositor, as
purchaser, and all amendments thereof and supplements thereto, attached hereto
as Exhibit J.
Mortgage Loan Schedule: The schedule, attached hereto as Exhibit B with
respect to the Mortgage Loans and as amended from time to time to reflect the
repurchase or substitution of Mortgage Loans pursuant to this Agreement.
Mortgage Note: The originally executed note or other evidence of the
indebtedness of a Mortgagor under the related Mortgage Loan.
Mortgage Pool: The pool of Mortgage Loans, identified on Exhibit B from
time to time, and any REO Properties acquired in respect thereof.
Mortgaged Property: Land and improvements securing the indebtedness of a
Mortgagor under the related Mortgage Loan or, in the case of REO Property, such
REO Property.
Mortgagor: The obligor on a Mortgage Note.
Net Liquidation Proceeds: As to any Liquidated Mortgage Loan, Liquidation
Proceeds net of (i) Liquidation Expenses which are payable therefrom by the
related Servicer or the Master Servicer in accordance with the related Servicing
Agreement or this Agreement and (ii) unreimbursed advances by the related
Servicer or the Master Servicer and Monthly Advances.
Net Mortgage Rate: With respect to each Mortgage Loan, the Mortgage
Interest Rate in effect from time to time less the Servicing Fee Rate (expressed
as a per annum rate).
Non-Discount Mortgage Loan: A Mortgage Loan having a Net Mortgage Rate
greater than the Remittance Rate.
Non-PO Class AF-1 Optimal Principal Amount: With respect to any
Distribution Date, the lesser of (a) the Non-PO Class AF-1 Principal Balance and
(b) the sum of:
(i) the Non-PO Class AF-1 Percentage of the applicable Non-PO Percentage of
the principal portion of all Monthly Payments, whether or not received, which
were due during the related Due Period on Group One Mortgage Loans which were
outstanding during such Due Period;
(ii) the Non-PO Class AF-1 Prepayment Percentage of the applicable Non-PO
Percentage of all Principal Prepayments made on any Group One Mortgage Loan
during the related Principal Prepayment Period;
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(iii) with respect to each Mortgage Loan not described in (iv) below, the
Non-PO Class AF-1 Percentage of the applicable Non-PO Percentage of the
principal portion of all Insurance Proceeds, condemnation awards and any other
cash proceeds from a source other than the applicable Mortgagor, to the extent
required to be deposited in the Master Servicer Collection Account and (v),
which were received during the related Principal Prepayment Period with respect
to a Group One Mortgage Loan, net of related unreimbursed Servicing Advances and
net of any portion thereof which, as to any such Mortgage Loan, constitutes Late
Collections that have been the subject of an Advance on any prior Distribution
Date;
(iv) with respect to each Group One Mortgage Loan which has become a
Liquidated Mortgage Loan during the related Principal Prepayment Period, the
lesser of (A) the Non-PO Class AF-1 Percentage of the applicable Non-PO
Percentage of an amount equal to the Principal Balance of such Liquidated
Mortgage Loan as of the Due Date immediately preceding the date on which it
became a Liquidated Mortgage Loan and (B) the Non-PO Class AF-1 Prepayment
Percentage of the applicable Non-PO Percentage of the Net Liquidation Proceeds
with respect to such liquidated Mortgage Loan (net of any unreimbursed
Advances);
(v) with respect to each Group One Mortgage Loan repurchased during the
related Principal Prepayment Period, an amount equal to the Non-PO Class AF-1
Prepayment Percentage of the applicable Non-PO Percentage of the principal
portion of the Purchase Price (net of amounts with respect to which a
distribution of principal has previously been made to the Non-PO Class AF-1
Certificateholders);
(vi) on or after the Credit Support Depletion Date, the excess of the
Non-PO Class AF-1 Principal Balance (calculated after giving effect to
reductions thereof on such Distribution Date with respect to the amounts
described in (i) - (v) above) over the Group One Non-PO Allocated Amount, as of
the preceding Distribution Date; and
(vii) Subsequent Recoveries.
Non-PO Class AF-2 Optimal Principal Amount: With respect to any
Distribution Date, the lesser of (a) the Non-PO Class AF-2 Principal Balance and
(b) the sum of:
(i) the Non-PO Class AF-2 Percentage of the applicable Non-PO Percentage of
the principal portion of all Monthly Payments, whether or not received, which
were due during the related Due Period on Group Two Mortgage Loans which were
outstanding during such Due Period;
(ii) the Non-PO Class AF-2 Prepayment Percentage of the applicable Non-PO
Percentage of all Principal Prepayments made on any Group Two Mortgage Loan
during the related Principal Prepayment Period;
(iii) with respect to each Mortgage Loan not described in (iv) below, the
Non-PO Class AF-2 Percentage of the applicable Non-PO Percentage of the
principal portion of all Insurance Proceeds, condemnation awards and any other
cash proceeds from a source other than the applicable Mortgagor, to the extent
required to be deposited in the Master Servicer Collection Account, which were
received during the related Principal Prepayment Period with respect to a Group
Two Mortgage Loan, net of related unreimbursed Servicing Advances and net of any
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portion thereof which, as to any such Mortgage Loan, constitutes Late
Collections that have been the subject of an Advance on any prior Distribution
Date;
(iv) with respect to each Group Two Mortgage Loan which has become a
Liquidated Mortgage Loan during the related Principal Prepayment Period, the
lesser of (A) the Non-PO Class AF-2 Percentage of the applicable Non-PO
Percentage of an amount equal to the Principal Balance of such Liquidated
Mortgage Loan as of the Due Date immediately preceding the date on which it
became a Liquidated Mortgage Loan and (B) the Non-PO Class AF-2 Prepayment
Percentage of the applicable Non-PO Percentage of the Net Liquidation Proceeds
with respect to such liquidated Mortgage Loan (net of any unreimbursed
Advances);
(v) with respect to each Group Two Mortgage Loan repurchased during the
related Principal Prepayment Period, an amount equal to the Non-PO Class AF-2
Prepayment Percentage of the applicable Non-PO Percentage of the principal
portion of the Purchase Price (net of amounts with respect to which a
distribution of principal has previously been made to the Non-PO Class AF-2
Certificateholders);
(vi) on or after the Credit Support Depletion Date, the excess of the
Non-PO Class AF-2 Principal Balance (calculated after giving effect to
reductions thereof on such Distribution Date with respect to the amounts
described in (i) - (v) above) over the Group Two Non-PO Allocated Amount, as of
the preceding Distribution Date; and
(vii) Subsequent Recoveries.
Non-PO Class AF-3 Optimal Principal Amount: With respect to any
Distribution Date, the lesser of (a) the Non-PO Class AF-3 Principal Balance and
(b) the sum of:
(i) the Non-PO Class AF-3 Percentage of the applicable Non-PO Percentage of
the principal portion of all Monthly Payments, whether or not received, which
were due during the related Due Period on Group Three Mortgage Loans which were
outstanding during such Due Period;
(ii) the Non-PO Class AF-3 Prepayment Percentage of the applicable Non-PO
Percentage of all Principal Prepayments made on any Group Three Mortgage Loan
during the related Principal Prepayment Period;
(iii) with respect to each Mortgage Loan not described in (iv) below, the
Non-PO Class AF-3 Percentage of the applicable Non-PO Percentage of the
principal portion of all Insurance Proceeds, condemnation awards and any other
cash proceeds from a source other than the applicable Mortgagor, to the extent
required to be deposited in the Master Servicer Collection Account, which were
received during the related Principal Prepayment Period with respect to a Group
Three Mortgage Loan, net of related unreimbursed Servicing Advances and net of
any portion thereof which, as to any such Mortgage Loan, constitutes Late
Collections that have been the subject of an Advance on any prior Distribution
Date;
(iv) with respect to each Group Three Mortgage Loan which has become a
Liquidated Mortgage Loan during the related Principal Prepayment Period, the
lesser of (A) the Non-PO Class AF-3 Percentage of the applicable Non-PO
Percentage of an amount equal to the Principal
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Balance of such Liquidated Mortgage Loan as of the Due Date immediately
preceding the date on which it became a Liquidated Mortgage Loan and (B) the
Non-PO Class AF-3 Prepayment Percentage of the applicable Non-PO Percentage of
the Net Liquidation Proceeds with respect to such liquidated Mortgage Loan (net
of any unreimbursed Advances);
(v) with respect to each Group Three Mortgage Loan repurchased during the
related Principal Prepayment Period, an amount equal to the Non-PO Class AF-3
Prepayment Percentage of the applicable Non-PO Percentage of the principal
portion of the Purchase Price (net of amounts with respect to which a
distribution of principal has previously been made to the Non-PO Class AF-3
Certificateholders);
(vi) on or after the Credit Support Depletion Date, the excess of the
Non-PO Class AF-3 Principal Balance (calculated after giving effect to
reductions thereof on such Distribution Date with respect to the amounts
described in (i) - (v) above) over the Group Three Non-PO Allocated Amount, as
of the preceding Distribution Date; and
(vii) Subsequent Recoveries.
Non-PO Class AF-1 Percentage: As of any Distribution Date, a fraction,
expressed as a percentage (which shall never exceed 100%), the numerator of
which is the Non-PO Class AF-1 Principal Balance and the denominator of which is
the Group One Non-PO Allocated Amount as of the immediately preceding Due Date.
Non-PO Class AF-2 Percentage: As of any Distribution Date, a fraction,
expressed as a percentage (which shall never exceed 100%), the numerator of
which is the Non-PO Class AF-2 Principal Balance and the denominator of which is
the Group Two Non-PO Allocated Amount of the immediately preceding Due Date.
Non-PO Class AF-3 Percentage: As of any Distribution Date, a fraction,
expressed as a percentage (which shall never exceed 100%), the numerator of
which is the Non-PO Class AF-3 Principal Balance and the denominator of which is
the Group Three Non-PO Allocated Amount of the immediately preceding Due Date.
Non-PO Class AF-1 Prepayment Percentage: As of any Distribution Date up to
and including the Distribution Date in September 2011, 100%; as of any
Distribution Date in the first year thereafter, the Non-PO Class AF-1 Percentage
plus 70% of the Mortgage Group One Subordinated Percentage for such Distribution
Date; as of any Distribution Date in the second year thereafter, the Non-PO
Class AF-1 Percentage plus 60% of the Mortgage Group One Subordinated Percentage
for such Distribution Date; as of any Distribution Date in the third year
thereafter, the Non-PO Class AF-1 Percentage plus 40% of the Mortgage Group One
Subordinated Percentage for such Distribution Date; as of any Distribution Date
in the fourth year thereafter, the Non-PO Class AF-1 Percentage plus 20% of the
Mortgage Group One Subordinated Percentage for such Distribution Date; and as of
any Distribution Date after the fourth year thereafter, the Non-PO Class AF-1
Percentage; provided that, if the Non-PO Class AF-1 Percentage as of any such
Distribution Date is greater than the Non-PO Class AF-1 Percentage on the first
Distribution Date, the Non-PO Class AF-1 Prepayment Percentage shall be 100%;
and provided further, however, that whenever the Non-PO Class AF-1 Percentage
equals 0%, the Non-PO Class AF-1 Prepayment Percentage shall equal 0%; and
provided further
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that no reduction of the Non-PO Class AF-1 Prepayment Percentage below the level
in effect for the most recent period shall occur with respect to any
Distribution Date unless, as of the last day of the month preceding such
Distribution Date, (i) the aggregate outstanding Principal Balance of Mortgage
Loans with respect to any Mortgage Group, each taken individually, delinquent 60
days or more (including for this purpose any Mortgage Loans in foreclosure and
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust Fund) does not exceed 50% of the Mortgage Group One
Subordinated Percentage of the Mortgage Pool Principal Balance with respect to
Mortgage Group One as of such date and (ii) cumulative Realized Losses with
respect to any Mortgage Group, each taken individually, do not exceed (a) 30% of
the related Subordinated Percentage of the Mortgage Pool Principal Balance with
respect to the related Mortgage Group as of the date of issuance of the
Certificates (the related Original Subordinated Principal Balance) if such
Distribution Date occurs between and including October 2011 and September 2012,
(b) 35% of the related Original Subordinated Principal Balance if such
Distribution Date occurs between and including October 2012 and September 2013,
(c) 40% of the related Original Subordinated Principal Balance if such
Distribution Date occurs between and including October 2013 and September 2014,
(d) 45% of the related Original Subordinated Principal Balance if such
Distribution Date occurs between and including October 2014 and September 2015,
and (e) 50% of the related Original Subordinated Principal Balance if such
Distribution Date occurs during or after October 2015.
Non-PO Class AF-2 Prepayment Percentage: As of any Distribution Date up to
and including the Distribution Date in September 2011, 100%; as of any
Distribution Date in the first year thereafter, the Non-PO Class AF-2 Percentage
plus 70% of the Mortgage Group Two Subordinated Percentage for such Distribution
Date; as of any Distribution Date in the second year thereafter, the applicable
Non-PO Class AF-2 Percentage plus 60% of the Mortgage Group Two Subordinated
Percentage for such Distribution Date; as of any Distribution Date in the third
year thereafter, the Non-PO Class AF-2 Percentage plus 40% of the Mortgage Group
Two Subordinated Percentage for such Distribution Date; as of any Distribution
Date in the fourth year thereafter, the applicable Non-PO Class AF-2 Percentage
plus 20% of the Mortgage Group Two Subordinated Percentage for such Distribution
Date; and as of any Distribution Date after the fourth year thereafter, the
Non-PO Class AF-2 Percentage; provided that, if the Non-PO Class AF-2 Percentage
on the first Distribution Date is greater than the Non-PO Class AF-2A
Percentage, the Non-PO Class AF-2 Prepayment Percentage shall be 100%; and
provided further, however, that whenever the Non-PO Class AF-2 Percentage equals
0%, the Non-PO Class AF-2 Prepayment Percentage shall equal 0%; and provided
further that no reduction of the Non-PO Class AF-2 Prepayment Percentage below
the level in effect for the most recent period shall occur with respect to any
Distribution Date unless, as of the last day of the month preceding such
Distribution Date, (i) the aggregate outstanding Principal Balance of Mortgage
Loans with respect to any Mortgage Group, each taken individually, delinquent 60
days or more (including for this purpose any Mortgage Loans in foreclosure and
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust Fund) does not exceed 50% of the Mortgage Group Two
Subordinated Percentage of the Mortgage Pool Principal Balance with respect to
Mortgage Group Two as of such date and (ii) cumulative Realized Losses with
respect to any Mortgage Group, each taken individually, do not exceed (a) 30% of
the related Subordinated Percentage of the Mortgage Pool Principal Balance with
respect to the related Mortgage Group as of the date of issuance of the
Certificates (the related Original Subordinated Principal Balance) if such
Distribution Date occurs between and including October 2011 and
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September 2012, (b) 35% of the related Original Subordinated Principal Balance
if such Distribution Date occurs between and including October 2012 and
September 2013, (c) 40% of the related Original Subordinated Principal Balance
if such Distribution Date occurs between and including October 2013 and
September 2014, (d) 45% of the related Original Subordinated Principal Balance
if such Distribution Date occurs between and including October 2014 and
September 2015, and (e) 50% of the related Original Subordinated Principal
Balance if such Distribution Date occurs during or after October 2015.
Non-PO Class AF-3 Prepayment Percentage: As of any Distribution Date up to
and including the Distribution Date in September 2011, 100%; as of any
Distribution Date in the first year thereafter, the Non-PO Class AF-3 Percentage
plus 70% of the Mortgage Group Three Subordinated Percentage for such
Distribution Date; as of any Distribution Date in the second year thereafter,
the applicable Non-PO Class AF-3 Percentage plus 60% of the Mortgage Group Three
Subordinated Percentage for such Distribution Date; as of any Distribution Date
in the third year thereafter, the Non-PO Class AF-3 Percentage plus 40% of the
Mortgage Group Three Subordinated Percentage for such Distribution Date; as of
any Distribution Date in the fourth year thereafter, the applicable Non-PO Class
AF-3 Percentage plus 20% of the Mortgage Group Three Subordinated Percentage for
such Distribution Date; and as of any Distribution Date after the fourth year
thereafter, the Non-PO Class AF-3 Percentage; provided that, if the Non-PO Class
AF-3 Percentage on the first Distribution Date is greater than the Non-PO Class
AF-3 Percentage, the Non-PO Class AF-3 Prepayment Percentage shall be 100%; and
provided further, however, that whenever the Non-PO Class AF-3 Percentage equals
0%, the Non-PO Class AF-3 Prepayment Percentage shall equal 0%; and provided
further that no reduction of the Non-PO Class AF-3 Prepayment Percentage below
the level in effect for the most recent period shall occur with respect to any
Distribution Date unless, as of the last day of the month preceding such
Distribution Date, (i) the aggregate outstanding Principal Balance of Mortgage
Loans with respect to any Mortgage Group, each taken individually, delinquent 60
days or more (including for this purpose any Mortgage Loans in foreclosure and
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust Fund) does not exceed 50% of the Mortgage Group Three
Subordinated Percentage of the Mortgage Pool Principal Balance with respect to
Mortgage Group Three as of such date and (ii) cumulative Realized Losses with
respect to any Mortgage Group, each taken individually, do not exceed (a) 30% of
the related Subordinated Percentage of the Mortgage Pool Principal Balance with
respect to the related Mortgage Group as of the date of issuance of the
Certificates (the related Original Subordinated Principal Balance) if such
Distribution Date occurs between and including October 2011 and September 2012,
(b) 35% of the related Original Subordinated Principal Balance if such
Distribution Date occurs between and including October 2012 and September 2013,
(c) 40% of the related Original Subordinated Principal Balance if such
Distribution Date occurs between and including October 2013 and September 2014,
(d) 45% of the related Original Subordinated Principal Balance if such
Distribution Date occurs between and including October 2014 and September 2015,
and (e) 50% of the related Original Subordinated Principal Balance if such
Distribution Date occurs during or after October 2015.
Non-PO Class AF-1 Principal Balance: As of any Distribution Date, (a) the
Non-PO Class AF-1 Principal Balance for the immediately preceding Distribution
Date less (b) amounts distributed (or deemed distributed) to the Class AF-1
Certificateholders on such preceding Distribution Date allocable to principal
(including the principal portion of Advances of the
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Servicer made pursuant to Section 6.06 and Realized Losses allocated to the
Class AF-1 Certificates pursuant to Section 6.02); provided that the Non-PO
Class AF-1 Principal Balance on the first Distribution Date shall be the
Original Non-PO Class AF-1 Principal Balance.
Non-PO Class AF-2 Principal Balance: As of any Distribution Date, (a) the
Non-PO Class AF-2 Principal Balance for the immediately preceding Distribution
Date less (b) amounts distributed (or deemed distributed) to the Class AF-2
Certificateholders on such preceding Distribution Date allocable to principal
(including the principal portion of Advances of the Servicer made pursuant to
Section 6.06 and Realized Losses allocated to the Class AF-2 Certificates
pursuant to Section 6.02); provided that the Non-PO Class AF-2 Principal Balance
on the first Distribution Date shall be the Original Non-PO Class AF-2 Principal
Balance.
Non-PO Class AF-3 Principal Balance: As of any Distribution Date, (a) the
Non-PO Class AF-3 Principal Balance for the immediately preceding Distribution
Date less (b) amounts distributed (or deemed distributed) to the Class AF-3
Certificateholders on such preceding Distribution Date allocable to principal
(including the principal portion of Advances of the Servicer made pursuant to
Section 6.06 and Realized Losses allocated to the Class AF-3 Certificates
pursuant to Section 6.02); provided that the Non-PO Class AF-3 Principal Balance
on the first Distribution Date shall be the Original Non-PO Class AF-3 Principal
Balance.
Non-PO Class AF-1 Principal Payment Rules: With respect to any Distribution
Date, distributions to the Class AF-1 Certificateholders pursuant to Section
6.01(I)(b)(ii)(A) shall be made to the Class AF-1 Certificates, until the Class
Certificate Balance of such class has been reduced to zero.
Non-PO Class AF-2 Principal Payment Rules:
(I) With respect to any Distribution Date up to and including the Credit
Support Depletion Date, distributions to the Class AF-2 Certificateholders
pursuant to Section 6.01(I)(b)(ii)(B) shall be made in the following amounts and
priority:
pro rata, as follows:
(a) to the Class AF-2A Certificates, based upon their outstanding principal
balance, until the Class Certificate Balance of such Class has been reduced to
zero; and
(b) to the aggregate of the Class AF-2B Certificates and Class AF-2C
Certificates, based upon their aggregate outstanding principal balance, as
follows:
(i) first, to the Class AF-2B Certificates, until the Class Certificate
Balance of such Class has been reduced to zero; and
(ii) to the Class AF-2C Certificates, until the Class Certificate Balance
of such Class has been reduced to zero.
(II) With respect to any Distribution Date after the Credit Support
Depletion Date, distributions pursuant to Section 6.01(I)(b)(ii)(B) shall be
made pro rata among the outstanding Classes of Class AF-2 Certificates in
relation to the respective Class Certificate Balances of such outstanding
Classes, and not in accordance with the priority of payments among such Classes
set forth in clause (I) above.
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Non-PO Class AF-3 Principal Payment Rules:
(I) With respect to any Distribution Date up to and including the Credit
Support Depletion Date, distributions to the Class AF-3 Certificateholders
pursuant to Section 6.01(I)(b)(ii)(C) shall be made in the following amounts and
priority:
first, to the Class AF-3A Certificates, until the Class Certificate Balance
of such class has been reduced to zero; and
second, to the Class AF-3B Certificates, until the Class Certificate
Balance of such class has been reduced to zero.
(II) With respect to any Distribution Date after the Credit Support
Depletion Date, distributions pursuant to Section 6.01(I)(b)(ii)(B) shall be
made pro rata among the outstanding Classes of Class AF-3 Certificates in
relation to the respective Class Certificate Balances of such outstanding
Classes, and not in accordance with the priority of payments among such Classes
set forth in clause (I) above.
Non-PO Percentage: With respect to each Mortgage Loan, the fraction,
expressed as a percentage (but not greater than 100%), the numerator of which
equals the applicable Net Mortgage Rate and the denominator of which equals the
applicable Remittance Rate.
Non-PO Principal Balance: In the case of a Non-Discount Mortgage Loan, the
Stated Principal Balance of such Mortgage Loan and, in the case of a Discount
Mortgage Loan, the product of (i) the Stated Principal Balance of such Mortgage
Loan and (ii) the Non-PO Percentage for such Mortgage Loan.
Nonrecoverable Advance: With respect to any Mortgage Loan any advance or
Monthly Advance (i) which was previously made or is proposed to be made by the
applicable Servicer, or the Master Servicer as successor Servicer, or the
Trustee as successor Master Servicer and (ii) which, in the good faith judgment
of the applicable Servicer, the Master Servicer or the Trustee, will not or, in
the case of a proposed advance or Monthly Advance, would not, be ultimately
recoverable by the applicable Servicer, the Master Servicer or the Trustee (as
successor Master Servicer) from Liquidation Proceeds, Insurance Proceeds or
future payments on the Mortgage Loan for which such advance or Monthly Advance
was made.
Offered Certificate: Any Senior Certificate or Offered Subordinate
Certificate issued hereunder, along with the Class AV-1A, Class AV-1B, Class
AV-2A, Class AV-2B, Class MV-1, Class MV-2 or Class MV-3 Certificates defined
and issued pursuant to the terms and conditions of the Stack II Agreement.
Offered Subordinate Certificates: The Class MF-l, Class MF-2 and Class MF-3
Certificates.
Officer's Certificate: A certificate signed by the Chairman of the Board,
the Vice Chairman of the Board, the President or a Vice President or Assistant
Vice President or other authorized officer of the Master Servicer or the
Depositor, as applicable, and delivered to the Trustee, as required by this
Agreement.
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Opinion of Counsel: A written opinion of counsel who is or are acceptable
to the Trustee and who, unless required to be Independent (an "Opinion of
Independent Counsel"), may be internal counsel for the Master Servicer or the
Depositor.
Optional Termination: The termination hereunder of that portion of the
Trust Fund related to the Certificates pursuant to Section 10.01(a) hereof.
Optional Termination Amount: The amount received by the Securities
Administrator in connection with any purchase of all of the Mortgage Loans and
REO Properties pursuant to Section 10.01(b) hereof.
Optional Termination Price: On any date after the Initial Optional
Termination Date, an amount equal to the sum of (A) the aggregate Stated
Principal Balance of each Mortgage Loan (other than any Mortgage Loan that has
become an REO Property) as of the Distribution Date on which the proceeds of the
Optional Termination are distributed to the Certificateholders, plus accrued
interest thereon at the applicable Mortgage Interest Rate as of the Due Date
preceding the Distribution Date on which the proceeds of the Optional
Termination are distributed to Certificateholders and the fair market value of
any REO Property, plus accrued interest thereon as of the Distribution Date on
which the proceeds of the Optional Termination are distributed to
Certificateholders, (B) any unreimbursed out-of-pocket costs and expenses owed
to the Master Servicer, the Trustee or the Securities Administrator (including
any amounts incurred by the Securities Administrator in connection with
conducting the Auction), a Servicer or the Master Servicer and any unpaid or
unreimbursed Servicing Fees, Monthly Advances and Servicing Advances, (C) any
unreimbursed costs, penalties and/or damages incurred by the Trust Fund in
connection with any violation relating to any of the Mortgage Loans of any
predatory or abusive lending law and (D) in the event an Auction has been
conducted, all reasonable fees and expenses incurred by the Securities
Administrator to conduct the Auction.
Original Class IO Notional Amount: The Class Certificate Balance of the
Class IO Certificates on the Closing Date, as set forth opposite such Class in
the Preliminary Statement.
Original Credit Support: With respect to any Class of Subordinate
Certificates (other than the Class B-3 Certificates), the level of Credit
Support indicated below:
Class A: 5.75%
Class M-1: 3.70%
Class M-2: 2.50%
Class M-3: 1.75%
Class B-1: 1.00%
Class B-2: 0.45%
Original Subordinated Principal Balance: The sum of the aggregate Class
Certificate Balances of each Class of Subordinate Certificates as of the Closing
Date.
Original Value: The lesser of (i) the Appraised Value or (ii) the sales
price of a Mortgaged Property at the time of origination of a Mortgage Loan,
except in instances where either clauses (i) or (ii) is unavailable, the other
may be used to determine the Original Value, or
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if both clauses (i) and (ii) are unavailable, Original Value may be determined
from other sources reasonably acceptable to the Depositor.
Outstanding Mortgage Loan: With respect to any Due Date, a Mortgage Loan
which, prior to such Due Date, was not the subject of a Principal Prepayment in
Full, did not become a Liquidated Mortgage Loan and was not purchased or
replaced.
Outstanding Principal Balance: As of the time of any determination, the
principal balance of a Mortgage Loan remaining to be paid by the Mortgagor, or,
in the case of an REO Property, the principal balance of the related Mortgage
Loan remaining to be paid by the Mortgagor at the time such property was
acquired by the Trust Fund less any Net Liquidation Proceeds with respect
thereto to the extent applied to principal.
Ownership Interest: As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
Paying Agent: The Securities Administrator or any successor Paying Agent
appointed by the Securities Administrator.
Percentage Interest: With respect to any Certificate (other than the Class
P Certificates), a fraction, expressed as a percentage, the numerator of which
is the Initial Class Certificate Balance (or Class IO Notional Amount in the
case of the Class IO Certificates) represented by such Certificate and the
denominator of which is the Initial Class Certificate Balance (or Class IO
Notional Amount in the case of the Class IO Certificates) of the related Class.
With respect to the Class P Certificates, the Percentage Interest evidenced
thereby shall be as specified on the face thereof, or otherwise, be equal to
100%.
Permitted Investments: Any one or more of the following obligations or
securities held in the name of the Trustee for the benefit of the
Certificateholders (provided that such obligation or security must be a
"permitted investment" within the meaning of such term as provided for in
Section 860G(a)(5) of the Code):
(i) direct obligations of, and obligations the timely payment of which
are fully guaranteed by the United States of America or any agency or
instrumentality of the United States of America the obligations of which
are backed by the full faith and credit of the United States of America;
(ii) (a) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States of America or any state
thereof (including the Trustee or the Master Servicer or its Affiliates
acting in its commercial banking capacity) and subject to supervision and
examination by federal and/or state banking authorities, provided that the
commercial paper and/or the short-term debt rating and/or the long-term
unsecured debt obligations of such depository institution or trust company
at the time of such investment or contractual commitment providing for such
investment have the Applicable Credit Rating or better from each Rating
Agency and (b) any other demand or time deposit or certificate of deposit
that is fully insured by the Federal Deposit Insurance Corporation;
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(iii) repurchase obligations with respect to (a) any security
described in clause (i) above or (b) any other security issued or
guaranteed by an agency or instrumentality of the United States of America,
the obligations of which are backed by the full faith and credit of the
United States of America, in either case entered into with a depository
institution or trust company (acting as principal) described in clause
(ii)(a) above where the Trustee holds the security therefor;
(iv) securities bearing interest or sold at a discount issued by any
corporation (including the Trustee or the Master Servicer or its
Affiliates) incorporated under the laws of the United States of America or
any state thereof that have the Applicable Credit Rating or better from
each Rating Agency at the time of such investment or contractual commitment
providing for such investment; provided, however, that securities issued by
any particular corporation will not be Permitted Investments to the extent
that investments therein will cause the then outstanding principal amount
of securities issued by such corporation and held as part of the Issuing
Entity to exceed 10% of the aggregate Outstanding Principal Balances of all
the Mortgage Loans and Permitted Investments held as part of the Issuing
Entity;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than one year after the date of issuance thereof)
having the Applicable Credit Rating or better from each Rating Agency at
the time of such investment;
(vi) a Reinvestment Agreement issued by any bank, insurance company or
other corporation or entity;
(vii) any other demand, money market or time deposit, obligation,
security or investment as may be acceptable to either Rating Agency as
evidenced in writing by each Rating Agency to the Trustee or Master
Servicer;
(viii) any money market or common trust fund having the Applicable
Credit Rating or better from each Rating Agency (if such fund is rated by
each Rating Agency), including any such fund for which the Trustee or
Master Servicer or any affiliate of the Trustee or Master Servicer acts as
a manager or an advisor; provided, however, that no instrument or security
shall be a Permitted Investment if such instrument or security evidences a
right to receive only interest payments with respect to the obligations
underlying such instrument or if such security provides for payment of both
principal and interest with a yield to maturity in excess of 120% of the
yield to maturity at par or if such instrument or security is purchased at
a price greater than par; and
(ix) units of a taxable money-market portfolio having the highest
rating assigned by each Rating Agency (except if S&P is a Rating Agency,
"AAAm" or "AAAM-G" by S&P) and restricted to obligations issued or
guaranteed by the United States of America or entities whose obligations
are backed by the full faith and credit of the United States of America and
repurchase agreements collateralized by such obligations.
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Permitted Transferee: Any Person other than a Disqualified Organization or
an "electing large partnership" (as defined by Section 775 of the Code).
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Principal Prepayment Period: With respect to any Distribution Date, the
period beginning on the first day of the month preceding the month in which such
Distribution Date occurs and ending on the last day of such month.
PHH: PHH Mortgage Corporation, or any successor thereto.
PHH Assignment Agreement: The Assignment, Assumption and Recognition
Agreement, dated as of September 1, 2006, among PHH Mortgage Corporation, the
Depositor and the Seller pursuant to which the PHH Servicing Agreement and the
rights of the Seller thereunder (other than the rights to enforce the
representations and warranties with respect to the PHH Mortgage Loans) were
assigned to the Depositor for the benefit of the Certificateholders.
PHH Mortgage Loans: The Mortgage Loans serviced by PHH pursuant to the PHH
Servicing Agreement.
PHH Servicing Agreement: The Mortgage Loan Flow Purchase, Sale and
Servicing Agreement dated as of March 27, 2001 between Xxxxxxx Xxxxx Mortgage
Capital Inc., Xxxxxx'x Gate Residential Mortgage Trust (formerly known as
Cendant Residential Mortgage Trust) and Cendant Mortgage Corporation (as amended
and in effect at any time).
Physical Certificate: The Residual Certificate.
Pooling and Servicing Agreement: The Pooling and Servicing Agreement
relating to the Mortgage Pass-Through Certificates, MLMI Series 2006-AF1,
jointly comprised of the Stack II Agreement and this Agreement.
Prepayment Assumption: A rate or rates of prepayment, as described in the
Prospectus Supplement related to the Offered Certificates.
Prepayment Interest Shortfall: As to any Distribution Date and any Mortgage
Loan (other than a Mortgage Loan relating to an REO Property) that was the
subject of (a) a Principal Prepayment in Full during the related Prepayment
Period, an amount equal to the excess of one month's interest at the Net
Mortgage Rate on the Stated Principal Balance of such Mortgage
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Loan over the amount of interest (adjusted to the Net Mortgage Rate) paid by the
Mortgagor for such Prepayment Period to the date of such Principal Prepayment in
Full or (b) a Curtailment during the prior calendar month, an amount equal to
one month's interest at the Net Mortgage Rate on the amount of such Curtailment.
The obligations of the Master Servicer in respect of any Prepayment Interest
Shortfall are set forth in Section 6.06.
Prepayment Penalty: With respect to any Prepayment Period, any prepayment
premium, charge or penalty payable by a Mortgagor in connection with any
Principal Prepayment on the Prepayment Penalty Mortgage Loans.
Prepayment Penalty Mortgage Loans: Any of the Mortgage Loans that are
subject to existing prepayment premiums.
Prepayment Period: With respect to any Mortgage Loan and any Distribution
Date, the calendar month preceding the month in which such Distribution Date
occurs.
Primary Mortgage Insurance Policy: Any primary mortgage guaranty insurance
policy issued in connection with a Mortgage Loan which provides compensation to
a Mortgage Note holder in the event of default by the obligor under such
Mortgage Note or the related Security Instrument, if any or any replacement
policy therefor through the related Accrual Period for such Class relating to a
Distribution Date.
Principal Balance: At the time of any determination, the principal balance
of a Mortgage Loan remaining to be paid at the close of business on the Cut-off
Date (after deduction of all principal payments due on or before the Cut-off
Date whether or not paid) (or, in the case of a substitute Mortgage Loan
included in the Trust Fund pursuant to the Mortgage Loan Purchase Agreement or
Section 2.04, the close of business as of the date of substitution) reduced by
all amounts previously distributed to Certificateholders that are allocable to
payments of principal on such Mortgage Loan (including the principal portion of
Advances of the Servicer made pursuant to Section 6.06).
Principal Prepayment: Any Principal Prepayment in full or Curtailment or
other recovery of principal on a Mortgage Loan which is received in advance of
its scheduled Due Date to the extent that it is not accompanied by an amount as
to interest representing scheduled interest due on any date or dates in any
month or months subsequent to the month of prepayment, including Insurance
Proceeds and Repurchase Proceeds, but excluding the principal portion of Net
Liquidation Proceeds.
Principal Prepayment in Full: Any Principal Prepayment made by a Mortgagor
of the entire unpaid principal balance of the Mortgage Loan.
Private Certificates: Any of the Class BF-1, Class BF-2, Class BF-3 and
Class P Certificates.
Prospectus Supplement: The Prospectus Supplement dated September 28, 2006,
relating to the public offering of the Offered Certificates.
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Protected Account: An account established and maintained for the benefit of
Certificateholders by each Servicer with respect to the related Mortgage Loans
and with respect to REO Property pursuant to the respective Servicing Agreement.
The Protected Account shall be an Eligible Account.
Purchase Price: With respect to any Mortgage Loan or REO Property to be
purchased pursuant to or as contemplated by Section 2.03 or 10.01, and as
confirmed by an Officers' Certificate from the Master Servicer to the Trustee,
an amount equal to the sum of (i) 100% of the Stated Principal Balance thereof
as of the date of purchase (or such other price as provided in Section 10.01),
(ii) accrued interest on such Stated Principal Balance at the applicable
Mortgage Interest Rate in effect from time to time from the Due Date as to which
interest was last covered by a payment by the Mortgagor or an advance by the
related Servicer or Master Servicer, which payment or advance had as of the date
of purchase been distributed to Certificateholders, through the end of the
calendar month in which the purchase is to be effected less any unreimbursed
Monthly Advances and any unpaid Servicing Fees payable to the purchaser of the
Mortgage Loan and (iii) any costs and damages incurred by the Issuing Entity in
connection with any violation by such Mortgage Loan or REO Property of any
predatory or abusive-lending law.
Qualified Insurer: Any insurance company duly qualified as such under the
laws of the state or states in which the related Mortgaged Property or Mortgaged
Properties is or are located, duly authorized and licensed in such state or
states to transact the type of insurance business in which it is engaged and
approved as an insurer by the Master Servicer, so long as the claims paying
ability of which is acceptable to the Rating Agencies for pass-through
certificates having the same rating as the Certificates rated by the Rating
Agencies as of the Closing Date.
Rating Agencies: Xxxxx'x and S&P.
Realized Loss: With respect to a Liquidated Mortgage Loan, the amount by
which the remaining unpaid principal balance of the Mortgage Loan exceeds the
amount of Liquidation Proceeds applied to the principal balance of the related
Mortgage Loan. To the extent the Master Servicer receives Subsequent Recoveries
with respect to any Mortgage Loan, the amount of the Realized Loss with respect
to that Mortgage Loan will be reduced to the extent such recoveries are applied
to reduce the Class Certificate Balance of any Class of Certificates on any
Distribution Date.
Record Date: With respect to each Distribution Date and each class of
Offered Certificates, the close of business on the last Business Day of the
month immediately preceding the month in which the related Distribution Date
occurs.
Reference Banks: Those banks (i) with an established place of business in
London, England, (ii) not controlling, under the control of or under common
control with the Depositor or the Securities Administrator, (iii) that have been
designated as such by the Securities Administrator and (iv) that are engaged in
transactions in the London interbank market.
Refinanced Mortgage Loan: Any Mortgage Loan the proceeds of which were not
used to purchase the related Mortgaged Property.
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Regular Certificates: Any of the Class AF-1, Class AF-2A, Class AF-2B,
Class AF-2C, Class AF-3A, Class AF-3B, Class IO, Class PO, Class MF-1, Class
MF-2, Class MF-3, Class BF-1, Class BF-2 or Class BF-3 Certificates.
Regulation AB: Subpart 22.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. Sections 229.1100-229.1123, as such may be amended from time to time,
and subject to such clarification and interpretation as have been provided by
the Commission in the adopting release (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.
Reinvestment Agreements: One or more reinvestment agreements, acceptable to
each of the Rating Agencies, from a bank, insurance company or other corporation
or entity (including the Trustee).
Relevant Servicing Criteria: The Servicing Criteria applicable to the
various parties, as set forth on Exhibit K hereto. For clarification purposes,
multiple parties can have responsibility for the same Relevant Servicing
Criteria. With respect to a Servicing Function Participant engaged by the Master
Servicer, the Securities Administrator, the Trustee, the Custodian or a
Servicer, the term "Relevant Servicing Criteria" may refer to one or more
discrete functions specified in the Relevant Servicing Criteria applicable to
such parties.
Relief Act: The Servicemembers Civil Relief Act, as amended.
Relief Act Mortgage Loan: Any Mortgage Loan as to which the Monthly Payment
thereof has been reduced due to the application of the Relief Act.
REMIC: Each pool of assets in the Trust Fund designated as a REMIC as
described in the Preliminary Statement.
REMIC Interests: Any regular or residual interest in any of REMIC 1, REMIC
2 or the Upper Tier REMIC, as described in the Preliminary Statement.
REMIC Opinion: An Opinion of Counsel to the effect that a contemplated
action will neither adversely affect the status as a REMIC of any REMIC created
hereunder nor subject any such REMIC to any tax under the REMIC Provisions.
REMIC Provisions: The provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations, including proposed regulations and rulings, and administrative
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
REMIC 1: As described in the Preliminary Statement.
REMIC 1 Interest: Each class of interest in REMIC 1 as described in the
Preliminary Statement.
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REMIC 1 Regular Interest: Each of the REMIC 1 Interests other than the
Class LT1-R Interest.
REMIC 1 Subordinate Balance Ratio: The ratio among the uncertificated
principal balances of each of the REMIC 1 Interests ending with the designation
"A" that is equal to the ratio among, with respect to each such REMIC 1
Interest, the excess of (x) the aggregate Non-PO Percentage of the Principal
Balance of each of the Mortgage Loans in the related Mortgage Group over (y) the
aggregate Class Certificate Balance of the Certificates in the Certificate Group
related to such Mortgage Group.
REMIC 2: Not applicable.
REMIC 2 Interest: Not applicable.
REMIC 2 Regular Interest: Not applicable.
Remittance Rate: With respect to each of Mortgage Group One, Mortgage Group
Two and Mortgage Group Three, the Mortgage Group One Remittance Rate, the
Mortgage Group Two Remittance Rate and the Mortgage Group Three Remittance Rate,
respectively.
REO Property: A Mortgaged Property acquired by the Servicer or Master
Servicer on behalf of the Trust Fund through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.15 in connection with a defaulted
Mortgage Loan.
Reportable Event: As defined in Section 3.18(a).
Reporting Servicer: As defined in Section 3.18(h).
Repurchase Proceeds: The repurchase price in connection with any repurchase
of a Mortgage Loan by the Seller and any cash deposit in connection with the
substitution of a Mortgage Loan.
Request for Release: A request for release in the form attached hereto as
Exhibit D.
Required Insurance Policy: With respect to any Mortgage Loan, any insurance
policy which is required to be maintained from time to time under this Agreement
with respect to such Mortgage Loan.
Residual Certificate: The Class A-R Certificate.
Residual Interest: Not applicable.
Responsible Officer: Any officer assigned to the Corporate Trust Office (or
any successor thereto), including any Vice President, Assistant Vice President,
Trust Officer, any Assistant Secretary, any trust officer or any other officer
of the Trustee or Securities Administrator customarily performing functions
similar to those performed by any of the above designated officers and having
direct responsibility for the administration of this Agreement, and any other
officer of the Trustee or Securities Administrator to whom a matter arising
hereunder may be referred because of such officers familiarity with the subject
matter thereof.
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Rule 144A Letter: The certificate to be furnished by each purchaser of a
Private Certificate (which is also a Physical Certificate) which is a Qualified
Institutional Buyer as defined under Rule 144A promulgated under the Securities
Act, substantially in the form set forth as Exhibit F-3 hereto.
Xxxxxxxx-Xxxxx Act: The Xxxxxxxx-Xxxxx Act of 2002 and the rules and
regulations of the Commission promulgated thereunder (including any
interpretations thereof by the Commission's staff).
Xxxxxxxx-Xxxxx Certification: A written certification signed by an officer
of the Master Servicer that complies with (i) the Xxxxxxxx-Xxxxx Act, and (ii)
Exchange Act Rules 13a-14(d) and 15d-14(d), as in effect from time to time;
provided that if, after the Closing Date (a) the Xxxxxxxx-Xxxxx Act is amended,
(b) the Rules referred to in clause (ii) are modified or superseded by any
subsequent statement, rule or regulation of the Commission or any statement of a
division thereof, or (c) any future releases, rules and regulations are
published by the Commission from time to time pursuant to the Xxxxxxxx-Xxxxx
Act, which in any such case affects the form or substance of the required
certification and results in the required certification being, in the reasonable
judgment of the Master Servicer, materially more onerous that then form of the
required certification as of the Closing Date, the Xxxxxxxx-Xxxxx Certification
shall be as agreed to by the Master Servicer and the Depositor following a
negotiation in good faith to determine how to comply with any such new
requirements.
S&P: Standard and Poor's, a division of The XxXxxx-Xxxx Companies, Inc. or
its successor in interest.
Scheduled Payment: With respect to any Mortgage Loan and any month, the
scheduled payment or payments of principal and interest due during such month on
such Mortgage Loan which either is payable by a Mortgagor in such month under
the related Mortgage Note or, in the case of REO Property, would otherwise have
been payable under the related Mortgage Note.
Scheduled Principal: The principal portion of any Scheduled Payment.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Xxxxx Fargo Bank, N.A., or any successor in
interest, or any successor securities administrator appointed as herein
provided.
Security Agreement: With respect to a Cooperative Loan, the agreement
creating a security interest in favor of the originator in the related
Cooperative Stock.
Security Instrument: A written instrument creating a valid first lien on a
Mortgaged Property securing a Mortgage Note, which may be any applicable form of
mortgage, deed of trust, deed to secure debt or security deed, including any
riders or addenda thereto.
Seller: Xxxxxxx Xxxxx Mortgage Lending, Inc., a Delaware corporation, or
any successor in interest.
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Senior Certificates: The Class AF-1 Certificates, Class AF-2A Certificates,
Class AF-2B Certificates, Class AF-2C Certificates, Class AF-3A Certificates,
Class AF-3B Certificates, Class IO Certificates and Class PO Certificates.
Servicer: With respect to each Mortgage Loan, CitiMortgage, IndyMac or PHH
as applicable and as specified on the Mortgage Loan Schedule.
Servicer Remittance Date: With respect to each Mortgage Loan, the date set
forth in the related Servicing Agreement.
Servicing Advances: With respect to any Mortgage Loan, all customary,
reasonable and necessary "out-of-pocket" costs and expenses incurred by the
Servicer in the performance of its servicing obligations, including, but not
limited to, the cost of (i) preservation, restoration, protection and repair of
a Mortgaged Property or Cooperative Unit, as applicable, (ii) any enforcement or
judicial proceedings with respect to a Mortgage Loan, including foreclosure
actions and (iii) the management and liquidation of REO Property.
Servicing Agreements: The CitiMortgage Servicing Agreement, IndyMac
Servicing Agreement and PHH Servicing Agreement.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing Fee: As to any Mortgage Loan and Distribution Date, an amount
equal to the product of (i) the Stated Principal Balance of such Mortgage Loan
as of the Due Date in the preceding calendar month and (ii) the applicable
Servicing Fee Rate. Such fee shall be payable monthly, computed on the basis of
the same principal amount and period respectively which any related interest
payment on a Mortgage Loan is computed.
Servicing Fee Rate: As to any Mortgage Loan, a per annum rate as set forth
in the Mortgage Loan Schedule.
Servicing Function Participant: Any Sub-Servicer, Subcontractor or any
other Person, engaged by a Servicer, the Custodian, the Master Servicer, the
Paying Agent, the Securities Administrator and the Trustee.
Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
names and specimen signatures appear on a list of servicing officers furnished
to the Trustee by the Master Servicer, as such list may be amended from time to
time.
Stack II Agreement: The Stack II Pooling and Servicing Terms dated as of
September 1, 2006.
Stack II Certificate: Any mortgage pass-through certificate issued pursuant
to the Stack II Agreement, evidencing a beneficial ownership interest in that
portion of the Trust Fund related to the Stack II Mortgage Loans set forth on
the Stack II Mortgage Loan Schedule, signed and countersigned by the Securities
Administrator.
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Stack II Mortgage Loan: A mortgage loan transferred and assigned to the
Trustee pursuant to Section 2.01 or Section 2.04 of the Stack II Agreement and
held as a part of the Trust Fund, as identified in the Stack II Mortgage Loan
Schedule, including a mortgage loan the property securing which has become an
REO Property.
Stack II Mortgage Loan Schedule: The schedule, attached to the Stack II
Agreement as Exhibit B with respect to the Stack II Mortgage Loans and as
amended from time to time to reflect the repurchase or substitution of Stack II
Mortgage Loans pursuant to the Stack II Agreement.
Startup Day: The Closing Date.
Stated Principal Balance: With respect to any Mortgage Loan and Due Date,
the unpaid principal balance of such Mortgage Loan as of such Due Date, as
specified in the amortization schedule at the time relating thereto (before any
adjustment to such amortization schedule by reason of any moratorium or similar
waiver or grace period), after giving effect to any previous partial prepayments
and Liquidation Proceeds received and to the payment of principal due on such
Due date and irrespective of any delinquency in payment by the related
Mortgagor.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing of Mortgage Loans but performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with respect to
Mortgage Loans under the direction or authority of any Servicer (or a
Sub-Servicer of any Servicer), the Master Servicer, the Trustee, the Custodian
or the Securities Administrator.
Subordinate Certificates: The Class MF-1, Class MF-2, Class MF-3, Class
BF-1, Class BF-2 and Class BF-3 Certificates.
Subordinated Optimal Principal Amount: Generally as of any Distribution
Date, an amount, not in excess of the aggregate outstanding principal balance of
the Subordinate Certificates, equal to (1) the sum of (a) an amount equal to the
applicable Subordinated Percentage of the applicable Non-PO Percentage of the
principal portion of all Scheduled Payments whether or not received, which were
due on the related Due Date on outstanding Mortgage Loans as of such Due Date;
(b) an amount equal to the applicable Subordinated Prepayment Percentage of the
applicable Non-PO Percentage of all principal prepayments received during the
related principal Prepayment Period; (c) with respect to each Mortgage Loan not
described in (d) below, an amount equal to the applicable Subordinated
Percentage of the applicable Non-PO Percentage of the sum of the principal
portion of all insurance proceeds, condemnation awards and any other cash
proceeds from a source other than the Mortgagor, to the extent required to be
deposited in the Master Servicer Collection Account, which were received during
the related principal Prepayment Period, net of related unreimbursed servicing
Advances and net of any portion thereof which, as to any Mortgage Loan,
constitutes a late collection with respect to which an Advance has previously
been made; (d) with respect to each Mortgage Loan which has become a Liquidated
Mortgage Loan during the related principal Prepayment Period, an amount equal to
the portion (if any) of the net liquidation proceeds with respect to such
Liquidated Mortgage Loan (net of any unreimbursed Advances) that was not
included in the Class PO Certificate Distribution Amount or the Non-PO Senior
Optimal Principal Amount with respect to such Distribution Date; (e) Subsequent
Recoveries; and (f) with respect to each Mortgage Loan repurchased during the
related principal Prepayment Period, an amount equal to the applicable
Subordinated Prepayment Percentage of the applicable Non-PO Percentage of the
principal portion of the purchase price thereof (net of amounts with respect to
which a distribution has previously been made to the Subordinate
Certificateholders), minus (2) the Class PO Shortfall Amount with respect to
such Distribution Date.
Subordinated Percentage: The Mortgage Group One Subordinated Percentage,
the Mortgage Group Two Subordinated Percentage or the Mortgage Group Three
Subordinated Percentage, as the case may be.
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Subordinated Prepayment Percentage: The Mortgage Group One Subordinated
Prepayment Percentage, the Mortgage group Two Subordinated Prepayment Percentage
or the Mortgage Group Three Prepayment Percentage, as the case may be.
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Subsequent Recoveries: Any amount recovered by a Servicer or the Master
Servicer (net of reimbursable expenses) with respect to a Liquidated Mortgage
Loan with respect to which a Realized Loss was incurred after the liquidation or
disposition of such Mortgage Loan.
Sub-Servicer: Any Person that services Mortgage Loans on behalf of a
Servicer, and is responsible for the performance (whether directly or through
sub-servicers or Subcontractors) of servicing functions required to be performed
under this Agreement, any related Servicing Agreement or any sub-servicing
agreement that are identified in Item 1122(d) of Regulation AB.
Substitute Mortgage Loan: With respect to any Mortgage Loan, which is
tendered to the Trustee pursuant to the related Servicing Agreement, the
Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable, in each case, (i) which has an Outstanding Principal Balance not
greater nor materially less than the Mortgage Loan for which it is to be
substituted; (ii) which has a Mortgage Interest Rate and Net Rate not less than,
and not materially greater than, such Mortgage Loan; (iii) which has a maturity
date not materially earlier or later than such Mortgage Loan and not later than
the latest maturity date of any Mortgage Loan; (iv) which is of the same
property type and occupancy type as such Mortgage Loan; (v) which has a
Loan-to-Value Ratio not greater than the Loan-to-Value Ratio of such Mortgage
Loan; (vi) which is current in payment of principal and interest as of the date
of substitution; and (vii) as to which the payment terms do not vary in any
material respect from the payment terms of the Mortgage Loan for which it is to
be substituted.
Tax Matters Person: The Securities Administrator or any successor thereto
or assignee thereof shall serve as tax administrator hereunder and as agent for
the Tax Matters Person. The Holder of the Residual Certificates shall be the Tax
Matters Person for the related REMIC, as more particularly set forth in Section
9.12 hereof.
Transfer: Any direct or indirect transfer or sale of any Ownership Interest
in a certificate.
Transferor Representation Letter: As defined in Section 5.02(b).
Trustee: HSBC Bank USA, National Association, or its successor in interest,
or any successor trustee appointed as herein provided.
Trust Fund: The corpus of the Issuing Entity created pursuant to Article II
of this Agreement and Article II of the Stack II Agreement.
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Undercollateralized Senior Certificates: As defined in Section 6.01(I).
Underlying Seller: With respect to each Mortgage Loan, IndyMac, Ameriquest
Mortgage Company, Quicken Loans, Inc., The New York Mortgage Corporation and
Weichert, as indicated on the Mortgage Loan Schedule.
Uninsured Cause: Any cause of damage to a Mortgaged Property or related REO
Property such that the complete restoration of such Mortgaged Property or
related REO Property is not fully reimbursable by the hazard insurance policies
required to be maintained pursuant the related Servicing Agreement, without
regard to whether or not such policy is maintained.
United States Person: A citizen or resident of the United States, a
corporation or partnership (including an entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States or any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations),
provided that, for purposes solely of the Class A-R Certificate, no partnership
or other entity treated as a partnership for United States federal income tax
purposes shall be treated as a United States Person unless all persons that own
an interest in such partnership either directly or through any entity that is
not a corporation for United States federal income tax purposes are United
States Persons, or an estate whose income is subject to United States federal
income tax regardless of its source, or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more such United States Persons have the authority to control
all substantial decisions of the trust. To the extent prescribed in regulations
by the Secretary of the Treasury, which have not yet been issued, a trust which
was in existence on August 20, 1996 (other than a trust treated as owned by the
grantor under subpart E of part I of subchapter J of chapter 1 of the Code), and
which was treated as a United States person on August 20, 1996 may elect to
continue to be treated as a United States person notwithstanding the previous
sentence.
Upper Tier REMIC: As described in the Preliminary Statement.
Upper Tier REMIC Regular Interest: Each of (i) each class of the Class AF-1
Certificates, Class AF-2 Certificates, Class AF-3 Certificates, Class M
Certificates and Class B Certificates and (ii) Class IO Component One, Class IO
Component Two, Class IO Component Three, Class PO Component One, Class PO
Component Two and Class PO Component Three.
Voting Rights: The portion of the voting rights of all of the Certificates
which is allocated to any Certificate. The Voting Rights allocated among Holders
of such Certificates outstanding shall be the fraction, expressed as a
percentage, the numerator of which is the aggregate Class Certificate Balance of
all the Certificates of such Class then outstanding and the denominator of which
is the aggregate Class Certificate Balance of all the Certificates then
outstanding. 100.00% of all Voting Rights will be allocated among all holders of
the Certificates in proportion to their then outstanding Class Certificate
Balances; provided, however, that any Certificate registered in the name of the
Master Servicer, the Depositor or the Securities
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Administrator or any of their respective affiliates shall not be included in the
calculation of Voting Rights. The Class P Certificates shall have no voting
rights.
Xxxxx Fargo: Xxxxx Fargo Bank, N.A., or any successor thereto.
Section 1.02 Accounting.
Unless otherwise specified herein, for the purpose of any definition or
calculation, whenever amounts are required to be netted, subtracted or added or
any distributions are taken into account such definition or calculation and any
related definitions or calculations shall be determined without duplication of
such functions.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans to Trustee.
(a) The Depositor concurrently with the execution and delivery of this
Agreement, sells, transfers and assigns to the Issuing Entity without recourse
all its right, title and interest in and to (i) the Mortgage Loans identified in
the Mortgage Loan Schedule, including all interest and principal due with
respect to the Mortgage Loans after the Cut-off Date, but excluding any payments
of principal and interest due on or prior to the Cut-off Date; (ii) such assets
as shall from time to time be credited or are required by the terms of this
Agreement to be credited to the Master Servicer Collection Account, (iii) such
assets relating to the Mortgage Loans as from time to time may be held by the
Servicers in Protected Accounts, the Master Servicer in the Master Servicer
Collection Account and the Securities Administrator in the Distribution Account
for the benefit of the Trustee on behalf of the Certificateholders, (iv) any REO
Property, (v) the Required Insurance Policies and any amounts paid or payable by
the insurer under any Insurance Policy (to the extent the mortgagee has a claim
thereto), (vi) the Mortgage Loan Purchase Agreement to the extent provided in
Subsection 2.03(a), (vii) the rights with respect to the Servicing Agreements as
assigned to the Depositor on behalf of the Certificateholders by the Assignment
Agreements and (viii) any proceeds of the foregoing. Although it is the intent
of the parties to this Agreement that the conveyance of the Depositor's right,
title and interest in and to the Mortgage Loans and other assets in the Trust
Fund pursuant to this Agreement shall constitute a purchase and sale and not a
loan, in the event that such conveyance is deemed to be a loan, it is the intent
of the parties to this Agreement that the Depositor shall be deemed to have
granted to the Trustee a first priority perfected security interest in all of
the Depositor's right, title and interest in, to and under the Mortgage Loans
and other assets in the Trust Fund, and that this Agreement shall constitute a
security agreement under applicable law.
(b) In connection with the above transfer and assignment, the Depositor
hereby deposits with the Trustee or the Custodian, as its agent, the following
documents or instruments
(I) with respect to each Mortgage Loan, other than a Cooperative Loan:
(i) the original Mortgage Note, endorsed in the following form: "Pay
to the order of HSBC Bank USA, National Association, as Trustee for the
registered holders of
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the Xxxxxxx Xxxxx Mortgage Investors, Inc., Mortgage Pass-Through
Certificates, Series 2006-AF1, without recourse," with all prior and
intervening endorsements showing a complete chain of endorsement from the
originator to the Person so endorsing to the Trustee;
(ii) the original recorded Mortgage or a copy of the Mortgage
certified by the public recording office in which such Mortgage has been
recorded;
(iii) an original Assignment of the Mortgage executed in the following
form: "HSBC Bank USA, National Association, as Trustee for the registered
holders of the Xxxxxxx Xxxxx Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 2006-AF1."
(iv) the original recorded Assignment or Assignments of the Mortgage
showing a complete chain of assignment from the originator to the Person
assigning the Mortgage to the Trustee as contemplated by the immediately
preceding clause (iii), if applicable and only to the extent available to
the Depositor with evidence of recording thereon;
(v) the originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon, if any;
(vi) the original of any guarantee executed in connection with the
Mortgage Note;
(vii) the original mortgagee title insurance policy;
(viii) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage; and
(ix) the original power of attorney, if applicable.
and (II) with respect to each Mortgage Loan that is a Cooperative Loan:
(x) the original Mortgage Note, endorsed in the following form: "Pay
to the order of HSBC Bank USA, National Association, as Trustee for the
registered holders of the Xxxxxxx Xxxxx Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 2006-AF1, without recourse," with all
prior and intervening endorsements showing a complete chain of endorsement
from the originator to the Person so endorsing to the Trustee;
(xi) the original duly executed assignment of Security Agreement to
the Trustee;
(xii) the acknowledgment copy of the original executed Form UCC-1 (or
certified copy thereof) with respect to the Security Agreement, and any
required continuation statements;
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(xiii) the acknowledgment copy of the original executed Form UCC-3
with respect to the Security Agreement, indicating the Trustee as the
assignee of the secured party;
(xiv) the stock certificate representing the Cooperative Assets
allocated to the cooperative unit, with a stock power in blank attached;
(xv) the original collateral assignment of the proprietary lease by
Mortgagor to the originator;
(xvi) a copy of the recognition agreement;
(xvii) if applicable and to the extent available, the original
intervening assignments, including warehousing assignments, if any,
showing, to the extent available, an unbroken chain of the related Mortgage
Loan to the Trustee, together with a copy of the related Form UCC-3 with
evidence of filing thereon; and
(xviii) the originals of each assumption, modification or substitution
agreement, if any, relating to the Mortgage Loan;
provided, however, that in lieu of the foregoing, the Depositor may deliver the
following documents, under the circumstances set forth below: (w) the Depositor
may deliver a Mortgage Note pursuant to (a)(i) and (b)(i) endorsed in blank,
provided that the endorsement is completed within 60 days of the Closing Date;
(x) in lieu of the original Mortgage, assignments to the Trustee or its
Custodian, as applicable, or intervening assignments thereof which have been
delivered, are being delivered or will, upon receipt of recording information
relating to the Mortgage required to be included thereon, be delivered to
recording offices for recording and have not been returned to the Depositor in
time to permit their delivery as specified above, the Depositor may deliver a
true copy thereof with a certification by the Depositor on the face of such
copy, substantially as follows: "Certified to be a true and correct copy of the
original, which has been transmitted for recording"; and (y) in lieu of the
Mortgage, assignment to the Trustee or intervening assignments thereof, if the
applicable jurisdiction retains the originals of such documents (as evidenced by
a certification from the Depositor or the Master Servicer, to such effect) the
Depositor may deliver photocopies of such documents containing an original
certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; and provided, further, however,
that in the case of Mortgage Loans which have been prepaid in full after the
Cut-off Date and prior to the Closing Date, the Depositor, in lieu of delivering
the above documents, may deliver to the Trustee or its Custodian, as applicable,
a certification to such effect and shall deposit all amounts paid in respect of
such Mortgage Loans in the Distribution Account on the Closing Date. The
Depositor shall deliver such original documents (including any original
documents as to which certified copies had previously been delivered) to the
Trustee or its Custodian, as applicable, promptly after they are received. As of
the date hereof, recordation of the assignment of the Mortgage Loans to the
Trustee or the Custodian, as applicable, is not required in any state by either
Rating Agency to obtain the initial rating on the Certificates (upon which
statement the Master Servicer, the Trustee and the Custodian may each
conclusively rely).
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If any original Mortgage Note referred to in Section 2.01(b)(I)(i) or
2.01(b)(II)(i) above cannot be located, the obligations of the Depositor to
deliver such documents shall be deemed to be satisfied upon delivery to the
Trustee or its Custodian, as applicable, of a photocopy of such Mortgage Note,
if available, with a lost note affidavit. If any of the original Mortgage Notes
for which a lost note affidavit was delivered to the Trustee or its Custodian,
as applicable, is subsequently located, such original Mortgage Note shall be
delivered to the Trustee or its Custodian, as applicable, within three Business
Days.
(c) The parties hereto agree that it is not intended that any mortgage loan
be included in the Trust Fund that is, without limitation, a "High Cost Loan" as
defined by the Home Ownership and Equity Protection Act of 1994 or any other
applicable anti-predatory lending laws, including but not limited to (i) a
"High-Cost Home Loan" as defined in the New Jersey Home Ownership Act effective
November 27, 2003, (ii) a "High-Cost Home Loan" as defined in the New Mexico
Home Loan Protection Act effective January 1, 2004, (iii) a "High Cost Home
Mortgage Loan" as defined in the Massachusetts Predatory Home Loan Practices Act
effective November 7, 2004 or (iv) a "High-Cost Home Loan" as defined by the
Indiana High Cost Home Loan Law effective January 1, 2005.
(d) Notwithstanding anything to the contrary contained herein, the parties
hereto acknowledge that the functions of the Trustee with respect to the
custody, acceptance, inspection and release of Mortgage Files, including but not
limited to certain insurance policies and documents contemplated by Section 3.12
of this Agreement, and preparation and delivery of the certifications shall be
performed by the Custodian(s) pursuant to the terms and conditions of the
Custodial Agreement(s).
Section 2.02 Acceptance of Mortgage Loans by Trustee.
(a) The Trustee acknowledges the sale, transfer and assignment of the Trust
Fund to it by the Depositor and its receipt thereof, subject to further review
and the exceptions which may be noted pursuant to the procedures described
below, and declares that it, or the Custodian on its behalf, holds the documents
(or certified copies thereof) delivered to it pursuant to Section 2.01, and
declares that it will continue to hold those documents and any amendments,
replacements or supplements thereto and all other assets of the Trust Fund
delivered to it as Trustee in trust for the use and benefit of all present and
future Holders of the Certificates. On or before the Closing Date (or, with
respect to any Substitute Mortgage Loan, within five Business Days after the
receipt by the Trustee or Custodian thereof), the Trustee agrees, for the
benefit of the Certificateholders, to review or cause to be reviewed by the
Custodian on its behalf (under the Custodial Agreement), each Mortgage File
delivered to it and to execute and deliver, or cause to be executed and
delivered, to the Depositor on the Closing Date an Initial Certification. In
conducting such review, the Trustee or Custodian will certify as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or any Mortgage Loan specifically identified in the exception
report annexed thereto as not being covered by such certification), (i) all
documents constituting part of such Mortgage File (other than such documents
described in Section 2.01(b)(I)(iii)) required to be delivered to it pursuant to
this Agreement are in its possession, provided that with respect to the
documents described in Section 2.01(b)(I)(v), (vi), (viii) and (ix) and
2.01(b)(II)(viii) and (ix) to the extent the Trustee or the Custodian on its
behalf has actual knowledge that such documents exist, (ii) such documents have
been reviewed by it and are not torn, mutilated, defaced or otherwise altered
(except if
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initialed by the obligor) and appear to relate on their face to such Mortgage
Loan, (iii) based on its examination and only as to the foregoing, the
information set forth in the Mortgage Loan Schedule corresponding to the loan
number for the Mortgage Loan, the Mortgagor's name, including the street address
but excluding the zip code, the Mortgage Interest Rate and the original
principal balance of the Mortgage Loan accurately reflects information set forth
in the Mortgage File and (iv) with respect to Mortgage Loans with a Mortgage
Interest Rate subject to adjustment, the gross margin, the lifetime cap and the
periodic cap for such Mortgage Loan. In performing any such review, the Trustee,
or the Custodian, as its agent, may conclusively rely on the purported due
execution and genuineness of any such document and on the purported genuineness
of any signature thereon. Notwithstanding anything to the contrary in this
Agreement, it is herein acknowledged that, in conducting such review, the
Trustee or the Custodian on its behalf is under no duty or obligation to
inspect, review or examine any such documents, instruments, certificates or
other papers to determine whether they are genuine, enforceable, or appropriate
for the represented purpose or whether they have actually been recorded or that
they are other than what they purport to be on their face, or to determine
whether any Person executing any documents is authorized to do so or whether any
signature is genuine.
If the Trustee or the Custodian, as its agent, finds any document
constituting part of the Mortgage File not to have been executed or received, or
to be unrelated to the Mortgage Loans identified in Exhibit B or to appear to be
defective on its face, the Trustee or the Custodian, as its agent, shall
promptly notify the Seller. In accordance with the Mortgage Loan Purchase
Agreement, the Seller shall correct or cure any such defect within ninety (90)
days from the date of notice from the Trustee or the Custodian, as its agent, of
the defect and if the Seller fails to correct or cure the defect within such
period, and such defect materially and adversely affects the interests of the
Certificateholders in the related Mortgage Loan, the Trustee, shall enforce the
Seller's obligation pursuant to the Mortgage Loan Purchase Agreement, within 90
days from the Trustee's or the Custodian's notification, to purchase such
Mortgage Loan at the Purchase Price; provided that, if such defect would cause
the Mortgage Loan to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such cure or repurchase must occur within 90 days
from the date such breach was discovered; provided, however, that if such defect
relates solely to the inability of the Seller to deliver the original Security
Instrument or intervening assignments thereof, or a certified copy because the
originals of such documents, or a certified copy have not been returned by the
applicable jurisdiction, the Seller shall not be required to purchase such
Mortgage Loan if the Seller delivers such original documents or certified copy
promptly upon receipt, but in no event later than 360 days after the Closing
Date. The foregoing repurchase obligation shall not apply in the event that the
Seller cannot deliver such original or copy of any document submitted for
recording to the appropriate recording office in the applicable jurisdiction
because such document has not been returned by such office; provided that the
Seller shall instead deliver a recording receipt of such recording office or, if
such receipt is not available, a certificate confirming that such documents have
been accepted for recording, and delivery to the Trustee or the Custodian, as
its agent, shall be effected by the Seller within thirty days of its receipt of
the original recorded document.
(b) No later than 180 days after the Closing Date, the Trustee or the
Custodian, as its agent, will review, for the benefit of the Certificateholders,
the Mortgage Files delivered to it and will execute and deliver or cause to be
executed and delivered to the Depositor a Final Certification. In conducting
such review, the Trustee or the Custodian, as its agent, will certify
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as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan specifically identified in the
exception report annexed thereto as not being covered by such certification),
that (i) all documents constituting part of such Mortgage File (other than such
documents described in Section 2.01(b)(I)(v) and (ix)) required to be delivered
to it pursuant to this Agreement are in its possession, provided that with
respect to the documents described in Section 2.01(b)(I)(v), (vi), (viii) and
(ix) and 2.01(b)(II)(viii) and (ix) to the extent the Trustee or the Custodian
on its behalf has actual knowledge that such documents exist, (ii) such
documents have been reviewed by it and are not torn, mutilated, defaced or
otherwise altered (except if initialed by the obligor) and appear regular on
their face and relate to such Mortgage Loan, (iii) based on its examination and
only as to the foregoing, the information set forth in the Mortgage Loan
Schedule corresponding to the loan number for the Mortgage Loan, the Mortgagor's
name, including the street address but excluding the zip code, the Mortgage
Interest Rate and the original principal balance of the Mortgage Loan accurately
reflects information set forth in the Mortgage File. In performing any such
review, the Trustee, or the Custodian, as its agent, may conclusively rely on
the purported due execution and genuineness of any such document and on the
purported genuineness of any signature thereon. Notwithstanding anything to the
contrary in this Agreement, it is herein acknowledged that, in conducting such
review, the Trustee or the Custodian on its behalf is under no duty or
obligation (i) to inspect, review or examine any such documents, instruments,
certificates or other papers to determine whether they are genuine, enforceable,
or appropriate for the represented purpose or whether they have actually been
recorded or that they are other than what they purport to be on their face, or
to determine whether any Person executing any documents is authorized to do so
or whether any signature is genuine. If the Trustee or the Custodian, as its
agent, finds any document constituting part of the Mortgage File not to have
been executed or received, or to be unrelated to the Mortgage Loans identified
in Exhibit B or to appear to be defective on its face, the Trustee or the
Custodian, as its agent, shall promptly notify the Seller. In accordance with
the Mortgage Loan Purchase Agreement, the Seller shall correct or cure any such
defect within 90 days from the date of notice from the Trustee of the defect and
if the Seller is unable to cure such defect within such period, and if such
defect materially and adversely affects the interests of the Certificateholders
in the related Mortgage Loan, the Trustee shall enforce the Seller's obligation
under the Mortgage Loan Purchase Agreement to purchase such Mortgage Loan at the
Purchase Price, provided, however, that if such defect relates solely to the
inability of the Seller to deliver the original Security Instrument or
intervening assignments thereof, or a certified copy, because the originals of
such documents, or a certified copy, have not been returned by the applicable
jurisdiction, the Seller shall not be required to purchase such Mortgage Loan,
if the Seller delivers such original documents or certified copy promptly upon
receipt, but in no event later than 360 days after the Closing Date.
(c) In the event that a Mortgage Loan is purchased by the Seller in
accordance with Subsections 2.02(a) or (b) above, the Seller shall remit to the
Master Servicer the Purchase Price for deposit in the Master Servicer Collection
Account and the Seller shall provide to the Trustee written notification
detailing the components of the Purchase Price. Upon deposit of the Purchase
Price in the Master Servicer Collection Account, the Depositor shall give
written notice thereof to the Trustee and the Custodian and the Trustee or the
Custodian, as its agent (upon receipt of a Request for Release in the form of
Exhibit D attached hereto with respect to such Mortgage Loan), shall release to
the Seller the related Mortgage File and the Trustee shall execute and deliver
all instruments of transfer or assignment, without recourse, furnished to it by
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the Seller as are necessary to vest in the Seller title to and rights under the
Mortgage Loan. Such purchase shall be deemed to have occurred on the date on
which the Purchase Price in available funds is received by the Trustee. The
Depositor or Master Servicer shall amend the Mortgage Loan Schedule, to reflect
such repurchase and shall promptly notify the Rating Agencies and the Master
Servicer of such amendment. The obligation of the Seller to repurchase any
Mortgage Loan as to which such a defect in a constituent document exists shall
be the sole remedy respecting such defect available to the Certificateholders or
to the Trustee on their behalf.
Section 2.03 Assignment of Interest in the Mortgage Loan Purchase
Agreement.
(a) The Depositor hereby assigns to the Trustee, on behalf of the
Certificateholders, all of its right, title and interest in the Mortgage Loan
Purchase Agreement, including but not limited to Depositor's rights pursuant to
the Servicing Agreements (noting that the Seller has retained the right in the
event of breach of the representations, warranties and covenants, if any, with
respect to the related Mortgage Loans of the related Servicer under the related
Servicing Agreement to enforce the provisions thereof and to seek all or any
available remedies). The obligations of the Seller to substitute or repurchase,
as applicable, a Mortgage Loan shall be the Trustee's and the
Certificateholders' sole remedy for any breach thereof. At the request of the
Trustee, the Depositor shall take such actions as may be necessary to enforce
the above right, title and interest on behalf of the Trustee and the
Certificateholders or shall execute such further documents as the Trustee may
reasonably require in order to enable the Trustee to carry out such enforcement.
With respect to the representations and warranties described in the Mortgage
Loan Purchase Agreement that are made to the best of the Seller's knowledge, if
it is discovered by any of the Depositor, the Seller, the Master Servicer, the
Securities Administrator or the Trustee that the substance of such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan, then notwithstanding
the Seller's lack of knowledge with respect to the substance of such
representation and warranty, such inaccuracy shall be deemed a breach of the
applicable representation or warranty.
(b) If the Depositor, the Master Servicer, Securities Administrator or the
Trustee discovers a breach of any of the representations and warranties set
forth in the Mortgage Loan Purchase Agreement, which breach materially and
adversely affects the value of the interests of Certificateholders or the
Trustee in the related Mortgage Loan, the party discovering the breach shall
give prompt written notice of the breach to the other parties. The Seller,
within 90 days of its discovery or receipt of notice that such breach has
occurred (whichever occurs earlier), shall cure the breach in all material
respects or, subject to the Mortgage Loan Purchase Agreement or Section 2.04 of
this Agreement, as applicable, shall purchase the Mortgage Loan or any property
acquired with respect thereto from the Trustee; provided, however, that if there
is a breach of any representation set forth in the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, and the Mortgage
Loan or the related property acquired with respect thereto has been sold, then
the Seller shall pay, in lieu of the Purchase Price, any excess of the Purchase
Price over the Net Liquidation Proceeds received upon such sale. (If the Net
Liquidation Proceeds exceed the Purchase Price, any excess shall be paid to the
Seller to the extent not required by law to be paid to the borrower.) Any such
purchase by the Seller shall be made by providing an amount equal to the
Purchase Price to the Master Servicer for deposit in the Master Servicer
Collection Account and written notification detailing the components of such
Purchase Price. The Depositor shall notify the Trustee in writing of the deposit
of the Purchase
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Price and submit to the Trustee or the Custodian, as its agent, a Request for
Release, and the Trustee shall release, or the Trustee shall cause the Custodian
to release, to the Seller the related Mortgage File and the Trustee shall
execute and deliver all instruments of transfer or assignment furnished to it by
the Seller, without recourse, as are necessary to vest in the Seller title to
and rights under the Mortgage Loan or any property acquired with respect
thereto. Such purchase shall be deemed to have occurred on the date on which the
Purchase Price in available funds is received by the Master Servicer. The
Depositor or the Master Servicer shall amend the Mortgage Loan Schedule to
reflect such repurchase and shall promptly notify the Master Servicer and the
Rating Agencies of such amendment. Enforcement of the obligation of the Seller
to purchase (or substitute a Substitute Mortgage Loan for) any Mortgage Loan or
any property acquired with respect thereto (or pay the Purchase Price as set
forth in the above proviso) as to which a breach has occurred and is continuing
shall constitute the sole remedy respecting such breach available to the
Certificateholders or the Trustee on their behalf.
Section 2.04 Substitution of Mortgage Loans. Notwithstanding anything to
the contrary in this Agreement, in lieu of purchasing a Mortgage Loan pursuant
to the Mortgage Loan Purchase Agreement or Sections 2.02 or 2.03 of this
Agreement, the Seller may, no later than the date by which such purchase by the
Seller would otherwise be required, tender to the Trustee a Substitute Mortgage
Loan accompanied by a certificate of an authorized officer of the Seller that
such Substitute Mortgage Loan conforms to the requirements set forth in the
definition of "Substitute Mortgage Loan" in the Mortgage Loan Purchase Agreement
or this Agreement, as applicable; provided, however, that substitution pursuant
to the Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable, in lieu of purchase shall not be permitted after the termination of
the two-year period beginning on the Startup Day; provided, further, that if the
breach would cause the Mortgage Loan to be other than a "qualified mortgage" as
defined in Section 860G(a)(3) of the Code, any such cure or substitution must
occur within 90 days from the date the breach was discovered. The Trustee or the
Custodian, as its agent, shall examine the Mortgage File for any Substitute
Mortgage Loan in the manner set forth in Section 2.02(a) and the Trustee or the
Custodian, as its agent, shall notify the Seller, in writing, within five
Business Days after receipt, whether or not the documents relating to the
Substitute Mortgage Loan satisfy the requirements of the fourth sentence of
Subsection 2.02(a). Within two Business Days after such notification, the Seller
shall provide to the Securities Administrator for deposit in the Distribution
Account the amount, if any, by which the Outstanding Principal Balance as of the
next preceding Due Date of the Mortgage Loan for which substitution is being
made, after giving effect to Scheduled Principal due on such date, exceeds the
Outstanding Principal Balance as of such date of the Substitute Mortgage Loan,
after giving effect to Scheduled Principal due on such date, which amount shall
be treated for the purposes of this Agreement as if it were the payment by the
Seller of the Purchase Price for the purchase of a Mortgage Loan by the Seller.
After such notification to the Seller and, if any such excess exists, upon
written notification of the receipt of such deposit, the Trustee shall accept
such Substitute Mortgage Loan which shall thereafter be deemed to be a Mortgage
Loan hereunder. In the event of such a substitution, accrued interest on the
Substitute Mortgage Loan for the month in which the substitution occurs and any
Principal Prepayments made thereon during such month shall be the property of
the Issuing Entity and accrued interest for such month on the Mortgage Loan for
which the substitution is made and any Principal Prepayments made thereon during
such month shall be the property of the Seller. The Scheduled Principal on a
Substitute Mortgage Loan due on the Due Date in the month of substitution shall
be the property
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of the Seller and the Scheduled Principal on the Mortgage Loan for which the
substitution is made due on such Due Date shall be the property of the Issuing
Entity. Upon acceptance of the Substitute Mortgage Loan (and delivery to the
Trustee or Custodian of a Request for Release for such Mortgage Loan), the
Trustee shall release to the Seller the related Mortgage File related to any
Mortgage Loan released pursuant to the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable, and shall execute and deliver all
instruments of transfer or assignment, without recourse, in form as provided to
it as are necessary to vest in the Seller title to and rights under any Mortgage
Loan released pursuant to the Mortgage Loan Purchase Agreement or Section 2.04
of this Agreement, as applicable. The Seller shall deliver the documents related
to the Substitute Mortgage Loan in accordance with the provisions of the
Mortgage Loan Purchase Agreement or Subsections 2.01(b) and 2.02(b) of this
Agreement, as applicable, with the date of acceptance of the Substitute Mortgage
Loan deemed to be the Closing Date for purposes of the time periods set forth in
those Subsections. The representations and warranties set forth in the Mortgage
Loan Purchase Agreement shall be deemed to have been made by the Seller with
respect to each Substitute Mortgage Loan as of the date of acceptance of such
Mortgage Loan by the Trustee. The Master Servicer shall amend the Mortgage Loan
Schedule to reflect such substitution and shall provide a copy of such amended
Mortgage Loan Schedule to the Trustee and the Rating Agencies.
Notwithstanding any other provision of this Agreement, the right to
substitute Mortgage Loans pursuant to this Article II shall be subject to the
additional limitations that no substitution of a Mortgage Loan shall be made
unless the Securities Administrator and the Trustee shall have received an
Opinion of Counsel (at the expense of the party seeking to make the
substitution) that, under current law, such substitution will not (A) affect
adversely the status of any REMIC established hereunder as a REMIC, or of the
related "regular interests" as "regular interests" in any such REMIC, or (B)
cause any such REMIC to engage in a "prohibited transaction" or prohibited
contribution pursuant to the REMIC provisions.
Section 2.05 Issuance of Certificates. The Trustee acknowledges the
assignment to it on behalf of the Issuing Entity of the Mortgage Loans and the
other assets comprising the Trust Fund and, concurrently therewith, the
Securities Administrator has signed, and countersigned and delivered to the
Depositor, in exchange therefor, Certificates in such authorized denominations
representing such Percentage Interests as the Depositor has requested. The
Trustee agrees that it will hold the Mortgage Loans and such other assets as may
from time to time be delivered to it segregated on the books of the Trustee in
trust for the benefit of the Certificateholders.
Section 2.06 Representations and Warranties Concerning the Depositor. The
Depositor hereby represents and warrants to the Trustee, the Master Servicer and
the Securities Administrator as follows:
(i) the Depositor (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and
(b) is qualified and in good standing as a foreign corporation to do
business in each jurisdiction where such qualification is necessary, except
where the failure so to qualify would not reasonably be expected to have a
material adverse effect on the Depositor's business as presently conducted
or on the Depositor's ability to enter into this Agreement and to
consummate the transactions contemplated hereby;
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(ii) the Depositor has full corporate power to own its property, to
carry on its business as presently conducted and to enter into and perform
its obligations under this Agreement;
(iii) the execution and delivery by the Depositor of this Agreement
have been duly authorized by all necessary corporate action on the part of
the Depositor; and neither the execution and delivery of this Agreement,
nor the consummation of the transactions herein contemplated, nor
compliance with the provisions hereof, will conflict with or result in a
breach of, or constitute a default under, any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on the
Depositor or its properties or the articles of incorporation or by-laws of
the Depositor, except those conflicts, breaches or defaults which would not
reasonably be expected to have a material adverse effect on the Depositor's
ability to enter into this Agreement and to consummate the transactions
contemplated hereby;
(iv) the execution, delivery and performance by the Depositor of this
Agreement and the consummation of the transactions contemplated hereby do
not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any
state, federal or other governmental authority or agency, except those
consents, approvals, notices, registrations or other actions as have
already been obtained, given or made;
(v) this Agreement has been duly executed and delivered by the
Depositor and, assuming due authorization, execution and delivery by the
other parties hereto, constitutes a valid and binding obligation of the
Depositor enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws affecting
the enforcement of the rights of creditors generally);
(vi) there are no actions, suits or proceedings pending or, to the
knowledge of the Depositor, threatened against the Depositor, before or by
any court, administrative agency, arbitrator or governmental body (i) with
respect to any of the transactions contemplated by this Agreement or (ii)
with respect to any other matter which in the judgment of the Depositor
will be determined adversely to the Depositor and will if determined
adversely to the Depositor materially and adversely affect the Depositor's
ability to enter into this Agreement or perform its obligations under this
Agreement; and the Depositor is not in default with respect to any order of
any court, administrative agency, arbitrator or governmental body so as to
materially and adversely affect the transactions contemplated by this
Agreement; and
(vii) immediately prior to the transfer and assignment to the Trustee,
each Mortgage Note and each Mortgage were not subject to an assignment or
pledge, and the Depositor had good and marketable title to and was the sole
owner thereof and had full right to transfer and sell such Mortgage Loan to
the Trustee free and clear of any encumbrance, equity, lien, pledge,
charge, claim or security interest.
Section 2.07 Representations and Warranties Concerning the Master Servicer
and Securities Administrator. Xxxxx Fargo Bank, N.A., in its capacity as Master
Servicer and
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Securities Administrator hereby represents and warrants to the Seller, the
Depositor and the Trustee as follows, as of the Closing Date:
(i) It is a national banking association duly formed, validly existing
and in good standing under the laws of the United States of America and is
duly authorized and qualified to transact any and all business contemplated
by this Agreement to be conducted by the Master Servicer and the Securities
Administrator, to the extent necessary to ensure its ability to master
service the Mortgage Loans in accordance with the terms of this Agreement
and to perform any of its other obligations under this Agreement in
accordance with the terms hereof;
(ii) It has the full corporate power and authority to execute, deliver
and perform, and to enter into and consummate the transactions contemplated
by this Agreement and has duly authorized by all necessary corporate action
on its part the execution, delivery and performance of this Agreement; and
this Agreement, assuming the due authorization, execution and delivery
hereof by the other parties hereto, constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms,
except that (a) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought.
(iii) The execution and delivery of this Agreement by it, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof are
in its ordinary course of business and will not (A) result in a material
breach of any term or provision of its charter or by-laws or (B) materially
conflict with, result in a material breach, violation or acceleration of,
or result in a material default under, the terms of any other material
agreement or instrument to which it is a party or by which it may be bound,
or (C) constitute a material violation of any statute, order or regulation
applicable to it of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it; and it is not in breach or
violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or violation may materially impair its
ability to perform or meet any of its obligations under this Agreement.
(iv) No litigation is pending or, to the best of its knowledge,
threatened, against it that would materially and adversely affect the
execution, delivery or enforceability of this Agreement or its ability to
perform any of its other obligations under this Agreement in accordance
with the terms hereof.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for its execution, delivery and
performance of, or compliance with, this Agreement or the consummation of
the transactions contemplated hereby, or if any such consent, approval,
authorization or order is required, it has obtained the same.
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ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master Servicer. The Master Servicer shall supervise, monitor
and oversee the obligation of the Servicers to service and administer their
respective Mortgage Loans in accordance with the terms of the applicable
Servicing Agreement and shall have full power and authority to do any and all
things which it may deem necessary or desirable in connection with such master
servicing and administration. In performing its obligations hereunder, the
Master Servicer shall act in a manner consistent with Accepted Master Servicing
Practices. Furthermore, the Master Servicer shall oversee and consult with each
Servicer as necessary from time-to-time to carry out the Master Servicer's
obligations hereunder, shall receive, review and evaluate all reports,
information and other data provided to the Master Servicer by each Servicer and
shall cause each Servicer to perform and observe the covenants, obligations and
conditions to be performed or observed by such Servicer under the applicable
Servicing Agreement. The Master Servicer shall independently and separately
monitor each Servicer's servicing activities with respect to each related
Mortgage Loan, reconcile the results of such monitoring with such information
provided in the previous sentence on a monthly basis and coordinate corrective
adjustments to the Servicers' and Master Servicer's records, and based on such
reconciled and corrected information, the Master Servicer shall provide such
information to the Securities Administrator as shall be necessary in order for
it to prepare the statements specified in Section 6.04, and prepare any other
information and statements required to be forwarded by the Master Servicer
hereunder. The Master Servicer shall reconcile the results of its monitoring
with the actual remittances of the Servicers to the Master Servicer Collection
Account pursuant to the applicable Servicing Agreements.
If the Master Servicer and the Securities Administrator are the same
entity, then at any time the Master Servicer is terminated as Master Servicer,
the Securities Administrator shall likewise be removed as securities
administrator.
The Trustee shall furnish the Servicers and the Master Servicer with any
limited powers of attorney and other documents in form acceptable to it
necessary or appropriate to enable the Servicers and the Master Servicer to
service and administer the related Mortgage Loans and REO Property. The Trustee
shall have no liability with respect to the use of any such limited power of
attorney.
The Trustee or the Custodian shall provide access to the records and
documentation in possession of the Trustee or the Custodian regarding the
related Mortgage Loans and REO Property and the servicing thereof to the
Certificateholders, the FDIC, and the supervisory agents and examiners of the
FDIC, such access being afforded only upon reasonable prior written request and
during normal business hours at the office of the Trustee or the Custodian;
provided, however, that, unless otherwise required by law, the Trustee or the
Custodian shall not be required to provide access to such records and
documentation if the provision thereof would violate the legal right to privacy
of any Mortgagor. The Trustee or the Custodian shall allow representatives of
the above entities to photocopy any of the records and documentation and shall
provide equipment for that purpose at a charge that covers the Trustee's or the
Custodian's actual costs.
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The Trustee shall execute and deliver to the related Servicer and the
Master Servicer upon request any court pleadings, requests for trustee's sale or
other documents necessary or desirable to (i) the foreclosure or trustee's sale
with respect to a Mortgaged Property; (ii) any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Security Instrument;
(iii) obtain a deficiency judgment against the Mortgagor; or (iv) enforce any
other rights or remedies provided by the Mortgage Note or Security Instrument or
otherwise available at law or equity.
Section 3.02 REMIC-Related Covenants. For as long as each REMIC shall
exist, the Trustee and the Securities Administrator shall act in accordance
herewith to assure continuing treatment of such REMIC as a REMIC, and the
Trustee and the Securities Administrator shall comply with any directions of the
Depositor, the related Servicer or the Master Servicer to assure such continuing
treatment. In particular, the Trustee shall not (a) sell or permit the sale of
all or any portion of the Mortgage Loans or of any investment of deposits in an
Account unless such sale is as a result of a repurchase of the Mortgage Loans
pursuant to this Agreement or the Trustee has received a REMIC Opinion prepared
at the expense of the Issuing Entity; and (b) other than with respect to a
substitution pursuant to the Mortgage Loan Purchase Agreement or Section 2.04 of
this Agreement, as applicable, accept any contribution to any REMIC after the
Startup Day without receipt of a REMIC Opinion.
Section 3.03 Monitoring of Servicers.
(a) The Master Servicer shall be responsible for reporting to the Trustee
and the Depositor the compliance by each Servicer with its duties under the
related Servicing Agreement. In the review of each Servicer's activities, the
Master Servicer may rely upon an officer's certificate of the Servicer with
regard to such Servicer's compliance with the terms of its Servicing Agreement.
In the event that the Master Servicer, in its judgment, determines that a
Servicer should be terminated in accordance with its Servicing Agreement, or
that a notice should be sent pursuant to such Servicing Agreement with respect
to the occurrence of an event that, unless cured, would constitute grounds for
such termination, the Master Servicer shall notify the Depositor and the Trustee
thereof and the Master Servicer shall issue such notice or take such other
action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
subject to the preceding paragraph, terminate the rights and obligations of such
Servicer thereunder and act as servicer of the related Mortgage Loans or, if the
Master Servicer is unwilling or unable to act as a Servicer, the Master Servicer
shall cause the Trustee to enter in to a new Servicing Agreement with a
successor Servicer selected by the Master Servicer that is eligible in
accordance with the criteria specified in this Agreement; provided, however, it
is understood and acknowledged by the parties hereto that there will be a period
of transition (not to exceed 90 days) before the actual servicing functions can
be fully transferred to such successor servicer. In either event, such
enforcement, including, without limitation, the legal prosecution of claims,
termination of the Servicing Agreements and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own
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expense subject to Section 3.03(c), provided that the Master Servicer shall not
be required to prosecute or defend any legal action except to the extent that
the Master Servicer shall have received reasonable indemnity for its costs and
expenses in pursuing such action.
(c) To the extent that the costs and expenses of the Master Servicer
related to any termination of a Servicer, appointment of a successor Servicer or
the transfer and assumption of servicing by the Master Servicer with respect to
any Servicing Agreement (including, without limitation, (i) all legal costs and
expenses and all due diligence costs and expenses associated with an evaluation
of the potential termination of a Servicer as a result of an event of default by
such Servicer and (ii) all costs and expenses associated with the complete
transfer of servicing, including all servicing files and all servicing data and
the completion, correction or manipulation of such servicing data as may be
required by the successor servicer to correct any errors or insufficiencies in
the servicing data or otherwise to enable the successor service to service the
Mortgage Loans in accordance with the related Servicing Agreement) are not fully
and timely reimbursed by the terminated Servicer, the Master Servicer shall be
entitled to reimbursement of such costs and expenses from the Master Servicer
Collection Account pursuant to Section 4.03(b).
(d) The Master Servicer shall require each Servicer to comply with the
remittance requirements and other obligations set forth in the related Servicing
Agreement.
(e) If the Master Servicer acts as Servicer, it will not assume liability
for the representations and warranties of such Servicer, if any, that it
replaces.
Section 3.04 Fidelity Bond. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions insurance
policy, affording coverage with respect to all directors, officers, employees
and other Persons acting on such Master Servicer's behalf, and covering errors
and omissions in the performance of the Master Servicer's obligations hereunder.
The errors and omissions insurance policy and the fidelity bond shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees.
Section 3.05 Power to Act; Procedures. The Master Servicer shall master
service the Mortgage Loans and shall have full power and authority, subject to
the REMIC Provisions and the provisions of Article X hereof, to do any and all
things that it may deem necessary or desirable in connection with the master
servicing and administration of the Mortgage Loans, including but not limited to
the power and authority (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages, (iii) to
collect any Insurance Proceeds and Liquidation Proceeds, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan, in each case, in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable; provided,
however, that the Master Servicer shall not (and, consistent with its
responsibilities under Section 3.03, shall not permit any Servicer to) knowingly
or intentionally take any action, or fail to take (or fail to cause to be taken)
any action reasonably within its control and the scope of duties more
specifically set forth herein, that, under the REMIC Provisions, if taken or not
taken, as the case may be, would cause any REMIC created hereunder to fail to
qualify as a REMIC or result in the imposition of a tax upon the Issuing Entity
(including but not limited to the tax on
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prohibited transactions as defined in Section 860F(a)(2) of the Code and the tax
on contributions to a REMIC set forth in Section 860G(d) of the Code) unless the
Master Servicer has received an Opinion of Counsel (but not at the expense of
the Master Servicer) to the effect that the contemplated action will not would
cause any REMIC created hereunder to fail to qualify as a REMIC or result in the
imposition of a tax upon any REMIC created hereunder. The Trustee shall furnish
the Master Servicer, upon written request from a Servicing Officer, with any
limited powers of attorney (in form acceptable to the Trustee) empowering the
Master Servicer or any Servicer to execute and deliver instruments of
satisfaction or cancellation, or of partial or full release or discharge, and to
foreclose upon or otherwise liquidate Mortgaged Property, and to appeal,
prosecute or defend in any court action relating to the Mortgage Loans or the
Mortgaged Property, in accordance with the applicable Servicing Agreement and
this Agreement, and the Trustee shall execute and deliver such other documents,
as the Master Servicer may request, to enable the Master Servicer to master
service and administer the Mortgage Loans and carry out its duties hereunder, in
each case in accordance with Accepted Master Servicing Practices (and the
Trustee shall have no liability for misuse of any such powers of attorney by the
Master Servicer or any Servicer). If the Master Servicer or the Trustee has been
advised that it is likely that the laws of the state in which action is to be
taken prohibit such action if taken in the name of the Trustee or that the
Trustee would be adversely affected under the "doing business" or tax laws of
such state if such action is taken in its name, the Master Servicer shall join
with the Trustee in the appointment of a co-trustee pursuant to Section 9.11
hereof. In the performance of its duties hereunder, the Master Servicer shall be
an independent contractor and shall not, except in those instances where it is
taking action in the name of the Trustee, be deemed to be the agent of the
Trustee.
Section 3.06 Due-on-Sale Clauses; Assumption Agreements. To the extent
provided in the applicable Servicing Agreement, to the extent Mortgage Loans
contain enforceable due-on-sale clauses, the Master Servicer shall cause the
Servicers to enforce such clauses in accordance with the applicable Servicing
Agreement. If applicable law prohibits the enforcement of a due-on-sale clause
or such clause is otherwise not enforced in accordance with the applicable
Servicing Agreement, and, as a consequence, a Mortgage Loan is assumed, the
original Mortgagor may be released from liability in accordance with the
applicable Servicing Agreement.
Section 3.07 Release of Mortgage Files.
(a) Upon becoming aware of the payment in full of any Mortgage Loan, or the
receipt by any Servicer of a notification that payment in full has been escrowed
in a manner customary for such purposes for payment to Certificateholders on the
next Distribution Date, the Servicers or the Master Servicer will, if required
under the applicable Servicing Agreement, promptly furnish to the Custodian, on
behalf of the Trustee, two copies of a certification substantially in the form
of Exhibit D hereto signed by a Servicing Officer or in a mutually agreeable
electronic format which will, in lieu of a signature on its face, originate from
a Servicing Officer (which certification shall include a statement to the effect
that all amounts received in connection with such payment that are required to
be deposited in the Protected Account maintained by the applicable Servicer
pursuant to its Servicing Agreement have been or will be so deposited) and shall
request that the Custodian, on behalf of the Trustee, deliver to the applicable
Servicer the related Mortgage File. Upon receipt of such certification and
request, the Custodian, on behalf of
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the Trustee, shall no later than five Business Days (or, to the extent that the
applicable Servicer notifies the Seller that a document is not in the Servicer's
possession as part of the servicing file which is needed for purposes of the
Servicer complying with any applicable law, within such shorter period as may be
necessary to enable the Servicer to comply with such law), release the related
Mortgage File to the applicable Servicer and the Trustee and Custodian shall
have no further responsibility with regard to such Mortgage File. Upon any such
payment in full, each Servicer is authorized, to give, as agent for the Trustee,
as the mortgagee under the Mortgage that secured the Mortgage Loan, an
instrument of satisfaction (or assignment of mortgage without recourse)
regarding the Mortgaged Property subject to the Mortgage, which instrument of
satisfaction or assignment, as the case may be, shall be delivered to the Person
or Persons entitled thereto against receipt therefor of such payment, it being
understood and agreed that no expenses incurred in connection with such
instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the Protected Account.
(b) From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan and in accordance with the applicable Servicing Agreement,
the Trustee shall execute such documents as requested and as shall be prepared
and furnished to the Trustee by a Servicer or the Master Servicer and as are
necessary to the prosecution of any such proceedings. In connection with the
foregoing, the Custodian, on behalf of the Trustee, shall, upon the request of a
Servicer or the Master Servicer, and delivery to the Custodian, on behalf of the
Trustee, of two copies of a Request for Release signed by a Servicing Officer
substantially in the form of Exhibit D (or in a mutually agreeable electronic
format which will, in lieu of a signature on its face, originate from a
Servicing Officer), release the related Mortgage File held in its possession or
control to the related Servicer or the Master Servicer, as applicable. Such
trust receipt shall obligate the related Servicer or the Master Servicer to
return the Mortgage File to the Custodian on behalf of the Trustee, when the
need therefor by the Servicer or the Master Servicer no longer exists unless the
Mortgage Loan shall be liquidated, in which case, upon receipt of a certificate
of a Servicing Officer similar to that hereinabove specified, the Mortgage File
shall be released by the Custodian, on behalf of the Trustee, to the related
Servicer or the Master Servicer.
Section 3.08 Documents, Records and Funds in Possession of Master Servicer
To Be Held for Trustee.
(a) The Master Servicer shall transmit and each Servicer (to the extent
required by the related Servicing Agreement) shall transmit to the Trustee or
Custodian such documents and instruments coming into the possession of the
Master Servicer or such Servicer from time to time as are required by the terms
hereof, or in the case of the Servicers, the applicable Servicing Agreement, to
be delivered to the Trustee or Custodian. Any funds received by the Master
Servicer or by a Servicer in respect of any Mortgage Loan or which otherwise are
collected by the Master Servicer or by a Servicer as Liquidation Proceeds or
Insurance Proceeds in respect of any Mortgage Loan shall be held for the benefit
of the Trustee and the Certificateholders subject to the Master Servicer's right
to retain or withdraw from the Master Servicer Collection Account the Master
Servicing Compensation and other amounts provided in this Agreement, and to the
right of each Servicer to retain its Servicing Fee and other amounts as provided
in the applicable Servicing Agreement. The Master Servicer shall, and (to the
extent provided in the applicable Servicing Agreement) shall cause each Servicer
to, provide access to information and documentation regarding the Mortgage Loans
to the Trustee, its agents and accountants at any
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time upon reasonable request and during normal business hours, and to
Certificateholders that are savings and loan associations, banks or insurance
companies, the Office of Thrift Supervision, the FDIC and the supervisory agents
and examiners of such Office and Corporation or examiners of any other federal
or state banking or insurance regulatory authority if so required by applicable
regulations of the Office of Thrift Supervision or other regulatory authority,
such access to be afforded without charge but only upon reasonable request in
writing and during normal business hours at the offices of the Master Servicer
designated by it. In fulfilling such a request, the Master Servicer shall not be
responsible for determining the sufficiency of such information.
(b) All Mortgage Files and funds collected or held by, or under the control
of, the Master Servicer, in respect of any Mortgage Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds or
Insurance Proceeds, shall be held by the Master Servicer for and on behalf of
the Trustee and the Certificateholders and shall be and remain the sole and
exclusive property of the Trustee; provided, however, that the Master Servicer
and each Servicer shall be entitled to setoff against, and deduct from, any such
funds any amounts that are properly due and payable to the Master Servicer or
such Servicer under this Agreement or the applicable Servicing Agreement.
Section 3.09 Standard Hazard Insurance and Flood Insurance Policies.
(a) For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Servicers under the related Servicing Agreements to maintain
or cause to be maintained standard fire and casualty insurance and, where
applicable, flood insurance, all in accordance with the provisions of the
related Servicing Agreements. It is understood and agreed that such insurance
shall be with insurers meeting the eligibility requirements set forth in the
applicable Servicing Agreement and that no earthquake or other additional
insurance is to be required of any Mortgagor or to be maintained on property
acquired in respect of a defaulted loan, other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require such
additional insurance.
(b) Pursuant to Sections 4.01 and 4.02, any amounts collected by the
Servicers or the Master Servicer, under any insurance policies (other than
amounts to be applied to the restoration or repair of the property subject to
the related Mortgage or released to the Mortgagor in accordance with the
applicable Servicing Agreement) shall be deposited into the Master Servicer
Collection Account, subject to withdrawal pursuant to Sections 4.02 and 4.03 in
accordance with the terms and conditions of the related Servicing Agreement. Any
cost incurred by the Master Servicer or any Servicer in maintaining any such
insurance if the Mortgagor defaults in its obligation to do so shall be added to
the amount owing under the Mortgage Loan where the terms of the Mortgage Loan so
permit; provided, however, that the addition of any such cost shall not be taken
into account for purposes of calculating the distributions to be made to
Certificateholders and shall be recoverable by the Master Servicer or such
Servicer pursuant to Sections 4.02 and 4.03.
Section 3.10 Presentment of Claims and Collection of Proceeds. The Master
Servicer shall (to the extent provided in the applicable Servicing Agreement)
cause the related Servicer to, prepare and present on behalf of the Trustee and
the Certificateholders all claims under the Insurance Policies and take such
actions (including the negotiation, settlement, compromise or
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enforcement of the insured's claim) as shall be necessary to realize recovery
under such policies. Any proceeds disbursed to the Master Servicer (or disbursed
to a Servicer and remitted to the Master Servicer) in respect of such policies,
bonds or contracts shall be promptly deposited in the Master Servicer Collection
Account upon receipt, except that any amounts realized that are to be applied to
the repair or restoration of the related Mortgaged Property as a condition
precedent to the presentation of claims on the related Mortgage Loan to the
insurer under any applicable Insurance Policy need not be so deposited (or
remitted).
Section 3.11 Maintenance of the Primary Mortgage Insurance Policies.
(a) The Master Servicer shall not take, or permit any Servicer (to the
extent such action is prohibited under the applicable Servicing Agreement) to
take, any action that would result in noncoverage under any applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of such Master
Servicer or Servicer, would have been covered thereunder. The Master Servicer
shall use its best reasonable efforts to cause each Servicer (to the extent
required under the related Servicing Agreement) to keep in force and effect (to
the extent that the Mortgage Loan requires the Mortgagor to maintain such
insurance), primary mortgage insurance applicable to each Mortgage Loan in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable. The Master Servicer shall not, and shall not permit
any Servicer (to the extent required under the related Servicing Agreement) to,
cancel or refuse to renew any such Primary Mortgage Insurance Policy that is in
effect at the date of the initial issuance of the Mortgage Note and is required
to be kept in force hereunder except in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable.
(b) The Master Servicer agrees to present, or to cause each Servicer (to
the extent required under the related Servicing Agreement) to present, on behalf
of the Trustee and the Certificateholders, claims to the insurer under any
Primary Mortgage Insurance Policies and, in this regard, to take such reasonable
action as shall be necessary to permit recovery under any Primary Mortgage
Insurance Policies respecting defaulted Mortgage Loans. Pursuant to Section 4.01
and 4.02, any amounts collected by the Master Servicer or any Servicer under any
Primary Mortgage Insurance Policies shall be deposited in the Master Servicer
Collection Account, subject to withdrawal pursuant to Section 4.03.
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Section 3.12 Trustee to Retain Possession of Certain Insurance Policies and
Documents. The Trustee or the Custodian shall retain possession and custody of
the originals (to the extent available) of any Primary Mortgage Insurance
Policies, or certificate of insurance if applicable, and any certificates of
renewal as to the foregoing as may be issued from time to time as contemplated
by this Agreement. Until all amounts distributable in respect of the
Certificates have been distributed in full and the Master Servicer otherwise has
fulfilled its obligations under this Agreement, the Trustee or its Custodian
shall also retain possession and custody of each Mortgage File in accordance
with and subject to the terms and conditions of this Agreement. The Master
Servicer shall promptly deliver or cause to be delivered to the Trustee or the
Custodian upon the execution or receipt thereof the originals of any Primary
Mortgage Insurance Policies, any certificates of renewal, and such other
documents or instruments that constitute portions of the Mortgage File that come
into the possession of the Master Servicer from time to time.
Section 3.13 Realization Upon Defaulted Mortgage Loans. The Master Servicer
shall cause each Servicer (to the extent required under the related Servicing
Agreement) to foreclose upon, repossess or otherwise comparably convert the
ownership of Mortgaged Properties securing such of the Mortgage Loans as come
into and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments, all in accordance with the terms and
conditions of the applicable Servicing Agreement.
Section 3.14 Compensation for the Master Servicer. The Master Servicer will
be entitled to all income and gain realized from any investment of funds in the
Master Servicer Collection Account, pursuant to Article IV, for the performance
of its activities hereunder. Servicing compensation in the form of assumption
fees, if any, late payment charges, as collected, if any, or otherwise (but not
including any prepayment premium or penalty) shall be retained by the applicable
Servicer and shall not be deposited in the Protected Account. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its activities hereunder and shall not be entitled to reimbursement therefor
except as provided in this Agreement.
Section 3.15 REO Property.
(a) In the event the Issuing Entity acquires ownership of any REO Property
in respect of any related Mortgage Loan, the deed or certificate of sale shall
be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in the
applicable Servicing Agreement, cause the applicable Servicer to sell, any REO
Property as expeditiously as possible and in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall cause the
applicable Servicer to protect and conserve, such REO Property in the manner and
to the extent required by the applicable Servicing Agreement, in accordance with
the REMIC Provisions and in a manner that does not result in a tax on "net
income from foreclosure property" or cause such REO Property to fail to qualify
as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code.
(b) The Master Servicer shall, to the extent required by the related
Servicing Agreement, cause the applicable Servicer to deposit all funds
collected and received in connection with the operation of any REO Property in
the Protected Account.
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(c) The Master Servicer and the applicable Servicer, upon the final
disposition of any REO Property, shall be entitled to reimbursement for any
related unreimbursed Monthly Advances and other unreimbursed advances as well as
any unpaid Servicing Fees from Liquidation Proceeds received in connection with
the final disposition of such REO Property; provided, that any such unreimbursed
Monthly Advances as well as any unpaid Servicing Fees may be reimbursed or paid,
as the case may be, prior to final disposition, out of any net rental income or
other net amounts derived from such REO Property.
(d) To the extent provided in the related Servicing Agreement, the
Liquidation Proceeds from the final disposition of the REO Property, net of any
payment to the Master Servicer and the applicable Servicer as provided above
shall be deposited in the Protected Account on or prior to the Determination
Date in the month following receipt thereof and be remitted by wire transfer in
immediately available funds to the Master Servicer for deposit into the related
Master Servicer Collection Account on the next succeeding Servicer Remittance
Date.
Section 3.16 Annual Statement as to Compliance.
Not later than March 1 of each calendar year (other than the calendar year
during which the Closing Date occurs), each Servicer shall deliver (or otherwise
make available) and each Servicer shall cause any Servicing Function Participant
engaged by it to deliver to the Master Servicer, the Securities Administrator
and the Depositor, an Officer's Certificate in the form attached hereto as
Exhibit P stating, as to each signatory thereof, that (i) a review of the
activities of such signatory during the preceding calendar year, or portion
thereof, and of the performance of such signatory under the related Servicing
Agreement or such other applicable agreement in the case of a Servicing Function
Participant has been made under such officer's supervision, and (ii) to the best
of such officer's knowledge, based on such review, such signatory has fulfilled
all its obligations under this Agreement, the related Servicing Agreement or
such other applicable agreement in all material respects throughout such year or
a portion thereof, or, if there has been a failure to fulfill any such
obligation in any material respect, specifying each such failure known to such
officer and the nature and status thereof.
The Master Servicer and the Securities Administrator shall deliver (or
otherwise make available) (and the Trustee, the Master Servicer and Securities
Administrator shall cause any Servicing Function Participant engaged by it to
deliver) to the Depositor and the Securities Administrator on or before March 1
(with a ten-calendar day cure period) of each year, commencing in March 2007, an
Officer's Certificate stating, as to the signer thereof, that (A) a review of
such party's activities during the preceding calendar year or portion thereof
and of such party's performance under this Agreement, or such other applicable
agreement in the case of a Servicing Function Participant, has been made under
such officer's supervision and (B) to the best of such officer's knowledge,
based on such review, such party has fulfilled all its obligations under this
Agreement, or such other applicable agreement in the case of a Servicing
Function Participant, in all material respects throughout such year or portion
thereof, or, if there has been a failure to fulfill any such obligation in any
material respect, specifying each such failure known to such officer and the
nature and status thereof.
The Master Servicer shall include all annual statements of compliance
received by it from each Servicer with its own annual statement of compliance to
be submitted to the Securities
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Administrator pursuant to this Section. For the avoidance of doubt, the Master
Servicer and the Securities Administrator may satisfy the requirements of this
Section 3.16 and Section 3.16 of the Stack II Agreement by each delivering a
single annual statement of compliance containing all of the information required
pursuant to this Section 3.16 and Section 3.16 of the Stack II Agreement.
In the event the Master Servicer, the Securities Administrator or any
Servicing Function Participant engaged by any such party or the Trustee is
terminated, assigns its rights and obligations under or resigns pursuant to the
terms of this Agreement, or such other applicable agreement in the case of a
Servicing Function Participant, as the case may be, such party shall provide, an
annual statement of compliance pursuant to this Section 3.16 or to such
applicable agreement, as the case may be, notwithstanding any such termination,
assignment or resignation.
Section 3.17 Reports on Assessment of Compliance and Attestation.
(a) Not later than March 1 of each calendar year (other than the calendar
year during which the Closing Date occurs) each Servicer at its own expense,
shall furnish, and shall cause any Servicing Function Participant engaged by it
to furnish (unless in the case of a Subcontractor, such Servicer has notified
the Depositor and the Master Servicer in writing that such compliance statement
is not required for the Subcontractor) to the Master Servicer, the Securities
Administrator and the Depositor an officer's assessment of its compliance with
the Relevant Servicing Criteria during the preceding calendar year as required
by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB
(the "Assessment of Compliance"), which assessment shall contain (A) a statement
by such party of its responsibility for assessing compliance with the Relevant
Servicing Criteria, (B) a statement that such party used the Relevant Servicing
Criteria to assess compliance with the Relevant Servicing Criteria, (C) such
party's assessment of compliance with the Relevant Servicing Criteria as of and
for the fiscal year covered by the Form 10-K required to be filed pursuant to
Section 3.18, including, if there has been any material instance of
noncompliance with the Relevant Servicing Criteria, a discussion of each such
failure and the nature and status thereof, which assessment shall be based on
the activities it performs with respect to asset-backed securities transactions
taken as a whole involving such party that are backed by the same asset type as
the Mortgage Loans, and (D) a statement that a registered public accounting firm
has issued an attestation report on such party's assessment of compliance with
the Relevant Servicing Criteria as of and for such period.
By March 1 (with a ten-calendar day cure period) of each year, commencing
in March 2007, the Master Servicer, the Securities Administrator and the
Custodian each at its own expense, shall furnish or otherwise make available,
and each such party and the Trustee 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 Sections
3.18(h), (i), (j) and (k), including, if there has been any material instance of
noncompliance with the Relevant Servicing Criteria, a discussion of each such
failure and the nature and status thereof, and (D) a
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statement that a registered public accounting firm has issued an attestation
report on such party's assessment of compliance with the Relevant Servicing
Criteria as of and for such period.
No later than the end of each fiscal year for the Issuing Entity for which
a 10-K is required to be filed, the Master Servicer, the Custodian and the
Trustee shall each forward to the Securities Administrator and the Depositor the
name of each Servicing Function Participant engaged by it and what Relevant
Servicing Criteria will be addressed in the report on assessment of compliance
prepared by such Servicing Function Participant (provided, however, that the
Master Servicer need not provide such information to the Securities
Administrator so long as the Master Servicer and the Securities Administrator
are the same Person). When the Master Servicer, and the Securities Administrator
(or any Servicing Function Participant engaged by them or the Trustee) submit
their assessments to the Securities Administrator, such parties will also at
such time include the assessment and attestation pursuant to this Section 3.17
of each Servicing Function Participant engaged by it.
Promptly after receipt of each report on assessment of compliance, (i) the
Depositor shall review each such report and, if applicable, consult with such
Servicer, the Master Servicer, the Securities Administrator and any Servicing
Function Participant engaged by any such party as to the nature of any material
instance of noncompliance with the Relevant Servicing Criteria by such Servicer
by each such party, and (ii) the Securities Administrator shall confirm that the
assessments individually address the Relevant Servicing Criteria for each party
as set forth on Exhibit K or any similar exhibit set forth in each Servicing
Agreement in respect of each Servicer and notify the Depositor of any
exceptions.
The Master Servicer shall include all annual reports on assessment of
compliance received by it from the Servicers with its own assessment of
compliance to be submitted to the Securities Administrator pursuant to this
Section. For the avoidance of doubt, the Master Servicer and the Securities
Administrator may satisfy the requirements of this Section 3.17 and Section 3.17
of the Stack II Agreement relating to reports on assessment of compliance by
each delivering a single annual report on assessment of compliance containing
all of the information required pursuant to this Section 3.17 and Section 3.17
of the Stack II Agreement.
In the event the Master Servicer, the Securities Administrator or any
Servicing Function Participant engaged by any such party or the Trustee is
terminated, assigns its rights and obligations under or resigns pursuant to the
terms of this Agreement, or any other applicable agreement, as the case may be,
such party shall provide, an assessment of compliance pursuant to this Section
3.17, coupled with an attestation as required in this Section 3.17, or such
applicable agreement notwithstanding any such termination, assignment or
resignation.
(b) Not later than March 1 of each calendar year (other than the calendar
year during which the Closing Date occurs) each Servicer at its own expense,
shall cause, and shall cause any Servicing Function Participant engaged by it to
cause (unless in the case of a Subcontractor, such Servicer has notified the
Depositor and the Master Servicer in writing that such report is not required
for the Subcontractor) a nationally or regionally recognized firm of independent
registered public accountants (who may also render other services to such
Servicer, the Master Servicer or any affiliate thereof) which is a member of the
American Institute of Certified Public Accountants to furnish a report (the
"Accountant's Attestation") to the Master Servicer, the Securities Administrator
and the Depositor to the effect that (i) it has obtained a representation
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regarding certain matters from the management of such party, which includes an
assertion that such party has complied with the Relevant Servicing Criteria, and
(ii) on the basis of an examination conducted by such firm in accordance with
standards for attestation engagements issued or adopted by the Public Company
Accounting Oversight Board, it is expressing an opinion as to whether such
party's compliance with the Relevant Servicing Criteria was fairly stated in all
material respects, or it cannot express an overall opinion regarding such
party's assessment of compliance with the Relevant Servicing Criteria. In the
event that an overall opinion cannot be expressed, such registered public
accounting firm shall state in such report why it was unable to express such an
opinion. Such report must be available for general use and not contain
restricted use language. Such Accountant's Attestation shall be in accordance
with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and
the Exchange Act.
By March 1 (with a ten-calendar day cure period) of each year, commencing
in March 2007, the Master Servicer, the Securities Administrator and the
Custodian, each at its own expense, shall cause, and each such party and the
Trustee shall cause any Servicing Function Participant engaged by it to cause,
each at its own expense, a registered public accounting firm (which may also
render other services to the Master Servicer, the Trustee, the Securities
Administrator, or such other Servicing Function Participants, as the case may
be) and that is a member of the American Institute of Certified Public
Accountants to furnish an attestation report to the Securities Administrator and
the Depositor, to the effect that (i) it has obtained a representation regarding
certain matters from the management of such party, which includes an assertion
that such party has complied with the Relevant Servicing Criteria, and (ii) on
the basis of an examination conducted by such firm in accordance with standards
for attestation engagements issued or adopted by the Public Company Accounting
Oversight Board, it is expressing an opinion as to whether such party's
compliance with the Relevant Servicing Criteria was fairly stated in all
material respects, or it cannot express an overall opinion regarding such
party's assessment of compliance with the Relevant Servicing Criteria. In the
event that an overall opinion cannot be expressed, such registered public
accounting firm shall state in such report why it was unable to express such an
opinion. Such report must be available for general use and not contain
restricted use language.
(c) Promptly after receipt of each assessment of compliance and attestation
report, the Securities Administrator shall confirm that each assessment
submitted pursuant to Section 3.17(a) is coupled with an attestation meeting the
requirements of Section 3.17(b) and notify the Depositor of any exceptions.
The Master Servicer shall include each such attestation furnished to it by
the Servicers with its own attestation to be submitted to the Securities
Administrator pursuant to this Section. For the avoidance of doubt, the Master
Servicer and the Securities Administrator may satisfy the requirements of this
Section 3.17 and Section 3.17 of the Stack II Agreement relating to attestations
by each delivering a single attestation containing all of the information
required pursuant to this Section 3.17 and Section 3.17 of the Stack II
Agreement.
In the event the Master Servicer, the Securities Administrator, the
Custodian, any Servicer or any Servicing Function Participant engaged by any
such party, is terminated, assigns its rights and duties under, or resigns
pursuant to the terms of, this Agreement, or any applicable Custodial Agreement,
Servicing Agreement or sub-servicing agreement, as the case may be, such party
shall cause a registered public accounting firm to provide an attestation
pursuant to this
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Section 3.17, or such other applicable agreement, notwithstanding any such
termination, assignment or resignation.
Section 3.18 Periodic Filings.
(a) Within four (4) Business Days after the occurrence of an event
requiring disclosure on Form 8-K (each such event, a "Reportable Event"), and if
requested by the Depositor, the Securities Administrator shall prepare and file
on behalf of the Issuing Entity a Form 8-K, as required by the Exchange Act,
provided that the Depositor shall file the initial Form 8-K in connection with
the issuance of the Certificates. Any disclosure or information related to a
Reportable Event or that is otherwise required to be included on Form 8-K (other
than the initial Form 8-K) ("Form 8-K Disclosure Information") shall be reported
by the parties set forth on Exhibit Q-3 to the Depositor and the Securities
Administrator and directed and approved by the Depositor, and the Securities
Administrator will have no duty or liability for any failure hereunder to
determine or prepare any Form 8-K Disclosure Information or any Form 8-K except
as set forth in the next paragraph.
(b) For so long as the Issuing Entity is subject to the reporting
requirements of the Exchange Act, following the occurrence of a Reportable Event
(A) each party listed on Exhibit Q-3 hereto shall use commercially reasonable
best efforts to provide immediate notice to the Master Servicer, the Securities
Administrator and the Depositor, by fax and by phone or by e-mail and by phone,
(B) each such party shall be required to provide to the Securities Administrator
and the Depositor, to the extent known, in XXXXX-compatible format or in such
other format as agreed upon by the Securities Administrator and such party, the
form and substance of any Form 8-K Disclosure Information if applicable,
together with the form set forth on Exhibit O (the "Additional Disclosure
Notification") by the close of business New York City time on the 2nd Business
Day following the occurrence of such Reportable Event and (C) the Depositor,
shall approve, as to form and substance, or disapprove, as the case may be, the
inclusion of the Form 8-K Disclosure Information on Form 8-K. The Securities
Administrator has no duty under this Agreement to monitor or enforce the
performance by the parties listed on Exhibit Q-3 of their duties under this
paragraph or proactively solicit or procure from such parties any Form 8-K
Disclosure Information. The Depositor will be responsible for any reasonable
fees and expenses assessed or incurred by the Securities Administrator in
connection with including any Form 8-K Disclosure Information on Form 8-K
pursuant to this paragraph.
(c) After preparing the Form 8-K, the Securities Administrator shall, upon
request, forward electronically a copy of the Form 8-K to the Depositor.
Promptly, but no later than the close of business on the third Business Day
after the Reportable Event, the Depositor shall notify the Securities
Administrator in writing (which may be furnished electronically) of any changes
to or approval of such Form 8-K. In the absence of receipt of any written
changes or approval, or if the Depositor does not request a copy of a Form 8-K,
the Securities Administrator shall be entitled to assume that such Form 8-K is
in final form and the Securities Administrator may proceed with the process for
execution and filing of the Form 8-K. A duly authorized representative of the
Master Servicer shall sign each Form 8-K. If a Form 8-K cannot be filed on time
or if a previously filed Form 8-K needs to be amended, the Securities
Administrator will follow the procedures set forth in Section 3.18(n).
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(d) Promptly (but no later than one Business Day) after filing with the
Commission, the Securities Administrator will make available on its internet
website a final executed copy of each Form 8-K prepared and filed by the
Securities Administrator. The parties to this Agreement acknowledge that the
performance by the Master Servicer and the Securities Administrator of its
duties under this Section 3.18 related to the timely preparation, execution and
filing of Form 8-K is contingent upon the other parties hereto strictly
observing all applicable deadlines in the performance of their duties under this
Section 3.18. The Depositor acknowledges that the performance by the Master
Servicer and the Securities Administrator of its duties under this Section 3.18
related to the timely preparation, execution and filing of Form 8-K is also
contingent upon the Servicers, the Custodian and any Servicing Function
Participant strictly observing deadlines no later than those set forth in this
paragraph that are applicable to the parties to this Agreement in the delivery
to the Securities Administrator of any necessary Form 8-K Disclosure Information
pursuant to the related Servicing Agreements, the Custodial Agreement or any
other applicable agreement. Neither the Master Servicer nor the Securities
Administrator shall have any liability for any loss, expense, damage or claim
arising out of or with respect to any failure to properly prepare, execute
and/or timely file such Form 8-K, where such failure results from the Securities
Administrator's inability or failure to obtain or receive, on a timely basis,
any information from any other party hereto or any Servicer, Custodian or
Servicing Function Participant needed to prepare, arrange for execution or file
such Form 8-K.
(e) Within fifteen (15) days after each Distribution Date (subject to
permitted extensions under the Exchange Act), the Securities Administrator
shall, on behalf of the Issuing Entity and in accordance with industry
standards, prepare and file with the Commission via the Electronic Data
Gathering and Retrieval System (XXXXX), a Form 10-D with a copy of the Monthly
Statement for such Distribution Date as an exhibit thereto. Any disclosure in
addition to the Monthly Statement that is required to be included on Form 10-D
("Additional Form 10-D Disclosure") shall be reported by the parties set forth
on Exhibit Q-1 to the Depositor and the Securities Administrator and directed
and approved by the Depositor pursuant to the following paragraph, and the
Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-D Disclosure except as
set forth in the next paragraph.
(f) As set forth in Exhibit Q-1 hereto, for so long as the Issuing Entity
is subject to the reporting requirements of the Exchange Act, within five (5)
calendar days after the related Distribution Date (i) each party listed on
Exhibit Q-1 hereto shall be required to provide to the Depositor and the
Securities Administrator, to the extent known, in XXXXX-compatible format or in
such other format as agreed upon by the Securities Administrator and such party,
the form and substance of any Additional Form 10-D Disclosure if applicable
together with an Additional Disclosure Notification, and (ii) the Depositor will
approve, as to form and substance, or disapprove, as the case may be, the
inclusion of the Additional Form 10-D Disclosure on Form 10-D. The Securities
Administrator has no duty under this Agreement to monitor or enforce the
performance by the parties listed on Exhibit Q-1 of their duties under this
paragraph or proactively solicit or procure from such parties any Additional
Form 10-D Disclosure Information. The Depositor will be responsible for any
reasonable fees and expenses incurred by the Securities Administrator in
connection with including any Additional Form 10-D Disclosure on Form 10-D
pursuant to this paragraph.
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(g) After preparing the Form 10-D, the Securities Administrator shall, upon
request, forward electronically a copy of the Form 10-D to the Depositor
(provided that such Form 10-D includes any Additional Form 10-D Disclosure).
Within two Business Days after receipt of such copy, but no later than the 12th
calendar day after the Distribution Date, the Depositor shall notify the
Securities Administrator in writing (which may be furnished electronically) of
any changes to or approval of such Form 10-D. In the absence of receipt of any
written changes or approval, or if the Depositor does not request a copy of a
Form 10-D, the Securities Administrator shall be entitled to assume that such
Form 10-D is in final form and the Securities Administrator may proceed with the
process for execution and filing of the Form 10-D. A duly authorized
representative of the Master Servicer shall sign each Form 10-D. If a Form 10-D
cannot be filed on time or if a previously filed Form 10-D needs to be amended,
the Securities Administrator will follow the procedures set forth in Section
3.18(n). Promptly (but not later than one Business Day) after filing with the
Commission, the Securities Administrator will make available on its internet
website a final executed copy of each Form 10-D prepared and filed by the
Securities Administrator. Form 10-D requires the registrant to indicate (by
checking "yes" or "no") that it "(1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days." The
Depositor hereby represents to the Securities Administrator that the Depositor
has filed all such required reports during the preceding 12 months and that it
has been subject to such filing requirement for the past 90 days. The Depositor
shall notify the Securities Administrator in writing, no later than the fifth
calendar day after the related Distribution Date with respect to the filing of a
report on Form 10-D, if the answer to the questions should be "no." The
Securities Administrator shall be entitled to rely on such representations in
preparing, executing and/or filing any such Form 10-D. The parties to this
Agreement acknowledge that the performance by the Master Servicer and the
Securities Administrator of its respective duties under this Section 3.18
related to the timely preparation, execution and filing of Form 10-D is
contingent upon the other parties hereto strictly observing all applicable
deadlines in the performance of their duties under this Section 3.18. The
Depositor acknowledges that the performance by the Master Servicer and the
Securities Administrator of its duties under this Section 3.18 related to the
timely preparation, execution and filing of Form 10-D is also contingent upon
the Servicers, the Custodian and any Servicing Function Participant strictly
observing deadlines no later than those set forth in this paragraph that are
applicable to the parties to this Agreement in the delivery to the Securities
Administrator of any necessary Additional Form 10-D Disclosure pursuant to the
related Servicing Agreements, the Custodial Agreement or any other applicable
agreement. Neither the Master Servicer nor the Securities Administrator will
have any liability for any loss, expense, damage or claim arising out of or with
respect to any failure to properly prepare, execute and/or timely file such Form
10-D resulting from the Securities Administrator's inability or failure to
obtain or receive any information needed to prepare, arrange for execution or
file such Form 10-D on a timely basis.
(h) On or prior to the 90th calendar day after the end of the fiscal year
for the Issuing Entity or such earlier date as may be required by the Exchange
Act (the "10-K Filing Deadline") (it being understood that the fiscal year for
the Issuing Entity ends on December 31st of each year) commencing in March 2007,
the Securities Administrator shall, on behalf of the Issuing Entity and in
accordance with industry standards, prepare and file with the Commission via
XXXXX a Form 10-K with respect to the Issuing Entity. Such Form 10-K shall
include the
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following items, in each case, as applicable, to the extent they have been
delivered to the Securities Administrator within the applicable time frames set
forth in this Agreement, the related Servicing Agreements and Custodial
Agreement: (i) an annual compliance statement for the Master Servicer, each
Servicer, the Securities Administrator and any Servicing Function Participant
engaged by any such party or the Trustee (together with the Custodian, each a
"Reporting Servicer"), as described in Section 3.16 of this Agreement, the
related Servicing Agreement and the Custodial Agreement; provided, however, that
the Securities Administrator, at its discretion, may omit from the Form 10-K any
annual compliance statement that is not required to be filed with such Form 10-K
pursuant to Regulation AB; (ii)(A) the annual reports on assessment of
compliance with Servicing Criteria for each Reporting Servicer (unless the
Depositor has determined that such compliance statement is not required by
Regulation AB), as described in Section 3.17 of this Agreement, the related
Servicing Agreement and the Custodial Agreement, and (B) if any Reporting
Servicer's report on assessment of compliance with Servicing Criteria described
in Section 3.17 identifies any material instance of noncompliance, disclosure
identifying such instance of noncompliance, or if any Reporting Servicer's
report on assessment of compliance with Servicing Criteria described in Section
3.17 of this Agreement is not included as an exhibit to such Form 10-K,
disclosure that such report is not included and an explanation why such report
is not included; provided, however, that the Securities Administrator, at its
discretion, may omit from the Form 10-K any assessment of compliance or
attestation report described in clause (iii) below that is not required to be
filed with such Form 10-K pursuant to Regulation AB; (iii)(A) the registered
public accounting firm attestation report for each Reporting Servicer, as
described in Section 3.17 of this Agreement, the related Servicing Agreement and
the Custodial Agreement, and (B) if any registered public accounting firm
attestation report described under Section 3.17 of this Agreement identifies any
material instance of noncompliance, disclosure identifying such instance of
noncompliance, or if any such registered public accounting firm attestation
report is not included as an exhibit to such Form 10-K, disclosure that such
report is not included and an explanation why such report is not included, and
(iv) a Xxxxxxxx-Xxxxx Certification in the form attached hereto as Exhibit L,
executed by the senior officer in charge of securitizations of the Master
Servicer. Any disclosure or information in addition to (i) through (iv) above
that is required to be included on Form 10-K ("Additional Form 10-K Disclosure")
shall be reported by the parties as set forth in Exhibit Q-2 to the Depositor
and the Securities Administrator and directed and approved by the Depositor
pursuant to the following paragraph and the Securities Administrator will have
no duty or liability for any failure hereunder to determine or prepare any
Additional Form 10-K Disclosure except or set forth in the next paragraph.
(i) As set forth in Exhibit Q-2 hereto, no later than March 1 (with a ten
calendar day cure period) of each year that the Issuing Entity is subject to the
Exchange Act reporting requirements, commencing in March 2007, (i) the parties
listed on Exhibit Q-2 hereto shall be required to provide to the Depositor and
the Securities Administrator, to the extent known, in XXXXX-compatible format or
in such other format as agreed upon by the Securities Administrator and such
party, the form and substance of any Additional Form 10-K Disclosure, if
applicable together with an Additional Disclosure Notification, and (ii) the
Depositor will approve, as to form and substance, or disapprove, as the case may
be, the inclusion of the Additional Form 10-K Disclosure and shall forward such
Additional Form 10-K Disclosure. The Securities Administrator has no duty under
this Agreement to monitor or enforce the performance by the parties listed on
Exhibit Q-2 of their duties under this paragraph or
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proactively solicit or procure from such parties any Additional Form 10-K
Disclosure Information. The Depositor will be responsible for any reasonable
fees and expenses incurred by the Securities Administrator in connection with
including any Additional Form 10-K Disclosure on Form 10-K pursuant to this
paragraph.
(j) After preparing the Form 10-K, the Securities Administrator shall, upon
request, forward electronically a copy of the Form 10-K to the Depositor. Within
three Business Days after receipt of such copy, but no later than March 25th,
the Depositor shall notify the Securities Administrator in writing (which may be
furnished electronically) of any changes to or approval of such Form 10-K. In
the absence of receipt of any written changes or approval, or if the Depositor
does not request a copy of a Form 10-K, the Securities Administrator shall be
entitled to assume that such Form 10-K is in final form and the Securities
Administrator may proceed with the process for execution and filing of the Form
10-K. A senior officer of the Master Servicer in charge of the master servicing
function shall sign the Form 10-K. If a Form 10-K cannot be filed on time or if
a previously filed Form 10-K needs to be amended, the Securities Administrator
will follow the procedures set forth in Section 3.18(n). Promptly (but no later
than one Business Day) after filing with the Commission, the Securities
Administrator will make available on its internet website a final executed copy
of each Form 10-K prepared and filed by the Securities Administrator. Form 10-K
requires the registrant to indicate (by checking "yes" or "no") that it "(1) has
filed all reports required to be filed by Section 13 or 15(d) of the Exchange
Act during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days." The Depositor hereby represents to
the Securities Administrator that the Depositor has filed all such required
reports during the preceding 12 months and that it has been subject to such
filing requirement for the past 90 days. The Depositor shall notify the
Securities Administrator in writing, no later than the 15th calendar day of
March in any year in which the Trust is subject to the reporting requirements of
the Exchange Act, if the answer to the questions should be "no." The Securities
Administrator shall be entitled to rely on such representations in preparing,
executing and/or filing any such Form 10-D. The parties to this Agreement
acknowledge that the performance by the Master Servicer and the Securities
Administrator of its duties under this Section 3.18 related to the timely
preparation, execution and filing of Form 10-K is contingent upon such parties
(and any Servicing Function Participant) strictly observing all applicable
deadlines in the performance of their duties under this Section 3.18, Section
3.16 and Section 3.17. The Depositor acknowledges that the performance by the
Master Servicer and the Securities Administrator of its duties under this
Section 3.18 related to the timely preparation, execution and filing of Form
10-K is also contingent upon the Servicers, the Custodian and any Servicing
Function Participant strictly observing deadlines no later than those set forth
in this paragraph that are applicable to the parties to this Agreement in the
delivery to the Securities Administrator of any necessary Additional Form 10-K
Disclosure, any annual statement of compliance and any assessment of compliance
and attestation pursuant to the related Servicing Agreement, the Custodial
Agreement or any other applicable agreement. Neither the Master Servicer nor the
Securities Administrator shall have any liability for any loss, expense, damage
or claim arising out of or with respect to any failure to properly prepare,
execute and/or timely file such Form 10-K resulting from the Securities
Administrator's inability or failure to obtain or receive any information from
any other party hereto or any Servicer, Custodian or Servicing Function
Participant needed to prepare, execute or file such Form 10-K.
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(k) Each Form 10-K shall include a Xxxxxxxx-Xxxxx Certification, which
shall be in the form attached hereto as Exhibit L. Each Servicer shall sign and
provide, and each of the Servicers, the Master Servicer and the Securities
Administrator shall cause any Servicing Function Participant engaged by it to
sign and provide, to the person who signs the Xxxxxxxx-Xxxxx Certification (the
"Certifying Person") by March 1 (with a ten day cure period) of each year in
which the Issuing Entity is subject to the reporting requirements of the
Exchange Act and otherwise within a reasonable period of time upon request, a
certification (a "Back-Up Certification") (in the form attached hereto as
Exhibit M) upon which the Certifying Person, the entity for which the Certifying
Person acts as an officer and such entity's officers, directors and affiliates
(collectively, with the Certifying Person, the "Certification Parties") can
reasonably rely. The senior officer of the Master Servicer in charge of the
master servicing function shall serve as the Certifying Person on behalf of the
Issuing Entity. Such officer of the Certifying Person can be contacted by e-mail
at xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx or by facsimile at 000-000-0000. In the
event any such party or Servicing Function Participant engaged by any such party
is terminated or resigns pursuant to the terms of this Agreement, or any other
applicable agreement, as the case may be, such party shall provide a Back-Up
Certification to the Master Servicer pursuant to this Section 3.18 with respect
to the period of time it was subject to this Agreement or any other applicable
agreement, as the case may be. Notwithstanding the foregoing, (i) the Master
Servicer and the Securities Administrator shall not be required to deliver a
Back-Up Certification to each other if both are the same Person and the Master
Servicer is the Certifying Person and (ii) the Master Servicer shall not be
obligated to sign the Xxxxxxxx-Xxxxx Certification in the event that it does not
receive any Back-Up Certification required to be furnished to it pursuant to
this section or any Servicing Agreement or Custodial Agreement.
(l) The Securities Administrator shall have no responsibility to file any
items with the Commission other than those specified in this section and the
Master Servicer shall execute any and all Form 10-Ds, 8-Ks and 10-Ks required
hereunder.
(m) On or prior to January 30 of the first year in which the Securities
Administrator is able to do so under applicable law, the Securities
Administrator shall prepare and file a Form 15 Suspension Notification relating
to the automatic suspension of reporting in respect of the Issuing Entity under
the Exchange Act.
(n) In the event that the Securities Administrator is unable to timely file
with the Commission all or any required portion of any Form 8-K, 10-D or 10-K
required to be filed by this Agreement because required disclosure information
was either not delivered to it or delivered to it after the delivery deadlines
set forth in this Agreement or for any other reason, the Securities
Administrator will promptly notify electronically the Depositor of such
inability to make a timely filing with the Commission. In the case of Form 10-D
and 10-K, the parties to this Agreement will cooperate to prepare and file a
Form 12b-25 and a 10-D/A and 10K/A, as applicable, pursuant to Rule 12b-25 of
the Exchange Act. In the case of Form 8-K, the Securities Administrator will,
upon receipt of all required Form 8-K Disclosure Information and upon the
approval and direction of the Depositor, include such disclosure information on
the next succeeding Form 10-D to be filed for the Issuing Entity. In the event
that any previously filed Form 8-K, 10-D or 10-K needs to be amended, in
connection with any Additional Form 10-D Disclosure (other than, in the case of
Form 10-D, for the purpose of restating any Monthly Statement), Additional Form
10-K Disclosure or Form 8-K Disclosure Information, the
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Securities Administrator will electronically notify the Depositor and such other
parties to the transaction as are affected by such amendment, and such parties
will cooperate to prepare any necessary 8-K/A, 10-D/A or 10-K/A. Any Form 15,
Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K shall be signed by duly
authorized representative or a senior officer in charge of master servicing, as
applicable, of the Master Servicer. The parties to this Agreement acknowledge
that the performance by the Master Servicer of its duties under this Section
3.18 related to the timely preparation, execution and filing of Form 15, a Form
12b-25 or any amendment to Form 8-K, 10-D or 10-K is contingent upon each such
party performing its duties under this Section. Neither the Master Servicer nor
the Securities Administrator shall have any liability for any loss, expense,
damage or claim arising out of or with respect to any failure to properly
prepare, execute and/or timely file any such Form 15, Form 12b-25 or any
amendments to Forms 8-K, 10-D or 10-K, where such failure results from the
Securities Administrator's inability or failure to receive, on a timely basis,
any information from any other party hereto or any Servicer, any Custodian or
any Servicing Function Participant needed to prepare, arrange for execution or
file such Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K.
(o) The Depositor and the Securities Administrator agree to use their good
faith efforts to cooperate in complying with the requirements of this Section
3.18.
(p) Each of the parties agrees to provide to the Securities Administrator
such additional information related to such party as the Securities
Administrator may reasonably request, including evidence of the authorization of
the person signing any certificate or statement, financial information and
reports, and such other information related to such party or its performance
hereunder.
(q) Any notice or notification required to be delivered by the Securities
Administrator or Master Servicer to the Depositor pursuant to this Section 3.18,
may be delivered via facsimile to (000) 000-0000, via email to xxxx_xxxx@xx.xxx
or telephonically by calling Xxxx Park at (000) 000-0000.
(r) For the avoidance of doubt, any filings or deliverables required under
this Section 3.18 and Section 3.18 of the Stack II Agreement, may be prepared,
delivered and filed in a consolidated manner. The Master Servicer, the
Securities Administrator and the Depositor may satisfy the requirements of this
Section 3.18 and Section 3.18 of the Stack II Agreement with a single set of
filings and deliverables addressing the requirements of both this Section 3.18
and Section 3.18 of the Stack II Agreement.
Section 3.19 Compliance with Regulation AB. Each of the parties hereto
acknowledges and agrees that the purpose of Sections 3.16, 3.17 and 3.18 is to
facilitate compliance by the Depositor with the provisions of Regulation AB, as
such may be amended or clarified from time to time. Therefore, each of the
parties agrees that the parties' obligations hereunder will be supplemented and
modified as necessary to be consistent with any such amendments, interpretive
advice or guidance, convention or consensus among active participants in the
asset-backed securities markets, advice of counsel, or otherwise in respect of
the requirements of Regulation AB and the parties shall comply with requests
made by the Depositor for delivery of additional or different information as the
Depositor may determine in good faith is necessary to comply with the provisions
of Regulation AB. Any such supplementation or modification shall be made in
accordance with Section 11.02 without the consent of the
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Certificateholders, and may result in a change in the reports filed by the
Securities Administrator on behalf of the Issuing Entity under the Exchange Act.
ARTICLE IV
ACCOUNTS
Section 4.01 Protected Accounts.
(a) The Master Servicer shall enforce the obligation of each Servicer to
establish and maintain a Protected Account in accordance with the applicable
Servicing Agreement, with records to be kept with respect thereto on a Mortgage
Loan by Mortgage Loan basis, into which accounts shall be deposited within two
Business Days (or as of such other time specified in the related Servicing
Agreement) of receipt all collections of principal and interest on any Mortgage
Loan and with respect to any REO Property received by a Servicer, including
Principal Prepayments, Insurance Proceeds, Liquidation Proceeds, Subsequent
Recoveries and advances made from the Servicer's own funds (less servicing
compensation as permitted by the applicable Servicing Agreement in the case of
the Servicer) and all other amounts to be deposited in the Protected Account.
The Servicer is hereby authorized to make withdrawals from and deposits to the
related Protected Account for purposes required or permitted by this Agreement.
To the extent provided in the related Servicing Agreement, the Protected Account
shall be held in a Designated Depository Institution and segregated on the books
of such institution in the name of the Trustee for the benefit of
Certificateholders.
(b) To the extent provided in the related Servicing Agreement, amounts on
deposit in a Protected Account may be invested in Permitted Investments in the
name of the Trustee for the benefit of Certificateholders and, except as
provided in the preceding paragraph, not commingled with any other funds, such
Permitted Investments to mature, or to be subject to redemption or withdrawal,
no later than the date on which such funds are required to be withdrawn for
deposit in the Master Servicer Collection Account, and shall be held until
required for such deposit. The income earned from Permitted Investments made
pursuant to this Section 4.01 shall be paid to the related Servicer under the
applicable Servicing Agreement, and the risk of loss of moneys required to be
distributed to the Certificateholders resulting from such investments shall be
borne by and be the risk of the related Servicer, as set forth in the applicable
Servicing Agreement. The related Servicer (to the extent provided in the related
Servicing Agreement) shall deposit the amount of any such loss in the Protected
Account within two Business Days of receipt of notification of such loss but not
later than the second Business Day prior to the Distribution Date on which the
moneys so invested are required to be distributed to the Certificateholders.
(c) To the extent provided in the related Servicing Agreement and subject
to this Article IV, on or before each Servicer Remittance Date, the related
Servicer shall withdraw or shall cause to be withdrawn from the Protected
Accounts and shall immediately deposit or cause to be deposited in the Master
Servicer Collection Account amounts representing the following collections and
payments (other than with respect to principal of or interest on the Mortgage
Loans due on or before the Cut-off Date) with respect to each Mortgage Group:
(i) Monthly Payments on the Mortgage Loans received or any related
portion thereof advanced by such Servicer pursuant to the related Servicing
Agreement which
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were due on or before the related Due Date, net of the amount thereof
comprising the Servicing Fees;
(ii) Principal Prepayments in Full and any Liquidation Proceeds
received by such Servicer with respect to such Mortgage Loans in the
related Prepayment Period, with interest to the date of prepayment or
liquidation, net of the amount thereof comprising the Servicing Fees;
(iii) Curtailments received by such Servicer for such Mortgage Loans
in the related Prepayment Period; and
(iv) Any amount to be used as a Monthly Advance.
(d) Withdrawals by the Master Servicer may be made from an Account only to
make remittances as provided in Section 4.01(c), 4.02 and 4.03; to reimburse the
Master Servicer or a Servicer for Monthly Advances which have been recovered by
subsequent collection from the related Mortgagor; to remove amounts deposited in
error; to remove fees, charges or other such amounts deposited on a temporary
basis; or to clear and terminate the account at the termination of this
Agreement in accordance with Section 10.01. As provided in Sections 4.01(c) and
4.02(b) certain amounts otherwise due to the Servicers may be retained by them
as set forth in the related Servicing Agreements and need not be deposited in
the Master Servicer Collection Account.
Section 4.02 Master Servicer Collection Account.
(a) The Master Servicer shall establish and maintain in the name of the
Trustee, for the benefit of the Certificateholders, the Master Servicer
Collection Account as a segregated trust account or accounts. The Master
Servicer Collection Account may be a sub-account of the Distribution Account.
The Master Servicer will deposit in the Master Servicer Collection Account as
identified by the Master Servicer and as received by the Master Servicer, the
following amounts:
(i) Any amounts withdrawn from a Protected Account or other permitted
account;
(ii) Any Monthly Advance and any Compensating Interest Payments;
(iii) Any Insurance Proceeds, Liquidation Proceeds or Subsequent
Recoveries received by or on behalf of the Master Servicer or which were
not deposited in a Protected Account or other permitted account;
(iv) The repurchase price with respect to any Mortgage Loans
repurchased and all proceeds of any Mortgage Loans or property acquired in
connection with the optional termination of the trust;
(v) Any amounts required to be deposited with respect to losses on
investments of deposits in an Account; and
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(vi) Any other amounts received by or on behalf of the Master Servicer
and required to be deposited in the Master Servicer Collection Account
pursuant to this Agreement.
(b) All amounts deposited to the Master Servicer Collection Account shall
be held by the Master Servicer in the name of the Trustee in trust for the
benefit of the Certificateholders in accordance with the terms and provisions of
this Agreement. The requirements for crediting the Master Servicer Collection
Account or the Distribution Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of (i) prepayment or late payment charges or assumption, tax service,
statement account or payoff, substitution, satisfaction, release and other like
fees and charges and (ii) the items enumerated in Subsections 4.05(a)(i), (ii),
(iii), (iv), (vi), (vii), (viii), (ix), (xi) and (xii) with respect to the
Securities Administrator, need not be credited by the Master Servicer or the
related Servicer to the Distribution Account or the Master Servicer Collection
Account, as applicable. In the event that the Master Servicer shall deposit or
cause to be deposited to the Distribution Account any amount not required to be
credited thereto, the Securities Administrator, upon receipt of a written
request therefor signed by a Servicing Officer of the Master Servicer, shall
promptly transfer such amount to the Master Servicer from the Distribution
Account, any provision herein to the contrary notwithstanding.
(c) The amount at any time credited to the Master Servicer Collection
Account shall be invested, in the name of the Trustee, or its nominee, for the
benefit of the Certificateholders, in Permitted Investments as directed by
Master Servicer. All Permitted Investments shall mature or be subject to
redemption or withdrawal on or before, and shall be held until, the next
succeeding Distribution Account Deposit Date. Any and all investment earnings on
amounts on deposit in the Master Servicer Collection Account from time to time
shall be for the account of the Master Servicer. The Master Servicer from time
to time shall be permitted to withdraw or receive distribution of any and all
investment earnings from the Master Servicer Collection Account. The risk of
loss of moneys required to be distributed to the Certificateholders resulting
from such investments shall be borne by and be the risk of the Master Servicer.
The Master Servicer shall deposit the amount of any such loss in the Master
Servicer Collection Account within two Business Days of receipt of notification
of such loss but not later than the second Business Day prior to the
Distribution Date on which the moneys so invested are required to be distributed
to the Certificateholders.
(d) For the avoidance of doubt, it is agreed that the Master Servicer shall
establish and maintain in the name of the Trustee, for the benefit of the
holders of the Stack II Certificates, a separate segregated trust account or
accounts pursuant to Section 4.02 of the Stack II Agreement.
Section 4.03 Permitted Withdrawals and Transfers from the Master Servicer
Collection Account.
(a) The Master Servicer will, from time to time on demand of the Master
Servicer, the Trustee or the Securities Administrator, make or cause to be made
such withdrawals or transfers from the Master Servicer Collection Account as the
Master Servicer has designated for such transfer or withdrawal pursuant to the
Servicing Agreements. The Master Servicer may clear
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and terminate the Master Servicer Collection Account pursuant to Section 10.01
and remove amounts from time to time deposited in error.
(b) On an ongoing basis, the Master Servicer shall withdraw from the Master
Servicer Collection Account (i) any expenses recoverable by the Trustee, the
Master Servicer or the Securities Administrator pursuant to this Agreement,
including but not limited to Sections 2.01(b), 3.03, 7.04 and 9.05 and (ii) any
amounts payable to the Master Servicer as set forth in Section 3.14.
(c) In addition, on or before each Distribution Account Deposit Date, the
Master Servicer shall deposit in the Distribution Account (or remit to the
Securities Administrator for deposit therein) any Monthly Advances required to
be made by the Master Servicer with respect to the Mortgage Loans.
(d) No later than 3:00 p.m. New York time on each Distribution Account
Deposit Date, the Master Servicer will transfer the Available Distribution
Amount on deposit in the Master Servicer Collection Account with respect to the
related Distribution Date to the Securities Administrator for deposit in the
Distribution Account.
Section 4.04 Distribution Account.
(a) The Securities Administrator shall establish and maintain in the name
of the Trustee, for the benefit of the Certificateholders, the Distribution
Account as a segregated trust account or accounts.
(b) All amounts deposited to the Distribution Account shall be held by the
Securities Administrator in the name of the Trustee in trust for the benefit of
the Certificateholders in accordance with the terms and provisions of this
Agreement.
(c) The Distribution Account shall constitute a trust account of the Trust
Fund segregated on the books of the Securities Administrator and held by the
Securities Administrator in trust in its Corporate Trust Office, and the
Distribution Account and the funds deposited therein shall not be subject to,
and shall be protected to the maximum extent permitted by applicable law from,
all claims, liens, and encumbrances of any creditors or depositors of the
Securities Administrator, the Trustee or the Master Servicer (whether made
directly, or indirectly through a liquidator or receiver of the Securities
Administrator, the Trustee or the Master Servicer). The Distribution Account
shall be an Eligible Account. The amount at any time credited to the
Distribution Account shall be (i) fully insured by the FDIC to the maximum
coverage provided thereby or (ii) invested in the name of the Trustee, in such
Permitted Investments selected by the Master Servicer or deposited in demand
deposits with such depository institutions as selected by the Master Servicer,
provided that time deposits of such depository institutions would be a Permitted
Investment. All Permitted Investments shall mature or be subject to redemption
or withdrawal on or before, and shall be held until, the next succeeding
Distribution Date if the obligor for such Permitted Investment is the Master
Servicer or, if such obligor is any other Person, the Business Day preceding
such Distribution Date. All investment earnings on amounts on deposit in the
Distribution Account or benefit from funds uninvested therein from time to time
shall be for the account of the Securities Administrator. The Securities
Administrator shall be permitted to withdraw or receive distribution of any and
all
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investment earnings from the Distribution Account on each Distribution Date. If
there is any loss on a Permitted Investment or demand deposit, the Securities
Administrator shall deposit such amount in the Distribution Account. With
respect to the Distribution Account and the funds deposited therein, the
Securities Administrator shall take such action as may be necessary to ensure
that the Certificateholders shall be entitled to the priorities afforded to such
a trust account (in addition to a claim against the estate of the Trust) as
provided by 12 U.S.C. Section 92a(e), and applicable regulations pursuant
thereto, if applicable, or any applicable comparable state statute applicable to
state chartered banking corporations.
(d) For the avoidance of doubt, the Securities Administrator shall
establish and maintain in the name of the Trustee, for the benefit of the
holders of the Stack II Certificates, a separate segregated trust account or
accounts pursuant to Section 4.04 of the Stack II Agreement.
Section 4.05 Permitted Withdrawals and Transfers from the Distribution
Account.
(a) The Securities Administrator will, from time to time on demand of the
Master Servicer, make or cause to be made such withdrawals or transfers from the
Distribution Account as the Master Servicer has designated for such transfer or
withdrawal pursuant to the Servicing Agreements for the following purposes
(limited in the case of amounts due the Master Servicer to those not withdrawn
from the Master Servicer Collection Account in accordance with the terms of this
Agreement):
(i) to reimburse the Master Servicer or any Servicer for any Monthly
Advance of its own funds or any advance of such Servicer's own funds, the
right of the Master Servicer or a Servicer to reimbursement pursuant to
this subclause (i) being limited to amounts received on a particular
Mortgage Loan (including, for this purpose, the Purchase Price therefor,
Insurance Proceeds and Liquidation Proceeds) which represent late payments
or recoveries of the principal of or interest on such Mortgage Loan
respecting which such Monthly Advance or advance was made;
(ii) to reimburse the Master Servicer or any Servicer from Insurance
Proceeds or Liquidation Proceeds relating to a particular Mortgage Loan for
amounts expended by the Master Servicer or such Servicer in good faith as a
Servicing Advance in connection with the restoration of the related
Mortgaged Property which was damaged by an Uninsured Cause or in connection
with the liquidation of such Mortgage Loan;
(iii) to reimburse the Master Servicer or any Servicer from Insurance
Proceeds relating to a particular Mortgage Loan for insured expenses
incurred with respect to such Mortgage Loan and to reimburse the Master
Servicer or such Servicer from Liquidation Proceeds from a particular
Mortgage Loan for Liquidation Expenses incurred with respect to such
Mortgage Loan; provided that the Master Servicer shall not be entitled to
reimbursement for Liquidation Expenses with respect to a Mortgage Loan to
the extent that (i) any amounts with respect to such Mortgage Loan were
paid as Excess Liquidation Proceeds pursuant to clause (xi) of this
Subsection 4.03 (a) to the Master Servicer; and (ii) such Liquidation
Expenses were not included in the computation of such Excess Liquidation
Proceeds;
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(iv) to pay the Master Servicer or any Servicer, as appropriate, from
Liquidation Proceeds or Insurance Proceeds received in connection with the
liquidation of any Mortgage Loan, the amount which it or such Servicer
would have been entitled to receive under subclause (ix) of this Subsection
4.03(a) as servicing compensation on account of each defaulted scheduled
payment on such Mortgage Loan if paid in a timely manner by the related
Mortgagor;
(v) to pay the Master Servicer or any Servicer from the Purchase Price
for any Mortgage Loan, the amount which it or such Servicer would have been
entitled to receive under subclause (ix) of this Subsection 4.03 (a) as
servicing compensation;
(vi) to reimburse the Master Servicer or any Servicer for advances of
funds pursuant to Sections, and the right to reimbursement pursuant to this
subclause being limited to amounts received on the related Mortgage Loan
(including, for this purpose, the Purchase Price therefor, Insurance
Proceeds and Liquidation Proceeds) which represent late recoveries of the
payments for which such advances were made;
(vii) to reimburse the Master Servicer or any Servicer for any Monthly
Advance or advance, after a Realized Loss has been allocated with respect
to the related Mortgage Loan if the Monthly Advance or advance has not been
reimbursed pursuant to clauses (i) and (vi);
(viii) to pay the Master Servicer as set forth in Section 3.14;
(ix) to reimburse the Master Servicer for expenses, costs and
liabilities incurred by and reimbursable to it pursuant to this Agreement,
including but not limited to Sections 3.03, 7.04(c) and (d);
(x) to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds to the extent not retained by
the related Servicer;
(xi) to reimburse or pay any Servicer any such amounts as are due
thereto under the applicable Servicing Agreement and have not been retained
by or paid to the Servicer, to the extent provided in the related Servicing
Agreement;
(xii) to reimburse the Trustee or the Securities Administrator for
expenses, costs and liabilities incurred by or reimbursable to it pursuant
to this Agreement;
(xiii) to remove amounts deposited in error; and
(xiv) to clear and terminate the Distribution Account pursuant to
Section 9.01.
(b) The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Distribution Account pursuant to subclauses (i) through
(vi), inclusive, and (viii) or with respect to any such amounts which would have
been covered by such subclauses had the amounts not been retained by the Master
Servicer without being deposited in the Distribution Account under Section
4.02(b).
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(c) On each Distribution Date, the Securities Administrator shall
distribute the Available Distribution Amount for each Mortgage Group to the
Holders of the Certificates in accordance with Section 6.01.
ARTICLE V
CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be executed by manual
or facsimile signature on behalf of the Securities Administrator by an
authorized officer. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures were affixed, authorized
to sign on behalf of the Securities Administrator shall bind the Issuing Entity,
notwithstanding that such individuals or any of them have ceased to be so
authorized prior to the authentication and delivery of such Certificates or did
not hold such offices at the date of such authentication and delivery. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form set forth as attached hereto executed
by the Securities Administrator by manual signature, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication. On
the Closing Date, the Securities Administrator shall authenticate the
Certificates to be issued at the written direction of the Depositor, or any
Affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer and Exchange of
Certificates.
(a) The Securities Administrator shall maintain, or cause to be maintained
in accordance with the provisions of Section 5.09 hereof, a Certificate Register
for the Trust Fund in which, subject to the provisions of subsections (b) and
(c) below and to such reasonable regulations as it may prescribe, the Securities
Administrator shall provide for the registration of Certificates and of
Transfers and exchanges of Certificates as herein provided. Upon surrender for
registration of Transfer of any Certificate, the Securities Administrator shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same Class and of like
aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Securities Administrator. Whenever any
Certificates are so surrendered for exchange, the Securities Administrator shall
execute, authenticate and deliver the Certificates that the Certificateholder
making the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of Transfer or exchange shall be accompanied by a
written instrument of Transfer in form satisfactory to the Securities
Administrator duly executed by the holder thereof or his attorney duly
authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required. All
Certificates surrendered for registration of Transfer or exchange shall be
canceled
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and subsequently destroyed by the Securities Administrator in accordance with
such Securities Administrator's customary procedures.
(b) No Transfer of a Class B, Class P or Class A-R Certificate shall be
made unless such Transfer is made pursuant to an effective registration
statement under the Securities Act and any applicable state securities laws or
is exempt from the registration requirements under the Securities Act and such
state securities laws. In the event that a Transfer is to be made in reliance
upon an exemption from the Securities Act and such laws, in order to assure
compliance with the Securities Act and such laws, the Certificateholder desiring
to effect such Transfer and such Certificateholder's prospective transferee
shall (except with respect to the initial transfer of a Class B, Class P or
Class A-R Certificate by Xxxxxxx Xxxxx & Co.) each certify to each Securities
Administrator in writing the facts surrounding the Transfer in substantially the
form set forth in Exhibit F-1 (the "Transferor Representation Letter") and (i)
deliver a letter in substantially the form of either Exhibit F-2 (the "Investor
Representation Letter") or Exhibit F-3 (the "Rule 144A Letter") or (ii) there
shall be delivered to the Securities Administrator an Opinion of Counsel that
such Transfer may be made pursuant to an exemption from the Securities Act,
which Opinion of Counsel shall not be an expense of the Depositor or the
Securities Administrator. The Depositor shall provide to any Holder of a Class
B, Class P or Class A-R Certificate and any prospective transferee designated by
any such Holder, information regarding the related Certificates and the Mortgage
Loans and such other information as shall be necessary to satisfy the condition
to eligibility set forth in Rule 144A(d)(4) for Transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Securities Administrator shall
cooperate with the Depositor in providing the Rule 144A information referenced
in the preceding sentence, including providing to the Depositor such information
in the possession of the Securities Administrator regarding the Certificates,
the Mortgage Loans and other matters regarding the Trust Fund as the Depositor
shall reasonably request to meet its obligation under the preceding sentence.
Each Holder of a Class B, Class P or Class A-R Certificate desiring to effect
such Transfer shall, and does hereby agree to, indemnify the Depositor and the
Securities Administrator against any liability that may result if the Transfer
is not so exempt or is not made in accordance with such federal and state laws.
No transfer of an ERISA Restricted Certificate or a Class A-R Certificate
will be registered unless the Securities Administrator has received (A) a
representation to the effect that such transferee is not an employee benefit
plan subject to Title I of ERISA, a plan subject to Section 4975 of the Code or
a plan subject to any state, local, federal, non-U.S. or other law substantively
similar to the foregoing provisions of ERISA or the Code ("Similar Law")
(collectively, a "Plan"), and is not directly or indirectly acquiring such
Certificate for, on behalf of, or with any assets of any such Plan, or (B)
solely in the case of an ERISA Restricted Certificate (I) if the Certificate has
been the subject of an ERISA-Qualifying Underwriting, a representation to the
effect that such transferee is an insurance company that is acquiring the
Certificate with assets contained in an "insurance company general account," as
defined in Section V(e) of Prohibited Transaction Class Exemption ("PTCE")
95-60, and the acquisition and holding of the Certificate are covered and exempt
under Sections I and III of PTCE 95-60, or (II) solely in the case of a
Definitive Certificate, an Opinion of Counsel satisfactory to the Securities
Administrator, and upon which the Securities Administrator shall be entitled to
rely, to the effect that the acquisition and holding of such Certificate will
not constitute or result in a
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nonexempt prohibited transaction under Title I of ERISA or Section 4975 of the
Code, or a violation of Similar Law, and will not subject the Securities
Administrator, the Master Servicer, the Trustee or the Depositor to any
obligation in addition to those expressly undertaken in this Agreement, which
Opinion of Counsel shall not be an expense of the Securities Administrator, the
Master Servicer, the Trustee or the Depositor.
Except in the case of a Definitive Certificate, the representations set
forth in the immediately preceding paragraph of this Subsection 5.02(b), other
than clause (B)(II) in the immediately preceding paragraph, shall be deemed to
have been made to the Securities Administrator by the transferee's acceptance of
an ERISA Restricted Certificate or a Class A-R Certificate (or the acceptance by
a Certificate Owner of the beneficial interest in any Class of ERISA Restricted
Certificates or a Class A-R Certificate).
Notwithstanding any other provision herein to the contrary, any purported
transfer of an ERISA Restricted Certificate or a Class A-R Certificate to or on
behalf of a Plan without the delivery to the Securities Administrator of a
representation or an Opinion of Counsel satisfactory to the Securities
Administrator as described above shall be void and of no effect. The Securities
Administrator shall not be under any liability to any Person for any
registration or transfer of any ERISA Restricted Certificate or Class A-R
Certificate that is in fact not permitted by this Section 5.02(b), nor shall the
Trustee or the Securities Administrator be under any liability for making any
payments due on such Certificate to the Holder thereof or taking any other
action with respect to such Holder under the provisions of this Agreement so
long as the transfer was registered by the Securities Administrator in
accordance with the foregoing requirements. The Trustee or the Securities
Administrator shall be entitled, but not obligated, to recover from any Holder
of any ERISA Restricted Certificate or Class A-R Certificate that was in fact a
Plan and that held such Certificate in violation of this Section 5.02(b) all
payments made on such ERISA Restricted Certificate or a Class A-R Certificate at
and after the time it commenced such holding. Any such payments so recovered
shall be paid and delivered to the last preceding Holder of such Certificate
that is not a Plan.
(c) Each Person who has or who acquires any Ownership Interest in a Class
A-R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class A-R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a Class
A-R Certificate shall be a Permitted Transferee and shall promptly notify
the Securities Administrator of any change or impending change in its
status as a Permitted Transferee.
(ii) No Ownership Interest in a Class A-R Certificate may be
purchased, transferred or sold, directly or indirectly, except in
accordance with the provisions hereof. No Ownership Interest in a Class A-R
Certificate may be registered on the Closing Date or thereafter
transferred, and the Securities Administrator shall not register the
Transfer of any Class A-R Certificate unless, in addition to the
certificates required to be delivered to the Securities Administrator under
subparagraph (b) above, the Securities Administrator shall have been
furnished with an affidavit (a "Transferee's Letter") of the initial owner
or the proposed transferee in the form attached hereto as Exhibit E-1 and
an affidavit (a "Transferor Certificate") of the proposed transferor in the
form attached
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hereto as Exhibit E-2. In the absence of a contrary instruction from the
transferor of a Class A-R Certificate, declaration (11) in Appendix A of
the Transferee's Letter may be left blank. If the transferor requests by
written notice to the Securities Administrator prior to the date of the
proposed transfer that one of the two other forms of declaration (11) in
Appendix A of the Transferee's Letter be used, then the requirements of
this Section 5.02(c)(ii) shall not have been satisfied unless the
Transferee's Letter includes such other form of declaration.
(iii) Each Person holding or acquiring any Ownership Interest in a
Class A-R Certificate shall agree (A) to obtain a Transferee's Letter from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Class A-R Certificate, (B) to obtain a Transferee's Letter
from any Person for whom such Person is acting as nominee, trustee or agent
in connection with any Transfer of a Class A-R Certificate and (C) not to
Transfer its Ownership Interest in a Class A-R Certificate or to cause the
Transfer of an Ownership Interest in a Class A-R Certificate to any other
Person if it has actual knowledge that such Person is not a Permitted
Transferee. Further, no transfer, sale or other disposition of any
Ownership Interest in a Class A-R Certificate may be made to a person who
is not a U.S. Person (within the meaning of Section 7701 of the Code)
unless such person furnishes the transferor and the Securities
Administrator with a duly completed and effective Internal Revenue Service
Form W-8ECI (or any successor thereto) and the Securities Administrator
consents to such transfer, sale or other disposition in writing.
(iv) Any attempted or purported Transfer of any Ownership Interest in
a Class A-R Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Class A-R Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Class A-R Certificate. The Securities Administrator shall
be under no liability to any Person for any registration of Transfer of a
Class A-R Certificate that is in fact not permitted by Section 5.02(b) and
this Section 5.02(c) or for making any payments due on such Certificate to
the Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transferee's Letter. The Securities
Administrator shall be entitled but not obligated to recover from any
Holder of a Class A-R Certificate that was in fact not a Permitted
Transferee at the time it became a Holder or, at such subsequent time as it
became other than a Permitted Transferee, all payments made on such Class
A-R Certificate at and after either such time. Any such payments so
recovered by the Securities Administrator shall be paid and delivered by
the Securities Administrator to the last preceding Permitted Transferee of
such Certificate.
(v) At the option of the Holder of the Class A-R Certificate, the
Class LT1-R Interest, the Class UT-R Interest and the residual interest in
any REMIC created under the Stack II Agreement may be severed and
represented by separate certificates; provided, however, that such separate
certification may not occur until the Securities Administrator receives a
REMIC Opinion to the effect that separate certification in the
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form and manner proposed would not result in the imposition of federal tax
upon the Issuing Entity or any of the REMICs provided for in the Pooling
and Servicing Agreement or cause any of the REMICs provided for in the
Pooling and Servicing Agreement to fail to qualify as a REMIC; and provided
further, that the provisions of Sections 5.02(b) and (c) will apply to each
such separate certificate as if the separate certificate were a Class A-R
Certificate. If, as evidenced by a REMIC Opinion, it is necessary to
preserve the REMIC status of any of the REMICs provided for in the Pooling
and Servicing Agreement, the Class LT1-R Interest, the Class UT-R Interest
and the residual interest in any REMIC created under the Stack II Agreement
shall be severed and represented by separate Certificates.
The restrictions on Transfers of a Class A-R Certificate set forth in this
Section 5.02(c) shall cease to apply (and the applicable portions of the legend
on a Class A-R Certificate may be deleted) with respect to Transfers occurring
after delivery to the Securities Administrator of an Opinion of Counsel, which
Opinion of Counsel shall not be an expense of the Securities Administrator or
the Depositor, to the effect that the elimination of such restrictions will not
cause any of the REMICs provided for herein to fail to qualify as a REMIC at any
time that the Certificates are outstanding or result in the imposition of any
tax on the Issuing Entity, any REMIC provided for herein, a Certificateholder or
another Person. Each Person holding or acquiring any Ownership Interest in a
Class A-R Certificate hereby consents to any amendment of this Agreement that,
based on an Opinion of Counsel furnished to the Securities Administrator, is
reasonably necessary (a) to ensure that the record ownership of, or any
beneficial interest in, a Class A-R Certificate is not transferred, directly or
indirectly, to a Person that is not a Permitted Transferee and (b) to provide
for a means to compel the Transfer of a Class A-R Certificate that is held by a
Person that is not a Permitted Transferee to a Holder that is a Permitted
Transferee.
(d) The transferor of the Class A-R Certificate shall notify the Securities
Administrator in writing upon the transfer of the Class A-R Certificate.
(e) The preparation and delivery of all certificates, opinions and other
writings referred to above in this Section 5.02 shall not be an expense of the
Issuing Entity, the Depositor or the Securities Administrator.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If (a) any
mutilated Certificate is surrendered to the Securities Administrator or the
Securities Administrator receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and of the ownership thereof and
(b) there is delivered to the Securities Administrator such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Securities Administrator that such Certificate has been
acquired by a bona fide purchaser, the Securities Administrator shall execute,
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like Class, tenor
and Percentage Interest. In connection with the issuance of any new Certificate
under this Section 5.03, the Securities Administrator may require the payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Securities Administrator) connected therewith. Any replacement
Certificate issued pursuant to this Section 5.03 shall constitute complete and
indefeasible evidence of ownership in the Trust Fund, as if originally issued,
whether or not the
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lost, stolen or destroyed Certificate shall be found at any time. All
Certificates surrendered to the Securities Administrator under the terms of this
Section 5.03 shall be canceled and destroyed by the Securities Administrator in
accordance with its standard procedures without liability on its part.
Section 5.04 Persons Deemed Owners. The Securities Administrator and any
agent of the Securities Administrator may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Securities Administrator, nor any agent of the
Securities Administrator shall be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and Addresses. If
three or more Certificateholders (a) request such information in writing from
the Securities Administrator, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders propose to transmit or if the
Depositor shall request such information in writing from the Securities
Administrator, then the Securities Administrator shall, within ten Business Days
after the receipt of such request, provide the Depositor or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of the Trust Fund held by the Securities Administrator, if
any. The Depositor and every Certificateholder, by receiving and holding a
Certificate, agree that the Securities Administrator shall not be held
accountable by reason of the disclosure of any such information as to the list
of the Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 5.06 Book-Entry Certificates. The Regular Certificates, upon
original issuance, shall be issued in the form of one or more typewritten
Certificates representing the Book-Entry Certificates, to be delivered to the
Depository by or on behalf of the Depositor. The Book-Entry Certificates shall
initially be registered on the Certificate Register in the name of the
Depository or its nominee, and no Certificate Owner of a Book-Entry Certificate
will receive a definitive certificate representing such Certificate Owner's
interest in such Certificates, except as provided in Section 5.08. Unless and
until definitive, fully registered Certificates ("Definitive Certificates") have
been issued to the Certificate Owners of the Book-Entry Certificates pursuant to
Section 5.08:
(a) the provisions of this Section shall be in full force and effect;
(b) the Depositor and the Securities Administrator may deal with the
Depository and the Depository Participants for all purposes (including the
making of distributions) as the authorized representative of the respective
Certificate Owners of the Book-Entry Certificates;
(c) registration of the Book-Entry Certificates may not be transferred by
the Securities Administrator except to another Depository;
(d) the rights of the respective Certificate Owners of the Book-Entry
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of the Book-Entry Certificates and the Depository and/or the
Depository Participants. Pursuant to the Depository Agreement, unless
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and until Definitive Certificates are issued pursuant to Section 5.08, the
Depository will make book-entry transfers among the Depository Participants and
receive and transmit distributions of principal and interest on the related
Certificates to such Depository Participants;
(e) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants;
(f) the Securities Administrator may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to its
Depository Participants; and
(g) to the extent that the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of the aggregate unpaid principal amount of
any Class of Certificates, such direction or consent may be given by Certificate
Owners (acting through the Depository and the Depository Participants) owning
Book-Entry Certificates evidencing the requisite percentage of principal amount
of such Class of Certificates.
Section 5.07 Notices to Depository. Whenever any notice or other
communication is required to be given to Certificateholders of the Class with
respect to which Book-Entry Certificates have been issued, unless and until
Definitive Certificates shall have been issued to the related Certificate
Owners, the Securities Administrator shall give all such notices and
communications to the Depository.
Section 5.08 Definitive Certificates. If, after Book-Entry Certificates
have been issued with respect to any Certificates, (a) the Depository or the
Depositor advises the Securities Administrator that the Depository is no longer
willing, qualified or able to discharge properly its responsibilities under the
Depository Agreement with respect to such Certificates and the Securities
Administrator or the Depositor is unable to locate a qualified successor, (b)
the Depositor notifies the Securities Administrator and the Depository of its
intent to terminate the book-entry system through the Depository and, upon
receipt of notice of such intent from the Depository, the Certificate Owners of
the Book-Entry Certificates agree to initiate such termination or (c) after the
occurrence and continuation of an Event of Default, Certificate Owners of such
Book-Entry Certificates having not less than 51% of the Voting Rights evidenced
by any Class of Book-Entry Certificates advise the Securities Administrator and
the Depository in writing through the Depository Participants that the
continuation of a book-entry system with respect to Certificates of such Class
through the Depository (or its successor) is no longer in the best interests of
the Certificate Owners of such Class, then the Securities Administrator shall
notify all Certificate Owners of such Book-Entry Certificates, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners of such Class requesting the same.
The Depositor shall provide the Securities Administrator with an adequate
inventory of certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon surrender to the Securities Administrator of any such
Certificates by the Depository, accompanied by registration instructions from
the Depository for registration, the Securities Administrator shall authenticate
and deliver such Definitive Certificates. Neither the Depositor nor the
Securities Administrator shall be liable for any delay
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in delivery of such instructions and each may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of such Definitive
Certificates, all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed by
the Securities Administrator, to the extent applicable with respect to such
Definitive Certificates and the Securities Administrator shall recognize the
Holders of such Definitive Certificates as Certificateholders hereunder.
Section 5.09 Maintenance of Office or Agency. The Securities Administrator
will maintain or cause to be maintained at its expense an office or offices or
agency or agencies where Certificates may be surrendered for registration of
transfer or exchange. The Securities Administrator initially designates its
offices at Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000,
Attention: Corporate Trust Services - Xxxxxxx Xxxxx Mortgage Investors Trust,
Series 2006-AF1 as offices for such purposes. The Securities Administrator will
give prompt written notice to the Certificateholders of any change in such
location of any such office or agency. For the avoidance of doubt, the
Securities Administrator may satisfy the requirements of both this Section 5.09
and Section 5.09 of the Stack II Agreement by maintaining a single office or
agency.
ARTICLE VI
PAYMENTS TO CERTIFICATEHOLDERS
Section 6.01 Distributions. Interest and principal on the Certificates will
be distributed by the Securities Administrator monthly on each Distribution
Date, commencing in October 2006, as instructed by the Master Servicer, in an
aggregate amount equal to the sum of the Available Distribution Amount for such
Distribution Date.
(I) Prior to the Credit Support Depletion Date, the Available Distribution
Amount shall be applied as follows:
(a) On each Distribution Date, the Securities Administrator shall
apply an amount equal to the Available Distribution Amount in the following
order of priority:
(i) Concurrently (A) solely from the Available Distribution
Amount with respect to Mortgage Group One, to the Class AF-1
Certificateholders (other than the Class PO Certificates), all amounts
distributable pursuant to (I)(b)(i)(A), (B) solely from the Available
Distribution Amount with respect to Mortgage Group Two, to the Class
AF-2 Certificateholders (other than the Class PO Certificates), all
amounts distributable pursuant to (I)(b)(i)(B) through (D) below, and
(C) solely from the Available Distribution Amount with respect to
Mortgage Group Three, to the Class AF-3 Certificateholders (other than
the Class PO Certificates), all amounts distributable pursuant to
(I)(b)(i)(E) through (F) below;
(ii) the balance, if any, of the Available Distribution Amount
shall be distributed first, (A) concurrently, solely from the
Available Distribution Amount with respect to Mortgage Group One to
the Class AF-1 Certificateholders in the amounts distributable
pursuant to (I)(b)(ii)(A) below, up to the Non-PO Class AF-1 Optimal
Principal Amount and (I)(b)(iii) below, up to the amounts payable
thereunder and to Class PO Component One, the Group One Class XX
Xxxxxx xxxxxxxx xx (X)(x)(xx)(X)
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xxxxx, (X) concurrently, solely from the Available Distribution Amount
with respect to Mortgage Group Two to the Class AF-2
Certificateholders in the amounts distributable pursuant to
(I)(b)(ii)(B) below, up to the Non-PO Class AF-2 Optimal Principal
Amount and (I)(b)(iv) below, up to the amounts payable thereunder and
to the Class PO Component Two Certificates, the Group Two Class PO
Amount pursuant to (I)(b)(ii)(B) below, and (C) concurrently, solely
from the Available Distribution Amount with respect to Mortgage Group
Three to the Class AF-3 Certificateholders in the amounts
distributable pursuant to (I)(b)(ii)(C) below, up to the Non-PO Class
AF-3 Optimal Principal Amount and (I)(b)(v) below, up to the amounts
payable thereunder and to the Class PO Component Three Certificates,
the Group Three Class PO Amount pursuant to (I)(b)(ii)(C) below, and
second, to the Class PO Component One, the portion of the Class PO
Shortfall Amount relating to the Group One Mortgage Loans, to the
Class PO Component Two, the portion of the Class PO Shortfall Amount
relating to the Group Two Mortgage Loans and to the Class PO Component
Three, the portion of the Class PO Shortfall Amount relating to the
Group Three Mortgage Loans, in accordance with paragraph (I)(b)(v)
below;
(iii) subject to subsection (b) below, to the Class M
Certificateholders, the balance, if any, of the Available Distribution
Amount after making the distributions provided for in paragraphs (i)
and (ii) above, in accordance with, and up to the amount calculated
pursuant to, Section 6.01(I)(c) below;
(iv) subject to subsection (b) below, to the Class B
Certificateholders, the balance, if any, of the Available Distribution
Amount after making the distributions provided for in paragraphs (i)
through (iii) above, in accordance with, and up to the amounts
calculated pursuant to, Section 6.01(I)(d) below; and
(v) to the Class A-R Certificateholders the balance, if any, of
the Available Distribution Amount remaining after the distributions
provided for in paragraphs (i) through (iv) above.
(b) Amounts payable to the Class A Certificateholders on any
Distribution Date shall be distributed as follows:
(i) to the extent the amount available for distribution pursuant
to paragraph (a)(i) above is sufficient:
(A) to the Class AF-1 Certificateholders, (1) the Class AF-1
Interest Accrual Amount plus (2) the Class AF-1 Shortfall from the
preceding Distribution Date;
(B) to the Class AF-2A Certificateholders, (1) the Class
AF-2A Interest Accrual Amount plus (2) the Class AF-2A Shortfall from
the preceding Distribution Date;
(C) to the Class AF-2B Certificateholders, (1) the Class
AF-2B Interest Accrual Amount plus (2) the Class AF-2B Shortfall from
the preceding Distribution Date;
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(D) to the Class AF-2C Certificateholders, (1) the Class AF-2C
Interest Accrual Amount plus (2) the Class AF-2C Shortfall from the
preceding Distribution Date;
(E) to the Class AF-3A Certificateholders, (1) the Class AF-3A
Interest Accrual Amount plus (2) the Class AF-3A Shortfall from the
preceding Distribution Date;
(F) to the Class AF-3B Certificateholders, (1) the Class AF-3B
Interest Accrual Amount plus (2) the Class AF-3B Shortfall from the
preceding Distribution Date;
(G) to the Class IO Certificateholders, the sum of (1) (a) the
Class IO Component One Interest Accrual Amount plus (b) the Class IO
Component One Shortfall from the preceding Distribution Date, (2) (a) the
Class IO Component Two Interest Accrual Amount plus (b) the Class IO
Component Two Shortfall from the preceding Distribution Date and (3) (a)
the Class IO Component Three Interest Accrual Amount plus (b) the Class IO
Component Three Shortfall from the preceding Distribution Date;
(ii) concurrently, (A) to the Class AF-1 Certificateholders, solely
from the Available Distribution Amount with respect to Mortgage Group One
up to the Non-PO Class AF-1 Optimal Principal Amount, allocated among the
Class AF-1 Certificates in accordance with the Non-PO Class AF-1 Principal
Payment Rules and to the Class PO Component One, the Group One Class PO
Amount, (B) to the Class AF-2 Certificateholders, solely from the Available
Distribution Amount with respect to Mortgage Group Two up to the Non-PO
Class AF-2 Optimal Principal Amount, allocated among the Class AF-2
Certificates in accordance with the Non-PO Class AF-2 Principal Payment
Rules and to Class PO Component Two, the Group Two Class PO Amount and (C)
to the Class AF-3 Certificateholders, solely from the Available
Distribution Amount with respect to Mortgage Group Three up to the Non-PO
Class AF-3 Optimal Principal Amount, allocated among the Class AF-3
Certificates in accordance with the Non-PO Class AF-3 Principal Payment
Rules and to Class PO Component Three, the Group Three Class PO Amount;
(iii) to the extent that the Available Distribution Amount with
respect to Mortgage Group One is insufficient to make distributions
pursuant to paragraphs (I)(b)(i)(A) or the portion of the Available
Distribution Amount with respect to Mortgage Group One remaining after
giving effect to the distributions in (I)(b)(i) above is insufficient to
distribute in full to the Class AF-1 Certificateholders amounts described
in (I)(b)(ii)(A) above (such shortfall, the "Class AF-1 Deficiency Amount")
and the Available Distribution Amount with respect to Mortgage Group Two or
Mortgage Group Three remaining after giving effect to the distributions in
(I)(b)(i) above exceeds the amount required to distribute in full to the
Class AF-2 Certificateholders or Class AF-3 Certificateholders, as
applicable, the amounts described in (I)(b)(ii)(B) or (I)(b)(ii)(C) above,
such excess shall be distributed in reduction of the Class AF-1 Deficiency
Amount in application first to amounts payable pursuant to Section
6.01(I)(b)(i) and second to amounts payable pursuant to Section
6.01(I)(b)(ii);
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(iv) to the extent that the Available Distribution Amount with
respect to Mortgage Group Two is insufficient to make distributions
pursuant to paragraphs (I)(b)(i)(B) through (D) or the portion of the
Available Distribution Amount with respect to Mortgage Group Two
remaining after giving effect to the distributions in (I)(b)(i) above
is insufficient to distribute in full to the Class AF-2
Certificateholders amounts described in (I)(b)(ii)(B) above (such
shortfall, the "Class AF-2 Deficiency Amount") and the Available
Distribution Amount with respect to Mortgage Group One or Mortgage
Group Three remaining after giving effect to the distributions in
(I)(b)(i) above exceeds the amount required to distribute in full to
the Class AF-1 Certificateholders or Class AF-3 Certificateholders, as
applicable, the amounts described in (I)(b)(ii)(A) or (I)(b)(ii)(C)
above, such excess shall be distributed in reduction of the Class AF-2
Deficiency Amount in application first to amounts payable pursuant to
Section 6.01(I)(b)(i) and second to amounts payable pursuant to
Section 6.01(I)(b)(ii);
(v) to the extent that the Available Distribution Amount with
respect to Mortgage Group Three is insufficient to make distributions
pursuant to paragraphs (I)(b)(i)(E) and (F) or the portion of the
Available Distribution Amount with respect to Mortgage Group Three
remaining after giving effect to the distributions in (b)(i) above is
insufficient to distribute in full to the Class AF-3
Certificateholders amounts described in (I)(b)(ii)(C) above (such
shortfall, the "Class AF-3 Deficiency Amount") and the Available
Distribution Amount with respect to Mortgage Group One or Mortgage
Group Two remaining after giving effect to the distributions in
(I)(b)(i) above exceeds the amount required to distribute in full to
the Class AF-1 Certificateholders or Class AF-2 Certificateholders, as
applicable, the amounts described in (I)(b)(ii)(A) or (I)(b)(ii)(C)
above, such excess shall be distributed in reduction of the Class AF-3
Deficiency Amount in application first to amounts payable pursuant to
Section (I)(b)(i) and second to amounts payable pursuant to Section
(I)(b)(ii);
(vi) to the Class PO Component One the portion of the Class PO
Shortfall Amount relating to the Group One Mortgage Loans, to the
Class PO Component Two the portion of the Class PO Shortfall Amount
relating to the Group Two Mortgage Loans and to the Class PO Component
Three the portion of the Class PO Shortfall Amount relating to the
Group Three Mortgage Loans; provided, however, that any amount
distributed pursuant to this Section 6.01(I)(b)(vi) shall not cause a
further reduction in the principal balance of the Class PO Component
One, Class PO Component Two or Class PO Component Three, as
applicable;
(vii) If the Available Distribution Amount with respect to
Mortgage Group One is insufficient to make the distributions set forth
in paragraphs (I)(b)(i)(A) above, the Securities Administrator shall
distribute the Available Distribution Amount with respect to Mortgage
Group One to the Class AF-1 Certificateholders pro rata in accordance
with the amounts otherwise distributable to them pursuant to paragraph
(I)(b)(i)(A) above. If the Available Distribution Amount with respect
to Mortgage Group Two is insufficient to make the distributions set
forth in paragraphs (I)(b)(i)(B) through (D) above, the Securities
Administrator shall distribute the Available Distribution Amount with
respect to Mortgage Group Two to the Class AF-2 Certificateholders pro
rata in accordance with the amounts otherwise distributable to them
pursuant to paragraphs (I)(b)(i)(B) through
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(D) above. If the Available Distribution Amount with respect to
Mortgage Group Three is insufficient to make the distributions set
forth in paragraphs (I)(b)(i)(E) through (F) above, the Securities
Administrator shall distribute the Available Distribution Amount with
respect to Mortgage Group Three to the Class AF-3 Certificateholders
pro rata in accordance with the amounts otherwise distributable to
them pursuant to paragraphs (I)(b)(i)(E) through (F) above; and
(viii) In addition to the foregoing distributions, the Class AF-1
Certificates, Class AF-2 Certificates or Class AF-3 Certificates will
receive additional principal distributions on any Distribution Date
prior to the Credit Support Depletion Date under the circumstances
specified in (A) and (B) below:
(A) On any Distribution Date on or after the date on which
the aggregate Class Certificate Balance of the Class AF-1
Certificates, the Class Certificate Balance of the Class AF-2
Certificates or the Class Certificate Balance of the Class AF-3
Certificates has been reduced to zero, all principal (other than the
applicable PO Percentage of any principal received on or in respect of
each Discount Mortgage Loan and limited to amounts in excess of that
needed to reduce the aggregate Class Certificate Balance of the Class
AF-1 Certificates, the Class Certificate Balance of the Class AF-2
Certificates or the Class Certificate Balance of the Class AF-3
Certificates to zero) on the Mortgage Loans in the Mortgage Group
relating to such Class A Certificates that are no longer outstanding
will be distributed as principal to the remaining Class A Certificates
(other than the Class PO Certificates) (pro rata) in accordance with
Section 6.01(I)(b)(ii)(A), Section 6.01(I)(b)(ii)(B) or Section
6.01(I)(b)(C), as applicable, in reduction of the Class Certificate
Balances thereof, provided that on such Distribution Date either (a)
the aggregate Subordinated Percentage for such Distribution Date is
less than 200% of the initial aggregate Subordinated Percentage, or
(b) the average outstanding Principal Balance of the Mortgage Loans in
either Mortgage Group delinquent 60 days or more over the prior six
months, as a percentage of the corresponding Group One or Group Two
Subordinated Amount, is greater than or equal to 50%. For purposes of
the foregoing, the "Aggregate Subordinated Percentage" for any
Distribution Date is equal to the aggregate Class Certificate Balance
of the Subordinate Certificates immediately prior to such Distribution
Date divided by the aggregate Stated Principal Balance of all of the
Mortgage Loans immediately prior to such Distribution Date.
(B) If on any Distribution Date on which the aggregate Class
Certificate Balance of the Class AF-1 Certificates, the Class AF-2
Certificates or the Class AF-3 Certificates would be greater than the
Group One Non-PO Allocated Amount, the Group Two Non-PO Allocated
Amount or the Group Three Non-PO Allocated Amount, as the case may be,
(the "Undercollateralized Group"), after giving effect to
distributions to be made on such Distribution Date, the portion of the
Available Distribution Amount in respect of principal on the Mortgage
Loans in the other Mortgage Group (the "Overcollateralized Group")
otherwise allocable to the Subordinate Certificates will be
distributed to the Classes of Class A Certificates (other than the
Class A-P Certificates) relating to the Undercollateralized Group (in
accordance with the priorities set forth in Section 6.01(I)(b)(ii)),
in reduction of the principal balances thereof,
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until the aggregate principal balance of the Certificates (other than
the Class A-P Certificates) included in the Undercollateralized Group
is equal to the Group One Non-PO Allocated Amount, the Group Two
Non-PO Allocated Amount or the Group Three Non-PO Allocated Amount, as
the case may be. Moreover, the Available Distribution Amount with
respect to the Overcollateralized Group will be further reduced (after
distributions of interest to the Class A Certificates included in the
Overcollateralized Group) in an amount equal to one month's interest
on the amount by which the Undercollateralized Group is
undercollateralized at the Group One Remittance Rate (if Mortgage
Group One is the Undercollateralized Group), the Group Two Remittance
Rate (if Mortgage Group Two is the Undercollateralized Group) or the
Group Three Remittance Rate (if Mortgage Group Three is the
Undercollateralized Group), plus any shortfall of such amounts from
prior Distribution Dates; provided, however, that in no event shall
the Available Distribution Amount with respect to the
Overcollateralized Group on any Distribution Date be reduced by more
than the sum of (i) the overcollateralized amount with respect to the
Overcollateralized Group and (ii) interest thereon at the applicable
Remittance Rate. Such amounts will be distributed to the applicable
Classes of Certificates in the priority of interest payable on such
Distribution Date.
(c) Amounts payable on any Distribution Date to the Class M
Certificateholders pursuant to Section 6.01(I)(a)(iii) shall be distributed
in the following priority:
(i) first, to the Class MF-1 Certificateholders, up to an amount
equal to (A) the Class MF-1 Interest Accrual Amount plus (B) the Class
MF-1 Shortfall from the preceding Distribution Date plus (C) the pro
rata portion, if any, of the Subordinated Optimal Principal Amount
allocable to the Class MF-1 Certificates in accordance with Section
6.01(I)(e) plus (D) any Carry-over Subordinated Principal Amounts with
respect to the Class MF-1 Certificates;
(ii) second, to the Class MF-2 Certificateholders, up to an
amount equal to (A) the Class MF-2 Interest Accrual Amount plus (B)
the Class MF-2 Shortfall from the preceding Distribution Date plus (C)
the pro rata portion, if any, of the Subordinated Optimal Principal
Amount allocable to the Class MF-2 Certificates in accordance with
Section 6.01(I)(e) plus (D) any Carry-over Subordinated Principal
Amounts with respect to the Class MF-2 Certificates plus (E) any
portion of the Subordinated Optimal Principal Amount allocated to the
Class MF-1 Certificates in excess of the Class Certificate Balance of
such Class;
(iii) third, to the Class MF-3 Certificateholders, up to an
amount equal to (A) the Class MF-3 Interest Accrual Amount plus (B)
the Class MF-3 Shortfall from the preceding Distribution Date plus (C)
the pro rata portion, if any, of the Subordinated Optimal Principal
Amount allocable to the Class MF-3 Certificates in accordance with
Section 6.01(I)(e) plus (D) any Carry-over Subordinated Principal
Amounts with respect to the Class MF-3 Certificates plus (E) any
portion of the Subordinated Optimal Principal Amount allocated to the
Class MF-2 Certificates in excess of the Class Certificate Balance of
such Class;
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(d) Amounts payable on any Distribution Date to the Class B
Certificateholders pursuant to Section 6.01(I)(a)(iv) shall be distributed
in the following priority:
(i) first, to the Class BF-1 Certificateholders, up to an amount
equal to (A) the Class BF-1 Interest Accrual Amount plus (B) the Class
BF-1 Shortfall from the preceding Distribution Date plus (C) the pro
rata portion, if any, of the Subordinated Optimal Principal Amount
allocable to the Class BF-1 Certificates in accordance with Section
6.01(I)(e) plus (D) any Carry-over Subordinated Principal Amounts with
respect to the Class BF-1 Certificates plus (E) any portion of the
Subordinated Optimal Principal Amount allocated to the Class M
Certificates in excess of the Class Certificate Balance of such Class;
(ii) second, to the Class BF-2 Certificateholders, up to an
amount equal to (A) the Class BF-2 Interest Accrual Amount plus (B)
the Class BF-2 Shortfall from the preceding Distribution Date plus (C)
the pro rata portion, if any, of the Subordinated Optimal Principal
Amount allocable to the Class BF-2 Certificates in accordance with
Section 6.01(I)(e) plus (D) any Carry-over Subordinated Principal
Amounts with respect to the Class BF-2 Certificates plus (E) any
portion of the Subordinated Optimal Principal Amount allocated to the
Class BF-1 Certificates in excess of the Class Certificate Balance of
such Class; and
(iii) third, to the Class BF-3 Certificateholders, up to an
amount equal to (A) the Class BF-3 Interest Accrual Amount plus (B)
the Class BF-3 Shortfall from the preceding Distribution Date plus (C)
the pro rata portion, if any, of the Subordinated Optimal Principal
Amount allocable to the Class BF-3 Certificates in accordance with
Section 6.01(I)(e) plus (D) any Carry-over Subordinated Principal
Amounts with respect to the Class BF-3 Certificates plus (E) any
portion of the Subordinated Optimal Principal Amount allocated to the
Class BF-2 Certificates in excess of the Class Certificate Balance of
such Class.
(e) On each Distribution Date, the Subordinated Optimal Principal
Amount shall be allocated among the Classes of Subordinate Certificates
entitled, pursuant to the next succeeding sentence, to an allocation of
principal on such Distribution Date, pro rata based upon the Class
Certificate Balances of all such Classes so entitled. With respect to the
Subordinate Certificates, on each Distribution Date, principal shall be
distributable to (1) any Class of Subordinate Certificates which has
current Credit Support (before giving effect to any distribution of
principal and any Realized Losses allocable on such Distribution Date)
greater than or equal to the Original Credit Support for such Class; (2)
the Class having the lowest numerical class designation of any outstanding
Class of Subordinate Certificates which does not meet the criteria in (1)
above; and (3) the Class BF-3 Certificates if all other outstanding Classes
of Subordinate Certificates meet the criteria in (1) above or if no other
Class of Subordinate Certificates is outstanding; provided, however, that
no Class of Subordinate Certificates shall receive any distributions of
principal if any Class of Subordinate Certificates having a lower numerical
class designation than such Class fails to meet the criteria in (1) above.
For purposes of this paragraph, the Class M Certificates shall be deemed to
have a lower numerical class designation than each Class of Class B
Certificates.
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(II) On or after the Credit Support Depletion Date, the Available Distribution
Amount shall be applied, first, in respect of interest in accordance with
Section 6.01(I)(b)(i) and, second, in respect of principal to each Class of the
Class A Certificates, pro rata, based upon their respective outstanding
balances.
Section 6.02 Allocation of Realized Losses.
(a) Prior to each Determination Date, the Servicer shall determine (i) the
total amount of Realized Losses, if any, incurred during the related Principal
Prepayment Period; and (ii) the respective portions of such Realized Losses
allocable to interest and to principal.
(b) The principal portion of any Realized Losses shall be allocated as
follows: first, to the Class BF-3 Certificates until the Class Certificate
Balance of the Class BF-3 Certificates has been reduced to zero; second, to the
Class BF-2 Certificates until the Class Certificate Balance of the Class BF-2
Certificates has been reduced to zero; third, to Class BF-1 Certificates until
the Class Certificate Balance of the Class BF-1 Certificates has been reduced to
zero; fourth, to the Class MF-3 Certificates until the Class Certificate Balance
of the Class MF-3 Certificates has been reduced to zero; fifth, to the Class
MF-2 Certificates until the Class Certificate Balance of the Class MF-2
Certificates has been reduced to zero; sixth, to the Class MF-1 Certificates
until the Class Certificate Balance of the Class MF-1 Certificates has been
reduced to zero; and seventh, to the Senior Certificates, on a pro rata basis
until the Class Certificate Balance of the Senior Certificates has been reduced
to zero; provided, however, that if a Realized Loss occurs with respect to a
Discount Mortgage Loan (a) the amount of such Realized Loss equal to the product
of (i) the amount of such Realized Loss and (ii) the PO Percentage with respect
to such Discount Mortgage Loan will be allocated to Class PO Component One (if
the Realized Loss occurred with respect to a Group One Mortgage Loan), to Class
PO Component Two (if the Realized Loss occurred with respect to the Group Two
Mortgage Loan) or to the Class PO Component Three (if the Realized Loss occurred
with respect to the Group Three Mortgage Loans) and (b) the remainder of such
Realized Loss will be allocated as described above.
(c) As used herein, an allocation of a Realized Loss on a "pro rata basis"
among two or more specified Classes of Certificates means an allocation on a pro
rata basis, among the various Classes so specified, to each such Class of
Certificates on the basis of their Class Certificate Balances prior to giving
effect to distributions to be made on such Distribution Date. All Realized
Losses and all other losses allocated to a Class of Certificates hereunder will
be allocated among the Certificates of such Class in proportion to the
Percentage Interests evidenced thereby.
(d) In the event that a recovery is made with respect to any Realized Loss,
the amount of such recovery shall be treated as a Principal Prepayment and
deposited into the Master Servicer Collection Account and distributed on the
applicable Distribution Date.
Section 6.03 Subordination. The rights of the Class B Certificateholders to
receive distributions in respect of the Class B Certificates on any Distribution
Date shall be subordinated to the rights of the Class A and Class M
Certificateholders to receive distributions in respect of the Class A and Class
M Certificates. The rights of the Class M Certificateholders to receive
distributions in respect of the Class M Certificates on any Distribution Date
shall be subordinated
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to the rights of the Class A Certificateholders to receive distributions in
respect of the Class A Certificates. The rights of the Class BF-1
Certificateholders to receive distributions in respect of the Class BF-1
Certificates on any Distribution Date shall be subordinate to the rights of the
Class A and Class M Certificateholders to receive distributions in respect of
such Class A and Class M Certificates. Each Class of Class B Certificates (other
than the Class BF-1 Certificates) is subordinated to the Class A Certificates,
the Class M Certificates and each Class of Class B Certificates having a lower
numerical class designation than such Class of Class B Certificates. The rights
of the Class MF-1 Certificateholders to receive distributions in respect of the
Class MF-1 Certificates on any Distribution Date shall be subordinate to the
rights of the Class A Certificateholders to receive distributions in respect of
such Class A Certificates. Each Class of Class M Certificates (other than the
Class MF-1 Certificates) is subordinated to the Class A Certificates and each
Class of Class M Certificates having a lower numerical class designation than
such Class of Class M Certificates.
Section 6.04 Payments.
(a) On each Distribution Date, other than the final Distribution Date, the
Securities Administrator shall distribute to each Certificateholder of record on
the directly preceding Record Date the Certificateholder's pro rata share of its
Class (based on the aggregate Percentage Interest represented by such Holder's
Certificates) of all amounts required to be distributed on such Distribution
Date to such Class, based solely on information provided to the Securities
Administrator by the Master Servicer. The Securities Administrator shall
calculate the amount to be distributed to each Class and, based on such amounts,
the Securities Administrator shall determine the amount to be distributed to
each Certificateholder. All of the Securities Administrator's calculations of
payments shall be based solely on information provided to the Securities
Administrator by the Master Servicer or the applicable Servicer. The Securities
Administrator shall not be required to confirm, verify or recompute any such
information but shall be entitled to rely conclusively on such information.
(b) Payment of the above amounts to each Certificateholder shall be made
(i) by check mailed to each Certificateholder entitled thereto at the address
appearing in the Certificate Register or (ii) upon receipt by the Securities
Administrator on or before the fifth Business Day preceding the Record Date of
written instructions from a Certificateholder by wire transfer to a United
States dollar account maintained by the payee at any United States depository
institution with appropriate facilities for receiving such a wire transfer;
provided, however, that the final payment in respect of each Class of
Certificates will be made only upon presentation and surrender of such
respective Certificates at the office or agency of the Securities Administrator
specified in the notice to Certificateholders of such final payment.
Section 6.05 Statements to Certificateholders.
(a) Concurrently with each distribution to Certificateholders, the
Securities Administrator shall make available to the parties hereto and each
Certificateholder via the Securities Administrator's internet website as set
forth below, the following information (such information the "Monthly
Statement"):
(i) the amount of the distribution made on such Distribution Date to
the Holders of each Class of Certificates, separately identified, allocable
to principal;
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(ii) the amount of the distribution made on such Distribution Date to
the Holders of each Class of Certificates allocable to interest, separately
identified;
(iii) the aggregate amount the Servicing Fee during the related Due
Period and such other customary information as the Trustee deems necessary
or desirable, or which a Certificateholder reasonably requests, to enable
Certificateholders to prepare their tax returns;
(iv) the aggregate amount of Monthly Advances for the related Due
Period;
(v) the aggregate Stated Principal Balance of the Mortgage Group One,
Mortgage Group Two and Mortgage Group Three at the close of business at the
end of the related Due Period;
(vi) the number, weighted average remaining term to maturity and
weighted average Mortgage Interest Rate of the Mortgage Group One, Mortgage
Group Two and Mortgage Group Three as of the related Due Date;
(vii) the number and aggregate unpaid principal balance of Mortgage
Group One, Mortgage Group Two and Mortgage Group Three (a) one month, two
months or three months delinquent on a contractual basis, (b) as to which
foreclosure proceedings have been commenced and (c) in bankruptcy as of the
close of business on the last day of the calendar month preceding such
Distribution Date determined in accordance with the MBA method;
(viii) with respect to any Mortgage Loan in Mortgage Group One,
Mortgage Group Two and Mortgage Group Three that became an REO Property
during the preceding calendar month, the Stated Principal Balance of such
Mortgage Loan as of the date it became an REO Property;
(ix) the book value of any REO Property as of the close of business on
the last Business Day of the calendar month preceding the Distribution
Date, and, cumulatively, the total number and cumulative principal balance
of all REO Properties as of the close of business of the last day of the
preceding due period;
(x) the aggregate amount of Principal Prepayments made during the
related Prepayment Period;
(xi) the aggregate amount of Realized Losses incurred during the
related Due Period and the cumulative amount of Realized Losses;
(xii) the aggregate amount of Extraordinary Trust Fund Expenses
withdrawn from the Master Servicer Collection Account for such Distribution
Date;
(xiii) the Class Certificate Balance or Notional Amount, as
applicable, of each Class of Certificates, after giving effect to the
distributions made on such Distribution Date;
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(xiv) the aggregate amount of interest accrued at the related
Certificate Rate with respect to each Class during the related Interest
Accrual Period and the respective portions thereof, if any, remaining
unpaid following the distributions made in respect of such Certificates on
such Distribution Date;
(xv) the aggregate amount of any Prepayment Interest Shortfalls for
such Distribution Date as determined separately for each Mortgage Group, to
the extent not covered by Compensating Interest Payments by the related
Servicer or the Master Servicer pursuant to the related Servicing Agreement
or Section 6.06;
(xvi) the Available Distribution Amount with respect to each Mortgage
Group;
(xvii) the Certificate Rate for each Class of Certificates for such
Distribution Date; and
(xviii) the aggregate Stated Principal Balance of Mortgage Loans from
Mortgage Group One, Mortgage Group Two and Mortgage Group Three purchased
by the Seller during the related Due Period and indicating the Section of
this Agreement requiring or allowing the purchase of each such Mortgage
Loan.
The information set forth above shall be calculated or reported, as the
case may be, by the Securities Administrator, based solely on, and to the extent
of, information provided to the Securities Administrator by the Master Servicer.
The Securities Administrator may conclusively rely on such information and shall
not be required to confirm, verify or recalculate any such information.
The Securities Administrator may make available each month, to any
interested party, the Monthly Statement to Certificateholders via the Securities
Administrator's website initially located at "xxx.xxxxxxx.xxx." Assistance in
using the website can be obtained by calling the Securities Administrator's
customer service desk at (000) 000-0000. Parties that are unable to use the
above distribution option are entitled to have a paper copy mailed to them via
first class mail by calling the customer service desk and indicating such. The
Securities Administrator shall have the right to change the way such reports are
distributed in order to make such distribution more convenient and/or more
accessible to the parties, and the Securities Administrator shall provide timely
and adequate notification to all parties regarding any such change.
(b) By January 30 of each year beginning in 2007, if so requested in
writing, the Securities Administrator will furnish such report to each Holder of
the Certificates of record at any time during the prior calendar year as to the
aggregate of amounts reported pursuant to subclauses (a)(ii) and (a)(v) above
with respect to the Certificates, plus information with respect to the amount of
servicing compensation and such other customary information as the Securities
Administrator may determine to be necessary and/or to be required by the
Internal Revenue Service or by a federal or state law or rules or regulations to
enable such Holders to prepare their tax returns for such calendar year. Such
obligations shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Securities
Administrator pursuant to the requirements of the Code.
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(c) The Securities Administrator may satisfy the requirements of this
Section 6.05 and Section 6.05 of the Stack II Agreement via a single Monthly
Statement, provided that such Monthly Statement adequately addresses all of the
content and delivery requirements contained in both this Section 6.05 and
Section 6.05 of the Stack II Agreement.
(d) Monthly Advances. If the Monthly Payment on a Mortgage Loan that was
due on a related Due Date and is delinquent other than as a result of
application of the Relief Act and for which the related Servicer was required to
make an advance pursuant to the related Servicing Agreement exceeds the amount
deposited in the Master Servicer Collection Account that will be used for a
Monthly Advance with respect to such Mortgage Loan, the Master Servicer will
deposit in the Master Servicer Collection Account not later than the
Distribution Account Deposit Date immediately preceding the related Distribution
Date an amount equal to such deficiency, net of the Servicing Fee for such
Mortgage Loan, except to the extent the Master Servicer determines any such
Monthly Advance to be nonrecoverable from Liquidation Proceeds, Insurance
Proceeds or future payments on the Mortgage Loan for which such Monthly Advance
was made. If the Master Servicer has not deposited the amount described above as
of the related Distribution Account Deposit Date, the Trustee will, subject to
applicable law and its determination of recoverability, deposit in the Master
Servicer Collection Account not later than the related Distribution Date, an
amount equal to the remaining deficiency as of the Distribution Account Deposit
Date. Subject to the foregoing, the Master Servicer shall continue to make such
Monthly Advances through the date that the related Servicer is required to do so
under its Servicing Agreement. If applicable, on the Distribution Account
Deposit Date, the Master Servicer shall present an Officer's Certificate to the
Securities Administrator (i) stating that the Master Servicer elects not to make
a Monthly Advance in a stated amount and (ii) detailing the reason it deems the
advance to be nonrecoverable.
Section 6.06 Compensating Interest Payments. The Master Servicer shall
deposit in the Master Servicer Collection Account not later than each
Distribution Account Deposit Date an amount equal to the aggregate amounts
required to be paid by the Servicers under the Servicing Agreements with respect
to subclause (a) of the definition of Prepayment Interest Shortfall with respect
to the Mortgage Loans for the related Distribution Date, and not so paid by the
related Servicers (such amount, the "Compensating Interest Payment"). The Master
Servicer shall not be entitled to any reimbursement of any Compensating Interest
Payment; provided, however, the aggregate compensating interest payments made by
the Master Servicer shall not exceed the Master Servicing Compensation.
Section 6.07 Allocation of Certain Interest Shortfalls.
(a) On any Distribution Date, the excess, if any, of (X) the aggregate
amounts required to be paid by the Servicers under the Servicing Agreements with
respect to subclause (a) of the definition of Prepayment Interest Shortfall with
respect to the Mortgage Loans for the related Distribution Date, and not so paid
by the related Servicers over (Y) the Compensating Interest Payment actually
paid into the Master Servicer Collection Account pursuant to Section 6.06 for
such Distribution Date shall equal the "Compensating Interest Shortfall" with
respect to such Distribution Date. On any Distribution Date, the Compensating
Interest Shortfall shall be allocated pro rata among the outstanding Classes of
Class A, Class M and Class B Certificates based on the amount of interest to
which each such
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Class would otherwise be paid on such Distribution Date had there been no such
Compensating Interest Shortfall.
(b) On any Distribution Date, the interest portion of any Realized Losses
("Realized Loss Interest Shortfall") shall be allocated to the Class of
Subordinate Certificates then outstanding having the highest numerical class
designation or, if no Class of Subordinate Certificates is then outstanding, to
the Class A Certificates (other than the Class PO Certificates) pro rata among
the outstanding Classes of Class A Certificates (other than the Class PO
Certificates) based on the amount of interest to which each such Class would
otherwise be entitled on such Distribution Date had there been no such Realized
Loss Interest Shortfall.
(c) Any interest shortfall resulting from the Relief Act or any similar
state legislation, as amended shall be allocated pro rata among the outstanding
Classes of Certificates based upon the amount of interest to which each such
Class would otherwise be paid on such Distribution Date.
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ARTICLE VII
THE MASTER SERVICER AND THE DEPOSITOR
Section 7.01 Liabilities of the Master Servicer. The Master Servicer shall
be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by the Master Servicer, as the case may
be, herein. The Depositor shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by the
Depositor.
Section 7.02 Merger or Consolidation of the Master Servicer.
(a) Each of the Master Servicer and the Depositor will keep in full force
and effect its existence, rights and franchises as a corporation under the laws
of the state of its incorporation, and will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its duties under this Agreement.
(b) Any Person into which the Master Servicer or the Depositor may be
merged or consolidated, or any corporation resulting from any merger or
consolidation to which the Master Servicer shall be a party, or any Person
succeeding to the business of the Master Servicer, shall be the successor of the
Master Servicer hereunder, without the execution or filing of any paper or
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 7.03 Indemnification from the Master Servicer and the Depositor.
(a) The Master Servicer agrees to indemnify the Indemnified Persons for,
and to hold them harmless against, any loss, liability or expense (including
reasonable legal fees and disbursements of counsel) incurred on their part that
may be sustained in connection with, arising out of, or relating to, any claim
or legal action (including any pending or threatened claim or legal action)
relating to this Agreement or the Certificates (i) related to the Master
Servicer's failure to perform its duties in compliance with this Agreement
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) or (ii) incurred by reason of the Master Servicer's
willful misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder, provided, in each case, that with respect to any such claim or legal
action (or pending or threatened claim or legal action), the Trustee or the
Securities Administrator shall have given the Master Servicer and the Depositor
written notice of such claim or legal action promptly after the Trustee or the
Securities Administrator shall have received knowledge thereof. This indemnity
shall survive the resignation or removal of the Trustee, Master Servicer or the
Securities Administrator and the termination of this Agreement.
(b) The Depositor will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise referred to in
Subsection (a) above.
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Section 7.04 Limitations on Liability of the Master Servicer and Others.
Subject to the obligation of the Master Servicer to indemnify the Indemnified
Persons pursuant to Section 7.03:
(a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Indemnified Persons, the Depositor, the Issuing Entity or the Certificateholders
for taking any action or for refraining from taking any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Master Servicer or any such Person against
any breach of warranties or representations made herein or any liability which
would otherwise be imposed by reason of such Person's willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder.
(b) The Master Servicer and any director, officer, employee or agent of the
Master Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder.
(c) The Master Servicer, the Custodian and any director, officer, employee
or agent of the Master Servicer or the Custodian shall be indemnified by the
Issuing Entity and held harmless thereby against any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on their
part that may be sustained in connection with, arising out of, or related to,
any claim or legal action (including any pending or threatened claim or legal
action) relating to this Agreement, the Certificates or any Servicing Agreement
(except to the extent that the Master Servicer or the Custodian, as the case may
be, is indemnified by a Servicer thereunder), other than (i) any such loss,
liability or expense related to the Master Servicer's failure to perform its
duties in compliance with this Agreement (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement), or to the
Custodian's failure to perform its duties under the Custodial Agreement,
respectively, or (ii) any such loss, liability or expense incurred by reason of
the Master Servicer's or the Custodian's willful misfeasance, bad faith or gross
negligence in the performance of duties hereunder or under the Custodial
Agreement, as applicable, or by reason of reckless disregard of obligations and
duties hereunder or under the Custodial Agreement, as applicable.
(d) The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties under
this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, the Master Servicer may in its discretion,
undertake any such action which it may deem necessary or desirable with respect
to this Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, the legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Issuing Entity, and the Master Servicer
shall be entitled to be reimbursed therefor out of the Master Servicer
Collection Account as provided by Section 4.03. Nothing in this Subsection
7.04(d) shall affect the Master Servicer's obligation to supervise, or to take
such actions as are necessary to ensure, the servicing and administration of the
Mortgage Loans pursuant to Subsection 3.01(a).
(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Master Servicer shall not be required to investigate or make recommendations
concerning potential liabilities which the Issuing Entity might incur as a
result of such course of action by reason of the condition of the
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Mortgaged Properties but shall give notice to the Trustee if it has notice of
such potential liabilities.
(f) The Master Servicer shall not be liable for any acts or omissions of
any Servicer, except as otherwise expressly provided herein.
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Section 7.05 Master Servicer Not to Resign. Except as provided in Section
7.07, the Master Servicer shall not resign from the obligations and duties
hereby imposed on it except upon a determination that any such duties hereunder
are no longer permissible under applicable law and such impermissibility cannot
be cured. Any such determination permitting the resignation of the Master
Servicer shall be evidenced by an Opinion of Independent Counsel to such effect
delivered to the Trustee. No such resignation by the Master Servicer shall
become effective until MLML or the Trustee or a successor to the Master Servicer
reasonably satisfactory to the Trustee shall have assumed the responsibilities
and obligations of the Master Servicer in accordance with Section 8.02 hereof.
The Trustee shall notify the Rating Agencies of the resignation of the Master
Servicer. If the Master Servicer and the Securities Administrator are the same
entity, then at any time the Master Servicer is terminated as master servicer,
the Securities Administrator shall likewise be removed as securities
administrator.
Section 7.06 Successor Master Servicer. In connection with the appointment
of any successor Master Servicer or the assumption of the duties of the Master
Servicer, MLML or the Trustee may make such arrangements for the compensation of
such successor master servicer out of payments on the Mortgage Loans as MLML or
the Trustee and such successor master servicer shall agree. If the successor
master servicer does not agree that such market value is a fair price, such
successor master servicer shall obtain two quotations of market value from third
parties actively engaged in the servicing of single-family mortgage loans.
Section 7.07 Sale and Assignment of Master Servicing. The Master Servicer
may sell and assign its rights and delegate its duties and obligations in its
entirety as Master Servicer under this Agreement; provided, however, that: (i)
the purchaser or transferee accepting such assignment and delegation (a) shall
be a Person which shall be qualified to service mortgage loans for Xxxxxx Xxx or
Xxxxxxx Mac; (b) shall have a net worth of not less than $10,000,000 (unless
otherwise approved by each Rating Agency pursuant to clause (ii) below); (c)
shall be reasonably satisfactory to the Trustee (as evidenced in a writing
signed by the Trustee); and (d) shall execute and deliver to the Trustee an
agreement, in form and substance reasonably satisfactory to the Trustee, which
contains an assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or observed by it as
master servicer under this Agreement, any custodial agreement from and after the
effective date of such agreement; (ii) each Rating Agency shall be given prior
written notice of the identity of the proposed successor to the Master Servicer
and each Rating Agency's rating of the Certificates in effect immediately prior
to such assignment, sale and delegation will not be downgraded, qualified or
withdrawn as a result of such assignment, sale and delegation, as evidenced by a
letter to such effect delivered to the Master Servicer and the Trustee; and
(iii) the Master Servicer assigning and selling the master servicing shall
deliver to the Trustee an Officer's Certificate and an Opinion of Independent
Counsel, each stating that all conditions precedent to such action under this
Agreement have been completed and such action is permitted by and complies with
the terms of this Agreement. No such assignment or delegation shall affect any
liability of the Master Servicer arising prior to the effective date thereof.
ARTICLE VIII
DEFAULT
Section 8.01 Events of Default. "Event of Default," wherever used herein,
means any one of the following events (whatever the reason for such Event of
Default and whether it shall
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be voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body) and only with respect to the defaulting
Master Servicer:
(i) The Master Servicer fails to cause to be deposited in the
Distribution Account any amount so required to be deposited pursuant to
this Agreement, and such failure continues unremedied for a period of three
Business Days after the date upon which written notice of such failure,
requiring the same to be remedied, shall have been given to the Master
Servicer; or
(ii) The Master Servicer fails to observe or perform in any material
respect any other material covenants and agreements set forth in this
Agreement to be performed by it, which covenants and agreements materially
affect the rights of Certificateholders, and such failure continues
unremedied for a period of 60 days after the date on which written notice
of such failure, properly requiring the same to be remedied, shall have
been given to the Master Servicer by the Trustee or to the Master Servicer
and the Trustee by the Holders of Certificates evidencing Percentage
Interests aggregating not less than 25% of the Trust Fund; or
(iii) There is entered against the Master Servicer a decree or order
by a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver or liquidator in
any insolvency, readjustment of debt, marshaling of assets and liabilities
or similar proceedings, or for the winding up or liquidation of its
affairs, and the continuance of any such decree or order is unstayed and in
effect for a period of 60 consecutive days, or an involuntary case is
commenced against the Master Servicer under any applicable insolvency or
reorganization statute and the petition is not dismissed within 60 days
after the commencement of the case; or
(iv) The Master Servicer consents to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating
to the Master Servicer or substantially all of its property; or the Master
Servicer admits in writing its inability to pay its debts generally as they
become due, files a petition to take advantage of any applicable insolvency
or reorganization statute, makes an assignment for the benefit of its
creditors, or voluntarily suspends payment of its obligations; or
(v) The Master Servicer assigns or delegates its duties or rights
under this Agreement in contravention of the provisions permitting such
assignment or delegation under Sections 7.05 or 7.07.
In each and every such case, so long as such Event of Default with respect to
the Master Servicer shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 51% of the Class Certificate Balance of the Certificates, by notice in
writing to the Master Servicer (and to the Trustee if given by such
Certificateholders), with a copy to the Rating Agencies, and with the consent of
the Seller, may terminate all of the rights and obligations (but not the
liabilities) of the Master Servicer under this Agreement and in and to the
Mortgage Loans and/or the REO Property serviced by the Master Servicer and the
proceeds thereof. Upon the receipt by the Master Servicer of the written
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notice, all authority and power of the Master Servicer under this Agreement,
whether with respect to the Certificates, the Mortgage Loans, REO Property or
under any other related agreements (but only to the extent that such other
agreements relate to the Mortgage Loans or related REO Property) shall, subject
to Section 8.02, automatically and without further action pass to and be vested
in the Trustee pursuant to this Section 8.01; and, without limitation, the
Trustee is hereby authorized and empowered to execute and deliver, on behalf of
the Master Servicer as attorney-in-fact or otherwise, any and all documents and
other instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees to cooperate with
the Trustee in effecting the termination of the Master Servicer's rights and
obligations hereunder, including, without limitation, the transfer to the
Trustee of (i) the property and amounts which are then or should be part of the
Issuing Entity or which thereafter become part of the Issuing Entity; and (ii)
originals or copies of all documents of the Master Servicer reasonably requested
by the Trustee to enable it to assume the Master Servicer's duties thereunder.
In addition to any other amounts which are then, or, notwithstanding the
termination of its activities under this Agreement, may become payable to the
Master Servicer under this Agreement, the Master Servicer shall be entitled to
receive, out of any amount received on account of a Mortgage Loan or related REO
Property, that portion of such payments which it would have received as
reimbursement under this Agreement if notice of termination had not been given.
The termination of the rights and obligations of the Master Servicer shall not
affect any obligations incurred by the Master Servicer prior to such
termination.
Section 8.02 Trustee to Act; Appointment of Successor.
(a) Upon the receipt by the Master Servicer of a notice of termination
pursuant to Section 8.01 or an Opinion of Independent Counsel pursuant to
Section 7.05 to the effect that the Master Servicer is legally unable to act or
to delegate its duties to a Person which is legally able to act, the Trustee
shall automatically become the successor in all respects to the Master Servicer
in its capacity under this Agreement and the transactions set forth or provided
for herein and shall thereafter be subject to all the responsibilities, duties,
liabilities and limitations on liabilities relating thereto placed on the Master
Servicer by the terms and provisions hereof; provided, however, that MLML shall
have the right to either (a) immediately assume the duties of the Master
Servicer or (b) select a successor master servicer; provided further, however,
that the Trustee shall have no obligation whatsoever with respect to any
liability (other than advances deemed recoverable and not previously made)
incurred by the Master Servicer at or prior to the time of termination. As
compensation therefor, the Trustee shall be entitled to all funds relating to
the Mortgage Loans which the Master Servicer would have been entitled to retain
if the Master Servicer had continued to act hereunder, except for those amounts
due the Master Servicer as reimbursement permitted under this Agreement for
advances previously made or expenses previously incurred. Notwithstanding the
above, or anything herein to the contrary, the Trustee, if it becomes Master
Servicer, shall have no responsibility or obligation (i) to repurchase or
substitute any Mortgage Loan, (ii) for any representation or warranty of the
Master Servicer hereunder, and (iii) for any act or omission of either a
predecessor or successor Master Servicer other than the Trustee. The Trustee may
conduct any activity required of it as Master Servicer hereunder through an
Affiliate or through an agent. Neither the Trustee (as successor Master
Servicer) nor any other successor Master Servicer shall be deemed to be in
default hereunder due
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to any act or omission of a predecessor Master Servicer, including but not
limited to failure to timely deliver to the Trustee distribution instructions,
any funds required to be deposited to the Trust Fund, or any breach of its duty
to cooperate with a transfer of master servicing. Neither the Trustee nor any
other successor Master Servicer shall be deemed to be in default hereunder by
reason of any failure to make, or any delay in making, any distribution
hereunder or any portion thereof or any failure to perform, or any delay in
performing, any duties or responsibilities hereunder, in either case caused
solely by the failure of the Master Servicer to deliver or provide, or any delay
in delivering or providing, any cash, information, documents or records required
to be provided to it by the Master Servicer. Notwithstanding the above, the
Trustee may, if it shall be unwilling so to act, or shall, if it is legally
unable so to act, appoint or petition a court of competent jurisdiction to
appoint, any established housing and home finance institution which is a Xxxxxx
Mae- or Xxxxxxx Mac-approved servicer, and with respect to a successor to the
Master Servicer only, having a net worth of not less than $10,000,000 and
meeting such other standards for a successor Master Servicer as are set forth in
this Agreement, as the successor to the Master Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer hereunder. Pending appointment of a successor to the Master
Servicer hereunder, the Trustee shall act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments on
the Mortgage Loans as it and such successor shall agree; provided, however, in
the event that the provisions of Section 7.06 shall apply, no such compensation
shall be in excess of that permitted the Trustee under this Subsection 8.02(a),
and that such successor shall undertake and assume the obligations of the
Trustee to pay compensation to any third Person acting as an agent or
independent contractor in the performance of master servicing responsibilities
hereunder. The Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
(b) If the Trustee shall succeed to any duties of the Master Servicer
respecting the Mortgage Loans as provided herein, it shall do so in a separate
capacity and not in its capacity as Trustee and, accordingly, the provisions of
Article IX shall be inapplicable to the Trustee in its duties as the successor
to the Master Servicer in the servicing of the Mortgage Loans (although such
provisions shall continue to apply to the Trustee in its capacity as Trustee);
the provisions of Article VII, however, shall apply to it in its capacity as
successor master servicer.
Section 8.03 Notification to Certificateholders. Upon any termination or
appointment of a successor to the Master Servicer, the Trustee shall give prompt
written notice thereof to Certificateholders at their respective addresses
appearing in the Certificate Register and to the Rating Agencies.
Section 8.04 Waiver of Defaults. The Trustee shall transmit by mail to all
Certificateholders, within 60 days after the occurrence of any Event of Default
known to the Trustee, unless such Event of Default shall have been cured, notice
of each such Event of Default hereunder known to the Trustee. The Holders of
Certificates evidencing Percentage Interests aggregating not less than 51% of
the Class Certificate Balance of the Certificates may, on behalf of all
Certificateholders, waive any default by the Master Servicer in the performance
of its obligations hereunder and the consequences thereof, except a default in
the making of or the causing to be made any required distribution on the
Certificates. Upon any such waiver of a past
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default, such default shall be deemed to cease to exist, and any Event of
Default arising therefrom shall be deemed to have been timely remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived. The Trustee shall give notice of any such waiver to the
Rating Agencies.
Section 8.05 List of Certificateholders. Upon reasonable, prior written
request of three or more Certificateholders of record, for purposes of
communicating with other Certificateholders with respect to their rights under
this Agreement, the Trustee will afford such Certificateholders access during
business hours to the most recent list of Certificateholders held by the
Trustee.
ARTICLE IX
CONCERNING THE TRUSTEE ANDTHE SECURITIES ADMINISTRATOR
Section 9.01 Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default and after
the curing or waiver of all Events of Default which may have occurred, and the
Securities Administrator each undertake to perform such duties and only such
duties as are specifically set forth in this Agreement as duties of the Trustee
and the Securities Administrator, respectively. If an Event of Default has
occurred and has not been cured or waived, the Trustee shall exercise such of
the rights and powers vested in it by this Agreement, and subject to Section
8.02(b) use the same degree of care and skill in their exercise, as a prudent
person would exercise under the circumstances in the conduct of his own affairs.
(b) Upon receipt of all resolutions, certificates, statements, opinions,
reports, documents, orders or other instruments which are specifically required
to be furnished to the Trustee and the Securities Administrator pursuant to any
provision of this Agreement, the Trustee and the Securities Administrator,
respectively, shall examine them to determine whether they are in the form
required by this Agreement; provided, however, that neither the Trustee nor the
Securities Administrator shall be responsible for the accuracy or content of any
resolution, certificate, statement, opinion, report, document, order or other
instrument furnished by the Master Servicer; provided, further, that neither the
Trustee nor the Securities Administrator shall be responsible for the accuracy
or verification of any calculation provided to it pursuant to this Agreement. If
any such instrument is found not to conform to the requirements of this
Agreement in a material manner, the Trustee shall take such action as it deems
appropriate to have the instrument corrected and if the instrument is not
corrected to its satisfaction, the Trustee will provide notice thereof to the
Certificateholders and take such further action as directed by the
Certificateholders.
(c) On each Distribution Date, the Securities Administrator shall make
monthly distributions and the final distribution to the Certificateholders from
funds in the Distribution Account as provided in Sections 6.01 and 10.01 herein
based solely on the report of the Master Servicer or the Servicers.
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(d) No provision of this Agreement shall be construed to relieve the
Trustee or the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct;
provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing or waiver of all such Events of Default which may have occurred, the
duties and obligations of the Trustee and the Securities Administrator
shall be determined solely by the express provisions of this Agreement,
neither the Trustee nor the Securities Administrator shall be liable except
for the performance of their respective duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee or the
Securities Administrator and, in the absence of bad faith on the part of
the Trustee or the Securities Administrator, respectively, the Trustee or
the Securities Administrator, respectively, may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee or the
Securities Administrator, respectively, and conforming to the requirements
of this Agreement;
(ii) Neither the Trustee nor the Securities Administrator shall be
liable in its individual capacity for an error of judgment made in good
faith by a Responsible Officer or Responsible Officers of the Trustee or an
officer of the Securities Administrator, respectively, unless it shall be
proved that the Trustee or the Securities Administrator, respectively, was
negligent in ascertaining the pertinent facts;
(iii) Neither the Trustee nor the Securities Administrator shall be
liable with respect to any action taken, suffered or omitted to be taken by
it in good faith in accordance with the directions of the Holders of
Certificates evidencing Percentage Interests aggregating not less than 25%
of the Class Certificate Balance of the Certificates, if such action or
non-action relates to the time, method and place of conducting any
proceeding for any remedy available to the Trustee or the Securities
Administrator, respectively, or exercising any trust or other power
conferred upon the Trustee or the Securities Administrator, respectively,
under this Agreement;
(iv) The Trustee shall not be required to take notice or be deemed to
have notice or knowledge of any default or Event of Default unless a
Responsible Officer of the Trustee's Corporate Trust Office shall have
actual knowledge thereof. In the absence of such notice, the Trustee may
conclusively assume there is no such default or Event of Default;
(v) The Trustee shall not in any way be liable by reason of any
insufficiency in any Account held by or in the name of Trustee unless it is
determined by a court of competent jurisdiction that the Trustee's gross
negligence or willful misconduct was the primary cause of such
insufficiency (except to the extent that the Trustee is obligor and has
defaulted thereon);
(vi) Anything in this Agreement to the contrary notwithstanding, in no
event shall the Trustee or the Securities Administrator be liable for
special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost
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profits), even if the Trustee or the Securities Administrator,
respectively, has been advised of the likelihood of such loss or damage and
regardless of the form of action; and
(vii) None of the Securities Administrator, the Depositor, the Master
Servicer, any Servicer or the Trustee shall be responsible for the acts or
omissions of the other, it being understood that this Agreement shall not
be construed to render them partners, joint venturers or agents of one
another.
Neither the Trustee nor the Securities Administrator shall be required to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there is reasonable ground for believing that the repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in this Agreement
shall in any event require the Trustee or the Securities Administrator to
perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer hereunder or under the Servicing Agreements,
except during such time, if any, as the Trustee shall be the successor to, and
be vested with the rights, duties, powers and privileges of, the Master Servicer
in accordance with the terms of this Agreement.
(e) All funds received by the Master Servicer and the Securities
Administrator and required to be deposited in the Master Servicer Collection
Account or Distribution Account pursuant to this Agreement will be promptly so
deposited by the Master Servicer and the Securities Administrator.
(f) Except for those actions that the Trustee or the Securities
Administrator is required to take hereunder, neither the Trustee nor the
Securities Administrator shall have any obligation or liability to take any
action or to refrain from taking any action hereunder in the absence of written
direction as provided hereunder.
Section 9.02 Certain Matters Affecting the Trustee and the Securities
Administrator. Except as otherwise provided in Section 9.01:
(i) The Trustee and the Securities Administrator may rely and shall be
protected in acting or refraining from acting in reliance on any
resolution, certificate of a Depositor, Master Servicer or Servicer,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) The Trustee and the Securities Administrator may consult with
counsel and any advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection with respect to any action
taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(iii) Neither the Trustee nor the Securities Administrator shall be
under any obligation to exercise any of the trusts or powers vested in it
by this Agreement, other than its obligation to give notices pursuant to
this Agreement, or to institute, conduct or defend any litigation hereunder
or in relation hereto at the request, order or direction of
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any of the Certificateholders pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may
be incurred therein or thereby. Nothing contained herein shall, however,
relieve the Trustee of the obligation, upon the occurrence of an Event of
Default of which a Responsible Officer of the Trustee's Corporate Trust
Office has actual knowledge (which has not been cured or waived), subject
to Section 8.02(b), to exercise such of the rights and powers vested in it
by this Agreement, and to use the same degree of care and skill in their
exercise, as a prudent person would exercise under the circumstances in the
conduct of his own affairs;
(iv) Prior to the occurrence of an Event of Default hereunder and
after the curing or waiver of all Events of Default which may have
occurred, neither the Trustee nor the Securities Administrator shall be
liable in its individual capacity for any action taken, suffered or omitted
by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(v) Neither the Trustee nor the Securities Administrator shall be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing to do so by Holders of Certificates evidencing
Percentage Interests aggregating not less than 25% of the Class Certificate
Balance of the Certificates and provided that the payment within a
reasonable time to the Trustee or the Securities Administrator, as
applicable, of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the Trustee or
the Securities Administrator, as applicable, reasonably assured to the
Trustee or the Securities Administrator, as applicable, by the security
afforded to it by the terms of this Agreement. The Trustee or the
Securities Administrator may require reasonable indemnity against such
expense or liability as a condition to taking any such action. The
reasonable expense of every such examination shall be paid by the
Certificateholders requesting the investigation;
(vi) The Trustee and the Securities Administrator may execute any of
the trusts or powers hereunder or perform any duties hereunder either
directly or through Affiliates, agents or attorneys; provided, however,
that the Trustee may not appoint any agent to perform its custodial
functions with respect to the Mortgage Files or paying agent functions
under this Agreement without the express written consent of the Securities
Administrator, which consent will not be unreasonably withheld. Neither the
Trustee nor the Securities Administrator shall be liable or responsible for
the misconduct or negligence of any of the Trustee's or the Securities
Administrator's agents or attorneys or a custodian or paying agent
appointed hereunder by the Trustee or the Securities Administrator with due
care and, when required, with the consent of the Securities Administrator;
(vii) Should the Trustee or the Securities Administrator deem the
nature of any action required on its part, other than a payment or transfer
under Subsection 4.01(b) or Section 4.02, to be unclear, the Trustee or the
Securities Administrator, respectively, may require prior to such action
that it be provided by the Depositor with reasonable further instructions;
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(viii) The right of the Trustee or the Securities Administrator to
perform any discretionary act enumerated in this Agreement shall not be
construed as a duty, and neither the Trustee nor the Securities
Administrator shall be accountable for other than its negligence or willful
misconduct in the performance of any such act;
(ix) Neither the Trustee nor the Securities Administrator shall be
required to give any bond or surety with respect to the execution of the
trust created hereby or the powers granted hereunder, except as provided in
Subsection 9.07; and
(x) Neither the Trustee nor the Securities Administrator shall have
any duty to conduct any affirmative investigation as to the occurrence of
any condition requiring the repurchase of any Mortgage Loan by the Seller
pursuant to this Agreement or the Mortgage Loan Purchase Agreement, as
applicable, or the eligibility of any Mortgage Loan for purposes of this
Agreement.
(xi) Any permissive right of the Trustee hereunder shall not be
construed as a duty.
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Section 9.03 Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans. The recitals contained herein and in the
Certificates (other than the signature and countersignature of the Securities
Administrator on the Certificates) shall be taken as the statements of the
Depositor, and neither the Trustee nor the Securities Administrator shall have
any responsibility for their correctness. Neither the Trustee nor the Securities
Administrator makes any representation as to the validity or sufficiency of the
Certificates (other than the signature and countersignature of the Securities
Administrator on the Certificates) or of any Mortgage Loan except as expressly
provided in Sections 2.02 and 2.05 hereof; provided, however, that the foregoing
shall not relieve the Trustee or the Custodian of the obligation to review the
Mortgage Files pursuant to Sections 2.02 and 2.04. The Securities
Administrator's signature and countersignature (or countersignature of its
agent) on the Certificates shall be solely in its capacity as Securities
Administrator of the Trust Fund and shall not constitute the Certificates an
obligation of the Securities Administrator in any other capacity. Neither the
Trustee or the Securities Administrator shall be accountable for the use or
application by the Depositor of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to the
Depositor with respect to the Mortgage Loans. Subject to the provisions of
Section 2.05, neither the Trustee nor the Securities Administrator shall be
responsible for the legality or validity of this Agreement or any document or
instrument relating to this Agreement, the validity of the execution of this
Agreement or of any supplement hereto or instrument of further assurance, or the
validity, priority, perfection or sufficiency of the security for the
Certificates issued hereunder or intended to be issued hereunder. Neither the
Trustee nor the Securities Administrator shall at any time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Mortgage or any Mortgage Loan, or the perfection and
priority of any Mortgage or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Trust Fund or its ability to
generate the payments to be distributed to Certificateholders, under this
Agreement. Neither the Trustee nor the Securities Administrator shall have any
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to record this Agreement.
Section 9.04 Trustee and Securities Administrator May Own Certificates. The
Trustee and the Securities Administrator in its individual capacity or in any
capacity other than as Trustee hereunder may become the owner or pledgee of any
Certificates with the same rights it would have if it were not Trustee or the
Securities Administrator, as applicable, and may otherwise deal with the parties
hereto.
Section 9.05 Trustee's and Securities Administrator's Fees and Expenses.
The fees and expenses of the Trustee and the Securities Administrator shall be
paid by the Master Servicer in accordance with a side letter agreement. In
addition, the Trustee and the Securities Administrator will be entitled to
recover from the Master Servicer Collection Account pursuant to Section 4.03(b)
all reasonable out-of-pocket expenses, disbursements and advances and the
expenses of the Trustee and the Securities Administrator, respectively, in
connection with any Event of Default, any breach of this Agreement or any claim
or legal action (including any pending or threatened claim or legal action)
incurred or made by the Trustee or the Securities Administrator, respectively,
in the administration of the trusts hereunder (including the reasonable
compensation, expenses and disbursements of its counsel) except any such
expense, disbursement or advance as may arise from its negligence or intentional
misconduct or which is
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the responsibility of the Certificateholders or the Trust Fund hereunder. If
funds in the Master Servicer Collection Account are insufficient therefor, the
Trustee and the Securities Administrator shall recover such expenses from the
Depositor. Such compensation and reimbursement obligation shall not be limited
by any provision of law in regard to the compensation of a trustee of an express
trust.
Section 9.06 Eligibility Requirements for Trustee and Securities
Administrator.
(a) The Trustee and any successor Trustee and the Securities Administrator
and any successor Securities Administrator shall during the entire duration of
this Agreement be a state bank or trust company or a national banking
association organized and doing business under the laws of such state or the
United States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus and undivided profits of at least
$40,000,000 or, in the case of a successor Trustee, $50,000,000, subject to
supervision or examination by federal or state authority and, in the case of the
Trustee, rated "BBB" or higher by S&P and "Aaa1" or higher by Moody's with
respect to their long-term rating and rated "BBB" or higher by S&P and "Baa1" or
higher by Moody's with respect to any outstanding long-term unsecured
unsubordinated debt, and, in the case of a successor Trustee or successor
Securities Administrator other than pursuant to Section 9.10, rated in one of
the two highest long-term debt categories of, or otherwise acceptable to, each
of the Rating Agencies. If the Trustee publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section 9.06 the combined
capital and surplus of such corporation shall be deemed to be its total equity
capital (combined capital and surplus) as set forth in its most recent report of
condition so published. In case at any time the Trustee or the Securities
Administrator shall cease to be eligible in accordance with the provisions of
this Section 9.06, the Trustee or the Securities Administrator shall resign
immediately in the manner and with the effect specified in Section 9.08.
(b) In addition, the Securities Administrator (i) may not be an originator,
Master Servicer, Servicer, the Depositor or an affiliate of the Depositor unless
the Securities Administrator is in an institutional trust department of the
relevant entity, (ii) must be authorized to exercise corporate trust powers
under the laws of its jurisdiction of organization, and (iii) must be rated at
least "A" by S&P or "A" Moody's. If no successor Securities Administrator shall
have been appointed and shall have accepted appointment within 60 days after the
Securities Administrator ceases to be the Securities Administrator pursuant to
Section 9.08, then the Trustee shall either (i) perform the duties of the
Securities Administrator pursuant to this Agreement until such time as a new
Securities Administrator is appointed or (ii) petition a court of competent
jurisdiction to appoint a successor securities administrator. The Trustee shall
notify the Rating Agencies of any change of Securities Administrator.
Section 9.07 Insurance. The Securities Administrator, at its own expense,
shall at all times maintain and keep in full force and effect: (i) fidelity
insurance, (ii) theft of documents insurance and (iii) forgery insurance (which
may be collectively satisfied by a "Financial Institution Bond" and/or a
"Bankers' Blanket Bond"). All such insurance shall be in amounts, with standard
coverage and subject to deductibles, as are customary for insurance typically
maintained by banks or their affiliates which act as custodians for
investor-owned mortgage pools. A certificate of an officer of the Securities
Administrator as to the Securities
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Administrator's compliance with this Section 9.07 shall be furnished to any
Certificateholder upon reasonable written request.
Section 9.08 Resignation and Removal of the Trustee and Securities
Administrator.
(a) The Trustee and the Securities Administrator may at any time resign and
be discharged from the trust hereby created by giving written notice thereof to
the Depositor and the Master Servicer, with a copy to the Rating Agencies. Upon
receiving such notice of resignation, the Depositor shall promptly appoint a
successor Trustee or successor Securities Administrator, as applicable, by
written instrument, in triplicate, one copy of which instrument shall be
delivered to each of the resigning Trustee or Securities Administrator, as
applicable, the successor Trustee or Securities Administrator, as applicable. If
no successor Trustee or Securities Administrator shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee or Securities Administrator may petition any
court of competent jurisdiction for the appointment of a successor Trustee or
Securities Administrator. If the Securities Administrator and the Master
Servicer are the same entity, then at any time the Securities Administrator
resigns or is removed as Securities Administrator, the Master Servicer shall
likewise be terminated as Master Servicer.
(b) If at any time the Trustee or the Securities Administrator shall cease
to be eligible in accordance with the provisions of Section 9.06 and shall fail
to resign after written request therefor by the Depositor or if at any time the
Trustee or the Securities Administrator shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or the
Securities Administrator, as applicable, or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or the
Securities Administrator, as applicable, or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Depositor shall
promptly remove the Trustee, or shall be entitled to remove the Securities
Administrator, as applicable, and appoint a successor Trustee or Securities
Administrator, as applicable, by written instrument, in triplicate, one copy of
which instrument shall be delivered to each of the Trustee or Securities
Administrator, as applicable, so removed, the successor Trustee or Securities
Administrator, as applicable.
(c) The Holders of Certificates evidencing Percentage Interests aggregating
not less than 51% of the Trust Fund may at any time remove the Trustee or the
Securities Administrator and appoint a successor Trustee or Securities
Administrator by written instrument or instruments, in quadruplicate, signed by
such Holders or their attorneys-in-fact duly authorized, one complete set of
which instruments shall be delivered to the Depositor, the Trustee, the
Securities Administrator (if the Trustee is removed), the Trustee (if the
Securities Administrator is removed), and the Trustee or Securities
Administrator so removed and the successor so appointed.
(d) No resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor Trustee or Securities Administrator
pursuant to any of the provisions of this Section 9.08 shall become effective
except upon appointment of and acceptance of such appointment by the successor
Trustee or Securities Administrator as provided in Section 9.09.
Section 9.09 Successor Trustee and Successor Securities Administrator.
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(a) Any successor Trustee or Securities Administrator appointed as provided
in Section 9.08 shall execute, acknowledge and deliver to the Depositor, the
Master Servicer and its predecessor Trustee or Securities Administrator an
instrument accepting such appointment hereunder. The resignation or removal of
the predecessor Trustee or Securities Administrator shall then become effective
and such successor Trustee or Securities Administrator, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with like effect as if
originally named as Trustee or Securities Administrator herein. The predecessor
Trustee or Securities Administrator shall after payment of its outstanding fees
and expenses promptly deliver to the successor Trustee or Securities
Administrator, as applicable, all assets and records of the Trust held by it
hereunder, and the Depositor and the predecessor Trustee or Securities
Administrator, as applicable, shall execute and deliver such instruments and do
such other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor Trustee or Securities Administrator, as
applicable, all such rights, powers, duties and obligations.
(b) No successor Trustee or Securities Administrator shall accept
appointment as provided in this Section 9.09 unless at the time of such
acceptance such successor Trustee or Securities Administrator shall be eligible
under the provisions of Section 9.06.
(c) Upon acceptance of appointment by a successor Trustee or Securities
Administrator as provided in this Section 9.09, the successor Trustee or
Securities Administrator shall mail notice of the succession of such Trustee or
Securities Administrator hereunder to all Certificateholders at their addresses
as shown in the Certificate Register and to the Rating Agencies. The Depositor
shall pay the cost of any mailing by the successor Trustee or Securities
Administrator.
Section 9.10 Merger or Consolidation of Trustee or Securities
Administrator. Any state bank or trust company or national banking association
into which the Trustee or the Securities Administrator may be merged or
converted or with which it may be consolidated or any state bank or trust
company or national banking association resulting from any merger, conversion or
consolidation to which the Trustee or the Securities Administrator,
respectively, shall be a party, or any state bank or trust company or national
banking association succeeding to all or substantially all of the corporate
trust business of the Trustee or the Securities Administrator, respectively,
shall be the successor of the Trustee or the Securities Administrator,
respectively, hereunder, provided such state bank or trust company or national
banking association shall be eligible under the provisions of Section 9.06. Such
succession shall be valid without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 9.11 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or property constituting the same may at the time be located, the
Depositor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee and the Depositor to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust, and to vest in such Person or Persons, in such capacity, such title to
the Trust, or any part thereof, and, subject to the other
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provisions of this Section 9.11, such powers, duties, obligations, rights and
trusts as the Depositor and the Trustee may consider necessary or desirable.
(b) If the Depositor shall not have joined in such appointment within 15
days after the receipt by it of a written request so to do, the Trustee shall
have the power to make such appointment without the Depositor.
(c) No co-Master Servicer or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 9.06
hereunder and no notice to Certificateholders of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.08
hereof.
(d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred on such
co-trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly, except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed by such separate trustee or
co-trustee at the direction of the Trustee.
(e) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(f) To the extent not prohibited by law, any separate trustee or co-trustee
may, at any time, request the Trustee, its agent or attorney-in-fact, with full
power and authority, to do any lawful act under or with respect to this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor Trustee.
(g) No Trustee under this Agreement shall be personally liable by reason of
any act or omission of another Trustee under this Agreement. The Depositor and
the Trustee acting jointly may at any time accept the resignation of or remove
any separate trustee or co-trustee.
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Section 9.12 Federal Information Returns and Reports to Certificateholders;
REMIC Administration.
(a) REMIC elections as set forth in the Preliminary Statement shall be made
on Forms 1066 or other appropriate federal tax or information return for the
taxable year ending on the last day of the calendar year in which the
Certificates are issued. The regular interests and residual interest in each
REMIC shall be as designated in the Preliminary Statement.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of section 860G(a)(9) of the Code. The latest possible
maturity date for purposes of Treasury Regulation 1.860G-1(a)(4) will be the
Latest Possible Maturity Date.
(c) The Securities Administrator shall, for federal income tax purposes,
maintain books and records with respect to each REMIC on a calendar year and on
an accrual basis.
(d) The Securities Administrator shall represent the Trust Fund in any
administrative or judicial proceeding relating to an examination or audit by any
governmental taxing authority with respect thereto. The Securities Administrator
shall pay any and all tax-related expenses (not including taxes) of each REMIC,
including but not limited to any professional fees or expenses related to audits
or any administrative or judicial proceedings with respect to such REMIC that
involve the Internal Revenue Service or state tax authorities, but only to the
extent that (i) such expenses are ordinary or routine expenses, including
expenses of a routine audit but not expenses of litigation (except as described
in (ii)); or (ii) such expenses or liabilities (including taxes and penalties)
are attributable to the negligence or willful misconduct of the Securities
Administrator in fulfilling its duties hereunder (including its duties as tax
return preparer). The Securities Administrator shall be entitled to
reimbursement of expenses to the extent provided in clause (i) above from the
Distribution Account, provided, however, the Securities Administrator shall not
be entitled to reimbursement for expenses incurred in connection with the
preparation of tax returns and other reports as required by this Section.
(e) The Securities Administrator shall prepare and file, and the Trustee
shall sign, all of each REMIC's and the Trust Fund's federal and appropriate
state tax and information returns as such REMIC's direct representative. The
expenses of preparing and filing such returns shall be borne by the Securities
Administrator.
(f) The Securities Administrator or its designee shall perform on behalf of
each REMIC all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions, or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, if required by the Code, the REMIC
Provisions, or other such guidance, the Securities Administrator shall provide,
upon receipt of additional reasonable compensation, to the Treasury or other
governmental authority such information as is necessary for the application of
any tax relating to the transfer of a Residual Certificate to any disqualified
person or organization pursuant to Treasury Regulation 1.860E-2(a)(5) and any
person designated in Section 860E(e)(3) of the Code.
(g) The Securities Administrator and the Holders of Certificates shall take
any action or cause any REMIC to take any action necessary to create or maintain
the status of any REMIC as a REMIC under the REMIC Provisions and shall assist
each other as necessary to create or
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maintain such status. Neither the Securities Administrator nor the Holder of any
Residual Certificate shall knowingly take any action, cause any REMIC to take
any action or fail to take (or fail to cause to be taken) any action that, under
the REMIC Provisions, if taken or not taken, as the case may be, could (i)
endanger the status of any REMIC as a REMIC or (ii) result in the imposition of
a tax upon any REMIC (including but not limited to the tax on prohibited
transactions as defined in Code Section 860F(a)(2) and the tax on prohibited
contributions set forth on Section 860G(d) of the Code) (either such event, an
"Adverse REMIC Event") unless the Securities Administrator has received a REMIC
Opinion (at the expense of the party seeking to take such action) to the effect
that the contemplated action will not endanger such status or result in the
imposition of such a tax. In addition, prior to taking any action with respect
to any REMIC or the assets therein, or causing any REMIC to take any action,
which is not expressly permitted under the terms of this Agreement, any Holder
of a Residual Certificate will consult with the Securities Administrator, in
writing, with respect to whether such action could cause an Adverse REMIC Event
to occur with respect to any REMIC, and no such Person shall take any such
action or cause any REMIC to take any such action as to which the Securities
Administrator has advised it in writing that an Adverse REMIC Event could occur;
provided, however, that if no Adverse REMIC Event would occur but such action
could result in the imposition of additional taxes on the Residual
Certificateholders, no such Person shall take any such action, or cause any
REMIC to take any such action without the written consent of the Residual
Certificateholders.
(h) Each Holder of a Residual Certificate shall pay when due any and all
taxes imposed on the related REMIC by federal or state governmental authorities.
To the extent that such taxes are not paid by a Residual Certificateholder, the
Securities Administrator shall pay any remaining REMIC taxes out of current or
future amounts otherwise distributable to the Holder of the Residual Certificate
in any such REMIC or, if no such amounts are available, out of other amounts
held in the Distribution Account, and shall reduce amounts otherwise payable to
holders of regular interests in any such REMIC, as the case may be.
(i) The Securities Administrator shall prepare and file with the Internal
Revenue Service ("IRS"), on behalf of each of REMIC 1 and the Upper Tier REMIC,
an application for an employer identification number on IRS Form SS-4 or by any
other acceptable method. The Securities Administrator shall also file a Form
8811 as required. The Securities Administrator, upon receipt from the IRS of the
Notice of Taxpayer Identification Number Assigned, shall upon request promptly
forward a copy of such notice to the Depositor. The Securities Administrator
shall furnish any other information that is required by the Code and regulations
thereunder to be made available to Certificateholders. The Depositor shall cause
each Servicer to provide the Securities Administrator with such information as
is necessary for the Securities Administrator to prepare such reports.
(j) No additional contributions of assets shall be made to any REMIC,
except as expressly provided in this Agreement.
(k) The Securities Administrator shall not enter into any arrangement by
which any REMIC will receive a fee or other compensation for services.
(l) The Class A-R Holder shall act as "tax matters person" with respect to
each REMIC and irrevocably appoints the Securities Administrator to act as its
agent in such roles.
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(m) The Securities Administrator shall prepare or cause to be prepared on
behalf of the Trust Fund, based upon information calculated in accordance with
this Agreement pursuant to instructions given by the Depositor, the Trustee
shall sign, and the Securities Administrator shall file federal tax returns, all
in accordance with Section 9.12 hereof. The Securities Administrator shall
prepare and file, and the Trustee shall sign, such state income tax returns and
such other returns as may be required by applicable law relating to the Trust
Fund, and, if required by state law, and shall file any other documents to the
extent required by applicable state tax law (to the extent such documents are in
the Securities Administrator's possession). The Securities Administrator shall
forward copies to the Depositor of all such returns and Form 1099 supplemental
tax information and such other information within the control of the Securities
Administrator as the Depositor may reasonably request in writing, and shall
distribute to each Certificateholder such forms and furnish such information
within the control of the Securities Administrator as are required by the Code
and the REMIC Provisions to be furnished to them, and will prepare and
distribute to Certificateholders Form 1099 (supplemental tax information) (or
otherwise furnish information within the control of the Securities
Administrator) to the extent required by applicable law.
(n) None of the Securities Administrator, the Trustee or the Depositor, as
assignees under this Agreement, shall provide any consent pursuant to this
Agreement or knowingly take any action under this Agreement that would conflict
with or violate the provisions of this Section 9.12.
(o) The parties intend that the portion of the Trust Fund consisting of the
right to receive the payments distributable to the Class P Certificates shall be
treated as a "grantor trust" under the Code, for the benefit of the holders of
the Class P Certificates, and the provisions hereof shall be interpreted
consistently with this intention. In furtherance of such intention, the
Securities Administrator shall (i) furnish or cause to be furnished to the
holders of the Class P Certificates information regarding their allocable share
of the income with respect to such grantor trust and (ii) file or cause to be
filed with the Internal Revenue Service, and the Trustee shall sign, Form 1041
(together with any necessary attachments) and such other forms as may be
applicable.
(p) Notwithstanding any other provision of this Agreement, the Trustee and
the Securities Administrator shall comply with all federal withholding
requirements respecting payments to Certificateholders of interest or original
issue discount on the Mortgage Loans, that the Trustee or the Securities
Administrator reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee or the Securities Administrator withholds any amount from interest or
original issue discount payments or advances thereof to any Certificateholder
pursuant to federal withholding requirements, the Trustee or the Securities
Administrator shall, together with its monthly report to such
Certificateholders, indicate such amount withheld.
(q) The Trustee and the Securities Administrator agree to indemnify the
Trust Fund and the Depositor for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by the Trust
Fund, the Depositor or the Trustee, as a result of a breach of the Trustee's
covenants and the Securities Administrator's covenants, respectively, set forth
in this Section 9.12; provided, however, such liability and obligation to
indemnify in this paragraph shall not be joint and several and neither the
Trustee nor the Securities Administrator
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shall be liable or be obligated to indemnify the Trust Fund for the failure by
the other to perform any duty under this Agreement or the breach by the other of
any covenant in this Agreement.
(r) The Securities Administrator covenants and agrees that it shall act as
agent (and the Securities Administrator is hereby appointed to act as agent) of
the Tax Matters Person on behalf of each of the REMICs provided for herein and
that in such capacity it shall: (a) to the extent that they are under its
control conduct the affairs of each of the REMICs provided for herein at all
times that any Certificates are outstanding so as to maintain the status of each
of the REMICs provided for herein as a REMIC under the REMIC Provisions; (b) not
knowingly or intentionally take any action or omit to take any action that would
cause the termination of the REMIC status of any of the REMICs provided for
herein or result in the imposition of tax upon any such REMIC; (c) not knowingly
or intentionally take any action or omit to take any action that would cause the
termination of the grantor trust status under Subpart E, Part I of Subchapter J
of the Code of any of the grantor trusts provided for herein or result in the
imposition of tax upon any such grantor trust; and (d) as and when necessary and
appropriate, represent each of the REMICs provided for herein in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of any of the REMICs provided for herein, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of any of the REMICs provided for herein,
and otherwise act on behalf of each of the REMICs provided for herein in
relation to any tax matter involving any of such REMICs or any controversy
involving the Trust Fund.
(s) Each of the Depositor, the Master Servicer, the Securities
Administrator and the Trustee agrees not to take or omit to take knowingly or
intentionally, any action or omit to take any action that would cause the
termination of the REMIC status of any of the REMICs provided for herein or
result in the imposition of a tax upon any of the REMICs provided for herein.
(t) For the avoidance of doubt, any returns, records, reports or filings
required under this Section 9.12 and Section 9.12 of the Stack II Agreement, may
be prepared, maintained and filed in a consolidated manner that addresses the
requirements of the Pooling and Servicing Agreement taken as a whole.
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ARTICLE X
TERMINATION
Section 10.01 Termination upon Liquidation or Repurchase of all Mortgage
Loans.
(a) Subject to Section 10.03, the obligations and responsibilities of the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
created hereby with respect to that portion of the Trust Fund relating to the
Certificates shall terminate upon the earlier of (a) an Optional Termination and
(b) the later of (i) the maturity or other liquidation of the last Mortgage Loan
remaining in the Trust Fund (or any Monthly Advance with respect thereto) and
the disposition of all REO Property and (ii) the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
this Agreement, as applicable. In no event shall the trusts created hereby
continue beyond the earlier of (i) the expiration of 21 years from the death of
the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador
of the United States to the Court of St. James's, living on the date hereof and
(ii) the Latest Possible Maturity Date.
(b) On or before the Determination Date following the Initial Optional
Termination Date, the Securities Administrator shall attempt to terminate that
portion of the Trust Fund relating to the Certificates by conducting an auction
of all of the Mortgage Loans and REO Properties via a solicitation of bids from
at least three (3) bidders, each of which shall be a nationally recognized
participant in mortgage finance (the "Auction"). The Depositor and the
Securities Administrator agree to work in good faith to develop bid procedures
in advance of the Initial Optional Termination Date to govern the operation of
the Auction. The Securities Administrator shall be entitled to retain an
investment banking firm and/or other agents in connection with the Auction, the
cost of which shall be included in the Optional Termination Price (unless an
Optional Termination does not occur in which case such costs shall be an expense
of the Issuing Entity). The Securities Administrator shall accept the highest
bid received at the Auction; provided that the amount of such bid equals or
exceeds the Optional Termination Price. The Securities Administrator shall
determine the Optional Termination Price based upon information provided by (i)
the Master Servicer with respect to the amounts described in clauses (A) and (B)
of the definition of "Optional Termination Price" (other than Securities
Administrator's expenses) and (ii) the Depositor with respect to the information
described in clause (C) of the definition of "Optional Termination Price." The
Securities Administrator may conclusively rely upon the information provided to
it in accordance with the immediately preceding sentence and shall not have any
liability for the failure of any party to provide such information.
If an Optional Termination does not occur as a result of the Auction's
failure to achieve the Optional Termination Price, the Master Servicer may, on
any Distribution Date following such Auction, at its option, terminate that
portion of the Trust Fund relating to the Certificates by purchasing all of the
Mortgage Loans and REO Properties at a price equal to the Optional Termination
Price. In connection with such termination, the Optional Termination Price shall
be delivered to the Securities Administrator no later than the Business Day
immediately preceding the related Distribution Date. Notwithstanding anything to
the contrary herein, the Optional Termination Amount paid to the Securities
Administrator by the winning bidder at the Auction or by the Master Servicer
shall be deposited by the Securities Administrator directly into the
Distribution Account immediately upon receipt. Upon any termination as a result
of an Auction,
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the Securities Administrator shall, out of the Optional Termination Amount
deposited into the Distribution Account, (x) pay the Securities Administrator
its costs and expenses necessary to conduct the Auction and any other
unreimbursed amounts owing to it and (y) pay to the Master Servicer or Servicer,
the aggregate amount of any unreimbursed out-of-pocket costs and expenses owed
to the Master Servicer or Servicer and any unpaid or unreimbursed Servicing
Fees, Monthly Advances and Servicing Advances.
(c) Notwithstanding anything to the contrary in clause (b) above, in the
event that the Securities Administrator and the Trustee receive the written
opinion of a nationally recognized participant in mortgage finance acceptable to
the Seller that the Mortgage Loans and REO Properties to be included in the
Auction will not be saleable at a price sufficient to achieve the Optional
Termination Price, the Securities Administrator need not conduct the Auction. In
such event, the Master Servicer shall have the option to purchase the Mortgage
Loans and REO Properties at the Optional Termination Price as of the Initial
Optional Termination Date.
(d) For the avoidance of doubt, the obligations and responsibilities of the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
created pursuant to the Stack II Agreement shall survive any termination
pursuant to this Section 10.01.
Section 10.02 Final Distribution on the Certificates.
If on any Determination Date, (i) the Securities Administrator determines
that there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund relating to the Mortgage Loans other than the funds in the Master
Servicer Collection Account, the Securities Administrator shall send a final
distribution notice promptly to each Certificateholder or (ii) the Securities
Administrator determines that a Class of Certificates shall be retired after a
final distribution on such Class, the Securities Administrator shall notify the
Certificateholders within seven (7) Business Days after such Determination Date
that the final distribution in retirement of such Class of Certificates is
scheduled to be made on the immediately following Distribution Date. Any final
distribution made pursuant to the immediately preceding sentence will be made
only upon presentation and surrender of the Certificates at the office of the
Securities Administrator.
Notice of any partial termination of the Issuing Entity, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Securities Administrator by letter to Certificateholders mailed no later
than the last calendar day of the month immediately preceding the month of such
final distribution (or with respect to an Auction, mailed no later than one
Business Day following completion of such Auction). Any such notice shall
specify (a) the Distribution Date upon which final distribution on the
Certificates will be made upon presentation and surrender of Certificates at the
office therein designated, (b) the location of the office or agency at which
such presentation and surrender must be made, and (c) that the Record Date
otherwise applicable to such Distribution Date is not applicable, distributions
being made only upon presentation and surrender of the Certificates at the
office therein specified. The Securities Administrator will give such notice to
each Rating Agency at the time such notice is given to Certificateholders.
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In the event such notice is given, the Master Servicer shall cause all
funds in the Master Servicer Collection Account to be deposited in the
Distribution Account on the Business Day prior to the applicable Distribution
Date in an amount equal to the final distribution in respect of the
Certificates. Upon receipt of written notice of such final deposit with respect
to the Issuing Entity and the receipt by the Trustee, or its Custodian, of a
Request for Release therefor, the Trustee, or its Custodian, shall promptly
release to the Securities Administrator or the Master Servicer, as applicable,
the Mortgage Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Securities
Administrator shall cause to be distributed to Certificateholders of each Class
the amounts allocable to such Certificates held in the Distribution Account in
the order and priority set forth in Section 6.01 hereof on the final
Distribution Date and in proportion to their respective Percentage Interests.
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above-mentioned written notice, the Securities Administrator shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Securities
Administrator may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets that remain a part of the Issuing Entity. If within one
year after the second notice all Certificates shall not have been surrendered
for cancellation, the Class A-R Certificateholders shall be entitled to all
unclaimed funds and other assets of the Issuing Entity that remain subject
hereto. Upon payment to the Class A-R Certificateholders of such funds and
assets, the Securities Administrator shall have no further duties or obligations
with respect thereto.
Section 10.03 Additional Termination Requirements.
(a) In the event the Securities Administrator or the Master Servicer
exercises its purchase option as provided in Section 10.01, that portion of the
Trust Fund relating to the Mortgage Loans shall be terminated in accordance with
the following additional requirements, unless the Securities Administrator shall
have been furnished with an Opinion of Counsel to the effect that the failure of
the Issuing Entity to comply with the requirements of this Section will not (i)
result in the imposition of taxes on "prohibited transactions" of the Issuing
Entity as defined in Section 860F of the Code or (ii) cause any REMIC
constituting part of the Issuing Entity to fail to qualify as a REMIC at any
time that any Certificates are outstanding:
(i) Within 90 days prior to the final Distribution Date, the
Securities Administrator shall adopt and sign a plan of complete
liquidation of the Issuing Entity as provided to it by the terminating
purchaser, meeting the requirements of a "qualified liquidation" under
Section 860F of the Code and any regulations thereunder; and
(ii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Distribution Date, the Securities
Administrator shall sell all of the assets of the Issuing Entity for cash
pursuant to the terms of the plan of complete liquidation.
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(b) By their acceptance of Certificates, the Holders thereof hereby agree
to appoint the Securities Administrator as their attorney in fact to: (i) adopt
such a plan of complete liquidation (and the Certificateholders hereby appoint
the Securities Administrator as their attorney in fact to sign such plan) as
appropriate and (ii) to take such other action in connection therewith as may be
reasonably required to carry out such plan of complete liquidation all in
accordance with the terms hereof.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Intent of Parties. The parties intend that each REMIC shall
be treated as a REMIC for federal income tax purposes and that the provisions of
this Agreement should be construed in furtherance of this intent.
Section 11.02 Amendment.
(a) This Agreement may be amended from time to time by the Depositor, the
Master Servicer, the Securities Administrator and the Trustee, and without the
consent of any of the Certificateholders to:
(i) to cure any ambiguity or correct any mistake,
(ii) to correct, modify or supplement any provision herein which
may be inconsistent with any other provision herein,
(iii) to add any other provisions with respect to matters or
questions arising under this Agreement, or
(iv) to modify, alter, amend, add to or rescind any of the terms
or provisions contained in this Agreement; provided, however, that, in the
case of clauses (iii) and (iv), such amendment will not, as evidenced by an
Opinion of Counsel addressed to the Securities Administrator to such
effect, adversely affect in any material respect the interests of any
Certificateholder; provided, further, however, that such amendment will be
deemed to not adversely affect in any material respect the interest of any
Holder if the Person requesting such amendment obtains a letter from each
Rating Agency stating that such amendment will not result in a reduction or
withdrawal of its rating of any Class of the Certificates, it being
understood and agreed that any such letter in and of itself will not
represent a determination as to the materiality of any such amendment and
will represent a determination only as to the credit issues affecting any
such rating.
Notwithstanding the foregoing, without the consent of the
Certificateholders, the Depositor, the Master Servicer, the Securities
Administrator and the Trustee may at any time and from time to time amend this
Agreement to modify, eliminate or add to any of its provisions to such extent as
shall be necessary or appropriate to maintain the qualification of any of the
REMICs provided for herein as REMICs under the Code or to avoid or minimize the
risk of the imposition of any tax on the Issuing Entity or any of the REMICs
provided for herein pursuant to
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the Code that would be a claim against the Issuing Entity at any time prior to
the final redemption of the Certificates, provided that the Trustee and the
Securities Administrator shall have been provided an Opinion of Counsel
addressed to the Trustee and the Securities Administrator, which opinion shall
be an expense of the party requesting such amendment but in any case shall not
be an expense of the Trustee and the Securities Administrator, to the effect
that such action is necessary or appropriate to maintain such qualification or
to avoid or minimize the risk of the imposition of such a tax.
(b) This Agreement may also be amended from time to time by the Master
Servicer, the Depositor, the Securities Administrator and the Trustee, and the
Assignment Agreements may also be amended from time to time by the Master
Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing Percentage Interests aggregating not less than 51% of the Class
Certificate Balance of the Certificates or of the applicable Class or Classes,
if such amendment affects only such Class or Classes, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall (i) reduce
in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Regular Certificate
without the consent of the Holder of such Regular Certificate, or (ii) reduce
the aforesaid percentage of Certificates the Holders of which are required to
consent to any such amendment, without the consent of the Holders of all
Certificates then outstanding. Notwithstanding any contrary provision of this
Agreement, the Trustee shall not consent to any amendment to this Agreement
unless it shall have first received an Opinion of Counsel addressed to the
Trustee, which opinion shall be an expense of the party requesting such
amendment but in any case shall not be an expense of the Trustee, to the effect
that such amendment is permitted hereunder and will not cause the imposition of
any tax on the Issuing Entity, any of the REMICs provided for herein or the
Certificateholders or cause any of the REMICs provided for herein to fail to
qualify as a REMIC at any time that any Certificates are outstanding.
(c) Promptly after the execution of any such amendment, the Securities
Administrator shall furnish a copy of such amendment or written notification of
the substance of such amendment to each Certificateholder, with a copy to the
Rating Agencies.
(d) In the case of an amendment under Subsection 11.02(b) above, it shall
not be necessary for the Certificateholders to approve the particular form of
such an amendment. Rather, it shall be sufficient if the Certificateholders
approve the substance of the amendment. The manner of obtaining such consents
and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as the
Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel stating that
the execution of such amendment is authorized or permitted by this Agreement and
will not adversely affect the status of any REMIC created hereunder. The Trustee
and the Securities Administrator may, but shall not be obligated to, enter into
any such amendment which affects the Trustee's or the Securities Administrator's
own respective rights, duties or immunities under this Agreement.
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Section 11.03 Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere. The Depositor
shall effect such recordation, at the expense of the Issuing Entity upon the
request in writing of a Certificateholder, but only if such direction is
accompanied by an Opinion of Counsel (provided at the expense of the
Certificateholder requesting recordation) to the effect that such recordation
would materially and beneficially affect the interests of the Certificateholders
or is required by law.
Section 11.04 Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall not terminate
this Agreement or the Issuing Entity, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Issuing Entity, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
(b) Except as expressly provided in this Agreement, no Certificateholders
shall have any right to vote or in any manner otherwise control the operation
and management of the Issuing Entity, or the obligations of the parties hereto,
nor shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to establish the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholders be under any liability to any third Person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon, under or with respect to this Agreement against the Depositor, the
Securities Administrator, the Master Servicer or any successor to any such
parties unless (i) such Certificateholder previously shall have given to the
Trustee a written notice of a continuing default, as herein provided, (ii) the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 51% of the Trust Fund shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs and expenses and liabilities to be incurred therein or
thereby, and (iii) the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused to institute any
such action, suit or proceeding.
(d) No one or more Certificateholders shall have any right by virtue of any
provision of this Agreement to affect the rights of any other Certificateholders
or to obtain or seek to obtain priority or preference over any other such
Certificateholder, or to enforce any right under this Agreement, except in the
manner herein provided and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of this
Section 11.04, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
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Section 11.05 Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
an agent duly appointed in writing. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is expressly required, to the
Depositor. Proof of execution of any such instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Agreement and
conclusive in favor of the Trustee and the Depositor, if made in the manner
provided in this Section 11.05.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his or her individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his or her
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the individual executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing on such Certificates, except an endorsement in
accordance with Section 5.02 made on a Regular Certificate presented in
accordance with Section 5.04) shall be proved by the Certificate Register, and
neither the Trustee, the Securities Administrator, the Depositor, the Master
Servicer nor any successor to any such parties shall be affected by any notice
to the contrary.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action of the holder of any Regular Certificate shall bind every future
holder of the same Regular Certificate and the holder of every Regular
Certificate issued upon the registration of transfer or exchange thereof, if
applicable, or in lieu thereof with respect to anything done, omitted or
suffered to be done by the Trustee, the Securities Administrator, the Depositor,
the Master Servicer or any successor to any such party in reliance thereon,
whether or not notation of such action is made upon such Certificates.
(e) In determining whether the Holders of the requisite percentage of
Certificates evidencing Percentage Interests have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Certificates
owned by the Trustee, the Securities Administrator, the Depositor, the Master
Servicer or any Affiliate thereof shall be disregarded, except as otherwise
provided in Section 11.02(b) and except that, in determining whether the
Securities Administrator or the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Certificates which a Responsible Officer of the Trustee knows to be so owned
shall be so disregarded. Certificates which have been pledged in good faith to
the Trustee, the Securities Administrator, the Depositor, the Master Servicer or
any Affiliate thereof may be regarded as outstanding if the pledgor establishes
to the satisfaction of the Securities Administrator the pledgor's right to act
with respect to such
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Certificates and that the pledgor is not an Affiliate of the Trustee, the
Securities Administrator, the Depositor, or the Master Servicer, as the case may
be.
Section 11.06 Governing Law. THIS AGREEMENT AND THE CERTIFICATES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO ITS CONFLICT OF LAWS RULES AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.07 Notices. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at (including delivery by
facsimile) or mailed by registered mail, return receipt requested, postage
prepaid, or by recognized overnight courier, to (i) in the case of the
Depositor, 0 Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Vice
President-Servicing, telecopier number: (000) 000-0000, or to such other address
as may hereafter be furnished to the other parties hereto in writing; (ii) in
the case of the Trustee, at its Corporate Trust Office, or such other address as
may hereafter be furnished to the other parties hereto in writing; (iii) in the
case of the Master Servicer or Securities Administrator, Xxxxx Fargo Bank, N.A.,
X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000, Attention: Client Service Manager MLMI
Series 2006-AF1, or, in the case of overnight deliveries, 0000 Xxx Xxxxxxxxx
Xxxx, Xxxxxxxx, Xxxxxxxx 00000-0000, Attention: Client Service Manager MLMI
Series 2006-AF1, facsimile no.: (000) 000-0000, or such other address as may
hereafter be furnished to the other parties hereto in writing; (iv) in the case
of the Custodian, Xxxxx Fargo Bank, N.A., 0000 00xx Xxxxxx Xxxxxxxxx, XX 0031,
Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: MLMI Series 2006-AF1; or such other
address as may hereafter be furnished to the other parties hereto in writing; or
(v) in the case of the Rating Agencies, Xxxxx'x Investors Service, Inc., 00
Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 and Standard & Poor's, a
division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000. Any notice delivered to the Depositor, the Trustee, the Securities
Administrator or the Master Servicer under this Agreement shall be effective
only upon receipt. Any notice required or permitted to be mailed to a
Certificateholder, unless otherwise provided herein, shall be given by
first-class mail, postage prepaid, at the address of such Certificateholder as
shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given when mailed, whether or not the Certificateholder receives such notice.
Section 11.08 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severed from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
Section 11.09 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the respective successors and
assigns of the parties hereto.
Section 11.10 Article and Section Headings. The article and section
headings herein are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof.
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Section 11.11 Counterparts. This Agreement may be executed in two or more
counterparts each of which when so executed and delivered shall be an original
but all of which together shall constitute one and the same instrument.
Section 11.12 Notice to Rating Agencies. The article and section headings
herein are for convenience of reference only, and shall not limited or otherwise
affect the meaning hereof. The Trustee shall promptly provide notice to each
Rating Agency with respect to each of the following of which it has actual
knowledge:
1. Any material change or amendment to this Agreement or the Servicing
Agreements;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Trustee, the Master Servicer or
the Securities Administrator;
4. The repurchase or substitution of Mortgage Loans;
5. The final payment to Certificateholders; and
6. Any change in the location of the Master Servicer Collection Account or
the Distribution Account.
ARTICLE XII
REMIC ADMINISTRATION
Section 12.01 [Reserved].
Section 12.02 Prohibited Transactions and Activities. Neither the Depositor
nor the Securities Administrator shall sell, dispose of, or substitute for any
of the Mortgage Loans, except in a disposition pursuant to (i) the foreclosure
of a Mortgage Loan, (ii) the bankruptcy of the Trust Fund, (iii) the termination
of each REMIC pursuant to Article X of this Agreement, (iv) a substitution
pursuant to Article II of this Agreement or (v) a repurchase of Mortgage Loans
pursuant to Article II of this Agreement, nor acquire any assets for any REMIC,
nor sell or dispose of any investments in the Distribution Account for gain, nor
accept any contributions to any REMIC after the Closing Date, unless it has
received an Opinion of Counsel (at the expense of the party causing such sale,
disposition, or substitution) that such disposition, acquisition, substitution,
or acceptance will not (a) affect adversely the status of any such REMIC as a
REMIC or of the interests therein other than the Residual Certificate as the
regular interests therein, (b) affect the distribution of interest or principal
on the Certificates, (c) result in the encumbrance of the assets transferred or
assigned to the Trust Fund (except pursuant to the provisions of this Agreement)
or (d) cause any such REMIC to be subject to any tax including a tax on
prohibited transactions or prohibited contributions pursuant to the REMIC
Provisions.
Section 12.03 Indemnification with Respect to Prohibited Transactions or
Loss of REMIC Status. In the event that a REMIC fails to qualify as a REMIC,
loses its status as a
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REMIC, or incurs federal, state or local taxes as a result of a prohibited
transaction or prohibited contribution under the REMIC Provisions due to the
negligent performance by the Securities Administrator of its duties and
obligations set forth herein, the Securities Administrator shall indemnify the
Certificateholders of the related Residual Certificate against any and all
losses, claims, damages, liabilities or expenses ("Losses") resulting from such
negligence; provided, however, that the Securities Administrator shall not be
liable for any such Losses attributable to the action or inaction of the
Depositor or the Holder of the Residual Certificate, nor for any such Losses
resulting from misinformation provided by any of the foregoing parties on which
the Securities Administrator has relied. Notwithstanding the foregoing, however,
in no event shall the Trustee or the Securities Administrator have any liability
(1) for any action or omission that is taken in accordance with and in
compliance with the express terms of, or which is expressly permitted by the
terms of, this Agreement or the Mortgage Loan Purchase Agreement, (2) for any
Losses other than arising out of malfeasance, willful misconduct or negligent
performance by the Securities Administrator with respect to its duties and
obligations set forth herein, and (3) for any special or consequential damages
to Certificateholders of the related Residual Certificate (in addition to
payment of principal and interest on the Certificates).
Section 12.04 REO Property.
(a) Notwithstanding any other provision of this Agreement, the Securities
Administrator shall not, except to the extent provided in this Agreement for
which the Securities Administrator is obligated to perform, knowingly permit any
Servicer to rent, lease, otherwise earn income or take any other action on
behalf of any REMIC with respect to any REO Property which might cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
section 860G(a)(8) of the Code or result in the receipt by any REMIC of any
"income from non-permitted assets" within the meaning of section 860F(a)(2) of
the Code or any "net income from foreclosure property" which is subject to tax
under the REMIC Provisions unless the Servicer has provided to the Securities
Administrator an Opinion of Counsel concluding that, under the REMIC Provisions,
such action would not adversely affect the status of any REMIC as a REMIC and
any income generated for any REMIC by the REO Property would not result in the
imposition of a tax upon such REMIC.
(b) The Depositor shall cause each Servicer (to the extent provided in the
applicable Servicing Agreement) to make reasonable efforts to sell any REO
Property for its fair market value. In any event, however, the Depositor shall,
or shall cause the Servicer (to the extent provided in this Agreement) to,
dispose of any REO Property within three years of its acquisition by the Issuing
Entity unless the Depositor or such Servicer (on behalf of the Issuing Entity)
has received a grant of extension from the Internal Revenue Service to the
effect that, under the REMIC Provisions and any relevant proposed legislation
and under applicable state law, the REMIC may hold REO Property for a longer
period without adversely affecting the REMIC status of such REMIC or causing the
imposition of a Federal or state tax upon such REMIC. If such an extension has
been received, then the Depositor, acting on behalf of the Trustee hereunder,
shall, or shall cause the Servicer to, continue to attempt to sell the REO
Property for its fair market value for such period longer than three years as
such extension permits (the "Extended Period"). If such an extension has not
been received and the Depositor or the Servicer, acting on behalf of the Issuing
Entity hereunder, is unable to sell the REO Property within 33 months after its
acquisition by the Issuing Entity or if such an extension, has been
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received and the Depositor or the Servicer is unable to sell the REO Property
within the period ending three months before the close of the Extended Period,
the Depositor shall cause the Servicer, before the end of the three year period
or the Extended Period, as applicable, to (i) purchase such REO Property at a
price equal to the REO Property's fair market value or (ii) auction the REO
Property to the highest bidder (which may be the Servicer) in an auction
reasonably designed to produce a fair price prior to the expiration of the
three-year period or the Extended Period, as the case may be.
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IN WITNESS WHEREOF, the Depositor, the Trustee, the Master Servicer and the
Securities Administrator have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first above
written.
XXXXXXX XXXXX MORTGAGE
INVESTORS, INC.,
as Depositor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
HSBC BANK USA, NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXX FARGO BANK, N.A.,
as Master Servicer
By:
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Assistant Vice President
XXXXX FARGO BANK, N.A.,
as Securities Administrator
By:
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Assistant Vice President
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.,
Depositor
XXXXX FARGO BANK, N.A.
Master Servicer and Securities Administrator
and
HSBC BANK USA, NATIONAL ASSOCIATION,
Trustee
STACK II POOLING AND SERVICING TERMS,
Constituting,
Along with the Stack I Pooling and Servicing Terms, the
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2006
----------
Mortgage Pass-Through Certificates, MLMI Series 2006-AF1
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS.................................................... 7
Section 1.02 Accounting.............................................. 51
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES.................................................. 52
Section 2.01 Conveyance of Mortgage Loans to Trustee................. 52
Section 2.02 Acceptance of Mortgage Loans by Trustee................. 55
Section 2.03 Assignment of Interest in the Mortgage Loan Purchase
Agreement............................................... 58
Section 2.04 Substitution of Mortgage Loans.......................... 59
Section 2.05 Issuance of Certificates................................ 61
Section 2.06 Representations and Warranties Concerning the
Depositor............................................... 61
Section 2.07 Representations and Warranties Concerning the Master
Servicer and Securities Administrator................... 62
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS............... 64
Section 3.01 Master Servicer......................................... 64
Section 3.02 REMIC-Related Covenants................................. 65
Section 3.03 Monitoring of Servicers................................. 65
Section 3.04 Fidelity Bond........................................... 66
Section 3.05 Power to Act; Procedures................................ 66
Section 3.06 Due-on-Sale Clauses; Assumption Agreements.............. 67
Section 3.07 Release of Mortgage Files............................... 67
Section 3.08 Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee......................... 68
Section 3.09 Standard Hazard Insurance and Flood Insurance
Policies................................................ 69
Section 3.10 Presentment of Claims and Collection of Proceeds........ 69
Section 3.11 Maintenance of the Primary Mortgage Insurance
Policies................................................ 70
Section 3.12 Trustee to Retain Possession of Certain Insurance
Policies and Documents.................................. 70
Section 3.13 Realization Upon Defaulted Mortgage Loans............... 71
Section 3.14 Compensation for the Master Servicer.................... 71
Section 3.15 REO Property............................................ 71
Section 3.16 Annual Statement as to Compliance....................... 72
Section 3.17 Reports on Assessment of Compliance and Attestation..... 73
Section 3.18 Periodic Filings........................................ 75
Section 3.19 Compliance with Regulation AB........................... 82
ARTICLE IV ACCOUNTS...................................................... 83
Section 4.01 Protected Accounts...................................... 83
Section 4.02 Master Servicer Collection Account...................... 84
Section 4.03 Permitted Withdrawals and Transfers from the Master
Servicer Collection Account............................ 85
Section 4.04 Distribution Account................................... 86
Section 4.05 Permitted Withdrawals and Transfers from the
Distribution Account................................... 86
Section 4.06 [Reserved.]............................................ 88
ARTICLE V CERTIFICATES................................................... 90
Section 5.01 The Certificates........................................ 90
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates................................ 90
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates....... 94
Section 5.04 Persons Deemed Owners................................... 95
Section 5.05 Access to List of Certificateholders' Names and
Addresses............................................... 95
Section 5.06 Book-Entry Certificates................................. 95
Section 5.07 Notices to Depository................................... 96
Section 5.08 Definitive Certificates................................. 96
Section 5.09 Maintenance of Office or Agency......................... 97
ARTICLE VI PAYMENTS TO CERTIFICATEHOLDERS................................ 98
Section 6.01 Distributions on the Certificates....................... 98
Section 6.02 Allocation of Losses.................................... 103
Section 6.03 Payments................................................ 104
Section 6.04 Statements to Certificateholders........................ 104
Section 6.05 Monthly Advances........................................ 107
Section 6.06 Compensating Interest Payments.......................... 107
ARTICLE VII THE MASTER SERVICER AND THE DEPOSITOR........................ 108
Section 7.01 Liabilities of the Master Servicer...................... 108
Section 7.02 Merger or Consolidation of the Master Servicer.......... 108
Section 7.03 Indemnification from the Master Servicer and the
Depositor............................................... 108
Section 7.04 Limitations on Liability of the Master Servicer and
Others.................................................. 109
Section 7.05 Master Servicer Not to Resign........................... 110
Section 7.06 Successor Master Servicer............................... 110
Section 7.07 Sale and Assignment of Master Servicing................. 110
ARTICLE VIII DEFAULT..................................................... 112
Section 8.01 Events of Default....................................... 112
Section 8.02 Trustee to Act; Appointment of Successor................ 113
Section 8.03 Notification to Certificateholders...................... 114
Section 8.04 Waiver of Defaults...................................... 114
Section 8.05 List of Certificateholders.............................. 115
ARTICLE IX CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR....... 116
iii
Section 9.01 Duties of Trustee...................................... 116
Section 9.02 Certain Matters Affecting the Trustee and the
Securities Administrator............................... 118
Section 9.03 Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans......................... 120
Section 9.04 Trustee and Securities Administrator May Own
Certificates........................................... 120
Section 9.05 Trustee's and Securities Administrator's Fees and
Expenses............................................... 120
Section 9.06 Eligibility Requirements for Trustee and Securities
Administrator.......................................... 121
Section 9.07 Insurance.............................................. 122
Section 9.08 Resignation and Removal of the Trustee and Securities
Administrator.......................................... 122
Section 9.09 Successor Trustee and Successor Securities
Administrator.......................................... 123
Section 9.10 Merger or Consolidation of Trustee or Securities
Administrator.......................................... 123
Section 9.11 Appointment of Co-Trustee or Separate Trustee.......... 124
Section 9.12 Federal Information Returns and Reports to
Certificateholders; REMIC Administration............... 125
ARTICLE X TERMINATION.................................................... 130
Section 10.01 Termination upon Liquidation or Repurchase of all
Mortgage Loans.......................................... 130
Section 10.02 Final Distribution on the Certificates.................. 131
Section 10.03 Additional Termination Requirements..................... 132
ARTICLE XI MISCELLANEOUS PROVISIONS...................................... 134
Section 11.01 Intent of Parties....................................... 134
Section 11.02 Amendment............................................... 134
Section 11.03 Recordation of Agreement................................ 136
Section 11.04 Limitation on Rights of Certificateholders.............. 136
Section 11.05 Acts of Certificateholders.............................. 136
Section 11.06 Governing Law........................................... 138
Section 11.07 Notices................................................. 138
Section 11.08 Severability of Provisions.............................. 139
Section 11.09 Successors and Assigns.................................. 139
Section 11.10 Article and Section Headings............................ 139
Section 11.11 Counterparts............................................ 139
Section 11.12 Notice to Rating Agencies............................... 139
ARTICLE XII REMIC ADMINISTRATION......................................... 140
Section 12.01 REMIC Administration.................................... 140
Section 12.02 Prohibited Transactions and Activities.................. 140
Section 12.03 Indemnification with Respect to Prohibited Transactions
or Loss of REMIC Status................................. 140
Section 12.04 REO Property............................................ 141
iv
EXHIBITS
Exhibit A-1 - Form of Class A and Class M Certificates
Exhibit A-2 - Form of Class B Certificates
Exhibit A-3 - Form of Class A-R Certificate
Exhibit A-4 Form of Class P Certificate
Exhibit B - Mortgage Loan Schedule
Exhibit C - [Reserved]
Exhibit D - Request for Release of Documents
Exhibit E-1 - Form of Transferee's Letter and Affidavit
Exhibit E-2 - Form of Transferor Certificate
Exhibit F-1 - Form of Transferor Representation Letter
Exhibit F-2 - Form of Investor Representation Letter
Exhibit F-3 - Form of Rule 144A Letter
Exhibit G - Form of Custodial Agreement
Exhibit H - [Reserved]
Exhibit I-1 to I-6 - Assignment Agreements
Exhibit J - Mortgage Loan Purchase Agreement
Exhibit K - Servicing Criteria To Be Addressed in Assessment of
Compliance
Exhibit L - Form of Xxxxxxxx-Xxxxx Certification
Exhibit M - Form of Back-up Xxxxxxxx-Xxxxx Certification
Exhibit N - [Reserved]
Exhibit O - Additional Disclosure Notification
Exhibit P - Form of Item 1123 Certification of Servicer
Exhibit Q-1 - Additional Form 10-D Disclosure
Exhibit Q-2 - Additional Form 10-K Disclosure
Exhibit Q-3 - Form 8-K Disclosure Information
v
STACK II POOLING AND SERVICING TERMS
These Stack II Pooling and Servicing Terms are dated as of September 1,
2006 (the "Agreement," and, together with the Stack I Pooling and Servicing
Terms (the "Stack I Agreement") dated as of September 1, 2006, the "Pooling and
Servicing Agreement"), among XXXXXXX XXXXX MORTGAGE INVESTORS, INC., as
depositor (the "Depositor"), XXXXX FARGO BANK, N.A., as master servicer (in such
capacity, the "Master Servicer") and as securities administrator (in such
capacity, the "Securities Administrator") and HSBC BANK USA, NATIONAL
ASSOCIATION, as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor has acquired the Mortgage Loans from the Seller and at the
Closing Date is the owner of the Mortgage Loans and the other related property
being conveyed by the Depositor to the Trustee hereunder on behalf of the
Issuing Entity for inclusion in the Trust Fund. On the Closing Date, the
Depositor will acquire the Certificates from the Securities Administrator as
consideration for the Depositor's transfer to the Issuing Entity of the Mortgage
Loans and the other related property constituting that portion of the Trust Fund
relating to the Certificates. The Depositor has duly authorized the execution
and delivery of this Agreement to provide for the conveyance to the Issuing
Entity of the Mortgage Loans and the other related property constituting that
portion of the Trust Fund relating to the Certificates. All covenants and
agreements made by the Seller in the Mortgage Loan Purchase Agreement and in
this Agreement and all covenants and agreements made by the Depositor, the
Trustee, the Securities Administrator and the Master Servicer herein with
respect to the Mortgage Loans and the other related property constituting that
portion of the Trust Fund relating to the Certificates are for the benefit of
the Holders from time to time of the Certificates. The Depositor, the Trustee,
the Securities Administrator and the Master Servicer are entering into this
Agreement, and the Trustee on behalf of the Issuing Entity is accepting the
Trust Fund created hereby, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged.
In conjunction herewith, the Depositor has acquired the Stack I Mortgage
Loans from the Seller and at the Closing Date is the owner of the Stack I
Mortgage Loans and the other related property being conveyed by the Depositor to
the Trustee under the Stack I Agreement on behalf of the Issuing Entity for
inclusion in the Trust Fund. On the Closing Date, the Depositor will acquire the
Stack I Certificates from the Securities Administrator as consideration for the
Depositor's transfer to the Issuing Entity of the Stack I Mortgage Loans and the
other related property constituting that portion of the Trust Fund relating to
the Stack I Certificates. The Depositor has duly authorized the execution and
delivery of the Stack I Agreement to provide for the conveyance to the Issuing
Entity of the Stack I Mortgage Loans and the other related property constituting
that portion of the Trust Fund relating to the Stack I Certificates. The terms
and conditions relating to the issuance of the Stack I Certificates are set
forth in the Stack I Agreement.
As provided herein, the Securities Administrator shall elect that the
portion of the Trust Fund relating to Loan Group 4 and Loan Group 5 be treated
for federal income tax purposes as comprising two real estate mortgage
investment conduits (each a "REMIC" or, in the alternative, "REMIC 1" and the
"Upper Tier REMIC," respectively) in a tiered structure. The Certificates
created under this Agreement, other than the Class A-R Certificate and the Class
P Certificate,
shall represent ownership of regular interests in the Upper Tier REMIC. The
Class A-R Certificate represents the sole class of residual interest in each of
REMIC 1 and the Upper Tier REMIC and any REMIC created under the Stack I
Agreement.
The Upper Tier REMIC shall hold as its assets the several classes of
uncertificated REMIC 1 Regular Interests. REMIC 1 shall hold as its assets the
property of the Trust Fund relating to Loan Group 4 and Loan Group 5 other than
(i) the REMIC 1 Interests and (ii) the amounts payable to the Class P
Certificates.
Each Upper Tier REMIC Regular Interest is hereby designated as a regular
interest in the Upper Tier REMIC for purposes of the REMIC Provisions. Each
REMIC 1 Regular Interest is hereby designated as a regular interest in REMIC 1
for purposes of the REMIC Provisions.
The Class LT1-R Interest is hereby designated as the sole class of residual
interest in REMIC 1 for purposes of the REMIC Provisions. The Class A-R
Certificate, other than the portion thereof representing the right to receive
payments in respect of the Class LT1-R Interest or the residual interest in any
REMIC created under the Stack I Agreement, is hereby designated as the sole
class of residual interest in the Upper Tier REMIC for purposes of the REMIC
provisions. The Class A-R Certificate will also represent the Class LT1-R
Interest and the residual interest in any REMIC created under the Stack I
Agreement.
THE REMIC 1 INTERESTS
The following table sets forth (or describes) the class designation,
interest rate, initial principal balance, and related group of Mortgage Loans
for each class of REMIC 1 Interests:
Principal Interest Related Loan Groups
Class Designation Balance Rate or Loan Group
----------------- ----------------- -------- -----------------------------
LT14A $ 51,964.6982 (2) Loan Group 4
LT14B $ 1,039,234.6982 (3) Loan Group 4
LT15A $ 98,920.1904 (2) Loan Group 5
LT15B $ 1,978,340.1904 (4) Loan Group 5
LT1Z $298,589,029.0828 (2) Loan Group 4 and Loan Group 5
LT1-R (1) (1) N/A
----------
(1) The Class LT1-R Interest represents the sole class of residual interest in
REMIC 1 and has neither a principal amount nor an interest rate. The Class
LT1-R Interest shall be represented by the Class A-R Certificate.
(2) The Class LT14A Interest, the Class LT15A Interest and the Class LT1Z
Interest shall have an interest rate for each Distribution Date (and the
related Interest Accrual Period) equal to the Net WAC.
(3) The Class LT14B Interest shall have an interest rate for any Distribution
Date (and the related Interest Accrual Period) equal to the Loan Group 4
Net WAC.
(4) The Class LT15B Interest shall have an interest rate for any Distribution
Date (and the related Interest Accrual Period) equal to the Loan Group 5
Net WAC.
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On each Distribution Date, the Securities Administrator shall first pay or
charge as an expense of REMIC 1 all expenses of the Issuing Entity for such
Distribution Date relating to Loan Group 4 and Loan Group 5.
Principal distributions shall be deemed to be made on the REMIC 1 Interests
first, so as to keep the uncertificated principal balance of each REMIC 1
Interest ending with the designation "A" equal to 1% of the excess of (x) the
aggregate Stated Principal Balance of the Mortgage Loans in the related Loan
Group over (y) the aggregate class principal amounts of the Certificates in the
Certificate Group related to such Loan Group (except that if 1% of any such
excess is greater than the principal amount of the corresponding REMIC 1
Interest ending with the designation "A", the least amount of principal shall be
distributed to such REMIC 1 Interests such that the REMIC 1 Subordinate Balance
Ratio is maintained); second, to each REMIC 1 Interest ending with the
designation "B" so as to keep the uncertificated principal balance of each such
REMIC 1 Interest equal to 1% of the aggregate Stated Principal Balance of the
Mortgage Loans in the related Loan Group and finally, all remaining principal
amounts shall be distributed in respect of the Class LT1Z Interest. Realized
Losses with respect to principal shall be allocated among the REMIC 1 Interests
first, so as to keep the uncertificated principal balance of each REMIC 1
Interest ending with the designation "A" equal to 1% of the excess of (x) the
aggregate Stated Principal Balance of the Mortgage Loans in the related Loan
Group over (y) the aggregate class principal amounts of the Certificates in the
Certificate Group related to such Loan Group (except that if 1% of any such
excess is greater than the principal amount of the corresponding REMIC 1
Interest ending with the designation "A", the least amount of losses shall be
allocated to such REMIC 1 Interests such that the REMIC 1 Subordinate Balance
Ratio is maintained); second, to each REMIC 1 Interest ending with the
designation "B" so as to keep the uncertificated principal balance of each such
REMIC 1 Interest equal to 1% of the aggregate Principal Balance of the Mortgage
Loans in the related Loan Group and finally, all remaining Realized Losses with
respect to principal shall be distributed in respect of the Class LT1Z Interest.
If on any Distribution Date the Class Certificate Balance of any Class of
Certificates is increased due to Subsequent Recoveries pursuant to the
definition of "Class Certificate Balance", then there shall be an equivalent
aggregate increase in the principal amounts of the REMIC 1 Regular Interests,
with such increase allocated (before the making of distributions and the
allocation of losses on the REMIC 1 Regular Interests on such Distribution Date)
among the REMIC 1 Regular Interests as follows: (i) first, to each REMIC 1
Interest ending with the designation "B" so as to keep the uncertificated
principal balance of each such REMIC 1 Interest equal to 1% of the aggregate
Stated Principal Balance of the Mortgage Loans in the related Loan Group, (ii)
second, to each REMIC 1 Regular Interest ending with the designation "A", so
that the uncertificated principal balance of each REMIC 1 Regular Interest
ending with the designation "A" is as close as possible to (but does not exceed)
1% of the excess of (x) the aggregate Stated Principal Balance of the Mortgage
Loans in the related Loan Group over (y) the aggregate class principal balance
of the Certificates in the Certificate Group related to such Loan Group;
provided, however, that (a) the REMIC 1 Subordinate Balance Ratio is maintained
and (b) amounts allocated to any REMIC 1 Regular Interest pursuant to this
clause (ii) shall not exceed the amount of any previous realized losses
allocated to such REMIC 1 Regular Interest not previously offset by
distributions or increases in the principal amount of such REMIC 1 Regular
Interest and (iii) finally, all remaining amounts to the Class LT1Z Interest.
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All computations with respect to the REMIC 1 Interests shall be computed to
eight decimal places.
THE CERTIFICATES
The following table sets forth (or describes) the Class designation,
Pass-Through Rate, initial Class Certificate Balance or initial notional amount,
and minimum denomination for each Class of Certificates comprising interests in
the Trust Fund created hereunder.
Initial Class
Certificate Balance
Class Pass-Through or Initial Notional Minimum Denominations
Designation Rate Amount or Percentage Interest
------------- ------------ ------------------- ----------------------
Class AV-1A (1) $ 93,790,900 $25,000.00
Class AV-1B (1) $ 4,936,000 $25,000.00
Class AV-2A (2) $177,942,000 $25,000.00
Class AV-2B (2) $ 10,000,000 $25,000.00
Class A-R (1) $ 100 100%
Class MV-1 (3) $ 5,432,000 $25,000.00
Class MV-2 (3) $ 3,470,000 $25,000.00
Class MV-3 (3) $ 2,263,000 $25,000.00
Class BV-1 (3) $ 1,961,000 $25,000.00
Class BV-2 (3) $ 1,207,000 $25,000.00
Class BV-3 (3) $ 755,488 $25,000.00
Class P N/A N/A(4) 100%
(1) The Pass-Through Rate with respect to any Distribution Date (and the
related Interest Accrual Period) for the Class AV-1A, Class AV-1B and Class
A-R Certificates will be the Loan Group 4 Net WAC.
(2) The Pass-Through Rate with respect to any Distribution Date (and the
related Interest Accrual Period) for the Class AV-2A and Class AV-2B
Certificates will be the Loan Group 5 Net WAC.
(3) The Pass-Through Rates with respect to any Distribution Date (and the
related Interest Accrual Period) for the Class MV-1, Class MV-2, Class
MV-3, Class BV-1, Class BV-2 and Class BV-3 Certificates will be equal to
the Subordinate Net WAC.
(4) The Class P Certificates will be entitled to receive Prepayment Penalties
on the Prepayment Penalty Mortgage Loans.
As of the Cut-off Date, the Mortgage Loans had an aggregate Stated
Principal Balance of $301,757,488.86.
In consideration of the mutual agreements herein contained, the Depositor,
the Trustee, Securities Administrator and the Master Servicer hereby agree as
follows:
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ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
otherwise expressly provided or unless the context otherwise requires, shall
have the meanings specified in this Article.
Accepted Master Servicing Practices: With respect to any Mortgage Loan, as
applicable, either (x) those customary mortgage master servicing practices of
prudent mortgage servicing institutions that master service mortgage loans of
the same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the Trustee
or the Master Servicer (except in its capacity as successor to a Servicer), or
(y) as provided in the applicable Servicing Agreement, to the extent applicable
to any Servicer, but in no event below the standard set forth in clause (x).
Account: The Master Servicer Collection Account, Distribution Account and
any Protected Account as the context may require.
Accountant's Attestation: As defined in Section 3.17.
Accrued Certificate Interest: With respect to each Class of Certificates,
an amount equal to the interest accrued during the related Interest Accrual
Period on the Class Certificate Balance thereof at the then-applicable
Pass-Through Rate. Accrued Certificate Interest on any Class of Certificates
will be reduced by the amount of (i) Prepayment Interest Shortfalls (to the
extent not offset by the related Servicer or Master Servicer with a Compensating
Interest Payment as provided in Section 6.06), (ii) the interest portion of
Realized Losses allocated to such Class of Certificates pursuant to Section 6.02
and (iii) any other interest shortfalls not covered by the subordination
provided by the Class M Certificates and Class B Certificates, including
shortfalls as a result of the Relief Act or similar legislation or regulations,
with all such reductions allocated among all of the Certificates in proportion
to their respective amounts of Accrued Certificate Interest payable on such
Distribution Date which would have resulted absent such reductions.
Additional Disclosure Notification: As defined in Section 3.18(b).
Additional Form 10-D Disclosure: As defined in Section 3.18(e).
Additional Form 10-K Disclosure: As defined in Section 3.18(h).
Adverse REMIC Event: As defined in Section 9.12(g).
Affiliate: As to any Person, any other Person controlling, controlled by or
under common control with such Person. "Control" means the power to direct the
management and policies of a Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise. "Controlled" and
"Controlling" have meanings correlative to the foregoing. The Master Servicer
may conclusively presume that a Person is not an Affiliate of another Person
unless a Responsible Officer of the Master Servicer has actual knowledge to the
contrary.
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Agreement: This Stack II Pooling and Servicing Agreement, including the
exhibits hereto, and all amendments hereof and supplements hereto.
Applicable Credit Rating: For any long-term deposit or security, a credit
rating of AAA in the case of S&P or Aaa in the case of Xxxxx'x. For any
short-term deposit or security, a rating of A-l+ in the case of S&P or P-1 in
the case of Xxxxx'x.
Appraised Value: For any Mortgaged Property related to a Mortgage Loan, the
amount set forth as the appraised value of such Mortgaged Property in an
appraisal made for the mortgage originator in connection with its origination of
the related Mortgage Loan.
Assessment of Compliance: As defined in Section 3.17.
Assignment: An assignment of the Mortgage, notice of transfer or equivalent
instrument, in recordable form, sufficient under the laws of the jurisdiction
wherein the related Mortgaged Property is located to reflect of record the sale
of the Mortgage Loan to the Trustee for the benefit of Certificateholders, which
assignment, notice of transfer or equivalent instrument may be in the form of
one or more blanket assignments covering Mortgages secured by Mortgaged
Properties located in the same county, if permitted by law and accompanied by an
Opinion of Counsel to that effect.
Assignment Agreements: The Xxxxx Fargo Bank Assignment Agreement, the
Greenpoint Assignment Agreement and the Washington Mutual Bank Assignment
Agreement, which are attached hereto as Exhibits I-3, I-5 and I-6, respectively.
Auction: The one-time auction conducted by the Securities Administrator, as
described in Section 10.01(b) hereof.
Available Funds: For any Distribution Date, the sum of the Group 4
Available Funds and the Group 5 Available Funds.
Back-Up Certification: As defined in Section 3.18(k).
Bankruptcy Code: The United States Bankruptcy Code, as amended as codified
in 11 U.S.C. Sections 101-1330.
Book-Entry Certificates: Any of the Certificates that shall be registered
in the name of the Depository or its nominee, the ownership of which is
reflected on the books of the Depository or on the books of a Person maintaining
an account with the Depository (directly, as a Depository Participant, or
indirectly, as an indirect participant in accordance with the rules of the
Depository and as described in Section 5.02 hereof). On the Closing Date, the
Certificates (other than the Class A-R Certificate and the Private Certificates)
shall be Book-Entry Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a day
on which the New York Stock Exchange or Federal Reserve is closed or on which
banking institutions in the jurisdiction in which the Trustee, the Master
Servicer, any Servicer or the Securities Administrator are authorized or
obligated by law or executive order to be closed.
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Certificate: Any mortgage pass-through certificate issued pursuant to this
Agreement evidencing a beneficial ownership interest in that portion of the
Trust Fund related to the Mortgage Loans, signed and countersigned by the
Securities Administrator. For the avoidance of doubt, as defined below, the term
"Stack I Certificate" shall be used to refer to any mortgage pass-through
certificate issued pursuant to the Stack I Agreement, evidencing a beneficial
ownership interest in that portion of the Trust Fund related to the Stack I
Mortgage Loans, signed and countersigned by the Securities Administrator.
Certificate Group: Each of the Group 4 Certificates and the Group 5
Certificates.
Certificate Owner: With respect to each Book-Entry Certificate, any
beneficial owner thereof.
Certificate Register: The register maintained pursuant to Section 5.02
hereof.
Certificateholder or Holder: The Person in whose name a Regular Certificate
is registered in the Certificate Register, except that a Disqualified
Organization or non-U.S. Person shall not be a Holder of the Class A-R
Certificate for any purpose hereof.
Certification Parties: As defined in Section 3.18(k).
Certifying Person: As defined in Section 3.18(k).
Class: Collectively, Certificates which have the same priority of payment
and bear the same class designation and the form of which is identical except
for variation in the Percentage Interest evidenced thereby.
Class A Certificate: Any of the Class AV-1A, Class AV-1B, Class AV-2A,
Class AV-2B or Class A-R Certificates as designated on the face thereof
substantially in the form annexed (other than the Class A-R Certificate) hereto
as Exhibit A-1, executed by the Securities Administrator and authenticated and
delivered by the Securities Administrator, representing the right to
distributions as set forth herein and therein.
Class A Certificateholder: Any Holder of a Class A Certificate.
Class A-R Certificate: The Class A-R Certificate executed, authenticated
and delivered by the Securities Administrator substantially in the form annexed
hereto as Exhibit A-3 and evidencing the ownership of the Class LT1-R Interest,
the residual interest in the Upper Tier REMIC and the residual interest in any
REMIC created under the Stack I Agreement.
Class B Certificate: Any one of the Class BV-1, Class BV-2 or Class BV-3
Certificates as designated on the face thereof substantially in the form annexed
hereto as Exhibit A-2, executed by the Securities Administrator and
authenticated and delivered by the Securities Administrator, representing the
right to distributions as set forth herein and therein.
Class B Certificateholder: Any Holder of a Class B Certificate.
Class B Percentage: The Class BV-1 Percentage, Class BV-2 Percentage or
Class BV-3 Percentage.
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Class BV-1 Percentage: With respect to any Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Class Certificate Balance of the Class BV-1 Certificates immediately
prior to such Distribution Date and the denominator of which is the aggregate
Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date.
Class BV-2 Percentage: With respect to any Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Class Certificate Balance of the Class BV-2 Certificates immediately
prior to such Distribution Date and the denominator of which is the aggregate
Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date.
Class BV-3 Percentage: With respect to any Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Class Certificate Balance of the Class BV-3 Certificates immediately
prior to such Distribution Date and the denominator of which is the aggregate
Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date.
Class Certificate Balance: With respect to any Certificate as of any date
of determination, the Class Certificate Balance of such Certificate on the
Distribution Date immediately prior to such date of determination, plus any
Subsequent Recoveries added to the Class Certificate Balance of such Certificate
pursuant to Section 6.01, and reduced by the aggregate of (a) all distributions
of principal made thereon on such immediately prior Distribution Date and (b)
without duplication of amounts described in clause (a) above, reductions in the
Class Certificate Balance thereof in connection with allocations thereto of
Realized Losses on the Mortgage Loans and Extraordinary Trust Fund Expenses on
such immediately prior Distribution Date (or, in the case of any date of
determination up to and including the initial Distribution Date, the initial
Class Certificate Balance of such Certificate, as stated on the face thereof);
provided, however, that the Class Certificate Balance of each Subordinate
Certificate of the Class of Subordinate Certificates outstanding with the
highest numerical designation at any given time shall be calculated to equal the
Percentage Interest evidenced by such Certificate multiplied by the excess, if
any, of (A) the then aggregate Stated Principal Balance of the Mortgage Loans
over (B) the then aggregate Class Certificate Balance of all other Classes of
Certificates then outstanding.
Class M Certificate: Any one of the Class MV-1, Class MV-2 or Class MV-3
Certificates as designated on the face thereof substantially in the form annexed
hereto as Exhibit A-1, executed by the Securities Administrator and
authenticated and delivered by the Securities Administrator, representing the
right to distributions as set forth herein and therein.
Class M Certificateholder: Any Holder of a Class M Certificate.
Class M Percentage: The Class MV-1 Percentage, Class MV-2 Percentage or
Class MV-3 Percentage.
Class MV-1 Percentage: With respect to any Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Class Certificate Balance of the Class MV-1 Certificates immediately
prior to such date and the denominator of
-8-
which is the aggregate Stated Principal Balance of all of the Mortgage Loans (or
related REO Properties) immediately prior to such Distribution Date.
Class MV-2 Percentage: With respect to any Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Class Certificate Balance of the Class MV-2 Certificates immediately
prior to such date and the denominator of which is the aggregate Stated
Principal Balance of all of the Mortgage Loans (or related REO Properties)
immediately prior to such Distribution Date.
Class MV-3 Percentage: With respect to any Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Class Certificate Balance of the Class MV-3 Certificates immediately
prior to such date and the denominator of which is the aggregate Stated
Principal Balance of all of the Mortgage Loans (or related REO Properties)
immediately prior to such Distribution Date.
Class P Certificate: Any one of the Class P Certificates as designated on
the face thereof substantially in the forum of annexed hereto as Exhibit A-4,
executed by the Securities Administrator and authenticated and delivered by the
Securities Administrator representing the right to distributions of Prepayment
Penalties received on the Prepayment Penalty Mortgage Loans as set forth herein.
Class Subordination Percentage: With respect to any Distribution Date and
each Class of Subordinate Certificates, the fraction (expressed as a percentage)
the numerator of which is the Class Certificate Balance of such Class of
Subordinate Certificates immediately prior to such Distribution Date and the
denominator of which is the aggregate of the Class Certificate Balances of all
Classes of Certificates immediately prior to such Distribution Date.
Closing Date: September 29, 2006.
Code: The Internal Revenue Code of 1986, as amended.
Commission: The Securities and Exchange Commission.
Compensating Interest Payment: As defined in Section 6.06.
Cooperative: A corporation that has been formed for the purpose of
cooperative apartment ownership.
Cooperative Assets: Shares issued by Cooperatives, the related Cooperative
Lease and any other collateral securing the Cooperative Loans.
Cooperative Lease: With respect to a Cooperative Loan, the proprietary
lease or occupancy agreement with respect to the cooperative apartment occupied
by the Mortgagor and relating to the related Cooperative Assets, which lease or
agreement confers an exclusive right to the holder of such Cooperative Assets to
occupy such apartment.
Cooperative Loan: The indebtedness of a Mortgagor evidenced by a Mortgage
Note which is secured by Cooperative Assets and which is being sold to the
Depositor pursuant to this Agreement, the Mortgage Loans so sold being
identified in the Mortgage Loan Schedule.
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Cooperative Stock: With respect to a Cooperative Loan, the single
outstanding class of stock, partnership interest or other ownership instrument
in the related Cooperative.
Corporate Trust Office: With respect to the Trustee, the principal
corporate trust office of the Trustee at which at any particular time its
corporate trust business in connection with this Agreement shall be
administered, which office at the date of the execution of this instrument is
located at HSBC Bank USA, National Association, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Issuer Services - Xxxxxxx Xxxxx Mortgage Investors, Inc.,
MLMI Series 2006-AF1, or at such other address as the Trustee may designate from
time to time by notice to the Certificateholders, the Depositor and the Master
Servicer and with respect to the Securities Administrator, for Certificate
transfer purposes, Xxxxx Fargo Center, Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000, Attn: Corporate Trust Services - MLMI 2006-AF1,
and for all other purposes, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx, 00000,
Attn: Client Service Manager - MLMI 2006-AF1.
Corresponding Class or Classes of Certificates: With respect to each REMIC
2 Regular Interest, the Class or Classes of Certificates appearing opposite such
REMIC 2 Regular Interest as described in the Preliminary Statement hereto.
Credit Support Depletion Date: The first Distribution Date on which the
aggregate Class Certificate Balance of the Subordinate Certificates is reduced
to zero.
Curtailment: Any Principal Prepayment made by a Mortgagor which is not a
Principal Prepayment in Full.
Custodial Agreement: An agreement, dated as of the Closing Date among the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
the Custodian in substantially the form of Exhibit G hereto.
Custodian: Xxxxx Fargo Bank, N.A., including any successors in interest, or
any successor custodian appointed pursuant to the provisions hereof and of the
Custodial Agreement.
Cut-off Date: September 1, 2006.
Debt Service Reduction: Any reduction of the Monthly Payments which a
Mortgagor is obligated to pay with respect to a Mortgage Loan as a result of any
proceeding under the Bankruptcy Code or any other similar state law or other
proceeding.
Defective Mortgage Loan: A Mortgage Loan replaced or to be replaced by one
or more Substitute Mortgage Loans.
Deficient Valuation: With respect to any Mortgage Loan, a valuation of the
related Mortgaged Property by a court of competent jurisdiction in an amount
less than the then outstanding principal balance of the Mortgage Loan, which
valuation results from a proceeding initiated under the Bankruptcy Code.
Definitive Certificates: As defined in Section 5.06.
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Depositor: Xxxxxxx Xxxxx Mortgage Investors, Inc., a Delaware corporation,
or any successor in interest.
Depository: The Depository Trust Company, the nominee of which is Cede &
Co., or any successor thereto.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Designated Depository Institution: A depository institution (commercial
bank, federal savings bank, mutual savings bank or savings and loan association)
or trust company (which may include the Trustee), the deposits of which are
fully insured by the FDIC to the extent provided by law.
Determination Date: With respect to each Mortgage Loan, the Determination
Date as defined in the related Servicing Agreement.
Disqualified Organization: A "disqualified organization" as defined in
Section 860 E(e)(5) of the Code.
Distribution Account: The trust account or accounts created and maintained
pursuant to Section 4.04, which shall be denominated "Xxxxx Fargo Bank, National
Association, as Securities Administrator for HSBC Bank USA, National
Association, as Trustee f/b/o holders of Xxxxxxx Xxxxx Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, MLMI Series 2006-AF1 - Distribution Account
(Stack II)." The Distribution Account shall be an Eligible Account.
Distribution Account Deposit Date: The Business Day prior to each
Distribution Date.
Distribution Date: The 25th day of any month, beginning in October 2006,
or, if such 25th day is not a Business Day, the Business Day immediately
following.
Due Date: With respect to each Mortgage Loan, the date in each month on
which its Monthly Payment is due if such due date is the first day of a month
and otherwise is deemed to be the first day of the following month or such other
date specified in the related Servicing Agreement.
Due Period: With respect to any Distribution Date and each Mortgage Loan,
the period commencing on the second day of the month preceding the month in
which the Distribution Date occurs and ending at the close of business on the
first day of the month in which the Distribution Date occurs.
Eligible Account: Any of (i) a segregated account maintained with a federal
or state chartered depository institution (A) the short-term obligations of
which are rated A-1 or better by S&P and P-1 by Xxxxx'x at the time of any
deposit therein or (B) insured by the FDIC (to the limits established by such
Corporation), the uninsured deposits (as evidenced in writing by the Rating
Agencies that use of any such account as the Distribution Account will not have
an adverse effect on the then-current ratings assigned to the Classes of
Certificates then rated by the
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Rating Agencies) in which account are otherwise secured such that, as evidenced
by an Opinion of Counsel (obtained by the Person requesting that the account be
held pursuant to this clause (i)) delivered to the Securities Administrator
prior to the establishment of such account, the Certificateholders will have a
claim with respect to the funds in such account and a perfected first priority
security interest against any collateral (which shall be limited to Permitted
Investments, each of which shall mature not later than the Business Day
immediately preceding the Distribution Date next following the date of
investment in such collateral or the Distribution Date if such Permitted
Investment is an obligation of the institution that maintains the Distribution
Account) securing such funds that is superior to claims of any other depositors
or general creditors of the depository institution with which such account is
maintained, (ii) a segregated trust account or accounts maintained with a
federal or state chartered depository institution or trust company with trust
powers acting in its fiduciary capacity or (iii) a segregated account or
accounts of a depository institution acceptable to the Rating Agencies (as
evidenced in writing by the Rating Agencies that use of any such account as the
Distribution Account will not have an adverse effect on the then-current ratings
assigned to the Classes of the Certificates then rated by the Rating Agencies).
Eligible Accounts may bear interest.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA Restricted Certificates: Any of the Class B-1, Class B-2, Class B-3
or Class P Certificates, and any other Certificate, as long as the acquisition
and holding of such Certificate is not covered by and exempt under an
underwriter's exemption.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that would satisfy the requirements of
Prohibited Transaction Exemption 90-29, Exemption Application No. D-8012, 55
Fed. Reg. 21459 (1990), as amended, granted to the underwriter by the United
States Department of Labor (or any other applicable underwriter's exemption
granted by the United States Department of Labor), except, in relevant part, for
the requirement that the certificates have received a rating at the time of
acquisition that is in one of the three (or four, in the case of a "designated
transaction") highest generic rating categories by at least one of the Rating
Agencies.
Event of Default: An event of default described in Section 8.01.
Excess Liquidation Proceeds: To the extent that such amount is not required
by law to be paid to the related Mortgagor, the amount, if any, by which
Liquidation Proceeds with respect to a Liquidated Mortgage Loan exceed the sum
of (i) the Outstanding Principal Balance of such Mortgage Loan and accrued but
unpaid interest at the related Mortgage Interest Rate through the last day of
the month in which the related Liquidation Date occurs, plus (ii) related
Liquidation Expenses.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Extraordinary Loss: Any Realized Loss or portion thereof caused by or
resulting from:
(i) nuclear or chemical reaction or nuclear radiation or radioactive
or chemical contamination, all whether controlled or uncontrolled and
whether such loss be direct or indirect, proximate or remote;
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(ii) hostile or warlike action in time of peace or war, including
action in hindering, combating or defending against an actual, impending or
expected attack by any government or sovereign power, de jure or de facto,
or by any authority maintaining or using military, naval or air forces, or
by military, naval or air forces, or by an agent of any such government,
power, authority or forces;
(iii) any weapon of war employing atomic fission or radioactive forces
whether in time of peace or war, and
(iv) insurrection, rebellion, revolution, civil war, usurped power or
action taken by governmental authority in hindering, combating or defending
against such an occurrence, seizure or destruction under quarantine or
customs regulations, confiscation by order of any government or public
authority, or risks of contraband or illegal transactions or trade.
Extraordinary Trust Fund Expenses: Any amounts reimbursable to the Master
Servicer or the Depositor pursuant to this Agreement, including but not limited
to Sections 4.03, 4.05 and 7.04, any amounts reimbursable to the Trustee and the
Securities Administrator from the Trust Fund pursuant to this Agreement,
including but not limited to Section 9.05, and any other costs, expenses,
liabilities and losses borne by the Trust Fund (exclusive of any cost, expense,
liability or loss that is specific to a particular Mortgage Loan or REO Property
and is taken into account in calculating a Realized Loss in respect thereof) for
which the Trust Fund has not and, in the reasonable good faith judgment of the
Securities Administrator, shall not, obtain reimbursement or indemnification
from any other Person.
Xxxxxx Xxx: Federal National Mortgage Association or any successor thereto.
FDIC: Federal Deposit Insurance Corporation or any successor thereto.
Final Certification: The certification substantially in the form of Exhibit
Two to the Custodial Agreement.
Fitch: Fitch Ratings or its successor in interest.
Form 8-K Disclosure Information: As defined in Section 3.18(a).
Xxxxxxx Mac: Xxxxxxx Mac, formerly the Federal Home Loan Mortgage
Corporation, or any successor thereto.
GreenPoint: GreenPoint Mortgage Funding, Inc., or any successor thereto.
GreenPoint Assignment Agreement: The Assignment, Assumption and Recognition
Agreement, dated as of September 1, 2006, among GreenPoint, the Depositor and
the Seller pursuant to which the GreenPoint Servicing Agreement and the rights
of the Seller thereunder (other than the rights to enforce the representations
and warranties with respect to the GreenPoint Loans) were assigned to the
Depositor for the benefit of the Certificateholders.
GreenPoint Loans: The Mortgage Loans serviced by GreenPoint pursuant to the
GreenPoint Servicing Agreement.
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GreenPoint Servicing Agreement: The Master Mortgage Loan Purchase and
Servicing Agreement, dated as of April 1, 2003, among Xxxxxxx Xxxxx Mortgage
Holdings Inc., Terwin Advisors LLC and GreenPoint (as amended and in effect at
any time).
Gross Margin: As to each Mortgage Loan, the fixed percentage set forth in
the related Mortgage Note and indicated on the Mortgage Loan Schedule which
percentage is added to the related Index on each Interest Adjustment Date to
determine (subject to rounding, the minimum and maximum Mortgage Interest Rate
and the Periodic Rate Cap) the Mortgage Interest Rate until the next Interest
Adjustment Date.
Group 4 Available Funds: With respect to any Distribution Date and the
Group 4 Mortgage Loans, an amount equal to the excess of (i) the sum of (a) the
aggregate of the related Monthly Payments received on or prior to the related
Determination Date, (b) Liquidation Proceeds, Insurance Proceeds, Principal
Prepayments, Subsequent Recoveries and other unscheduled recoveries of principal
and interest in respect of the Group 4 Mortgage Loans during the related
Prepayment Period, (c) the aggregate of any amounts received in respect of a
related REO Property withdrawn from any Protected Account and deposited in the
Master Servicer Collection Account for such Distribution Date, (d) the aggregate
of any amounts deposited in the Master Servicer Collection Account by the
related Servicer or the Master Servicer in respect of related Prepayment
Interest Shortfalls for such Distribution Date and (e) the aggregate of any
related Monthly Advances made by the related Servicer or the Master Servicer for
such Distribution Date, over (ii) the sum of (a) related amounts reimbursable or
payable to the related Servicer or the Master Servicer pursuant to Sections 4.03
and 4.05, (b) related amounts deposited in the Master Servicer Collection
Account or the Distribution Account, as the case may be, in error and (c) any
Extraordinary Trust Fund Expenses.
Group 4 Certificates: The Class AV-1A, Class AV-1B and Class A-R
Certificates.
Group 4 Mortgage Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
Group 4 Senior Accelerated Distribution Percentage: With respect to any
Distribution Date, the percentage indicated below:
Group 4 Senior Accelerated
Distribution Date Distribution Percentage
----------------- --------------------------
October 2006 through September 2013 100%
October 2013 through September 2014 Group 4 Senior Percentage, plus 70% of
the Group 4 Subordinate Percentage
October 2014 through September 2015 Group 4 Senior Percentage, plus 60% of
the Group 4 Subordinate Percentage
October 2015 through September 2016 Group 4 Senior Percentage, plus 40% of
the Group 4 Subordinate Percentage
October 2016 through September 2017 Group 4 Senior Percentage, plus 20% of
the Group 4 Subordinate Percentage
October 2017 and thereafter Group 4 Senior Percentage
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provided, however, (i) that any scheduled reduction to the Group 4 Senior
Accelerated Distribution Percentage described above shall not occur as of any
Distribution Date unless either (a)(1)(x) the outstanding principal balance of
Mortgage Loans delinquent 60 days or more (including foreclosure and REO
Property) averaged over the last six months as a percentage of the aggregate
outstanding Class Certificate Balance of the Class M Certificates and the Class
B Certificates, is less than 50%, or (y) the outstanding principal balance of
Mortgage Loans delinquent 60 days or more (including foreclosure and REO
Property) averaged over the last six months, as a percentage of the aggregate
outstanding principal balance of all Mortgage Loans averaged over the last six
months, does not exceed 2% and (2) Realized Losses on the Mortgage Loans to date
for such Distribution Date if occurring during the eighth, ninth, tenth,
eleventh or twelfth year (or any year thereafter) after the Closing Date are
less than 30%, 35%, 40%, 45% or 50%, respectively, of the sum of the Initial
Class Certificate Balances of the Class M Certificates and Class B Certificates
or (b) (1) the aggregate outstanding principal balance of the Mortgage Loans
delinquent 60 days or more (including foreclosure and REO Property) averaged
over the last six months, as a percentage of the aggregate outstanding principal
balance of all Mortgage Loans averaged over the last six months, does not exceed
4% and (2) Realized Losses on the Mortgage Loans on or prior to such
Distribution Date if occurring during the eighth, ninth, tenth, eleventh or
twelfth year (or any year thereafter) after the Closing Date are less than 10%,
15%, 20%, 25% or 30%, respectively, of the sum of the Initial Class Certificate
Balances of the Class M Certificates and Class B Certificates and (ii) that for
any Distribution Date on which the Group 4 Senior Percentage is greater than the
Original Group 4 Senior Percentage, the Group 4 Senior Accelerated Distribution
Percentage and Group 5 Senior Accelerated Distribution Percentage for such
Distribution Date shall be 100%. Notwithstanding the foregoing, upon the
reduction of the aggregate Class Certificate Balance of the Group 4 Certificates
to zero, the Group 4 Senior Accelerated Distribution Percentage will equal 0%.
In addition, on any Distribution Date on or after the Distribution Date
occurring in October 2009, if the current weighted average of the Subordinate
Percentages for the Certificates is equal to or greater than two times the
initial weighted average of the Subordinate Percentages for the Certificates,
and (a) the outstanding principal balance of the Mortgage Loans delinquent 60
days or more (including for this purpose any such Mortgage Loans in foreclosure
or bankruptcy and such Mortgage Loans with respect to which the related
Mortgaged Property has been acquired by the Issuing Entity), averaged over the
last six months, as a percentage of the Subordinate Percentage for that
Distribution Date times the aggregate Stated Principal Balance of the Mortgage
Loans, does not exceed 50% and (b) cumulative Realized Losses on the Mortgage
Loans do not exceed 20% of the initial Subordinate Percentage times the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date,
then, in each case, the Group 4 Senior Accelerated Distribution Percentage for
such Distribution Date will be equal to, prior to the Distribution Date
occurring in October 2009, the Group 4 Senior Percentage plus 50% of the
Subordinate Percentage and, on or after the Distribution Date occurring in
October 2009, the Group 4 Senior Percentage.
Group 4 Senior Percentage: As of any Distribution Date, the lesser of 100%
and a fraction, expressed as a percentage, the numerator of which is the
aggregate Class Certificate Balance of the Group 4 Certificates immediately
prior to such Distribution Date and the
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denominator of which is the aggregate Stated Principal Balance of all of the
Group 4 Mortgage Loans or related REO Properties immediately prior to such
Distribution Date.
Group 4 Senior Principal Distribution Amount: As to any Distribution Date,
the lesser of (a) the balance of the Group 4 Available Funds remaining after the
distribution of all amounts required to be distributed pursuant to subclause
first and second of Section 6.01(A) and (b) the sum of the following:
(A) the Group 4 Senior Percentage for such Distribution Date
times the sum of the following:
(1) the principal portion of each Monthly Payment due during
the related Due Period on each Outstanding Mortgage Loan in Loan Group
4, whether or not received on or prior to the related Determination
Date, minus the principal portion of any Debt Service Reduction;
(2) the Stated Principal Balance of any Group 4 Mortgage
Loan repurchased during the related Prepayment Period pursuant to
Section 2.02 or 2.03 hereof or pursuant to the related Servicing
Agreement; and
(3) the principal portion of all other unscheduled
collections, including Subsequent Recoveries (other than Principal
Prepayments in Full and Curtailments and amounts received in
connection with the liquidation or disposition of a Group 4 Mortgage
Loan, including without limitation Insurance Proceeds, Liquidation
Proceeds and REO Proceeds) received during the related Prepayment
Period to the extent applied by the related Servicer as recoveries of
principal of the related Mortgage Loan pursuant to related Servicing
Agreement;
(B) with respect to the liquidation or other disposition of a
Group 4 Mortgage Loan which occurred during the related Prepayment Period
and did not result in any Extraordinary Losses, an amount equal to the
lesser of (a) the Group 4 Senior Percentage for such Distribution Date
times the Stated Principal Balance of such Group 4 Mortgage Loan and (b)
the Group 4 Senior Accelerated Distribution Percentage for such
Distribution Date times the related unscheduled collections (including
without limitation Insurance Proceeds, Liquidation Proceeds and REO
Proceeds) to the extent applied by the related Servicer or the Master
Servicer as recoveries of principal of the related Mortgage Loan pursuant
to the related Servicing Agreement or this Agreement;
(C) the Group 4 Senior Accelerated Distribution Percentage for
such Distribution Date times the aggregate of all Principal Prepayments in
Full and Curtailments received in the related Prepayment Period with
respect to the Group 4 Mortgage Loans; and
(D) any amounts described in clauses (A), (B) or (C) of this
definition, as determined for any previous Distribution Date, which remain
unpaid after application of amounts previously distributed pursuant to this
clause (D) to the extent that such amounts are not attributable to Realized
Losses which have been allocated to the Class M Certificates or Class B
Certificates.
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Group 4 Subordinate Amount: On any date of determination, the excess of the
aggregate Stated Principal Balance of the Group 4 Mortgage Loans as of such date
over the aggregate Class Certificate Balances of the Group 4 Certificates then
outstanding.
Group 5 Available Funds: With respect to any Distribution Date and the
Group 5 Mortgage Loans, an amount equal to the excess of (i) the sum of (a) the
aggregate of the related Monthly Payments received on or prior to the related
Determination Date, (b) Liquidation Proceeds, Insurance Proceeds, Principal
Prepayments, Subsequent Recoveries and other unscheduled recoveries of principal
and interest in respect of the Group 5 Mortgage Loans during the related
Prepayment Period, (c) the aggregate of any amounts received in respect of a
related REO Property withdrawn from any Protected Account and deposited in the
Master Servicer Collection Account for such Distribution Date, (d) the aggregate
of any amounts deposited in the Master Servicer Collection Account by the
related Servicer or the Master Servicer in respect of related Prepayment
Interest Shortfalls for such Distribution Date and (e) the aggregate of any
related Monthly Advances made by the related Servicer or the Master Servicer for
such Distribution Date, over (ii) the sum of (a) related amounts reimbursable or
payable to the related Servicer or the Master Servicer pursuant to Sections 4.03
and 4.05, (b) related amounts deposited in the Master Servicer Collection
Account or the Distribution Account, as the case may be, in error and (c) any
Extraordinary Trust Fund Expenses.
Group 5 Certificates: The Class AV-2A and Class AV-2B Certificates.
Group 5 Mortgage Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
Group 5 Senior Accelerated Distribution Percentage: With respect to any
Distribution Date, the percentage indicated below:
Group 5 Senior Accelerated
Distribution Date Distribution Percentage
----------------- --------------------------
October 2006 through September 2013 100%
October 2013 through September 2014 Group 5 Senior Percentage, plus 70% of
the Group 5 Subordinate Percentage
October 2014 through September 2015 Group 5 Senior Percentage, plus 60% of
the Group 5 Subordinate Percentage
October 2015 through September 2016 Group 5 Senior Percentage, plus 40% of
the Group 5 Subordinate Percentage
October 2016 through September 2017 Group 5 Senior Percentage, plus 20% of
the Group 5 Subordinate Percentage
October 2017 and thereafter Group 5 Senior Percentage
provided, however, (i) that any scheduled reduction to the Group 5 Senior
Accelerated Distribution Percentage described above shall not occur as of any
Distribution Date unless either (a)(1)(x) the outstanding principal balance of
Mortgage Loans delinquent 60 days or more (including foreclosure and REO
Property) averaged over the last six months as a percentage of
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the aggregate outstanding Class Certificate Balance of the Class M Certificates
and the Class B Certificates, is less than 50%, or (y) the outstanding principal
balance of Mortgage Loans delinquent 60 days or more (including foreclosure and
REO Property) averaged over the last six months, as a percentage of the
aggregate outstanding principal balance of all Mortgage Loans averaged over the
last six months, does not exceed 2% and (2) Realized Losses on the Mortgage
Loans to date for such Distribution Date if occurring during the eighth, ninth,
tenth, eleventh or twelfth year (or any year thereafter) after the Closing Date
are less than 30%, 35%, 40%, 45% or 50%, respectively, of the sum of the Initial
Class Certificate Balances of the Class M Certificates and Class B Certificates
or (b) (1) the aggregate outstanding principal balance of the Mortgage Loans
delinquent 60 days or more (including foreclosure and REO Property) averaged
over the last six months, as a percentage of the aggregate outstanding principal
balance of all Mortgage Loans averaged over the last six months, does not exceed
4% and (2) Realized Losses on the Mortgage Loans on or prior to such
Distribution Date if occurring during the eighth, ninth, tenth, eleventh or
twelfth year (or any year thereafter) after the Closing Date are less than 10%,
15%, 20%, 25% or 30%, respectively, of the sum of the Initial Class Certificate
Balances of the Class M Certificates and Class B Certificates and (ii) that for
any Distribution Date on which the Group 5 Senior Percentage is greater than the
Original Group 5 Senior Percentage, the Group 4 Senior Accelerated Distribution
Percentage and Group 5 Senior Accelerated Distribution Percentage for such
Distribution Date shall be 100%. Notwithstanding the foregoing, upon the
reduction of the aggregate Class Certificate Balance of the Group 5 Certificates
to zero, the Group 5 Senior Accelerated Distribution Percentage will equal 0%.
In addition, on any Distribution Date on or after the Distribution Date
occurring in October 2009, if the current weighted average of the Subordinate
Percentages for the Certificates is equal to or greater than two times the
initial weighted average of the Subordinate Percentages for the Certificates,
and (a) the outstanding principal balance of the Mortgage Loans delinquent 60
days or more (including for this purpose any such Mortgage Loans in foreclosure
or bankruptcy and such Mortgage Loans with respect to which the related
Mortgaged Property has been acquired by the Trust), averaged over the last six
months, as a percentage of the Subordinate Percentage for that Distribution Date
times the aggregate Stated Principal Balance of the Mortgage Loans, does not
exceed 50% and (b) cumulative Realized Losses on the Mortgage Loans do not
exceed 20% of the initial Subordinate Percentage times the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date, then, in each
case, the Group 5 Senior Accelerated Distribution Percentage for such
Distribution Date will be equal to, prior to the Distribution Date occurring in
October 2009, the Group 5 Senior Percentage plus 50% of the Subordinate
Percentage and, on or after the Distribution Date occurring in October 2009, the
Group 5 Senior Percentage.
Group 5 Senior Percentage: As of any Distribution Date, the lesser of 100%
and a fraction, expressed as a percentage, the numerator of which is the
aggregate Class Certificate Balance of the Group 5 Certificates immediately
prior to such Distribution Date and the denominator of which is the aggregate
Stated Principal Balance of all of the Group 5 Mortgage Loans or related REO
Properties immediately prior to such Distribution Date.
Group 5 Senior Principal Distribution Amount: As to any Distribution Date,
the lesser of (a) the balance of the Group 5 Available Funds remaining after the
distribution of all amounts required to be distributed pursuant to Section
6.01(B) and (b) the sum of the following:
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(A) the Group 5 Senior Percentage for such Distribution Date
times the sum of the following:
(1) the principal portion of each Monthly Payment due during
the related Due Period on each Outstanding Mortgage Loan in Loan Group
5, whether or not received on or prior to the related Determination
Date, minus the principal portion of any Debt Service Reduction;
(2) the Stated Principal Balance of any Group 5 Mortgage
Loan repurchased during the related Prepayment Period pursuant to
Section 2.02 or 2.03 hereof or the related Servicing Agreement; and
(3) the principal portion of all other unscheduled
collections, including Subsequent Recoveries (other than Principal
Prepayments in Full and Curtailments and amounts received in
connection with the liquidation or disposition of a Group 5 Mortgage
Loan, including without limitation Insurance Proceeds, Liquidation
Proceeds and REO Proceeds) received during the related Prepayment
Period to the extent applied by the related Servicer as recoveries of
principal of the related Mortgage Loan pursuant to related Servicing
Agreement;
(B) with respect to the liquidation or other disposition of a
Group 5 Mortgage Loan which occurred during the related Prepayment Period
and did not result in any Extraordinary Losses, an amount equal to the
lesser of (a) the Group 5 Senior Percentage for such Distribution Date
times the Stated Principal Balance of such Group 5 Mortgage Loan and (b)
the Group 5 Senior Accelerated Distribution Percentage for such
Distribution Date times the related unscheduled collections (including
without limitation Insurance Proceeds, Liquidation Proceeds and REO
Proceeds) to the extent applied by the related Servicer or the Master
Servicer as recoveries of principal of the related Mortgage Loan pursuant
to the related Servicing Agreement or this Agreement;
(C) the Group 5 Senior Accelerated Distribution Percentage for
such Distribution Date times the aggregate of all Principal Prepayments in
Full and Curtailments received in the related Prepayment Period with
respect to the Group 5 Mortgage Loans; and
(D) any amounts described in clauses (A), (B) or (C) of this
definition, as determined for any previous Distribution Date, which remain
unpaid after application of amounts previously distributed pursuant to this
clause (D) to the extent that such amounts are not attributable to Realized
Losses which have been allocated to the Class M Certificates or Class B
Certificates.
Group 5 Subordinate Amount: On any date of determination, the excess of the
aggregate Stated Principal Balance of the Group 5 Mortgage Loans as of such date
over the aggregate Class Certificate Balances of the Group 5 Certificates then
outstanding.
Highest Priority: As of any date of determination, the Class of Subordinate
Certificates then outstanding with the earliest priority for payments pursuant
to Section 6.01, in the following
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order: Class MV-1, Class MV-2, Class MV-3, Class BV-1, Class BV-2 and Class BV-3
Certificates.
Indemnified Persons: The Trustee, the Master Servicer, the Depositor and
the Securities Administrator and their officers, directors, agents and employees
and, with respect to the Trustee, any separate co-trustee and its officers,
directors, agents and employees.
Independent: When used with respect to any specified Person, any such
Person who (a) is in fact independent of the Depositor, the Master Servicer and
their respective Affiliates, (b) does not have any direct financial interest in
or any material indirect financial interest in the Depositor or the Master
Servicer or any Affiliate thereof, and (c) is not connected with the Depositor
or the Master Servicer or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar
functions; provided, however, that a Person shall not fail to be Independent of
the Depositor or the Master Servicer or any Affiliate thereof merely because
such Person is the beneficial owner of 1% or less of any class of securities
issued by the Depositor or the Master Servicer or any Affiliate thereof, as the
case may be.
Index: The index, if any, specified in a Mortgage Note by reference to
which the related Mortgage Interest Rate will be adjusted from time to time.
Initial Certification: The certification substantially in the form of
Exhibit One to the Custodial Agreement.
Initial Class Certificate Balance: With respect to any Regular Certificate,
the amount designated "Initial Class Certificate Balance" on the face thereof.
Initial Optional Termination Date: The first Distribution Date following
the date on which the aggregate Stated Principal Balance of the Mortgage Loans
is less than 5% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date.
Initial Subordinate Class Percentage: With respect to each Class of
Subordinate Certificates, an amount which is equal to the initial aggregate
Class Certificate Balance of such Class of Subordinate Certificates divided by
the aggregate Stated Principal Balance of all the Mortgage Loans as of the
Cut-off Date as follows:
Class MV-1: 1.80% Class BV-1: 0.65%
Class MV-2: 1.15% Class BV-2: 0.40%
Class MV-3: 0.75% Class BV-3: 0.25%
Insurance Policy: With respect to any Mortgage Loan, any standard hazard
insurance policy, flood insurance policy or title insurance policy.
Insurance Proceeds: Amounts paid by the insurer under any Insurance Policy
covering any Mortgage Loan or Mortgaged Property other than amounts required to
be paid over to the
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Mortgagor pursuant to law or the related Mortgage Note or Security Instrument
and other than amounts used to repair or restore the Mortgaged Property or to
reimburse insured expenses.
Interest Accrual Period: With respect to each Distribution Date, (a) for
each Class of Certificates, the calendar month preceding the month in which such
Distribution Date occurs.
Interest Adjustment Date: With respect to a Mortgage Loan, the date, if
any, specified in the related Mortgage Note on which the Mortgage Interest Rate
is subject to adjustment.
Investor Representation Letter: As defined in Section 5.02(b).
Issuing Entity: Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-AF1.
Latest Possible Maturity Date: With respect to the Certificates, the
Distribution Date in October 2036.
Liquidated Mortgage Loan: Any defaulted Mortgage Loan (including any REO
Property) as to which the related Servicer has determined that all amounts it
expects to recover from or on account of such Mortgage Loan have been recovered.
Liquidation Date: With respect to any Liquidated Mortgage Loan, the date on
which the related Servicer has certified that such Mortgage Loan has become a
Liquidated Mortgage Loan.
Liquidation Expenses: With respect to a Mortgage Loan in liquidation,
unreimbursed expenses paid or incurred by or for the account of the Master
Servicer or the related Servicer in connection with the liquidation of such
Mortgage Loan and the related Mortgaged Property, such expenses including (a)
property protection expenses, (b) property sales expenses, (c) foreclosure and
sale costs, including court costs and reasonable attorneys' fees, and (d)
similar expenses reasonably paid or incurred in connection with liquidation.
Liquidation Proceeds: With respect to any Mortgage Loan, cash received in
connection with the liquidation of a defaulted Mortgage Loan, whether through
trustee's sale, foreclosure sale or otherwise, and amounts received through
Insurance Proceeds and condemnation proceeds.
Loan Group: Loan Group 4 or Loan Group 5, as applicable.
Loan Group 4: The group of Mortgage Loans designated as belonging to Loan
Group 4 on the Mortgage Loan Schedule.
Loan Group 4 Net WAC: The weighted average of the Net Mortgage Rates on the
Group 4 Mortgage Loans weighted on the basis of the respective Stated Principal
Balance of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding such Distribution Date.
Loan Group 5: The group of Mortgage Loans designated as belonging to Loan
Group 5 on the Mortgage Loan Schedule.
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Loan Group 5 Net WAC: The weighted average of the Net Mortgage Rates on the
Group 5 Mortgage Loans weighted on the basis of the respective Stated Principal
Balance of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding such Distribution Date.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the original principal
balance of the related Mortgage Loan and the denominator of which is the
Original Value of the related Mortgaged Property.
Lower Priority: As of any date of determination and with respect to any
Class of Subordinate Certificates, any other Class of Subordinate Certificates
then outstanding with a later priority for payments pursuant to Section 6.01.
Master Servicer: Xxxxx Fargo Bank, N.A. including any successors in
interest who meet the qualifications of the Servicing Agreements and this
Agreement, and any successor master servicer appointed hereunder.
Master Servicer Collection Account: The trust account or accounts created
and maintained pursuant to Section 4.02, which shall be denominated "Xxxxx Fargo
Bank, National Association as Master Servicer for HSBC Bank USA, National
Association, as Trustee f/b/o holders of Xxxxxxx Xxxxx Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, MLMI Series 2006-AF1 - Master Servicer
Collection Account (Stack II)." The Master Servicer Collection Account shall be
an Eligible Account.
Master Servicing Compensation: The meaning specified in Section 3.14.
Maximum Lifetime Mortgage Rate: The maximum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.
Minimum Lifetime Mortgage Rate: The minimum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes in
the applicable Index.
MLML: Xxxxxxx Xxxxx Mortgage Lending, Inc., a Delaware corporation, or any
successor in interest.
Monthly Advance: An advance of principal or interest required to be made by
the applicable Servicer pursuant to the related Servicing Agreement or the
Master Servicer pursuant to Section 6.05.
Monthly Payment: With respect to any Mortgage Loan, the scheduled monthly
payment of principal and interest on such Mortgage Loan which is payable by the
related Mortgagor from time to time under the related Mortgage Note, determined:
(a) after giving effect to (i) any Deficient Valuation and/or Debt Service
Reduction with respect to such Mortgage Loan and (ii) any reduction in the
amount of interest collectible from the related Mortgagor pursuant to the Relief
Act; (b) without giving effect to any extension granted or agreed to by the
related Servicer pursuant to related Servicing Agreement; and (c) on the
assumption that all other amounts, if any, due under such Mortgage Loan are paid
when due.
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Monthly Statement: The statement distributed to Certificateholders pursuant
to Section 6.04.
Moody's: Xxxxx'x Investors Service, Inc. or its successor in interest.
Mortgage: The mortgage, deed of trust or other instrument creating a first
lien on, or first priority security interest in, a Mortgaged Property securing a
Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01(b) pertaining
to a particular Mortgage Loan and any additional documents required to be added
to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate at which interest accrues from time
to time on any Mortgage Loan pursuant to the related Mortgage Note, which rate
is equal to the "Mortgage Interest Rate" set forth with respect thereto on the
Mortgage Loan Schedule.
Mortgage Loan: A mortgage loan transferred and assigned to the Trustee
pursuant to Section 2.01 or Section 2.04 and held as a part of the Trust Fund,
as identified in the Mortgage Loan Schedule, including a mortgage loan the
property securing which has become an REO Property. For the avoidance of doubt,
as defined below, the term "Stack I Mortgage Loan" shall be used within this
Agreement to refer to a mortgage loan transferred and assigned to the Trustee
pursuant to Section 2.01 or Section 2.04 of the Stack I Agreement, including a
mortgage loan the property securing which has become a REO Property.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement
dated as of September 29, 2006, between the Seller and the Depositor, as
purchaser, and all amendments thereof and supplements thereto, attached hereto
as Exhibit J.
Mortgage Loan Schedule: The schedule, attached hereto as Exhibit B with
respect to the Mortgage Loans and as amended from time to time to reflect the
repurchase or substitution of Mortgage Loans pursuant to this Agreement.
Mortgage Note: The originally executed note or other evidence of the
indebtedness of a Mortgagor under the related Mortgage Loan.
Mortgage Pool: The pool of Mortgage Loans, identified on Exhibit B from
time to time, and any REO Properties acquired in respect thereof.
Mortgaged Property: Land and improvements securing the indebtedness of a
Mortgagor under the related Mortgage Loan or, in the case of REO Property, such
REO Property.
Mortgagor: The obligor on a Mortgage Note.
Net Liquidation Proceeds: As to any Liquidated Mortgage Loan, Liquidation
Proceeds net of (i) Liquidation Expenses which are payable therefrom by the
related Servicer or the Master Servicer in accordance with the related Servicing
Agreement or this Agreement and (ii) unreimbursed advances by the related
Servicer or the Master Servicer and Monthly Advances.
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Net Mortgage Rate: With respect to each Mortgage Loan, the Mortgage
Interest Rate in effect from time to time less the Servicing Fee Rate (expressed
as a per annum rate).
Net WAC: The weighted average of the Net Mortgage Rates on the Mortgage
Loans weighted on the basis of the respective Stated Principal Balance of each
such Mortgage Loan as of the beginning of the Due Period immediately preceding
such Distribution Date.
Nonrecoverable Advance: With respect to any Mortgage Loan any advance or
Monthly Advance (i) which was previously made or is proposed to be made by the
applicable Servicer, or the Master Servicer as successor Servicer, or the
Trustee as successor Master Servicer and (ii) which, in the good faith judgment
of the applicable Servicer, the Master Servicer or the Trustee, will not or, in
the case of a proposed advance or Monthly Advance, would not, be ultimately
recoverable by the applicable Servicer, the Master Servicer or the Trustee (as
successor Master Servicer) from Liquidation Proceeds, Insurance Proceeds or
future payments on the Mortgage Loan for which such advance or Monthly Advance
was made.
Offered Certificate: Any Senior Certificate or Offered Subordinate
Certificate issued hereunder, along with the Class AF-1, Class AF-2A, Class
AF-2B, Class AF-2C, Class AF-3A, Class AF-3B, Class PO, Class IO, Class MF-1,
Class MF-2 or Class MF-3 defined and issued pursuant to the terms and conditions
of the Stack I Agreement.
Offered Subordinate Certificates: The Class MV-l, Class MV-2 and Class MV-3
Certificates.
Officer's Certificate: A certificate signed by the Chairman of the Board,
the Vice Chairman of the Board, the President or a Vice President or Assistant
Vice President or other authorized officer of the Master Servicer or the
Depositor, as applicable, and delivered to the Trustee, as required by this
Agreement.
Opinion of Counsel: A written opinion of counsel who is or are acceptable
to the Trustee and who, unless required to be Independent (an "Opinion of
Independent Counsel"), may be internal counsel for the Master Servicer or the
Depositor.
Optional Termination: The termination hereunder of that portion of the
Trust Fund related to the Certificates pursuant to Section 10.01(a) hereof.
Optional Termination Amount: The amount received by the Securities
Administrator in connection with any purchase of all of the Mortgage Loans and
REO Properties pursuant to Section 10.01(b) hereof.
Optional Termination Price: On any date after the Initial Optional
Termination Date, an amount equal to the sum of (A) the aggregate Stated
Principal Balance of each Mortgage Loan (other than any Mortgage Loan that has
become an REO Property) as of the Distribution Date on which the proceeds of the
Optional Termination are distributed to the Certificateholders, plus accrued
interest thereon at the applicable Mortgage Rate as of the Due Date preceding
the Distribution Date on which the proceeds of the Optional Termination are
distributed to Certificateholders and the fair market value of any REO Property,
plus accrued interest thereon as of the Distribution Date on which the proceeds
of the Optional Termination are distributed to
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Certificateholders, (B) any unreimbursed out-of-pocket costs and expenses owed
to the Master Servicer, the Trustee or the Securities Administrator (including
any amounts incurred by the Securities Administrator in connection with
conducting the Auction), a Servicer or the Master Servicer and any unpaid or
unreimbursed Servicing Fees, Monthly Advances and Servicing Advances, (C) any
unreimbursed costs, penalties and/or damages incurred by the Trust Fund in
connection with any violation relating to any of the Mortgage Loans of any
predatory or abusive lending law and (D) in the event an Auction has been
conducted, all reasonable fees and expenses incurred by the Securities
Administrator to conduct the Auction.
Original Value: The lesser of (i) the Appraised Value or (ii) the sales
price of a Mortgaged Property at the time of origination of a Mortgage Loan,
except in instances where either clauses (i) or (ii) is unavailable, the other
may be used to determine the Original Value, or if both clauses (i) and (ii) are
unavailable, Original Value may be determined from other sources reasonably
acceptable to the Depositor.
Outstanding Mortgage Loan: With respect to any Due Date, a Mortgage Loan
which, prior to such Due Date, was not the subject of a Principal Prepayment in
Full, did not become a Liquidated Mortgage Loan and was not purchased or
replaced.
Outstanding Principal Balance: As of the time of any determination, the
principal balance of a Mortgage Loan remaining to be paid by the Mortgagor, or,
in the case of an REO Property, the principal balance of the related Mortgage
Loan remaining to be paid by the Mortgagor at the time such property was
acquired by the Trust Fund less any Net Liquidation Proceeds with respect
thereto to the extent applied to principal.
Ownership Interest: As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
Pass-Through Rate: With respect to the Certificates and any Distribution
Date, the following:
(i) For the Class AV-1A, Class AV-1B and Class A-R Certificates
on each Distribution Date, a per annum rate equal to the Loan Group 4
Net WAC for such Distribution Date.
(ii) For the Class AV-2A and Class AV-2B Certificates on each
Distribution Date, a per annum rate equal to the Loan Group 5 Net WAC
for such Distribution Date.
(iii) For each class of Class M Certificates and Class B
Certificates on each Distribution Date a per annum rate equal to the
Subordinate Net WAC.
(iv) The Class P Certificates do not have a Pass-Through Rate.
Paying Agent: The Securities Administrator or any successor Paying Agent
appointed by the Securities Administrator.
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Percentage Interest: With respect to any Certificate (other than the Class
A-R and Class P Certificates), a fraction, expressed as a percentage, the
numerator of which is the Initial Class Certificate Balance represented by such
Certificate and the denominator of which is the Initial Class Certificate
Balance of the related Class. With respect to the Class A-R and Class P
Certificates, the Percentage Interest evidenced thereby shall be as specified on
the face thereof, or otherwise, be equal to 100%.
Periodic Rate Cap: With respect to each Mortgage Loan, the maximum
adjustment that can be made to the Mortgage Interest Rate on each Interest
Adjustment Date in accordance with its terms, regardless of changes in the
applicable Index.
Permitted Investments: Any one or more of the following obligations or
securities held in the name of the Trustee for the benefit of the
Certificateholders (provided that such obligation or security must be a
"permitted investment" within the meaning of such term as provided for in
Section 860G(a)(5) of the Code):
(i) direct obligations of, and obligations the timely payment of which
are fully guaranteed by the United States of America or any agency or
instrumentality of the United States of America the obligations of which
are backed by the full faith and credit of the United States of America;
(ii) (a) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States of America or any state
thereof (including the Trustee or the Master Servicer or its Affiliates
acting in its commercial banking capacity) and subject to supervision and
examination by federal and/or state banking authorities, provided that the
commercial paper and/or the short-term debt rating and/or the long-term
unsecured debt obligations of such depository institution or trust company
at the time of such investment or contractual commitment providing for such
investment have the Applicable Credit Rating or better from each Rating
Agency and (b) any other demand or time deposit or certificate of deposit
that is fully insured by the Federal Deposit Insurance Corporation;
(iii) repurchase obligations with respect to (a) any security
described in clause (i) above or (b) any other security issued or
guaranteed by an agency or instrumentality of the United States of America,
the obligations of which are backed by the full faith and credit of the
United States of America, in either case entered into with a depository
institution or trust company (acting as principal) described in clause
(ii)(a) above where the Trustee holds the security therefor;
(iv) securities bearing interest or sold at a discount issued by any
corporation (including the Trustee or the Master Servicer or its
Affiliates) incorporated under the laws of the United States of America or
any state thereof that have the Applicable Credit Rating or better from
each Rating Agency at the time of such investment or contractual commitment
providing for such investment; provided, however, that securities issued by
any particular corporation will not be Permitted Investments to the extent
that investments therein will cause the then outstanding principal amount
of securities issued by such corporation and held as part of the Issuing
Entity to exceed 10% of the aggregate
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Outstanding Principal Balances of all the Mortgage Loans and Permitted
Investments held as part of the Issuing Entity;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than one year after the date of issuance thereof)
having the Applicable Credit Rating or better from each Rating Agency at
the time of such investment;
(vi) a Reinvestment Agreement issued by any bank, insurance company or
other corporation or entity;
(vii) any other demand, money market or time deposit, obligation,
security or investment as may be acceptable to either Rating Agency as
evidenced in writing by each Rating Agency to the Trustee or Master
Servicer;
(viii) any money market or common trust fund having the Applicable
Credit Rating or better from each Rating Agency (if such fund is rated by
each Rating Agency), including any such fund for which the Trustee or
Master Servicer or any affiliate of the Trustee or Master Servicer acts as
a manager or an advisor; provided, however, that no instrument or security
shall be a Permitted Investment if such instrument or security evidences a
right to receive only interest payments with respect to the obligations
underlying such instrument or if such security provides for payment of both
principal and interest with a yield to maturity in excess of 120% of the
yield to maturity at par or if such instrument or security is purchased at
a price greater than par; and
(ix) units of a taxable money-market portfolio having the highest
rating assigned by each Rating Agency (except if S&P is a Rating Agency,
"AAAm" or "AAAM-G" by S&P) and restricted to obligations issued or
guaranteed by the United States of America or entities whose obligations
are backed by the full faith and credit of the United States of America and
repurchase agreements collateralized by such obligations.
Permitted Transferee: Any Person other than a Disqualified Organization or
an "electing large partnership" (as defined by Section 775 of the Code).
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Physical Certificate: The Residual Certificate.
Pooling and Servicing Agreement: The Pooling and Servicing Agreement
relating to the Mortgage Pass-Through Certificates, MLMI Series 2006-AF1,
jointly comprised of the Stack I Agreement and this Agreement.
Prepayment Distribution Trigger: With respect to any Distribution Date and
any Class of Subordinate Certificates (other than the Class MV-1 Certificates),
a test that shall be satisfied if the fraction (expressed as a percentage) equal
to the sum of the Class Certificate Balances of
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such Class and each Class of Subordinate Certificates with a Lower Priority
than such Class immediately prior to such Distribution Date divided by the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date is greater than or equal
to the sum of the related Initial Subordinate Class Percentages of such Classes
of Subordinate Certificates.
Prepayment Interest Shortfall: As to any Distribution Date and any Mortgage
Loan (other than a Mortgage Loan relating to an REO Property) that was the
subject of (a) a Principal Prepayment in Full during the related Prepayment
Period, an amount equal to the excess of one month's interest at the Net
Mortgage Rate on the Stated Principal Balance of such Mortgage Loan over the
amount of interest (adjusted to the Net Mortgage Rate) paid by the Mortgagor for
such Prepayment Period to the date of such Principal Prepayment in Full or (b) a
Curtailment during the prior calendar month, an amount equal to one month's
interest at the Net Mortgage Rate on the amount of such Curtailment. The
obligations of the Master Servicer in respect of any Prepayment Interest
Shortfall are set forth in Section 6.06.
Prepayment Penalty: With respect to any Prepayment Period, any prepayment
premium, charge or penalty payable by a Mortgagor in connection with any
Principal Prepayment on the Prepayment Penalty Mortgage Loans.
Prepayment Penalty Mortgage Loans: Any of the Mortgage Loans that are
subject to existing prepayment premiums.
Prepayment Period: With respect to any Mortgage Loan and any Distribution
Date, the calendar month preceding the month in which such Distribution Date
occurs.
Primary Mortgage Insurance Policy: Any primary mortgage guaranty insurance
policy issued in connection with a Mortgage Loan which provides compensation to
a Mortgage Note holder in the event of default by the obligor under such
Mortgage Note or the related Security Instrument, if any or any replacement
policy therefor through the related Interest Accrual Period for such Class
relating to a Distribution Date.
Principal Prepayment: Any Principal Prepayment in full or Curtailment or
other recovery of principal on a Mortgage Loan which is received in advance of
its scheduled Due Date to the extent that it is not accompanied by an amount as
to interest representing scheduled interest due on any date or dates in any
month or months subsequent to the month of prepayment, including Insurance
Proceeds and Repurchase Proceeds, but excluding the principal portion of Net
Liquidation Proceeds.
Principal Prepayment in Full: Any Principal Prepayment made by a Mortgagor
of the entire unpaid principal balance of the Mortgage Loan.
Private Certificates: Any of the Class BV-1, Class BV-2, Class BV-3 and
Class P Certificates.
Prospectus Supplement: The Prospectus Supplement dated July 28, 2006,
relating to the public offering of the Offered Certificates.
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Protected Account: An account established and maintained for the benefit of
Certificateholders by each Servicer with respect to the related Mortgage Loans
and with respect to REO Property pursuant to the respective Servicing Agreement.
The Protected Account shall be an Eligible Account.
Purchase Price: With respect to any Mortgage Loan or REO Property to be
purchased pursuant to or as contemplated by Section 2.03 or 10.01, and as
confirmed by an Officers' Certificate from the Master Servicer to the Trustee,
an amount equal to the sum of (i) 100% of the Stated Principal Balance thereof
as of the date of purchase (or such other price as provided in Section 10.01),
(ii) accrued interest on such Stated Principal Balance at the applicable
Mortgage Interest Rate in effect from time to time from the Due Date as to which
interest was last covered by a payment by the Mortgagor or an advance by the
related Servicer or Master Servicer, which payment or advance had as of the date
of purchase been distributed to Certificateholders, through the end of the
calendar month in which the purchase is to be effected less any unreimbursed
Monthly Advances and any unpaid Servicing Fees payable to the purchaser of the
Mortgage Loan and (iii) any costs and damages incurred by the Issuing Entity in
connection with any violation by such Mortgage Loan or REO Property of any
predatory or abusive-lending law.
Rating Agencies: Xxxxx'x and S&P.
Realized Loss: With respect to a Liquidated Mortgage Loan, the amount by
which the remaining unpaid principal balance of the Mortgage Loan exceeds the
amount of Liquidation Proceeds applied to the principal balance of the related
Mortgage Loan. To the extent the Master Servicer receives Subsequent Recoveries
with respect to any Mortgage Loan, the amount of the Realized Loss with respect
to that Mortgage Loan will be reduced to the extent such recoveries are applied
to reduce the Class Certificate Balance of any Class of Certificates on any
Distribution Date.
Record Date: With respect to each Distribution Date and each class of
Offered Certificates, the close of business on the last Business Day of the
month immediately preceding the month in which the related Distribution Date
occurs.
Refinanced Mortgage Loan: Any Mortgage Loan the proceeds of which were not
used to purchase the related Mortgaged Property.
Regular Certificates: Any of the Class AV-1A, Class AV-1B, Class AV-2A,
Class AV-2B, Class MV-1, Class MV-2, Class MV-3, Class BV-1, Class BV-2 or Class
BV-3 Certificates.
Regulation AB: Subpart 22.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. Sections 229.1100-229.1123, as such may be amended from time to time,
and subject to such clarification and interpretation as have been provided by
the Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed Reg. 1,506, 1,531 (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.
Reinvestment Agreements: One or more reinvestment agreements, acceptable to
each of the Rating Agencies, from a bank, insurance company or other corporation
or entity (including the Trustee).
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Relevant Servicing Criteria: The Servicing Criteria applicable to the
various parties, as set forth on Exhibit K hereto. For clarification purposes,
multiple parties can have responsibility for the same Relevant Servicing
Criteria. With respect to a Servicing Function Participant engaged by the Master
Servicer, the Securities Administrator, the Trustee, the Custodian or a
Servicer, the term "Relevant Servicing Criteria" may refer to one or more
discrete functions specified in the Relevant Servicing Criteria applicable to
such parties.
Relief Act: The Servicemembers Civil Relief Act, as amended.
Relief Act Mortgage Loan: Any Mortgage Loan as to which the Monthly Payment
thereof has been reduced due to the application of the Relief Act.
REMIC: Each pool of assets in the Trust Fund designated as a REMIC as
described in the Preliminary Statement.
REMIC Opinion: An Opinion of Counsel to the effect that a contemplated
action will neither adversely affect the status as a REMIC of any REMIC created
hereunder nor subject any such REMIC to any tax under the REMIC Provisions.
REMIC Provisions: The provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations, including proposed regulations and rulings, and administrative
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
REMIC 1: As described in the Preliminary Statement.
REMIC 1 Interest: Each class of interest in REMIC 1 as described in the
Preliminary Statement.
REMIC 1 Regular Interest: Each of the REMIC 1 Interests other than the
Class LT1-R Interest.
REMIC 1 Subordinate Balance Ratio: The ratio among the uncertificated
principal balances of each of the REMIC 1 Interests ending with the designation
"A" that is equal to the ratio among, with respect to each such REMIC 1
Interest, the excess of (x) the aggregate Stated Principal Balance of the
Mortgage Loans in the related Loan Group over (y) the aggregate Class
Certificate Balance of the Certificates in the Certificate Group related to such
Loan Group.
REMIC 2: Not applicable.
REMIC 2 Interest: Not applicable.
REMIC 2 Regular Interest: Not applicable.
REO Property: A Mortgaged Property acquired by the Servicer or Master
Servicer on behalf of the Trust Fund through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.15 in connection with a defaulted
Mortgage Loan.
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Reportable Event: As defined in Section 3.18(a).
Reporting Servicer: As defined in Section 3.18(h).
Repurchase Proceeds: The Repurchase Price in connection with any repurchase
of a Mortgage Loan by the Seller and any cash deposit in connection with the
substitution of a Mortgage Loan.
Request for Release: A request for release in the form attached hereto as
Exhibit D.
Required Insurance Policy: With respect to any Mortgage Loan, any insurance
policy which is required to be maintained from time to time under this Agreement
with respect to such Mortgage Loan.
Residual Certificate: The Class A-R Certificate.
Residual Interest: The Residual Certificate, other than the portion thereof
representing the right to payments in respect of (i) the Class LT1-R Interest
and (ii) the residual interest in any REMIC created under the Stack I Agreement.
Responsible Officer: Any officer assigned to the Corporate Trust Office (or
any successor thereto), including any Vice President, Assistant Vice President,
Trust Officer, any Assistant Secretary, any trust officer or any other officer
of the Trustee or Securities Administrator customarily performing functions
similar to those performed by any of the above designated officers and having
direct responsibility for the administration of this Agreement, and any other
officer of the Trustee or Securities Administrator to whom a matter arising
hereunder may be referred because of such officers familiarity with the subject
matter thereof.
Rule 144A Letter: The certificate to be furnished by each purchaser of a
Private Certificate (which is also a Physical Certificate) which is a Qualified
Institutional Buyer as defined under Rule 144A promulgated under the Securities
Act, substantially in the form set forth as Exhibit F-3 hereto.
Xxxxxxxx-Xxxxx Act: The Xxxxxxxx-Xxxxx Act of 2002 and the rules and
regulations of the Commission promulgated thereunder (including any
interpretations thereof by the Commission's staff).
Xxxxxxxx-Xxxxx Certification: A written certification signed by an officer
of the Master Servicer that complies with (i) the Xxxxxxxx-Xxxxx Act, and (ii)
Exchange Act Rules 13a-14(d) and 15d-14(d), as in effect from time to time;
provided that if, after the Closing Date (a) the Xxxxxxxx-Xxxxx Act is amended,
(b) the Rules referred to in clause (ii) are modified or superseded by any
subsequent statement, rule or regulation of the Commission or any statement of a
division thereof, or (c) any future releases, rules and regulations are
published by the Commission from time to time pursuant to the Xxxxxxxx-Xxxxx
Act, which in any such case affects the form or substance of the required
certification and results in the required certification being, in the reasonable
judgment of the Master Servicer, materially more onerous that then form of the
required certification as of the Closing Date, the Xxxxxxxx-Xxxxx Certification
shall be as
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agreed to by the Master Servicer and the Depositor following a negotiation in
good faith to determine how to comply with any such new requirements.
S&P: Standard and Poor's, a division of The XxXxxx-Xxxx Companies, Inc. or
its successor in interest.
Scheduled Payment: With respect to any Mortgage Loan and any month, the
scheduled payment or payments of principal and interest due during such month on
such Mortgage Loan which either is payable by a Mortgagor in such month under
the related Mortgage Note or, in the case of REO Property, would otherwise have
been payable under the related Mortgage Note.
Scheduled Principal: The principal portion of any Scheduled Payment.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Xxxxx Fargo Bank, N.A., or any successor in
interest, or any successor securities administrator appointed as herein
provided.
Security Agreement: With respect to a Cooperative Loan, the agreement
creating a security interest in favor of the originator in the related
Cooperative Stock.
Security Instrument: A written instrument creating a valid first lien on a
Mortgaged Property securing a Mortgage Note, which may be any applicable form of
mortgage, deed of trust, deed to secure debt or security deed, including any
riders or addenda thereto.
Seller: Xxxxxxx Xxxxx Mortgage Lending, Inc., a Delaware corporation, or
any successor in interest.
Senior Accelerated Distribution Percentage: The Group 4 or Group 5 Senior
Accelerated Distribution Percentage, as applicable.
Senior Certificates: The Class AV-1A Certificates, Class AV-1B
Certificates, Class AV-2A Certificates, Class AV-2B Certificates and Class A-R
Certificates.
Senior Percentage: The Group 4 Senior Percentage or Group 5 Senior
Percentage, as applicable.
Senior Principal Distribution Amount: The Group 4 Senior Principal
Distribution Amount or Group 5 Senior Principal Distribution Amount, as
applicable.
Servicer: With respect to each Mortgage Loan, Washington Mutual Bank,
GreenPoint, or Xxxxx Fargo, as applicable and as specified on the Mortgage Loan
Schedule.
Servicer Remittance Date: With respect to each Mortgage Loan, the date set
forth in the related Servicing Agreement.
Servicing Advances: With respect to any Mortgage Loan, all customary,
reasonable and necessary "out-of-pocket" costs and expenses incurred by the
Servicer in the performance of its servicing obligations, including, but not
limited to, the cost of (i) preservation, restoration,
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protection and repair of a Mortgaged Property or cooperative unit, as
applicable, (ii) any enforcement or judicial proceedings with respect to a
Mortgage Loan, including foreclosure actions and (iii) the management and
liquidation of REO Property.
Servicing Agreements: The Washington Mutual Bank Servicing Agreement,
GreenPoint Servicing Agreement and Xxxxx Fargo Servicing Agreement.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing Fee: As to any Mortgage Loan and Distribution Date, an amount
equal to the product of (i) the Stated Principal Balance of such Mortgage Loan
as of the Due Date in the preceding calendar month and (ii) the applicable
Servicing Fee Rate. Such fee shall be payable monthly, computed on the basis of
the same principal amount and period respectively which any related interest
payment on a Mortgage Loan is computed. If the Index and/or Gross Margin are
adjusted as provided in the related Mortgage Note, the Servicing Fee shall be
the rate per annum in effect immediately prior to such adjustment.
Servicing Fee Rate: As to any Mortgage Loan, a per annum rate as set forth
in the Mortgage Loan Schedule.
Servicing Function Participant: Any Sub-Servicer, Subcontractor or any
other Person engaged by a Servicer, the Custodian, the Master Servicer, the
Paying Agent, the Securities Administrator and the Trustee.
Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
names and specimen signatures appear on a list of servicing officers furnished
to the Trustee by the Master Servicer, as such list may be amended from time to
time.
Stack I Agreement: The Stack I Pooling and Servicing Terms dated as of
September 1, 2006.
Stack I Certificate: Any mortgage pass-through certificate issued pursuant
to the Stack I Agreement, evidencing a beneficial ownership interest in that
portion of the Trust Fund related to the Stack I Mortgage Loans set forth on the
Stack I Mortgage Loan Schedule, signed and countersigned by the Securities
Administrator.
Stack I Mortgage Loan: A mortgage loan transferred and assigned to the
Trustee pursuant to Section 2.01 or Section 2.04 of the Stack I Agreement and
held as a part of the Trust Fund, as identified in the Stack I Mortgage Loan
Schedule, including a mortgage loan the property securing which has become an
REO Property.
Stack I Mortgage Loan Schedule: The schedule, attached to the Stack I
Agreement as Exhibit B with respect to the Stack I Mortgage Loans and as amended
from time to time to reflect the repurchase or substitution of Stack I Mortgage
Loans pursuant to the Stack I Agreement.
Startup Day: The Closing Date.
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Stated Principal Balance: With respect to any Mortgage Loan and Due Date,
the unpaid principal balance of such Mortgage Loan as of such Due Date, as
specified in the amortization schedule at the time relating thereto (before any
adjustment to such amortization schedule by reason of any moratorium or similar
waiver or grace period), after giving effect to any previous partial prepayments
and Liquidation Proceeds received and to the payment of principal due on such
Due date and irrespective of any delinquency in payment by the related
Mortgagor.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing of Mortgage Loans but performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with respect to
Mortgage Loans under the direction or authority of any Servicer (or a
Sub-Servicer of any Servicer), the Master Servicer, the Trustee, the Custodian
or the Securities Administrator.
Subordinate Certificates: The Class MV-1, Class MV-2, Class MV-3, Class
BV-1, Class BV-2 and Class BV-3 Certificates.
Subordinate Net WAC: For any Distribution Date, a per annum rate equal to
the weighted average of the Loan Group 4 Net WAC and the Loan Group 5 Net WAC,
weighted in proportion to the results of subtracting from the aggregate Stated
Principal Balance of the Mortgage Loans of each Loan Group as of the beginning
of the Due Period immediately preceding such Distribution Date, the aggregate
Class Certificate Balance of the Senior Certificates related to each such Loan
Group.
Subordinate Percentage: For any Distribution Date, the difference between
100% and the Senior Percentage for such date.
Subordinate Prepayment Percentage: With respect to any Distribution Date
and each Class of Subordinate Certificates, under the applicable circumstances
set forth below, the respective percentages set forth below:
(i) For any Distribution Date prior to the Distribution Date in
October 2013 (unless the Class Certificate Balances of the Senior
Certificates have been reduced to zero), 0%.
(ii) For any Distribution Date for which clause (i) does not apply,
and on which any Class of Subordinate Certificates are outstanding:
(a) in the case of the Class of Subordinate Certificates then
outstanding with the Highest Priority and each other Class of
Subordinate Certificates for which the related Prepayment Distribution
Trigger has been satisfied, a fraction, expressed as a percentage, the
numerator of which is the Class Certificate Balance of such Class
immediately prior to such date and the denominator of which is the sum
of the Class Certificate Balances immediately prior to such date of
(1) the Class of Subordinate Certificates then outstanding with the
Highest Priority and (2) all other Classes of Subordinate Certificates
for which the respective Prepayment Distribution Triggers have been
satisfied; and
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(b) in the case of each other Class of Subordinate Certificates
for which the Prepayment Distribution Triggers have not been
satisfied, 0%; and
(iii) Notwithstanding the foregoing, if the application of the
foregoing percentages on any Distribution Date as provided in Section 6.01
of this Agreement (determined without regard to the proviso in the
definition of "Subordinate Principal Distribution Amount") would result in
a distribution in respect of principal of any Class or Classes of
Subordinate Certificates in an amount greater than the remaining Class
Certificate Balance thereof (any such class, a "Maturing Class"), then: (a)
the Subordinate Prepayment Percentage of each Maturing Class shall be
reduced to a level that, when applied as described above, would exactly
reduce the Class Certificate Balance of such Class to zero; (b) the
Subordinate Prepayment Percentage of each other Class of Subordinate
Certificates (any such Class, a "Non-Maturing Class") shall be recalculated
in accordance with the provisions in paragraph (ii) above, as if the Class
Certificate Balance of each Maturing Class had been reduced to zero (such
percentage as recalculated, the "Recalculated Percentage"); (c) the total
amount of the reductions in the Subordinate Prepayment Percentages of the
Maturing Class or Classes pursuant to clause (a) of this sentence,
expressed as an aggregate percentage, shall be allocated among the
Non-Maturing Classes in proportion to their respective Recalculated
Percentages (the portion of such aggregate reduction so allocated to any
Non-Maturing Class, the "Adjustment Percentage"); and (d) for purposes of
such Distribution Date, the Subordinate Prepayment Percentage of each
Non-Maturing Class shall be equal to the sum of (1) the Subordinate
Prepayment Percentage thereof, calculated in accordance with the provisions
in paragraph (ii) above as if the Class Certificate Balance of each
Maturing Class had not been reduced to zero, plus (2) the related
Adjustment Percentage.
Subordinate Principal Distribution Amount: With respect to any Distribution
Date and each Class of Class M Certificates and Class B Certificates, the sum of
the following:
(i) the product of (x) the related Class M Percentage or Class B
Percentage for such Class and (y) the aggregate of the following amounts:
(1) the principal portion of each Monthly Payment due during
the related Due Period on each Outstanding Mortgage Loan, whether or
not received on or prior to the related Determination Date, minus the
principal portion of any Debt Service Reduction;
(2) the Stated Principal Balance of any Mortgage Loan
repurchased during the related Prepayment Period pursuant to Section
2.02 or 2.03; and
(3) the principal portion of all other unscheduled
collections (other than Principal Prepayments in Full and Curtailments
and amounts received in connection with the liquidation or other
disposition of a Mortgage Loan, including without limitation Insurance
Proceeds, Liquidation Proceeds and REO Proceeds) received during the
related Prepayment Period to the extent applied by the related
Servicer as recoveries of principal of the related Mortgage Loan
pursuant to the related Servicing Agreement;
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(ii) such Class's pro rata share, based on the Class Certificate
Balance of each Class of Class M Certificates and Class B Certificates then
outstanding, of, with respect to each Mortgage Loan for which a liquidation
or other disposition occurred during the related Prepayment Period and did
not result in any Extraordinary Losses, an amount equal to the related
unscheduled collections (including without limitation Insurance Proceeds,
Liquidation Proceeds and REO Proceeds) to the extent applied by the related
Servicer as recoveries of principal of the related Mortgage Loan pursuant
to the related Servicing Agreement, to the extent such collections are not
otherwise distributed to the Senior Certificates;
(iii) the product of (x) the related Subordinate Prepayment
Percentage for such Distribution Date and (y) the aggregate of all
Principal Prepayments in Full and Curtailments of the Mortgage Loans
received in the related Prepayment Period, to the extent not payable to the
Senior Certificates; and
(iv) any amounts described in clauses (i), (ii) and (iii) as
determined for any previous Distribution Date, that remain undistributed to
the extent that such amounts are not attributable to Realized Losses which
have been allocated to a Class of Subordinate Certificates;
provided, however, that such amount shall in no event exceed the outstanding
Class Certificate Balance of such Class of Certificates immediately prior to
such date.
Subsequent Recoveries: Any amount recovered by a Servicer or the Master
Servicer (net of reimbursable expenses) with respect to a Liquidated Mortgage
Loan with respect to which a Realized Loss was incurred after the liquidation or
disposition of such Mortgage Loan.
Sub-Servicer: Any Person that services Mortgage Loans on behalf of a
Servicer, and is responsible for the performance (whether directly or through
sub-servicers or Subcontractors) of servicing functions required to be performed
under this Agreement, any related Servicing Agreement or any sub-servicing
agreement that are identified in Item 1122(d) of Regulation AB.
Substitute Mortgage Loan: With respect to any Mortgage Loan, which is
tendered to the Trustee pursuant to the related Servicing Agreement, the
Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable, in each case, (i) which has an Outstanding Principal Balance not
greater nor materially less than the Mortgage Loan for which it is to be
substituted; (ii) which has a Mortgage Interest Rate and Net Rate not less than,
and not materially greater than, such Mortgage Loan; (iii) which has a maturity
date not materially earlier or later than such Mortgage Loan and not later than
the latest maturity date of any Mortgage Loan; (iv) which is of the same
property type and occupancy type as such Mortgage Loan; (v) which has a
Loan-to-Value Ratio not greater than the Loan-to-Value Ratio of such Mortgage
Loan; (vi) which is current in payment of principal and interest as of the date
of substitution; (vii) as to which the payment terms do not vary in any material
respect from the payment terms of the Mortgage Loan for which it is to be
substituted and (viii) which has a Gross Margin, Periodic Rate Cap and Maximum
Lifetime Mortgage Rate no less than those of such Mortgage Loan, has the same
Index and interval between Interest Adjustment Dates as such Mortgage Loan, and
a Minimum Lifetime Mortgage Rate no lower than that of such Mortgage Loan.
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Tax Matters Person: The Securities Administrator or any successor thereto
or assignee thereof shall serve as tax administrator hereunder and as agent for
the Tax Matters Person. The Holder of the Residual Certificates shall be the Tax
Matters Person for the related REMIC, as more particularly set forth in Section
9.12 hereof.
Transfer: Any direct or indirect transfer or sale of any Ownership Interest
in a certificate.
Transferor Representation Letter: As defined in Section 5.02(b).
Trust Fund: The corpus of the Issuing Entity created pursuant to Article II
of this Agreement and Article II of the Stack I Agreement.
Trustee: HSBC Bank USA, National Association, or its successor in interest,
or any successor trustee appointed as herein provided.
Undercollateralized Amount: On any Distribution Date, the excess of (x) the
aggregate Class Certificate Balance of any Class or Classes of Senior
Certificates related to a Loan Group immediately prior to such Distribution Date
over (y) the aggregate Stated Principal Balance of the Mortgage Loans in its
related Loan Group as of the beginning of the related Due Period.
Undercollateralized Senior Certificates: As defined in Section 6.01(I).
Underlying Seller: With respect to each Mortgage Loan, Washington Mutual
Bank, Washington Mutual Mortgage, GreenPoint or Xxxxx Fargo, as indicated on the
Mortgage Loan Schedule.
Uninsured Cause: Any cause of damage to a Mortgaged Property or related REO
Property such that the complete restoration of such Mortgaged Property or
related REO Property is not fully reimbursable by the hazard insurance policies
required to be maintained pursuant the related Servicing Agreement, without
regard to whether or not such policy is maintained.
United States Person: A citizen or resident of the United States, a
corporation or partnership (including an entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States or any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations),
provided that, for purposes solely of the Class A-R Certificate, no partnership
or other entity treated as a partnership for United States federal income tax
purposes shall be treated as a United States Person unless all persons that own
an interest in such partnership either directly or through any entity that is
not a corporation for United States federal income tax purposes are United
States Persons, or an estate whose income is subject to United States federal
income tax regardless of its source, or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more such United States Persons have the authority to control
all substantial decisions of the trust. To the extent prescribed in regulations
by the Secretary of the Treasury, which have not yet been issued, a trust which
was in existence on August 20, 1996 (other than a trust treated as owned by the
grantor under subpart E of part I of subchapter J of chapter 1 of the Code), and
which was treated as a United States person on August 20, 1996 may elect to
continue to be treated as a United States person notwithstanding the previous
sentence.
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Upper Tier REMIC: As described in the Preliminary Statement.
Upper Tier REMIC Regular Interest: Each of the Class AV-1A Certificates,
Class AV-1B Certificates, the Class AV-2A Certificates, the Class AV-2B
Certificates, the Class MV-1 Certificates, the Class MV-2 Certificates, the
Class MV-3 Certificates, the Class BV-1 Certificates, the Class BV-2
Certificates and the Class BV-3 Certificates.
Voting Rights: The portion of the voting rights of all of the Certificates
which is allocated to any Certificate. The Voting Rights allocated among Holders
of such Certificates outstanding shall be the fraction, expressed as a
percentage, the numerator of which is the aggregate Class Certificate Balance of
all the Certificates of such Class then outstanding and the denominator of which
is the aggregate Class Certificate Balance of all the Certificates then
outstanding (other than the Class A-R Certificate). 99.00% of all Voting Rights
will be allocated among all holders of the Certificates (other than the Class
A-R Certificate) in proportion to their then outstanding Class Certificate
Balances, and 1.00% of the Voting Rights shall be allocated to the Class A-R
Certificate; provided, however, that any Certificate registered in the name of
the Master Servicer, the Depositor or the Securities Administrator or any of
their respective affiliates shall not be included in the calculation of Voting
Rights. The Class P Certificates shall have no voting rights.
Washington Mutual Bank: Washington Mutual Bank, or any successor thereto.
Washington Mutual Bank Assignment Agreement: The Assignment, Assumption and
Recognition Agreement, dated as of September 1, 2006, among Washington Mutual
Bank, the Depositor and the Seller pursuant to which the Washington Mutual Bank
Servicing Agreement and the rights of the Seller thereunder (other than the
rights to enforce the representations and warranties with respect to the
Washington Mutual Bank Mortgage Loans) were assigned to the Depositor for the
benefit of the Certificateholders.
Washington Mutual Bank Mortgage Loans: The Mortgage Loans serviced by
Washington Mutual Bank pursuant to the Washington Mutual Servicing Agreement.
Washington Mutual Servicing Agreement: The Servicing Agreement dated as of
November 1, 2005, among Xxxxxxx Xxxxx Mortgage Lending Inc. and Washington
Mutual Bank, as amended by the Regulation AB Amendment dated March 1, 2006.
Xxxxx Fargo: Xxxxx Fargo Bank, N.A., or any successor thereto.
Xxxxx Fargo Assignment Agreement: The Assignment, Assumption and
Recognition Agreement, dated as of September 1, 2006, among Xxxxx Fargo Bank,
N.A., the Depositor and the Seller pursuant to which the Xxxxx Fargo Servicing
Agreement and the rights of the Seller thereunder (other than the rights to
enforce the representations and warranties with respect to the Xxxxx Fargo
Mortgage Loans) were assigned to the Depositor for the benefit of the
Certificateholders.
Xxxxx Fargo Mortgage Loans: The Mortgage Loans serviced by Xxxxx Fargo
pursuant to the Xxxxx Fargo Servicing Agreement.
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Xxxxx Fargo Servicing Agreement: The Seller's Warranties and Servicing
Agreement (2006-W60), dated as of July 1, 2006, among Xxxxxxx Xxxxx Mortgage
Lending Inc. and Xxxxx Fargo Bank, N.A. (as amended and in effect at any time).
Section 1.02 Accounting.
Unless otherwise specified herein, for the purpose of any definition or
calculation, whenever amounts are required to be netted, subtracted or added or
any distributions are taken into account such definition or calculation and any
related definitions or calculations shall be determined without duplication of
such functions.
ARTICLE II
CONVEYANCE OF MORTGAGE
LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans to Trustee.
(a) The Depositor concurrently with the execution and delivery of this
Agreement, sells, transfers and assigns to the Issuing Entity without recourse
all its right, title and interest in and to (i) the Mortgage Loans identified in
the Mortgage Loan Schedule, including all interest and principal due with
respect to the Mortgage Loans after the Cut-off Date, but excluding any payments
of principal and interest due on or prior to the Cut-off Date; (ii) such assets
as shall from time to time be credited or are required by the terms of this
Agreement to be credited to the Master Servicer Collection Account, (iii) such
assets relating to the Mortgage Loans as from time to time may be held by the
Servicers in Protected Accounts, the Master Servicer in the Master Servicer
Collection Account and the Securities Administrator in the Distribution Account
for the benefit of the Trustee on behalf of the Certificateholders, (iv) any REO
Property, (v) the Required Insurance Policies and any amounts paid or payable by
the insurer under any Insurance Policy (to the extent the mortgagee has a claim
thereto), (vi) the Mortgage Loan Purchase Agreement to the extent provided in
Subsection 2.03(a), (vii) the rights with respect to the Servicing Agreements as
assigned to the Depositor on behalf of the Certificateholders by the Assignment
Agreements and (viii) any proceeds of the foregoing. Although it is the intent
of the parties to this Agreement that the conveyance of the Depositor's right,
title and interest in and to the Mortgage Loans and other assets in the Trust
Fund pursuant to this Agreement shall constitute a purchase and sale and not a
loan, in the event that such conveyance is deemed to be a loan, it is the intent
of the parties to this Agreement that the Depositor shall be deemed to have
granted to the Trustee a first priority perfected security interest in all of
the Depositor's right, title and interest in, to and under the Mortgage Loans
and other assets in the Trust Fund, and that this Agreement shall constitute a
security agreement under applicable law.
(b) In connection with the above transfer and assignment, the Depositor
hereby deposits with the Trustee or the Custodian, as its agent, the following
documents or instruments
(I) with respect to each Mortgage Loan, other than a Cooperative Loan:
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(i) the original Mortgage Note, endorsed in the following form: "Pay
to the order of HSBC Bank USA, National Association, as Trustee for the
registered holders of the Xxxxxxx Xxxxx Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 2006-AF1, without recourse," with all
prior and intervening endorsements showing a complete chain of endorsement
from the originator to the Person so endorsing to the Trustee;
(ii) the original recorded Mortgage or a copy of the Mortgage
certified by the public recording office in which such Mortgage has been
recorded;
(iii) an original Assignment of the Mortgage executed in the following
form: "HSBC Bank USA, National Association, as Trustee for the registered
holders of the Xxxxxxx Xxxxx Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 2006-AF1.
(iv) the original recorded Assignment or Assignments of the Mortgage
showing a complete chain of assignment from the originator to the Person
assigning the Mortgage to the Trustee as contemplated by the immediately
preceding clause (iii), if applicable and only to the extent available to
the Depositor with evidence of recording thereon;
(v) the originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon, if any;
(vi) the original of any guarantee executed in connection with the
Mortgage Note;
(vii) the original mortgagee title insurance policy;
(viii) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage; and
(ix) the original power of attorney, if applicable.
and (II) with respect to each Mortgage Loan that is a Cooperative Loan:
(x) the original Mortgage Note, endorsed in the following form: "Pay
to the order of HSBC Bank USA, National Association, as Trustee for the
registered holders of the Xxxxxxx Xxxxx Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 2006-AF1, without recourse," with all
prior and intervening endorsements showing a complete chain of endorsement
from the originator to the Person so endorsing to the Trustee;
(xi) the original duly executed assignment of Security Agreement to
the Trustee;
(xii) the acknowledgment copy of the original executed Form UCC-1 (or
certified copy thereof) with respect to the Security Agreement, and any
required continuation statements;
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(xiii) the acknowledgment copy of the original executed Form UCC-3
with respect to the Security Agreement, indicating the Trustee as the
assignee of the secured party;
(xiv) the stock certificate representing the Cooperative Assets
allocated to the cooperative unit, with a stock power in blank attached;
(xv) the original collateral assignment of the proprietary lease by
Mortgagor to the originator;
(xvi) a copy of the recognition agreement;
(xvii) if applicable and to the extent available, the original
intervening assignments, including warehousing assignments, if any,
showing, to the extent available, an unbroken chain of the related Mortgage
Loan to the Trustee, together with a copy of the related Form UCC-3 with
evidence of filing thereon; and
(xviii) the originals of each assumption, modification or substitution
agreement, if any, relating to the Mortgage Loan;
provided, however, that in lieu of the foregoing, the Depositor may deliver the
following documents, under the circumstances set forth below: (w) the Depositor
may deliver a Mortgage Note pursuant to (a)(i) and (b)(i) endorsed in blank,
provided that the endorsement is completed within 60 days of the Closing Date;
(x) in lieu of the original Mortgage, assignments to the Trustee or its
Custodian, as applicable, or intervening assignments thereof which have been
delivered, are being delivered or will, upon receipt of recording information
relating to the Mortgage required to be included thereon, be delivered to
recording offices for recording and have not been returned to the Depositor in
time to permit their delivery as specified above, the Depositor may deliver a
true copy thereof with a certification by the Depositor on the face of such
copy, substantially as follows: "Certified to be a true and correct copy of the
original, which has been transmitted for recording"; and (y) in lieu of the
Mortgage, assignment to the Trustee or intervening assignments thereof, if the
applicable jurisdiction retains the originals of such documents (as evidenced by
a certification from the Depositor or the Master Servicer, to such effect) the
Depositor may deliver photocopies of such documents containing an original
certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; and provided, further, however,
that in the case of Mortgage Loans which have been prepaid in full after the
Cut-off Date and prior to the Closing Date, the Depositor, in lieu of delivering
the above documents, may deliver to the Trustee or its Custodian, as applicable,
a certification to such effect and shall deposit all amounts paid in respect of
such Mortgage Loans in the Distribution Account on the Closing Date. The
Depositor shall deliver such original documents (including any original
documents as to which certified copies had previously been delivered) to the
Trustee or its Custodian, as applicable, promptly after they are received. As of
the date hereof, recordation of the assignment of the Mortgage Loans to the
Trustee or the Custodian, as applicable, is not required in any state by either
Rating Agency to obtain the initial rating on the Certificates (upon which
statement the Master Servicer, the Trustee and the Custodian may each
conclusively rely).
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If any original Mortgage Note referred to in Section 2.01(b)(I)(i) or
2.01(b)(II)(i) above cannot be located, the obligations of the Depositor to
deliver such documents shall be deemed to be satisfied upon delivery to the
Trustee or its Custodian, as applicable, of a photocopy of such Mortgage Note,
if available, with a lost note affidavit. If any of the original Mortgage Notes
for which a lost note affidavit was delivered to the Trustee or its Custodian,
as applicable, is subsequently located, such original Mortgage Note shall be
delivered to the Trustee or its Custodian, as applicable, within three Business
Days.
(c) The parties hereto agree that it is not intended that any mortgage loan
be included in the Trust Fund that is, without limitation, a "High Cost Loan" as
defined by the Home Ownership and Equity Protection Act of 1994 or any other
applicable anti-predatory lending laws, including but not limited to (i) a
"High-Cost Home Loan" as defined in the New Jersey Home Ownership Act effective
November 27, 2003, (ii) a "High-Cost Home Loan" as defined in the New Mexico
Home Loan Protection Act effective January 1, 2004, (iii) a "High Cost Home
Mortgage Loan" as defined in the Massachusetts Predatory Home Loan Practices Act
effective November 7, 2004 or (iv) a "High-Cost Home Loan" as defined by the
Indiana High Cost Home Loan Law effective January 1, 2005.
(d) Notwithstanding anything to the contrary contained herein, the parties
hereto acknowledge that the functions of the Trustee with respect to the
custody, acceptance, inspection and release of Mortgage Files, including but not
limited to certain insurance policies and documents contemplated by Section 3.12
of this Agreement, and preparation and delivery of the certifications shall be
performed by the Custodian(s) pursuant to the terms and conditions of the
Custodial Agreement(s).
Section 2.02 Acceptance of Mortgage Loans by Trustee.
(a) The Trustee acknowledges the sale, transfer and assignment of the Trust
Fund to it by the Depositor and its receipt thereof, subject to further review
and the exceptions which may be noted pursuant to the procedures described
below, and declares that it, or the Custodian on its behalf, holds the documents
(or certified copies thereof) delivered to it pursuant to Section 2.01, and
declares that it will continue to hold those documents and any amendments,
replacements or supplements thereto and all other assets of the Trust Fund
delivered to it as Trustee in trust for the use and benefit of all present and
future Holders of the Certificates. On or before the Closing Date (or, with
respect to any Substitute Mortgage Loan, within five Business Days after the
receipt by the Trustee or Custodian thereof), the Trustee agrees, for the
benefit of the Certificateholders, to review or cause to be reviewed by the
Custodian on its behalf (under the Custodial Agreement), each Mortgage File
delivered to it and to execute and deliver, or cause to be executed and
delivered, to the Depositor on the Closing Date an Initial Certification. In
conducting such review, the Trustee or Custodian will certify as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or any Mortgage Loan specifically identified in the exception
report annexed thereto as not being covered by such certification), (i) all
documents constituting part of such Mortgage File (other than such documents
described in Section 2.01(b)(I)(iii)) required to be delivered to it pursuant to
this Agreement are in its possession, provided that with respect to the
documents described in Section 2.01(b)(I)(v), (vi), (viii) and (ix) and
2.01(b)(II)(viii) and (ix) to the extent the Trustee or the Custodian on its
behalf has actual knowledge that such documents exist, (ii) such documents have
been reviewed by it and are not torn, mutilated, defaced or otherwise altered
(except if
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initialed by the obligor) and appear to relate on their face to such Mortgage
Loan, (iii) based on its examination and only as to the foregoing, the
information set forth in the Mortgage Loan Schedule corresponding to the loan
number for the Mortgage Loan, the Mortgagor's name, including the street address
but excluding the zip code, the Mortgage Interest Rate and the original
principal balance of the Mortgage Loan accurately reflects information set forth
in the Mortgage File and (iv) with respect to Mortgage Loans with a Mortgage
Interest Rate subject to adjustment, the Gross Margin, the lifetime cap and the
periodic cap for such Mortgage Loan. In performing any such review, the Trustee,
or the Custodian, as its agent, may conclusively rely on the purported due
execution and genuineness of any such document and on the purported genuineness
of any signature thereon. Notwithstanding anything to the contrary in this
Agreement, it is herein acknowledged that, in conducting such review, the
Trustee or the Custodian on its behalf is under no duty or obligation to
inspect, review or examine any such documents, instruments, certificates or
other papers to determine whether they are genuine, enforceable, or appropriate
for the represented purpose or whether they have actually been recorded or that
they are other than what they purport to be on their face, or to determine
whether any Person executing any documents is authorized to do so or whether any
signature is genuine.
If the Trustee or the Custodian, as its agent, finds any document
constituting part of the Mortgage File not to have been executed or received, or
to be unrelated to the Mortgage Loans identified in Exhibit B or to appear to be
defective on its face, the Trustee or the Custodian, as its agent, shall
promptly notify the Seller. In accordance with the Mortgage Loan Purchase
Agreement, the Seller shall correct or cure any such defect within ninety (90)
days from the date of notice from the Trustee or the Custodian, as its agent, of
the defect and if the Seller fails to correct or cure the defect within such
period, and such defect materially and adversely affects the interests of the
Certificateholders in the related Mortgage Loan, the Trustee, shall enforce the
Seller's obligation pursuant to the Mortgage Loan Purchase Agreement, within 90
days from the Trustee's or the Custodian's notification, to purchase such
Mortgage Loan at the Purchase Price; provided that, if such defect would cause
the Mortgage Loan to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such cure or repurchase must occur within 90 days
from the date such breach was discovered; provided, however, that if such defect
relates solely to the inability of the Seller to deliver the original Security
Instrument or intervening assignments thereof, or a certified copy because the
originals of such documents, or a certified copy have not been returned by the
applicable jurisdiction, the Seller shall not be required to purchase such
Mortgage Loan if the Seller delivers such original documents or certified copy
promptly upon receipt, but in no event later than 360 days after the Closing
Date. The foregoing repurchase obligation shall not apply in the event that the
Seller cannot deliver such original or copy of any document submitted for
recording to the appropriate recording office in the applicable jurisdiction
because such document has not been returned by such office; provided that the
Seller shall instead deliver a recording receipt of such recording office or, if
such receipt is not available, a certificate confirming that such documents have
been accepted for recording, and delivery to the Trustee or the Custodian, as
its agent, shall be effected by the Seller within thirty days of its receipt of
the original recorded document.
(b) No later than 180 days after the Closing Date, the Trustee or the
Custodian, as its agent, will review, for the benefit of the Certificateholders,
the Mortgage Files delivered to it and will execute and deliver or cause to be
executed and delivered to the Depositor a Final Certification. In conducting
such review, the Trustee or the Custodian, as its agent, will certify
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as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan specifically identified in the
exception report annexed thereto as not being covered by such certification),
that (i) all documents constituting part of such Mortgage File (other than such
documents described in Section 2.01(b)(I)(v) and (ix)) required to be delivered
to it pursuant to this Agreement are in its possession, provided that with
respect to the documents described in Section 2.01(b)(I)(v), (vi), (viii) and
(ix) and 2.01(b)(II)(viii) and (ix) to the extent the Trustee or the Custodian
on its behalf has actual knowledge that such documents exist, (ii) such
documents have been reviewed by it and are not torn, mutilated, defaced or
otherwise altered (except if initialed by the obligor) and appear regular on
their face and relate to such Mortgage Loan, (iii) based on its examination and
only as to the foregoing, the information set forth in the Mortgage Loan
Schedule corresponding to the loan number for the Mortgage Loan, the Mortgagor's
name, including the street address but excluding the zip code, the Mortgage
Interest Rate and the original principal balance of the Mortgage Loan accurately
reflects information set forth in the Mortgage File. In performing any such
review, the Trustee, or the Custodian, as its agent, may conclusively rely on
the purported due execution and genuineness of any such document and on the
purported genuineness of any signature thereon. Notwithstanding anything to the
contrary in this Agreement, it is herein acknowledged that, in conducting such
review, the Trustee or the Custodian on its behalf is under no duty or
obligation (i) to inspect, review or examine any such documents, instruments,
certificates or other papers to determine whether they are genuine, enforceable,
or appropriate for the represented purpose or whether they have actually been
recorded or that they are other than what they purport to be on their face, or
to determine whether any Person executing any documents is authorized to do so
or whether any signature is genuine. If the Trustee or the Custodian, as its
agent, finds any document constituting part of the Mortgage File not to have
been executed or received, or to be unrelated to the Mortgage Loans identified
in Exhibit B or to appear to be defective on its face, the Trustee or the
Custodian, as its agent, shall promptly notify the Seller. In accordance with
the Mortgage Loan Purchase Agreement, the Seller shall correct or cure any such
defect within 90 days from the date of notice from the Trustee of the defect and
if the Seller is unable to cure such defect within such period, and if such
defect materially and adversely affects the interests of the Certificateholders
in the related Mortgage Loan, the Trustee shall enforce the Seller's obligation
under the Mortgage Loan Purchase Agreement to purchase such Mortgage Loan at the
Purchase Price, provided, however, that if such defect relates solely to the
inability of the Seller to deliver the original Security Instrument or
intervening assignments thereof, or a certified copy, because the originals of
such documents, or a certified copy, have not been returned by the applicable
jurisdiction, the Seller shall not be required to purchase such Mortgage Loan,
if the Seller delivers such original documents or certified copy promptly upon
receipt, but in no event later than 360 days after the Closing Date.
(c) In the event that a Mortgage Loan is purchased by the Seller in
accordance with Subsections 2.02(a) or (b) above, the Seller shall remit to the
Master Servicer the Purchase Price for deposit in the Master Servicer Collection
Account and the Seller shall provide to the Trustee written notification
detailing the components of the Purchase Price. Upon deposit of the Purchase
Price in the Master Servicer Collection Account, the Depositor shall give
written notice thereof to the Trustee and the Custodian and the Trustee or the
Custodian, as its agent (upon receipt of a Request for Release in the form of
Exhibit D attached hereto with respect to such Mortgage Loan), shall release to
the Seller the related Mortgage File and the Trustee shall execute and deliver
all instruments of transfer or assignment, without recourse, furnished to it by
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the Seller as are necessary to vest in the Seller title to and rights under the
Mortgage Loan. Such purchase shall be deemed to have occurred on the date on
which the Purchase Price in available funds is received by the Trustee. The
Depositor or Master Servicer shall amend the Mortgage Loan Schedule, to reflect
such repurchase and shall promptly notify the Rating Agencies and the Master
Servicer of such amendment. The obligation of the Seller to repurchase any
Mortgage Loan as to which such a defect in a constituent document exists shall
be the sole remedy respecting such defect available to the Certificateholders or
to the Trustee on their behalf.
Section 2.03 Assignment of Interest in the Mortgage Loan Purchase
Agreement.
(a) The Depositor hereby assigns to the Trustee, on behalf of the
Certificateholders, all of its right, title and interest in the Mortgage Loan
Purchase Agreement, including but not limited to Depositor's rights pursuant to
the Servicing Agreements (noting that the Seller has retained the right in the
event of breach of the representations, warranties and covenants, if any, with
respect to the related Mortgage Loans of the related Servicer under the related
Servicing Agreement to enforce the provisions thereof and to seek all or any
available remedies). The obligations of the Seller to substitute or repurchase,
as applicable, a Mortgage Loan shall be the Trustee's and the
Certificateholders' sole remedy for any breach thereof. At the request of the
Trustee, the Depositor shall take such actions as may be necessary to enforce
the above right, title and interest on behalf of the Trustee and the
Certificateholders or shall execute such further documents as the Trustee may
reasonably require in order to enable the Trustee to carry out such enforcement.
With respect to the representations and warranties described in the Mortgage
Loan Purchase Agreement that are made to the best of the Seller's knowledge, if
it is discovered by any of the Depositor, the Seller, the Master Servicer, the
Securities Administrator or the Trustee that the substance of such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan, then notwithstanding
the Seller's lack of knowledge with respect to the substance of such
representation and warranty, such inaccuracy shall be deemed a breach of the
applicable representation or warranty.
(b) If the Depositor, the Master Servicer, Securities Administrator or the
Trustee discovers a breach of any of the representations and warranties set
forth in the Mortgage Loan Purchase Agreement, which breach materially and
adversely affects the value of the interests of Certificateholders or the
Trustee in the related Mortgage Loan, the party discovering the breach shall
give prompt written notice of the breach to the other parties. The Seller,
within 90 days of its discovery or receipt of notice that such breach has
occurred (whichever occurs earlier), shall cure the breach in all material
respects or, subject to the Mortgage Loan Purchase Agreement or Section 2.04 of
this Agreement, as applicable, shall purchase the Mortgage Loan or any property
acquired with respect thereto from the Trustee; provided, however, that if there
is a breach of any representation set forth in the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, and the Mortgage
Loan or the related property acquired with respect thereto has been sold, then
the Seller shall pay, in lieu of the Purchase Price, any excess of the Purchase
Price over the Net Liquidation Proceeds received upon such sale. (If the Net
Liquidation Proceeds exceed the Purchase Price, any excess shall be paid to the
Seller to the extent not required by law to be paid to the borrower.) Any such
purchase by the Seller shall be made by providing an amount equal to the
Purchase Price to the Master Servicer for deposit in the Master Servicer
Collection Account and written notification detailing the components of such
Purchase Price. The Depositor shall notify the Trustee in writing of the deposit
of the Purchase
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Price and submit to the Trustee or the Custodian, as its agent, a Request for
Release, and the Trustee shall release, or the Trustee shall cause the Custodian
to release, to the Seller the related Mortgage File and the Trustee shall
execute and deliver all instruments of transfer or assignment furnished to it by
the Seller, without recourse, as are necessary to vest in the Seller title to
and rights under the Mortgage Loan or any property acquired with respect
thereto. Such purchase shall be deemed to have occurred on the date on which the
Purchase Price in available funds is received by the Master Servicer. The
Depositor or the Master Servicer shall amend the Mortgage Loan Schedule to
reflect such repurchase and shall promptly notify the Master Servicer and the
Rating Agencies of such amendment. Enforcement of the obligation of the Seller
to purchase (or substitute a Substitute Mortgage Loan for) any Mortgage Loan or
any property acquired with respect thereto (or pay the Purchase Price as set
forth in the above proviso) as to which a breach has occurred and is continuing
shall constitute the sole remedy respecting such breach available to the
Certificateholders or the Trustee on their behalf.
Section 2.04 Substitution of Mortgage Loans. Notwithstanding anything to
the contrary in this Agreement, in lieu of purchasing a Mortgage Loan pursuant
to the Mortgage Loan Purchase Agreement or Sections 2.02 or 2.03 of this
Agreement, the Seller may, no later than the date by which such purchase by the
Seller would otherwise be required, tender to the Trustee a Substitute Mortgage
Loan accompanied by a certificate of an authorized officer of the Seller that
such Substitute Mortgage Loan conforms to the requirements set forth in the
definition of "Substitute Mortgage Loan" in the Mortgage Loan Purchase Agreement
or this Agreement, as applicable; provided, however, that substitution pursuant
to the Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable, in lieu of purchase shall not be permitted after the termination of
the two-year period beginning on the Startup Day; provided, further, that if the
breach would cause the Mortgage Loan to be other than a "qualified mortgage" as
defined in Section 860G(a)(3) of the Code, any such cure or substitution must
occur within 90 days from the date the breach was discovered. The Trustee or the
Custodian, as its agent, shall examine the Mortgage File for any Substitute
Mortgage Loan in the manner set forth in Section 2.02(a) and the Trustee or the
Custodian, as its agent, shall notify the Seller, in writing, within five
Business Days after receipt, whether or not the documents relating to the
Substitute Mortgage Loan satisfy the requirements of the fourth sentence of
Subsection 2.02(a). Within two Business Days after such notification, the Seller
shall provide to the Securities Administrator for deposit in the Distribution
Account the amount, if any, by which the Outstanding Principal Balance as of the
next preceding Due Date of the Mortgage Loan for which substitution is being
made, after giving effect to Scheduled Principal due on such date, exceeds the
Outstanding Principal Balance as of such date of the Substitute Mortgage Loan,
after giving effect to Scheduled Principal due on such date, which amount shall
be treated for the purposes of this Agreement as if it were the payment by the
Seller of the Purchase Price for the purchase of a Mortgage Loan by the Seller.
After such notification to the Seller and, if any such excess exists, upon
written notification of the receipt of such deposit, the Trustee shall accept
such Substitute Mortgage Loan which shall thereafter be deemed to be a Mortgage
Loan hereunder. In the event of such a substitution, accrued interest on the
Substitute Mortgage Loan for the month in which the substitution occurs and any
Principal Prepayments made thereon during such month shall be the property of
the Issuing Entity and accrued interest for such month on the Mortgage Loan for
which the substitution is made and any Principal Prepayments made thereon during
such month shall be the property of the Seller. The Scheduled Principal on a
Substitute Mortgage Loan due on the Due Date in the month of substitution shall
be the property
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of the Seller and the Scheduled Principal on the Mortgage Loan for which the
substitution is made due on such Due Date shall be the property of the Issuing
Entity. Upon acceptance of the Substitute Mortgage Loan (and delivery to the
Trustee or Custodian of a Request for Release for such Mortgage Loan), the
Trustee shall release to the Seller the related Mortgage File related to any
Mortgage Loan released pursuant to the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable, and shall execute and deliver all
instruments of transfer or assignment, without recourse, in form as provided to
it as are necessary to vest in the Seller title to and rights under any Mortgage
Loan released pursuant to the Mortgage Loan Purchase Agreement or Section 2.04
of this Agreement, as applicable. The Seller shall deliver the documents related
to the Substitute Mortgage Loan in accordance with the provisions of the
Mortgage Loan Purchase Agreement or Subsections 2.01(b) and 2.02(b) of this
Agreement, as applicable, with the date of acceptance of the Substitute Mortgage
Loan deemed to be the Closing Date for purposes of the time periods set forth in
those Subsections. The representations and warranties set forth in the Mortgage
Loan Purchase Agreement shall be deemed to have been made by the Seller with
respect to each Substitute Mortgage Loan as of the date of acceptance of such
Mortgage Loan by the Trustee. The Master Servicer shall amend the Mortgage Loan
Schedule to reflect such substitution and shall provide a copy of such amended
Mortgage Loan Schedule to the Trustee and the Rating Agencies.
Notwithstanding any other provision of this Agreement, the right to
substitute Mortgage Loans pursuant to this Article II shall be subject to the
additional limitations that no substitution of a Mortgage Loan shall be made
unless the Securities Administrator and the Trustee shall have received an
Opinion of Counsel (at the expense of the party seeking to make the
substitution) that, under current law, such substitution will not (A) affect
adversely the status of any REMIC established hereunder as a REMIC, or of the
related "regular interests" as "regular interests" in any such REMIC, or (B)
cause any such REMIC to engage in a "prohibited transaction" or prohibited
contribution pursuant to the REMIC provisions.
Section 2.05 Issuance of Certificates. The Trustee acknowledges the
assignment to it on behalf of the Issuing Entity of the Mortgage Loans and the
other assets comprising the Trust Fund and, concurrently therewith, the
Securities Administrator has signed, and countersigned and delivered to the
Depositor, in exchange therefor, Certificates in such authorized denominations
representing such Percentage Interests as the Depositor has requested. The
Trustee agrees that it will hold the Mortgage Loans and such other assets as may
from time to time be delivered to it segregated on the books of the Trustee in
trust for the benefit of the Certificateholders.
Section 2.06 Representations and Warranties Concerning the Depositor. The
Depositor hereby represents and warrants to the Trustee, the Master Servicer and
the Securities Administrator as follows:
(i) the Depositor (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and
(b) is qualified and in good standing as a foreign corporation to do
business in each jurisdiction where such qualification is necessary, except
where the failure so to qualify would not reasonably be expected to have a
material adverse effect on the Depositor's business as presently conducted
or on the Depositor's ability to enter into this Agreement and to
consummate the transactions contemplated hereby;
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(ii) the Depositor has full corporate power to own its property, to
carry on its business as presently conducted and to enter into and perform
its obligations under this Agreement;
(iii) the execution and delivery by the Depositor of this Agreement
have been duly authorized by all necessary corporate action on the part of
the Depositor; and neither the execution and delivery of this Agreement,
nor the consummation of the transactions herein contemplated, nor
compliance with the provisions hereof, will conflict with or result in a
breach of, or constitute a default under, any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on the
Depositor or its properties or the articles of incorporation or by-laws of
the Depositor, except those conflicts, breaches or defaults which would not
reasonably be expected to have a material adverse effect on the Depositor's
ability to enter into this Agreement and to consummate the transactions
contemplated hereby;
(iv) the execution, delivery and performance by the Depositor of this
Agreement and the consummation of the transactions contemplated hereby do
not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any
state, federal or other governmental authority or agency, except those
consents, approvals, notices, registrations or other actions as have
already been obtained, given or made;
(v) this Agreement has been duly executed and delivered by the
Depositor and, assuming due authorization, execution and delivery by the
other parties hereto, constitutes a valid and binding obligation of the
Depositor enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws affecting
the enforcement of the rights of creditors generally);
(vi) there are no actions, suits or proceedings pending or, to the
knowledge of the Depositor, threatened against the Depositor, before or by
any court, administrative agency, arbitrator or governmental body (i) with
respect to any of the transactions contemplated by this Agreement or (ii)
with respect to any other matter which in the judgment of the Depositor
will be determined adversely to the Depositor and will if determined
adversely to the Depositor materially and adversely affect the Depositor's
ability to enter into this Agreement or perform its obligations under this
Agreement; and the Depositor is not in default with respect to any order of
any court, administrative agency, arbitrator or governmental body so as to
materially and adversely affect the transactions contemplated by this
Agreement; and
(vii) immediately prior to the transfer and assignment to the Trustee,
each Mortgage Note and each Mortgage were not subject to an assignment or
pledge, and the Depositor had good and marketable title to and was the sole
owner thereof and had full right to transfer and sell such Mortgage Loan to
the Trustee free and clear of any encumbrance, equity, lien, pledge,
charge, claim or security interest.
Section 2.07 Representations and Warranties Concerning the Master Servicer
and Securities Administrator. Xxxxx Fargo Bank, N.A., in its capacity as Master
Servicer and
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Securities Administrator hereby represents and warrants to the Seller, the
Depositor and the Trustee as follows, as of the Closing Date:
(i) It is a national banking association duly formed, validly existing
and in good standing under the laws of the United States of America and is
duly authorized and qualified to transact any and all business contemplated
by this Agreement to be conducted by the Master Servicer and the Securities
Administrator, to the extent necessary to ensure its ability to master
service the Mortgage Loans in accordance with the terms of this Agreement
and to perform any of its other obligations under this Agreement in
accordance with the terms hereof;
(ii) It has the full corporate power and authority to execute, deliver
and perform, and to enter into and consummate the transactions contemplated
by this Agreement and has duly authorized by all necessary corporate action
on its part the execution, delivery and performance of this Agreement; and
this Agreement, assuming the due authorization, execution and delivery
hereof by the other parties hereto, constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms,
except that (a) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought.
(iii) The execution and delivery of this Agreement by it, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof are
in its ordinary course of business and will not (A) result in a material
breach of any term or provision of its charter or by-laws or (B) materially
conflict with, result in a material breach, violation or acceleration of,
or result in a material default under, the terms of any other material
agreement or instrument to which it is a party or by which it may be bound,
or (C) constitute a material violation of any statute, order or regulation
applicable to it of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it; and it is not in breach or
violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or violation may materially impair its
ability to perform or meet any of its obligations under this Agreement.
(iv) No litigation is pending or, to the best of its knowledge,
threatened, against it that would materially and adversely affect the
execution, delivery or enforceability of this Agreement or its ability to
perform any of its other obligations under this Agreement in accordance
with the terms hereof.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for its execution, delivery and
performance of, or compliance with, this Agreement or the consummation of
the transactions contemplated hereby, or if any such consent, approval,
authorization or order is required, it has obtained the same.
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ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master Servicer. The Master Servicer shall supervise, monitor
and oversee the obligation of the Servicers to service and administer their
respective Mortgage Loans in accordance with the terms of the applicable
Servicing Agreement and shall have full power and authority to do any and all
things which it may deem necessary or desirable in connection with such master
servicing and administration. In performing its obligations hereunder, the
Master Servicer shall act in a manner consistent with Accepted Master Servicing
Practices. Furthermore, the Master Servicer shall oversee and consult with each
Servicer as necessary from time-to-time to carry out the Master Servicer's
obligations hereunder, shall receive, review and evaluate all reports,
information and other data provided to the Master Servicer by each Servicer and
shall cause each Servicer to perform and observe the covenants, obligations and
conditions to be performed or observed by such Servicer under the applicable
Servicing Agreement. The Master Servicer shall independently and separately
monitor each Servicer's servicing activities with respect to each related
Mortgage Loan, reconcile the results of such monitoring with such information
provided in the previous sentence on a monthly basis and coordinate corrective
adjustments to the Servicers' and Master Servicer's records, and based on such
reconciled and corrected information, the Master Servicer shall provide such
information to the Securities Administrator as shall be necessary in order for
it to prepare the statements specified in Section 6.04, and prepare any other
information and statements required to be forwarded by the Master Servicer
hereunder. The Master Servicer shall reconcile the results of its monitoring
with the actual remittances of the Servicers to the Master Servicer Collection
Account pursuant to the applicable Servicing Agreements.
If the Master Servicer and the Securities Administrator are the same
entity, then at any time the Master Servicer is terminated as Master Servicer,
the Securities Administrator shall likewise be removed as securities
administrator.
The Trustee shall furnish the Servicers and the Master Servicer with any
limited powers of attorney and other documents in form acceptable to it
necessary or appropriate to enable the Servicers and the Master Servicer to
service and administer the related Mortgage Loans and REO Property. The Trustee
shall have no liability with respect to the use of any such limited power of
attorney.
The Trustee or the Custodian shall provide access to the records and
documentation in possession of the Trustee or the Custodian regarding the
related Mortgage Loans and REO Property and the servicing thereof to the
Certificateholders, the FDIC, and the supervisory agents and examiners of the
FDIC, such access being afforded only upon reasonable prior written request and
during normal business hours at the office of the Trustee or the Custodian;
provided, however, that, unless otherwise required by law, the Trustee or the
Custodian shall not be required to provide access to such records and
documentation if the provision thereof would violate the legal right to privacy
of any Mortgagor. The Trustee or the Custodian shall allow representatives of
the above entities to photocopy any of the records and documentation and shall
provide equipment for that purpose at a charge that covers the Trustee's or the
Custodian's actual costs.
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The Trustee shall execute and deliver to the related Servicer and the
Master Servicer upon request any court pleadings, requests for trustee's sale or
other documents necessary or desirable to (i) the foreclosure or trustee's sale
with respect to a Mortgaged Property; (ii) any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Security Instrument;
(iii) obtain a deficiency judgment against the Mortgagor; or (iv) enforce any
other rights or remedies provided by the Mortgage Note or Security Instrument or
otherwise available at law or equity.
Section 3.02 REMIC-Related Covenants. For as long as each REMIC shall
exist, the Trustee and the Securities Administrator shall act in accordance
herewith to assure continuing treatment of such REMIC as a REMIC, and the
Trustee and the Securities Administrator shall comply with any directions of the
Depositor, the related Servicer or the Master Servicer to assure such continuing
treatment. In particular, the Trustee shall not (a) sell or permit the sale of
all or any portion of the Mortgage Loans or of any investment of deposits in an
Account unless such sale is as a result of a repurchase of the Mortgage Loans
pursuant to this Agreement or the Trustee has received a REMIC Opinion prepared
at the expense of the Issuing Entity; and (b) other than with respect to a
substitution pursuant to the Mortgage Loan Purchase Agreement or Section 2.04 of
this Agreement, as applicable, accept any contribution to any REMIC after the
Startup Day without receipt of a REMIC Opinion.
Section 3.03 Monitoring of Servicers.
(a) The Master Servicer shall be responsible for reporting to the Trustee
and the Depositor the compliance by each Servicer with its duties under the
related Servicing Agreement. In the review of each Servicer's activities, the
Master Servicer may rely upon an officer's certificate of the Servicer with
regard to such Servicer's compliance with the terms of its Servicing Agreement.
In the event that the Master Servicer, in its judgment, determines that a
Servicer should be terminated in accordance with its Servicing Agreement, or
that a notice should be sent pursuant to such Servicing Agreement with respect
to the occurrence of an event that, unless cured, would constitute grounds for
such termination, the Master Servicer shall notify the Depositor and the Trustee
thereof and the Master Servicer shall issue such notice or take such other
action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
subject to the preceding paragraph, terminate the rights and obligations of such
Servicer thereunder and act as servicer of the related Mortgage Loans or, if the
Master Servicer is unwilling or unable to act as a Servicer, the Master Servicer
shall cause the Trustee to enter in to a new Servicing Agreement with a
successor Servicer selected by the Master Servicer that is eligible in
accordance with the criteria specified in this Agreement; provided, however, it
is understood and acknowledged by the parties hereto that there will be a period
of transition (not to exceed 90 days) before the actual servicing functions can
be fully transferred to such successor servicer. In either event, such
enforcement, including, without limitation, the legal prosecution of claims,
termination of the Servicing Agreements and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own
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expense subject to Section 3.03(c), provided that the Master Servicer shall not
be required to prosecute or defend any legal action except to the extent that
the Master Servicer shall have received reasonable indemnity for its costs and
expenses in pursuing such action.
(c) To the extent that the costs and expenses of the Master Servicer
related to any termination of a Servicer, appointment of a successor Servicer or
the transfer and assumption of servicing by the Master Servicer with respect to
any Servicing Agreement (including, without limitation, (i) all legal costs and
expenses and all due diligence costs and expenses associated with an evaluation
of the potential termination of a Servicer as a result of an event of default by
such Servicer and (ii) all costs and expenses associated with the complete
transfer of servicing, including all servicing files and all servicing data and
the completion, correction or manipulation of such servicing data as may be
required by the successor servicer to correct any errors or insufficiencies in
the servicing data or otherwise to enable the successor service to service the
Mortgage Loans in accordance with the related Servicing Agreement) are not fully
and timely reimbursed by the terminated Servicer, the Master Servicer shall be
entitled to reimbursement of such costs and expenses from the Master Servicer
Collection Account pursuant to Section 4.03(b).
(d) The Master Servicer shall require each Servicer to comply with the
remittance requirements and other obligations set forth in the related Servicing
Agreement.
(e) If the Master Servicer acts as Servicer, it will not assume liability
for the representations and warranties of such Servicer, if any, that it
replaces.
Section 3.04 Fidelity Bond. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions insurance
policy, affording coverage with respect to all directors, officers, employees
and other Persons acting on such Master Servicer's behalf, and covering errors
and omissions in the performance of the Master Servicer's obligations hereunder.
The errors and omissions insurance policy and the fidelity bond shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees.
Section 3.05 Power to Act; Procedures. The Master Servicer shall master
service the Mortgage Loans and shall have full power and authority, subject to
the REMIC Provisions and the provisions of Article X hereof, to do any and all
things that it may deem necessary or desirable in connection with the master
servicing and administration of the Mortgage Loans, including but not limited to
the power and authority (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages, (iii) to
collect any Insurance Proceeds and Liquidation Proceeds, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan, in each case, in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable; provided,
however, that the Master Servicer shall not (and, consistent with its
responsibilities under Section 3.03, shall not permit any Servicer to) knowingly
or intentionally take any action, or fail to take (or fail to cause to be taken)
any action reasonably within its control and the scope of duties more
specifically set forth herein, that, under the REMIC Provisions, if taken or not
taken, as the case may be, would cause any REMIC created hereunder to fail to
qualify as a REMIC or result in the imposition of a tax upon the Issuing Entity
(including but not limited to the tax on
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prohibited transactions as defined in Section 860F(a)(2) of the Code and the tax
on contributions to a REMIC set forth in Section 860G(d) of the Code) unless the
Master Servicer has received an Opinion of Counsel (but not at the expense of
the Master Servicer) to the effect that the contemplated action will not would
cause any REMIC created hereunder to fail to qualify as a REMIC or result in the
imposition of a tax upon any REMIC created hereunder. The Trustee shall furnish
the Master Servicer, upon written request from a Servicing Officer, with any
limited powers of attorney (in form acceptable to the Trustee) empowering the
Master Servicer or any Servicer to execute and deliver instruments of
satisfaction or cancellation, or of partial or full release or discharge, and to
foreclose upon or otherwise liquidate Mortgaged Property, and to appeal,
prosecute or defend in any court action relating to the Mortgage Loans or the
Mortgaged Property, in accordance with the applicable Servicing Agreement and
this Agreement, and the Trustee shall execute and deliver such other documents,
as the Master Servicer may request, to enable the Master Servicer to master
service and administer the Mortgage Loans and carry out its duties hereunder, in
each case in accordance with Accepted Master Servicing Practices (and the
Trustee shall have no liability for misuse of any such powers of attorney by the
Master Servicer or any Servicer). If the Master Servicer or the Trustee has been
advised that it is likely that the laws of the state in which action is to be
taken prohibit such action if taken in the name of the Trustee or that the
Trustee would be adversely affected under the "doing business" or tax laws of
such state if such action is taken in its name, the Master Servicer shall join
with the Trustee in the appointment of a co-trustee pursuant to Section 9.11
hereof. In the performance of its duties hereunder, the Master Servicer shall be
an independent contractor and shall not, except in those instances where it is
taking action in the name of the Trustee, be deemed to be the agent of the
Trustee.
Section 3.06 Due-on-Sale Clauses; Assumption Agreements. To the extent
provided in the applicable Servicing Agreement, to the extent Mortgage Loans
contain enforceable due-on-sale clauses, the Master Servicer shall cause the
Servicers to enforce such clauses in accordance with the applicable Servicing
Agreement. If applicable law prohibits the enforcement of a due-on-sale clause
or such clause is otherwise not enforced in accordance with the applicable
Servicing Agreement, and, as a consequence, a Mortgage Loan is assumed, the
original Mortgagor may be released from liability in accordance with the
applicable Servicing Agreement.
Section 3.07 Release of Mortgage Files.
(a) Upon becoming aware of the payment in full of any Mortgage Loan, or the
receipt by any Servicer of a notification that payment in full has been escrowed
in a manner customary for such purposes for payment to Certificateholders on the
next Distribution Date, the Servicers or the Master Servicer will, if required
under the applicable Servicing Agreement, promptly furnish to the Custodian, on
behalf of the Trustee, two copies of a certification substantially in the form
of Exhibit D hereto signed by a Servicing Officer or in a mutually agreeable
electronic format which will, in lieu of a signature on its face, originate from
a Servicing Officer (which certification shall include a statement to the effect
that all amounts received in connection with such payment that are required to
be deposited in the Protected Account maintained by the applicable Servicer
pursuant to its Servicing Agreement have been or will be so deposited) and shall
request that the Custodian, on behalf of the Trustee, deliver to the applicable
Servicer the related Mortgage File. Upon receipt of such certification and
request, the Custodian, on behalf of
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the Trustee, shall no later than five Business Days (or, to the extent that the
applicable Servicer notifies the Seller that a document is not in the Servicer's
possession as part of the Servicing File which is needed for purposes of the
Servicer complying with any applicable law, within such shorter period as may be
necessary to enable the Servicer to comply with such law), release the related
Mortgage File to the applicable Servicer and the Trustee and Custodian shall
have no further responsibility with regard to such Mortgage File. Upon any such
payment in full, each Servicer is authorized, to give, as agent for the Trustee,
as the mortgagee under the Mortgage that secured the Mortgage Loan, an
instrument of satisfaction (or assignment of mortgage without recourse)
regarding the Mortgaged Property subject to the Mortgage, which instrument of
satisfaction or assignment, as the case may be, shall be delivered to the Person
or Persons entitled thereto against receipt therefor of such payment, it being
understood and agreed that no expenses incurred in connection with such
instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the Protected Account.
(b) From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan and in accordance with the applicable Servicing Agreement,
the Trustee shall execute such documents as requested and as shall be prepared
and furnished to the Trustee by a Servicer or the Master Servicer and as are
necessary to the prosecution of any such proceedings. In connection with the
foregoing, the Custodian, on behalf of the Trustee, shall, upon the request of a
Servicer or the Master Servicer, and delivery to the Custodian, on behalf of the
Trustee, of two copies of a Request for Release signed by a Servicing Officer
substantially in the form of Exhibit D (or in a mutually agreeable electronic
format which will, in lieu of a signature on its face, originate from a
Servicing Officer), release the related Mortgage File held in its possession or
control to the related Servicer or the Master Servicer, as applicable. Such
trust receipt shall obligate the related Servicer or the Master Servicer to
return the Mortgage File to the Custodian on behalf of the Trustee, when the
need therefor by the Servicer or the Master Servicer no longer exists unless the
Mortgage Loan shall be liquidated, in which case, upon receipt of a certificate
of a Servicing Officer similar to that hereinabove specified, the Mortgage File
shall be released by the Custodian, on behalf of the Trustee, to the related
Servicer or the Master Servicer.
Section 3.08 Documents, Records and Funds in Possession of Master Servicer
To Be Held for Trustee.
(a) The Master Servicer shall transmit and each Servicer (to the extent
required by the related Servicing Agreement) shall transmit to the Trustee or
Custodian such documents and instruments coming into the possession of the
Master Servicer or such Servicer from time to time as are required by the terms
hereof, or in the case of the Servicers, the applicable Servicing Agreement, to
be delivered to the Trustee or Custodian. Any funds received by the Master
Servicer or by a Servicer in respect of any Mortgage Loan or which otherwise are
collected by the Master Servicer or by a Servicer as Liquidation Proceeds or
Insurance Proceeds in respect of any Mortgage Loan shall be held for the benefit
of the Trustee and the Certificateholders subject to the Master Servicer's right
to retain or withdraw from the Master Servicer Collection Account the Master
Servicing Compensation and other amounts provided in this Agreement, and to the
right of each Servicer to retain its Servicing Fee and other amounts as provided
in the applicable Servicing Agreement. The Master Servicer shall, and (to the
extent provided in the applicable Servicing Agreement) shall cause each Servicer
to, provide access to information and documentation regarding the Mortgage Loans
to the Trustee, its agents and accountants at any
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time upon reasonable request and during normal business hours, and to
Certificateholders that are savings and loan associations, banks or insurance
companies, the Office of Thrift Supervision, the FDIC and the supervisory agents
and examiners of such Office and Corporation or examiners of any other federal
or state banking or insurance regulatory authority if so required by applicable
regulations of the Office of Thrift Supervision or other regulatory authority,
such access to be afforded without charge but only upon reasonable request in
writing and during normal business hours at the offices of the Master Servicer
designated by it. In fulfilling such a request, the Master Servicer shall not be
responsible for determining the sufficiency of such information.
(b) All Mortgage Files and funds collected or held by, or under the control
of, the Master Servicer, in respect of any Mortgage Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds or
Insurance Proceeds, shall be held by the Master Servicer for and on behalf of
the Trustee and the Certificateholders and shall be and remain the sole and
exclusive property of the Trustee; provided, however, that the Master Servicer
and each Servicer shall be entitled to setoff against, and deduct from, any such
funds any amounts that are properly due and payable to the Master Servicer or
such Servicer under this Agreement or the applicable Servicing Agreement.
Section 3.09 Standard Hazard Insurance and Flood Insurance Policies.
(a) For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Servicers under the related Servicing Agreements to maintain
or cause to be maintained standard fire and casualty insurance and, where
applicable, flood insurance, all in accordance with the provisions of the
related Servicing Agreements. It is understood and agreed that such insurance
shall be with insurers meeting the eligibility requirements set forth in the
applicable Servicing Agreement and that no earthquake or other additional
insurance is to be required of any Mortgagor or to be maintained on property
acquired in respect of a defaulted loan, other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require such
additional insurance.
(b) Pursuant to Sections 4.01 and 4.02, any amounts collected by the
Servicers or the Master Servicer, under any insurance policies (other than
amounts to be applied to the restoration or repair of the property subject to
the related Mortgage or released to the Mortgagor in accordance with the
applicable Servicing Agreement) shall be deposited into the Master Servicer
Collection Account, subject to withdrawal pursuant to Sections 4.02 and 4.03 in
accordance with the terms and conditions of the related Servicing Agreement. Any
cost incurred by the Master Servicer or any Servicer in maintaining any such
insurance if the Mortgagor defaults in its obligation to do so shall be added to
the amount owing under the Mortgage Loan where the terms of the Mortgage Loan so
permit; provided, however, that the addition of any such cost shall not be taken
into account for purposes of calculating the distributions to be made to
Certificateholders and shall be recoverable by the Master Servicer or such
Servicer pursuant to Sections 4.02 and 4.03.
Section 3.10 Presentment of Claims and Collection of Proceeds. The Master
Servicer shall (to the extent provided in the applicable Servicing Agreement)
cause the related Servicer to, prepare and present on behalf of the Trustee and
the Certificateholders all claims under the Insurance Policies and take such
actions (including the negotiation, settlement, compromise or
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enforcement of the insured's claim) as shall be necessary to realize recovery
under such policies. Any proceeds disbursed to the Master Servicer (or disbursed
to a Servicer and remitted to the Master Servicer) in respect of such policies,
bonds or contracts shall be promptly deposited in the Master Servicer Collection
Account upon receipt, except that any amounts realized that are to be applied to
the repair or restoration of the related Mortgaged Property as a condition
precedent to the presentation of claims on the related Mortgage Loan to the
insurer under any applicable Insurance Policy need not be so deposited (or
remitted).
Section 3.11 Maintenance of the Primary Mortgage Insurance Policies.
(a) The Master Servicer shall not take, or permit any Servicer (to the
extent such action is prohibited under the applicable Servicing Agreement) to
take, any action that would result in noncoverage under any applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of such Master
Servicer or Servicer, would have been covered thereunder. The Master Servicer
shall use its best reasonable efforts to cause each Servicer (to the extent
required under the related Servicing Agreement) to keep in force and effect (to
the extent that the Mortgage Loan requires the Mortgagor to maintain such
insurance), primary mortgage insurance applicable to each Mortgage Loan in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable. The Master Servicer shall not, and shall not permit
any Servicer (to the extent required under the related Servicing Agreement) to,
cancel or refuse to renew any such Primary Mortgage Insurance Policy that is in
effect at the date of the initial issuance of the Mortgage Note and is required
to be kept in force hereunder except in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable.
(b) The Master Servicer agrees to present, or to cause each Servicer (to
the extent required under the related Servicing Agreement) to present, on behalf
of the Trustee and the Certificateholders, claims to the insurer under any
Primary Mortgage Insurance Policies and, in this regard, to take such reasonable
action as shall be necessary to permit recovery under any Primary Mortgage
Insurance Policies respecting defaulted Mortgage Loans. Pursuant to Section 4.01
and 4.02, any amounts collected by the Master Servicer or any Servicer under any
Primary Mortgage Insurance Policies shall be deposited in the Master Servicer
Collection Account, subject to withdrawal pursuant to Section 4.03.
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Section 3.12 Trustee to Retain Possession of Certain Insurance Policies and
Documents. The Trustee or the Custodian shall retain possession and custody of
the originals (to the extent available) of any Primary Mortgage Insurance
Policies, or certificate of insurance if applicable, and any certificates of
renewal as to the foregoing as may be issued from time to time as contemplated
by this Agreement. Until all amounts distributable in respect of the
Certificates have been distributed in full and the Master Servicer otherwise has
fulfilled its obligations under this Agreement, the Trustee or its Custodian
shall also retain possession and custody of each Mortgage File in accordance
with and subject to the terms and conditions of this Agreement. The Master
Servicer shall promptly deliver or cause to be delivered to the Trustee or the
Custodian upon the execution or receipt thereof the originals of any Primary
Mortgage Insurance Policies, any certificates of renewal, and such other
documents or instruments that constitute portions of the Mortgage File that come
into the possession of the Master Servicer from time to time.
Section 3.13 Realization Upon Defaulted Mortgage Loans. The Master Servicer
shall cause each Servicer (to the extent required under the related Servicing
Agreement) to foreclose upon, repossess or otherwise comparably convert the
ownership of Mortgaged Properties securing such of the Mortgage Loans as come
into and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments, all in accordance with the terms and
conditions of the applicable Servicing Agreement.
Section 3.14 Compensation for the Master Servicer. The Master Servicer will
be entitled to all income and gain realized from any investment of funds in the
Master Servicer Collection Account, pursuant to Article IV, for the performance
of its activities hereunder. Servicing compensation in the form of assumption
fees, if any, late payment charges, as collected, if any, or otherwise (but not
including any prepayment premium or penalty) shall be retained by the applicable
Servicer and shall not be deposited in the Protected Account. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its activities hereunder and shall not be entitled to reimbursement therefor
except as provided in this Agreement.
Section 3.15 REO Property.
(a) In the event the Issuing Entity acquires ownership of any REO Property
in respect of any related Mortgage Loan, the deed or certificate of sale shall
be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in the
applicable Servicing Agreement, cause the applicable Servicer to sell, any REO
Property as expeditiously as possible and in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall cause the
applicable Servicer to protect and conserve, such REO Property in the manner and
to the extent required by the applicable Servicing Agreement, in accordance with
the REMIC Provisions and in a manner that does not result in a tax on "net
income from foreclosure property" or cause such REO Property to fail to qualify
as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code.
(b) The Master Servicer shall, to the extent required by the related
Servicing Agreement, cause the applicable Servicer to deposit all funds
collected and received in connection with the operation of any REO Property in
the Protected Account.
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(c) The Master Servicer and the applicable Servicer, upon the final
disposition of any REO Property, shall be entitled to reimbursement for any
related unreimbursed Monthly Advances and other unreimbursed advances as well as
any unpaid Servicing Fees from Liquidation Proceeds received in connection with
the final disposition of such REO Property; provided, that any such unreimbursed
Monthly Advances as well as any unpaid Servicing Fees may be reimbursed or paid,
as the case may be, prior to final disposition, out of any net rental income or
other net amounts derived from such REO Property.
(d) To the extent provided in the related Servicing Agreement, the
Liquidation Proceeds from the final disposition of the REO Property, net of any
payment to the Master Servicer and the applicable Servicer as provided above
shall be deposited in the Protected Account on or prior to the Determination
Date in the month following receipt thereof and be remitted by wire transfer in
immediately available funds to the Master Servicer for deposit into the related
Master Servicer Collection Account on the next succeeding Servicer Remittance
Date.
Section 3.16 Annual Statement as to Compliance.
Not later than March 1 of each calendar year (other than the calendar year
during which the Closing Date occurs), each Servicer shall deliver (or otherwise
make available) and each Servicer shall cause any Servicing Function Participant
engaged by it to deliver to the Master Servicer, the Securities Administrator
and the Depositor, an Officer's Certificate in the form attached hereto as
Exhibit P stating, as to each signatory thereof, that (i) a review of the
activities of such signatory during the preceding calendar year, or portion
thereof, and of the performance of such signatory under the related Servicing
Agreement or such other applicable agreement in the case of a Servicing Function
Participant has been made under such officer's supervision, and (ii) to the best
of such officer's knowledge, based on such review, such signatory has fulfilled
all its obligations under this Agreement, the related Servicing Agreement or
such other applicable agreement in all material respects throughout such year or
a portion thereof, or, if there has been a failure to fulfill any such
obligation in any material respect, specifying each such failure known to such
officer and the nature and status thereof.
The Master Servicer and the Securities Administrator shall deliver (or
otherwise make available) (and the Trustee, the Master Servicer and Securities
Administrator shall cause any Servicing Function Participant engaged by it to
deliver) to the Depositor and the Securities Administrator on or before March 1
(with a ten-calendar day cure period) of each year, commencing in March 2007, an
Officer's Certificate stating, as to the signer thereof, that (A) a review of
such party's activities during the preceding calendar year or portion thereof
and of such party's performance under this Agreement, or such other applicable
agreement in the case of a Servicing Function Participant, has been made under
such officer's supervision and (B) to the best of such officer's knowledge,
based on such review, such party has fulfilled all its obligations under this
Agreement, or such other applicable agreement in the case of a Servicing
Function Participant, in all material respects throughout such year or portion
thereof, or, if there has been a failure to fulfill any such obligation in any
material respect, specifying each such failure known to such officer and the
nature and status thereof.
The Master Servicer shall include all annual statements of compliance
received by it from each Servicer with its own annual statement of compliance to
be submitted to the Securities
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Administrator pursuant to this Section. For the avoidance of doubt, the Master
Servicer and the Securities Administrator may satisfy the requirements of this
Section 3.16 and Section 3.16 of the Stack I Agreement by each delivering a
single annual statement of compliance containing all of the information required
pursuant to this Section 3.16 and Section 3.16 of the Stack I Agreement.
In the event the Master Servicer, the Securities Administrator or any
Servicing Function Participant engaged by any such party or the Trustee is
terminated, assigns its rights and obligations under or resigns pursuant to the
terms of this Agreement, or such other applicable agreement in the case of a
Servicing Function Participant, as the case may be, such party shall provide, an
annual statement of compliance pursuant to this Section 3.16 or to such
applicable agreement, as the case may be, notwithstanding any such termination,
assignment or resignation.
Section 3.17 Reports on Assessment of Compliance and Attestation.
(a) Not later than March 1 of each calendar year (other than the calendar
year during which the Closing Date occurs) each Servicer at its own expense,
shall furnish, and shall cause any Servicing Function Participant engaged by it
to furnish (unless in the case of a Subcontractor, such Servicer has notified
the Depositor and the Master Servicer in writing that such compliance statement
is not required for the Subcontractor) to the Master Servicer, the Securities
Administrator and the Depositor an officer's assessment of its compliance with
the Relevant Servicing Criteria during the preceding calendar year as required
by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB
(the "Assessment of Compliance"), which assessment shall contain (A) a statement
by such party of its responsibility for assessing compliance with the Relevant
Servicing Criteria, (B) a statement that such party used the Relevant Servicing
Criteria to assess compliance with the Relevant Servicing Criteria, (C) such
party's assessment of compliance with the Relevant Servicing Criteria as of and
for the fiscal year covered by the Form 10-K required to be filed pursuant to
Section 3.18, including, if there has been any material instance of
noncompliance with the Relevant Servicing Criteria, a discussion of each such
failure and the nature and status thereof, which assessment shall be based on
the activities it performs with respect to asset-backed securities transactions
taken as a whole involving such party that are backed by the same asset type as
the Mortgage Loans, and (D) a statement that a registered public accounting firm
has issued an attestation report on such party's assessment of compliance with
the Relevant Servicing Criteria as of and for such period.
By March 1 (with a ten-calendar day cure period) of each year, commencing
in March 2007, the Master Servicer, the Securities Administrator and the
Custodian each at its own expense, shall furnish or otherwise make available,
and each such party and the Trustee 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 Sections
3.18(h), (i), (j) and (k), including, if there has been any material instance of
noncompliance with the Relevant Servicing Criteria, a discussion of each such
failure and the nature and status thereof, and (D) a
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statement that a registered public accounting firm has issued an attestation
report on such party's assessment of compliance with the Relevant Servicing
Criteria as of and for such period.
No later than the end of each fiscal year for the Issuing Entity for which
a 10-K is required to be filed, the Master Servicer, the Custodian and the
Trustee shall each forward to the Securities Administrator and the Depositor the
name of each Servicing Function Participant engaged by it and what Relevant
Servicing Criteria will be addressed in the report on assessment of compliance
prepared by such Servicing Function Participant (provided, however, that the
Master Servicer need not provide such information to the Securities
Administrator so long as the Master Servicer and the Securities Administrator
are the same Person). When the Master Servicer, and the Securities Administrator
(or any Servicing Function Participant engaged by them or the Trustee) submit
their assessments to the Securities Administrator, such parties will also at
such time include the assessment and attestation pursuant to this Section 3.17
of each Servicing Function Participant engaged by it.
Promptly after receipt of each report on assessment of compliance, (i) the
Depositor shall review each such report and, if applicable, consult with such
Servicer, the Master Servicer, the Securities Administrator and any Servicing
Function Participant engaged by any such party as to the nature of any material
instance of noncompliance with the Relevant Servicing Criteria by such Servicer
by each such party, and (ii) the Securities Administrator shall confirm that the
assessments individually address the Relevant Servicing Criteria for each party
as set forth on Exhibit K or any similar exhibit set forth in each Servicing
Agreement in respect of each Servicer and notify the Depositor of any
exceptions.
The Master Servicer shall include all annual reports on assessment of
compliance received by it from the Servicers with its own assessment of
compliance to be submitted to the Securities Administrator pursuant to this
Section. For the avoidance of doubt, the Master Servicer and the Securities
Administrator may satisfy the requirements of this Section 3.17 and Section 3.17
of the Stack II Agreement relating to reports on assessment of compliance by
each delivering a single annual report on assessment of compliance containing
all of the information required pursuant to Section 3.17 of the Stack I
Agreement relating to reports on assessment of compliance.
In the event the Master Servicer, the Securities Administrator or any
Servicing Function Participant engaged by any such party or the Trustee is
terminated, assigns its rights and obligations under or resigns pursuant to the
terms of this Agreement, or any other applicable agreement, as the case may be,
such party shall provide, an assessment of compliance pursuant to this Section
3.17, coupled with an attestation as required in this Section 3.17, or such
applicable agreement notwithstanding any such termination, assignment or
resignation.
(b) Not later than March 1 of each calendar year (other than the calendar
year during which the Closing Date occurs) each Servicer at its own expense,
shall cause, and shall cause any Servicing Function Participant engaged by it to
cause (unless in the case of a Subcontractor, such Servicer has notified the
Depositor and the Master Servicer in writing that such report is not required
for the Subcontractor) a nationally or regionally recognized firm of independent
registered public accountants (who may also render other services to such
Servicer, the Master Servicer or any affiliate thereof) which is a member of the
American Institute of Certified Public Accountants to furnish a report (the
"Accountant's Attestation") to the Master Servicer, the
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Securities Administrator and the Depositor to the effect that (i) it has
obtained a representation regarding certain matters from the management of such
party, which includes an assertion that such party has complied with the
Relevant Servicing Criteria, and (ii) on the basis of an examination conducted
by such firm in accordance with standards for attestation engagements issued or
adopted by the Public Company Accounting Oversight Board, it is expressing an
opinion as to whether such party's compliance with the Relevant Servicing
Criteria was fairly stated in all material respects, or it cannot express an
overall opinion regarding such party's assessment of compliance with the
Relevant Servicing Criteria. In the event that an overall opinion cannot be
expressed, such registered public accounting firm shall state in such report why
it was unable to express such an opinion. Such report must be available for
general use and not contain restricted use language. Such Accountant's
Attestation shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of
Regulation S-X under the Securities Act and the Exchange Act.
By March 1 (with a ten-calendar day cure period) of each year, commencing
in March 2007, the Master Servicer, the Securities Administrator and the
Custodian, each at its own expense, shall cause, and each such party and the
Trustee shall cause any Servicing Function Participant engaged by it to cause,
each at its own expense, a registered public accounting firm (which may also
render other services to the Master Servicer, the Trustee, the Securities
Administrator, or such other Servicing Function Participants, as the case may
be) and that is a member of the American Institute of Certified Public
Accountants to furnish an attestation report to the Securities Administrator and
the Depositor, to the effect that (i) it has obtained a representation regarding
certain matters from the management of such party, which includes an assertion
that such party has complied with the Relevant Servicing Criteria, and (ii) on
the basis of an examination conducted by such firm in accordance with standards
for attestation engagements issued or adopted by the Public Company Accounting
Oversight Board, it is expressing an opinion as to whether such party's
compliance with the Relevant Servicing Criteria was fairly stated in all
material respects, or it cannot express an overall opinion regarding such
party's assessment of compliance with the Relevant Servicing Criteria. In the
event that an overall opinion cannot be expressed, such registered public
accounting firm shall state in such report why it was unable to express such an
opinion. Such report must be available for general use and not contain
restricted use language.
(c) Promptly after receipt of each assessment of compliance and attestation
report, the Securities Administrator shall confirm that each assessment
submitted pursuant to Section 3.17(a) is coupled with an attestation meeting the
requirements of Section 3.17(b) and notify the Depositor of any exceptions.
The Master Servicer shall include each such attestation furnished to it by
the Servicers with its own attestation to be submitted to the Securities
Administrator pursuant to this Section. For the avoidance of doubt, the Master
Servicer and the Securities Administrator may satisfy the requirements of this
Section 3.17 and Section 3.17 of the Stack I Agreement relating to attestations
by each delivering a single attestation containing all of the information
required pursuant to this Section 3.17 and Section 3.17 of the Stack I Agreement
relating to attestations.
In the event the Master Servicer, the Securities Administrator, the
Custodian, any Servicer or any Servicing Function Participant engaged by any
such party, is terminated, assigns its rights and duties under, or resigns
pursuant to the terms of, this Agreement, or any applicable Custodial Agreement,
Servicing Agreement or sub-servicing agreement, as the case may be, such
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party shall cause a registered public accounting firm to provide an attestation
pursuant to this Section 3.17, or such other applicable agreement,
notwithstanding any such termination, assignment or resignation.
Section 3.18 Periodic Filings.
(a) Within four (4) Business Days after the occurrence of an event
requiring disclosure on Form 8-K (each such event, a "Reportable Event"), and if
requested by the Depositor, the Securities Administrator shall prepare and file
on behalf of the Issuing Entity a Form 8-K, as required by the Exchange Act,
provided that the Depositor shall file the initial Form 8-K in connection with
the issuance of the Certificates. Any disclosure or information related to a
Reportable Event or that is otherwise required to be included on Form 8-K (other
than the initial Form 8-K) ("Form 8-K Disclosure Information") shall be reported
by the parties set forth on Exhibit Q-3 to the Depositor and the Securities
Administrator and directed and approved by the Depositor, and the Securities
Administrator will have no duty or liability for any failure hereunder to
determine or prepare any Form 8-K Disclosure Information or any Form 8-K except
as set forth in the next paragraph.
(b) For so long as the Issuing Entity is subject to the reporting
requirements of the Exchange Act, following the occurrence of a Reportable Event
(A) each party listed on Exhibit Q-3 hereto shall use commercially reasonable
best efforts to provide immediate notice to the Master Servicer, the Securities
Administrator and the Depositor, by fax and by phone or by e-mail and by phone,
(B) each such party shall be required to provide to the Securities Administrator
and the Depositor, to the extent known, in XXXXX-compatible format or in such
other format as agreed upon by the Securities Administrator and such party, the
form and substance of any Form 8-K Disclosure Information if applicable,
together with the form set forth on Exhibit O (the "Additional Disclosure
Notification") by the close of business New York City time on the 2nd Business
Day following the occurrence of such Reportable Event and (C) the Depositor,
shall approve, as to form and substance, or disapprove, as the case may be, the
inclusion of the Form 8-K Disclosure Information on Form 8-K. The Securities
Administrator has no duty under this Agreement to monitor or enforce the
performance by the parties listed on Exhibit Q-3 of their duties under this
paragraph or proactively solicit or procure from such parties any Form 8-K
Disclosure Information. The Depositor will be responsible for any reasonable
fees and expenses assessed or incurred by the Securities Administrator in
connection with including any Form 8-K Disclosure Information on Form 8-K
pursuant to this paragraph.
(c) After preparing the Form 8-K, the Securities Administrator shall, upon
request, forward electronically a copy of the Form 8-K to the Depositor.
Promptly, but no later than the close of business on the third Business Day
after the Reportable Event, the Depositor shall notify the Securities
Administrator in writing (which may be furnished electronically) of any changes
to or approval of such Form 8-K. In the absence of receipt of any written
changes or approval, or if the Depositor does not request a copy of a Form 8-K,
the Securities Administrator shall be entitled to assume that such Form 8-K is
in final form and the Securities Administrator may proceed with the process for
execution and filing of the Form 8-K. A duly authorized representative of the
Master Servicer shall sign each Form 8-K. If a Form 8-K cannot be filed on time
or if a previously filed Form 8-K needs to be amended, the Securities
Administrator will follow the procedures set forth in Section 3.18(n).
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(d) Promptly (but no later than one Business Day) after filing with the
Commission, the Securities Administrator will make available on its internet
website a final executed copy of each Form 8-K prepared and filed by the
Securities Administrator. The parties to this Agreement acknowledge that the
performance by the Master Servicer and the Securities Administrator of its
duties under this Section 3.18 related to the timely preparation, execution and
filing of Form 8-K is contingent upon the other parties hereto strictly
observing all applicable deadlines in the performance of their duties under this
Section 3.18. The Depositor acknowledges that the performance by the Master
Servicer and the Securities Administrator of its duties under this Section 3.18
related to the timely preparation, execution and filing of Form 8-K is also
contingent upon the Servicers, the Custodian and any Servicing Function
Participant strictly observing deadlines no later than those set forth in this
paragraph that are applicable to the parties to this Agreement in the delivery
to the Securities Administrator of any necessary Form 8-K Disclosure Information
pursuant to the related Servicing Agreements, the Custodial Agreement or any
other applicable agreement. Neither the Master Servicer nor the Securities
Administrator shall have any liability for any loss, expense, damage or claim
arising out of or with respect to any failure to properly prepare, execute
and/or timely file such Form 8-K, where such failure results from the Securities
Administrator's inability or failure to obtain or receive, on a timely basis,
any information from any other party hereto or any Servicer, Custodian or
Servicing Function Participant needed to prepare, arrange for execution or file
such Form 8-K.
(e) Within fifteen (15) days after each Distribution Date (subject to
permitted extensions under the Exchange Act), the Securities Administrator
shall, on behalf of the Issuing Entity and in accordance with industry
standards, prepare and file with the Commission via the Electronic Data
Gathering and Retrieval System (XXXXX), a Form 10-D with a copy of the Monthly
Statement for such Distribution Date as an exhibit thereto. Any disclosure in
addition to the Monthly Statement that is required to be included on Form 10-D
("Additional Form 10-D Disclosure") shall be reported by the parties set forth
on Exhibit Q-1 to the Depositor and the Securities Administrator and directed
and approved by the Depositor pursuant to the following paragraph, and the
Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-D Disclosure except as
set forth in the next paragraph.
(f) As set forth in Exhibit Q-1 hereto, for so long as the Issuing Entity
is subject to the reporting requirements of the Exchange Act, within five (5)
calendar days after the related Distribution Date (i) each party listed on
Exhibit Q-1 hereto shall be required to provide to the Depositor and the
Securities Administrator, to the extent known, in XXXXX-compatible format or in
such other format as agreed upon by the Securities Administrator and such party,
the form and substance of any Additional Form 10-D Disclosure if applicable
together with an Additional Disclosure Notification, and (ii) the Depositor will
approve, as to form and substance, or disapprove, as the case may be, the
inclusion of the Additional Form 10-D Disclosure on Form 10-D. The Securities
Administrator has no duty under this Agreement to monitor or enforce the
performance by the parties listed on Exhibit Q-1 of their duties under this
paragraph or proactively solicit or procure from such parties any Additional
Form 10-D Disclosure Information. The Depositor will be responsible for any
reasonable fees and expenses incurred by the Securities Administrator in
connection with including any Additional Form 10-D Disclosure on Form 10-D
pursuant to this paragraph.
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(g) After preparing the Form 10-D, the Securities Administrator shall, upon
request, forward electronically a copy of the Form 10-D to the Depositor
(provided that such Form 10-D includes any Additional Form 10-D Disclosure).
Within two Business Days after receipt of such copy, but no later than the 12th
calendar day after the Distribution Date, the Depositor shall notify the
Securities Administrator in writing (which may be furnished electronically) of
any changes to or approval of such Form 10-D. In the absence of receipt of any
written changes or approval, or if the Depositor does not request a copy of a
Form 10-D, the Securities Administrator shall be entitled to assume that such
Form 10-D is in final form and the Securities Administrator may proceed with the
process for execution and filing of the Form 10-D. A duly authorized
representative of the Master Servicer shall sign each Form 10-D. If a Form 10-D
cannot be filed on time or if a previously filed Form 10-D needs to be amended,
the Securities Administrator will follow the procedures set forth in Section
3.18(n). Promptly (but not later than one Business Day) after filing with the
Commission, the Securities Administrator will make available on its internet
website a final executed copy of each Form 10-D prepared and filed by the
Securities Administrator. Form 10-D requires the registrant to indicate (by
checking "yes" or "no") that it "(1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days." The
Depositor hereby represents to the Securities Administrator that the Depositor
has filed all such required reports during the preceding 12 months and that it
has been subject to such filing requirement for the past 90 days. The Depositor
shall notify the Securities Administrator in writing, no later than the fifth
calendar day after the related Distribution Date with respect to the filing of a
report on Form 10-D, if the answer to the questions should be "no." The
Securities Administrator shall be entitled to rely on such representations in
preparing, executing and/or filing any such Form 10-D. The parties to this
Agreement acknowledge that the performance by the Master Servicer and the
Securities Administrator of its respective duties under this Section 3.18
related to the timely preparation, execution and filing of Form 10-D is
contingent upon the other parties hereto strictly observing all applicable
deadlines in the performance of their duties under this Section 3.18. The
Depositor acknowledges that the performance by the Master Servicer and the
Securities Administrator of its duties under this Section 3.18 related to the
timely preparation, execution and filing of Form 10-D is also contingent upon
the Servicers, the Custodian and any Servicing Function Participant strictly
observing deadlines no later than those set forth in this paragraph that are
applicable to the parties to this Agreement in the delivery to the Securities
Administrator of any necessary Additional Form 10-D Disclosure pursuant to the
related Servicing Agreements, the Custodial Agreement or any other applicable
agreement. Neither the Master Servicer nor the Securities Administrator will
have any liability for any loss, expense, damage or claim arising out of or with
respect to any failure to properly prepare, execute and/or timely file such Form
10-D resulting from the Securities Administrator's inability or failure to
obtain or receive any information needed to prepare, arrange for execution or
file such Form 10-D on a timely basis.
(h) On or prior to the 90th calendar day after the end of the fiscal year
for the Issuing Entity or such earlier date as may be required by the Exchange
Act (the "10-K Filing Deadline") (it being understood that the fiscal year for
the Issuing Entity ends on December 31st of each year) commencing in March 2007,
the Securities Administrator shall, on behalf of the Issuing Entity and in
accordance with industry standards, prepare and file with the Commission via
XXXXX a Form 10-K with respect to the Issuing Entity. Such Form 10-K shall
include the
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following items, in each case, as applicable, to the extent they have been
delivered to the Securities Administrator within the applicable time frames set
forth in this Agreement, the related Servicing Agreements and Custodial
Agreement: (i) an annual compliance statement for the Master Servicer, each
Servicer, the Securities Administrator and any Servicing Function Participant
engaged by any such party or the Trustee (together with the Custodian, each a
"Reporting Servicer"), as described in Section 3.16 of this Agreement, the
related Servicing Agreement and the Custodial Agreement; provided, however, that
the Securities Administrator, at its discretion, may omit from the Form 10-K any
annual compliance statement that is not required to be filed with such Form 10-K
pursuant to Regulation AB; (ii)(A) the annual reports on assessment of
compliance with Servicing Criteria for each Reporting Servicer (unless the
Depositor has determined that such compliance statement is not required by
Regulation AB), as described in Section 3.17 of this Agreement, the related
Servicing Agreement and the Custodial Agreement, and (B) if any Reporting
Servicer's report on assessment of compliance with Servicing Criteria described
in Section 3.17 identifies any material instance of noncompliance, disclosure
identifying such instance of noncompliance, or if any Reporting Servicer's
report on assessment of compliance with Servicing Criteria described in Section
3.17 of this Agreement is not included as an exhibit to such Form 10-K,
disclosure that such report is not included and an explanation why such report
is not included; provided, however, that the Securities Administrator, at its
discretion, may omit from the Form 10-K any assessment of compliance or
attestation report described in clause (iii) below that is not required to be
filed with such Form 10-K pursuant to Regulation AB; (iii)(A) the registered
public accounting firm attestation report for each Reporting Servicer, as
described in Section 3.17 of this Agreement, the related Servicing Agreement and
the Custodial Agreement, and (B) if any registered public accounting firm
attestation report described under Section 3.17 of this Agreement identifies any
material instance of noncompliance, disclosure identifying such instance of
noncompliance, or if any such registered public accounting firm attestation
report is not included as an exhibit to such Form 10-K, disclosure that such
report is not included and an explanation why such report is not included, and
(iv) a Xxxxxxxx-Xxxxx Certification in the form attached hereto as Exhibit L,
executed by the senior officer in charge of securitizations of the Master
Servicer. Any disclosure or information in addition to (i) through (iv) above
that is required to be included on Form 10-K ("Additional Form 10-K Disclosure")
shall be reported by the parties as set forth in Exhibit Q-2 to the Depositor
and the Securities Administrator and directed and approved by the Depositor
pursuant to the following paragraph and the Securities Administrator will have
no duty or liability for any failure hereunder to determine or prepare any
Additional Form 10-K Disclosure except or set forth in the next paragraph.
(i) As set forth in Exhibit Q-2 hereto, no later than March 1 (with a ten
calendar day cure period) of each year that the Issuing Entity is subject to the
Exchange Act reporting requirements, commencing in March 2007, (i) the parties
listed on Exhibit Q-2 hereto shall be required to provide to the Depositor and
the Securities Administrator, to the extent known, in XXXXX-compatible format or
in such other format as agreed upon by the Securities Administrator and such
party, the form and substance of any Additional Form 10-K Disclosure, if
applicable together with an Additional Disclosure Notification, and (ii) the
Depositor will approve, as to form and substance, or disapprove, as the case may
be, the inclusion of the Additional Form 10-K Disclosure and shall forward such
Additional Form 10-K Disclosure. The Securities Administrator has no duty under
this Agreement to monitor or enforce the performance by the parties listed on
Exhibit Q-2 of their duties under this paragraph or
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proactively solicit or procure from such parties any Additional Form 10-K
Disclosure Information. The Depositor will be responsible for any reasonable
fees and expenses incurred by the Securities Administrator in connection with
including any Additional Form 10-K Disclosure on Form 10-K pursuant to this
paragraph.
(j) After preparing the Form 10-K, the Securities Administrator shall, upon
request, forward electronically a copy of the Form 10-K to the Depositor. Within
three Business Days after receipt of such copy, but no later than March 25th,
the Depositor shall notify the Securities Administrator in writing (which may be
furnished electronically) of any changes to or approval of such Form 10-K. In
the absence of receipt of any written changes or approval, or if the Depositor
does not request a copy of a Form 10-K, the Securities Administrator shall be
entitled to assume that such Form 10-K is in final form and the Securities
Administrator may proceed with the process for execution and filing of the Form
10-K. A senior officer of the Master Servicer in charge of the master servicing
function shall sign the Form 10-K. If a Form 10-K cannot be filed on time or if
a previously filed Form 10-K needs to be amended, the Securities Administrator
will follow the procedures set forth in Section 3.18(n). Promptly (but no later
than one Business Day) after filing with the Commission, the Securities
Administrator will make available on its internet website a final executed copy
of each Form 10-K prepared and filed by the Securities Administrator. Form 10-K
requires the registrant to indicate (by checking "yes" or "no") that it "(1) has
filed all reports required to be filed by Section 13 or 15(d) of the Exchange
Act during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days." The Depositor hereby represents to
the Securities Administrator that the Depositor has filed all such required
reports during the preceding 12 months and that it has been subject to such
filing requirement for the past 90 days. The Depositor shall notify the
Securities Administrator in writing, no later than the 15th calendar day of
March in any year in which the Trust is subject to the reporting requirements of
the Exchange Act, if the answer to the questions should be "no." The Securities
Administrator shall be entitled to rely on such representations in preparing,
executing and/or filing any such Form 10-D. The parties to this Agreement
acknowledge that the performance by the Master Servicer and the Securities
Administrator of its duties under this Section 3.18 related to the timely
preparation, execution and filing of Form 10-K is contingent upon such parties
(and any Servicing Function Participant) strictly observing all applicable
deadlines in the performance of their duties under this Section 3.18, Section
3.16 and Section 3.17. The Depositor acknowledges that the performance by the
Master Servicer and the Securities Administrator of its duties under this
Section 3.18 related to the timely preparation, execution and filing of Form
10-K is also contingent upon the Servicers, the Custodian and any Servicing
Function Participant strictly observing deadlines no later than those set forth
in this paragraph that are applicable to the parties to this Agreement in the
delivery to the Securities Administrator of any necessary Additional Form 10-K
Disclosure, any annual statement of compliance and any assessment of compliance
and attestation pursuant to the related Servicing Agreement, the Custodial
Agreement or any other applicable agreement. Neither the Master Servicer nor the
Securities Administrator shall have any liability for any loss, expense, damage
or claim arising out of or with respect to any failure to properly prepare,
execute and/or timely file such Form 10-K resulting from the Securities
Administrator's inability or failure to obtain or receive any information from
any other party hereto or any Servicer, Custodian or Servicing Function
Participant needed to prepare, execute or file such Form 10-K.
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(k) Each Form 10-K shall include a Xxxxxxxx-Xxxxx Certification, which
shall be in the form attached hereto as Exhibit L. Each Servicer shall sign and
provide, and each of the Servicers, the Master Servicer and the Securities
Administrator shall cause any Servicing Function Participant engaged by it to
sign and provide, to the person who signs the Xxxxxxxx-Xxxxx Certification (the
"Certifying Person") by March 1 (with a ten day cure period) of each year in
which the Issuing Entity is subject to the reporting requirements of the
Exchange Act and otherwise within a reasonable period of time upon request, a
certification (a "Back-Up Certification") (in the form attached hereto as
Exhibit M) upon which the Certifying Person, the entity for which the Certifying
Person acts as an officer and such entity's officers, directors and affiliates
(collectively, with the Certifying Person, the "Certification Parties") can
reasonably rely. The senior officer of the Master Servicer in charge of the
master servicing function shall serve as the Certifying Person on behalf of the
Issuing Entity. Such officer of the Certifying Person can be contacted by e-mail
at xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx or by facsimile at 000-000-0000. In the
event any such party or Servicing Function Participant engaged by any such party
is terminated or resigns pursuant to the terms of this Agreement, or any other
applicable agreement, as the case may be, such party shall provide a Back-Up
Certification to the Master Servicer pursuant to this Section 3.18 with respect
to the period of time it was subject to this Agreement or any other applicable
agreement, as the case may be. Notwithstanding the foregoing, (i) the Master
Servicer and the Securities Administrator shall not be required to deliver a
Back-Up Certification to each other if both are the same Person and the Master
Servicer is the Certifying Person and (ii) the Master Servicer shall not be
obligated to sign the Xxxxxxxx-Xxxxx Certification in the event that it does not
receive any Back-Up Certification required to be furnished to it pursuant to
this section or any Servicing Agreement or Custodial Agreement.
(l) The Securities Administrator shall have no responsibility to file any
items with the Commission other than those specified in this section and the
Master Servicer shall execute any and all Form 10-Ds, 8-Ks and 10-Ks required
hereunder.
(m) On or prior to January 30 of the first year in which the Securities
Administrator is able to do so under applicable law, the Securities
Administrator shall prepare and file a Form 15 Suspension Notification relating
to the automatic suspension of reporting in respect of the Issuing Entity under
the Exchange Act.
(n) In the event that the Securities Administrator is unable to timely file
with the Commission all or any required portion of any Form 8-K, 10-D or 10-K
required to be filed by this Agreement because required disclosure information
was either not delivered to it or delivered to it after the delivery deadlines
set forth in this Agreement or for any other reason, the Securities
Administrator will promptly notify electronically the Depositor of such
inability to make a timely filing with the Commission. In the case of Form 10-D
and 10-K, the parties to this Agreement will cooperate to prepare and file a
Form 12b-25 and a 10-D/A and 10K/A, as applicable, pursuant to Rule 12b-25 of
the Exchange Act. In the case of Form 8-K, the Securities Administrator will,
upon receipt of all required Form 8-K Disclosure Information and upon the
approval and direction of the Depositor, include such disclosure information on
the next succeeding Form 10-D to be filed for the Issuing Entity. In the event
that any previously filed Form 8-K, 10-D or 10-K needs to be amended, in
connection with any Additional Form 10-D Disclosure (other than, in the case of
Form 10-D, for the purpose of restating any Monthly Statement), Additional Form
10-K Disclosure or Form 8-K Disclosure Information, the
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Securities Administrator will electronically notify the Depositor and such other
parties to the transaction as are affected by such amendment, and such parties
will cooperate to prepare any necessary 8-K/A, 10-D/A or 10-K/A. Any Form 15,
Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K shall be signed by duly
authorized representative or a senior officer in charge of master servicing, as
applicable, of the Master Servicer. The parties to this Agreement acknowledge
that the performance by the Master Servicer of its duties under this Section
3.18 related to the timely preparation, execution and filing of Form 15, a Form
12b-25 or any amendment to Form 8-K, 10-D or 10-K is contingent upon each such
party performing its duties under this Section. Neither the Master Servicer nor
the Securities Administrator shall have any liability for any loss, expense,
damage or claim arising out of or with respect to any failure to properly
prepare, execute and/or timely file any such Form 15, Form 12b-25 or any
amendments to Forms 8-K, 10-D or 10-K, where such failure results from the
Securities Administrator's inability or failure to receive, on a timely basis,
any information from any other party hereto or any Servicer, any Custodian or
any Servicing Function Participant needed to prepare, arrange for execution or
file such Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K.
(o) The Depositor and the Securities Administrator agree to use their good
faith efforts to cooperate in complying with the requirements of this Section
3.18.
(p) Each of the parties agrees to provide to the Securities Administrator
such additional information related to such party as the Securities
Administrator may reasonably request, including evidence of the authorization of
the person signing any certificate or statement, financial information and
reports, and such other information related to such party or its performance
hereunder.
(q) Any notice or notification required to be delivered by the Securities
Administrator or Master Servicer to the Depositor pursuant to this Section 3.18,
may be delivered via facsimile to (000) 000-0000, via email to xxxx_xxxx@xx.xxx
or telephonically by calling Xxxx Park at (000) 000-0000.
(r) For the avoidance of doubt, any filing or deliverables required under
this Section 3.18 and Section 3.18 of the Stack I Agreement may be prepared,
delivered and filed in a consolidated manner. The Master Servicer, the
Securities Administrator and the Depositor may satisfy the requirements of this
Section 3.18 and Section 3.18 of the Stack I Agreement with a single set of
filings and deliverables addressing the requirements of both this Section 3.18
and Section 3.18 of the Stack I Agreement.
Section 3.19 Compliance with Regulation AB. Each of the parties hereto
acknowledges and agrees that the purpose of Sections 3.16, 3.17 and 3.18 is to
facilitate compliance by the Depositor with the provisions of Regulation AB, as
such may be amended or clarified from time to time. Therefore, each of the
parties agrees that the parties' obligations hereunder will be supplemented and
modified as necessary to be consistent with any such amendments, interpretive
advice or guidance, convention or consensus among active participants in the
asset-backed securities markets, advice of counsel, or otherwise in respect of
the requirements of Regulation AB and the parties shall comply with requests
made by the Depositor for delivery of additional or different information as the
Depositor may determine in good faith is necessary to comply with the provisions
of Regulation AB. Any such supplementation or modification shall be made in
accordance with Section 11.02 without the consent of the
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Certificateholders, and may result in a change in the reports filed by the
Securities Administrator on behalf of the Issuing Entity under the Exchange Act.
ARTICLE IV
ACCOUNTS
Section 4.01 Protected Accounts.
(a) The Master Servicer shall enforce the obligation of each Servicer to
establish and maintain a Protected Account in accordance with the applicable
Servicing Agreement, with records to be kept with respect thereto on a Mortgage
Loan by Mortgage Loan basis, into which accounts shall be deposited within two
Business Days (or as of such other time specified in the related Servicing
Agreement) of receipt all collections of principal and interest on any Mortgage
Loan and with respect to any REO Property received by a Servicer, including
Principal Prepayments, Insurance Proceeds, Liquidation Proceeds, Subsequent
Recoveries and advances made from the Servicer's own funds (less servicing
compensation as permitted by the applicable Servicing Agreement in the case of
the Servicer) and all other amounts to be deposited in the Protected Account.
The Servicer is hereby authorized to make withdrawals from and deposits to the
related Protected Account for purposes required or permitted by this Agreement.
To the extent provided in the related Servicing Agreement, the Protected Account
shall be held in a Designated Depository Institution and segregated on the books
of such institution in the name of the Trustee for the benefit of
Certificateholders.
(b) To the extent provided in the related Servicing Agreement, amounts on
deposit in a Protected Account may be invested in Permitted Investments in the
name of the Trustee for the benefit of Certificateholders and, except as
provided in the preceding paragraph, not commingled with any other funds, such
Permitted Investments to mature, or to be subject to redemption or withdrawal,
no later than the date on which such funds are required to be withdrawn for
deposit in the Master Servicer Collection Account, and shall be held until
required for such deposit. The income earned from Permitted Investments made
pursuant to this Section 4.01 shall be paid to the related Servicer under the
applicable Servicing Agreement, and the risk of loss of moneys required to be
distributed to the Certificateholders resulting from such investments shall be
borne by and be the risk of the related Servicer, as set forth in the applicable
Servicing Agreement. The related Servicer (to the extent provided in the related
Servicing Agreement) shall deposit the amount of any such loss in the Protected
Account within two Business Days of receipt of notification of such loss but not
later than the second Business Day prior to the Distribution Date on which the
moneys so invested are required to be distributed to the Certificateholders.
(c) To the extent provided in the related Servicing Agreement and subject
to this Article IV, on or before each Servicer Remittance Date, the related
Servicer shall withdraw or shall cause to be withdrawn from the Protected
Accounts and shall immediately deposit or cause to be deposited in the Master
Servicer Collection Account amounts representing the following collections and
payments (other than with respect to principal of or interest on the Mortgage
Loans due on or before the Cut-off Date) with respect to each Loan Group:
(i) Monthly Payments on the Mortgage Loans received or any related
portion thereof advanced by such Servicer pursuant to the related Servicing
Agreement which
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were due on or before the related Due Date, net of the amount thereof
comprising the Servicing Fees;
(ii) Principal Prepayments in Full and any Liquidation Proceeds
received by such Servicer with respect to such Mortgage Loans in the
related Prepayment Period, with interest to the date of prepayment or
liquidation, net of the amount thereof comprising the Servicing Fees;
(iii) Curtailments received by such Servicer for such Mortgage Loans
in the related Prepayment Period; and
(iv) Any amount to be used as a Monthly Advance.
(d) Withdrawals by the Master Servicer may be made from an Account only to
make remittances as provided in Section 4.01(c), 4.02 and 4.03; to reimburse the
Master Servicer or a Servicer for Monthly Advances which have been recovered by
subsequent collection from the related Mortgagor; to remove amounts deposited in
error; to remove fees, charges or other such amounts deposited on a temporary
basis; or to clear and terminate the account at the termination of this
Agreement in accordance with Section 10.01. As provided in Sections 4.01(c) and
4.02(b) certain amounts otherwise due to the Servicers may be retained by them
as set forth in the related Servicing Agreements and need not be deposited in
the Master Servicer Collection Account.
Section 4.02 Master Servicer Collection Account.
(a) The Master Servicer shall establish and maintain in the name of the
Trustee, for the benefit of the Certificateholders, the Master Servicer
Collection Account as a segregated trust account or accounts. The Master
Servicer Collection Account may be a sub-account of the Distribution Account.
The Master Servicer will deposit in the Master Servicer Collection Account as
identified by the Master Servicer and as received by the Master Servicer, the
following amounts:
(i) Any amounts withdrawn from a Protected Account or other permitted
account;
(ii) Any Monthly Advance and any Compensating Interest Payments;
(iii) Any Insurance Proceeds, Liquidation Proceeds or Subsequent
Recoveries received by or on behalf of the Master Servicer or which were
not deposited in a Protected Account or other permitted account;
(iv) The repurchase price with respect to any Mortgage Loans
repurchased and all proceeds of any Mortgage Loans or property acquired in
connection with the optional termination of the trust;
(v) Any amounts required to be deposited with respect to losses on
investments of deposits in an Account; and
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(vi) Any other amounts received by or on behalf of the Master Servicer
and required to be deposited in the Master Servicer Collection Account
pursuant to this Agreement.
(b) All amounts deposited to the Master Servicer Collection Account shall
be held by the Master Servicer in the name of the Trustee in trust for the
benefit of the Certificateholders in accordance with the terms and provisions of
this Agreement. The requirements for crediting the Master Servicer Collection
Account or the Distribution Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of (i) prepayment or late payment charges or assumption, tax service,
statement account or payoff, substitution, satisfaction, release and other like
fees and charges and (ii) the items enumerated in Subsections 4.05(a)(i), (ii),
(iii), (iv), (vi), (vii), (viii), (ix), (xi) and (xii) with respect to the
Securities Administrator, need not be credited by the Master Servicer or the
related Servicer to the Distribution Account or the Master Servicer Collection
Account, as applicable. In the event that the Master Servicer shall deposit or
cause to be deposited to the Distribution Account any amount not required to be
credited thereto, the Securities Administrator, upon receipt of a written
request therefor signed by a Servicing Officer of the Master Servicer, shall
promptly transfer such amount to the Master Servicer from the Distribution
Account, any provision herein to the contrary notwithstanding.
(c) The amount at any time credited to the Master Servicer Collection
Account shall be invested, in the name of the Trustee, or its nominee, for the
benefit of the Certificateholders, in Permitted Investments as directed by
Master Servicer. All Permitted Investments shall mature or be subject to
redemption or withdrawal on or before, and shall be held until, the next
succeeding Distribution Account Deposit Date. Any and all investment earnings on
amounts on deposit in the Master Servicer Collection Account from time to time
shall be for the account of the Master Servicer. The Master Servicer from time
to time shall be permitted to withdraw or receive distribution of any and all
investment earnings from the Master Servicer Collection Account. The risk of
loss of moneys required to be distributed to the Certificateholders resulting
from such investments shall be borne by and be the risk of the Master Servicer.
The Master Servicer shall deposit the amount of any such loss in the Master
Servicer Collection Account within two Business Days of receipt of notification
of such loss but not later than the second Business Day prior to the
Distribution Date on which the moneys so invested are required to be distributed
to the Certificateholders.
(d) For the avoidance of doubt, it is agreed that the Master Servicer shall
establish and maintain in the name of the Trustee, for the benefit of the
holders of the Stack I Certificates, a separate segregated trust account or
accounts pursuant to Section 4.02 of the Stack I Agreement.
Section 4.03 Permitted Withdrawals and Transfers from the Master Servicer
Collection Account.
(a) The Master Servicer will, from time to time on demand of the Master
Servicer, the Trustee or the Securities Administrator, make or cause to be made
such withdrawals or transfers from the Master Servicer Collection Account as the
Master Servicer has designated for such transfer or withdrawal pursuant to the
Servicing Agreements. The Master Servicer may clear
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and terminate the Master Servicer Collection Account pursuant to Section 10.01
and remove amounts from time to time deposited in error.
(b) On an ongoing basis, the Master Servicer shall withdraw from the Master
Servicer Collection Account (i) any expenses recoverable by the Trustee, the
Master Servicer or the Securities Administrator pursuant to this Agreement,
including but not limited to Sections 2.01(b), 3.03, 7.04 and 9.05 and (ii) any
amounts payable to the Master Servicer as set forth in Section 3.14.
(c) In addition, on or before each Distribution Account Deposit Date, the
Master Servicer shall deposit in the Distribution Account (or remit to the
Securities Administrator for deposit therein) any Monthly Advances required to
be made by the Master Servicer with respect to the Mortgage Loans.
(d) No later than 3:00 p.m. New York time on each Distribution Account
Deposit Date, the Master Servicer will transfer all Available Funds on deposit
in the Master Servicer Collection Account with respect to the related
Distribution Date to the Securities Administrator for deposit in the
Distribution Account.
Section 4.04 Distribution Account.
(a) The Securities Administrator shall establish and maintain in the name
of the Trustee, for the benefit of the Certificateholders, the Distribution
Account as a segregated trust account or accounts.
(b) All amounts deposited to the Distribution Account shall be held by the
Securities Administrator in the name of the Trustee in trust for the benefit of
the Certificateholders in accordance with the terms and provisions of this
Agreement.
(c) The Distribution Account shall constitute a trust account of the Trust
Fund segregated on the books of the Securities Administrator and held by the
Securities Administrator in trust in its Corporate Trust Office, and the
Distribution Account and the funds deposited therein shall not be subject to,
and shall be protected to the maximum extent permitted by applicable law from,
all claims, liens, and encumbrances of any creditors or depositors of the
Securities Administrator, the Trustee or the Master Servicer (whether made
directly, or indirectly through a liquidator or receiver of the Securities
Administrator, the Trustee or the Master Servicer). The Distribution Account
shall be an Eligible Account. The amount at any time credited to the
Distribution Account shall be (i) fully insured by the FDIC to the maximum
coverage provided thereby or (ii) invested in the name of the Trustee, in such
Permitted Investments selected by the Master Servicer or deposited in demand
deposits with such depository institutions as selected by the Master Servicer,
provided that time deposits of such depository institutions would be a Permitted
Investment. All Permitted Investments shall mature or be subject to redemption
or withdrawal on or before, and shall be held until, the next succeeding
Distribution Date if the obligor for such Permitted Investment is the Master
Servicer or, if such obligor is any other Person, the Business Day preceding
such Distribution Date. All investment earnings on amounts on deposit in the
Distribution Account or benefit from funds uninvested therein from time to time
shall be for the account of the Securities Administrator. The Securities
Administrator shall be permitted to withdraw or receive distribution of any and
all
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investment earnings from the Distribution Account on each Distribution Date. If
there is any loss on a Permitted Investment or demand deposit, the Securities
Administrator shall deposit such amount in the Distribution Account. With
respect to the Distribution Account and the funds deposited therein, the
Securities Administrator shall take such action as may be necessary to ensure
that the Certificateholders shall be entitled to the priorities afforded to such
a trust account (in addition to a claim against the estate of the Trust) as
provided by 12 U.S.C. Section 92a(e), and applicable regulations pursuant
thereto, if applicable, or any applicable comparable state statute applicable to
state chartered banking corporations.
(d) For the avoidance of doubt, the Securities Administrator shall
establish and maintain in the name of the Trustee, for the benefit of the
holders of the Stack I Certificates, a separate segregated trust account or
accounts pursuant to Section 4.04 of the Stack I Agreement.
Section 4.05 Permitted Withdrawals and Transfers from the Distribution
Account.
(a) The Securities Administrator will, from time to time on demand of the
Master Servicer, make or cause to be made such withdrawals or transfers from the
Distribution Account as the Master Servicer has designated for such transfer or
withdrawal pursuant to the Servicing Agreements for the following purposes
(limited in the case of amounts due the Master Servicer to those not withdrawn
from the Master Servicer Collection Account in accordance with the terms of this
Agreement):
(i) to reimburse the Master Servicer or any Servicer for any Monthly
Advance of its own funds or any advance of such Servicer's own funds, the
right of the Master Servicer or a Servicer to reimbursement pursuant to
this subclause (i) being limited to amounts received on a particular
Mortgage Loan (including, for this purpose, the Purchase Price therefor,
Insurance Proceeds and Liquidation Proceeds) which represent late payments
or recoveries of the principal of or interest on such Mortgage Loan
respecting which such Monthly Advance or advance was made;
(ii) to reimburse the Master Servicer or any Servicer from Insurance
Proceeds or Liquidation Proceeds relating to a particular Mortgage Loan for
amounts expended by the Master Servicer or such Servicer in good faith as a
Servicing Advance in connection with the restoration of the related
Mortgaged Property which was damaged by an Uninsured Cause or in connection
with the liquidation of such Mortgage Loan;
(iii) to reimburse the Master Servicer or any Servicer from Insurance
Proceeds relating to a particular Mortgage Loan for insured expenses
incurred with respect to such Mortgage Loan and to reimburse the Master
Servicer or such Servicer from Liquidation Proceeds from a particular
Mortgage Loan for Liquidation Expenses incurred with respect to such
Mortgage Loan; provided that the Master Servicer shall not be entitled to
reimbursement for Liquidation Expenses with respect to a Mortgage Loan to
the extent that (i) any amounts with respect to such Mortgage Loan were
paid as Excess Liquidation Proceeds pursuant to clause (xi) of this
Subsection 4.03 (a) to the Master Servicer; and (ii) such Liquidation
Expenses were not included in the computation of such Excess Liquidation
Proceeds;
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(iv) to pay the Master Servicer or any Servicer, as appropriate, from
Liquidation Proceeds or Insurance Proceeds received in connection with the
liquidation of any Mortgage Loan, the amount which it or such Servicer
would have been entitled to receive under subclause (ix) of this Subsection
4.03(a) as servicing compensation on account of each defaulted scheduled
payment on such Mortgage Loan if paid in a timely manner by the related
Mortgagor;
(v) to pay the Master Servicer or any Servicer from the Purchase Price
for any Mortgage Loan, the amount which it or such Servicer would have been
entitled to receive under subclause (ix) of this Subsection 4.03 (a) as
servicing compensation;
(vi) to reimburse the Master Servicer or any Servicer for advances of
funds pursuant to Sections, and the right to reimbursement pursuant to this
subclause being limited to amounts received on the related Mortgage Loan
(including, for this purpose, the Purchase Price therefor, Insurance
Proceeds and Liquidation Proceeds) which represent late recoveries of the
payments for which such advances were made;
(vii) to reimburse the Master Servicer or any Servicer for any Monthly
Advance or advance, after a Realized Loss has been allocated with respect
to the related Mortgage Loan if the Monthly Advance or advance has not been
reimbursed pursuant to clauses (i) and (vi);
(viii) to pay the Master Servicer as set forth in Section 3.14;
(ix) to reimburse the Master Servicer for expenses, costs and
liabilities incurred by and reimbursable to it pursuant to this Agreement,
including but not limited to Sections 3.03, 7.04(c) and (d);
(x) to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds to the extent not retained by
the related Servicer;
(xi) to reimburse or pay any Servicer any such amounts as are due
thereto under the applicable Servicing Agreement and have not been retained
by or paid to the Servicer, to the extent provided in the related Servicing
Agreement;
(xii) to reimburse the Trustee or the Securities Administrator for
expenses, costs and liabilities incurred by or reimbursable to it pursuant
to this Agreement;
(xiii) to remove amounts deposited in error; and
(xiv) to clear and terminate the Distribution Account pursuant to
Section 9.01.
(b) The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Distribution Account pursuant to subclauses (i) through
(vi), inclusive, and (viii) or with respect to any such amounts which would have
been covered by such subclauses had the amounts not been retained by the Master
Servicer without being deposited in the Distribution Account under Section
4.02(b).
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(c) On each Distribution Date, the Securities Administrator shall
distribute the Available Funds for each Loan Group to the Holders of the
Certificates in accordance with Section 6.01.
ARTICLE V
CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be executed by manual
or facsimile signature on behalf of the Securities Administrator by an
authorized officer. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures were affixed, authorized
to sign on behalf of the Securities Administrator shall bind the Issuing Entity,
notwithstanding that such individuals or any of them have ceased to be so
authorized prior to the authentication and delivery of such Certificates or did
not hold such offices at the date of such authentication and delivery. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form set forth as attached hereto executed
by the Securities Administrator by manual signature, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication. On
the Closing Date, the Securities Administrator shall authenticate the
Certificates to be issued at the written direction of the Depositor, or any
Affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer and Exchange of
Certificates.
(a) The Securities Administrator shall maintain, or cause to be maintained
in accordance with the provisions of Section 5.09 hereof, a Certificate Register
for the Trust Fund in which, subject to the provisions of subsections (b) and
(c) below and to such reasonable regulations as it may prescribe, the Securities
Administrator shall provide for the registration of Certificates and of
Transfers and exchanges of Certificates as herein provided. Upon surrender for
registration of Transfer of any Certificate, the Securities Administrator shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same Class and of like
aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Securities Administrator. Whenever any
Certificates are so surrendered for exchange, the Securities Administrator shall
execute, authenticate and deliver the Certificates that the Certificateholder
making the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of Transfer or exchange shall be accompanied by a
written instrument of Transfer in form satisfactory to the Securities
Administrator duly executed by the holder thereof or his attorney duly
authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required. All
Certificates surrendered for registration of Transfer or exchange shall be
canceled
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and subsequently destroyed by the Securities Administrator in accordance with
such Securities Administrator's customary procedures.
(b) No Transfer of a Class B, Class P or Class A-R Certificate shall be
made unless such Transfer is made pursuant to an effective registration
statement under the Securities Act and any applicable state securities laws or
is exempt from the registration requirements under the Securities Act and such
state securities laws. In the event that a Transfer is to be made in reliance
upon an exemption from the Securities Act and such laws, in order to assure
compliance with the Securities Act and such laws, the Certificateholder desiring
to effect such Transfer and such Certificateholder's prospective transferee
shall (except with respect to the initial transfer of a Class B, Class P or
Class A-R Certificate by Xxxxxxx Xxxxx & Co.) each certify to each Securities
Administrator in writing the facts surrounding the Transfer in substantially the
form set forth in Exhibit F-1 (the "Transferor Representation Letter") and (i)
deliver a letter in substantially the form of either Exhibit F-2 (the "Investor
Representation Letter") or Exhibit F-3 (the "Rule 144A Letter") or (ii) there
shall be delivered to the Securities Administrator an Opinion of Counsel that
such Transfer may be made pursuant to an exemption from the Securities Act,
which Opinion of Counsel shall not be an expense of the Depositor or the
Securities Administrator. The Depositor shall provide to any Holder of a Class
B, Class P or Class A-R Certificate and any prospective transferee designated by
any such Holder, information regarding the related Certificates and the Mortgage
Loans and such other information as shall be necessary to satisfy the condition
to eligibility set forth in Rule 144A(d)(4) for Transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Securities Administrator shall
cooperate with the Depositor in providing the Rule 144A information referenced
in the preceding sentence, including providing to the Depositor such information
in the possession of the Securities Administrator regarding the Certificates,
the Mortgage Loans and other matters regarding the Trust Fund as the Depositor
shall reasonably request to meet its obligation under the preceding sentence.
Each Holder of a Class B, Class P or Class A-R Certificate desiring to effect
such Transfer shall, and does hereby agree to, indemnify the Depositor and the
Securities Administrator against any liability that may result if the Transfer
is not so exempt or is not made in accordance with such federal and state laws.
No transfer of an ERISA Restricted Certificate or a Class A-R Certificate
will be registered unless the Securities Administrator has received (A) a
representation to the effect that such transferee is not an employee benefit
plan subject to Title I of ERISA, a plan subject to Section 4975 of the Code or
a plan subject to any state, local, federal, non-U.S. or other law substantively
similar to the foregoing provisions of ERISA or the Code ("Similar Law")
(collectively, a "Plan"), and is not directly or indirectly acquiring such
Certificate for, on behalf of, or with any assets of any such Plan, or (B)
solely in the case of an ERISA Restricted Certificate (I) if the Certificate has
been the subject of an ERISA-Qualifying Underwriting, a representation to the
effect that such transferee is an insurance company that is acquiring the
Certificate with assets contained in an "insurance company general account," as
defined in Section V(e) of Prohibited Transaction Class Exemption ("PTCE")
95-60, and the acquisition and holding of the Certificate are covered and exempt
under Sections I and III of PTCE 95-60, or (II) solely in the case of a
Definitive Certificate, an Opinion of Counsel satisfactory to the Securities
Administrator, and upon which the Securities Administrator shall be entitled to
rely, to the effect that the acquisition and holding of such Certificate will
not constitute or result in a
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nonexempt prohibited transaction under Title I of ERISA or Section 4975 of the
Code, or a violation of Similar Law, and will not subject the Securities
Administrator, the Master Servicer, the Trustee or the Depositor to any
obligation in addition to those expressly undertaken in this Agreement, which
Opinion of Counsel shall not be an expense of the Securities Administrator, the
Master Servicer, the Trustee or the Depositor.
Except in the case of a Definitive Certificate, the representations set
forth in the immediately preceding paragraph of this Subsection 5.02(b), other
than clause (B)(II) in the immediately preceding paragraph, shall be deemed to
have been made to the Securities Administrator by the transferee's acceptance of
an ERISA Restricted Certificate or a Class A-R Certificate (or the acceptance by
a Certificate Owner of the beneficial interest in any Class of ERISA Restricted
Certificates or a Class A-R Certificate).
Notwithstanding any other provision herein to the contrary, any purported
transfer of an ERISA Restricted Certificate or a Class A-R Certificate to or on
behalf of a Plan without the delivery to the Securities Administrator of a
representation or an Opinion of Counsel satisfactory to the Securities
Administrator as described above shall be void and of no effect. The Securities
Administrator shall not be under any liability to any Person for any
registration or transfer of any ERISA Restricted Certificate or Class A-R
Certificate that is in fact not permitted by this Section 5.02(b), nor shall the
Trustee or the Securities Administrator be under any liability for making any
payments due on such Certificate to the Holder thereof or taking any other
action with respect to such Holder under the provisions of this Agreement so
long as the transfer was registered by the Securities Administrator in
accordance with the foregoing requirements. The Trustee or the Securities
Administrator shall be entitled, but not obligated, to recover from any Holder
of any ERISA Restricted Certificate or Class A-R Certificate that was in fact a
Plan and that held such Certificate in violation of this Section 5.02(b) all
payments made on such ERISA Restricted Certificate or a Class A-R Certificate at
and after the time it commenced such holding. Any such payments so recovered
shall be paid and delivered to the last preceding Holder of such Certificate
that is not a Plan.
(c) Each Person who has or who acquires any Ownership Interest in a Class
A-R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class A-R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a Class
A-R Certificate shall be a Permitted Transferee and shall promptly notify
the Securities Administrator of any change or impending change in its
status as a Permitted Transferee.
(ii) No Ownership Interest in a Class A-R Certificate may be
purchased, transferred or sold, directly or indirectly, except in
accordance with the provisions hereof. No Ownership Interest in a Class A-R
Certificate may be registered on the Closing Date or thereafter
transferred, and the Securities Administrator shall not register the
Transfer of any Class A-R Certificate unless, in addition to the
certificates required to be delivered to the Securities Administrator under
subparagraph (b) above, the Securities Administrator shall have been
furnished with an affidavit (a "Transferee's Letter") of the initial owner
or the proposed transferee in the form attached hereto as Exhibit E-1 and
an affidavit (a "Transferor Certificate") of the proposed transferor in the
form attached
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hereto as Exhibit E-2. In the absence of a contrary instruction from the
transferor of a Class A-R Certificate, declaration (11) in Appendix A of
the Transferee's Letter may be left blank. If the transferor requests by
written notice to the Securities Administrator prior to the date of the
proposed transfer that one of the two other forms of declaration (11) in
Appendix A of the Transferee's Letter be used, then the requirements of
this Section 5.02(c)(ii) shall not have been satisfied unless the
Transferee's Letter includes such other form of declaration.
(iii) Each Person holding or acquiring any Ownership Interest in a
Class A-R Certificate shall agree (A) to obtain a Transferee's Letter from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Class A-R Certificate, (B) to obtain a Transferee's Letter
from any Person for whom such Person is acting as nominee, trustee or agent
in connection with any Transfer of a Class A-R Certificate and (C) not to
Transfer its Ownership Interest in a Class A-R Certificate or to cause the
Transfer of an Ownership Interest in a Class A-R Certificate to any other
Person if it has actual knowledge that such Person is not a Permitted
Transferee. Further, no transfer, sale or other disposition of any
Ownership Interest in a Class A-R Certificate may be made to a person who
is not a U.S. Person (within the meaning of Section 7701 of the Code)
unless such person furnishes the transferor and the Securities
Administrator with a duly completed and effective Internal Revenue Service
Form W-8ECI (or any successor thereto) and the Securities Administrator
consents to such transfer, sale or other disposition in writing.
(iv) Any attempted or purported Transfer of any Ownership Interest in
a Class A-R Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Class A-R Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Class A-R Certificate. The Securities Administrator shall
be under no liability to any Person for any registration of Transfer of a
Class A-R Certificate that is in fact not permitted by Section 5.02(b) and
this Section 5.02(c) or for making any payments due on such Certificate to
the Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transferee's Letter. The Securities
Administrator shall be entitled but not obligated to recover from any
Holder of a Class A-R Certificate that was in fact not a Permitted
Transferee at the time it became a Holder or, at such subsequent time as it
became other than a Permitted Transferee, all payments made on such Class
A-R Certificate at and after either such time. Any such payments so
recovered by the Securities Administrator shall be paid and delivered by
the Securities Administrator to the last preceding Permitted Transferee of
such Certificate.
(v) At the option of the Holder of the Class A-R Certificate, the
Class LT1-R Interest, the Residual Interest and the residual interest in
any REMIC created under the Stack I Agreement may be severed and
represented by separate certificates; provided, however, that such separate
certification may not occur until the Securities Administrator receives a
REMIC Opinion to the effect that separate certification in the form and
manner
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proposed would not result in the imposition of federal tax upon the Issuing
Entity or any of the REMICs provided for herein or provided for under the
Stack I Agreement or cause any of the REMICs provided for herein or
provided for under the Stack I Agreement to fail to qualify as a REMIC; and
provided further, that the provisions of Sections 5.02(b) and (c) will
apply to each such separate certificate as if the separate certificate were
a Class A-R Certificate. If, as evidenced by a REMIC Opinion, it is
necessary to preserve the REMIC status of any of the REMICs provided for
herein or provided for under the Stack I Agreement, the Class LT1-R
Interest, the Residual Interest and the residual interest in any REMIC
created under the Stack I Agreement shall be severed and represented by
separate Certificates.
The restrictions on Transfers of a Class A-R Certificate set forth in this
Section 5.02(c) shall cease to apply (and the applicable portions of the legend
on a Class A-R Certificate may be deleted) with respect to Transfers occurring
after delivery to the Securities Administrator of an Opinion of Counsel, which
Opinion of Counsel shall not be an expense of the Securities Administrator or
the Depositor, to the effect that the elimination of such restrictions will not
cause any of the REMICs provided for herein to fail to qualify as a REMIC at any
time that the Certificates are outstanding or result in the imposition of any
tax on the Issuing Entity, any REMIC provided for herein, a Certificateholder or
another Person. Each Person holding or acquiring any Ownership Interest in a
Class A-R Certificate hereby consents to any amendment of this Agreement that,
based on an Opinion of Counsel furnished to the Securities Administrator, is
reasonably necessary (a) to ensure that the record ownership of, or any
beneficial interest in, a Class A-R Certificate is not transferred, directly or
indirectly, to a Person that is not a Permitted Transferee and (b) to provide
for a means to compel the Transfer of a Class A-R Certificate that is held by a
Person that is not a Permitted Transferee to a Holder that is a Permitted
Transferee.
(d) The transferor of the Class A-R Certificate shall notify the Securities
Administrator in writing upon the transfer of the Class A-R Certificate.
(e) The preparation and delivery of all certificates, opinions and other
writings referred to above in this Section 5.02 shall not be an expense of the
Issuing Entity, the Depositor or the Securities Administrator.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If (a) any
mutilated Certificate is surrendered to the Securities Administrator or the
Securities Administrator receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and of the ownership thereof and
(b) there is delivered to the Securities Administrator such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Securities Administrator that such Certificate has been
acquired by a bona fide purchaser, the Securities Administrator shall execute,
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like Class, tenor
and Percentage Interest. In connection with the issuance of any new Certificate
under this Section 5.03, the Securities Administrator may require the payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Securities Administrator) connected therewith. Any replacement
Certificate issued pursuant to this Section 5.03 shall constitute complete and
indefeasible evidence of ownership in the Trust Fund, as if originally issued,
whether or not the
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lost, stolen or destroyed Certificate shall be found at any time. All
Certificates surrendered to the Securities Administrator under the terms of this
Section 5.03 shall be canceled and destroyed by the Securities Administrator in
accordance with its standard procedures without liability on its part.
Section 5.04 Persons Deemed Owners. The Securities Administrator and any
agent of the Securities Administrator may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Securities Administrator, nor any agent of the
Securities Administrator shall be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and Addresses. If
three or more Certificateholders (a) request such information in writing from
the Securities Administrator, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders propose to transmit or if the
Depositor shall request such information in writing from the Securities
Administrator, then the Securities Administrator shall, within ten Business Days
after the receipt of such request, provide the Depositor or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of the Trust Fund held by the Securities Administrator, if
any. The Depositor and every Certificateholder, by receiving and holding a
Certificate, agree that the Securities Administrator shall not be held
accountable by reason of the disclosure of any such information as to the list
of the Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 5.06 Book-Entry Certificates. The Regular Certificates, upon
original issuance, shall be issued in the form of one or more typewritten
Certificates representing the Book-Entry Certificates, to be delivered to the
Depository by or on behalf of the Depositor. The Book-Entry Certificates shall
initially be registered on the Certificate Register in the name of the
Depository or its nominee, and no Certificate Owner of a Book-Entry Certificate
will receive a definitive certificate representing such Certificate Owner's
interest in such Certificates, except as provided in Section 5.08. Unless and
until definitive, fully registered Certificates ("Definitive Certificates") have
been issued to the Certificate Owners of the Book-Entry Certificates pursuant to
Section 5.08:
(a) the provisions of this Section shall be in full force and effect;
(b) the Depositor and the Securities Administrator may deal with the
Depository and the Depository Participants for all purposes (including the
making of distributions) as the authorized representative of the respective
Certificate Owners of the Book-Entry Certificates;
(c) registration of the Book-Entry Certificates may not be transferred by
the Securities Administrator except to another Depository;
(d) the rights of the respective Certificate Owners of the Book-Entry
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of the Book-Entry Certificates and the Depository and/or the
Depository Participants. Pursuant to the Depository Agreement, unless
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and until Definitive Certificates are issued pursuant to Section 5.08, the
Depository will make book-entry transfers among the Depository Participants and
receive and transmit distributions of principal and interest on the related
Certificates to such Depository Participants;
(e) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants;
(f) the Securities Administrator may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to its
Depository Participants; and
(g) to the extent that the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of the aggregate unpaid principal amount of
any Class of Certificates, such direction or consent may be given by Certificate
Owners (acting through the Depository and the Depository Participants) owning
Book-Entry Certificates evidencing the requisite percentage of principal amount
of such Class of Certificates.
Section 5.07 Notices to Depository. Whenever any notice or other
communication is required to be given to Certificateholders of the Class with
respect to which Book-Entry Certificates have been issued, unless and until
Definitive Certificates shall have been issued to the related Certificate
Owners, the Securities Administrator shall give all such notices and
communications to the Depository.
Section 5.08 Definitive Certificates. If, after Book-Entry Certificates
have been issued with respect to any Certificates, (a) the Depository or the
Depositor advises the Securities Administrator that the Depository is no longer
willing, qualified or able to discharge properly its responsibilities under the
Depository Agreement with respect to such Certificates and the Securities
Administrator or the Depositor is unable to locate a qualified successor, (b)
the Depositor notifies the Securities Administrator and the Depository of its
intent to terminate the book-entry system through the Depository and, upon
receipt of notice of such intent from the Depository, the Certificate Owners of
the Book-Entry Certificates agree to initiate such termination or (c) after the
occurrence and continuation of an Event of Default, Certificate Owners of such
Book-Entry Certificates having not less than 51% of the Voting Rights evidenced
by any Class of Book-Entry Certificates advise the Securities Administrator and
the Depository in writing through the Depository Participants that the
continuation of a book-entry system with respect to Certificates of such Class
through the Depository (or its successor) is no longer in the best interests of
the Certificate Owners of such Class, then the Securities Administrator shall
notify all Certificate Owners of such Book-Entry Certificates, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners of such Class requesting the same.
The Depositor shall provide the Securities Administrator with an adequate
inventory of certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon surrender to the Securities Administrator of any such
Certificates by the Depository, accompanied by registration instructions from
the Depository for registration, the Securities Administrator shall authenticate
and deliver such Definitive Certificates. Neither the Depositor nor the
Securities Administrator shall be liable for any delay
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in delivery of such instructions and each may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of such Definitive
Certificates, all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed by
the Securities Administrator, to the extent applicable with respect to such
Definitive Certificates and the Securities Administrator shall recognize the
Holders of such Definitive Certificates as Certificateholders hereunder.
Section 5.09 Maintenance of Office or Agency. The Securities Administrator
will maintain or cause to be maintained at its expense an office or offices or
agency or agencies where Certificates may be surrendered for registration of
transfer or exchange. The Securities Administrator initially designates its
offices at Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000,
Attention: Client Service Manager - Xxxxxxx Xxxxx Mortgage Investors Trust,
Series 2006-AF1 as offices for such purposes. The Securities Administrator will
give prompt written notice to the Certificateholders of any change in such
location of any such office or agency. For the avoidance of doubt, the
Securities Administrator may satisfy the requirements of both this Section 5.09
and Section 5.09 of the Stack I Agreement by maintaining a single office or
agency.
ARTICLE VI
PAYMENTS TO CERTIFICATEHOLDERS
Section 6.01 Distributions on the Certificates. (a) Interest and principal
on the Certificates will be distributed by the Securities Administrator monthly
on each Distribution Date, commencing in October 2006, as instructed by the
Master Servicer, in an aggregate amount equal to the sum of the Available Funds
for such Distribution Date. On each Distribution Date, the Available Funds shall
be distributed as follows:
(A) On each Distribution Date, the Group 4 Available Funds will be
distributed in the following order of priority among the Group 4
Certificates except as otherwise noted:
first, to the Class AV-1A, Class AV-1B and Class A-R
Certificates, pro rata, the Accrued Certificate Interest on each
class of Group 4 Certificates for such Distribution Date;
second, to the Class AV-1A, Class AV-1B and Class A-R
Certificates, pro rata, any Accrued Certificate Interest thereon
remaining undistributed from previous Distribution Dates, to the
extent of remaining Group 4 Available Funds, any shortfall in
available amounts being allocated to the Group 4 Certificates in
proportion to the amount of such Accrued Certificate Interest
remaining undistributed for each class of Group 4 Certificates
for such Distribution Date; and
third, to the Class AV-1A, Class AV-1B and Class A-R
Certificates, pro rata, in reduction of the Class Certificate
Balances thereof, the Group 4 Senior Principal Distribution
Amount for such Distribution Date to the extent of remaining
Group 4 Available Funds, until the Class Certificate Balances of
such Classes have been reduced to zero.
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(B) On each Distribution Date, the Group 5 Available Funds will be
distributed in the following order of priority among the Group 5
Certificates except as otherwise noted:
first, to the Class AV-2A and Class AV-2B Certificates, pro rata,
the Accrued Certificate Interest on each class of Group 5
Certificates for such Distribution Date;
second, to the Class AV-2A and Class AV-2B, pro rata, any Accrued
Certificate Interest thereon remaining undistributed from
previous Distribution Dates, to the extent of remaining Group 5
Available Funds, any shortfall in available amounts being
allocated to the Group 5 Certificates in proportion to the amount
of such Accrued Certificate Interest remaining undistributed for
each class of Group 5 Certificates for such Distribution Date;
and
third, to the Class AV-2A and Class AV-2B Certificates, pro rata,
in reduction of the Class Certificate Balances thereof, the Group
5 Senior Principal Distribution Amount for such Distribution Date
to the extent of remaining Group 5 Available Funds, until the
Class Certificate Balances of such Classes have been reduced to
zero.
(C) [Reserved.]
(D) [Reserved.]
(E) [Reserved.]
(F) [Reserved.]
(G) On each Distribution Date on or prior to the Credit Support
Depletion Date, an amount equal to the sum of the remaining Group 4
Available Funds and Group 5 Available Funds after the distributions in
clauses (A) through (E) above and after any distributions required to
be made pursuant to clauses (H) and (I) below, will be distributed
sequentially, in the following order, to the Class MV-1, Class MV-2,
Class MV-3, Class BV-1, Class BV-2 and Class BV-3 Certificates, in
each case up to an amount equal to and in the following order: (a) the
Accrued Certificate Interest thereon for such Distribution Date, (b)
any Accrued Certificate Interest thereon remaining undistributed from
previous Distribution Dates and (c) such Class's Subordinate Principal
Distribution Amount for such Distribution Date, in each case to the
extent of the remaining Available Funds.
(H) On each Distribution Date prior to the Credit Support Depletion
Date but after the reduction of the aggregate Class Certificate
Balance of the related Senior Certificates of a related Loan Group to
zero, the remaining Class or Classes of related Senior Certificates
will be entitled to receive in reduction of their Class Certificate
Balances, pro rata, based upon their respective Class Certificate
Balances immediately prior to such Distribution Date, in addition to
any Principal
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Prepayments related to such remaining Senior Certificates' respective
Loan Group allocated to such Senior Certificates, 100% of the
Principal Prepayments on any Mortgage Loan in the Loan Group relating
to the fully repaid Class or Classes of Senior Certificates; provided,
however, that if both (a) the weighted average of the Subordinate
Percentage equals or exceeds 200% of the original weighted average of
the Subordinate Percentage as of the Closing Date on or after the
Distribution Date in October 2009 and (b) the aggregate Stated
Principal Balance of the Mortgage Loans delinquent 60 days or more,
averaged over the last six months, as a percentage of the aggregate
Class Certificate Balance of the Class M Certificates and Class B
Certificates, does not exceed 50%, then the additional allocation of
Principal Prepayments to the Senior Certificates in accordance with
this clause (H) will not be made and 100% of the Principal Prepayments
on any Mortgage Loan in the Loan Group relating to the fully repaid
class or classes of Senior Certificates will be allocated to the
Subordinate Certificates.
(I) If on any Distribution Date on which the aggregate Class
Certificate Balance of any Class or Classes of Senior Certificates
would be greater than the aggregate Stated Principal Balance of the
Mortgage Loans in its related Loan Group (the amount of such excess,
the "Undercollateralized Amount," and any such Class or Classes of
Senior Certificates, the "Undercollateralized Senior Certificates")
and any Subordinate Certificates are still outstanding in each case
after giving effect to distributions to be made on such Distribution
Date, (i) 100% of amounts otherwise allocable to the Subordinate
Certificates in respect of principal will be distributed to the
Undercollateralized Senior Certificates in reduction of the Class
Certificate Balances thereof, until the aggregate Class Certificate
Balance of such Class or Classes of Undercollateralized Senior
Certificates is equal to the aggregate Stated Principal Balance of the
Mortgage Loans in its related Loan Group, and (ii) the Accrued
Certificate Interest otherwise allocable to the Subordinate
Certificates on such Distribution Date will be reduced, if necessary,
and distributed to such Class or Classes of Undercollateralized Senior
Certificates pursuant to clause first of clauses (A), (B), (C), (D),
or (E) above, as applicable, in an amount equal to the Accrued
Certificate Interest at the Pass-Through Rate for such Class or
Classes of Undercollateralized Senior Certificates for such
Distribution Date on a balance equal to the related
Undercollateralized Amount. Any such reduction in the Accrued
Certificate Interest on the Subordinate Certificates will be allocated
to the Class BV-3, Class BV-2, Class BV-1, Class MV-3, Class MV-2 and
Class MV-1 Certificates, in that order.
On each Distribution Date, any Available Funds remaining after payment of
interest and principal to the Classes of Certificates entitled thereto, as
described above, will be distributed to the Class A-R Certificates; provided
that if on any Distribution Date on and after the Credit Support Depletion Date
there are any Group 4 and Group 5 Available Funds remaining after payment of
interest and principal to a Class or Classes of Senior Certificates entitled
thereto, such amounts will be distributed to the other Classes of Senior
Certificates, pro rata, based upon their Class Certificate Balances, until all
amounts due to all Classes of Senior Certificates have been paid in full, before
any amounts are distributed to the Class A-R Certificates.
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In addition to the foregoing distributions, with respect to any Subsequent
Recoveries, the Master Servicer shall deposit such amounts into the Master
Servicer Collection Account pursuant to Section 4.01(a). If, after taking into
account such Subsequent Recoveries, the amount of a Realized Loss is reduced,
the amount of such Subsequent Recoveries will be applied to increase the Class
Certificate Balance of the Class of Subordinate Certificates with the highest
payment priority to which Realized Losses have been allocated, including any
Class of Subordinate Certificates to which a Realized Loss was previously
allocated and whose Class Certificate Balance has been reduced to zero, but not
by more than the amount of Realized Losses previously allocated to that Class of
Certificates pursuant to Section 6.02. The amount of any remaining Subsequent
Recoveries will be applied to increase the Class Certificate Balance of the
Class of Certificates with the next highest payment priority, up to the amount
of such Realized Losses previously allocated to that Class of Certificates
pursuant to Section 6.02, and so on. Holders of such Certificates will not be
entitled to any payment in respect of Accrued Certificate Interest 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 to the
Class Certificate Balance of each Certificate of such Class in accordance with
its respective Percentage Interest.
(J) Any Prepayment Penalties shall be distributed to the Class P
Certificates.
Section 6.02 Allocation of Losses.
(a) On or prior to each Determination Date, the Securities Administrator
shall determine the amount of any Realized Loss in respect of each Mortgage Loan
that occurred during the immediately preceding calendar month.
(b) With respect to any Certificates on any Distribution Date, the
principal portion of each Realized Loss on a Mortgage Loan shall be allocated as
follows:
first, to the Class BV-3 Certificates until the Class Certificate
Balance thereof has been reduced to zero;
second, to the Class BV-2 Certificates until the Class Certificate
Balance thereof has been reduced to zero;
third, to the Class BV-1 Certificates until the Class Certificate
Balance thereof has been reduced to zero;
fourth, to the Class MV-3 Certificates until the Class Certificate
Balance thereof has been reduced to zero;
fifth, to the Class MV-2 Certificates until the Class Certificate
Balance thereof has been reduced to zero;
sixth, to the Class MV-1 Certificates until the Class Certificate
Balance thereof has been reduced to zero;
seventh, if the Realized Loss occurs on a Mortgage Loan in a Loan
Group where the aggregate Stated Principal Balance of the Mortgage Loans in
such Loan Group is
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greater than the aggregate Class Certificate Balance of the related Senior
Certificates, the Realized Loss will be allocated to any Senior
Certificates related to a Loan Group where the aggregate Stated Principal
Balance of the Mortgage Loans in such Loan Group is less than the aggregate
Class Certificate Balance of the related Senior Certificates (any such
amount, the "Deficiency Amount"), pro rata, based on the respective
Deficiency Amount, in each case until the amount by which the aggregate
Stated Principal Balance of the Mortgage Loans in the Loan Group in which
the Realized Loss occurs exceeds the aggregate Class Certificate Balance of
the related Senior Certificates until the Class Certificate Balances of
such Senior Certificates have been reduced to zero; and
eighth, to the Senior Certificates related to the Loan Group in which
the Realized Loss occurred, until the Class Certificate Balances thereof
have been reduced to zero.
Notwithstanding the foregoing, any portion of any Realized Loss that
would otherwise be allocated to the Class AV-1A Certificates will instead
be allocated first to the Class AV-1B Certificates until the Class
Certificate Balance thereof has been reduced to zero, and any portion of
any Realized Loss that would otherwise be allocated to the Class AV-2A
Certificates will instead be allocated first to the Class AV-2B
Certificates until the Class Certificate Principal Balance thereof has been
reduced to zero.
(c) Notwithstanding the other provisions of Section 6.02, the first $0.86
of Realized Losses shall not be allocated to any Class of Certificates.
Section 6.03 Payments.
(a) On each Distribution Date, other than the final Distribution Date, the
Securities Administrator shall distribute to each Certificateholder of record on
the directly preceding Record Date the Certificateholder's pro rata share of its
Class (based on the aggregate Percentage Interest represented by such Holder's
Certificates) of all amounts required to be distributed on such Distribution
Date to such Class, based solely on information provided to the Securities
Administrator by the Master Servicer. The Securities Administrator shall
calculate the amount to be distributed to each Class and, based on such amounts,
the Securities Administrator shall determine the amount to be distributed to
each Certificateholder. All of the Securities Administrator's calculations of
payments shall be based solely on information provided to the Securities
Administrator by the Master Servicer or the applicable Servicer. The Securities
Administrator shall not be required to confirm, verify or recompute any such
information but shall be entitled to rely conclusively on such information.
(b) Payment of the above amounts to each Certificateholder shall be made
(i) by check mailed to each Certificateholder entitled thereto at the address
appearing in the Certificate Register or (ii) upon receipt by the Securities
Administrator on or before the fifth Business Day preceding the Record Date of
written instructions from a Certificateholder by wire transfer to a United
States dollar account maintained by the payee at any United States depository
institution with appropriate facilities for receiving such a wire transfer;
provided, however, that the final payment in respect of each Class of
Certificates will be made only upon presentation and surrender of such
respective Certificates at the office or agency of the Securities Administrator
specified in the notice to Certificateholders of such final payment.
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Section 6.04 Statements to Certificateholders.
(a) Concurrently with each distribution to Certificateholders, the
Securities Administrator shall make available to the parties hereto and each
Certificateholder via the Securities Administrator's internet website as set
forth below, the following information (such information the "Monthly
Statement"):
(i) the amount of the distribution made on such Distribution Date to
the Holders of each Class of Certificates, separately identified, allocable
to principal;
(ii) the amount of the distribution made on such Distribution Date to
the Holders of each Class of Certificates allocable to interest, separately
identified;
(iii) the aggregate amount the Servicing Fee during the related Due
Period and such other customary information as the Trustee deems necessary
or desirable, or which a Certificateholder reasonably requests, to enable
Certificateholders to prepare their tax returns;
(iv) the aggregate amount of Monthly Advances for the related Due
Period;
(v) the aggregate Stated Principal Balance of the Group 4 Mortgage
Loans and Group 5 Mortgage Loans at the close of business at the end of the
related Due Period;
(vi) the number, weighted average remaining term to maturity and
weighted average Mortgage Interest Rate of the Group 4 Mortgage Loans and
Group 5 Mortgage Loans as of the related Due Date;
(vii) the number and aggregate unpaid principal balance of Group 4
Mortgage Loans and Group 5 Mortgage Loans (a) one month, two months or
three months delinquent on a contractual basis, (b) as to which foreclosure
proceedings have been commenced and (c) in bankruptcy as of the close of
business on the last day of the calendar month preceding such Distribution
Date determined in accordance with the MBA method;
(viii) with respect to any Group 4 Mortgage Loan and Group 5 Mortgage
Loan that became an REO Property during the preceding calendar month, the
Stated Principal Balance of such Group 4 Mortgage Loan or Group 5 Mortgage
Loan as of the date it became an REO Property;
(ix) the book value of any REO Property as of the close of business on
the last Business Day of the calendar month preceding the Distribution
Date, and, cumulatively, the total number and cumulative principal balance
of all REO Properties as of the close of business of the last day of the
preceding due period;
(x) the aggregate amount of Principal Prepayments made during the
related Prepayment Period;
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(xi) the aggregate amount of Realized Losses incurred during the
related Due Period and the cumulative amount of Realized Losses;
(xii) the aggregate amount of Extraordinary Trust Fund Expenses
withdrawn from the Master Servicer Collection Account for such Distribution
Date;
(xiii) the Class Certificate Balance of each Class of Certificates,
after giving effect to the distributions made on such Distribution Date;
(xiv) the aggregate amount of interest accrued at the related
Pass-Through Rate with respect to each Class during the related Interest
Accrual Period and the respective portions thereof, if any, remaining
unpaid following the distributions made in respect of such Certificates on
such Distribution Date;
(xv) the aggregate amount of any Prepayment Interest Shortfalls for
such Distribution Date as determined separately for each Mortgage Group, to
the extent not covered by Compensating Interest Payments by the related
Servicer or the Master Servicer pursuant to the related Servicing Agreement
or Section 6.06;
(xvi) the Group 4 Available Funds and Group 5 Available Funds;
(xvii) [Reserved.]
(xviii) the Pass-Through Rate for each Class of Certificates for such
Distribution Date; and
(xix) the aggregate Stated Principal Balance of Group 4 Mortgage Loans
and Group 5 Mortgage Loans purchased by the Seller during the related Due
Period and indicating the Section of this Agreement requiring or allowing
the purchase of each such Group 4 Mortgage Loan and Group 5 Mortgage Loan.
The information set forth above shall be calculated or reported, as the
case may be, by the Securities Administrator, based solely on, and to the extent
of, information provided to the Securities Administrator by the Master Servicer.
The Securities Administrator may conclusively rely on such information and shall
not be required to confirm, verify or recalculate any such information.
The Securities Administrator may make available each month, to any
interested party, the Monthly Statement to Certificateholders via the Securities
Administrator's website initially located at "xxx.xxxxxxx.xxx." Assistance in
using the website can be obtained by calling the Securities Administrator's
customer service desk at (000) 000-0000. Parties that are unable to use the
above distribution option are entitled to have a paper copy mailed to them via
first class mail by calling the customer service desk and indicating such. The
Securities Administrator shall have the right to change the way such reports are
distributed in order to make such distribution more convenient and/or more
accessible to the parties, and the Securities Administrator shall provide timely
and adequate notification to all parties regarding any such change.
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(b) By January 30 of each year beginning in 2007, if so requested in
writing, the Securities Administrator will furnish such report to each Holder of
the Certificates of record at any time during the prior calendar year as to the
aggregate of amounts reported pursuant to subclauses (a)(ii) and (a)(v) above
with respect to the Certificates, plus information with respect to the amount of
servicing compensation and such other customary information as the Securities
Administrator may determine to be necessary and/or to be required by the
Internal Revenue Service or by a federal or state law or rules or regulations to
enable such Holders to prepare their tax returns for such calendar year. Such
obligations shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Securities
Administrator pursuant to the requirements of the Code.
(c) The Securities Administrator may satisfy the requirements of this
Section 6.04 and Section 6.04 of the Stack I Agreement via a single Monthly
Statement, provided that such Monthly Statement adequately addresses all of the
content and delivery requirements contained in both this Section 6.04 and
Section 6.04 of the Stack I Agreement.
Section 6.05 Monthly Advances. If the Monthly Payment on a Mortgage Loan
that was due on a related Due Date and is delinquent other than as a result of
application of the Relief Act and for which the related Servicer was required to
make an advance pursuant to the related Servicing Agreement exceeds the amount
deposited in the Master Servicer Collection Account that will be used for a
Monthly Advance with respect to such Mortgage Loan, the Master Servicer will
deposit in the Master Servicer Collection Account not later than the
Distribution Account Deposit Date immediately preceding the related Distribution
Date an amount equal to such deficiency, net of the Servicing Fee for such
Mortgage Loan, except to the extent the Master Servicer determines any such
Monthly Advance to be nonrecoverable from Liquidation Proceeds, Insurance
Proceeds or future payments on the Mortgage Loan for which such Monthly Advance
was made. If the Master Servicer has not deposited the amount described above as
of the related Distribution Account Deposit Date, the Trustee will, subject to
applicable law and its determination of recoverability, deposit in the Master
Servicer Collection Account not later than the related Distribution Date, an
amount equal to the remaining deficiency as of the Distribution Account Deposit
Date. Subject to the foregoing, the Master Servicer shall continue to make such
Monthly Advances through the date that the related Servicer is required to do so
under its Servicing Agreement. If applicable, on the Distribution Account
Deposit Date, the Master Servicer shall present an Officer's Certificate to the
Securities Administrator (i) stating that the Master Servicer elects not to make
a Monthly Advance in a stated amount and (ii) detailing the reason it deems the
advance to be nonrecoverable.
Section 6.06 Compensating Interest Payments. The Master Servicer shall
deposit in the Master Servicer Collection Account not later than each
Distribution Account Deposit Date an amount equal to the aggregate amounts
required to be paid by the Servicers under the Servicing Agreements with respect
to subclause (a) of the definition of Prepayment Interest Shortfall with respect
to the Mortgage Loans for the related Distribution Date, and not so paid by the
related Servicers (such amount, the "Compensating Interest Payment"). The Master
Servicer shall not be entitled to any reimbursement of any Compensating Interest
Payment; provided, however, the aggregate compensating interest payments made by
the Master Servicer shall not exceed the Master Servicing Compensation.
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ARTICLE VII
THE MASTER SERVICER AND THE DEPOSITOR
Section 7.01 Liabilities of the Master Servicer. The Master Servicer shall
be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by the Master Servicer, as the case may
be, herein. The Depositor shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by the
Depositor.
Section 7.02 Merger or Consolidation of the Master Servicer.
(a) Each of the Master Servicer and the Depositor will keep in full force
and effect its existence, rights and franchises as a corporation under the laws
of the state of its incorporation, and will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its duties under this Agreement.
(b) Any Person into which the Master Servicer or the Depositor may be
merged or consolidated, or any corporation resulting from any merger or
consolidation to which the Master Servicer shall be a party, or any Person
succeeding to the business of the Master Servicer, shall be the successor of the
Master Servicer hereunder, without the execution or filing of any paper or
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 7.03 Indemnification from the Master Servicer and the Depositor.
(a) The Master Servicer agrees to indemnify the Indemnified Persons for,
and to hold them harmless against, any loss, liability or expense (including
reasonable legal fees and disbursements of counsel) incurred on their part that
may be sustained in connection with, arising out of, or relating to, any claim
or legal action (including any pending or threatened claim or legal action)
relating to this Agreement or the Certificates (i) related to the Master
Servicer's failure to perform its duties in compliance with this Agreement
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) or (ii) incurred by reason of the Master Servicer's
willful misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder, provided, in each case, that with respect to any such claim or legal
action (or pending or threatened claim or legal action), the Trustee or the
Securities Administrator shall have given the Master Servicer and the Depositor
written notice of such claim or legal action promptly after the Trustee or the
Securities Administrator shall have received knowledge thereof. This indemnity
shall survive the resignation or removal of the Trustee, Master Servicer or the
Securities Administrator and the termination of this Agreement.
(b) The Depositor will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise referred to in
Subsection (a) above.
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Section 7.04 Limitations on Liability of the Master Servicer and Others.
Subject to the obligation of the Master Servicer to indemnify the Indemnified
Persons pursuant to Section 7.03:
(a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Indemnified Persons, the Depositor, the Issuing Entity or the Certificateholders
for taking any action or for refraining from taking any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Master Servicer or any such Person against
any breach of warranties or representations made herein or any liability which
would otherwise be imposed by reason of such Person's willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder.
(b) The Master Servicer and any director, officer, employee or agent of the
Master Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder.
(c) The Master Servicer, the Custodian and any director, officer, employee
or agent of the Master Servicer or the Custodian shall be indemnified by the
Issuing Entity and held harmless thereby against any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on their
part that may be sustained in connection with, arising out of, or related to,
any claim or legal action (including any pending or threatened claim or legal
action) relating to this Agreement, the Certificates or any Servicing Agreement
(except to the extent that the Master Servicer or the Custodian, as the case may
be, is indemnified by a Servicer thereunder), other than (i) any such loss,
liability or expense related to the Master Servicer's failure to perform its
duties in compliance with this Agreement (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement), or to the
Custodian's failure to perform its duties under the Custodial Agreement,
respectively, or (ii) any such loss, liability or expense incurred by reason of
the Master Servicer's or the Custodian's willful misfeasance, bad faith or gross
negligence in the performance of duties hereunder or under the Custodial
Agreement, as applicable, or by reason of reckless disregard of obligations and
duties hereunder or under the Custodial Agreement, as applicable.
(d) The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties under
this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, the Master Servicer may in its discretion,
undertake any such action which it may deem necessary or desirable with respect
to this Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, the legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Issuing Entity, and the Master Servicer
shall be entitled to be reimbursed therefor out of the Master Servicer
Collection Account as provided by Section 4.03. Nothing in this Subsection
7.04(d) shall affect the Master Servicer's obligation to supervise, or to take
such actions as are necessary to ensure, the servicing and administration of the
Mortgage Loans pursuant to Subsection 3.01(a).
(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Master Servicer shall not be required to investigate or make recommendations
concerning potential liabilities which the Issuing Entity might incur as a
result of such course of action by reason of the condition of the
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Mortgaged Properties but shall give notice to the Trustee if it has notice of
such potential liabilities.
(f) The Master Servicer shall not be liable for any acts or omissions of
any Servicer, except as otherwise expressly provided herein.
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Section 7.05 Master Servicer Not to Resign. Except as provided in Section
7.07, the Master Servicer shall not resign from the obligations and duties
hereby imposed on it except upon a determination that any such duties hereunder
are no longer permissible under applicable law and such impermissibility cannot
be cured. Any such determination permitting the resignation of the Master
Servicer shall be evidenced by an Opinion of Independent Counsel to such effect
delivered to the Trustee. No such resignation by the Master Servicer shall
become effective until MLML or the Trustee or a successor to the Master Servicer
reasonably satisfactory to the Trustee shall have assumed the responsibilities
and obligations of the Master Servicer in accordance with Section 8.02 hereof.
The Trustee shall notify the Rating Agencies of the resignation of the Master
Servicer. If the Master Servicer and the Securities Administrator are the same
entity, then at any time the Master Servicer is terminated as master servicer,
the Securities Administrator shall likewise be removed as securities
administrator.
Section 7.06 Successor Master Servicer. In connection with the appointment
of any successor Master Servicer or the assumption of the duties of the Master
Servicer, MLML or the Trustee may make such arrangements for the compensation of
such successor master servicer out of payments on the Mortgage Loans as MLML or
the Trustee and such successor master servicer shall agree. If the successor
master servicer does not agree that such market value is a fair price, such
successor master servicer shall obtain two quotations of market value from third
parties actively engaged in the servicing of single-family mortgage loans.
Section 7.07 Sale and Assignment of Master Servicing. The Master Servicer
may sell and assign its rights and delegate its duties and obligations in its
entirety as Master Servicer under this Agreement; provided, however, that: (i)
the purchaser or transferee accepting such assignment and delegation (a) shall
be a Person which shall be qualified to service mortgage loans for Xxxxxx Xxx or
Xxxxxxx Mac; (b) shall have a net worth of not less than $10,000,000 (unless
otherwise approved by each Rating Agency pursuant to clause (ii) below); (c)
shall be reasonably satisfactory to the Trustee (as evidenced in a writing
signed by the Trustee); and (d) shall execute and deliver to the Trustee an
agreement, in form and substance reasonably satisfactory to the Trustee, which
contains an assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or observed by it as
master servicer under this Agreement, any custodial agreement from and after the
effective date of such agreement; (ii) each Rating Agency shall be given prior
written notice of the identity of the proposed successor to the Master Servicer
and each Rating Agency's rating of the Certificates in effect immediately prior
to such assignment, sale and delegation will not be downgraded, qualified or
withdrawn as a result of such assignment, sale and delegation, as evidenced by a
letter to such effect delivered to the Master Servicer and the Trustee; and
(iii) the Master Servicer assigning and selling the master servicing shall
deliver to the Trustee an Officer's Certificate and an Opinion of Independent
Counsel, each stating that all conditions precedent to such action under this
Agreement have been completed and such action is permitted by and complies with
the terms of this Agreement. No such assignment or delegation shall affect any
liability of the Master Servicer arising prior to the effective date thereof.
ARTICLE VIII
DEFAULT
Section 8.01 Events of Default. "Event of Default," wherever used herein,
means any one of the following events (whatever the reason for such Event of
Default and whether it shall
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be voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body) and only with respect to the defaulting
Master Servicer:
(i) The Master Servicer fails to cause to be deposited in the
Distribution Account any amount so required to be deposited pursuant to
this Agreement, and such failure continues unremedied for a period of three
Business Days after the date upon which written notice of such failure,
requiring the same to be remedied, shall have been given to the Master
Servicer; or
(ii) The Master Servicer fails to observe or perform in any material
respect any other material covenants and agreements set forth in this
Agreement to be performed by it, which covenants and agreements materially
affect the rights of Certificateholders, and such failure continues
unremedied for a period of 60 days after the date on which written notice
of such failure, properly requiring the same to be remedied, shall have
been given to the Master Servicer by the Trustee or to the Master Servicer
and the Trustee by the Holders of Certificates evidencing Percentage
Interests aggregating not less than 25% of the Trust Fund; or
(iii) There is entered against the Master Servicer a decree or order
by a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver or liquidator in
any insolvency, readjustment of debt, marshaling of assets and liabilities
or similar proceedings, or for the winding up or liquidation of its
affairs, and the continuance of any such decree or order is unstayed and in
effect for a period of 60 consecutive days, or an involuntary case is
commenced against the Master Servicer under any applicable insolvency or
reorganization statute and the petition is not dismissed within 60 days
after the commencement of the case; or
(iv) The Master Servicer consents to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating
to the Master Servicer or substantially all of its property; or the Master
Servicer admits in writing its inability to pay its debts generally as they
become due, files a petition to take advantage of any applicable insolvency
or reorganization statute, makes an assignment for the benefit of its
creditors, or voluntarily suspends payment of its obligations; or
(v) The Master Servicer assigns or delegates its duties or rights
under this Agreement in contravention of the provisions permitting such
assignment or delegation under Sections 7.05 or 7.07.
In each and every such case, so long as such Event of Default with respect to
the Master Servicer shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 51% of the Class Certificate Balance of the Certificates, by notice in
writing to the Master Servicer (and to the Trustee if given by such
Certificateholders), with a copy to the Rating Agencies, and with the consent of
the Seller, may terminate all of the rights and obligations (but not the
liabilities) of the Master Servicer under this Agreement and in and to the
Mortgage Loans and/or the REO Property serviced by the Master Servicer and the
proceeds thereof. Upon the receipt by the Master Servicer of the written
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notice, all authority and power of the Master Servicer under this Agreement,
whether with respect to the Certificates, the Mortgage Loans, REO Property or
under any other related agreements (but only to the extent that such other
agreements relate to the Mortgage Loans or related REO Property) shall, subject
to Section 8.02, automatically and without further action pass to and be vested
in the Trustee pursuant to this Section 8.01; and, without limitation, the
Trustee is hereby authorized and empowered to execute and deliver, on behalf of
the Master Servicer as attorney-in-fact or otherwise, any and all documents and
other instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees to cooperate with
the Trustee in effecting the termination of the Master Servicer's rights and
obligations hereunder, including, without limitation, the transfer to the
Trustee of (i) the property and amounts which are then or should be part of the
Issuing Entity or which thereafter become part of the Issuing Entity; and (ii)
originals or copies of all documents of the Master Servicer reasonably requested
by the Trustee to enable it to assume the Master Servicer's duties thereunder.
In addition to any other amounts which are then, or, notwithstanding the
termination of its activities under this Agreement, may become payable to the
Master Servicer under this Agreement, the Master Servicer shall be entitled to
receive, out of any amount received on account of a Mortgage Loan or related REO
Property, that portion of such payments which it would have received as
reimbursement under this Agreement if notice of termination had not been given.
The termination of the rights and obligations of the Master Servicer shall not
affect any obligations incurred by the Master Servicer prior to such
termination.
Section 8.02 Trustee to Act; Appointment of Successor.
(a) Upon the receipt by the Master Servicer of a notice of termination
pursuant to Section 8.01 or an Opinion of Independent Counsel pursuant to
Section 7.05 to the effect that the Master Servicer is legally unable to act or
to delegate its duties to a Person which is legally able to act, the Trustee
shall automatically become the successor in all respects to the Master Servicer
in its capacity under this Agreement and the transactions set forth or provided
for herein and shall thereafter be subject to all the responsibilities, duties,
liabilities and limitations on liabilities relating thereto placed on the Master
Servicer by the terms and provisions hereof; provided, however, that MLML shall
have the right to either (a) immediately assume the duties of the Master
Servicer or (b) select a successor master servicer; provided further, however,
that the Trustee shall have no obligation whatsoever with respect to any
liability (other than advances deemed recoverable and not previously made)
incurred by the Master Servicer at or prior to the time of termination. As
compensation therefor, the Trustee shall be entitled to all funds relating to
the Mortgage Loans which the Master Servicer would have been entitled to retain
if the Master Servicer had continued to act hereunder, except for those amounts
due the Master Servicer as reimbursement permitted under this Agreement for
advances previously made or expenses previously incurred. Notwithstanding the
above, or anything herein to the contrary, the Trustee, if it becomes Master
Servicer, shall have no responsibility or obligation (i) to repurchase or
substitute any Mortgage Loan, (ii) for any representation or warranty of the
Master Servicer hereunder, and (iii) for any act or omission of either a
predecessor or successor Master Servicer other than the Trustee. The Trustee may
conduct any activity required of it as Master Servicer hereunder through an
Affiliate or through an agent. Neither the Trustee (as successor Master
Servicer) nor any other successor Master Servicer shall be deemed to be in
default hereunder due
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to any act or omission of a predecessor Master Servicer, including but not
limited to failure to timely deliver to the Trustee distribution instructions,
any funds required to be deposited to the Trust Fund, or any breach of its duty
to cooperate with a transfer of master servicing. Neither the Trustee nor any
other successor Master Servicer shall be deemed to be in default hereunder by
reason of any failure to make, or any delay in making, any distribution
hereunder or any portion thereof or any failure to perform, or any delay in
performing, any duties or responsibilities hereunder, in either case caused
solely by the failure of the Master Servicer to deliver or provide, or any delay
in delivering or providing, any cash, information, documents or records required
to be provided to it by the Master Servicer. Notwithstanding the above, the
Trustee may, if it shall be unwilling so to act, or shall, if it is legally
unable so to act, appoint or petition a court of competent jurisdiction to
appoint, any established housing and home finance institution which is a Xxxxxx
Mae- or Xxxxxxx Mac-approved servicer, and with respect to a successor to the
Master Servicer only, having a net worth of not less than $10,000,000 and
meeting such other standards for a successor Master Servicer as are set forth in
this Agreement, as the successor to the Master Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer hereunder. Pending appointment of a successor to the Master
Servicer hereunder, the Trustee shall act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments on
the Mortgage Loans as it and such successor shall agree; provided, however, in
the event that the provisions of Section 7.06 shall apply, no such compensation
shall be in excess of that permitted the Trustee under this Subsection 8.02(a),
and that such successor shall undertake and assume the obligations of the
Trustee to pay compensation to any third Person acting as an agent or
independent contractor in the performance of master servicing responsibilities
hereunder. The Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
(b) If the Trustee shall succeed to any duties of the Master Servicer
respecting the Mortgage Loans as provided herein, it shall do so in a separate
capacity and not in its capacity as Trustee and, accordingly, the provisions of
Article IX shall be inapplicable to the Trustee in its duties as the successor
to the Master Servicer in the servicing of the Mortgage Loans (although such
provisions shall continue to apply to the Trustee in its capacity as Trustee);
the provisions of Article VII, however, shall apply to it in its capacity as
successor master servicer.
Section 8.03 Notification to Certificateholders. Upon any termination or
appointment of a successor to the Master Servicer, the Trustee shall give prompt
written notice thereof to Certificateholders at their respective addresses
appearing in the Certificate Register and to the Rating Agencies.
Section 8.04 Waiver of Defaults. The Trustee shall transmit by mail to all
Certificateholders, within 60 days after the occurrence of any Event of Default
known to the Trustee, unless such Event of Default shall have been cured, notice
of each such Event of Default hereunder known to the Trustee. The Holders of
Certificates evidencing Percentage Interests aggregating not less than 51% of
the Class Certificate Balance of the Certificates may, on behalf of all
Certificateholders, waive any default by the Master Servicer in the performance
of its obligations hereunder and the consequences thereof, except a default in
the making of or the causing to be made any required distribution on the
Certificates. Upon any such waiver of a past
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default, such default shall be deemed to cease to exist, and any Event of
Default arising therefrom shall be deemed to have been timely remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived. The Trustee shall give notice of any such waiver to the
Rating Agencies.
Section 8.05 List of Certificateholders. Upon reasonable, prior written
request of three or more Certificateholders of record, for purposes of
communicating with other Certificateholders with respect to their rights under
this Agreement, the Trustee will afford such Certificateholders access during
business hours to the most recent list of Certificateholders held by the
Trustee.
ARTICLE IX
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 9.01 Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default and after
the curing or waiver of all Events of Default which may have occurred, and the
Securities Administrator each undertake to perform such duties and only such
duties as are specifically set forth in this Agreement as duties of the Trustee
and the Securities Administrator, respectively. If an Event of Default has
occurred and has not been cured or waived, the Trustee shall exercise such of
the rights and powers vested in it by this Agreement, and subject to Section
8.02(b) use the same degree of care and skill in their exercise, as a prudent
person would exercise under the circumstances in the conduct of his own affairs.
(b) Upon receipt of all resolutions, certificates, statements, opinions,
reports, documents, orders or other instruments which are specifically required
to be furnished to the Trustee and the Securities Administrator pursuant to any
provision of this Agreement, the Trustee and the Securities Administrator,
respectively, shall examine them to determine whether they are in the form
required by this Agreement; provided, however, that neither the Trustee nor the
Securities Administrator shall be responsible for the accuracy or content of any
resolution, certificate, statement, opinion, report, document, order or other
instrument furnished by the Master Servicer; provided, further, that neither the
Trustee nor the Securities Administrator shall be responsible for the accuracy
or verification of any calculation provided to it pursuant to this Agreement. If
any such instrument is found not to conform to the requirements of this
Agreement in a material manner, the Trustee shall take such action as it deems
appropriate to have the instrument corrected and if the instrument is not
corrected to its satisfaction, the Trustee will provide notice thereof to the
Certificateholders and take such further action as directed by the
Certificateholders.
(c) On each Distribution Date, the Securities Administrator shall make
monthly distributions and the final distribution to the Certificateholders from
funds in the Distribution Account as provided in Sections 6.01 and 10.01 herein
based solely on the report of the Master Servicer or the Servicers.
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(d) No provision of this Agreement shall be construed to relieve the
Trustee or the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct;
provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing or waiver of all such Events of Default which may have occurred, the
duties and obligations of the Trustee and the Securities Administrator
shall be determined solely by the express provisions of this Agreement,
neither the Trustee nor the Securities Administrator shall be liable except
for the performance of their respective duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee or the
Securities Administrator and, in the absence of bad faith on the part of
the Trustee or the Securities Administrator, respectively, the Trustee or
the Securities Administrator, respectively, may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee or the
Securities Administrator, respectively, and conforming to the requirements
of this Agreement;
(ii) Neither the Trustee nor the Securities Administrator shall be
liable in its individual capacity for an error of judgment made in good
faith by a Responsible Officer or Responsible Officers of the Trustee or an
officer of the Securities Administrator, respectively, unless it shall be
proved that the Trustee or the Securities Administrator, respectively, was
negligent in ascertaining the pertinent facts;
(iii) Neither the Trustee nor the Securities Administrator shall be
liable with respect to any action taken, suffered or omitted to be taken by
it in good faith in accordance with the directions of the Holders of
Certificates evidencing Percentage Interests aggregating not less than 25%
of the Class Certificate Balance of the Certificates, if such action or
non-action relates to the time, method and place of conducting any
proceeding for any remedy available to the Trustee or the Securities
Administrator, respectively, or exercising any trust or other power
conferred upon the Trustee or the Securities Administrator, respectively,
under this Agreement;
(iv) The Trustee shall not be required to take notice or be deemed to
have notice or knowledge of any default or Event of Default unless a
Responsible Officer of the Trustee's Corporate Trust Office shall have
actual knowledge thereof. In the absence of such notice, the Trustee may
conclusively assume there is no such default or Event of Default;
(v) The Trustee shall not in any way be liable by reason of any
insufficiency in any Account held by or in the name of Trustee unless it is
determined by a court of competent jurisdiction that the Trustee's gross
negligence or willful misconduct was the primary cause of such
insufficiency (except to the extent that the Trustee is obligor and has
defaulted thereon);
(vi) Anything in this Agreement to the contrary notwithstanding, in no
event shall the Trustee or the Securities Administrator be liable for
special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost
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profits), even if the Trustee or the Securities Administrator,
respectively, has been advised of the likelihood of such loss or damage and
regardless of the form of action; and
(vii) None of the Securities Administrator, the Depositor, the Master
Servicer, any Servicer or the Trustee shall be responsible for the acts or
omissions of the other, it being understood that this Agreement shall not
be construed to render them partners, joint venturers or agents of one
another.
Neither the Trustee nor the Securities Administrator shall be required to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there is reasonable ground for believing that the repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in this Agreement
shall in any event require the Trustee or the Securities Administrator to
perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer hereunder or under the Servicing Agreements,
except during such time, if any, as the Trustee shall be the successor to, and
be vested with the rights, duties, powers and privileges of, the Master Servicer
in accordance with the terms of this Agreement.
(e) All funds received by the Master Servicer and the Securities
Administrator and required to be deposited in the Master Servicer Collection
Account or Distribution Account pursuant to this Agreement will be promptly so
deposited by the Master Servicer and the Securities Administrator.
(f) Except for those actions that the Trustee or the Securities
Administrator is required to take hereunder, neither the Trustee nor the
Securities Administrator shall have any obligation or liability to take any
action or to refrain from taking any action hereunder in the absence of written
direction as provided hereunder.
Section 9.02 Certain Matters Affecting the Trustee and the Securities
Administrator. Except as otherwise provided in Section 9.01:
(i) The Trustee and the Securities Administrator may rely and shall be
protected in acting or refraining from acting in reliance on any
resolution, certificate of a Depositor, Master Servicer or Servicer,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) The Trustee and the Securities Administrator may consult with
counsel and any advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection with respect to any action
taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(iii) Neither the Trustee nor the Securities Administrator shall be
under any obligation to exercise any of the trusts or powers vested in it
by this Agreement, other than its obligation to give notices pursuant to
this Agreement, or to institute, conduct or defend any litigation hereunder
or in relation hereto at the request, order or direction of
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any of the Certificateholders pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may
be incurred therein or thereby. Nothing contained herein shall, however,
relieve the Trustee of the obligation, upon the occurrence of an Event of
Default of which a Responsible Officer of the Trustee's Corporate Trust
Office has actual knowledge (which has not been cured or waived), subject
to Section 8.02(b), to exercise such of the rights and powers vested in it
by this Agreement, and to use the same degree of care and skill in their
exercise, as a prudent person would exercise under the circumstances in the
conduct of his own affairs;
(iv) Prior to the occurrence of an Event of Default hereunder and
after the curing or waiver of all Events of Default which may have
occurred, neither the Trustee nor the Securities Administrator shall be
liable in its individual capacity for any action taken, suffered or omitted
by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(v) Neither the Trustee nor the Securities Administrator shall be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing to do so by Holders of Certificates evidencing
Percentage Interests aggregating not less than 25% of the Class Certificate
Balance of the Certificates and provided that the payment within a
reasonable time to the Trustee or the Securities Administrator, as
applicable, of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the Trustee or
the Securities Administrator, as applicable, reasonably assured to the
Trustee or the Securities Administrator, as applicable, by the security
afforded to it by the terms of this Agreement. The Trustee or the
Securities Administrator may require reasonable indemnity against such
expense or liability as a condition to taking any such action. The
reasonable expense of every such examination shall be paid by the
Certificateholders requesting the investigation;
(vi) The Trustee and the Securities Administrator may execute any of
the trusts or powers hereunder or perform any duties hereunder either
directly or through Affiliates, agents or attorneys; provided, however,
that the Trustee may not appoint any agent to perform its custodial
functions with respect to the Mortgage Files or paying agent functions
under this Agreement without the express written consent of the Securities
Administrator, which consent will not be unreasonably withheld. Neither the
Trustee nor the Securities Administrator shall be liable or responsible for
the misconduct or negligence of any of the Trustee's or the Securities
Administrator's agents or attorneys or a custodian or paying agent
appointed hereunder by the Trustee or the Securities Administrator with due
care and, when required, with the consent of the Securities Administrator;
(vii) Should the Trustee or the Securities Administrator deem the
nature of any action required on its part, other than a payment or transfer
under Subsection 4.01(b) or Section 4.02, to be unclear, the Trustee or the
Securities Administrator, respectively, may require prior to such action
that it be provided by the Depositor with reasonable further instructions;
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(viii) The right of the Trustee or the Securities Administrator to
perform any discretionary act enumerated in this Agreement shall not be
construed as a duty, and neither the Trustee nor the Securities
Administrator shall be accountable for other than its negligence or willful
misconduct in the performance of any such act;
(ix) Neither the Trustee nor the Securities Administrator shall be
required to give any bond or surety with respect to the execution of the
trust created hereby or the powers granted hereunder, except as provided in
Subsection 9.07; and
(x) Neither the Trustee nor the Securities Administrator shall have
any duty to conduct any affirmative investigation as to the occurrence of
any condition requiring the repurchase of any Mortgage Loan by the Seller
pursuant to this Agreement or the Mortgage Loan Purchase Agreement, as
applicable, or the eligibility of any Mortgage Loan for purposes of this
Agreement.
(xi) Any permissive right of the Trustee hereunder shall not be
construed as a duty.
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Section 9.03 Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans. The recitals contained herein and in the
Certificates (other than the signature and countersignature of the Securities
Administrator on the Certificates) shall be taken as the statements of the
Depositor, and neither the Trustee nor the Securities Administrator shall have
any responsibility for their correctness. Neither the Trustee nor the Securities
Administrator makes any representation as to the validity or sufficiency of the
Certificates (other than the signature and countersignature of the Securities
Administrator on the Certificates) or of any Mortgage Loan except as expressly
provided in Sections 2.02 and 2.05 hereof; provided, however, that the foregoing
shall not relieve the Trustee or the Custodian of the obligation to review the
Mortgage Files pursuant to Sections 2.02 and 2.04. The Securities
Administrator's signature and countersignature (or countersignature of its
agent) on the Certificates shall be solely in its capacity as Securities
Administrator of the Trust Fund and shall not constitute the Certificates an
obligation of the Securities Administrator in any other capacity. Neither the
Trustee or the Securities Administrator shall be accountable for the use or
application by the Depositor of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to the
Depositor with respect to the Mortgage Loans. Subject to the provisions of
Section 2.05, neither the Trustee nor the Securities Administrator shall be
responsible for the legality or validity of this Agreement or any document or
instrument relating to this Agreement, the validity of the execution of this
Agreement or of any supplement hereto or instrument of further assurance, or the
validity, priority, perfection or sufficiency of the security for the
Certificates issued hereunder or intended to be issued hereunder. Neither the
Trustee nor the Securities Administrator shall at any time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Mortgage or any Mortgage Loan, or the perfection and
priority of any Mortgage or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Trust Fund or its ability to
generate the payments to be distributed to Certificateholders, under this
Agreement. Neither the Trustee nor the Securities Administrator shall have any
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to record this Agreement.
Section 9.04 Trustee and Securities Administrator May Own Certificates. The
Trustee and the Securities Administrator in its individual capacity or in any
capacity other than as Trustee hereunder may become the owner or pledgee of any
Certificates with the same rights it would have if it were not Trustee or the
Securities Administrator, as applicable, and may otherwise deal with the parties
hereto.
Section 9.05 Trustee's and Securities Administrator's Fees and Expenses.
The fees and expenses of the Trustee and the Securities Administrator shall be
paid by the Master Servicer in accordance with a side letter agreement. In
addition, the Trustee and the Securities Administrator will be entitled to
recover from the Master Servicer Collection Account pursuant to Section 4.03(b)
all reasonable out-of-pocket expenses, disbursements and advances and the
expenses of the Trustee and the Securities Administrator, respectively, in
connection with any Event of Default, any breach of this Agreement or any claim
or legal action (including any pending or threatened claim or legal action)
incurred or made by the Trustee or the Securities Administrator, respectively,
in the administration of the trusts hereunder (including the reasonable
compensation, expenses and disbursements of its counsel) except any such
expense, disbursement or advance as may arise from its negligence or intentional
misconduct or which is
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the responsibility of the Certificateholders or the Trust Fund hereunder. If
funds in the Master Servicer Collection Account are insufficient therefor, the
Trustee and the Securities Administrator shall recover such expenses from the
Depositor. Such compensation and reimbursement obligation shall not be limited
by any provision of law in regard to the compensation of a trustee of an express
trust.
Section 9.06 Eligibility Requirements for Trustee and Securities
Administrator.
(a) The Trustee and any successor Trustee and the Securities Administrator
and any successor Securities Administrator shall during the entire duration of
this Agreement be a state bank or trust company or a national banking
association organized and doing business under the laws of such state or the
United States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus and undivided profits of at least
$40,000,000 or, in the case of a successor Trustee, $50,000,000, subject to
supervision or examination by federal or state authority and, in the case of the
Trustee, rated "BBB" or higher by S&P and "Aaa1" or higher by Moody's with
respect to their long-term rating and rated "BBB" or higher by S&P and "Baa1" or
higher by Moody's with respect to any outstanding long-term unsecured
unsubordinated debt, and, in the case of a successor Trustee or successor
Securities Administrator other than pursuant to Section 9.10, rated in one of
the two highest long-term debt categories of, or otherwise acceptable to, each
of the Rating Agencies. If the Trustee publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section 9.06 the combined
capital and surplus of such corporation shall be deemed to be its total equity
capital (combined capital and surplus) as set forth in its most recent report of
condition so published. In case at any time the Trustee or the Securities
Administrator shall cease to be eligible in accordance with the provisions of
this Section 9.06, the Trustee or the Securities Administrator shall resign
immediately in the manner and with the effect specified in Section 9.08.
(b) In addition, the Securities Administrator (i) may not be an Originator,
Master Servicer, Servicer, the Depositor or an affiliate of the Depositor unless
the Securities Administrator is in an institutional trust department of the
relevant entity, (ii) must be authorized to exercise corporate trust powers
under the laws of its jurisdiction of organization, and (iii) must be rated at
least "A" by S&P or "A" Moody's. If no successor Securities Administrator shall
have been appointed and shall have accepted appointment within 60 days after the
Securities Administrator ceases to be the Securities Administrator pursuant to
Section 9.08, then the Trustee shall either (i) perform the duties of the
Securities Administrator pursuant to this Agreement until such time as a new
Securities Administrator is appointed or (ii) petition a court of competent
jurisdiction to appoint a successor securities administrator. The Trustee shall
notify the Rating Agencies of any change of Securities Administrator.
Section 9.07 Insurance. The Securities Administrator, at its own expense,
shall at all times maintain and keep in full force and effect: (i) fidelity
insurance, (ii) theft of documents insurance and (iii) forgery insurance (which
may be collectively satisfied by a "Financial Institution Bond" and/or a
"Bankers' Blanket Bond"). All such insurance shall be in amounts, with standard
coverage and subject to deductibles, as are customary for insurance typically
maintained by banks or their affiliates which act as custodians for
investor-owned mortgage pools. A certificate of an officer of the Securities
Administrator as to the Securities
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Administrator's compliance with this Section 9.07 shall be furnished to any
Certificateholder upon reasonable written request.
Section 9.08 Resignation and Removal of the Trustee and Securities
Administrator.
(a) The Trustee and the Securities Administrator may at any time resign and
be discharged from the trust hereby created by giving written notice thereof to
the Depositor and the Master Servicer, with a copy to the Rating Agencies. Upon
receiving such notice of resignation, the Depositor shall promptly appoint a
successor Trustee or successor Securities Administrator, as applicable, by
written instrument, in triplicate, one copy of which instrument shall be
delivered to each of the resigning Trustee or Securities Administrator, as
applicable, the successor Trustee or Securities Administrator, as applicable. If
no successor Trustee or Securities Administrator shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee or Securities Administrator may petition any
court of competent jurisdiction for the appointment of a successor Trustee or
Securities Administrator. If the Securities Administrator and the Master
Servicer are the same entity, then at any time the Securities Administrator
resigns or is removed as Securities Administrator, the Master Servicer shall
likewise be terminated as Master Servicer.
(b) If at any time the Trustee or the Securities Administrator shall cease
to be eligible in accordance with the provisions of Section 9.06 and shall fail
to resign after written request therefor by the Depositor or if at any time the
Trustee or the Securities Administrator shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or the
Securities Administrator, as applicable, or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or the
Securities Administrator, as applicable, or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Depositor shall
promptly remove the Trustee, or shall be entitled to remove the Securities
Administrator, as applicable, and appoint a successor Trustee or Securities
Administrator, as applicable, by written instrument, in triplicate, one copy of
which instrument shall be delivered to each of the Trustee or Securities
Administrator, as applicable, so removed, the successor Trustee or Securities
Administrator, as applicable.
(c) The Holders of Certificates evidencing Percentage Interests aggregating
not less than 51% of the Trust Fund may at any time remove the Trustee or the
Securities Administrator and appoint a successor Trustee or Securities
Administrator by written instrument or instruments, in quadruplicate, signed by
such Holders or their attorneys-in-fact duly authorized, one complete set of
which instruments shall be delivered to the Depositor, the Trustee, the
Securities Administrator (if the Trustee is removed), the Trustee (if the
Securities Administrator is removed), and the Trustee or Securities
Administrator so removed and the successor so appointed.
(d) No resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor Trustee or Securities Administrator
pursuant to any of the provisions of this Section 9.08 shall become effective
except upon appointment of and acceptance of such appointment by the successor
Trustee or Securities Administrator as provided in Section 9.09.
Section 9.09 Successor Trustee and Successor Securities Administrator.
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(a) Any successor Trustee or Securities Administrator appointed as provided
in Section 9.08 shall execute, acknowledge and deliver to the Depositor, the
Master Servicer and its predecessor Trustee or Securities Administrator an
instrument accepting such appointment hereunder. The resignation or removal of
the predecessor Trustee or Securities Administrator shall then become effective
and such successor Trustee or Securities Administrator, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with like effect as if
originally named as Trustee or Securities Administrator herein. The predecessor
Trustee or Securities Administrator shall after payment of its outstanding fees
and expenses promptly deliver to the successor Trustee or Securities
Administrator, as applicable, all assets and records of the Trust held by it
hereunder, and the Depositor and the predecessor Trustee or Securities
Administrator, as applicable, shall execute and deliver such instruments and do
such other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor Trustee or Securities Administrator, as
applicable, all such rights, powers, duties and obligations.
(b) No successor Trustee or Securities Administrator shall accept
appointment as provided in this Section 9.09 unless at the time of such
acceptance such successor Trustee or Securities Administrator shall be eligible
under the provisions of Section 9.06.
(c) Upon acceptance of appointment by a successor Trustee or Securities
Administrator as provided in this Section 9.09, the successor Trustee or
Securities Administrator shall mail notice of the succession of such Trustee or
Securities Administrator hereunder to all Certificateholders at their addresses
as shown in the Certificate Register and to the Rating Agencies. The Depositor
shall pay the cost of any mailing by the successor Trustee or Securities
Administrator.
Section 9.10 Merger or Consolidation of Trustee or Securities
Administrator. Any state bank or trust company or national banking association
into which the Trustee or the Securities Administrator may be merged or
converted or with which it may be consolidated or any state bank or trust
company or national banking association resulting from any merger, conversion or
consolidation to which the Trustee or the Securities Administrator,
respectively, shall be a party, or any state bank or trust company or national
banking association succeeding to all or substantially all of the corporate
trust business of the Trustee or the Securities Administrator, respectively,
shall be the successor of the Trustee or the Securities Administrator,
respectively, hereunder, provided such state bank or trust company or national
banking association shall be eligible under the provisions of Section 9.06. Such
succession shall be valid without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 9.11 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or property constituting the same may at the time be located, the
Depositor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee and the Depositor to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust, and to vest in such Person or Persons, in such capacity, such title to
the Trust, or any part thereof, and, subject to the other
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provisions of this Section 9.11, such powers, duties, obligations, rights and
trusts as the Depositor and the Trustee may consider necessary or desirable.
(b) If the Depositor shall not have joined in such appointment within 15
days after the receipt by it of a written request so to do, the Trustee shall
have the power to make such appointment without the Depositor.
(c) No co-Master Servicer or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 9.06
hereunder and no notice to Certificateholders of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.08
hereof.
(d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred on such
co-trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly, except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed by such separate trustee or
co-trustee at the direction of the Trustee.
(e) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(f) To the extent not prohibited by law, any separate trustee or co-trustee
may, at any time, request the Trustee, its agent or attorney-in-fact, with full
power and authority, to do any lawful act under or with respect to this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor Trustee.
(g) No Trustee under this Agreement shall be personally liable by reason of
any act or omission of another Trustee under this Agreement. The Depositor and
the Trustee acting jointly may at any time accept the resignation of or remove
any separate trustee or co-trustee.
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Section 9.12 Federal Information Returns and Reports to Certificateholders;
REMIC Administration.
(a) REMIC elections as set forth in the Preliminary Statement shall be made
on Forms 1066 or other appropriate federal tax or information return for the
taxable year ending on the last day of the calendar year in which the
Certificates are issued. The regular interests and residual interest in each
REMIC shall be as designated in the Preliminary Statement.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of section 860G(a)(9) of the Code. The latest possible
maturity date for purposes of Treasury Regulation 1.860G-1(a)(4) will be the
Latest Possible Maturity Date.
(c) The Securities Administrator shall, for federal income tax purposes,
maintain books and records with respect to each REMIC on a calendar year and on
an accrual basis.
(d) The Securities Administrator shall represent the Trust Fund in any
administrative or judicial proceeding relating to an examination or audit by any
governmental taxing authority with respect thereto. The Securities Administrator
shall pay any and all tax-related expenses (not including taxes) of each REMIC,
including but not limited to any professional fees or expenses related to audits
or any administrative or judicial proceedings with respect to such REMIC that
involve the Internal Revenue Service or state tax authorities, but only to the
extent that (i) such expenses are ordinary or routine expenses, including
expenses of a routine audit but not expenses of litigation (except as described
in (ii)); or (ii) such expenses or liabilities (including taxes and penalties)
are attributable to the negligence or willful misconduct of the Securities
Administrator in fulfilling its duties hereunder (including its duties as tax
return preparer). The Securities Administrator shall be entitled to
reimbursement of expenses to the extent provided in clause (i) above from the
Distribution Account, provided, however, the Securities Administrator shall not
be entitled to reimbursement for expenses incurred in connection with the
preparation of tax returns and other reports as required by this Section.
(e) The Securities Administrator shall prepare and file, and the Trustee
shall sign, all of each REMIC's and the Trust Fund's federal and appropriate
state tax and information returns as such REMIC's direct representative. The
expenses of preparing and filing such returns shall be borne by the Securities
Administrator.
(f) The Securities Administrator or its designee shall perform on behalf of
each REMIC all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions, or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, if required by the Code, the REMIC
Provisions, or other such guidance, the Securities Administrator shall provide,
upon receipt of additional reasonable compensation, to the Treasury or other
governmental authority such information as is necessary for the application of
any tax relating to the transfer of a Residual Certificate to any disqualified
person or organization pursuant to Treasury Regulation 1.860E-2(a)(5) and any
person designated in Section 860E(e)(3) of the Code.
(g) The Securities Administrator and the Holders of Certificates shall take
any action or cause any REMIC to take any action necessary to create or maintain
the status of any REMIC as a REMIC under the REMIC Provisions and shall assist
each other as necessary to create or
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maintain such status. Neither the Securities Administrator nor the Holder of any
Residual Certificate shall knowingly take any action, cause any REMIC to take
any action or fail to take (or fail to cause to be taken) any action that, under
the REMIC Provisions, if taken or not taken, as the case may be, could (i)
endanger the status of any REMIC as a REMIC or (ii) result in the imposition of
a tax upon any REMIC (including but not limited to the tax on prohibited
transactions as defined in Code Section 860F(a)(2) and the tax on prohibited
contributions set forth on Section 860G(d) of the Code) (either such event, an
"Adverse REMIC Event") unless the Securities Administrator has received a REMIC
Opinion (at the expense of the party seeking to take such action) to the effect
that the contemplated action will not endanger such status or result in the
imposition of such a tax. In addition, prior to taking any action with respect
to any REMIC or the assets therein, or causing any REMIC to take any action,
which is not expressly permitted under the terms of this Agreement, any Holder
of a Residual Certificate will consult with the Securities Administrator, in
writing, with respect to whether such action could cause an Adverse REMIC Event
to occur with respect to any REMIC, and no such Person shall take any such
action or cause any REMIC to take any such action as to which the Securities
Administrator has advised it in writing that an Adverse REMIC Event could occur;
provided, however, that if no Adverse REMIC Event would occur but such action
could result in the imposition of additional taxes on the Residual
Certificateholders, no such Person shall take any such action, or cause any
REMIC to take any such action without the written consent of the Residual
Certificateholders.
(h) Each Holder of a Residual Certificate shall pay when due any and all
taxes imposed on the related REMIC by federal or state governmental authorities.
To the extent that such taxes are not paid by a Residual Certificateholder, the
Securities Administrator shall pay any remaining REMIC taxes out of current or
future amounts otherwise distributable to the Holder of the Residual Certificate
in any such REMIC or, if no such amounts are available, out of other amounts
held in the Distribution Account, and shall reduce amounts otherwise payable to
holders of regular interests in any such REMIC, as the case may be.
(i) The Securities Administrator shall prepare and file with the Internal
Revenue Service ("IRS"), on behalf of each of REMIC 1 and the Upper Tier REMIC,
an application for an employer identification number on IRS Form SS-4 or by any
other acceptable method. The Securities Administrator shall also file a Form
8811 as required. The Securities Administrator, upon receipt from the IRS of the
Notice of Taxpayer Identification Number Assigned, shall upon request promptly
forward a copy of such notice to the Depositor. The Securities Administrator
shall furnish any other information that is required by the Code and regulations
thereunder to be made available to Certificateholders. The Depositor shall cause
each Servicer to provide the Securities Administrator with such information as
is necessary for the Securities Administrator to prepare such reports.
(j) No additional contributions of assets shall be made to any REMIC,
except as expressly provided in this Agreement.
(k) The Securities Administrator shall not enter into any arrangement by
which any REMIC will receive a fee or other compensation for services.
(l) The Class A-R Holder shall act as "tax matters person" with respect to
each REMIC and irrevocably appoints the Securities Administrator to act as its
agent in such roles.
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(m) The Securities Administrator shall prepare or cause to be prepared on
behalf of the Trust Fund, based upon information calculated in accordance with
this Agreement pursuant to instructions given by the Depositor, the Trustee
shall sign, and the Securities Administrator shall file federal tax returns, all
in accordance with Section 9.12 hereof. The Securities Administrator shall
prepare and file, and the Trustee shall sign, such state income tax returns and
such other returns as may be required by applicable law relating to the Trust
Fund, and, if required by state law, and shall file any other documents to the
extent required by applicable state tax law (to the extent such documents are in
the Securities Administrator's possession). The Securities Administrator shall
forward copies to the Depositor of all such returns and Form 1099 supplemental
tax information and such other information within the control of the Securities
Administrator as the Depositor may reasonably request in writing, and shall
distribute to each Certificateholder such forms and furnish such information
within the control of the Securities Administrator as are required by the Code
and the REMIC Provisions to be furnished to them, and will prepare and
distribute to Certificateholders Form 1099 (supplemental tax information) (or
otherwise furnish information within the control of the Securities
Administrator) to the extent required by applicable law.
(n) None of the Securities Administrator, the Trustee or the Depositor, as
assignees under this Agreement, shall provide any consent pursuant to this
Agreement or knowingly take any action under this Agreement that would conflict
with or violate the provisions of this Section 9.12.
(o) The parties intend that the portion of the Trust Fund consisting of the
right to receive the payments distributable to the Class P Certificates shall be
treated as a "grantor trust" under the Code, for the benefit of the holders of
the Class P Certificates, and the provisions hereof shall be interpreted
consistently with this intention. In furtherance of such intention, the
Securities Administrator shall (i) furnish or cause to be furnished to the
holders of the Class P Certificates information regarding their allocable share
of the income with respect to such grantor trust and (ii) file or cause to be
filed with the Internal Revenue Service, and the Trustee shall sign, Form 1041
(together with any necessary attachments) and such other forms as may be
applicable.
(p) Notwithstanding any other provision of this Agreement, the Trustee and
the Securities Administrator shall comply with all federal withholding
requirements respecting payments to Certificateholders of interest or original
issue discount on the Mortgage Loans, that the Trustee or the Securities
Administrator reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee or the Securities Administrator withholds any amount from interest or
original issue discount payments or advances thereof to any Certificateholder
pursuant to federal withholding requirements, the Trustee or the Securities
Administrator shall, together with its monthly report to such
Certificateholders, indicate such amount withheld.
(q) The Trustee and the Securities Administrator agree to indemnify the
Trust Fund and the Depositor for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by the Trust
Fund, the Depositor or the Trustee, as a result of a breach of the Trustee's
covenants and the Securities Administrator's covenants, respectively, set forth
in this Section 9.12; provided, however, such liability and obligation to
indemnify in this paragraph shall not be joint and several and neither the
Trustee nor the Securities Administrator
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shall be liable or be obligated to indemnify the Trust Fund for the failure by
the other to perform any duty under this Agreement or the breach by the other of
any covenant in this Agreement.
(r) The Securities Administrator covenants and agrees that it shall act as
agent (and the Securities Administrator is hereby appointed to act as agent) of
the Tax Matters Person on behalf of each of the REMICs provided for herein and
that in such capacity it shall: (a) to the extent that they are under its
control conduct the affairs of each of the REMICs provided for herein at all
times that any Certificates are outstanding so as to maintain the status of each
of the REMICs provided for herein as a REMIC under the REMIC Provisions; (b) not
knowingly or intentionally take any action or omit to take any action that would
cause the termination of the REMIC status of any of the REMICs provided for
herein or result in the imposition of tax upon any such REMIC; (c) not knowingly
or intentionally take any action or omit to take any action that would cause the
termination of the grantor trust status under Subpart E, Part I of Subchapter J
of the Code of any of the grantor trusts provided for herein or result in the
imposition of tax upon any such grantor trust; and (d) as and when necessary and
appropriate, represent each of the REMICs provided for herein in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of any of the REMICs provided for herein, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of any of the REMICs provided for herein,
and otherwise act on behalf of each of the REMICs provided for herein in
relation to any tax matter involving any of such REMICs or any controversy
involving the Trust Fund.
(s) Each of the Depositor, the Master Servicer, the Securities
Administrator and the Trustee agrees not to take or omit to take knowingly or
intentionally, any action or omit to take any action that would cause the
termination of the REMIC status of any of the REMICs provided for herein or
result in the imposition of a tax upon any of the REMICs provided for herein.
(t) For the avoidance of doubt, any returns, records, reports or filings
required under this Section 9.12 and Section 9.12 of the Stack I Agreement, may
be prepared, maintained and filed in a consolidated manner that addresses the
requirements of the Pooling and Servicing Agreement taken as a whole.
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ARTICLE X
TERMINATION
Section 10.01 Termination upon Liquidation or Repurchase of all Mortgage
Loans.
(a) Subject to Section 10.03, the obligations and responsibilities of the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
created hereby with respect to that portion of the Trust Fund relating to the
Certificates shall terminate upon the earlier of (a) an Optional Termination and
(b) the later of (i) the maturity or other liquidation of the last Mortgage Loan
remaining in the Trust Fund (or any Monthly Advance with respect thereto) and
the disposition of all REO Property and (ii) the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
this Agreement, as applicable. In no event shall the trusts created hereby
continue beyond the earlier of (i) the expiration of 21 years from the death of
the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador
of the United States to the Court of St. James's, living on the date hereof and
(ii) the Latest Possible Maturity Date.
(b) On or before the Determination Date following the Initial Optional
Termination Date, the Securities Administrator shall attempt to terminate that
portion of the Trust Fund relating to the Certificates by conducting an auction
of all of the Mortgage Loans and REO Properties via a solicitation of bids from
at least three (3) bidders, each of which shall be a nationally recognized
participant in mortgage finance (the "Auction"). The Depositor and the
Securities Administrator agree to work in good faith to develop bid procedures
in advance of the Initial Optional Termination Date to govern the operation of
the Auction. The Securities Administrator shall be entitled to retain an
investment banking firm and/or other agents in connection with the Auction, the
cost of which shall be included in the Optional Termination Price (unless an
Optional Termination does not occur in which case such costs shall be an expense
of the Issuing Entity). The Securities Administrator shall accept the highest
bid received at the Auction; provided that the amount of such bid equals or
exceeds the Optional Termination Price. The Securities Administrator shall
determine the Optional Termination Price based upon information provided by (i)
the Master Servicer with respect to the amounts described in clauses (A) and (B)
of the definition of "Optional Termination Price" (other than Securities
Administrator's expenses) and (ii) the Depositor with respect to the information
described in clause (C) of the definition of "Optional Termination Price." The
Securities Administrator may conclusively rely upon the information provided to
it in accordance with the immediately preceding sentence and shall not have any
liability for the failure of any party to provide such information.
If an Optional Termination does not occur as a result of the Auction's
failure to achieve the Optional Termination Price, the Master Servicer may, on
any Distribution Date following such Auction, at its option, terminate that
portion of the Trust Fund relating to the Certificates by purchasing all of the
Mortgage Loans and REO Properties at a price equal to the Optional Termination
Price. In connection with such termination, the Optional Termination Price shall
be delivered to the Securities Administrator no later than the Business Day
immediately preceding the related Distribution Date. Notwithstanding anything to
the contrary herein, the Optional Termination Amount paid to the Securities
Administrator by the winning bidder at the Auction or by the Master Servicer
shall be deposited by the Securities Administrator directly into the
Distribution Account immediately upon receipt. Upon any termination as a result
of an Auction,
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the Securities Administrator shall, out of the Optional Termination Amount
deposited into the Distribution Account, (x) pay the Securities Administrator
its costs and expenses necessary to conduct the Auction and any other
unreimbursed amounts owing to it and (y) pay to the Master Servicer or Servicer,
the aggregate amount of any unreimbursed out-of-pocket costs and expenses owed
to the Master Servicer or Servicer and any unpaid or unreimbursed Servicing
Fees, Monthly Advances and Servicing Advances.
(c) Notwithstanding anything to the contrary in clause (b) above, in the
event that the Securities Administrator and the Trustee receive the written
opinion of a nationally recognized participant in mortgage finance acceptable to
the Seller that the Mortgage Loans and REO Properties to be included in the
Auction will not be saleable at a price sufficient to achieve the Optional
Termination Price, the Securities Administrator need not conduct the Auction. In
such event, the Master Servicer shall have the option to purchase the Mortgage
Loans and REO Properties at the Optional Termination Price as of the Initial
Optional Termination Date.
(d) For the avoidance of doubt, the obligations and responsibilities of the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
created pursuant to the Stack I Agreement shall survive any termination pursuant
to this Section 10.01.
Section 10.02 Final Distribution on the Certificates.
If on any Determination Date, (i) the Securities Administrator determines
that there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund relating to the Mortgage Loans other than the funds in the Master
Servicer Collection Account, the Securities Administrator shall send a final
distribution notice promptly to each Certificateholder or (ii) the Securities
Administrator determines that a Class of Certificates shall be retired after a
final distribution on such Class, the Securities Administrator shall notify the
Certificateholders within seven (7) Business Days after such Determination Date
that the final distribution in retirement of such Class of Certificates is
scheduled to be made on the immediately following Distribution Date. Any final
distribution made pursuant to the immediately preceding sentence will be made
only upon presentation and surrender of the Certificates at the office of the
Securities Administrator.
Notice of any partial termination of the Issuing Entity, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Securities Administrator by letter to Certificateholders mailed no later
than the last calendar day of the month immediately preceding the month of such
final distribution (or with respect to an Auction, mailed no later than one
Business Day following completion of such Auction). Any such notice shall
specify (a) the Distribution Date upon which final distribution on the
Certificates will be made upon presentation and surrender of Certificates at the
office therein designated, (b) the location of the office or agency at which
such presentation and surrender must be made, and (c) that the Record Date
otherwise applicable to such Distribution Date is not applicable, distributions
being made only upon presentation and surrender of the Certificates at the
office therein specified. The Securities Administrator will give such notice to
each Rating Agency at the time such notice is given to Certificateholders.
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In the event such notice is given, the Master Servicer shall cause all
funds in the Master Servicer Collection Account to be deposited in the
Distribution Account on the Business Day prior to the applicable Distribution
Date in an amount equal to the final distribution in respect of the
Certificates. Upon receipt of written notice of such final deposit with respect
to the Issuing Entity and the receipt by the Trustee, or its Custodian, of a
Request for Release therefor, the Trustee, or its Custodian, shall promptly
release to the Securities Administrator or the Master Servicer, as applicable,
the Mortgage Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Securities
Administrator shall cause to be distributed to Certificateholders of each Class
the amounts allocable to such Certificates held in the Distribution Account in
the order and priority set forth in Section 6.01 hereof on the final
Distribution Date and in proportion to their respective Percentage Interests.
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above-mentioned written notice, the Securities Administrator shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Securities
Administrator may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets that remain a part of the Issuing Entity. If within one
year after the second notice all Certificates shall not have been surrendered
for cancellation, the Class A-R Certificateholders shall be entitled to all
unclaimed funds and other assets of the Issuing Entity that remain subject
hereto. Upon payment to the Class A-R Certificateholders of such funds and
assets, the Securities Administrator shall have no further duties or obligations
with respect thereto.
Section 10.03 Additional Termination Requirements.
(a) In the event the Securities Administrator or the Master Servicer
exercises its purchase option as provided in Section 10.01, that portion of the
Trust Fund relating to the Mortgage Loans shall be terminated in accordance with
the following additional requirements, unless the Securities Administrator shall
have been furnished with an Opinion of Counsel to the effect that the failure of
the Issuing Entity to comply with the requirements of this Section will not (i)
result in the imposition of taxes on "prohibited transactions" of the Issuing
Entity as defined in Section 860F of the Code or (ii) cause any REMIC
constituting part of the Issuing Entity to fail to qualify as a REMIC at any
time that any Certificates are outstanding:
(i) Within 90 days prior to the final Distribution Date, the
Securities Administrator shall adopt and sign a plan of complete
liquidation of the Issuing Entity as provided to it by the terminating
purchaser, meeting the requirements of a "qualified liquidation" under
Section 860F of the Code and any regulations thereunder; and
(ii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Distribution Date, the Securities
Administrator shall sell all of the assets of the Issuing Entity for cash
pursuant to the terms of the plan of complete liquidation.
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(b) By their acceptance of Certificates, the Holders thereof hereby agree
to appoint the Securities Administrator as their attorney in fact to: (i) adopt
such a plan of complete liquidation (and the Certificateholders hereby appoint
the Securities Administrator as their attorney in fact to sign such plan) as
appropriate and (ii) to take such other action in connection therewith as may be
reasonably required to carry out such plan of complete liquidation all in
accordance with the terms hereof.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Intent of Parties. The parties intend that each REMIC shall
be treated as a REMIC for federal income tax purposes and that the provisions of
this Agreement should be construed in furtherance of this intent.
Section 11.02 Amendment.
(a) This Agreement may be amended from time to time by the Depositor, the
Master Servicer, the Securities Administrator and the Trustee, and without the
consent of any of the Certificateholders to:
(i) to cure any ambiguity or correct any mistake,
(ii) to correct, modify or supplement any provision herein which
may be inconsistent with any other provision herein,
(iii) to add any other provisions with respect to matters or
questions arising under this Agreement, or
(iv) to modify, alter, amend, add to or rescind any of the terms
or provisions contained in this Agreement; provided, however, that, in the
case of clauses (iii) and (iv), such amendment will not, as evidenced by an
Opinion of Counsel addressed to the Securities Administrator to such
effect, adversely affect in any material respect the interests of any
Certificateholder; provided, further, however, that such amendment will be
deemed to not adversely affect in any material respect the interest of any
Holder if the Person requesting such amendment obtains a letter from each
Rating Agency stating that such amendment will not result in a reduction or
withdrawal of its rating of any Class of the Certificates, it being
understood and agreed that any such letter in and of itself will not
represent a determination as to the materiality of any such amendment and
will represent a determination only as to the credit issues affecting any
such rating.
Notwithstanding the foregoing, without the consent of the
Certificateholders, the Depositor, the Master Servicer, the Securities
Administrator and the Trustee may at any time and from time to time amend this
Agreement to modify, eliminate or add to any of its provisions to such extent as
shall be necessary or appropriate to maintain the qualification of any of the
REMICs provided for herein as REMICs under the Code or to avoid or minimize the
risk of the imposition of any tax on the Issuing Entity or any of the REMICs
provided for herein pursuant to
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the Code that would be a claim against the Issuing Entity at any time prior to
the final redemption of the Certificates, provided that the Trustee and the
Securities Administrator shall have been provided an Opinion of Counsel
addressed to the Trustee and the Securities Administrator, which opinion shall
be an expense of the party requesting such amendment but in any case shall not
be an expense of the Trustee and the Securities Administrator, to the effect
that such action is necessary or appropriate to maintain such qualification or
to avoid or minimize the risk of the imposition of such a tax.
(b) This Agreement may also be amended from time to time by the Master
Servicer, the Depositor, the Securities Administrator and the Trustee, and the
Assignment Agreements may also be amended from time to time by the Master
Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing Percentage Interests aggregating not less than 51% of the Class
Certificate Balance of the Certificates or of the applicable Class or Classes,
if such amendment affects only such Class or Classes, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall (i) reduce
in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Regular Certificate
without the consent of the Holder of such Regular Certificate, or (ii) reduce
the aforesaid percentage of Certificates the Holders of which are required to
consent to any such amendment, without the consent of the Holders of all
Certificates then outstanding. Notwithstanding any contrary provision of this
Agreement, the Trustee shall not consent to any amendment to this Agreement
unless it shall have first received an Opinion of Counsel addressed to the
Trustee, which opinion shall be an expense of the party requesting such
amendment but in any case shall not be an expense of the Trustee, to the effect
that such amendment is permitted hereunder and will not cause the imposition of
any tax on the Issuing Entity, any of the REMICs provided for herein or the
Certificateholders or cause any of the REMICs provided for herein to fail to
qualify as a REMIC at any time that any Certificates are outstanding.
(c) Promptly after the execution of any such amendment, the Securities
Administrator shall furnish a copy of such amendment or written notification of
the substance of such amendment to each Certificateholder, with a copy to the
Rating Agencies.
(d) In the case of an amendment under Subsection 11.02(b) above, it shall
not be necessary for the Certificateholders to approve the particular form of
such an amendment. Rather, it shall be sufficient if the Certificateholders
approve the substance of the amendment. The manner of obtaining such consents
and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as the
Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel stating that
the execution of such amendment is authorized or permitted by this Agreement and
will not adversely affect the status of any REMIC created hereunder. The Trustee
and the Securities Administrator may, but shall not be obligated to, enter into
any such amendment which affects the Trustee's or the Securities Administrator's
own respective rights, duties or immunities under this Agreement.
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Section 11.03 Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere. The Depositor
shall effect such recordation, at the expense of the Issuing Entity upon the
request in writing of a Certificateholder, but only if such direction is
accompanied by an Opinion of Counsel (provided at the expense of the
Certificateholder requesting recordation) to the effect that such recordation
would materially and beneficially affect the interests of the Certificateholders
or is required by law.
Section 11.04 Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall not terminate
this Agreement or the Issuing Entity, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Issuing Entity, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
(b) Except as expressly provided in this Agreement, no Certificateholders
shall have any right to vote or in any manner otherwise control the operation
and management of the Issuing Entity, or the obligations of the parties hereto,
nor shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to establish the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholders be under any liability to any third Person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon, under or with respect to this Agreement against the Depositor, the
Securities Administrator, the Master Servicer or any successor to any such
parties unless (i) such Certificateholder previously shall have given to the
Trustee a written notice of a continuing default, as herein provided, (ii) the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 51% of the Trust Fund shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs and expenses and liabilities to be incurred therein or
thereby, and (iii) the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused to institute any
such action, suit or proceeding.
(d) No one or more Certificateholders shall have any right by virtue of any
provision of this Agreement to affect the rights of any other Certificateholders
or to obtain or seek to obtain priority or preference over any other such
Certificateholder, or to enforce any right under this Agreement, except in the
manner herein provided and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of this
Section 11.04, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
-116-
Section 11.05 Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
an agent duly appointed in writing. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is expressly required, to the
Depositor. Proof of execution of any such instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Agreement and
conclusive in favor of the Trustee and the Depositor, if made in the manner
provided in this Section 11.05.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his or her individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his or her
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the individual executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing on such Certificates, except an endorsement in
accordance with Section 5.02 made on a Regular Certificate presented in
accordance with Section 5.04) shall be proved by the Certificate Register, and
neither the Trustee, the Securities Administrator, the Depositor, the Master
Servicer nor any successor to any such parties shall be affected by any notice
to the contrary.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action of the holder of any Regular Certificate shall bind every future
holder of the same Regular Certificate and the holder of every Regular
Certificate issued upon the registration of transfer or exchange thereof, if
applicable, or in lieu thereof with respect to anything done, omitted or
suffered to be done by the Trustee, the Securities Administrator, the Depositor,
the Master Servicer or any successor to any such party in reliance thereon,
whether or not notation of such action is made upon such Certificates.
(e) In determining whether the Holders of the requisite percentage of
Certificates evidencing Percentage Interests have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Certificates
owned by the Trustee, the Securities Administrator, the Depositor, the Master
Servicer or any Affiliate thereof shall be disregarded, except as otherwise
provided in Section 11.02(b) and except that, in determining whether the
Securities Administrator or the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Certificates which a Responsible Officer of the Trustee knows to be so owned
shall be so disregarded. Certificates which have been pledged in good faith to
the Trustee, the Securities Administrator, the Depositor, the Master Servicer or
any Affiliate thereof may be regarded as outstanding if the pledgor establishes
to the satisfaction of the Securities Administrator the pledgor's right to act
with respect to such
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Certificates and that the pledgor is not an Affiliate of the Trustee, the
Securities Administrator, the Depositor, or the Master Servicer, as the case may
be.
Section 11.06 Governing Law. THIS AGREEMENT AND THE CERTIFICATES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO ITS CONFLICT OF LAWS RULES AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.07 Notices. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at (including delivery by
facsimile) or mailed by registered mail, return receipt requested, postage
prepaid, or by recognized overnight courier, to (i) in the case of the
Depositor, 0 Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Vice
President-Servicing, telecopier number: (000) 000-0000, or to such other address
as may hereafter be furnished to the other parties hereto in writing; (ii) in
the case of the Trustee, at its Corporate Trust Office, or such other address as
may hereafter be furnished to the other parties hereto in writing; (iii) in the
case of the Master Servicer or Securities Administrator, Xxxxx Fargo Bank, N.A.,
X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000, Attention: Client Service Manager MLMI
Series 2006-AF1, or, in the case of overnight deliveries, 0000 Xxx Xxxxxxxxx
Xxxx, Xxxxxxxx, Xxxxxxxx 00000-0000, Attention: Client Service Manager MLMI
Series 2006-AF1, facsimile no.: (000) 000-0000, or such other address as may
hereafter be furnished to the other parties hereto in writing; (iv) in the case
of the Custodian, Xxxxx Fargo Bank, N.A., 0000 00xx Xxxxxx Xxxxxxxxx, XX 0031,
Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: MLMI Series 2006-AF1; or such other
address as may hereafter be furnished to the other parties hereto in writing; or
(v) in the case of the Rating Agencies, Xxxxx'x Investors Service, Inc., 00
Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 and Standard & Poor's, a
division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000. Any notice delivered to the Depositor, the Trustee, the Securities
Administrator or the Master Servicer under this Agreement shall be effective
only upon receipt. Any notice required or permitted to be mailed to a
Certificateholder, unless otherwise provided herein, shall be given by
first-class mail, postage prepaid, at the address of such Certificateholder as
shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given when mailed, whether or not the Certificateholder receives such notice.
Section 11.08 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severed from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
Section 11.09 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the respective successors and
assigns of the parties hereto.
Section 11.10 Article and Section Headings. The article and section
headings herein are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof.
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Section 11.11 Counterparts. This Agreement may be executed in two or more
counterparts each of which when so executed and delivered shall be an original
but all of which together shall constitute one and the same instrument.
Section 11.12 Notice to Rating Agencies. The article and section headings
herein are for convenience of reference only, and shall not limited or otherwise
affect the meaning hereof. The Trustee shall promptly provide notice to each
Rating Agency with respect to each of the following of which it has actual
knowledge:
1. Any material change or amendment to this Agreement or the Servicing
Agreements;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Trustee, the Master Servicer or
the Securities Administrator;
4. The repurchase or substitution of Mortgage Loans;
5. The final payment to Certificateholders; and
6. Any change in the location of the Master Servicer Collection Account or
the Distribution Account.
ARTICLE XII
REMIC ADMINISTRATION
Section 12.01 [Reserved].
Section 12.02 Prohibited Transactions and Activities. Neither the Depositor
nor the Securities Administrator shall sell, dispose of, or substitute for any
of the Mortgage Loans, except in a disposition pursuant to (i) the foreclosure
of a Mortgage Loan, (ii) the bankruptcy of the Trust Fund, (iii) the termination
of each REMIC pursuant to Article X of this Agreement, (iv) a substitution
pursuant to Article II of this Agreement or (v) a repurchase of Mortgage Loans
pursuant to Article II of this Agreement, nor acquire any assets for any REMIC,
nor sell or dispose of any investments in the Distribution Account for gain, nor
accept any contributions to any REMIC after the Closing Date, unless it has
received an Opinion of Counsel (at the expense of the party causing such sale,
disposition, or substitution) that such disposition, acquisition, substitution,
or acceptance will not (a) affect adversely the status of any such REMIC as a
REMIC or of the interests therein other than the Residual Certificate as the
regular interests therein, (b) affect the distribution of interest or principal
on the Certificates, (c) result in the encumbrance of the assets transferred or
assigned to the Trust Fund (except pursuant to the provisions of this Agreement)
or (d) cause any such REMIC to be subject to any tax including a tax on
prohibited transactions or prohibited contributions pursuant to the REMIC
Provisions.
Section 12.03 Indemnification with Respect to Prohibited Transactions or
Loss of REMIC Status. In the event that a REMIC fails to qualify as a REMIC,
loses its status as a
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REMIC, or incurs federal, state or local taxes as a result of a prohibited
transaction or prohibited contribution under the REMIC Provisions due to the
negligent performance by the Securities Administrator of its duties and
obligations set forth herein, the Securities Administrator shall indemnify the
Certificateholders of the related Residual Certificate against any and all
losses, claims, damages, liabilities or expenses ("Losses") resulting from such
negligence; provided, however, that the Securities Administrator shall not be
liable for any such Losses attributable to the action or inaction of the
Depositor or the Holder of the Residual Certificate, nor for any such Losses
resulting from misinformation provided by any of the foregoing parties on which
the Securities Administrator has relied. Notwithstanding the foregoing, however,
in no event shall the Trustee or the Securities Administrator have any liability
(1) for any action or omission that is taken in accordance with and in
compliance with the express terms of, or which is expressly permitted by the
terms of, this Agreement or the Mortgage Loan Purchase Agreement, (2) for any
Losses other than arising out of malfeasance, willful misconduct or negligent
performance by the Securities Administrator with respect to its duties and
obligations set forth herein, and (3) for any special or consequential damages
to Certificateholders of the related Residual Certificate (in addition to
payment of principal and interest on the Certificates).
Section 12.04 REO Property.
(a) Notwithstanding any other provision of this Agreement, the Securities
Administrator shall not, except to the extent provided in this Agreement for
which the Securities Administrator is obligated to perform, knowingly permit any
Servicer to rent, lease, otherwise earn income or take any other action on
behalf of any REMIC with respect to any REO Property which might cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
section 860G(a)(8) of the Code or result in the receipt by any REMIC of any
"income from non-permitted assets" within the meaning of section 860F(a)(2) of
the Code or any "net income from foreclosure property" which is subject to tax
under the REMIC Provisions unless the Servicer has provided to the Securities
Administrator an Opinion of Counsel concluding that, under the REMIC Provisions,
such action would not adversely affect the status of any REMIC as a REMIC and
any income generated for any REMIC by the REO Property would not result in the
imposition of a tax upon such REMIC.
(b) The Depositor shall cause each Servicer (to the extent provided in the
applicable Servicing Agreement) to make reasonable efforts to sell any REO
Property for its fair market value. In any event, however, the Depositor shall,
or shall cause the Servicer (to the extent provided in this Agreement) to,
dispose of any REO Property within three years of its acquisition by the Issuing
Entity unless the Depositor or such Servicer (on behalf of the Issuing Entity)
has received a grant of extension from the Internal Revenue Service to the
effect that, under the REMIC Provisions and any relevant proposed legislation
and under applicable state law, the REMIC may hold REO Property for a longer
period without adversely affecting the REMIC status of such REMIC or causing the
imposition of a Federal or state tax upon such REMIC. If such an extension has
been received, then the Depositor, acting on behalf of the Trustee hereunder,
shall, or shall cause the Servicer to, continue to attempt to sell the REO
Property for its fair market value for such period longer than three years as
such extension permits (the "Extended Period"). If such an extension has not
been received and the Depositor or the Servicer, acting on behalf of the Issuing
Entity hereunder, is unable to sell the REO Property within 33 months after its
acquisition by the Issuing Entity or if such an extension, has been
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received and the Depositor or the Servicer is unable to sell the REO Property
within the period ending three months before the close of the Extended Period,
the Depositor shall cause the Servicer, before the end of the three year period
or the Extended Period, as applicable, to (i) purchase such REO Property at a
price equal to the REO Property's fair market value or (ii) auction the REO
Property to the highest bidder (which may be the Servicer) in an auction
reasonably designed to produce a fair price prior to the expiration of the
three-year period or the Extended Period, as the case may be.
-121-
IN WITNESS WHEREOF, the Depositor, the Trustee, the Master Servicer and the
Securities Administrator have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first above
written.
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.,
as Depositor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
HSBC BANK USA, NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXX FARGO BANK, N.A.,
as Master Servicer
By:
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Assistant Vice President
XXXXX FARGO BANK, N.A.,
as Securities Administrator
By:
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Assistant Vice President
EXHIBIT A-1
FORM OF CLASS [_-A_][M-_] CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
THE DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER OR THE SECURITIES ADMINISTRATOR
REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE, THE
REMIC REGULAR INTEREST REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED OR INSURED BY THE DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, THE
SECURITIES ADMINISTRATOR OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL
AGENCY OR INSTRUMENTALITY.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION
SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT
PRINCIPAL BALANCE BY INQUIRY OF THE SECURITIES ADMINISTRATOR.
[THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES AND THE RESIDUAL
CERTIFICATES TO THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
IF ANY BOOK-ENTRY CERTIFICATE (OR ANY INTEREST THEREIN) IS ACQUIRED OR HELD IN
VIOLATION OF THE PROVISIONS OF SECTION 5.02(B) OF THE POOLING AND SERVICING
AGREEMENT, THEN THE LAST PRECEDING TRANSFEREE THAT IS IN COMPLIANCE WITH SUCH
PROVISIONS SHALL BE RESTORED, TO THE EXTENT PERMITTED BY LAW, TO ALL RIGHTS AND
OBLIGATIONS AS CERTIFICATE OWNER THEREOF RETROACTIVE TO THE DATE OF SUCH
TRANSFER OF SUCH CERTIFICATE. NEITHER THE TRUSTEE NOR THE SECURITIES
ADMINISTRATOR SHALL BE UNDER ANY LIABILITY TO
A-1-1
ANY PERSON FOR MAKING ANY PAYMENTS DUE ON SUCH CERTIFICATE TO SUCH PRECEDING
TRANSFEREE.
ANY PURPORTED CERTIFICATE OWNER WHOSE ACQUISITION OR HOLDING OF ANY BOOK-ENTRY
CERTIFICATE (OR INTEREST THEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS
IN SECTION 5.02(B) OF THE AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE
DEPOSITOR, THE TRUSTEE, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER AND
THE TRUST FUND FROM AND AGAINST ANY AND ALL LIABILITIES, CLAIMS, COSTS OR
EXPENSES INCURRED BY SUCH PARTIES AS A RESULT OF SUCH ACQUISITION OR HOLDING.
A-1-2
MLMI Series 2006-AF1, Class [_-A_][M-_] Aggregate Certificate Principal
Balance of the Class [_-A_][M-_]
Certificates as of the Issue Date:
$__________
Pass-Through Rate: Variable(1) Initial Certificate Principal
Balance of this Class [_-A_][M-_]
Certificate as of the Issue Date
$__________
Date of Agreement and Cut-off Date: Master Servicer and Securities
September 1, 2006 Administrator: Xxxxx Fargo
Bank, N.A.
First Distribution Date: October 25, 2006 Trustee: HSBC Bank USA, National
Association
No. __ Issue Date: September 29, 2006
CUSIP: ___________
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
MORTGAGE PASS-THROUGH CERTIFICATE
MLMI SERIES 2006-AF1
evidencing a beneficial ownership interest in a Trust Fund (the "Trust
Fund") consisting primarily of five groups of conventional, one- to four-family,
fixed rate and adjustable rate, fully amortizing mortgage loans secured by first
liens on residential property (the "Mortgage Loans") formed and sold by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN XXXXXXX
XXXXX MORTGAGE INVESTORS, INC., THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER
THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS
----------
(1) As described in the Pooling and Servicing Agreement referenced herein.
A-1-3
ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that CEDE & CO. is the registered owner of a Percentage
Interest obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class [_-A_][M-_] Certificates as
of the Issue Date in that certain beneficial ownership interest evidenced by all
the Class [_-A_][M-_] Certificates in the Trust Fund created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor (hereinafter called
the "Depositor," which term includes any successor entity under the Agreement),
Xxxxx Fargo Bank, N.A., as master servicer (in such capacity, the "Master
Servicer") and securities administrator (in such capacity, the "Securities
Administrator") and HSBC Bank USA, National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Interest on this Certificate will accrue during the period specified
in the Agreement on the Certificate Principal Balance hereof at a per annum rate
equal to the variable Pass-Through Rate described in the Agreement.
Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class [_-A_][M-_] Certificates on such
Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
[_-A_][M-_] Certificates, or otherwise by check mailed by first class mail to
the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Securities
Administrator of the pendency of such distribution and only upon the
presentation and surrender of this Certificate at the office or agency appointed
by the Securities Administrator for that purpose as provided in the Agreement.
If any Book-Entry Certificate (or any interest therein) is acquired or
held in violation of the provisions of Section 5.02(b) of the Agreement, then
the last preceding Transferee that is in compliance with such provisions shall
be restored, to the extent permitted by law, to all rights and obligations as
Certificate Owner thereof retroactive to the date of such Transfer of such
Certificate. Neither the Trustee nor the Securities Administrator shall be under
A-1-4
any liability to any Person for making any payments due on such Certificate to
such preceding Transferee.
Any purported Certificate Owner whose acquisition or holding of any
Book-Entry Certificate (or interest therein) was effected in violation of the
restrictions in Section 5.02(b) of the Agreement shall indemnify and hold
harmless the Depositor, the Trustee, the Securities Administrator, the Master
Servicer and the Trust Fund from and against any and all liabilities, claims,
costs or expenses incurred by such parties as a result of such acquisition or
holding.
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Master Servicer Collection Account and the
Distribution Account may be made from time to time for purposes other than
distributions to Holders of the Certificates, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Securities Administrator, the Master Servicer
and the Trustee and the rights of the Holders of the Certificates under the
Agreement at any time by the Depositor, the Securities Administrator, the Master
Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing Percentage Interests aggregating not less than 51% of the Trust Fund
or of the applicable Class or Classes, if such amendment affects only such Class
or Classes, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Certificateholders. Any such consent by the Holder
of this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
A-1-5
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Securities Administrator, the Master Servicer, the
Trustee and the Certificate Registrar and any agent of the Depositor, the
Securities Administrator, the Master Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Securities
Administrator, the Master Servicer, the Trustee, the Certificate Registrar nor
any such agent shall be affected by notice to the contrary.
This certificate shall be governed by and construed in accordance with
the laws of the state of New York.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by the Securities Administrator and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in the Trust Fund and (iii) the Optional Termination of the trust fund
according to the procedures described in the Agreement, which can occur on any
date after the first Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than 5% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-1-6
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
XXXXX FARGO BANK, N.A.,
as Securities Administrator
By:
------------------------------------
AUTHORIZED SIGNATORY
Dated: September 29, 2006
SECURITIES ADMINISTRATOR'S CERTIFICATE AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Pooling and Servicing Agreement.
XXXXX FARGO BANK, N.A.,
as Authenticating Agent
By:
------------------------------------
AUTHORIZED SIGNATORY
Dated: September 29, 2006
A-1-7
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts to
Minors Act
JT TEN - as joint tenants with right of ______________________
survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
_______________________________________________________________________________.
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:
________________________________________________________________________________
_______________________________________________________________________________.
Dated:
------------------------------
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
A-1-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds
to ____________________________________________________________________________,
for the account of ____________________________________________________________,
account number___________, or, if mailed by check, to _________________________,
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or __________________________________________________,
as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS [B-_] [RULE 144A] [REG S] CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
THE DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER OR THE SECURITIES ADMINISTRATOR
REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE, THE
REMIC REGULAR INTEREST REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE
GUARANTEED OR INSURED BY THE DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, THE
SECURITIES ADMINISTRATOR OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL
AGENCY OR INSTRUMENTALITY.
FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL
BALANCE OF THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION
SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT
PRINCIPAL BALANCE BY INQUIRY OF THE SECURITIES ADMINISTRATOR.
THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES, THE CLASS M
CERTIFICATES AND THE RESIDUAL CERTIFICATES TO THE EXTENT DESCRIBED IN THE
AGREEMENT REFERRED TO HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
IF ANY BOOK-ENTRY CERTIFICATE (OR ANY INTEREST THEREIN) IS ACQUIRED OR HELD IN
VIOLATION OF THE PROVISIONS OF SECTION 5.02(B) OF THE POOLING AND SERVICING
AGREEMENT, THEN THE LAST PRECEDING TRANSFEREE THAT IS IN COMPLIANCE WITH SUCH
PROVISIONS SHALL BE RESTORED, TO THE EXTENT PERMITTED BY LAW, TO ALL RIGHTS AND
OBLIGATIONS AS CERTIFICATE OWNER THEREOF RETROACTIVE TO THE DATE OF SUCH
TRANSFER OF SUCH CERTIFICATE. NEITHER THE TRUSTEE NOR THE SECURITIES
ADMINISTRATOR SHALL BE UNDER ANY LIABILITY TO
1
ANY PERSON FOR MAKING ANY PAYMENTS DUE ON SUCH CERTIFICATE TO SUCH PRECEDING
TRANSFEREE.
ANY PURPORTED CERTIFICATE OWNER WHOSE ACQUISITION OR HOLDING OF ANY BOOK-ENTRY
CERTIFICATE (OR INTEREST THEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS
IN SECTION 5.02(B) OF THE AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE
DEPOSITOR, THE TRUSTEE, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER AND
THE TRUST FUND FROM AND AGAINST ANY AND ALL LIABILITIES, CLAIMS, COSTS OR
EXPENSES INCURRED BY SUCH PARTIES AS A RESULT OF SUCH ACQUISITION OR HOLDING.
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE SECURITIES ADMINISTRATOR WITH (A) A REPRESENTATION THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENT SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE") OR A PLAN SUBJECT TO ANY PROVISION UNDER ANY FEDERAL,
STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SUBSTANTIVELY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW")
(COLLECTIVELY, A "PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS
CERTIFICATE FOR, ON BEHALF OF, OR WITH ANY ASSETS OF ANY SUCH PLAN, (B) IF THIS
CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING, A
REPRESENTATION THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY THAT IS ACQUIRING
THIS CERTIFICATE WITH ASSETS OF AN "INSURANCE COMPANY GENERAL ACCOUNT" AS
DEFINED IN SECTION V(E) OF PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60
AND THE ACQUISITION AND HOLDING OF THIS CERTIFICATE ARE COVERED AND EXEMPT UNDER
SECTIONS I AND III OF PTCE 95-60 OR (C) SOLELY IN THE CASE OF A DEFINITIVE
CERTIFICATE, AN OPINION OF COUNSEL SATISFACTORY TO THE SECURITIES ADMINISTRATOR,
AND UPON WHICH THE SECURITIES ADMINISTRATOR SHALL BE ENTITLED TO RELY, TO THE
EFFECT THAT THE ACQUISITION AND HOLDING OF THIS CERTIFICATE BY THE PROSPECTIVE
TRANSFEREE WILL NOT CONSTITUTE OR RESULT IN A NONEXEMPT PROHIBITED TRANSACTION
UNDER ERISA OR THE CODE, OR A VIOLATION OF SIMILAR LAW, AND WILL NOT SUBJECT THE
TRUSTEE, THE SECURITIES ADMINISTRATOR, THE CERTIFICATE REGISTRAR, THE MASTER
SERVICER, ANY SERVICER OR THE DEPOSITOR TO ANY OBLIGATION IN ADDITION TO THOSE
UNDERTAKEN BY SUCH ENTITIES IN THE POOLING AND SERVICING AGREEMENT, WHICH
OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE SECURITIES
ADMINISTRATOR, THE CERTIFICATE REGISTRAR, THE MASTER SERVICER, ANY SERVICER OR
THE DEPOSITOR. IF THE CERTIFICATE IS NOT A DEFINITIVE CERTIFICATE, THE
TRANSFEREE IS DEEMED TO HAVE MADE THE REPRESENTATION IN (A) OR (B) ABOVE.
2
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF ANY STATE
AND MAY NOT BE RESOLD OR TRANSFERRED [WITHIN THE UNITED STATES (AS DEFINED IN
RULES 901 THROUGH 905 OF THE 1933 ACT ("REGULATION S")) OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, A U.S. PERSON (AS DEFINED IN REGULATION S),] UNLESS IT IS
REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN
TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER
APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 5.02 OF THE AGREEMENT.
3
MLMI Series 2006-AF1, Class [B-_] Aggregate Certificate Principal
[RULE 144A] [REGULATION S] Balance of Class [B-_] Certificates
as of the Issue Date: $____________
Pass Through Rate: Variable(1) Initial Class Certificate Principal
Balance of this Class [B-_]
Certificate as of the Issue Date:
$___________
Date of Agreement and Cut-off Date: Master Servicer and Securities
September 1, 2006 Administrator:
Xxxxx Fargo Bank, N.A.
First Distribution Date: October 25, 2006 Trustee: HSBC Bank USA, National
Association
No. __ Issue Date: September 29, 2006
CUSIP: ___________
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
MORTGAGE PASS-THROUGH CERTIFICATE
MLMI SERIES 2006-AF1
evidencing a beneficial ownership interest in a Trust Fund (the "Trust
Fund") consisting primarily of five groups of conventional, one- to four-family,
fixed rate and adjustable rate, fully amortizing mortgage loans secured by first
liens on residential property (the "Mortgage Loans") formed and sold by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN XXXXXXX
XXXXX MORTGAGE INVESTORS, INC., THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER
THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS
----------
(1) As described in the Pooling and Servicing Agreement referenced herein.
4
ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that CEDE & CO. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class [B-_] Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class [B-_] Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Xxxxxxx
Xxxxx Mortgage Investors, Inc., as depositor (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement),
Xxxxx Fargo Bank, N.A., as master servicer (in such capacity, the "Master
Servicer") and securities administrator (in such capacity, the "Securities
Administrator") and HSBC Bank USA, National Association, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Interest on this Certificate will accrue during the period specified
in the Agreement on the Certificate Principal Balance hereof at a per annum rate
equal to the variable Pass-Through Rate described in the Agreement.
Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class [B-_] Certificates on such
Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
[B-_] Certificates, or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Securities Administrator
of the pendency of such distribution and only upon the presentation and
surrender of this Certificate at the office or agency appointed by the
Securities Administrator for that purpose as provided in the Agreement.
If any Book-Entry Certificate (or any interest therein) is acquired or
held in violation of the provisions of Section 5.02(b) of the Agreement, then
the last preceding Transferee that is in compliance with such provisions shall
be restored, to the extent permitted by law, to all rights and obligations as
Certificate Owner thereof retroactive to the date of such Transfer of such
Certificate. Neither the Trustee nor the Securities Administrator shall be under
5
any liability to any Person for making any payments due on such Certificate to
such preceding Transferee.
Any purported Certificate Owner whose acquisition or holding of any
Book_Entry Certificate (or interest therein) was effected in violation of the
restrictions in Section 5.02(b) of the Agreement shall indemnify and hold
harmless the Depositor, the Trustee, the Securities Administrator, the Master
Servicer and the Trust Fund from and against any and all liabilities, claims,
costs or expenses incurred by such parties as a result of such acquisition or
holding.
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Master Servicer Collection Account and the
Distribution Account may be made from time to time for purposes other than
distributions to Holders of the Certificates, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Securities Administrator, the Master Servicer
and the Trustee and the rights of the Holders of the Certificates under the
Agreement at any time by the Depositor, the Securities Administrator, the Master
Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing Percentage Interests aggregating not less than 51% of the Trust Fund
or of the applicable Class or Classes, if such amendment affects only such Class
or Classes, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Certificateholders. Any such consent by the Holder
of this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
6
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and any applicable state securities laws or
is exempt from the registration requirements under the 1933 Act and such state
securities laws. .In the event that a transfer is to be made in reliance upon an
exemption from the 1933 Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Securities Administrator in writing the facts surrounding
the transfer in a Transferor Representation Letter as described in the Agreement
and (i) deliver to the Securities Administrator an Investor Representation
Letter or Rule 144A Letter as described in the Agreement or (ii) have delivered
to the Securities Administrator an Opinion of Counsel that such transfer may be
made pursuant to an exemption from the Securities Act, which Opinion of Counsel
shall not be an expense of the Depositor or the Securities Administrator. Any
Certificateholder desiring to effect a transfer of this Certificate shall
indemnify the Securities Administrator and the Depositor against any liability
that may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Securities Administrator, the Master Servicer, the
Trustee and the Certificate Registrar and any agent of the Depositor, the
Securities Administrator, the Master Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Securities
Administrator, the Master Servicer, the Trustee, the Certificate Registrar nor
any such agent shall be affected by notice to the contrary.
This certificate shall be governed by and construed in accordance with
the laws of the state of New York.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by the Securities Administrator and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in the Trust Fund and (iii) the Optional Termination of the trust fund
according to the procedures described in the Agreement, which can occur on any
date after the first Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than 5% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date.
7
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
8
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
XXXXX FARGO BANK, N.A.,
as Securities Administrator
By:
------------------------------------
AUTHORIZED SIGNATORY
Dated: September 29, 2006
SECURITIES ADMINISTRATOR'S CERTIFICATE AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Pooling and Servicing Agreement.
XXXXX FARGO BANK, N.A.,
as Authenticating Agent
By:
------------------------------------
AUTHORIZED SIGNATORY
Dated: September 29, 2006
9
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts to
Minors Act
JT TEN - as joint tenants with right of ______________________
survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
_______________________________________________________________________________.
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:
________________________________________________________________________________
_______________________________________________________________________________.
Dated:
------------------------------
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
10
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds
to ____________________________________________________________________________,
for the account of ____________________________________________________________,
account number___________, or, if mailed by check, to _________________________,
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or __________________________________________________,
as its agent.
11
EXHIBIT A-3
FORM OF CLASS A-R CERTIFICATE
SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A "RESIDUAL
INTEREST" IN ONE OR MORE "REAL ESTATE MORTGAGE INVESTMENT CONDUITS", AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE
DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER OR THE SECURITIES ADMINISTRATOR
REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE, THE
REMIC RESIDUAL INTERESTS REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS
ARE GUARANTEED OR INSURED BY THE DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER,
THE SECURITIES ADMINISTRATOR OR BY ANY OF THEIR AFFILIATES OR BY ANY
GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE SECURITIES ADMINISTRATOR AND THE DEPOSITOR WITH A
REPRESENTATION THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO ANY
FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE
SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE, AND IS
NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON BEHALF OF, OR WITH
ANY ASSETS OF ANY SUCH PLAN. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE MAY BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02
OF THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR
IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF THE PROPOSED TRANSFEREE PROVIDES AN AFFIDAVIT TO THE SECURITIES ADMINISTRATOR
THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES OR ANY POSSESSION THEREOF,
ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY
1
OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER THAN A COOPERATIVE
DESCRIBED IN SECTION 521 OF THE CODE) THAT IS EXEMPT FROM THE TAX IMPOSED BY
CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY
SECTION 511 OF THE CODE, (3) ANY ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C)
OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3)
SHALL HEREINAFTER BE REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (4) AN
AGENT OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH TRANSFER IS TO
IMPEDE THE ASSESSMENT OR COLLECTION OF TAX. NOTWITHSTANDING THE REGISTRATION IN
THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED
ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE
HEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND
THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN. ANY PERSON
THAT IS A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL
OWNERSHIP OF THIS CERTIFICATE.
2
MLMI Series 2006-AF1, Class A-R Aggregate Certificate Principal
Balance of the Class A-R
Certificates as of the Issue Date:
$100
Pass-Through Rate: Variable(1) Master Servicer and Securities
Administrator: Xxxxx Fargo Bank,
N.A.
Date of Agreement and Cut-off Date: Trustee: HSBC Bank USA, National
September 1, 2006 Association
First Distribution Date: October 25, 2006 Issue Date: September 29, 2006
No. __ CUSIP: ___________
MORTGAGE PASS-THROUGH CERTIFICATE
MLMI SERIES 2006-AF1
evidencing a beneficial ownership interest in a Trust Fund (the "Trust
Fund") consisting primarily of five groups of conventional, one- to four-family,
fixed rate and adjustable rate, fully amortizing mortgage loans secured by first
liens on residential property (the "Mortgage Loans") formed and sold by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN XXXXXXX
XXXXX MORTGAGE INVESTORS, INC., THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER
THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _____________________________ is a registered
owner of a ___% Percentage Interest specified above in that certain beneficial
ownership interest evidenced by all the Class A-R Certificates in the Trust Fund
created pursuant to a Pooling and Servicing Agreement, dated as specified above
(the "Agreement"), among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement), Xxxxx Fargo Bank, N.A., as master servicer (in such
capacity, the "Master Servicer") and securities administrator (in such capacity,
the "Securities Administrator") and HSBC Bank USA, National Association, as
trustee (the "Trustee"), a
----------
(1) As described in the Pooling and Servicing Agreement referenced herein.
3
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (each, a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-R Certificates on such Distribution
Date pursuant to the Agreement.
Interest on this Certificate will accrue during the period specified
in the Agreement on the Certificate Principal Balance hereof at a at a per annum
rate equal to the variable Pass-Through Rate described in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
Corporate Trust Office.
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the related Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Master Servicer Collection Account and the
Distribution Account may be made from time to time for purposes other than
distributions to Holders of the Certificates, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the related Mortgage Loans.
The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Securities Administrator, the Master Servicer
and the Trustee and the rights of the Holders of the Certificates under the
Agreement at any time by the Depositor, the Securities Administrator, the Master
Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing Percentage Interests aggregating not less than 66 2/3% of the Trust
Fund or of the applicable Class or Classes, if such amendment affects only such
Class or Classes, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Certificateholders. Any such consent by the Holder
of this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities
4
Administrator as provided in the Agreement, duly endorsed by, or accompanied by
an assignment in the form below or other written instrument of transfer in form
satisfactory to the Securities Administrator and the Certificate Registrar duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and any applicable state securities laws or
is exempt from the registration requirements under the 1933 Act and such state
securities laws. .In the event that a transfer is to be made in reliance upon an
exemption from the 1933 Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Securities Administrator in writing the facts surrounding
the transfer in a Transferor Certificate as described in the Agreement and (i)
deliver to the Securities Administrator an Investment Letter or Rule 144A Letter
as described in the Agreement or (ii) have delivered to the Securities
Administrator an Opinion of Counsel that such transfer may be made pursuant to
an exemption from the Securities Act, which Opinion of Counsel shall not be an
expense of the Depositor or the Securities Administrator. Any Certificateholder
desiring to effect a transfer of this Certificate shall indemnify the Securities
Administrator and the Depositor against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
Each Person holding or acquiring any Ownership Interest in a Class A-R
Certificate shall be a Permitted Transferee, as described in the Agreement, and
shall promptly notify the Securities Administrator of any change or impending
change in its status as a Permitted Transferee.
Prior to registration of any transfer, sale or other disposition of
this Certificate, the proposed transferee shall provide to the Securities
Administrator the affidavits described in Section 5.02(c) of the Agreement. Each
Person holding or acquiring any Ownership Interest in a Class A-R Certificate
shall agree to comply with the requirements of Section 5.02(c) of the Agreement
in connection with any transfer thereof. Any attempted or purported transfer of
any Ownership Interest in a Class A-R Certificate in violation of the provisions
of Section 5.02(c) of the Agreement shall be absolutely null and void and shall
vest no rights in the purported transferee. If any purported transferee shall
become a Holder of a Class A-R Certificate in violation of the provisions of
Section 5.02(c) of the Agreement, then the last preceding Permitted Transferee
shall be restored to all rights as Holder thereof retroactive to the date of
registration of Transfer of such Class A-R Certificate, as described more fully
in the Agreement.
The Holder of this Certificate, by its acceptance hereof, shall be
deemed to have consented to the provisions of Section 5.02 of the Agreement and
to any amendment of the Agreement deemed necessary by counsel of the Depositor
to ensure that the transfer of this
5
Certificate to any Person other than a Permitted Transferee or any other Person
will not cause the REMIC to cease to qualify as a REMIC or cause the imposition
of a tax upon the REMIC.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Securities Administrator, the Master Servicer, the
Trustee and the Certificate Registrar and any agent of the Depositor, the
Securities Administrator, the Master Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Securities
Administrator, the Master Servicer, the Trustee, the Certificate Registrar nor
any such agent shall be affected by notice to the contrary.
This certificate shall be governed by and construed in accordance with
the laws of the state of New York.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by the Securities Administrator and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in the Trust Fund and (iii) the Optional Termination of the trust fund
according to the procedures described in the Agreement, which can occur on any
date after the first Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than 5% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
6
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
XXXXX FARGO BANK, N.A.,
as Securities Administrator
By:
------------------------------------
AUTHORIZED SIGNATORY
Dated: September 29, 2006
SECURITIES ADMINISTRATOR'S CERTIFICATE AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Pooling and Servicing Agreement.
XXXXX FARGO BANK, N.A.,
as Authenticating Agent
By:
------------------------------------
AUTHORIZED SIGNATORY
Dated: September 29, 2006
7
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ______________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:
________________________________________________________________________________
_______________________________________________________________________________.
Dated:
--------------------
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds
to ____________________________________________________________________________,
for the account of ____________________________________________________________,
account number___________, or, if mailed by check, to _________________________,
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or __________________________________________________,
as its agent.
9
EXHIBIT A-4
FORM OF CLASS P CERTIFICATE
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
THE DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER OR THE SECURITIES ADMINISTRATOR
REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE DEPOSITOR, THE
TRUSTEE, THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR OR BY ANY OF THEIR
AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE SECURITIES ADMINISTRATOR WITH (A) A REPRESENTATION THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENT SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE") OR A PLAN SUBJECT TO ANY PROVISION UNDER ANY FEDERAL,
STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SUBSTANTIVELY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW")
(COLLECTIVELY, A "PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS
CERTIFICATE FOR, ON BEHALF OF, OR WITH ANY ASSETS OF ANY SUCH PLAN, (B) IF THIS
CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING, A
REPRESENTATION THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY THAT IS ACQUIRING
THIS CERTIFICATE WITH ASSETS OF AN "INSURANCE COMPANY GENERAL ACCOUNT" AS
DEFINED IN SECTION V(E) OF PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60
AND THE ACQUISITION AND HOLDING OF THIS CERTIFICATE ARE COVERED AND EXEMPT UNDER
SECTIONS I AND III OF PTCE 95-60 OR (C) SOLELY IN THE CASE OF A DEFINITIVE
CERTIFICATE, AN OPINION OF COUNSEL SATISFACTORY TO THE SECURITIES ADMINISTRATOR,
AND UPON WHICH THE SECURITIES ADMINISTRATOR SHALL BE ENTITLED TO RELY, TO THE
EFFECT THAT THE ACQUISITION AND HOLDING OF THIS CERTIFICATE BY THE PROSPECTIVE
TRANSFEREE WILL NOT CONSTITUTE OR RESULT IN A NONEXEMPT PROHIBITED TRANSACTION
UNDER ERISA OR THE CODE, OR A VIOLATION OF SIMILAR LAW, AND WILL NOT SUBJECT THE
TRUSTEE, THE SECURITIES ADMINISTRATOR, THE CERTIFICATE REGISTRAR, THE MASTER
SERVICER, ANY SERVICER OR THE DEPOSITOR TO ANY OBLIGATION IN ADDITION TO THOSE
UNDERTAKEN BY SUCH ENTITIES IN THE POOLING AND SERVICING AGREEMENT, WHICH
OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE SECURITIES
ADMINISTRATOR, THE CERTIFICATE REGISTRAR, THE MASTER SERVICER, ANY SERVICER OR
THE DEPOSITOR. IF THE CERTIFICATE IS NOT A DEFINITIVE CERTIFICATE, THE
TRANSFEREE IS DEEMED TO HAVE MADE THE REPRESENTATION IN (A) OR (B) ABOVE.
10
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR
IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
11
MLMI Series 2006-AF1, Class P Percentage Interest: 100%
Date of Agreement and Cut-off Date: Master Servicer and Securities
September 1, 2006 Administrator: Xxxxx Fargo Bank, N.A.
First Distribution Date: Trustee: HSBC Bank USA, National
October 25, 2006 Association
No. [__________] Issue Date: September 29, 2006
CUSIP: [____________]
MORTGAGE PASS-THROUGH CERTIFICATE
MLMI SERIES 2006-AF1
evidencing a beneficial ownership interest in a Trust Fund (the "Trust
Fund") consisting primarily of five groups of conventional, one- to four-family,
fixed rate and adjustable-rate, fully amortizing mortgage loans secured by first
liens on residential property (the "Mortgage Loans") formed and sold by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
XXXXXXX XXXXX MORTGAGE INVESTORS, INC., THE MASTER SERVICER, THE
SECURITIES ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS
ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ___________________________ is the registered
owner of a 100% Percentage Interest in that certain beneficial ownership
interest evidenced by all the Class P Certificates in the Trust Fund created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement), Xxxxx Fargo Bank, N.A., as master servicer (in such
capacity, the "Master Servicer") and securities administrator (in such capacity,
the "Securities Administrator") and HSBC Bank USA, National Association, as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
12
Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class P Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Securities Administrator by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Securities
Administrator in writing at least five Business Days prior to the Record Date
immediately prior to such Distribution Date and is the registered owner of Class
P Certificates, or otherwise by check mailed by first class mail to the address
of the Person entitled thereto, as such name and address shall appear on the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Securities Administrator of the
pendency of such distribution and only upon the presentation and surrender of
this Certificate at the office or agency appointed by the Securities
Administrator for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series specified on the
face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Master Servicer Collection Account and the
Distribution Account may be made from time to time for purposes other than
distributions to Holders of the Certificates, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions provided
therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Securities Administrator, the Master Servicer
and the Trustee and the rights of the Holders of the Certificates under the
Agreement at any time by the Depositor, the Securities Administrator, the Master
Servicer and the Trustee, with the consent of the Holders of Certificates
evidencing Percentage Interests aggregating not less than 51% of the Trust Fund
or of the applicable Class or Classes, if such amendment affects only such Class
or Classes, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Certificateholders. Any such consent by the Holder
of this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities
13
Administrator as provided in the Agreement, duly endorsed by, or accompanied by
an assignment in the form below or other written instrument of transfer in form
satisfactory to the Securities Administrator and the Certificate Registrar duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Certificateholder
surrendering the same.
No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and any applicable state securities laws or
is exempt from the registration requirements under the 1933 Act and such state
securities laws. .In the event that a transfer is to be made in reliance upon an
exemption from the 1933 Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Securities Administrator in writing the facts surrounding
the transfer in a Transferor Representation Letter as described in the Agreement
and (i) deliver to the Securities Administrator an Investor Representation
Letter or Rule 144A Letter as described in the Agreement or (ii) have delivered
to the Securities Administrator an Opinion of Counsel that such transfer may be
made pursuant to an exemption from the Securities Act, which Opinion of Counsel
shall not be an expense of the Depositor or the Securities Administrator. Any
Certificateholder desiring to effect a transfer of this Certificate shall
indemnify the Securities Administrator and the Depositor against any liability
that may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Securities Administrator, the Master Servicer, the
Trustee and the Certificate Registrar and any agent of the Depositor, the
Securities Administrator, the Master Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Securities
Administrator, the Master Servicer, the Trustee, the Certificate Registrar nor
any such agent shall be affected by notice to the contrary.
This certificate shall be governed by and construed in accordance with
the laws of the state of New York.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by the Securities Administrator and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in the
14
Trust Fund and (iii) the Optional Termination of the trust fund according to the
procedures described in the Agreement, which can occur on any date after the
first Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans is less than 5% of the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
15
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
XXXXX FARGO BANK, N.A.,
as Securities Administrator
By:
------------------------------------
AUTHORIZED SIGNATORY
Dated: September 29, 2006
SECURITIES ADMINISTRATOR'S CERTIFICATE AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Pooling and Servicing Agreement.
XXXXX FARGO BANK, N.A.,
as Authenticating Agent
By:
------------------------------------
AUTHORIZED SIGNATORY
Dated: September 29, 2006
16
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ______________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
_______________________________________________________________________________.
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:
________________________________________________________________________________
_______________________________________________________________________________.
Dated:
---------------------
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
17
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds
to ____________________________________________________________________________,
for the account of ____________________________________________________________,
account number___________, or, if mailed by check, to _________________________,
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by _______________________________________________,
the assignee named above, or __________________________________________________,
as its agent.
18
EXHIBIT B
MORTGAGE LOAN SCHEDULE
[Provided Upon Request]
B-1
EXHIBIT C
[RESERVED]
C-1
EXHIBIT D
REQUEST FOR RELEASE OF DOCUMENTS
To: Xxxxx Fargo Bank, N.A.
0000 00xx Xxxxxx X.X.
Xxxxxxxxxxx Xxxxxxxxx 00000
Attn: ______________________
Re: Custodial Agreement dated as of September 29, 2006 among HSBC Bank USA,
National Association, Xxxxxxx Xxxxx Mortgage Investors, Inc. and Xxxxx
Fargo Bank, N.A.
In connection with the administration of the Mortgage Loans held by you as
Custodian for the Owner pursuant to the above-captioned Custodial Agreement, we
request the release, and hereby acknowledge receipt, of the Custodian's Mortgage
File for the Mortgage Loan described below, for the reason indicated.
Mortgage Loan Number: ________________________________________
Mortgagor Name, Address & Zip Code: __________________________
Reason for Requesting Documents (check one): _________________
[ ] 1. Mortgage Paid in full
[ ] 2. Foreclosure
[ ] 3. Substitution
[ ] 4. Other Liquidation (Repurchases, etc.)
[ ] 5. Nonliquidation Reason: ________________________________
By:
------------------------------------
(authorized signer)
Issuer:
--------------------------------
Address:
-------------------------------
Date:
----------------------------------
D-1
Custodian
Xxxxx Fargo Bank, N.A.
Please acknowledge the execution of the above request by your signature and
date below:
Please acknowledge the execution of the above request by your signature and
date below:
------------------------------------- ----------------------------------------
Signature Date
Documents returned to Custodian:
------------------------------------- ----------------------------------------
Custodian Date
D-2
EXHIBIT E-1
FORM OF TRANSFEREE'S LETTER AND AFFIDAVIT
[DATE]
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services - Xxxxxxx Xxxxx Mortgage Investors Trust,
Series 2006-AF1
Ladies and Gentlemen:
We propose to purchase Xxxxxxx Xxxxx Mortgage Investors Trust, Series
2006-AF1 Mortgage Pass-Through Certificates, Class A-R, described in the
Prospectus Supplement, dated September 8, 2006, and the Prospectus, dated
September 28, 2006. Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement dated September
1, 2006 relating to this issuance of the Xxxxxxx Xxxxx Mortgage Investors Trust,
Series 2006-AF1 Mortgage Pass-Through Certificates (the "Pooling and servicing
Agreement").
1. We certify that (a) we are not a disqualified organization and (b)
we are not purchasing such Class A-R Certificate on behalf of a disqualified
organization; for this purpose the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code. We
understand that any breach by us of this certification may cause us to be liable
for an excise tax imposed upon transfers to disqualified organizations.
2. We certify that (a) we have historically paid our debts as they
became due, (b) we intend, and believe that we will be able, to continue to pay
our debts as they become due in the future, (c) we understand that, as
beneficial owner of the Class A-R Certificate, we may incur tax liabilities in
excess of any cash flows generated by the Class A-R Certificate, and (d) we
intend to pay any taxes associated with holding the Class A-R Certificate as
they become due and (e) we will not cause income from the Class A-R Certificate
to be attributable to a foreign permanent establishment or fixed base (within
the meaning of an applicable income tax treaty) of ours or another U.S.
taxpayer.
E-1-1
3. We acknowledge that we will be the beneficial owner of the Class
A-R Certificate and:(1)
_____ The Class A-R Certificate will be registered in our name.
_____ The Class A-R Certificate will be held in the name of our
nominee, _________________, which is not a disqualified
organization.
4. We certify that we are not an employee benefit plan subject to
Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), a plan subject to Section 4975 of the Code or a plan subject to
federal, state, local, non-U.S. or other law substantively similar to the
foregoing provisions of ERISA or the Code (each, a "Plan"), and are not directly
or indirectly acquiring the Class A-R Certificate on behalf of or with any
assets of a Plan.
5. We certify that (i) we are a U.S. person or (ii) we will hold the
Class A-R Certificate in connection with the conduct of a trade or business
within the United States and have furnished the transferor and the Securities
Administrator with a duly completed and effective Internal Revenue Service Form
W-8ECI or successor form at the time and in the manner required by the Code; for
this purpose the term "U.S. person" means a citizen or resident of the United
States, a corporation, or partnership (unless, in the case of a partnership,
Treasury regulations are adopted that provide otherwise) created or organized in
or under the laws of the United States, any State thereof or the District of
Columbia, including an entity treated as a corporation or partnership for
federal income tax purposes, an estate whose income is subject to United States
federal income tax regardless of the source of its income, or a trust if a court
within the United States is able to exercise primary supervision over the
administration of the trust and one or more such U.S. persons have the authority
to control all substantial decisions of the trust (or, to the extent provided in
applicable Treasury regulations, certain trusts in existence on August 20, 1996
which are eligible to elect to be treated as U.S. Persons. We agree that any
breach by us of this certification shall render the transfer of any interest in
the Class A-R Certificate to us absolutely null and void and shall cause no
rights in the Class A-R Certificate to vest in us.
6. We agree that in the event that at some future time we wish to
transfer any interest in the Class A-R Certificate, we will transfer such
interest in the Class A-R Certificate only (a) to a transferee that (i) is not a
disqualified organization and is not purchasing such interest in the Class A-R
Certificate on behalf of a disqualified organization, (ii) is a U.S. person or
will hold the Class A-R Certificate in connection with the conduct of a trade or
business within the United States and will furnish us and the Securities
Administrator with a duly completed and effective Internal Revenue Service Form
W-8ECI or successor form at the time and in the manner required by the Code and
(iii) has delivered to the Securities Administrator a letter in the form of this
letter (including the affidavit appended hereto) and, we will provide the
Securities Administrator a written statement substantially in the form of
Exhibit E-2 to the Pooling and Servicing Agreement.
----------
(1) Check appropriate box and if necessary fill in the name of the Transferee's
nominee.
E-1-2
7. We hereby designate _______________________ as our fiduciary to act
as the tax matters person for each of the REMICs provided for in the Pooling and
Servicing Agreement in which the Class A-R Certificate represents the residual
interest.
Very truly yours,
[Purchaser]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Accepted as of __________ __, 200__
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
E-1-3
APPENDIX A
Affidavit pursuant to (i) Section 860E(e)(4) of the Internal
Revenue Code of 1986, as amended, and (ii) certain provisions of the
Pooling and Servicing Agreement
Under penalties of perjury, the undersigned declares that the following is true:
1. He or she is an officer of _________________________ (the "Investor"),
2. the Investor's Employer Identification number is __________,
3. the Investor is not a "disqualified organization" (as defined below),
has no plan or intention of becoming a disqualified organization, and
is not acquiring any of its interest in the Xxxxxxx Xxxxx Mortgage
Investors Trust, Series 2006-AF1 Mortgage Pass-Through Certificates,
Class A-R Certificate on behalf of a disqualified organization or any
other entity,
4. unless Xxxxxxx Xxxxx Mortgage Investors, Inc. ("MLMI") has consented
to the transfer to the Investor, the Investor is a "U.S. person" (as
defined below),
5. that no purpose of the transfer is to avoid or impede the assessment
or collection of tax,
6. the Investor has historically paid its debts as they became due,
7. the Investor intends, and believes that it will be able, to continue
to pay its debts as they become due in the future,
8. the Investor understands that, as beneficial owner of the Class A-R
Certificate, it may incur tax liabilities in excess of any cash flows
generated by the Class A-R Certificate,
9. the Investor intends to pay any taxes associated with holding the
Class A-R Certificate as they become due,
10. the Investor consents to any amendment of the Pooling and Servicing
Agreement that shall be deemed necessary by MLMI (upon advice of
counsel) to constitute a reasonable arrangement to ensure that the
Class A-R Certificate will not be owned directly or indirectly by a
disqualified organization, and
11. IF BRACKETED, THE FOLLOWING CERTIFICATIONS ARE INAPPLICABLE [the
transfer is not a direct or indirect transfer of the Class A-R
Certificate to a foreign permanent establishment or fixed base (within
the meaning of an applicable income tax treaty) of the Investor, and
as to each of the residual interests represented by the Class A-R
Certificate, the present value of the anticipated tax liabilities
associated with holding such residual interest does not exceed the sum
of:
E-1-4
A. the present value of any consideration given to the Investor
to acquire such residual interest;
B. the present value of the expected future distributions on
such residual interest; and
C. the present value of the anticipated tax savings associated
with holding such residual interest as the related REMIC
generates losses.
For purposes of this declaration, (i) the Investor is assumed to pay
tax at a rate equal to the highest rate of tax specified in Section
11(b)(1) of the Code, but the tax rate specified in Section
55(b)(1)(B) of the Code may be used in lieu of the highest rate
specified in Section 11(b)(1) of the Code if the Investor has been
subject to the alternative minimum tax under Section 55 of the Code in
the preceding two years and will compute its taxable income in the
current taxable year using the alternative minimum tax rate, and (ii)
present values are computed using a discount rate equal to the Federal
short-term rate prescribed by Section 1274(d) of the Code for the
month of the transfer and the compounding period used by the
Investor;]
[(11)(A) at the time of the transfer, and at the close of each of the
Investor's two fiscal years preceding the Investor's fiscal year of
transfer, the Investor's gross assets for financial reporting purposes
exceed $100 million and its net assets for financial reporting
purposes exceed $10 million; and
(B) the Investor is an eligible corporation as defined in Treasury
regulations Section 1.860E-1(c)(6)(i) and has agreed in writing that
any subsequent transfer of the Class A-R Certificate will be to
another eligible corporation in a transaction that satisfies Treasury
regulation Sections 1.860E-1(c)(4)(i), 1.860E-1(c)(4)(ii),
1.860E-1(c)(4)(iii) and 1.860E-1(c)(5) and such transfer will not be a
direct or indirect transfer to a foreign permanent establishment
(within the meaning of an applicable income tax treaty) of a domestic
corporation.
For purposes of this declaration, the gross and net assets of the Investor do
not include any obligation of any related person as defined in Treasury
regulation Section 1.860E-1(c)(6)(ii) or any other asset if a principal purpose
for holding or acquiring the other asset is to permit the Investor to make this
declaration or to satisfy the requirements of Treasury regulation Section
1.860E-1(c)(5)(i).]
(12) The Investor will not cause income from the Class A-R Certificate to be
attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of the Investor or another U.S.
taxpayer.
E-1-5
For purpose of this affidavit, the term "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (except any entity treated as other than an instrumentality of
the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code
of 1986, as amended (the "Code")), any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from taxation under the
Code (unless such organization is subject to tax on excess inclusions) and any
organization that is described in Section 1381(a)(2)(C) of the Code and the term
"U.S. Person" means a citizen or resident of the United States, a corporation or
partnership (unless, in the case of a partnership, Treasury regulations are
adopted that provide otherwise) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, including an
entity treated as a corporation or partnership for federal income tax purposes,
an estate whose income is subject to Unites States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of such trust, and one or
more such U.S. Persons have the authority to control all substantial decisions
of such trust, (or, to the extent provided in applicable Treasury regulations,
certain trusts in existence on August 20, 1996 which are eligible to elect to be
treated as U.S. Persons).
E-1-6
IN WITNESS WHEREOF, the Investor has caused this instrument to be executed on
its behalf, pursuant to authority of its Board of Directors, by its
_____________ this ___ day of ______________, 20__.
[INVESTOR]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Personally appeared before me the above-named _______________________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the ____________________________ of the Investor, and acknowledged to me that
he executed the same as his free act and deed and the free act and deed of the
Investor.
Subscribed and sworn before me this ___ day of ______________, 20__.
NOTARY PUBLIC
_____________________________________
COUNTY OF ___________________________
STATE OF ____________________________
My commission expires the _____ day of __________ 20__.
E-1-7
EXHIBIT E-2
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Corporate Trust Services - Xxxxxxx Xxxxx Mortgage Investors Trust,
Series 2006-AF1
Re: Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-AF1
_______________________ (the "Transferor") has reviewed the attached
affidavit of _____________________________ (the "Transferee"), and has no actual
knowledge that such affidavit is not true, and has no reason to believe that the
Transferee has the intention to impede the assessment or collection of any
federal, state or local taxes legally required to be paid with respect to the
Class A-R Certificate referred to in the attached affidavit. In addition, the
Transferor has conducted a reasonable investigation at the time of the transfer
and found that the Transferee had historically paid its debts as they came due
and found no significant evidence to indicate that the Transferee will not
continue to pay its debts as they become due.
Very truly yours,
[Transferor]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
E-2-1
EXHIBIT F-1
FORM OF TRANSFEROR REPRESENTATION LETTER
______________, 200___
Xxxxxxx Xxxxx Mortgage Investors, Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Re: Xxxxxxx Xxxxx Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, Series 2006-AF1, Class [__]
Ladies and Gentlemen:
In connection with the sale by ___________ (the "Seller") to ________ (the
"Purchaser") of $_________ Initial Certificate Principal Balance of Mortgage
Pass-Through Certificates, Series 2006-AF1, Class _____ (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of September 1, 2006 among Xxxxxxx Xxxxx
Mortgage Investors, Inc., as depositor (the "Depositor"), Xxxxx Fargo Bank, N.A.
as master servicer (in such capacity, the "Master Servicer") and securities
administrator (in such capacity, the "Securities Administrator"), and HSBC Bank
USA, National Association, as trustee (the "Trustee"). The Seller hereby
certifies, represents and warrants to, and covenants with, the Depositor and the
Securities Administrator that:
Neither the Seller nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the "Act"), that would render the disposition of any Certificate a violation of
Section 5 of the Act or any state securities law, or that would require
registration or qualification pursuant thereto. The Seller will not act in any
manner set forth in the foregoing sentence with respect to any Certificate. The
F-1-1
Seller has not and will not sell or otherwise transfer any of the Certificates,
except in compliance with the provisions of the Pooling and Servicing Agreement.
Very truly yours,
----------------------------------------
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
F-1-2
EXHIBIT F-2
FORM OF INVESTOR REPRESENTATION LETTER (NON-RULE 144A)
__________, 200__
Xxxxxxx Xxxxx Mortgage Investors, Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Re: Xxxxxxx Xxxxx Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, Series 2006-AF1, Class [___]
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we certify
that (a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (The "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we are an
institutional "accredited investor," as defined in Regulation D under the Act,
and have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Certificates, (d) solely in the case of an ERISA
Restricted Certificate, we (i) are not an employee benefit plan or arrangement
subject to Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), a plan subject to Section 4975 of the Internal Revenue Code
of 1986, as amended (the "Code") or a plan subject to any provisions under any
federal, state, local, non-U.S. or other laws or regulations that are
substantively similar to foregoing provisions of ERISA or the Code ("Similar
Law") (collectively, a "Plan"), and are not directly or indirectly acquiring
this Certificate for, on behalf of or with any assets of any such Plan, (ii) if
the Certificate has been the subject of an ERISA-Qualifying Underwriting, are an
insurance company that is acquiring the Certificate with assets of an "insurance
company general account" as defined in Section V(E) of Prohibited Transaction
Class Exemption ("PTCE") 95-60, and the acquisition and holding of the
Certificate are covered and exempt under Sections I and III of PTCE 95-60, or
(iii) solely in the case of a Definitive Certificate, shall deliver herewith an
Opinion of Counsel satisfactory to the Securities Administrator, and upon which
the Securities Administrator shall be entitled to rely, to the effect that the
acquisition and holding of this certificate by the transferee will not result in
a nonexempt prohibited transaction under ERISA or the Code, or a violation of
Similar Law, and will not subject the Depositor, the Master Servicer, the
Securities Administrator or the Trustee to any obligation in addition to those
undertaken by such entities in the Pooling and Servicing Agreement, which
Opinion of Counsel
F-2-1
shall not be an expense of the Depositor, the Master Servicer, the Securities
Administrator or the Trustee, (e) we are acquiring the Certificates for
investment for our own account and not with a view to any distribution of such
Certificates (but without prejudice to our right at all times to sell or
otherwise dispose of the Certificates in accordance with clause (g) below), (f)
we have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, or taken any other action which would result in a
violation of Section 5 of the Act, and (g) we will not sell, transfer or
otherwise dispose of any Certificates unless (1) such sale, transfer or other
disposition is made pursuant to an effective registration statement under the
Act or is exempt from such registration requirements, and if requested, we will
at our expense provide an opinion of counsel satisfactory to the addressees of
this Certificate that such sale, transfer or other disposition may be made
pursuant to an exemption from the Act, (2) The purchaser or transferee of such
Certificate has executed and delivered to you a certificate to substantially the
same effect as this certificate, and (3) The purchaser or transferee has
otherwise complied with any conditions for transfer set forth in the Pooling and
Servicing Agreement.
Very truly yours,
----------------------------------------
Print Name of Transferee
By:
------------------------------------
Authorized Officer
F-2-2
EXHIBIT F-3
FORM OF RULE 144A LETTER
____________, 2006
Xxxxxxx Xxxxx Mortgage Investors, Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Re: Xxxxxxx Xxxxx Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, Series 2006-AF1, Class [___]
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we certify
that (a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (The "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) solely in the case of an ERISA Restricted
Certificate, we (i) are not an employee benefit plan or arrangement subject to
Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), a plan subject to Section 4975 of the Internal Revenue Code of 1986,
as amended (the "Code") or a plan subject to any provisions under any federal,
state, local, non-U.S. or other laws or regulations that are substantively
similar to foregoing provisions of ERISA or the Code ("Similar Law")
(collectively, a "Plan"), and are not directly or indirectly acquiring this
Certificate for, on behalf of or with any assets of any such Plan, (ii) if the
Certificate has been the subject of an ERISA-Qualifying Underwriting, are an
insurance company that is acquiring the Certificate with assets of an "insurance
company general account" as defined in Section V(E) of Prohibited Transaction
Class Exemption ("PTCE") 95-60, and the acquisition and holding of the
Certificate are covered and exempt under Sections I and III of PTCE 95-60, or
(iii) solely in the case of a Definitive Certificate, shall deliver herewith an
Opinion of Counsel satisfactory to the Securities Administrator, and upon which
the Securities Administrator shall be entitled to rely, to the effect that the
acquisition and holding of this certificate by the transferee will not result in
a nonexempt prohibited transaction under ERISA or the Code, or a violation of
Similar Law, and will not subject the Depositor, the Master Servicer, the
Securities Administrator or the Trustee to any obligation in addition to those
undertaken by such entities in the Pooling and Servicing Agreement, which
Opinion of Counsel shall not be an expense of the Depositor, the Master
Servicer, the Securities Administrator or the
F-3-1
Trustee, (e) we have not, nor has anyone acting on our behalf offered,
transferred, pledged, sold or otherwise disposed of the Certificates, any
interest in the Certificates or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Act or that would render the
disposition of the Certificates a violation of Section 5 of the Act or require
registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act, in such manner with respect to the Certificates,
(f) we are a "qualified institutional buyer" as that term is defined in Rule
144A under the Act ("Rule 144A") and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2, (g) we are
aware that the sale to us is being made in reliance on Rule 144A, and (h) we are
acquiring the Certificates for our own account or for resale pursuant to Rule
144A and further, understand that such Certificates may be resold, pledged or
transferred only (A) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (B) pursuant to another
exemption from registration under the Act.
Very truly yours,
----------------------------------------
Print Name of Transferee
By:
------------------------------------
Authorized Officer
F-3-2
ANNEX I TO EXHIBIT F-3
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (The "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, The undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, The Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) The Buyer owned and/or
invested on a discretionary basis $___________(1) in securities (except for the
1 excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) The Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or similar
business trust, partnership, or charitable organization described in Section
501(c)(3) of the Internal Revenue Code of 1986, as amended.
___ Bank. The Buyer (a) is a national bank or banking institution organized
under the laws of any State, territory or the District of Columbia, The business
of which is substantially confined to banking and is supervised by the State or
territorial banking commission or similar official or is a foreign bank or
equivalent institution, and (b) has an audited net worth of at least $25,000,000
as demonstrated in its latest annual financial statements, a copy of which is
attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association or
similar institution, which is supervised and examined by a State or Federal
authority having supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an audited net worth
of at least $25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
___ Broker-dealer. The Buyer is a dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934.
----------
(1) Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own
and/or invest on a discretionary basis at least $10,000,000 in securities.
F-3-3
___ Insurance Company. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the reinsuring of
risks underwritten by insurance companies and which is subject to supervision by
the insurance commissioner or a similar official or agency of a State, territory
or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and maintained by
a State, its political subdivisions, or any agency or instrumentality of the
State or its political subdivisions, for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974.
___ Investment Advisor. The Buyer is an investment advisor registered under
the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business investment
company licensed by the U.S. Small Business Administration under Section 301(c)
or (d) of the Small Business Investment Act of 1958.
___ Business Development Company. Buyer is a business development company
as defined in Section 202(a)(22) of the Investment Advisors Act of 1940.
3. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer, (ii) securities that are part of an
unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) securities issued or guaranteed by the U.S. or any instrumentality
thereof, (iv) bank deposit notes and certificates of deposit, (v) loan
participations, (vi) repurchase agreements, (vii) securities owned but subject
to a repurchase agreement and (viii) currency, interest rate and commodity
swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, The Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
The securities may be valued at market. Further, in determining such aggregate
amount, The Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
F-3-4
6. Until the date of purchase of the Rule 144A Securities, The Buyer will
notify each of the parties to which this certification is made of any changes in
the information and conclusions herein. Until such notice is given, The Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, The Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
----------------------------------------
Print Name of Buyer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
F-3-5
ANNEX II TO EXHIBIT F-3
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (The "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, The undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, The Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) The Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, The Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, The cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, The securities may be valued at market.
___ The Buyer owned $_____ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent fiscal
year (such amount being calculated in accordance with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which owned in
the aggregate $_____ in securities (other than the excluded securities referred
to below) as of the end of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
F-3-6
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, The Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, The undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the information and conclusions
herein. Until such notice is given, The Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.
----------------------------------------
Print Name of Buyer or Adviser
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
IF AN ADVISER:
----------------------------------------
Print Name of Buyer
Date:
----------------------------------
F-3-7
EXHIBIT G
FORM OF CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT (as amended and supplemented from time to
time, the "Agreement"), dated as of September 1, 2006, by and among HSBC BANK
USA, NATIONAL ASSOCIATION, as trustee (including its successors under each
Pooling and Servicing Agreement defined below, the "Trustee"), XXXXXXX XXXXX
MORTGAGE INVESTORS, INC., as the company (together with any successor in
interest, the "Company"), XXXXX FARGO BANK, N.A., as securities administrator
and master servicer (together with any successor in interest or successor under
each Pooling and Servicing Agreement referred to below, the "Master Servicer")
and XXXXX FARGO BANK, N.A., as custodian (together with any successor in
interest or any successor appointed hereunder, the "Custodian").
WITNESSETH THAT:
WHEREAS, the Company, the Master Servicer and the Trustee have entered
into two Pooling and Servicing Agreement, each dated as of September 1, 2006,
relating to the issuance of Xxxxxxx Xxxxx Mortgage Investors Trust., Series
2006-AF1 Mortgage Pass-Through Certificates, (as amended and supplemented from
time to time, the "Pooling and Servicing Agreement"); and
WHEREAS, the Custodian has agreed to act as agent for the Trustee for
the purposes of receiving and holding certain documents and other instruments
delivered by the Company or the Master Servicer under the Pooling and Servicing
Agreement and the Servicers under their respective Servicing Agreements, all
upon the terms and conditions and subject to the limitations hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the Trustee, the Company, the
Master Servicer and the Custodian hereby agree as follows:
I.
DEFINITIONS
Capitalized terms used in this Agreement and not defined herein shall
have the meanings assigned in the Pooling and Servicing Agreement, unless
otherwise required by the context herein.
II.
CUSTODY OF MORTGAGE DOCUMENTS
A. Custodian to Act as Agent: Acceptance of Mortgage Files,
Attestations and Assessments of Compliance.
1. The Custodian, as the duly appointed agent of the Trustee for these
purposes, acknowledges (subject to any exceptions noted in the Initial
Certification referred to in Section 2.3(a)) receipt of the Mortgage Files
relating to the Mortgage Loans identified on the schedule
attached hereto (the "Mortgage Files") and declares that it holds and will hold
such Mortgage Files as agent for the Trustee, in trust, for the use and benefit
of all present and future Certificateholders.
2. On or before March 1st of each calendar year, beginning with March
1, 2007, the Custodian shall, at its own expense, cause a firm of independent
public accountants (who may also render other services to Custodian), that is a
member of the American Institute of Certified Public Accountants, to furnish to
the Company and the Master Servicer a report to the effect that such firm
attests to, and reports on, the assessment made by such asserting party pursuant
to Section 2.01(c) below, which report shall be made in accordance with
standards for attestation engagements issued or adopted by the Public Company
Accounting Oversight Board.
3. On or before March 1st of each calendar year, beginning with March
1, 2007, the Custodian shall deliver to the Company and the Master Servicer a
report regarding its assessment of compliance with the servicing criteria
identified in Exhibit Three attached hereto, as of and for the period ending the
end of the fiscal year ending no later than December 31 of the year prior to the
year of delivery of the report, with respect to asset-backed security
transactions taken as a whole in which the Custodian is performing any of the
servicing criteria specified in Exhibit Three and that are backed by the same
asset type backing such asset-backed securities. Each such report shall include
(a) a statement of the party's responsibility for assessing compliance with the
servicing criteria applicable to such party, (b) a statement that such party
used the criteria identified in Item 1122(d) of Regulation AB (Section
229.1122(d)) to assess the compliance with the applicable servicing criteria,
(c) disclosure of any material instance of noncompliance identified by such
party, and (d) a statement that a registered public accounting firm has issued
an attestation report on such party's assessment of compliance with the
applicable servicing criteria, which report shall be delivered by the Custodian
as provided in this Section 2.01(c). However, the Custodian's obligation to
provide a report on assessment of compliance or an attestation with respect to
itself and with respect to any Subcontractor shall be suspended in any year in
which the Issuing Entity's reporting obligations under the Exchange Act are
suspended.
4. The Custodian has not and shall not engage any Subcontractor which
is "participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, unless such Subcontractor agrees to provide in any year in which
a Form 10-K will be filed by the Trust., no later than March 1st of such year,
an assessment and a statement of registered public accounting firm certifying
its compliance with the applicable servicing criteria in Item 1122(d) of
Regulation AB as of and for the period ending the end of the fiscal year ending
no later than December 31 of the year prior to the year of delivery of the
report. "Subcontractor" as used herein means any vendor, subcontractor or other
Person that is not responsible for the overall servicing (as "servicing" is
commonly understood by participants in the mortgage-backed securities market) of
the Mortgage Loans but performs one or more discrete functions identified in
Item 1122(d) of Regulation AB with respect to the Mortgage Loans under the
direction or authority of the Custodian.
5. The Custodian agrees to indemnify the Company, the Master Servicer,
the Trust Fund and each of their respective directors, officers, employees and
agents and hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and any other costs, fees and expenses
that any of them may sustain arising out of or based upon the engagement of any
Subcontractor in violation of Section 2.01(d) or any failure by the Custodian to
deliver any information, report, certification, accountants' letter or other
material when and as required under this Agreement, including any report under
Sections 2.01(b) or 2.01(c).
B. Reserved.
C. Review of Mortgage Files.
1. On or prior to the Closing Date, the Custodian agrees, for the
benefit of Certificateholders, to review, in accordance with the provisions of
Section 2.02 of the Pooling and Servicing Agreement, each such document, and
shall deliver to the Trustee an Initial Certification in the form annexed hereto
as Exhibit One evidencing receipt (subject to any exceptions noted therein) of a
Mortgage File for each of the Mortgage Loans listed on the Schedule attached
hereto (the "Mortgage Loan Schedule") and certifying that all such documents
have been executed and received and that such documents relate to the Mortgage
Loans identified on the Mortgage Loan Schedule, except for any exceptions listed
on Schedule A attached to such Initial Certification. The Custodian shall be
under no duty or obligation to inspect, review or examine said documents,
instruments, certificates or other papers to determine that the same are
genuine, enforceable, or appropriate for the represented purpose or that they
have actually been recorded or that they are other than what they purport to be
on their face.
2. Not later than 180 days after the Closing Date, the Custodian shall
review the Mortgage Files as provided in Section 2.02 of the Pooling and
Servicing Agreement and deliver to the Trustee a Final Certification in the form
annexed hereto as Exhibit Two evidencing the completeness of the Mortgage Files
(subject to any exceptions noted therein).
3. In reviewing the Mortgage Files as provided herein and in the
Pooling and Servicing Agreement, the Custodian shall make no representation as
to and shall not be responsible to verify (i) the validity, legality,
enforceability, due authorization, recordability, sufficiency or genuineness of
any of the documents included in any Mortgage File or (ii) the collectibility,
insurability, effectiveness or suitability of any of the documents in any
Mortgage File.
Upon receipt of written request from the Trustee, the Custodian shall
as soon as practicable supply the Trustee with a list of all of the documents
relating to the Mortgage Loans then contained in the Mortgage Files.
D. Notification of Breaches of Representations and Warranties. Upon
discovery by the Custodian of a breach of any representation or warranty made by
the Company as set forth in the Pooling and Servicing Agreement with respect to
a Mortgage Loan relating to a Mortgage File, the Custodian shall give prompt
written notice to the Company, the related Servicer and the Trustee.
E. Custodian to Cooperate: Release of Mortgage Files. Upon receipt of
written notice from the Master Servicer that the Mortgage Loan Seller has
repurchased a Mortgage Loan pursuant to Article II of the Pooling and Servicing
Agreement, and that the purchase price
therefor has been deposited in the Master Servicer Collection Account or the
Distribution Account, then the Custodian agrees to promptly release to the
Mortgage Loan Seller the related Mortgage File.
Upon the Custodian's receipt of a request for release (a "Request for
Release") substantially in the form of Exhibit D to the Pooling and Servicing
Agreement signed by a Servicing Officer of the related Servicer stating that it
has received payment in full of a Mortgage Loan or that payment in full will be
escrowed in a manner customary for such purposes, the Custodian agrees promptly
to release to such Servicer the related Mortgage File. The Company shall deliver
to the Custodian and the Custodian agrees to accept the Mortgage Note and other
documents constituting the Mortgage File with respect to any Substitute Mortgage
Loan.
From time to time as is appropriate for the servicing or foreclosure
of any Mortgage Loan, including, for this purpose, collection under any Primary
Mortgage Insurance Policy, the related Servicer shall deliver to the Custodian a
Request for Release signed by a Servicing Officer requesting that possession of
all of the Mortgage File be released to such Servicer and certifying as to the
reason for such release and that such release will not invalidate any insurance
coverage provided in respect of the Mortgage Loan under any of the Insurance
Policies. Upon receipt of the foregoing, the Custodian shall deliver the
Mortgage File to such Servicer. The related Servicer shall cause each Mortgage
File or any document therein so released to be returned to the Custodian when
the need therefore by such Servicer no longer exists, unless (i) the Mortgage
Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the Master Servicer Collection Account or the
Distribution Account or (ii) the Mortgage File or such document has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the related Servicer has delivered to the Custodian a
certificate of a Servicing Officer certifying as to the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery.
At any time that a Servicer is required to deliver to the Custodian a
Request for Release, such Servicer shall deliver two copies of the Request for
Release if delivered in hard copy or such Servicer may furnish such Request for
Release electronically to the Custodian, in which event the Servicing Officer
transmitting the same shall be deemed to have signed the Request for Release. In
connection with any Request for Release of a Mortgage File because of a
repurchase of a Mortgage Loan, the related Servicer shall send to the Trustee an
assignment of mortgage, without recourse, representation or warranty from the
Trustee to the Mortgage Loan Seller and the related Mortgage Note which shall be
endorsed without recourse, representation or warranty by the Trustee and the
Trustee shall forward such documents to the Mortgage Loan Seller. In connection
with any Request for Release of a Mortgage File because of the payment in full
of a Mortgage Loan, the related Servicer shall send to the Trustee a certificate
of satisfaction or other similar instrument to be executed by or on behalf of
the Trustee and returned to such Servicer.
F. Assumption Agreements. In the event that any assumption agreement
or substitution of liability agreement is entered into with respect to any
Mortgage Loan subject to this Agreement in accordance with the terms and
provisions of the Pooling and Servicing Agreement, the Master Servicer, to the
extent provided in the related Servicing Agreement, shall cause the related
Servicer to notify the Custodian that such assumption or substitution agreement
has been completed by forwarding to the Custodian the original of such
assumption or substitution agreement, which shall be added to the related
Mortgage File and, for all purposes, shall be considered a part of such Mortgage
File to the same extent as all other documents and instruments constituting
parts thereof.
III.
CONCERNING THE CUSTODIAN
A. Custodian a Bailee and Agent of the Trustee. With respect to each
Mortgage Note, Mortgage and other documents constituting each Mortgage File
which are delivered to the Custodian, the Custodian is exclusively the bailee
and agent of the Trustee and has no instructions to hold any Mortgage Note or
Mortgage for the benefit of any person other than the Trustee and the
Certificateholders and undertakes to perform such duties and only such duties as
are specifically set forth in this Agreement. Except upon compliance with the
provisions of Section 2.5 of this Agreement, no Mortgage Note, Mortgage or
Mortgage File shall be delivered by the Custodian to the Company, the Servicer
or the Master Servicer or otherwise released from the possession of the
Custodian.
B. Reserved.
C. Custodian May Own Certificates. The Custodian in its individual or
any other capacity may become the owner or pledgee of Certificates with the same
rights it would have if it were not Custodian.
D. Master Servicer to Pay Custodian's Fees and Expenses. The Master
Servicer covenants and agrees to pay to the Custodian from time to time, and the
Custodian shall be entitled to, reasonable compensation for all services
rendered by it in the exercise and performance of any of the powers and duties
hereunder of the Custodian, and the Master Servicer will pay or reimburse the
Custodian upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Custodian in accordance with any of the
provisions of this Agreement (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ), except any such expense, disbursement or advance as may arise from
its negligence or bad faith or to the extent that such cost or expense is
indemnified by the Company pursuant to the Pooling and Servicing Agreement.
E. Custodian May Resign; Trustee May Remove Custodian. The Custodian
may resign from the obligations and duties hereby imposed upon it as such
obligations and duties relate to its acting as Custodian of the Mortgage Loans.
Upon receiving such notice of resignation, the Trustee shall either take custody
of the Mortgage Files itself and give prompt notice thereof to the Company, the
Master Servicer and the Custodian, or promptly appoint a successor Custodian by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Custodian and one copy to the successor Custodian. If
the Trustee shall
not have taken custody of the Mortgage Files and no successor Custodian shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Custodian may petition any
court of competent jurisdiction for the appointment of a successor Custodian.
The Trustee may remove the Custodian at any time with the consent of
the Master Servicer. In such event, the Trustee shall appoint, or petition a
court of competent jurisdiction to appoint, a successor Custodian hereunder. Any
successor Custodian shall be a depository institution subject to supervision or
examination by federal or state authority, shall be able to satisfy the other
requirements contained in Section 3.7 and shall be unaffiliated with the
Servicer or the Company.
Any resignation or removal of the Custodian and appointment of a
successor Custodian pursuant to any of the provisions of this Section 3.5 shall
become effective upon acceptance of appointment by the successor Custodian. The
Trustee shall give prompt notice to the Company and the Master Servicer of the
appointment of any successor Custodian. No successor Custodian shall be
appointed by the Trustee without the prior approval of the Company and the
Master Servicer.
F. Merger or Consolidation of Custodian. Any Person into which the
Custodian may be merged or converted or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Custodian shall be a party, or any Person succeeding to the business of the
Custodian, shall be the successor of the Custodian hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
G. Representations of the Custodian. The Custodian hereby represents
that it is a depository institution subject to supervision or examination by a
federal or state authority, has a combined capital and surplus of at least
$15,000,000 and is qualified to do business in the jurisdictions in which it
will hold any Mortgage File.
IV.
MISCELLANEOUS PROVISIONS
A. Notices. All notices, requests, consents, demands and other
communications required under this Agreement or pursuant to any other instrument
or document delivered hereunder shall be in writing and, unless otherwise
specifically provided, may be delivered personally, by telegram or telex, or by
registered or certified mail, postage prepaid, return receipt requested, at the
addresses specified on the signature page hereof (unless changed by the
particular party whose address is stated herein by similar notice in writing),
in which case the notice will be deemed delivered when received.
B. Amendments. No modification or amendment of or supplement to this
Agreement shall be valid or effective unless the same is in writing and signed
by all parties hereto, and neither the Company, the Master Servicer nor the
Trustee shall enter into any amendment hereof except as permitted by the Pooling
and Servicing Agreement. The Trustee
shall give prompt notice to the Custodian of any amendment or supplement to the
Pooling and Servicing Agreement and furnish the Custodian with written copies
thereof.
C. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED A CONTRACT MADE UNDER
THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
D. Recordation of Agreement. To the extent permitted by applicable
law, this Agreement is subject to recordation in all appropriate public offices
for real property records in all the counties or other comparable jurisdictions
in which any or all of the properties subject to the Mortgages are situated, and
in any other appropriate public recording office or elsewhere, such recordation
to be effected by the Company and at the Trust's expense on direction by the
Trustee, but only upon direction accompanied by an Opinion of Counsel (which
shall be at the expense of the party requesting such recordation and in no event
at the expense of the Trustee) reasonably satisfactory to the Company to the
effect that the failure to effect such recordation is likely to materially and
adversely affect the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
E. Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
IN WITNESS WHEREOF, this Agreement is executed as of the date first
above written.
Address: HSBC BANK USA, NATIONAL ASSOCIATION,
as Trustee
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address: XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000 By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address: XXXXX FARGO BANK, N.A.,
as Master Servicer
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
By:
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Assistant Vice President
Address: XXXXX FARGO BANK, N.A.,
as Custodian
0000 00xx Xxxxxx Xxxxxxxxx, XX 0031
Xxxxxxxxxxx, XX 00000
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT ONE
FORM OF CUSTODIAN INITIAL CERTIFICATION
___________, 200__
Xxxxxxx Xxxxx Mortgage Investors, Inc.
4 World Financial Center, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
HSBC Bank USA, National Association
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: The Pooling and Servicing Agreements, dated as of September 1,
2006, each among Xxxxxxx Xxxxx Mortgage Investors, Inc., as
depositor, Xxxxx Fargo Bank, N.A., as master servicer and
securities administrator, and HSBC Bank USA, National
Association, as trustee,
Mortgage Pass-Through Certificates, Series 2006-AF1
Ladies and Gentlemen:
Attached is the Custodian's preliminary exception report delivered in
accordance with Section 2.02 of the referenced Pooling and Servicing Agreements
(the "Pooling and Servicing Agreement"). Capitalized terms used but not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Custodian makes no representations as to
(i) the validity, legality, sufficiency, enforceability or genuineness of any of
the documents contained in the Mortgage File pertaining to the Mortgage Loans
identified on the Mortgage Loan Schedule, (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan or (iii) the existence of
any assumption, modification, written assurance, or substitution agreement, with
respect to any Mortgage File if no such documents appear in the Mortgage File
delivered to the Custodian.
XXXXX FARGO BANK, N.A.,
as Custodian
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
G-1
EXHIBIT TWO
FORM OF CUSTODIAN FINAL CERTIFICATION
____________, 2006
Xxxxxxx Xxxxx Mortgage Investors, Inc.
4 World Financial Center, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ____________________
HSBC Bank USA, National Association
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: The Pooling and Servicing Agreements, dated as of September 1,
2006, each among Xxxxxxx Xxxxx Mortgage Investors, Inc., as
depositor, Xxxxx Fargo Bank, N.A., as master servicer and
securities administrator and HSBC Bank USA, National Association,
as trustee,
Mortgage Pass-Through Certificates, Series 2006-AF1
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreements, the undersigned, hereby certifies that, except as noted on
the Schedule of Exceptions attached hereto, for each Mortgage Loan listed on the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on
the attachment hereto), it has received a complete Mortgage File which includes
the documents required to be included in the Mortgage File as set forth in each
Pooling and Servicing Agreement.
The undersigned has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreements. The undersigned makes no
representation as to: (i) the validity, legality, sufficiency, enforceability or
genuineness of any documents contained in any Mortgage File for any of the
Mortgage Loans listed on the Mortgage Loan Schedule to each Pooling and
Servicing Agreement, (ii) the collectability, insurability, effectiveness or
suitability of any such Mortgage Loan or (iii) whether any Mortgage File should
include any flood insurance policy, any rider, addends, surety or guaranty
agreement, power of attorney, buy down agreement, assumption agreement,
modification agreement, written assurance or substitution agreement.
G-2
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreements.
XXXXX FARGO BANK, N.A.,
as Custodian
By:
------------------------------------
Name:
----------------------------------
G-3
EXHIBIT THREE
FORM OF CERTIFICATION REGARDING SERVICING CRITERIA TO BE ADDRESSED IN REPORT ON
ASSESSMENT COMPLIANCE
The assessment of compliance to be delivered by Xxxxx Fargo Bank shall address,
at a minimum, the criteria identified below as "Applicable Servicing Criteria":
SERVICING CRITERIA
-------------------------------------------------------------------------------- APPLICABLE SERVICING
REFERENCE CRITERIA CRITERIA
---------------- ------------------------------------------------------------- --------------------
GENERAL SERVICING CONSIDERATIONS
1122(d)(1)(i) Policies and procedures are instituted to monitor any
performance or other triggers and events of default in
accordance with the transaction agreements.
1122(d)(1)(ii) If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor
the third party's performance and compliance with such
servicing activities.
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a
back-up servicer for the mortgage loans are maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect
on the party participating in the servicing function
throughout the reporting period in the amount of coverage
required by and otherwise in accordance with the terms of the
transaction agreements.
CASH COLLECTION AND ADMINISTRATION
1122(d)(2)(i) Payments on mortgage loans are deposited into the appropriate
custodial bank accounts and related bank clearing accounts no
more than two business days following receipt, or such other
number of days specified in the transaction agreements.
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor
or to an investor are made only by authorized personnel.
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash
flows or distributions, and any interest or other fees
charged for such advances, are made, reviewed and approved as
specified in the transaction agreements.
1122(d)(2)(iv) The related accounts for the transaction, such as cash
reserve accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with
respect to commingling of cash) as set forth in the
transaction agreements.
1122(d)(2)(v) Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction
agreements. For purposes of this criterion, "federally
insured depository institution" with respect to a foreign
financial institution means a foreign financial institution
that meets the requirements of Rule 13k-1(b)(1) of the
Securities Exchange Act.
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized
access.
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts. These
reconciliations are (A) mathematically accurate; (B) prepared
within 30 calendar days after the bank statement cutoff date,
or such other number of days specified in the transaction
agreements; (C) reviewed and approved by someone other than
the person who prepared the reconciliation; and (D) contain
explanations for reconciling items. These reconciling items
are resolved within 90 calendar days of their original
identification, or such other number of days specified in the
transaction agreements.
G-4
SERVICING CRITERIA
-------------------------------------------------------------------------------- APPLICABLE SERVICING
REFERENCE CRITERIA CRITERIA
---------------- ------------------------------------------------------------- --------------------
INVESTOR REMITTANCES AND REPORTING
1122(d)(3)(i) Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements.
Specifically, such reports (A) are prepared in accordance
with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance
with the terms specified in the transaction agreements; (C)
are filed with the Commission as required by its rules and
regulations; and (D) agree with investors' or the trustee's
records as to the total unpaid principal balance and number
of mortgage loans serviced by the Servicer.
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and other
terms set forth in the transaction agreements.
1122(d)(3)(iii) Disbursements made to an investor are posted within two
business days to the Servicer's investor records, or such
other number of days specified in the transaction agreements.
1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree
with cancelled checks, or other form of payment, or custodial
bank statements.
POOL ASSET ADMINISTRATION
1122(d)(4)(i) Collateral or security on mortgage loans is maintained as X
required by the transaction agreements or related mortgage
loan documents.
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as X
required by the transaction agreements.
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool
are made, reviewed and approved in accordance with any
conditions or requirements in the transaction agreements.
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made in
accordance with the related mortgage loan documents are
posted to the Servicer's obligor records maintained no more
than two business days after receipt, or such other number of
days specified in the transaction agreements, and allocated
to principal, interest or other items (e.g., escrow) in
accordance with the related mortgage loan documents.
1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree
with the Servicer's records with respect to an obligor's
unpaid principal balance.
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's
mortgage loans (e.g., loan modifications or re-agings) are
made, reviewed and approved by authorized personnel in
accordance with the transaction agreements and related pool
asset documents.
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures
and repossessions, as applicable) are initiated, conducted
and concluded in accordance with the timeframes or other
requirements established by the transaction agreements.
1122(d)(4)(viii) Records documenting collection efforts are maintained during
the period a mortgage loan is delinquent in accordance with
the transaction agreements. Such records are maintained on at
least a monthly basis, or such other period specified in the
transaction agreements, and describe the entity's activities
in monitoring delinquent mortgage loans including, for
example, phone calls, letters and payment rescheduling plans
in cases where delinquency is deemed temporary (e.g., illness
or unemployment).
1122(d)(4)(ix) Adjustments to interest rates or rates of return for mortgage
loans with variable rates are computed based on the related
mortgage loan documents.
G-5
SERVICING CRITERIA
-------------------------------------------------------------------------------- APPLICABLE SERVICING
REFERENCE CRITERIA CRITERIA
---------------- ------------------------------------------------------------- --------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as
escrow accounts): (A) such funds are analyzed, in accordance
with the obligor's mortgage loan documents, on at least an
annual basis, or such other period specified in the
transaction agreements; (B) interest on such funds is paid,
or credited, to obligors in accordance with applicable
mortgage loan documents and state laws; and (C) such funds
are returned to the obligor within 30 calendar days of full
repayment of the related mortgage loans, or such other number
of days specified in the transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related penalty
or expiration dates, as indicated on the appropriate bills or
notices for such payments, provided that such support has
been received by the servicer at least 30 calendar days prior
to these dates, or such other number of days specified in the
transaction agreements.
1122(d)(4)(xii) Any late payment penalties in connection with any payment to
be made on behalf of an obligor are paid from the servicer's
funds and not charged to the obligor, unless the late payment
was due to the obligor's error or omission.
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within
two business days to the obligor's records maintained by the
servicer, or such other number of days specified in the
transaction agreements.
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
agreements.
1122(d)(4)(xv) Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is
maintained as set forth in the transaction agreements.
G-6
EXHIBIT H
[RESERVED]
H-1-1
EXHIBIT I-1
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
CITIMORTGAGE, INC.
(PROVIDED UPON REQUEST)
I-1-1
EXHIBIT I-2
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
INDYMAC BANK, F.S.B.
(PROVIDED UPON REQUEST)
I-2-1
EXHIBIT I-3
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
XXXXX FARGO
(PROVIDED UPON REQUEST)
I-3-1
EXHIBIT I-4
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
PHH MORTGAGE CORPORATION
(PROVIDED UPON REQUEST)
I-3-1
EXHIBIT I-5
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
GREENPOINT MORTGAGE FUNDING, INC.
(PROVIDED UPON REQUEST)
I-3-1
EXHIBIT I-6
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
WASHINGTON MUTUAL BANK
(PROVIDED UPON REQUEST)
I-3-1
EXHIBIT J
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of September 1, 2006, as
amended and supplemented by any and all amendments hereto (collectively, the
"Agreement"), by and between XXXXXXX XXXXX MORTGAGE LENDING, INC., a Delaware
corporation (the "Seller"), and XXXXXXX XXXXX MORTGAGE INVESTORS, INC., a
Delaware corporation (the "Purchaser").
Upon the terms and subject to the conditions of this Agreement, the
Seller agrees to sell, and the Purchaser agrees to purchase, certain first lien,
adjustable-rate mortgage loans secured by one- to four-family residences,
townhouses, individual condominiums, co-op units and units in planned unit
developments (collectively, the "Mortgage Loans") as described herein. The
Purchaser intends to deposit the Mortgage Loans into a trust fund (the "Trust
Fund") and create Mortgage Pass-Through Certificates, MLMI Series 2006-AF1 (the
"Certificates"), under a pooling and servicing agreement, to be dated as of
September 1, 2006 (the "Pooling and Servicing Agreement"), by and among the
Purchaser, as depositor, HSBC Bank USA, National Association, as trustee (the
"Trustee") and Xxxxx Fargo Bank, N.A., as master servicer and securities
administrator (the "Master Servicer" and "Securities Administrator").
The Purchaser has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (Number 333-130545)
relating to its Mortgage Pass-Through Certificates and the offering of certain
series thereof (including certain classes of the Certificates) from time to time
in accordance with Rule 415 under the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder (the
"Securities Act"). Such registration statement, when it became effective under
the Securities Act, and the prospectus relating to the public offering of
certain classes of the Certificates by the Purchaser (the "Public Offering"), as
from time to time each is amended or supplemented pursuant to the Securities Act
or otherwise, are referred to herein as the "Registration Statement" and the
"Prospectus," respectively. The "Prospectus Supplement" shall mean that
supplement, dated September 28, 2006 to the Prospectus, dated September 8, 2006,
relating to certain classes of the Certificates. With respect to the Public
Offering of certain classes of the Certificates, the Purchaser and Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx") have entered into a
terms agreement dated as of September 27, 2006 to an underwriting agreement
dated February 28, 2003, between the Purchaser and Xxxxxxx Xxxxx (together, the
"Underwriting Agreement").
Now, therefore, in consideration of the premises and the mutual
agreements set forth herein, the parties hereto agree as follows:
Section 1. Definitions.
Certain terms are defined herein. Capitalized terms used herein but not
defined herein shall have the meanings specified in the Pooling and Servicing
Agreement. The following other terms are defined as follows:
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Closing Date: September 29, 2006.
Custodial Agreement: An agreement, dated as of the Closing Date among
the Depositor, the Master Servicer, the Securities Administrator, the Trustee
and the Custodian in substantially the form of Exhibit G to the Pooling and
Servicing Agreement.
Custodian: Xxxxx Fargo Bank, N.A., including any successors in
interest, or any successor custodian appointed pursuant to the provisions hereof
and of the Custodial Agreement.
Cut-off Date: September 1, 2006.
Cut-off Date Balance: $[___________].
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Substitute Mortgage Loan.
Due Date: With respect to each Mortgage Loan, the first day in each
month.
Xxxxxx Xxx: Federal National Mortgage Association or any successor
thereto.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation or any
successor thereto.
Master Servicer: Xxxxx Fargo Bank, X.X.
Xxxxxxx Xxxxx: Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated.
Moody's: Xxxxx'x Investors Service, Inc., or its successors in
interest.
Mortgage: The mortgage or deed of trust creating a first lien on an
interest in real property securing a Mortgage Note.
Mortgage File: The items referred to in Exhibit 1 and Exhibit 2
pertaining to a particular Mortgage Loan and any additional documents required
to be added to such documents pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne by a
Mortgage Note as stated therein.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Rate: With respect to any Distribution Date and each Mortgage
Loan, the Mortgage Interest Rate for such Mortgage Loan on such Distribution
Date less the Servicing Fee Rate for such Mortgage Loan on such Distribution
Date.
Offered Certificates: Shall mean the Class [___] Certificates issued
pursuant to the Pooling and Servicing Agreement.
J-2
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller or the Purchaser, reasonably acceptable to the Trustee.
Person: Any legal person, including any individual, corporation,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Purchase Price: With respect to any Mortgage Loan required to be
purchased by the Seller pursuant to the applicable provisions of this Agreement,
an amount equal to the sum of (i) 100% of the principal remaining unpaid on such
Mortgage Loan as of the date of purchase (including if a foreclosure has already
occurred, the principal balance of the related Mortgage Loan at the time the
Mortgaged Property was acquired), (ii) accrued and unpaid interest thereon at
the Mortgage Interest Rate through and including the last day of the month of
purchase and (iii) any costs and damages incurred by the Issuing Entity in
connection with any violation by such Mortgage Loan of any predatory or
abusive-lending law.
Rating Agencies: S&P and Moody's, each a "Rating Agency."
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.,
or its successors in interest.
Securities Act: The Securities Act of 1933, as amended.
Security: As used herein, the term shall refer to the Trust Fund and
the Certificates created thereby.
Substitute Mortgage Loan: A mortgage loan substituted for a Deleted
Mortgage Loan which must meet on the date of such substitution the requirements
stated herein and in the Pooling and Servicing Agreement; upon such
substitution, such mortgage loan shall be a "Mortgage Loan" hereunder.
Value: The value of the Mortgaged Property at the time of origination
of the related Mortgage Loan, such value being the lesser of (i) the value of
such property set forth in an appraisal accepted by the Originator or (ii) the
sales price of such property at the time of origination.
Section 2. Purchase and Sale of the Mortgage Loans and Related Rights.
(a) Upon satisfaction of the conditions set forth in Section 10
hereof, the Seller agrees to sell, and the Purchaser agrees to purchase Mortgage
Loans having an aggregate Cut-off Date Balance of $[_______________].
(b) The closing for the purchase and sale of the Mortgage Loans and
the closing for the issuance of the Certificates will take place on the Closing
Date at the office of the Purchaser's counsel in New York, New York or such
other place as the parties shall agree.
J-3
(c) Upon the satisfaction of the conditions set forth in Section 10
hereof, on the Closing Date, in consideration of the purchase of the Mortgage
Loans, the Purchaser shall (i) pay to the Seller an amount equal to the net sale
proceeds of the Offered Certificates plus accrued interest in immediately
available funds by wire transfer to such account or accounts as shall be
designated by the Seller and (ii) deliver to the Seller the Class B
Certificates.
(d) In addition to the foregoing, on the Closing Date the Seller
assigns to the Purchaser without recourse all of its right, title and interest
in (1) the Mortgage Loan Flow Purchase, Sale and Servicing Agreement, dated as
of March 27, 2001, by and between Xxxxxxx Xxxxx Mortgage Capital, Inc. ("MLMC"),
Cendant Mortgage Corporation ("PHH Mortgage Corporation" or "PHH") and Xxxxxx'x
Gate Residential Mortgage Trust, (2) the Assignment, Assumption and Recognition
Agreement, dated as of September 1, 2006, among the Seller, the Purchaser and
PHH, (3) the Seller's Warranties and Servicing Agreement (WFHM Mortgage Loan
Series 2006-W60), dated as of July 1, 2006, by and between Seller and Xxxxx
Fargo Bank, N.A. ("Xxxxx"), (8) the Assignment, Assumption and Recognition
Agreement, dated as of September 1, 2006, among the Seller, the Purchaser and
Xxxxx, (4) the Master Mortgage Loan Purchase and Servicing Agreement, dated as
of April 1, 2003, among Xxxxxxx Xxxxx Mortgage Holdings Inc., Terwin Advisors,
LLC and GreenPoint Mortgage Funding, Inc. ("Greenpoint"), as amended by
Amendment No. 1, dated as of August 20, 2003 among MLMH, Terwin and GreenPoint,
and the Bring-Down Letter related thereto, (5) the Assignment, Assumption and
Recognition Agreement, dated as of September 1, 2006, among the Seller, the
Purchaser and Greenpoint, (6) the Mortgage Servicing Purchase and Sale Agreement
dated as of May 31, 2006, between the Seller and CitiMortgage, Inc. ("CITI"),
(7) the Assignment, Assumption and Recognition Agreement, dated as of September
1, 2006, among the Seller, the Purchaser and CITI, (8) the Master Seller's
Warranties and Servicing Agreement, dated as of May 1, 2006, among the Seller
and IndyMac Bank, F.S.B. ("IndyMac"), (8) the Assignment, Assumption and
Recognition Agreement, dated as of September 1, 2006, among the Seller, the
Purchaser and IndyMac, (9) the Mortgage Loan Purchase Agreement, dated as of
November 1, 2005, as amended by the Regulation AB Amendment dated March 1, 2006,
between the Seller and Washington Mutual Mortgage Securities Corp ("WMMSC"),
(10) the Mortgage Loan Purchase Agreement dated as of May 1, 2006, between the
Seller, Washington Mutual Bank ("WAMU") and Washington Mutual Bank fsb, and (11)
the Assignment, Assumption and Recognition Agreement, dated as of September 1,
2006, among the Seller, the Purchaser and WAMU.
Section 3. Mortgage Loan Schedules.
The Seller agrees to provide to the Purchaser as of the date hereof a
preliminary listing of the Mortgage Loans (the "Preliminary Mortgage Loan
Schedule") setting forth the information listed on Exhibit 3 to this Agreement
with respect to each of the Mortgage Loans being sold by the Seller. If there
are changes to the Preliminary Mortgage Loan Schedule, the Seller shall provide
to the Purchaser as of the Closing Date a final schedule (the "Final Mortgage
Loan Schedule") setting forth the information listed on Exhibit 3 to this
Agreement with respect to each of the Mortgage Loans being sold by the Seller to
the Purchaser. The Final Mortgage Loan Schedule shall be delivered to the
Purchaser on the Closing Date, shall be attached to an amendment to this
Agreement to be executed on the Closing Date by the parties hereto and shall
J-4
be in form and substance mutually agreed to by the Seller and the Purchaser (the
"Amendment"). If there are no changes to the Preliminary Mortgage Loan Schedule,
the Preliminary Mortgage Loan Schedule shall be the Final Mortgage Loan Schedule
for all purposes hereof.
Section 4 Mortgage Loan Transfer.
The Purchaser will be entitled to all scheduled payments of principal
and interest on the Mortgage Loans due after the Cut-off Date (regardless of
when actually collected) and all payments thereof other than scheduled principal
and interest received after the Cut-off Date. The Seller will be entitled to all
scheduled payments of principal and interest on the Mortgage Loans due on or
before the Cut-off Date (including payments collected after the Cut-off Date)
and all payments thereof other than scheduled principal and interest on the
Mortgage Loans received on or before the Cut-off Date. Such principal amounts
and any interest thereon belonging to the Seller as described above will not be
included in the aggregate outstanding principal balance of the Mortgage Loans as
of the Cut-off Date as set forth on the Final Mortgage Loan Schedule.
Pursuant to various conveyancing documents to be executed on the
Closing Date and pursuant to the Pooling and Servicing Agreement, the Purchaser
will assign on the Closing Date all of its right, title and interest in and to
the Mortgage Loans to the Trustee for the benefit of the Certificateholders. In
connection with the transfer and assignment of the Mortgage Loans, the Seller
has delivered or will deliver or cause to be delivered to the Trustee by the
Closing Date or such later date as is agreed to by the Purchaser and the Seller
(each of the Closing Date and such later date is referred to as a "Mortgage File
Delivery Date"), the items of each Mortgage File, provided, however, that in
lieu of the foregoing, the Seller may deliver the following documents, under the
circumstances set forth below: (x) in lieu of the original Mortgage, assignments
to the Trustee or intervening assignments thereof which have been delivered, are
being delivered or will upon receipt of recording information relating to the
Mortgage required to be included thereon, be delivered to recording offices for
recording and have not been returned in time to permit their delivery as
specified above, the Seller may deliver a true copy thereof with a certification
by the Seller or the Originator, on the face of such copy, substantially as
follows: "Certified to be a true and correct copy of the original, which has
been transmitted for recording;" (y) in lieu of the Mortgage, assignments to the
Trustee or intervening assignments thereof, if the applicable jurisdiction
retains the originals of such documents or if the originals are lost (in each
case, as evidenced by a certification from the Seller to such effect), the
Seller may deliver photocopies of such documents containing an original
certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; and (z) in lieu of the Mortgage
Notes relating to the Mortgage Loans, each identified in the list delivered by
the Purchaser to the Trustee on the Closing Date and attached hereto as Exhibit
6 the Seller may deliver lost note affidavits and indemnities of the Seller; and
provided further, however, that in the case of Mortgage Loans which have been
prepaid in full after the Cut-off Date and prior to the Closing Date, the
Seller, in lieu of delivering the above documents, may deliver to the Trustee a
certification by the Seller to such effect. The Seller shall deliver such
original documents (including any original documents as to which certified
copies had previously been delivered) or such certified copies to the Trustee
promptly after they are received. The Seller shall cause the Mortgage and
intervening assignments, if any, and the assignment of the
J-5
Mortgage to be recorded not later than 180 days after the Closing Date, or, in
lieu of such assignments, shall provide an Opinion of Counsel pursuant to
Section 6(a) hereof to the effect that the recordation of such assignment is not
necessary to protect the Trustee's interest in the related Mortgage Loan. Upon
the request of the Purchaser, the Seller will assist the Purchaser in effecting
the assignment referred to above.
The Seller and the Purchaser acknowledge hereunder that all of the
Mortgage Loans and the related servicing will ultimately be assigned to HSBC
Bank USA, National Association, as Trustee for the Certificateholders, on the
date hereof.
Section 5. Examination of Mortgage Files.
(a) On or before the Mortgage File Delivery Date, the Seller will have
made the Mortgage Files available to the Purchaser or its agent for examination
which may be at the offices of the Trustee or the Seller and/or the Custodian.
The fact that the Purchaser or its agent has conducted or has failed to conduct
any partial or complete examination of the Mortgage Files shall not affect the
Purchaser's rights to demand cure, repurchase, substitution or other relief as
provided in this Agreement. In furtherance of the foregoing, the Seller shall
make the Mortgage Files available to the Purchaser or its agent from time to
time so as to permit the Purchaser to confirm the Seller's compliance with the
delivery and recordation requirements of this Agreement and the Pooling and
Servicing Agreement. In addition, upon request of the Purchaser, the Seller
agrees to provide to the Purchaser, Xxxxxxx Xxxxx and to any investors or
prospective investors in the Certificates information regarding the Mortgage
Loans and their servicing, to make the Mortgage Files available to the
Purchaser, Xxxxxxx Xxxxx and to such investors or prospective investors (which
may be at the offices of the Seller and/or the Seller's custodian) and to make
available personnel knowledgeable about the Mortgage Loans for discussions with
the Purchaser, Xxxxxxx Xxxxx and such investors or prospective investors, upon
reasonable request during regular business hours, sufficient to permit the
Purchaser, Xxxxxxx Xxxxx and such investors or potential investors to conduct
such due diligence as any such party reasonably believes is appropriate.
(b) Pursuant to the Pooling and Servicing Agreement, on the Closing
Date the Trustee (or the Custodian), for the benefit of the Certificateholders,
will review items of the Mortgage Files as set forth on Exhibit 1 and will
deliver to the Seller a certification in the form attached as Exhibit One to the
Custodial Agreement.
(c) Pursuant to the Pooling and Servicing Agreement, the Trustee or
the Custodian, as its agent, will review the Mortgage Files within 180 days of
the Closing Date and will deliver to the Purchaser a final certification
substantially in the form of Exhibit Two to the Custodial Agreement. If the
Trustee or the Custodian, as its agent, is unable to deliver a final
certification with respect to the items listed in Exhibit 2 due to any document
that is missing, has not been executed, is unrelated, determined on the basis of
the Mortgagor name, original principal balance and loan number, to the Mortgage
Loans identified in the Final Mortgage Loan Schedule (a "Material Defect"), the
Trustee or the Custodian, as its agent, shall notify the Seller of such Material
Defect. The Seller shall correct or cure any such Material Defect within 90 days
from the date of notice from the Trustee or the Custodian, as applicable, of the
Material Defect and if the Seller does not correct or cure such Material Defect
within such period and
J-6
such defect materially and adversely affects the interests of the
Certificateholders in the related Mortgage Loan, the Seller will, in accordance
with the terms of the Pooling and Servicing Agreement, within 90 days of the
date of notice, provide the Trustee with a Substitute Mortgage Loan (if within
two years of the Closing Date) or purchase the related Mortgage Loan at the
applicable Purchase Price; provided, however, that if such defect relates solely
to the inability of the Seller to deliver the original security instrument or
intervening assignments thereof, or a certified copy because the originals of
such documents, or a certified copy, have not been returned by the applicable
jurisdiction, the Seller shall not be required to purchase such Mortgage Loan if
the Seller delivers such original documents or certified copy promptly upon
receipt, but in no event later than 360 days after the Closing Date. The
foregoing repurchase obligation shall not apply in the event that the Seller
cannot deliver such original or copy of any document submitted for recording to
the appropriate recording office in the applicable jurisdiction because such
document has not been returned by such office; provided that the Seller shall
instead deliver a recording receipt of such recording office or, if such receipt
is not available, a certificate of the Seller confirming that such documents
have been accepted for recording, and delivery to the Trustee or the Custodian,
as its agent, shall be effected by the Seller within thirty days of its receipt
of the original recorded document.
(d) At the time of any substitution, the Seller shall deliver or cause
to be delivered the Substitute Mortgage Loan, the related Mortgage File and any
other documents and payments required to be delivered in connection with a
substitution pursuant to the Pooling and Servicing Agreement. At the time of any
purchase or substitution, the Trustee shall (i) assign to the Seller and release
or cause the Custodian, as its agent, to release the documents (including, but
not limited to, the Mortgage, Mortgage Note and other contents of the Mortgage
File) in the possession of the Trustee or the Custodian relating to the Deleted
Mortgage Loan and (ii) execute and deliver such instruments of transfer or
assignment, in each case without recourse, as shall be necessary to vest in the
Seller title to such Deleted Mortgage Loan.
Section 6. Recordation of Assignments of Mortgage.
(a) The Seller need not cause to be recorded any assignment which
relates to a Mortgage Loan in any jurisdiction; provided, however, each
assignment of Mortgage shall be submitted for recording by the Seller, at no
expense to the Issuing Entity or Trustee, upon the earliest to occur of (i)
reasonable direction by the Holders of Certificates evidencing, in the
aggregate, not less than 25% of the Voting Rights, (ii) the occurrence of an
Event of Default with respect to the Master Servicer (upon instruction of the
Seller), (iii) the occurrence of a bankruptcy, insolvency or foreclosure
relating to the Seller or (iv) with respect to any one assignment of Mortgage,
the occurrence of a bankruptcy, insolvency or foreclosure relating to the
Mortgagor under the related Mortgage.
While each such Mortgage or assignment is being recorded, if
necessary, the Seller shall leave or cause to be left with the Trustee a
certified copy of such Mortgage or assignment. All customary recording fees and
reasonable expenses relating to the recordation of the assignments of Mortgage
to the Trustee shall be borne by the Seller.
(b) It is the express intent of the parties hereto that the conveyance
of the
J-7
Mortgage Loans by the Seller to the Purchaser, as contemplated by this Agreement
be, and be treated as, a sale. It is, further, not the intention of the parties
that such conveyance be deemed a pledge of the Mortgage Loans by the Seller to
the Purchaser to secure a debt or other obligation of the Seller. However, in
the event that, notwithstanding the intent of the parties, the Mortgage Loans
are held by a court of competent jurisdiction to continue to be property of the
Seller, then (i) this Agreement shall also be deemed to be a security agreement
within the meaning of Articles 8 and 9 of the applicable Uniform Commercial
Code; (ii) the transfer of the Mortgage Loans provided for herein shall be
deemed to be a grant by the Seller to the Purchaser of a security interest in
all of the Seller's right, title and interest in and to the Mortgage Loans and
all amounts payable to the holders of the Mortgage Loans in accordance with the
terms thereof and all proceeds of the conversion, voluntary or involuntary, of
the foregoing into cash, instruments, securities or other property, to the
extent the Purchaser would otherwise be entitled to own such Mortgage Loans and
proceeds pursuant to Section 4 hereof, including all amounts, other than
investment earnings, from time to time held or invested in any accounts created
pursuant to the Pooling and Servicing Agreement, whether in the form of cash,
instruments, securities or other property; (iii) the possession by the Purchaser
or the Trustee of Mortgage Notes and such other items of property as constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
"possession by the secured party" for purposes of perfecting the security
interest pursuant to Section 9-305 (or comparable provision) of the applicable
Uniform Commercial Code; and (iv) notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Purchaser for the purpose of perfecting such security interest under
applicable law. Any assignment of the interest of the Purchaser pursuant to any
provision hereof or pursuant to the Pooling and Servicing Agreement shall also
be deemed to be an assignment of any security interest created hereby. The
Seller and the Purchaser shall, to the extent consistent with this Agreement,
take such actions as may be reasonably necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans, 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 the Pooling and Servicing Agreement.
Section 7. Representations and Warranties of Seller Concerning the Mortgage
Loans.
The Seller hereby represents and warrants to the Purchaser as of the
Closing Date or such other date as may be specified below with respect to each
Mortgage Loan being sold by it:
(a) the information set forth in the Mortgage Loan Schedule hereto is
true and correct in all material respects;
(b) immediately prior to the transfer to the Purchaser, the Seller was
the sole owner of beneficial title and holder of each Mortgage and Mortgage
Note relating to the Mortgage Loans and is conveying the same free and
clear of any and all liens, claims, encumbrances, participation interests,
equities, pledges, charges or security interests of any nature and the
Seller has full right and authority to sell or assign the same pursuant to
this Agreement;
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(c) no selection procedure reasonably believed by the Seller to be
adverse to the interests of the Certificateholders was utilized in
selecting the Mortgage Loans;
(d) each Mortgage Loan constitutes a "qualified mortgage" under
Section 860G(a)(3)(A) of the Code and Treasury Regulation Section
1.860G-2(a)(1);
(e) no Mortgage Loan is in foreclosure;
(f) no Mortgage Loan provides for interest other than at either (i) a
single fixed rate in effect throughout the term of the Mortgage Loan or
(ii) a "variable rate" (within the meaning of Treas. Reg. Section
1.860G-1(a)(3)) in effect throughout the term of the Mortgage Loan;
(g) the Seller would not, based on the delinquency status of the
Mortgage Loans, institute foreclosure proceedings with respect to any of
the Mortgage Loans prior to the next scheduled payment for such Mortgage
Loan;
(h) the information set forth under the captions "Description of the
Mortgage Pools--General," "--Tabular Characteristics of the Mortgage Loans"
and in Annex II of the Prospectus Supplement is true and correct in all
material respects;
(i) as of the Cut-off Date, no Mortgage Loan is more than 30 days past
due. 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
related Mortgaged Property, directly or indirectly, for the payment of any
amount required by the Mortgage Note or Mortgage;
(j) to the best of the Seller's knowledge, there are no delinquent
taxes, ground rents, water charges, sewer rents, assessments, insurance
premiums, leasehold payments, including assessments payable in future
installments or other outstanding charges affecting the related Mortgaged
Property;
(k) to the best of the Seller's knowledge, there is no default,
breach, violation or event of acceleration existing under the Mortgage or
the Mortgage Note and no event which, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration, and the Seller has not
waived any default, breach, violation or event of acceleration;
(l) to the best of the Seller's knowledge, the Mortgaged Property is
free of damage and waste and there is no proceeding pending for the total
or partial condemnation thereof;
(m) to the best of the Seller's knowledge, the Mortgaged Property is
lawfully occupied under applicable law at time of origination; all
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with
respect to the use and occupancy of the same, including
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but not limited to certificates of occupancy, have been made or obtained
from the appropriate authorities;
(n) all requirements of any federal, state or local law (including
usury, truth in lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity, disclosure or recording, predatory
and abusive lending laws) applicable to the origination and servicing of
such Mortgage Loan have been complied with in all material respects;
(o) to the best of the Seller's knowledge, as of the date of transfer
of the Mortgage Loans, there is no mechanics' lien or claim for work, labor
or material affecting the Mortgaged Property except those which are insured
against by the title insurance policy;
(p) to the best of the Seller's knowledge, as of the date of the
transfer of the Mortgage Loans to the Purchaser, there is no valid offset,
defense or counterclaim to any Mortgage Note or Mortgage;
(q) to the best of the Seller's knowledge, as of the date of closing,
the Mortgaged Property subject to any Mortgage is free of material damage
and is in good repair;
(r) at the time of origination, no improvement located on or being
part of the Mortgaged Property was in violation of any applicable zoning
and subdivision laws or ordinances;
(s) each Mortgage Loan is and will be a mortgage loan arising out of
the originator's practice in accordance with the seller/originator's
underwriting guidelines. The seller has no knowledge of any fact that
should have led it to expect at the time of the initial creation of an
interest in the Mortgage Loan that such Mortgage Loan would not be paid in
full when due;
(t) each original Mortgage has been recorded or is in the process of
being recorded in the appropriate jurisdictions wherein such recordation is
required to perfect the lien thereof for the benefit of the Trust Fund;
(u) the related Mortgage File contains each of the documents and
instruments specified;
(v) each Mortgage Loan is being serviced according to the related
Servicer's guidelines;
(w) the Mortgage Note and the Mortgage have not been impaired, altered
or modified in any material respect, except by a written instrument which
has been recorded or is in the process of being recorded;
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(x) a lender's title policy or binder, or other assurance of title
insurance customary in a form acceptable to Xxxxxx Xxx or Xxxxxxx Mac was
issued at origination and each policy or binder is valid and remains in
full force and effect;
(y) none of the Mortgage Loans are secured by a leasehold interest;
(z) There is no Mortgage Loan in the Trust Fund that was originated on
or after October 1, 2002 and before March 7, 2003, which is secured by
property located in the State of Georgia. There is no Mortgage Loan in the
Trust Fund that was originated on or after March 7, 2003, which is a "high
cost home loan" as defined under the Georgia Fair Lending Act;
(aa) none of the Mortgage Loans is subject to the Home Ownership and
Equity Protection Act of 1994 or is a "high cost" or "predatory" loan as
defined by applicable local, state and federal predatory and abusive
lending laws; and
(bb) no Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable (as such terms are defined in Appendix E of the then current
Standard & Poor's Glossary For File Format For LEVELS(R) Version 5.7
Revised (attached hereto as Exhibit 7);
(cc) There is no Mortgage Loan in the Trust Fund that was originated
on or after January 1, 2005, which is a "high cost home loan" as defined
under the Indiana Home Loan Practices Act (I.C. 24-9);
(dd) With respect to each Mortgage Loan underlying the Security, no
borrower obtained a prepaid single-premium credit-life, credit disability,
credit unemployment or credit property insurance policy in connection with
the origination of the mortgage loan;
(ee) With respect to any Mortgage Loan underlying the Security that
contains a provision permitting imposition of a penalty upon a prepayment
prior to maturity: (a) the Mortgage Loan provides some benefit to the
borrower (e.g., a rate or fee reduction) in exchange for accepting such
prepayment penalty; (b) the Mortgage Loan's originator had a written policy
of offering the borrower, or requiring third-party brokers to offer the
borrower, the option of obtaining a mortgage loan that did not require
payment of such a penalty; (c) the prepayment penalty was adequately
disclosed to the borrower pursuant to applicable state and federal law; (d)
no Mortgage Loan that is a subprime loan originated on or after October 1,
2002 underlying the Security will provide for prepayment penalties for a
term in excess of three years and any Mortgage Loans originated prior to
such date, and any non-subprime loans, will not provide for prepayment
penalties for a term in excess of five years; in each case unless the
Mortgage Loan was modified to reduce the prepayment period to no more than
three years from the date of the note and the borrower was notified in
writing of such reduction in prepayment period; and (e) such prepayment
penalty shall not be imposed in any instance where the Mortgage Loan is
accelerated or paid off in connection with the workout of a delinquent
mortgage or due to the borrower's default, notwithstanding that the terms
of the Mortgage Loan or state or federal law might permit the imposition of
such penalty;
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(ff) The Servicer for each Mortgage Loan underlying the Security has
fully furnished, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on its borrower credit files to Equifax,
Experian, and Trans Union Credit Information Company (three of the credit
repositories), on a monthly basis;
(gg) The Servicer for each Mortgage Loan underlying the Security will
fully furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on its borrower credit files to Equifax,
Experian, and Trans Union Credit Information Company (three of the credit
repositories), on a monthly basis;
(hh) With respect to each Mortgage Loan underlying the Security, the
borrower was not encouraged or required to select a mortgage loan product
offered by the related Originator which is a higher cost product designed
for less creditworthy borrowers, taking into account such facts as, without
limitation, the Mortgage Loan's requirements and the borrower's credit
history, income, assets and liabilities. For a borrower who seeks financing
through such Originator's higher-priced subprime lending channel, the
borrower should be directed towards or offered such Originator's standard
mortgage line if the borrower is able to qualify for one of the standard
products;
(ii) The methodology used in underwriting the extension of credit for
each Mortgage Loan in the Trust Fund did not rely on the extent of the
borrower's equity in the collateral as the principal determining factor in
approving such extension of credit. The methodology employed objective
criteria that related such facts as, without limitation, the borrower's
credit history, income, assets or liabilities, to the proposed mortgage
payment and, based on such methodology, the Originator made a reasonable
determination that at the time of origination the borrower had the ability
to make timely payments on the Mortgage Loan;
(jj) No borrower under a Mortgage Loan in the Trust Fund was charged
"points and fees" in an amount greater than (a) $1,000 or (b) 5% of the
principal amount of such Mortgage Loan, whichever is greater. For purposes
of this representation, "points and fees" (x) include origination,
underwriting, broker and finder's fees and charges that the lender imposed
as a condition of making the Mortgage Loan, whether they are paid to the
lender or a third party; and (y) exclude bona fide discount points, fees
paid for actual services rendered in connection with the origination of the
mortgage (such as attorneys' fees, notaries fees and fees paid for property
appraisals, credit reports, surveys, title examinations and extracts, flood
and tax certifications, and home inspections); the cost of mortgage
insurance or credit-risk price adjustments; the costs of title, hazard, and
flood insurance policies; state and local transfer taxes or fees; escrow
deposits for the future payment of taxes and insurance premiums; and other
miscellaneous fees and charges that, in total, do not exceed 0.25 percent
of the loan amount;
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(kk) With respect to any Mortgage Loan originated on or after August
1, 2004 and underlying the Security, neither the related Mortgage nor the
related Mortgage Note requires the borrower to submit to arbitration to
resolve any dispute arising out of or relating in any way to the mortgage
loan transaction;
(ll) With respect to any Mortgage Loans underlying the Security that
are on manufactured housing, upon the origination of each such Mortgage
Loan the manufactured housing unit either: (i) will be the principal
residence of the borrower or (ii) will be classified as real property under
applicable state law;
(mm) No first lien Mortgage Loan underlying the Security has an
original principal balance that exceeds the applicable Xxxxxxx Mac loan
limit; and
(nn) If any of the Mortgage Loans underlying the Security are
"seasoned" (a seasoned mortgage loan is one where the date of the Mortgage
Note is more than 1 year before the date of issuance of the related
Security) the Seller:
(i) represents that it currently operates or actively participates in
an on-going and active program or business (A) to originate mortgages,
and/or (B) to make periodic purchases of mortgage loans from
originators or other sellers, and/or (C) to issue and/or purchase
securities or bonds supported by the mortgages, with a portion of the
proceeds generated by such program or business being used to purchase
or originate mortgages made to borrowers who are:
(x) low-income families (families with incomes of 80% or less of
area median income) living in low-income areas (a census tract or
block numbering area in which the median income does not exceed
80 percent of the area median income) and/or
(y) very low-income families (families with incomes of 60% or
less of area median income); and
(ii) agrees that Xxxxxxx Mac for a period of two (2) years following
the date of the agreement may contact the Seller to confirm that it
continues to operate or actively participate in the mortgage program
or business and to obtain other nonproprietary information about the
Seller's activities that may assist Xxxxxxx Mac in completing its
regulatory reporting requirements. The Seller will make reasonable
efforts to provide such information to Xxxxxxx Mac.
It is understood and agreed that the representations and warranties
set forth in this Section 7 will inure to the benefit of the Purchaser, its
successors and assigns, notwithstanding any restrictive or qualified endorsement
on any Mortgage Note or assignment of Mortgage or the examination of any
Mortgage File. Upon any substitution for a Mortgage Loan, the representations
and warranties set forth above shall be deemed to be made by the Seller as to
any Substitute Mortgage Loan as of the date of substitution.
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Upon discovery or receipt of notice by the Seller, the Purchaser or
the Trustee of a breach of any representation or warranty of the Seller set
forth in this Section 7 which materially and adversely affects the value of the
interests of the Purchaser, the Certificateholders or the Trustee in any of the
Mortgage Loans delivered to the Purchaser pursuant to this Agreement, the party
discovering or receiving notice of such breach shall give prompt written notice
to the others. In the case of any such breach of a representation or warranty
set forth in this Section 7, within 90 days from the date of discovery by the
Seller, or the date the Seller is notified by the party discovering or receiving
notice of such breach (whichever occurs earlier), the Seller will (i) cure such
breach in all material respects, (ii) purchase the affected Mortgage Loan at the
applicable Purchase Price or (iii) if within two years of the Closing Date,
substitute a qualifying Substitute Mortgage Loan in exchange for such Mortgage
Loan. The obligations of the Seller to cure, purchase or substitute a qualifying
Substitute Mortgage Loan shall constitute the Purchaser's, the Trustee's and the
Certificateholder's sole and exclusive remedy under this Agreement or otherwise
respecting a breach of representations or warranties hereunder with respect to
the Mortgage Loans, except for the obligation of the Seller to indemnify the
Purchaser for such breach as set forth in and limited by Section 14 hereof. With
respect to the representations and warranties described in the Agreement which
are made to the best of the Seller's knowledge, if it is discovered by any of
the Depositor, the Seller or the Trustee that the substance of such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan, then notwithstanding
the seller's lack of knowledge with respect to the substance of such
representation and warranty, such inaccuracy shall be deemed a breach of the
applicable representation or warranty.
Any cause of action against the Seller or relating to or arising out
of a breach by the Seller of any representations and warranties made in this
Section 7 shall accrue as to any Mortgage Loan upon (i) discovery of such breach
by the Seller or notice thereof by the party discovering such breach and (ii)
failure by the Seller to cure such breach, purchase such Mortgage Loan or
substitute a qualifying Substitute Mortgage Loan pursuant to the terms hereof.
Section 8. Representations and Warranties Concerning the Seller.
As of the date hereof and as of the Closing Date, the Seller represents and
warrants to the Purchaser as to itself in the capacity indicated as follows:
(a) the Seller (i) is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and (ii) is
qualified and in good standing to do business in each jurisdiction where
such qualification is necessary, except where the failure so to qualify
would not reasonably be expected to have a material adverse effect on the
Seller's business as presently conducted or on the Seller's ability to
enter into this Agreement and to consummate the transactions contemplated
hereby;
(b) the Seller has full power to own its property, to carry on its
business as presently conducted and to enter into and perform its
obligations under this Agreement;
(c) the execution and delivery by the Seller of this Agreement have
been duly authorized by all necessary action on the part of the Seller; and
neither the execution and
J-14
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 Seller or its properties or the charter or by-laws of
the Seller, except those conflicts, breaches or defaults which would not
reasonably be expected to have a material adverse effect on the Seller's
ability to enter into this Agreement and to consummate the transactions
contemplated hereby;
(d) the execution, delivery and performance by the Seller of this
Agreement and the consummation of the transactions contemplated hereby do
not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any
state, federal or other governmental authority or agency, except those
consents, approvals, notices, registrations or other actions as have
already been obtained, given or made and, in connection with the
recordation of the Mortgages, powers of attorney or assignments of
Mortgages not yet completed;
(e) this Agreement has been duly executed and delivered by the Seller
and, assuming due authorization, execution and delivery by the Purchaser,
constitutes a valid and binding obligation of the Seller enforceable
against it in accordance with its terms (subject to applicable bankruptcy
and insolvency laws and other similar laws affecting the enforcement of the
rights of creditors generally);
(f) there are no actions, suits or proceedings pending or, to the
knowledge of the Seller, threatened against the Seller, before or by any
court, administrative agency, arbitrator or governmental body (i) with
respect to any of the transactions contemplated by this Agreement or (ii)
with respect to any other matter which in the judgment of the Seller will
be determined adversely to the Seller and will if determined adversely to
the Seller materially and adversely affect the Seller's ability to perform
its obligations under this Agreement; and the Seller is not in default with
respect to any order of any court, administrative agency, arbitrator or
governmental body so as to materially and adversely affect the transactions
contemplated by this Agreement; and
(g) the Seller's Information (as defined in Section 13(a) hereof) does
not include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made, in light of
the circumstances under which they were made, not misleading.
Section 9. Representations and Warranties Concerning the Purchaser.
As of the date hereof and as of the Closing Date, the Purchaser
represents and warrants to the Seller as follows:
(a) the Purchaser (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and
(ii) is qualified and in good standing as a foreign corporation to do
business in each jurisdiction where such qualification is necessary, except
where the failure so to qualify would not reasonably be
J-15
expected to have a material adverse effect on the Purchaser's business as
presently conducted or on the Purchaser's ability to enter into this
Agreement and to consummate the transactions contemplated hereby;
(b) the Purchaser has full corporate power to own its property, to
carry on its business as presently conducted and to enter into and perform
its obligations under this Agreement;
(c) the execution and delivery by the Purchaser of this Agreement have
been duly authorized by all necessary corporate action on the part of the
Purchaser; and neither the execution and delivery of this Agreement, nor
the consummation of the transactions herein contemplated, nor compliance
with the provisions hereof, will conflict with or result in a breach of, or
constitute a default under, any of the provisions of any law, governmental
rule, regulation, judgment, decree or order binding on the Purchaser or its
properties or the articles of incorporation or by-laws of the Purchaser,
except those conflicts, breaches or defaults which would not reasonably be
expected to have a material adverse effect on the Purchaser's ability to
enter into this Agreement and to consummate the transactions contemplated
hereby;
(d) the execution, delivery and performance by the Purchaser of this
Agreement and the consummation of the transactions contemplated hereby do
not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any
state, federal or other governmental authority or agency, except those
consents, approvals, notices, registrations or other actions as have
already been obtained, given or made;
(e) this Agreement has been duly executed and delivered by the
Purchaser and, assuming due authorization, execution and delivery by the
Seller, constitutes a valid and binding obligation of the Purchaser
enforceable against it in accordance with its terms (subject to applicable
bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally);
(f) there are no actions, suits or proceedings pending or, to the
knowledge of the Purchaser, threatened against the Purchaser, before or by
any court, administrative agency, arbitrator or governmental body (i) with
respect to any of the transactions contemplated by this Agreement or (ii)
with respect to any other matter which in the judgment of the Purchaser
will be determined adversely to the Purchaser and will if determined
adversely to the Purchaser materially and adversely affect the Purchaser's
ability to perform its obligations under this Agreement; and the Purchaser
is not in default with respect to any order of any court, administrative
agency, arbitrator or governmental body so as to materially and adversely
affect the transactions contemplated by this Agreement; and
(g) the Purchaser's Information (as defined in Section 13(b) hereof)
does not include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made, in light of
the circumstances under which they were
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made, not misleading.
Section 10. Conditions to Closing.
(a) The obligations of the Purchaser under this Agreement will be
subject to the satisfaction, on or prior to the Closing Date, of the
following conditions:
(i) Each of the obligations of the Seller required to be
performed at or prior to the Closing Date pursuant to the terms of this
Agreement shall have been duly performed and complied with in all material
respects; all of the representations and warranties of the Seller under this
Agreement shall be true and correct as of the date or dates specified in all
material respects; and no event shall have occurred which, with notice or the
passage of time, would constitute a default under this Agreement, or the Pooling
and Servicing Agreement; and the Purchaser shall have received certificates to
that effect signed by authorized officers of the Seller.
(ii) The Purchaser shall have received all of the following
closing documents, in such forms as are agreed upon and reasonably acceptable to
the Purchaser, duly executed by all signatories other than the Purchaser as
required pursuant to the respective terms thereof:
(A) If required pursuant to Section 3 hereof, the Amendment
dated as of the Closing Date and any documents referred to therein;
(B) If required pursuant to Section 3 hereof, the Final
Mortgage Loan Schedule containing the information set forth on Exhibit 3
hereto, one copy to be attached to each counterpart of the Amendment;
(C) The Pooling and Servicing Agreement, in form and
substance reasonably satisfactory to the Trustee and the Purchaser, and all
documents required thereby duly executed by all signatories;
(D) A certificate of an officer of the Seller dated as of
the Closing Date, in a form reasonably acceptable to the Purchaser, and
attached thereto the resolutions of the Seller's authorizing the
transactions contemplated by this Agreement, together with copies of the
charter and by-laws of the Seller;
(E) One or more opinions of counsel from the Seller's
counsel otherwise in form and substance reasonably satisfactory to the
Purchaser, the Trustee and each Rating Agency;
(F) A letter from each of the Rating Agencies giving each
Class of Certificates set forth on Schedule A the rating set forth on
Schedule A; and
(G) Such other documents, certificates (including additional
representations and warranties) and opinions as may be reasonably necessary
to secure the intended ratings from each Rating Agency for the
Certificates.
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(iii) The Certificates to be sold to Xxxxxxx Xxxxx pursuant to
the Underwriting Agreement shall have been issued and sold to Xxxxxxx Xxxxx.
(iv) The Seller shall have furnished to the Purchaser such other
certificates of its officers or others and such other documents and opinions of
counsel to evidence fulfillment of the conditions set forth in this Agreement
and the transactions contemplated hereby as the Purchaser and its counsel may
reasonably request.
(b) The obligations of the Seller under this Agreement shall be
subject to the satisfaction, on or prior to the Closing Date, of the
following conditions:
(i) The obligations of the Purchaser required to be performed by
it on or prior to the Closing Date pursuant to the terms of this Agreement shall
have been duly performed and complied with in all material respects, and all of
the representations and warranties of the Purchaser under this Agreement shall
be true and correct in all material respects as of the date hereof and as of the
Closing Date, and no event shall have occurred which would constitute a breach
by it of the terms of this Agreement, and the Seller shall have received a
certificate to that effect signed by an authorized officer of the Purchaser.
(ii) The Seller shall have received copies of all of the
following closing documents, in such forms as are agreed upon and reasonably
acceptable to the Seller, duly executed by all signatories other than the Seller
as required pursuant to the respective terms thereof:
(A) If required pursuant to Section 3 hereof, the Amendment
dated as of the Closing Date and any documents referred to therein;
(B) The Pooling and Servicing Agreement, in form and
substance reasonably satisfactory to the Seller, and all documents required
thereby duly executed by all signatories;
(C) A certificate of an officer of the Purchaser dated as of
the Closing Date, in a form reasonably acceptable to the Seller, and
attached thereto the resolutions of the Purchaser authorizing the
transactions contemplated by this Agreement and the Pooling and Servicing
Agreement, together with copies of the Purchaser's articles of
incorporation, and evidence as to the good standing of the Purchaser dated
as of a recent date;
(D) One or more opinions of counsel from the Purchaser's
counsel in form and substance reasonably satisfactory to the Seller; and
(E) Such other documents, certificates (including additional
representations and warranties) and opinions as may be reasonably necessary
to secure the intended rating from each Rating Agency for the Certificates;
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Section 11. Fees and Expenses.
Subject to Section 17 hereof, the Seller shall pay on the Closing Date
or such later date as may be agreed to by the Purchaser (i) the fees and
expenses of the Seller's attorneys and the reasonable fees and expenses of the
Purchaser's attorneys, (ii) the fees and expenses of Deloitte & Touche LLP,
(iii) the filing fee charged by the Commission for the registration of the
Certificates, (iv) the fees and expenses including counsel's fees and expenses
in connection with any "blue sky" and legal investment matters, (v) the fees and
expenses of the Trustee which shall include without limitation the fees and
expenses of the Trustee (and the fees and disbursements of its counsel) with
respect to (A) legal and document review of this Agreement, the Pooling and
Servicing Agreement, the Certificates and related agreements, (B) attendance at
the Closing and (C) review of the Mortgage Loans to be performed by the Trustee,
(vi) the expenses for printing or otherwise reproducing the Certificates, the
Prospectus and the Prospectus Supplement, (vii) the fees and expenses of each
Rating Agency (both initial and ongoing), (viii) the fees and expenses relating
to the preparation and recordation of mortgage assignments (including
intervening assignments, if any and if available, to evidence a complete chain
of title from the originator to the Trustee) from the Seller to the Trustee or
the expenses relating to the Opinion of Counsel referred to in Section 6(a)
hereof, as the case may be, and (ix) Mortgage File due diligence expenses and
other out-of-pocket expenses incurred by the Purchaser in connection with the
purchase of the Mortgage Loans and by Xxxxxxx Xxxxx in connection with the sale
of the Offered Certificates. The Seller additionally agrees to pay directly to
any third party on a timely basis the fees provided for above which are charged
by such third party and which are billed periodically.
Section 12. Accountants' Letters
Deloitte & Touche LLP will review the characteristics of a sample of
the Mortgage Loans described in the Final Mortgage Loan Schedule and will
compare those characteristics to the description of the Mortgage Loans contained
in the Prospectus Supplement under the captions "Summary--The Mortgage Loans",
"Description of the Mortgage Groups--General", "--Tabular Characteristics of the
Mortgage Loans" and "Annex II--The Mortgage Groups". The Seller will cooperate
with the Purchaser in making available all information and taking all steps
reasonably necessary to permit such accountants to complete the review and to
deliver the letters required of them under the Underwriting Agreement. Deloitte
& Touche LLP will also confirm certain calculations as set forth under the
captions "Yield, Prepayment and Maturity Considerations with respect to the
Stack I Certificates" or "Yield, Prepayment and Weighted Average Life with
respect to the Stack II Certificates", as applicable, in the Prospectus
Supplement.
Section 13. Indemnification.
(a) The Seller shall indemnify and hold harmless the Purchaser and its
directors, officers and controlling persons (as defined in Section 15 of
the Securities Act) from and against any loss, claim, damage or liability
or action in respect thereof, to which they or any of them may become
subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon (i) any
untrue
J-19
statement of a material fact contained in the Seller's Information as
identified in Exhibit 4, the omission to state in the Prospectus Supplement
or Prospectus (or any amendment thereof or supplement thereto approved by
the Seller and in which additional Seller's Information is identified), in
reliance upon and in conformity with Seller's Information a material fact
required to be stated therein or necessary to make the statements therein
in light of the circumstances in which they were made, not misleading, (ii)
any representation or warranty assigned or made by the Seller in Section 7
or Section 8 hereof being, or alleged to be, untrue or incorrect, or (iii)
any failure by the Seller to perform its obligations under this Agreement;
and the Seller shall reimburse the Purchaser and each other indemnified
party for any legal and other expenses reasonably incurred by them in
connection with investigating or defending or preparing to defend against
any such loss, claim, damage, liability or action.
(b) The Seller shall indemnify and hold harmless the Purchaser, the
Trust Fund and the Trustee against any documented out-of-pocket losses,
penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments, and other costs and expenses resulting from any
claim, demand, defense or assertion by any third party that results from, a
material breach of the representations and warranties set forth in Section
7 of this Agreement; provided, however, indemnification shall not be
available for any economic losses of the Purchaser due to reinvestment
losses, loss of investment income or any other special, indirect or
consequential losses. The Seller shall indemnify and hold harmless the
Purchaser, the Trust Fund and the Trustee against any losses, penalties,
fines, forfeitures, reasonable and necessary legal fees and related costs,
judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion by any third party in connection with the Georgia Fair
Lending Act; provided, however, indemnification shall not be available for
any economic losses of the Purchaser due to reinvestment losses, loss of
investment income or any other special, indirect or consequential losses.
The foregoing indemnity agreement is in addition to any liability which the
Seller otherwise may have to the Purchaser or any other such indemnified party.
(c) The Purchaser shall indemnify and hold harmless the Seller and its
respective directors, officers and controlling persons (as defined in
Section 15 of the Securities Act) from and against any loss, claim, damage
or liability or action in respect thereof, to which they or any of them may
become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon
(i) any untrue statement of a material fact contained in the Purchaser's
Information as identified in Exhibit 5, the omission to state in the
Prospectus Supplement or Prospectus (or any amendment thereof or supplement
thereto approved by the Purchaser and in which additional Purchaser's
Information is identified), in reliance upon and in conformity with the
Purchaser's Information, a material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances in
which they were made, not misleading, (ii) any representation or warranty
made by the Purchaser in Section 9 hereof being, or alleged to be, untrue
or incorrect, or (iii) any failure by the
J-20
Purchaser to perform its obligations under this Agreement; and the
Purchaser shall reimburse the Seller, and each other indemnified party for
any legal and other expenses reasonably incurred by them in connection with
investigating or defending or preparing to defend any such loss, claim,
damage, liability or action. The foregoing indemnity agreement is in
addition to any liability which the Purchaser otherwise may have to the
Seller, or any other such indemnified party,
(d) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify each party
against whom indemnification is to be sought in writing of the commencement
thereof (but the failure so to notify an indemnifying party shall not
relieve it from any liability which it may have under this Section 13
except to the extent that it has been prejudiced in any material respect by
such failure or from any liability which it may have otherwise). In case
any such action is brought against any indemnified party, and it notifies
an indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent it may elect by
written notice delivered to the indemnified party promptly (but, in any
event, within 30 days) after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their
own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such indemnified party or parties unless (i) the
employment of such counsel shall have been authorized in writing by one of
the indemnifying parties in connection with the defense of such action,
(ii) the indemnifying parties shall not have employed counsel to have
charge of the defense of such action within a reasonable time after notice
of commencement of the action, or (iii) such indemnified party or parties
shall have reasonably concluded that there is a conflict of interest
between itself or themselves and the indemnifying party in the conduct of
the defense of any claim or that the interests of the indemnified party or
parties are not substantially co-extensive with those of the indemnifying
party (in which case the indemnifying parties shall not have the right to
direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by
the indemnifying parties (provided, however, that the indemnifying party
shall be liable only for the fees and expenses of one counsel in addition
to one local counsel in the jurisdiction involved. Anything in this
subsection to the contrary notwithstanding, an indemnifying party shall not
be liable for any settlement or any claim or action effected without its
written consent; provided, however, that such consent was not unreasonably
withheld.
(e) If the indemnification provided for in paragraphs (a) and (b) of
this Section 13 shall for any reason be unavailable to an indemnified party
in respect of any loss, claim, damage or liability, or any action in
respect thereof, referred to in Section 13, then the indemnifying party
shall in lieu of indemnifying the indemnified party contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim,
J-21
damage or liability, or action in respect thereof, in such proportion as
shall be appropriate to reflect the relative benefits received by the
Seller on the one hand and the Purchaser on the other from the purchase and
sale of the Mortgage Loans, the offering of the Certificates and the other
transactions contemplated hereunder. No person found liable for a
fraudulent misrepresentation shall be entitled to contribution from any
person who is not also found liable for such fraudulent misrepresentation.
(f) The parties hereto agree that reliance by an indemnified party on
any publicly available information or any information or directions
furnished by an indemnifying party shall not constitute negligence, bad
faith or willful misconduct by such indemnified party.
Section 14. Notices.
All demands, notices and communications hereunder shall be in writing
but may be delivered by facsimile transmission subsequently confirmed in
writing. Notices to the Seller shall be directed to Xxxxxxx Xxxxx Mortgage
Lending Inc., 0 Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (Telecopy:
212-449-6710), and notices to the Purchaser shall be directed to Xxxxxxx Xxxxx
Mortgage Investors, Inc., 0 Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(Telecopy: 212-449-6710), Attention: Xxxxx Xxxxxxx; or to any other address as
may hereafter be furnished by one party to the other party by like notice. Any
such demand, notice or communication hereunder shall be deemed to have been
received on the date received at the premises of the addressee (as evidenced, in
the case of registered or certified mail, by the date noted on the return
receipt) provided that it is received on a business day during normal business
hours and, if received after normal business hours, then it shall be deemed to
be received on the next business day.
Section 15. Transfer of Mortgage Loans.
The Purchaser retains the right to assign the Mortgage Loans and any
or all of its interest under this Agreement to the Trustee without the consent
of the Seller, and, upon such assignment, the Trustee shall succeed to the
applicable rights and obligations of the Purchaser hereunder; provided, however,
the Purchaser shall remain entitled to the benefits set forth in Sections 11, 13
and 17 hereto and as provided in Section 2(a). Notwithstanding the foregoing,
the sole and exclusive right and remedy of the Trustee with respect to a breach
of representation or warranty of the Seller shall be the purchase or
substitution obligations of the Seller contained in Sections 5 and 7 hereof.
Section 16. Termination.
This Agreement may be terminated (a) by the mutual consent of the
parties hereto prior to the Closing Date, (b) by the Purchaser, if the
conditions to the Purchaser's obligation to close set forth under Section 10(a)
hereof are not fulfilled as and when required to be fulfilled or (c) by the
Seller, if the conditions to the Seller's obligation to close set forth under
Section 10(b) hereof are not fulfilled as and when required to be fulfilled. In
the event of termination pursuant to clause (b), the Seller shall pay, and in
the event of termination pursuant to clause (c), the
J-22
Purchaser shall pay, all reasonable out-of-pocket expenses incurred by the other
in connection with the transactions contemplated by this Agreement. In the event
of a termination pursuant to clause (a), each party shall be responsible for its
own expenses.
Section 17. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Seller submitted
pursuant hereto, shall remain operative and in full force and effect and shall
survive delivery of the Mortgage Loans to the Purchaser (and by the Purchaser to
the Trustee). Subsequent to the delivery of the Mortgage Loans to the Purchaser,
the Seller's representations and warranties contained herein with respect to the
Mortgage Loans shall be deemed to relate to the Mortgage Loans actually
delivered to the Purchaser and included in the Final Mortgage Loan Schedule and
any Substitute Mortgage Loan and not to those Mortgage Loans deleted from the
Preliminary Mortgage Loan Schedule pursuant to Section 3 hereof prior to the
Closing.
Section 18. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the Closing Date of the Mortgage Loans
described on the Mortgage Loan Schedule in accordance with the terms and
conditions of this Agreement is mandatory. It is specifically understood and
agreed that each Mortgage Loan is unique and identifiable on the date hereof and
that an award of money damages would be insufficient to compensate the Purchaser
for the losses and damages incurred by the Purchaser in the event of the
Seller's failure to deliver the Mortgage Loans on or before the Closing Date.
The Seller hereby grants to the Purchaser a lien on and a continuing security
interest in the Seller's interest in each Mortgage Loan and each document and
instrument evidencing each such Mortgage Loan to secure the performance by the
Seller of its obligation hereunder, and the Seller agrees that it holds such
Mortgage Loans in custody for the Purchaser, subject to the Purchaser's
obligation to deliver or cause to be delivered the consideration for the
Mortgage Loans pursuant to Section 2 hereof. The Seller agrees that, upon
acceptance of the Mortgage Loans by the Purchaser or its designee and delivery
of payment to the Seller, that its security interest in the Mortgage Loans shall
be released. All rights and remedies of the Purchaser under this Agreement are
distinct from, and cumulative with, any other rights or remedies under this
Agreement or afforded by law or equity and all such rights and remedies may be
exercised concurrently, independently or successively.
Notwithstanding the foregoing, if on the Closing Date, each of the
conditions set forth in Section 10 hereof shall have been satisfied and the
Purchaser shall not have paid or caused to be paid the purchase price as
described in Section 2(c) hereof, or any such condition shall not have been
waived or satisfied and the Purchaser determines not to pay or cause to be paid
the purchase price, the Purchaser shall immediately effect the redelivery of the
Mortgage Loans, if delivery to the Purchaser has occurred and the security
interest created by this Section 18 shall be deemed to have been released.
Section 19. Severability.
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Any part, provision, representation or warranty of this Agreement
which is prohibited or which is held to be void or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable any
provision hereof.
Section 20. Counterparts.
This Agreement may be executed in counterparts, each of which will be
an original, but which together shall constitute one and the same agreement.
Section 21. Amendment.
This Agreement cannot be amended or modified in any manner without the
prior written consent of each party.
Section 22. GOVERNING LAW.
THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE AND PERFORMED IN THE
STATE OF NEW YORK AND SHALL BE INTERPRETED IN ACCORDANCE WITH THE LAWS OF SUCH
STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES OF SUCH STATE.
Section 23. Further Assurances.
Each of the parties agrees to execute and deliver such instruments and
take such actions as another party may, from time to time, reasonably request in
order to effectuate the purpose and to carry out the terms of this Agreement
including any amendments hereto which may be required by either Rating Agency.
Section 24. Successors and Assigns.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and their permitted successors and
assigns and, to the extent specified in Section 13 hereof, Xxxxxxx Xxxxx, and
their directors, officers and controlling persons (within the meaning of federal
securities laws). The Seller acknowledges and agrees that the Purchaser may
assign its rights under this Agreement (including, without limitation, with
respect to the Seller's representations and warranties respecting the Mortgage
Loans) to the Trustee. Any person into which the Seller may be merged or
consolidated (or any person resulting from any merger or consolidation involving
the Seller), any person resulting from a change in form of the Seller or any
person succeeding to the business of the Seller, shall be considered the
"successor" of the
J-24
Seller hereunder and shall be considered a party hereto without the execution or
filing of any paper or any further act or consent on the part of any party
hereto. Except as provided in the two preceding sentences, this Agreement cannot
be assigned, pledged or hypothecated by either party hereto without the written
consent of the other parties to this Agreement and any such assignment or
purported assignment shall be deemed null and void.
Section 25. The Seller.
The Seller will keep in full effect all rights as are necessary to
perform their respective obligations under this Agreement.
Section 26. Entire Agreement.
This Agreement contains the entire agreement and understanding between
the parties 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.
Section 27. No Partnership.
Nothing herein contained shall be deemed or construed to create a
partnership or joint venture between the parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused their names to be signed
hereto by their respective duly authorized officers as of the date first above
written.
XXXXXXX XXXXX MORTGAGE LENDING, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
J-26
EXHIBIT 1 TO MORTGAGE LOAN PURCHASE AGREEMENT
CONTENTS OF MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include each of
the following items, which shall be available for inspection by the Purchaser or
its designee, and which shall be delivered to the Purchaser or its designee
pursuant to the terms of the Agreement.
A. With respect to each Mortgage Loan (other than a Cooperative Loan):
(i) the original Mortgage Note, endorsed in the following form: "Pay
to the order of HSBC Bank USA, National Association, as Trustee for the
registered holders of the Xxxxxxx Xxxxx Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 2006-AF1, without recourse," with all
prior and intervening endorsements showing a complete chain of endorsement
from the originator to the Person so endorsing to the Trustee;
(ii) the original recorded Mortgage or a copy of the Mortgage
certified by the public recording office in which such Mortgage has been
recorded;
(iii) an original Assignment of the Mortgage executed in the following
form: "HSBC Bank USA, National Association, as Trustee for the registered
holders of the Xxxxxxx Xxxxx Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 2006-AF1.
(iv) the original recorded Assignment or Assignments of the Mortgage
showing a complete chain of assignment from the originator to the Person
assigning the Mortgage to the Trustee as contemplated by the immediately
preceding clause (iii), if applicable and only to the extent available to
the Depositor with evidence of recording thereon;
(v) the originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon, if any;
(vi) the original of any guarantee executed in connection with the
Mortgage Note;
(vii) the original mortgagee title insurance policy;
(viii) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage; and
(ix) the original power of attorney, if applicable.
B. With respect to each Mortgage Loan that is a Cooperative Loan:
(i) the original Mortgage Note, endorsed in the following form: "Pay
to the order of HSBC Bank USA, National Association, as Trustee for the
registered holders of the
J-27
Xxxxxxx Xxxxx Mortgage Investors, Inc., Mortgage Pass-Through Certificates,
Series 2006-AF1, without recourse," with all prior and intervening
endorsements showing a complete chain of endorsement from the originator to
the Person so endorsing to the Trustee;
(ii) the original duly executed assignment of Security Agreement to
the Trustee;
(iii) the acknowledgment copy of the original executed Form UCC-1 (or
certified copy thereof) with respect to the Security Agreement, and any
required continuation statements;
(iv) the acknowledgment copy of the original executed Form UCC-3 with
respect to the Security Agreement, indicating the Trustee as the assignee
of the secured party;
(v) the stock certificate representing the Cooperative Assets
allocated to the cooperative unit, with a stock power in blank attached;
(vi) the original collateral assignment of the proprietary lease by
Mortgagor to the originator;
(vii) a copy of the recognition agreement;
(viii) if applicable and to the extent available, the original
intervening assignments, including warehousing assignments, if any,
showing, to the extent available, an unbroken chain of the related Mortgage
Loan to the Trustee, together with a copy of the related Form UCC-3 with
evidence of filing thereon; and
(ix) the originals of each assumption, modification or substitution
agreement, if any, relating to the Mortgage Loan.
J-28
EXHIBIT 2 TO MORTGAGE LOAN PURCHASE AGREEMENT
CONTENTS OF FINAL MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include each of
the following items, which shall be available for inspection by the Purchaser or
its agent, and which shall be delivered to the Purchaser pursuant to the terms
of the Agreement.
A. With respect to each Mortgage Loan (other than a Cooperative Loan):
(i) the original Mortgage Note, endorsed in the following form: "Pay
to the order of HSBC Bank USA, National Association, as Trustee for the
registered holders of the Xxxxxxx Xxxxx Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 2006-AF1, without recourse," with all
prior and intervening endorsements showing a complete chain of endorsement
from the originator to the Person so endorsing to the Trustee;
(ii) the original recorded Mortgage or a copy of the Mortgage
certified by the public recording office in which such Mortgage has been
recorded;
(iii) an original Assignment of the Mortgage executed in the following
form: "HSBC Bank USA, National Association, as Trustee for the registered
holders of the Xxxxxxx Xxxxx Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 2006-AF1.
(iv) the original recorded Assignment or Assignments of the Mortgage
showing a complete chain of assignment from the originator to the Person
assigning the Mortgage to the Trustee as contemplated by the immediately
preceding clause (iii), if applicable and only to the extent available to
the Depositor with evidence of recording thereon;
(v) the originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon, if any;
(vi) the original of any guarantee executed in connection with the
Mortgage Note;
(vii) the original mortgagee title insurance policy;
(viii) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage; and
(ix) the original power of attorney, if applicable.
B. With respect to each Mortgage Loan that is a Cooperative Loan:
(i) the original Mortgage Note, endorsed in the following form: "Pay
to the
J-29
order of HSBC Bank USA, National Association, as Trustee for the registered
holders of the Xxxxxxx Xxxxx Mortgage Investors, Inc., Mortgage
Pass-Through Certificates, Series 2006-AF1, without recourse," with all
prior and intervening endorsements showing a complete chain of endorsement
from the originator to the Person so endorsing to the Trustee;
(ii) the original duly executed assignment of Security Agreement to
the Trustee;
(iii) the acknowledgment copy of the original executed Form UCC-1 (or
certified copy thereof) with respect to the Security Agreement, and any
required continuation statements;
(iv) the acknowledgment copy of the original executed Form UCC-3 with
respect to the Security Agreement, indicating the Trustee as the assignee
of the secured party;
(v) the stock certificate representing the Cooperative Assets
allocated to the cooperative unit, with a stock power in blank attached;
(vi) the original collateral assignment of the proprietary lease by
Mortgagor to the originator;
(vii) a copy of the recognition agreement;
(viii) if applicable and to the extent available, the original
intervening assignments, including warehousing assignments, if any,
showing, to the extent available, an unbroken chain of the related Mortgage
Loan to the Trustee, together with a copy of the related Form UCC-3 with
evidence of filing thereon; and
(ix) the originals of each assumption, modification or substitution
agreement, if any, relating to the Mortgage Loan.
J-30
EXHIBIT 3 TO MORTGAGE LOAN PURCHASE AGREEMENT
MORTGAGE LOAN SCHEDULE INFORMATION
The Preliminary and Final Mortgage Loan Schedules shall set forth the
following information with respect to each Mortgage Loan:
1) the loan number of the mortgage loan;
2) the city, state and zip code of the Mortgage Property;
3) a code indicating whether the Mortgaged Property is
owner-occupied;
4) the type of Residential Dwelling constituting the Mortgaged
Property;
5) the original months to maturity;
6) the original date of the mortgage;
7) the Loan-to-Value Ratio at origination;
8) the Mortgage Rate;
9) the date on which the first Monthly Payment was due on the
Mortgage Loan;
10) the stated maturity date;
11) the amount of the Monthly Payment at origination;
12) the amount of the Monthly Payment as of the Cut-off Date;
13) the last Due Date on which a Monthly Payment was actually
applied to the unpaid Stated Principal Balance;
14) the original principal amount of the Mortgage Loan;
15) the Stated Principal Balance of the Mortgage Loan as of the
close of business on the Cut-off Date;
16) a code indicating the purpose of the Mortgage Loan (i.e.,
purchase financing, Rate/Term Refinancing, Cash-Out
Refinancing);
17) a code indicating the documentation style (i.e., full,
alternative or reduced);
18) the Value of the Mortgaged Property;
J-31
19) the sale price of the Mortgaged Property, if applicable;
20) the actual unpaid principal balance of the Mortgage Loan as
of the Cut-off Date;
21) the Servicing Fee;
22) with respect to each adjustable-rate Mortgage Loan, the next
Interest Rate Adjustment Date;
23) with respect to each adjustable-rate Mortgage Loan, the
Gross Margin;
24) with respect to each adjustable-rate Mortgage Loan, the
Minimum and Maximum Mortgage Rate under the terms of the
Mortgage Note;
25) with respect to each adjustable-rate Mortgage Loan, the
First Rate Cap;
26) with respect to each adjustable-rate Mortgage Loan, the
related Periodic Rate Cap;
27) with respect to each adjustable-rate Mortgage Loan, whether
additional collateral exists;
28) with respect to each adjustable-rate Mortgage Loan, whether
it is interest-only; and
29) with respect to each adjustable-rate Mortgage Loan, the
Seller.
Such schedule shall set forth the following information with respect
to the Mortgage Loans in the aggregate as of the Cut-off Date: (1) the number of
Mortgage Loans; (2) the current principal balance of the Mortgage Loans; (3) the
weighted average Mortgage Rate of the Mortgage Loans; and (4) the weighted
average maturity of the Mortgage Loans.
J-32
EXHIBIT 4 TO MORTGAGE LOAN PURCHASE AGREEMENT
SELLER'S INFORMATION
All information in the Prospectus Supplement described under the
following Sections: "Summary -- The Mortgage Loans," "Description of the
Mortgage Groups" and "Annex II -- The Mortgage Groups".
J-33
EXHIBIT 5 TO MORTGAGE LOAN PURCHASE AGREEMENT
PURCHASER'S INFORMATION
All information in the Prospectus Supplement and the Prospectus,
except the Seller's Information.
J-34
EXHIBIT 6 TO MORTGAGE LOAN PURCHASE AGREEMENT
SCHEDULE OF LOST NOTES
Available Upon Request
J-35
EXHIBIT 7 TO MORTGAGE LOAN PURCHASE AGREEMENT
REVISED April 18, 0000
XXXXXXXX X - 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
Name of Anti-Predatory Lending Category under Applicable
State/Jurisdiction Law/Effective Date Anti-Predatory Lending Law
------------------ -------------------------------------- --------------------------
Arkansas Arkansas Home Loan Protection Act, High Cost Home Loan
Ark. Code High Cost Home Loan Xxx.
Sections 00-00-000 et seq.
Effective July 16, 0000
Xxxxxxxxx Xxxxxxx, XX Ordinance No. 72-2003 (PSH), Mun. Code Covered Loan
Sections 757.01 et seq.
Effective June 2, 2003
Colorado Consumer Equity Protection, Colo. Covered Loan
Stat. Xxx. Sections 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, 0000
Xxxxxxxxxxx Xxxxxxxxxxx Abusive Home Loan Lending High Cost Home Loan
Practices Act, Conn. Gen. Stat.
Sections 36a-746 et seq.
Effective October 1, 0000
Xxxxxxxx xx Xxxxxxxx Home Loan Protection Act, D.C. Code Covered Loan
Sections 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
Sections
J-36
STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
Name of Anti-Predatory Lending Category under Applicable
State/Jurisdiction Law/Effective Date Anti-Predatory Lending Law
------------------ -------------------------------------- --------------------------
494.0078 et seq.
Effective October 2, 2002
Georgia (Oct. 1, 0000 - Xxxxxxx Xxxx Xxxxxxx Xxx, Xx. Code High Cost Home Loan
Mar. 6, 2003) Xxx. Sections 7-6A-1 et seq.
Effective October 1, 2002 - March
6, 2003
Georgia as amended Georgia Fair Lending Act, Ga. Code High Cost Home Loan
(Mar. 7, 2003 - current) Xxx. Sections 7-6A-1 et seq.
Effective for loans closed on or
after Xxxxx 0, 0000
XXXXX Section 32 Home Ownership and Equity Protection High Cost Loan
Act of 1994, 15 U.S.C. Section 1639,
12 C.F.R. Sections 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, Sections 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
Sections 16a-1-101 et seq. Consumer Loan (id. Section
16a-3-207) and;
Sections 16a-1-301 and 16a-3-207 High APR Consumer Loan
became effective April 14, 1999; (id. Section 16a-3-308a)
Section 16a-3-308a became effective
July 1, 1999
Kentucky 2003 KY H.B. 287 - High Cost Home High Cost Home Loan
Loan Act, Ky. Rev. Stat. Sections
360.100 et seq.
Effective June 24, 2003
Maine Truth in Lending, Me. Rev. Stat. High Rate High Fee Mortgage
tit. 9-A, Sections 8-101 et seq.
J-37
STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
Name of Anti-Predatory Lending Category under Applicable
State/Jurisdiction Law/Effective Date Anti-Predatory Lending Law
------------------ -------------------------------------- --------------------------
Effective September 29, 1995 and
as amended from time to time
Massachusetts Part 40 and Part 32, 209 C.M.R. High Cost Home Loan
Sections 32.00 et seq. and 209
C.M.R. Sections 40.01 et seq.
Effective March 22, 2001 and amended
from time to time
Nevada Assembly Xxxx No. 284, Nev. Rev. Stat. Home Loan
Sections 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. Sections
46:10B-22 et seq.
Effective for loans closed on or after
November 27, 2003
New Mexico Home Loan Protection Act, N.M. High Cost Home Loan
Rev. Stat. Sections 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.
Sections 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.
Sections 1349.25 et seq.
Effective May 24, 2002
Oklahoma Consumer Credit Code (codified in Subsection 10 Mortgage
J-38
STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
Name of Anti-Predatory Lending Category under Applicable
State/Jurisdiction Law/Effective Date Anti-Predatory Lending Law
------------------ -------------------------------------- --------------------------
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.
Sections 37-23-10 et seq.
Effective for loans taken on or after
January 1, 0000
Xxxx Xxxxxxxx Xxxx Xxxxxxxx Residential Mortgage West Virginia Mortgage
Lender, Broker and Servicer Act, W. Loan Act Loan
Va. Code Xxx. Sections 31-17-1 et seq.
Effective June 5, 2002
STANDARD & POOR'S COVERED LOAN CATEGORIZATION
Name of Anti-Predatory Lending Category under Applicable
State/Jurisdiction Law/Effective Date Anti-Predatory Lending Law
------------------ -------------------------------------- --------------------------
Georgia (Oct. 1, 2002 - Georgia Fair Lending Act, Ga. Code Xxx. Covered Loan
Mar. 6, 2003) Sections 7-6A-1 et seq.
Effective October 1, 2002 - March 6,
0000
Xxx Xxxxxx Xxx Xxxxxx Home Ownership Security Act Covered Home Loan
of 2002, N.J. Rev. Stat. Sections
46:10B-22 et seq.
Effective November 27, 2003 - July 5,
2004
J-39
STANDARD & POOR'S HOME LOAN LOAN CATEGORIZATION
Name of Anti-Predatory Lending Category under Applicable
State/Jurisdiction Law/Effective Date Anti-Predatory Lending Law
------------------ -------------------------------------- --------------------------
Georgia (Oct. 1, 2002 - Georgia Fair Lending Act, Ga. Code Xxx. Home Loan
Mar. 6, 2003) Sections 7-6A-1 et seq.
Effective October 1, 2002 - March 6,
0000
Xxx Xxxxxx Xxx Xxxxxx Home Ownership Security Act Home Loan
of 2002, N.J. Rev. Stat. Sections
46:10B-22 et seq.
Effective for loans closed on or after
November 27, 2003
New Mexico Home Loan Protection Act, N.M. Rev. Home Loan
Stat. Sections 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.
Sections 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. Sections
37-23-10 et seq.
Effective for loans taken on or after
January 1, 2004
J-40
SCHEDULE A TO MORTGAGE LOAN PURCHASE AGREEMENT
REQUIRED RATINGS FOR EACH CLASS OF CERTIFICATES
Offered Certificates
Class Xxxxx'x S&P
----------- ------- ---
Class AF-1 Aaa AAA
Class AF-2A Aaa AAA
Class AF-2B Aaa AAA
Class AF-2C Aaa AAA
Class AF-3A Aaa AAA
Class AF-3B Aaa AAA
Class PO Aaa AAA
Class IO Aaa AAA
Class A-R N/R AAA
Class AV-1A Aaa AAA
Class AV-1B Aa1 AAA
Class AV-2A Aaa AAA
Class AV-2B Aa1 AAA
Class MF-1 Aa2 AA
Class MF-2 A2 A
Class MF-3 Baa2 BBB
Class MV-1 Aa2 AA
Class MV-2 A2 A
Class MV-3 Baa2 BBB
None of the above ratings has been lowered since the respective dates of such
letters.
J-41
EXHIBIT K
SERVICING CRITERIA TO BE ADDRESSED
IN ASSESSMENT OF COMPLIANCE
(RMBS UNLESS OTHERWISE NOTED)
KEY: X - obligation
WHERE THERE ARE MULTIPLE CHECKS FOR CRITERIA THE ATTESTING PARTY WILL IDENTIFY
IN ITS MANAGEMENT ASSERTION THAT IT IS ATTESTING ONLY TO THE PORTION OF THE
DISTRIBUTION CHAIN IT IS RESPONSIBLE FOR IN THE RELATED TRANSACTION AGREEMENTS.
CAPITALIZED TERMS USED HEREIN BUT NOT DEFINED HEREIN SHALL HAVE THE MEANINGS
ASSIGNED TO THEM IN THE POOLING AND SERVICING AGREEMENT, DATED AS OF SEPTEMBER
1, 2006, AMONG XXXXXXX XXXXX MORTGAGE INVESTORS, INC., AS DEPOSITOR, XXXXX FARGO
BANK, N.A., AS MASTER SERVICER AND SECURITIES ADMINISTRATOR, AND HSBC BANK USA,
NATIONAL ASSOCIATION, AS TRUSTEE.
REG AB REFERENCE SERVICING CRITERIA SECURITIES ADMINISTRATOR MASTER SERVICER
---------------- ----------------------------------------------------------- ------------------------ ---------------
GENERAL SERVICING CONSIDERATIONS
1122(d)(1)(i) Policies and procedures are instituted to monitor any
performance or other triggers and events of default in
accordance with the transaction agreements. X X
1122(d)(1)(ii) If any material servicing activities are outsourced to
third parties, policies and procedures are instituted to
monitor the third party's performance and compliance with X X
such servicing activities.
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain N/A N/A
a back-up servicer for the Pool Assets 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 X
required by and otherwise in accordance with the terms of
the transaction agreements.
CASH COLLECTION AND ADMINISTRATION
1122(d)(2)(i) Payments on pool assets are deposited into the appropriate
custodial bank accounts and related bank clearing accounts
no more than two business days following receipt, or such
other number of days specified in the transaction X X
agreements.
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an
obligor or to an investor are made only by authorized X X
personnel.
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash
flows or distributions, and any interest or other fees
charged for such advances, are made, reviewed and approved X
as specified in the transaction agreements.
1122(d)(2)(iv) The related accounts for the transaction, such as cash
reserve accounts or accounts established as a form of over
collateralization, are separately maintained (e.g., with
respect to commingling of cash) as set forth in the
transaction agreements. X X
K-1
REG AB REFERENCE SERVICING CRITERIA SECURITIES ADMINISTRATOR MASTER SERVICER
---------------- ----------------------------------------------------------- ------------------------ ---------------
1122(d)(2)(v) Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction
agreements. For purposes of this criterion, "federally
insured depository institution" with respect to a foreign
financial institution means a foreign financial institution
that meets the requirements of Rule 13k-1(b)(1) of the
Securities Exchange Act. X X
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent
unauthorized access.
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts.
These reconciliations are (A) mathematically accurate; (B)
prepared within 30 calendar days after the bank statement
cutoff date, or such other number of days specified in the
transaction agreements; (C) reviewed and approved by
someone other than the person who prepared the
reconciliation; and (D) contain explanations for
reconciling items. These reconciling items are resolved
within 90 calendar days of their original identification,
or such other number of days specified in the transaction
agreements. X X
INVESTOR REMITTANCES AND REPORTING
1122(d)(3)(i) Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the
transaction agreements and applicable Commission
requirements. Specifically, such reports (A) are prepared
in accordance with timeframes and other terms set forth in
the transaction agreements; (B) provide information
calculated in accordance with the terms specified in the
transaction agreements; (C) are filed with the Commission
as required by its rules and regulations; and (D) agree
with investors' or the trustee's records as to the total
unpaid principal balance and number of Pool Assets serviced
by the Servicer. X X
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and other
terms set forth in the transaction agreements. X X
1122(d)(3)(iii) Disbursements made to an investor are posted within two
business days to the Servicer's investor records, or such
other number of days specified in the transaction
agreements. X X
1122(d)(3)(iv) Amounts remitted to investors per the investor reports
agree with cancelled checks, or other form of payment, or
custodial bank statements. X X
POOL ASSET ADMINISTRATION
1122(d)(4)(i) Collateral or security on pool assets is maintained as
required by the transaction agreements or related pool
asset documents.
1122(d)(4)(ii) Pool assets and related documents are safeguarded as
required by the transaction agreements
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool
are made, reviewed and approved in accordance with any
conditions or requirements in the transaction agreements.
K-2
REG AB REFERENCE SERVICING CRITERIA SECURITIES ADMINISTRATOR MASTER SERVICER
---------------- ----------------------------------------------------------- ------------------------ ----------------
1122(d)(4)(iv) Payments on pool assets, including any payoffs, made in
accordance with the related pool asset documents are posted
to the Servicer's obligor records maintained no more than
two business days after receipt, or such other number of
days specified in the transaction agreements, and allocated
to principal, interest or other items (e.g., escrow) in
accordance with the related pool asset documents.
1122(d)(4)(v) The Servicer's records regarding the pool assets agree with
the Servicer's records with respect to an obligor's unpaid
principal balance.
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's
pool assets (e.g., loan modifications or re-agings) are
made, reviewed and approved by authorized personnel in
accordance with the transaction agreements and related pool
asset documents.
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance
plans, modifications and deeds in lieu of foreclosure,
foreclosures and repossessions, as applicable) are
initiated, conducted and concluded in accordance with the
timeframes or other requirements established by the
transaction agreements.
1122(d)(4)(viii) Records documenting collection efforts are maintained
during the period a pool asset is delinquent in accordance
with the transaction agreements. Such records are
maintained on at least a monthly basis, or such other
period specified in the transaction agreements, and
describe the entity's activities in monitoring delinquent
pool assets including, for example, phone calls, letters
and payment rescheduling plans in cases where delinquency
is deemed temporary (e.g., illness or unemployment).
1122(d)(4)(ix) Adjustments to interest rates or rates of return for pool
assets with variable rates are computed based on the
related pool asset documents.
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as
escrow accounts): (A) such funds are analyzed, in
accordance with the obligor's pool asset documents, on at
least an annual basis, or such other period specified in
the transaction agreements; (B) interest on such funds is
paid, or credited, to obligors in accordance with
applicable pool asset documents and state laws; and (C)
such funds are returned to the obligor within 30 calendar
days of full repayment of the related pool assets, or such
other number of days specified in the transaction
agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments, provided
that such support has been received by the servicer at
least 30 calendar days prior to these dates, or such other
number of days specified in the transaction agreements.
1122(d)(4)(xii) Any late payment penalties in connection with any payment
to be made on behalf of an obligor are paid from the
Servicer's funds and not charged to the obligor, unless the
late payment was due to the obligor's error or omission.
K-3
REG AB REFERENCE SERVICING CRITERIA SECURITIES ADMINISTRATOR MASTER SERVICER
---------------- ----------------------------------------------------------- ------------------------ ---------------
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted
within two business days to the obligor's records
maintained by the servicer, or such other number of days
specified in the transaction agreements.
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
agreements. X
1122(d)(4)(xv) Any external enhancement or other support, identified in
Item 1114(a)(1) through (3) or Item 1115 of Regulation AB,
is maintained as set forth in the transaction agreements.
K-4
EXHIBIT L
XXXXXXXX-XXXXX CERTIFICATION
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Center, 10th Floor
New York, New York 10080
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Re: Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-AF1
I, [identify the certifying individual], certify that:
1. I have reviewed the report on Form 10-K and all reports on Form
10-D required to be filed in respect of the period covered by this report on
Form 10-K of Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-AF1 (the
"Exchange Act periodic reports");
2. Based on my knowledge, the Exchange Act periodic reports, taken as
a whole, do not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by this report;
3. Based on my knowledge, all of the distribution, servicing and other
information required to be provided under Form 10-D for the period covered by
this report is included in the Exchange Act periodic reports;
4. [I am responsible for reviewing the activities performed by the
servicer(s) and based on my knowledge and the compliance review(s) conducted in
preparing the servicer compliance statement(s) required in this report under
Item 1123 of Regulation AB, and except as disclosed in the Exchange Act periodic
reports, the servicer(s) [has/have] fulfilled [its/their] obligations under the
servicing agreement(s) in all material respects; and]
5. All of the reports on assessment of compliance with servicing
criteria for ABS and their related attestation reports on assessment of
compliance with servicing criteria for asset-backed securities required to be
included in this report in accordance with Item 1122 of Regulation AB and
Exchange Act Rules 13a-18 and 15d-18 have been included as an exhibit to this
report, except as otherwise disclosed in this report. Any material instances of
noncompliance described in such reports have been disclosed in this report on
Form 10-K.
L-1
[In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties [name of
servicer, sub-servicer, co-servicer, depositor or trustee].]
Date:
---------------
----------------------------------------
[Signature]
----------------------------------------
[Title]
L-2
EXHIBIT M
FORM OF BACK-UP XXXXXXXX-XXXXX CERTIFICATION
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Center, 10th Floor
New York, New York 10080
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Re: Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-AF1
[_______], the [_______] of [_______] (the "Company") hereby certifies
to the Depositor, the Master Servicer and the Securities Administrator, and each
of their officers, directors and affiliates that:
(1) I have reviewed [the servicer compliance statement of the Company
provided in accordance with Item 1123 of Regulation AB (the "Compliance
Statement"),] the report on assessment of the Company's compliance with the
Servicing Criteria set forth in Item 1122(d) of Regulation AB (the "Servicing
Criteria"), provided in accordance with Rules 13a-18 and 15d-18 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and Item 1122
of Regulation AB (the "Servicing Assessment"), the registered public accounting
firm's attestation report provided in accordance with Rules 13a-18 and 15d-18
under the Exchange Act and Section 1122(b) of Regulation AB (the "Attestation
Report"), and all servicing reports, officer's certificates and other
information relating to the servicing of the Mortgage Loans by the Company
during 200[ ] that were delivered by the Company to any of the Depositor, the
Master Servicer and the Trustee pursuant to the Agreement (collectively, the
"Company Servicing Information");
(2) Based on my knowledge, the Company Servicing Information, taken as
a whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in the light of the
circumstances under which such statements were made, not misleading with respect
to the period of time covered by the Company Servicing Information;
(3) Based on my knowledge, all of the Company Servicing Information
required to be provided by the Company under the Agreement has been provided to
the Depositor, the Master Servicer and the Securities Administrator;
(4) I am responsible for reviewing the activities performed by
[_______] as [_______] under the [_______] (the "Agreement"), and based on my
knowledge [and the compliance review conducted in preparing the Compliance
Statement] and except as disclosed in [the Compliance Statement,] the Servicing
Assessment or the Attestation Report, the Company has fulfilled its obligations
under the Agreement in all material respects; and
M-1
(5) [The Compliance Statement required to be delivered by the Company
pursuant to the Agreement, and] [The] [the] Servicing Assessment and Attestation
Report required to be provided by the Company and [by any Subservicer or
Subcontractor] pursuant to the Agreement, have been provided to the Depositor,
the Master Servicer and the Securities Administrator. Any material instances of
noncompliance described in such reports have been disclosed to the Depositor,
the Master Servicer and the Securities Administrator. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such reports.
Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated as of September
1, 2006, among Xxxxxxx Xxxxx Mortgage Investors, Inc., as depositor (the
"Depositor"), Xxxxx Fargo Bank, N.A., as master servicer (in such capacity, the
"Master Servicer") and securities administrator (in such capacity, the
"Securities Administrator") and HSBC Bank USA, National Association, as trustee
(the "Trustee").
[_________]
as [_______]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
M-2
EXHIBIT N
[RESERVED]
N-1
EXHIBIT O
ADDITIONAL DISCLOSURE NOTIFICATION
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Center, 10th Floor
New York, New York 10080
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
RE: Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-AF1
**Additional Form [10-D][10-K][8-K] Disclosure** Required
Ladies and Gentlemen:
In accordance with Section 3.18(b) of the Pooling and Servicing
Agreement, dated as of September 1, 2006, among Xxxxxxx Xxxxx Mortgage
Investors, Inc., as depositor, Xxxxx Fargo Bank, N.A., as master servicer and
securities administrator and HSBC Bank USA, National Association, as trustee,
the undersigned, as [_____], hereby notifies you that certain events have come
to our attention that [will] [may] need to be disclosed on Form
[10-D][10-K][8-K].
Description of Additional Form [10-D][10-K][8-K] Disclosure: __________
List of any Attachments hereto to be included in the Additional Form
[10-D][10-K][8-K] Disclosure: __________
Any inquiries related to this notification should be directed to [_____],
phone number: [_____]; email address: [_____].
[NAME OF PARTY],
as [role]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
O-1
EXHIBIT P
FORM OF ITEM 1123 CERTIFICATION OF SERVICER
[DATE]
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Center, 10th Floor
New York, New York 10080
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Re: Xxxxxxx Xxxxx Mortgage Investors Trust, Series 2006-AF1 Mortgage
Pass-Through Certificates
I, [identify name of certifying individual], [title of certifying individual] of
[name of servicing company] (the "Servicer"), hereby certify that:
(1) A review of the activities of the Servicer during the preceding
calendar year and of the performance of the Servicer under the [related
servicing agreement] (the "Servicing Agreement") has been made under my
supervision; and
(2) To the best of my knowledge, based on such review, the Servicer
has fulfilled all its obligations under the related Servicing Agreement in all
material respects throughout such year or a portion thereof[, or, if there has
been a failure to fulfill any such obligation in any material respect, I have
specified below each such failure known to me and the nature and status
thereof].
Date:
---------------
[Servicer]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
P-1
EXHIBIT Q-1
ADDITIONAL FORM 10-D DISCLOSURE
ADDITIONAL FORM 10-D DISCLOSURE
------------------------------------------------------------------------------------------------------------------
ITEM ON FORM 10-D PARTY RESPONSIBLE
--------------------------------------------------------- ------------------------------------------------------
ITEM 1: DISTRIBUTION AND POOL PERFORMANCE INFORMATION
Information included in the [Monthly Statement] Master Servicer
Servicer
Securities Administrator
Any information required by 1121 which is NOT included Depositor
on the [Monthly Statement]
ITEM 2: LEGAL PROCEEDINGS
Any legal proceeding pending against the following
entities or their respective property, that is material
to Certificateholders, including any proceeding known to
be contemplated by governmental authorities:
- Issuing Entity (Trust Fund) Trustee, Master Servicer, Securities Administrator and
Depositor
- Sponsor (Seller) Seller (if a party to the Pooling and Servicing
Agreement) or Depositor
- Depositor Depositor
- Trustee Trustee
- Securities Administrator Securities Administrator
- Master Servicer Master Servicer
- Custodian Custodian
- 1110(b) Originator Depositor
- Any 1108(a)(2) Servicer (other than the Servicer
Master Servicer or Securities Administrator)
- Any other party contemplated by 1100(d)(1) Depositor
ITEM 3: SALE OF SECURITIES AND USE OF PROCEEDS Depositor
Information from Item 2(a) of Part II of Form 10-Q:
With respect to any sale of securities by the sponsor,
depositor or issuing entity, that are backed by the same
asset pool or are otherwise issued by the issuing entity,
whether or not registered, provide the sales and use of
proceeds information in Item 701 of Regulation S-K.
Pricing information can be omitted if securities were
not registered.
Q-1-1
ADDITIONAL FORM 10-D DISCLOSURE
------------------------------------------------------------------------------------------------------------------
ITEM ON FORM 10-D PARTY RESPONSIBLE
--------------------------------------------------------- ------------------------------------------------------
ITEM 4: DEFAULTS UPON SENIOR SECURITIES Securities Administrator
Trustee
Information from Item 3 of Part II of Form 10-Q:
Report the occurrence of any Event of Default (after
expiration of any grace period and provision of any
required notice)
ITEM 5: SUBMISSION OF MATTERS TO A VOTE OF SECURITY Securities Administrator
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*
- Determining applicable disclosure threshold Depositor
- 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*
- Determining current maximum probable exposure Depositor
- Determining current significance percentage Depositor
- 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.
2
ADDITIONAL FORM 10-D DISCLOSURE
------------------------------------------------------------------------------------------------------------------
ITEM ON FORM 10-D PARTY RESPONSIBLE
--------------------------------------------------------- ------------------------------------------------------
ITEM 8: OTHER INFORMATION Any party responsible for the applicable Form 8-K
Disclosure item
Disclose any information required to be reported on Form
8-K during the period covered by the Form 10-D but not
reported
ITEM 9: EXHIBITS
Monthly Statement to Certificateholders Securities Administrator
Exhibits required by Item 601 of Regulation S-K, such as Depositor
material agreements
3
EXHIBIT Q-2
ADDITIONAL FORM 10-K DISCLOSURE
ADDITIONAL FORM 10-K DISCLOSURE
------------------------------------------------------------------------------------------------------------------
ITEM ON FORM 10-K PARTY RESPONSIBLE
--------------------------------------------------------- ------------------------------------------------------
ITEM 1B: UNRESOLVED STAFF COMMENTS Depositor
ITEM 9B: OTHER INFORMATION Any party responsible for disclosure items on Form 8-K
Disclose any information required to be reported on Form
8-K during the fourth quarter covered by the Form 10-K
but not reported
ITEM 15: EXHIBITS, FINANCIAL STATEMENT SCHEDULES Securities Administrator
Depositor
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-K if updated information is required pursuant to
the Item.
REG AB ITEM 1114(B)(2): CREDIT ENHANCEMENT PROVIDER
FINANCIAL INFORMATION
- Determining applicable disclosure threshold Depositor
- 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-K if updated information is required pursuant to
the Item.
REG AB ITEM 1115(B): DERIVATIVE COUNTERPARTY FINANCIAL
INFORMATION
- Determining current maximum probable exposure Depositor
- Determining current significance percentage Depositor
- 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-K if updated information is required pursuant to
the Item.
REG AB ITEM 1117: LEGAL PROCEEDINGS
Any legal proceeding pending against the following
entities or their respective property, that is material
to Certificateholders, including any proceeding known to
be contemplated by
1
ADDITIONAL FORM 10-K DISCLOSURE
------------------------------------------------------------------------------------------------------------------
ITEM ON FORM 10-K PARTY RESPONSIBLE
--------------------------------------------------------- ------------------------------------------------------
governmental authorities:
- Issuing Entity (Trust Fund) Trustee, Master Servicer, Securities Administrator and
Depositor
- Sponsor (Seller) Seller (if a party to the Pooling and Servicing
Agreement) or Depositor
- Depositor Depositor
- Trustee Trustee
- Securities Administrator Securities Administrator
- Master Servicer Master Servicer
- Custodian Custodian
- 1110(b) Originator Depositor
- Any 1108(a)(2) Servicer (other than the Servicer
Master Servicer or Securities Administrator)
- Any other party contemplated by 1100(d)(1) Depositor
REG AB ITEM 1119: AFFILIATIONS AND RELATIONSHIPS
Whether (a) the Sponsor (Seller), Depositor or Issuing Depositor as to (a)
Entity is an affiliate of the following parties, and (b) Sponsor/Seller as to (a)
to the extent known and material, any of the following
parties are affiliated with one another:
- Master Servicer Master Servicer
- Securities Administrator Securities Administrator
- Trustee Trustee
- Any other 1108(a)(3) servicer Servicer
- Any 1110 Originator Depositor/Sponsor
- Any 1112(b) Significant Obligor Depositor/Sponsor
- Any 1114 Credit Enhancement Provider Depositor/Sponsor
- Any 1115 Derivate Counterparty Provider Depositor/Sponsor
- Any other 1101(d)(1) material party Depositor/Sponsor
Whether there are any "outside the ordinary course Depositor as to (a)
business arrangements" other than would be obtained in Sponsor/Seller as to (a)
an arm's length transaction between (a) the Sponsor
(Seller), Depositor or Issuing Entity on the one hand,
and (b) any of the following parties (or their
affiliates) on the other hand, that exist currently or
within the past two years and that are material to a
Certificateholder's understanding of the Certificates:
- Master Servicer Master Servicer
- Securities Administrator Securities Administrator
- Trustee Depositor
- Any other 1108(a)(3) servicer Servicer
- Any 1110 Originator Depositor/Sponsor
- Any 1112(b) Significant Obligor Depositor/Sponsor
- Any 1114 Credit Enhancement Provider Depositor/Sponsor
2
ADDITIONAL FORM 10-K DISCLOSURE
------------------------------------------------------------------------------------------------------------------
ITEM ON FORM 10-K PARTY RESPONSIBLE
--------------------------------------------------------- ------------------------------------------------------
- Any 1115 Derivate Counterparty Provider Depositor/Sponsor
- Any other 1101(d)(1) material party Depositor/Sponsor
Whether there are any specific relationships involving Depositor as to (a)
the transaction or the pool assets between (a) the Sponsor/Seller as to (a)
Sponsor (Seller), Depositor or Issuing Entity on the one
hand, and (b) any of the following parties (or their
affiliates) on the other hand, that exist currently or
within the past two years and that are material:
- Master Servicer Master Servicer
- Securities Administrator Securities Administrator
- Trustee Depositor
- Any other 1108(a)(3) servicer Servicer
- Any 1110 Originator Depositor/Sponsor
- Any 1112(b) Significant Obligor Depositor/Sponsor
- Any 1114 Credit Enhancement Provider Depositor/Sponsor
- Any 1115 Derivate Counterparty Provider Depositor/Sponsor
- Any other 1101(d)(1) material party Depositor/Sponsor
3
EXHIBIT Q-3
FORM 8-K DISCLOSURE INFORMATION
FORM 8-K DISCLOSURE INFORMATION
-----------------------------------------------------------------------------
ITEM ON FORM 8-K PARTY RESPONSIBLE
---------------------------------------- ----------------------------------
ITEM 1.01- ENTRY INTO A MATERIAL All parties
DEFINITIVE AGREEMENT
Disclosure is required regarding entry
into or amendment of any definitive
agreement that is material to the
securitization, even if depositor is not
a party.
Examples: servicing agreement, custodial
agreement.
Note: disclosure not required as to
definitive agreements that are fully
disclosed in the prospectus
ITEM 1.02- TERMINATION OF A MATERIAL All parties
DEFINITIVE AGREEMENT
Disclosure is required regarding
termination of any definitive agreement
that is material to the securitization
(other than expiration in accordance
with its terms), even if depositor is
not a party.
Examples: servicing agreement, custodial
agreement.
ITEM 1.03- BANKRUPTCY OR RECEIVERSHIP Depositor
Disclosure is required regarding the
bankruptcy or receivership, with respect
to any of the following:
- Sponsor (Seller) Depositor/Sponsor (Seller)
- Depositor Depositor
- Master Servicer Master Servicer
- Affiliated Servicer Servicer
- Other Servicer servicing 20% or Servicer
more of the pool assets at the time
of the report
- Other material servicers Servicer
- Trustee Trustee
- Securities Administrator Securities Administrator
- Significant Obligor Depositor
- Credit Enhancer (10% or more) Depositor
- Derivative Counterparty Depositor
- Custodian Custodian
FORM 8-K DISCLOSURE INFORMATION
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ITEM ON FORM 8-K PARTY RESPONSIBLE
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ITEM 2.04- TRIGGERING EVENTS THAT Depositor
ACCELERATE OR INCREASE A DIRECT Master Servicer
FINANCIAL OBLIGATION OR AN OBLIGATION Securities Administrator
UNDER AN OFF-BALANCE SHEET ARRANGEMENT
Includes an early amortization,
performance trigger or other event,
including event of default, that would
materially alter the payment
priority/distribution of cash
flows/amortization schedule.
Disclosure will be made of events other
than waterfall triggers which are
disclosed in the monthly statements to
the certificateholders.
ITEM 3.03- MATERIAL MODIFICATION TO Securities Administrator
RIGHTS OF SECURITY HOLDERS Trustee
Depositor
Disclosure is required of any material
modification to documents defining the
rights of Certificateholders, including
the Pooling and Servicing Agreement.
ITEM 5.03- AMENDMENTS OF ARTICLES OF Depositor
INCORPORATION OR BYLAWS; CHANGE OF
FISCAL YEAR
Disclosure is required of any amendment
"to the governing documents of the
issuing entity".
ITEM 6.01- ABS INFORMATIONAL AND Depositor
COMPUTATIONAL MATERIAL
ITEM 6.02- CHANGE OF SERVICER OR Master Servicer/Securities
SECURITIES ADMINISTRATOR Administrator/Depositor/Servicer/
Trustee
Requires disclosure of any removal,
replacement, substitution or addition of
any master servicer, affiliated
servicer, other servicer servicing 10%
or more of pool assets at time of
report, other material servicers or
trustee.
Reg AB disclosure about any new servicer Servicer/Master Servicer/Depositor
or master servicer is also required.
Reg AB disclosure about any new Trustee Trustee
is also required.
ITEM 6.03- CHANGE IN CREDIT ENHANCEMENT Depositor/Securities Administrator
OR EXTERNAL SUPPORT
Covers termination of any enhancement in
manner other than by its terms, the
addition of an enhancement, or a
material change in the enhancement
provided. Applies to external credit
enhancements as well as derivatives.
FORM 8-K DISCLOSURE INFORMATION
-----------------------------------------------------------------------------
ITEM ON FORM 8-K PARTY RESPONSIBLE
---------------------------------------- ----------------------------------
Reg AB disclosure about any new Depositor
enhancement provider is also required.
ITEM 6.04- FAILURE TO MAKE A REQUIRED Securities Administrator
DISTRIBUTION Trustee
ITEM 6.05- SECURITIES ACT UPDATING Depositor
DISCLOSURE
If any material pool characteristic
differs by 5% or more at the time of
issuance of the securities from the
description in the final prospectus,
provide updated Reg AB disclosure about
the actual asset pool.
If there are any new servicers or Depositor
originators required to be disclosed
under Regulation AB as a result of the
foregoing, provide the information
called for in Items 1108 and 1110
respectively.
ITEM 7.01- REG FD DISCLOSURE All parties
ITEM 8.01- OTHER EVENTS Depositor
Any event, with respect to which
information is not otherwise called for
in Form 8-K, that the registrant deems
of importance to certificateholders.
ITEM 9.01- FINANCIAL STATEMENTS AND Responsible party for
EXHIBITS reporting/disclosing the financial
statement or exhibit
