AMERICAN HOME MORTGAGE ASSETS LLC, DEPOSITOR WELLS FARGO BANK, N.A., MASTER SERVICER AND SECURITIES ADMINISTRATOR AND DEUTSCHE BANK NATIONAL TRUST COMPANY, TRUSTEE POOLING AND SERVICING AGREEMENT DATED AS OF SEPTEMBER 1, 2006 MORTGAGE- BACKED...
AMERICAN
HOME MORTGAGE ASSETS LLC,
DEPOSITOR
XXXXX
FARGO BANK, N.A.,
MASTER
SERVICER AND SECURITIES ADMINISTRATOR
AND
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
TRUSTEE
DATED
AS
OF SEPTEMBER 1, 2006
________________________
MORTGAGE-BACKED
PASS-THROUGH CERTIFICATES
SERIES
2006-5
TABLE
OF
CONTENTS
ARTICLE
I
DEFINITIONS
|
Section
1.01
|
Defined
Terms.
|
Accepted
Master Servicing Practices
Accrual
Period
Accrued
Certificate Interest
Additional
Disclosure Notice
Additional
Form 10-D Disclosure
Additional
Form 10-K Disclosure
Adjustable
Rate Mortgage Loans
Advance
Affiliate
Aggregate
Stated Principal Balance
Agreement
Allocated
Realized Loss Amount
Assessment
of Compliance
Assessment
of Compliance
Assignment
Assumed
Final Maturity Date
Available
Funds
Bankruptcy
Code
Book-Entry
Certificate
Business
Day
Cap
Contract
Cap
Contract Reserve Fund
Cap
Counterparty
Cap
Extra
Principal Distribution Amount
Cash
Liquidation
Certificate
Certificateholder”
or “Holder
Certificate
Owner
Certificate
Principal Balance
Certificate
Register
Class
Class
A-1
Certificates
Class
A-2
Certificates
Class
A-3-1 Certificates
Class
A-3-2 Certificates
Class
A
Certificates
Class
C
Certificates
Class
C
Interest
Class
M
Certificates
Class
M-1
Certificates
Class
M-2
Certificates
Class
M-3
Certificates
Class
M-4
Certificates
Class
M-5
Certificates
Class
M-6
Certificates
Class
M-7
Certificates
Class
P
Certificates
Class
P
Interest
Class
R
Certificate
Class
R-1
Interest
Class
R-2
Interest
Class
R-3
Interest
Class
R-4
Interest
Class
RX
Certificate
Closing
Date
Code
Collateral
Value
Commission
Compensating
Interest
Confirmation
Cooperative
Cooperative
Assets
Cooperative
Building
Cooperative
Lease
Cooperative
Loan
Cooperative
Unit
Corporate
Trust Office
Corresponding
Certificate
Cumulative
Loss Trigger Event
Current
Report
Curtailment
Custodian
Cut-off
Date
Cut-off
Date Balance
Debt
Service Reduction
Deferred
Interest
Deficient
Valuation
Definitive
Certificate
Deleted
Mortgage Loan
Delinquency
Trigger Test
Delinquent
Depositor
Depository
Depository
Participant
Determination
Date
Disqualified
Organization
Distribution
Account
Distribution
Date
Distribution
Report
Due
Date
Due
Period
Depositor
Information
XXXXX
Eligible
Account
Eligible
Substitute Mortgage Loan
ERISA
Restricted Certificates
Event
of
Default
Exchange
Act
Exchange
Act Reports
Xxxxxx
Xxx
FDIC
Fitch
Ratings
Form
8-K
Disclosure Information
Form
10-K
Filing Deadline
Xxxxxxx
Mac
Initial
Certificate Principal Balance
Initial
Notional Amount
Insurance
Policy
Insurance
Proceeds
Interest
Remittance Amount
Issuing
Entity
Late
Collections
Lender-Paid
Insured Loans
Lender-Paid
Insurer
Lender-Paid
Primary Insurance Policy
Lender-Paid
Primary Insurance Rate
LIBOR
Business Day
LIBOR
Certificate
LIBOR
Determination Date
Liquidated
Mortgage Loan
Liquidation
Proceeds
Loan-to-Value
Ratio
Lost
Note
Affidavit
Margin
Marker
Rate
Master
Servicer
Master
Servicer Information
Master
Servicing Compensation
Maximum
Uncertificated Accrued Interest Deferral Amount
MERS
MERS®
System
Mezzanine
Principal Distribution Amount
MIN
MOM
Loan
MOM
Loan
Monthly
Payment
Xxxxx’x
Mortgage
Mortgage
File
Mortgage
Loan
Mortgage
Loan Purchase Agreement
Mortgage
Loan Schedule
Mortgage
Note
Mortgage
Rate
Mortgaged
Property
Mortgagor
MTA
MTA
Certificates
MTA
Determination Date
Net
Deferred Interest
Net
Liquidation Proceeds
Net
Mortgage Rate
Net
Prepayment Interest Shortfall
Net
Rate
Cap
Net
Rate
Shortfall
Net
Rate
Shortfall Carry-Forward Amount
Nonrecoverable
Advance
Non-United
States Person
OC
Floor
Offered
Certificates
Officers’
Certificate
One-Month
LIBOR
Opinion
of Counsel
Optional
Termination Date
OTS
Outstanding
Mortgage Loan
Outstanding
Principal Balance
Overcollateralization
Target Amount
Overcollateralized
Amount
Ownership
Interest
Pass-Through
Rate
PCAOB
Permitted
Investment
Permitted
Transferee
Person
Prepayment
Assumption
Prepayment
Charge
Prepayment
Interest Shortfall
Prepayment
Period
Primary
Hazard Insurance Policy
Primary
Mortgage Insurance Policy
Principal
Distribution Amount
Principal
Prepayment
Principal
Prepayment in Full
Principal
Remittance Amount
Prospectus
Supplement
Protected
Account
Purchase
Price
Qualified
Insurer
Rating
Agency
Realized
Loss
Record
Date
Reference
Banks
Regular
Certificate
Regular
Interest
Regulation
AB
Relevant
Servicing Criteria
Relief
Act
Relief
Act Interest Shortfall
REMIC
REMIC
1
REMIC
1
Interest Loss Allocation Amount
REMIC
1
Overcollateralization Amount
REMIC
1
Principal Loss Allocation Amount
REMIC
1
Regular Interests
REMIC
1
Required Overcollateralization Amount
REMIC
2
REMIC
2
Certificate
REMIC
2
Certificateholder
REMIC
2
Regular Interest
REMIC
3
REMIC
3
Regular Interest
REMIC
4
REMIC
4
Regular Interest
Remittance
Report
REO
Acquisition
REO
Disposition
REO
Imputed Interest
REO
Proceeds
REO
Property
Reportable
Event
Reporting
Servicer
Repurchase
Price
Repurchase
Proceeds
Request
for Release
Residual
Certificates
Residual
Interest
Responsible
Officer
Rolling
Sixty Day Delinquency Rate
Sarbanes
Oxley Certification
Securities
Administrator
Securitites
Administrator Information
Security
Agreement
Senior
Certificates
Senior
Enhancement Percentage
Servicer
Servicer
Remittance Date
Servicing
Advances
Servicing
Agreement
Servicing
Criteria
Servicing
Fee
Servicing
Fee Rate
Servicing
Function Participant
Servicing
Officer
Servicing
Rights Pledgee
Significance
Estimate
Significance
Percentage
Single
Certificate
Sixty-Day
Delinquency Rate
Sponsor
Standard
& Poor’s
Startup
Day
Stated
Principal Balance
Stepdown
Date
Stepdown
Target Subordination Percentage and Initial Target Subordination
Percentage
Step-Up
Date
Subservicer
Subsequent
Recoveries
Substitution
Adjustment
Tax
Returns
Termination
Price
Terminating
Purchase
Transfer
Transferor
Trigger
Event
Trust
Fund
Trust
REMIC
Trustee
Uncertificated
Accrued Interest
Uncertificated
Principal Balance
Uncertificated
Pass-Through Rate
Uncertificated
REMIC 1 Pass-Through Rate
Underwriter
Uninsured
Cause
United
States Person
Voting
Rights
Weighted
Average Net Mortgage Rate
|
Section
1.02
|
Determination
of LIBOR.
|
|
Section
1.03
|
Determination
of MTA.
|
|
Section
1.04
|
Allocation
of Certain Interest Shortfalls.
|
ARTICLE
II
CONVEYANCE
OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
|
Section
2.01
|
Conveyance
of Mortgage Loans.
|
|
Section
2.02
|
Acceptance
of the Trust Fund by the Trustee.
|
|
Section
2.03
|
Representations,
Warranties and Covenants of the Master Servicer and the
Depositor.
|
|
Section
2.04
|
Assignment
of Interest in the Mortgage Loan Purchase Agreement.
|
|
Section
2.05
|
Issuance
of Certificates; Conveyance of REMIC Regular Interests and Acceptance
of
REMIC 1, REMIC 2, REMIC 3 and REMIC 4 by the Trustee.
|
|
Section
2.06
|
Negative
Covenants of the Trustee and Master Servicer.
|
|
Section
2.07
|
Purposes
and Powers of the Issuing Entity.
|
ARTICLE
III
ADMINISTRATION
AND SERVICING OF THE TRUST FUND
|
Section
3.01
|
Administration
and Servicing of Mortgage Loans.
|
|
Section
3.02
|
REMIC-Related
Covenants.
|
|
Section
3.03
|
Monitoring
of Servicer.
|
|
Section
3.04
|
Fidelity
Bond.
|
|
Section
3.05
|
Power
to Act; Procedures.
|
|
Section
3.06
|
Due-on-Sale
Clauses; Assumption Agreements.
|
|
Section
3.07
|
Release
of Mortgage Files.
|
|
Section
3.08
|
Documents,
Records and Funds in Possession of Master Servicer To Be Held for
Trustee.
|
|
Section
3.09
|
Standard
Hazard Insurance and Flood Insurance Policies.
|
|
Section
3.10
|
Presentment
of Claims and Collection of Proceeds.
|
|
Section
3.11
|
Maintenance
of the Primary Mortgage Insurance Policies.
|
|
Section
3.12
|
Trustee
to Retain Possession of Certain Insurance Policies and
Documents.
|
|
Section
3.13
|
Realization
Upon Defaulted Mortgage Loans.
|
|
Section
3.14
|
Compensation
for the Master Servicer.
|
|
Section
3.15
|
REO
Property.
|
|
Section
3.16
|
Protected
Accounts.
|
|
Section
3.17
|
[Reserved].
|
|
Section
3.18
|
[Reserved].
|
|
Section
3.19
|
Distribution
Account.
|
|
Section
3.20
|
Permitted
Withdrawals and Transfers from the Distribution Account.
|
|
Section
3.21
|
Annual
Statement as to Compliance.
|
|
Section
3.22
|
Annual
Assessments of Compliance and Attestation Reports.
|
|
Section
3.23
|
Exchange
Act Reporting.
|
|
Section
3.24
|
Intention
of the Parties and Interpretation.
|
|
Section
3.25
|
Reserved.
|
|
Section
3.26
|
Optional
Purchase of Defaulted Mortgage Loans.
|
|
Section
3.27
|
[Reserved]
|
|
Section
3.28
|
[Reserved]
|
ARTICLE
IV
PAYMENTS
TO CERTIFICATEHOLDERS
|
Section
4.01
|
Distributions.
|
|
Section
4.02
|
Statements
to Certificateholders.
|
|
Section
4.03
|
Remittance
Reports; Advances by the Master Servicer.
|
|
Section
4.04
|
Distributions
on the REMIC Regular Interests.
|
|
Section
4.05
|
Allocation
of Realized Losses.
|
|
Section
4.06
|
Information
Reports to Be Filed by the Servicer.
|
|
Section
4.07
|
Compliance
with Withholding Requirements.
|
|
Section
4.08
|
[Reserved].
|
|
Section
4.09
|
Allocation
of Net Deferred Interest.
|
|
Section
4.10
|
Cap
Contract.
|
|
Section
4.11
|
Cap
Contract Reserve Fund
|
ARTICLE
V
THE
CERTIFICATES
|
Section
5.01
|
The
Certificates.
|
|
Section
5.02
|
Registration
of Transfer and Exchange of Certificates.
|
|
Section
5.03
|
Mutilated,
Destroyed, Lost or Stolen Certificates.
|
|
Section
5.04
|
Persons
Deemed Owners.
|
ARTICLE
VI
THE
DEPOSITOR AND THE MASTER SERVICER
|
Section
6.01
|
Liability
of the Depositor and the Master Servicer.
|
|
Section
6.02
|
Merger,
Consolidation or Conversion of the Depositor or the Master
Servicer.
|
|
Section
6.03
|
Limitation
on Liability of the Depositor, the Master Servicer, the Securities
Administrator and Others.
|
|
Section
6.04
|
Limitation
on Resignation of the Master Servicer.
|
|
Section
6.05
|
Sale
and Assignment of Master Servicing.
|
ARTICLE
VII
DEFAULT
|
Section
7.01
|
Events
of Default.
|
|
Section
7.02
|
Trustee
to Act; Appointment of Successor.
|
|
Section
7.03
|
Notification
to Certificateholders.
|
|
Section
7.04
|
Waiver
of Events of Default.
|
|
Section
7.05
|
List
of Certificateholders.
|
ARTICLE
VIII
CONCERNING
THE TRUSTEE AND SECURITIES ADMINISTRATOR
|
Section
8.01
|
Duties
of Trustee and the Securities Administrator.
|
|
Section
8.02
|
Certain
Matters Affecting the Trustee and the Securities
Administrator.
|
|
Section
8.03
|
Trustee
and Securities Administrator Not Liable for Certificates or Mortgage
Loans.
|
|
Section
8.04
|
Trustee
and Securities Administrator May Own Certificates.
|
|
Section
8.05
|
Trustee’s
and Securities Administrator’s Fees.
|
|
Section
8.06
|
Eligibility
Requirements for Trustee and the Securities Administrator.
|
|
Section
8.07
|
Resignation
and Removal of the Trustee and the Securities
Administrator.
|
|
Section
8.08
|
Successor
Trustee and Successor Securities Administrator.
|
|
Section
8.09
|
Merger
or Consolidation of Trustee or Securities Administrator.
|
|
Section
8.10
|
Appointment
of Co-Trustee or Separate Trustee.
|
ARTICLE
IX
TERMINATION
|
Section
9.01
|
Termination
Upon Repurchase or Liquidation of All Mortgage Loans or upon Purchase
of
Certificates.
|
|
Section
9.02
|
Termination
of the Trust REMICs.
|
|
Section
9.03
|
Additional
Termination Requirements.
|
ARTICLE
X
REMIC
PROVISIONS
|
Section
10.01
|
REMIC
Administration.
|
|
Section
10.02
|
Prohibited
Transactions and Activities.
|
|
Section
10.03
|
Master
Servicer, Securities Administrator and Sponsor
Indemnification.
|
ARTICLE
XI
MISCELLANEOUS
PROVISIONS
|
Section
11.01
|
Amendment.
|
|
Section
11.02
|
Recordation
of Agreement; Counterparts.
|
|
Section
11.03
|
Limitation
on Rights of Certificateholders.
|
|
Section
11.04
|
Governing
Law.
|
|
Section
11.05
|
Notices.
|
|
Section
11.06
|
Severability
of Provisions.
|
|
Section
11.07
|
Successors
and Assigns.
|
|
Section
11.08
|
Article
and Section Headings.
|
|
Section
11.09
|
Notice
to Rating Agencies.
|
|
Section
11.10
|
Third
Party Rights.
|
Signatures
Acknowledgments
Exhibit
A Form
of
Class A Certificates
Exhibit
B-1 Form
of
Class M Certificates
Exhibit
B-2 Form
of
Class R Certificate and Class RX Certificate
Exhibit
B-3 Form
of
Class C Certificate
Exhibit
B-4 Form
of
Class P Certificate
Exhibit
C Form
of
Custodian Initial Certification
Exhibit
D Form
of
Custodian Final Certification
Exhibit
E Form
of
Remittance Report
Exhibit
F Form
of
Request for Release
Exhibit
G-1 Form
of
Investor Representation Letter
Exhibit
G-2 Form
of
Transferor Representation Letter
Exhibit
G-3 Form
of
Rule 144A Investment Representation
Exhibit
G-4 Form
of
Transferor Certificate for Transfers of Residual Certificates
Exhibit
G-5 Form
of
Transfer Affidavit and Agreement for Transfers of Residual
Certificates
Exhibit
H Mortgage
Loan Schedule
Exhibit
I Form
of
Lost Note Affidavit
Exhibit
J [Reserved]
Exhibit
K [Reserved]
Exhibit
L Servicing
Criteria To Be Addressed In Assessment of Compliance
Exhibit
M Form
of
Servicing Agreement
Exhibit
N Form
of
Mortgage Loan Purchase Agreement
Exhibit
O Form
10-D, Form 8-K And Form 10-K Reporting Responsibility
Exhibit
P Form
of
Cap Contract
Exhibit
Q [Reserved]
Exhibit
R Form
of
Trustee’s Limited Power of Attorney
Exhibit
S Form
of
Additional Disclosure Notification
This
Pooling and Servicing Agreement, dated and effective as of September 1, 2006,
is
entered into among American Home Mortgage Assets LLC, 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 Deutsche Bank National Trust Company, as
trustee (the “Trustee”).
PRELIMINARY
STATEMENT:
The
Depositor intends to sell pass-through certificates (collectively, the
“Certificates”), to be issued hereunder in multiple Classes, which in the
aggregate will evidence the entire beneficial ownership interest in the Trust
Fund created hereunder. The Certificates will consist of fifteen Classes of
Certificates, designated as Class A-1, Class A-2, Class A-3-1, Class A-3-2,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7,
Class R, Class RX, Class P and Class C Certificates.
REMIC
1
As
provided herein, the Securities Administrator on behalf of the Trustee will
make
an election to treat the segregated pool of assets consisting of the Mortgage
Loans (exclusive of the Cap Contract Reserve Fund) as a REMIC for federal income
tax purposes, and such segregated pool of assets will be designated as “REMIC
1”. The Class R-1 Interest will represent the sole Class of “residual interests”
in REMIC 1 for purposes of the REMIC Provisions.
The
following table irrevocably sets forth the designation, the Uncertificated
REMIC
1 Pass-Through Rate, the initial Uncertificated Principal Balance, and for
purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the
“latest possible maturity date” for each of the REMIC 1 Regular Interests. None
of the REMIC 1 Regular Interests will be certificated.
|
Designation
|
Uncertificated
REMIC 1
Pass-Through
Rate
|
Initial
Uncertificated
Principal
Balance
|
Assumed
Final
Maturity
Date(1)
|
|
|
LT-AA
|
(2)
|
$
|
1,497,454,981.82
|
November
25, 2046
|
|
LT-A1
|
(2)
|
$
|
11,490,680.00
|
November
25, 2046
|
|
LT-A2
|
(2)
|
$
|
1,436,330.00
|
November
25, 2046
|
|
LT-A3-1
|
(2)
|
$
|
650,000.00
|
November
25, 2046
|
|
LT-A3-2
|
(2)
|
$
|
786,330.00
|
November
25, 2046
|
|
LT-M1
|
(2)
|
$
|
336,160.00
|
November
25, 2046
|
|
LT-M2
|
(2)
|
$
|
122,240.00
|
November
25, 2046
|
|
LT-M3
|
(2)
|
$
|
91,680.00
|
November
25, 2046
|
|
LT-M4
|
(2)
|
$
|
91,680.00
|
November
25, 2046
|
|
LT-M5
|
(2)
|
$
|
68,760.00
|
November
25, 2046
|
|
LT-M6
|
(2)
|
$
|
68,760.00
|
November
25, 2046
|
|
LT-M7
|
(2)
|
$
|
61,120.00
|
November
25, 2046
|
|
LT-ZZ
|
(2)
|
$
|
15,356,565.75
|
November
25, 0000
|
|
XX-X
|
N/A
|
$
|
100.00
|
November
25, 2046
|
|
(1)
|
For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the
Distribution Date in the month following the maturity date for the
Mortgage Loan with the latest possible maturity date has been designated
as the “latest possible maturity date” for each REMIC 1 Regular
Interest.
|
|
(2)
|
Calculated
in accordance with the definition of “Uncertificated REMIC 1 Pass-Through
Rate” herein.
|
REMIC
2
As
provided herein, the Securities Administrator on behalf of the Trustee will
make
an election to treat the segregated pool of assets consisting of the REMIC
1
Regular Interests as a REMIC for federal income tax purposes, and such
segregated pool of assets will be designated as “REMIC 2”. The Class R-2
Interest will represent the sole Class of “residual interests” in REMIC 2 for
purposes of the REMIC Provisions.
The
following table irrevocably sets forth the Class designation, Pass-Through
Rate
and Initial Certificate Principal Balance for each Class of Certificates that
represents ownership of one or more of the “regular interests” in REMIC 2
created hereunder.
|
Class
Designation
|
Initial
Certificate
Principal
Balance
|
Pass-Through
Rate
|
Assumed
Final
Maturity
Date(1)
|
|
|
Class
A-1
|
$ 1,149,068,000
|
Adjustable(2)
|
November
25, 2046
|
|
|
Class
A-2
|
$ 143,633,000
|
Adjustable(2)
|
November
25, 2046
|
|
|
Class
A-3-1
|
$ 65,000,000
|
Adjustable(2)
|
November
25, 2046
|
|
|
Class
A-3-2
|
$ 78,633,000
|
Adjustable(2)
|
November
25, 2046
|
|
|
Class
M-1
|
$ 33,616,000
|
Adjustable(2)
|
November
25, 2046
|
|
|
Class
M-2
|
$ 12,224,000
|
Adjustable(2)
|
November
25, 2046
|
|
|
Class
M-3
|
$ 9,168,000
|
Adjustable(2)
|
November
25, 2046
|
|
|
Class
M-4
|
$ 9,168,000
|
Adjustable(2)
|
November
25, 2046
|
|
|
Class
M-5
|
$ 6,876,000
|
Adjustable(2)
|
November
25, 2046
|
|
|
Class
M-6
|
$ 6,876,000
|
Adjustable(2)
|
November
25, 2046
|
|
|
Class
M-7
|
$ 6,112,000
|
Adjustable(2)
|
November
25, 2046
|
|
|
Class
C Interest
|
$7,641,287.57
|
(4)
|
November
25, 2046
|
|
|
Class
P Interest
|
$100.00
|
N/A
|
November
25, 2046
|
|
|
(1)
|
For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the
Distribution Date in the month following the maturity date for the
Mortgage Loan with the latest possible maturity date has been designated
as the “latest possible maturity date” for each Class of
Certificates.
|
|
(2)
|
Calculated
in accordance with the definition of “Pass-Through Rate” herein.
|
| (3) |
The
Class C Interest will not accrue interest on its Certificate Principal
Balance, but will accrue interest at the Class C Pass-Through Rate
on the
Certificate Notional Balance of the Class C Certificates outstanding
from
time to time which shall equal the aggregate of the Uncertificated
Principal Balances of the REMIC 1 Regular Interests (other than
REMIC 1 Regular Interest
LT-P).
|
REMIC
3
As
provided herein, the Securities Administrator on behalf of the Trustee will
make
an election to treat the segregated pool of assets consisting of the Class
C
Interest as a REMIC for federal income tax purposes, and such segregated pool
of
assets will be designated as “REMIC 3”. The Class R-3 Interest will represent
the sole Class of “residual interests” in REMIC 3 for purposes of the REMIC
Provisions.
The
following table irrevocably sets forth the designation, the Pass-Through Rate,
the initial Certificate Principal Balance, and for purposes of satisfying
Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity
date” for the Class C Certificates.
|
Designation
|
Pass-Through
Rate
|
Initial
Certificated
Principal
Balance
|
Assumed
Final
Maturity
Date(1)
|
|
|
Class
C
|
(2)
|
$
|
$7,641,287.57
|
November
25, 2046
|
|
(1)
|
For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the
Distribution Date in the month following the maturity date for the
Mortgage Loan with the latest possible maturity date has been designated
as the “latest possible maturity date” for the Class C
Certificates.
|
|
(2)
|
Calculated
in accordance with the definition of “Pass-Through Rate”
herein.
|
REMIC
4
As
provided herein, the Securities Administrator on behalf of the Trustee will
make
an election to treat the segregated pool of assets consisting of the Class
P
Interest as a REMIC for federal income tax purposes, and such segregated pool
of
assets will be designated as “REMIC 4”. The Class R-4 Interest will represent
the sole Class of “residual interests” in REMIC 4 for purposes of the REMIC
Provisions.
The
following table irrevocably sets forth the designation, the Pass-Through Rate,
the initial Certificate Principal Balance, and for purposes of satisfying
Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity
date” for the Class P Certificates.
|
Designation
|
Pass-Through
Rate
|
Initial
Certificated
Principal
Balance
|
Assumed
Final
Maturity
Date(1)
|
|
|
Class
P
|
N/A
|
$
|
100.00
|
November
25, 2046
|
(1) For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the
Distribution Date in the month following the maturity date for the Mortgage
Loan
with the latest possible maturity date has been designated as the “latest
possible maturity date” for the Class P Certificates.
ARTICLE
I
DEFINITIONS
Section
1.01 Defined
Terms.
Whenever
used in this Agreement, the following words and phrases, unless the context
otherwise requires, shall have the meanings specified in this Article.
Unless
otherwise specified, all calculations in respect of interest on each class
of
Class M Certificates shall be made on the basis of a 360-day year consisting
of
the actual number of days in the related Accrual Period. All calculations of
interest with regard to each of the Class A Certificates shall be on the basis
of a 360-day year consisting of twelve 30-days months.
“Accepted
Master Servicing Practices”: With respect to any Mortgage Loan, as applicable,
either (x) those customary mortgage master servicing practices of prudent
mortgage master 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 Master
Servicer (except in its capacity as successor to the Servicer), or (y) as
provided in this Agreement, to the extent applicable to the Master Servicer,
but
in no event below the standard set forth in clause (x).
“Accrual
Period”: With respect to any Distribution Date and each Class of the Class M
Certificates, the period commencing on the prior Distribution Date (or in the
case of the first Distribution Date, the Closing Date) and ending on the day
immediately preceding that Distribution Date. With respect to each Class of
the
Class A Certificates, the prior calendar month.
“Accrued
Certificate Interest”: For any Distribution Date and each Class of the Class A
Certificates and Class M Certificates, interest accrued during the related
Accrual Period at the then-applicable Pass-Through Rate on the related
Certificate Principal Balance thereof immediately prior to such Distribution
Date. Accrued Certificate Interest for each Class of the Class M Certificates
shall be calculated on the basis of the actual number of days in the related
Accrual Period and a 360-day year. Accrued Certificate Interest for each Class
of the Class A Certificates shall be calculated on the basis of a 360-day year
consisting of twelve 30-day months. On each Distribution Date, Accrued
Certificate Interest will be reduced by the following, which will be allocated
to the related Certificates on a pro rata basis, based on the amount of Accrued
Certificate Interest that would have been payable from the Mortgage Loans absent
these reductions: (a) Prepayment Interest Shortfalls on the Mortgage Loans,
to
the extent not covered by Compensating Interest paid by the Servicer or the
Master Servicer, (b) interest shortfalls on the Mortgage Loans resulting from
the application of the Relief Act or similar state law, (c) the interest portion
of Realized Losses not allocated through subordination and (d) the amount of
Net
Deferred Interest, if any, allocated hereto in accordance with Section 4.09
of
this Agreement. In addition, Accrued Certificate Interest for any Class of
Certificates will be reduced by any Realized Losses allocated thereto through
subordination.
“Additional
Disclosure Notification”: As defined in Section 3.23 hereof.
“Additional
Form 10-D Disclosure”: As defined in Section 3.23 hereof.
“Additional
Form 10-K Disclosure”: As defined in Section 4.23 hereof.
“Adjustable
Rate Mortgage Loan”: Each Mortgage Loan identified in the Mortgage Loan Schedule
as having a Mortgage Rate which is adjustable at any point during the life
of
the related Mortgage, including any Mortgage Loans delivered in replacement
thereof.
“Advance”:
As to any Mortgage Loan, any advance made by the Servicer or the Master Servicer
on any Distribution Date pursuant to Section 4.03.
“Affiliate”:
With respect to any Person, any other Person controlling, controlled by or
under
common control with such Person. For purposes of this definition, “control”
means the power to direct the management and policies of a Person, directly
or
indirectly, whether through ownership of voting securities, by contract or
otherwise and “controlling” and “controlled” shall have meanings correlative to
the foregoing.
“Aggregate
Stated Principal Balance”: As of any date of determination, the Aggregate Stated
Principal Balance of the Mortgage Loans.
“Agreement”:
This Pooling and Servicing Agreement and all amendments hereof.
“Allocated
Realized Loss Amount”: With respect to any Class of Offered Certificates, other
than the Class A-1 Certificates, and any Distribution Date, an amount equal
to
(a) the sum of any Realized Losses allocated to that Class of Certificates
on
that Distribution Date and any Allocated Realized Loss Amount for that Class
remaining unpaid from the previous Distribution Dates, in each case, with
interest thereon at the applicable Pass-Through Rate for such Distribution
Date
for such Class for the related Accrual Period plus (b) any Subsequent Recoveries
with respect to such Class of Certificates.
“Annual
Statement of Compliance”: As defined in Section 3.21 hereof.
“Assessment
of Compliance”: As defined in Section 3.22 hereof.
“Assignment”:
An assignment
of Mortgage, notice of transfer or equivalent instrument, in recordable form,
which is sufficient under the laws of the jurisdiction wherein the related
Mortgaged Property is located to reflect a record the sale of the
Mortgage.
“Assumed
Final Maturity Date”:
The
Distribution Date in October 2046.
“Available
Funds”: With respect to any Distribution Date, the sum of (a) the Interest
Remittance Amount for that Distribution Date and (b) the Principal Remittance
Amount for that Distribution Date, net of (c) fees payable to, and other amounts
reimbursable to, the Trustee, the Master Servicer, the Securities Administrator,
the Servicer, the Custodian, the LPMI Insurer and other providers of lender
paid
mortgage insurance.
“Bankruptcy
Code”: The Bankruptcy Code of 1978, as amended.
“Book-Entry
Certificate”: Any Certificate registered in the name of the Depository or its
nominee.
“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 Master Servicer, the Servicer,
any
Subservicer or the Corporate Trust Office of the Securities Administrator or
the
Trustee, respectively, is located are authorized or obligated by law or
executive order to be closed.
“Cap
Contract”: With respect to the Offered Certificates, the transaction evidenced
by a confirmation, a form of which is attached hereto as Exhibit P.
“Cap
Contract Reserve Fund”: The separate fund created and initially maintained by
the Securities Administrator pursuant to Section 4.11 in the name of the
Securities Administrator for the benefit of the Holders of the Offered
Certificates and designated “American Home Mortgage Assets Trust 2006-5 Cap
Contract Reserve Fund.” Funds in the Cap Contract Reserve Fund shall be held in
trust for the Holders of the Offered Certificates for the uses and purposes
set
forth in this Agreement. The Cap Contract Reserve Fund shall not be an asset
of
any REMIC.
“Cap
Counterparty”: The Bank of New York.
“Cap
Extra Principal Distribution Amount”: With respect to any Distribution Date, is
the lesser of (x) amounts available from the Cap Contract Reserve Fund to pay
principal as provided in Section 4.11 hereof, and (y) the excess of the
Overcollateralization Target Amount over the Overcollateralized Amount, but
only
to the extent such excess is as a result of Realized Losses incurred on the
Mortgage Loans in the current or prior Accrual Periods.
“Cash
Liquidation”: As to any defaulted Mortgage Loan other than a Mortgage Loan as to
which an REO Acquisition occurred, a determination by the Servicer that it
has
received all Insurance Proceeds, Liquidation Proceeds and other payments or
cash
recoveries which the Servicer reasonably and in good faith expects to be finally
recoverable with respect to such Mortgage Loan.
“Certificate”:
Any Class X-0, Xxxxx X-0, Class A-3-1, Class A-3-2, Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class R, Class RX, Class P
or
Class C Certificate.
“Certificateholder”
or “Holder”: The Person in whose name a Certificate is registered in the
Certificate Register, except that only a Permitted Transferee shall be a holder
of a Residual Certificate for any purposes hereof and, solely for the purposes
of giving any consent pursuant to this Agreement, any Certificate registered
in
the name of the Depositor or the Master Servicer or any affiliate thereof shall
be deemed not to be outstanding and the Voting Rights to which such Certificate
is entitled shall not be taken into account in determining whether the requisite
percentage of Voting Rights necessary to effect any such consent has been
obtained, except as otherwise provided in Section 11.01. The Trustee and the
Securities Administrator shall be entitled to rely upon a certification of
the
Depositor or the Master Servicer in determining if any Certificates are
registered in the name of the respective affiliate. All references herein to
“Holders” or “Certificateholders” shall reflect the rights of Certificate Owners
as they may indirectly exercise such rights through the Depository and
participating members thereof, except as otherwise specified herein;
provided,
however,
that
the Trustee and the Securities Administrator shall be required to recognize
as a
“Holder” or “Certificateholder” only the Person in whose name a Certificate is
registered in the Certificate Register.
“Certificate
Owner”: With respect to a Book-Entry Certificate, the Person who is the
beneficial owner of such Certificate, as reflected on the books of an indirect
participating brokerage firm for which a Depository Participant acts as agent,
if any, and otherwise on the books of a Depository Participant, if any, and
otherwise on the books of the Depository.
“Certificate
Principal Balance”: With respect to any Offered Certificate as of any date of
determination, an amount equal to the sum of (x) any Net Deferred Interest
allocated thereto on the related Distribution Date and all previous Distribution
Dates and (y) the initial Certificate Principal Balance of that Certificate,
reduced by the aggregate of (a) all amounts allocable to principal previously
distributed with respect to that Certificate and (b) any reductions in the
Certificate Principal Balance of that Certificate deemed to have occurred in
connection with allocations of Realized Losses in the manner described in this
Agreement, provided, however, that after the Certificate Principal Balance
of
any Certificate outstanding with the highest payment priority to which Realized
Losses have been allocated shall be increased by the percentage interest
evidenced thereby multiplied by the amount of any Subsequent Recoveries not
previously allocated, but not by more than the amount of Realized Losses
previously allocated to reduce the Certificate Principal Balance of that
Certificate, and the Certificate Principal Balance of the Class of Class M
Certificates, with a Certificate Principal Balance greater than zero with the
lowest payment priority shall be further reduced by an amount equal to the
percentage interest evidenced thereby multiplied by the excess, if any, of
(i)
the then-aggregate Certificate Principal Balance of the Class A Certificates
and
Class M Certificates outstanding over (ii) the then-aggregate Stated Principal
Balance of all of the Mortgage Loans as of such date. With respect to the Class
C Interest and any date of determination, the excess of the aggregate
Uncertificated Principal Balance of the REMIC 1 Regular Interests over the
Certificate Principal Balances of the Class A, Class M and Class P Certificates.
The Class R and Class RX will not have a Certificate Principal Balance. With
respect to the Class C Certificates, the Certificate Principal Balance of the
Class C Interest.
“Certificate
Register”: The register maintained pursuant to Section 5.02.
“Class”:
Collectively, all of the Certificates bearing the same designation.
“Class
A-1 Certificates”: Any one of the Class A-1 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 and evidencing (i) a REMIC Regular Interest in REMIC 2 and
(ii) the right to receive the related Net Rate Shortfall Carry-Forward
Amount.
“Class
A-2 Certificates”: Any one of the Class A-2 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 and evidencing (i) a REMIC Regular Interest in REMIC 2 and
(ii) the right to receive the related Net Rate Shortfall Carry-Forward
Amount.
“Class
A-3-1 Certificates”: Any one of the Class A-3-1 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 and evidencing (i) a REMIC Regular Interest in REMIC 2 and
(ii) the right to receive the related Net Rate Shortfall Carry-Forward
Amount.
“Class
A-3-2 Certificates”: Any one of the Class A-3-2 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 and evidencing (i) a REMIC Regular Interest in REMIC 2 and
(ii) the right to receive the related Net Rate Shortfall Carry-Forward Amount.
“Class A Certificates”: The Class A-1, Class A-2, Class A-3-1 and Class A-3-2
Certificates.
“Class
C
Certificates”: Any one of the Class C Certificates as designated on the face
thereof substantially in the form annexed hereto as Exhibit B-3, executed by
the
Securities Administrator and authenticated and delivered by the Securities
Administrator representing the right to distributions as set forth herein and
therein and evidencing (i) a REMIC Regular Interest in REMIC 3 and (ii) the
obligation to pay Net Rate Shortfall Carry-Forward Amounts.
“Class
C
Interest”: An uncertificated interest in the Trust Fund held by the Trustee on
behalf of the Holders of the Class C Certificates, evidencing a REMIC Regular
Interest in REMIC 2.
“Class
M
Certificates”: The
Class
M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class M-7
Certificates.
“Class
M-1 Certificates”: Any one of the Class M-1 Certificates as designated on the
face thereof substantially in the form annexed hereto as Exhibit B-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 and evidencing (i) a REMIC Regular Interest in REMIC 2 and
(ii) the right to receive the related Net Rate Shortfall Carry-Forward
Amount.
“Class
M-2 Certificates”: Any one of the Class M-2 Certificates as designated on the
face thereof substantially in the form annexed hereto as Exhibit B-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 and evidencing (i) a REMIC Regular Interest in REMIC 2 and
(ii) the right to receive the related Net Rate Shortfall Carry-Forward
Amount.
“Class
M-3 Certificates”: Any one of the Class M-3 Certificates as designated on the
face thereof substantially in the form annexed hereto as Exhibit B-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 and evidencing (i) a REMIC Regular Interest in REMIC 2 and
(ii) the right to receive the related Net Rate Shortfall Carry-Forward
Amount.
“Class
M-4 Certificates”: Any one of the Class M-4 Certificates as designated on the
face thereof substantially in the form annexed hereto as Exhibit B-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 and evidencing (i) a REMIC Regular Interest in REMIC 2 and
(ii) the right to receive the related Net Rate Shortfall Carry-Forward
Amount.
“Class
M-5 Certificates: Any one of the Class M-5 Certificates as designated on the
face thereof substantially in the form annexed hereto as Exhibit B-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 and evidencing (i) a REMIC Regular Interest in REMIC 2 and
(ii) the right to receive the related Net Rate Shortfall Carry-Forward
Amount.
“Class
M-6 Certificates”: Any one of the Class M-6 Certificates as designated on the
face thereof substantially in the form annexed hereto as Exhibit B-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 and evidencing (i) a REMIC Regular Interest in REMIC 2 and
(ii) the right to receive the related Net Rate Shortfall Carry-Forward
Amount.
“Class
M-7 Certificates”: Any one of the Class M-7 Certificates as designated on the
face thereof substantially in the form annexed hereto as Exhibit B-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 and evidencing (i) a REMIC Regular Interest in REMIC 2 and
(ii) the right to receive the related Net Rate Shortfall Carry-Forward
Amount.
“Class
P
Certificates”: Any one of the Class P Certificates as designated on the face
thereof substantially in the form annexed hereto as Exhibit B-4, executed by
the
Securities Administrator and authenticated and delivered by the Securities
Administrator representing the right to distributions as set forth herein and
therein and evidencing a REMIC Regular Interest in REMIC 4.
“Class
P
Interest”: An uncertificated interest in the Trust Fund held by the Trustee on
behalf of the Holders of the Class P Certificates, evidencing a REMIC Regular
Interest in REMIC 2.
“Class
R
Certificate”: Any one of the Class R Certificates as designated on the face
thereof substantially in the form annexed hereto as Exhibit B-2, executed by
the
Securities Administrator and authenticated and delivered by the Securities
Administrator, evidencing ownership of the Class R-1 Interest and Class R-2
Interest.
“Class
R-1 Interest”: The uncertificated Residual Interest in REMIC 1.
“Class
R-2 Interest”: The uncertificated Residual Interest in REMIC 2.
“Class
R-3 Interest”: The uncertificated Residual Interest in REMIC 3.
“Class
R-4 Interest”: The uncertificated Residual Interest in REMIC 4.
“Class
RX
Certificate”: Any one of the Class RX Certificates as designated on the face
thereof substantially in the form annexed hereto as Exhibit B-2, executed by
the
Securities Administrator and authenticated and delivered by the Securities
Administrator, evidencing ownership of the Class R-3 Interest and Class R-4
Interest.
“Closing
Date”: September 22, 2006.
“Code”:
The Internal Revenue Code of 1986, as amended.
“Collateral
Value”: The appraised value of a Mortgaged Property based upon the lesser of (i)
the appraisal made at the time of the origination of the related Mortgage Loan,
or (ii) the sales price of such Mortgaged Property at such time of origination.
With respect to a Mortgage Loan the proceeds of which were used to refinance
an
existing mortgage loan, the appraised value of the Mortgaged Property based
upon
the appraisal obtained at the time of refinancing.
“Commission”:
The Securities and Exchange Commission.
“Compensating
Interest”: With respect to any Distribution Date, an amount equal to Prepayment
Interest Shortfalls resulting from Principal Prepayments during the related
Prepayment Period, but not more than the Servicing Fees for the immediately
preceding Due Period.
“Confirmation”:
With respect to the Offered Certificates and the Cap Contract, the Confirmation
(Reference #38303) with a trade date of September 22, 2006, evidencing a
transaction between the Securities Administrator and the Cap Counterparty.
“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
Building”: The building and other property owned by a Cooperative.
“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
Unit”: A specific dwelling unit in a Cooperative Building as to which exclusive
occupancy rights have been granted pursuant to a Lease.
“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
related to this Agreement shall be administered, which office at the date of
the
execution of this Agreement is located at 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx
Xxx,
Xxxxxxxxxx 00000, Attention: Trust Administration - AH06A5, 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 - AHMA 2006-5, and for all other purposes, 0000 Xxx
Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx, 00000, Attn: Corporate Trust Services -
American Home 2006-5.
“Corresponding
Certificate”: With respect to:
|
REMIC
1 Regular Interest/REMIC 2 Regular
Interest
|
Certificate
|
|
LT-A1
|
Class
X-0
|
|
XX-X-0
|
Class
A-2
|
|
LT-A3-1
|
Class
A-3-1
|
|
LT-A3-2
|
Class
A-3-2
|
|
LT-M1
|
Class
M-1
|
|
LT-M2
|
Class
M-2
|
|
LT-M3
|
Class
M-3
|
|
LT-M4
|
Class
M-4
|
|
LT-M5
|
Class
M-5
|
|
LT-M6
|
Class
M-6
|
|
LT-M7
|
Class
M-7
|
|
Class
C Interest
|
Class
C
|
|
REMIC
1 Regular Interest LT-P/Class P
Interest
|
Class
P
|
“Cumulative
Loss Trigger Event”: A
Cumulative
Loss Trigger Event is in effect with respect to any Distribution Date on or
after the Stepdown Date if the aggregate amount of Realized Losses on the
Mortgage Loans from (and including) the Cut-Off Date for each such Mortgage
Loan
to (and including) the related Due Date (reduced by the aggregate amount of
Subsequent Recoveries received from the Cut-Off Date through the Prepayment
Period related to that Due Date) exceeds the applicable percentage, for such
Distribution Date, of the aggregate Stated Principal Balance of the Mortgage
Loans, as set forth below:
|
Distribution
Date
|
Percentage
|
|
October
2008 — September 2009
|
0.15%
with respect to October
2008,
plus an additional 1/12th of 0.25% for each month thereafter through
September
2009
|
|
October
2009 — September 2010
|
0.40%
with respect to October
2009,
plus an additional 1/12th of 0.30% for each month thereafter through
September
2010
|
|
October
2010 — September 2011
|
0.70%
with respect to October
2010,
plus an additional 1/12th of 0.30% for each month thereafter through
September
2011
|
|
October
2011 — September 2012
|
1.00%
with respect to October
2011,
plus an additional 1/12th of 0.50% for each month thereafter through
September
2012
|
|
October
2012 and thereafter
|
1.50%
|
“Current
Report”: The Current Report pursuant to Section 13 or 15(d) of the Exchange
Act.
“Curtailment”:
Any Principal Prepayment made by a Mortgagor which is not a Principal Prepayment
in Full.
“Custodian”:
Deutsche Bank National Trust Company, or any successor custodian appointed
pursuant to the provisions hereof.
“Cut-off
Date”: With respect to the Mortgage Loans, September 1, 2006.
“Cut-off
Date Balance”: The Aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date.
“Debt
Service Reduction”: With respect to any Mortgage Loan, a reduction in the
scheduled monthly payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction
constituting a Deficient Valuation or any reduction that results in a permanent
forgiveness of principal.
“Deferred
Interest”: The amount of interest which is deferred and added to the Stated
Principal Balance of a Mortgage Loan due to the negative amortization feature
of
such Mortgage Loan.
“Deficient
Valuation”: With respect to any Mortgage Loan, a valuation by a court of
competent jurisdiction of the Mortgaged Property in an amount less than the
then
outstanding indebtedness under the Mortgage Loan, or any reduction in the amount
of principal to be paid in connection with any scheduled Monthly Payment that
constitutes a permanent forgiveness of principal, which valuation or reduction
results from a proceeding under the Bankruptcy Code.
“Definitive
Certificate”: Any definitive, fully registered Certificate.
“Deleted
Mortgage Loan”: A Mortgage Loan replaced or to be replaced with an Eligible
Substitute Mortgage Loan.
“Delinquency
Trigger Test”: A Delinquency Trigger Test is in effect with respect to a
Distribution Date on or after the Stepdown Date if the Rolling Sixty Day
Delinquency Rate for the outstanding Mortgage Loans equals or exceeds the
product of 40.00% and the Senior Enhancement Percentage.
“Delinquent”:
A mortgage loan is considered to be: “30 to 59 days” or “30 or more days”
delinquent when a payment due on any scheduled due date remains unpaid as of
the
close of business on the next following monthly scheduled due date; “60 to 89
days” or “60 or more days” delinquent when a payment due on any scheduled due
date remains unpaid as of the close of business on the second following monthly
scheduled due date; and so on. The determination as to whether a mortgage loan
falls into these categories is made as of the close of business on the last
business day of each month. For example, a mortgage loan with a payment due
on
July 1 that remained unpaid as of the close of business on August 31 would
then
be considered to be 30 to 59 days delinquent.
“Depositor”:
American Home Mortgage Assets LLC.
“Depository”:
The Depository Trust Company, or any successor Depository hereafter named.
The
nominee of the initial Depository for purposes of registering those Certificates
that are to be Book-Entry Certificates is Cede & Co. The Depository shall at
all times be a “clearing corporation” as defined in Section 8-102(5) of the
Uniform Commercial Code of the State of New York and a “clearing agency”
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended.
“Depository
Participant”: A broker, dealer, bank or other financial institutions or other
Person for whom from time to time a Depository effects book-entry transfers
and
pledges of securities deposited with the Depository.
“Determination
Date”: Either of the LIBOR Determination Date or the MTA Determination
Date.
“Disqualified
Organization”: Any organization defined as a “disqualified organization” under
Section 860E(e)(5) of the Code, which includes any of the following: (i) the
United States, any State or political subdivision thereof, any possession of
the
United States, or any agency or instrumentality of any of the foregoing (other
than an instrumentality which is a corporation if all of its activities are
subject to tax and, except for the Xxxxxxx Mac, a majority of its board of
directors is not selected by such governmental unit), (ii) a foreign government,
any international organization, or any agency or instrumentality of any of
the
foregoing, (iii) any organization (other than certain farmers’ cooperatives
described in Section 521 of the Code) which is exempt from the tax imposed
by
Chapter 1 of the Code (including the tax imposed by Section 511 of the Code
on
unrelated business taxable income), (iv) rural electric and telephone
cooperatives described in Section 1381(a)(2)(C) of the Code and (v) any other
Person so designated by the Securities Administrator based upon an Opinion
of
Counsel that the holding of an Ownership Interest in a Residual Certificate
by
such Person may cause any REMIC or any Person having an Ownership Interest
in
any Class of Certificates (other than such Person) to incur a liability for
any
federal tax imposed under the Code that would not otherwise be imposed but
for
the Transfer of an Ownership Interest in a Residual Certificate to such Person.
The terms “United States”, “State” and “international organization” shall have
the meanings set forth in Section 7701 of the Code or successor
provisions.
“Distribution
Account”: The account established and maintained by the Securities Administrator
on behalf of the Trustee and for the benefit of the Certificateholders, pursuant
to Section 3.19 hereof. The Distribution Account shall be an Eligible Account.
“Distribution
Date”: The 25th day of any month, or if such 25th day is not a Business Day, the
Business Day immediately following such 25th day, commencing in October
2006.
“Distribution
Report”: The Asset-Backed Issuer Distribution Report pursuant to Section 13 or
15(d) of the Exchange Act.
“Due
Date”: With respect to all of the Mortgage Loans, the date in each month on
which its Monthly Payment is due, exclusive of any days of grace.
“Due
Period”: With respect to any Distribution Date and the Mortgage Loans, the
period commencing on the second day of the month immediately preceding the
month
in which such Distribution Date occurs and ending on the first day of the month
in which such Distribution Date occurs.
“Depositor
Information”: As defined in Section 3.23 hereof.
“XXXXX”:
The Electronic Data Gathering and Retrieval System of the
Commission.
“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 Standard & Poor’s, F-1 by Fitch Ratings and P-1 by
Moody’s at the time of any deposit therein or (B) insured by the FDIC (to the
limits established by such Corporation), the uninsured deposits 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 subject to regulations regarding
fiduciary funds on deposit similar to Title 12 of the Code of Federal
Regulations Section 9.10(b), which, in either case, has corporate 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 a letter from the Rating Agencies to the Trustee and the Securities
Administrator 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.
“Eligible
Substitute Mortgage Loan”: A Mortgage Loan substituted by the
Sponsor for
a
Deleted Mortgage Loan which must, on the date of such substitution, as confirmed
in an Officers’ Certificate of Sponsor delivered to the Trustee, (i) have an
outstanding principal balance, after deduction of the principal portion of
the
monthly payment due in the month of substitution (or in the case of a
substitution of more than one Mortgage Loan for a Deleted Mortgage Loan, an
aggregate outstanding principal balance, after such deduction), not in excess
of
the Stated Principal Balance of the Deleted Mortgage Loan (the amount of any
shortfall to be paid to the Securities Administrator for deposit in the
Distribution Account in the month of substitution); (ii) have a Mortgage Rate
and a Net Mortgage Rate no lower than and not more than 1% per annum higher
than
the Mortgage Rate and Net Mortgage Rate, respectively, of the Deleted Mortgage
Loan as of the date of substitution; (iii) have a Loan-to-Value Ratio at the
time of substitution no higher than that of the Deleted Mortgage Loan at the
time of substitution; (iv) have a remaining term to stated maturity not greater
than (and not more than one year less than) that of the Deleted Mortgage Loan;
(v) comply with each representation and warranty set forth in Section 2.04
hereof; and, (vi) comply with each non-statistical representation and warranty
set forth in the Mortgage Loan Purchase Agreement and the Mortgage Loan Sale
and
Servicing Agreement.
“ERISA
Restricted Certificates”: Any of the Class R Certificates.
“Event
of
Default”: One or more of the events described in Section 7.01.
“Exchange
Act”: The Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“Exchange
Act Reports”: Any reports required to be filed pursuant to this
Agreement.
“Xxxxxx
Xxx”: Federal National Mortgage Association or any successor.
“FDIC”:
Federal Deposit Insurance Corporation or any successor.
“Fitch
Ratings”: Fitch Ratings, Inc., or its successor in interest.
“Form
8-K
Disclosure Information”: As defined in Section 3.23 hereof.
“Form
10-K Filing Deadline”: As defined in Section 3.23 hereof.
“Xxxxxxx
Mac”: Federal Home Loan Mortgage Corporation or any successor.
“Initial
Certificate Principal Balance”: With respect to each Class of Regular
Certificates, the Initial Certificate Principal Balance of such Class of
Certificates as set forth in the Preliminary Statement hereto, or with respect
to any single Certificate, the Initial Certificate Principal Balance as stated
on the face thereof.
“Initial
Notional Amount”: With respect to the Class C Certificates,
$1,528,015,287.57.
“Insurance
Policy”: With respect to any Mortgage Loan, any insurance policy (including the
Lender-Paid
Primary Insurance Policy)
which
is required to be maintained from time to time under this Agreement in respect
of such Mortgage Loan.
“Insurance
Proceeds”: Proceeds paid in respect of the Mortgage Loans pursuant to any
Insurance Policy, to the extent such proceeds are payable to the mortgagee
under
the Mortgage, any Subservicer, the Master Servicer or the Securities
Administrator and are not applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the procedures that
the
Master Servicer would follow in servicing Mortgage Loans held for its own
account.
“Interest
Remittance Amount”: For any Distribution Date, the sum of:
|
(i)
|
the
interest portion of all scheduled monthly payments on the Mortgage
Loans
due on the related Due Date, to the extent received or
advanced;
|
|
(ii)
|
the
interest portion of all proceeds of the repurchase of a Mortgage
Loan (or,
in the case of a substitution, certain amounts representing a principal
adjustment) as required by the Agreement during the preceding calendar
month; and
|
|
(iii)
|
the
interest portion of all other unscheduled collections received during
the
preceding calendar month in respect of the Mortgage Loans, including,
Liquidation Proceeds and Insurance Proceeds, in each case to the
extent
applied as recoveries of interest.
|
“Issuing
Entity”: American Home Mortgage Assets Trust 2006-5.
“Late
Collections”: With respect to any Mortgage Loan, all amounts received during any
Due Period, whether as late payments of Monthly Payments or as Insurance
Proceeds, Liquidation Proceeds or otherwise, which represent late payments
or
collections of Monthly Payments due but delinquent for a previous Due Period
and
not previously recovered.
“Lender-Paid
Insured Loans”: The Mortgage Loans included in the Trust Fund covered by the
Lender-Paid Primary Insurance Policy, as applicable, as indicated on the
Mortgage Loan Schedule.
“Lender-Paid
Insurer”: MGIC Insurance Corporation, PMI Insurance Corporation, Radian Inc.,
Republic Mortgage Insurance Company, Triad Guaranty Insurance Corporation or
United Guaranty Corporation, as applicable.
“Lender-Paid
Primary Insurance Policy”: The lender-paid Primary Insurance Policy issued by
the Lender-Paid Insurer, as assigned to the Issuing Entity on the Closing Date,
or any replacement policy therefore.
“Lender-Paid
Primary Insurance Rate”: With respect to any Lender-Paid Insured Loan covered by
the Lender-Paid Primary Insurance Policy, the rate per annum at which the
premium on the Lender-Paid Primary Insurance Policy accrues.
“LIBOR
Business Day”: A day on which banks are open for dealing in foreign currency and
exchange in London and New York City.
“LIBOR
Certificate”: Each of the Class M Certificates.
“LIBOR
Determination Date”: With
respect to each Class of LIBOR
Certificates and (i) the first Accrual Period, the second LIBOR Business Day
preceding the Closing Date, and (ii) with respect to each Accrual Period
thereafter, the second LIBOR Business Day preceding the date on which such
Accrual Period commences.
“Liquidated
Mortgage Loan”: As to any Distribution Date, any Mortgage Loan in respect of
which the Servicer has determined, in accordance with the servicing procedures
specified in the Servicing Agreement, as of the end of the related Prepayment
Period, that all Liquidation Proceeds which it expects to recover with respect
to the liquidation of the Mortgage Loan or disposition of the related REO
Property have been recovered.
“Liquidation
Proceeds”: Amounts received by the Servicer in connection with the liquidation
of a defaulted Mortgage Loan whether through trustee's sale, foreclosure sale,
proceeds of insurance policies, condemnation proceeds or otherwise.
“Loan-to-Value
Ratio”: As of any date of determination, the fraction, expressed as a
percentage, the numerator of which is the current principal balance of the
Mortgage Loan at the date of determination and the denominator of which is
the
Collateral Value of the related Mortgaged Property.
“Lost
Note Affidavit”: With respect to any Mortgage Loan as to which the original
Mortgage Note has been permanently lost, misplaced or destroyed and has not
been
replaced, an affidavit from the Sponsor certifying that the original Mortgage
Note has been lost, misplaced or destroyed (together with a copy of the related
Mortgage Note) and indemnifying the Trust Fund against any loss, cost or
liability resulting from the failure to deliver the original Mortgage Note
in
the form of Exhibit I hereto.
“Margin”:
With respect to any Accrual Period and Class of Class A Certificates or Class
M
Certificates, the per annum rate indicated in the following table:
|
Class
|
Margin
(1)
|
Margin
(2)
|
|
A-1
|
0.920%
|
1.840%
|
|
A-2
|
0.970%
|
1.940%
|
|
A-3-1
|
1.050%
|
2.100%
|
|
A-3-2
|
1.050%
|
2.100%
|
|
M-1
|
0.410%
|
0.615%
|
|
M-2
|
0.420%
|
0.630%
|
|
M-3
|
0.430%
|
0.645%
|
|
M-4
|
0.650%
|
0.975%
|
|
M-5
|
0.750%
|
1.125%
|
|
M-6
|
1.100%
|
1.650%
|
|
M-7
|
1.750%
|
2.625%
|
|
(1)
|
For
any Accrual Period relating to any Distribution Date occurring prior
to
the Step-Up Date.
|
|
(2)
|
For
any Accrual Period relating to any Distribution Date occurring on
or after
the Step-Up Date.
|
“Marker
Rate”: With respect to the Class C Interest and any Distribution Date, a per
annum rate equal to two (2) times the weighted average of the Uncertificated
REMIC 1 Pass-Through Rates for each REMIC 1 Regular Interest (other than REMIC
1
Regular Interest LT-AA and REMIC 1 Regular Interest LT-P), with the rate on
each
such REMIC 1 Regular Interest (other than REMIC 1 Regular Interest LT-ZZ)
subject to a cap equal to the Pass-Through Rate for the Corresponding
Certificate for the purpose of this calculation; and with the rate on REMIC
1
Regular Interest LT-ZZ subject to a cap of zero for the purpose of this
calculation; provided,
however,
that
solely for this purpose, calculations of the Uncertificated REMIC 1 Pass-Through
Rate and the related caps with respect to each such REMIC 1 Regular Interest
(other than REMIC 1 Regular Interest LT-A1, REMIC 1 Regular Interest LT-A2,
REMIC 1 Regular Interest LT-A3-1, REMIC 1 Regular Interest LT-A3-2 and REMIC
1
Regular Interest LT-ZZ) shall be multiplied by a fraction, the numerator of
which is the actual number of days in the related Interest Accrual Period and
the denominator of which is 30.
“Master
Servicer”: Xxxxx Fargo Bank, N.A., or any successor master servicer appointed as
herein provided.
“Master
Servicer Information”: As defined in Section 3.23 hereof.
“Master
Servicing Compensation”: As defined in Section 3.14 hereof.
“Maximum
Uncertificated Accrued Interest Deferral Amount”: With respect to any
Distribution Date, the excess of (a) accrued interest at the Uncertificated
REMIC 1 Pass Through Rate applicable to REMIC 1 Regular Interest LT-ZZ for
such
Distribution Date on a balance equal to the Uncertificated Principal Balance
of
REMIC 1 Regular Interest LT-ZZ minus the REMIC 1 Overcollateralization Amount,
in each case for such Distribution Date, over (b) the sum of the Uncertificated
Accrued Interest on each REMIC 1 Regular Interest (other than REMIC 1 Regular
Interest LT-ZZ and REMIC 1 Regular Interest LT-P), with the rate on each such
REMIC 1 Regular Interest subject to a cap equal to the Pass-Through Rate for
the
related Corresponding Certificate for the purpose of this calculation;
provided,
however,
that
for this purpose, calculations of the Uncertificated REMIC 1 Pass-Through Rate
and the related caps with respect to each such REMIC 1 Regular Interest (other
than REMIC 1 Regular Interest LT-A1, REMIC 1 Regular Interest LT-A2, REMIC
1
Regular Interest LT-A3-1, REMIC 1 Regular Interest LT-A3-2 and REMIC 1 Regular
Interest LT-ZZ) shall be multiplied by a fraction, the numerator of which is
the
actual number of days elapsed in the related Accrual Period and the denominator
of which is 30.
“MERS”:
Mortgage Electronic Registration Systems, Inc., a corporation organized and
existing under the laws of the State of Delaware, or any successor
thereto.
“MERS®
System”: The system of recording transfers of Mortgages electronically
maintained by MERS.
“Mezzanine
Principal Distribution Amount”: For any class of Class M Certificates and
Distribution Date will equal the excess of:
(1)
the
sum of:
(a)
the
aggregate Certificate Principal Balance of the Senior Certificates (after taking
into account the distribution of the Senior Principal Distribution Amount for
such Distribution Date),
(b)
the
aggregate Certificate Principal Balance of any Class(es) of Class M Certificates
that are senior to the subject class (in each case, after taking into account
the distribution of the applicable Mezzanine Principal Distribution Amount(s)
for such more senior Class(es) of Certificates for such Distribution Date),
and
(c)
the
Certificate Principal Balance of such class of Class M Certificates immediately
prior to such Distribution Date, over
(2)
the
lesser of (a) the product of (x) 100% minus the applicable Stepdown Target
Subordination Percentage for the subject Class of the Class M Certificates
for
that Distribution Date and (y) the aggregate Stated Principal Balance of the
Mortgage Loans as of the Due Date in the month of that Distribution Date (after
giving effect to principal prepayments received in the related Prepayment
Period) and (b) the aggregate Stated Principal Balance of the Mortgage Loans
as
of the Due Date in the month of that Distribution Date (after giving effect
to
principal prepayments received in the related Prepayment Period) minus the
OC
Floor;
provided,
however, that if such Class of Class M Certificates is the only class of Class
M
Certificates outstanding on such Distribution Date, that Class will be entitled
to receive the entire remaining Principal Distribution Amount until its
Certificate Principal Balance is reduced to zero.
“MIN”:
The Mortgage Identification Number for Mortgage Loans registered with MERS
on
the MERS® System.
“MOM
Loan”: With respect to
any
Mortgage Loan, MERS acting as the mortgagee of such Mortgage Loan, solely as
nominee for the originator of such Mortgage Loan and its successors and assigns,
at the origination thereof.
“Monthly
Advance”: An Advance.
“Monthly
Payment”: With respect to any Mortgage Loan, the scheduled monthly payment of
principal and interest on such Mortgage Loan which is payable by a Mortgagor
from time to time under the related Mortgage Note as originally executed (after
adjustment, if any, for Deficient Valuations occurring prior to such Due Date,
and after any adjustment by reason of any bankruptcy or similar proceeding
or
any moratorium or similar waiver or grace period).
“Moody’s”:
Xxxxx’x Investors Service, Inc., or its successor in interest.
“Mortgage”:
The mortgage, deed of trust or any other instrument securing the Mortgage
Loan.
“Mortgage
File”: The mortgage documents listed in Section 2.01 pertaining to a particular
Mortgage Loan and any additional documents required to be added to the Mortgage
File pursuant to this Agreement; provided, that whenever the term “Mortgage
File” is used to refer to documents actually received by the Custodian as agent
for the Trustee, such term shall not be deemed to include such additional
documents required to be added unless they are actually so added.
“Mortgage
Loan”: Each of the Mortgage Loans (including the Cooperative Loans), transferred
and assigned to the Trustee pursuant to Section 2.01 or 2.04 and from time
to
time held in the Trust Fund (including any Eligible Substitute Mortgage Loans),
the Mortgage Loans so transferred, assigned and held being identified in the
Mortgage Loan Schedule. As used herein, the term “Mortgage Loan” includes the
related Mortgage Note and Mortgage.
“Mortgage
Loan Purchase Agreement”: The Mortgage Loan Purchase Agreement dated as of
September 22, 2006, between American Home Mortgage Corp., as seller and the
Depositor as purchaser, and all amendments thereof and supplements thereto,
a
form of
which is attached hereto as Exhibit N.
“Mortgage
Loan Schedule”: As of any date of determination, the schedule of Mortgage Loans
included in the Trust Fund. The initial schedule of Mortgage Loans with
accompanying information transferred on the Closing Date to the Trustee as
part
of the Trust Fund for the Certificates, attached hereto as Exhibit H for the
Certificates (in each case as amended from time to time to reflect the addition
of Eligible Substitute Mortgage Loans) (and, for purposes of the Trustee
pursuant to Section 2.02, in computer-readable form as delivered to the
Custodian), which list shall set forth the following information with respect
to
each Mortgage Loan:
|
(i)
|
the
loan number;
|
|
(ii)
|
the
city, state and zip code of the Mortgaged
Property;
|
|
(iii)
|
the
original term to maturity;
|
|
(iv)
|
the
original principal balance and the original Mortgage
Rate;
|
|
(v)
|
the
first Distribution Date;
|
|
(vi)
|
the
type of Mortgaged Property;
|
|
(vii)
|
the
Monthly Payment in effect as of the Cut-off
Date;
|
|
(viii)
|
the
principal balance as of the Cut-off
Date;
|
|
(ix)
|
the
Mortgage Rate as of the Cut-off
Date;
|
|
(x)
|
the
occupancy status;
|
|
(xi)
|
the
purpose of the Mortgage Loan;
|
|
(xii)
|
the
Collateral Value of the Mortgaged
Property;
|
|
(xiii)
|
the
original term to maturity;
|
|
(xiv)
|
the
paid-through date of the Mortgage
Loan
|
|
(xv)
|
[Reserved];
|
|
(xvi)
|
the
Servicing Fee Rate;
|
|
(xvii)
|
the
Net Mortgage Rate for such Mortgage
Loan;
|
|
(xviii)
|
whether
the Mortgage Loan is covered by a private mortgage insurance policy
or an
original certificate of private mortgage
insurance;
|
|
(xix)
|
the
documentation type;
|
|
(xx)
|
the
type and term of the related Prepayment Charge, if
any;
|
|
(xxi)
|
whether
such Mortgage Loan is a Lender-Paid Insured Loan and, if so, the
Lender-Paid Primary Insurance Rate;
|
|
(xxii)
|
with
respect to each Adjustable Rate Mortgage
Loan.
|
|
(a)
|
the
frequency of each adjustment date;
|
|
(b)
|
the
next adjustment date;
|
|
(c)
|
the
Maximum Mortgage Rate;
|
|
(d)
|
the
Minimum Mortgage Rate;
|
|
(e)
|
the
Mortgage Rate as of the Cut-off
Date;
|
|
(f)
|
the
related Periodic Rate Cap;
|
|
(g)
|
the
Gross Margin; and
|
|
(h)
|
the
purpose of the Mortgage Loan.
|
“Mortgage
Note”: The note or other evidence of the indebtedness of a Mortgagor under a
Mortgage Loan.
“Mortgage
Rate”: With respect to any Mortgage Loan, the annual rate at which interest
accrues on such Mortgage Loan, as adjusted from time to time in accordance
with
the provisions of the Mortgage Note.
“Mortgaged
Property”: The underlying property securing a Mortgage Loan.
“Mortgagor”:
The obligor or obligors on a Mortgage Note.
“MTA”:
The twelve-month average monthly yield on U.S. Treasury Securities adjusted
to a
constant maturity of one-year, as published by the Federal Reserve Board in
the
Federal Reserve Statistical Release “Selected Interest Rates
(H.15).”
“MTA
Certificates”: The
Class
A Certificates.
“MTA
Determination Date”: With
respect to each Class of MTA
Certificates and (i) the first Accrual Period, the fifteenth Business Day
preceding the Closing Date, and (ii) with respect to each Accrual Period
thereafter, the fifteenth Business Day preceding the date on which such Accrual
Period commences.
“Net
Deferred Interest”: On any Distribution Date, Deferred Interest on the Mortgage
Loans during the related Due Period net of Principal Prepayments in full,
partial Principal Prepayments, Net Liquidation Proceeds, Repurchase Proceeds
and
scheduled principal payments, in that order, available to be distributed on
the
Certificates on that Distribution Date.
“Net
Liquidation Proceeds”: With respect to any Liquidated Mortgage Loan, Liquidation
Proceeds and Subsequent Recoveries net of unreimbursed Servicing Advances by
the
Servicer Monthly Advances and Liquidation Expenses.
“Net
Mortgage Rate”: With respect to each Mortgage Loan Due Date, a per annum rate of
interest equal to the then-applicable Mortgage Rate on such Mortgage Loan less
the Servicing Fee Rate and, with respect to the Lender-Paid Insured Loans,
the
Lender-Paid Primary Insurance Rate.
“Net
Prepayment Interest Shortfall”: With respect to any Distribution Date, the
excess, if any, of any Prepayment Interest Shortfalls for such date over the
related Compensating Interest.
“Net
Rate
Cap”: With respect to any Distribution Date and the Class A Certificates and
Class M Certificates, the product of:
(a)
the
Weighted Average Adjusted Net Mortgage Rate on the Mortgage Loans as of the
Due
Date in the prior calendar month (after giving effect to principal prepayments
received in the Prepayment Period related to that prior Due Date),
and
(b)
a
fraction, the numerator of which is 30, and the denominator of which is, (a)
30
with respect to the MTA Certificates and (b) the actual number of days that
elapsed in the related Accrual Period, with respect to the LIBOR
Certificates.
For
federal income tax purposes, the Net Rate Cap, with respect to any Distribution
Date, shall be expressed as the weighted average of the Uncertificated REMIC
1
Pass-Through Rates on each REMIC 1 Regular Interest weighted on the basis of
the
Uncertificated Principal Balance of each such REMIC 1 Regular
Interest.
“Net
Rate
Shortfall”: With
respect to the Class A Certificates and Class M Certificates on any Distribution
Date, as determined separately for each such Class of Certificates, the excess,
if any, of (x) the related Accrued Certificate Interest thereon for such
Distribution Date calculated pursuant to clause (i) of the related definition
of
Pass-Through Rate, in each case prior to reduction for Net Deferred Interest,
over (y) Accrued Certificate Interest thereon for such Distribution Date
calculated at the Net Rate Cap.
“Net
Rate
Shortfall Carry-Forward Amount”: With respect to the Offered Certificates on any
Distribution Date, as determined separately for each such Class of Certificates,
an amount equal to the aggregate amount of Net Rate Shortfall for such Class
of
Certificates on such Distribution Date, plus any unpaid Net Rate Shortfall
for
such Class of Certificates from prior Distribution Dates, plus interest thereon
at the related Pass-Through Rate for such Distribution Date for such Class
for
the related Accrual Period, to the extent previously unreimbursed.
“Nonrecoverable
Advance”: Any Advance or Servicing Advance previously made or proposed to be
made in respect of a Mortgage Loan which, in the good faith judgment of the
Servicer or the Master Servicer, will not or, in the case of a proposed Advance
or Servicing Advance, would not be ultimately recoverable from related Late
Collections, Insurance Proceeds, Liquidation Proceeds or REO Proceeds. The
determination by the Servicer or the Master Servicer that it has made a
Nonrecoverable Advance or that any proposed Advance or Servicing Advance would
constitute a Nonrecoverable Advance, shall be evidenced by a certificate of
a
Servicing Officer delivered, in the case of the Servicer, to the Depositor
and
the Master Servicer, and in the case of the Master Servicer, to the Depositor
and the Securities Administrator.
“Non-United
States Person”: Any Person other than a United States Person.
“OC
Floor”: An
amount
equal to 0.50% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-Off Date.
“Offered
Certificates”: The Class A and Class M Certificates.
“Officers’
Certificate”: A certificate signed by the Chairman of the Board, the Vice
Chairman of the Board, the President or a vice president and by the Treasurer,
the Secretary, or one of the assistant treasurers or assistant secretaries
of
the Depositor, the Sponsor, the Master Servicer, the Servicer or of any
Subservicer and delivered to the Depositor, Securities Administrator and
Trustee.
“One-Month
LIBOR”: With respect to any Accrual Period, the rate determined by the
Securities Administrator on the related LIBOR Determination Date on the basis
of
the London interbank offered rate for one-month United States dollar deposits,
as such rates appear on the Telerate Screen Page 3750, as of 11:00 a.m. (London
time) on such LIBOR Determination Date pursuant to Section 1.02.
“Opinion
of Counsel”: A written opinion of counsel, who may be counsel for the Depositor,
the Sponsor, or the Master Servicer, reasonably acceptable to the Trustee and
Securities Administrator; except that any opinion of counsel relating to (a)
the
qualification of any account required to be maintained pursuant to this
Agreement as an Eligible Account, (b) the qualification of each REMIC as a
REMIC, (c) compliance with the REMIC Provisions or (d) resignation of the Master
Servicer pursuant to Section 6.04 must be an opinion of counsel who (i) is
in
fact independent of the Depositor and the Master Servicer, (ii) does not have
any direct financial interest or any material indirect financial interest in
the
Depositor or the Master Servicer or in an affiliate of either and (iii) is
not
connected with the Depositor or the Master Servicer as an officer, employee,
director or person performing similar functions.
“Optional
Termination Date”:
The
first Distribution Date on which the Aggregate Stated Principal Balance of
the
Mortgage Loans and properties acquired in respect thereof, remaining in the
Trust Fund has been reduced to less than or equal to 1% of the Cut-off Date
Balance.
“OTS”:
Office of Thrift Supervision or any successor.
“Outstanding
Mortgage Loan”: As to any Due Date, a Mortgage Loan (including an REO Property)
which was not the subject of a Principal Prepayment in Full, Cash Liquidation
or
REO Disposition and which was not purchased prior to such Due Date pursuant
to
Sections 2.02, 2.04 or 3.14.
“Outstanding
Principal Balance”: With respect to a mortgage loan, the principal balance of
such 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 Issuing
Entity.
“Overcollateralization
Target Amount”: With
respect to any Distribution Date (a) prior to the Stepdown Date, an amount
equal
to 0.50% of the aggregate Stated Principal Balance of the Mortgage Loans as
of
the Cut-Off Date and (b) on or after the Stepdown Date, the greater of (i)
(x)
for any Distribution Date on or after the Stepdown Date but prior to the
Distribution Date in October 2012, an amount equal to 1.25% of the aggregate
Stated Principal Balance of the Mortgage Loans as of the Due Date in the month
of that Distribution Date (after giving effect to principal prepayments received
in the related Prepayment Period) and (y) for any Distribution Date on or after
the Stepdown Date and on or after the Distribution Date in October 2012, an
amount equal to 1.00% of the aggregate Stated Principal Balance of the Mortgage
Loans as of the Due Date in the month of that Distribution Date (after giving
effect to principal prepayments received in the related Prepayment Period)
and
(ii) the OC Floor. Notwithstanding the foregoing, on and after any Distribution
Date following the reduction of the aggregate Certificate Principal Balance
of
the Class A Certificates and Class M Certificates to zero, the
Overcollateralization Target Amount shall be zero.
“Overcollateralized
Amount”: For any Distribution Date, the amount, if any, by which (i) the
aggregate Stated Principal Balance of the Mortgage Loans (after giving effect
to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, unscheduled collections of principal received during
the
related Prepayment Period and any Realized Losses on the Mortgage Loans during
the related Prepayment Period), exceeds (ii) the aggregate Certificate Principal
Balance of the Offered Certificates and the Class P Certificates as of such
Distribution Date (after giving effect to distributions on such Distribution
Date).
“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”: The Pass-Through Rate of the Class A-1, Class A-2, Class A-3-1 and Class
A-3-2 Certificates will be equal to the lesser of (i) One-Year MTA plus the
related Margin and (ii) the Net Rate Cap. The Pass-Through Rate of the Class
M
Certificates will be equal to the lesser of (i) One-Month LIBOR plus the related
Margin and (ii) the Net Rate Cap. With respect to the Class C Interest and
any
Distribution Date, a per annum rate equal to the percentage equivalent of a
fraction, the numerator of which is (x) the sum of (i) 100% of the
Uncertificated Accrued Interest on REMIC 1 Regular Interest LT-P and (ii)
interest on the Uncertificated Balance of each REMIC 1 Regular Interest listed
in clause (y) at a rate equal to the related Uncertificated REMIC 1 Pass-Through
Rate minus the Marker Rate and the denominator of which is (y) the aggregate
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-AA, REMIC 1
Regular Interest LT-A1, REMIC 1 Regular Interest LT-A2, REMIC 1 Regular Interest
LT-A3-1, REMIC 1 Regular Interest LT-A3-2, REMIC 1 Regular Interest LT-M1,
REMIC
1 Regular Interest LT-M2, REMIC 1 Regular Interest LT-M3, REMIC 1 Regular
Interest LT-M4, REMIC 1 Regular Interest LT-M5, REMIC 1 Regular Interest LT-M6,
REMIC 1 Regular Interest LT-M7 and REMIC 1 Regular Interest LT-ZZ.
With
respect to the Class C Certificates, 100% of the interest distributable to
the
Class C Interest, expressed as a per annum rate.
“PCAOB”:
The Public Company Accounting Oversight Board.
“Permitted
Investment”: One or more of the following:
(i) obligations
of or guaranteed as to principal and interest by the United States or any agency
or instrumentality thereof when such obligations are backed by the full faith
and credit of the United States;
(ii) repurchase
agreements on obligations specified in clause (i) maturing not more than one
month from the date of acquisition thereof, provided that the unsecured
obligations of the party agreeing to repurchase such obligations are at the
time
rated by each Rating Agency in its highest short-term rating
available;
(iii) federal
funds, certificates of deposit, demand deposits, time deposits and bankers’
acceptances (which shall each have an original maturity of not more than 90
days
and, in the case of bankers’ acceptances, shall in no event have an original
maturity of more than 365 days or a remaining maturity of more than 30 days)
denominated in United States dollars of any U.S. depository institution or
trust
company incorporated under the laws of the United States or any state thereof
or
of any domestic branch of a foreign depository institution or trust company;
provided that the debt obligations of such depository institution or trust
company (or, if the only Rating Agency is Standard & Poor’s, in the case of
the principal depository institution in a depository institution holding
company, debt obligations of the depository institution holding company) at
the
date of acquisition thereof have been rated by each Rating Agency in its highest
short-term rating available; and provided further that, if the only Rating
Agency is Standard & Poor’s or Fitch Ratings and if the depository or trust
company is a principal subsidiary of a bank holding company and the debt
obligations of such subsidiary are not separately rated, the applicable rating
shall be that of the bank holding company; and, provided further that, if the
original maturity of such short-term obligations of a domestic branch of a
foreign depository institution or trust company shall exceed 30 days, the
short-term rating of such institution shall be A-1+ in the case of Standard
& Poor’s if Standard & Poor’s is the Rating Agency;
(iv) commercial
paper (having original maturities of not more than 365 days) of any corporation
incorporated under the laws of the United States or any state thereof which
on
the date of acquisition has been rated by Moody’s, Xxxxx Ratings and Standard
& Poor’s in their highest short-term ratings available; provided that such
commercial paper shall have a remaining maturity of not more than 30
days;
(v) a
money
market fund or a qualified investment fund rated by Moody’s and Fitch Ratings,
if so rated, in its highest long-term ratings available and rated AAAm or AAAm-G
by Standard & Poor’s, including any such funds for which Xxxxx Fargo Bank,
N.A. or any affiliate thereof serves as an investment advisor, manager,
administrator, shareholder, servicing agent, and/or custodian or sub-custodian;
and
(vi) other
obligations or securities that are acceptable to each Rating Agency as a
Permitted Investment hereunder and will not reduce the rating assigned to any
Class of Certificates by such Rating Agency below the lower of the then-current
rating or the rating assigned to such Certificates as of the Closing Date by
such Rating Agency, as evidenced in writing;
provided,
however,
that no
instrument shall be a Permitted Investment if it represents, either (1) the
right to receive only interest payments with respect to the underlying debt
instrument or (2) the right to receive both principal and interest payments
derived from obligations underlying such instrument and the principal and
interest payments with respect to such instrument provide a yield to maturity
greater than 120% of the yield to maturity at par of such underlying
obligations.
“Permitted
Transferee”: Any transferee of a Residual Certificate other than a Disqualified
Organization, a Non-United States Person or an “electing large partnership” (as
defined in Section 775 of the Code).
“Person”:
Any individual, corporation, partnership, limited liability company, joint
venture, association, joint-stock company, trust, unincorporated organization
or
government or any agency or political subdivision thereof.
“Prepayment
Assumption”: As defined in the Prospectus Supplement.
“Prepayment
Charge”: With respect to any Mortgage Loan, the charges, penalties or premiums,
if any, due in connection with a full or partial prepayment of such Mortgage
Loan in accordance with the terms of the related Mortgage Note (or any rider
or
annex thereto), or any amounts in respect thereof paid by the Sponsor in
accordance with the Mortgage Loan Purchase Agreement or the Servicer in
accordance with the Servicing Agreement.
“Prepayment
Interest Shortfall”: As to any Distribution Date and any Mortgage Loan (other
than a Mortgage Loan relating to an REO Property) that was the subject of (a)
a
Principal Prepayment in Full during the related Prepayment Period, an amount
equal to the excess of one month’s interest at the Net Mortgage Rate on the
Stated Principal Balance of such Mortgage Loan over the amount of interest
(adjusted to the Net Mortgage Rate) paid by the Mortgagor for such Prepayment
Period to the date of such Principal Prepayment in Full or (b) a Curtailment
during the prior calendar month, an amount equal to one month’s interest at the
Mortgage Rate on the amount of such Curtailment.
“Prepayment
Period”: As to any Distribution Date, the calendar month preceding the month in
which such Distribution Date occurs.
“Primary
Hazard Insurance Policy”: Each primary hazard insurance policy required to be
maintained pursuant to Section 3.09.
“Primary
Mortgage Insurance Policy”: Any primary mortgage insurance policy of mortgage
guaranty insurance including any replacement policy therefor.
“Principal
Distribution Amount”: With
respect
to each Distribution Date, is the excess, if any, of:
(i) the
aggregate Certificate Principal Balance of the Offered Certificates immediately
prior to such Distribution Date, over
(ii) the
excess, if any, of (a) the aggregate Stated Principal Balance of the Mortgage
Loans as of the Due Date occurring in the month of that Distribution Date (after
giving effect to principal prepayments received in the related Prepayment
Period), over (b) the Overcollateralization Target Amount for such Distribution
Date.
“Principal
Prepayment”: Any payment of principal made by the Mortgagor on a Mortgage Loan
which is received in advance of its scheduled Due Date and which is not
accompanied by an amount of interest representing scheduled interest due on
any
date or dates in any month or months subsequent to the month of
prepayment.
“Principal
Prepayment in Full”: Any Principal Prepayment made by a Mortgagor of the entire
unpaid principal balance of the Mortgage Loan.
“Principal
Remittance Amount”: For
any
Distribution Date, the sum of
| (i) |
the
principal portion of all scheduled monthly payments on the Mortgage
Loans
due on the related Due Date, to the extent received or
advanced;
|
| (ii) |
the
principal portion of all proceeds of the repurchase of a Mortgage
Loan
(or, in the case of a substitution, certain amounts representing
a
principal adjustment) as required by the Agreement during the preceding
calendar month; and
|
| (iii) |
the
principal portion of all other unscheduled collections received during
the
preceding calendar month in respect of the Mortgage Loans, including
full
and partial prepayments, Liquidation Proceeds and Insurance Proceeds,
in
each case to the extent applied as recoveries of
principal.
|
“Prospectus
Supplement”: That certain Prospectus Supplement dated September 22, 2006,
relating to the public offering of the Offered Certificates.
“Protected
Account”: An account established and maintained for the benefit of
Certificateholders by the Servicer with respect to the Mortgage Loans and with
respect to REO Property pursuant to the Servicing Agreement.
“Purchase
Price”: With respect to any Mortgage Loan (or REO Property) required to be
purchased pursuant to Section 2.02, 2.04 or 3.06, an amount equal to the sum
of
(i) 100% of the Stated Principal Balance thereof, (ii) unpaid accrued interest
(or REO Imputed Interest) at the applicable Net Mortgage Rate on the Stated
Principal Balance thereof outstanding during each Due Period that such interest
was not paid or advanced, from the date through which interest was last paid
by
the Mortgagor or advanced and distributed to Certificateholders together with
unpaid Servicing Fees and, if such Mortgage Loan is a Lender-Paid Insured Loan,
the premium payable at the Lender-Paid Primary Insurance Rate, from the date
through which interest was last paid by the Mortgagor, in each case to the
first
day of the month in which such Purchase Price is to be distributed, plus (iii)
the aggregate of all Advances and Servicing Advances made in respect thereof
that were not previously reimbursed and (iv) costs and damages incurred by
the
Trust Fund in connection with a repurchase pursuant to Section 2.04 hereof
that
arises out of a violation of any anti-predatory 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
Agency”: Standard & Poor’s and Moody’s, and each of their successors. If
such agencies and their successors are no longer in existence, “Rating Agency”
shall be such nationally recognized statistical rating agency, or other
comparable Person, designated by the Depositor, notice of which designation
shall be given to the Trustee, the Securities Administrator and Master Servicer.
References herein to the two highest long term debt ratings of a Rating Agency
shall mean “AA” or better in the case of Standard & Poor’s and Fitch Ratings
and “Aa2” or better in the case of Moody’s and references herein to the two
highest short-term debt ratings of a Rating Agency shall mean “A-1+” in the case
of Standard & Poor’s, “F-1” in the case of Fitch Ratings and “P-1” in the
case of Moody’s, and in the case of any other Rating Agency such references
shall mean such rating categories without regard to any plus or
minus.
“Realized
Loss”: With respect to each Mortgage Loan or REO Property as to which a Cash
Liquidation or REO Disposition has occurred, an amount (not less than zero)
equal to (i) the Stated Principal Balance of the Mortgage Loan as of the date
of
Cash Liquidation or REO Disposition, plus (ii) interest (and REO Imputed
Interest, if any) at the Net Mortgage Rate from the Due Date as to which
interest was last paid or advanced to Certificateholders up to the date of
the
Cash Liquidation or REO Disposition on the Stated Principal Balance of such
Mortgage Loan outstanding during each Due Period that such interest was not
paid
or advanced, minus (iii) the proceeds, if any, received during the month in
which such Cash Liquidation or REO Disposition occurred, to the extent applied
as recoveries of interest at the Net Mortgage Rate and to principal of the
Mortgage Loan, net of the portion thereof reimbursable to the Master Servicer
or
the Servicer with respect to related Advances or Servicing Advances not
previously reimbursed. With respect to each Mortgage Loan which has become
the
subject of a Deficient Valuation, the difference between the principal balance
of the Mortgage Loan outstanding immediately prior to such Deficient Valuation
and the principal balance of the Mortgage Loan as reduced by the Deficient
Valuation. In addition, to the extent the Servicer or 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 Certificate Principal Balance of
any
Class of Certificates on any Distribution Date.
“Record
Date”: With respect to the Class A Certificates and each Distribution Date, the
close of business on the last Business Day of the calendar month preceding
such
Distribution Date. With respect to each Distribution Date and the Class M
Certificates, so long as such Certificates are Book-Entry Certificates, the
Business Day immediately prior to such Distribution Date, and if any such
Certificates are no longer Book-Entry Certificates, then the close of business
on the last Business Day of the calendar month preceding such Distribution
Date.
For each Class of the Class R, Class RX, Class C and Class P Certificates and
each Distribution Date, the close of business on the last Business Day of the
calendar month preceding such Distribution Date.
“Reference
Banks” Leading banks selected by the Securities Administrator after consultation
with the Depositor and engaged in transactions in Eurodollar deposits in the
international Eurocurrency market (i) with an established place of business
in
London, (ii) whose quotations appear on the Telerate Screen Page 3750 on the
LIBOR Determination Date in question and (iii) which have been designated as
such by the Securities Administrator and (iv) not controlling, controlled by,
or
under common control with, the Depositor, the Sponsor, the Master Servicer
or
the Servicer.
“Regular
Certificate”: Any of the Certificates other than a Residual
Certificate.
“Regular
Interest”: A “regular interest” in a REMIC within the meaning of Section
860G(a)(1) of the Code.
“Regulation
AB”: Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to
such clarification and interpretation as have been provided by the Commission
in
the adopting release (Asset-Backed Securities, Securities Act Release No.
33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time
to
time.
“Relevant
Servicing Criteria”: Means with respect to any Servicing Function Participant,
the Servicing Criteria applicable to such party, as set forth on Exhibit L
to
the Agreement. 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 or the Servicer, the term “Relevant Servicing Criteria” may refer
to a portion of the Relevant Servicing Criteria applicable to such
parties.
“Relief
Act”: The Servicemembers Civil Relief Act, f/k/a Soldiers’ and Sailors’ Civil
Relief Act of 1940, as amended.
“Relief
Act Interest Shortfall”: With respect to any Distribution Date, for any Mortgage
Loan with respect to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended Due Period as a result of the
application of the Relief Act, the amount by which (i) interest collectible
on
such Mortgage Loan during such Due Period is less than (ii) one month’s interest
on the Principal Balance of such Mortgage Loan at the Loan Rate for such
Mortgage Loan before giving effect to the application of the Relief
Act.
“REMIC”:
A “real estate mortgage investment conduit” within the meaning of Section 860D
of the Code.
“REMIC
1”: The segregated pool of assets subject hereto (exclusive of the Cap Contract
Reserve Fund) with respect to which a REMIC election is to be made, conveyed
in
trust to the Trustee, for the benefit of the Holders of the REMIC 1 Regular
Interests and the Holders of the Class R Certificates, consisting of: (i) each
Mortgage Loan (exclusive of payments of principal and interest due on or before
the Cut-off Date, if any, received by the Master Servicer which shall not
constitute an asset of the Trust Fund) as from time to time are subject to
this
Agreement and all payments under and proceeds of such Mortgage Loans (exclusive
of any prepayment fees and late payment charges received on the Mortgage Loans),
together with all documents included in the related Mortgage File, subject
to
Section 2.01; (ii) such funds or assets as from time to time are deposited
in
the Distribution Account and belonging to the Trust Fund; (iii) any related
REO
Property; (iv) the Primary Hazard Insurance Policies, if any, the Primary
Mortgage Insurance Policies, if any, and all other Insurance Policies with
respect to the Mortgage Loans; and (v) the Depositor’s interest in respect of
the representations and warranties made by the Sponsor in the Mortgage Loan
Purchase Agreement. REMIC 1 specifically does not include the Cap Contract
Reserve Fund.
“REMIC
1
Interest Loss Allocation Amount”: With respect to any Distribution Date, an
amount equal to (a) the product of (i) the aggregate Stated Principal Balance
of
the Mortgage Loans and REO Properties then outstanding and (ii) the
Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest II-LTAA
minus the Marker Rate, divided by (b) 12.
“REMIC
1
Overcollateralization Amount”: With respect to any date of determination, (i)
1.00% of the aggregate Uncertificated Principal Balances of the REMIC 1 Regular
Interests minus (ii) the aggregate of the Uncertificated Principal Balances
of
REMIC 1 Regular Interest LT-A1, REMIC 1 Regular Interest LT-A2, REMIC 1 Regular
Interest LT-A3-1, REMIC 1 Regular Interest LT-A3-2, REMIC 1 Regular Interest
LT-M1, REMIC 1 Regular Interest LT-M2, REMIC 1 Regular Interest LT-M3, REMIC
1
Regular Interest LT-M4, REMIC 1 Regular Interest LT-M5, REMIC 1 Regular Interest
LT-M6, REMIC 1 Regular Interest LT-M7 and REMIC 1 Regular Interest LT-P, in
each
case as of such date of determination.
“REMIC
1
Principal Loss Allocation Amount”: With respect to any Distribution Date, an
amount equal to (a) the product of (i) the aggregate Stated Principal Balance
of
the Mortgage Loans and REO Properties then outstanding and (ii) 1 minus a
fraction, the numerator of which is two times the aggregate of the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT-A1, REMIC
1
Regular Interest LT-A2, REMIC 1 Regular Interest LT-A3-1, REMIC 1 Regular
Interest LT-A3-2, REMIC 1 Regular Interest LT-M1, REMIC 1 Regular Interest
LT-M2, REMIC 1 Regular Interest LT-M3, REMIC 1 Regular Interest LT-M4, REMIC
1
Regular Interest LT-M5, REMIC 1 Regular Interest LT-M6 and REMIC 1 Regular
Interest LT-M7 and the denominator of which is the aggregate of the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT-A1, REMIC
1
Regular Interest LT-A2, REMIC 1 Regular Interest LT-A3-1, REMIC 1 Regular
Interest LT-A3-2, REMIC 1 Regular Interest LT-M1, REMIC 1 Regular Interest
LT-M2, REMIC 1 Regular Interest LT-M3, REMIC 1 Regular Interest LT-M4, REMIC
1
Regular Interest LT-M5, REMIC 1 Regular Interest LT-M6, REMIC 1 Regular Interest
LT-M7 and REMIC 1 Regular Interest LT-ZZ.
“REMIC
1
Regular Interests”: The REMIC 1 Regular Interests, as set forth in the
Preliminary Statement.
“REMIC
1
Required Overcollateralization Amount”: 1.00% of the Overcollateralization
Target Amount.
“REMIC
2”: The segregated pool of assets consisting of all of the REMIC 1 Regular
Interests conveyed in trust to the Trustee, for the benefit of the REMIC 2
Certificateholders pursuant to Section 2.05, and all amounts deposited therein,
with respect to which a separate REMIC election is to be made.
“REMIC
2
Certificate”: Any Regular Certificate or Class R Certificate.
“REMIC
2
Certificateholder”: The Holder of any REMIC 2 Certificate.
“REMIC
2
Regular Interest”: The Class C Interest, Class P Interest and any “regular
interest” in REMIC 2 the ownership of which is represented by a Class A
Certificate or Class M Certificate.
“REMIC
3”: The segregated pool of assets consisting of the Class C Interest conveyed
in
trust to the Trustee, for the benefit of the Holders of the Class C Certificates
and the Class RX Certificates (in respect of the Class R-3 Interest), pursuant
to Article II hereunder, and all amounts deposited therein, with respect to
which a separate REMIC election is to be made.
“REMIC
3
Regular Interest”: Any “regular interest” in REMIC 3 the ownership of which is
represented by a Class C Certificate.
“REMIC
4”: The segregated pool of assets consisting of the Class P Interest conveyed
in
trust to the Trustee, for the benefit of the Holders of the Class P Certificates
and the Class RX Certificates (in respect of the Class R-4 Interest), pursuant
to Article II hereunder, and all amounts deposited therein, with respect to
which a separate REMIC election is to be made.
“REMIC
4
Regular Interest”: Any “regular interest” in REMIC 4 the ownership of which is
represented by a Class P Certificate.
“Remittance
Report”: A report prepared by the Master Servicer (and delivered to the
Securities Administrator) providing the information set forth in Exhibit E
attached hereto.
“REO
Acquisition”: The acquisition by the Servicer on behalf of the Issuing Entity
for the benefit of the Certificateholders of any REO Property pursuant to
Section 3.15.
“REO
Disposition”: The receipt by the Servicer of Insurance Proceeds, Liquidation
Proceeds, Subsequent Recoveries and other payments and recoveries (including
proceeds of a final sale) which the Servicer expects to be finally recoverable
from the sale or other disposition of the REO Property.
“REO
Imputed Interest”: As to any REO Property, for any period, an amount equivalent
to interest (at the Mortgage Rate that would have been applicable to the related
Mortgage Loan had it been outstanding) on the unpaid principal balance of the
Mortgage Loan as of the date of acquisition thereof (as such balance is reduced
pursuant to Section 3.15 by any income from the REO Property treated as a
recovery of principal).
“REO
Proceeds”: Proceeds, net of directly related expenses, received in respect of
any REO Property (including, without limitation, proceeds from the rental of
the
related Mortgaged Property and of any REO Disposition), which proceeds are
required to be deposited into the Distribution Account as and when
received.
“REO
Property”: A Mortgaged Property acquired by the Servicer on behalf of the
Issuing Entity through foreclosure or deed-in-lieu of foreclosure in connection
with a defaulted Mortgage Loan.
“Reportable
Event”: As defined in Section 3.23 hereof.
“Reporting
Servicer”: As defined in Section 3.23 hereof.
“Repurchase
Price”: With respect to any Mortgage Loan required to be repurchased by the
Sponsor, on any date pursuant to the Mortgage Loan Purchase Agreement, or
purchased by the Servicer pursuant to the Servicing Agreement an amount equal
to
the sum, without duplication, of (i) 100% of the Stated Principal Balance
thereof (without reduction for any amounts charged off) plus (ii) unpaid accrued
interest at the Mortgage Rate on the outstanding principal balance thereof
from
the Due Date to which interest was last paid by the Mortgagor to the first
day
of the month following the month of purchase plus (iii) the amount of
unreimbursed Monthly Advances or unreimbursed Servicing Advances made with
respect to such Mortgage Loan plus (iv) any other amounts owed to the Master
Servicer or the Servicer as applicable, pursuant to the Agreement or Servicing
Agreement and not included in clause (iii) of this definition plus (v) any
costs
and damages incurred by the Issuing Entity in connection with any violation
by
such loan of any predatory lending law.
“Repurchase
Proceeds”: The Repurchase Price in connection with any repurchase of a mortgage
loan by the Sponsor and any cash deposit in connection with the substitution
of
a mortgage loan.
“Request
for Release”: A release signed by a Servicing Officer, in the form of Exhibit F
attached hereto.
“Residual
Certificates”: The Class R Certificates and Class RX Certificates.
“Residual
Interest”: The sole Class of “residual interests” in a REMIC within the meaning
of Section 860G(a)(2) of the Code.
“Responsible
Officer”: When used with respect to the Trustee shall mean any officer within
the Corporate Trust Office of the Trustee with direct responsibility for the
administration of this Agreement and also, with respect to a particular matter,
any other officer of the Trustee to whom such matter is referred because of
such
officer’s knowledge of and familiarity with the particular subject. When used
with respect to the Securities Administrator shall mean any officer assigned
with direct responsibility for the administration of this Agreement and also,
with respect to a particular matter, any other officer of the Securities
Administrator to whom such matter is referred because of such officer’s
knowledge of and familiarity with the particular subject.
“Rolling
Sixty Day Delinquency Rate”: With
respect to any Distribution Date on or after the Stepdown Date is the average
of
the Sixty-Day Delinquency Rates for such Distribution Date and the two
immediately preceding distribution dates.
“Sarbanes
Oxley Certification”: A written certification covering servicing of the Mortgage
Loans by the Servicer and signed by an officer of the Depositor that complies
with (i) the Xxxxxxxx-Xxxxx Act of 2002, as amended from time to time, and
(ii)
the February 21, 2003 Statement by the Staff of the Division of Corporation
Finance of the Securities and Exchange Commission Regarding Compliance by
Asset-Backed Issuers with Exchange Act Rules 13a-14 and 15d-14, as in effect
from time to time.
“Securities
Administrator”: Xxxxx Fargo Bank, N.A., or its successor in interest, or any
successor securities administrator appointed as herein provided.
“Securitites
Administrator Information”: As defined in Section 3.23 hereof.
“Security
Agreement”: With respect to a Cooperative Loan, the agreement creating a
security interest in favor of the originator in the related Cooperative
Assets.
“Senior
Certificates”: The Class A Certificates.
“Senior
Enhancement Percentage”:
With
respect to any Distribution Date on or after the Stepdown Date is equal to
a
fraction (expressed as a percentage) of:
(1)
the
numerator of which is the excess of:
(a)
the
aggregate Stated Principal Balance of the Mortgage Loans for the preceding
Distribution Date over
(b)
(i)
before the aggregate Certificate Principal Balance of the Senior Certificates
has been reduced to zero, the aggregate Certificate Principal Balance of the
Senior Certificates, or
(ii)
after such time, the Certificate Principal Balance of the most senior Class
of
the Class M Certificates outstanding, as of the Business Day immediately
preceding the Distribution Date in the calendar month prior to the month of
such
Distribution Date, and
(2) the
denominator of which is the aggregate Stated Principal Balance of the Mortgage
Loans for the preceding Distribution Date.
“Senior
Principal Distribution Amount”: For any
Distribution Date, the excess of:
(1)
the
aggregate Certificate Principal Balance of the Senior Certificates immediately
prior to such Distribution Date, over
(2)
the
lesser of (A) the product of (i) (x) 85.00% on any Distribution Date on or
after
the Stepdown Date and prior to the Distribution Date in October 2012 or (y)
88.00% on any Distribution Date on or after the Stepdown Date and on or after
the Distribution Date in October 2012 and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the Due Date in the month of that
Distribution Date (after giving effect to principal prepayments received in
the
related Prepayment Period) and (B) the aggregate Stated Principal Balance of
the
Mortgage Loans as of the Due Date in the month of that Distribution Date (after
giving effect to Principal Prepayments received in the related Prepayment
Period) minus the OC Floor.
“Servicer”:
American Home Mortgage Servicing, Inc., or its successor in
interest.
“Servicer
Remittance Date”: Three Business Days prior to the related Distribution Date.
The first Servicer Remittance Date shall occur on October 20, 2006.
“Servicing
Advances”: All customary, reasonable and necessary “out of pocket” costs and
expenses incurred in connection with a default, delinquency or other
unanticipated event in the performance by the Master Servicer, the Servicer
or
any Subservicer of its servicing obligations, including, but not limited to,
the
cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
including any expenses incurred in relation to any such proceedings that result
from the Mortgage Loan being registered on the MERS System, (iii) the management
and liquidation of any REO Property, including reasonable fees paid to any
independent contractor in connection therewith, and (iv) compliance with the
obligations under the second paragraph of Section 3.01, Section 3.09 and Section
3.13 (other than any deductible described in the last paragraph
thereof).
“Servicing
Agreement”: The Servicing Agreement dated as of September 22, 2006 among the
Servicer, the Master Servicer, the Trustee and the Sponsor, substantially in
the
form attached hereto as Exhibit M.
“Servicing
Criteria”: Means the criteria set forth in paragraph (d) of Item 1122 of
Regulation AB, as such may be amended from time to time.
“Servicing
Fee”: With respect to each Mortgage Loan, accrued interest at the Servicing Fee
Rate with respect to the Mortgage Loan on the same principal balance on which
interest on the Mortgage Loan accrues for the calendar month. The Servicing
Fee
consists of servicing and other related compensation payable to the Servicer
or
to the Master Servicer if the Master Servicer is directly servicing the loan,
and includes any amount payable to any Subservicer by the Servicer.
“Servicing
Fee Rate”: 0.375% per annum.
“Servicing
Function Participant”: Means the Servicer, the Master Servicer and the
Securities Administrator, any Subservicer, Subcontractor or affiliates of any
of
the foregoing, or any other Person, that is participating in the servicing
function within the meaning of Item 1122 of Regulation AB performing activities
addressed by the Servicing Criteria, unless such Person’s activities relate only
to five percent (5%) or less of the Mortgage Loans.
“Servicing
Officer”: Any officer of the Master Servicer or the Servicer involved in, or
responsible for, the administration and master servicing or servicing of the
Mortgage Loans, as applicable, whose name and specimen signature appear on
a
list of servicing officers furnished to the Trustee by the Master Servicer
and
the Servicer, as such list may from time to time be amended.
“Servicing
Rights Pledgee”: One or more lenders, selected by the Servicer, to which the
Servicer may pledge and assign all of its right, title and interest in, to
and
under the Servicing Agreement, including Bank of America, N.A., as the
representative of certain lenders.
“Significance
Estimate”: With respect to any Distribution Date, and in accordance with Item
1115 of Regulation AB, shall be an amount determined based on the reasonable
good-faith estimate by the Sponsor or its affiliate of the aggregate maximum
probable exposure of the outstanding Certificates to the Cap
Contract.
“Significance
Percentage”: With respect to any Distribution Date, and in accordance with Item
1115 of Regulation AB, shall be an percentage equal to the Significance Estimate
divided by the aggregate outstanding Certificate Principal Balance of the Class
A Certificates and Class M Certificates, prior to the distribution of the
Principal Distribution Amount on such Distribution Date.
“Single
Certificate”: A Regular Certificate of any Class evidencing an Initial
Certificate Principal Balance or Initial Notional Amount, as applicable, of
$1,000.
“Sixty-Day
Delinquency Rate”:
With
respect to any Distribution Date on or after the Stepdown Date, is a fraction,
expressed as a percentage, the numerator of which is the aggregate Stated
Principal Balance for such Distribution Date of all Mortgage Loans that were
60
or more days Delinquent as of the close of business on the last day of the
calendar month preceding such Distribution Date (including Mortgage Loans in
foreclosure, bankruptcy and REO Properties) and the denominator of which is
the
aggregate Stated Principal Balance for such Distribution Date of the Mortgage
Loans as of the related Due Date (after giving effect to principal prepayments
in the Prepayment Period related to that prior Due Date).
“Sponsor”:
American Home Mortgage Corp.
“Standard
& Poor’s”: Standard & Poor’s, a division of The XxXxxx-Xxxx Companies,
Inc., or its successor in interest.
“Startup
Day”: The day designated as such pursuant to Article X hereof.
“Stated
Principal Balance”: With respect to any Mortgage Loan or related REO Property at
any given time, (i) the principal balance of the Mortgage Loan outstanding
as of
the Cut-off Date, after application of principal payments due on or before
such
date, whether or not received, minus (ii) the sum of (a) the principal portion
of the Monthly Payments due with respect to such Mortgage Loan or REO Property
during each Due Period ending prior to the most recent Distribution Date which
were received or with respect to which an Advance was made, and (b) all
Principal Prepayments with respect to such Mortgage Loan or REO Property, and
all Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries and REO
Proceeds to the extent applied by the Master Servicer as recoveries of principal
in accordance with Section 3.15 with respect to such Mortgage Loan or REO
Property, which were distributed pursuant to Section 4.01 on any previous
Distribution Date, and (c) any Realized Loss with respect thereto allocated
pursuant to Section 4.07 for any previous Distribution Date.
“Stepdown
Date”: The
earlier to occur of:
(i) the
Distribution Date following the Distribution Date on which the aggregate
Certificate Principal Balance of the Senior Certificates is reduced to zero;
and
(ii) the
later
to occur of (x) the Distribution Date in October 2009 and (y) the first
Distribution Date on which a fraction, the numerator of which is the excess
of
the aggregate Stated Principal Balance of the Mortgage Loans as of the Due
Date
in the month preceding the month in which that Distribution Date occurs (after
giving effect to principal prepayments received in the Prepayment Period related
to that Due Date) over the aggregate Certificate Principal Balance of the Senior
Certificates immediately prior to that Distribution Date, and the denominator
of
which is the aggregate Stated Principal Balance of the Mortgage Loans as of
the
Due Date in the month of the current Distribution Date (after giving effect
to
principal prepayments received in the Prepayment Period related to that Due
Date) is greater than or equal to (a) 15.00% on any Distribution Date prior
to
the Distribution Date in October 2012 and (b) 12.00% on any Distribution Date
on
or after the Distribution Date in October 2012.
“Stepdown
Target Subordination Percentage and Initial Target Subordination
Percentage”: For
Class
A Certificates and each Class of Class M Certificates will equal the respective
percentages indicated in the following table:
|
Initial
Target Subordination Percentage
|
Stepdown
Target Subordination Percentage(1)
|
Stepdown
Target Subordination Percentage(2)
|
||||||||
|
Class
A
|
6.000
|
%
|
15.000
|
%
|
12.000
|
%
|
||||
|
Class
M-1
|
3.800
|
%
|
9.500
|
%
|
7.600
|
%
|
||||
|
Class
M-2
|
3.000
|
%
|
7.500
|
%
|
6.000
|
%
|
||||
|
Class
M-3
|
2.400
|
%
|
6.000
|
%
|
4.800
|
%
|
||||
|
Class
M-4
|
1.800
|
%
|
4.500
|
%
|
3.600
|
%
|
||||
|
Class
M-5
|
1.350
|
%
|
3.375
|
%
|
2.700
|
%
|
||||
|
Class
M-6
|
0.900
|
%
|
2.250
|
%
|
1.800
|
%
|
||||
|
Class
M-7
|
0.500
|
%
|
1.250
|
%
|
1.000
|
%
|
||||
(1)
For
any Distribution Date occurring on or after the Distribution Date in October
2009 and prior to the Distribution Date occurring in October 2012.
(2)
For
any Distribution Date occurring on or after the Distribution Date in October
2012.
“Step-Up
Date”: With respect to the Offered Certificates, the Distribution Date following
the Optional Termination Date.
“Subservicer”:
Any Subservicer appointed by the Servicer pursuant to a Servicing
Agreement.
“Subsequent
Recoveries”: As of any Distribution Date, amounts received by the Servicer or
Master Servicer (net of any related expenses permitted to be reimbursed pursuant
to Section 4.02) or surplus amounts held by the Servicer or Master Servicer
to
cover estimated expenses (including, but not limited to, recoveries in respect
of the representations and warranties made by the Sponsor in the Mortgage Loan
Purchase Agreement) specifically related to a Mortgage Loan that was the subject
of a liquidation or final disposition of any REO Property prior to the related
Prepayment Period that resulted in a Realized Loss.
“Substitution
Adjustment”: As defined in Section 2.04 hereof.
“Tax
Returns”: The federal income tax return on Internal Revenue Service Form 1066,
U.S. Real Estate Mortgage Investment Conduit Income Tax Return, including
Schedule Q thereto, Quarterly Notice to Residual Interest Holders of REMIC
Taxable Income or Net Loss Allocation, or any successor forms, to be filed
on
behalf of each REMIC due to their classification as REMICs under the REMIC
Provisions, together with any and all other information, reports or returns
that
may be required to be furnished to the Certificateholders or filed with the
Internal Revenue Service or any other governmental taxing authority under any
applicable provisions of federal, state or local tax laws.
“Termination
Price”:
An
amount equal to (a) 100% of the unpaid principal balance of each Mortgage Loan
(other than one as to which a REO Property was acquired) on the day of
repurchase together with accrued interest on such unpaid principal balance
at
the Net Mortgage Rate to the first day of the month in which the proceeds of
such repurchase are to be distributed, plus (b) the appraised value of any
REO
Property (but not more than the unpaid principal balance of the related Mortgage
Loan, together with accrued interest on that balance at the Net Mortgage Rate
to
the first day of the month such repurchase price is distributed) less the good
faith estimate of the Servicer of liquidation expenses to be incurred in
connection with its disposal thereof, such appraisal to be conducted by an
appraiser mutually agreed upon by the Servicer and the Master Servicer on behalf
of the Trustee at the expense of the terminating party.
“Terminating
Purchase”:
The
purchase of all Mortgage Loans and each REO Property owned by the Issuing Entity
pursuant to Section 9.01 hereof.
“Transfer”:
Any direct or indirect transfer, sale, pledge, hypothecation or other form
of
assignment of any Ownership Interest in a Certificate.
“Transferor”:
Any Person who is disposing by Transfer of any Ownership Interest in a
Certificate.
“Trigger
Event”: A
Trigger
Event is in effect with respect to any Distribution Date on or after the
Stepdown Date if either a Delinquency Trigger Test is in effect with respect
to
that Distribution Date or a Cumulative Loss Trigger Event is in effect with
respect to that Distribution Date.
“Trust
Fund”: REMIC 1, REMIC 2, REMIC 3, REMIC 4 and the Cap Contract Reserve
Fund.
“Trust
REMIC”: REMIC 1, REMIC 2, REMIC 3 and REMIC 4.
“Trustee”:
Deutsche Bank National Trust Company, or its successor in interest, or any
successor trustee appointed as herein provided.
“Uncertificated
Accrued Interest”: With respect to each REMIC Regular Interest on each
Distribution Date, an amount equal to one month’s interest at the related
Uncertificated Pass-Through Rate on the Uncertificated Principal Balance, as
applicable, of such REMIC Regular Interest. In each case, Uncertificated Accrued
Interest will be reduced by any Net Prepayment Interest Shortfalls and Relief
Act Interest Shortfalls (allocated to such REMIC Regular Interests as set forth
in Section 1.04).
“Uncertificated
Principal Balance”: With respect to each REMIC Regular Interest, the principal
amount of such REMIC Regular Interest outstanding as of any date of
determination. As of the Closing Date, the Uncertificated Principal Balance
of
each such REMIC Regular Interest shall equal the amount set forth in the
Preliminary Statement hereto as its initial Uncertificated Principal Balance.
On
each Distribution Date, the Uncertificated Principal Balance of each such REMIC
Regular Interest shall be reduced by all distributions of principal made on
such
REMIC Regular Interest on such Distribution Date pursuant to Section 4.06 and,
if and to the extent necessary and appropriate, shall be further reduced on
such
Distribution Date by Realized Losses as provided in Section 4.07, and the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-ZZ shall be
increased by interest deferrals as provided in Section 4.07. With respect to
the
Class C Interest as of any date of determination, an amount equal to the excess,
if any, of (A) the then aggregate Uncertificated Principal Balance of the REMIC
2 Regular Interests over (B) the then aggregate Certificate Principal Balance
of
the Class A Certificates, the Class M Certificates and the Class P Certificates
then outstanding. The Uncertificated Principal Balance of each REMIC Regular
Interest shall never be less than zero.
“Uncertificated
Pass-Through Rate”: The Uncertificated REMIC 1 Pass-Through Rate.
“Uncertificated
REMIC 1 Pass-Through Rate”: With respect to each REMIC 1 Regular Interest, a per
annum rate (but not less than zero) equal to the Weighted Average Adjusted
Net
Mortgage Rate on the Mortgage Loans as of the Due Date in the prior calendar
month (after giving effect to principal prepayments received in the Prepayment
Period related to that prior Due Date).
“Underwriter”:
Deutsche Bank Securities Inc.
“Uninsured
Cause”: Any cause of damage to property subject to a Mortgage such that the
complete restoration of such property is not fully reimbursable by the hazard
insurance policies or flood insurance policies required to be maintained
pursuant to Section 3.13.
“United
States Person”: A citizen or resident of the United States, a corporation or a
partnership (including an entity treated as a corporation or partnership for
United States 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 restrictions on the transfer of Class
R Certificates, 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 required by the applicable operative agreement
to be 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, 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.
“Voting
Rights”: The portion of the voting rights of all of the Certificates which is
allocated to any Certificate. At all times during the term of this Agreement,
(i) 96% of all Voting Rights will be allocated among the Holders of the Class
A
Certificates and Class M Certificates in proportion to the then outstanding
Certificate Principal Balances of their respective Certificates and (ii) 1%
of
all Voting Rights will be allocated to the Holders of each Class of the Class
R,
Class RX, Class C and Class P Certificates. The Voting Rights allocated to
any
Class of Certificates shall be allocated among all Holders of the Certificates
of such Class in proportion to the outstanding Percentage Interests in such
Class represented thereby.
“Weighted
Average Adjusted Net Mortgage Rate”: With respect to any Distribution Date, the
weighted average of the Net Mortgage Rates of each Mortgage Loan, weighted
on
the basis of its Stated Principal Balance as of the Due Date occurring in the
month preceding the month of that Distribution Date (after giving effect to
principal prepayments in the Prepayment Period related to that prior Due
Date).
Section
1.02 Determination
of LIBOR.
On
each
LIBOR Determination Date, the Securities
Administrator will
determine One-Month LIBOR and the related Pass-Through Rate for each Class
of
LIBOR Certificates for the next Accrual Period.
In
the
event that on any LIBOR Determination Date, Telerate Screen 3750 fails to
indicate the London interbank offered rate for one-month United States dollar
deposits, then One-Month LIBOR for the LIBOR Certificates for the related
Accrual Period will be established by the Securities Administrator as
follows:
|
(a)
|
If
on such LIBOR Determination Date two or more Reference Banks provide
such
offered quotations, One-Month LIBOR for the related Accrual Period
shall
be the arithmetic mean of such offered quotations (rounded upwards
if
necessary to the nearest whole multiple of
0.0625%).
|
|
(b)
|
If
on such LIBOR Determination Date fewer than two Reference Banks provide
such offered quotations, One-Month LIBOR for the related Accrual
Period
shall be the higher of (x) One-Month LIBOR as determined on the previous
LIBOR Determination Date and (y) the Reserve Interest
Rate.
|
|
(c)
|
If
no such quotations can be obtained and no Reference Bank rate is
available, One-Month LIBOR will be the One-Month LIBOR rate applicable
to
the preceding Accrual Period.
|
The
establishment of One-Month LIBOR by the Securities Administrator on any LIBOR
Determination Date and the Securities Administrator’s calculation of the
Pass-Through Rate applicable to the LIBOR Certificates for the relevant Accrual
Period, in the absence of manifest error, will be final and binding. The
Securities Administrator will supply to any Certificateholder so requesting
by
telephone the Pass-Through Rate on the LIBOR Certificates for the current and
the immediately preceding Accrual Period.
Section
1.03 Determination
of MTA.
(a) On
each
related MTA Determination Date, so long as the MTA Certificates are outstanding,
the Securities Administrator shall determine MTA for the related Accrual Period
as published by the Federal Reserve Board in the Federal Reserve Statistical
Release 'Selected
Interest Rates (H.15)', determined by averaging the monthly yields for the
most
recently available twelve months. The MTA figure used to determine the
Pass-Through Rates on the MTA Certificates will be based on the MTA as of
fifteen days before the beginning of the related Accrual Period.
(b) If
on any
MTA Determination Date MTA is no longer available, the index used to determine
the Pass-Through Rates on the MTA Certificates will be the same
index selected to determine the interest rates on the related Mortgage
Loans.
(c) The
Pass-Through Rate for each Class of MTA Certificates for each Accrual Period
shall be determined by the Securities Administrator on each MTA Determination
Date so long as the MTA Certificates are outstanding on the basis of MTA and
the
respective formulae appearing in the definition of the Pass-Through Rate
corresponding to the MTA Certificates.
The
determination of MTA and the Pass-Through Rates for the MTA Certificates by
the
Securities Administrator shall (in the absence of manifest error) be final,
conclusive and binding upon each Holder of a MTA Certificate and the Securities
Administrator.
Section
1.04 Allocation
of Certain Interest Shortfalls.
The
aggregate amount of any Net Prepayment Interest Shortfalls and any Relief Act
Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated among REMIC 1 Regular Interest LT-AA,
REMIC
1 Regular Interest LT-A1, REMIC 1 Regular Interest LT-A2, REMIC 1 Regular
Interest LT-A3-1, REMIC 1 Regular Interest LT-A3-2, REMIC 1 Regular Interest
LT-M1, REMIC 1 Regular Interest LT-M2, REMIC 1 Regular Interest LT-M3, REMIC
1
Regular Interest LT-M4, REMIC 1 Regular Interest LT-M5, REMIC 1 Regular Interest
LT-M6, REMIC 1 Regular Interest LT-M7 and REMIC 1 Regular Interest LT-ZZ, pro
rata based on, and to the extent of, one month’s interest at the then applicable
respective Uncertificated REMIC 1 Pass-Through Rate on the respective
Uncertificated Principal Balance of each such REMIC 1 Regular
Interest.
ARTICLE
II
CONVEYANCE
OF MORTGAGE LOANS;
ORIGINAL
ISSUANCE OF CERTIFICATES
Section
2.01 Conveyance
of Mortgage Loans.
The
Depositor, as of the Closing Date, and concurrently with the execution and
delivery hereof, does hereby assign, transfer, sell, set over and otherwise
convey to the Trustee without recourse all the right, title and interest of
the
Depositor in and to the Mortgage Loans identified on the Mortgage Loan Schedule
(exclusive of any prepayment fees and late payment charges received thereon)
and
all other assets included or to be included in the Trust Fund for the benefit
of
the Certificateholders. Such assignment includes all principal and interest
received by the Servicer on or with respect to the Mortgage Loans (other than
payment of principal and interest due on or before the Cut-off
Date).
In
connection with such transfer and assignment, the Depositor has caused the
Sponsor with respect to each Mortgage Loan, to deliver to, and deposit to or
at
the direction of the Trustee, as described in the Mortgage Loan Purchase
Agreement, with respect to each Mortgage Loan, the following documents or
instruments:
(a) With
respect to each Mortgage Loan, other than a Cooperative Loan:
(i) the
original Mortgage Note endorsed without recourse to the order of the Trustee
or
in blank, and showing an unbroken chain of endorsements from the original payee
thereof to the Person endorsing it to the Trustee or in blank or, with respect
to any Mortgage Loan as to which the original Mortgage Note has been lost or
destroyed and has not been replaced, a Lost Note Affidavit;
(ii) the
original Mortgage with evidence of recording thereon, or, if the original
Mortgage has not yet been returned from the public recording office, a copy
of
the original Mortgage certified by the Sponsor or the public recording office
in
which such original Mortgage has been recorded;
(iii) an
assignment (which may be included in one or more blanket assignments if
permitted by applicable law) of the Mortgage in blank or to the Trustee (or
to
MERS, if the Mortgage Loan is registered on the MERS® System and noting the
presence of a MIN) and otherwise in recordable form;
(iv) originals
of any intervening assignments of the Mortgage, with evidence of recording
thereon, or, if the original of any such intervening assignment has not yet
been
returned from the public recording office, a copy of such original intervening
assignment certified by the Sponsor or the public recording office in which
such
original intervening assignment has been recorded;
(v) the
original policy of title insurance (or a preliminary title report commitment
for
title insurance, if the policy is being held by the title insurance company
pending recordation of the Mortgage); and
(vi) the
original or a true and correct copy of any assumption, modification,
consolidation or substitution agreement, if any, relating to the Mortgage
Loan.
(b) With
respect to each Mortgage Loan that is a Cooperative Loan (as indicated on the
Mortgage Loan Schedule):
(i) the
original Mortgage Note endorsed without recourse to the order of the Trustee
or
in blank, and showing an unbroken chain of endorsements from the original payee
thereof to the Person endorsing it to the Trustee or in blank or, with respect
to any Mortgage Loan as to which the original Mortgage Note has been lost or
destroyed and has not been replaced, a Lost Note Affidavit;
(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
original or a true and correct copy of any assumption, modification,
consolidation or substitution agreement, if any, relating to the Mortgage
Loan.
Within
30
days after the Closing Date, the Depositor shall complete or cause to be
completed the Assignments of Mortgage in the name of “Deutsche Bank National
Trust Company, as trustee under the Agreement relating to American Home Mortgage
Assets LLC, Mortgaged-Backed Pass-Through Certificates, Series 2006-5” (or shall
prepare or cause to be prepared new forms of Assignment of Mortgage so completed
in the name of the Trustee) for each Mortgage Property in a state, if any,
which
is specifically excluded from the Opinion of Counsel delivered by the Depositor
to the Trustee and the Custodian, each such assignment shall be recorded in
the
appropriate public office for real property records, and returned to the
Custodian, at no expense to the Trustee or the Custodian.
The
Sponsor
is
obligated as described in the Mortgage Loan Purchase Agreement, with respect
to
the Mortgage Loans, to deliver to or at the direction of the Trustee: (a) either
the original recorded Mortgage, or in the event such original cannot be
delivered by the Sponsor, a copy of such Mortgage certified as true and complete
by the appropriate recording office, in those instances where a copy thereof
certified by the Sponsor was delivered to the Custodian as agent for the Trustee
pursuant to clause (ii) above; and (b) either the original Assignment or
Assignments of the Mortgage, with evidence of recording thereon, showing an
unbroken chain of assignment from the originator to the Sponsor, or in the
event
such original cannot be delivered by the Sponsor, a copy of such Assignment
or
Assignments certified as true and complete by the appropriate recording office,
in those instances where copies thereof certified by the Sponsor were delivered
to the Custodian as agent for the Trustee pursuant to clause (iv) above.
However, pursuant to the Mortgage Loan Purchase Agreement, the Sponsor need
not
cause to be recorded any assignment in any jurisdiction under the laws of which,
as evidenced by an Opinion of Counsel delivered by the Sponsor to the Trustee,
the Custodian and the Rating Agencies, the recordation of such assignment is
not
necessary to protect the Trustee’s interest in the related Mortgage Loan;
provided,
however,
notwithstanding the delivery of any Opinion of Counsel, each assignment shall
be
submitted for recording by the Sponsor in the manner described above, at no
expense to the Issuing Entity, the Custodian or the Trustee, upon the earliest
to occur of: (i) reasonable direction by the Holders of Certificates evidencing
at least 25% of the Voting Rights, (ii) the occurrence of an Event of Default,
(iii) the occurrence of a bankruptcy, insolvency or foreclosure relating to
the
Sponsor, (iv) the occurrence of a servicing transfer as described in Section
7.02 hereof and (v) if the Sponsor is not the Master Servicer and with respect
to any one assignment, the occurrence of a bankruptcy, insolvency or foreclosure
relating to the Mortgagor under the related Mortgage.
Notwithstanding
anything to the contrary contained in this Section 2.01, in those instances
where the public recording office retains the original Mortgage after it has
been recorded, the Sponsor shall be deemed to have satisfied its obligations
hereunder upon delivery to the Custodian as agent for the Trustee of a copy
of
such Mortgage certified by the public recording office to be a true and complete
copy of the recorded original thereof.
If
any
Assignment is lost or returned unrecorded to the Custodian as agent for the
Trustee because of any defect therein, the Sponsor, as the case may be, is
required, as described in the Mortgage Loan Purchase Agreement, to prepare
a
substitute Assignment or cure such defect, as the case may be, and the Sponsor,
as applicable, shall cause such Assignment to be recorded in accordance with
this section.
In
connection with the assignment of any Mortgage Loan registered on the MERS®
System, the Sponsor
further
agrees that it will cause, at the Sponsor’s own expense, as of the Closing Date,
the MERS® System to indicate that such Mortgage Loans have been assigned by the
Sponsor to the Trustee in accordance with this Agreement for the benefit of
the
Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code in the field which identifies the specific Trustee and (b) the
code
in the field “Pool Field” which identifies the series of the Certificates issued
in connection with such Mortgage Loans. The Depositor further agrees that it
will not, and will not permit the Servicer to alter the codes referenced in
this
paragraph with respect to any Mortgage Loan during the term of this Agreement
unless and until such Mortgage Loan is repurchased in accordance with the terms
of this Agreement.
With
respect to the Cooperative Loans, the Depositor will, promptly after the Closing
Date, cause the related financing statements (if not yet filed) and an
assignment thereof from the Depositor to the Trustee to be filed in the
appropriate offices.
Except
as
may otherwise expressly be provided herein, none of the Depositor, the
Custodian, the Master Servicer, or the Trustee shall (and the Master Servicer
shall ensure that no Servicer shall) assign, sell, dispose of or transfer any
interest in the Trust Fund or any portion thereof, or cause the Trust Fund
or
any portion thereof to be subject to any lien, claim, mortgage, security
interest, pledge or other encumbrance.
It
is
intended that the conveyance of the Mortgage Loans by the Depositor to the
Trustee as provided in this Section be, and be construed as, a sale of the
Mortgage Loans as provided for in this Section 2.01 by the Depositor to the
Trustee for the benefit of the Certificateholders. It is, further, not intended
that such conveyance be deemed a pledge of the Mortgage Loans by the Depositor
to the Trustee to secure a debt or other obligation of the Depositor. However,
in the event that the Mortgage Loans are held to be property of the Depositor,
or if for any reason this Agreement is held or deemed to create a security
interest in the Mortgage Loans, then it is intended that, (a) this Agreement
shall also be deemed to be a security agreement within the meaning of Articles
8
and 9 of the New York Uniform Commercial Code and the Uniform Commercial Code
of
any other applicable jurisdiction; (b) the conveyance provided for in this
Section shall be deemed to be (1) a grant by the Depositor to the Trustee of
a
security interest in all of the Depositor’s right (including the power to convey
title thereto), title and interest, whether now owned or hereafter acquired,
in
and to (A) the Mortgage Loans, including the Mortgage Notes, the Mortgages,
any
related Insurance Policies and all other documents in the related Mortgage
Files, (B) all amounts payable to the holders of the Mortgage Loans in
accordance with the terms thereof and (C) all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities
or
other property, including without limitation all amounts from time to time
held
or invested in the Distribution Account, whether in the form of cash,
instruments, securities or other property and (2) an assignment by the Depositor
to the Trustee of any security interest in any and all of the Sponsor’s right
(including the power to convey title thereto), title and interest, whether
now
owned or hereafter acquired, in and to the property described in the foregoing
clauses (1)(A) through (C); (c) the possession by the Custodian as agent for
the
Trustee or any other agent of 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” or possession by a
purchaser or a person designated by such secured party, for purposes of
perfecting the security interest pursuant to the New York Uniform Commercial
Code and the Uniform Commercial Code of any other applicable jurisdiction
(including, without limitation, Sections 9-115, 9-305, 8-102, 8-301, 8-501
and
8-503 thereof); and (d) 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 Trustee
for the purpose of perfecting such security interest under applicable law.
The
Depositor shall, to the extent consistent with this Agreement, take such actions
as may be necessary to ensure that, if this Agreement were deemed to create
a
security interest in the Mortgage Loans and the REMIC 1 Regular Interests,
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 Agreement.
Section
2.02 Acceptance
of the Trust Fund by the Trustee.
The
Trustee acknowledges receipt (subject to any exceptions noted in the Initial
Certification described below), of the documents referred to in Section 2.01
above and all other assets included in the definition of “Trust
Fund”
and
declares that it (or the Custodian on its behalf) holds and will hold such
documents and the other documents delivered to Custodian as agent for the
Trustee constituting the Mortgage Files, and that it holds or will hold such
other assets included in the definition of “Trust
Fund”
(to
the
extent delivered or assigned to the Custodian as agent for the Trustee), in
trust for the exclusive use and benefit of all present and future
Certificateholders.
The
Trustee agrees to cause, for the benefit of the Certificateholders, the
Custodian as agent for the Trustee to review each Mortgage File on or before
the
Closing Date to ascertain that all documents required to be delivered to it
are
in its possession, and the Custodian as agent for the Trustee agrees to execute
and deliver, or cause to be executed and delivered, to the Depositor on the
Closing Date, with respect to each Mortgage Loan, an Initial Certification
in
the form annexed hereto as Exhibit C to the effect that, 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 such certification as
not
covered by such certification), (i) all documents required to be delivered
to it
pursuant to this Agreement with respect to such Mortgage Loan are in its
possession, and (ii) such documents have been reviewed by it and appear regular
on their face and relate to such Mortgage Loan. Neither the Custodian, the
Trustee or the Master Servicer shall be under any duty to determine whether
any
Mortgage File should include any of the documents specified in clauses (v)
or
(vi) of Section 2.01(a). Neither the Custodian, the Trustee or the Master
Servicer shall be under any duty or obligation to inspect, review or examine
said documents, instruments, certificates or other papers to determine that
the
same are genuine, valid, enforceable, appropriate for the represented purpose
or
that they have actually been recorded, or that they are in recordable form
or
that they are other than what they purport to be on their face.
Within
180 days of the Closing Date, with respect to the Mortgage Loans, the Custodian
as agent for the Trustee shall deliver to the Depositor a Final Certification
in
the form annexed hereto as Exhibit D evidencing the completeness of the Mortgage
Files, with any applicable exceptions noted thereon.
If
in the
process of reviewing the Mortgage Files and preparing the certifications
referred to above the Custodian as agent for the Trustee or the Master Servicer
finds any document or documents constituting a part of a Mortgage File to be
missing or not in compliance with the criteria as set forth herein, the
Custodian as agent for the Trustee shall promptly notify the Trustee, the
Sponsor, the Depositor and the Securities Administrator (which may be by an
exception report). The Sponsor shall cure any such defect within 60 days from
the date on which the Sponsor was notified of such defect, and if the Sponsor
does not cure such defect in all material respects during such period, the
Trustee shall request on behalf of the Certificateholders that the Sponsor
purchase such Mortgage Loan from the Trust Fund at the Purchase Price within
90
days after the date on which the Sponsor was notified of such defect; 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.
It is understood and agreed that the obligation of the Sponsor to cure a
material defect in, or purchase any Mortgage Loan as to which a material defect
in a constituent document exists shall constitute the sole remedy respecting
such defect available to Certificateholders or the Trustee on behalf of
Certificateholders. The Purchase Price for the purchased Mortgage Loan shall
be
deposited or caused to be deposited upon receipt by the Securities Administrator
in the Distribution Account and, upon receipt by the Custodian as agent for
the
Trustee and the Securities Administrator of written notification of such deposit
signed by a Servicing Officer, the Custodian as agent for the Trustee shall
release or cause to be released to the Sponsor the related Mortgage File and
the
Trustee shall execute and deliver such instruments of transfer or assignment,
in
each case without recourse, as the Sponsor shall require as necessary to vest
in
the Sponsor ownership of any Mortgage Loan released pursuant hereto and at
such
time neither the Custodian nor the Trustee shall have any further responsibility
with respect to the related Mortgage File. In furtherance of the foregoing,
if
the Sponsor is not a member of MERS and the Mortgage is registered on the MERS®
System, the Servicer, at the the Sponsor’s expense, shall cause MERS to execute
and deliver an assignment of the Mortgage in recordable form to transfer the
Mortgage from MERS to the the Sponsor and shall cause such Mortgage to be
removed from registration on the MERS® System in accordance with MERS’ rules and
regulations.
In
connection with any repurchase of a Mortgage Loan or the cure of a breach of
a
representation or warranty pursuant to this Section 2.02, the Sponsor shall
promptly furnish to the Securities Administrator and the Trustee an officer’s
certificate, signed by a duly authorized officer of the Sponsor to the effect
that such repurchase or cure has been made in accordance with the terms and
conditions of this Agreement and that all conditions precedent to such
repurchase or cure have been satisfied, including the delivery to the Securities
Administrator of the Purchase Price for deposit into the Distribution Account,
together with copies of any Opinion of Counsel required to be delivered pursuant
to this Agreement and the related Request for Release, in which the Securities
Administrator and the Trustee may rely. Solely for purposes of the Securities
Administrator providing an Assessment of Compliance, upon receipt of such
documentation, the Securities Administrator shall approve such repurchase,
substitution or cure, as applicable, and which approval shall consist solely
of
the Securities Administrator’s receipt of such documentation and
deposits.
Section
2.03 Representations,
Warranties and Covenants of the Master Servicer and the
Depositor.
(a) The
Master Servicer hereby represents and warrants to and covenants with the
Depositor for the benefit of Certificateholders and the Trustee
that:
(i) The
Master Servicer is, and throughout the term hereof shall remain, a national
banking association duly organized, validly existing and in good standing under
the laws of the state of its incorporation, the Master Servicer is, and shall
remain, in compliance with the laws of each state in which any Mortgaged
Property is located to the extent necessary to perform its obligations under
this Agreement, and the Master Servicer or an affiliate is, and shall remain,
approved to service Mortgage Loans for Xxxxxx Xxx and Xxxxxxx Mac;
(ii) The
execution and delivery of this Agreement by the Master Servicer, and the
performance and compliance with the terms of this Agreement by the Master
Servicer, will not violate the Master Servicer’s articles of incorporation or
bylaws or constitute a default (or an event which, with notice or lapse of
time,
or both, would constitute a default) under, or result in the breach of, any
material agreement or other instrument to which it is a party or which is
applicable to it or any of its assets;
(iii) The
Master Servicer has the full power and authority to enter into and consummate
all transactions contemplated by this Agreement, has duly authorized the
execution, delivery and performance of this Agreement, and has duly executed
and
delivered this Agreement;
(iv) This
Agreement, assuming due authorization, execution and delivery by the Depositor
and the Trustee, constitutes a valid, legal and binding obligation of the Master
Servicer, enforceable against the Master Servicer in accordance with the terms
hereof, subject to (A) applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors’ rights
generally, and (B) general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law;
(v) The
Master Servicer is not in violation of, and its execution and delivery of this
Agreement and its performance and compliance with the terms of this Agreement
will not constitute a violation of, any law, any order or decree of any court
or
arbiter, or any order, regulation or demand of any federal, state or local
governmental or regulatory authority, which violation is likely to affect
materially and adversely either the ability of the Master Servicer to perform
its obligations under this Agreement or the financial condition of the Master
Servicer;
(vi) No
litigation is pending (other than litigation with respect to which pleadings
or
documents have been filed with a court, but not served on the Master Servicer)
or, to the best of the Master Servicer’s knowledge, threatened against the
Master Servicer which would prohibit its entering into this Agreement or
performing its obligations under this Agreement or is likely to affect
materially and adversely either the ability of the Master Servicer to perform
its obligations under this Agreement or the financial condition of the Master
Servicer;
(vii) The
Master Servicer will comply in all material respects in the performance of
this
Agreement with all reasonable rules and requirements of each insurer under
each
Insurance Policy;
(viii) The
execution of this Agreement and the performance of the Master Servicer’s
obligations hereunder do not require any license, consent or approval of any
state or federal court, agency, regulatory authority or other governmental
body
having jurisdiction over the Master Servicer, other than such as have been
obtained; and
(ix) No
information, certificate of an officer, statement furnished in writing or report
delivered to the Depositor, any affiliate of the Depositor or the Trustee by
the
Master Servicer in its capacity as Master Servicer, will, to the knowledge
of
the Master Servicer, contain any untrue statement of a material
fact.
It
is
understood and agreed that the representations, warranties and covenants set
forth in this Section 2.03(a) shall survive the execution and delivery of this
Agreement, and shall inure to the benefit of the Depositor, the Trustee and
the
Certificateholders. Upon discovery by any of the Depositor, the Trustee, the
Securities Administrator or the Master Servicer of a breach of any of the
foregoing representations, warranties and covenants that materially and
adversely affects the interests of the Depositor or the Trustee or the value
of
any Mortgage Loan or Prepayment Charge, the party discovering such breach shall
give prompt written notice to the other parties.
(b) The
Depositor hereby represents and warrants to the Master Servicer, the Securities
Administrator and the Trustee for the benefit of Certificateholders that as
of
the Closing Date
(i) the
Depositor (a) is a limited liability company duly organized, validly existing
and in good standing under the laws of the State of Delaware and (b) is
qualified and in good standing as a foreign corporation to do business in each
jurisdiction where such qualification is necessary, except where the failure
so
to qualify would not reasonably be expected to have a material adverse effect
on
the Depositor’s business as presently conducted or on the Depositor’s ability to
enter into this Agreement and to consummate the transactions contemplated
hereby;
(ii) the
Depositor has full corporate power to own its property, to carry on its business
as presently conducted and to enter into and perform its obligations under
this
Agreement;
(iii) the
execution and delivery by the Depositor of this Agreement have been duly
authorized by all necessary corporate action on the part of the Depositor;
and
neither the execution and delivery of this Agreement, nor the consummation
of
the transactions herein contemplated, nor compliance with the provisions hereof,
will conflict with or result in a breach of, or constitute a default under,
any
of the provisions of any law, governmental rule, regulation, judgment, decree
or
order binding on the Depositor or its properties or the articles of
incorporation or by-laws of the Depositor, except those conflicts, breaches
or
defaults which would not reasonably be expected to have a material adverse
effect on the Depositor’s ability to enter into this Agreement and to consummate
the transactions contemplated hereby;
(iv) the
execution, delivery and performance by the Depositor of this Agreement and
the
consummation of the transactions contemplated hereby do not require the consent
or approval of, the giving of notice to, the registration with, or the taking
of
any other action in respect of, any state, federal or other governmental
authority or agency, except those consents, approvals, notices, registrations
or
other actions as have already been obtained, given or made;
(v) this
Agreement has been duly executed and delivered by the Depositor and, assuming
due authorization, execution and delivery by the other parties hereto,
constitutes a valid and binding obligation of the Depositor enforceable against
it in accordance with its terms (subject to applicable bankruptcy and insolvency
laws and other similar laws affecting the enforcement of the rights of creditors
generally);
(vi) there
are
no actions, suits or proceedings pending or, to the knowledge of the Depositor,
threatened against the Depositor, before or by any court, administrative agency,
arbitrator or governmental body (i) with respect to any of the transactions
contemplated by this Agreement or (ii) with respect to any other matter which
in
the judgment of the Depositor will be determined adversely to the Depositor
and
will if determined adversely to the Depositor materially and adversely affect
the Depositor’s ability to enter into this Agreement or perform its obligations
under this Agreement; and the Depositor is not in default with respect to any
order of any court, administrative agency, arbitrator or governmental body
so as
to materially and adversely affect the transactions contemplated by this
Agreement;
(vii) The
Depositor has filed all reports required to be filed by Section 13 or Section
15(d) of the Exchange Act during the preceding 12 months (or for such shorter
period that the Depositor was required to file such reports) and it has been
subject to such filing requirements for the past 90 days; and
(viii) 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.
It
is
understood and agreed that the representations, warranties and covenants set
forth in this Section 2.03(b) shall survive the execution and delivery of this
Agreement, and shall inure to the benefit of the Master Servicer, Securities
Administrator, the Trustee and the Certificateholders. Upon discovery by either
the Depositor, the Master Servicer, the Securities Administrator, the Custodian
or the Trustee of a breach of any representation or warranty set forth in this
Section 2.03 which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the party discovering such breach
shall
give prompt written notice to the other parties.
Section
2.04 Assignment
of Interest in the Mortgage Loan Purchase Agreement.
The
Depositor hereby assigns to the Trustee for the benefit of Certificateholders
all of its rights (but none of its obligations) in, to and under the Mortgage
Loan Purchase Agreement. Insofar as the Mortgage Loan Purchase Agreement relates
to such representations and warranties and any remedies provided thereunder
for
any breach of such representations and warranties, such right, title and
interest may be enforced by the Trustee on behalf of the Certificateholders.
Upon the discovery by the Depositor, the Master Servicer, the Securities
Administrator or the Trustee of a breach of any of the representations and
warranties made in the Mortgage Loan Purchase Agreement in respect of any
Mortgage Loan which materially and adversely affects the value of a Mortgage
Loan or the interests of the Certificateholders in such Mortgage Loan, the
party
discovering such breach shall give prompt written notice to the other parties.
The Trustee shall promptly notify the Sponsor
of
such
breach and request that the Sponsor shall, within 90 days from the date that
the
Sponsor was notified or otherwise obtained knowledge of such breach, either
(i)
cure such breach in all material respects or (ii) purchase such Mortgage Loan
from the Trust Fund at the Purchase Price and in the manner set forth in Section
2.02; provided that if such 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 repurchase must occur within 90 days from the date such breach
was
discovered. However, in the case of a breach under the Mortgage Loan Purchase
Agreement, subject to the approval of the Depositor, the Sponsor shall have
the
option to substitute a Eligible Substitute Mortgage Loan or Loans for such
Mortgage Loan if such substitution occurs within two years following the Closing
Date, except 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
substitution must occur within 90 days from the date the breach was discovered
if such 90 day period expires before two years following the Closing Date.
In
the event that Sponsor elects to substitute a Eligible Substitute Mortgage
Loan
or Loans for a Deleted Mortgage Loan pursuant to this Section 2.04, the Trustee
shall enforce the obligation of the Sponsor under the Mortgage Loan Purchase
Agreement to deliver to the Custodian as agent for the Trustee and the Master
Servicer, as appropriate, with respect to such Eligible Substitute Mortgage
Loan
or Loans, the original Mortgage Note, the Mortgage, an Assignment of the
Mortgage in recordable form, and such other documents and agreements as are
required by Section 2.01, with the Mortgage Note endorsed as required by Section
2.01. No substitution will be made in any calendar month after the Determination
Date for such month. Monthly Payments due with respect to Eligible Substitute
Mortgage Loans in the month of substitution, to the extent received by the
Master Servicer or any Subservicer, shall not be part of the Trust Fund and
will
be retained by the Master Servicer and remitted by the Master Servicer to the
Sponsor on the next succeeding Distribution Date. For the month of substitution,
distributions to Certificateholders will include the Monthly Payment due on
a
Deleted Mortgage Loan for such month and thereafter the Sponsor shall be
entitled to retain all amounts received in respect of such Deleted Mortgage
Loan. The Depositor shall amend or cause to be amended the Mortgage Loan
Schedule for the benefit of the Certificateholders to reflect the removal of
such Deleted Mortgage Loan and the substitution of the Eligible Substitute
Mortgage Loan or Loans and the Depositor shall deliver the amended Mortgage
Loan
Schedule to the Custodian as agent for the Trustee. Upon such substitution,
the
Eligible Substitute Mortgage Loan or Loans shall be subject to the terms of
this
Agreement in all respects, the Sponsor shall be deemed to have made the
representations and warranties with respect to the Eligible Substitute Mortgage
Loan contained in the Mortgage Loan Purchase Agreement as of the date of
substitution, and the Depositor shall be deemed to have made with respect to
any
Eligible Substitute Mortgage Loan or Loans, as of the date of substitution,
the
representations and warranties set forth in the Mortgage Loan Purchase Agreement
(other than any statistical representations set forth therein).
In
connection with the substitution of one or more Eligible Substitute Mortgage
Loans for one or more Deleted Mortgage Loans, the Master Servicer will determine
the amount (the “Substitution Adjustment”), if any, by which the aggregate
principal balance of all such Eligible Substitute Mortgage Loans as of the
date
of substitution is less than the Aggregate Stated Principal Balance of all
such
Deleted Mortgage Loans (in each case after application of the principal portion
of the Monthly Payments due in the month of substitution that are to be
distributed to Certificateholders in the month of substitution). In accordance
with the Mortgage Loan Purchase Agreement, the Sponsor shall give notice in
writing to the Trustee, the Custodian and the Securities Administrator of such
event, which notice shall be accompanied by an Officers’ Certificate as to the
calculation of such shortfall (and that such shortfall, if any, has been
Deposited into the Distribution Account) and by an Opinion of Counsel to the
effect that such substitution will not cause (a) any federal tax to be imposed
on any Trust REMIC, including without limitation, any federal tax imposed on
“prohibited transactions” under Section 860F(a)(1) of the Code or on
“contributions after the startup date” under Section 860G(d)(1) of the Code or
(b) any portion of any Trust REMIC to fail to qualify as a REMIC at any time
that any Certificate is outstanding. The costs of any substitution as described
above, including any related assignments, opinions or other documentation in
connection therewith shall be borne by the Sponsor.
In
connection with any repurchase of a Mortgage Loan, substitution or the cure
of a
breach of a representation or warranty pursuant to Section 2.02 and this Section
2.04, the Sponsor shall promptly furnish to the Securities Administrator and
the
Trustee an officer’s certificate, signed by a duly authorized officer of the
Sponsor to the effect that such repurchase, substitution or cure has been made
in accordance with the terms and conditions of this Agreement and that all
conditions precedent to such repurchase, substitution or cure have been
satisfied, including the delivery to the Securities Administrator of the
Purchase Price or Substitution Adjustment amount, as applicable, for deposit
into the Distribution Account, together with copies of any Opinion of Counsel
required to be delivered pursuant to this Agreement and the related Request
for
Release, in which the Securities Administrator and the Trustee may rely. Solely
for purposes of the Securities Administrator providing an Assessment of
Compliance, upon receipt of such documentation, the Securities Administrator
shall approve such repurchase, substitution or cure, as applicable, and which
approval shall consist solely of the Securities Administrator’s receipt of such
documentation and deposits.
Except
as
expressly set forth herein, none of the Trustee, the Custodian, the Securities
Administrator or the Master Servicer is under any obligation to discover any
breach of the above-mentioned representations and warranties. It is understood
and agreed that the obligation of the Sponsor to cure such breach, purchase
or
to substitute for such Mortgage Loan as to which such a breach has occurred
and
is continuing shall constitute the sole remedy respecting such breach available
to Certificateholders or the Trustee on behalf of Certificateholders.
Section
2.05 Issuance
of Certificates; Conveyance of REMIC Regular Interests and Acceptance of REMIC
1, REMIC 2, REMIC 3 and REMIC 4 by the Trustee.
(a) The
Trustee acknowledges the assignment to it of the Mortgage Loans and the delivery
to the Custodian as agent for the Trustee of the Mortgage Files, subject to
the
provisions of Sections 2.01 and 2.02, together with the assignment to it of
all
other assets included in the Trust Fund, receipt of which is hereby
acknowledged. Concurrently with such assignment and delivery and in exchange
therefor, the Securities Administrator, pursuant to the written request of
the
Depositor executed by an officer of the Depositor, has executed, authenticated
and delivered to or upon the order of the Depositor, the Certificates in
authorized denominations. The interests evidenced by the Certificates,
constitute the entire beneficial ownership interest in the Trust
Fund.
(b) The
Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, assign, set over and otherwise convey in trust to the Trustee without
recourse all the right, title and interest of the Depositor in and to REMIC
1
for the benefit of the Holders of the REMIC 1 Regular Interests and Holders
of
the Class R Certificates (in respect of the Class R-1 Interest). The Trustee
acknowledges receipt of REMIC 1 and declares that it holds and will hold the
same in trust for the exclusive use and benefit of the Holders of the REMIC
1
Regular Interests and Holders of the Class R Certificates (in respect of the
Class R-1 Interest). The interests evidenced by the Class R-1 Interest, together
with the REMIC 1 Regular Interests, constitute the entire beneficial ownership
interest in REMIC 1.
(c) The
Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, assign, set over and otherwise convey in trust to the Trustee without
recourse all the right, title and interest of the Depositor in and to the REMIC
1 Regular Interests (which are uncertificated) for the benefit of the Holders
of
the Regular Certificates (other than the Class C Certificates and the Class
P
Certificates), the Class C Interest, the Class P Interest and the Class R
Certificates (in respect of the Class R-2 Interest). The Trustee acknowledges
receipt of the REMIC 1 Regular Interests and declares that it holds and will
hold the same in trust for the exclusive use and benefit of the Holders of
the
Regular Certificates (other than the Class C Certificates and the Class P
Certificates), the Class C Interest, the Class P Interest and the Class R
Certificates (in respect of the Class R-2 Interest). The interests evidenced
by
the Class R-2 Interest, together with the Regular Certificates (other than
the
Class C Certificates and the Class P Certificates), the Class C Interest and
the
Class P Interest constitute the entire beneficial ownership interest in REMIC
2.
(d) The
Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, assign, set over and otherwise convey in trust to the Trustee without
recourse all the right, title and interest of the Depositor in and to the Class
C Interest (which is uncertificated) for the benefit of the Holders of the
Class
C Certificates and the Class RX Certificates (in respect of the Class R-3
Interest). The Trustee acknowledges receipt of the Class C Interest and declares
that it holds and will hold the same in trust for the exclusive use and benefit
of the Holders of the Class C Certificates and the Class RX Certificates (in
respect of the Class R-3 Interest). The interests evidenced by the Class R-3
Interest, together with the Class C Certificates constitute the entire
beneficial ownership interest in REMIC 3.
(e) The
Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, assign, set over and otherwise convey in trust to the Trustee without
recourse all the right, title and interest of the Depositor in and to the Class
P Interest (which is uncertificated) for the benefit of the Holders of the
Class
P Certificates and the Class RX Certificates (in respect of the Class R-4
Interest). The Trustee acknowledges receipt of the Class P Interest and declares
that it holds and will hold the same in trust for the exclusive use and benefit
of the Holders of the Class P Certificates and the Class RX Certificates (in
respect of the Class R-4 Interest). The interests evidenced by the Class R-4
Interest, together with the Class P Certificates constitute the entire
beneficial ownership interest in REMIC 4.
(f) Concurrently
with (i) the assignment and delivery to the Trustee of REMIC 1 and the
acceptance by the Trustee thereof, pursuant to Section 2.01, Section 2.02 and
subsection (b), (ii) the assignment and delivery to the Trustee of REMIC 2
and
the acceptance by the Trustee thereof, pursuant to subsection (c), (iii) the
assignment and delivery to the Trustee of REMIC 3 and the acceptance by the
Trustee thereof, pursuant to subsection (d), and (iv) the assignment and
delivery to the Trustee of REMIC 4 and the acceptance by the Trustee thereof,
pursuant to subsection (e), the Securities Administrator has executed,
authenticated and delivered to or upon the order of the Depositor, the Class
R
Certificates in authorized denominations and the Class RX Certificates in
authorized denominations
Section
2.06 Negative
Covenants of the Trustee and Master Servicer.
Except
as
otherwise expressly permitted by this Agreement the Trustee, the Securities
Administrator and Master Servicer shall not cause the Trust Fund
to:
(i) sell,
transfer, exchange or otherwise dispose of any of the assets of the Trust
Fund;
(ii) dissolve
or liquidate the Trust Fund in whole or in part;
(iii) engage,
directly or indirectly, in any business other than that arising out of the
issue
of the Certificates, and the actions contemplated or required to be performed
under this Agreement;
(iv) incur,
create or assume any indebtedness for borrowed money;
(v) voluntarily
file a petition for bankruptcy, reorganization, assignment for the benefit
of
creditors or similar proceeding; or
(vi) merge,
convert or consolidate with any other Person.
Section
2.07 Purposes
and Powers of the Issuing Entity.
The
purpose of the common law trust, as created hereunder, is to engage in the
following activities:
(a) acquire
and hold the Mortgage Loans and the other assets of the Trust Fund and the
proceeds therefrom;
(b) to
issue
the Certificates sold to the Depositor in exchange for the Mortgage
Loans;
(c) to
make
payments on the Certificates;
(d) to
engage
in those activities that are necessary, suitable or convenient to accomplish
the
foregoing or are incidental thereto or connected therewith; and
(e) subject
to compliance with this Agreement, to engage in such other activities as may
be
required in connection with conservation of the Trust Fund and the making of
distributions to the Certificateholders.
The
Issuing Entity is hereby authorized to engage in the foregoing activities.
The
Trustee shall not knowingly cause the Issuing Entity to engage in any activity
other than in connection with the foregoing or other than as required or
authorized by the terms of this Agreement while any Certificate is outstanding,
and this Section 2.07 may not be amended, without the consent of the
Certificateholders evidencing 51% or more of the aggregate voting rights of
the
Certificates.
ARTICLE
III
ADMINISTRATION
AND SERVICING
OF
THE
TRUST FUND
Section
3.01 Administration
and Servicing of Mortgage Loans.
(a) The
Master Servicer shall supervise, monitor and oversee the obligation of the
Servicer to service and administer the Mortgage Loans in accordance with the
terms of the Servicing Agreement and shall have full power and authority to
do
any and all things which it may deem necessary or desirable in connection with
such master servicing and administration. In performing its obligations
hereunder, the Master Servicer shall act in a manner consistent with Accepted
Master Servicing Practices. Furthermore, the Master Servicer shall oversee
and
consult with the Servicer as necessary from time-to-time to carry out the Master
Servicer’s obligations hereunder, shall receive, review and evaluate all
reports, information and other data provided to the Master Servicer by the
Servicer and shall cause the Servicer to perform and observe the covenants,
obligations and conditions to be performed or observed by the Servicer under
the
Servicing Agreement. The Master Servicer shall independently and separately
monitor the Servicer’s servicing activities with respect to each related
Mortgage Loan, reconcile the results of such monitoring with such information
provided in the previous sentence on a monthly basis and coordinate corrective
adjustments to the Servicer’s and Master Servicer’s records, and based on such
reconciled and corrected information, the Master Servicer shall provide such
information to the Securities Administrator as shall be necessary in order
for
it to prepare the statements specified in Section 4.03, and prepare any other
information and statements required to be forwarded by the Master Servicer
hereunder. The Master Servicer shall reconcile the results of its Mortgage
Loan
monitoring with the actual remittances of the Servicer to the Distribution
Account pursuant to the Servicing Agreement.
In
addition to the foregoing, in connection with a modification of any Mortgage
Loan by the Servicer, if the Master Servicer is unable to enforce the
obligations of the Servicer with respect to such modification, the Master
Servicer shall notify the Depositor of such Servicer’s failure to comply with
the terms of the Servicing Agreement or this Agreement. If the Servicing
Agreement requires the approval of the Master Servicer for a modification to
a
Mortgage Loan, the Master Servicer shall approve such modification if, based
upon its receipt of written notification from the Servicer outlining the terms
of such modification and appropriate supporting documentation, the Master
Servicer determines that the modification is permitted under the terms of the
Servicing Agreement and that any conditions to such modification set forth
in
the Servicing Agreement have been satisfied. Furthermore, if the Servicing
Agreement requires the oversight and monitoring of loss mitigation measures
with
respect to the related Mortgage Loans, the Master Servicer will monitor any
loss
mitigation procedure or recovery action related to a defaulted Mortgage Loan
(to
the extent it receives notice of such from the Servicer) and confirm that such
loss mitigation procedure or recovery action is initiated, conducted and
concluded in accordance with any timeframes and any other requirements set
forth
in the Servicing Agreement, and the Master Servicer shall notify the Depositor
in any case in which the Master Servicer believes that the Servicer is not
complying with such timeframes and/or other requirements.
The
Trustee shall furnish the Servicer and the Master Servicer with a separate
power
of attorney in the standard form used by the Trustee in the form of Exhibit
R to
the extent necessary and appropriate to enable the Servicer and the Master
Servicer to service and administer the Mortgage Loans and REO Property. The
Trustee shall not be liable for the actions of any Servicer or the Master
Servicer under such powers of attorney.
The
Trustee shall provide access to the records and documentation in possession
of
the Trustee regarding the 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;
provided, however, that, unless otherwise required by law, the Trustee 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
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 actual costs.
The
Trustee shall execute and deliver to the Servicer and the Master Servicer 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.
(b) Consistent
with the terms of this Agreement, the Master Servicer may waive, modify or
vary
any term of any Mortgage Loan or consent to the postponement of strict
compliance with any such term or in any manner grant indulgence to any Mortgagor
if such waiver, modification, postponement or indulgence is in conformity with
the Accepted Servicing Practices; provided, however, that:
(A) the
Master Servicer shall not make future advances (except as provided in Section
4.03);
(B) the
Master Servicer shall not permit any modification with respect to any Mortgage
Loan that would change the Mortgage Rate, defer or forgive the payment of any
principal or interest payments, reduce the outstanding Stated Principal Balance
(except for reductions resulting from actual payments of principal) or extend
the final maturity date on such Mortgage Loan (unless (i) the Mortgagor is
in
default with respect to the Mortgage Loan or (ii) such default is, in the
judgment of the Master Servicer, reasonably foreseeable); and
(C) the
Master Servicer shall not consent to (i) partial releases of Mortgages, (ii)
alterations, (iii) removal, demolition or division of properties subject to
Mortgages, (iv) modification or (v) second mortgage subordination agreements
with respect to any Mortgage Loan that would: (i) affect adversely the status
of
any REMIC as a REMIC,(ii) cause any REMIC to be subject to a tax on “prohibited
transactions” or “contributions” pursuant to the REMIC Provisions, or (iii) both
(x) effect an exchange or reissuance of such Mortgage Loan under Section 1001
of
the Code (or Treasury regulations promulgated thereunder) and (y) cause any
REMIC constituting part of the Trust Fund to fail to qualify as a REMIC under
the Code or the imposition of any tax on “prohibited transactions” or
“contributions” after the Startup Day under the REMIC Provisions.
The
provisions of this Section 3.01(b) shall apply to the exercise of such waiver,
modification, postponement or indulgence rights by the Master Servicer in its
capacity as such and shall not apply to the exercise of any similar rights
by
the Servicer, who shall instead be subject to the provisions of the Servicing
Agreement. Such waiver, modification, postponement and indulgence rights of
the
Master Servicer set forth in this Section shall not be construed as a
duty.
(c) The
Master Servicer shall enforce the obligation of the Servicer under the Servicing
Agreement in connection with the waiver of Prepayment Charges in accordance
with
the criteria therein and to pay the amount of any waived Prepayment
Charges.
Section
3.02 REMIC-Related
Covenants.
For
as
long as each REMIC shall exist, the Trustee, the Master Servicer and the
Securities Administrator shall act in accordance herewith to assure continuing
treatment of such REMIC as a REMIC, and the Trustee, the Master Servicer and
the
Securities Administrator shall comply with any directions of the Depositor,
the
Servicer or the Master Servicer to assure such continuing treatment. In
particular, (a) the Trustee shall not sell or permit the sale of all or any
portion of the Mortgage Loans, (b) the Securities Administrator shall not sell
or permit the sale of all or any portion or of any investment of deposits in
an
Account unless, in each such case, such sale is as a result of a repurchase
of
the Mortgage Loans pursuant to this Agreement or the Trustee and the Securities
Administrator have received a REMIC Opinion addressed to the Trustee and the
Securities Administrator prepared at the expense of the Trust Fund; and (c)
other than with respect to a substitution pursuant to the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, the Securities
Administrator shall not accept any contribution to any REMIC after the Startup
Day without receipt of a REMIC Opinion addressed to the Securities
Administrator.
Section
3.03 Monitoring
of Servicer.
(a) The
Master Servicer shall be responsible for reporting to the Trustee and the
Depositor the non-compliance by the Servicer with its duties under the Servicing
Agreement. In the review of the Servicer’s activities, the Master Servicer may
rely upon an officer’s certificate of the Servicer (or similar document signed
by an officer of the Servicer) with regard to the Servicer’s compliance with the
terms of its Servicing Agreement. In the event that the Master Servicer, in
its
judgment, determines that the Servicer should be terminated in accordance with
its Servicing Agreement, or that a notice should be sent pursuant to such
Servicing Agreement with respect to the occurrence of an event that, unless
cured, would constitute grounds for such termination, the Master Servicer shall
notify the Depositor and the Trustee thereof and the Master Servicer shall
issue
such notice or take such other action as it deems appropriate.
(b) The
Master Servicer, for the benefit of the Trustee and the Certificateholders,
shall enforce the obligations of the Servicer under the Servicing Agreement,
and
shall, in the event that the Servicer fails to perform its obligations in
accordance with the Servicing Agreement, subject to the preceding paragraph,
terminate the rights and obligations of the Servicer thereunder and act as
servicer of the related Mortgage Loans or to cause the Trustee to enter in
to a
new Servicing Agreement with a successor Servicer selected by the Master
Servicer; provided, however, it is understood and acknowledged by the parties
hereto that there will be a period of transition (not to exceed 100 days) before
the actual servicing functions can be fully transferred to such successor
Servicer. Such enforcement, including, without limitation, the legal prosecution
of claims, termination of Servicing Agreements and the pursuit of other
appropriate remedies, shall be in such form and carried out to such an extent
and at such time as the Master Servicer, in its good faith business judgment,
would require were it the owner of the related Mortgage Loans. The Master
Servicer shall pay the costs of such enforcement at its own expense, provided
that the Master Servicer shall not be required to prosecute or defend any legal
action except to the extent that the Master Servicer shall have received
reasonable indemnity for its costs and expenses in pursuing such
action.
(c) To
the
extent that the costs and expenses of the Master Servicer related to any
termination of the Servicer, appointment of a successor Servicer or the transfer
and assumption of servicing by the Master Servicer with respect to 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 the Servicer as a result of an event of default by
the
Servicer and (ii) all costs and expenses associated with the complete transfer
of servicing, including all servicing files and all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the successor servicer to correct any errors or insufficiencies in the
servicing data or otherwise to enable the successor service to service the
Mortgage Loans in accordance with the Servicing Agreement) are not fully and
timely reimbursed by the terminated Servicer, the Master Servicer shall be
entitled to reimbursement of such costs and expenses from the Distribution
Account.
(d) The
Master Servicer shall require the Servicer to comply with the remittance
requirements and other obligations set forth in the Servicing
Agreement.
(e) If
the
Master Servicer acts as Servicer, it will not assume liability for the
representations and warranties of the 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,
Liquidation Proceeds and Subsequent Recoveries, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan, in each case, in accordance with the provisions
of
this Agreement and the Servicing Agreement, as applicable; provided, however,
that the Master Servicer shall not (and, consistent with its responsibilities
under Section 3.03, shall not permit the Servicer to) knowingly or intentionally
take any action, or fail to take (or fail to cause to be taken) any action
reasonably within its control and the scope of duties more specifically set
forth herein, that, under the REMIC Provisions, if taken or not taken, as the
case may be, would cause any REMIC to fail to qualify as a REMIC or result
in
the imposition of a tax upon the Trust Fund (including but not limited to the
tax on prohibited transactions as defined in Section 860F(a)(2) of the Code
and
the tax on contributions to a REMIC set forth in Section 860G(d) of the Code)
unless the Master Servicer has received an Opinion of Counsel (but not at the
expense of the Master Servicer) to the effect that the contemplated action
would
not cause any REMIC to fail to qualify as a REMIC or result in the imposition
of
a tax upon any REMIC. The Trustee shall furnish the Master Servicer, upon
written request from a Servicing Officer, with the Trustee’s standard form of
power of attorney in the form of Exhibit R empowering the Master Servicer or
the
Servicer to execute and deliver instruments of satisfaction or cancellation,
or
of partial or full release or discharge, and to foreclose upon or otherwise
liquidate Mortgaged Property, and to appeal, prosecute or defend in any court
action relating to the Mortgage Loans or the Mortgaged Property, in accordance
with the Servicing Agreement and this Agreement, and the Trustee shall execute
and deliver such other documents, as the Master Servicer may request, to enable
the Master Servicer to master service and administer the Mortgage Loans and
carry out its duties hereunder, in each case in accordance with Accepted Master
Servicing Practices (and the Trustee shall have no liability for the use of
any
such powers of attorney by the Master Servicer or the Servicer). If the Master
Servicer or the Trustee has been advised that it is likely that the laws of
the
state in which action is to be taken prohibit such action if taken in the name
of the Trustee or that the Trustee would be adversely affected under the “doing
business” or tax laws of such state if such action is taken in its name, the
Master Servicer shall join with the Trustee in the appointment of a co-trustee
pursuant to Section 8.10 hereof. In the performance of its duties hereunder,
the
Master Servicer shall be an independent contractor and shall not be deemed
to be
the agent of the Trustee.
Section
3.06 Due-on-Sale
Clauses; Assumption Agreements.
To
the
extent provided in the Servicing Agreement, to the extent Mortgage Loans contain
enforceable due-on-sale clauses, the Master Servicer shall cause the Servicer
to
enforce such clauses in accordance with the Servicing Agreement. If applicable
law prohibits the enforcement of a due-on-sale clause or such clause is
otherwise not enforced in accordance with the Servicing Agreement, and, as
a
consequence, a Mortgage Loan is assumed, the original Mortgagor may be released
from liability in accordance with the Servicing Agreement.
Section
3.07 Release
of Mortgage Files.
(a) Upon
becoming aware of the payment in full of any Mortgage Loan, or the receipt
by
the Servicer of a notification that payment in full has been escrowed in a
manner customary for such purposes for payment to Certificateholders on the
next
Distribution Date, the Servicer will, if required under the Servicing Agreement
(or if the Servicer does not, the Master Servicer may), promptly furnish to
the
Custodian, on behalf of the Trustee, two copies of a certification substantially
in the form of Exhibit F hereto signed by an officer of the Servicer or in
a
mutually agreeable electronic format which will, in lieu of a signature on
its
face, originate from a Servicing Officer (which certification shall include
a
statement to the effect that all amounts received in connection with such
payment that are required to be deposited in the Protected Account maintained
by
the Servicer pursuant to Section 3.16 or by the Servicer pursuant to its
Servicing Agreement have been or will be so deposited) and shall request that
the Custodian, on behalf of the Trustee, deliver to the Servicer the related
Mortgage File. Upon receipt of such certification and Request for Release,
the
Custodian, on behalf of the Trustee, shall release the related Mortgage File
to
the Servicer within five (5) Business Days and the Trustee and Custodian shall
have no further responsibility with regard to such Mortgage File. Upon any
such
payment in full, the Servicer is authorized, to give as the mortgagee under
the
Mortgage that secured the Mortgage Loan, an instrument of satisfaction (or
assignment of mortgage without recourse) regarding the Mortgaged Property
subject to the Mortgage, which instrument of satisfaction or assignment, as
the
case may be, shall be delivered to the Person or Persons entitled thereto
against receipt therefor of such payment, it being understood and agreed that
no
expenses incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the Protected
Account.
(b) From
time
to time and as appropriate for the servicing or foreclosure of any Mortgage
Loan
and in accordance with the Servicing Agreement, the Trustee shall execute such
documents as shall be prepared and furnished to the Trustee by the Servicer
or
the Master Servicer (in form reasonably acceptable to the Trustee) and as are
necessary to the prosecution of any such proceedings. The Custodian, on behalf
of the Trustee, shall, upon the request of the Servicer or the Master Servicer,
and delivery to the Custodian, on behalf of the Trustee, of two copies of a
request for release signed by a Servicing Officer substantially in the form
of
Exhibit F (or in a mutually agreeable electronic format which will, contain
a
signature on its face and originate from a Servicing Officer), release the
related Mortgage File held in its possession or control to the Servicer or
the
Master Servicer, as applicable. Such trust receipt shall obligate the Servicer
or the Master Servicer to return the Mortgage File to the Custodian on behalf
of
the Trustee, when the need therefor by the Servicer or the Master Servicer
no
longer exists unless the Mortgage Loan shall be liquidated, in which case,
upon
receipt of a certificate of a Servicing Officer similar to that hereinabove
specified, the Mortgage File shall be released by the Custodian, on behalf
of
the Trustee, to the Servicer or the Master Servicer.
Section
3.08 Documents,
Records and Funds in Possession of Master Servicer To Be Held for
Trustee.
(a) The
Master Servicer shall transmit and the Servicer (to the extent required by
the
Servicing Agreement) shall transmit to the Custodian on behalf of the Trustee
such documents and instruments coming into the possession of the Master Servicer
or the Servicer from time to time as are required by the terms hereof, or in
the
case of the Servicer, the Servicing Agreement, to be delivered to the Trustee
or
the Custodian. Any funds received by the Master Servicer or by the Servicer
in
respect of any Mortgage Loan or which otherwise are collected by the Master
Servicer or by the Servicer as Liquidation Proceeds, Insurance Proceeds or
Subsequent Recoveries 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 Distribution Account the Master
Servicing Compensation and other amounts provided in this Agreement, and to
the
right of the Servicer to retain its Servicing Fee and other amounts as provided
in the Servicing Agreement. The Master Servicer shall, and (to the extent
provided in the Servicing Agreement) shall cause the Servicer to, provide access
to information and documentation regarding the Mortgage Loans to the Trustee,
its agents and accountants at any time upon reasonable request in writing 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, Insurance
Proceeds or Subsequent Recoveries, shall be held by the Master Servicer for
and
on behalf of the Trustee and the Certificateholders and shall be and remain
the
sole and exclusive property of the Trustee; provided, however, that the Master
Servicer and the Servicer shall be entitled to setoff against, and deduct from,
any such funds any amounts that are properly due and payable to the Master
Servicer or the Servicer under this Agreement or the Servicing
Agreement.
Section
3.09 Standard
Hazard Insurance and Flood Insurance Policies.
(a) For
each
Mortgage Loan, the Master Servicer shall enforce any obligation of the Servicer
under the Servicing Agreement to maintain or cause to be maintained standard
fire and casualty insurance and, where applicable, flood insurance, all in
accordance with the provisions of the Servicing Agreement. It is understood
and
agreed that such insurance shall be with insurers meeting the eligibility
requirements set forth in the Servicing Agreement and that no earthquake or
other additional insurance is to be required of any Mortgagor or to be
maintained on property acquired in respect of a defaulted loan, other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance.
(b) Pursuant
to Section 3.16 and 3.19, any amounts collected by the Servicer or the Master
Servicer, under any insurance policies (other than amounts to be applied to
the
restoration or repair of the property subject to the related Mortgage or
released to the Mortgagor in accordance with the Servicing Agreement) shall
be
deposited into the Distribution Account, subject to withdrawal pursuant to
Section 3.16 and 3.20. Any cost incurred by the Master Servicer or the Servicer
in maintaining any such insurance if the Mortgagor defaults in its obligation
to
do so shall be added to the amount owing under the Mortgage Loan where the
terms
of the Mortgage Loan so permit; provided, however, that the addition of any
such
cost shall not be taken into account for purposes of calculating the
distributions to be made to Certificateholders and shall be recoverable by
the
Master Servicer or the Servicer pursuant to Section 3.16 and 3.20.
Section
3.10 Presentment
of Claims and Collection of Proceeds.
The
Master Servicer shall (to the extent provided in the Servicing Agreement) cause
the Servicer to prepare and present on behalf of the Trustee and the
Certificateholders all claims under the Insurance Policies and take such actions
(including the negotiation, settlement, compromise or enforcement of the
insured’s claim) as shall be necessary to realize recovery under such policies.
Any proceeds disbursed to the Master Servicer (or disbursed to the Servicer
and
remitted to the Master Servicer) in respect of such policies, bonds or contracts
shall be promptly deposited in the Distribution Account upon receipt, except
that any amounts realized that are to be applied to the repair or restoration
of
the related Mortgaged Property as a condition precedent to the presentation
of
claims on the related Mortgage Loan to the insurer under any applicable
Insurance Policy need not be so deposited (or remitted).
Section
3.11 Maintenance
of the Primary Mortgage Insurance Policies.
(a) The
Master Servicer shall not take, or permit the Servicer (to the extent such
action is prohibited under the Servicing Agreement) to take, any action that
would result in noncoverage under any applicable Primary Mortgage Insurance
Policy of any loss which, but for the actions of the Master Servicer or the
Servicer, would have been covered thereunder. The Master Servicer shall use
its
best reasonable efforts to cause the Servicer (to the extent required under
the
Servicing Agreement) to keep in force and effect (to the extent that the
Mortgage Loan requires the Mortgagor to maintain such insurance), primary
mortgage insurance applicable to each Mortgage Loan in accordance with the
provisions of this Agreement and the Servicing Agreement, as applicable. The
Master Servicer shall not, and shall not permit the Servicer (to the extent
required under the Servicing Agreement) to, cancel or refuse to renew any such
Primary Mortgage Insurance Policy that is in effect at the date of the initial
issuance of the Mortgage Note and is required to be kept in force hereunder
except in accordance with the provisions of this Agreement and the Servicing
Agreement, as applicable.
(b) The
Master Servicer agrees to present, or to cause the Servicer (to the extent
required under the Servicing Agreement) to present, on behalf of the Trustee
and
the Certificateholders, claims to the insurer under any Primary Mortgage
Insurance Policies and, in this regard, to take such reasonable action as shall
be necessary to permit recovery under any Primary Mortgage Insurance Policies
respecting defaulted Mortgage Loans. Pursuant to Section 3.19, any amounts
collected by the Master Servicer or the Servicer under any Primary Mortgage
Insurance Policies shall be deposited in the Distribution Account, subject
to
withdrawal pursuant to Section 3.20.
Section
3.12 Trustee
to Retain Possession of Certain Insurance Policies and Documents.
The
Trustee (or the Custodian, as directed by the Trustee), 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, if any, as directed by the Trustee) 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, as directed by the
Trustee), upon the execution or receipt thereof the originals of any Primary
Mortgage Insurance Policies, any certificates of renewal, and such other
documents or instruments that constitute portions of the Mortgage File that
come
into the possession of the Master Servicer from time to time.
Section
3.13 Realization
Upon Defaulted Mortgage Loans.
The
Master Servicer shall cause the Servicer (to the extent required under the
Servicing Agreement) to foreclose upon, repossess or otherwise comparably
convert the ownership of Mortgaged Properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments, all in
accordance with the 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 Distribution Account (the “Master Servicing
Compensation”), pursuant to Article IV, for the performance of its activities
hereunder. The Master Servicer shall be required to pay all expenses incurred
by
it in connection with its activities hereunder and shall not be entitled to
reimbursement therefor except as provided in this Agreement.
Section
3.15 REO
Property.
(a) In
the
event the Issuing Entity acquires ownership of any REO Property in respect
of
any related Mortgage Loan, the deed or certificate of sale shall be issued
to
the Trustee, or to its nominee, on behalf of the related Certificateholders.
The
Master Servicer shall, to the extent provided in the Servicing Agreement, cause
the Servicer to sell any REO Property as expeditiously as possible and in
accordance with the provisions of this Agreement and the Servicing Agreement,
as
applicable. Pursuant to its efforts to sell such REO Property, the Master
Servicer shall cause the Servicer to protect and conserve, such REO Property
in
the manner and to the extent required by the Servicing Agreement, in accordance
with the REMIC Provisions and in a manner that does not result in a tax on
“net
income from foreclosure property” or cause such REO Property to fail to qualify
as “foreclosure property” within the meaning of Section 860G(a)(8) of the
Code.
(b) The
Master Servicer shall, to the extent required by the Servicing Agreement, cause
the Servicer to deposit all funds collected and received in connection with
the
operation of any REO Property in the Protected Account.
(c) The
Master Servicer and the Servicer, upon the final disposition of any REO
Property, shall be entitled to reimbursement for any related unreimbursed
Monthly Advances and other unreimbursed advances as well as any unpaid Servicing
Fees from Liquidation Proceeds received in connection with the final disposition
of such REO Property; provided, that any such unreimbursed Monthly Advances
as
well as any unpaid Servicing Fees may be reimbursed or paid, as the case may
be,
prior to final disposition, out of any net rental income or other net amounts
derived from such REO Property.
(d) To
the
extent provided in the Servicing Agreement, the Liquidation Proceeds from the
final disposition of the REO Property, net of any payment to the Master Servicer
and the Servicer as provided above shall be deposited in the Protected Account
on or prior to the Determination Date in the month following receipt thereof
and
be remitted by wire transfer in immediately available funds to the Securities
Administrator for deposit into the Distribution Account on the next succeeding
Servicer Remittance Date.
Section
3.16 Protected
Accounts.
(a) The
Master Servicer shall enforce the obligation of the Servicer to establish and
maintain a Protected Account in accordance with the Servicing Agreement, with
records to be kept with respect thereto on a Mortgage Loan by Mortgage Loan
basis, into which accounts shall be deposited within 48 hours (or as of such
other time specified in the Servicing Agreement) of receipt, all collections
of
principal and interest on any Mortgage Loan and any REO Property received by
the
Servicer, including Principal Prepayments, Insurance Proceeds, Liquidation
Proceeds, and advances made from the Servicer’s own funds (less servicing
compensation as permitted by the Servicing Agreement in the case of the
Servicer) and all other amounts to be deposited in the Protected Account. The
Servicer is hereby authorized to make withdrawals from and deposits to the
related Protected Account for purposes required or permitted by this Agreement.
To the extent provided in the Servicing Agreement, the Protected Account shall
be held by a Designated Depository Institution and segregated on the books
of
such institution in the name of the Securities Administrator on behalf of the
Trustee for the benefit of Certificateholders.
(b) To
the
extent provided in the Servicing Agreement, amounts on deposit in a Protected
Account may be invested in Permitted Investments in the name of the Securities
Administrator on behalf 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 shall mature, or shall be subject to
redemption or withdrawal, no later than the date on which such funds are
required to be withdrawn for deposit in the Distribution Account, and shall
be
held until required for such deposit. The income earned from Permitted
Investments made pursuant to this Section 3.16 shall be paid to the Servicer
under the Servicing Agreement, and the risk of loss of moneys required to be
distributed to the Certificateholders resulting from such investments shall
be
borne by and be the risk of the Servicer. The Servicer (to the extent provided
in the Servicing Agreement) shall deposit the amount of any such loss in the
Protected Account within two Business Days of receipt of notification of such
loss but not later than the second Business Day prior to the Servicer Remittance
Date on which the moneys so invested are required to be distributed to the
Securities Administrator.
(c) To
the
extent provided in the Servicing Agreement and subject to this Article III,
on
or before each Servicer Remittance Date, the Servicer shall withdraw or shall
cause to be withdrawn from its Protected Accounts and shall immediately deposit
or cause to be deposited in the Distribution 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):
(1) Scheduled
payments on the Mortgage Loans received or any related portion thereof advanced
by the Servicer pursuant to its Servicing Agreement which were due on or before
the related Due Date, net of the amount thereof comprising its Servicing Fee
or
any fees with respect to any lender-paid primary mortgage insurance
policy;
(2) Full
Principal Prepayments and any Liquidation Proceeds received by the Servicer
with
respect to the Mortgage Loans in the related Prepayment Period, with interest
to
the date of prepayment or liquidation, net of the amount thereof comprising
its
Servicing Fee;
(3) Partial
Principal Prepayments received by the Servicer for the Mortgage Loans in the
related Prepayment Period; and
(4) Any
amount to be used as a Monthly Advance.
(d) Withdrawals
may be made from an Account only to make remittances as provided in the
Servicing Agreement; to reimburse the Master Servicer or the Servicer for
Monthly Advances which have been recovered by subsequent collections 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
9.01. To the extent provided in the Servicing Agreement, certain amounts
otherwise due to the Servicer may be retained by them and need not be deposited
in the Distribution Account
Section
3.17 [Reserved].
Section
3.18 [Reserved].
Section
3.19 Distribution
Account.
(a) The
Securities Administrator shall establish and maintain on behalf of the Trustee,
for the benefit of the Certificateholders, the Distribution Account as a
segregated trust account or accounts. The Distribution Account shall be an
Eligible Account. The Master Servicer or Servicer, as the case may be, will
remit to the Securities Administrator for deposit in the Distribution Account,
the following amounts:
(1) Any
amounts withdrawn from a Protected Account;
(2) Any
Monthly Advance and any payments of Compensating Interest;
(3) Any
Insurance Proceeds, Net Liquidation Proceeds or Subsequent Recoveries received
by or on behalf of the Servicer or Master Servicer or which were not deposited
in a Protected Account;
(4) Any
proceeds of any Mortgage Loan or REO Property repurchased or purchased in
accordance with Sections 2.02, 2.04 and 9.01, and all amounts required to be
deposited in connection with the substitution of an Eligible Substitute Mortgage
Loan pursuant to Section 2.04;
(5) Any
amounts required to be deposited with respect to losses on investments of
deposits in an Account; and
(6) Any
other
amounts received by or on behalf of the Master Servicer and required to be
deposited in the Distribution Account pursuant to this Agreement.
(b) All
amounts deposited to the Distribution Account shall be held by the Securities
Administrator on behalf 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 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 Subsection 3.20(a) need not be credited by the Master Servicer
or
the Servicer to the Distribution 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, any provision herein to the contrary
notwithstanding.
(c) The
Distribution Account shall constitute a trust account of the Issuing Entity
segregated on the books of the Securities Administrator as being held on behalf
of the Trustee, and the Distribution Account and the funds deposited therein
shall not be subject to, and shall be protected from, all claims, liens, and
encumbrances of any creditors or depositors of the Trustee, the Securities
Administrator or the Master Servicer (whether made directly, or indirectly
through a liquidator or receiver of the Trustee or the Master Servicer). The
Distribution Account shall be an Eligible Account. The Distribution Account
and
deposits into the Distribution Account shall be deemed to have been made. The
amount at any time credited to the Distribution Account shall be (i) held in
cash and fully insured by the FDIC to the maximum coverage provided thereby
or
(ii) invested by the Securities Administrator on behalf 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, manager or advisor for such Permitted
Investment is an affiliate of the Securities Administrator 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
Master Servicer. The Securities Administrator shall withdraw and remit to the
Master Servicer any and all investment earnings from the Distribution Account
on
each Distribution Date. If there is any loss on a Permitted Investment or demand
deposit, the Master Servicer shall deposit the amount of the loss to the
Distribution Account. With respect to the Distribution Account and the funds
deposited therein, the Master Servicer 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 Trustee or the Securities Administrator) as provided by 12 U.S.C.
§ 92a(e), and applicable regulations pursuant thereto, if applicable, or any
applicable comparable state statute applicable to state chartered banking
corporations.
Section
3.20 Permitted
Withdrawals and Transfers from the Distribution Account.
(a) The
Securities Administrator will, from time to time, make or cause to be made
such
withdrawals or transfers from the Distribution Account as the Securities
Administrator has designated for such transfer or withdrawal pursuant to this
Agreement and the Servicing Agreements:
(1) to
reimburse the Master Servicer or the Servicer for any Monthly Advance of its
own
funds, the right of the Master Servicer or the Servicer to reimbursement
pursuant to this subclause (i) being limited to amounts received on a particular
Mortgage Loan (including, for this purpose, the Purchase Price therefor,
Insurance Proceeds and Liquidation Proceeds) which represent late payments
or
recoveries of the principal of or interest on such Mortgage Loan respecting
which such Monthly Advance was made;
(2) to
reimburse the Master Servicer or the Servicer from Insurance Proceeds or
Liquidation Proceeds relating to a particular Mortgage Loan for amounts expended
by the Master Servicer or the Servicer in good faith 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;
(3) to
reimburse the Master Servicer or the Servicer from Insurance Proceeds relating
to a particular Mortgage Loan for insured expenses incurred with respect to
such
Mortgage Loan and to reimburse the Master Servicer or the Servicer from
Liquidation Proceeds from a particular Mortgage Loan for Liquidation Expenses
incurred with respect to 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 3.20(a) to the Master Servicer; and (ii) such Liquidation Expenses
were not included in the computation of such Excess Liquidation
Proceeds;
(4) to
reimburse the Master Servicer or the Servicer for advances of funds (other
than
Monthly Advances) made with respect to the Mortgage Loans, 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;
(5) to
reimburse the Master Servicer or the Servicer for any Monthly Advance or
advance, after a Realized Loss has been allocated with respect to the related
Mortgage Loan if the Monthly Advance or advance has not been reimbursed pursuant
to clauses (1) and (4);
(6) to
pay
the Master Servicer as set forth in Section 3.14;
(7) to
reimburse the Master Servicer for expenses, costs and liabilities incurred
by
and reimbursable to it pursuant to Sections 3.03 and 6.03;
(8) to
pay to
the Master Servicer, as additional servicing compensation, any Excess
Liquidation Proceeds to the extent not retained by the Servicer;
(9) to
reimburse or pay the Servicer any such amounts as are due thereto under the
Servicing Agreement and have not been retained by or paid to the Servicer,
to
the extent provided in the Servicing Agreement;
(10) to
reimburse the Trustee, the Securities Administrator or the Custodian for
expenses, costs and liabilities incurred by or reimbursable to it pursuant
to
this Agreement;
(11) to
remove
amounts deposited in error; and
(12) 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 (1) through (4) immediately
above 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.
(c) On
each
Distribution Date, the Securities Administrator shall distribute the amounts
on
deposit in the Distribution Account to the Holders of the Certificates pursuant
to Section 4.01.
Section
3.21 Annual
Statement as to Compliance.
(a) The
Master Servicer and the Securities Administrator, each at its own expense,
shall
deliver (and the Master Servicer and Securities Administrator shall cause any
Servicing Function Participant engaged by it to deliver) to the Sponsor, the
Securities Administrator and the Depositor, on or before March 15 of each year,
commencing in March 2007, an Officer’s Certificate (an “Annual Statement of
Compliance”) 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 any Servicing Function Participant engaged by it, 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 any
Servicing Function Participant engaged by it, 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. Such Annual
Statement of Compliance shall contain no restrictions or limitations on its
use.
(b) The
Master Servicer shall include all annual statements of compliance received
by it
with its own annual statement of compliance to be submitted to the Securities
Administrator pursuant to this Section.
(c) For
so
long as the Issuing Entity is subject to Exchange Act reporting requirements,
failure of the Master Servicer to comply timely with this Section 3.21 shall,
upon written notice from the Trustee, constitute a Master Servicing Default
(but
subject to the Master Servicer’s rights to payment of any Master Servicing
Compensation and reimbursement of amounts for which it is entitled to be
reimbursed prior to the date of termination) and the Trustee shall, at the
direction of the Sponsor, terminate all the rights and obligations of the Master
Servicer under this Master Servicing Agreement and in and to the Mortgage Loans
and the proceeds thereof without compensating the Master Servicer for the same.
This paragraph shall supersede any other provision in this Agreement or any
other agreement to the contrary.
(d) Unless
available on the Securities Administrator’s website, copies of such Master
Servicer annual statements of compliance shall be provided to any
Certificateholder upon request, by the Master Servicer or by the Securities
Administrator at the Master Servicer’s expense if the Master Servicer failed to
provide such copies (unless (i) the Master Servicer shall have failed to provide
the Securities Administrator with such statement or (ii) the Securities
Administrator shall be unaware of the Master Servicer’s failure to provide such
statement).
(e) In
the
event the Master Servicer, the Securities Administrator or any Servicing
Function Participant engaged by parties is terminated or resigns pursuant to
the
terms of this Agreement, or any applicable agreement in the case of a Servicing
Function Participant, as the case may be, such party shall provide an Officer’s
Certificate pursuant to this Section 3.21 with
respect to the period of time it was subject to this Agreement or any other
applicable agreement, as the case may be.
Section
3.22 Annual
Assessments of Compliance and Attestation Reports.
(a) By
March
15 of each year, commencing in March 2007, the Master Servicer and the
Securities Administrator, each at its own expense, shall furnish, and each
such
party shall cause any Servicing Function Participant engaged by it to furnish,
each at its own expense, to the Securities Administrator, the Sponsor and the
Depositor, a report on an assessment of compliance with the Relevant Servicing
Criteria that contains (A) a statement by such party of its responsibility
for
assessing compliance with the Relevant Servicing Criteria, (B) a statement
that
such party used the Relevant Servicing Criteria to assess compliance with the
Relevant Servicing Criteria, (C) such party’s assessment of compliance with the
Relevant Servicing Criteria as of and for the fiscal year covered by the Form
10-K required to be filed pursuant to Section 3.23(d), including, if there
has
been any material instance of noncompliance with the Relevant Servicing
Criteria, a discussion of each such failure and the nature and status thereof,
and (D) a statement that a registered public accounting firm has issued an
attestation report on such party’s assessment of compliance with the Relevant
Servicing Criteria as of and for such period.
(b) No
later
than the end of each fiscal year for which a Form 10-K is required to be filed,
the Master Servicer shall forward to the Securities Administrator the name
of
each Servicing Function Participant engaged by it and what Relevant Servicing
Criteria will be addressed in the report on assessment of compliance prepared
by
such Servicing Function Participant. When the Master Servicer and the Securities
Administrator (or any Servicing Function Participant engaged by them) submit
their assessments to the Securities Administrator, such parties shall also
at
such time include the assessment (and attestation pursuant to Section 3.22)
of
each Servicing Function Participant engaged by it.
(c) Promptly
after receipt of such report on assessment of compliance from the Master
Servicer, the Securities Administrator, the Servicer or any Servicing Function
Participant engaged by such parties (i) the Depositor shall review each such
report and, if applicable, consult with the Master Servicer, the Securities
Administrator, the Servicer and any Servicing Function Participant engaged
by
such parties as to the nature of any material instance of noncompliance with
the
Relevant Servicing Criteria by each such party, and (ii) the Securities
Administrator shall confirm that the assessments, taken as a whole, address
all
of the Servicing Criteria and taken individually address the Relevant Servicing
Criteria for each party as set forth on Exhibit L and notify the Depositor
of
any exceptions.
(d)
The
Master Servicer shall include all annual reports on assessment of compliance
with its own assessment of compliance received by it to be submitted to the
Securities Administrator pursuant to this Section.
(e) For
so
long as the Issuing Entity is subject to Exchange Act reporting requirements,
failure of the Master Servicer to comply timely with this Section 3.22 shall
upon written notice from the Trustee, constitute a Master Servicing Default
(but
subject to the Master Servicer’s rights to payment of any master Servicing
Compensation and reimbursement of amounts for which it is entitled to be
reimbursed prior to the date of termination) and the Trustee shall, at the
direction of the Sponsor, terminate all the rights and obligations of the Master
Servicer under this Agreement and in and to the Mortgage Loans and the proceeds
thereof without compensating the Master Servicer for the same. This paragraph
shall supersede any other provision in this Agreement or any other agreement
to
the contrary.
(f) In
the
event the Master Servicer, the Securities Administrator or any Servicing
Function Participant engaged by parties 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 report on assessment of compliance pursuant to this
Section 3.22 with respect to the period of time it was subject to this Agreement
or any applicable sub-servicing agreement, as the case may be.
(g) By
March
15 of each year, commencing in March 2007, the Master Servicer and the
Securities Administrator, each at its own expense, shall cause, and each such
party shall cause any Servicing Function Participant engaged by it to cause,
each at its own expense, a registered public accounting firm (which may also
render other services to the Master Servicer, the Securities Administrator,
or
such other Servicing Function Participants, as the case may be) and that is
a
member of the American Institute of Certified Public Accountants to furnish
a
report to the Securities Administrator and the Sponsor, to the effect that
(i)
it has obtained a representation regarding certain matters from the management
of such party, which includes an assertion that such party has complied with
the
Relevant Servicing Criteria, and (ii) on the basis of an examination conducted
by such firm in accordance with standards for attestation engagements issued
or
adopted by the PCAOB, it is expressing an opinion as to whether such party’s
compliance with the Relevant Servicing Criteria was fairly stated in all
material respects, or it cannot express an overall opinion regarding such
party’s assessment of compliance with the Relevant Servicing Criteria. In the
event that an overall opinion cannot be expressed, such registered public
accounting firm shall state in such report why it was unable to express such
an
opinion. Such report must be available for general use and not contain
restricted use language.
(h) Promptly
after receipt of such report from the Master Servicer, the Securities
Administrator, the Servicer or any Servicing Function Participant engaged by
such parties, (i) the Sponsor shall review the report and, if applicable,
consult with such parties as to the nature of any defaults by such parties,
in
the fulfillment of any of each such party’s obligations hereunder or under any
other applicable agreement, and (ii) the Securities Administrator shall confirm
that each assessment submitted pursuant to Section 3.22 is coupled with an
attestation meeting the requirements of this Section and notify the Sponsor
of
any exceptions.
(i) The
Master Servicer shall include all attestations received by it with its own
attestation to be submitted to the Securities Administrator pursuant to this
Section.
Section
3.23 Exchange
Act Reporting.
(a) (i)Within
15
days after each Distribution Date (subject to permitted extensions under the
Exchange Act), the Securities Administrator shall prepare and file on behalf
of
the Issuing Entity any Form 10-D required by the Exchange Act, in form and
substance as required by the Exchange Act. The Securities Administrator shall
file each Form 10-D with a copy of the Distribution Date Statement for the
related Distribution Date attached thereto. Any disclosure in addition to the
Distribution Date Statement that is required to be included on Form 10-D
(“Additional Form 10-D Disclosure”) shall be determined and prepared by the
entity that is indicated in Exhibit O as the party responsible for providing
that information 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.
(ii) Within
5
calendar days after the related Distribution Date, (A) the Master Servicer,
the
Securities Administrator, the Issuing Entity and the Sponsor hereby agree to,
and the other parties to the American Home Mortgage Assets Trust 2006-5
transaction shall be required to, provide to the Securities Administrator and
the Depositor, to the extent known by a responsible officer thereof, in
XXXXX-compatible form, or in such other form as otherwise agreed upon by the
Securities Administrator and such party, the form and substance of any
Additional Form 10-D Disclosure for which such party is responsible as set
forth
on Exhibit O hereto, if applicable, together with an Additional Disclosure
Notification in the form of Exhibit S hereto (an “Additional Disclosure
Notification”) and (B) 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 Depositor will be responsible for any reasonable
fees and expenses assessed or incurred by the Securities Administrator in
connection with including any Additional Form 10-D Disclosure on Form 10-D
pursuant to this paragraph.
(iii) After
preparing the Form 10-D, the Securities Administrator shall forward
electronically a draft copy of the Form 10-D to the Depositor (provided that
such Form 10-D includes any Additional Form 10-D Disclosure) and the Master
Servicer for review. No later than the Business Day prior to the date specified
in the sentence after the following sentence (provided that, the Securities
Administrator forwards a copy of the Form 10-D no later than 2 Business Days
prior to such Business Day), the Depositor and the Master Servicer shall notify
the Securities Administrator of any changes to or approval of such Form 10-D.
In
the absence of any written changes or approval within the same time, the
Securities Administrator shall be entitled to assume that such Form 10-D is
in
final form and the Securities Administrator may proceed with arrangements for
the execution of, and the filing of the Form 10-D. No later than 2 Business
Days
prior to the 15th calendar day after the related Distribution Date, a duly
authorized representative of the Master Servicer shall sign the 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 3.23(c)(ii). Promptly (but no later than 1 Business Day) after filing
with the Commission, the Securities Administrator will make available on its
internet website a final executed copy of each Form 10-D prepared and filed
by
the Securities Administrator. 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 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 the representations
in
Section 2.03(vi) or any such notice in preparing, executing and/or filing any
such report. Each party to this Agreement acknowledges that the performance
by
the Master Servicer and Securities Administrator of its duties under this
Section 3.23(a) related to the timely preparation, execution and filing of
Form
10-D is contingent upon such parties strictly observing all applicable deadlines
in the performance of their duties as set forth in this Agreement. Neither
the
Securities Administrator nor the Master Servicer shall have any liability for
any loss, expense, damage, claim arising out of or with respect to any failure
to properly prepare, execute and/or timely file such Form 10-D, where such
failure results from the Securities Administrator’s inability or failure to
obtain or receive, on a timely basis, any information from any other party
hereto needed to prepare, arrange for execution or file such Form 10-D, not
resulting from its own negligence, bad faith or willful misconduct. In addition,
the Securities Administrator shall not have any liability for (i) the content
of
any information provided to the Securities Administrator for filing on a Form
10-D, (ii) determining what information is required to be filed on a Form 10-D,
(iii) reformatting any information so that it is able to be filed on XXXXX,
(iv)
the failure to include any information if it is not provided to the Securities
Administrator on a timely basis or (v) any late filing of a Form 10-D in the
event that the relevant party does not deliver all information, data, signatures
and exhibits required to be provided or filed on or prior to the second Business
Day prior to the applicable filing deadline.
(b) (i)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 any 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 (“Form 8-K Disclosure
Information”) shall be determined and prepared by the entity that is indicated
in Exhibit O as the responsible party for providing that information 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.
(ii) For
so
long as the Issuing Entity is subject to the Exchange Act reporting
requirements, no later than 12:00 noon New York time on the 2nd Business Day
after the occurrence of a Reportable Event (i) the Master Servicer, the
Securities Administrator, the Issuing Entity and the Depositor hereby agree
to,
and the other parties to the American Home Mortgage Assets Trust 2006-5
transaction shall be required to, provide to the Securities Administrator and
the Depositor, to the extent known by a responsible officer thereof, in
XXXXX-compatible form, or in such other form as otherwise agreed upon by the
Securities Administrator and such party, the form and substance of any Form
8-K
Disclosure Information for which such party is responsible as set forth on
Exhibit O hereto, 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 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.
(iii) After
preparing the Form 8-K, the Securities Administrator shall, upon request,
forward electronically a draft copy of the Form 8-K to the Master Servicer
and
the Depositor for review. No later than the close of business New York City
time
on the third Business Day after the Reportable Event, the Depositor and the
Master Servicer shall notify the Securities Administrator of any changes to
or
approval of such Form 8-K. In the absence of any written changes or approval
within such timeframe, the Securities Administrator shall be entitled to assume
that such Form 8-K is in final form and the Securities Administrator may proceed
with arrangements for the execution of, and filing of, the Form 8-K. No later
than 12:00 noon New York time on the 4th Business Day after the Reportable
Event, a duly authorized representative of the Master Servicer shall sign the
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 3.23(c)(ii). Promptly (but no later than 1 Business Day)
after filing with the Commission, the Securities Administrator will, make
available on its internet website a final executed copy of each Form 8-K that
has been 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 their respective duties under this Section 3.23(b)
related to the timely preparation, execution and filing of Form 8-K is
contingent upon such parties strictly observing all applicable deadlines in
the
performance of their duties under this Agreement. Neither the Master Servicer
nor the Securities Administrator shall have any liability for any loss, expense,
damage, claim arising out of or with respect to any failure to properly prepare,
execute and/or timely file such Form 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 needed to prepare,
arrange for execution or file such Form 8-K, not resulting from its own
negligence, bad faith or willful misconduct. In addition, the Securities
Administrator shall not have any liability for (i) the content of any
information provided to the Securities Administrator for filing on a Form 8-K,
(ii) determining what information is required to be filed on a Form 8-K, (iii)
reformatting any information so that it is able to be filed on XXXXX (iv) the
failure to include any information if it is not provided to the Securities
Administrator on a timely basis or (v) any late filing of a Form 8-K in the
event that the relevant party does not deliver all information, data, signatures
and exhibits required to be provided or filed on or prior to the second Business
Day prior to the applicable filing deadline.
(c) (i)On
or
prior to January 30 of the first year in which the Securities Administrator
is
able to do so under applicable law, the Securities Administrator shall prepare
and file a Form 15 relating to the automatic suspension of reporting in respect
of the Issuing Entity under the Exchange Act.
(ii) 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 the Depositor. In the case of Form 10-D and 10-K, the parties
to
this Agreement and the Servicer will cooperate to prepare and file a Form 12b-25
and a 10-DA and 10-KA as applicable, pursuant to Rule 12b-25 of the Exchange
Act. In the case of Form 8-K, the Securities Administrator will, upon receipt
of
all required Form 8-K Disclosure Information and upon the approval and direction
of the Depositor, include such disclosure information on the next Form 10-D.
In
the event that any previously filed Form 8-K, 10-D or 10-K needs to be amended
and such amendment includes any Additional Form 10-D Disclosure, any Additional
Form 10-K Disclosure or any Form 8-K Disclosure Information or any amendment
to
such disclosure, the Securities Administrator will notify the Depositor of
the
amendment pertaining to an additional reporting item on such form and the
Depositor will cooperate with the Securities Administrator to prepare any
necessary 8-KA, 10-DA or 10-KA. Any Form 15, Form 12b-25 or any amendment to
Form 8-K or 10-D shall be signed by a senior officer of the Master Servicer
and
any amendment to Form 10-K shall be signed by an officer of the Depositor.
The
parties to this Agreement acknowledge that the performance by the Master
Servicer and the Securities Administrator of their duties under this Section
3.23(c) 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 Agreement. Neither the Master
Servicer nor the Securities Administrator shall have any liability for any
loss,
expense, damage, claim arising out of or with respect to any failure to properly
prepare, execute and/or timely file any such Form 15, Form 12b-25 or any
amendments to Forms 8-K, 10-D or 10-K, where such failure results from the
Securities Administrator’s inability or failure to obtain or receive, on a
timely basis, any information from any other party hereto needed to prepare,
arrange for execution or file such Form 15, Form 12b-25 or any amendments to
Forms 8-K, 10-D or 10-K, not resulting from its own negligence, bad faith or
willful misconduct. In addition, the Securities Administrator shall not have
any
liability for (i) the content of any information provided to the Securities
Administrator for filing on a Form 10-K, (ii) determining what information
is
required to be filed on a Form 10-K, (iii) reformatting any information so
that
it is able to be filed on XXXXX (iv) the failure to include any information
if
it is not provided to the Securities Administrator on a timely basis or (v)
any
late filing of a Form 10-K in the event that the relevant party does not deliver
all information, data, signatures and exhibits required to be provided or filed
on or prior to March 15 of each calendar year prior to the filing deadline
for
such Form 10-K.
(d) (i)Within
90
days after the end of each fiscal year of 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
prepare and file on behalf of the Issuing Entity a Form 10-K, in form and
substance as required by the Exchange Act. Each such Form 10-K shall include
the
following items, in each case to the extent they have been delivered to the
Securities Administrator within the applicable time frames set forth in this
Agreement and the Servicing Agreement, (i) an annual compliance statement for
the Servicer, the Master Servicer, the Securities Administrator and any
Servicing Function Participant engaged by such parties (a “Reporting Servicer”)
as described under the related servicing agreement and Section 3.21 hereof,
(ii)(A) the annual reports on assessment of compliance with servicing criteria
for each Reporting Servicer, as described in the servicing agreement and Section
3.22 hereof, and (B) if each Reporting Servicer’s report on assessment of
compliance with servicing criteria described under the servicing agreement
and
Section 3.22 hereof 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
thereunder is not included as an exhibit to such Form 10-K, disclosure that
such
report is not included and an explanation why such report is not included,
(iii)(A) the registered public accounting firm attestation report for each
Reporting Servicer, as described in the related servicing agreement or under
Section 3.22 hereof, and (B) if any registered public accounting firm
attestation report described in the related servicing 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) the Sarbanes Oxley Certification as described in the Servicing Agreement.
Any disclosure or information in addition to (i) through (iv) above that is
required to be included on Form 10-K (“Additional Form 10-K Disclosure”) shall
be determined and prepared by the entity that is indicated in Exhibit O as
the
responsible party for providing that information and the Securities
Administrator will have no duty or liability for any failure hereunder to
determine or prepare any Additional Form 10-K Disclosure, except as set forth
in
the next paragraph.
(ii) No
later
than March 15 of each year that the Issuing Entity is subject to the Exchange
Act reporting requirements, commencing in 2007, (i) the Master Servicer, the
Securities Administrator, the Issuing Entity and the Sponsor hereby agree to,
and the other parties to the American Home Mortgage Assets Trust 2006-5
transaction shall be required to, provide to the Securities Administrator and
the Sponsor, to the extent known to a responsible officer thereof, in
XXXXX-compatible form, or in such other form as otherwise agreed upon by the
Securities Administrator and such party, the form and substance of any
Additional Form 10-K Disclosure for which such party is responsible as set
forth
on Exhibit O hereto, 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 on Form 10-K. The Depositor will be responsible for any reasonable
fees and expenses assessed or incurred by the Securities Administrator in
connection with including any Additional Form 10-K Disclosure on Form 10-K
pursuant to this paragraph.
(iii) After
preparing the Form 10-K, the Securities Administrator shall forward
electronically a draft copy of the Form 10-K to the Master Servicer and the
Depositor for review. No later than the Business Day prior to the date specified
in the sentence after the following sentence (provided that, the Securities
Administrator forwards a copy of the Form 10-K no later than 2 Business Days
prior to such Business Day), the Depositor and the Master Servicer shall notify
the Securities Administrator of any changes to or approval of such Form 10-K.
In
the absence of receipt of any written changes or approval within such timeframe,
the Securities Administrator shall be entitled to assume that such Form 10-K
is
in final form and the Securities Administrator may proceed with the execution
of, and filing of, the Form 10-K. No later than the close of business on the
4th
Business Day prior to the 10-K Filing Deadline, a senior officer of the
Depositor shall sign the Form 10-K and return an electronic or fax copy of
such
signed Form 10-K (with an original executed hard copy to follow by overnight
mail) to the Securities Administrator. If a Form 10-K cannot be filed on time
or
if a previously filed Form 10-K needs to be amended, the Securities
Administrator will follow the procedures set forth in Section 3.23(c)(ii).
Promptly (but no later than 1 Business Day) after filing with the Commission,
the Securities Administrator will make available on its internet website a
final
executed copy of each Form 10-K prepared and filed by the Securities
Administrator. The parties to this Agreement acknowledge that the performance
by
the Master Servicer and the Securities Administrator of their respective duties
under this Section 3.23(d) related to the timely preparation, execution and
filing of Form 10-K is contingent upon such parties (and any Additional Servicer
or Servicing Function Participant) strictly observing all applicable deadlines
in the performance of their duties under this Section 3.23(d), Section 3.21
and
Section 3.22 hereof and Section 4.09 of the Servicing Agreement. Form 10-K
requires the registrant to indicate (by checking “yes” or “no”) that it (1) has
filed all reports required to be filed by Section 13 or 15(d) of the Exchange
Act during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such
filing requirements for the past 90 days. The Depositor shall notify the
Securities Administration in writing, no later than March 15th after the related
Distribution Date with respect to the filing of a report on Form 10-K, if the
answer to the questions should be “no”. The Securities Administrator shall be
entitled to rely on the representations in Section 2.03(vi) or any such notice
in preparing, executing and/or filing any such report. Neither the Master
Servicer nor the Securities Administrator shall have any liability for any
loss,
expense, damage, claim arising out of or with respect to any failure to properly
prepare , execute and/or timely file such Form 10-K, where such failure results
from the Securities Administrator’s inability or failure to obtain or receive,
on a timely basis, any information from any other party hereto needed to
prepare, arrange for execution or file such Form 10-K, not resulting from its
own negligence, bad faith or willful misconduct. No later than each Distribution
Date of each year that the Issuing Entity is subject to the Exchange Act
reporting requirements, the Depositor shall make available to the Securities
Administrator the related Significance Estimate and the Securities Administrator
shall use such information to calculate the related Significance Percentage.
If
the Significance Percentage meets either of the threshold levels detailed in
Item 1115(b)(1) or 1115(b)(2) of Regulation AB, the Securities Administrator
shall deliver written notification to the Depositor and the Cap Provider to
that
effect. The Securities Administrator shall request and the Depositor shall
obtain from the Cap Provider any information required under Regulation AB to
the
extent required under the Cap Contract. The Depositor will be obligated pursuant
to the Cap Contract to provide to the Securities Administrator any information
that may be required to be included in any Form 10-D, Form 8-K or Form 10-K
or
written notification instructing the Securities Administrator that such
Additional Disclosure regarding the Cap Provider is not necessary for such
Distribution Date.
So
long
as the Depositor is subject to the filing requirements of the Exchange Act
with
respect to the Issuing Entity, the Trustee shall notify the Securities
Administrator, the Sponsor and the Depositor of any bankruptcy or receivership
with respect to the Trustee or of any proceedings of the type described under
Item 1117 of Regulation AB that have occurred since the Trustee’s last
notification, together with a description thereof, no later than the date on
which such information is required of other parties hereto as set forth under
this Section 3.23. In addition, the Trustee shall notify the Securities
Administrator, the Sponsor and the Depositor of any affiliations that develop
after the Closing Date between the Trustee and the Depositor, the Sponsor,
the
Securities Administrator, the Master Servicer or the Servicer of the type
described under Item 1119(a) of Regulation AB, together with a description
thereof, no later than the date on which such information is required of other
parties hereto as set forth under this Section 3.23. Should the identification
of any of the Depositor, the Sponsor, the Securities Administrator, the Master
Servicer or the Servicer change, the Depositor shall promptly notify the
Trustee.
The
Securities Administrator shall indemnify and hold harmless the Depositor and
the
Master Servicer and each of its officers, directors and affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon a breach of the Securities Administrator’s
obligations under Sections 3.21, 3.22 and 3.23 or the Securities Administrator’s
negligence, bad faith or willful misconduct in connection therewith. In
addition, the Securities Administrator shall indemnify and hold harmless the
Depositor and the Master Servicer and each of their respective officers,
directors and affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in any
Back-Up Certification, any Annual Statement of Compliance, any Assessment of
Compliance or any Additional Disclosure provided by the Securities Administrator
on its behalf or on behalf of any subservicer or subcontractor pursuant to
Sections 3.21, 3.22 and 3.23 (the “Securities Administrator Information”), or
(ii) any omission or alleged omission to state therein 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; provided, by way
of
clarification, that this paragraph shall be construed solely by reference to
the
Securities Administrator Information and not to any other information
communicated in connection with the Certificates, without regard to whether
the
Securities Administrator Information or any portion thereof is presented
together with or separately from such other information.
The
Depositor shall indemnify and hold harmless the Securities Administrator and
the
Master Servicer and each of its officers, directors and affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon a breach of the obligations of the Depositor under
Sections 3.21, 3.22 and 3.23 or the Depositor’s negligence, bad faith or willful
misconduct in connection therewith. In addition, the Depositor shall indemnify
and hold harmless the Master Servicer, the Securities Administrator and each
of
their respective officers, directors and affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees
and
related costs, judgments and other costs and expenses arising out of or based
upon any untrue statement or alleged untrue statement of any material fact
contained in any Additional Disclosure provided by the Depositor that is
required to be filed pursuant to Section 3.23 (the “Depositor Information”), or
(ii) any omission or alleged omission to state therein 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; provided, by way
of
clarification, that this paragraph shall be construed solely by reference to
the
Depositor Information that is required to be filed and not to any other
information communicated in connection with the Certificates, without regard
to
whether the Depositor Information or any portion thereof is presented together
with or separately from such other information.
The
Master Servicer shall indemnify and hold harmless the Securities Administrator
and the Depositor and each of its respective officers, directors and affiliates
from and against any losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments and other costs and
expenses arising out of or based upon a breach of the obligations of the Master
Servicer under Sections 3.21, 3.22 and 3.23 or the Master Servicer’s negligence,
bad faith or willful misconduct in connection therewith. In addition, the Master
Servicer shall indemnify and hold harmless the Depositor and each of its
officers, directors and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of or based upon
(i)
any untrue statement or alleged untrue statement of any material fact contained
in any Annual Statement of Compliance, any Assessment of Compliance or any
Additional Disclosure provided by the Master Servicer on its behalf or on behalf
of any subservicer or subcontractor pursuant to Sections 3.21, 3.22 and 3.23
(the “Master Servicer Information”), or (ii) any omission or alleged omission to
state therein 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; provided, by way of clarification, that this paragraph shall
be
construed solely by reference to the Master Servicer Information and not to
any
other information communicated in connection with the Certificates, without
regard to whether the Master Servicer Information or any portion thereof is
presented together with or separately from such other information.
If
the
indemnification provided for herein is unavailable or insufficient to hold
harmless the Depositor, the Securities Administrator or the Master Servicer,
as
applicable, then the defaulting party, in connection with any conduct for which
it is providing indemnification under this Section 3.23(b), agrees that it
shall
contribute to the amount paid or payable by the other parties as a result of
the
losses, claims, damages or liabilities of the other party in such proportion
as
is appropriate to reflect the relative fault and the relative benefit of the
respective parties.
Notwithstanding
the provisions of Section 11.01, this Section 3.23 may be amended without the
consent of the Certificateholders.
Any
notice or notification required to be delivered by the Securities Administrator
or Master Servicer to the Depositor pursuant to this Section 3.23, may be
delivered via email at xxxx.xxxx@xxxxxxxxxx.xxx with a follow-up telephone
call
to the Depositor’s Legal Department at (000) 000-0000.
Failure
of the Securities Administrator to comply with this Section 3.23 (including
with
respect to the timeframes required in this Section) which failure results in
a
failure to timely file the related Form 10-K, shall be deemed a default and
the
Trustee at the written direction of the Depositor shall, in addition to whatever
rights the Trustee may have under this Agreement and at law or equity or to
damages, including injunctive relief and specific performance, upon notice
immediately terminate all of the rights and obligations of the Securities
Administrator under this Agreement and in and to the Mortgage Loans and the
proceeds thereof without compensating the Securities Administrator for the
same.
This paragraph shall supersede any other provision in this Agreement or any
other agreement to the contrary.
Notwithstanding
anything to the contrary in this Agreement, no default by the Securities
Administrator shall have occurred with respect to any failure to properly
prepare, execute and/or timely file any report on Form 8-K, Form 10-D or Form
10-K, any Form 15 or Form 12b-25 or any amendments to Form 8-K, 10-D or 10-K,
where such failure results from any party’s failure to deliver, on a timely
basis, any information from such party needed to prepare, arrange for execution
or file any such report, Form or amendment, and does not result from its own
negligence, bad faith or willful misconduct.
Section
3.24 Intention
of the Parties and Interpretation.
Each
of
the parties acknowledges and agrees that the purpose of Sections 3.21, 3.22
and
3.23 of this Agreement is to facilitate compliance by the Sponsor, the Master
Servicer, the Securities Administrator and the Depositor with the provisions
of
Regulation AB. Therefore, each of the parties agrees that (a) the obligations
of
the parties hereunder shall be interpreted in such a manner as to accomplish
that purpose, (b) 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, (c) the parties shall comply with reasonable
requests made by the Sponsor or the Depositor for delivery of additional or
different information as the Sponsor or the Depositor may determine in good
faith is necessary to comply with the provisions of Regulation AB, and (d)
no
amendment of this Agreement shall be required to effect any such changes in
the
parties’ obligations as are necessary to accommodate evolving interpretations of
the provisions of Regulation AB.
Section
3.25 Reserved.
Section
3.26 Optional
Purchase of Defaulted Mortgage Loans.
(a) During
the first full calendar month (but excluding the last Business Day thereof)
following a Mortgage Loan or related REO Property becoming 90 days or more
delinquent, the Servicer shall have the option, but not the obligation to
purchase from the Trust Fund any such Mortgage Loan or related REO Property
that
is then still 90 days or more delinquent, which the Servicer determines in
good
faith will otherwise become subject to foreclosure proceedings (evidence of
such
determination to be delivered in writing to the Master Servicer prior to
purchase), at a price equal to the Purchase Price. The Purchase Price for any
Mortgage Loan or related REO Property purchased hereunder shall be deposited
in
the Distribution Account, and, upon receipt of written certification of such
deposit from the Servicer in the Request for Release, the Trustee shall execute
and deliver such instruments of transfer or assignment, in each case without
recourse, as the Servicer shall furnish and as shall be necessary to vest in
the
Servicer title to any Mortgage Loan or related REO Property released pursuant
hereto.
If
with
respect to any delinquent Mortgage Loan or related REO Property, the option
of
the Servicer set forth in the preceding paragraph shall have arisen but the
Servicer shall have failed to exercise such option on or before the Business
Day
preceding the last Business Day of the calendar month following the calendar
month during which such Mortgage Loan or related REO Property first became
90
days or more delinquent, then such option shall automatically expire; provided,
however, that if any such Mortgage Loan or related REO Property shall cease
to
be 90 days or more delinquent but then subsequently shall again become 90 days
or more delinquent, then the Servicer shall be entitled to another repurchase
option with respect to such Mortgage Loan or REO Property as provided in the
preceding paragraph.
Section
3.27 [Reserved]
Section
3.28 [Reserved]
ARTICLE
IV
PAYMENTS
TO CERTIFICATEHOLDERS
Section
4.01 Distributions.
(a) On
each
Distribution Date the Securities Administrator shall distribute to each
Certificateholder of record as of the next preceding Record Date (other than
as
provided in Section 9.01 respecting the final distribution) either in
immediately available funds (by wire transfer or otherwise) to the account
of
such Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder has so notified the Securities Administrator
at least 5 Business Days prior to the related Record Date, or otherwise by
check
mailed to such Certificateholder at the address of such Holder appearing in
the
Certificate Register, such Certificateholder’s share (based on the aggregate of
the Percentage Interests represented by Certificates of the applicable Class
held by such Holder) of the amounts required to be distributed to such Holder
pursuant to this Section 4.01.
(b) Distributions
to holders of each Class of Certificates will be made on each Distribution
Date
from the aggregate Available Funds in the following order of
priority:
(i) to
the
Class A Certificates, pro rata, based on entitlement, the Accrued Certificate
Interest for each such Class and such Distribution Date plus any Accrued
Certificate Interest remaining unpaid from any prior Distribution Dates with
interest thereon at the related Pass-Through Rate;
(ii) sequentially,
to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6 and
Class M-7 Certificates, in that order, the Accrued Certificate Interest for
each
such Class and such Distribution Date;
(iii) (A)
for
each Distribution Date prior to the Stepdown Date or on which a Trigger Event
is
in effect, in the following order of priority:
(1)
in an
amount up to the Principal Distribution Amount for such Distribution Date,
concurrently, to the following Classes of Certificates, based on the related
Principal Distribution Amount as follows:
(a) 80.00005569735173%
of the Principal Distribution Amount, to the Class A-1 Certificates until their
Certificate Principal Balances are reduced to zero; and:
(b) 19.99994430264827%
of the Principal Distribution Amount, concurrently, to the Class A-2, Class
A-3-1 and Class A-3-2 Certificates, pro rata, based on the Certificate Principal
Balances thereof, until their respective Certificate Principal Balances are
reduced to zero;
(2)
any
remaining Principal Distribution Amount for such Distribution Date after
distributions pursuant to clause (1) above, sequentially, to the Class X-0,
Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6 and Class M-7
Certificates, in that order, until their respective Certificate Principal
Balances are reduced to zero;
(B) on
each
Distribution Date on or after the Stepdown Date so long as a Trigger Event
is
not in effect, in the following order of priority:
(1) in
an
amount up to the Senior Principal Distribution Amount for such Distribution
Date, concurrently, to the following classes of Certificates, based on the
related Senior Principal Distribution Amount as follows:
(a) 80.00005569735173%
of the Senior Principal Distribution Amount to the Class A-1 Certificates until
their Certificate Principal Balance are reduced to zero; and:
(b) 19.99994430264827%
of the Senior Principal Distribution Amount, concurrently, to the Class A-2,
Class A-3-1 and Class A-3-2 Certificates, pro rata, based on the Certificate
Principal Balances thereof, until their respective Certificate Principal
Balances are reduced to zero;
(2) sequentially,
to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6 and
Class M-7 Certificates, in that order, in an amount up to the related Mezzanine
Principal Distribution Amount, until their respective Certificate Principal
Balances are reduced to zero;
(iv) sequentially,
in an amount up to the aggregate Allocated Realized Loss Amount for the Class
A
Certificates, first to the Class A-2 Certificates, and then to the Class A-3-1
Certificates and the Class A-3-2 Certificates, on a pro rata basis, in an amount
up to the Allocated Realized Loss Amount for each such Class;
(v) sequentially,
to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6 and
Class M-7 Certificates, in that order, in an amount up to the Allocated Realized
Loss Amount for each such Class;
(vi) sequentially,
to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6 and
Class M-7 Certificates, in that order, any Accrued Certificate Interest thereon
remaining undistributed from previous Distribution Dates;
(viii)concurrently,
to the Class A Certificates, pro rata, based upon each Class’ Net Rate Shortfall
Carry-Forward Amount, in an amount up to the remaining Net Rate Shortfall
Carry-Forward Amounts for each such Class after application of payments under
the Cap Contract;
(iv) sequentially,
to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6 and
Class M-7 Certificates, in that order, in an amount up to the Net Rate Shortfall
Carry-Forward Amounts for each such Class;
(v) to
the
Class C Certificates, Accrued Certificate Interest and the overcollateralization
release amount; and
(vi) to
the
Class R Certificates, any remaining amount.
On
each
Distribution Date, all Prepayment Charges on the Mortgage Loans will be
distributed to the holders of the Class P Certificates.
(c) In
addition to the foregoing distributions, with respect to any Subsequent
Recoveries, the Master Servicer or Servicer, as the case may be, shall deposit
such funds into the Distribution Account pursuant to Section 3.19. 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 Certificate Principal Balance of the Class of Certificates with the highest
payment priority to which Realized Losses have been allocated, but not by more
than the amount of Realized Losses previously allocated to that Class of
Certificates. The amount of any remaining Subsequent Recoveries will be applied
to increase the Certificate Principal 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, 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 Accrual Period
preceding the Distribution Date on which such increase occurs. Any such
increases shall be applied to the Certificate Principal Balance of each
Certificate of such Class in accordance with its respective Percentage
Interest.
(d) Each
distribution with respect to a Book-Entry Certificate shall be paid to the
Depository, as Holder thereof, and the Depository shall be responsible for
crediting the amount of such distribution to the accounts of its Depository
Participants in accordance with its normal procedures. Each Depository
Participant shall be responsible for disbursing such distribution to the
Certificate Owners that it represents and to each indirect participating
brokerage firm (a “brokerage firm” or “indirect participating firm”) for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Securities
Administrator, the Depositor or the Master Servicer shall have any
responsibility therefor except as otherwise provided by this
Agreement.
(e) Except
as
otherwise provided in Section 9.01, if the Securities Administrator anticipates
that a final distribution with respect to any Class of Certificates will be
made
on the next Distribution Date, the Securities Administrator shall, no later
than
two Business Days after the Determination Date in the month of such final
distribution, mail on such date to each Holder of such Class of Certificates
a
notice to the effect that: (i) the Securities Administrator anticipates that
the
final distribution with respect to such Class of Certificates will be made
on
such Distribution Date but only upon presentation and surrender of such
Certificates at the office of the Securities Administrator or as otherwise
specified therein, and (ii) no interest shall accrue on such Certificates from
and after the end of the prior calendar month.
(f) Any
funds
not distributed to any Holder or Holders of Certificates of such Class on such
Distribution Date because of the failure of such Holder or Holders to tender
their Certificates shall, on such date, be set aside and held in trust and
credited to the account of the appropriate non-tendering Holder or Holders.
If
any Certificates as to which notice has been given pursuant to this Section
4.01(f) shall not have been surrendered for cancellation within six months
after
the time specified in such notice, the Securities Administrator shall mail
a
second notice to the remaining non-tendering Certificateholders to surrender
their Certificates for cancellation in order to receive the final distribution
with respect thereto. If within six months after the second notice all such
Certificates shall not have been surrendered for cancellation, the Securities
Administrator shall take reasonable steps as directed by the Depositor, or
appoint an agent to take reasonable steps, to contact the remaining
non-tendering Certificateholders concerning surrender of their Certificates.
The
costs and expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in the Trust Fund.
If within nine months after the second notice any such Certificates shall not
have been surrendered for cancellation, the Class R Certificateholders shall
be
entitled to all unclaimed funds and other assets which remain subject hereto.
No
interest shall accrue or be payable to any Certificateholder on any amount
held
in trust as a result of such Certificateholder’s failure to surrender its
Certificate(s) for final payment thereof in accordance with this Section
4.01(f).
(g) On
each
Distribution Date, other than the final Distribution Date, the Securities
Administrator shall distribute to each Certificateholder of record as of the
immediately 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. 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. 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.
Section
4.02 Statements
to Certificateholders.
(a) On
each
Distribution Date, based, as applicable, on information provided to it by the
Master Servicer, the Securities Administrator shall prepare and make available
on the Securities Administrator’s website as set forth below, to each Holder of
the Regular Certificates, the Trustee, the Master Servicer and the Rating
Agencies, a statement as to the distributions made on such Distribution Date
setting forth:
(i) the
amount of the related distribution to Holders of each Class allocable to
principal, separately identifying (A) the aggregate amount of any Principal
Prepayments included therein and (B) the aggregate of all scheduled payments
of
principal included therein;
(ii) the
amount of the distribution made on such Distribution Date to the Holders of
each
Class of Regular Certificates allocable to interest, separately
identified;
(iii) the
applicable accrual periods for calculating distributions and general
distribution dates;
(iv) the
total
cash flows received and the general sources thereof;
(v) the
Pass-Through Rate on each Class of Regular Certificates for such Distribution
Date;
(vi) the
Pass-Through Rate for each Class of Certificates with respect to the current
Accrual Period, and, if applicable, whether such Pass-Through Rate was limited
by the Net Rate Cap;
(vii) the
aggregate amount of Advances included in the distribution on such Distribution
Date (including the general purpose of such Advances), the aggregate amount
of
unreimbursed Advances at the close of business on the Distribution Date, and
the
general source of funds for reimbursements;
(viii) the
Overcollateralized Amount and the Overcollateralization Target
Amount;
(ix) the
proceeds (if any) from the Cap Contract;
(x) the
number and Aggregate Stated Principal Balance of, and Realized Loss on, the
Mortgage Loans as of the end of the related Due Period;
(xi) the
Certificate Principal Balance or Certificate Notional Amount, as applicable,
of
each Class before and after giving effect (i) to all distributions allocable
to
principal on such Distribution Date and (ii) the allocation of any Applied
Realized Loss Amounts for such Distribution Date;
(xii) the
number and Aggregate Stated Principal Balance of Mortgage Loans, using the
OTS
method, (a) as to which the Monthly Payment is delinquent for 31-60 days, 61-90
days, 91 or more days, respectively, (b) in foreclosure and (c) that have become
REO Property, in each case as of the end of the preceding calendar month,
determined in the aggregate;
(xiii) the
number, aggregate principal balance and book value of any REO Properties as
of
the close of business on the last day of the calendar month preceding the month
in which such Distribution Date occurs;
(xiv) the
aggregate amount of Principal Prepayments made during the related Prepayment
Period;
(xv) the
aggregate amount of Realized Losses incurred during the related Prepayment
Period and the cumulative amount of Realized Losses;
(xvi) the
amount, if any, of fees or expenses accrued and paid, with an identification
of
the payee and the general purpose of such fees including the related amount
of
the Servicing Fees paid to or retained by the Servicer for the related Due
Period;
(xvii) the
aggregate amount of extraordinary Trust Fund expenses withdrawn from the
Distribution Account for such Distribution Date;
(xviii) the
aggregate amount of any Prepayment Interest Shortfalls for such Distribution
Date, to the extent not covered by payments by the Servicer or Master Servicer
pursuant to Section 1.04, and the aggregate amount of Relief Act Interest
Shortfalls for such Distribution Date;
(xix) the
Accrued Certificate Interest in respect of each Class of Certificates for such
Distribution Date;
(xx) the
aggregate of any deposits to and withdrawals from the Cap Contract Reserve
Fund
for such Distribution Date and the remaining amount on deposit in the Cap
Contract Reserve Fund after such deposits and withdrawals;
(xxi)
the
Senior Percentage, the Senior Prepayment Percentage, the Subordinate Percentage
and the Subordinate Prepayment Percentage;
(xxii) Available
Funds for such Distribution Date;
(xxiii) the
amount of the Prepayment Charges remitted by the Servicer;
(xxiv) unless
otherwise set forth in the Form 10-D relating to such Distribution Date, with
respect to the Mortgage Loans and if applicable, material modifications,
extensions or waivers to Mortgage Loan terms, fees, penalties or payments during
the preceding calendar month or that have become material over
time;
(xxv) with
respect to any Mortgage Loan that was liquidated during the preceding calendar
month, the loan number and Stated Principal Balance of, and Realized Loss on,
such Mortgage Loan as of the close of business on the Determination Date
preceding such Distribution Date;
(xxvi) whether
the loss or delinquency or tests contained in the definitions of “Senior
Prepayment Percentage” and “Subordinate Prepayment Percentage” were
met;
(xxvii) updated
pool composition data including the following: weighted average Mortgage Rate,
weighted average remaining term to maturity and weighted average Net Mortgage
Rate of the Mortgage Loans as of the close of business on the first day of
the
calendar month in which such Distribution Date occurs; and
(xxviii) unless
otherwise set forth in the Form 10-D relating to such Distribution Date,
material breaches of Mortgage Loan representations or warranties or transaction
covenants.
On
each
Distribution Date, the Securities Administrator shall provide Bloomberg
Financial Markets, L.P. (“Bloomberg”) CUSIP level factors for each Class of
Certificates as of such Distribution Date, using a format and media mutually
acceptable to the Securities Administrator and Bloomberg.
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 Securities Administrator’s 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.
Within
a
reasonable period of time after the end of each calendar year, the Securities
Administrator shall prepare and forward, to each Person who at any time during
the calendar year was a Holder of a Certificate, a statement containing the
information set forth in subclauses (i) and (ii) above, aggregated for such
calendar year or applicable portion thereof during which such person was a
Certificateholder. Such obligation of the Securities Administrator shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Securities Administrator pursuant to any
requirements of the Code and regulations thereunder as from time to time are
in
force.
Within
a
reasonable period of time after the end of each calendar year, the Securities
Administrator shall prepare and forward, to each Person who at any time during
the calendar year was a Holder of a Class R Certificate a statement containing
the information provided pursuant to the previous paragraph aggregated for
such
calendar year or applicable portion thereof during which such Person was a
Certificateholder. Such obligation of the Securities Administrator shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Securities Administrator pursuant to any
requirements of the Code as from time to time are in force.
Section
4.03 Remittance
Reports; Advances by the Master Servicer.
(a) On
the
Business Day following each Determination Date but in no event later than the
20th
day of
each month (or if such 20th
day is
not a Business Day, the preceding Business Day), the Master Servicer shall
deliver to the Securities Administrator a report, prepared as of the close
of
business on the Determination Date (the “Remittance Report”), in the form of an
electronic format mutually acceptable to each party. The Remittance Report
and
any written information supplemental thereto shall include such information
with
respect to the Mortgage Loans that is required by the Securities Administrator
for purposes of making the calculations and preparing the statement described
in
Sections 4.01 and 4.02, as set forth in written specifications or guidelines
issued by the Securities Administrator from time to time.
(b) If
the
scheduled payment on a Mortgage Loan that was due on a related Due Date is
delinquent, other than as a result of application of the Relief Act, and for
which the Servicer was required to make an advance pursuant to the Servicing
Agreement exceeds the amount deposited in the Distribution Account which will
be
used for an advance with respect to such Mortgage Loan, the Master Servicer
will
deposit in the Distribution Account not later than the Business Day 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 advance to be a Nonrecoverable Advance. Subject
to
the foregoing, the Master Servicer shall continue to make such advances through
the date that the Servicer is required to do so under its Servicing Agreement.
If the Master Servicer deems an advance to be a Nonrecoverable Advance, on
the
Business Day immediately preceding the related Distribution 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 a
Nonrecoverable Advance.
(c) The
Master Servicer shall deposit in the Distribution Account not later than each
Business Day immediately preceding the related Distribution Date an amount
equal
to the sum of the aggregate amounts required to be paid by the Servicer under
the Servicing Agreements with respect to subclauses (a) and (b) of the
definition of Interest Shortfall with respect to the Mortgage Loans for the
related Distribution Date, and not so paid by the Servicer (such amount, the
“Compensating Interest Payment”). The Master Servicer shall not be entitled to
any reimbursement of any Compensating Interest Payment.
Section
4.04 Distributions
on the REMIC Regular Interests.
On
each
Distribution Date, the following amounts, in the following order of priority,
shall be distributed by REMIC 1 to REMIC 2 on account of the REMIC 1 Regular
Interests or withdrawn from the Distribution Account and distributed to the
Holders of the Class R Certificates, as the case may be:
(i) first,
to
Holders of REMIC 1 Regular Interest LT-AA, REMIC
1
Regular Interest LT-A1, REMIC 1 Regular Interest LT-A2, REMIC 1 Regular Interest
LT-A3-1, REMIC 1 Regular Interest LT-A3-2, REMIC 1 Regular Interest LT-M1,
REMIC
1 Regular Interest LT-M2, REMIC 1 Regular Interest LT-M3, REMIC 1 Regular
Interest LT-M4, REMIC 1 Regular Interest LT-M5, REMIC 1 Regular Interest LT-M6,
REMIC 1 Regular Interest LT-M7
and
REMIC 1 Regular Interest LT-ZZ, pro rata, in an amount equal to (A) the
Uncertificated Accrued Interest for each such REMIC 1 Regular Interest for
such
Distribution Date, plus (B) any amounts in respect thereof remaining unpaid
from
previous Distribution Dates. Amounts payable as Uncertificated Accrued Interest
in respect of REMIC 1 Regular Interest LT-ZZ shall be reduced and deferred
when
the REMIC 1 Overcollateralization Amount is less than the REMIC 1 Required
Overcollateralization Amount, by the lesser of (x) the amount of such difference
and (y) the Maximum Uncertificated Accrued Interest Deferral Amount and such
amount will be payable to the Holders of REMIC
1
Regular Interest LT-A1, REMIC 1 Regular Interest LT-A2, REMIC 1 Regular Interest
LT-A3-1, REMIC 1 Regular Interest LT-A3-2, REMIC 1 Regular Interest LT-M1,
REMIC
1 Regular Interest LT-M2, REMIC 1 Regular Interest LT-M3, REMIC 1 Regular
Interest LT-M4, REMIC 1 Regular Interest LT-M5, REMIC 1 Regular Interest LT-M6
and REMIC 1 Regular Interest LT-M7
in the
same proportion as the Overcollateralization Increase Amount is allocated to
the
Corresponding Certificates and the Uncertificated Principal Balance of REMIC
1
Regular Interest LT-ZZ shall be increased by such amount;
(ii) second,
to the Holders of REMIC 1 Regular Interests, in an amount equal to the remainder
of the Available Distribution Amount for such Distribution Date after the
distributions made pursuant to clause (i) above, allocated as
follows:
(a) 98.00%
of
such remainder (other than amounts payable under clause (c) below) to the
Holders of REMIC 1 Regular Interest LT-AA, until the Uncertificated Principal
Balance of such REMIC 1 Regular Interest is reduced to zero;
(b) 2.00%
of
such remainder (other than amounts payable under clause (c) below, first, to
the
Holders of REMIC 1 Regular Interest LT-A1, REMIC 1 Regular Interest LT-A2,
REMIC
1 Regular Interest LT-A3-1, REMIC 1 Regular Interest LT-A3-2, REMIC 1 Regular
Interest LT-M1, REMIC 1 Regular Interest LT-M2, REMIC 1 Regular Interest LT-M3,
REMIC 1 Regular Interest LT-M4, REMIC 1 Regular Interest LT-M5, REMIC 1 Regular
Interest LT-M6 and REMIC 1 Regular Interest LT-M7, 1.00%, in the same proportion
as principal payments are allocated to the Corresponding Certificates, until
the
Uncertificated Principal Balances of such REMIC 1 Regular Interests are reduced
to zero and second, to the Holders of REMIC 1 Regular Interest LT-ZZ until
the
Uncertificated Principal Balance of such REMIC 1 Regular Interest is reduced
to
zero; then
(c) any
remaining amount to the Holders of the Class R Certificates (in respect of
the
Class R-2 Interest); and
(iii) third,
to
REMIC 1 Regular Interest LT-P, 100% of the amount paid in respect of REMIC
I
Regular Interest LT-P;
(1) provided,
however,
that
(i) 98.00% and (ii) 2.00% of any principal payments that are attributable to
an
Overcollateralization Reduction Amount shall be allocated to Holders of (i)
REMIC 1 Regular Interest LT-AA, and (ii) REMIC 1 Regular Interest LT-ZZ,
respectively.
(2) any
remaining amount to the Holders of the Class R Certificates (in respect of
the
Class R-2 Interest); and
(ii) third,
to
REMIC 1 Regular Interest LT-P, 100% of the amount paid in respect of
REMIC I Regular Interest LT-P;
provided,
however, that (i) 98.00% and (ii) 2.00% of any principal payments that are
attributable to an Overcollateralization Reduction Amount shall be allocated
to
Holders of (i) REMIC 1 Regular Interest LT-AA, and (ii) REMIC 1 Regular Interest
LT-ZZ, respectively.
All
amounts distributed on the Class C Certificates shall be deemed to be
distributed on the Class C Interest.
All
amounts distributed on the Class P Certificates shall be deemed to be
distributed on the Class P Interest.
Section
4.05 Allocation
of Realized Losses.
Any
Realized Losses on the Mortgage Loans will be allocated on any Distribution
Date, first, to the Class M-7 Certificates, in reduction of the Certificate
Principal Balance thereof, until reduced to zero, second, to the Class M-6
Certificates, in reduction of the Certificate Principal Balance thereof, until
reduced to zero, third, to the Class M-5 Certificates, in reduction of the
Certificate Principal Balance thereof, until reduced to zero, fourth, to the
Class M-4 Certificates, in reduction of the Certificate Principal Balance
thereof, until reduced to zero, fifth, to the Class M-3 Certificates, in
reduction of the Certificate Principal Balance thereof, until reduced to zero,
sixth, to the Class M-2 Certificates, in reduction of the Certificate Principal
Balance thereof, until reduced to zero, and seventh, to the Class M-1
Certificates, in reduction of the Certificate Principal Balance thereof, until
reduced to zero. Realized losses will not be allocated to the Class A-1
Certificates.
Thereafter,
any remaining Realized Losses with respect to the Mortgage Loans will be
allocated on any Distribution Date, first, to the Class A-3-1 Certificates
and
the Class A-3-2 Certificates on a pro rata basis, in reduction of the
Certificate Principal Balances thereof, until reduced to zero, and second,
to
the Class A-2 Certificates, in reduction of the Certificate Principal Balance
thereof, until reduced to zero.
Any
allocation of a Realized Loss to a Certificate will be made by reducing the
Certificate Principal Balance thereof by the amount so allocated as of the
Distribution Date in the month following the calendar month in which such
Realized Loss was incurred.
If,
after
taking into account Subsequent Recoveries, the amount of a Realized Loss is
reduced, the amount of such Subsequent Recoveries will be applied to increase
the Certificate Principal Balance of the Class M Certificates with the highest
payment priority to which Realized Losses have been allocated, and then to
increase the Certificate Principal Balance of the Class A Certificates with
the
highest payment priority to which Realized Losses have been allocated, but
not
by more than the amount of Realized Losses previously allocated to that Class
of
Certificates. The amount of any remaining Subsequent Recoveries will be applied
to increase the Certificate Principal 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, and so on. Holders of the
Certificates will not be entitled to any payment in respect of any Accrued
Certificate Interest on the amount of such increases for any Accrual Period
preceding the Distribution Date on which such increase occurs. Any such
increases shall be applied to the Certificate Principal Balance of each
Certificate of such Class in accordance with its respective percentage
interest.
On
each
Distribution Date, if the aggregate Certificate Principal Balances of all
Classes of the Class A Certificates and Class M Certificates exceeds the
Aggregate Stated Principal Balances of the Mortgage Loans after giving effect
to
distributions of principal and the allocation of all losses to these
Certificates on that Distribution Date, that excess will be deemed a principal
loss and will be allocated to the most junior Class of Class M Certificates
then
outstanding.
With
respect to the REMIC 1 Regular Interests, all Realized Losses on the Mortgage
Loans shall be allocated by the Securities Administrator on each Distribution
Date as follows: first, to Uncertificated Accrued Interest payable to the REMIC
1 Regular Interest LT-AA and REMIC 1 Regular Interest LT-ZZ up to an aggregate
amount equal to the REMIC 1 Interest Loss Allocation Amount, 98% and 2%,
respectively; second, to the Uncertificated Principal Balances of REMIC 1
Regular Interest LT-AA and REMIC 1 Regular Interest LT-ZZ up to an aggregate
amount equal to the REMIC 1 Principal Loss Allocation Amount, 98% and 2%,
respectively; third, to the Uncertificated Principal Balances of REMIC 1 Regular
Interest LT-AA, REMIC 1 Regular Interest LT-M7 and REMIC 1 Regular Interest
LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance
of REMIC 1 Regular Interest LT-M7 has been reduced to zero; fourth, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT-AA, REMIC
1
Regular Interest LT-M6 and REMIC 1 Regular Interest LT-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT-M6 has been reduced to zero; fifth, to the Uncertificated Principal
Balances of REMIC 1 Regular Interest LT-AA, REMIC 1 Regular Interest LT-M5
and
REMIC 1 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-M5 has been
reduced to zero; sixth, to the Uncertificated Principal Balances of REMIC 1
Regular Interest LT-AA, REMIC 1 Regular Interest LT-M4 and REMIC 1 Regular
Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 1 Regular Interest LT-M4 has been reduced to zero; seventh,
to
the Uncertificated Principal Balances of REMIC 1 Regular Interest LT-AA, REMIC
1
Regular Interest LT-M3 and REMIC 1 Regular Interest LT-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT-M3 has been reduced to zero; eighth, to the Uncertificated Principal
Balances of REMIC 1 Regular Interest LT-AA, REMIC 1 Regular Interest LT-M2
and
REMIC 1 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-M2 has been
reduced to zero; ninth, to the Uncertificated Principal Balances of REMIC 1
Regular Interest LT-AA, REMIC 1 Regular Interest LT-M1 and REMIC 1 Regular
Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 1 Regular Interest LT-M1 has been reduced to zero; tenth,
to
the Uncertificated Principal Balances of REMIC 1 Regular Interest LT-AA, 98%
REMIC 1 Regular Interest LT-A3-1 and REMIC 1 Regular Interest LT-A3-2, 1%,
pro
rata and REMIC 1 Regular Interest LT-ZZ, 1%, respectively, until the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT-A3-1 and REMIC
1 Regular Interest LT-A3-2 have been reduced to zero; and eleventh, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT-AA, REMIC
1
Regular Interest LT-A2 and REMIC 1 Regular Interest LT-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT-A2 has been reduced to zero.
Section
4.06 Information
Reports to Be Filed by the Servicer.
The
Servicer shall file information reports with respect, to the extent set forth
in
the Servicing Agreements, to the receipt of mortgage interest received in a
trade or business, foreclosures and abandonments of any Mortgaged Property
and
the information returns relating to cancellation of indebtedness income with
respect to any Mortgaged Property required by Sections 6050H, 6050J and 6050P
of
the Code, respectively, and deliver to the Securities Administrator an Officers’
Certificate stating that such reports have been filed. Such reports shall be
in
form and substance sufficient to meet the reporting requirements imposed by
such
Sections 6050H, 6050J and 6050P of the Code.
Section
4.07 Compliance
with Withholding Requirements.
Notwithstanding
any other provision of this Agreement 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 Securities Administrator reasonably believes are applicable under
the
Code. The consent of Certificateholders shall not be required for such
withholding. In the event 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 Securities
Administrator shall, together with its monthly report to such Certificateholders
pursuant to Section 4.02 hereof, indicate such amount withheld.
Section
4.08 [Reserved].
Section
4.09 Allocation
of Net Deferred Interest.
For
any
Distribution Date, Net Deferred Interest shall be allocated among the Classes
of
Senior Certificates and the Classes of Subordinate Certificates based on, in
the
case of each Class of Certificates, the interest accrued on each such Class
for
the related Accrual Period.
Section
4.10 Cap
Contract.
The
Securities Administrator shall deposit any amounts received from time to time
with respect to the Cap Contract into the Cap Contract Reserve
Fund.
The
Securities Administrator shall prepare and deliver any notices required to
be
delivered under the Cap Contract.
The
Cap
Counterparty shall act as calculation agent and/or shall terminate the Cap
Contract, in each case upon the occurrence of certain events of default or
termination events to the extent specified in or pursuant to the Confirmations.
Upon any such termination, the Cap Counterparty will be obligated to pay the
Securities Administrator for the benefit of the Certificateholders an amount
in
respect of such termination. Any amounts received by the Securities
Administrator in respect of such termination shall be deposited and held in
the
Cap Contract Reserve Fund to pay Allocated Realized Loss Amounts and Net Rate
Shortfall Carry-Forward Amounts on the Classes of Offered Certificates as
provided in Section 4.11 hereof on the Distribution Dates following such
termination to and including the Cap Contract Scheduled Termination Date. On
the
Cap Contract Scheduled Termination Date, after all other distributions to be
made on such date have been made pursuant to the terms of this Agreement, if
any
such amounts received by the Securities Administrator with respect thereto
in
respect of such termination remain in the Cap Contract Reserve Fund, such
amounts shall be distributed by the Securities Administrator to the
Underwriter.
Section
4.11 Cap
Contract Reserve Fund
(a) On
the
Closing Date, the Securities Administrator shall establish and maintain in
its
name, in trust for the benefit of the Holders of the Offered Certificates,
the
Cap Contract Reserve Fund, and shall deposit $1,000 therein upon receipt from
or
on behalf of the Depositor of such amount. All funds on deposit in the Cap
Contract Reserve Fund shall be held separate and apart from, and shall not
be
commingled with, any other moneys, including without limitation, other moneys
held by the Securities Administrator pursuant to this Agreement.
(b) On
each
Distribution Date, the Securities Administrator shall deposit into the Cap
Contract Reserve Fund all amounts received in respect of the Cap Contract for
the Accrual Period. The Securities Administrator shall make withdrawals from
the
Cap Contract Reserve Fund to make distributions pursuant to this Section
4.11.
(c) Funds
in
the Cap Contract Reserve Fund will be invested by the Securities Administrator
in the Xxxxx Fargo Advantage Prime Investment Money Market Fund. All such
investments shall be made in the name of the Trustee, for the benefit of the
Holders of the Offered Certificates. Any net investment earnings on such amounts
shall be retained therein until withdrawn as provided in this Section 4.11.
Any
losses incurred in the Cap Contract Reserve Fund in respect of any such
investments shall be charged against amounts on deposit in the Cap Contract
Reserve Fund (or such investments) immediately as realized. The Securities
Administrator shall not be liable for the amount of any loss incurred in respect
of any investment or lack of investment of funds held in the Cap Contract
Reserve Fund and made in accordance with this Section 4.11. For federal income
tax purposes, the Class C Certificates shall be the owner of the Cap Contract
Reserve Fund. The Cap Contract Reserve Fund will not constitute an asset of
any
REMIC created hereunder.
(d) On
each
Distribution Date, the Securities Administrator will deposit in the Cap Contract
Reserve Fund any amounts received in respect of the Cap Contract. On each
Distribution Date, such amounts received in respect of the Cap Contract will
be
distributed to the Certificates to the extent necessary and to the extent not
previously distributed in the following order of priority:
(1) concurrently,
to the Class A-2 Certificates and Class A-3-2 Certificates, an amount up to
the
remaining Allocated Realized Loss Amount for each such Class, on a pro rata
basis, based on the aggregate remaining Allocated Realized Loss Amounts for
such
Certificates;
(2) sequentially,
to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6 and
Class M-7 Certificates, in that order, an amount up to the amount of any
remaining Allocated Realized Loss Amount for each such Class;
(3) concurrently,
to the Class A-1, Class A-2 and Class A-3-2 Certificates, pro rata, based on
the
related Net Rate Shortfall Carry-Forward Amount prior to application of Section
4.01(b) in an amount up to the amount of any remaining Net Rate Shortfall
Carry-Forward Amounts for each such Class;
(4) sequentially,
to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6 and
Class M-7 Certificates, in that order, in an amount up to the amount of any
remaining Net Rate Shortfall Carry-Forward Amount, prior to application of
Section 4.01 (b), for each such Class;
(5) concurrently,
on a pro rata basis, to the Class A-1, Class A-2 and Class A-3-2 Certificates,
the Accrued Certificate Interest for each such Class and such Distribution
Date
plus any Accrued Certificate Interest remaining unpaid from any prior
Distribution Dates with interest thereon at the related Pass-Through
Rate;
(6) sequentially,
to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6 and
Class M-7 Certificates, in that order, in an amount up to the Accrued
Certificate Interest for each such Class and such Distribution Date plus any
Accrued Certificate Interest remaining unpaid from any prior Distribution Dates
with interest thereon at the related Pass-Through Rate;
(7) to
the
Class A-1, Class A-2, Class A-3-2 and Class M Certificates, an amount equal
to
any Cap Extra Principal Distribution Amount, but solely to the extent the
payment of the Cap Extra Principal Distribution Amount is as a result of
Realized Losses incurred on the Mortgage Loans, to be included in the Principal
Distribution Amount for that distribution date and payable as provided under
Section 4.01 (b); and
(8) to
the
Underwriter; provided however, that any such amount that is attributable to
the
Cap Contract shall instead be held in the Cap Contract Reserve Fund to be used
on future Distribution Dates until the Distribution Date immediately following
the earlier of (i) the Cap Contract Termination Date and (ii) the date on which
the aggregate Certificate Principal Balance of the Offered Certificates has
been
reduced to zero, at which time any amounts remaining on deposit in the Cap
Contract Reserve Fund with respect to the Cap Contract will be distributed
to
the Underwriter.
ARTICLE
V
THE
CERTIFICATES
Section
5.01 The
Certificates.
(a) The
Certificates will be substantially in the respective forms annexed hereto as
Exhibits A and B. The Certificates will be issuable in registered form only.
The
Class A certificates will be issued in minimum denominations of a $100,000
principal balance and integral multiples of $1 in excess thereof. The Class
M
Certificates will be issued in minimum denominations of a $250,000 principal
balance and integral multiples of $1 in excess thereof. The Class R, Class
RX and Class C Certificates will be issued in minimum percentage interests
of
20%. The Class P Certificates will be issued in minimum percentage interests
of
100%.
Upon
original issue, the Certificates shall, upon the written request of the
Depositor executed by an officer of the Depositor, be executed and delivered
by
the Securities Administrator, authenticated by the Securities Administrator
and
delivered to or upon the order of the Depositor upon receipt by the Securities
Administrator of the documents specified in Section 2.01. The Certificates
shall
be executed by manual or facsimile signature on behalf of the Securities
Administrator by a Responsible Officer. Certificates bearing the manual or
facsimile signatures of individuals who were at the time they signed the proper
officers of the Securities Administrator shall bind the Securities
Administrator, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such Certificates.
No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein executed by the
Securities Administrator by manual signature, and such Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been
duly
authenticated and delivered hereunder. All Certificates issued on the Closing
Date shall be dated the Closing Date and any Certificates delivered thereafter
shall be dated the date of their authentication.
(b) The
Certificates shall initially be issued as one or more Certificates registered
in
the name of the Depository or its nominee and, except as provided below,
registration of such Certificates may not be transferred by the Securities
Administrator except to another Depository that agrees to hold such Certificates
for the respective Certificate Owners with Ownership Interests therein. The
Certificate Owners shall hold their respective Ownership Interests in and to
each of such Book-Entry Certificates through the book-entry facilities of the
Depository and, except as provided below, shall not be entitled to Definitive
Certificates in respect of such Ownership Interests. All transfers by
Certificate Owners of their respective Ownership Interests in the Book-Entry
Certificates shall be made in accordance with the procedures established by
the
Depository Participant or brokerage firm representing such Certificate Owner.
Each Depository Participant shall transfer the Ownership Interests only in
the
Book-Entry Certificates of Certificate Owners it represents or of brokerage
firms for which it acts as agent in accordance with the Depositor’s normal
procedures. The Securities Administrator shall not be required to monitor,
determine or inquire as to compliance with the transfer restrictions with
respect to the Book-Entry Certificates, and the Securities Administrator shall
have no liability for transfers of Ownership Interests in the Book-Entry
Certificates made through the book-entry facilities of the Depositary or between
or among Depositary Participants or Certificate Owners, made in violation of
the
applicable restrictions.
The
Trustee, the Securities Administrator, the Master Servicer and the Depositor
may
for all purposes (including the making of payments due on the respective Classes
of Book-Entry Certificates) deal with the Depository as the authorized
representative of the Certificate Owners with respect to the respective Classes
of Book-Entry Certificates for the purposes of exercising the rights of
Certificateholders hereunder. The rights of Certificate Owners with respect
to
the respective Classes of Book-Entry Certificates shall be limited to those
established by law and agreements between such Certificate Owners and the
Depository Participants and brokerage firms representing such Certificate
Owners. Multiple requests and directions from, and votes of, the Certificate
Owners as Holder of any Class of Book-Entry Certificates with respect to any
particular matter shall not be deemed inconsistent if they are made with respect
to different Certificate Owners. The Securities Administrator may establish
a
reasonable record date in connection with solicitations of consents from or
voting by Certificateholders and shall give notice to the Depository of such
record date.
If
(i)(A)
the Depositor advises the Securities Administrator in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Depositor is unable to locate a
qualified successor or (ii) the Depositor, with the consent of Certificate
Owners, advises the Securities Administrator in writing that it elects to
terminate the book-entry system through the Depository, the Securities
Administrator shall notify all Certificate Owners, through the Depository,
of
the occurrence of any such event and of the availability of Definitive
Certificates to Certificate Owners requesting the same. Upon surrender to the
Securities Administrator of the Book-Entry Certificates by the Depository,
accompanied by registration instructions from the Depository for registration
of
transfer, the Securities Administrator shall, at the expense of the Depositor,
issue the Definitive Certificates. Neither the Depositor, the Master Servicer
nor the Securities Administrator shall be liable for any actions taken by the
Depository or its nominee, including, without limitation, any delay in delivery
of such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Certificates
the
Trustee, the Securities Administrator and the Master Servicer shall recognize
the Holders of the Definitive Certificates as Certificateholders
hereunder.
(c) Each
Certificate is intended to be a “security” governed by Article 8 of the Uniform
Commercial Code as in effect in the State of New York and any other applicable
jurisdiction, to the extent that any of such laws may be
applicable.
Section
5.02 Registration
of Transfer and Exchange of Certificates.
(a) The
Securities Administrator shall maintain a Certificate Register in which, subject
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.
(b) Except
as
provided in Section 5.02(c), no transfer, sale, pledge or other disposition
of a
Class
R,
Class RX, Class C or Class P Certificate shall
be
made unless such transfer, sale, pledge or other disposition is exempt from
the
registration requirements of the Securities Act of 1933, as amended (the “Act”),
and any applicable state securities laws or is made in accordance with said
Act
and laws. In the event that a transfer of a Class R, Class RX, Class C or Class
P Certificate is to be made under this Section 5.02(b), (i) the Securities
Administrator shall require an Opinion of Counsel acceptable to and in form
and
substance satisfactory to the Securities Administrator that such transfer shall
be made pursuant to an exemption, describing the applicable exemption and the
basis therefor, from said Act and laws or is being made pursuant to said Act
and
laws, which Opinion of Counsel shall not be an expense of the Securities
Administrator, the Trustee, the Depositor or the Master Servicer, provided
that
such Opinion of Counsel will not be required in connection with the initial
transfer of any such Certificate by the Depositor or any affiliate thereof,
to a
non-affiliate of the Depositor and (ii) the Securities Administrator shall
require the transferee to execute a representation letter, substantially in
the
form of Exhibit G-1 hereto, and the Securities Administrator shall require
the
transferor to execute a representation letter, substantially in the form of
Exhibit G-2 hereto, each acceptable to and in form and substance satisfactory
to
the Securities Administrator certifying to the Depositor and the Securities
Administrator the facts surrounding such transfer, which representation letters
shall not be an expense of the Securities Administrator, the Trustee, the
Depositor or the Master Servicer; provided,
however,
that
such representation letters will not be required in connection with any transfer
of any such Certificate by the Depositor to an affiliate of the Depositor and
the Securities Administrator shall be entitled to conclusively rely upon a
representation (which, upon the request of the Securities Administrator, shall
be a written representation) from the Depositor of the status of such transferee
as an affiliate of the Depositor. Any such Certificateholder desiring to effect
such transfer shall, and does hereby agree to, indemnify the Securities
Administrator, the Trustee, the Depositor and the Master Servicer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such applicable federal and state laws.
(c) Notwithstanding
the requirements of Section 5.02(b), transfers of Class R, Class RX, Class
C or
Class P Certificates may be made in accordance with this Section 5.02(c) if
the
prospective transferee of a Certificate provides the Securities Administrator
and the Depositor with an investment letter substantially in the form of Exhibit
G-3 attached hereto, which investment letter shall not be an expense of the
Securities Administrator, the Trustee, the Depositor or the Master Servicer,
and
which investment letter states that, among other things, such transferee is
a
“qualified institutional buyer” as defined under Rule 144A, provided that, in
the case of any Book-Entry Certificate, such transferee shall be deemed to
have
made such representations and warranties contained in such investment letter.
Such transfers shall be deemed to have complied with the requirements of Section
5.02(b) hereof. Any such Certificateholder desiring to effect such transfer
shall, and does hereby agree to, indemnify the Securities Administrator, the
Trustee, the Depositor and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
applicable federal and state laws
The
Securities Administrator shall require an Opinion of Counsel, on which the
Securities Administrator, the Trustee, the Depositor and the Master Servicer
may
rely, from a prospective transferee prior to the transfer of any ERISA
Restricted Certificate, Class
C,
Class P or Class RX Certificates
to any
employee benefit plan or other retirement arrangement, including an individual
retirement account or Xxxxx plan, that is subject to the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), or Section 4975 of the Code
(any of the foregoing, a “Plan”), to a trustee or other Person acting on behalf
of any Plan, or to any other person who is using “plan assets” of any Plan to
effect such acquisition (including any insurance company using funds in its
general or separate accounts that may constitute “plan assets”). Such Opinion of
Counsel must establish to the satisfaction of the Securities Administrator
that
such transfer is permissible under applicable law, will not constitute or result
in a prohibited transaction under Section 406 of ERISA or Section 4975 of the
Code, and will not subject the Securities Administrator, the Trustee, the Master
Servicer or the Depositor to any obligation in addition to those undertaken
in
this Agreement. None of the Depositor, the Master Servicer, the Securities
Administrator or the Trustee will be required to obtain such Opinion of Counsel
on behalf of any prospective transferee. A purchaser of an ERISA Restricted
Certificate, Class C, Class P or Class RX Certificates shall be deemed to
represent to the Securities Administrator, the Trustee, the Master Servicer
and
the Depositor that it is not a Plan or using assets of a Plan if it does not
provide such an Opinion of Counsel.
For
so
long as the Supplemental Interest Trust which holds the Cap Contract is in
existence, each beneficial owner of an Class A-1 Certificate or any interest
therein, shall be deemed to have represented, by virtue of its acquisition
or
holding of the Class A-1 Certificate, or interest therein, that either (i)
it is
not a Plan or (ii) (A) it is an accredited investor within the meaning of the
Prohibited Transaction Exemption 2002-41 and (B) the acquisition and holding
of
such Certificate and the separate right to receive payments from the Cap
Contract are eligible for the exemptive relief available under Prohibited
Transaction Class Exemption 91-38, 96-23, 90-1, 84-14 or 95-60.
Each
beneficial owner of a Class A Certificate (except in the case of the Class
A-1
Certificates) or Class M Certificate or any interest therein shall be deemed
to
have represented, by virtue of its acquisition or holding of that Certificate
or
interest therein, that either (i) it is not a Plan or a trustee or other Person
acting on behalf of a Plan or using “plan assets” of a Plan to effect such
acquisition (including any insurance company using funds in its general or
separate accounts that may constitute “plan assets”) or (ii) (1) it is an
insurance company, (2) the source of funds used to acquire or hold the
Certificate or interest therein is an “insurance company general account,” as
such term is defined in PTCE 95-60, and (3) the conditions in Sections I and
III
of PTCE 95-60 have been satisfied.
If
any
Certificate, or any interest therein, is acquired or held in violation of this
section 5.02(c), the next preceding permitted beneficial owner will be treated
as the beneficial owner of that Certificate, retroactive to the date of transfer
to the purported beneficial owner. Any purported beneficial owner whose
acquisition or holding of a Certificate, or interest therein, was effected
in
violation of this section shall indemnify to the extent permitted by law and
hold harmless the Depositor, the Sponsor, the Master Servicer, any servicer,
any
Underwriter and the Trustee from and against any and all liabilities, claims,
costs or expenses incurred by such parties as a result of such acquisition
or
holding.
(d) [Reserved]
(e) (i)
Each
Person who has or who acquires any Ownership Interest in a Residual Certificate
shall be deemed by the acceptance or acquisition of such Ownership Interest
to
have agreed to be bound by the following provisions and to have irrevocably
authorized the Securities Administrator or its designee under clause (iii)(A)
below to deliver payments to a Person other than such Person and to negotiate
the terms of any mandatory sale under clause (iii)(B) below and to execute
all
instruments of transfer and to do all other things necessary in connection
with
any such sale. The rights of each Person acquiring any Ownership Interest in
a
Residual Certificate are expressly subject to the following
provisions:
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(A)
|
Each
Person holding or acquiring any Ownership Interest in a Residual
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.
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(B)
|
In
connection with any proposed Transfer of any Ownership Interest in
a
Residual Certificate, the Securities Administrator shall require
delivery
to it, and shall not register the Transfer of any Residual Certificate
until its receipt of (I) an affidavit and agreement (a “Transfer Affidavit
and Agreement” in the form attached hereto as Exhibit G-5) from the
proposed Transferee, in form and substance satisfactory to the Securities
Administrator representing and warranting, among other things, that
it is
a Permitted Transferee, that it is not acquiring its Ownership Interest
in
the Residual Certificate that is the subject of the proposed Transfer
as a
nominee, trustee or agent for any Person who is not a Permitted
Transferee, that for so long as it retains its Ownership Interest
in a
Residual Certificate, it will endeavor to remain a Permitted Transferee,
and that it has reviewed the provisions of this Section 5.02 and
agrees to
be bound by them, and (II) a certificate, in the form attached hereto
as
Exhibit G-4, from the Holder wishing to transfer the Residual Certificate,
in form and substance satisfactory to the Securities Administrator
representing and warranting, among other things, that no purpose
of the
proposed Transfer is to impede the assessment or collection of
tax.
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(C)
|
Notwithstanding
the delivery of a Transfer Affidavit and Agreement by a proposed
Transferee under clause (B) above, if a Responsible Officer of the
Securities Administrator assigned to this transaction has actual
knowledge
that the proposed Transferee is not a Permitted Transferee, no Transfer
of
an Ownership Interest in a Residual Certificate to such proposed
Transferee shall be effected.
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(D)
|
Each
Person holding or acquiring any Ownership Interest in a Residual
Certificate shall agree (x) to require a Transfer Affidavit and Agreement
from any other Person to whom such Person attempts to transfer its
Ownership Interest in a Residual Certificate and (y) not to transfer
its
Ownership Interest unless it provides a certificate to the Securities
Administrator in the form attached hereto as Exhibit
G-4.
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(E)
|
Each
Person holding or acquiring an Ownership Interest in a Residual
Certificate, by purchasing an Ownership Interest in such Certificate,
agrees to give the Securities Administrator written notice that it
is a
“pass-through interest holder” within the meaning of Temporary Treasury
Regulations Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring
an
Ownership Interest in a Residual Certificate, if it is “a pass-through
interest holder”, or is holding an Ownership Interest in a Residual
Certificate on behalf of a “pass-through interest
holder.”
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(ii) The
Securities Administrator will register the Transfer of any Residual Certificate
only if it shall have received the Transfer Affidavit and Agreement in the
form
attached hereto as Exhibit G-5, a certificate of the Holder requesting such
transfer in the form attached hereto as Exhibit G-4 and all of such other
documents as shall have been reasonably required by the Securities Administrator
as a condition to such registration. Transfers of the Residual Certificates
other than to Permitted Transferees are prohibited.
(iii) (A)
If
any
Person other than a Permitted Transferee shall become a Holder of a Residual
Certificate, then the last preceding Permitted Transferee shall be restored,
to
the extent permitted by law, to all rights and obligations as Holder thereof
retroactive to the date of registration of such Transfer of such Residual
Certificate. If a Non-United States Person shall become a Holder of a Residual
Certificate, then the last preceding Permitted Transferee shall be restored,
to
the extent permitted by law, to all rights and obligations as Holder thereof
retroactive to the date of registration of such Transfer of such Residual
Certificate. If a transfer of a Residual Certificate is disregarded pursuant
to
the provisions of Treasury Regulations Section 1.860E-1 or Section 1.860G-3,
then the last preceding Permitted Transferee shall be restored, to the extent
permitted by law, to all rights and obligations as Holder thereof retroactive
to
the date of registration of such transfer of such Residual Certificate. The
prior Holder shall be entitled to recover from any purported Holder of a
Residual Certificate that was in fact not a Permitted Transferee under this
Section 5.05(b) at the time it became a Holder all payments made on such
Residual Certificate. Each Holder of a Residual Certificate, by acceptance
thereof, shall be deemed for all purposes to have consented to the provisions
of
this clause (b) and to any amendment of this Agreement deemed necessary (whether
as a result of new legislation or otherwise) by counsel of the Depositor to
ensure that the Residual Certificates are not transferred to any Person who
is
not a Permitted Transferee and that any transfer of such Residual Certificates
will not cause the imposition of a tax upon the Issuing Entity or cause any
such
REMIC to fail to qualify as a REMIC. The Securities Administrator shall be
under
no liability to any Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by this Section 5.02 or for making
any
payments due on such Certificate to the Holder thereof or for taking any other
action with respect to such Holder under the provisions of this
Agreement.
(B)
If
any
purported Transferee shall become a Holder of a Residual Certificate in
violation of the restrictions in this Section 5.02 and to the extent that the
retroactive restoration of the rights of the Holder of such Residual Certificate
as described in clause (iii)(A) above shall be invalid, illegal or
unenforceable, then the Securities Administrator shall have the right, without
notice to the Holder or any prior Holder of such Residual Certificate, to sell
such Residual Certificate to a purchaser selected by the Securities
Administrator on such terms as the Securities Administrator may choose. Such
purported Transferee shall promptly endorse and deliver each Residual
Certificate in accordance with the instructions of the Securities Administrator.
Such purchaser may be the Securities Administrator itself. The proceeds of
such
sale, net of the commissions (which may include commissions payable to the
Securities Administrator), expenses and taxes due, if any, will be remitted
by
the Securities Administrator to such purported Transferee. The terms and
conditions of any sale under this clause (iii)(B) shall be determined in the
sole discretion of the Securities Administrator, and the Securities
Administrator shall not be liable to any Person having an Ownership Interest
in
a Residual Certificate as a result of its exercise of such
discretion.
(iv) The
Securities Administrator shall make available to the Internal Revenue Service
and those Persons specified by the REMIC Provisions, all information necessary
to compute any tax imposed (A) as a result of the transfer of an ownership
interest in a Residual Certificate to any Person who is a Disqualified
Organization, including the information regarding “excess inclusions” of such
Residual Certificates required to be provided to the Internal Revenue Service
and certain Persons as described in Treasury Regulations Sections 1.860D-1(b)(5)
and 1.860E-2(a)(5), and (B) as a result of any regulated investment company,
real estate investment trust, common trust fund, partnership, trust, estate
or
organization described in Section 1381 of the Code that holds an Ownership
Interest in a Residual Certificate having as among its record Holders at any
time any Person who is a Disqualified Organization. The Securities Administrator
may charge and shall be entitled to reasonable compensation for providing such
information as may be required from those Persons which may have had a tax
imposed upon them as specified in clauses (A) and (B) of this paragraph for
providing such information.
(v) Subject
to the preceding paragraphs, upon surrender for registration of transfer of
any
Certificate at the office of the Securities Administrator maintained for such
purpose, the Securities Administrator shall execute, authenticate and deliver,
in the name of the designated transferee or transferees, one or more new
Certificates of the same Class of a like aggregate Percentage Interest. Every
Certificate surrendered for transfer shall be accompanied by notification of
the
account of the designated transferee or transferees for the purpose of receiving
distributions pursuant to Section 4.01 by wire transfer, if any such transferee
desires and is eligible for distribution by wire transfer.
(vi) At
the
option of the Certificateholders, Certificates may be exchanged for other
Certificates of authorized denominations of the same Class of a like aggregate
Percentage Interest, upon surrender of the Certificates to be exchanged at
the
office of the Securities Administrator. Whenever any Certificates are so
surrendered for exchange the Securities Administrator shall execute,
authenticate and deliver the Certificates which the Certificateholder making
the
exchange is entitled to receive. Every Certificate presented or surrendered
for
transfer or exchange shall (if so required by the Securities Administrator)
be
duly endorsed by, or be accompanied by a written instrument of transfer in
the
form satisfactory to the Securities Administrator duly executed by, the Holder
thereof or his attorney duly authorized in writing.
(vii) No
service charge shall be made to the Certificateholders for any transfer or
exchange of Certificates, but the Securities Administrator may require payment
of a sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
(viii) All
Certificates surrendered for transfer and exchange shall be canceled and
retained by the Securities Administrator in accordance with the Securities
Administrator’s standard procedures.
Section
5.03 Mutilated,
Destroyed, Lost or Stolen Certificates.
If
(i)
any mutilated Certificate is surrendered to the Securities Administrator and
the
Securities Administrator receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate, and (ii) there is delivered
to
the Securities Administrator such security or indemnity as may be required
by it
to save it 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 the same Class and Percentage Interest. Upon
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
shall constitute complete and indefeasible evidence of ownership in the Trust
Fund, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section
5.04 Persons
Deemed Owners.
The
Depositor, the Master Servicer, Securities Administrator the Trustee and any
agent of any of them may treat the person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 4.01 and for all other purposes whatsoever,
and neither the Depositor, the Master Servicer, the Trustee nor any agent of
any
of them shall be affected by notice to the contrary.
ARTICLE
VI
THE
DEPOSITOR AND THE MASTER SERVICER
Section
6.01 Liability
of the Depositor and the Master Servicer.
The
Depositor and the Master Servicer each shall be liable in accordance herewith
only to the extent of the obligations specifically imposed upon and undertaken
by the Depositor and the Master Servicer herein. Only the Master Servicer,
any
successor master servicer or the Trustee acting as successor master servicer
shall be liable with respect to the master servicing of the Mortgage Loans
and
the REO Property for actions taken by any such Person in contravention of the
Master Servicer’s duties hereunder.
The
Master Servicer shall indemnify the Depositor, the Trustee and any director,
officer, employee or agent of the Depositor or the Trustee against any such
claim or legal action (including any pending or threatened claim or legal
action), loss, liability, fee or expense that may be sustained in connection
with this Agreement related to the willful misfeasance, bad faith, or negligence
in the performance of the Master Servicer’s duties hereunder.
Section
6.02 Merger,
Consolidation or Conversion of the Depositor or the Master
Servicer.
The
Depositor and the Master Servicer each will keep in full effect its existence,
rights and franchises as a corporation under the laws of the state of its
incorporation, and each 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 respective duties under this Agreement.
Any
Person into which the Depositor or the Master Servicer may be merged,
consolidated or converted, or any corporation resulting from any merger or
consolidation to which the Depositor or the Master Servicer shall be a party,
or
any Person succeeding to the business of the Depositor or the Master Servicer,
shall be the successor of the Depositor or the Master Servicer, as the case
may
be, hereunder, without the execution or filing of any paper or any further
act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person
to
the Master Servicer or an affiliate thereof shall be qualified to service
Mortgage Loans for Xxxxxx Mae or Xxxxxxx Mac.
Section
6.03 Limitation
on Liability of the Depositor, the Master Servicer, the Securities Administrator
and Others.
Neither
the Depositor, the Master Servicer nor any of the directors, officers, employees
or agents of the Depositor or the Master Servicer shall be under any liability
to the Trust Fund or the Certificateholders for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor or the Master Servicer (but this provision
shall
protect the above described persons) against any breach of warranties or
representations made herein, or against any specific liability imposed on the
Master Servicer pu