Exhibit 99.1
Execution Copy
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL I INC.
Depositor
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
Master Servicer and Securities Administrator
and
LASALLE BANK NATIONAL ASSOCIATION
Trustee and Custodian
---------------------------
POOLING AND SERVICING AGREEMENT
Dated as of October 1, 2006
---------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE LOAN TRUST 2006-16AX
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-16AX
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS............................................................................................14
Section 1.01. Definitions........................................................................................14
ARTICLE II DECLARATION OF TRUST; ISSUANCE OF CERTIFICATES........................................................69
Section 2.01. Creation and Declaration of Trust Fund; Conveyance of Mortgage Loans...............................69
Section 2.02. Acceptance of Trust Fund by Trustee; Review of Documentation for Trust Fund........................72
Section 2.03. Representations and Warranties of the Depositor....................................................73
Section 2.04. Representations and Warranties of the Depositor and the Seller as to the Mortgage Loans...........75
Section 2.05. Representations and Warranties of the Seller; Discovery of Breach; Repurchase or
Substitution of Mortgage Loans.................................................................75
Section 2.06. Grant Clause.......................................................................................79
Section 2.07. Depositor's Option to Purchase Breached Mortgage Loans.............................................80
Section 2.08. Release of Mortgage Documents for Servicing........................................................82
ARTICLE III THE CERTIFICATES.....................................................................................80
Section 3.01. The Certificates...................................................................................80
Section 3.02. Registration.......................................................................................81
Section 3.03. Transfer and Exchange of Certificates..............................................................81
Section 3.04. Cancellation of Certificates.......................................................................85
Section 3.05. Replacement of Certificates........................................................................85
Section 3.06. Persons Deemed Owners..............................................................................86
Section 3.07. Temporary Certificates.............................................................................86
Section 3.08. Appointment of Paying Agent........................................................................87
Section 3.09. Book-Entry Certificates............................................................................87
ARTICLE IV ADMINISTRATION OF THE TRUST FUND......................................................................88
Section 4.01. Custodial Accounts; Distribution Account...........................................................88
Section 4.02. Permitted Withdrawals from the Custodial Accounts and the Distribution Account.....................90
Section 4.03. [Reserved].........................................................................................91
Section 4.04. [Reserved].........................................................................................91
Section 4.05. Reports to Trustee and Certificateholders..........................................................91
ARTICLE V DISTRIBUTIONS TO HOLDERS OF CERTIFICATES...............................................................94
Section 5.01. Distributions Generally............................................................................94
Section 5.02. Priorities of Distribution.........................................................................95
Section 5.03. Allocation of Principal Payments to the Senior Certificates.......................................102
Section 5.04. Allocation of Losses..............................................................................104
Section 5.05. Advances by the Master Servicer...................................................................106
Section 5.06. Compensating Interest Payments....................................................................106
Section 5.07. [Reserved]........................................................................................106
Section 5.08. Determination of Pass-Through Rates for LIBOR Certificates and Group 3 Senior Certificates........106
Section 5.09. The Swap Account..................................................................................108
Section 5.10. Certain Matters Regarding The Swap Agreement......................................................110
Section 5.11. The Reserve Fund..................................................................................112
ARTICLE VI CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR; EVENTS OF DEFAULT...........................114
Section 6.01. Duties of Trustee and the Securities Administrator................................................114
Section 6.02. Certain Matters Affecting the Trustee and the Securities Administrator............................117
Section 6.03. Trustee and Securities Administrator Not Liable for Certificates..................................118
Section 6.04. Trustee and the Securities Administrator May Own Certificates.....................................119
Section 6.05. Eligibility Requirements for Trustee..............................................................119
Section 6.06. Resignation and Removal of Trustee and the Securities Administrator...............................119
Section 6.07. Successor Trustee and Successor Securities Administrator..........................................122
Section 6.08. Merger or Consolidation of Trustee or the Securities Administrator................................123
Section 6.09. Appointment of Co-Trustee, Separate Trustee or Custodian..........................................124
Section 6.10. Authenticating Agents.............................................................................125
Section 6.11. Indemnification of the Trustee and the Securities Administrator...................................126
Section 6.12. Fees and Expenses of the Master Servicer, Securities Administrator, the Trustee and the
Custodian.....................................................................................127
Section 6.13. Collection of Monies..............................................................................127
Section 6.14. Events of Default; Trustee To Act; Appointment of Successor.......................................127
Section 6.15. Additional Remedies of Trustee Upon Event of Default..............................................132
Section 6.16. Waiver of Defaults................................................................................133
Section 6.17. Notification to Holders...........................................................................133
Section 6.18. Directions by Certificateholders and Duties of Trustee During Event of Default....................133
Section 6.19. Action Upon Certain Failures of the Master Servicer and Upon Event of Default.....................133
Section 6.20. Preparation of Tax Returns and Other Reports......................................................134
Section 6.21. Certain Matters Regarding any Custodian Appointed Hereunder.......................................137
ARTICLE VII PURCHASE OF MORTGAGE LOANS AND TERMINATION OF THE TRUST FUND........................................135
Section 7.01. Purchase of Mortgage Loans; Termination of Trust Fund Upon Purchase or Liquidation of All
Mortgage Loans................................................................................135
Section 7.02. Procedure Upon Redemption of Trust Fund...........................................................137
Section 7.03. Additional Trust Fund Termination Requirements....................................................138
ARTICLE VIII RIGHTS OF CERTIFICATEHOLDERS.......................................................................139
Section 8.01. Limitation on Rights of Holders...................................................................139
ii
Section 8.02. Access to List of Holders.........................................................................140
Section 8.03. Acts of Holders of Certificates...................................................................141
RTICLE IX ADMINISTRATION AND SERVICING OF MORTGAGE LOANS BY THE MASTER SERVICER................................142
Section 9.01. Duties of the Master Servicer; Enforcement of Servicers' and Master Servicer's Obligations........142
Section 9.02. Assumption of Master Servicing by Trustee.........................................................144
Section 9.03. Representations and Warranties of the Master Servicer.............................................145
Section 9.04. Compensation to the Master Servicer...............................................................146
Section 9.05. Merger or Consolidation...........................................................................147
Section 9.06. Resignation of Master Servicer and Securities Administrator.......................................148
Section 9.07. Assignment or Delegation of Duties by the Master Servicer and Securities Administrator............148
Section 9.08. Limitation on Liability of the Master Servicer and Others.........................................149
Section 9.09. Indemnification; Third-Party Claims...............................................................149
Section 9.10. Eligibility Requirements for Securities Administrator.............................................150
Section 9.11. Annual Statement as to Compliance.................................................................150
ARTICLE X REMIC ADMINISTRATION..................................................................................151
Section 10.01. REMIC Administration.............................................................................151
Section 10.02. Prohibited Transactions and Activities...........................................................154
Section 10.03. Indemnification with Respect to Prohibited Transactions or Loss of REMIC Status..................155
Section 10.04. REO Property.....................................................................................155
Section 10.05. Fidelity.........................................................................................156
ARTICLE XI MISCELLANEOUS PROVISIONS.............................................................................156
Section 11.01. Binding Nature of Agreement; Assignment..........................................................156
Section 11.02. Entire Agreement.................................................................................156
Section 11.03. Amendment........................................................................................157
Section 11.04. Voting Rights....................................................................................158
Section 11.05. Provision of Information.........................................................................158
Section 11.06. Governing Law....................................................................................158
Section 11.07. Notices..........................................................................................159
Section 11.08. Severability of Provisions.......................................................................159
Section 11.09. Indulgences; No Waivers..........................................................................159
Section 11.10. Headings Not To Affect Interpretation............................................................159
Section 11.11. Benefits of Agreement............................................................................159
Section 11.12. Special Notices to the Rating Agencies...........................................................160
Section 11.13. Conflicts........................................................................................160
Section 11.14. Counterparts.....................................................................................160
Section 11.15. No Petitions.....................................................................................161
Section 11.16. Indemnification by Trust.........................................................................161
iii
ARTICLE XII EXCHANGE ACT REPORTING..............................................................................161
Section 12.01. Filing Obligations...............................................................................161
Section 12.02. Form 10-D Reporting..............................................................................163
Section 12.03. Form 8-K Reporting...............................................................................164
Section 12.04. Form 10-K Reporting..............................................................................165
Section 12.05. ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification.....................................................................167
Section 12.06. Reports on Assessment of Compliance and Attestation..............................................167
Section 12.07. Use of Subcontractors............................................................................168
Section 12.08. Indemnification by the Master Servicer and the Securities Administrator..........................169
Section 12.09. Indemnification by the Custodian.................................................................175
iv
ATTACHMENTS
Exhibit A Forms of Certificates
Exhibit B Form of Residual Certificate Transfer Affidavit (Transferee)
Exhibit C Form of Residual Certificate Transfer Affidavit (Transferor)
Exhibit D Form of Swap Agreement
Exhibit E List of Purchase and Servicing Agreements
Exhibit F [Reserved]
Exhibit G Assignment and Notice of Transfer with respect to each Additional Collateral Mortgage Loan
Exhibit H Form of Rule 144A Transfer Certificate
Exhibit I Form of Purchaser's Letter for Institutional Accredited Investors
Exhibit J Form of ERISA Transfer Affidavit
Exhibit K Form of Letter of Representations with the Depository Trust Company
Exhibit L-1 Form of Initial Custodian Certification
Exhibit L-2 Form of Final Custodian Certification
Exhibit M Request for Release of Documents
Exhibit N Additional Disclosure Required Under Regulation AB
Exhibit O Form of Servicing Criteria to be Addressed in Assessment of Compliance Statement
Exhibit P Additional Disclosure Notification
Exhibit Q Glossary of Terms for Standard & Poor's LEVELS(R) Version 5.7 File Format
Exhibit R Form of Lost Note Affidavit
Schedule A Mortgage Loan Schedule
Schedule B Principal Balances Schedule
v
This POOLING AND SERVICING AGREEMENT, dated as of October 1, 2006
(the "Agreement"), by and among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL I INC., a Delaware
corporation, as depositor (the "Depositor"), LASALLE BANK NATIONAL
ASSOCIATION, a national banking association, as trustee (the "Trustee"), and
as the custodian (the "Custodian") and ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
in its separate capacities as master servicer (the "Master Servicer"), as
securities administrator (the "Securities Administrator") and, in its capacity
as Securities Administrator, as auction administrator (the "Auction
Administrator") and acknowledged by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC., a
New York corporation, as seller (the "Seller"), for purposes of Section 2.05.
WITNESSETH THAT
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed
to the Trustee in return for the Certificates. As provided herein, the Trustee
will make multiple elections to treat segregated pools of assets subject to
this Agreement for federal income tax purposes (other than the Additional
Collateral, the Swap Agreement and the assets held in the Swap Account) as the
following four separate real estate mortgage investment conduits (each, a
"REMIC"): REMIC 1A, REMIC 1B, REMIC 2 and the Master REMIC. The Swap Agreement
and Swap Account will be assets of a separate trust, and will not be part of
any REMIC.
REMIC 1A will consist of the Aggregate Group I Mortgage Loans,
excluding any rights of the Trust Fund in respect of the Additional Collateral
and the Swap Agreement. REMIC 1A will issue uncertificated REMIC regular
interests (the "REMIC 1A Regular Interests"). The REMIC 1A Regular Interests
will represent the "regular interests" in REMIC 1A. The Class R-1A Interest
will represent the single Class of "residual interest" in REMIC 1A.
REMIC 1B will consist of the Group 3 Mortgage Loans, excluding any
rights of the Trust Fund in respect of the Additional Collateral and the Swap
Agreement. REMIC 1B will issue uncertificated REMIC regular interests (the
"REMIC 1B Regular Interests", collectively with the REMIC 1A Regular
Interests, the "REMIC 1 Regular Interests"). The REMIC 1B Regular Interests
will represent the "regular interests" in REMIC 1B. The Class R-1B Interest
will represent the single Class of "residual interest" in REMIC 1B.
The Trustee will hold the REMIC 1 Regular Interests for the benefit
of REMIC 2. REMIC 2 will consist of the REMIC 1 Interests and will issue
uncertificated REMIC regular interests (the "REMIC 2 Regular Interests"). The
REMIC 2 Regular Interests will represent the "regular interests" in REMIC 2.
The Class R-2 Interest will represent the single Class of "residual interest"
in REMIC 2.
The Trustee will hold the REMIC 2 Regular Interests for the benefit
of the Master REMIC. The Master REMIC will consist of the REMIC 2 Interests
and will be evidenced by the Certificates (other than the Class A-R
Certificates), which will constitute the regular interests in
the Master REMIC (the "Regular Certificates") and the Class MR Interest, which
will represent the single Class of "residual interest" in the Master REMIC.
The Class A-R Certificates will represent the beneficial ownership of each
class of residual interests created hereby. The "latest possible maturity
date" for federal income tax purposes of all regular and residual interests
created hereunder will be the Latest Possible Maturity Date.
REMIC 1A
The REMIC 1A Interests will have the Initial Principal Balances and
Pass-Through Rates as set forth in the following table:
Initial Pass-Through
REMIC 1A Interests Principal Balance(1) Rate
------------------ -------------------- ----
Class 1A-1A $ 10,512,846.25 (2)
Class 1A-1B $ 10,512,846.25 (2)
Class 1A-2A $ 10,204,571.35 (2)
Class 1A-2B $ 10,204,571.35 (2)
Class 1A-3A $ 9,905,130.90 (2)
Class 1A-3B $ 9,905,130.90 (2)
Class 1A-4A $ 9,614,473.50 (2)
Class 1A-4B $ 9,614,473.50 (2)
Class 1A-5A $ 9,332,341.60 (2)
Class 1A-5B $ 9,332,341.60 (2)
Class 1A-6A $ 9,093,889.55 (2)
Class 1A-6B $ 9,093,889.55 (2)
Class 1A-7A $ 8,791,594.15 (2)
Class 1A-7B $ 8,791,594.15 (2)
Class 1A-8A $ 8,533,599.90 (2)
Class 1A-8B $ 8,533,599.90 (2)
Class 1A-9A $ 8,283,173.45 (2)
Class 1A-9B $ 8,283,173.45 (2)
Class 1A-10A $ 8,040,092.80 (2)
Class 1A-10B $ 8,040,092.80 (2)
Class 1A-11A $ 7,804,142.60 (2)
Class 1A-11B $ 7,804,142.60 (2)
Class 1A-12A $ 7,575,113.65 (2)
Class 1A-12B $ 7,575,113.65 (2)
Class 1A-13A $ 7,352,803.20 (2)
Class 1A-13B $ 7,352,803.20 (2)
Class 1A-14A $ 7,137,013.95 (2)
Class 1A-14B $ 7,137,013.95 (2)
Class 1A-15A $ 6,927,554.95 (2)
Class 1A-15B $ 6,927,554.95 (2)
Class 1A-16A $ 6,724,240.40 (2)
Class 1A-16B $ 6,724,240.40 (2)
Class 1A-17A $ 6,526,890.20 (2)
Class 1A-17B $ 6,526,890.20 (2)
2
Initial Pass-Through
REMIC 1A Interests Principal Balance(1) Rate
------------------ -------------------- ----
Class 1A-18A $ 6,335,329.40 (2)
Class 1A-18B $ 6,335,329.40 (2)
Class 1A-19A $ 6,409,462.90 (2)
Class 1A-19B $ 6,409,462.90 (2)
Class 1A-20A $ 6,612,513.30 (2)
Class 1A-20B $ 6,612,513.30 (2)
Class 1A-21A $ 5,766,918.15 (2)
Class 1A-21B $ 5,766,918.15 (2)
Class 1A-22A $ 6,755,477.20 (2)
Class 1A-22B $ 6,755,477.20 (2)
Class 1A-23A $ 5,730,064.00 (2)
Class 1A-23B $ 5,730,064.00 (2)
Class 1A-24A $ 5,231,249.70 (2)
Class 1A-24B $ 5,231,249.70 (2)
Class 1A-25A $ 5,077,703.45 (2)
Class 1A-25B $ 5,077,703.45 (2)
Class 1A-26A $ 4,928,661.85 (2)
Class 1A-26B $ 4,928,661.85 (2)
Class 1A-27A $ 4,783,992.95 (2)
Class 1A-27B $ 4,783,992.95 (2)
Class 1A-28A $ 4,643,568.35 (2)
Class 1A-28B $ 4,643,568.35 (2)
Class 1A-29A $ 4,507,263.65 (2)
Class 1A-29B $ 4,507,263.65 (2)
Class 1A-30A $ 4,374,958.10 (2)
Class 1A-30B $ 4,374,958.10 (2)
Class 1A-31A $ 4,246,534.20 (2)
Class 1A-31B $ 4,246,534.20 (2)
Class 1A-32A $ 4,269,981.65 (2)
Class 1A-32B $ 4,269,981.65 (2)
Class 1A-33A $ 4,240,604.30 (2)
Class 1A-33B $ 4,240,604.30 (2)
Class 1A-34A $ 8,392,793.65 (2)
Class 1A-34B $ 8,392,793.65 (2)
Class 1A-35A $ 6,231,252.00 (2)
Class 1A-35B $ 6,231,252.00 (2)
Class 1A-36A $ 3,496,682.95 (2)
Class 1A-36B $ 3,496,682.95 (2)
Class 1A-37A $ 2,372,363.15 (2)
Class 1A-37B $ 2,372,363.15 (2)
Class 1A-38A $ 3,185,560.00 (2)
Class 1A-38B $ 3,185,560.00 (2)
Class 1A-39A $ 3,092,043.65 (2)
Class 1A-39B $ 3,092,043.65 (2)
Class 1A-40A $ 3,001,271.30 (2)
3
Initial Pass-Through
REMIC 1A Interests Principal Balance(1) Rate
------------------ -------------------- ----
Class 1A-40B $ 3,001,271.30 (2)
Class 1A-41A $ 2,913,162.95 (2)
Class 1A-41B $ 2,913,162.95 (2)
Class 1A-42A $ 2,827,639.35 (2)
Class 1A-42B $ 2,827,639.35 (2)
Class 1A-43A $ 2,744,625.15 (2)
Class 1A-43B $ 2,744,625.15 (2)
Class 1A-44A $ 2,664,046.80 (2)
Class 1A-44B $ 2,664,046.80 (2)
Class 1A-45A $ 2,585,832.95 (2)
Class 1A-45B $ 2,585,832.95 (2)
Class 1A-46A $ 2,509,914.10 (2)
Class 1A-46B $ 2,509,914.10 (2)
Class 1A-47A $ 2,436,223.05 (2)
Class 1A-47B $ 2,436,223.05 (2)
Class 1A-48A $ 2,364,694.40 (2)
Class 1A-48B $ 2,364,694.40 (2)
Class 1A-49A $ 2,295,264.75 (2)
Class 1A-49B $ 2,295,264.75 (2)
Class 1A-50A $ 2,227,872.55 (2)
Class 1A-50B $ 2,227,872.55 (2)
Class 1A-51A $ 2,163,078.70 (2)
Class 1A-51B $ 2,163,078.70 (2)
Class 1A-52A $ 2,135,938.10 (2)
Class 1A-52B $ 2,135,938.10 (2)
Class 1A-53A $ 2,073,220.85 (2)
Class 1A-53B $ 2,073,220.85 (2)
Class 1A-54A $ 2,012,344.10 (2)
Class 1A-54B $ 2,012,344.10 (2)
Class 1A-55A $ 1,980,665.25 (2)
Class 1A-55B $ 1,980,665.25 (2)
Class 1A-56A $ 1,921,198.85 (2)
Class 1A-56B $ 1,921,198.85 (2)
Class 1A-57A $ 2,628,300.45 (2)
Class 1A-57B $ 2,628,300.45 (2)
Class 1A-58A $ 36,827,882.90 (2)
Class 1A-58B $ 36,827,882.90 (2)
Class 1A-59A $ 20,205,678.40 (2)
Class 1A-59B $ 20,205,678.40 (2)
Class 1A-60A $ 1,647,544.10 (2)
Class 1A-60B $ 1,647,544.10 (2)
Class 1A-Support (3) (3)
Class 1A-P $1,000 (4)
Class 1A-Group 1 (5) (5)
Class 1A-Group 2 (6) (6)
4
Initial Pass-Through
REMIC 1A Interests Principal Balance(1) Rate
------------------ -------------------- ----
Class R-1 (7) (7)
---------------------------
(1) Scheduled principal, prepayments and Realized Losses will be
allocated first, to the Class 1A-Support Interest, Class 1-A-Group 1
Interest and Class 1A-Group 2 Interest in the amounts provided in Notes
(3), (5) and (7) below, and second, among the other Classes designated
"1A-", sequentially to the Classes having the lowest cardinal number
following such designation, in each case until reduced to zero, and
among any Classes having the same numerical designation, pro rata among
each such Class.
(2) The Weighted Average Net Mortgage Rate for Aggregate Loan Group I.
(3) On the Closing Date and on each Distribution Date, following the
allocation of Principal Amounts and Realized Losses, the principal
balance in respect of the Class 1A-Support Interest will equal the
excess of the principal balance of the Mortgage Loans over the
principal balance in respect of the remaining REMIC 1A Interests
other than the Class R-1A and Class 1A-P Interests.
(4) The Class 1A-P Interest will not be entitled to any interest, but
will be entitled to 100% of any prepayment premiums paid on the
Aggregate Group I Mortgage Loans.
(5) On each Distribution Date, following the allocation of Principal
Amounts and Realized Losses, the principal balance in respect of the
Class 1A-Group 1 Interest will be 0.001% of the aggregated Stated
Principal Balance of Group 1 Mortgage Loans. On each Distribution
Date, the interest rate will be the Weighted Average of the Adjusted
Net Mortgages Rates then in effect on the beginning of the related
Due Period on the Group 1 Mortgage Loans ("Group 1 Loan WAC").
(6) On each Distribution Date, following the allocation of Principal
Amounts and Realized Losses, the principal balance in respect of the
Class 1A-Group 2 Interest will be 0.001% of the aggregated Stated
Principal Balance of Group 2 Mortgage Loans. On each Distribution
Date, the interest rate will be the Weighted Average of the Adjusted
Net Mortgages Rates then in effect on the beginning of the related
Due Period on the Group 2 Mortgage Loans ("Group 2 Loan WAC").
(7) The Class R-1A Interest is the sole class of residual interest in
REMIC 1A. It has no principal balance and pays no principal or
interest.
REMIC 1B
REMIC 1B will issue a regular interest for each Group 3 Mortgage Loan
that will accrue interest at the net mortgage rate in respect of its
corresponding Mortgage Loan, and that will have on each Distribution Date,
following allocations of scheduled principal, prepayments and Realized Losses,
a principal balance equal to that in respect of its corresponding Mortgage
Loan. REMIC 1B will also issue the Class 1B-P, and the Class R-1B Interests.
The Class 1B-P Interest will not be entitled to any interest, but will be
entitled to 100% of any
5
prepayment premiums paid on the Group 3 Mortgage Loans. The Class R-1B Interest
is the sole class of residual interest in REMIC 1B, will have no principal
balance and pay no principal or interest.
REMIC 2
The REMIC 2 Interests will have the Initial Principal Balances and
Pass-Through Rates as set forth in the following table:
--------------------------------------------------------------------------------------------------------------------
Subsidiary REMIC Interests Initial Balance Pass-Through Rate Corresponding Certificate
--------------------------------------------------------------------------------------------------------------------
2-1-A (1) (2) Class 1-A
--------------------------------------------------------------------------------------------------------------------
2-2-A-1 (1) (2) Class 2-A-1
--------------------------------------------------------------------------------------------------------------------
2-2-A-2 (1) (2) Class 2-A-2
--------------------------------------------------------------------------------------------------------------------
2-2-A-3 (1) (2) Class 2-A-3
--------------------------------------------------------------------------------------------------------------------
2-2-A-4 (1) (2) Class 2-A-4
--------------------------------------------------------------------------------------------------------------------
2-M-1 (1) (2) Class M-1
--------------------------------------------------------------------------------------------------------------------
2-M-2 (1) (2) Class M-2
--------------------------------------------------------------------------------------------------------------------
2-M-3 (1) (2) Class M-3
--------------------------------------------------------------------------------------------------------------------
2-M-4 (1) (2) Class M-4
--------------------------------------------------------------------------------------------------------------------
2-M-5 (1) (2) Class M-5
--------------------------------------------------------------------------------------------------------------------
2-M-6 (1) (2) Class M-6
--------------------------------------------------------------------------------------------------------------------
2-B-1 (1) (2) Class B-1
--------------------------------------------------------------------------------------------------------------------
2-B-2 (1) (2) Class B-2
--------------------------------------------------------------------------------------------------------------------
2-B-3 (1) (2) Class B-3
--------------------------------------------------------------------------------------------------------------------
2-I-Accrual (1) (2) N/A
--------------------------------------------------------------------------------------------------------------------
2-Swap IO (3) (3) N/A
--------------------------------------------------------------------------------------------------------------------
2-I-P $1,000 (4) N/A
--------------------------------------------------------------------------------------------------------------------
2-Group 1 (1) (5) N/A
--------------------------------------------------------------------------------------------------------------------
2-Group 2 (1) (6) N/A
--------------------------------------------------------------------------------------------------------------------
2-3-A-1 (7) (8) Class 3-A-1
--------------------------------------------------------------------------------------------------------------------
2-3-A-2 (7) (8) Class 3-A-2
--------------------------------------------------------------------------------------------------------------------
2-3-M-1 (7) (8) Class 3-M-1
--------------------------------------------------------------------------------------------------------------------
2-3-M-2 (7) (8) Class 3-M-2
--------------------------------------------------------------------------------------------------------------------
2-3-B-1 (7) (8) Class 3-B-1
--------------------------------------------------------------------------------------------------------------------
2-3-B-2 (7) (8) Class 3-B-2
--------------------------------------------------------------------------------------------------------------------
2-3-Accrual (7) (8) N/A
--------------------------------------------------------------------------------------------------------------------
2-3-P $1,000 (4) N/A
--------------------------------------------------------------------------------------------------------------------
2-A-R (7) (8) Class A-R
--------------------------------------------------------------------------------------------------------------------
R-2 (9) (9) N/A
--------------------------------------------------------------------------------------------------------------------
---------------
(1) For each Distribution Date, following the allocation of scheduled
principal, prepayments and Realized Losses: (i) each such Class of
Interests (other than the Class 2-I-Accrual, Class 2-Group 1 and
6
Class 2-Group 2 Interests) will have a principal balance equal to 50%
of the principal balance in respect of the Corresponding Class of
Certificates, (ii) the principal balance in respect of the Class
2-Group 1 Interest will be 0.001% of the aggregated Stated Principal
Balance of Group 1 Mortgage Loans, (iii) the principal balance in
respect of the Class 2-Group 2 Interest will be 0.001% of the
aggregated Stated Principal Balance of Group 2 Mortgage Loans and (iv)
the Class 2-I-Accrual Interests will have a principal balance equal to
the excess of the principal balance of Aggregate Group I Mortgage Loans
over the principal balance of the Class 2-1-A, Class 2-2-A-1, Class
2-2-A-2, Class 2-2-A-3, Class 2-2-A-4, Class 2-M-1, Class 2-M-2, Class
2-M-3, Class 2-M-4, Class 2-M-5, Class 2-M-6, Class 2-B-1, Class 2-B-2,
Class 2-B-3, Class 2-Group 1 and Class 2-Group 2 Interests (with the
Class 2-I-Accrual Interest, the "Aggregate Group I REMIC 2 Interests").
(2) The interest rate with respect to any Distribution Date will equal
the weighted average of the pass through rates of the REMIC 1A
Interests (other than the Class R-1A, Class 2-Group 1 and Class 2-Group
2 and Class 1A-P Interests) treating: (i) each "A" class (e.g. ▇▇-▇▇,
▇▇-▇▇, ▇▇-▇▇ ...) as subject to a cap and a floor equal to the product
of 2 and the Weighted Average Adjusted Net Mortgage Rate for Aggregate
Group I minus the product of 2 and the Fixed Amount, as defined in the
Swap Agreement, and (ii) each "B" class (e.g. LT-1B, LT-2B, LT-3B ...)
as subject to a cap and a floor rate equal to the the product of 2 and
One Month LIBOR, in each case whose cardinal number preceding such
designation (▇.▇. -▇, -▇, -▇,...) is not exceeded by the ordinal number
of the Distribution Date following the Closing Date (e.g. first,
second, third,...) for such Distribution Date (the "Aggregate Group I
REMIC 2 Cap").
(3) For each Distribution Date, the REMIC 2-Swap IO shall be entitled to
receive from each Class "A" and Class "B" interest whose cardinal
number preceding such designation (e.g., -▇, -▇, -▇) is not exceeded
by the ordinal number of the Distribution Date following the Closing
Date (e.g., first, second, third) for such Distribution Date interest
at a pass through rate equal to the excess of the Fixed Amount, as
defined in the Swap Agreement over One Month LIBOR for such
Distribution Date.
(4) The Class 2-I-P Interest will not be entitled to any interest, but
will be entitled to 100% of any prepayment premiums paid on the
Aggregate Group I Mortgage Loans. The Class 2-3-P Interest will not
be entitled to any interest, but will be entitled to 100% of any
prepayment premiums paid on the Group 3 Mortgage Loans.
(5) The interest rate with respect to any Distribution Date will equal the
weighted average of the pass through rates of the REMIC 1A Interests
(other than the Class R-1A, Class 1A-Group 1, Class 1A-Group 2 and
Class 1A-P Interests) treating: (i) each "A" class (e.g. ▇▇-▇▇, ▇▇-▇▇,
▇▇-▇▇ ...) as subject to a cap and a floor equal to the product of 2
and the Weighted Average Adjusted Net Mortgage Rate for Loan Group 1
minus the product of 2 and the Fixed Amount, as defined in the Swap
Agreement, and (ii) each "B" class (e.g. LT-1B, LT-2B, LT-3B ...) as
subject to a cap and a floor rate equal to the the product of 2 and One
Month LIBOR, in each case whose cardinal number preceding such
designation (▇.▇. -▇, -▇, -▇,...) is not exceeded by the ordinal number
of the Distribution Date following the Closing Date (e.g. first,
second, third,...) for such Distribution Date (the "Group 1 REMIC 2
Cap").
7
(6) The interest rate with respect to any Distribution Date will equal the
weighted average of the pass through rates of the REMIC 1A Interests
(other than the Class R-1A, Class 1A-Group 1, Class 1A-Group 2 and
Class 1A-P Interests) treating: (i) each "A" class (e.g. ▇▇-▇▇, ▇▇-▇▇,
▇▇-▇▇ ...) as subject to a cap and a floor equal to the product of 2
and the Weighted Average Adjusted Net Mortgage Rate for Group 2 minus
the product of 2 and the Fixed Amount, as described in the Swap
Agreement, and (ii) each "B" class (e.g. LT-1B, LT-2B, LT-3B ...) as
subject to a cap and a floor rate equal to the the product of 2 and One
Month LIBOR, in each case whose cardinal number preceding such
designation (▇.▇. -▇, -▇, -▇,...) is not exceeded by the ordinal number
of the Distribution Date following the Closing Date (e.g. first,
second, third,...) for such Distribution Date (the "Group 2 REMIC 2
Cap", collectively with the Aggregate Group I REMIC 2 Cap, Group 1
REMIC 2 Cap and Group 3 Net WAC Cap, and with respect to the related
Class of Master REMIC regular interests, the "applicable REMIC Cap").
(7) For each Distribution Date, following the allocation of scheduled
principal, prepayments and Realized Losses: (i) each such Class of
Interests (other than the Class 2-3-Accrual Interest) will have a
principal balance equal to 50% of the principal balance in respect of
the Corresponding Class of Certificates, and (ii) the Class 2-3-Accrual
Interests will have a principal balance equal to the excess of the
principal balance of Group 3 Mortgage Loans over the principal balance
of the Class 2-3-A-1, Class 2-3-A-2, Class 2-3-M-1, Class 2-3-M-2,
Class 2-3-B-1 and Class 2-3-B-2 Interests (with the Class 2-3-Accrual
Interest, the "Group 3 REMIC 2 Interests").
(8) The pass through rate will equal the weighted average of the pass
through rates of the REMIC 1B Interests (other than the Class R-1B, and
Class 1B-P Interests).
(9) The R-2 Interest is the sole Class of residual interest in the REMIC 2.
It pays no interest or principal.
The Master REMIC
----------------
The following table sets forth characteristics of the Master REMIC
Certificates, together with the minimum denominations and integral multiples
in excess thereof in which such Classes shall be issuable (except that one
Certificate of each Class of Certificates may be issued in a different amount
and, in addition, one Residual Certificate representing the Tax Matters Person
Certificate may be issued in a different amount):
========================== ========================== ====================== ====================== ======================
Pass-Through
Class Designation Initial Class Principal Rate Minimum Denomination Integral Multiples
Balance (per annum) in Excess of Minimum
-------------------------- -------------------------- ---------------------- ---------------------- ----------------------
Class 1-A $182,501,000.00 (1) $25,000.00 $1,000.00
-------------------------- -------------------------- ---------------------- ---------------------- ----------------------
Class 2-A-1 $239,700,000.00 (1) $25,000.00 $1,000.00
========================== ========================== ====================== ====================== ======================
8
========================== ========================== ====================== ====================== ======================
Class 2-A-2 $150,700,000.00 (1) $25,000.00 $1,000.00
-------------------------- -------------------------- ---------------------- ---------------------- ----------------------
Class 2-A-3 $49,125,000.00 (1) $25,000.00 $1,000.00
-------------------------- -------------------------- ---------------------- ---------------------- ----------------------
Class 2-A-4 $48,837,000.00 (1) $25,000.00 $1,000.00
-------------------------- -------------------------- ---------------------- ---------------------- ----------------------
Class 3-A-1 $197,408,000.00 (1) $25,000.00 $1,000.00
-------------------------- -------------------------- ---------------------- ---------------------- ----------------------
Class 3-A-2 $21,935,000.00 (1) $25,000.00 $1,000.00
-------------------------- -------------------------- ---------------------- ---------------------- ----------------------
Class A-R (3) $100.00 (4) (5) (5)
-------------------------- -------------------------- ---------------------- ---------------------- ----------------------
Class M-1 $9,712,000.00 (1) $25,000.00 $1,000.00
-------------------------- -------------------------- ---------------------- ---------------------- ----------------------
Class M-2 $8,993,000.00 (1) $25,000.00 $1,000.00
-------------------------- -------------------------- ---------------------- ---------------------- ----------------------
Class M-3 $5,036,000.00 (1) $25,000.00 $1,000.00
-------------------------- -------------------------- ---------------------- ---------------------- ----------------------
Class M-4 $3,957,000.00 (1) $25,000.00 $1,000.00
-------------------------- -------------------------- ---------------------- ---------------------- ----------------------
Class M-5 $3,237,000.00 (1) $25,000.00 $1,000.00
-------------------------- -------------------------- ---------------------- ---------------------- ----------------------
Class M-6 $3,238,000.00 (1) $25,000.00 $1,000.00
-------------------------- -------------------------- ---------------------- ---------------------- ----------------------
Class B-1 $2,518,000.00 (1) $25,000.00 $1,000.00
-------------------------- -------------------------- ---------------------- ---------------------- ----------------------
Class B-2 $2,518,000.00 (1) $25,000.00 $1,000.00
-------------------------- -------------------------- ---------------------- ---------------------- ----------------------
Class B-3 $3,597,000.00 (1) $25,000.00 $1,000.00
-------------------------- -------------------------- ---------------------- ---------------------- ----------------------
Class 3-M-1 $5,685,000.00 (1) $25,000.00 $1,000.00
-------------------------- -------------------------- ---------------------- ---------------------- ----------------------
Class 3-M-2 $4,383,000.00 (1) $25,000.00 $1,000.00
-------------------------- -------------------------- ---------------------- ---------------------- ----------------------
Class 3-B-1 $2,960,000.00 (1) $25,000.00 $1,000.00
-------------------------- -------------------------- ---------------------- ---------------------- ----------------------
Class 3-B-2 $1,185,000.00 (1) $25,000.00 $1,000.00
-------------------------- -------------------------- ---------------------- ---------------------- ----------------------
Class I-P $1,000.00 (6) $1,000.00 N/A
-------------------------- -------------------------- ---------------------- ---------------------- ----------------------
Class 3-P $1,000.00 (6) $1,000.00 N/A
-------------------------- -------------------------- ---------------------- ---------------------- ----------------------
Class I-OC (7) (7) (8) (8)
-------------------------- -------------------------- ---------------------- ---------------------- ----------------------
Class 3-OC (9) (9) (8) (8)
========================== ========================== ====================== ====================== ======================
-----------------------------------------
(1) Interest will accrue on each Class of Aggregate Group I Certificates
and each Class of Group 3 Subordinated Certificates during each
Interest Accrual Period at a rate equal to the lesser of LIBOR plus
the Pass-Through Margin for such Class for such Distribution Date and
the applicable related Net WAC Pass-Through Rate for such
Distribution Date. For federal income tax purposes and for each
Distribution Date, each Class of Aggregate Group I Certificates will
bear interest at a pass through rate equal to its Pass Through Rate
substituting the terms "Aggregate Group I REMIC 2 Cap", "Group 1
REMIC 2 Cap" and "Group 2 REMIC 2 Cap", as applicable, for each
reference to "Aggregate Group I Net WAC Pass-Through Rate", "Group 1
Senior WAC Pass-Through Rate" and "Group 2 Senior WAC Pass-Through
Rate", as applicable, and all earned interest accrued in respect of
such Certificates in excess of such applicable cap or caps will be
treated as a Class IO Shortfall as provided in Section 10.01(o) herein.
The Pass-Through Rate for the Class of Aggregate Group I Certificates
for the Interest Accrual Period related to the first Distribution Date
will be as indicated in column (3) in the definition of "Pass-Through
Margin".
(2) Interest will accrue on each Class of Group 3 Senior Certificates
during each Interest Accrual Period to and including the Interest
Accrual Period related to the Distribution Date in July 2016 will be
a per annum rate equal to the lesser of (i) 5.750% with respect to
the Class 3-A-1 Certificates and 6.000% with respect to the Class
3-A-2 Certificates and (ii) the Group 3 Net WAC Cap. Commencing with
the Interest Accrual Period related to the Distribution Date in
August 2016, Interest will accrue on each Class of
9
Group 3 Senior Certificates at a per annum rate equal to the least of
(i) six-month LIBOR + 1.250%, (ii) the Group 3 Net WAC Cap and (iii)
12.000%.
(3) The Class A-R Certificates represent the sole Class of residual
interest in each REMIC created hereunder.
(4) The Pass-Through Rate for the Class A-R Certificates for the Interest
Accrual Period related to any Distribution Date will be a per annum
rate equal to the Weighted Average Net Mortgage Rate on the Group 3
Mortgage Loans. The Pass-Through Rate for the Class A-R Certificates
for the Interest Accrual Period related to the first Distribution
Date will be a per annum rate of 7.12168%.
(5) The Class A-R Certificate shall be issued as two separate
certificates, one with an initial Certificate Balance of $99.99 and
the Tax Matters Person Certificate with an initial Certificate
Balance of $0.01.
(6) The Class I-P and Class 3-P Certificates will not be entitled to any
interest, but will be entitled to 100% of any prepayment premiums
paid on the Aggregate Group I Mortgage Loans and Group 3 Mortgage
Loans, respectively.
(7) For each Interest Accrual Period and for all federal income tax
purposes, the Class I-OC Certificates will represent three classes of
regular interests issued by the Master REMIC, (i) a class that does
not accrue interest and has a principal balance equal to the
Aggregate Group I Overcollateralized Amount as of the Closing Date,
(ii) a regular interest that accrues a specified portion of the
interest on the Aggregate Group I REMIC 2 Interests equal to the
excess of the Aggregate Group I REMIC 2 Cap over the product of two
and the weighted average interest rate of the Aggregate Group I REMIC
2 Regular Interests, with each Class other than the Class 2-I-Accrual
Interest subject to a cap equal to the Pass-Through Rate of the
corresponding Master REMIC Class and the Class 2-I-Accrual Interest
subject to a cap of 0.00%, and (iii) a regular interest entitled to
100% of the cash flow in respect of the Class 2-Swap IO Interest. The
Pass-Through Rate of the Class I-OC Certificates shall be a rate
sufficient to entitle it to all interest accrued on the Aggregate
Group I Mortgage Loans less the interest accrued on the other
interests issued by the Master REMIC. The Class I-OC Distributable
Amount for any Distribution Date is payable from current interest on
the Aggregate Group I Mortgage Loans and any Aggregate Group I
Overcollateralization Release Amount for that Distribution Date. The
Class I-OC Certificates will represent beneficial ownership of a
regular interest issued by the Master REMIC and amounts in the
Supplemental Interest Trust, subject to the obligation to make
payments in respect of Basis Risk Carry Forward Amounts. For federal
income tax purposes, the Class I-OC Certificateholders' obligation to
make payments of Basis Risk Carry Forward Amounts will be treated as
payments made pursuant to an interest rate cap contract written by
the Class I-OC Certificateholders in favor of each Class of Aggregate
Group I Certificates.
(8) The Class I-OC Certificates will be issued as a single Class of
Certificates.
10
(9) For each Interest Accrual Period and for all federal income tax
purposes, the Class 3-OC Certificates will represent two classes of
regular interests issued by the Master REMIC, (i) a class that does
not accrue interest and has a principal balance equal to the Group 3
Overcollateralized Amount as of the Closing Date and (ii) a regular
interest that accrues a specified portion of the interest on the
Group 3 REMIC 2 Interests equal to the excess of the Group 3 REMIC 2
Cap over the product of two and the weighted average interest rate of
the Group 3 REMIC 2 Regular Interests, with each Class other than the
Class 2-3-Accrual Interest subject to a cap equal to the Pass-Through
Rate of the corresponding Master REMIC Class and the Class
2-3-Accrual Interest subject to a cap of 0.00%. The Pass-Through Rate
of the Class 3-OC Certificates shall be a rate sufficient to entitle
it to all interest accrued on the Group 3 Mortgage Loans less the
interest accrued on the other interests issued by the Master REMIC.
The Class 3-OC Distributable Amount for any Distribution Date is
payable from current interest on the Group 3 Mortgage Loans and any
Group 3 Overcollateralization Release Amount for that Distribution
Date. The Class 3-OC Certificates will represent beneficial ownership
of a regular interest issued by the Master REMIC, subject to the
obligation to make payments in respect of Basis Risk Carry Forward
Amounts. For federal income tax purposes, the Class 3-OC
Certificateholders' obligation to make payments of Basis Risk Carry
Forward Amounts will be treated as payments made pursuant to an
interest rate cap contract written by the Class 3-OC
Certificateholders in favor of each Class of Group 3 Certificates.
The foregoing provisions in the Preliminary Statement are intended to
cause net interest and principal collections in respect of the Aggregate Group
I Mortgage Loans to be distributed from REMIC 1 to REMIC 2, from REMIC 2 to
the Master REMIC and from the Master REMIC to each Class of Certificates. The
Preliminary Statement will be interpreted and applied consistently with such
intent.
For any purpose for which the Pass-Through Rates is calculated, the
interest rate on the Mortgage Loans shall be appropriately adjusted to account
for the difference between the monthly day count convention of the Mortgage
Loans and the monthly day count convention of the regular interests issued by
each of the REMICs. For purposes of calculating the Pass-Through Rates for
each of the interests issued by each REMIC created hereunder (other than the
Master REMIC) such rates shall be adjusted to equal a monthly day count
convention based on a 30 day month for each Due Period and a 360-day year so
that the Mortgage Loans and all regular interests will be using the same
monthly day count convention.
The fiscal year of each REMIC will end on December 31.
11
Set forth below are designations of Classes or Components of Certificates and
other defined terms to the categories used herein:
Accretion Directed Certificates.............. None.
Accretion Directed Components................ None.
Accrual Certificates......................... None.
Accrual Components........................... None.
Aggregate Certificate Group.................. The Aggregate Group I Certificates or the Group 3 Certificates, as
applicable.
Aggregate Group I Certificates............... Aggregate Group I Senior Certificates and Aggregate Group I
Subordinated Certificates.
Aggregate Group I Senior Certificates........ Group 1 Senior Certificates and Group 2 Senior Certificates.
Aggregate Group I Subordinated Certificates.. Class M and Class B Certificates.
Book-Entry Certificates...................... All Classes of Certificates other than the Definitive Certificates.
Group 1 Senior Certificates.................. Class 1-A Certificates.
Group 2 Senior Certificates.................. Class 2-A-1, Class 2-A-2, Class 2-A-3 and Class 2-A-4 Certificates.
Group 3 Certificates......................... Group 3 Senior Certificates and Group 3 Subordinated Certificates.
Group 3 Senior Certificates.................. Class 3-A-1 and Class 3-A-2 Certificates.
Group 3 Subordinated Certificates............ Class 3-M and Class 3-B Certificates.
Class 3-M Certificates....................... Class 3-M-1 and Class 3-M-2 Certificates.
Class 3-B Certificates....................... Class 3-B-1 and Class 3-B-2 Certificates.
Class B Certificates......................... Class B-1, Class B-2 and Class B-3 Certificates.
Class M Certificates......................... The Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class
M-6 Certificates.
Component Certificates....................... None.
Components................................... For purposes of calculating distributions of principal and/or
interest, the Component Certificates, if any, will be comprised of
multiple payment components having the designations, Initial
Component Balances or Notional Amounts, as
12
applicable, and Pass-Through Rates set forth below:
Initial Component
Destination Principal Balance Pass-Through Rate
----------- ----------------- -----------------
N/A N/A N/A
Definitive Certificates...................... Private Certificates and the Residual Certificates.
Delay Certificates........................... All interest-bearing Classes of Certificates other than the
Non-Delay Certificates, if
any. For the avoidance of
doubt, the Delay Certificates
include the Group 3 Senior
Certificates.
ERISA-Restricted Certificates................ The Residual Certificates and Private Certificates; and any
Certificate of a Class that
ceases to satisfy the
applicable rating requirement
under the Underwriter's
Exemption.
Senior Certificates.......................... Class A-R, Class 1-A, Class 2-A-1, Class 2-A-2, Class 2-A-3, Class
2-A-4, Class 3-A-1 and Class 3-A-2 Certificates.
Senior Certificate Group..................... Group 1 Senior Certificates, Group 2 Senior Certificates and Group 3
Senior Certificates.
Subordinated Certificates.................... Aggregate Group I Subordinated Certificates and Group 3 Subordinated
Certificates.
Subordinated Certificate Group............... Aggregate Group I Subordinated Certificates and Group 3 Subordinated
Certificates.
Class M Senior Certificates.................. Class M-1, Class M-2 and Class M-3 Certificates.
LIBOR Certificates........................... Aggregate Group I Certificates and Group 3 Subordinated Certificates.
Non-Delay Certificates....................... The LIBOR Certificates.
Notional Amount Certificates................. None.
Notional Amount Components................... None.
Offered Certificates......................... All Classes of Certificates other than the Private Certificates.
Planned Principal Classes.................... None.
Principal Only Certificates.................. None.
Private Certificates......................... Class I-P, Class 3-P, Class I-OC and Class 3-OC Certificates.
Rating Agencies.............................. S&P and ▇▇▇▇▇'▇.
Regular Certificates......................... All Classes of Certificates, other than the Residual Certificates.
Residual Certificates........................ Class A-R Certificates.
13
Scheduled Principal Classes.................. None.
Targeted Principal Classes................... None.
Underwriter.................................. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated.
With respect to any of the foregoing designations as to which the
corresponding reference is "None," all defined terms and provisions herein
relating solely to such designations shall be of no force or effect, and any
calculations herein incorporating references to such designations shall be
interpreted without reference to such designations and amounts. Defined terms
and provisions herein relating to statistical rating agencies not designated
above as Rating Agencies shall be of no force or effect.
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
The following words and phrases, unless the context otherwise
requires, shall have the following meanings:
Accountant: A Person engaged in the practice of accounting who
(except when this Agreement provides that an Accountant must be Independent)
may be employed by or affiliated with the Depositor or an Affiliate of the
Depositor.
Accretion Directed Certificates: As specified in the Preliminary
Statement.
Accretion Direction Rule: Not applicable.
Accrual Amount: Not Applicable.
Accrual Certificates: As specified in the Preliminary Statement.
Accrual Components: As specified in the Preliminary Statement.
Accrual Termination Date: Not applicable.
Acknowledgements: The Assignment, Assumption and Recognition
Agreements, each dated as of October 1, 2006, assigning rights under the
Purchase and Servicing Agreements from the Seller to the Depositor and from
the Depositor to the Trustee, for the benefit of the Certificateholders.
Act: The Securities Act of 1933, as amended.
Additional Collateral: With respect to any Additional Collateral
Mortgage Loan, the marketable securities and other acceptable collateral
pledged as collateral pursuant to the related pledge agreements.
14
Additional Collateral Mortgage Loan: Each Mortgage Loan identified as
such in the Mortgage Loan Schedule.
Additional Form 10-D Disclosure: As defined in Section 12.02 hereof.
Additional Form 10-K Disclosure: As defined in Section 12.04 hereof.
Additional Servicer: Each affiliate of each Servicer that services
any of the Mortgage Loans and each Person who is not an affiliate of the any
Servicer, who services 10% or more of the Mortgage Loans. For clarification
purposes, the Master Servicer and the Securities Administrator are Additional
Servicers.
Adjustment Date: A date specified in each Mortgage Note as a date on
which the Mortgage Rate on the related Mortgage Loan will be adjusted.
Advance: With respect to a Mortgage Loan, the payments required to be
made by the Master Servicer or the applicable Servicer with respect to any
Distribution Date pursuant to this Agreement or the applicable Purchase and
Servicing Agreement, as applicable, the amount of any such payment being equal
to the aggregate of the payments of principal and interest (net of the
applicable Servicing Fee and net of any net income in the case of any REO
Property) on the Mortgage Loans that were due on the related Due Date and not
received as of the close of business on the related Determination Date, less
the aggregate amount of any such delinquent payments that the Master Servicer
or the applicable Servicer has determined would constitute Nonrecoverable
Advances if advanced.
Adverse REMIC Event: Either (i) loss of status as a REMIC, within the
meaning of Section 860D of the Code, for any group of assets identified as a
REMIC in the Preliminary Statement to this Agreement, or (ii) imposition of
any tax, including the tax imposed under Section 860F(a)(1) on prohibited
transactions, and the tax imposed under Section 860G(d) on certain
contributions to a REMIC, on any REMIC created hereunder to the extent such
tax would be payable from assets held as part of the Trust Fund.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Certificate Group: As specified in the Preliminary
Statement.
Aggregate Expense Rate: With respect to any Mortgage Loan, the
applicable Servicing Fee Rate and, with respect to any LPMI Mortgage Loan, the
interest premium charged by the mortgagee to obtain or maintain any Primary
Mortgage Insurance Policy.
Aggregate Group I Assets: As such term is used with respect to any
Aggregate Group I Auction, as defined in Section 7.01(b) hereof.
15
Aggregate Group I Auction: As defined in Section 7.01(b) hereof.
Aggregate Group I Auction Administrator: The Securities
Administrator, or any successor in interest, or if any successor Aggregate
Group I Auction Administrator shall be appointed as herein provided, then such
successor Aggregate Group I Auction Administrator.
Aggregate Group I Auction Date: As defined in Section 7.01(b) hereof.
Aggregate Group I Auction Excess Proceeds: With respect to an
Aggregate Group I Auction Sale, the excess of the Mortgage Loan Aggregate
Group I Auction Price paid by the Aggregate Group I Auction Purchaser over the
Minimum Bid Price.
Aggregate Group I Auction Purchaser: As defined in Section 7.01(b)
hereof. For the avoidance of doubt, the Aggregate Group I Auction Purchaser
cannot be the Seller or an Affiliate of the Seller.
Aggregate Group I Auction Sale: As defined in Section 7.01(b) hereof.
Aggregate Group I Available Distribution Amount: For any Distribution
Date and the Aggregate Group I Certificates, the sum of the following amounts:
(1) the total amount of all cash received by or on behalf of each
Servicer with respect to the Aggregate Group I Mortgage Loans serviced by it
and received by the Master Servicer by the related Servicer Remittance Date
and not previously distributed (including Liquidation Proceeds, Subsequent
Recoveries, condemnation proceeds and Insurance Proceeds with respect to the
Aggregate Group I Mortgage Loans), except:
o all scheduled payments of principal and related interest
collected on the Aggregate Group I Mortgage Loans but due on
a date after the related Due Date;
o all partial Principal Prepayments received with respect to
the Aggregate Group I Mortgage Loans after the related
Prepayment Period, together with all related interest
accrued on such Mortgage Loans;
o all Prepayment Penalties received in connection with the
Aggregate Group I Mortgage Loans;
o all Principal Prepayments in Full received with respect to
the Aggregate Group I Mortgage Loans after the related
Prepayment Period, together with all related interest
accrued on such Mortgage Loans;
o Liquidation Proceeds, condemnation proceeds and Insurance
Proceeds received on such Mortgage Loans after the previous
calendar month;
o all amounts reimbursable to a Servicer pursuant to the terms
of the related Purchase and Servicing Agreement or this
Agreement, as applicable, or to the Master Servicer, the
Securities Administrator, the Trustee and/or any Custodian
pursuant to the terms of this Agreement;
16
o reinvestment income on the balance of funds, if any, in the
Custodial Accounts or Distribution Account; and
o any fees payable to the Servicers and the Master Servicer,
in each case with respect to the Aggregate Group I Mortgage
Loans;
(2) all Advances on the Aggregate Group I Mortgage Loans made by each
Servicer and/or the Master Servicer for that Distribution Date;
(3) any amounts paid as Compensating Interest with respect to the
Aggregate Group I Mortgage Loans by each Servicer and/or the Master Servicer
for that Distribution Date; and
(4) the total amount of any cash deposited in the Distribution
Account in connection with the repurchase of any Mortgage Loans by the
Depositor, the Seller or the related Originator.
Aggregate Group I Basic Principal Distribution Amount: For any
Distribution Date will equal the excess of the Aggregate Group I Principal
Remittance Amount over the Aggregate Group I Excess Subordinated Amount.
Aggregate Group I Certificates: As specified in the Preliminary
Statement.
Aggregate Group I Excess Subordinated Amount: For any Distribution
Date, will equal the excess, if any, of (i) the Aggregate Group I
Overcollateralized Amount on that Distribution Date over (ii) the Aggregate
Group I Overcollateralization Target Amount for such Distribution Date.
Aggregate Group I Extra Principal Distribution Amount: For any
Distribution Date, will be the lesser of the Aggregate Group I Net Monthly
Excess Cashflow for such Distribution Date and the Aggregate Group I
Overcollateralization Increase Amount as of that Distribution Date.
Aggregate Group I Interest Distribution Amount: With respect to the
Aggregate Group I Senior Certificates, the Aggregate Group I Senior Interest
Distribution Amount. With respect to the Aggregate Group I Subordinated
Certificates, the Aggregate Group I Subordinated Interest Distribution Amount.
Aggregate Group I Interest Remittance Amount: For any Distribution
Date, that portion of the Aggregate Group I Available Distribution Amount for
such Distribution Date that represents interest received or advanced on the
Aggregate Group I Mortgage Loans.
Aggregate Group I Mortgage Loan Auction Price: The price, calculated
as set forth in Section 7.01(b), to be paid in connection with the purchase of
the Aggregate Group I Mortgage Loans by the Aggregate Group I Auction
Purchaser.
Aggregate Group I Mortgage Loans: Collectively, the Mortgage Loans in
Loan Group 1 and the Mortgage Loans in Loan Group 2.
Aggregate Group I Net Monthly Excess Cashflow: For any Distribution
Date, the excess, if any, of (x) the Available Distribution Amount for the
Distribution Date over (y) the sum for
17
the Distribution Date of the aggregate of the Aggregate Group I Interest
Distribution Amounts payable to the holders of the Aggregate Group I
Certificates, the Aggregate Group I Principal Distribution Amount, any Net
Swap Payments to the Swap Counterparty and any Swap Termination Payment owed
to the Swap Counterparty, including, without limitation, any Senior Defaulted
Swap Termination Payment, but not including any other Defaulted Swap
Termination Payment owed to the Swap Counterparty, if any, remaining unpaid on
that Distribution Date after distributions under Sections 5.02(a)(1)(A)(i),
5.02(a)(1)(B)(i) and 5.02(a)(1)(B)(ii) for that Distribution Date.
Aggregate Group I Overcollateralization Increase Amount: With respect
to any Distribution Date and the Aggregate Group I Certificates, the amount,
if any, by which the Aggregate Group I Overcollateralization Target Amount
exceeds the Aggregate Group I Overcollateralized Amount for such Distribution
Date (calculated for this purpose only after assuming that 100% of the
Aggregate Group I Principal Remittance Amount on such Distribution Date has
been distributed).
Aggregate Group I Overcollateralization Release Amount: For any
Distribution Date, the lesser of (1) the Aggregate Group I Principal
Remittance Amount and (2) the excess of (a) the Aggregate Group I
Overcollateralized Amount over (b) the Aggregate Group I Overcollateralization
Target Amount. In addition, in connection with the final distribution on the
Aggregate Group I Certificates pursuant to Section 7.02 hereof, the Aggregate
Group I Overcollateralization Release Amount for the related Distribution Date
shall also include the excess, if any of, (a) the purchase price paid for the
Aggregate Group I Mortgage Loans and any REO Properties related to the
Aggregate Group I Mortgage Loans pursuant to Section 7.01 hereof, less any
costs incurred by the Trust Fund in connection with the liquidation thereof
pursuant to Section 7.02 hereof, over (b) the amount distributed on the
Aggregate Group I Certificates on that Distribution Date.
Aggregate Group I Overcollateralization Target Amount: With respect
to any Distribution Date (i) prior to the related Stepdown Date, the product
of (x) 0.80% and (y) the aggregate Stated Principal Balance of the Aggregate
Group I Mortgage Loans as of the Cut-off Date, (ii) on and after the related
Stepdown Date, provided that a Trigger Event for the Aggregate Group I
Certificates is not in effect, the lesser of (a) the product of (x) 1.60% and
(y) the aggregate Stated Principal Balance of the Aggregate Group I Mortgage
Loans as of the related Due Date and (b) the product of (x) 0.80% and (y) the
aggregate Stated Principal Balance of the Aggregate Group I Mortgage Loans as
of the Cut-off Date and (iii) on and after the related Stepdown Date, if a
Trigger Event for the Aggregate Group I Certificates is in effect, the
Aggregate Group I Overcollateralization Target Amount for the immediately
preceding Distribution Date; provided, however, that on each Distribution Date
the Aggregate Group I Overcollateralization Target Amount shall not be lower
than $2,517,987.
Aggregate Group I Overcollateralized Amount: As of the Closing Date,
an amount equal to $5,755,826. With respect to any Distribution Date following
the Closing Date, the amount by which the aggregate Stated Principal Balance
of the Aggregate Group I Mortgage Loans as of the last day of the related Due
Period exceeds the aggregate Class Principal Balance of the Offered
Certificates after taking into account all payments of principal on such
Distribution Date.
18
Aggregate Group I Principal Distribution Amount: For any Distribution
Date will be the sum of the Aggregate Group I Basic Principal Distribution
Amount and the Aggregate Group I Extra Principal Distribution Amount, in each
case for that Distribution Date.
Aggregate Group I Principal Remittance Amount: For the Aggregate
Group I Certificates and any Distribution Date, the sum of
(i) the principal portion of all Scheduled Payments on the Aggregate
Group I Mortgage Loans due during the related Due Period, whether or not
received on or prior to the related Determination Date;
(ii) the principal portion of all proceeds received in respect of the
repurchase of a Mortgage Loan (or, in the case of a substitution, certain
amounts representing a principal adjustment as required by this Agreement)
during the related Prepayment Period; and
(iii) the principal portion of all other unscheduled collections,
including Insurance Proceeds, condemnation proceeds, Liquidation Proceeds and
all partial Principal Prepayments and Principal Prepayments in full, received
during the related Prepayment Period, to the extent applied as recoveries of
principal on the Mortgage Loans, provided, that in no event will the Aggregate
Group I Principal Remittance Amount with respect to any Distribution Date be
(x) less than zero or (y) greater than the then outstanding aggregate Class
Principal Balance of the Aggregate Group I Certificates.
Aggregate Group I Senior Certificates: As specified in the
Preliminary Statement.
Aggregate Group I Senior Enhancement Percentage: For any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate
Class Principal Balance of the Aggregate Group I Subordinated Certificates and
(ii) the Aggregate Group I Overcollateralized Amount by (y) the aggregate
Stated Principal Balance of the Aggregate Group I Mortgage Loans as of the end
of the related Due Period, calculated after taking into account distributions
of principal on the Aggregate Group I Mortgage Loans, distribution of the
Aggregate Group I Principal Distribution Amount and all payments of principal
from the Swap Account, if any, for such Distribution Date, to the holders of
the Aggregate Group I Certificates then entitled to distributions of principal
on such Distribution Date.
Aggregate Group I Senior Interest Distribution Amount: For each Class
of Aggregate Group I Senior Certificates and any Distribution Date, the
interest accrued during the related Interest Accrual Period on the related
Class Principal Balance of that Class immediately prior to the Distribution
Date at the Pass-Through Rate for that Class reduced (to an amount not less
than zero), in the case of such Class, by the allocable share, if any, for
that Class of Prepayment Interest Shortfalls to the extent not covered by
Compensating Interest paid by the Master Servicer or the Servicers and Relief
Act Interest Shortfalls, together with the Interest Carry Forward Amount, if
any, for such Distribution Date for such Class of Aggregate Group I Senior
Certificates.
Aggregate Group I Senior Principal Distribution Amount: With respect
to any Distribution Date (i) prior to the related Stepdown Date or on or after
the related Stepdown Date if a Trigger Event is in effect for the Aggregate
Group I Certificates, the Aggregate Group I
19
Principal Distribution Amount or (ii) on or after the related Stepdown Date if
a Trigger Event for the Aggregate Group I Certificates is not in effect for
that Distribution Date, the lesser of:
o the Aggregate Group I Principal Distribution Amount for that
Distribution Date; and
o the excess (if any) of (A) the aggregate Class Principal
Balance of the Aggregate Group I Senior Certificates
immediately prior to that Distribution Date over (B) the
lesser of (i) the aggregate Stated Principal Balance of the
Aggregate Group I Mortgage Loans as of the last day of the
related Due Period multiplied by 86.50% and (ii) the amount,
if any, by which (x) the aggregate Stated Principal Balance
of the Aggregate Group I Mortgage Loans as of the last day
of the related Due Period exceeds (y) $2,517,987.
Aggregate Group I Sequential Trigger Event: With respect to any
Distribution Date, an Aggregate Group I Sequential Trigger Event is in effect
if (a) with respect to any Distribution Date occurring before November 2008,
the circumstances in which the aggregate amount of Realized Losses incurred
since the Cut-off Date through the last day of the related Prepayment Period
divided by the aggregate Stated Principal Balance of the Aggregate Group I
Mortgage Loans as of the Cut-off Date exceeds 0.25% and (b) with respect to
any Distribution Date occurring in or after November 2008, a Trigger Event for
the Aggregate Group I Certificates is in effect.
Aggregate Group I Subordinated Basis Risk Carry Forward Amount: With
respect to any Class of Aggregate Group I Subordinated Certificates and any
Distribution Date on which the Pass-Through Rate for that Class of Aggregate
Group I Subordinated Certificates is limited to the Aggregate Group I
Subordinated Net WAC Pass-Through Rate, an amount equal to the sum of (i) the
excess, if any, of (x) the amount of interest such Class of Aggregate Group I
Subordinated Certificates would have been entitled to receive on such
Distribution Date if the Aggregate Group I Net WAC Pass-Through Rate had not
been applicable to such Class of Aggregate Group I Subordinated Certificates
on such Distribution Date over (y) the amount of interest accrued on such
Distribution Date at the Aggregate Group I Subordinated Net WAC Pass-Through
Rate and (ii) the Aggregate Group I Subordinated Basis Risk Carry Forward
Amount for the previous Distribution Date not previously distributed together
with interest thereon at a rate equal to the related Pass-Through Rate for
such Class of Aggregate Group I Subordinated Certificates for the most
recently ended Interest Accrual Period.
Aggregate Group I Subordinated Certificates: As specified in the
Preliminary Statement.
Aggregate Group I Subordinated Interest Distribution Amount: With
respect to any Class of Aggregate Group I Subordinated Certificates and any
Distribution Date, interest accrued during the related Interest Accrual Period
on the related Class Principal Balance of that Class immediately prior to the
Distribution Date at the Pass-Through Rate for that Class reduced (to an
amount not less than zero), in the case of such Class, by the allocable share,
if any, for that Class of Prepayment Interest Shortfalls on the Aggregate
Group I Mortgage Loans to the extent not covered by (x) Compensating Interest
paid by the Master Servicer or the Servicers for the Aggregate Group I
Mortgage Loans and (y) Relief Act Interest Shortfalls on the Aggregate Group I
Mortgage Loans.
20
Aggregate Group I Subordinated Net WAC Pass-Through Rate: For the
Aggregate Group I Subordinated Certificates and any Distribution Date will be
a per annum rate equal to (i) the weighted average of the Net Mortgage Rates
of the Aggregate Group I Mortgage Loans as of the first day of the month
preceding the month in which such Distribution Date occurs, minus (ii) the
Swap Payment Rate, adjusted, in each case, to accrue on the basis of a 360-day
year and the actual number of days in the related Interest Accrual Period,
except that with respect to the November 2006 Distribution Date, the number of
days in the related Interest Accrual Period will be 25.
Aggregate Planned Balance: With respect to any group of Planned
Principal Classes or Components and any Distribution Date, the amount set
forth for such group for such Distribution Date in Schedule B hereto.
Aggregate Targeted Balance: With respect to any group of Targeted
Principal Classes or Components and any Distribution Date, the amount set
forth for such group for such Distribution Date in Schedule B hereto.
Aggregate Voting Interests: The aggregate of the Voting Interests of
all the Aggregate Group I Certificates under this Agreement.
Agreement: This Pooling and Servicing Agreement and all amendments or
supplements hereto.
Allocable Share: Not applicable.
American Home Mortgage Loan: Each Mortgage Loan originated by
American Home Mortgage Corporation and listed on the Mortgage Loan Schedule.
American Home Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement listed in Exhibit E hereto between the Seller and
American Home Mortgage Corporation.
Amount Held for Future Distribution: As to any Distribution Date and
the Mortgage Loans in an Loan Group, the aggregate amount related to that Loan
Group held in the Custodial Accounts at the close of business on the related
Determination Date on account of (i) Principal Prepayments received on the
Mortgage Loans in that Loan Group after the related Prepayment Period and
Liquidation Proceeds and Subsequent Recoveries related to the Mortgage Loans
in that Loan Group received in the month of such Distribution Date and (ii)
all Scheduled Payments related to the Mortgage Loans in that Loan Group due
after the related Due Date.
Applicable Credit Support Percentage: Not applicable.
Applied Loss Amount: As to any Distribution Date, with respect to the
Aggregate Group I Subordinated Certificates and the Class I-OC Certificates,
the excess, if any, of (i) the aggregate Class Principal Balances of the
Aggregate Group I Certificates and the Class I-OC Certificates, after giving
effect to all Realized Losses with respect to the Aggregate Group I Mortgage
Loans during the Due Period for such Distribution Date and payments of
principal and Net Swap Receipts on such Distribution Date over (ii) the
aggregate Stated Principal Balance of
21
the Aggregate Group I Mortgage Loans for such Distribution Date. As to any
Distribution Date, with respect to the Group 3 Subordinated Certificates and
the Class 3-OC Certificates, the excess, if any, of (i) the aggregate Class
Principal Balances of the Group 3 Certificates and the Class 3-OC
Certificates, after giving effect to all Realized Losses with respect to the
Aggregate Group 3 Mortgage Loans during the Due Period for such Distribution
Date over (ii) the aggregate Stated Principal Balance of the Aggregate Group 3
Mortgage Loans for such Distribution Date.
Appraised Value: With respect to any Mortgage Loan, the Appraised
Value of the related Mortgaged Property shall be: (i) with respect to a
Mortgage Loan other than a Refinancing Mortgage Loan, the lesser of (a) the
value of the Mortgaged Property based upon the appraisal made at the time of
the origination of such Mortgage Loan and (b) the sales price of the Mortgaged
Property at the time of the origination of such Mortgage Loan; and (ii) with
respect to a Refinancing Mortgage Loan, the value of the Mortgaged Property
based upon the appraisal made at the time of the origination of such
Refinancing Mortgage Loan.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument, in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect the sale of the Mortgage to the Trustee, which assignment, notice of
transfer or equivalent instrument may be in the form of one or more blanket
assignments covering the Mortgage Loans secured by Mortgaged Properties
located in the same jurisdiction, if permitted by law; provided, however, that
the Trustee shall not be responsible for determining whether any such
assignment is in recordable form or sufficient under the laws of the
applicable jurisdiction to reflect the sale of the Mortgage to the Trustee.
Assignment of Proprietary Lease: With respect to a Cooperative Loan,
an assignment of the Proprietary Lease sufficient under the laws of the
jurisdiction wherein the related Cooperative Unit is located to reflect the
assignment of such Proprietary Lease; provided, however, that the Trustee
shall not be responsible for determining whether such assignment is sufficient
to reflect the assignment of the Proprietary Lease.
Assignment of Recognition Agreement: With respect to a Cooperative
Loan, an assignment of the Recognition Agreement sufficient under the laws of
the jurisdiction wherein the related Cooperative Unit is located to reflect
the assignment of such Recognition Agreement; provided, however, that the
Trustee shall not be responsible for determining whether such assignment is
sufficient to reflect the assignment of the Recognition Agreement.
Authenticating Agent: Any authenticating agent appointed pursuant to
Section 6.10 until any successor authenticating agent for the Certificates is
named, and thereafter "Authenticating Agent" shall mean any such successor.
The initial Authenticating Agent shall be the Securities Administrator under
this Agreement.
Authorized Officer: Any Person who may execute an Officer's
Certificate on behalf of the Depositor.
Available Funds: Not applicable.
22
Bankruptcy: As to any Person, the making of an assignment for the
benefit of creditors, the filing of a voluntary petition in bankruptcy,
adjudication as a bankrupt or insolvent, the entry of an order for relief in a
bankruptcy or insolvency proceeding, the seeking of reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief, or seeking, consenting to or acquiescing in the appointment of a
trustee, receiver or liquidator, dissolution, or termination, as the case may
be, of such Person pursuant to the provisions of either the Bankruptcy Code or
any other similar state laws.
Bankruptcy Code: The United States Bankruptcy Code of 1986, as
amended.
Basis Risk Carry Forward Amount: With respect to the Group 1 Senior
Certificates, the Group 1 Senior Basis Risk Carry Forward Amount, with respect
to the Group 2 Senior Certificates, the Group 2 Senior Basis Risk Carry
Forward Amount, with respect to the Aggregate Group I Subordinated
Certificates, the Aggregate Group I Subordinated Basis Risk Carry Forward
Amount, and with respect to the Group 3 Certificates, the Group 3 Basis Risk
Carry Forward Amount.
Book-Entry Certificates: Beneficial interests in Certificates
designated as "Book-Entry Certificates" in this Agreement, ownership and
transfers of which shall be evidenced or made through book entries by a
Clearing Agency as described in Section 3.09; provided, that after the
occurrence of a Book-Entry Termination whereupon book-entry registration and
transfer are no longer permitted and Definitive Certificates are to be issued
to Certificate Owners, such Book-Entry Certificates shall no longer be
"Book-Entry Certificates." The Classes of Certificates that constitute
"Book-Entry Certificates" as of the Closing Date are set forth in the
Preliminary Statement.
Book-Entry Termination: The date on which the Clearing Agency is no
longer willing or able to properly discharge its responsibilities with respect
to the Book Entry Certificates, and the Depositor is unable to locate a
qualified successor.
Breached Mortgage Loan: A Mortgage Loan (a)(i) on which the first
payment was not made or (ii) that has been delinquent one or two times in the
six months following the Cut-off Date and (b) as to which the Seller obtained
a representation or warranty that no condition set forth in (a)(i) or, for the
same or other period time specified in such representation or warranty
(a)(ii), exists.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which banking institutions in New York, New York or, if other than New
York, the city in which the Corporate Trust Office of the Trustee is located,
or the States of Maryland or Minnesota, are authorized or obligated by law or
executive order to be closed.
Certificate: Any one of the certificates signed by the Trustee, or
the Securities Administrator on the Trustee's behalf, and authenticated by the
Securities Administrator as Authenticating Agent in substantially the forms
attached hereto as Exhibit A.
Certificate Balance: With respect to any Certificate other than a
Class I-OC or Class 3-OC Certificate at any date, the maximum dollar amount of
principal to which the Holder thereof is then entitled hereunder, such amount
being equal to the principal balance as of the Closing
23
Date (A) plus any Subsequent Recoveries added to the Certificate Balance of
such Certificate pursuant to Section 5.02 hereof, (B) minus the sum of (i) all
distributions of principal previously made with respect thereto, and (ii) with
respect to the Subordinated Certificates only, all Applied Loss Amounts
allocated thereto and all other reductions in Certificate Balance previously
allocated thereto pursuant to Section 5.04 hereof. No individual Class I-OC
Certificate or Class 3-OC Certificate has a Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency (directly or as an indirect participant, in
accordance with the rules of such Clearing Agency).
Certificate Register and Certificate Registrar: The register
maintained and the registrar appointed pursuant to Section 3.02. The initial
Certificate Registrar is the Securities Administrator under this Agreement.
Certificateholder: The meaning provided in the definition of
"Holder."
Certification Party: As defined in Section 12.05 hereof.
Certifying Person: As defined in Section 12.05 hereof.
Class: All Certificates bearing the same Class designation as set
forth in the Preliminary Statement.
Class 3-B Certificates: As set forth in the Preliminary Statement.
Class 3-B-1 Principal Distribution Amount: With respect to the Class
3-B-1 Certificates and any Distribution Date (i) prior to the related Stepdown
Date or on or after the related Stepdown Date if a Trigger Event is in effect
for the Group 3 Certificates for that Distribution Date, the Group 3 Principal
Distribution Amount for that Distribution Date remaining after distribution of
the Group 3 Senior Principal Distribution Amount, the Class 3-M-1 Principal
Distribution Amount and the Class 3-M-2 Principal Distribution Amount or (ii)
on or after the related Stepdown Date if a Trigger Event for the Group 3
Certificates is not in effect for that Distribution Date, the lesser of:
o the Group 3 Principal Distribution Amount for that
Distribution Date remaining after distribution of the Group
3 Senior Principal Distribution Amount, the Class 3-M-1
Principal Distribution Amount and the Class 3-M-2 Principal
Distribution Amount; and
o the excess (if any) of (A) the sum of (1) the Class
Principal Balance of the Class 3-B-1 Certificates
immediately prior to that Distribution Date and (2) the
aggregate Class Principal Balance of the Group 3 Senior and
Class 3-M Certificates (after taking into account the
payment of the Group 3 Senior Certificates, Class 3-M-1 and
Class 3-M-2 Principal Distribution Amounts for such
Distribution Date) over (B) the lesser of (i) the aggregate
Stated Principal Balance of the Group 3 Mortgage Loans as of
the last day of the related Due Period multiplied by 96.20%
and (ii) the amount, if any, by
24
which (x) the aggregate Stated Principal Balance of the
Group 3 Mortgage Loans as of the last day of the related Due
Period exceeds (y) $829,054.
Class 3-B-2 Principal Distribution Amount: With respect to the Class
3-B-2 Certificates and any Distribution Date (i) prior to the related Stepdown
Date or on or after the related Stepdown Date if a Trigger Event is in effect
for the Group 3 Certificates for that Distribution Date, the Group 3 Principal
Distribution Amount for that Distribution Date remaining after distribution of
the Group 3 Senior Principal Distribution Amount, the Class 3-M-1 Principal
Distribution Amount, the Class 3-M-2 Principal Distribution Amount and the
Class 3-B-1 Principal Distribution Amount or (ii) on or after the related
Stepdown Date if a Trigger Event is not in effect for the Group 3 Certificates
for that Distribution Date, the lesser of:
o the Group 3 Principal Distribution Amount for that
Distribution Date remaining after distribution of the Group
3 Senior Principal Distribution Amount, the Class 3-M-1
Principal Distribution Amount, the Class 3-M-2 Principal
Distribution Amount and the Class 3-B-1 Principal
Distribution Amount; and
o the excess (if any) of (A) the sum of (1) the Class
Principal Balance of the Class 3-B-2 Certificates
immediately prior to that Distribution Date and (2) the
aggregate Class Principal Balance of the Group 3 Senior
Certificates, Class 3-M-1, Class 3-B-1 and Class 3-B-1
Certificates (after taking into account the payment of the
Group 3 Senior Certificates, Class 3-M-1, Class 3-M-2 and
Class 3-B-1 Principal Distribution Amounts for such
Distribution Date) over (B) the lesser of (i) the aggregate
Stated Principal Balance of the Group 3 Mortgage Loans as of
the last day of the related Due Period multiplied by 97.20%
and (ii) the amount, if any, by which (x) the aggregate
Stated Principal Balance of the Group 3 Mortgage Loans as of
the last day of the related Due Period exceeds (y) $829,054.
Class 3-M Certificates: As set forth in the Preliminary Statement.
Class 3-M-1 Principal Distribution Amount: With respect to the Class
3-M-1 Certificates and any Distribution Date (i) prior to the related Stepdown
Date or on or after the related Stepdown Date if a Trigger Event is in effect
for the Group 3 Certificates for that Distribution Date, the Group 3 Principal
Distribution Amount for that Distribution Date remaining after distribution of
the Group 3 Senior Principal Distribution Amount or (ii) on or after the
related Stepdown Date if a Trigger Event for the Group 3 Certificates is not
in effect for that Distribution Date, the lesser of:
o the Group 3 Principal Distribution Amount for that
Distribution Date remaining after distribution of the Group
3 Senior Principal Distribution Amount; and
o the excess (if any) of (A) the sum of (1) the Class
Principal Balance of the Class 3-M-1 Certificates
immediately prior to that Distribution Date and (2) the
aggregate Class Principal Balance of the Group 3 Senior
Certificates (after taking into account the payment of the
Group 3 Senior Principal Distribution Amount for such
Distribution Date) over (B) the lesser of (i) the aggregate
Stated Principal Balance of the Group 3 Mortgage Loans as of
the last day of the related Due Period multiplied by 90.00%
and
25
(ii) the amount, if any, by which (x) the aggregate Stated
Principal Balance of the Group 3 Mortgage Loans as of the
last day of the related Due Period exceeds (y) $829,054.
Class 3-M-2 Principal Distribution Amount: With respect to the Class
3-M-2 Certificates and any Distribution Date (i) prior to the related Stepdown
Date or on or after the related Stepdown Date if a Trigger Event is in effect
for the Group 3 Certificates for that Distribution Date, the Group 3 Principal
Distribution Amount for that Distribution Date remaining after distribution of
the Group 3 Senior Principal Distribution Amount and the Class 3-M-1 Principal
Distribution Amount or (ii) on or after the related Stepdown Date if a Trigger
Event for the Group 3 Certificates is not in effect for that Distribution
Date, the lesser of:
o the Group 3 Principal Distribution Amount for that
Distribution Date remaining after distribution of the Group
3 Senior Principal Distribution Amount and the Class 3-M-1
Principal Distribution Amount; and
o the excess (if any) of (A) the sum of (1) the Class
Principal Balance of the Class 3-M-2 Certificates
immediately prior to that Distribution Date and (2) the
aggregate Class Principal Balance of the Group 3 Senior and
Class 3-M-1 Certificates (after taking into account the
payment of the Group 3 Senior and Class 3-M-1 Principal
Distribution Amounts for such Distribution Date) over (B)
the lesser of (i) the aggregate Stated Principal Balance of
the Group 3 Mortgage Loans as of the last day of the related
Due Period multiplied by 93.70% and (ii) the amount, if any,
by which (x) the aggregate Stated Principal Balance of the
Group 3 Mortgage Loans as of the last day of the related Due
Period exceeds (y) $829,054.
Class 3-OC Certificates: As specified in the Preliminary Statement.
Class 3-OC Distributable Amount: With respect to any Distribution
Date and the Class 3-OC Certificates, the excess, if any, of (x) the sum of
(i) the amount of interest accrued during the related Accrual Period at the
related Pass-Through Rate on the Class Principal Balance for such Distribution
Date and not included in the Group 3 Extra Principal Distribution Amount on
that Distribution Date and (ii) the Group 3 Overcollateralization Release
Amount, if any, for such Distribution Date, over (y) the Group 3
Overcollateralization Increase Amount, if any, for such Distribution Date.
Class 3-OC Interest: The Upper-Tier Regular Interest as specified and
described in the Preliminary Statement and the related footnote thereto.
Class 3-P Distribution Amount: For each Distribution Date and the
Group 3 Mortgage Loans, an amount equal to the total of all Prepayment
Penalties received by the Securities Administrator from the Servicers on the
Group 3 Mortgage Loans in the prior Due Period. The Class 3-P Distribution
Amount is not part of the Group 3 Available Distribution Amount and is
therefore not available for distributions to the other Classes of
Certificates.
Class A Principal Allocation Percentage: With respect to each of the
Group 1 Senior Certificates and the Group 2 Senior Certificates and any
Distribution Date, the percentage
26
equivalent of a fraction, determined as follows: (i) in the case of the Group
1 Senior Certificates the numerator of which is (x) the portion of the
Aggregate Group I Principal Remittance Amount for such Distribution Date that
is attributable to principal received or advanced on the Group 1 Mortgage
Loans, and the denominator of which is (y) the Aggregate Group I Principal
Remittance Amount for such Distribution Date and (ii) in the case of the Group
2 Senior Certificates the numerator of which is (x) the portion of the
Aggregate Group I Principal Remittance Amount for such Distribution Date that
is attributable to principal received or advanced on the Group 2 Mortgage
Loans, and the denominator of which is (y) the Aggregate Group I Principal
Remittance Amount for such Distribution Date.
Class B Certificates: As set forth in the Preliminary Statement.
Class B-1 Principal Distribution Amount: With respect to the Class
B-1 Certificates and any Distribution Date (i) prior to the related Stepdown
Date or on or after the related Stepdown Date if a Trigger Event is in effect
for the Aggregate Group I Certificates for that Distribution Date, the
Aggregate Group I Principal Distribution Amount for that Distribution Date
remaining after distribution of the Aggregate Group I Senior Principal
Distribution Amount, the Class M-1 Principal Distribution Amount, the Class
M-2 Principal Distribution Amount, the Class M-3 Principal Distribution
Amount, the Class M-4 Principal Distribution Amount, the Class M-5 Principal
Distribution Amount and the Class M-6 Principal Distribution Amount or (ii) on
or after the related Stepdown Date if a Trigger Event for the Aggregate Group
I Certificates is not in effect for that Distribution Date, the lesser of:
o the Aggregate Group I Principal Distribution Amount for that
Distribution Date remaining after distribution of the
Aggregate Group I Senior Principal Distribution Amount, the
Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal
Distribution Amount, the Class M-4 Principal Distribution
Amount, the Class M-5 Principal Distribution Amount and the
Class M-6 Principal Distribution Amount; and
o the excess (if any) of (A) the sum of (1) the Class
Principal Balance of the Class B-1 Certificates immediately
prior to that Distribution Date and (2) the aggregate Class
Principal Balance of the Aggregate Group I Senior and Class
M Certificates (after taking into account the payment of the
Aggregate Group I Senior Certificates, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5 and Class M-6 Principal
Distribution Amounts for such Distribution Date) over (B)
the lesser of (i) the aggregate Stated Principal Balance of
the Aggregate Group I Mortgage Loans as of the last day of
the related Due Period multiplied by 96.70% and (ii) the
amount, if any, by which (x) the aggregate Stated Principal
Balance of the Aggregate Group I Mortgage Loans as of the
last day of the related Due Period exceeds (y) $2,517,987.
Class B-2 Principal Distribution Amount: With respect to the Class
B-2 Certificates and any Distribution Date (i) prior to the related Stepdown
Date or on or after the related Stepdown Date if a Trigger Event is in effect
for the Aggregate Group I Certificates for that Distribution Date, the
Aggregate Group I Principal Distribution Amount for that Distribution Date
remaining after distribution of the Aggregate Group I Senior Principal
Distribution Amount, the Class M-1 Principal Distribution Amount, the Class
M-2 Principal Distribution Amount, the Class M-3
27
Principal Distribution Amount, the Class M-4 Principal Distribution Amount,
the Class M-5 Principal Distribution Amount, the Class M-6 Principal
Distribution Amount and the Class B-1 Principal Distribution Amount or (ii) on
or after the related Stepdown Date if a Trigger Event for the Aggregate Group
I Certificates is not in effect for that Distribution Date, the lesser of:
o the Aggregate Group I Principal Distribution Amount for that
Distribution Date remaining after distribution of the
Aggregate Group I Senior Principal Distribution Amount, the
Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal
Distribution Amount, the Class M-4 Principal Distribution
Amount, the Class M-5 Principal Distribution Amount, the
Class M-6 Principal Distribution Amount and the Class B-1
Principal Distribution Amount; and
o the excess (if any) of (A) the sum of (1) the Class
Principal Balance of the Class B-2 Certificates immediately
prior to that Distribution Date and (2) the aggregate Class
Principal Balance of the Aggregate Group I Senior
Certificates, Class M and Class B-1 Certificates (after
taking into account the payment of the Aggregate Group I
Senior Certificates, Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5, Class M-6 and Class B-1 Principal
Distribution Amounts for such Distribution Date) over (B)
the lesser of (i) the aggregate Stated Principal Balance of
the Aggregate Group I Mortgage Loans as of the last day of
the related Due Period multiplied by 97.40% and (ii) the
amount, if any, by which (x) the aggregate Stated Principal
Balance of the Aggregate Group I Mortgage Loans as of the
last day of the related Due Period exceeds (y) $2,517,987.
Class B-3 Principal Distribution Amount: With respect to the Class
B-3 Certificates and any Distribution Date (i) prior to the related Stepdown
Date or on or after the related Stepdown Date if a Trigger Event is in effect
for the Aggregate Group I Certificates for that Distribution Date, the
Aggregate Group I Principal Distribution Amount for that Distribution Date
remaining after distribution of the Aggregate Group I Senior Principal
Distribution Amount, the Class M-1 Principal Distribution Amount, the Class
M-2 Principal Distribution Amount, the Class M-3 Principal Distribution
Amount, the Class M-4 Principal Distribution Amount, the Class M-5 Principal
Distribution Amount, the Class M-6 Principal Distribution Amount, the Class
B-1 Principal Distribution Amount and the Class B-2 Principal Distribution
Amount or (ii) on or after the related Stepdown Date if a Trigger Event for
the Aggregate Group I Certificates is not in effect for that Distribution
Date, the lesser of:
o the Aggregate Group I Principal Distribution Amount for that
Distribution Date remaining after distribution of the
Aggregate Group I Senior Principal Distribution Amount, the
Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal
Distribution Amount, the Class M-4 Principal Distribution
Amount, the Class M-5 Principal Distribution Amount, the
Class M-6 Principal Distribution Amount, the Class B-1
Principal Distribution Amount and the Class B-2 Principal
Distribution Amount; and
o the excess (if any) of (A) the sum of (1) the Class
Principal Balance of the Class B-3 Certificates immediately
prior to that Distribution Date and (2) the aggregate Class
28
Principal Balance of the Aggregate Group I Senior
Certificates, Class M, Class B-1 and Class B-2 Certificates
(after taking into account the payment of the Aggregate
Group I Senior Certificates, Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6, Class B-1 and Class
B-2 Principal Distribution Amounts for such Distribution
Date) over (B) the lesser of (i) the aggregate Stated
Principal Balance of the Aggregate Group I Mortgage Loans as
of the last day of the related Due Period multiplied by
98.40% and (ii) the amount, if any, by which (x) the
aggregate Stated Principal Balance of the Aggregate Group I
Mortgage Loans as of the last day of the related Due Period
exceeds (y) $2,517,987.
Class Interest Shortfall: Not applicable.
Class I-OC Certificates: As specified in the Preliminary Statement.
Class I-OC Distributable Amount: With respect to any Distribution
Date and the Class I-OC Certificates, the excess, if any, of (x) the sum of
(i) the amount of interest accrued during the related Accrual Period at the
related Pass-Through Rate on the Class Principal Balance for such Distribution
Date and not included in the Aggregate Group I Extra Principal Distribution
Amount on that Distribution Date and (ii) the Aggregate Group I
Overcollateralization Release Amount, if any, for such Distribution Date, over
(y) the Aggregate Group I Overcollateralization Increase Amount and the amount
of any Swap Termination Payment, if any, for such Distribution Date.
Class I-OC Interest: The Upper-Tier Regular Interest as specified and
described in the Preliminary Statement and the related footnote thereto.
Class I-P Distribution Amount: For each Distribution Date and the
Aggregate Group I Mortgage Loans, an amount equal to the total of all
Prepayment Penalties received by the Securities Administrator from the
Servicers on the Aggregate Group I Mortgage Loans in the prior Due Period. The
Class I-P Distribution Amount is not part of the Aggregate Group I Available
Distribution Amount and is therefore not available for distributions to the
other Classes of Certificates.
Class M Certificates: As set forth in the Preliminary Statement.
Class M-1 Principal Distribution Amount: With respect to the Class
M-1 Certificates and any Distribution Date (i) prior to the related Stepdown
Date or on or after the related Stepdown Date if a Trigger Event is in effect
for the Aggregate Group I Certificates for that Distribution Date, the
Aggregate Group I Principal Distribution Amount for that Distribution Date
remaining after distribution of the Aggregate Group I Senior Principal
Distribution Amount or (ii) on or after the related Stepdown Date if a Trigger
Event for the Aggregate Group I Certificates is not in effect for that
Distribution Date, the lesser of:
o the Aggregate Group I Principal Distribution Amount for that
Distribution Date remaining after distribution of the
Aggregate Group I Senior Principal Distribution Amount; and
29
o the excess (if any) of (A) the sum of (1) the Class
Principal Balance of the Class M-1 Certificates immediately
prior to that Distribution Date and (2) the aggregate Class
Principal Balance of the Aggregate Group I Senior
Certificates (after taking into account the payment of the
Aggregate Group I Senior Principal Distribution Amount for
such Distribution Date) over (B) the lesser of (i) the
aggregate Stated Principal Balance of the Aggregate Group I
Mortgage Loans as of the last day of the related Due Period
multiplied by 89.20% and (ii) the amount, if any, by which
(x) the aggregate Stated Principal Balance of the Aggregate
Group I Mortgage Loans as of the last day of the related Due
Period exceeds (y) $2,517,987.
Class M-2 Principal Distribution Amount: With respect to the Class
M-2 Certificates and any Distribution Date (i) prior to the related Stepdown
Date or on or after the related Stepdown Date if a Trigger Event is in effect
for the Aggregate Group I Certificates for that Distribution Date, the
Aggregate Group I Principal Distribution Amount for that Distribution Date
remaining after distribution of the Aggregate Group I Senior Principal
Distribution Amount and the Class M-1 Principal Distribution Amount or (ii) on
or after the related Stepdown Date if a Trigger Event for the Aggregate Group
I Certificates is not in effect for that Distribution Date, the lesser of:
o the Aggregate Group I Principal Distribution Amount for that
Distribution Date remaining after distribution of the
Aggregate Group I Senior Principal Distribution Amount and
the Class M-1 Principal Distribution Amount; and
o the excess (if any) of (A) the sum of (1) the Class
Principal Balance of the Class M-2 Certificates immediately
prior to that Distribution Date and (2) the aggregate Class
Principal Balance of the Aggregate Group I Senior and Class
M-1 Certificates (after taking into account the payment of
the Aggregate Group I Senior and Class M-1 Principal
Distribution Amounts for such Distribution Date) over (B)
the lesser of (i) the aggregate Stated Principal Balance of
the Aggregate Group I Mortgage Loans as of the last day of
the related Due Period multiplied by 91.70% and (ii) the
amount, if any, by which (x) the aggregate Stated Principal
Balance of the Aggregate Group I Mortgage Loans as of the
last day of the related Due Period exceeds (y) $2,517,987.
Class M-3 Principal Distribution Amount: With respect to the Class
M-3 Certificates and any Distribution Date (i) prior to the related Stepdown
Date or on or after the related Stepdown Date if a Trigger Event is in effect
for the Aggregate Group I Certificates for that Distribution Date, the
Aggregate Group I Principal Distribution Amount for that Distribution Date
remaining after distribution of the Aggregate Group I Senior Principal
Distribution Amount, the Class M-1 Principal Distribution Amount and the Class
M-2 Principal Distribution Amount or (ii) on or after the related Stepdown
Date if a Trigger Event for the Aggregate Group I Certificates is not in
effect for that Distribution Date, the lesser of:
o the Aggregate Group I Principal Distribution Amount for that
Distribution Date remaining after distribution of the
Aggregate Group I Senior Principal Distribution Amount, the
Class M-1 Principal Distribution Amount and the Class M-2
Principal Distribution Amount; and
30
o the excess (if any) of (A) the sum of (1) the Class
Principal Balance of the Class M-3 Certificates immediately
prior to that Distribution Date and (2) the aggregate Class
Principal Balance of the Aggregate Group I Senior
Certificates, Class M-1 and Class M-2 Certificates (after
taking into account the payment of the Aggregate Group I
Senior Certificates, Class M-1 and Class M-2 Principal
Distribution Amounts for such Distribution Date) over (B)
the lesser of (i) the aggregate Stated Principal Balance of
the Aggregate Group I Mortgage Loans as of the last day of
the related Due Period multiplied by 93.10% and (ii) the
amount, if any, by which (x) the aggregate Stated Principal
Balance of the Aggregate Group I Mortgage Loans as of the
last day of the related Due Period exceeds (y) $2,517,987.
Class M-4 Principal Distribution Amount: With respect to the Class
M-4 Certificates and any Distribution Date (i) prior to the related Stepdown
Date or on or after the related Stepdown Date if a Trigger Event is in effect
for the Aggregate Group I Certificates for that Distribution Date, the
Aggregate Group I Principal Distribution Amount for that Distribution Date
remaining after distribution of the Aggregate Group I Senior Principal
Distribution Amount, the Class M-1 Principal Distribution Amount, the Class
M-2 Principal Distribution Amount and the Class M-3 Principal Distribution
Amount or (ii) on or after the related Stepdown Date if a Trigger Event for
the Aggregate Group I Certificates is not in effect for that Distribution
Date, the lesser of:
o the Aggregate Group I Principal Distribution Amount for that
Distribution Date remaining after distribution of the
Aggregate Group I Senior Principal Distribution Amount, the
Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount and the Class M-3 Principal
Distribution Amount; and
o the excess (if any) of (A) the sum of (1) the Class
Principal Balance of the Class M-4 Certificates immediately
prior to that Distribution Date and (2) the aggregate Class
Principal Balance of the Aggregate Group I Senior
Certificates, Class M-1, Class M-2 and Class M-3
Certificates (after taking into account the payment of the
Aggregate Group I Senior Certificates, Class M-1, Class M-2
and Class M-3 Principal Distribution Amounts for such
Distribution Date) over (B) the lesser of (i) the aggregate
Stated Principal Balance of the Aggregate Group I Mortgage
Loans as of the last day of the related Due Period
multiplied by 94.20% and (ii) the amount, if any, by which
(x) the aggregate Stated Principal Balance of the Aggregate
Group I Mortgage Loans as of the last day of the related Due
Period exceeds (y) $2,517,987.
Class M-5 Principal Distribution Amount: With respect to the Class
M-5 Certificates and any Distribution Date (i) prior to the related Stepdown
Date or on or after the related Stepdown Date if a Trigger Event is in effect
for the Aggregate Group I Certificates for that Distribution Date, the
Aggregate Group I Principal Distribution Amount for that Distribution Date
remaining after distribution of the Aggregate Group I Senior Principal
Distribution Amount, the Class M-1 Principal Distribution Amount, the Class
M-2 Principal Distribution Amount, the Class M-3 Principal Distribution Amount
and the Class M-4 Principal Distribution Amount or (ii) on or after the
related Stepdown Date if a Trigger Event for the Aggregate Group I
Certificates is not in effect for that Distribution Date, the lesser of:
31
o the Aggregate Group I Principal Distribution Amount for that
Distribution Date remaining after distribution of the
Aggregate Group I Senior Principal Distribution Amount, the
Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal
Distribution Amount and the Class M-4 Principal Distribution
Amount; and
o the excess (if any) of (A) the sum of (1) the Class
Principal Balance of the Class M-5 Certificates immediately
prior to that Distribution Date and (2) the aggregate Class
Principal Balance of the Aggregate Group I Senior
Certificates, Class M-1, Class M-2, Class M-3 and Class M-4
Certificates (after taking into account the payment of the
Aggregate Group I Senior Certificates, Class M-1, Class M-2,
Class M-3 and Class M-4 Principal Distribution Amounts for
such Distribution Date) over (B) the lesser of (i) the
aggregate Stated Principal Balance of the Aggregate Group I
Mortgage Loans as of the last day of the related Due Period
multiplied by 95.10% and (ii) the amount, if any, by which
(x) the aggregate Stated Principal Balance of the Aggregate
Group I Mortgage Loans as of the last day of the related Due
Period exceeds (y) $2,517,987.
Class M-6 Principal Distribution Amount: With respect to the Class
M-6 Certificates and any Distribution Date (i) prior to the related Stepdown
Date or on or after the related Stepdown Date if a Trigger Event is in effect
for the Aggregate Group I Certificates for that Distribution Date, the
Aggregate Group I Principal Distribution Amount for that Distribution Date
remaining after distribution of the Aggregate Group I Senior Principal
Distribution Amount, the Class M-1 Principal Distribution Amount, the Class
M-2 Principal Distribution Amount, the Class M-3 Principal Distribution
Amount, the Class M-4 Principal Distribution Amount and the Class M-5
Principal Distribution Amount or (ii) on or after the related Stepdown Date if
a Trigger Event for the Aggregate Group I Certificates is not in effect for
that Distribution Date, the lesser of:
o the Aggregate Group I Principal Distribution Amount for that
Distribution Date remaining after distribution of the
Aggregate Group I Senior Principal Distribution Amount, the
Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal
Distribution Amount, the Class M-4 Principal Distribution
Amount and the Class M-5 Principal Distribution Amount; and
o the excess (if any) of (A) the sum of (1) the Class
Principal Balance of the Class M-6 Certificates immediately
prior to that Distribution Date and (2) the aggregate Class
Principal Balance of the Aggregate Group I Senior
Certificates, Class M-1, Class M-2, Class M-3, Class M-4 and
Class M-5 Certificates (after taking into account the
payment of the Aggregate Group I Senior Certificates, Class
M-1, Class M-2, Class M-3, Class M-4 and Class M-5 Principal
Distribution Amounts for such Distribution Date) over (B)
the lesser of (i) the aggregate Stated Principal Balance of
the Aggregate Group I Mortgage Loans as of the last day of
the related Due Period multiplied by 96.00% and (ii) the
amount, if any, by which (x) the aggregate Stated Principal
Balance of the Aggregate Group I Mortgage Loans as of the
last day of the related Due Period exceeds (y) $2,517,987.
Class Optimal Interest Distribution Amount: Not applicable.
32
Class Principal Balance: With respect to any Class of Certificates
other than the Class I-OC and Class 3-OC Certificates and as to any date of
determination, the aggregate of the Certificate Balances of all Certificates
of such Class as of such date. With respect to the Class I-OC Certificates and
any Distribution Date, the Aggregate Group I Overcollateralized Amount as of
that Distribution Date. With respect to the Class 3-OC Certificates and any
Distribution Date, the Group 3 Overcollateralized Amount as of that
Distribution Date.
Class Subordination Percentage: Not applicable.
Clearing Agency: An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. As
of the Closing Date, the Clearing Agency shall be The Depository Trust
Company.
Clearing Agency Participant: A broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency
effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
Closing Date: October 31, 2006.
Code: The Internal Revenue Code of 1986, as amended, and as it may be
further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
Collateralization Event: As defined in the Swap Agreement.
Commission: The U.S. Securities and Exchange Commission.
Compensating Interest Payment: As to any Distribution Date, an amount
equal to the lesser of (i) the Prepayment Interest Shortfall on the Mortgage
Loans serviced by such Servicer with respect to such Distribution Date and
(ii) the portion of the applicable Servicing Fee that the related Servicer is
required to remit to the Trust as compensation therefor in accordance with the
terms of the related Purchase and Servicing Agreement.
Component: As specified in the Preliminary Statement.
Component Balance: With respect to any Component and any Distribution
Date, the Initial Component Balance thereof on the Closing Date, (A) plus any
Subsequent Recoveries added to the Component Balance of such Component
pursuant to Section 5.02, (B) minus the sum of all amounts applied in
reduction of the principal balance of such Component and Realized Losses
allocated thereto on previous Distribution Dates.
Component Certificates: As specified in the Preliminary Statement.
Component Notional Amount: Not applicable.
Confirmation: With respect to the Swap Agreement, the related
Confirmation dated October 31, 2006, evidencing the transaction between the
Swap Counterparty and the Securities Administrator on behalf of the Trust
Fund.
33
Consent: A document executed by the Cooperative Corporation (i)
consenting to the sale of the Cooperative Unit to the Mortgagor and (ii)
certifying that all maintenance charges relating to the Cooperative Unit have
been paid.
Controlling Person: With respect to any Person, any other Person who
"controls" such Person within the meaning of the Securities Act.
Cooperative Corporation: The entity that holds title (fee or an
acceptable leasehold estate) to the real property and improvements
constituting the Cooperative Property and which governs the Cooperative
Property, which Cooperative Corporation must qualify as a Cooperative Housing
Corporation under Section 216 of the Code.
Cooperative Loan: A Mortgage Loan secured by Cooperative Shares and a
Proprietary Lease, if any.
Cooperative Property: The real property and improvements owned by the
Cooperative Corporation, that includes the allocation of individual dwelling
units to the holders of the shares of the Cooperative Corporation.
Cooperative Shares: Shares issued by a Cooperative Corporation.
Cooperative Unit: With respect to any Cooperative Loan, a specific
unit in a Cooperative Property.
Corporate Trust Office: With respect to the Trustee, the designated
office of the Trustee in the State of Illinois at which at any particular time
its corporate trust business with respect to this Agreement is administered,
which office at the date of the execution of this Agreement is located at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Global
Securities and Trust Services MSM 2006-16AX, and which is the address to which
notices to and correspondence with the Trustee should be directed, or at such
other address as the Trustee may designate from time to time by notice to the
Certificateholders, the Depositor, the Master Servicer and the Securities
Administrator or the principal corporate trust office of any successor
Trustee. With respect to the Certificate Registrar and presentment of
Certificates for registration of transfer, exchange or final payment, ▇▇▇▇▇
Fargo Bank, National Association, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Loan Trust 2006-16AX, and for all other purposes, ▇.▇. ▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or for overnight deliveries, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇), Attention: Corporate Trust, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Loan Trust 2006-16AX.
Custodial Account: Each custodial account (other than an Escrow
Account) established and maintained by a Servicer pursuant to a Purchase and
Servicing Agreement.
Custodial Agreement: Not applicable.
Custodial Delivery Failure: With respect to any Custodian appointed
hereunder, as defined in Section 6.21 hereof.
Custodian: A Person who is at anytime appointed by the Depositor as a
custodian of the Mortgage Documents and the Trustee Mortgage Files. The
initial Custodian is LaSalle Bank, National Association.
34
Custodian Certification: As defined in Section 2.01.
Cut-off Date: October 1, 2006.
Cut-off Date Pool Principal Balance: $956,297,395.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which became
final and non-appealable, except such a reduction resulting from a Deficient
Valuation or any reduction that results in a permanent forgiveness of
principal.
Deceased Holder: Not applicable.
Defaulted Swap Termination Payment: Any Swap Termination Payment
required to be paid by the Supplemental Interest Trust to the Swap
Counterparty pursuant to the Swap Agreement as a result of an Event of Default
(as defined in the Swap Agreement) with respect to which the Swap Counterparty
is the defaulting party or a Termination Event (as defined in the Swap
Agreement) (other than Illegality or a Tax Event that is not a Tax Event Upon
Merger (each as defined in the Swap Agreement)) with respect to which the Swap
Counterparty is the sole Affected Party (as defined in the Swap Agreement).
Defective Mortgage Loan: The meaning specified in Section 2.05(a).
Deficient Valuation: With respect to any Mortgage Loan, a valuation
of the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding indebtedness under the Mortgage Loan, or
any reduction in the amount of principal to be paid in connection with any
Scheduled Payment that results in a permanent forgiveness of principal, which
valuation or reduction results from an order of such court which is final and
non-appealable in a proceeding under the Bankruptcy Code.
Definitive Certificate: A Certificate of any Class issued in
definitive, fully registered, certificated form. As of the Closing Date the
Classes of Certificates being issued as "Definitive Certificates" are set
forth in the Preliminary Statement.
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased, or
replaced or to be replaced with a Replacement Mortgage Loan.
Delinquent: Any Mortgage Loan with respect to which the Scheduled
Payment due on a Due Date is not received.
Depositor: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc., a Delaware corporation
having its principal place of business in New York, or its successors in
interest.
35
Depository: Cede & Co., or any other organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of
the Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code
of the State of New York.
Determination Date: With respect to each Servicer, the "Determination
Date" set forth in the related Purchase and Servicing Agreement.
Disqualified Organization: A "disqualified organization" as defined
in Section 860E(e)(5) of the Code.
Distribution Account: The separate Eligible Account created and
maintained by the Securities Administrator, on behalf of the Trustee, pursuant
to Section 4.01. Funds in the Distribution Account (exclusive of any earnings
on investments made with funds deposited in the Distribution Account) shall be
held in trust for the Trustee and the Certificateholders for the uses and
purposes set forth in this Agreement.
Distribution Account Deposit Date: With respect to each Servicer, not
later than 1:00 p.m., New York time, on 18th day of each calendar month after
the initial issuance of the Certificates or, if such 18th day is not a
Business Day, either the immediately preceding or immediately following
Business Day, as set forth in the related Acknowledgement, commencing in
November 2006.
Distribution Date: The 25th day of each month or, if such 25th day is
not a Business Day, the next succeeding Business Day, commencing in November
2006.
Due Date: With respect to any Distribution Date, the first day of the
month in which such Distribution Date occurs. With respect to any Mortgage
Loan, the date on which a Scheduled Payment is due under the related Mortgage
Note as indicated in the applicable Purchase and Servicing Agreement.
Due Period: As to any Distribution Date, the calendar month prior to
such Distribution Date.
▇▇▇▇▇: The Commission's Electronic Data Gathering, Analysis and
Retrieval system.
Eligible Account: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a
depository institution or trust company that is the principal subsidiary of a
holding company, the debt obligations of such holding company) have the
highest short-term ratings of each Rating Agency at the time any amounts are
held on deposit therein, or (ii) an account or accounts in a depository
institution or trust company in which such accounts are insured by the FDIC or
the SAIF (to the limits established by the FDIC or the SAIF) and the uninsured
deposits in which accounts are otherwise secured such that, as evidenced by an
Opinion of Counsel delivered to the Trustee, the Securities Administrator and
to each Rating Agency, the Certificateholders have a claim with respect to the
funds in such account or a perfected first priority security interest against
any collateral (which shall be limited to Permitted
36
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution or trust company in
which such account is maintained, or (iii) a trust account or accounts
maintained with the trust department of a federal or state chartered
depository institution or trust company, acting in its fiduciary capacity or
(iv) any other account acceptable to each Rating Agency, as evidenced by a
signed writing delivered by each Rating Agency. Eligible Accounts may bear
interest, and may include, if otherwise qualified under this definition,
accounts maintained with the Trustee, the Paying Agent, the Securities
Administrator or the Master Servicer.
Eligible Institution: An institution having the highest short-term
debt rating, and one of the two highest long-term debt ratings of the Rating
Agencies or the approval of the Rating Agencies.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of an
Underwriter's Exemption.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: With respect to each Mortgage Loan, as defined in
Article I of the related Purchase and Servicing Agreement.
Estoppel Letter: A document executed by the Cooperative Corporation
certifying, with respect to a Cooperative Unit, (i) the appurtenant
Proprietary Lease will be in full force and effect as of the date of issuance
thereof, (ii) the related stock certificate was registered in the Mortgagor's
name and the Cooperative Corporation has not been notified of any lien upon,
pledge of, levy of execution on or disposition of such stock certificate, and
(iii) the Mortgagor is not in default under the appurtenant Proprietary Lease
and all charges due the Cooperative Corporation have been paid.
Event of Default: Any one of the conditions or circumstances enumerated
in Section 6.14.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
Exchange Act Reports: Any reports on Form 10-D, Form 8-K and Form
10-K required to be filed with respect to the Trust Fund under the Exchange
Act.
▇▇▇▇▇▇ ▇▇▇: The entity formerly known as the Federal National
Mortgage Association, a federally chartered and privately owned corporation
organized and existing under the Federal National Mortgage Association Charter
Act, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation or any successor
thereto.
37
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of
the Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Final Custodian Certification: As defined in Section 2.02 hereof.
Fiscal Agent: Not applicable.
Fitch: Fitch, Inc., or any successor thereto. If Fitch is designated
as a Rating Agency in the Preliminary Statement, for purposes of Section 11.07
the address for notices to Fitch shall be Fitch, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgage Surveillance Group,
or such other address as Fitch may hereafter furnish to the Depositor, the
Trustee and the Master Servicer.
Form 8-K Disclosure: As defined in Section 12.03 hereof.
Global Securities: The global certificates representing the
Book-Entry Certificates.
GMAC Serviced Mortgage Loan: Each Mortgage Loan serviced by GMAC
Mortgage, LLC, as successor in interest to GMAC Mortgage Corporation, and
listed on the Mortgage Loan Schedule.
GMAC Servicing Agreement: The Servicing Agreement listed in Exhibit E
hereto between the Seller and GMAC Mortgage, LLC, as successor in interest to
GMAC Mortgage Corporation.
Group 1 Mortgage Loans: The Mortgage Loans in Loan Group 1.
Group 1 Senior Basis Risk Carry Forward Amount: With respect to any
Class of Group 1 Senior Certificates and any Distribution Date on which the
Pass-Through Rate for that Class of Group 1 Senior Certificates is limited to
the Group 1 Senior WAC Pass-Through Rate, an amount equal to the sum of (i)
the excess of (x) the amount of interest such Class of Group 1 Senior
Certificates would have been entitled to receive on such Distribution Date if
the Group 1 Senior WAC Pass-Through Rate had not been applicable to such Class
of Group 1 Senior Certificates on such Distribution Date over (y) the amount
of interest accrued on such Distribution Date at the Group 1 Senior WAC
Pass-Through Rate and Group 1 Senior Basis Risk Carry Forward Amount for the
previous Distribution Date not previously distributed together with interest
thereon at a rate equal to the related Pass-Through Rate for such Class of
Group 1 Senior Certificates for the most recently ended Interest Accrual
Period.
Group 1 Senior Certificates: As set forth in the Preliminary
Statement.
Group 1 Senior Principal Allocation Amount: With respect to the Group
1 Senior Certificates and any Distribution Date, the product of the Class A
Principal Allocation Percentage for the Group 1 Senior Certificates for that
Distribution Date and the Aggregate Group I Principal Distribution Amount for
that Distribution Date.
38
Group 1 Senior WAC Pass-Through Rate: For the Group 1 Senior
Certificates and any Distribution Date, the lesser of (x) the Aggregate Group
I Subordinated Net WAC Pass-Through Rate and (y) a per annum rate equal to (i)
the weighted average of the Net Mortgage Rates of the Group 1 Mortgage Loans
as of the first day of the month preceding the month in which such
Distribution Date occurs, minus (ii) the Swap Payment Rate adjusted, in each
case, to accrue on the basis of a 360-day year and the actual number of days
in the related Interest Accrual Period, except that with respect to the
November 2006 Distribution Date, the number of days in the related Interest
Accrual Period will be 25.
Group 2 Mortgage Loans: The Mortgage Loans in Loan Group 2.
Group 2 Senior Basis Risk Carry Forward Amount: With respect to any
Class of Group 2 Senior Certificates and any Distribution Date on which the
Pass-Through Rate for that Class of Group 2 Senior Certificates is limited to
the Group 2 Senior WAC Pass-Through Rate, an amount equal to the sum of (i)
the excess of (x) the amount of interest such Class of Group 2 Senior
Certificates would have been entitled to receive on such Distribution Date if
the Group 2 Senior WAC Pass-Through Rate had not been applicable to such Class
of Group 2 Senior Certificates on such Distribution Date over (y) the amount
of interest accrued on such Distribution Date at the Group 2 Senior WAC
Pass-Through Rate and Group 2 Senior Basis Risk Carry Forward Amount for the
previous Distribution Date not previously distributed together with interest
thereon at a rate equal to the related Pass-Through Rate for such Class of
Group 2 Senior Certificates for the most recently ended Interest Accrual
Period.
Group 2 Senior Certificates: As set forth in the Preliminary
Statement.
Group 2 Senior Certificates: As specified in the Preliminary
Statement.
Group 2 Senior Principal Allocation Amount: With respect to the Group
2 Senior Certificates and any Distribution Date, the product of the Class A
Principal Allocation Percentage for the Group 2 Senior Certificates for that
Distribution Date and the Aggregate Group I Principal Distribution Amount for
that Distribution Date.
Group 2 Senior WAC Pass-Through Rate: For the Group 2 Senior
Certificates and any Distribution Date, the lesser of (x) the Aggregate Group
I Subordinated Net WAC Pass-Through Rate and (y) a per annum rate equal to (i)
the weighted average of the Net Mortgage Rates of the Group 2 Mortgage Loans
as of the first day of the month preceding the month in which such
Distribution Date occurs, minus (ii) the Swap Payment Rate adjusted, in each
case, to accrue on the basis of a 360-day year and the actual number of days
in the related Interest Accrual Period, except that with respect to the
November 2006 Distribution Date, the number of days in the related Interest
Accrual Period will be 25.
Group 3 Auction: As defined in Section 7.01(b) hereof.
Group 3 Auction Administrator: The Securities Administrator, or any
successor in interest, or if any successor Group 3 Auction Administrator shall
be appointed as herein provided, then such successor Group 3 Auction
Administrator.
Group 3 Auction Date: As defined in Section 7.01(b) hereof.
39
Group 3 Auction Excess Proceeds: With respect to a Group 3 Auction
Sale, the excess of the Mortgage Loan Group 3 Auction Price paid by the Group
3 Auction Purchaser over the Minimum Bid Price.
Group 3 Auction Purchaser: As defined in Section 7.01(b) hereof. For
the avoidance of doubt, the Group 3 Auction Purchaser cannot be the Seller or
an Affiliate of the Seller.
Group 3 Auction Sale: As defined in Section 7.01(b) hereof.
Group 3 Available Distribution Amount: For any Distribution Date and
the Group 3 Certificates, the sum of the following amounts:
(1) the total amount of all cash received by or on behalf of each
Servicer with respect to the Group 3 Mortgage Loans serviced by it and
received by the Master Servicer by the related Servicer Remittance Date and
not previously distributed (including Liquidation Proceeds, Subsequent
Recoveries, condemnation proceeds and Insurance Proceeds with respect to the
Group 3 Mortgage Loans), except:
o all scheduled payments of principal and related interest
collected on the Group 3 Mortgage Loans but due on a date
after the related Due Date;
o all partial Principal Prepayments received with respect to
the Group 3 Mortgage Loans after the related Prepayment
Period, together with all related interest accrued on such
Mortgage Loans;
o all Prepayment Penalties received in connection with the
Group 3 Mortgage Loans;
o all Principal Prepayments in Full received with respect to
the Group 3 Mortgage Loans after the related Prepayment
Period, together with all related interest accrued on such
Mortgage Loans;
o Liquidation Proceeds, condemnation proceeds and Insurance
Proceeds received on such Mortgage Loans after the previous
calendar month;
o all amounts reimbursable to a Servicer pursuant to the terms
of the related Purchase and Servicing Agreement or this
Agreement, as applicable, or to the Master Servicer, the
Securities Administrator, the Trustee and/or any Custodian
pursuant to the terms of this Agreement;
o reinvestment income on the balance of funds, if any, in the
Custodial Accounts or Distribution Account; and
o any fees payable to the Servicers and the Master Servicer,
in each case with respect to the Group 3 Mortgage Loans;
(2) all Advances on the Group 3 Mortgage Loans made by each Servicer
and/or the Master Servicer for that Distribution Date;
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(3) any amounts paid as Compensating Interest with respect to the
Group 3 Mortgage Loans by each Servicer and/or the Master Servicer for that
Distribution Date; and
(4) the total amount of any cash deposited in the Distribution
Account in connection with the repurchase of any Mortgage Loans by the
Depositor, the Seller or the related Originator.
Group 3 Basic Principal Distribution Amount: For any Distribution
Date will equal the excess of the Group 3 Principal Remittance Amount over the
Group 3 Excess Subordinated Amount.
Group ▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇: With respect to any Class of
Group 3 Certificates and any Distribution Date on which the Pass-Through Rate
for that Class of Group 3 Certificates is limited to the Group 3 Net WAC
Pass-Through Rate, an amount equal to the sum of (i) the excess, if any, of
(x) the amount of interest such Class of Group 3 Certificates would have been
entitled to receive on such Distribution Date if the Group 3 Net WAC
Pass-Through Rate had not been applicable to such Class of Group 3
Certificates on such Distribution Date over (y) the amount of interest accrued
on such Distribution Date at the Group 3 Net WAC Pass-Through Rate and Group 3
Basis Risk Carry Forward Amount for the previous Distribution Date not
previously distributed together with interest thereon at a rate equal to the
related Pass-Through Rate for such Class of Group 3 Certificates for the most
recently ended Interest Accrual Period.
Group 3 Certificates: As specified in the Preliminary Statement.
Group 3 Excess Subordinated Amount: For any Distribution Date, will
equal the excess, if any, of the Group 3 Overcollateralized Amount on that
Distribution Date over (ii) the Group 3 Overcollateralization Target Amount
for such Distribution Date.
Group 3 Extra Principal Distribution Amount: For any Distribution
Date, will be the lesser of the Group 3 Net Monthly Excess Cashflow for such
Distribution Date and the Group 3 Overcollateralization Increase Amount as of
that Distribution Date.
Group 3 Interest Distribution Amount: With respect to the Group 3
Senior Certificates, the Group 3 Senior Interest Distribution Amount. With
respect to the Group 3 Subordinated Certificates, the Group 3 Subordinated
Interest Distribution Amount.
Group 3 Interest Remittance Amount: For any Distribution Date, that
portion of the Group 3 Available Distribution Amount for such Distribution
Date that represents interest received or advanced on the Group 3 Mortgage
Loans.
Group 3 Mortgage Loan Auction Price: The price, calculated as set
forth in Section 7.01(b), to be paid in connection with the purchase of the
Group 3 Mortgage Loans by the Group 3 Auction Purchaser.
Group 3 Mortgage Loans: The Mortgage Loans in Loan Group 3.
Group 3 Net Monthly Excess Cashflow: For any Distribution Date, the
excess, if any, of (x) the Available Distribution Amount for the Distribution
Date over (y) the sum for the
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Distribution Date of the aggregate of the Group 3 Interest Distribution
Amounts payable to the holders of the Group 3 Certificates, the Group 3
Principal Distribution Amount and any Net Swap Payments to the Swap
Counterparty.
Group 3 Net WAC Pass-Through Rate: For the Group 3 Certificates and
any Distribution Date, a per annum rate equal to the weighted average of the
Net Mortgage Rates of the Group 3 Mortgage Loans as of the first day of the
month preceding the month in which such Distribution Date occurs, adjusted, in
the case of the Group 3 Subordinated Certificates, to accrue on the basis of a
360-day year and the actual number of days in the related Interest Accrual
Period, except that with respect to the Group 3 Subordinated Certificates and
the November 2006 Distribution Date, the number of days in the related
Interest Accrual Period will be 25.
Group 3 Overcollateralization Increase Amount: With respect to any
Distribution Date, the amount, if any, by which the Group 3
Overcollateralization Target Amount exceeds the Group 3 Overcollateralized
Amount for such Distribution Date (calculated for this purpose only after
assuming that 100% of the Group 3 Principal Remittance Amount on such
Distribution Date has been distributed).
Group 3 Overcollateralization Release Amount: For any Distribution
Date, the lesser of (1) the Group 3 Principal Remittance Amount and (2) the
excess of (a) the Group 3 Overcollateralized Amount over (b) the Group 3
Overcollateralization Target Amount. In addition, in connection with the final
distribution on the Group 3 Certificates pursuant to Section 7.02 hereof, the
Group 3 Overcollateralization Release Amount for the related Distribution Date
shall also include the excess, if any of, (a) the purchase price paid for the
Group 3 Mortgage Loans and any REO Properties related to the Group 3 Mortgage
Loans pursuant to Section 7.01 hereof, less any costs incurred by the Trust Fund
in connection with the liquidation thereof pursuant to Section 7.02 hereof, over
(b) the amount distributed on the Group 3 Certificates on that Distribution
Date.
Group 3 Overcollateralization Target Amount: With respect to any
Distribution Date (i) prior to the related Stepdown Date, the product of (x)
1.40% and (y) the aggregate Stated Principal Balance of the Group 3 Mortgage
Loans as of the Cut-off Date, (ii) on and after the related Stepdown Date,
provided that a Trigger Event for the Group 3 Certificates is not in effect,
the lesser of (a) the product of (x) 2.80% and (y) the aggregate Stated
Principal Balance of the Group 3 Mortgage Loans as of the related Due Date and
(b) the product of (x) 1.40% and (y) the aggregate Stated Principal Balance of
the Group 3 Mortgage Loans as of the Cut-off Date and (iii) on and after the
related Stepdown Date, if a Trigger Event for the Group 3 Certificates is in
effect, the Group 3 Overcollateralization Target Amount for the immediately
preceding Distribution Date; provided, however, that on each Distribution Date
the Group 3 Overcollateralization Target Amount shall not be lower than
$829,054.
Group 3 Overcollateralized Amount: As of the Closing Date, an amount
equal to $3,316,568. With respect to any Distribution Date following the
Closing Date, the amount by which the aggregate Stated Principal Balance of
the Group 3 Mortgage Loans as of the last day of the related Due Period
exceeds the aggregate Class Principal Balance of the Offered Certificates
after taking into account all payments of principal on such Distribution Date.
42
Group 3 Principal Distribution Amount: For any Distribution Date will
be the sum of the Group 3 Basic Principal Distribution Amount and the Group 3
Extra Principal Distribution Amount, in each case for that Distribution Date
and the $100 deposited in respect of the Class A-R Certificates.
Group 3 Principal Remittance Amount: For the Certificates and any
Distribution Date, the sum of
(i) the principal portion of all Scheduled Payments on the Mortgage
Loans due during the related Due Period, whether or not received on or prior
to the related Determination Date;
(ii) the principal portion of all proceeds received in respect of the
repurchase of a Mortgage Loan (or, in the case of a substitution, certain
amounts representing a principal adjustment as required by this Agreement)
during the related Prepayment Period; and
(iii) the principal portion of all other unscheduled collections,
including Insurance Proceeds, condemnation proceeds, Liquidation Proceeds and
all partial Principal Prepayments and Principal Prepayments in full, received
during the related Prepayment Period, to the extent applied as recoveries of
principal on the Mortgage Loans, provided, that in no event will the Group 3
Principal Remittance Amount with respect to any Distribution Date be (x) less
than zero or (y) greater than the then outstanding aggregate Class Principal
Balance of the Group 3 Certificates.
Group 3 Reserve Fund: A Reserve Fund established by the Securities
Administrator on behalf of the Trustee for the benefit of the Holders of the
Group 3 Certificates and the Class 3-OC Certificates. The Group 3 Reserve Fund
is an "outside Reserve Fund" within the meaning of Treasury regulation Section
1.860G-2(h), which is not an asset of any REMIC, ownership of which is
evidenced by the Class 3-OC Certificates, and which is established and
maintained pursuant to Section 5.11.
Group 3 Senior Certificates: As specified in the Preliminary
Statement.
Group 3 Senior Enhancement Percentage: For any Distribution Date, the
percentage obtained by dividing (x) the sum of (i) the aggregate Class
Principal Balance of the Subordinated Certificates and (ii) the Group 3
Overcollateralized Amount by (y) the aggregate Stated Principal Balance of the
Group 3 Mortgage Loans as of the end of the related Due Period, calculated
after taking into account distributions of principal on the Group 3 Mortgage
Loans and distribution of the Group 3 Principal Distribution Amount other than
the $100 deposited in respect of the Class A-R Certificates to the holders of
the Group 3 Certificates then entitled to distributions of principal on such
Distribution Date.
Group 3 Senior Interest Distribution Amount: For each Class of Group
3 Senior Certificates and the Class A-R Certificates and any Distribution
Date, the interest accrued during the related Interest Accrual Period on the
related Class Principal Balance of that Class immediately prior to the
Distribution Date at the Pass-Through Rate for that Class reduced (to an
amount not less than zero), in the case of such Class, by the allocable share,
if any, for that Class of Prepayment Interest Shortfalls to the extent not
covered by Compensating Interest paid by the Master Servicer or the Servicers
and Relief Act Interest Shortfalls, together with the Interest
43
Carry Forward Amount, if any, for such Distribution Date for such Class of
Group 3 Senior Certificates.
Group 3 Senior Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the related Stepdown Date or on or after the
related Stepdown Date if a Trigger Event for the Group 3 Certificates is in
effect, the Group 3 Principal Distribution Amount or (ii) on or after the
related Stepdown Date if a Trigger Event for the Group 3 Certificates is not
in effect for that Distribution Date, the lesser of:
o the Group 3 Principal Distribution Amount for that
Distribution Date; and
o the excess (if any) of (A) the aggregate Class Principal
Balance of the Group 3 Senior Certificates immediately prior
to that Distribution Date over (B) the lesser of (i) the
aggregate Stated Principal Balance of the Group 3 Mortgage
Loans as of the last day of the related Due Period
multiplied by 85.20% and (ii) the amount, if any, by which
(x) the aggregate Stated Principal Balance of the Group 3
Mortgage Loans as of the last day of the related Due Period
exceeds (y) $829,054.
Group 3 Sequential Trigger Event: With respect to any Distribution
Date, a Group 3 Sequential Trigger Event is in effect if (a) with respect to
any Distribution Date occurring before November 2008, the circumstances in
which the aggregate amount of Realized Losses incurred since the Cut-off Date
through the last day of the related Prepayment Period divided by the aggregate
Stated Principal Balance of the Group 3 Mortgage Loans as of the Cut-off Date
exceeds 0.30% and (b) with respect to any Distribution Date occurring in or
after November 2008, a Trigger Event for the Group 3 Certificates is in
effect.
Group 3 Subordinated Certificates: As specified in the Preliminary
Statement.
Group 3 Subordinated Interest Distribution Amount: With respect to
any Class of Group 3 Subordinated Certificates and any Distribution Date,
interest accrued during the related Interest Accrual Period on the related
Class Principal Balance of that Class immediately prior to the Distribution
Date at the Pass-Through Rate for that Class reduced (to an amount not less
than zero), in the case of such Class, by the allocable share, if any, for
that Class of Prepayment Interest Shortfalls on the Group 3 Mortgage Loans to
the extent not covered by (x) Compensating Interest paid by the Master
Servicer or the Servicers for the Group 3 Mortgage Loans and (y) Relief Act
Interest Shortfalls on the Group 3 Mortgage Loans.
Hemisphere Mortgage Loan: Each Mortgage Loan originated by The
Hemisphere National Bank and listed on the Mortgage Loan Schedule.
Holder: The registered owner of any Certificate as recorded on the
books of the Certificate Registrar except that, solely for the purposes of
taking any action or giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Depositor, the Trustee, the Master
Servicer, the Securities Administrator and any Servicer, or any Affiliate
thereof shall be deemed not to be outstanding in determining whether the
requisite percentage necessary to effect any such consent has been obtained,
except that, in determining whether the Trustee or the Securities
Administrator shall be protected in relying upon any such consent, only
44
Certificates that a Responsible Officer of the Trustee or the Securities
Administrator, respectively, knows to be so owned shall be disregarded. The
Trustee or the Securities Administrator may request and conclusively rely on
certifications by the Depositor, the Master Servicer, the Securities
Administrator or any Servicer in determining whether any Certificates are
registered to an Affiliate of the Depositor, the Master Servicer, the
Securities Administrator or any Servicer.
HUD: The United States Department of Housing and Urban Development,
or any successor thereto.
Indemnifying Party: As specified in Section 12.08 hereof.
Independent: When used with respect to any Accountants, a Person who
is "independent" within the meaning of Rule 2-01(b) of the Securities and
Exchange Commission's Regulation S-X. When used with respect to any other
Person, a Person who (a) is in fact independent of another specified Person
and any Affiliate of such other Person, (b) does not have any material direct
financial interest in such other Person or any Affiliate of such other Person,
and (c) is not connected with such other Person or any Affiliate of such other
Person as an officer, employee, promoter, underwriter, trustee, partner,
director or Person performing similar functions.
Index: As to each Mortgage Loan, the index from time to time in
effect for adjustment of the Mortgage Rate as set forth as such on the related
Mortgage Note.
Initial Component Balance: As specified in the Preliminary Statement.
Initial Custodian Certification: As defined in Section 2.02.
Initial Optional Termination Date: With respect to the Aggregate
Group I Mortgage Loans, the first Distribution Date following the date on
which the aggregate Stated Principal Balance of the Aggregate Group I Mortgage
Loans is equal to or less than 10% of the aggregate Stated Principal Balance
thereof as of the Cut-off Date. With respect to the Group 3 Mortgage Loans,
the first Distribution Date following the date on which the aggregate Stated
Principal Balance of the Group 3 Mortgage Loans is equal to or less than 10%
of the aggregate Stated Principal Balance thereof as of the Cut-off Date.
Insurance Policy: With respect to any Mortgage Loan, any insurance
policy, including all names and endorsements thereto in effect, including any
replacement policy or policies for any Insurance Policies.
Insurance Proceeds: Proceeds paid by any Insurance Policy (excluding
proceeds required to be applied to the restoration and repair of the related
Mortgaged Property or released to the Mortgagor), in each case other than any
amount included in such Insurance Proceeds in respect of Insured Expenses and
the proceeds from any Limited Purpose Surety Bond.
Insured Expenses: Expenses covered by an Insurance Policy or any
other insurance policy with respect to the Mortgage Loans.
45
Interest Accrual Period: With respect to each Class of Delay
Certificates, its corresponding Subsidiary REMIC Regular Interest and any
Distribution Date, the calendar month prior to the month of such Distribution
Date. With respect to any Class of Non-Delay Certificates, its corresponding
Subsidiary REMIC Regular Interest and the Distribution Date in November 2006,
the 25 day period commencing on the Closing Date and ending on the day
immediately preceding such Distribution Date. With respect to any Class of
Non-Delay Certificates, its corresponding Subsidiary REMIC Regular Interest
and each Distribution Date following the Distribution Date in November 2006,
the one month period commencing on the Distribution Date in the calendar month
preceding the month in which such Distribution Date occurs and ending on the
day immediately preceding such Distribution Date. For purposes of computing
interest accruals on each Class of Non-Delay Certificates, each Interest
Accrual Period has the actual number of days in such month and each year is
assumed to have 360 days. For purposes of computing interest accruals on each
Class of Delay Certificates, each Interest Accrual Period has 30 days in such
month and each year is assumed to have 360 days.
Interest Carry Forward Amount: With respect to any Distribution Date
and the Aggregate Group I Certificates, the amount, if any, by which the
Aggregate Group I Interest Distribution Amount for that Class of Aggregate
Group I Certificates for the immediately preceding Distribution Date exceeds
the actual amount distributed on such Class in respect of interest on the
immediately preceding Distribution Date, together with any Interest Carry
Forward Amount with respect to such Class remaining unpaid from the previous
Distribution Date, plus interest accrued thereon at the related Pass-Through
Rate for the most recently ended Interest Accrual Period. With respect to any
Distribution Date and the Group 3 Certificates, the amount, if any, by which
the Group 3 Interest Distribution Amount for that Class of Group 3
Certificates for the immediately preceding Distribution Date exceeds the
actual amount distributed on such Class in respect of interest on the
immediately preceding Distribution Date, together with any Interest Carry
Forward Amount with respect to such Class remaining unpaid from the previous
Distribution Date, plus interest accrued thereon at the related Pass-Through
Rate for the most recently ended Interest Accrual Period.
Interest Determination Date: With respect to the Interest Accrual
Period for any Class of LIBOR Certificates, the second Business Day prior to
the first day of such Interest Accrual Period. With respect to the Interest
Accrual Period related to any Distribution Date on or after the Distribution
Date in August 2016 for any Class of Group 3 Senior Certificates, the second
Business Day prior to the first day of such Interest Accrual Period.
Interest Transfer Amount: Not applicable.
Investor Based Exemption: Any of Prohibited Transaction Class
Exemption ("PTCE") 84-14 (for transactions by independent "qualified
professional asset managers"), PTCE 90-1 (for transactions by insurance
company pooled separate accounts), PTCE 91-38 (for transactions by bank
collective investment funds), PTCE 95-60 (for transactions by insurance
company general accounts), PTCE 96-23 (for transactions effected by "in house
asset managers") the service provider exemption provided by Section 308(b)(17)
of ERISA and Section 4975(d)(20) of the Code, or any comparable exemption
available under Similar Law.
46
Last Scheduled Distribution Date: With respect to the Aggregate Group
I Certificates, the Distribution Date in November 2036. With respect to the
Group 3 Certificates, the Distribution Date in November 2036.
Latest Possible Maturity Date: With respect to the Aggregate Group I
Certificates, the Distribution Date in November 2036. With respect to the
Group 3 Certificates, the Distribution Date in November 2036.
LIBOR: The London interbank offered rate for one-month United States
dollar deposits calculated in the manner described in Section 5.09.
LIBOR Business Day: Any day on which banks in London, England and The
City of New York are open and conducting transactions in foreign currency and
exchange.
LIBOR Certificates: As specified in the Preliminary Statement.
Limited Purpose Surety Bond: Collectively, Ambac Assurance
Corporation Surety Bond No. AB0039BE and any other Limited Purpose Surety Bond
securing an Additional Collateral Mortgage Loan.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in
the calendar month preceding the month of such Distribution Date and as to
which the related Servicer has certified (in accordance with its Purchase and
Servicing Agreement) that it has received all amounts it expects to receive in
connection with the liquidation of such Mortgage Loan including the final
disposition of an REO Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds, received
in connection with the partial or complete liquidation of defaulted Mortgage
Loans, whether through trustee's sale, foreclosure sale or otherwise or
amounts received in connection with any condemnation or partial release of a
Mortgaged Property and any other proceeds received in connection with an REO
Property.
Living Holders: Not applicable.
Loan Group: Any of Loan Group 1, Loan Group 2 and Loan Group 3, as
applicable.
Loan Group 1: All Mortgage Loans identified as Group 1 Mortgage Loans
on the Mortgage Loan Schedule.
Loan Group 2: All Mortgage Loans identified as Group 2 Mortgage Loans
on the Mortgage Loan Schedule.
Loan Group 3: All Mortgage Loans identified as Group 3 Mortgage Loans
on the Mortgage Loan Schedule.
Loan-To-Value Ratio: With respect to any Mortgage Loan and as to any
date of determination, the fraction (expressed as a percentage) the numerator
of which is the principal
47
balance of the related Mortgage Loan at such date of determination and the
denominator of which is the Appraised Value of the related Mortgaged Property.
LPMI Mortgage Loan: Certain Mortgage Loans as to which the lender
(rather than the borrower) acquires the Primary Mortgage Insurance Policy and
charges the related borrower an interest premium.
Master REMIC: As described in the Preliminary Statement.
Master Servicer: ▇▇▇▇▇ Fargo Bank, National Association, a national
banking association organized under the laws of the United States in its
capacity as Master Servicer and any Person succeeding as Master Servicer
hereunder or any successor in interest, or if any successor master servicer
shall be appointed as herein provided, then such successor master servicer.
Master Servicer Compensation: With respect to any Master Servicer
that is a successor to ▇▇▇▇▇ Fargo Bank, National Association as Master
Servicer, the portion of the earnings on the funds on deposit in the
Distribution Account payable on each Distribution Date pursuant to Section
4.02(b)(ii) hereof agreed to by and between such successor Master Servicer and
the successor securities administrator; provided, that the sum of such Master
Servicer Compensation and the Securities Administrator Compensation payable on
each Distribution Date shall not exceed the total earnings on funds in the
Distribution Account payable pursuant to Section 4.02(b)(ii) hereof earned
since the prior Distribution Date.
Memorandum: Not applicable.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any
successor to Mortgage Electronic Registration Systems, Inc.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the
MERS(R) System.
MERS(R) System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The mortgage identification number for any MERS Mortgage Loan.
Minimum Aggregate Group I Auction Price: With respect to any
Distribution Date on which an Aggregate Group I Auction is being held, an
amount equal to the sum of (a) 100% of the current aggregate Stated Principal
Balance of the Aggregate Group I Mortgage Loans, plus accrued interest
thereon, (b) the fair market value of any related REO Property in the Trust
Fund and all other property in the Trust Fund being purchased, (c) any
unreimbursed Servicing Advances related to the Aggregate Group I Mortgage
Loans, (d) any expenses incurred by the Aggregate Group I Auction
Administrator in the Aggregate Group I Auction process and (e) any Swap
Termination Payment owed to the Swap Counterparty.
Minimum Group 3 Auction Price: With respect to any Distribution Date
on which a Group 3 Auction is being held, an amount equal to the sum of (a)
100% of the current aggregate
48
Stated Principal Balance of the Group 3 Mortgage Loans, plus accrued interest
thereon, (b) the fair market value of any related REO Property in the Trust
Fund and all other property in the Trust Fund being purchased, (c) any
unreimbursed Servicing Advances related to the Group 3 Mortgage Loans and (d)
any expenses incurred by the Group 3 Auction Administrator in the Group 3
Auction process.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., or any successor thereto.
If ▇▇▇▇▇'▇ is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 11.07 the address for notices to Moody's shall be ▇▇▇▇▇'▇
Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Residential Pass-Through Monitoring, or such other address as
Moody's may hereafter furnish to the Depositor or the Master Servicer.
Mortgage: A mortgage, deed of trust or other instrument encumbering a
fee simple interest in real property securing a Mortgage Note, together with
improvements thereto.
Mortgage Documents: With respect to each Mortgage Loan, the mortgage
documents required to be delivered to the Custodian.
Mortgage Loan: A Mortgage and the related notes or other evidences of
indebtedness secured by each such Mortgage conveyed, transferred, sold,
assigned to or deposited with the Trustee pursuant to Section 2.01 (including
any REO Property), including without limitation, each Mortgage Loan listed on
the Mortgage Loan Schedule, as amended from time to time.
Mortgage Loan Schedule: The schedule attached hereto as Schedule A,
which shall identify each Mortgage Loan, as such schedule may be amended by
the Depositor or a Servicer from time to time to reflect the addition of
Replacement Mortgage Loans to, or the deletion of Deleted Mortgage Loans from,
the Trust Fund. Such schedule shall, among other things (i) designate the
Servicer servicing such Mortgage Loan and the applicable Servicing Fee Rate;
(ii) identify the designated Loan Group in which such Mortgage Loan is
included, (iii) identify any LPMI Mortgage Loan and designate the rate at
which the premium for such insurance is calculated and (iv) separately
identify the Additional Collateral Mortgage Loans, if any.
Mortgage Note: The original executed note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage under a Mortgage Loan.
Mortgage Rate: As to any Mortgage Loan, the annual rate of interest
borne by the related Mortgage Notes.
Mortgaged Property: The underlying property, including any Additional
Collateral, securing a Mortgage Loan which, with respect to a Cooperative
Loan, is the related Cooperative Shares and Proprietary Lease.
MortgageIT Mortgage Loan: Each Mortgage Loan originated by
MortgageIT, Inc. and listed on the Mortgage Loan Schedule.
49
MortgageIT Purchase Agreement: The Mortgage Loan Purchase Agreement
listed in Exhibit E hereto between the Seller and MortgageIT, Inc.
Mortgagor: The obligor on a Mortgage Note.
MSMCI Mortgage Loan: A Mortgage Loan sold by the Seller to the
Depositor pursuant to the MSMCI Purchase Agreement.
MSMCI Purchase Agreement: The Mortgage Loan Purchase Agreement listed
in Exhibit E hereto between the Seller and the Depositor.
Net Liquidation Proceeds: With respect to any Liquidated Mortgage
Loan or any other disposition of related Mortgaged Property, the related
Liquidation Proceeds net of Advances, Servicer Advances, Servicing Fees and
any other accrued and unpaid servicing fees received and retained in
connection with the liquidation of such Mortgage Loan or Mortgaged Property.
Net Mortgage Rate: With respect to any Mortgage Loan and any
Distribution Date, the related Mortgage Rate as of the Due Date in the month
preceding the month of such Distribution Date reduced by the Aggregate Expense
Rate for such Mortgage Loan.
Net Prepayment Interest Shortfalls: As to any Distribution Date and
Aggregate Loan Group, the amount by which the aggregate of Prepayment Interest
Shortfalls for that Aggregate Loan Group exceeds the Compensating Interest
Payments for that Aggregate Loan Group for that Distribution Date (and any
amounts paid by the Master Servicer in respect of such shortfalls pursuant to
Section 5.06). Each Class' pro rata share of the Net Interest Shortfalls on
the Mortgage Loans in the related Aggregate Loan Group shall be based on the
amount of interest the Class otherwise would have been entitled to receive on
such Distribution Date.
Net Swap Payment: With respect to any Distribution Date and payment
paid by the Supplemental Interest Trust to the Swap Counterparty, the excess,
if any, of the "Fixed Amount" (as defined in the Swap Agreement) with respect
to such Distribution Date over the "Floating Amount" (as defined in the Swap
Agreement) with respect to such Distribution Date. For the avoidance of doubt,
Net Swap Payments do not include Swap Termination Payments.
Net Swap Receipt: With respect to any Distribution Date and payment
by the Swap Counterparty to the Supplemental Interest Trust, the excess, if
any, of the "Floating Amount" (as defined in the Swap Agreement) with respect
to such Distribution Date over the "Fixed Amount" (as defined in the Swap
Agreement) with respect to such Distribution Date.
Net WAC Pass-Through Rate: For any Distribution Date and (a) the
Group 1 Senior Certificates, the Group 1 Senior WAC Pass-Through Rate, (b) the
Group 2 Senior Certificates, the Group 2 Senior WAC Pass-Through Rate, (c) the
Aggregate Group I Subordinated Certificates, the Aggregate Group I Net WAC
Pas-Through Rate, and (d) the Group 3 Certificates, the Group 3 Net WAC
Pass-Through Rate, as the context requires.
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
Certificate.
Non-Delay Certificates: As specified in the Preliminary Statement.
50
Non-permitted Foreign Holder: As defined in Section 3.03(f).
Nonrecoverable Advance: Any portion of an Advance or Servicer Advance
previously made or proposed to be made by the Master Servicer and/or a
Servicer (as certified in an Officer's Certificate of such Servicer), which in
the good faith judgment of such party, shall not be ultimately recoverable by
such party from the related Mortgagor, related Liquidation Proceeds or
otherwise.
Non-U.S. Person: Any person other than a "United States person"
within the meaning of Section 7701(a)(30) of the Code.
Notional Amount: Not Applicable.
Notional Amount Certificates: Not Applicable.
Offered Certificates: As specified in the Preliminary Statement.
Offering Document: The Prospectus or the Memorandum, as applicable.
Officer's Certificate: A certificate signed by two Authorized
Officers of the Depositor or the Chairman of the Board, any Vice Chairman, the
President, any Vice President or any Assistant Vice President of the Master
Servicer or the Securities Administrator or in the case of any other Person,
signed by an authorized officer of such Person, and in each case delivered to
the Trustee or the Securities Administrator, as applicable signed by an
authorized officer of that Person.
Officer's Certificate of a Servicer: A certificate (i) signed by the
Chairman of the Board, the Vice Chairman of the Board, the President, a
Managing Director, a Vice President (however denominated), an Assistant Vice
President, the Treasurer, the Secretary, or one of the Assistant Treasurers or
Assistant Secretaries of a Servicer, or (ii) if provided for herein, signed by
a Servicing Officer, as the case may be, and delivered to the Trustee, the
Securities Administrator or the Master Servicer, as required hereby.
Opinion of Counsel: A written opinion of counsel, reasonably
acceptable in form and substance to the Trustee, the Securities Administrator
or the Master Servicer, as required hereby, and who may be in-house or outside
counsel to the Depositor, the Master Servicer, the Securities Administrator or
the Trustee but which must be Independent outside counsel with respect to any
such opinion of counsel concerning the transfer of any Residual Certificate or
concerning certain matters with respect to ERISA, or the taxation, or the
federal income tax status, of each REMIC.
Original Applicable Credit Support Percentage: Not applicable.
Originator: Any one of American Home Mortgage Corporation or
MortgageIT, Inc., as applicable.
Pass-Through Margin: For each Class of Aggregate Group I Certificates
and the Interest Accrual Period related to each Distribution Date, as follows:
51
(1) (2) (3)
------ ------ -------
Class 1-A 0.170% 0.340% 5.4900%
Class 2-A-1 0.080% 0.160% 5.4000%
Class 2-A-2 0.170% 0.340% 5.4900%
Class 2-A-3 0.250% 0.500% 5.5700%
Class 2-A-4 0.250% 0.500% 5.5700%
Class M-1 0.310% 0.465% 5.6300%
Class M-2 0.320% 0.480% 5.6400%
Class M-3 0.340% 0.510% 5.6600%
Class M-4 0.400% 0.600% 5.7200%
Class M-5 0.420% 0.630% 5.7400%
Class M-6 0.480% 0.720% 5.8000%
Class B-1 0.850% 1.275% 6.1700%
Class B-2 1.100% 1.650% 6.4200%
Class B-3 1.950% 2.925% (4)
----------
(1) For the Interest Accrual Period for each Distribution Date occurring
on or prior to the related Initial Optional Termination Date.
(2) For each Interest Accrual Period following the Initial Optional
Termination Date relating to the Aggregate Group I Certificates.
(3) The Pass-Through Rate for each Class of Aggregate Group I
Certificates during the Interest Accrual Period related to the first
Distribution Date.
(4) The Pass-Through Rate for the Class B-3 Certificates for the Interest
Accrual Period related to the first Distribution Date is limited by
the Aggregate Group I Subordinated Net WAC Pass-Through Rate of
7.0653% per annum.
For each Class of Group 3 Senior Certificates and the Interest
Accrual Period related to each Distribution Date, as follows:
(1) (2) (3)
------ ------------------------ ------
Class 3-A-1 5.750% Six-Month LIBOR + 1.250% 5.750%
Class 3-A-2 6.000% Six-Month LIBOR + 1.250% 6.000%
----------
(1) For the Interest Accrual Period for each Distribution Date occurring
on or prior to the Distribution Date in July 2016.
(2) For the Interest Accrual Period for each Distribution Date occurring
on or after the Distribution Date in August 2016.
(3) The Pass-Through Rate for each Class of Group 3 Senior Certificates
during the Interest Accrual Period related to the first Distribution
Date.
For each Class of Group 3 Subordinated Certificates and the Interest
Accrual Period related to each Distribution Date, as follows:
52
(1) (2) (3)
------ ------ -------
Class 3-M-1 0.340% 0.510% 5.6600%
Class 3-M-2 0.450% 0.675% 5.7700%
Class 3-B-1 1.200% 1.800% 6.5200%
Class 3-B-2 1.500% 2.250% (4)
----------
(1) For the Interest Accrual Period for each Distribution Date occurring
on or prior to the related Initial Optional Termination Date.
(2) For each Interest Accrual Period following the Initial Optional
Termination Date relating to the Group 3 Certificates.
(3) The Pass-Through Rate for each Class of Group 3 Certificates during
the Interest Accrual Period related to the first Distribution Date.
(4) The Pass-Through Rate for the Class 3-B-2 Certificates for the
Interest Accrual Period related to the first Distribution Date is
limited by the Group 3 Net WAC Pass-Through Rate of 6.8137% per
annum.
Pass-Through Rate: For any interest bearing Class of Certificates or
Component, the per annum rate set forth or calculated in the manner described
in the Preliminary Statement.
Paying Agent: Any paying agent appointed pursuant to Section 3.08.
The initial Paying Agent shall be the Securities Administrator under this
Agreement.
PCOAB: The Public Company Accounting Oversight Board.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the initial principal balance or notional
amount, as applicable, of such Certificate by the aggregate of the Class
Principal Balance or Notional Amount, as applicable, of all Certificates of
the same Class.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof,
provided that such obligations are backed by the full faith and
credit of the United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency, or such lower
rating as shall not result in the downgrading or withdrawal of the
ratings then assigned to the Certificates by the Rating Agencies, as
evidenced by a signed writing delivered by each Rating Agency;
(iii) commercial or finance company paper which is then
receiving the highest commercial or finance company paper rating of
each Rating Agency rating such paper, or such lower rating as shall
not result in the downgrading or withdrawal of the ratings then
53
assigned to the Certificates by the Rating Agencies, as evidenced by
a signed writing delivered by each Rating Agency;
(iv) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or trust
company incorporated under the laws of the United States or of any
state thereof and subject to supervision and examination by federal
and/or state banking authorities, provided that the commercial paper
and/or long-term unsecured debt obligations of such depository
institution or trust company (or in the case of the principal
depository institution in a holding company system, the commercial
paper or long-term unsecured debt obligations of such holding
company, but only if ▇▇▇▇▇'▇ is not the applicable Rating Agency) are
then rated one of the two highest long-term and the highest
short-term ratings of each Rating Agency for such securities, or such
lower ratings as shall not result in the downgrading or withdrawal of
the ratings then assigned to the Certificates by the Rating Agencies,
as evidenced by a signed writing delivered by each Rating Agency;
(v) demand or time deposits or certificates of deposit
issued by any bank or trust company or savings institution to the
extent that such deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation acceptable to the Rating
Agencies at the time of the issuance of such agreements, as evidenced
by a signed writing delivered by each Rating Agency;
(vii) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered into
with a depository institution or trust company (acting as principal)
described in clause (iv) above;
(viii) securities (other than stripped bonds, stripped
coupons or instruments sold at a purchase price in excess of 115% of
the face amount thereof) bearing interest or sold at a discount
issued by any corporation incorporated under the laws of the United
States or any state thereof which, at the time of such investment,
have one of the two highest ratings of each Rating Agency (except if
the Rating Agency is Moody's, such rating shall be the highest
commercial paper rating of Moody's for any such series), or such
lower rating as shall not result in the downgrading or withdrawal of
the ratings then assigned to the Certificates by the Rating Agencies,
as evidenced by a signed writing delivered by each Rating Agency;
(ix) interests in any money market fund which at the date of
acquisition of the interests in such fund and throughout the time
such interests are held in such fund has the highest applicable
rating by each Rating Agency rating such fund or such lower rating as
shall not result in a change in the rating then assigned to the
Certificates by each Rating Agency, as evidenced by a signed writing
delivered by each Rating Agency, including funds for which the
Trustee, the Master Servicer, the Securities Administrator or any of
its Affiliates is investment manager or adviser;
54
(x) short-term investment funds sponsored by any trust
company or national banking association incorporated under the laws
of the United States or any state thereof which on the date of
acquisition has been rated by each applicable Rating Agency in their
respective highest applicable rating category or such lower rating as
shall not result in a change in the rating then specified stated
maturity and bearing interest or sold at a discount acceptable to
each Rating Agency as shall not result in the downgrading or
withdrawal of the ratings then assigned to the Certificates by the
Rating Agencies, as evidenced by a signed writing delivered by each
Rating Agency; and
(xi) such other investments having a specified stated
maturity and bearing interest or sold at a discount acceptable to the
Rating Agencies as shall not result in the downgrading or withdrawal
of the ratings then assigned to the Certificates by the Rating
Agencies, as evidenced by a signed writing delivered by each Rating
Agency;
provided, that no such instrument shall be a Permitted Investment if (i) such
instrument evidences the right to receive interest only payments with respect
to the obligations underlying such instrument or (ii) such instrument would
require the Depositor to register as an investment company under the
Investment Company Act of 1940, as amended.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Plan: Any employee benefit plan or other plan or arrangement subject
to Section 406 of ERISA or Section 4975 of the Code, including individual
retirement accounts and annuities, ▇▇▇▇▇ plans and collective investment funds
and separate accounts in which such plans, accounts or arrangements are
invested.
Plan Asset Regulations: The Department of Labor regulations set forth
in 29 C.F.R. ss.2510.3-101.
Planned Balance: With respect to any group of Planned Principal
Classes or Components in the aggregate and any Distribution Date appearing in
Schedule B hereto, the Aggregate Planned Balance for such group and
Distribution Date. With respect to any other Planned Principal Class or
Component and any Distribution Date appearing in Schedule B hereto, the
applicable amount appearing opposite such Distribution Date for such Class or
Component.
Planned Principal Classes: As specified in the Preliminary Statement.
Prepayment Interest Shortfall: With respect to each Mortgage Loan,
the amount of the shortfall in interest payable on such Mortgage Loan that
occurs as a result of the prepayment by the related Mortgagor of such Mortgage
Loan calculated in accordance with formula set forth in the related Purchase
and Servicing Agreement.
Prepayment Penalty: As to a Mortgage Loan, any penalty payable by a
Mortgagor in connection with certain partial prepayments and all prepayments
in full made within the related Prepayment Penalty Period, the Prepayment
Penalties with respect to each applicable Mortgage Loan so held by the Trust
Fund being identified in the Prepayment Penalty Schedule.
55
Prepayment Penalty Period: As to any Mortgage Loan, the period of
time during which a Prepayment Penalty may be imposed.
Prepayment Penalty Schedule: As of any date, the list of Prepayment
Penalties included in the Trust Fund on that date (including the Prepayment
Penalty summary attached thereto). The Prepayment Penalty Schedule shall set
forth, by Loan Group, the following information with respect to each
Prepayment Penalty:
o the Mortgage Loan account number;
o a code indicating the type of Prepayment Penalty;
o the state of origination in which the related Mortgage
Property is located;
o the first date on which a monthly payment is or was due
under the related Mortgage Note;
o the term of the Prepayment Penalty;
o the original principal amount of the related Mortgage Loan;
and
o the Cut-off Date Principal Balance of the related Mortgage
Loan.
The Prepayment Penalty Schedule shall be amended from time to time by
the Seller in accordance with this Agreement.
Prepayment Period: With respect to any Mortgage Loan and any
Distribution Date, the calendar month preceding that Distribution Date.
Prepayment Shift Percentage: Not applicable.
Primary Mortgage Insurance Policy: Each policy of primary mortgage
guaranty insurance or any replacement policy therefor with respect to any
Mortgage Loan.
Principal Prepayment: Any payment of principal by a Mortgagor on a
Mortgage Loan that is received in advance of its scheduled Due Date and is not
accompanied by an amount representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Reductions: Not applicable.
Priority Amount: Not applicable.
Priority Percentage: Not applicable.
56
Private Certificate: As specified in the Preliminary Statement.
Pro Rata Portion: With respect to any Class of Group 2 Senior
Certificates and any Distribution Date will be equal to the product of (x) a
fraction, the numerator of which is the Class Principal Balance of that class
of Group 2 Senior Certificates immediately prior to that Distribution Date,
and the denominator of which is equal to the aggregate Class Principal Balance
of the Group 2 Senior Certificates immediately prior to that Distribution
Date, and (y) the Group 2 Senior Principal Allocation Amount payable to all of
the classes of Group 2 Senior Certificates on that Distribution Date.
Pro Rata Share: Not applicable.
Pro Rata Subordinated Percentage: Not applicable.
Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
Proprietary Lease: With respect to any Cooperative Property, a lease
or occupancy agreement between a Cooperative Corporation and a holder of
related Cooperative Shares.
Prospectus: The prospectus supplement dated October 26, 2006,
together with the accompanying prospectus dated March 14, 2006, relating to
the Offered Certificates.
Purchase and Servicing Agreements: Collectively, the mortgage loan
purchase and servicing agreements, each as amended by the related
Acknowledgement, listed in Exhibit E hereto, as each such agreement may be
amended or supplemented from time to time as permitted hereunder.
Purchase Date: As defined in Section 7.01(c).
Purchase Price: With respect to any Mortgage Loan required or
permitted to be purchased by the Seller or Depositor pursuant to this
Agreement, or by the related Originator or Servicer pursuant to the related
Purchase and Servicing Agreement, an amount equal to the sum of (i) 100% of
the unpaid principal balance of the Mortgage Loan on the date of such purchase
and (ii) accrued interest thereon at the applicable Net Mortgage Rate from the
date through which interest was last paid by the Mortgagor to the Due Date in
the month in which the Purchase Price is to be distributed to
Certificateholders, or such other amount as may be specified in the related
Purchase and Servicing Agreement and (iii) costs and damages incurred by the
Trust Fund in connection with a repurchase pursuant to Section 2.05 hereof
that arises out of a violation of any predatory or abusive lending law with
respect to the related Mortgage Loan.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If any such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee.
References herein to a given rating category of a Rating Agency shall mean
such rating category without giving effect to any modifiers.
57
Realized Loss: With respect to each Liquidated Mortgage Loan, an
amount (not less than zero or more than the Stated Principal Balance of the
related Mortgage Loan) as of the date of such liquidation, equal to (i) the
Stated Principal Balance of the Liquidated Mortgage Loan as of the date of
such liquidation, plus (ii) interest at the Net Mortgage Rate from the Due
Date as to which interest was last paid or advanced (and not reimbursed) to
Certificateholders up to the Due Date in the month in which Liquidation
Proceeds are required to be distributed on the Stated Principal Balance of
such Liquidated Mortgage Loan from time to time, minus (iii) the Liquidation
Proceeds, if any, received during the month in which such liquidation
occurred, to the extent applied as recoveries of interest at the Net Mortgage
Rate and to principal of the Liquidated Mortgage Loan. With respect to each
Mortgage Loan which has become the subject of a Deficient Valuation, if the
principal amount due under the related Mortgage Note has been reduced, the
difference between the principal balance of the Mortgage Loan outstanding
immediately prior to such Deficient Valuation and the principal balance of the
Mortgage Loan as reduced by the Deficient Valuation. With respect to each
Mortgage Loan which has become the subject of a Debt Service Reduction and any
Distribution Date, the amount, if any, by which the principal portion of the
related Scheduled Payment has been reduced.
To the extent the Master Servicer or a Servicer receives Subsequent
Recoveries with respect to any Mortgage Loan, the amount of the Realized Loss
with respect to that Mortgage Loan will be reduced by such Subsequent
Recoveries.
Recognition Agreement: An agreement among a Cooperative Corporation,
a lender and a Mortgagor with respect to a Cooperative Loan whereby such
parties (i) acknowledge that such lender may make, or intends to make, such
Cooperative Loan, and (ii) make certain agreements with respect to such
Cooperative Loan.
Record Date: As to any Distribution Date (i) with respect to the
Non-Delay Certificates, the last Business Day preceding such Distribution Date
(or the Closing Date, in the case of the first Distribution Date) unless such
Certificates shall no longer be Book-Entry Certificates, in which case the
Record Date shall be the last Business Day of the month preceding the month of
such Distribution Date and (ii) in the case of the Delay Certificates
(including the Non-Delay Certificates that are subsequently reissued as
Definitive Certificates), the last Business Day of the month preceding the
month of each Distribution Date.
Redemption Price: With respect to the Aggregate Group I Certificates
and any Distribution Date, the sum of (a) 100% of the aggregate Stated Principal
Balance of the Aggregate Group I Mortgage Loans as of the related Due Date
(after giving effect to Principal Prepayments received in the related Prepayment
Period), (b) the fair market value of any related REO Property, (c) all amounts
(including, without limitation, all previously unreimbursed Advances and
Servicer Advances and accrued and unpaid Servicing Fees) payable or
reimbursable to the Trustee, the Securities Administrator, the Master Servicer,
the Servicers or the Custodian pursuant to this Agreement, the Purchase and
Servicing Agreements, or the Custodial Agreements (to the extent such amounts
are not paid to the Custodian by the Seller) related to the Aggregate Group I
Mortgage Loans and (d) any Swap Termination Payment owed to the Swap
Counterparty. With respect to the Group 3 Certificates and any Distribution
Date, the sum of (a) 100% of the aggregate Stated Principal Balance of the Group
3 Mortgage Loans as of the related Due Date (after giving effect to Principal
Prepayments received in the related Prepayment
58
Period), (b) the fair market value of any related REO Property and (c) all
amounts (including, without limitation, all previously unreimbursed Advances and
Servicer Advances and accrued and unpaid Servicing Fees ) payable or
reimbursable to the Trustee, the Securities Administrator, the Master Servicer,
the Servicers or the Custodian pursuant to this Agreement, the Purchase and
Servicing Agreements, or the Custodial Agreements (to the extent such amounts
are not paid to the Custodian by the Seller) related to the Group 3 Mortgage
Loans.
Refinancing Mortgage Loan: Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.
Regular Certificates: As specified in the Preliminary Statement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005))
or by the staff of the Commission, or as may be provided by the Commission or
its staff from time to time.
Relevant Servicing Criteria: The Servicing Criteria applicable to the
various parties, as set forth on Exhibit O attached hereto. For clarification
purposes, multiple parties can have responsibility for the same Relevant
Servicing Criteria. With respect to a Servicing Function Participant engaged
by the Master Servicer, the Securities Administrator, any Servicer or any
Custodian, the term "Relevant Servicing Criteria" may refer to a portion of
the Relevant Servicing Criteria applicable to such parties.
Relief Act: The Servicemembers' Civil Relief Act (formerly known as
the Soldiers' and Sailors' Civil Relief Act of 1940), as amended, and any
similar state laws.
Relief Act Interest Shortfalls: With respect to any Distribution Date
and any Mortgage Loan as to which there has been a reduction in the amount of
interest collectible thereon for the most recently ended calendar month as a
result of the application of the Relief Act, the amount, if any, by which (i)
interest collectible on such Mortgage Loan for the most recently ended
calendar month is less than (ii) interest accrued thereon for such month
pursuant to the Mortgage Note.
Relief Act Reduction: A reduction in the amount of the monthly
interest payment on a Mortgage Loan pursuant to the Servicemembers' Civil
Relief Act.
REMIC: Each pool of assets in the Trust Fund designated as a REMIC as
described in the Preliminary Statement.
REMIC 1: As specified in the Preliminary Statement.
REMIC 1 Interest: As specified in the Preliminary Statement.
REMIC 1 Regular Interest: As specified in the Preliminary Statement.
59
REMIC 2: As specified in the Preliminary Statement.
REMIC 2 Interest: As specified in the Preliminary Statement.
REMIC 2 Regular Interest: As specified in the Preliminary Statement.
REMIC Provisions: The provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G of the Code, and related provisions, and regulations,
including proposed regulations and rulings, and administrative pronouncements
promulgated thereunder, as the foregoing may be in effect from time to time.
REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan or otherwise treated as having been acquired pursuant to the
REMIC Provisions.
Replacement Mortgage Loan: A mortgage loan substituted by an
Originator or the Seller for a Deleted Mortgage Loan which must, on the date
of such substitution, as confirmed in a Request for Release, (i) have a Stated
Principal Balance, after deduction of all Scheduled Payments due in the month
of substitution, not in excess of the Stated Principal Balance of the Deleted
Mortgage Loan, (ii) if such Mortgage Loan is a fixed-rate Mortgage Loan, have
a Mortgage Rate not less than (and not more than two percentage points greater
than) the mortgage rate of the Deleted Mortgage Loan, (iii) if such Mortgage
Loan is an adjustable-rate Mortgage Loan, have a Mortgage Rate not less than
(and not more than two percentage points greater than) the mortgage rate of
the Deleted Mortgage Loan, (iv) have a Loan-to-Value Ratio equal to or less
than that of the Deleted Mortgage Loan, (v) have a remaining term to maturity
not greater than (and not more than one year less than) that of the Deleted
Mortgage Loan, (vi) is otherwise acceptable to the Seller, (vii) if such
Mortgage Loan is an adjustable-rate Mortgage Loan, have the same adjustment
date as that of the Deleted Mortgage Loan, (viii) if such Mortgage Loan is an
adjustable-rate Mortgage Loan, have a minimum Mortgage Rate not less than that
of the Deleted Mortgage Loan, (ix) if such Mortgage Loan is an adjustable-rate
Mortgage Loan, have the same Index as that of the Deleted Mortgage Loan, (x)
comply with all of the representations and warranties set forth in the related
underlying servicing agreement, as modified by any related assignment thereof,
and (xi) shall be accompanied by an Opinion of Counsel that such Replacement
Mortgage Loan would not adversely affect the REMIC status of any REMIC created
hereunder or would not otherwise be prohibited by this Pooling and Servicing
Agreement.
Replacement Swap Counterparty Payment: With respect to the Swap
Agreement, any payments that have been received by the Trust as a result of
entering into a replacement interest rate swap agreement following an
Additional Termination Event described in Part 1(h)(ii) of the Swap Agreement.
Reportable Event: As defined in Section 12.03 hereof.
Reporting Party: The Depositor, any Originator, the Master Servicer,
any Custodian, any Servicer, any originator identified in the Prospectus
Supplement, the Swap Counterparty, any credit enhancement provider described
herein and any other material transaction party as may be
60
mutually agreed between the Depositor and the Master Servicer from time to
time for the purpose of complying with the requirements of the Commission.
Reporting Subcontractor: With respect to the Master Servicer, the
Securities Administrator or any Custodian, any Subcontractor determined by
such Person pursuant to Section 12.08(b) to be "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB. References to a
Reporting Subcontractor shall refer only to the Subcontractor of such Person
and shall not refer to Subcontractors generally.
Repurchase Price: With respect to any Mortgage Loan purchased from
the Trust pursuant to Section 2.07 hereof, 100% of the unpaid principal
balance of such Mortgage Loan, plus all related accrued and unpaid interest,
and the amount of any unreimbursed Servicing Advances made by the Servicers or
the Master Servicer related to the Mortgage Loan.
Request for Release: The Request for Release submitted by the
applicable Servicer to the Trustee or the applicable Custodian, as applicable,
substantially in the form of Exhibit M or the equivalent form under the
applicable Custodial Agreement.
Required Distributions: Not applicable.
Reserve Fund: The Group 3 Reserve Fund.
Reserve Fund Deposit: With respect to the Group 3 Reserve Fund,
$1,000.
Residual Certificate: The Class A-R Certificates.
Responsible Officer: With respect to the Trustee, any officer in the
corporate trust department or similar group of the Trustee with direct
responsibility for the administration of this Agreement and also, with respect
to a particular corporate trust matter, any other officer to whom such matter
is referred because of his or her knowledge of and familiarity with the
particular subject. With respect to the Master Servicer, any officer in its
master servicing operations with direct responsibility for the Administration
of this Agreement. With respect to the Securities Administrator, any officer
in the corporate trust department or similar group of the Securities
Administrator with direct responsibility for the administration of this
Agreement and also, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his or her knowledge
of and familiarity with the particular subject.
Restricted Classes: As defined in Section 5.02(e).
Restricted Global Security: As defined in Section 3.01(c).
Rule 144A: Rule 144A under the Securities Act.
S&P: Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
If S&P is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 11.07 the address for notices to S&P shall be Standard &
Poor's, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Mortgage
Surveillance Monitoring, or such other address as S&P may hereafter furnish to
the Depositor and the Master Servicer.
SAIF: The Saving's Association Insurance Fund, or any successor
thereto.
61
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act: The ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and
regulations of the Commission promulgated thereunder (including any
interpretations thereof by the Commission's staff).
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification: A written certification covering the
activities of all Servicing Function Participants and signed by a senior
officer of the Master Servicer in charge of the master servicing function that
complies with (i) the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as amended from time to
time, and (ii) Exchange Act Rules 13a-14(d) and 15d-14(d), as in effect from
time to time.
Scheduled Aggregate Group I Principal Distribution Amount: Not
applicable.
Scheduled Balances: Not applicable.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage
Loan which, unless otherwise specified in the related Purchase and Servicing
Agreement, shall give effect to any related Debt Service Reduction and any
Deficient Valuation that affects the amount of the monthly payment due on such
Mortgage Loan.
Scheduled Principal Classes: As specified in the Preliminary
Statement.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations thereunder.
Securities Administrator: ▇▇▇▇▇ Fargo Bank, National Association, not
in its individual capacity but solely as Securities Administrator, or any
successor in interest, or if any successor Securities Administrator shall be
appointed as herein provided, then such successor Securities Administrator.
Securities Administrator Compensation: With respect to any Securities
Administrator that is a successor to ▇▇▇▇▇ Fargo Bank, National Association as
Securities Administrator, the portion of the earnings on the funds on deposit
in the Distribution Account payable on each Distribution Date pursuant to
Section 4.02(b)(ii) hereof agreed to by and between such Securities
Administrator and the successor master servicer; provided, that (x) such
Securities Administrator Compensation payable on each Distribution Date shall
equal at least one day's earnings accrued since the prior Distribution Date
and (y) the sum of such Securities Administrator Compensation and the Master
Servicer Compensation payable on each Distribution Date shall not exceed the
total earnings on the funds on deposit in the Distribution Account payable on
each Distribution Date pursuant to Section 4.02(b)(ii) hereof earned since the
prior Distribution Date.
Seller: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., a New York corporation.
Senior Certificates: As specified in the Preliminary Statement.
Senior Credit Support Depletion Date: Not Applicable.
62
Senior Defaulted Swap Termination Payment: The lesser of (i) any
Replacement Swap Counterparty Payment, and (ii) any Swap Termination Payment
owed to the Swap Counterparty.
Servicer: Each Servicer under a Purchase and Servicing Agreement, and
its respective successors and assigns. As of the Closing Date, the Servicer of
the Mortgage Loans shall be GMAC Mortgage, LLC, as successor in interest to
GMAC Mortgage Corporation.
Servicer Advance: A "Servicer Advance" or "Servicing Advance" as
defined in the applicable Purchase and Servicing Agreement.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as the same may be amended from time to time.
Servicing Fee: As to any Distribution Date and each Mortgage Loan, an
amount equal to the product of (a) one-twelfth of the related Servicing Fee
Rate and (b) the Stated Principal Balance of such Mortgage Loan as of the
first day of the related Due Period.
Servicing Fee Rate: With respect to each Mortgage Loan and any
Distribution Date, the per annum rate specified in the related Purchase and
Servicing Agreement.
Servicing Function Participant: Any Sub-Servicer, Subcontractor or
any other Person, other than each Servicer, the Master Servicer, the Trustee,
the Securities Administrator and any Custodian, that is performing activities
addressed by the Servicing Criteria.
Servicing Officer: Any officer of the related Servicer involved in,
or responsible for, the administration and servicing of the related Mortgage
Loans whose name and facsimile signature appear on a list of servicing
officers furnished to the Master Servicer by the related Servicer on the
Closing Date pursuant to the related Purchase and Servicing Agreement, as such
list may from time to time be amended.
Shift Percentage: Not applicable.
Similar Law: As defined in Section 3.03(d) hereof.
Six-Month LIBOR: The London interbank offered rate for six-month
United States dollar deposits calculated in the manner described in Section
5.09.
Startup Day: The day designated as such pursuant to Section 10.01(b)
hereof.
Stated Principal Balance: As to any Mortgage Loan and Due Date, the
unpaid principal balance of such Mortgage Loan as of such Due Date as
specified in the amortization schedule at the time relating thereto (before
any adjustment to such amortization schedule by reason of any moratorium or
similar waiver or grace period) after giving effect to any previous partial
Principal Prepayments and Liquidation Proceeds allocable to principal (other
than with respect to any Liquidated Mortgage Loan) and to the payment of
principal due on such Due Date and irrespective of any delinquency in payment
by the related Mortgagor.
Stepdown Date: With respect to the Aggregate Group I Certificates,
the later to occur of:
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(1) the earlier to occur of
(x) the Distribution Date in November 2009, and
(y) the Distribution Date on which the aggregate Class
Principal Balance of the Aggregate Group I Senior Certificates is
reduced to zero; and
(2) the first Distribution Date on which the Aggregate Group I Senior
Enhancement Percentage (calculated for this purpose only after taking into
account distributions of principal on the Aggregate Group I Mortgage Loans,
but prior to any distribution of the Aggregate Group I Principal Distribution
Amount or any Net Swap Receipts to the holders of the Aggregate Group I
Certificates on the Distribution Date) is greater than or equal to 13.50%.
With respect to the Group 3 Certificates, the later to occur of:
(1) the earlier to occur of
(x) the Distribution Date in November 2009, and
(y) the Distribution Date on which the aggregate Class
Principal Balance of the Group 3 Senior Certificates is reduced to
zero; and
(2) the first Distribution Date on which the Group 3 Senior
Enhancement Percentage (calculated for this purpose only after taking into
account distributions of principal on the Group 3 Mortgage Loans, but prior to
any distribution of the Group 3 Principal Distribution Amount on the
Distribution Date) is greater than or equal to 14.80%.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood
by participants in the mortgage-backed securities market) of Mortgage Loans
but performs one or more discrete functions identified in Item 1122(d) of
Regulation AB with respect to Mortgage Loans under the direction or authority
of any Servicer (including a Sub-Servicer of any Servicer), the Securities
Administrator, the Master Servicer, the Trustee or any Custodian, as the case
may be.
Subordinated Certificates: As specified in the Preliminary Statement.
Subsequent Recoveries: As to any Distribution Date, with respect to a
Liquidated Mortgage Loan that resulted in a Realized Loss in a prior calendar
month, amounts received by the Securities Administrator from the related
Servicer (net of any related expenses permitted to be reimbursed pursuant to
Section 4.02) specifically related to such Liquidated Mortgage Loan.
Sub-Servicer: Any Person that (i) is considered to be a Servicing
Function Participant, (ii) services Mortgage Loans on behalf of any Servicer,
and (iii) is responsible for the performance (whether directly or through
sub-servicers or Subcontractors) of Servicing functions required to be
performed under this Agreement, any related Servicing Agreement or any
sub-servicing agreement that are identified in Item 1122(d) of Regulation AB.
Substitution Adjustment Amount: As defined in the second paragraph of
Section 2.05(b).
64
Substitution Event: As defined in the Swap Agreement.
Supplemental Interest Trust: The corpus of a trust created pursuant
to Section 5.10 hereof, consisting of the Swap Agreement and amounts on
deposit in the Swap Account, subject to the obligation to pay amounts
specified in Section 5.10 hereof.
Swap Account: As defined in Section 5.10 hereof.
Swap Agreement: The ISDA Master Agreement (including the Schedule
thereto and the transaction evidenced by the related Confirmation by and
between the Securities Administrator on behalf of the Trust and the Swap
Counterparty), assigned to the Supplemental Interest Trust for the benefit of
the Aggregate Group I Certificates.
Swap Counterparty: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services Inc., a Delaware
limited partnership, and its successors in interest, and any successor swap
provider under any replacement Swap Agreement.
Swap Payment Allocation: For any Class of Aggregate Group I
Certificates and any Distribution Date is that Class's pro rata share of the
Net Swap Receipts, if any, for that Distribution Date, based on the respective
Class Principal Balances of the Aggregate Group I Certificates.
Swap Payment Rate: For any Distribution Date is a fraction expressed
as a percentage, the numerator of which is any Net Swap Payment or Swap
Termination Payment (other than any Defaulted Swap Termination Payment) owed
to the Swap Counterparty for such Distribution Date, and the denominator of
which is the Stated Principal Balance of the Aggregate Group I Mortgage Loans
as of the first day of the related Due Period, multiplied by 12.
Swap Termination Date: With respect to each Distribution Date under
the Swap Agreement, to and including the Distribution Date in October 2011.
Swap Termination Payment: Any payment payable by the Supplemental
Interest Trust or the Swap Counterparty upon termination of the Swap Agreement
as a result of an Event of Default (as defined in the Swap Agreement) or a
Termination Event (as defined in the Swap Agreement).
Targeted Balance: With respect to any group of Targeted Principal
Classes or Components in the aggregate and any Distribution Date appearing in
Schedule B hereto, the Aggregate Targeted Balance for such group and
Distribution Date. With respect to any other Targeted Principal Class or
Component and any Distribution Date appearing in Schedule B hereto, the
applicable amount appearing opposite such Distribution Date for such Class or
Component.
Tax Matters Person: The person designated as "tax matters person" in
the manner provided under Treasury regulation ss. 1.860F-4(d) and temporary
Treasury regulation ss.301.6231(a)(7)1T. Initially, the Tax Matters Person
shall be the Securities Administrator.
65
Tax Matters Person Certificate: The Class A-R Certificate with a
Denomination of $0.01.
Three Month Rolling Average: With respect to the end of the Due
Period related to any Distribution Date and the Aggregate Group I Mortgage
Loans, the rolling 3 month average percentage of the aggregate Stated
Principal Balance of the Aggregate Group I Mortgage Loans that are 60 or more
days Delinquent (including Mortgage Loans in foreclosure, REO Property or
discharged in bankruptcy). With respect to the end of the Due Period related
to any Distribution Date and the Group 3 Mortgage Loans, the rolling 3 month
average percentage of the aggregate Stated Principal Balance of the Group 3
Mortgage Loans that are 60 or more days Delinquent (including Mortgage Loans
in foreclosure, REO Property or discharged in bankruptcy).
Trigger Event: With respect to any Distribution Date and the
Aggregate Group I Certificates, a Trigger Event is in effect if (x) the Three
Month Rolling Average with respect to the Aggregate Group I Mortgage Loans
exceeds 40.00% of the Aggregate Group I Senior Enhancement Percentage for the
prior Distribution Date, or (y) the aggregate amount of Realized Losses on the
Aggregate Group I Mortgage Loans incurred since the Cut-off Date through the
last day of the related Due Period divided by the aggregate outstanding
principal balance of the Aggregate Group I Mortgage Loans as of the Cut-off
exceeds the applicable percentages set forth below with respect to such
Distribution Date:
Distribution Date Percentage
----------------- ----------
November 2008 --October 2009...................... 0.25% for the first month, plus an additional 1/12th of 0.40%
for each month thereafter
November 2009 --October 2010...................... 0.65% for the first month, plus an additional 1/12th of 0.50%
for each month thereafter
November 2010 --October 2011...................... 1.15% for the first month, plus an additional 1/12th of 0.50%
for each month thereafter
November 2011 --October 2012...................... 1.65% for the first month, plus an additional 1/12th of 0.30%
for each month thereafter
November 2012 and thereafter..................... 1.95%
With respect to any Distribution Date and the Group 3 Certificates, a
Trigger Event is in effect if (x) the Three Month Rolling Average with respect
to the Group 3 Mortgage Loans exceeds 40.00% of the Group 3 Senior Enhancement
Percentage for the prior Distribution Date, or (y) the aggregate amount of
Realized Losses on the Group 3 Mortgage Loans incurred since the Cut-off Date
through the last day of the related Due Period divided by the aggregate
outstanding principal balance of the Group 3 Mortgage Loans as of the Cut-off
exceeds the applicable percentages set forth below with respect to such
Distribution Date:
66
Distribution Date Percentage
----------------- ----------
November 2008 --October 2009...................... 0.30% for the first month, plus an additional 1/12th of 0.40%
for each month thereafter
November 2009 --October 2010...................... 0.70% for the first month, plus an additional 1/12th of 0.55%
for each month thereafter
November 2010 --October 2011...................... 1.25% for the first month, plus an additional 1/12th of 0.50%
for each month thereafter
November 2011 --October 2012...................... 1.75% for the first month, plus an additional 1/12th of 0.30%
for each month thereafter
November 2012 --October 2013...................... 2.05% for the first month, plus an additional 1/12th of 0.05%
for each month thereafter
November 2013 and thereafter..................... 2.10%
Trust: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Loan Trust 2006-16AX.
Trust Fund: The corpus of the trust created pursuant to this
Agreement consisting of (i) the Mortgage Loans and all interest and principal
received on or with respect thereto after the Cut-off Date (other than
Scheduled Payments due on or prior to the Cut-off Date) to the extent not
applied in computing the Cut-off Date Principal Balance thereof; (ii) all
cash, instruments or property held or required to be held in the Custodial
Accounts, the Distribution Account and the Group 3 Reserve Fund and all
amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has been acquired
by foreclosure, deed-in-lieu of foreclosure or otherwise; (iv) the Depositor's
rights assigned to the Trustee under the Purchase and Servicing Agreements, as
modified by the Acknowledgements and under the Custodial Agreements; (v) the
pledge, control and guaranty agreements and the Limited Purpose Surety Bond
relating to the Additional Collateral Mortgage Loans; (vi) all insurance
policies related to the Mortgage Loans and any insurance proceeds; and (vii)
all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing.
Trustee: LaSalle Bank National Association, a national banking
association, organized under the laws of the United States and any Person
succeeding the Trustee hereunder, or if any successor trustee or any
co-trustee shall be appointed as herein provided, then such successor trustee
and such co-trustee, as the case may be.
Trustee Mortgage Files: With respect to each Mortgage Loan, the
Mortgage Documents to be retained in the custody and possession of the Trustee
or Custodian on behalf of the Trustee identified in Section 2.01(a) hereof.
UCC: The Uniform Commercial Code as enacted in the relevant
jurisdiction.
Underwriter: As specified in the Preliminary Statement.
Underwriter's Exemption: Prohibited Transaction Exemption 2002-41, 67
Fed. Reg. 54487 (2002), as amended (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department
of Labor.
67
Underwriting Agreement: The Underwriting Agreement, dated October 26,
2006, among the Seller, the Depositor and the Underwriter.
Uniform Commercial Code: The Uniform Commercial Code as in effect in
any applicable jurisdiction from time to time.
Unpaid Interest Shortfall Amount: With respect to the Aggregate Group
I Certificates, the sum of Relief Act Interest Shortfalls and net prepayment
interest shortfalls on the Aggregate Group I Mortgage Loans allocated to such
Class of Aggregate Group I Certificates on that Distribution Date and such
amounts from any prior Distribution Date remaining unpaid. With respect to the
Group 3 Certificates, the sum of Relief Act Interest Shortfalls and net
prepayment interest shortfalls on the Group 3 Mortgage Loans allocated to such
Class of Group 3 Certificates on that Distribution Date and such amounts from
any prior Distribution Date remaining unpaid.
Unpaid Realized Loss Amount: With respect to any Class of
Subordinated Certificates, the portion of any Realized Losses on the Mortgage
Loans in the related Aggregate Loan Group previously allocated to that Class
remaining unpaid from prior Distribution Dates.
Unscheduled Principal Distribution Amount: Not applicable.
Voting Interests: The portion of the voting rights of all the
Certificates that is allocated to any Certificate for purposes of the voting
provisions of this Agreement. At all times during the term of this Agreement,
1.00% of all Voting Interests shall be allocated to each of the Class I-OC
Certificates, the Class 3-OC Certificates, any Class of Notional Amount
Certificates and the Class A-R Certificates. Voting Interests shall be
allocated among all other Classes of Certificates pro rata based on Class
Principal Balances for each Class then outstanding. Voting Interests shall be
allocated among the Certificates within each such Class in proportion to their
Certificate Balances or Percentage Interests.
Weighted Average Net Mortgage Rate: As to any Distribution Date, the
average of the Net Mortgage Rate of each Mortgage Loan, weighted on the basis
of its Stated Principal Balance as of the end of the Prepayment Period related
to the immediately preceding Distribution Date.
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ARTICLE II
DECLARATION OF TRUST;
ISSUANCE OF CERTIFICATES
Section 2.01. Creation and Declaration of Trust Fund; Conveyance of
Mortgage Loans.
(a) Concurrently with the execution and delivery of this Agreement,
the Depositor does hereby transfer, assign, set over, deposit with and
otherwise convey to the Trustee, without recourse, subject to Sections 2.02
and 2.05, in trust, all the right, title and interest of the Depositor in and
to the Trust Fund. Such conveyance includes, without limitation, (i) the
Mortgage Loans, including the right to all payments of principal and interest
received on or with respect to the Mortgage Loans on and after the Cut-off
Date (other than Scheduled Payments due on or before such date), and all such
payments due after such date but received prior to such date and intended by
the related Mortgagors to be applied after such date; (ii) all of the
Depositor's right, title and interest in and to all amounts from time to time
credited to and the proceeds of the Distribution Account, any Custodial
Accounts or any Escrow Account established with respect to the Mortgage Loans;
(iii) all of the rights and obligations of the Depositor as assignee of the
Seller with respect to the Seller's rights and obligations under the Purchase
and Servicing Agreements pursuant to the Acknowledgements; (iv) all of the
Depositor's right, title or interest in REO Property and the proceeds thereof;
(v) all of the Depositor's rights under any Insurance Policies related to the
Mortgage Loans; (vi) $2,000 (which amount has been delivered by the Depositor
to the Securities Administrator to be held in the Distribution Account until
distributed to the Holders of the Class I-P and Class 3-P Certificates
pursuant to Section 5.02(a)) and $100, plus interest, (which amount has been
delivered by the Depositor to the Securities Administrator to be held in the
Distribution Account until distributed to the Holders of the Class A-R
Certificates pursuant to Section 5.02(a)); and (vii) if applicable, the
Depositor's security interest in any collateral pledged to secure the Mortgage
Loans, including the Mortgaged Properties and any Additional Collateral
relating to the Additional Collateral Mortgage Loans, including, but not
limited to, the pledge, control and guaranty agreements and the Limited
Purpose Surety Bond, to have and to hold, in trust; and the Trustee declares
that, subject to the review provided for in Section 2.02, it has received and
shall hold the Trust Fund, as trustee, in trust, for the benefit and use of
the Holders of the Certificates and for the purposes and subject to the terms
and conditions set forth in this Agreement, and, concurrently with such
receipt, has caused to be executed, authenticated and delivered to or upon the
order of the Depositor, in exchange for the Trust Fund, Certificates in the
authorized denominations evidencing the entire ownership of the Trust Fund.
The foregoing sale, transfer, assignment, set-over, deposit and
conveyance does not and is not intended to result in the creation or
assumption by the Trustee of any obligation of the Depositor, the Seller or
any other Person in connection with the Mortgage Loans or any other agreement
or instrument relating thereto except as specifically set forth therein.
In connection with such transfer and assignment of the Mortgage
Loans, the Depositor shall cause to be delivered and the Custodian acting
on the Trustee's behalf will continue to hold the documents or instruments
listed below
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with respect to each Mortgage Loan (each, a "Trustee Mortgage File") so
transferred and assigned:
(i) with respect to each Mortgage Loan, the original Mortgage Note
endorsed without recourse in proper form to the order of "LaSalle Bank
National Association, as Trustee of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Loan Trust
2006-16AX, Mortgage Pass-Through Certificates, without recourse", or in blank
(in each case, with all necessary intervening endorsements, as applicable);
(ii) with respect to each Mortgage Loan (other than a Cooperative
Loan) that is not a MERS Mortgage Loan, the original Mortgage with evidence of
recording thereon, or if the original Mortgage has not yet been returned from
the recording office, a copy of such Mortgage certified by the applicable
Originator, title company, escrow agent or closing attorney to be a true copy
of the original of the Mortgage which has been sent for recording in the
appropriate jurisdiction in which the Mortgaged Property is located, and in
the case of the each MERS Mortgage Loan, the original Mortgage, noting the
presence of the MIN of the Mortgage Loans and either language indicating that
the Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM Loan or if the
Mortgage Loan was not a MOM Loan at origination, the original Mortgage and the
assignment thereof to MERS, with evidence of recording indicated thereon;
(iii) with respect to each Mortgage Loan (other than a Cooperative
Loan) that is not a MERS Mortgage Loan, the Assignment of Mortgage in form and
substance acceptable for recording in the relevant jurisdiction, such
assignment being either (A) in blank, without recourse, or (B) endorsed to
"LaSalle Bank National Association, as Trustee of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Loan
Trust 2006-16AX, Mortgage Pass-Through Certificates, without recourse";
(iv) with respect to each Mortgage Loan (other than a Cooperative
Loan) that is not a MERS Mortgage Loan, the originals of all intervening
assignments of the Mortgage, if any, with evidence of recording thereon, or if
the original intervening assignment has not yet been returned from the
recording office, a copy of such assignment certified by the applicable
Originator, title company, escrow agent or closing attorney to be a true copy
of the original of the assignment which has been sent for recording in the
appropriate jurisdiction in which the Mortgaged Property is located;
(v) with respect to each Mortgage Loan (other than a Cooperative
Loan), the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(vi) if any, with respect to each Mortgage Loan (other than a
Cooperative Loan), the original policy of title insurance (or a true copy
thereof) with respect to any such Mortgage Loan, or, if such policy has not
yet been delivered by the insurer, the title commitment or title binder to
issue same;
(vii) if any, with respect to each Mortgage Loan (other than a
Cooperative Loan), the original power of attorney and guaranty agreement with
respect to such Mortgage Loan;
(viii) [Reserved];
(ix) with respect to each Mortgage Loan which constitutes a
Cooperative Loan:
70
(a) the original of any security agreement or similar
document executed in connection with the
Cooperative Loan;
(b) the original Recognition Agreement and the original
Assignment of Recognition Agreement;
(c) UCC-1 financing statements with recording
information thereon from the appropriate
governmental recording offices if necessary to
perfect the security interest of the Cooperative
Loan under the Uniform Commercial Code in the
jurisdiction in which the Cooperative Property is
located, accompanied by UCC-3 financing statements
executed in blank for recordation of the change in
the secured party thereunder;
(d) an Estoppel Letter and/or Consent;
(e) a search for (i) federal tax liens, mechanics'
liens, lis pendens, judgments of record or
otherwise against (x) the Cooperative Corporation
and (y) the seller of the Cooperative Unit, (ii)
filings of financing statements and (iii) the deed
of the cooperative project into the Cooperative
Corporation;
(f) the guaranty of the Mortgage Note and Cooperative
Loan, if any;
(g) the original Proprietary Lease and the Assignment
of Proprietary Lease executed by the Mortgagor in
blank or if the Proprietary Lease has been assigned
by the Mortgagor to the Seller, then the Seller
must execute an assignment of the Assignment of
Proprietary Lease in blank; and
(h) if any, the original or certified copy of the
certificates evidencing ownership of the
Cooperative Shares issued by the Cooperative
Corporation and related assignment of such
certificates or an assignment of such Cooperative
Shares, in blank, executed by the Mortgagor with
such signature guaranteed;
(x) [Reserved]; and
(xi) any other document or instruments required to be delivered.
In addition, in connection with the assignment of any MERS Mortgage
Loan, it is understood that the related Originator will cause the MERS(R)
System to indicate that such Mortgage Loans have been assigned by the related
Originator to the Trustee in accordance with this Agreement for the benefit of
the Certificateholders by including (or deleting, in the case of Mortgage
Loans which are repurchased in accordance with this Agreement) in such
computer files the information required by the MERS(R) System to identify the
series of Certificates issued in connection with such Mortgage Loans. It is
further understood that the related Originator will not, and the Master
Servicer hereby agrees that it will not, alter the information referenced in
this paragraph with respect to any Mortgage Loan during the term of this
Agreement unless and until such Mortgage Loan is repurchased in accordance
with the terms of this Agreement.
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On or prior to the Closing Date, the Depositor shall cause to be
delivered to the Master Servicer, the Trustee and the Custodian an electronic
copy of the Mortgage Loan Schedule in a form acceptable to the Master Servicer,
the Depositor, the Trustee and the Custodian.
(b) As soon as is practicable after the Closing Date, the Depositor
shall cause the Servicer of any Additional Collateral Mortgage Loan to deliver
to the applicable Custodian the Assignment and Notice of Transfer with respect
to each Additional Collateral Mortgage Loan as well as the assignments of any
rights with respect to each Additional Collateral Mortgage Loan under any
Limited Purpose Surety Bond.
(c) In instances where a title insurance policy is required to be
delivered to the applicable Custodian on behalf of the Trustee and is not so
delivered, the Depositor will provide a copy of such title insurance policy to
the applicable Custodian on behalf of the Trustee, as promptly as practicable
after the execution and delivery hereof, but in any case within 180 days of
the Closing Date.
(d) For Mortgage Loans (if any) that have been prepaid in full after
the Cut-off Date and prior to the Closing Date, the Depositor, in lieu of
delivering the above documents, herewith delivers such amount to the
Securities Administrator, and delivers to the Securities Administrator, the
Trustee, and the applicable Custodian, an Officer's Certificate which shall
include a statement to the effect that all amounts received in connection with
such prepayment that are required to be deposited in the Distribution Account
pursuant to Section 4.01 have been so deposited. All original documents that
are not delivered to the applicable Custodian on behalf of the Trustee shall
be held by the Master Servicer or the related Servicer in trust for the
benefit of the Trustee and the Certificateholders.
(e) Neither the Depositor nor the Trust will acquire or hold any
Mortgage Loan that would violate the representations made by the Seller set
forth in clauses (iv) through (vi) of Section 2.05(b) hereof.
Section 2.02. Acceptance of Trust Fund by Trustee; Review of
Documentation for Trust Fund.
(a) The Trustee, by execution and delivery hereof, acknowledges
receipt by it of notice from the Custodian that each holds the documents
identified in the Initial Custodial Certification in the form annexed hereto
as Exhibit L-1 (the "Initial Custodial Certification") pertaining to the
Mortgage Loans listed on the Mortgage Loan Schedule.
(b) Nothing in this Agreement shall be construed to constitute an
assumption by the Trust Fund, the Trustee, any Custodian or the
Certificateholders of any unsatisfied duty, claim or other liability on any
Mortgage Loan or to any Mortgagor.
(c) Each of the parties hereto acknowledges that (i) the Custodian
has delivered to the Depositor, the Master Servicer and the Trustee, the
Initial Custodial Certification, in the form annexed hereto as Exhibit L-1,
stating that it has performed the applicable review of the Mortgage Loans as
required herein and (ii) thereafter, if applicable, the Custodian shall
perform the applicable review of the Mortgage Loans and deliver the further
certifications (including but not limited to the Final Custodial
Certification) as provided herein.
With respect to the MSMCI Mortgage Loans only, not later than 180
days after the Closing Date, the Trustee shall enforce the related Custodian's
obligation to deliver to the Depositor, the Master Servicer and the Trustee a
Final Custodial Certification in the form
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annexed hereto as Exhibit L-2 (the "Final Custodial Certification"), with any
applicable exceptions noted thereon. To the extent that the Custodian must
deliver a Final Certification, the Trustee shall enforce the Custodian's
obligation to make available, upon request of any Certificateholder, a copy of
any exceptions noted on the Initial Custodial Certification or the Final
Custodial Certification.
(d) Upon execution of this Agreement, the Depositor hereby delivers
to the Trustee (with a copy to the Master Servicer) and the Trustee
acknowledges receipt of the Acknowledgements, together with the related
Purchase and Servicing Agreements.
(e) Neither the Trustee nor the Custodian shall make any representation
as to: (i) the validity, legality, sufficiency, enforceability or genuineness of
any of the documents contained in the Trustee Mortgage File of any of the
Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, perfection, priority, effectiveness or suitability
of any such Mortgage Loan. Except as specifically required hereunder, neither
the Trustee nor the Custodian shall be responsible to verify the validity,
sufficiency or genuiness of any document in the Trustee Mortgage File.
Section 2.03. Representations and Warranties of the Depositor.
(a) The Depositor hereby represents and warrants to the Trustee, for
the benefit of the Certificateholders, and to the Master Servicer and the
Securities Administrator as of the Closing Date or such other date as is
specified, that:
(i) the Depositor is a corporation duly organized, validly
existing and in good standing under the laws governing its creation
and existence and has full corporate power and authority to own its
property, to carry on its business as presently conducted, to enter
into and perform its obligations under this Agreement, and to create
the trust pursuant hereto;
(ii) the execution and delivery by the Depositor of this
Agreement have been duly authorized by all necessary corporate action
on the part of the Depositor; neither the execution and delivery of
this Agreement, nor the consummation of the transactions herein
contemplated, nor compliance with the provisions hereof, will
conflict with or result in a breach of, or constitute a default
under, any of the provisions of any law, governmental rule,
regulation, judgment, decree or order binding on the Depositor or its
properties or the certificate of incorporation or bylaws of the
Depositor;
(iii) the execution, delivery and performance by the Depositor
of this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice
to, the registration with, or the taking of any other action in respect
of, any state, federal or other governmental authority or agency,
except such as has been obtained, given, effected or taken prior to the
date hereof;
(iv) this Agreement has been duly executed and delivered by
the Depositor and, assuming due authorization, execution and delivery
by the Trustee, the Master Servicer and the Securities Administrator,
constitutes a valid and binding obligation of the Depositor
enforceable against it in accordance with its terms except as such
enforceability may be subject to (A) applicable bankruptcy and
insolvency laws and other similar laws affecting the enforcement of
the rights of creditors generally and (B) general principles of
equity regardless of whether such enforcement is considered in a
proceeding in equity or at law;
(v) there are no actions, suits or proceedings pending or,
to the knowledge of the Depositor, threatened or likely to be
asserted against or affecting the Depositor,
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before or by any court, administrative agency, arbitrator or
governmental body (A) with respect to any of the transactions
contemplated by this Agreement or (B) with respect to any other
matter which in the judgment of the Depositor will be determined
adversely to the Depositor and will if determined adversely to the
Depositor materially and adversely affect it or its business, assets,
operations or condition, financial or otherwise, or adversely affect
its ability to perform its obligations under this Agreement;
(vi) immediately prior to the transfer and assignment of the
Mortgage Loans to the Trustee, the Depositor was the sole owner of
record and holder of each Mortgage Loan, and the Depositor had good
and marketable title thereto, and had full right to transfer and sell
each Mortgage Loan to the Trustee free and clear, subject only to (1)
liens of current real property taxes and assessments not yet due and
payable and, if the related Mortgaged Property is a condominium unit,
any lien for common charges permitted by statute, (2) covenants,
conditions and restrictions, rights of way, easements and other
matters of public record as of the date of recording of such Mortgage
acceptable to mortgage lending institutions in the area in which the
related Mortgaged Property is located and specifically referred to in
the lender's title insurance policy or attorney's opinion of title
and abstract of title delivered to the originator of such Mortgage
Loan, and (3) such other matters to which like properties are
commonly subject which do not, individually or in the aggregate,
materially interfere with the benefits of the security intended to be
provided by the Mortgage, of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest, and had
full right and authority, subject to no interest or participation of,
or agreement with, any other party, to sell and assign each Mortgage
Loan pursuant to this Agreement;
(vii) This Agreement creates a valid and continuing security
interest (as defined in the applicable Uniform Commercial Code (the
"UCC"), in the Mortgage Loans in favor of the Trustee, which security
interest is prior to all other liens, and is enforceable as such
against creditors of and purchasers from the Depositor;
(viii) The Mortgage Loans constitute "instruments" within
the meaning of the applicable UCC;
(ix) Other than the security interest granted to the Trustee
pursuant to this Agreement, the Depositor has not pledged, assigned,
sold, granted a security interest in, or otherwise conveyed any of
the Mortgage Loans. The Depositor has not authorized the filing of
and is not aware of any financing statement against the Depositor
that includes a description of the collateral covering the Mortgage
Loans other than a financing statement relating to the security
interest granted to the Trustee hereunder or that has been
terminated. The Depositor is not aware of any judgment or tax lien
filings against the Depositor;
(x) None of the Mortgage Loans have any marks or notations
indicating that such Mortgage Loans have been pledged, assigned or
otherwise conveyed to any Person other than the Trustee; and
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(xi) The Depositor has received all consents and approvals
required by the terms of the Mortgage Loans to convey the Mortgage
Loans hereunder to the Trustee.
The foregoing representations made in this Section 2.03 shall survive
the termination of this Agreement and shall not be waived by any party hereto.
Section 2.04. Representations and Warranties of the Depositor and
the Seller as to the Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee with
respect to the Mortgage Loans or each Mortgage Loan, as the case may be, as of
the date hereof or such other date set forth herein that as of the Closing
Date:
(a) Immediately prior to the transfer and assignment contemplated
herein, the Depositor was the sole owner and holder of the Mortgage Loans. The
Mortgage Loans were not assigned or pledged by the Depositor and the Depositor
had good and marketable title thereto, and the Depositor had full right to
transfer and sell the Mortgage Loans to the Trustee, for the benefit of the
Certificateholders, free and clear of any encumbrance, participation interest,
lien, equity, pledge, claim or security interest and had full right and
authority subject to no interest or participation in, or agreement with any
other party to sell or otherwise transfer the Mortgage Loans.
(b) As of the Closing Date, the Depositor has transferred all right,
title and interest in the Mortgage Loans to the Trustee on behalf of the
Trust.
(c) As of the Closing Date, the Depositor has not transferred the
Mortgage Loans to the Trustee on behalf of the Trust with any intent to
hinder, delay or defraud an of its creditors.
It is understood and agreed that the representations and warranties
set forth in this Section 2.04 shall survive delivery of the respective
Mortgage Files to the Trustee or the Custodian and shall inure to the benefit
of the Trustee, notwithstanding any restrictive or qualified endorsement or
assignment.
Section 2.05. Representations and Warranties of the Seller; Discovery
of Breach; Repurchase or Substitution of Mortgage Loans.
(a) With respect to the MSMCI Mortgage Loans the Seller hereby makes
the representations and warranties contained in Section 3.01 of the MSMCI
Purchase Agreement to and for the benefit of the Depositor, the Trustee and
the Trust Fund.
The Seller hereby represents and warrants that no Mortgage Loan
contains a provision whereby the related mortgagor is permitted to convert the
Mortgage Rate from an adjustable rate to a fixed rate.
The Seller hereby represents and warrants to the Trustee with respect
to the Mortgage Loans as of the date hereof or such other date set forth
herein that as of the Closing Date:
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(i) Each Mortgage Loan at origination complied in all
material respects with applicable predatory and abusive lending laws
and consummation of the transactions contemplated by this Agreement
will not involve the violation of any such laws.
(ii) All of the Mortgage Loans were originated in compliance
with all applicable laws, including, but not limited to, all
applicable anti-predatory and abusive lending laws.
(iii) None of the Mortgage Loans is covered by the Home
Ownership and Equity Protection Act of 1994 ("HOEPA").
(iv) None of the Mortgage Loans is a "high cost" loan as
defined by applicable predatory and abusive lending laws.
(v) No Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable, and with respect to the foregoing, the terms "High Cost
Loan" and "Covered Loan" have the meaning assigned to them in the
then current version of Standard & Poor's LEVELS(R), which is now
Version 5.7 Glossary Revised, Appendix E which is attached hereto as
Exhibit Q (the "Glossary") where (x) a "High Cost Loan" is each loan
identified in the column "Category under applicable anti-predatory
lending law" of the table entitled "Standard & Poor's High Cost Loan
Categorization" in the Glossary as each such loan is defined in the
applicable anti-predatory lending law of the State or jurisdiction
specified in such table and (y) a "Covered Loan" is each loan
identified in the column "Category under applicable anti-predatory
lending law" of the table entitled "Standard & Poor's High Covered
Loan Categorization" in the Glossary as each such loan is defined in
the applicable anti-predatory lending law of the State or
jurisdiction specified in such table.
(vi) No Mortgage Loan originated on or after October 1, 2002
through March 6, 2003 is governed by the Georgia Fair Lending Act.
(vii) With respect to the Mortgage Loans in Loan Group 1, no
borrower obtained a prepaid single-premium credit-life, credit
disability, credit unemployment or credit property insurance policy
In connection with the origination of the Mortgage Loan.
(viii) With respect to the Mortgage Loans in Loan Group 1,
no Mortgage Loan imposes a prepayment penalty for more than five
years following its origination.
(ix) With respect to the Mortgage Loans in Loan Group 1,
each Mortgage Loan is a "qualified mortgage" under Section 860G(a)(3)
of the Code.
(x) With respect to the Mortgage Loans in Loan Group 1, as
to each consumer report (as defined in the Fair Credit Reporting Act,
Public Law 91-508) or other credit information furnished to the
Seller, the Person providing such information has full right and
authority and is not precluded by law or contract from furnishing
such information to the Seller and the Seller is not precluded from
furnishing the same to any subsequent or prospective purchaser of
such Mortgage. With respect to each Mortgage Loan in Loan Group 1 the
Seller has caused to be fully furnished, in accordance with the Fair
Credit
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Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit
files to Equifax, Experian and Trans Union Credit Information Company
(three of the credit repositories), on a monthly basis.
(xi) With respect to the Mortgage Loans in Loan Group 1, no
Mortgagor with respect to any Mortgage Loan originated on or after
August 1, 2004 agreed to submit to arbitration to resolve any dispute
arising out of or relating in any way to the mortgage loan
transaction.
(xii) With respect to the Mortgage Loans in Loan Group 1, no
Mortgage Loan that was originated on or after January 1, 2005, is a
"high cost home loan" as defined under the Indiana Home Loan Practices
Act (I.C. 24-9).
(xiii) With respect to the Mortgage Loans in Loan Group 1, no
Mortgage Loan has an APR or total points and fees that exceed the
thresholds set by HOEPA and its implementing regulations, including 12
CFR ss. 226.32(a)(1)(i) and (ii).
(xiv) With respect to the Mortgage Loans in Loan Group 1, no
Mortgage Loan which contains a provision permitting imposition of a
penalty upon a prepayment prior to maturity except if: (a) the Mortgage
Loan provides some benefit to the borrower (e.g., a rate or fee
reduction) in exchange for accepting such prepayment penalty; (b) the
Mortgage Loan's originator had a written policy of offering the
borrower, or requiring third-party brokers to offer the borrower, the
option of obtaining a mortgage loan that did not require payment of
such a penalty; (c) the prepayment penalty was adequately disclosed to
the borrower pursuant to applicable state and federal law; (d) the
Mortgage Loan does not provide for prepayment penalties for a term in
excess of five years; unless the loan was modified to reduce the
prepayment period to no more than five years from the date of the note
and the borrower was notified in writing of such reduction in
prepayment period; and (e) such prepayment penalty shall not be imposed
in any instance where the Mortgage Loan is accelerated or paid off in
connection with the workout of a
delinquent mortgage or due to the borrower's default, notwithstanding
that the terms of the Mortgage Loan or state or federal law might
permit the imposition of such penalty.
(xv) With respect to the Mortgage Loans in Loan Group 1, the
borrower was not encouraged or required to select a mortgage loan
product offered by the Mortgage Loan's originator which is a higher
cost product designed for less creditworthy borrowers, taking into
account such facts as, without limitation, the Mortgage Loan's
requirements and the borrower's credit history, income, assets and
liabilities.
(xvi) With respect to the Mortgage Loans in Loan Group 1, the
methodology used in underwriting the extension of credit for each
Mortgage Loan did not rely solely on the extent of the borrower's
equity in the collateral as the principal determining factor in
approving such extension of credit. The methodology employed objective
criteria such as the borrower's income, assets and liabilities, to the
proposed mortgage payment and, based on such methodology, the Mortgage
Loan's originator made a reasonable determination that at the time of
origination the borrower had the ability to make timely payments on the
Mortgage Loan.
(xvii) With respect to the Mortgage Loans in Loan Group 1, each
Mortgage Loan is secured by a first lien on the related Mortgaged
Property that did not exceed the following loan limits
---------------------------------------- -----------------------------------------------------------------------------
Maximum Original Loan Amount of First Mortgage
---------------------------------------- -----------------------------------------------------------------------------
Number of Units Continental United States or Puerto Alaska, Guam, Hawaii or
--------------- Rico Virgin Islands
---------------------------------------- -------------------------------------- --------------------------------------
1 $417,000 $625,500
---------------------------------------- -------------------------------------- --------------------------------------
2 $533,850 $800,775
---------------------------------------- -------------------------------------- --------------------------------------
3 $645,300 $967,950
---------------------------------------- -------------------------------------- --------------------------------------
4 $801,950 $1,202,925
---------------------------------------- -------------------------------------- --------------------------------------
(xviii) With respect to the Mortgage Loans in Loan Group 1, no
manufactured housing units underlie the related Certificates.
(xix) With respect to the Mortgage Loans in Loan Group 1, no
Mortgage Loan is "seasoned" (a seasoned mortgage loan is one where the
date of the mortgage note is more than 1 year before the date of
issuance of the certificates).
(xx) With respect to the Mortgage Loans in Loan Group 1, the
borrowers related to any Mortgage Loan was charged "points and fees" in
an amount greater than (a) $1,000 or (b) 5% of the principal amount of
such Mortgage Loan, whichever is greater. For purposes of this
representation, "points and fees" (x) include origination,
underwriting, broker and finder's fees and charges that the lender
imposed as a condition
of making the mortgage loan, whether they are paid to the lender
or a third party; and (y) exclude bona fide discount points,
fees paid for actual services rendered in connection with the
origination of the mortgage (such as attorneys' fees, notaries fees and
fees paid for property appraisals, credit reports, surveys, title
examinations and extracts, flood and tax certifications, and home
inspections); the cost of mortgage insurance or credit-risk price
adjustments; the costs of title, hazard, and flood insurance policies;
state and local transfer taxes or fees; escrow deposits for the future
payment of taxes and insurance premiums; and other miscellaneous fees
and charges, which miscellaneous fee and charges, in total, do not
exceed 0.25 percent of the loan amount.
Upon discovery by the Depositor, the Seller or the related Originator
or receipt of written notice of any materially defective document in, or,
following the date of delivery to the Trustee of the Custodian's certifications,
that a document is missing from, a Trustee Mortgage File, or discovery by the
Trustee, the Depositor, the Seller or the related Originator of the breach by
such Originator or Seller of any representation or warranty under the related
Purchase and Servicing Agreement, as modified by the Acknowledgement, in the
case of the Originator, or under this Agreement, in the case of the Seller, in
respect of any Mortgage Loan which materially adversely affects the value of
that Mortgage Loan or the interest therein of the Certificateholders (a
"Defective Mortgage Loan") (each of the Depositor, the Seller and the related
Originator hereby agreeing to give written notice thereof to the Trustee and the
other of such parties), the Trustee, or its designee, shall promptly notify the
Depositor and the Seller or the related Originator, as applicable, in writing of
such nonconforming or missing document or breach and request that the Seller or
related Originator deliver such missing document or cure or cause the cure of
such defect or breach within a period of time specified in the related Purchase
and Servicing Agreement, and if the Seller or related Originator, as applicable,
does not deliver such missing document or cure such defect or breach in all
material respects during such period, the Trustee, shall enforce the obligations
of the related Originator under the related Purchase and Servicing Agreement, as
modified by the Acknowledgement, or the Seller under this Agreement, as
applicable, and cause the related Originator or the Seller, as the case may be,
to repurchase that Mortgage Loan from the Trust Fund at the Purchase Price on or
prior to the Determination Date following the expiration of such specified
period (subject to Section 2.05(c) below); provided, however, that, in
connection with any such breach that could not reasonably have been cured within
such specified period (unless permitted a greater period of time to cure under
the related Purchase and Servicing Agreement), subject to Section 2.05(c) below,
if the related Originator or the Seller, as applicable, shall have commenced to
cure such breach within such specified period, the related Originator or the
Seller shall be permitted to proceed thereafter diligently and expeditiously to
cure the same within such additional time as is reasonably necessary to cure
such breach provided, further however, that a breach of any of the
representations and warranties of the Seller set forth in clauses (i) through
(xx) above, are automatically deemed to materially and adversely affect the
interests of the Certificateholders. To the extent that the amount by which the
Purchase Price (as defined in this Agreement) exceeds the repurchase price
payable by the related Originator under the related Purchase and Servicing
Agreement, including any costs and damages that are incurred by the Trust Fund
as a result of any violation of any applicable federal, state, or local
predatory or abusive lending law arising from or in connection with the
origination of any Mortgage Loan repurchased by the related Originator or the
Seller, the payment of such excess shall be borne by the Seller. The Purchase
Price for the repurchased Mortgage Loan shall be deposited in the related
Distribution
Account, and the Trustee, or its designee, upon receipt of written
certification from the Securities Administrator of such deposit, shall release
or cause the Custodian to release to the related Originator or the Seller, as
applicable, the related Trustee Mortgage File and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse,
representation or warranties, as either party shall furnish to it and as shall
be necessary to vest in such party any Mortgage Loan released pursuant hereto
and the Trustee, or its designee, shall have no further responsibility with
regard to such Trustee Mortgage File (it being understood that the Trustee shall
have no responsibility for determining the sufficiency of such assignment for
its intended purpose). If pursuant to the foregoing provisions the related
Originator or the Seller repurchases a Mortgage Loan that is a MERS Mortgage
Loan, the related Servicer shall cause MERS to designate on the MERS(R) System
the related Originator or the Seller, as applicable, as the beneficial holder of
such Mortgage Loan.
In lieu of repurchasing any such Mortgage Loan as provided above,
either party may cause such Mortgage Loan to be removed from the Trust Fund
(in which case it shall become a Deleted Mortgage Loan) and substitute one or
more Replacement Mortgage Loans in the manner and subject to the limitations
set forth in Section 2.05(b) below. It is understood and agreed that the
obligations of the Originators and the Seller to cure or to repurchase (or to
substitute for) any related Mortgage Loan as to which a document is missing, a
material defect in a constituent document exists or as to which such a breach
has occurred and is continuing shall constitute the sole remedy against the
such party respecting such omission, defect or breach available to the Trustee
on behalf of the Certificateholders.
(b) Any substitution of Replacement Mortgage Loans for Deleted
Mortgage Loans made pursuant to Section 2.05(a) above must be effected prior
to the last Business Day that is within two years after the Closing Date. As
to any Deleted Mortgage Loan for which the related Originator or the Seller
substitutes a Replacement Mortgage Loan or Loans, such substitution shall be
effected by delivering to the Custodian, on behalf of the Trustee, for such
Replacement Mortgage Loan or Loans, the Mortgage Note, the Mortgage, any
related assignment thereof and the Acknowledgement to the Trustee, and such
other documents and agreements, with all necessary endorsements thereon,
together with an Officers' Certificate stating that each such Replacement
Mortgage Loan satisfies the definition thereof and specifying the Substitution
Adjustment Amount (as described below), if any, in connection with such
substitution. Monthly Payments due with respect to Replacement Mortgage Loans
in the month of substitution shall not be included as part of the Trust Fund
and shall be retained by the related Originator or the Seller, as applicable.
For the month of substitution, distributions to the Certificateholders shall
reflect the collections and recoveries in respect of such Deleted Mortgage in
the Due Period preceding the month of substitution and the related Originator
or the Seller, as applicable, shall thereafter be entitled to retain all
amounts subsequently received in respect of such Deleted Mortgage Loan. Upon
such substitution, such Replacement Mortgage Loan shall constitute part of the
Trust Fund and shall be subject in all respects to the terms of this Agreement
and the related Purchase and Servicing Agreement, as modified by the related
Acknowledgement, including all representations and warranties thereof included
in such Purchase and Servicing Agreement, as modified by the Acknowledgement,
in each case as of the date of substitution.
For any month in which an Originator or the Seller substitutes one or
more Replacement Mortgage Loans for one or more Deleted Mortgage Loans, the
related Servicer shall determine the excess (each, a "Substitution Adjustment
Amount"), if any, by which the aggregate Purchase Price of all such Deleted
Mortgage Loans exceeds the aggregate Stated Principal Balance of the
Replacement Mortgage Loans replacing such Deleted Mortgage Loans, together
with one
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month's interest on such excess amount at the applicable Net Mortgage Rate.
On the date of such substitution, the related Originator or Seller, as
applicable, shall deliver or cause to be delivered to the related Servicer for
deposit in the related Custodial Account an amount equal to the related
Substitution Adjustment Amount, if any, and the Custodian, on behalf of the
Trustee, upon receipt of the related Replacement Mortgage Loan or Loans and
Request for Release and certification by such Servicer of such deposit, shall
release to the related Originator or the Seller, as applicable, the related
Trustee Mortgage File or Files and the Trustee or the Custodian, as applicable,
shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, as the related Originator or Seller shall deliver to it
and as shall be necessary to vest therein any Deleted Mortgage Loan released
pursuant hereto.
In addition, the related Originator or the Seller, as applicable,
shall obtain at its own expense and deliver to the Trustee and the Securities
Administrator an Opinion of Counsel to the effect that such substitution
(either specifically or as a class of transactions) shall not cause an Adverse
REMIC Event. If such Opinion of Counsel cannot be delivered, then such
substitution may only be effected at such time as the required Opinion of
Counsel can be given.
(c) Upon discovery by the related Originator, the Seller, the Master
Servicer, the Depositor or the Trustee that any Mortgage Loan does not
constitute a "qualified mortgage" within the meaning of Section 860G(a)(3) of
the Code, the party discovering such fact shall within two Business Days give
written notice thereof to the other parties. In connection therewith, the
applicable party shall repurchase or, subject to the limitations set forth in
Section 2.05(b), substitute one or more Replacement Mortgage Loans for the
affected Mortgage Loan within 90 days of the earlier of discovery or receipt
of such notice with respect to such affected Mortgage Loan. Any such
repurchase or substitution shall be made in the same manner as set forth in
Section 2.05(a) above and/or in accordance with this Section 2.05(c). The
Trustee shall re-convey to the related Originator or the Seller, as
applicable, the Mortgage Loan to be released pursuant hereto in the same
manner, and on the same terms and conditions, as it would a Mortgage Loan
repurchased for breach of a representation or warranty.
Section 2.06. Grant Clause.
(a) It is intended that the conveyance of the Depositor's right,
title and interest in and to property constituting the Trust Fund pursuant to
this Agreement shall constitute, and shall be construed as, a sale of such
property and not a grant of a security interest to secure a loan. However, if
such conveyance is deemed to be in respect of a loan, it is intended that: (1)
the rights and obligations of the parties shall be established pursuant to the
terms of this Agreement; (2) the Depositor hereby grants to the Trustee for
the benefit of the Holders of the Certificates a first priority security
interest in all of the Depositor's right, title and interest in, to and under,
whether now owned or hereafter acquired, the Trust Fund and all proceeds of
any and all property constituting the Trust Fund to secure payment of the
Certificates; and (3) this Agreement shall constitute a security agreement
under applicable law. If such conveyance is deemed to be in respect of a loan
and the trust created by this Agreement terminates prior to the satisfaction
of the claims of any Person holding any Certificate, the security interest
created hereby shall continue in full force and effect and the Trustee shall
be deemed to be the collateral agent for the benefit of such Person, and all
proceeds shall be distributed as herein provided.
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(b) The Depositor shall, to the extent consistent with this
Agreement, take such reasonable actions as may be necessary to ensure that, if
this Agreement were deemed to create a security interest in the Mortgage Loans
and the other property described above, such security interest would be deemed
to be a perfected security interest of first priority under applicable law and
will be maintained as such throughout the term of this Agreement. The
Depositor will, at its own expense, make all initial filings on or about the
Closing Date and shall forward a copy of such filing or filings to the
Trustee. Without limiting the generality of the foregoing, the Depositor shall
prepare and forward for filing, or shall cause to be forwarded for filing, at
the expense of the Depositor, all filings necessary to maintain the
effectiveness of any original filings necessary under the relevant UCC to
perfect the Trustee's security interest in or lien on the Mortgage Loans,
including without limitation (x) continuation statements, and (y) such other
statements as may be occasioned by (1) any change of name of an Originator,
the Depositor or the Trustee, (2) any change of location of the place of
business or the chief executive office of the Seller or the Depositor, (3) any
transfer of any interest of an Originator or the Depositor in any Mortgage
Loan or (4) any change under the relevant UCC or other applicable laws.
Neither the Originators nor the Depositor shall organize under the law of any
jurisdiction other than the State under which each is organized as of the
Closing Date (whether changing its jurisdiction of organization or organizing
under an additional jurisdiction) without giving 30 days prior written notice
of such action to its immediate and intermediate transferee, including the
Trustee. Before effecting such change, any Originator or the Depositor
proposing to change its jurisdiction of organization shall prepare and file in
the appropriate filing office any financing statements or other statements
necessary to continue the perfection of the interests of its immediate and
intermediate transferees, including the Trustee, in the Mortgage Loans. In
connection with the transactions contemplated by this Agreement, each of the
Originators and the Depositor authorizes its immediate or intermediate
transferee (but not the Trustee) to file in any filing office any initial
financing statements, any amendments to financing statements, any continuation
statements, or any other statements or filings described in this paragraph
(b).
Section 2.07. Depositor's Option to Purchase Breached Mortgage Loans.
(a) Subject to the terms specified in this Agreement, the Depositor
has the option, but is not obligated, to purchase from the Trust Fund any
Breached Mortgage Loan at the Repurchase Price; provided that the entity from
which the Seller purchased the Mortgage Loan has both (a) agreed to purchase
the Mortgage Loan from the Depositor and (b) has represented to the Seller
that it has the ability to purchase such Mortgage Loan from the Depositor, as
soon as is practicable thereafter at the Repurchase Price.
Section 2.08. Release of Mortgage Documents for Servicing.
(a) From time to time and as appropriate for the foreclosure or
servicing of any of the Mortgage Loans, the Custodian shall, upon receipt in
writing, facsimile or electronic transmission from the Master Servicer or a
Servicer of a Request for Release release to the Master Servicer or such
Servicer the Mortgage Documents set forth in such Request for Release. All
Mortgage Documents released by the Custodian to the Master Servicer or a
Servicer pursuant to this Section 2.08 shall be held by the Master Servicer or
such Servicer in trust for the benefit of the Trust pursuant to the applicable
Purchase and Servicing Agreement. Upon the repurchase of any Mortgage Loan or
upon the payment in full of any Mortgage Loan, and upon receipt by the Custodian
of (i) the Request for Release (which Request for Release shall include a
statement to the effect that all amounts payable to the Trust in connection with
a repurchase have been deposited in the related Custodial Account or the
Collection Account or (ii) direction of the Depositor or the Trustee, as
applicable, the Custodian shall promptly release the related Mortgage Documents
in accordance with such Request for Release or direction.
ARTICLE III
THE CERTIFICATES
Section 3.01. The Certificates.
(a) The Certificates shall be issuable in registered form only and
shall be securities governed by Article 8 of the New York Uniform Commercial
Code. The Book-Entry Certificates will be evidenced by one or more
certificates, beneficial ownership of which will be held in the dollar
denominations in Certificate Balance, or Notional Amount, as applicable, or in
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the Percentage Interests, specified herein. Each Class of Certificates will be
issued in the minimum denominations and integral multiples thereof of the
initial Certificate Balance (or Notional Amount) specified in the Preliminary
Statement hereto.
(b) The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer of the Trustee or
of the Securities Administrator on the Trustee's behalf. Each Certificate
shall, on original issue, be authenticated by the Authenticating Agent upon
the order of the Depositor upon receipt by the Trustee (or its Custodian) of
the Trustee Mortgage Files described in Section 2.01. No Certificate shall be
entitled to any benefit under this Agreement, or be valid for any purpose,
unless there appears on such Certificate a certificate of authentication
substantially in the form provided for herein, executed by an authorized
officer of the Authenticating Agent, by manual signature, and such
certification upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
At any time and from time to time after the execution and delivery of this
Agreement, the Depositor may deliver Certificates executed by or on behalf of
the Trustee to the Authenticating Agent for authentication and the
Authenticating Agent shall authenticate and deliver such Certificates as in
this Agreement provided and not otherwise.
(c) The Class I-OC Class 3-OC, Class I-P, Class 3-P and Class A-R
Certificates offered and sold in reliance on the exemption from registration
under Rule 144A under the Act shall be issued initially in definitive, fully
registered form without interest coupons with the applicable legends set forth
in Exhibit A added to the forms of such Certificates (each, a "Restricted
Global Security").
Section 3.02. Registration.
The Securities Administrator is hereby appointed, and the Securities
Administrator hereby accepts its appointment as, initial Certificate Registrar
in respect of the Certificates and shall maintain books for the registration
and for the transfer of Certificates (the "Certificate Register"). The Trustee
may appoint a bank or trust company to act as successor Certificate Registrar.
A registration book shall be maintained for the Certificates collectively. The
Certificate Registrar may resign or be discharged or removed and a new
successor may be appointed in accordance with the procedures and requirements
set forth in Sections 6.06 and 6.07 hereof with respect to the resignation,
discharge or removal of the Securities Administrator and the appointment of a
successor Securities Administrator. The Certificate Registrar may appoint, by
a written instrument delivered to the Holders and the Master Servicer, any
bank or trust company to act as co-registrar under such conditions as the
Certificate Registrar may prescribe; provided, however, that the Certificate
Registrar shall not be relieved of any of its duties or responsibilities
hereunder by reason of such appointment.
Section 3.03. Transfer and Exchange of Certificates.
(a) A Certificate (other than Book-Entry Certificates which shall be
subject to Section 3.09 hereof) may be transferred by the Holder thereof only
upon presentation and surrender of such Certificate at the office of the
Certificate Registrar duly endorsed or accompanied by an assignment duly
executed by such Holder or his duly authorized attorney in
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such form as shall be satisfactory to the Certificate Registrar. Upon the
transfer of any Certificate in accordance with the preceding sentence, the
Securities Administrator on behalf of the Trustee shall execute, and the
Authenticating Agent shall authenticate and deliver to the transferee, one or
more new Certificates of the same Class and evidencing, in the aggregate, the
same aggregate Certificate Balance (or Notional Amount) as the Certificate
being transferred. No service charge shall be made to a Certificateholder for
any registration of transfer of Certificates, but the Certificate Registrar
may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any registration of transfer of
Certificates.
(b) A Certificate may be exchanged by the Holder thereof for any
number of new Certificates of the same Class, in authorized denominations,
representing in the aggregate the same Certificate Balance (or Notional
Amount) as the Certificate surrendered, upon surrender of the Certificate to
be exchanged at the office of the Certificate Registrar duly endorsed or
accompanied by a written instrument of transfer duly executed by such Holder
or his duly authorized attorney in such form as is satisfactory to the
Certificate Registrar. Certificates delivered upon any such exchange will
evidence the same obligations, and will be entitled to the same rights and
privileges, as the Certificates surrendered. No service charge shall be made
to a Certificateholder for any exchange of Certificates, but the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any exchange of
Certificates. Whenever any Certificates are so surrendered for exchange, the
Securities Administrator on behalf of the Trustee shall execute, and the
Authenticating Agent shall authenticate, date and deliver the Certificates
which the Certificateholder making the exchange is entitled to receive.
(c) By acceptance of a Restricted Certificate, whether upon original
issuance or subsequent transfer, each Holder of such a Certificate
acknowledges the restrictions on the transfer of such Certificate set forth
thereon and agrees that it will transfer such a Certificate only as provided
herein.
The following restrictions shall apply with respect to the transfer
and registration of transfer of a Restricted Certificate to a transferee that
takes delivery in the form of a Definitive Certificate:
(i) The Certificate Registrar shall register the transfer of
a Restricted Certificate if the requested transfer is (x) to the
Depositor or an affiliate (as defined in Rule 405 under the ▇▇▇▇ ▇▇▇)
of the Depositor or (y) being made to a "qualified institutional
buyer" (a "QIB") as defined in Rule 144A under the Securities Act of
1933, as amended (the "Act") by a transferor that has provided the
Certificate Registrar with a certificate in the form of Exhibit H
hereto; and
(ii) The Certificate Registrar shall register the transfer
of a Restricted Certificate if the requested transfer is being made
to an "accredited investor" under Rule 501(a)(1), (2), (3) or (7)
under the Act, or to any Person all of the equity owners in which are
such accredited investors, by a transferor who furnishes to the
Certificate Registrar a letter of the transferee substantially in the
form of Exhibit I hereto.
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(d) No transfer of an ERISA-Restricted Certificate in the form of a
Definitive Certificate shall be made to any Person or shall be effective
unless the Certificate Registrar, on behalf of the Trustee, has received (A) a
certificate substantially in the form of Exhibit J hereto (or Exhibit B, in
the case of a Residual Certificate) from such transferee or (B) an Opinion of
Counsel satisfactory to the Certificate Registrar and the Securities
Administrator to the effect that the purchase and holding of such a
Certificate will not constitute or result in any nonexempt prohibited
transactions under Title I of ERISA or Section 4975 of the Code or any
Federal, state or local law ("Similar Law") materially similar to the
foregoing provisions of ERISA or the Code and will not subject the Certificate
Registrar, the Trustee, the Master Servicer, the Depositor or the Securities
Administrator to any obligation in addition to those undertaken in the
Agreement; provided, however, that the Certificate Registrar will not require
such certificate or opinion in the event that, as a result of a change of law
or otherwise, counsel satisfactory to the Certificate Registrar has rendered
an opinion to the effect that the purchase and holding of an ERISA-Restricted
Certificate by a Plan or a Person that is purchasing or holding such a
Certificate with the assets of a Plan will not constitute or result in a
prohibited transaction under Title I of ERISA or Section 4975 of the Code and
will not subject the Certificate Registrar, the Trustee, the Master Servicer,
the Depositor or the Securities Administrator to any obligation in addition to
those undertaken in this Agreement. Each Transferee of an ERISA-Restricted
Certificate that is a Book-Entry Certificate shall be deemed to have made the
appropriate representation set forth in paragraph 2 and the representation set
forth in paragraph 3 of Exhibit J. The preparation and delivery of the
certificate and opinions referred to above shall not be an expense of the
Trust Fund, the Certificate Registrar, the Trustee, the Master Servicer, the
Depositor or the Securities Administrator.
During the period the Supplemental Interest Trust is in effect, no
transfer of an Aggregate Group I Certificate shall be made unless the
Securities Administrator shall have received either a representation from the
transferee of such Aggregate Group I Certificate acceptable to and in form and
substance satisfactory to the Securities Administrator to the effect that such
transferee is not a Plan, or (ii) a representation that the purchase and
holding of the Aggregate Group I Certificate satisfy the requirements for
exemptive relief under an Investor Based Exemption, or in the case of a Plan
subject to Similar Law, will not constitute a non-exempt violation of such
Similar Law. In the event such a representation letter is not delivered, one
of the foregoing representations, as appropriate, shall be deemed to have been
made by the transferee's (including an initial acquirer's) acceptance of the
Aggregate Group I Certificate. In the event that such representation is
violated, such transfer or acquisition shall be void and of no effect.
Notwithstanding the foregoing, no opinion or certificate shall be
required for the initial issuance of the ERISA-Restricted Certificates to the
Underwriter. The Certificate Registrar shall have no obligation to monitor
transfers of Book-Entry Certificates that are ERISA-Restricted Certificates
and shall have no liability for transfers of such Certificates in violation of
the transfer restrictions. The Certificate Registrar shall be under no
liability to any Person for any registration of transfer of any
ERISA-Restricted Certificate that is in fact not permitted by this Section
3.03(d) and neither the Securities Administrator nor the Paying Agent shall
have any liability for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder under
the provisions of this Agreement so long as the transfer was registered by the
Certificate Registrar in accordance with the foregoing requirements. The
Securities Administrator, on behalf of the Trustee, shall be entitled, but not
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obligated, to recover from any Holder of any ERISA-Restricted Certificate that
was in fact a Plan or a Person acting on behalf of a Plan any payments made on
such ERISA-Restricted Certificate at and after such time. Any such payments so
recovered by the Securities Administrator, on behalf of the Trustee, shall be
paid and delivered by the Securities Administrator, on behalf of the Trustee,
to the last preceding Holder of such Certificate that is not such a Plan or
Person acting on behalf of a Plan.
(e) As a condition of the registration of transfer or exchange of any
Certificate, the Certificate Registrar may require the certified taxpayer
identification number of the owner of the Certificate and the payment of a sum
sufficient to cover any tax or other governmental charge imposed in connection
therewith; provided, however, that the Certificate Registrar shall have no
obligation to require such payment or to determine whether or not any such tax
or charge may be applicable. No service charge shall be made to the
Certificateholder for any registration, transfer or exchange of a Certificate.
(f) Notwithstanding anything to the contrary contained herein, no
Residual Certificate may be owned, pledged or transferred, directly or
indirectly, by or to (i) a Disqualified Organization or (ii) an individual,
corporation or partnership or other person unless such person (A) is not a
Non-U.S. Person or (B) is a Non-U.S. Person that holds a Residual Certificate
in connection with the conduct of a trade or business within the United States
and has furnished the transferor and the Certificate Registrar with an
effective Internal Revenue Service Form W-8ECI or successor form at the time
and in the manner required by the Code (any such person who is not covered by
clause (A) or (B) above is referred to herein as a "Non-permitted Foreign
Holder").
Prior to and as a condition of the registration of any transfer, sale
or other disposition of a Residual Certificate, the proposed transferee shall
deliver to the Certificate Registrar an affidavit in substantially the form
attached hereto as Exhibit B representing and warranting, among other things,
that such transferee is neither a Disqualified Organization, an agent or
nominee acting on behalf of a Disqualified Organization, nor a Non-permitted
Foreign Holder (any such transferee, a "Permitted Transferee"), and the
proposed transferor shall deliver to the Trustee and the Certificate Registrar
an affidavit in substantially the form attached hereto as Exhibit C. In
addition, the Trustee or the Certificate Registrar may (but shall have no
obligation to) require, prior to and as a condition of any such transfer, the
delivery by the proposed transferee of an Opinion of Counsel, addressed to the
Trustee and the Certificate Registrar, that such proposed transferee or, if
the proposed transferee is an agent or nominee, the proposed beneficial owner,
is not a Disqualified Organization, agent or nominee thereof, or a
Non-permitted Foreign Holder. Notwithstanding the registration in the
Certificate Register of any transfer, sale, or other disposition of a Residual
Certificate to a Disqualified Organization, an agent or nominee thereof, or
Non-permitted Foreign Holder, such registration shall be deemed to be of no
legal force or effect whatsoever and such Disqualified Organization, agent or
nominee thereof, or Non-permitted Foreign Holder shall not be deemed to be a
Certificateholder for any purpose hereunder, including, but not limited to,
the receipt of distributions on such Residual Certificate. The Depositor and
the Certificate Registrar shall be under no liability to any Person for any
registration or transfer of a Residual Certificate to a Disqualified
Organization, agent or nominee thereof or Non-permitted Foreign Holder or for
the Paying Agent making any payments due on such Residual Certificate to the
Holder thereof or for taking any other action with respect to such
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Holder under the provisions of the Agreement, so long as the transfer was
effected in accordance with this Section 3.03(f), unless the Certificate
Registrar shall have actual knowledge at the time of such transfer or the time
of such payment or other action that the transferee is a Disqualified
Organization, or an agent or nominee thereof, or Non-permitted Foreign Holder.
The Certificate Registrar shall be entitled to recover from any Holder of a
Residual Certificate that was a Disqualified Organization, agent or nominee
thereof, or Non-permitted Foreign Holder at the time it became a Holder or any
subsequent time it became a Disqualified Organization, agent or nominee
thereof, or Non-permitted Foreign Holder, all payments made on such Residual
Certificate at and after either such times (and all costs and expenses,
including but not limited to attorneys' fees, incurred in connection
therewith). Any payment (not including any such costs and expenses) so
recovered by the Certificate Registrar shall be paid and delivered to the last
preceding Holder of such Residual Certificate.
If any purported transferee shall become a registered Holder of a
Residual Certificate in violation of the provisions of this Section 3.03(f),
then upon receipt of written notice to the Trustee or the Certificate
Registrar that the registration of transfer of such Residual Certificate was
not in fact permitted by this Section 3.03(f), the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof retroactive to
the date of such registration of transfer of such Residual Certificate. The
Depositor, the Certificate Registrar and the Trustee shall be under no
liability to any Person for any registration of transfer of a Residual
Certificate that is in fact not permitted by this Section 3.03(f), or for the
Paying Agent making any payment due on such Certificate to the registered
Holder thereof or for taking any other action with respect to such Holder
under the provisions of this Agreement so long as the transfer was registered
upon receipt of the affidavit described in the preceding paragraph of this
Section 3.03(f).
(g) Each Holder or Certificate Owner of a Restricted Certificate,
ERISA-Restricted Certificate or Residual Certificate, or an interest therein,
by such Holder's or Owner's acceptance thereof, shall be deemed for all
purposes to have consented to the provisions of this section.
Section 3.04. Cancellation of Certificates.
Any Certificate surrendered for registration of transfer or exchange
shall be cancelled and retained in accordance with normal retention policies
with respect to cancelled certificates maintained by the Certificate
Registrar.
Section 3.05. Replacement of Certificates.
If (i) any Certificate is mutilated and is surrendered to the Trustee
or the Certificate Registrar or (ii) the Certificate Registrar receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and there is delivered to the Trustee and the Certificate
Registrar such security or indemnity as may be required by them to save each
of them harmless, then, in the absence of notice to the Depositor, the Trustee
or the Certificate Registrar that such destroyed, lost or stolen Certificate
has been acquired by a protected purchaser, the Securities Administrator on
behalf of the Trustee shall execute and the Authenticating Agent shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor and
Certificate Balance. Upon the issuance of
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any new Certificate under this Section 3.05, the Trustee, the Depositor or the
Certificate Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Trustee, the
Depositor or the Certificate Registrar) connected therewith. Any replacement
Certificate issued pursuant to this Section 3.05 shall constitute complete and
indefeasible evidence of ownership in the applicable Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
If after the delivery of such new Certificate, a protected purchaser
of the original Certificate in lieu of which such new Certificate was issued
presents for payment such original Certificate, the Depositor, the Certificate
Registrar and the Trustee or any agent shall be entitled to recover such new
Certificate from the Person to whom it was delivered or any Person taking
therefrom, except a protected purchaser, and shall be entitled to recover upon
the security or indemnity provided therefor to the extent of any loss, damage,
cost or expenses incurred by the Depositor, the Certificate Registrar, the
Trustee or any agent in connection therewith.
Section 3.06. Persons Deemed Owners.
Subject to the provisions of Section 3.09 with respect to Book-Entry
Certificates, the Depositor, the Master Servicer, the Securities
Administrator, the Trustee, the Certificate Registrar, the Paying Agent and
any agent of any of them shall treat the Person in whose name any Certificate
is registered upon the books of the Certificate Registrar as the owner of such
Certificate for the purpose of receiving distributions pursuant to Sections
5.01 and 5.02 and for all other purposes whatsoever, and neither the
Depositor, the Master Servicer, the Securities Administrator, the Trustee, the
Certificate Registrar, the Paying Agent nor any agent of any of them shall be
affected by notice to the contrary.
Section 3.07. Temporary Certificates.
(a) Pending the preparation of definitive Certificates, upon the
order of the Depositor, the Securities Administrator on behalf of the Trustee
shall execute and the Authenticating Agent shall authenticate and deliver
temporary Certificates that are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Certificates in lieu of which
they are issued and with such variations as the authorized officers executing
such Certificates may determine, as evidenced by their execution of such
Certificates.
(b) If temporary Certificates are issued, the Depositor will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office or agency of the Certificate Registrar without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Certificates, the Securities Administrator on behalf of the Trustee
shall execute and the Authenticating Agent shall authenticate and deliver in
exchange therefor a like aggregate Certificate Balance of definitive
Certificates of the same Class in the authorized denominations. Until so
exchanged, the temporary Certificates shall in all respects be entitled to the
same benefits under this Agreement as definitive Certificates of the same
Class.
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Section 3.08. Appointment of Paying Agent.
The Securities Administrator is hereby appointed as the initial
Paying Agent. The Trustee may appoint a successor Paying Agent (which may be
the Trustee) for the purpose of making distributions to the Certificateholders
hereunder. The Trustee shall cause any Paying Agent, other than the Securities
Administrator, to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee that such Paying Agent will
hold all sums held by it for the payment to the Certificateholders in an
Eligible Account (which shall be the Distribution Account) in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be
paid to the Certificateholders. All funds remitted by the Securities
Administrator to any such Paying Agent for the purpose of making distributions
shall be paid to the Certificateholders on each Distribution Date and any
amounts not so paid shall be returned on such Distribution Date to the
Securities Administrator. If the Paying Agent is not the Trustee or the
Securities Administrator, the Securities Administrator shall cause to be
remitted to the Paying Agent on or before the Business Day prior to each
Distribution Date, by wire transfer in immediately available funds, the funds
to be distributed on such Distribution Date. Any Paying Agent shall be either
a bank or trust company or otherwise authorized under law to exercise
corporate trust powers.
Section 3.09. Book-Entry Certificates.
(a) Each Class of Book-Entry Certificates, upon original issuance,
shall be issued in the form of one or more typewritten Certificates
representing the Book-Entry Certificates. The Book-Entry Certificates shall
initially be registered on the Certificate Register in the name of the nominee
of the Clearing Agency, and no Certificate Owner will receive a definitive
certificate representing such Certificate Owner's interest in the Book-Entry
Certificates, except as provided in Section 3.09(c). Unless Definitive
Certificates have been issued to Certificate Owners of Book-Entry Certificates
pursuant to Section 3.09(c):
(i) the provisions of this Section 3.09 shall be in full
force and effect;
(ii) the Certificate Registrar, the Paying Agent and the
Trustee shall deal with the Clearing Agency for all purposes
(including the making of distributions on the Book-Entry
Certificates) as the authorized representatives of the Certificate
Owners and the Clearing Agency and shall be responsible for crediting
the amount of such distributions to the accounts of such Persons
entitled thereto, in accordance with the Clearing Agency's normal
procedures;
(iii) to the extent that the provisions of this Section 3.09
conflict with any other provisions of this Agreement, the provisions
of this Section 3.09 shall control; and
(iv) the rights of Certificate Owners shall be exercised
only through the Clearing Agency and the Clearing Agency Participants
and shall be limited to those established by law and agreements
between such Certificate Owners and the Clearing Agency and/or the
Clearing Agency Participants. Unless and until Definitive
Certificates are issued pursuant to Section 3.09(c), the initial
Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit distributions
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of principal of and interest on the Book-Entry Certificates to such
Clearing Agency Participants.
(b) Whenever notice or other communication to the Certificateholders
is required under this Agreement, unless and until Definitive Certificates
shall have been issued to Certificate Owners pursuant to Section 3.09(c), the
Securities Administrator shall give all such notices and communications
specified herein to be given to Holders of the Book-Entry Certificates to the
Clearing Agency.
(c) If (i) (A) the Clearing Agency or the Depositor advises the
Certificate Registrar in writing that the Clearing Agency is no longer willing
or able to discharge properly its responsibilities with respect to the
Book-Entry Certificates, and (B) the Depositor is unable to locate a qualified
successor satisfactory to the Depositor and the Certificate Registrar or (ii)
after the occurrence of an Event of Default, Certificate Owners representing
beneficial interests aggregating not less than 50% of the Class Principal
Balance of a Class of Book-Entry Certificates advise the Paying Agent and the
Clearing Agency through the Clearing Agency Participants in writing that the
continuation of a book-entry system through the Clearing Agency is no longer
in the best interests of the Certificate Owners of a Class of Book-Entry
Certificates, the Certificate Registrar shall notify the Clearing Agency to
effect notification to all Certificate Owners, through the Clearing Agency, of
the occurrence of any such event and of the availability of Definitive
Certificates to Certificate Owners requesting the same. Upon surrender to the
Certificate Registrar of the Book-Entry Certificates by the Clearing Agency,
accompanied by registration instructions from the Clearing Agency for
registration, the Certificate Registrar shall issue the Definitive
Certificates. Neither the Depositor, the Certificate Registrar nor the Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Certificates all references herein to
obligations imposed upon or to be performed by the Clearing Agency shall be
deemed to be imposed upon and performed by the Certificate Registrar, to the
extent applicable, with respect to such Definitive Certificates and the
Certificate Registrar shall recognize the holders of the Definitive
Certificates as Certificateholders hereunder. Notwithstanding the foregoing,
the Certificate Registrar, upon the instruction of the Depositor, shall have
the right to issue Definitive Certificates on the Closing Date in connection
with credit enhancement programs.
ARTICLE IV
ADMINISTRATION OF THE TRUST FUND
Section 4.01. Custodial Accounts; Distribution Account.
(a) On or prior to the Closing Date, the Master Servicer shall have
caused each Servicer to establish and maintain one or more Custodial Accounts,
as provided in the related Purchase and Servicing Agreement, into which all
Scheduled Payments and unscheduled payments with respect to the related
Mortgage Loans, net of any deductions or reimbursements permitted under the
related Purchase and Servicing Agreement, shall be deposited. On each
Distribution Account Deposit Date, the Servicers shall remit to the Securities
Administrator for
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deposit into the Distribution Account, all amounts so required to be deposited
into such account in accordance with the terms of the related Purchase and
Servicing Agreements.
(b) The Securities Administrator, as Paying Agent for the Trust,
shall establish and maintain an Eligible Account entitled "Distribution
Account of LaSalle Bank National Association, as Trustee for the benefit of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Loan Trust 2006-16AX, Holders of Mortgage Pass-Through
Certificates." The Securities Administrator shall, promptly upon receipt from
the Servicers on each related Distribution Account Deposit Date, deposit into
the Distribution Account and retain on deposit until the related Distribution
Date the following amounts:
(i) the aggregate of collections with respect to the
Mortgage Loans remitted by the Servicers from the related Custodial
Accounts in accordance with the Purchase and Servicing Agreements;
(ii) any amounts required to be deposited by the Master
Servicer with respect to the Mortgage Loans for the related Due
Period pursuant to this Agreement, including the amount of any
Advances or Compensating Interest Payments with respect to the
Mortgage Loans not paid by the Servicers; and
(iii) any other amounts so required to be deposited in the
Distribution Account in the related Due Period pursuant to this
Agreement.
(c) In the event the Master Servicer or a Servicer has remitted in
error to the Distribution Account any amount not required to be remitted in
accordance with the definition of Available Distribution Amount, it may at any
time direct the Securities Administrator to withdraw such amount from the
Distribution Account for repayment to the Master Servicer or Servicer, as
applicable, by delivery of an Officer's Certificate to the Securities
Administrator and the Trustee which describes the amount deposited in error.
(d) On each Distribution Date and Initial Optional Termination Date,
the Securities Administrator, as Paying Agent, shall withdraw from funds
available in the Distribution Account and distribute the Available
Distribution Amount to the Certificateholders and any other parties entitled
thereto in the amounts and priorities set forth in Section 5.02. The
Securities Administrator may from time to time withdraw from the Distribution
Account and pay the Master Servicer, the Trustee, the Custodian, the
Securities Administrator or any Servicer any amounts permitted to be paid or
reimbursed to such Person from funds in the Distribution Account pursuant to
this Agreement or any Purchase and Servicing Agreement.
(e) Funds in the Distribution Account may be invested in Permitted
Investments selected by and at the written direction of the Securities
Administrator, which shall mature not later than one Business Day prior to the
Distribution Date (except that if such Permitted Investment is an obligation
of the Securities Administrator or any of its Affiliates, or is managed or
advised by the Securities Administrator or any Affiliate, then such Permitted
Investment shall mature not later than such applicable Distribution Date) and
any such Permitted Investment shall not be sold or disposed of prior to its
maturity. All such Permitted Investments shall be made in the name of the
Trustee (in its capacity as such) or its nominee. All income and gain realized
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from any Permitted Investment of amounts on deposit in the Distribution
Account shall be for the benefit of the Securities Administrator, as
additional compensation for its duties hereunder, and shall be subject to its
withdrawal or order from time to time, and shall not be part of the Trust
Fund; provided, however, that if ▇▇▇▇▇ Fargo Bank, National Association is no
longer the Master Servicer and the Securities Administrator, any such income
and gain shall be used to pay the successor Master Servicer and the successor
Securities Administrator, the Master Servicer Compensation and the Securities
Administrator Compensation, respectively. The amount of any losses incurred in
respect of any such investments shall be deposited in such Distribution
Account by the Securities Administrator out of its own funds, without any
right of reimbursement therefor, immediately as realized.
Section 4.02. Permitted Withdrawals from the Custodial Accounts and
the Distribution Account.
(a) Each Servicer may from time to time make withdrawals from its
Custodial Account for the following purposes:
(i) to reimburse itself for unreimbursed Advances made by
it, such right of reimbursement pursuant to this subclause (i) being
limited to amounts received on the Mortgage Loan(s) in respect of
which any such Advance was made;
(ii) to reimburse itself for any Nonrecoverable Advance
previously made by it;
(iii) to reimburse itself for unreimbursed Servicer
Advances, each Servicer's right to reimbursement pursuant to this
clause (a) with respect to any Mortgage Loan being limited to amounts
received on such Mortgage Loan(s) which represent late recoveries of
the payments for which such advances were made pursuant to the
related Purchase and Servicing Agreement;
(iv) to reimburse itself for expenses incurred by it and
reimbursable pursuant to the related Purchase and Servicing
Agreement; and
(v) to withdraw any amount deposited in the Custodial
Account and not required to be deposited therein.
To the extent required by the related Purchase and Servicing
Agreement each Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from its Custodial Account pursuant to such subclauses (i), (ii),
(iii), (iv) and (v). Prior to making any withdrawal from its Custodial Account
pursuant to subclause (ii), the related Servicer shall deliver to the Master
Servicer an Officer's Certificate of a Servicing Officer indicating the amount
of any previous Advance determined by the Servicer to be a Nonrecoverable
Advance and identifying the related Mortgage Loans(s), and their respective
portions of such Nonrecoverable Advance.
(b) The Securities Administrator shall withdraw funds from the
Distribution Account for distributions to Certificateholders in the manner
specified in this Agreement (and to withhold from the amounts so withdrawn,
the amount of any taxes that it is authorized to
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withhold pursuant to Section 10.01). In addition, the Securities Administrator
may from time to time make withdrawals from the Distribution Account for the
following purposes:
(i) to pay all costs and expenses described in clause (e) of
the definition of "Available Distribution Amount";
(ii) (x) for so long as ▇▇▇▇▇ Fargo Bank, National
Association is the Master Servicer and the Securities Administrator,
to pay to the Master Servicer the investment earnings on the
Distribution Account as its compensation for the related Distribution
Date and (y) thereafter, concurrently, to the Master Servicer and the
Securities Administrator, the Master Servicer Compensation and the
Securities Administrator Compensation, respectively;
(iii) to withdraw and return to the Master Servicer any
amount deposited in the Distribution Account and not required to be
deposited therein; and
(iv) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 7.01 hereof.
(v) [Reserved].
Section 4.03. [Reserved].
Section 4.04. [Reserved].
Section 4.05. Reports to Trustee and Certificateholders.
On each Distribution Date, the Securities Administrator shall have
prepared and shall make available to the Trustee, the Depositor, the Rating
Agencies and each Certificateholder a written report setting forth the
following information (on the basis of Mortgage Loan level information
obtained from the Master Servicer and the Servicers):
(a) the amount of the distributions, separately identified, with
respect to each Class of Certificates;
(b) the amount of the distributions set forth in the clause (a)
allocable to principal, separately identifying the aggregate amount of any
Principal Prepayments, liquidation proceeds or other unscheduled recoveries of
principal included in that amount;
(c) the amount of the distributions set forth in the clause (a)
allocable to interest and how it was calculated;
(d) [reserved];
(e) the Class Principal Balance of each Class of Certificates after
giving effect to the distribution of principal on that Distribution Date;
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(f) with respect to each Loan Group, the aggregate Stated Principal
Balance of the Mortgage Loans at the end of the related Prepayment Period, and
the Weighted Average Net Mortgage Rate and the Mortgage Pool at the beginning
of the related Due Period;
(g) [reserved];
(h) [reserved];
(i) with respect to each Loan Group, the amount of the Servicing Fee
paid to or retained by the Master Servicer and by each Servicer, respectively;
(j) the amount of Monthly Advances for the related Due Period;
(k) with respect to each Loan Group, for each Distribution Date to
and including the Distribution Date in December 2006: the number and Stated
Principal Balance of the Mortgage Loans that were (A) Delinquent using the MBA
Method (exclusive of Mortgage Loans in foreclosure) (1) 30 to 59 days, (2) 60
to 89 days and (3) 90 or more days, (B) in foreclosure and Delinquent (1) 30
to 59 days, (2) 60 to 89 days and (3) 90 or more days and (C) in bankruptcy as
of the close of business on the last day of the calendar month preceding that
Distribution Date;
(l) with respect to each Loan Group, for each Distribution Date on
and after the Distribution Date in January 2007: the number and Stated
Principal Balance of the Mortgage Loans that were (A) Delinquent using the OTS
Method (exclusive of Mortgage Loans in foreclosure) (1) 30 to 59 days, (2) 60
to 89 days and (3) 90 or more days, (B) in foreclosure and Delinquent (1) 30
to 59 days, (2) 60 to 89 days and (3) 90 or more days and (C) in bankruptcy as
of the close of business on the last day of the calendar month preceding that
Distribution Date;
(m) with respect to each Loan Group, the total number and principal
balance of any REO properties as of the close of business on the last day of
the preceding Due Period;
(n) with respect to each Loan Group, the amount of Realized Losses
incurred during the preceding calendar month;
(o) with respect to each Loan Group, the cumulative amount of
Realized Losses incurred since the Closing Date;
(p) the Realized Losses, if any, allocated to each Class of
Certificates on that Distribution Date;
(q) the Class Principal Balance of each Class of Certificates after
giving effect to the distribution of principal on the Distribution Date;
(r) the Pass-Through Rate for each Class of Certificates for that
Distribution Date;
(s) the amount received by the Securities Administrator pursuant to
the Swap Agreement from the Swap Counterparty with respect to that
Distribution Date;
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(t) with respect to each Loan Group, the total amount of Prepayment
Penalties collected and due to the Trust Fund, as reported by the Servicers;
(u) the applicable Record Date(s) for such Distribution Date;
(v) with respect to each Class of Certificates and each Aggregate
Certificate Group, the amount thereof allocable to interest, any Unpaid
Interest Amount included in such distribution and any remaining Unpaid
Interest Amount after giving effect to such distribution, any Basis Risk Carry
Forward Amount for such Distribution Date and, in the case of the Aggregate
Group I Certificates, the amount of all Basis Risk Carry Forward Amount
covered by withdrawals from the Swap Account and the Supplemental Interest
Trust on such Distribution Date;
(w) with respect to each Class of Certificates and each Aggregate
Certificate Group, if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to such
Holders if there were sufficient funds available therefor, the amount of the
shortfall and the allocation thereof as between principal and interest,
including, in the case of the Aggregate Group I Certificates, any Basis Risk
Carry Forward Amount not covered by amounts in the Swap Account and the
Supplemental Interest Trust;
(x) with respect to each Aggregate Certificate Group, whether a
Trigger Event has occurred and is continuing (including the calculation
demonstrating the existence of the Trigger Event and the aggregate outstanding
balance of all 60+ Day Delinquent Mortgage Loans);
(y) with respect to each Aggregate Certificate Group, the amount of
any Net Monthly Excess Cash Flow on such Distribution Date and the allocation
thereof to the Certificateholders with respect to Unpaid Interest Amounts,
Unpaid Realized Loss Amounts, or Basis Risk Carry Forward Amounts; and
(z) the amount distributed on the Class I-OC and Class 3-OC
Certificates.
(aa) with respect to each Aggregate Certificate Group, the
Overcollateralized Amount and the Overcollateralization Target Amount.
(bb) with respect to each Class of Certificates and each Aggregate
Certificate Group, the amount of any Subsequent Recoveries for such
Distribution Date.
The Securities Administrator shall make such reports available each
month via its website at ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇.▇▇▇. Assistance in using the
website may be obtained by calling the Securities Administrator's customer
service desk at (▇▇▇) ▇▇▇-▇▇▇▇. Certificateholders and other parties that are
unable to use the website are entitled to have a paper copy mailed to them via
first class mail by contacting the Securities Administrator and indicating
such. In preparing or furnishing the foregoing reports, the Securities
Administrator shall be entitled to rely conclusively on the accuracy of the
information or data regarding the Mortgage Loans and the related REO
Properties that has been provided to the Securities Administrator by the
Master Servicer and the Servicers, and neither the Trustee nor the Securities
Administrator shall be obligated to verify, recompute, reconcile or
recalculate any such information or data.
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Upon the reasonable advance written request of any Certificateholder
that is a savings and loan, bank or insurance company, which request, if
received by the Trustee or any agent thereof, shall be promptly forwarded to
the Securities Administrator, the Securities Administrator shall provide, or
cause to be provided, (or, to the extent that such information or
documentation is not required to be provided by a Servicer under the
applicable Purchase and Servicing Agreement, shall use reasonable efforts to
obtain such information and documentation from such Servicer, and provide) to
such Certificateholders such reports and access to information and
documentation regarding the Mortgage Loans as such Certificateholders may
reasonably deem necessary to comply with applicable regulations of the Office
of Thrift Supervision or its successor or other regulatory authorities with
respect to an investment in the Certificates; provided, however, that the
Securities Administrator shall be entitled to be reimbursed by such
Certificateholders for the Securities Administrator's actual expenses incurred
in providing such reports and access.
ARTICLE V
DISTRIBUTIONS TO HOLDERS OF CERTIFICATES
Section 5.01. Distributions Generally.
(a) Subject to Section 7.01 respecting the final distribution on the
Certificates, on each Distribution Date the Securities Administrator or the
Paying Agent shall make all distributions in accordance with this Article V.
Such distributions shall be made by check mailed to each Certificateholder's
address as it appears on the Certificate Register of the Certificate Registrar
or, upon written request made to the Securities Administrator at least five
Business Days prior to the related Record Date by any Certificateholder owning
an aggregate initial Certificate Balance of at least $1,000,000 or in the case
of a Class of Notional Amount Certificates or a Residual Certificate or Class
I-OC or Class 3-OC Certificate, a Percentage Interest of not less than 100% by
wire transfer in immediately available funds to an account specified in the
request and at the expense of such Certificateholder; provided, however, that
the final distribution in respect of any Certificate shall be made only upon
presentation and surrender of such Certificate at the Certificate Registrar's
Corporate Trust Office; provided, further, that the foregoing provisions shall
not apply to any Class of Certificates as long as such Certificate remains a
Book-Entry Certificate in which case all payments made shall be made through
the Clearing Agency and its Clearing Agency Participants. Notwithstanding the
reduction of the Class Principal Balance of any Class of Certificates to zero,
such Class will be outstanding hereunder (solely for the purpose of receiving
distributions and not for any other purpose) until the termination of the
respective obligations and responsibilities of the Depositor, the Master
Servicer, the Securities Administrator and the Trustee hereunder in accordance
with Article VII. Wire transfers will be made at the expense of the Holder
requesting such wire transfer by deducting a wire transfer fee from the
related distribution. Notwithstanding such final payment of principal of any
of the Certificates, each Residual Certificate will remain outstanding until
the termination of each REMIC and the payment in full of all other amounts due
with respect to the Residual Certificates and at such time such final payment
in retirement of any Residual Certificate will be made only upon presentation
and surrender of such Certificate at the Certificate Registrar's Corporate
Trust Office. If any payment required to be made on the
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Certificates is to be made on a day that is not a Business Day, then such
payment will be made on the next succeeding Business Day.
(b) All distributions or allocations made with respect to the
Certificateholders within each Class on each Distribution Date shall be
allocated among the outstanding Certificates in such Class equally in
proportion to their respective initial Class Principal Balances or Notional
Amounts (or Percentage Interests).
Section 5.02. Priorities of Distribution.
(a) (1) On each Distribution Date, the Securities Administrator shall
withdraw from the Distribution Account the Aggregate Group I Available
Distribution Amount (to the extent that such amount is then on deposit in the
Distribution Account) and shall distribute such amount to the Aggregate Group
I Certificates in the following order of priority:
(A) With respect to the portion of the Aggregate Group I Available
Distribution Amount for such Distribution Date consisting of the
Aggregate Group I Interest Remittance Amount for such Distribution
Date, on each Distribution Date, the Securities Administration shall
withdraw the Aggregate Group I Interest Remittance Amount from the
Available Distribution Amount on deposit in the Distribution Account
for that Distribution Date, and distribute such funds to the
specified Class of Aggregate Group I Certificates that have
outstanding Class Principal Balances and the Swap Account,
sequentially, in the following order of priority:
(i) to the Swap Account, the sum of (x) all Net Swap
Payments and (y) any Swap Termination Payment owed
to the Swap Counterparty, including, without
limitation, any Senior Defaulted Swap Termination
Payment, but not including any other Defaulted Swap
Termination Payment owed to the Swap Counterparty,
if any;
(ii) concurrently,
1. from the portion of the Aggregate Group I
Interest Remittance Amount relating to Loan Group
1, to the Class 1-A Certificates, their Aggregate
Group I Senior Interest Distribution Amount for
such Distribution Date, and
2. from the portion of the Aggregate Group I
Interest Remittance Amount relating to Loan Group
2, concurrently, to the Class 2-A-1, Class 2-A-2,
Class 2-A-3 and Class 2-A-4 Certificates their
respective Aggregate Group I Senior Interest
Distribution Amounts for such Distribution Date,
pro rata, based on their respective Aggregate Group
I Senior Interest Distribution Amounts for such
Distribution Date; and
(iii) concurrently,
1. from the portion of the Aggregate Group I
Interest Remittance Amount relating to Loan Group
2, to the Class 1-A Certificates, their
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Aggregate Group I Senior Interest Distribution
Amount for such Distribution Date remaining unpaid
after distributions pursuant to Section
5.02(a)(1)(A)(ii)(1) hereof on that Distribution
Date, and
2. from the portion of the Aggregate Group I
Interest Remittance Amount relating to Loan Group
1, concurrently, to the Class 2-A-1, Class 2-A-2,
Class 2-A-3 and Class 2-A-4 Certificates their
respective Aggregate Group I Senior Interest
Distribution Amounts for such Distribution Date
remaining unpaid after distributions pursuant to
Section 5.02(a)(1)(A)(ii)(2) hereof on that
Distribution Date, pro rata, based on their
respective Aggregate Group I Senior Interest
Distribution Amounts for such Distribution Date;
and
(iv) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class
M-3, Class M-4, Class M-5, Class M-6, Class B-1,
Class B-2 and Class B-3 Certificates, in that
order, their respective Aggregate Group I
Subordinated Interest Distribution Amounts, in each
case, to the extent of the Aggregate Group I
Interest Remittance Amount remaining after
distributions of interest to the Classes of
Certificates with a higher payment priority; and
(iv) any remaining Aggregate Group I Interest Remittance
Amount on any Distribution Date will be distributed
pursuant to Section 5.02(a)(1)(C) hereof.
(B)(i) On each Distribution Date (a) prior to the related Stepdown
Date or (b) on which a Trigger Event for the Aggregate Group I
Certificates is in effect, the Swap Counterparty and the Holders of
each Class of Aggregate Group I Certificates shall be entitled to
receive payments and distributions in respect of principal from the
Aggregate Group I Principal Distribution Amount, respectively, in the
following order of priority:
(i) to the Swap Account, the sum of (x) all Net Swap
Payments and (y) any Swap Termination Payment owed
to the Swap Counterparty, including, without
limitation, any Senior Defaulted Swap Termination
Payment, but not including any other Defaulted Swap
Termination Payment owed to the Swap Counterparty,
if any, remaining unpaid on that Distribution Date
after distributions under Section 5.02(a)(1)(A)(i)
for that Distribution Date;
(ii) to the holders of the Aggregate Group I Senior
Certificates pursuant to Section 5.03(a) hereof,
until their respective Class Principal Balances are
reduced to zero;
(iii) sequentially, to the holders of the Class ▇-▇,
▇▇▇▇▇ ▇-▇, Class M-3, Class M-4, Class M-5, Class
M-6, Class B-1, Class B-2 and Class B-3
Certificates, in that order, until their respective
Class Principal Balances are reduced to zero; and
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(iv) any remaining Aggregate Group I Principal
Distribution Amount on any Distribution Date will
be will be distributed pursuant to Section
5.02(a)(1)(C) hereof; or
(i) On each Distribution Date (a) on or after the related
Stepdown Date and (b) on which a Trigger Event for the Aggregate
Group I Certificates is not in effect, the Swap Counterparty and the
Holders of each Class of Aggregate Group I Certificates shall be
entitled to receive payments and distributions in respect of
principal from the Aggregate Group I Principal Distribution Amount,
respectively, in the following order of priority:
(i) to the Swap Account, the sum of (x) all Net Swap
Payments and (y) any Swap Termination Payment owed
to the Swap Counterparty, including, without
limitation, any Senior Defaulted Swap Termination
Payment, but not including any other Defaulted Swap
Termination Payment owed to the Swap Counterparty,
if any, remaining unpaid on that Distribution Date
after distributions under Section 5.02(a)(1)(A)(i)
for that Distribution Date;
(ii) to the holders of the Aggregate Group I Senior
Certificates pursuant to Section 5.03(a) hereof,
until their respective Class Principal Balances are
reduced to zero;
(iii) to the Class M-1 Certificates, the Class M-1
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero;
(iv) to the Class M-2 Certificates, the Class M-2
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero;
(v) to the Class M-3 Certificates, the Class M-3
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero;
(vi) to the Class M-4 Certificates, the Class M-4
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero;
(vii) to the Class M-5 Certificates, the Class M-5
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero;
(viii) to the Class M-6 Certificates, the Class M-6
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero;
(ix) to the Class B-1 Certificates, the Class B-1
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero;
(x) to the Class B-2 Certificates, the Class B-2
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero;
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(xi) to the Class B-3 Certificates, the Class B-3
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero; and
(xii) any remaining Aggregate Group I Principal
Distribution Amount on any Distribution Date will
be distributed pursuant to Section 5.02(a)(1)(C)
hereof.
(C) On each Distribution Date the remaining Aggregate Group I Net
Monthly Excess Cashflow, after giving effect to the distribution of the
Aggregate Group I Extra Principal Distribution Amount for that Distribution
Date, shall be distributed to the Swap Counterparty and the Aggregate Group I
Certificates in the following order of priority, in each case to the extent of
the amounts remaining:
(i) to the Class M-1 Certificates, the related Interest
Carry Forward Amount;
(ii) to the Class M-1 Certificates, the related Unpaid
Realized Loss Amount;
(iii) to the Class M-2 Certificates, the related Interest
Carry Forward Amount;
(iv) to the Class M-2 Certificates, the related Unpaid
Realized Loss Amount;
(v) to the Class M-3 Certificates, the related Interest
Carry Forward Amount;
(vi) to the Class M-3 Certificates, the related Unpaid
Realized Loss Amount;
(vii) to the Class M-4 Certificates, the related Interest
Carry Forward Amount;
(viii) to the Class M-4 Certificates, the related Unpaid
Realized Loss Amount;
(ix) to the Class M-5 Certificates, the related Interest
Carry Forward Amount;
(x) to the Class M-5 Certificates, the related Unpaid
Realized Loss Amount;
(xi) to the Class M-6 Certificates, the related Interest
Carry Forward Amount;
(xii) to the Class M-6 Certificates, the related Unpaid
Realized Loss Amount;
(xiii) to the Class B-1 Certificates, the related Interest
Carry Forward Amount;
(xiv) to the Class B-1 Certificates, the related Unpaid
Realized Loss Amount;
(xv) to the Class B-2 Certificates, the related Interest
Carry Forward Amount;
(xvi) to the Class B-2 Certificates, the related Unpaid
Realized Loss Amount;
(xvii) to the Class B-3 Certificates, the related Interest
Carry Forward Amount;
(xviii) to the Class B-3 Certificates, the related Unpaid
Realized Loss Amount;
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(xix) sequentially, first (i) concurrently, to the Aggregate
Group I Senior Certificates with Basis Risk Carry Forward Amounts on
that Distribution Date, first pro rata, based on their respective
Class Principal Balances to the extent needed to pay any Basis Risk
Carry Forward Amount Carryover for each such Class and then, pro
rata, based on any Basis Risk Carry Forward Amount Carryover for each
such Class, in an amount up to the amount of any Basis Risk Carry
Forward Amount remaining unpaid for such Classes of Certificates and
then (ii) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class
M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, in that order, in an amount up to the amount of any
Basis Risk Carry Forward Amount for such Classes of Certificates;
(xxi) sequentially, first (i) concurrently, to the Aggregate
Group I Senior Certificates, first pro rata, based on their
respective Class Principal Balances to the extent needed to pay any
Unpaid Interest Shortfall Amount for each such Class and then, pro
rata, based on any Unpaid Interest Shortfall Amount for each such
Class, in an amount up to the amount of any Unpaid Interest Shortfall
Amount remaining unpaid for such Classes of Certificates and then
(ii) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class M-4,
Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, in that order, in an amount up to the amount of any
Unpaid Interest Shortfall Amount for such Classes of Certificates;
(xxii) to the Swap Account, the amount of any Defaulted Swap
Termination Payment, other than a Senior Defaulted Swap Termination
Payment, owed to the Swap Counterparty;
(xxiii) to the Class I-OC Certificates, the Class I-OC
Distributable Amount; and
(xxiv) to the holders of the Class A-R Certificates, any
remaining amounts; provided that if such Distribution Date is the
Distribution Date immediately following the expiration of the latest
prepayment charge term or any Distribution Date thereafter, then any
such remaining amounts, together with the Class I-P Distribution
Amount, will be distributed first, to the holders of the Class I-P
Certificates, until the Class Principal Balance thereof has been
reduced to zero; and second, to the holders of the Class A-R
Certificates.
For the avoidance of doubt, Section 5.02(a)(1)(C) is intended to cause the
Class I-OC Certificates to receive from amounts remaining after the
application of all other clauses of Section 5.02(a)(1)(C) preceding it, an
amount up to the sum of the Class I-OC Distributable Amount for that
Distribution Date and any Class I-OC Distributable Amounts remaining unpaid
from prior Distribution Dates and the Securities Administrator shall construe
Section 5.02(a)(1)(C) as necessary so as to accomplish such result.
(D) On each Distribution Date, the Class I-P Distribution Amount
received during the related Prepayment Period will be distributed to
the holders of the Class I-P Certificates. On the Distribution Date
in March 2012, the $1,000 held in trust for the Class I-P
Certificates will be distributed to the holders of the Class I-P
Certificates.
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(1) On each Distribution Date, the Securities Administrator shall
withdraw from the Distribution Account the Group 3 Available Distribution
Amount (to the extent that such amount is then on deposit in the Distribution
Account) and shall distribute such amount to the Group 3 Certificates in the
following order of priority:
(A) With respect to the portion of the Group 3 Available Distribution
Amount for such Distribution Date consisting of the Group 3 Interest
Remittance Amount for such Distribution Date, on each Distribution
Date, the Securities Administration shall withdraw the Group 3
Interest Remittance Amount from the Available Distribution Amount on
deposit in the Distribution Account for that Distribution Date, and
distribute such funds to the specified Class of Group 3 Certificates
that have outstanding Class Principal Balances, sequentially, in the
following order of priority:
(i) concurrently, to the Class A-R, Class 3-A-1, Class
3-A-2, Class 3-A-3 and Class 3-A-4 Certificates
their respective Group 3 Senior Interest
Distribution Amounts for such Distribution Date,
pro rata, based on their respective Group 3 Senior
Interest Distribution Amounts for such Distribution
Date;
(ii) sequentially, to the Class 3-M-1, Class 3-M-2,
Class 3-B-1 and Class 3-B-2 Certificates, in that
order, their respective Group 3 Subordinated
Interest Distribution Amounts, in each case, to the
extent of the Group 3 Interest Remittance Amount
remaining after distributions of interest to the
Classes of Certificates with a higher payment
priority; and
(iv) any remaining Group 3 Interest Remittance Amount on
any Distribution Date will be distributed pursuant
to Section 5.02(a)(2)(C) hereof.
(B)(i) On each Distribution Date (a) prior to the related Stepdown
Date or (b) on which a Trigger Event for the Group 3 Certificates is
in effect, the Holders of each Class of Group 3 Certificates shall be
entitled to receive payments and distributions in respect of
principal from the Group 3 Principal Distribution Amount,
respectively, in the following order of priority:
(i) first, sequentially, first to the Class A-R
Certificates, until its Class Principal Balance is
reduced to zero, and then, to the holders of the
Group 3 Senior Certificates pursuant to Section
5.03(b) hereof, until their respective Class
Principal Balances are reduced to zero;
(ii) sequentially, to the holders of the Class 3-M-1,
Class 3-M-2, Class 3-B-1 and Class 3-B-2
Certificates, in that order, until their respective
Class Principal Balances are reduced to zero; and
(iii) any remaining Group 3 Principal Distribution Amount
on any Distribution Date will be will be
distributed pursuant to Section 5.02(a)(2)(C)
hereof; or
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On each Distribution Date (a) on or after the related
Stepdown Date and (b) on which a Trigger Event for the Group 3
Certificates is not in effect, the Holders of each Class of Group 3
Certificates shall be entitled to receive payments and distributions
in respect of principal from the Group 3 Principal Distribution
Amount, respectively, in the following order of priority:
(i) to the holders of the Group 3 Senior Certificates
pursuant to Section 5.03(b) hereof, until their
respective Class Principal Balances are reduced to
zero;
(ii) to the Class 3-M-1 Certificates, the Class 3-M-1
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero;
(iii) to the Class 3-M-2 Certificates, the Class 3-M-2
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero;
(iv) to the Class 3-B-1 Certificates, the Class 3-B-1
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero;
(v) to the Class 3-B-2 Certificates, the Class 3-B-2
Principal Distribution Amount, until its Class
Principal Balance is reduced to zero; and
(vi) any remaining Group 3 Principal Distribution Amount
on any Distribution Date will be distributed
pursuant to Section 5.02(a)(2)(C) hereof.
(C) On each Distribution Date the remaining Group 3 Net Monthly
Excess Cashflow, after giving effect to the distribution of the Group 3 Extra
Principal Distribution Amount for that Distribution Date, shall be distributed
to the Group 3 Certificates in the following order of priority, in each case
to the extent of the amounts remaining:
(i) to the Class 3-M-1 Certificates, the related Interest
Carry Forward Amount;
(ii) to the Class 3-M-1 Certificates, the related Unpaid
Realized Loss Amount;
(iii) to the Class 3-M-2 Certificates, the related Interest
Carry Forward Amount;
(iv) to the Class 3-M-2 Certificates, the related Unpaid
Realized Loss Amount;
(v) to the Class 3-B-1 Certificates, the related Interest
Carry Forward Amount;
(vi) to the Class 3-B-1 Certificates, the related Unpaid
Realized Loss Amount;
(vii) to the Class 3-B-2 Certificates, the related Interest
Carry Forward Amount;
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(viii) to the Class 3-B-2 Certificates, the related Unpaid
Realized Loss Amount;
(ix) to the Group 3 Reserve Fund, the amount of any Basis
Risk Carry Forward Amount for such Distribution Date and from the
Group 3 Reserve Fund sequentially, first (i) concurrently, to the
Group 3 Senior Certificates with Basis Risk Carry Forward Amounts on
that Distribution Date, first pro rata, based on their respective
Class Principal Balances to the extent needed to pay any Basis Risk
Carry Forward Amount Carryover for each such Class and then, pro
rata, based on any Basis Risk Carry Forward Amount Carryover for each
such Class, in an amount up to the amount of any Basis Risk Carry
Forward Amount remaining unpaid for such Classes of Certificates and
then (ii) sequentially, to the Class 3-M-1, Class 3-M-2, Class 3-B-1
and Class 3-B-2 Certificates, in that order, in an amount up to the
amount of any Basis Risk Carry Forward Amount for such Classes of
Certificates;
(x) sequentially, first (i) concurrently, to the Group 3
Senior Certificates, first pro rata, based on their respective Class
Principal Balances to the extent needed to pay any Unpaid Interest
Shortfall Amount for each such Class and then, pro rata, based on any
Unpaid Interest Shortfall Amount for each such Class, in an amount up
to the amount of any Unpaid Interest Shortfall Amount remaining
unpaid for such Classes of Certificates and then (ii) sequentially,
to the Class 3-M-1, Class 3-M-2, Class 3-B-1 and Class 3-B-2
Certificates, in that order, in an amount up to the amount of any
Unpaid Interest Shortfall Amount for such Classes of Certificates;
(xi) to the Class 3-OC Certificates, the Class 3-OC
Distributable Amount; and
(xii) to the holders of the Class A-R Certificates, any
remaining amounts; provided that if such Distribution Date is the
Distribution Date immediately following the expiration of the latest
prepayment charge term or any Distribution Date thereafter, then any
such remaining amounts, together with the Class 3-P Distribution
Amount, will be distributed first, to the holders of the Class 3-P
Certificates, until the Class Principal Balance thereof has been
reduced to zero; and second, to the holders of the Class A-R
Certificates.
For the avoidance of doubt, Section 5.02(a)(2)(C) is intended to cause the
Class 3-OC Certificates to receive from amounts remaining after the
application of all other clauses of Section 5.02(a)(2)(C) preceding it, an
amount up to the sum of the Class 3-OC Distributable Amount for that
Distribution Date and any Class 3-OC Distributable Amounts remaining unpaid
from prior Distribution Dates and the Securities Administrator shall construe
Section 5.02(a)(2)(C) as necessary so as to accomplish such result.
(D) On each Distribution Date, the Class 3-P Distribution Amount
received during the related Prepayment Period will be distributed to the
holders of the Class 3-P Certificates. On the Distribution Date in March 2012,
the $1,000 held in trust for the Class 3-P Certificates will be distributed to
the holders of the Class 3-P Certificates.
Section 5.03. Allocation of Principal Payments to the Senior
Certificates.
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(a) Distributions to the Aggregate Group I Senior Certificates. All
principal distributions to the holders of the Aggregate Group I Senior
Certificates on any Distribution Date will be allocated concurrently between
the Group 1 Senior Certificates and the Group 2 Senior Certificates, based on
their respective Class A Principal Allocation Percentages for that
Distribution Date. Any payments of principal to the Group 1 Senior
Certificates will first be made from payments relating to the Group 1 Mortgage
Loans and any payments of principal to the Group 2 Senior Certificates will
first be made from payments relating to the Group 2 Mortgage Loans.
However, commencing with the Distribution Date on which the aggregate
Class Principal Balance of either the Group 1 Senior Certificates or the Group
2 Senior Certificates has been reduced to zero, the remaining principal
distributions distributable to the Aggregate Group I Senior Certificates on
that Distribution Date and all of the principal distributions distributable to
the Aggregate Group I Senior Certificates on all subsequent Distribution Dates
will be distributed to the holders of the remaining Aggregate Group I Senior
Certificates in accordance with the principal distribution allocations
described below, until their Class Principal Balances have been reduced to
zero.
(i) Distributions to the Group 1 Senior Certificates. On
each Distribution Date, the Group 1 Senior Principal Allocation
Amount will be distributed to the Class 1-A Certificates, until its
Class Principal Balance is reduced to zero.
(ii) Distributions to the Group 2 Senior Certificates.
A. On each Distribution Date on which an Aggregate Group I Sequential
Trigger is not in effect, except as set forth in paragraph C. below, the Group
2 Senior Principal Allocation Amount will be distributed to the Group 2 Senior
Certificates concurrently as follows:
1. the aggregate of the Pro Rata Portions for the
Class 2-A-1, Class 2-A-2 and Class 2-A-3
Certificates for that Distribution Date will be
distributed sequentially, to the Class 2-A-1, Class
2-A-2 and Class 2-A-3 Certificates, in that order,
until their respective Class Principal Balances
have been reduced to zero; and
2. the Pro Rata Portion for the Class 2-A-4
Certificates for that Distribution Date will be
distributed to the Class 2-A-4 Certificates, until
its Class Principal Balance has been reduced to
zero.
B. On each Distribution Date on which an Aggregate Group I
Sequential Trigger is in effect, except as set forth in
paragraph C. below, principal will be distributed to the
Group 2 Senior Certificates sequentially, to the Class
2-A-1, Class 2-A-2, Class 2-A-3 and Class 2-A-4
Certificates, in that order, until their respective Class
Principal Balances have been reduced to zero.
C. Notwithstanding the allocation of principal to the Group 2
Senior Certificates described above, in the event that the
aggregate Class Principal Balance of the
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Aggregate Group I Subordinated Classes and the Class I-OC
Certificates have been reduced to zero, principal will be
distributed as follows:
1. if an Aggregate Group I Sequential Trigger is not
in effect, then principal distributions to the
Group 2 Senior Certificates will be distributed
concurrently, to the Class 2-A-1, Class 2-A-2 and
Class 2-A-3 and Class 2-A-4 Certificates, pro rata,
until their respective Class Principal Balances are
reduced to zero; or
2. if an Aggregate Group I Sequential Trigger is in
effect, then principal distributions to the Group 2
Senior Certificates will be allocated first,
concurrently, to the Class 2-A-1, Class 2-A-2 and
Class 2-A-3 Certificates, pro rata, until their
respective Class Principal Balances are reduced to
zero, and then to the Class 2-A-4 Certificates,
until its Class Principal Balance is reduced to
zero.
(b) Distributions to the Group 3 Senior Certificates.
o On each Distribution Date on which a Group 3 Sequential
Trigger is not in effect, principal will be distributed to the Group 3 Senior
Certificates concurrently, to the Class 3-A-1 and Class 3-A-2 Certificates,
pro rata, until their respective Class Principal Balances have been reduced to
zero.
o On each Distribution Date on which a Group 3 Sequential
Trigger is in effect, principal will be distributed to the Group 3 Senior
Certificates, sequentially, to the Class 3-A-1 and Class 3-A-2 Certificates,
in that order, until their respective Class Principal Balances have been
reduced to zero.
Section 5.04. Allocation of Losses.
(a) On or prior to each Distribution Date, the Securities
Administrator shall aggregate the information provided by each Servicer with
respect to the total amount of Realized Losses experienced on the Aggregate
Group I Mortgage Loans and Group 3 Mortgage Loans, respectively, for the
related Distribution Date.
(b) (1) Applied Loss Amounts with respect to the Aggregate Group I
Mortgage Loans on any Distribution Date shall be allocated as follows:
(i) any Applied Loss Amounts on the Aggregate Group I
Mortgage Loans shall be allocated first to the Class I-OC
Certificates, until its Class Principal Balance is reduced to zero,
and second, to the Aggregate Group I Subordinated Certificates in
reverse order of their respective priorities of payment (beginning
with the Class of Class B Certificates then outstanding with the
highest numerical Class designation or, if no Classes of Class B
Certificates are outstanding, then beginning with the Class of Class
M Certificates then outstanding with the highest numerical Class
designation) until the respective Class Principal Balance of each
such Class is reduced to zero; and
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(ii) The Class Principal Balance of the Class of Aggregate
Group I Subordinated Certificates then outstanding with the highest
numerical Class designation shall be reduced on each Distribution
Date by the amount, if any, by which the aggregate of the Class
Principal Balances of all outstanding Classes of Aggregate Group I
Certificates (after giving effect to the distribution of principal
and the allocation of Applied Loss Amounts on the Aggregate Group I
Mortgage Loans on such Distribution Date) exceeds the aggregate
Stated Principal Balance of the Aggregate Group I Mortgage Loans for
the following Distribution Date. For the avoidance of doubt, no
reductions will be made in the Class Principal Balance of the
Aggregate Group I Senior Certificates in respect of Realized Losses
on the Aggregate Group I Mortgage Loans.
(2) Applied Loss Amounts with respect to the Group 3 Mortgage
Loans on any Distribution Date shall be allocated as follows:
(i) any Applied Loss Amounts on the Group 3 Mortgage Loans
shall be allocated first to the Class 3-OC Certificates, until its
Class Principal Balance is reduced to zero, and second, to the Group
3 Subordinated Certificates in reverse order of their respective
priorities of payment (beginning with the Class of Class 3-B
Certificates then outstanding with the highest numerical Class
designation or, if no Classes of Class 3-B Certificates are
outstanding, then beginning with the Class of Class 3-M Certificates
then outstanding with the highest numerical Class designation) until
the respective Class Principal Balance of each such Class is reduced
to zero; and
(ii) The Class Principal Balance of the Class of Group 3
Subordinated Certificates then outstanding with the highest numerical
Class designation shall be reduced on each Distribution Date by the
amount, if any, by which the aggregate of the Class Principal
Balances of all outstanding Classes of Group 3 Certificates (after
giving effect to the distribution of principal and the allocation of
Applied Loss Amounts on the Group 3 Mortgage Loans on such
Distribution Date) exceeds the aggregate Stated Principal Balance of
the Group 3 Mortgage Loans for the following Distribution Date. For
the avoidance of doubt, no reductions will be made in the Class
Principal Balance of the Group 3 Senior Certificates in respect of
Realized Losses on the Group 3 Mortgage Loans.
(c) Any Applied Loss Amounts allocated to a Class of Subordinated
Certificates or any reduction in the Class Principal Balance of a Class of
Subordinated Certificates pursuant to Section 5.04(b) above shall be allocated
among the Certificates of such Class in proportion to their respective
Certificate Balances.
(d) Any allocation of Realized Losses to a Certificate or to any
Component or any reduction in the Certificate Balance of a Certificate,
pursuant to Section 5.04(b) above shall be accomplished by reducing the
Certificate Balance or Component Balance thereof, as applicable, immediately
following the distributions made on the related Distribution Date in
accordance with the definition of "Certificate Balance" or "Component
Balance," as the case may be. All Realized Losses or Applied Loss Amounts
allocated to a Class of Component Certificates will be allocated, pro rata, to
the related Components.
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(e) For the avoidance of doubt, no Realized Losses on the Aggregate
Group I Mortgage Loans shall be allocated to the Class I-P Certificates and no
Realized Losses on the Group 3 Mortgage Loans shall be allocated to the Class
3-P Certificates.
Section 5.05. Advances by the Master Servicer.
If any Servicer fails to remit any Advance required to be made under
the applicable Purchase and Servicing Agreement, the Master Servicer shall
itself make, or shall cause the successor Servicer to make, such Advance. If
the Master Servicer determines that an Advance is required, it shall on the
Business Day preceding the related Distribution Date immediately following
such Determination Date remit to the Securities Administrator from its own
funds (or funds advanced by the applicable Servicer) for deposit in the
Distribution Account immediately available funds in an amount equal to such
Advance. The Master Servicer and each Servicer shall be entitled to be
reimbursed for all Advances made by it. Notwithstanding anything to the
contrary herein, in the event the Master Servicer determines in its reasonable
judgment that an Advance is non-recoverable, the Master Servicer shall be
under no obligation to make such Advance. If the Master Servicer determines
that an Advance is non-recoverable, it shall, on or prior to the related
Distribution Date, deliver an Officer's Certificate to the Trustee and the
Securities Administrator to such effect.
Section 5.06. Compensating Interest Payments.
The amount of compensation payable to the Securities Administrator in
respect of the Mortgage Loans and any Distribution Date shall be reduced (but
not below zero) by the amount of any aggregate Compensating Interest Payment
from the Servicers for such Distribution Date, but only to the extent that
Prepayment Interest Shortfalls relating to such Distribution Date are required
to be paid by the Servicers pursuant to the Purchase and Servicing Agreements,
as amended by the Acknowledgements, but are not actually paid by the Servicer.
Such amount shall not be treated as an Advance and shall not be reimbursable.
Section 5.07. [Reserved].
Section 5.08. Determination of Pass-Through Rates for LIBOR
Certificates and Group 3 Senior Certificates.
(a) On each Interest Determination Date after the initial Interest
Determination Date and for so long as any LIBOR Certificates are outstanding,
the Securities Administrator will determine LIBOR on the basis of the British
Bankers' Association ("BBA") "Interest Settlement Rate" for one-month deposits
in U.S. dollars as found on Telerate page 3750 as of 11:00 a.m. London time on
each related LIBOR Determination Date. "Telerate Page 3750" means the display
page currently so designated on the Moneyline Telerate Service (formerly the Dow
▇▇▇▇▇ Markets) (or such other page as may replace that page on that service for
the purpose of displaying comparable rates or prices).
On each Interest Determination Date, commencing with the Interest
Determination Date related to the Distribution Date in August 2016, and for so
long as any Group 3 Senior Certificates are outstanding, the Securities
Administrator will determine Six-Month LIBOR on the basis of the British
Bankers' Association ("BBA") "Interest Settlement Rate" for six-month
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deposits in U.S. dollars as found on Telerate page 3750 as of 11:00 a.m.
London time on each related LIBOR Determination Date. "Telerate Page 3750"
means the display page currently so designated on the Moneyline Telerate
Service (formerly the Dow ▇▇▇▇▇ Markets) (or such other page as may replace
that page on that service for the purpose of displaying comparable rates or
prices).
(b) If on any Interest Determination Date, LIBOR or Six-Month LIBOR
cannot be determined as provided in paragraph (a) of this Section 5.09, the
Securities Administrator shall either (i) request each Reference Bank to
inform the Securities Administrator of the quotation offered by its principal
London office for making one-month or six-month, as applicable, United States
dollar deposits in leading banks in the London interbank market, as of 11:00
a.m. (London time) on such Interest Determination Date or (ii) in lieu of
making any such request, rely on such Reference Bank quotations that appear at
such time on the Reuters Screen LIBO Page (as defined in the International
Swap Dealers Association Inc. Code of Standard Wording, Assumptions and
Provisions for Swaps, 1986 Edition), to the extent available. LIBOR or
Six-Month LIBOR for the next related Interest Accrual Period will be
established by the Securities Administrator on each interest Determination
Date as follows:
(i) If on any Interest Determination Date two or more
Reference Banks provide such offered quotations, LIBOR or Six-Month
LIBOR, as applicable, for the next applicable Interest Accrual Period
shall be the arithmetic mean of such offered quotations (rounding
such arithmetic mean upwards if necessary to the nearest whole
multiple of 1/32%).
(ii) If on any Interest Determination Date only one or none
of the Reference Banks provides such offered quotations, LIBOR or
Six-Month LIBOR, as applicable, for the next Interest Accrual Period
shall be whichever is the higher of (i) LIBOR or Six-Month LIBOR, as
applicable, as determined on the previous related Interest
Determination Date or (ii) the Reserve Interest Rate. The "Reserve
Interest Rate" shall be the rate per annum which the Securities
Administrator determines to be either (i) the arithmetic mean
(rounded upwards if necessary to the nearest whole multiple of 1/32%)
of the one-month, in the case of LIBOR, or six-month, in the case of
Six-Month LIBOR, United States dollar lending rates that New York
City banks selected by the Securities Administrator are quoting, on
the relevant Interest Determination Date, to the principal London
offices of at least two of the Reference Banks to which such
quotations are, in the opinion of the Securities Administrator, being
so made, or (ii) in the event that the Securities Administrator can
determine no such arithmetic mean, the lowest one-month United States
dollar lending rate which New York City banks selected by the
Securities Administrator are quoting on such Interest Determination
Date to leading European banks.
(iii) If on any Interest Determination Date the Securities
Administrator is required but is unable to determine the Reserve
Interest Rate for LIBOR or Six-Month LIBOR in the manner provided in
paragraph (b) above, LIBOR for LIBOR or Six-Month LIBOR for the
related Classes of Certificates shall be LIBOR for LIBOR or Six-Month
LIBOR, as applicable, as determined on the preceding applicable
Interest Determination Date or (B) in the case of the first Interest
Determination Date, LIBOR shall be 5.32%.
107
Until all of the LIBOR Certificates and Group 3 Senior Certificates
are paid in full, the Securities Administrator will at all times retain at
least four Reference Banks for the purpose of determining LIBOR and Six-Month
LIBOR with respect to each Interest Determination Date. The Securities
Administrator initially shall designate the Reference Banks. Each "Reference
Bank" shall be a leading bank engaged in transactions in Eurodollar deposits
in the international Eurocurrency market, shall not control, be controlled by,
or be under common control with, the Securities Administrator and shall have
an established place of business in London. If any such Reference Bank should
be unwilling or unable to act as such or if the Master Servicer should
terminate its appointment as Reference Bank, the Securities Administrator
shall promptly appoint or cause to be appointed another Reference Bank. The
Securities Administrator shall have no liability or responsibility to any
Person for (i) the selection of any Reference Bank for purposes of determining
LIBOR and Six-Month LIBOR or (ii) any inability to retain at least four
Reference Banks which is caused by circumstances beyond its reasonable
control.
(c) The Pass-Through Rate for each Class of LIBOR Certificates for
each Interest Accrual Period and, commencing with the Interest Accrual Period
related to the Distribution Date in August 2016, the Pass-Through Rate for
each Class of Group 3 Senior Certificates for each Interest Accrual Period
shall be determined by the Securities Administrator on each related Interest
Determination Date so long as such Classes of Certificates are outstanding on
the basis of LIBOR, in the case of the LIBOR Certificates, and Six-Month
LIBOR, in the case of the Group 3 Senior Certificates, and the respective
formulae appearing in footnotes corresponding to the LIBOR Certificates and
the Group 3 Senior Certificates in the table in the Preliminary Statement.
(d) In determining LIBOR, any Pass-Through Rate for the LIBOR
Certificates, Six-Month LIBOR, any Pass-Through Rate for the Group 3 Senior
Certificates, any Interest Settlement Rate, or any Reserve Interest Rate, the
Securities Administrator may conclusively rely and shall be protected in
relying upon the offered quotations (whether written, oral or on the Dow ▇▇▇▇▇
Markets) from the BBA designated banks, the Reference Banks or the New York
City banks as to LIBOR, Six-Month LIBOR, the Interest Settlement Rate or the
Reserve Interest Rate, as appropriate, in effect from time to time. The
Securities Administrator shall not have any liability or responsibility to any
Person for (i) the selection of New York City banks for purposes of
determining any Reserve Interest Rate or (ii) its inability, following a
good-faith reasonable effort, to obtain such quotations from, the BBA
designated banks, the Reference Banks or the New York City banks or to
determine such arithmetic mean, all as provided for in this Section 5.09.
(e) The establishment of LIBOR and Six-Month LIBOR and each
Pass-Through Rate for the LIBOR Certificates and the Group 3 Senior
Certificates by the Securities Administrator shall (in the absence of manifest
error) be final, conclusive and binding upon each Holder of a Certificate and
the Securities Administrator.
Section 5.09. The Swap Account.
(a) The Securities Administrator shall establish and maintain the
Swap Account, a separate non-interest bearing trust account for the benefit of
the holders of the Aggregate Group I Certificates (the "Swap Account") on
behalf of the trustee of the supplemental interest trust.
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The Swap Account shall be an Eligible Account, and funds on deposit therein
shall be held separate and apart from, and shall not be commingled with, any
other moneys, including, without limitation, other moneys of the Securities
Administrator, on behalf of the Trustee, held pursuant to this Agreement. The
Swap Account shall be held by a separate trust (the "Supplemental Interest
Trust") as part of the Aggregate Group I Assets of the Supplemental Interest
Trust. The Supplemental Interest Trust shall not be an asset of any REMIC. For
the avoidance of doubt, any amounts paid from the Swap Account to the
Aggregate Group I Certificates shall be deemed to have been distributed from
the Supplemental Interest Trust.
(b) On or prior to each Distribution Date prior to the Swap
Termination Date, Swap Termination Payments, Net Swap Payments owed to the
Swap Counterparty and Net Swap Receipts for that Distribution Date shall be
deposited into a trust account (the "Swap Account") established by the
Securities Administrator, on behalf of the Trustee, as part of the Aggregate
Group I Assets of the Supplemental Interest Trust.
(c) Funds in the Swap Account shall be distributed to the Aggregate
Group I Certificates and to the Swap Counterparty in the following order of
priority:
(i) to the Swap Counterparty, all Net Swap Payments, if any,
owed to the Swap Counterparty for that Distribution Date;
(ii) to the Swap Counterparty, any Swap Termination Payment,
including, without limitation, any Senior Defaulted Swap Termination
Payment but not including any other Defaulted Swap Termination
Payment, for that Distribution Date;
(iii) concurrently, to the Class 1-A, Class 2-A-1, Class
2-A-2, Class 2-A-3 and Class 2-A-4 Certificates, pro rata, any unpaid
Interest Carry Forward Amounts;
(iv) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, in that order, any unpaid Interest Carry Forward
Amounts;
(v) to the Aggregate Group I Certificates in accordance with
the principal distribution rules in effect for such Distribution
Date, in an amount equal to the lesser of: (i) the amount necessary
to meet the Aggregate Group I Overcollateralization Target for that
Distribution Date and (ii) the aggregate of all prior and current
unreimbursed Realized Loss Amounts not previously distributed;
(vi) concurrently, to the Class 1-A, Class 2-A-1, Class
2-A-2, Class 2-A-3 and Class 2-A-4 Certificates, pro rata, in an
amount up to their respective Swap Payment Allocations for that
Distribution Date, any remaining Basis Risk Carry Forward Amounts;
(vii) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, in that order, in an amount up to their respective Swap
Payment Allocations for that Distribution Date, any remaining Basis
Risk Carry Forward Amounts;
109
(viii) concurrently, to the Aggregate Group I Certificates,
pro rata by need, any remaining Basis Risk Carry Forward Amounts;
(ix) sequentially to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, in that order, any remaining Unreimbursed Realized Loss
Amounts;
(x) to the Swap Counterparty, any Defaulted Swap Termination
Payment, other than a Senior Defaulted Swap Termination Payment, owed
to the Swap Counterparty for that Distribution Date; and
(xi) all remaining amounts to the holder of the Class I-OC
Certificates.
Section 5.10. Certain Matters Regarding The Swap Agreement.
(a) In the event that, upon the Supplemental Interest Trust entering
into a replacement interest rate swap following the occurrence of an
Additional Termination Event of the type described in Part 1(h)(ii) of the
Swap Agreement, the Supplemental Interest Trust is entitled to receive a
payment from a replacement swap provider, the Securities Administrator shall
direct the replacement swap provider to make such payment to the Swap Account.
Any Senior Defaulted Swap Termination Payment shall be made from the Swap
Account to the Swap Counterparty immediately upon receipt of such payment,
regardless of whether the date of receipt thereof is a Distribution Date. To
the extent that any Replacement Swap Counterparty Payment is made to an
account other than the Swap Account, then, notwithstanding anything to the
contrary contained in this Agreement, any Senior Defaulted Swap Termination
Payment shall be paid to the Swap Counterparty immediately upon receipt of
such Replacement Swap Counterparty Payment, regardless of whether the date of
receipt thereof is a Distribution Date and without regard to anything to the
contrary contained in this Agreement. For the avoidance of doubt, the parties
agree that the Swap Counterparty shall have first priority to any Replacement
Swap Counterparty Payment over the payment by the Supplemental Interest Trust
to Certificateholders, any Servicer, the Master Servicer, the Securities
Administrator, each Custodian or any other Person.
(b) The Securities Administrator shall account for the Supplemental
Interest Trust as a grantor trust under subpart E, Part I of subchapter J of
the Code and not as an asset of any Trust REMIC created pursuant to this
Agreement. The beneficial owners of the Supplemental Interest Trust are the
Class I-OC Certificateholders. For federal income tax purposes, Net Swap
Payments and Swap Termination Payments payable to the Swap Counterparty shall
be deemed to be paid to the Swap Account, first, by the Holder of the Class
I-OC Certificates and second, other than any Defaulted Swap Termination
Payment, by the Holders of the applicable Class or Classes of Certificates as
and to the extent provided in Section 10.01 hereof.
(c) Any Basis Risk Carry Forward Amounts (excluding any such Amounts
attributable to the excess of the REMIC Cap over the related Net WAC
Pass-Through Rate) distributed by the Securities Administrator to the
Certificateholders shall be accounted for by the Securities Administrator, for
federal income tax purposes, as amounts paid first to the Holders of
110
the Class I-OC Certificates, and then to the respective Class or Classes of
Offered Certificates. In addition, the Securities Administrator shall account
for the rights of Holders of each Class of Offered Certificates to receive the
Basis Risk Carry Forward Amounts from the Swap Account (along with Basis Risk
Carry Forward Amounts payable from Aggregate Group I Net Monthly Excess
Cashflow) as rights in a separate limited recourse interest rate cap contract
written by the Class I-OC Certificateholders and the Swap Counterparty in
favor of Holders of each such Class.
(d) The Swap Account shall be an "outside reserve fund" for federal
income tax purposes and not an asset of any Trust REMIC. Furthermore, the
Holders of the Class I-OC Certificates shall be the beneficial owners of the
Supplemental Interest Trust for all federal income tax purposes, and shall be
taxable on all income earned thereon.
(e) With respect to the failure of the Swap Counterparty to perform
any of its obligations under the Swap Agreement, the breach by the Swap
Counterparty of any of its representations and warranties made pursuant to the
Swap Agreement, or the termination of the Swap Agreement, the Securities
Administrator on behalf of the Supplemental Interest Trust shall send any
notices and make any demands, on behalf of the Supplemental Interest Trust as
are required under the Swap Agreement. To the extent that the Swap
Counterparty fails to make any payment required under terms of the Swap
Agreement, the Securities Administrator on behalf of the Supplemental Interest
Trust shall immediately demand that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the guarantor of the Swap
Counterparty's obligations under the guarantee of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ relating to
the Swap Agreement, make any and all payments then required to be made by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ pursuant to such guarantee. In addition, in the event a
"Delivery Amount" (as defined in the Swap Agreement) was due but was not
delivered by the Swap Counterparty as required by the Swap Agreement, the
Securities Administrator on behalf of the Supplemental Interest Trust shall
deliver a notice of failure to transfer collateral on the next Business Day
following such failure, in accordance with the terms of the Swap Agreement.
The Securities Administrator on behalf of the Supplemental Interest Trust
shall cause any replacement Swap Counterparty to provide a copy of the related
replacement Swap Agreement to the Securities Administrator on behalf of the
Supplemental Interest Trust and the Depositor.
Notwithstanding any provision contained in this Agreement,
the Securities Administrator shall not be required to make any distributions
from the Swap Account except as expressly set forth in this Section 5.10.
(f) Upon a Collateralization Event or a Substitution Event, the
Securities Administrator, acting at the written direction of the Depositor,
shall attempt to obtain Rating Agency approval for the ISDA Credit Support
Annex and following final negotiation of the ISDA Credit Support Annex the
Securities Administrator shall demand payment of the Delivery Amount (as
defined in the ISDA Credit Support Annex) on each Valuation Date (as defined
in the ISDA Credit Support Annex) and to perform its other obligations in
accordance with the ISDA Credit Support Annex. If a Delivery Amount is
demanded, the Securities Administrator, acting at the written direction of the
Depositor, shall set up an account in accordance with Section 5.10 to hold
cash or other eligible investments pledged under such ISDA Credit Support
Annex. Any cash or other eligible investments pledged under an ISDA Credit
Support Annex shall not be part of the Distribution Account or the
Supplemental Interest Trust unless they are applied in accordance with such
ISDA Credit Support Annex to make a payment due to the
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Supplemental Interest Trust pursuant to the Swap Agreement. If Eligible Credit
Support (as defined in the ISDA Credit Support Annex) with a value equal to
the Delivery Amount is not delivered, the Securities Administrator shall
notify the Swap Counterparty of such failure.
(g) Upon an Event of Default (as defined in the Swap Agreement) or
Termination Event (as defined in the Swap Agreement) for which the
Supplemental Interest Trust has the right to designate an Early Termination
Date (as defined in the Swap Agreement), the Securities Administrator will act
at the written direction of the Depositor as to whether it will designate an
Early Termination Date; provided, however, that the Securities Administrator
shall provide written notice to each Rating Agency following the Event of
Default or Termination Event. Upon the termination of the Swap Agreement under
the circumstances contemplated by this Section 5.11(f), the Securities
Administrator shall use its reasonable best efforts to enforce the rights of
the Supplemental Interest Trust thereunder as may be permitted by the terms of
the Swap Agreement and consistent with the terms hereof, and shall apply the
proceeds of any such efforts to enter into a replacement swap agreement with
another swap provider. To the extent such replacement swap agreement can be
entered into, any termination payments received by the Supplemental Interest
Trust in respect of the terminated swap agreement shall be used, to the extent
necessary, by the Supplemental Interest Trust for the purpose of entering into
such replacement swap agreement.
(h) In the event that the Issuing Entity receives a Swap Termination
Payment, and a successor Swap Counterparty (or its guarantor) cannot be
obtained, then the Securities Administrator will be required to deposit any
Swap Termination Payment into a reserve account that is a sub-account of the
Swap Account. On each subsequent Distribution Date (so long as funds are
available in such reserve account), the Securities Administrator will be
required to withdraw from the reserve account and deposit into the Swap
Account an amount equal to the amount of any Net Swap Receipt due the Issuing
Entity (calculated in accordance with the terms of the original Swap
Agreement) and treat such amount as a Net Swap Receipt for purposes of
determining the distributions from the Swap Account. The remaining amount in
the reserve account will remain in that account and not treated as a Swap
Termination Payment for purposes of determining the distributions from the
Swap Account until the final Swap Termination Date.
(i) The Swap Counterparty shall be an express third party beneficiary
of this Agreement for the purpose of enforcing the provisions hereof to the
extent of the Swap Counterparty's rights explicitly specified herein as if a
party hereto.
(j) Notwithstanding any contrary provision of this Agreement, no
amendment shall adversely affect in any material respect the Swap Counterparty
without at least ten Business Days' prior notice to the Swap Counterparty and
without the prior written consent of the Swap Counterparty, which consent
shall not be unreasonably withheld. The Depositor shall provide the Swap
Counterparty with prior written notice of any proposed material amendment of
this Agreement.
Section 5.11. The Reserve Fund.
On the Closing Date, the Securities Administrator shall
establish and maintain in its name, in trust for the benefit of the Group 3
Certificates, the Group 3 Reserve Fund and shall
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deposit $1,000 therein upon receipt of such amount from or on behalf of the
Underwriter. On each Distribution Date, the Securities Administrator shall
transfer from the Distribution Account to the Group 3 Reserve Fund the amounts
specified pursuant to Section 5.02(a)(2)(C)(ix). Any such amounts transferred
shall be treated for federal tax purposes as amounts distributed to the
Holders of the Class 3-OC Certificates. On each Distribution Date, to the
extent required, the Securities Administrator shall withdraw amounts in the
Group 3 Reserve Fund to make distributions to the Classes of Group 3
Certificates in accordance with the priorities set forth in Section
5.02(a)(2)(C)(ix). On the Distribution Date on which the termination of the
Group 3 Certificates occurs pursuant to Section 7.02, after making all
distributions required in connection with the Group 3 Certificates, the
Securities Administrator shall withdraw from the Group 3 Reserve Fund (to the
extent of funds available on deposit therein) any remaining amounts and
distribute them to the Holders of the Class 3-OC Certificates.
The Group 3 Reserve Fund shall be an Eligible Account, and
funds on deposit therein shall be held separate and apart from, and shall not
be commingled with, any other moneys, including without limitation, other
moneys held by the Securities Administrator on behalf of the Trustee pursuant
to this Agreement. Amounts held in the Group 3 Reserve Fund from time to time
shall continue to constitute assets of the Trust Fund, but not of any REMIC
created under this Agreement, until released from the Group 3 Reserve Fund
pursuant to this Section 5.11. The Group 3 Reserve Fund constitutes an
"outside Reserve Fund" within the meaning of Treasury Regulation ss.
1.860G-2(h) and is not an asset of any REMIC. The Holders of the Class 3-OC
Certificates shall be the owner of the Group 3 Reserve Fund. The Securities
Administrator shall keep records that accurately reflect the funds on deposit
in the Group 3 Reserve Fund. Funds in the Group 3 Reserve Fund may be invested
in Permitted Investments at the written direction of the Majority of the
Holders of the Class 3-OC Certificates, which Permitted Investments shall
mature not later than the Business Day immediately preceding the first
Distribution Date that follows the date of such investment (except that if
such Permitted Investment is an obligation of the institution that maintains
the Group 3 Reserve Fund, then such Permitted Investment shall mature not
later than such Distribution Date) and shall not be sold or disposed of prior
to maturity; provided, however, that if the Securities Administrator does not
receive written investment directions, the funds in the Group 3 Reserve Fund
shall be invested in the ▇▇▇▇▇ Fargo Prime Investment Money Market Fund. All
such Permitted Investments shall be made in the name of the Trustee, for the
benefit of the Holders of the Class 3-OC Certificates. All losses incurred in
the Group 3 Reserve Fund in respect of any such investments shall be charged
against amounts on deposit in the Group 3 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 in the Group 3 Reserve Fund. The Class 3-OC Certificates
shall evidence ownership of the Group 3 Reserve Fund for federal tax purposes.
To the extent that a Class of Group 3 Certificates receives
interest in excess of the Net WAC Pass-Through Rate, such interest shall be
deemed to have been paid to the Group 3 Reserve Fund and then paid by the
Group 3 Reserve Fund to those Certificateholders. For purposes of the Code,
amounts deemed deposited in the Group 3 Reserve Fund shall be deemed to have
first been distributed to the Class 3-OC Certificates.
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ARTICLE VI
CONCERNING THE TRUSTEE AND
THE SECURITIES ADMINISTRATOR; EVENTS OF DEFAULT
Section 6.01. Duties of Trustee and the Securities Administrator.
(a) The Trustee, except during the continuance of an Event of
Default, and the Securities Administrator undertakes to perform such duties
and only such duties as are specifically set forth in this Agreement. Any
permissive right of the Trustee or the Securities Administrator provided for
in this Agreement shall not be construed as a duty of the Trustee or the
Securities Administrator. If an Event of Default has occurred and has not
otherwise been cured or waived, the Trustee or the Securities Administrator
shall exercise such of the rights and powers vested in it by this Agreement
and use the same degree of care and skill in their exercise as a prudent
Person would exercise or use under the circumstances in the conduct of such
Person's own affairs, unless the Trustee is acting as master servicer, in
which case it shall use the same degree of care and skill (in its capacity as
successor Master Servicer) as a master servicer hereunder.
(b) Each of the Trustee and the Securities Administrator, upon
receipt of all resolutions, certificates, statements, opinions, reports,
documents, orders or other instruments furnished to the Trustee or the
Securities Administrator which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to determine
whether they are in the form required by this Agreement; provided, however,
that neither the Trustee nor the Securities Administrator shall be responsible
for the accuracy or content of any such resolution, certificate, statement,
opinion, report, document, order or other instrument furnished by the Master
Servicer or any Servicer to the Trustee or the Securities Administrator
pursuant to this Agreement, and shall not be required to recalculate or verify
any numerical information furnished to the Trustee or the Securities
Administrator pursuant to this Agreement. Subject to the immediately preceding
sentence, if any such resolution, certificate, statement, opinion, report,
document, order or other instrument is found not to conform to the form
required by this Agreement in a material manner the Securities Administrator
shall take such action as it deems appropriate to cause the instrument to be
corrected, and if the instrument is not corrected to the Securities
Administrator 's satisfaction, the Securities Administrator will provide
notice thereof to the Certificateholders and will, at the expense of the Trust
Fund, which expense shall be reasonable given the scope and nature of the
required action, take such further action as directed by the
Certificateholders.
(c) Neither the Trustee nor the Securities Administrator shall have
any liability arising out of or in connection with this Agreement, except for
its respective negligence or willful misconduct. Notwithstanding anything in
this Agreement to the contrary, neither the Trustee nor the Securities
Administrator shall be liable for special, indirect or consequential losses or
damages of any kind whatsoever (including, but not limited to, lost profits).
No provision of this Agreement shall be construed to relieve the Trustee or
the Securities Administrator from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct; provided, however,
that:
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(i) The Trustee shall not be personally liable with respect
to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of Holders of Certificates as
provided in Section 6.18 hereof;
(ii) For all purposes under this Agreement, the Trustee
shall not be deemed to have notice of any Event of Default unless a
Responsible Officer of the Trustee has actual knowledge thereof or
unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Holders of the Certificates and this
Agreement;
(iii) For all purposes under this Agreement, the Securities
Administrator shall not be deemed to have notice of any Event of
Default (other than resulting from a failure by the Master Servicer
(i) to remit funds (or to make Advances) or (ii) to furnish
information to the Securities Administrator when required to do so)
unless a Responsible Officer of the Securities Administrator has
actual knowledge thereof or unless written notice of any event which
is in fact such a default is received by the Securities Administrator
at the address provided in Section 11.07, and such notice references
the Holders of the Certificates and this Agreement;
(iv) No provision of this Agreement shall require the
Trustee or the Securities Administrator to expend or risk its own
funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or indemnity reasonably satisfactory to
it against such risk or liability is not reasonably assured to it;
and none of the provisions contained in this Agreement shall in any
event require the Trustee or the Securities Administrator to perform,
or be responsible for the manner of performance of, any of the
obligations of the Master Servicer under this Agreement;
(v) Neither the Trustee nor the Securities Administrator
shall be responsible for any act or omission of each other or the
Master Servicer, the Depositor, the Seller, any Servicer or any
Custodian.
(d) The Trustee shall have no duty hereunder with respect to any
complaint, claim, demand, notice or other document it may receive or which may
be alleged to have been delivered to or served upon it by the parties as a
consequence of the assignment of any Mortgage Loan hereunder; provided,
however, that the Trustee shall promptly remit to the Master Servicer, upon
receipt any such complaint, claim, demand, notice or other document (i) which
is delivered to the Corporate Trust Office of the Trustee, (ii) of which a
Responsible Officer has actual knowledge, and (iii) which contains information
sufficient to permit the Trustee to make a determination that the real
property to which such document relates is a Mortgaged Property related to a
Mortgage Loan.
(e) Neither the Trustee nor the Securities Administrator shall be
personally liable with respect to any action taken, suffered or omitted to be
taken by it in good faith in accordance with the direction of the
Certificateholders of any Class holding Certificates which evidence, as to
such Class, Percentage Interests aggregating not less than 25% as to the time,
method and
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place of conducting any proceeding for any remedy available to the Trustee or
the Securities Administrator or exercising any trust or power conferred upon
the Trustee or the Securities Administrator, as applicable, under this
Agreement or the Acknowledgements.
(f) Neither the Trustee nor the Securities Administrator shall be
required to perform services under this Agreement or the Purchase and
Servicing Agreements, or to expend or risk its own funds or otherwise incur
financial liability for the performance of any of its duties hereunder or the
exercise of any of its rights or powers if there is reasonable ground for
believing that the timely payment of its fees and expenses or the repayment of
such funds or indemnity reasonably satisfactory to it against such risk or
liability is not reasonably assured to it, and none of the provisions
contained in this Agreement shall in any event require the Trustee or the
Securities Administrator, as applicable, to perform, or be responsible for the
manner of performance of, any of the obligations of the Master Servicer or any
Servicer under this Agreement or any Purchase and Servicing Agreement except
during such time, if any, as the Trustee shall be the successor to, and be
vested with the rights, duties, powers and privileges of, the Master Servicer
in accordance with the terms of this Agreement.
(g) The Trustee shall not be held liable by reason of any
insufficiency in the Distribution Account resulting from any investment loss
on any Permitted Investment included therein (except to the extent that the
Trustee is the obligor and has defaulted thereon).
(h) Neither the Trustee nor, except as otherwise provided herein, the
Securities Administrator shall have any duty (A) to see to any recording,
filing, or depositing of this Agreement or any agreement referred to herein or
any financing statement or continuation statement evidencing a security
interest, or to see to the maintenance of any such recording or filing or
depositing or to any rerecording, refiling or redepositing of any thereof, (B)
to see to any insurance, (C) to see to the payment or discharge of any tax,
assessment, or other governmental charge or any lien or encumbrance of any
kind owing with respect to, assessed or levied against, any part of the Trust
Fund other than from funds available in the Distribution Account, or (D) to
confirm or verify the contents of any reports or certificates of the Master
Servicer or any Servicer delivered to the Trustee or the Securities
Administrator pursuant to this Agreement believed by the Trustee or the
Securities Administrator, as applicable, to be genuine and to have been signed
or presented by the proper party or parties.
(i) Neither the Securities Administrator nor the Trustee shall be
liable in its individual capacity for an error of judgment made in good faith
by a Responsible Officer or other officers of the Trustee or the Securities
Administrator, as applicable, unless it shall be proved that the Trustee or
the Securities Administrator, as applicable, was negligent in ascertaining the
pertinent facts.
(j) Notwithstanding anything in this Agreement to the contrary,
neither the Securities Administrator nor the Trustee shall be liable for
special, indirect or consequential losses or damages of any kind whatsoever
(including, but not limited to, lost profits), even if the Trustee or the
Securities Administrator, as applicable, has been advised of the likelihood of
such loss or damage and regardless of the form of action.
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(k) Neither the Securities Administrator nor the Trustee shall be
responsible for the acts or omissions of the other, it being understood that
this Agreement shall not be construed to render them agents of one another, or
of any Servicer.
Section 6.02. Certain Matters Affecting the Trustee and the
Securities Administrator.
Except as otherwise provided in Section 6.01:
(i) Each of the Trustee and the Securities Administrator may
request, and may rely and shall be protected in acting or refraining
from acting upon any resolution, Officer's Certificate, certificate
of auditors or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other
paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(ii) Each of the Trustee and the Securities Administrator
may consult with counsel and any advice of its counsel or Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such advice or Opinion of Counsel;
(iii) Neither the Trustee nor the Securities Administrator
shall be personally liable for any action taken, suffered or omitted
by it in good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Agreement;
(iv) Unless an Event of Default shall have occurred and be
continuing, neither the Trustee nor the Securities Administrator
shall be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the
Holders of at least a majority in Class Principal Balance (or
Percentage Interest) of each Class of Certificates; provided,
however, that, if the payment within a reasonable time to the Trustee
or the Securities Administrator, as applicable, of the costs,
expenses or liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Trustee or the
Securities Administrator, as applicable, not reasonably assured to
the Trustee or the Securities Administrator by the security afforded
to it by the terms of this Agreement, the Trustee or the Securities
Administrator, as applicable, may require indemnity reasonably
satisfactory to it against such expense or liability or payment of
such estimated expenses from the Certificateholders as a condition to
proceeding. The reasonable expense thereof shall be paid by the party
requesting such investigation and if not reimbursed by the requesting
party shall be reimbursed to the Trustee or the Securities
Administrator, as applicable, by the Trust Fund;
(v) Each of the Trustee and the Securities Administrator may
execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents, custodians or
attorneys, which agents, custodians or attorneys shall have any and
all of the rights, powers, duties and obligations of the Trustee and
the Securities Administrator conferred on them by such appointment,
provided that each of the Trustee and the Securities
117
Administrator shall continue to be responsible for its duties and
obligations hereunder to the extent provided herein, and provided
further that neither the Trustee nor the Securities Administrator
shall be responsible for any misconduct or negligence on the part of
any such agent or attorney appointed with due care by the Trustee or
the Securities Administrator, as applicable;
(vi) Neither the Trustee nor the Securities Administrator
shall be under any obligation to exercise any of the trusts or powers
vested in it by this Agreement or the Acknowledgements or to
institute, conduct or defend any litigation hereunder or in relation
hereto, in each case at the request, order or direction of any of the
Certificateholders pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee or
the Securities Administrator, as applicable, security or indemnity
reasonably satisfactory to it against the costs, expenses and
liabilities which may be incurred therein or thereby;
(vii) The right of the Trustee and the Securities
Administrator to perform any discretionary act enumerated in this
Agreement shall not be construed as a duty, and neither the Trustee
nor the Securities Administrator shall be answerable for other than
its negligence or willful misconduct in the performance of such act;
and
(viii) Neither the Trustee nor the Securities Administrator
shall be required to give any bond or surety in respect of the
execution of the Trust Fund created hereby or the powers granted
hereunder.
Section 6.03. Trustee and Securities Administrator Not Liable for
Certificates.
The Trustee and the Securities Administrator make no representations
as to the validity or sufficiency of this Agreement, any Purchase and
Servicing Agreement or Acknowledgement, any Swap Agreement or of the
Certificates (other than, in the case of the Securities Administrator, the
certificate of authentication on the Certificates) or of any Mortgage Loan, or
related document save that the Trustee and the Securities Administrator
represent that, assuming due execution and delivery by the other parties
hereto, this Agreement has been duly authorized, executed and delivered by it
and constitutes its valid and binding obligation, enforceable against it in
accordance with its terms except that such enforceability may be subject to
(A) applicable bankruptcy and insolvency laws and other similar laws affecting
the enforcement of the rights of creditors generally, and (B) general
principles of equity regardless of whether such enforcement is considered in a
proceeding in equity or at law. The Trustee and the Securities Administrator
shall not be accountable for the use or application by the Depositor of funds
paid to the Depositor in consideration of the assignment of the Mortgage Loans
to the Trust Fund by the Depositor or for the use or application of any funds
deposited into the Distribution Account or any other fund or account
maintained with respect to the Certificates. The Trustee and the Securities
Administrator shall not be responsible for the legality or validity of this
Agreement or any other document or agreement described in this Section 6.03 or
the validity, priority, perfection or sufficiency of the security for the
Certificates issued or intended to be issued hereunder. Neither the Trustee
nor, except as otherwise provided herein, the Securities Administrator shall
have any responsibility for filing any financing or continuation statement in
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any public office at any time or to otherwise perfect or maintain the
perfection of any security interest or lien granted to it hereunder or to
record this Agreement.
Section 6.04. Trustee and the Securities Administrator May Own
Certificates.
The Trustee and the Securities Administrator and any Affiliate or
agent of either of them in its individual or any other capacity may become the
owner or pledgee of Certificates and may transact banking and trust business
with the other parties hereto and their Affiliates with the same rights it
would have if it were not Trustee, Securities Administrator or such agent.
Section 6.05. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be (i) an institution whose
accounts are insured by the FDIC, (ii) a corporation or national banking
association, organized and doing business under the laws of any State or the
United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by federal or state
authority and (iii) not an Affiliate of the Master Servicer or any Servicer.
If such corporation or national banking association publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then, for the purposes of this
Section, the combined capital and surplus of such corporation or national
banking association shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any
time the Trustee shall cease to be eligible in accordance with provisions of
this Section, the Trustee shall resign immediately in the manner and with the
effect specified in Section 6.06.
Section 6.06. Resignation and Removal of Trustee and the Securities
Administrator.
(a) The Trustee may at any time resign and be discharged from the
trust hereby created by giving written notice thereof to the Securities
Administrator, the Depositor and the Master Servicer. Upon receiving such
notice of resignation, the Depositor will promptly appoint a successor
trustee, by written instrument, one copy of which instrument shall be
delivered to the resigning Trustee, one copy to the successor trustee, one
copy to the Securities Administrator and one copy to the Master Servicer. If
no successor trustee shall have been so appointed and shall have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
At least 15 calendar days prior to the effective date of such
resignation, the Trustee shall provide (x) written notice to the Depositor and
the Master Servicer of any successor pursuant to this Section (other than a
successor appointed by the Depositor in accordance with the preceding
paragraph) and (y) in writing and in form and substance reasonably
satisfactory to the Depositor, all information reasonably requested by the
Depositor in order to comply with its reporting obligation under Item 6.02 of
Form 8-K with respect to the resignation of the Trustee.
(b) If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 6.05 and shall fail to resign after
written request therefor by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged a bankrupt or insolvent, or
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a receiver of the Trustee of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of either of their
property or affairs for the purpose of rehabilitation, conservation or
liquidation, (iii) (A) a tax is imposed or threatened with respect to the
Trust Fund by any state in which the Trustee or the Trust Fund held by the
Trustee is located due to the location of the Trustee, (B) the imposition of
such tax would be avoided by the appointment of a different trustee and (C)
the Trustee fails to indemnify the Trust Fund against such tax (iv) the
continued use of the Trustee would result in a downgrading of the rating by
any Rating Agency of any Class of Certificates with a rating, or (v) the
Trustee fails to comply with its obligations under the penultimate paragraph
of Section 6.14(a), in the preceding paragraph or Article XII and such failure
is not remedied within the lesser of 10 calendar days or such period in which
the applicable Exchange Act Report can be filed timely (without taking into
account any extensions), then, in the case of clauses (i) through (iv), the
Depositor shall remove the Trustee and the Depositor shall appoint a successor
trustee, acceptable to the Master Servicer by written instrument, one copy of
which instrument shall be delivered to the Trustee so removed, one copy to the
successor trustee, one copy to the Securities Administrator and one copy to
the Master Servicer.
(c) The Holders of more than 50% of the Class Principal Balance (or
Percentage Interest) of each Class of Certificates may at any time upon 30
days' written notice to the Trustee and to the Depositor remove the Trustee by
such written instrument, signed by such Holders or their attorney-in-fact duly
authorized, one copy of which instrument shall be delivered to the Depositor,
one copy to the Trustee, one copy to the Securities Administrator and one copy
to the Master Servicer; the Depositor shall thereupon appoint a successor
trustee in accordance with this Section.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall
become effective upon acceptance of appointment by the successor trustee, as
provided in Section 6.07. If no successor trustee shall have been so appointed
and shall have accepted appointment within 30 days after such notice of
dismissal, the Trustee who received such notice of dismissal may petition any
court of competent jurisdiction for the appointment of a successor trustee.
(e) The Securities Administrator shall not resign except in
accordance with the provisions of Sections 9.06 and 9.07 hereof, to the same
extent that the Master Servicer is entitled to resign or assign or delegate,
as applicable, its duties hereunder.
(f) If at any time the Securities Administrator shall cease to be
eligible in accordance with the provisions of Section 9.10 hereof and shall
fail to resign after written request thereto by the Depositor, or if at any
time the Securities Administrator shall become incapable of acting, or shall
be adjudged as bankrupt or insolvent, or a receiver of the Securities
Administrator or of its property shall be appointed, or any public officer
shall take charge or control of the Securities Administrator or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, or a tax is imposed with respect to the Trust Fund by any state
in which the Securities Administrator or the Trust Fund is located and the
imposition of such tax would be avoided by the appointment of a different
Securities Administrator, then the Depositor or the Trustee may remove the
Securities Administrator and appoint a successor securities administrator by
written instrument, in triplicate, one copy of which instrument shall
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be delivered to the Securities Administrator so removed, one copy of which
shall be delivered to the Master Servicer and one copy to the successor
securities administrator.
(g) If no successor securities administrator shall have been
appointed and shall have accepted appointment within 60 days after ▇▇▇▇▇ Fargo
Bank, N.A., as Securities Administrator, ceases to be the securities
administrator pursuant to this Section 6.06, then the Trustee (as successor
Securities Administrator) shall perform the duties of the Securities
Administrator pursuant to this Agreement. The Trustee shall notify the Rating
Agencies of any change of the Securities Administrator. In such event, the
Trustee shall assume all of the rights and obligations of the Securities
Administrator hereunder arising thereafter except that the Trustee shall not
be (i) liable for losses of the predecessor Securities Administrator or any
acts or omissions of the predecessor Securities Administrator hereunder, (ii)
deemed to have made any representations and warranties of the Securities
Administrator made herein and (iii) subject to the same resignation
limitations as set forth in Section 9.06 hereof; provided, however, that the
Trustee (as successor securities administrator) shall not resign until a
successor securities administrator has accepted appointment pursuant to
Section 6.07 hereof. The Trustee shall not be accountable, shall have no
liability and makes no representation as to any acts or omissions hereunder of
the Securities Administrator until such time as the Trustee may be required to
act as successor Securities Administrator pursuant to this Section 6.06 and
thereupon only for the acts or omissions of the Trustee as successor
Securities Administrator. If the Trustee is unwilling, or unable, to act as
successor Securities Administrator, then, in such event, the Trustee may
appoint, or petition a court of competent jurisdiction to appoint a successor
Securities Administrator meeting the criteria set forth in Section 9.10
hereof. Such successor Securities Administrator shall be entitled to the
Securities Administrator Compensation.
(h) The Trustee as successor securities administrator shall be
entitled to be reimbursed for all reasonable costs and expenses associated
with the transfer of the duties of the Securities Administrator by the
predecessor Securities Administrator, including, without limitation, any costs
or expenses associated with the complete transfer of all securities
administrator data and the completion, correction or manipulation of such
securities administrator data as may be required by the Trustee as successor
securities administrator to correct any errors or insufficiencies in such
securities administrator data or otherwise to enable the Trustee or successor
securities administrator to perform the duties of the Securities Administrator
properly and effectively; provided, however, that the predecessor Securities
Administrator shall not be obligated to make any such reimbursements if such
Securities Administrator was terminated or removed without cause or if such
termination or removal was a result of the imposition of any tax on the Trust
Estate by any state in which the Securities Administrator or the Trust Fund is
located. If such costs are not paid by the predecessor Securities
Administrator, the Trustee shall pay such costs from the Trust Fund.
(i) The Trustee, as successor Securities Administrator, as
compensation for its activities hereunder as successor Securities
Administrator, shall be entitled to retain or withdraw from the Distribution
Account an amount equal to the Securities Administrator Compensation.
(j) The Holders of Certificates entitled to at least 51% of the
Voting Rights may at any time remove the Securities Administrator and appoint
a successor securities administrator by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys-in-
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fact duly authorized, one complete set of which instruments shall be delivered
by the successor Securities Administrator to the Trustee, one complete set to
the Securities Administrator so removed and one complete set to the successor
so appointed. Notice of any removal of the Securities Administrator shall be
given to each Rating Agency by the successor securities administrator.
(k) Any resignation or removal of the Securities Administrator and
appointment of a successor securities administrator pursuant to any of the
provisions of this Section 6.06 or Section 9.06 shall become effective upon
acceptance by the successor securities administrator of appointment as
provided in Section 6.07 hereof.
(l) If the Securities Administrator and the Master Servicer are the
same Person, any removal of the Master Servicer pursuant to an Event of
Default shall also result in the removal of the Securities Administrator and
require the appointment of a successor pursuant to this Section and Section
6.07.
(m) The Securities Administrator shall cooperate with the Trustee and
any successor securities administrator in effecting the termination of the
Securities Administrator's responsibilities and rights hereunder, providing to
the Trustee and successor securities administrator all documents and records
in electronic or other form reasonably requested by it to enable it to assume
the Securities Administrator's functions hereunder and for the transfer to the
Trustee or successor Securities Administrator of all amounts in the
Distribution Account or any other account or fund maintained by the Securities
Administrator with respect to the Trust Fund. Neither the Trustee nor the
Master Servicer, as applicable, nor any other successor, as applicable, shall
be deemed to be in default hereunder by reason of any failure to make, or any
delay in making, any distribution hereunder or any portion thereof caused by
(i) the failure of the predecessor Securities Administrator to deliver, or any
delay in delivering, cash, documents or records to it, (ii) the failure of the
predecessor Securities Administrator to cooperate as required by this
Agreement, (iii) the failure of the predecessor Securities Administrator to
deliver the related Mortgage Loan data as required by this Agreement or (iv)
restrictions imposed by any regulatory authority having jurisdiction over the
predecessor Securities Administrator. No successor securities administrator
shall be deemed to be in default hereunder by reason of any failure to make,
or any delay in making, any distribution hereunder or any portion thereof
caused by (i) the failure of the Master Servicer to deliver, or any delay in
delivering cash, documents or records to it related to such distribution, or
(ii) the failure of Trustee or the Master Servicer to cooperate as required by
this Agreement.
Section 6.07. Successor Trustee and Successor Securities
Administrator.
(a) Any successor trustee or successor securities administrator
appointed as provided in Section 6.06 shall execute, acknowledge and deliver
to the Depositor and to its predecessor trustee or predecessor securities
administrator, as applicable, an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
or predecessor securities administrator, as applicable, shall become effective
and such successor trustee or successor securities administrator, as
applicable, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as trustee or
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securities administrator, as applicable, herein. The predecessor trustee or
predecessor securities administrator, as applicable, shall deliver to the
successor trustee or successor securities administrator, as applicable, all
Trustee Mortgage Files and documents and statements related to each Trustee
Mortgage File held by it hereunder, and shall duly assign, transfer, deliver
and pay over to the successor trustee the entire Trust Fund, together with all
necessary instruments of transfer and assignment or other documents properly
executed necessary to effect such transfer and such of the records or copies
thereof maintained by the predecessor trustee in the administration hereof as
may be requested by the successor trustee and shall thereupon be discharged
from all duties and responsibilities under this Agreement. In addition, the
Depositor and the predecessor trustee or predecessor securities administrator,
as applicable, shall execute and deliver such other instruments and do such
other things as may reasonably be required to more fully and certainly vest
and confirm in the successor trustee or successor securities administrator, as
applicable, all such rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in this
Section unless at the time of such appointment such successor trustee shall be
eligible under the provisions of Section 6.05 and has provided to the
Depositor in writing and in form and substance reasonably satisfactory to the
Depositor, all information reasonably requested by the Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect
to a replacement Trustee.
(c) Upon acceptance of appointment by a successor trustee or
successor securities administrator, as applicable, as provided in this
Section, the Master Servicer shall mail notice of the succession of such
trustee or securities administrator, as applicable, hereunder to all Holders
of Certificates at their addresses as shown in the Certificate Register and to
any Rating Agency. The costs of such mailing shall be borne by the Master
Servicer.
(d) Any successor securities administrator shall also either serve as
auction administrator pursuant to Section 7.01(b) hereof or select an
investment bank to act as auction administrator at the expense of the Trust
Fund.
(e) Any successor trustee or successor securities administrator
appointed as provided in Section 6.06 shall also be the successor trustee or
successor securities administrator, as applicable, with respect to the
Supplemental Interest Trust.
Section 6.08. Merger or Consolidation of Trustee or the Securities
Administrator.
Any Person into which the Trustee or Securities Administrator may be
merged or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Trustee or Securities
Administrator shall be a party, or any Persons succeeding to the business of
the Trustee or Securities Administrator, shall be the successor to the Trustee
or Securities Administrator hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding, provided that, in the case of the
Trustee, such Person shall be eligible under the provisions of Section 6.05.
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At least 15 calendar days prior to the effective date of any
succession by merger or consolidation of the Trustee or the Securities
Administrator, the Trustee or the Securities Administrator, as applicable,
shall provide (x) written notice to the Depositor of any successor pursuant to
this Section and (y) in writing and in form and substance reasonably
satisfactory to the Depositor, all information reasonably requested by the
Depositor in order to comply with its reporting obligation under Item 6.02 of
Form 8-K with respect to a replacement Trustee or Securities Administrator, as
applicable.
Section 6.09. Appointment of Co-Trustee, Separate Trustee or
Custodian.
(a) Notwithstanding any other provisions hereof, at any time, the
Trustee, the Depositor or the Certificateholders evidencing more than 50% of
the Class Principal Balance (or Percentage Interest) of every Class of
Certificates shall have the power from time to time to appoint one or more
Persons, approved by the Trustee, to act either as co-trustees jointly with
the Trustee, or as separate trustees, or as custodians, for the purpose of
holding title to, foreclosing or otherwise taking action with respect to any
Mortgage Loan outside the state where the Trustee has its principal place of
business where such separate trustee or co-trustee is necessary or advisable
(or the Trustee has been advised by the Master Servicer that such separate
trustee or co-trustee is necessary or advisable) under the laws of any state
in which a property securing a Mortgage Loan is located or for the purpose of
otherwise conforming to any legal requirement, restriction or condition in any
state in which a property securing a Mortgage Loan is located or in any state
in which any portion of the Trust Fund is located. The separate Trustees,
co-trustees, or custodians so appointed shall be trustees or custodians for
the benefit of all the Certificateholders and shall have such powers, rights
and remedies as shall be specified in the instrument of appointment; provided,
however, that no such appointment shall, or shall be deemed to, constitute the
appointee an agent of the Trustee. The obligation of the Master Servicer to
make Advances pursuant to Section 5.05 hereof shall not be affected or
assigned by the appointment of a co-trustee.
(b) Every separate trustee, co-trustee, and custodian shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all powers, duties, obligations and rights conferred
upon the Trustee in respect of the receipt, custody and payment of
moneys shall be exercised solely by the Trustee;
(ii) all other rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed
upon and exercised or performed by the Trustee and such separate
trustee, co-trustee, or custodian jointly, except to the extent that
under any law of any jurisdiction in which any particular act or acts
are to be performed the Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers,
duties and obligations, including the holding of title to the Trust
Fund or any portion thereof in any such jurisdiction, shall be
exercised and performed by such separate trustee, co-trustee, or
custodian;
(iii) no trustee or custodian hereunder shall be personally
liable by reason of any act or omission of any other trustee or
custodian hereunder; and
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(iv) the Trustee may at any time, by an instrument in
writing executed by it, with the concurrence of the Depositor, accept
the resignation of or remove any separate trustee, co-trustee or
custodian, so appointed by it or them, if such resignation or removal
does not violate the other terms of this Agreement.
(c) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee, co-trustee or custodian shall refer to this
Agreement and the conditions of this Article VI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision
of this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed
with the Trustee and a copy given to the Master Servicer.
(d) Any separate trustee, co-trustee or custodian may, at any time,
constitute the Trustee its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Agreement on its behalf and in its name. If any separate
trustee, co-trustee or custodian shall die, become incapable of acting, resign
or be removed, all of its estates, properties, rights, remedies and trusts
shall vest in and be exercised by the Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
(e) No separate trustee, co-trustee or custodian hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
6.05 hereunder and no notice to the Certificateholders of the appointment
shall be required under Section 6.07 hereof.
(f) The Securities Administrator on behalf of the Trustee agrees to
instruct the co-trustees, if any, to the extent necessary to fulfill the
Trustee's obligations hereunder.
(g) The Trust shall pay the reasonable compensation of the
co-trustees (which compensation shall not reduce any compensation payable to
the Trustee under such Section).
Section 6.10. Authenticating Agents.
(a) The Trustee may appoint one or more Authenticating Agents which
shall be authorized to act on behalf of the Trustee in authenticating
Certificates. The Securities Administrator is hereby appointed as initial
Authenticating Agent, and the Securities Administrator accepts such
appointment. Wherever reference is made in this Agreement to the
authentication of Certificates by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication on
behalf of the Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent must be a corporation organized and doing business
under the laws of the United States of America or of any state, having a
combined capital and surplus of at least $15,000,000, authorized under such
laws to do a trust business and subject to supervision or examination by
federal or state authorities.
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(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any Person succeeding to the corporate agency business of
any Authenticating Agent, shall continue to be the Authenticating Agent
without the execution or filing of any paper or any further act on the part of
the Trustee or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at
least 30 days' advance written notice of resignation to the Trustee and the
Depositor. The Trustee may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and the Depositor. Upon receiving a notice of resignation
or upon such a termination, or in case at any time any Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section
6.10, the Trustee may appoint a successor authenticating agent, shall give
written notice of such appointment to the Depositor and shall mail notice of
such appointment to all Holders of Certificates. Any successor authenticating
agent upon acceptance of its appointment hereunder shall become vested with
all the rights, powers, duties and responsibilities of its predecessor
hereunder, with like effect as if originally named as Authenticating Agent. No
successor authenticating agent shall be appointed unless eligible under the
provisions of this Section 6.10. No Authenticating Agent shall have
responsibility or liability for any action taken by it as such at the
direction of the Trustee.
Section 6.11. Indemnification of the Trustee and the Securities
Administrator.
The Trustee (in its individual capacity and in its representative
capacity as Trustee hereunder) and the Securities Administrator and their
respective directors, officers, employees and agents shall be entitled to
indemnification from the Trust Fund for any loss, liability or expense
(including the reasonable compensation and the expenses and disbursements of
its agents or counsel), incurred without negligence or willful misconduct on
their part, arising out of, or in connection with, the acceptance or
administration of the trusts created hereunder or under the Purchase and
Servicing Agreements, the Acknowledgements or the Swap Agreement or in
connection with the performance of their duties hereunder or thereunder
including the costs and expenses of defending themselves against any claim in
connection with the exercise or performance of any of their powers or duties
hereunder or thereunder, provided that:
(i) with respect to any such claim, the Trustee or the
Securities Administrator, as applicable, shall have given the
Depositor written notice thereof promptly after the Trustee, the
Securities Administrator, as applicable, shall have knowledge
thereof;
(ii) while maintaining control over its own defense, the
Trustee or the Securities Administrator, as applicable, shall
cooperate and consult fully with the Depositor in preparing such
defense; and
(iii) notwithstanding anything to the contrary in this
Section 6.11, the Trust Fund shall not be liable for settlement of
any such claim by the Trustee or the Securities Administrator, as
applicable, entered into without the prior consent of the Depositor,
which consent shall not be unreasonably withheld.
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The provisions of this Section 6.11 shall survive any termination of
this Agreement and the resignation or removal of the Trustee or the Securities
Administrator or Custodian, as applicable, and shall be construed to include,
but not be limited to any loss, liability or expense under any environmental
law.
Section 6.12. Fees and Expenses of the Master Servicer, Securities
Administrator, the Trustee and the Custodian.
(a) For so long as ▇▇▇▇▇ Fargo Bank, National Association is the
Master Servicer and the Securities Administrator, the Securities Administrator
shall be entitled to be paid by the Master Servicer reasonable compensation
for the Securities Administrator's services hereunder in an amount to be
agreed upon between the Master Servicer and the Securities Administrator.
Should ▇▇▇▇▇ Fargo Bank, National Association no longer be both the Master
Servicer and the Securities Administrator, the Securities Administrator shall
be entitled to receive the Securities Administrator Compensation payable
pursuant to Section 4.02(b)(ii) hereof. The Securities Administrator shall be
entitled to all disbursements and advancements incurred or made by the
Securities Administrator in accordance with this Agreement (including fees and
expenses of its counsel and all persons not regularly in its employment),
except any such expenses arising from its negligence, bad faith or willful
misconduct.
(b) As compensation for its services hereunder, the Trustee and each
Custodian shall each be entitled to receive a fee (which, in the case of the
Trustee, shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) which shall be paid by the
Master Servicer pursuant to a separate agreement between the Trustee, the
Custodian and the Master Servicer. Any expenses incurred by the Trustee or the
Custodian shall be reimbursed in accordance with Section 6.11. The parties
hereto acknowledge and agree that (i) the Master Servicer shall only be
obligated to pay to the Custodian the fee agreed to by the Custodian and the
Master Servicer in the separate fee agreement referred to above, and (ii)
except as may be expressly set forth therein with respect to the Master
Servicer, in no event shall the Master Servicer have any responsibility or
liability for the payment of any other fees or any expenses or other amounts,
if any, that may be payable to the Custodian.
Section 6.13. Collection of Monies.
Except as otherwise expressly provided in this Agreement, the
Securities Administrator on behalf of the Trustee may demand payment or
delivery of, and shall receive and collect, all money and other property
payable to or receivable by the Securities Administrator on behalf of the
Trustee pursuant to this Agreement. The Securities Administrator on behalf of
the Trustee shall hold all such money and property received by it as part of
the Trust Fund and shall distribute it as provided in this Agreement.
Section 6.14. Events of Default; Trustee To Act; Appointment of
Successor.
(a) The occurrence of any one or more of the following events shall
constitute an "Event of Default" with respect to the Master Servicer:
(i) Any failure by the Master Servicer to furnish the
Securities Administrator the Mortgage Loan data on the Mortgage Loans
sufficient to prepare the reports
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described in Section 4.05 which continues unremedied for a period of
one Business Day after the date upon which written notice of such
failure shall have been given to the Master Servicer by the Trustee
or the Securities Administrator or to the Master Servicer, the
Securities Administrator and the Trustee by the Holders of not less
than 25% of the Class Principal Balance or Percentage Interest of
each Class of Certificates affected thereby; or
(ii) Any failure on the part of the Master Servicer duly to
observe or perform in any material respect any other of the covenants
or agreements (other than those referred to in (vii) and (ix) below)
on the part of the Master Servicer contained in this Agreement
(including any obligation to enforce any Purchase and Servicing
Agreement) or any representation or warranty of the Master Servicer
shall prove to be untrue in any material respect, which failure or
breach continues unremedied for a period of 60 days after the date on
which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer by the Trustee
or the Securities Administrator, or to the Master Servicer, the
Securities Administrator and the Trustee by the Holders of more than
50% of the Aggregate Voting Interests of the Certificates; provided
that the sixty-day cure period shall not apply so long as the
Depositor is required to file Exchange Act Reports with respect to
the Trust Fund, the failure to comply with the requirements set forth
in Section 9.11, Section 9.05 and Section 9.06 (with respect to
notice and information to be provided to the Depositor) or Article
XII, for which the grace period shall not exceed the lesser of 10
calendar days or such period in which the applicable Exchange Act
Report can be filed timely (without taking into account any
extensions); or
(iii) A decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Master Servicer, and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days or
any Rating Agency reduces or withdraws or threatens to reduce or
withdraw the rating of the Certificates because of the financial
condition or loan servicing capability of such Master Servicer; or
(iv) The Master Servicer shall consent to the appointment of
a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities,
voluntary liquidation or similar proceedings of or relating to the
Master Servicer or of or relating to all or substantially all of its
property; or
(v) The Master Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to
take advantage of any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations; or
(vi) The Master Servicer shall be dissolved, or shall
dispose of all or substantially all of its assets, or consolidate
with or merge into another entity or shall
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permit another entity to consolidate or merge into it, such that the
resulting entity does not meet the criteria for a successor servicer
as specified in Section 9.05 hereof; or
(vii) If a representation or warranty set forth in Section
9.03 hereof shall prove to be incorrect as of the time made in any
respect that materially and adversely affects the interests of the
Certificateholders, and the circumstance or condition in respect of
which such representation or warranty was incorrect shall not have
been eliminated or cured within 90 days after the date on which
written notice of such incorrect representation or warranty shall
have been given to the Master Servicer by the Trustee or the
Securities Administrator, or to the Master Servicer, the Securities
Administrator and the Trustee by the Holders of more than 50% of the
Aggregate Voting Interests of the Certificates; or
(viii) A sale or pledge of any of the rights of the Master
Servicer hereunder or an assignment of this Agreement by the Master
Servicer or a delegation of the rights or duties of the Master
Servicer hereunder shall have occurred in any manner not otherwise
permitted hereunder and without the prior written consent of the
Trustee and Certificateholders holding more than 50% of the Aggregate
Voting Interests of the Certificates; or
(ix) After receipt of notice from the Trustee or the
Securities Administrator, any failure of the Master Servicer to make
any Advances required to be made by it hereunder; or
(x) (a) Any failure by the Master Servicer to deposit in the
Distribution Account or remit to the Securities Administrator any
payment required to be made by the Master Servicer under the terms of
this Agreement (other than an Advance required pursuant to Section
5.05 hereof), which failure shall continue unremedied for three
Business Days after the date upon which written notice of such
failure shall have been given to the Master Servicer by the
Securities Administrator, Trustee or the Depositor or to the Master
Servicer and the Trustee by the Holders of Certificates having not
less than 25% of the Voting Rights evidenced by the Certificates or
(b) any failure by the Master Servicer to deposit in the Distribution
Account or remit to the Securities Administrator any Advance required
to be made by the Master Servicer under Section 5.05 hereof, which
failure shall continue unremedied for one Business Day after the date
upon which written notice of such failure shall have been given to
the Master Servicer by the Securities Administrator, Trustee or the
Depositor or to the Master Servicer and the Trustee by the Holders of
Certificates having not less than 25% of the Voting Rights evidenced
by the Certificates; or
(xi) If the Master Servicer and the Securities Administrator
are the same Person, any removal of the Securities Administrator
pursuant to Section 6.06.
If an Event of Default described in clauses (i) through (ix) or (xi)
of this Section shall occur with respect to the Master Servicer, then, in each
and every case, subject to applicable law, so long as any such Event of
Default shall not have been remedied within any period of time prescribed by
this Section, the Trustee, by notice in writing to the Master Servicer may,
and, if so directed by (a) Certificateholders evidencing more than 50% of the
Class Principal Balance of
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each Class of Certificates or (b) the Depositor, in the case of a failure
related to a filing obligation triggered by a Reportable Event; the Trustee
shall by notice in writing to the Master Servicer (with a copy to each Rating
Agency and the Depositor), terminate all of the respective rights and
obligations of the Master Servicer hereunder and in and to the Mortgage Loans
and the proceeds thereof. Subject to Section 6.01(c)(ii), if an Event of
Default described in clause (x) of this Section shall occur with respect to
the Master Servicer, then, in each and every case, subject to applicable law,
so long as any such Event of Default shall not have been remedied within any
period of time prescribed by this Section, the Trustee shall by notice in
writing to the Master Servicer terminate all of the respective rights and
obligations of the Master Servicer hereunder and in and to the Mortgage Loans
and the proceeds thereof. On or after the receipt by the Master Servicer of
such written notice, all authority and power of the Master Servicer, and with
respect to the Master Servicer only in its capacity as Master Servicer under
this Agreement, whether with respect to the Mortgage Loans or otherwise, shall
pass to and be vested in the Trustee; and the Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the defaulting Master Servicer
as attorney-in-fact or otherwise, any and all documents and other instruments,
and to do or accomplish all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, whether to complete the
transfer and endorsement or assignment of the affected Mortgage Loans and
related documents or otherwise. The defaulting Master Servicer agrees to
cooperate with the Trustee and the Securities Administrator in effecting the
termination of the defaulting Master Servicer's responsibilities and rights
hereunder as Master Servicer which includes, without limitation, notifying the
Servicers of the assignment of the master servicing function and providing the
Trustee or its designee all documents and records in electronic or other form
reasonably requested by it to enable the Trustee or its designee to assume the
defaulting Master Servicer's functions hereunder and the transfer to the
Trustee for administration by it of all amounts which shall at the time be or
should have been deposited by the defaulting Master Servicer in the
Distribution Account, any related Custodial Account and any other account or
fund maintained with respect to the Certificates or thereafter received with
respect to the affected Mortgage Loans. The Master Servicer being terminated
shall bear all costs of the transfer of the master servicing to the successor
master servicer, including but not limited to those of the Trustee or
Securities Administrator reasonably allocable to specific employees and
overhead, legal fees and expenses, accounting and financial consulting fees
and expenses, and costs of amending the Agreement, if necessary. If such costs
are not paid by the terminated Master Servicer, the Trustee shall pay such
costs from the Trust Fund.
Notwithstanding the termination of its activities as Master Servicer,
any terminated Master Servicer shall continue to be entitled to reimbursement
under this Agreement to the extent such reimbursement relates to the period
prior to such Master Servicer's termination.
The Securities Administrator and the Master Servicer shall promptly
notify the Responsible Officers of the Trustee and the Depositor of the
occurrence and continuance of an Event of Default. If any Event of Default
shall occur, the Trustee, upon a Responsible Officer of the Trustee becoming
aware of the occurrence thereof, shall promptly notify each Rating Agency of
the nature and extent of such Event of Default. The Securities Administrator
shall immediately give written notice to the Master Servicer upon the failure
of the Master Servicer to make Advances as required under this Agreement with
a copy to the Trustee.
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Upon the occurrence of an Event of Default, the Trustee shall provide
the Depositor in writing and in form and substance reasonably satisfactory to
the Depositor, all information reasonably requested by the Depositor in order
to comply with its reporting obligation under Item 6.02 of Form 8-K with
respect to a successor master servicer in the event the Trustee should succeed
to the duties of the Master Servicer as set forth herein.
In order to comply with applicable Form 8-K reporting requirements
under Regulation AB, at least 15 calendar days prior to the effective date of
such appointment, (x) the Trustee shall provide written notice to the
Depositor of such successor pursuant to this Section 6.14 and (y) such
successor Master Servicer shall provide to the Depositor in writing and in
form and substance reasonably satisfactory to the Depositor, all information
reasonably requested by the Depositor in order to comply with its reporting
obligation under Item 6.02 of Form 8-K with respect to a replacement master
servicer.
(b) On and after the time the Master Servicer receives a notice of
termination from the Trustee or the Securities Administrator, as applicable,
pursuant to Section 6.14(a) or the Trustee or the Securities Administrator, as
applicable, receives the resignation of the Master Servicer evidenced by an
Opinion of Counsel pursuant to Section 9.06, the Trustee, unless another
master servicer shall have been appointed, shall be the successor in all
respects to the Master Servicer, in its capacity as such under this Agreement
and the transactions set forth or provided for herein and shall have all the
rights and powers and be subject to all the responsibilities, duties and
liabilities relating thereto and arising thereafter placed on the Master
Servicer, hereunder, including the obligation to make Advances; provided,
however, that any failure to perform such duties or responsibilities caused by
the failure of the Master Servicer to provide information required by this
Agreement shall not be considered a default by the Trustee or the Securities
Administrator, as applicable, hereunder. In addition, neither the Trustee nor
the Securities Administrator, as applicable, shall have any responsibility for
any act or omission of the Master Servicer prior to the issuance of any notice
of termination. The Trustee shall have no liability relating to the
representations and warranties of the Master Servicer set forth in Section
9.03. In the capacity as such successor, the Trustee shall have the same
limitations on liability herein granted to the Master Servicer. As
compensation for being the successor master servicer, the Trustee shall be
entitled to receive all compensation payable to the Master Servicer under this
Agreement. Any successor to the Master Servicer hereunder also may assume the
obligations of the Securities Administrator hereunder as successor in such
capacity shall be entitled to the compensation payable to the Securities
Administrator pursuant to Section 4.02 hereof from and after the date of such
assumption.
(c) Notwithstanding the above, the Trustee may, if it shall be
unwilling to continue to so act, or shall, if it is unable to so act, petition
a court of competent jurisdiction to appoint, or appoint on its own behalf any
established housing and home finance institution servicer, master servicer,
servicing or mortgage servicing institution having a net worth of not less
than $15,000,000 and meeting such other standards for a successor master
servicer, as are set forth in this Agreement, as the successor to such Master
Servicer in the assumption of all of the respective responsibilities, duties
or liabilities of a master servicer, like the Master Servicer. Any entity
designated by the Trustee, may be an Affiliate of the Trustee; provided,
however, that, unless such Affiliate meets the net worth requirements and
other standards set forth herein for a successor master servicer, the Trustee,
in its individual capacity shall agree, at the time of such
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designation, to be and remain liable to the Trust Fund for such Affiliate's
actions and omissions in performing its duties hereunder. In connection with
such appointment and assumption, the Trustee may make such arrangements for
the compensation of such successor out of payments on the Mortgage Loans as it
and such successor shall agree; provided, however, that no such compensation
shall be in excess of that permitted to the Master Servicer hereunder. The
Trustee and such successor shall take such actions, consistent with this
Agreement, as shall be necessary to effectuate any such succession and may
make other arrangements with respect to the master servicing to be conducted
hereunder which are not inconsistent herewith. The Master Servicer shall
cooperate with the Trustee and any successor master servicer in effecting the
termination of the Master Servicer's responsibilities and rights hereunder
including, without limitation, notifying the Servicers of the assignment of
the master servicing functions and providing the Trustee and successor master
servicer all documents and records in electronic or other form reasonably
requested by it to enable it to assume the Master Servicer's functions
hereunder and the transfer to the Trustee or such successor all amounts which
shall at the time be or should have been deposited by the Master Servicer in
the Distribution Account, any Custodial Account, or any other account or fund
maintained with respect to the Certificates or thereafter be received with
respect to the Mortgage Loans. Neither the Trustee nor the Securities
Administrator, as applicable, nor any other successor, as applicable, shall be
deemed to be in default hereunder by reason of any failure to make, or any
delay in making, any distribution hereunder or any portion thereof caused by
(i) the failure of the Master Servicer to deliver, or any delay in delivering,
cash, documents or records to it, (ii) the failure of the Master Servicer to
cooperate as required by this Agreement, (iii) the failure of the Master
Servicer to deliver the related Mortgage Loan data as required by this
Agreement or (iv) restrictions imposed by any regulatory authority having
jurisdiction over the Master Servicer. No successor master servicer shall be
deemed to be in default hereunder by reason of any failure to make, or any
delay in making, any distribution hereunder or any portion thereof caused by
(i) the failure of the Securities Administrator to deliver, or any delay in
delivering cash, documents or records to it related to such distribution, or
(ii) the failure of Trustee or the Securities Administrator to cooperate as
required by this Agreement.
Section 6.15. Additional Remedies of Trustee Upon Event of Default.
During the continuance of any Event of Default, so long as such Event
of Default shall not have been remedied, the Trustee, in addition to the
rights specified in Section 6.14, shall have the right, in its own name and as
trustee of the Trust Fund, to take all actions now or hereafter existing at
law, in equity or by statute to enforce its rights and remedies and to protect
the interests, and enforce the rights and remedies, of the Certificateholders
(including the institution and prosecution of all judicial, administrative and
other proceedings and the filings of proofs of claim and debt in connection
therewith). Except as otherwise expressly provided in this Agreement, no
remedy provided for by this Agreement shall be exclusive of any other remedy,
and each and every remedy shall be cumulative and in addition to any other
remedy, and no delay or omission to exercise any right or remedy shall impair
any such right or remedy or shall be deemed to be a waiver of any Event of
Default.
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Section 6.16. Waiver of Defaults.
More than 50% of the Aggregate Voting Interests of the
Certificateholders may waive any default or Event of Default by the Master
Servicer in the performance of its obligations hereunder, except that a
default in the making of any required deposit to the Distribution Account that
would result in a failure of the Securities Administrator or the Paying Agent
to make any required payment of principal of or interest on the Certificates
may only be waived with the consent of 100% of the affected
Certificateholders. Upon any such waiver of a past default, such default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent
thereon except to the extent expressly so waived.
Section 6.17. Notification to Holders.
Upon termination of the Master Servicer or appointment of a successor
to the Master Servicer, in each case as provided herein, the Trustee shall
promptly mail notice thereof by first class mail to the Securities
Administrator and the Certificateholders at their respective addresses
appearing on the Certificate Register. The Trustee shall also, within 45 days
after the occurrence of any Event of Default known to the Trustee, give
written notice thereof to the Securities Administrator and the
Certificateholders, unless such Event of Default shall have been cured or
waived prior to the issuance of such notice and within such 45-day period.
Section 6.18. Directions by Certificateholders and Duties of Trustee
During Event of Default.
Subject to the provisions of Section 8.01 hereof, during the
continuance of any Event of Default, Holders of Certificates evidencing not
less than 25% of the Class Principal Balance (or Percentage Interest) of each
Class of Certificates affected thereby may direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement; provided, however, that the Trustee shall be under no obligation to
pursue any such remedy, or to exercise any of the trusts or powers vested in
it by this Agreement (including, without limitation, (i) the conducting or
defending of any administrative action or litigation hereunder or in relation
hereto and (ii) the terminating of the Master Servicer or any successor master
servicer from its rights and duties as master servicer hereunder) at the
request, order or direction of any of the Certificateholders, unless such
Certificateholders shall have offered to the Trustee security or indemnity
reasonably satisfactory to it against the cost, expenses and liabilities which
may be incurred therein or thereby; and, provided further, that, subject to
the provisions of Section 8.01, the Trustee shall have the right to decline to
follow any such direction if the Trustee, in accordance with an Opinion of
Counsel, determines that the action or proceeding so directed may not lawfully
be taken or if the Trustee in good faith determines that the action or
proceeding so directed would involve it in personal liability for which it is
not indemnified to its satisfaction.
Section 6.19. Action Upon Certain Failures of the Master Servicer and
Upon Event of Default.
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In the event that a Responsible Officer of the Trustee shall have
actual knowledge or written notice of any action or inaction of the Master
Servicer that would become an Event of Default upon the Master Servicer's
failure to remedy the same after notice, the Trustee shall give notice thereof
to the Master Servicer.
Section 6.20. Preparation of Tax Returns and Other Reports.
(a) The Securities Administrator shall prepare or cause to be
prepared on behalf of the Trust Fund, based upon information calculated in
accordance with this Agreement pursuant to instructions given by the
Depositor, and the Securities Administrator shall file federal tax returns,
all in accordance with Article X hereof. If the Securities Administrator is
notified in writing that a state tax return or other return is required, then,
at the sole expense of the Trust Fund, the Securities Administrator shall
prepare and file such state income tax returns and such other returns as may
be required by applicable law relating to the Trust Fund, and, if required by
state law, shall file any other documents to the extent required by applicable
state tax law (to the extent such documents are in the Securities
Administrator's possession). The Securities Administrator shall forward copies
to the Depositor of all such returns and Form 1099 supplemental tax
information and such other information within the control of the Securities
Administrator as the Depositor may reasonably request in writing, and shall
forward to each Certificateholder such forms and furnish such information
within the control of the Securities Administrator as are required by the Code
and the REMIC Provisions to be furnished to them, and will prepare and forward
to Certificateholders Form 1099 (supplemental tax information) (or otherwise
furnish information within the control of the Securities Administrator) to the
extent required by applicable law. The Master Servicer will indemnify the
Securities Administrator and the Trustee for any liability of or assessment
against the Securities Administrator or the Trustee, as applicable, resulting
from any error in any of such tax or information returns directly resulting
from errors in the information provided by such Master Servicer except to the
extent that such information was provided in reasonable reliance upon
information from any Servicer.
(b) The Securities Administrator shall prepare and file with the
Internal Revenue Service ("IRS"), on behalf of the Trust Fund and each REMIC
created hereunder, an application for an employer identification number on IRS
Form SS-4 or by any other acceptable method. The Securities Administrator
shall also file a Form 8811 as required. The Securities Administrator, upon
receipt from the IRS of the Notice of Taxpayer Identification Number Assigned,
shall upon request promptly forward a copy of such notice to the Trustee and
the Depositor. The Securities Administrator shall furnish any other
information that is required by the Code and regulations thereunder to be made
available to the Certificateholders. The Master Servicer agrees that it shall
cause each Servicer to, provide the Securities Administrator with such
information related to the Mortgage Loans in the possession of such Servicer,
as may reasonably be required for the Securities Administrator to prepare such
reports.
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Section 6.21. Certain Matters Regarding any Custodian Appointed
Hereunder.
(a) The Custodian shall maintain continuous custody of all items
constituting the Trustee Mortgage Files in secure facilities in accordance with
customary standards for such custody and shall reflect in its records the
interest of the Trustee for the benefit of the Certificateholders therein. Each
Mortgage Note (and Assignment of Mortgage) shall be maintained in fire resistant
facilities.
(b) With respect to the documents constituting each Trustee Mortgage
File relating to a Mortgage Loan listed on the Mortgage Loan Schedule, the
Custodian shall (i) act exclusively as the custodian for the Trustee, (ii) hold
all documents constituting such Trustee Mortgage File received by it for the
exclusive use and benefit of the Trust, and (iii) make disposition thereof only
in accordance with the terms of this Agreement.
(c) In the event that (i) the Trustee, a Servicer, the Securities
Administrator, the Master Servicer or the Custodian shall be served by a third
party with any type of levy, attachment, writ or court order with respect to any
Trustee Mortgage File or any document included within a Trustee Mortgage File or
(ii) a third party shall institute any court proceeding by which any Trustee
Mortgage File or a document included within a Trustee Mortgage File shall be
required to be delivered otherwise than in accordance with the provisions of
this Agreement, the party receiving such service shall promptly deliver or cause
to be delivered to the other parties to this Agreement copies of all court
papers, orders, documents and other materials concerning such proceedings. The
Custodian shall, to the extent permitted by law, continue to hold and maintain
all the Trustee Mortgage Files that are the subject of such proceedings pending
a final, nonappealable order of a court of competent jurisdiction permitting or
directing disposition thereof. Upon final determination of such court, the
Custodian shall dispose of such Trustee Mortgage File or any document included
within such Trustee Mortgage File as directed by the Trustee which shall give a
direction consistent with such determination. Expenses and fees (including
reasonable attorney's fees) of the Custodian incurred as a result of such
proceedings shall be borne by the Trust Fund.
(d) The Custodian shall provide access to the Mortgage Loan Documents
in its possession regarding the related Mortgage Loans and REO Property and the
servicing thereof to the Trustee, the Master Servicer, the Securities
Administrator, the related Servicer, the Certificateholders, the FDIC, and the
supervisory agents and examiners of the FDIC, such access being afforded only
upon reasonable prior written request and during normal business hours at the
office of the Custodian. The Custodian shall allow representatives of the above
entities to photocopy any of the records and documentation and shall provide
equipment for that purpose at the expense of the person requesting such access.
(e) The Custodian shall have no duties or responsibilities except those
that are specifically set forth herein, or as subsequently agreed in writing by
the parties hereto, and no implied covenants or obligations shall be read into
this Agreement against the Custodian.
(f) The Custodian shall have no responsibility nor duty with respect to
any Trustee Mortgage Files while not in its possession.
(g) The Custodian shall be under no obligation to make any
investigation into the facts or matters stated in any resolution, exhibit,
request, representation, opinion, certificate, statement, acknowledgement,
consent, order or document in the Trustee Mortgage File.
(h) If the Trustee and a Custodian are the same Person, any removal or
resignation of that Person in either capacity shall also result in the removal
of the Person in its other capacity.
(i) In the event that the Custodian fails to produce a Mortgage Note,
Assignment of Mortgage or any other document related to a Mortgage Loan that was
in its possession pursuant to Section 2.01 within five (5) Business Days after
required or requested by the Depositor, the Trustee, the Master Servicer or the
related Servicer, and provided, that (i) Custodian previously delivered to the
Trustee an Initial Certification or a Final Certification with respect to such
document; (ii) such document is not outstanding pursuant to a Request for
Release; and (iii) such document was held by the Custodian on behalf of the
Trustee (a "Custodial Delivery Failure"), then the Custodian shall (a) with
respect to any missing Mortgage Note, promptly deliver to the Depositor, the
Trustee, the Master Servicer or the Servicer upon request, a Lost Note Affidavit
in the form of Exhibit R annexed hereto and (b) with respect to any missing
document related to such Mortgage Loan including but not limited to, a missing
Mortgage Note, indemnify the Depositor, Trustee, the Master Servicer or the
Servicer in accordance with the succeeding paragraph of this Section 6.21(i).
The Custodian appointed hereunder agrees to indemnify and hold the
Depositor, the Trustee, the Master Servicer and the Servicer and their
respective employees, officers, directors and agents harmless against any and
all direct liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements, including reasonable
attorney's fees, that may be imposed on, incurred by, or asserted against it or
them in any way relating to or arising out of such Custodial Delivery Failure.
The foregoing indemnification shall survive any termination or assignment of
this Agreement or the removal or resignation of the Custodian hereunder.
For the avoidance of doubt, if the entity serving as Trustee is also
serving as a Custodian, such entity in its capacity as Custodian shall have the
same rights, protections and indemnities as are afforded to the Trustee
hereunder provided that such Custodian shall not be indemnified by the Trust
Fund for any liability, obligation, loss, damage, penalty, action, judgment,
suit, cost, expense or disbursement imposed on, incurred by or asserted against
the Custodian because of the breach by the Custodian of its obligations
hereunder, which breach was caused by negligence, lack of good faith or willful
misconduct on the part of the Custodian or any of its directors, officers,
agents or employees.
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ARTICLE VII
PURCHASE OF MORTGAGE LOANS AND
TERMINATION OF THE TRUST FUND
Section 7.01. Purchase of Mortgage Loans; Termination of Trust Fund
Upon Purchase or Liquidation of All Mortgage Loans.
(a) The respective obligations and responsibilities of the Trustee,
the Securities Administrator and the Master Servicer created hereby (other
than the obligation of the Securities Administrator to make payments to the
Certificateholders as set forth in Section 7.02), shall terminate on the
earliest of (i) the final payment or other liquidation of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property, (ii)
the sale or auction of the property held by the Trust Fund in accordance with
both Section 7.01(b) and/or 7.01(c) and (iii) the Latest Possible Maturity
Date; provided, however, that in no event shall the Trust Fund created hereby
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador of the United
States to the Court of St. James's, living on the date hereof. Any termination
of the Trust Fund shall be carried out in such a manner so that the
termination of each REMIC included therein shall qualify as a "qualified
liquidation" under the REMIC Provisions.
(b) (1) Auction of the Aggregate Group I Mortgage Loans. On the
related Initial Optional Termination date related to the Aggregate Group I
Mortgage Loans, the Auction Administrator shall solicit bids for the Aggregate
Group I Assets from at least three institutions that are regular purchasers
and/or sellers in the secondary market of residential whole mortgage loans
similar to the Mortgage Loans. If the Auction Administrator receives at least
three bids for the Aggregate Group I Assets, and one of such bids is equal to
or greater than the Minimum Auction Price, the Auction Administrator shall
sell (such sale, an "Aggregate Group I Auction") the related Aggregate Group I
Assets to the highest bidder (the "Aggregate Group I Auction Purchaser") at
the price offered by the Auction Purchaser (the "Aggregate Group I Mortgage
Loan Auction Price"). If the Auction Administrator receives less than three
bids, or does not receive any bid that is at least equal to the Minimum
Auction Price, the Auction Administrator shall, on each six-month anniversary
of the Initial Optional Termination Date for the Aggregate Group I Mortgage
Loans, repeat these auction procedures until the Auction Administrator
receives a bid that is at least equal to the Minimum Auction Price, at which
time the Auction Administrator shall sell the Aggregate Group I Assets to the
Auction Purchaser at that Mortgage Loan Auction Price; provided, however, that
the Auction Administrator shall not be required to repeat these auction
procedures on any Distribution Date for any six-month anniversary of the
Initial Optional Termination Date unless the Auction Administrator reasonably
believes that there is a reasonable likelihood of receiving a bid of at least
the Minimum Auction Price. The Auction Administrator shall give notice to the
Rating Agencies and each Servicer that is servicing any of the Aggregate Group
I Mortgage Loans of the sale of the related Aggregate Group I Assets pursuant
to this Section 7.01(b) (an "Aggregate Group I Auction Sale") and of the
Auction Date.
(2) Auction of the Group 3 Mortgage Loans. On the related
Initial Optional Termination date related to the Group 3 Mortgage
Loans, the Auction Administrator shall
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solicit bids for the Group 3 Assets from at least three institutions
that are regular purchasers and/or sellers in the secondary market of
residential whole mortgage loans similar to the Mortgage Loans. If
the Auction Administrator receives at least three bids for the Group
3 Assets, and one of such bids is equal to or greater than the
Minimum Auction Price, the Auction Administrator shall sell (such
sale, an "Group 3 Auction") the related Group 3 Assets to the highest
bidder (the "Group 3 Auction Purchaser") at the price offered by the
Auction Purchaser (the "Group 3 Mortgage Loan Auction Price"). If the
Auction Administrator receives less than three bids, or does not
receive any bid that is at least equal to the Minimum Auction Price,
the Auction Administrator shall, on each six-month anniversary of the
Initial Optional Termination Date for the Group 3 Mortgage Loans,
repeat these auction procedures until the Auction Administrator
receives a bid that is at least equal to the Minimum Auction Price,
at which time the Auction Administrator shall sell the Group 3 Assets
to the Auction Purchaser at that Mortgage Loan Auction Price;
provided, however, that the Auction Administrator shall not be
required to repeat these auction procedures on any Distribution Date
for any six-month anniversary of the Initial Optional Termination
Date unless the Auction Administrator reasonably believes that there
is a reasonable likelihood of receiving a bid of at least the Minimum
Auction Price. The Auction Administrator shall give notice to the
Rating Agencies and each Servicer that is servicing any of the Group
3 Mortgage Loans of the sale of the related Group 3 Assets pursuant
to this Section 7.01(b) (an "Group 3 Auction Sale") and of the
Auction Date.
(c) In the event that the Master Servicer chooses to exercise its
optional termination rights it shall do so in accordance with the following:
(i) Optional Termination Related to the Aggregate Group I
Mortgage Loans. On any Distribution Date occurring after the Initial
Optional Termination Date related to the Aggregate Group I Mortgage
Loans, the Master Servicer has the option to cause the Trust Fund to
adopt a plan of complete liquidation of the Aggregate Group I
Mortgage Loans pursuant to Sections 7.02 and 7.03 hereof to sell all
of the property related thereto. If the Master Servicer elects to
exercise such option, it shall no later than 30 days prior to the
Distribution Date selected for purchase of the Aggregate Group I
Mortgage Loans and all other assets of the Trust Fund related to the
Aggregate Group I Certificates (with respect to the Aggregate Group I
Certificates, the "Purchase Date") deliver written notice to the
Trustee and the Securities Administrator and either (a) deposit in
the Distribution Account the related Redemption Price or (b) state in
such notice that the Redemption Price shall be deposited in the
Distribution Account not later than 10:00 a.m., New York City time,
on the applicable Purchase Date. Upon exercise of such option, the
Aggregate Group I Assets shall be sold to the Master Servicer at a
price equal to the related Redemption Price.
(ii) Optional Termination Related to the Group 3 Mortgage
Loans. On any Distribution Date occurring on or after the Initial
Optional Termination Date related to the Group 3 Mortgage Loans, the
Master Servicer has the option to cause the Trust to adopt a plan of
complete liquidation of the Group 3 Mortgage Loans pursuant to
Sections 7.02 and 7.03 hereof to sell all of the property related
thereto. If the Master Servicer elects to exercise such option, it
shall no later than 30 days prior to the
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Distribution Date selected for purchase of the Group 3 Mortgage Loans
and all other assets of the Trust related to the Group 3 Certificates
(with respect to the Group 3 Certificates, the "Purchase Date")
deliver written notice to the Trustee and the Securities
Administrator and either (a) deposit in the Distribution Account the
related aggregate Redemption Price or (b) state in such notice that
the Redemption Price shall be deposited in the Distribution Account
not later than 10:00 a.m., New York City time, on the applicable
Purchase Date. Upon exercise of such option, the property of the
Trust related to the Group 3 Certificates shall be sold to the Master
Servicer at a price equal to the aggregate Redemption Price for the
Group 3 Certificates.
(d) The Depositor, the Master Servicer, each Servicer, the Securities
Administrator, the Trustee and the Custodian shall be reimbursed from the
Redemption Price for any Advances, Servicer Advances, accrued and unpaid
Servicing Fees or other amounts with respect to the Mortgage Loans and any
related assets being purchased pursuant to Section 7.01(b) or (c) above that
are reimbursable to such parties (and such other amounts which, if not related
to the Mortgage Loans and other assets of the Trust Fund not being purchased,
that are then due and owing to any such Person) under this Agreement and the
related Purchase and Servicing Agreement or the related Custodial Agreement.
Section 7.02. Procedure Upon Redemption of Trust Fund.
(a) Notice of any termination pursuant to the provisions of Section
7.01, specifying the Distribution Date upon which the final distribution shall
be made or the purchase of the Trust's assets related to the Aggregate Group I
Certificatesor the Group 3 Certificates, as applicable, will occur, shall be
given promptly by the Securities Administrator by first class mail to the
related Certificateholders mailed in the case of a redemption of the related
Certificates, no later than (i) the first day of the month in which the
Distribution Date selected for redemption of such Certificates shall occur or
(ii) upon (x) the sale of all of the property of the Trust Fund by the
Securities Administrator or in the case of a sale of assets of the Trust Fund,
or (y) upon the final payment or other liquidation of the last Mortgage Loan
or REO Property in the Trust Fund. Such notice shall specify (A) the Initial
Optional Termination Date, Distribution Date upon which final distribution on
the Certificates of all amounts required to be distributed to
Certificateholders pursuant to Section 5.02 will be made upon presentation and
surrender of the Certificates at the Certificate Registrar's Corporate Trust
Office, and (B) that the Record Date otherwise applicable to such Distribution
Date is not applicable, distribution being made only upon presentation and
surrender of the Certificates at the office or agency of the Securities
Administrator therein specified. The Securities Administrator shall give such
notice to the Trustee, the Master Servicer and the Certificate Registrar at
the time such notice is given to Holders of the Certificates. Upon any such
termination, the duties of the Certificate Registrar with respect to the
affected Certificates shall terminate and, in the event that such termination
is the second termination pursuant to Section 7.01, the Securities
Administrator shall terminate the Distribution Account and any other account
or fund maintained with respect to the Certificates, subject to the Securities
Administrator's obligation hereunder to hold all amounts payable to
Certificateholders in trust without interest pending such payment.
(b) In the event that all of the Holders do not surrender their
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice,
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the Securities Administrator shall give a second written notice to the
remaining Certificateholders to surrender their Certificates for cancellation
and receive the final distribution with respect thereto. If within one year
after the second notice any Certificates shall not have been surrendered for
cancellation, the Securities Administrator may take appropriate steps to
contact the remaining Certificateholders concerning surrender of such
Certificates, and the cost thereof shall be paid out of the amounts
distributable to such Holders. If within two years after the second notice any
Certificates shall not have been surrendered for cancellation, the Securities
Administrator shall deliver any remaining funds being held by it to the Holder
of the Class A-R Certificates and the Holder of the Class A-R Certificates
shall, subject to applicable state law relating to escheatment, hold all
amounts distributable to such Holders for the benefit of such Holders. No
interest shall accrue on any amount held by the Securities Administrator and
not distributed to a Certificateholder due to such Certificateholder's failure
to surrender its Certificate(s) for payment of the final distribution thereon
in accordance with this Section. The foregoing provisions are intended to
distribute to each Class of Certificates any accrued and unpaid interest
and/or principal to which they are entitled based on their Pass-Through Rates
and Class Certificate Balances or Notional Amounts set forth in the
Preliminary Statement upon liquidation of the Trust Fund.
(c) Any reasonable expenses incurred by the Securities Administrator
in connection with any purchase or termination or liquidation of the portion
of the Trust Fund related to the Aggregate Group I Certificates or the Group 3
Certificates, as applicable, shall be reimbursed from proceeds received from
the liquidation of the Trust Fund.
(d) Any purchase of the Aggregate Group I Assets or the Group 3
Assets by the related Auction Purchaser shall be made on an Auction Date by
receipt of the Auction Administrator of the related Mortgage Loan Auction
Price from the Auction Purchaser, and deposit of the such Mortgage Loan
Auction Price into the Distribution Account by the Auction Administrator
before the Distribution Date on which such purchase is effected. Upon deposit
of such purchase price into the Distribution Account, the Trustee and the
Securities Administrator, shall, upon request and at the expense of the
Auction Purchaser, execute and deliver all such instruments of transfer or
assignment, in each case without recourse, as shall be reasonably requested by
the Auction Purchaser to vest title in the Auction Purchaser in the Aggregate
Group I Assets or the Group 3 Assets so purchased and shall transfer or
deliver to the Auction Purchaser the purchased Aggregate Group I Assets or the
purchased Group 3 Assets.
Section 7.03. Additional Trust Fund Termination Requirements.
(a) On the termination of the Trust Fund under Section 7.01 (a), upon
an Auction Sale pursuant to Section 7.01(b) or upon the exercise of the right
to purchase all of the Aggregate Group I Mortgage Loans, the Group 3 Mortgage
Loans or the Group 3I Mortgage Loans, as applicable, pursuant to Section
7.01(c), the Securities Administrator, on behalf of the Trustee, shall comply
with requirements of this Section 7.03 with respect to each Lower Tier REMIC
relating to the assets to be sold (the "Affected REMIC") and with respect to
the Certificates corresponding to the Affected REMIC (the "Corresponding
Certificates"), unless the party having the right to purchase the assets of
the Affected REMIC (the "Purchaser") delivers to the Trustee and the
Securities Administrator, an Opinion of Counsel (at the Master Servicer's
expense), addressed to the Trustee and the Securities Administrator to the
effect that the failure
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of the Trustee and the Securities Administrator to comply with the
requirements of this Section 7.03 will not result in an Adverse REMIC Event:
(i) Within 89 days prior to the time of making the final
payment on the Corresponding Certificates, (and upon notification by
(1) the Auction Administrator in the case of a purchase under Section
7.01(b) or (2) the Master Servicer in the case of a purchase under
Section 7.01(c)(i) or Section 7.01(c)(ii), as applicable) the
Securities Administrator on behalf of the Trustee shall adopt on
behalf of the Affected REMIC, a plan of complete liquidation, meeting
the requirements of a qualified liquidation under the REMIC
Provisions;
(ii) Any sale of the assets of the Affected REMIC shall be
for cash and shall occur at or after the time the plan of complete
liquidation is adopted and prior to the time the final payments on
the Corresponding Certificates are made;
(iii) On the date specified for final payment of the
Corresponding Certificates, the Securities Administrator shall make
final distributions of principal and interest on the Corresponding
Certificates in accordance with Section 5.02 and, after payment of,
or provision for any outstanding expenses, distribute or credit, or
cause to be distributed or credited, to the Holders of the Residual
Certificates all cash on hand after such final payment (other than
cash retained to meet claims), and the portion of the Trust Fund (and
the Affected REMIC) shall terminate at that time; and
(iv) In no event may the final payment on the Corresponding
Certificates or the final distribution or credit to the Holders of
the Residual Certificates be made after the 89th day from the date on
which the plan of complete liquidation is adopted.
(b) By its acceptance of a Residual Certificate, each Holder thereof
hereby agrees to accept the plan of complete liquidation adopted by the
Securities Administrator on behalf of the Trustee under this Section and to
take such other action in connection therewith as may be reasonably requested
by the Trustee, the Securities Administrator or any Servicer.
ARTICLE VIII
RIGHTS OF CERTIFICATEHOLDERS
Section 8.01. Limitation on Rights of Holders.
(a) The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or this Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or
take any action or proceeding in any court for a partition or winding up of
this Trust Fund, nor otherwise affect the rights, obligations and liabilities
of the parties hereto or any of them. Except as otherwise expressly provided
herein, no Certificateholder, solely by virtue of its status as a
Certificateholder, shall have any right to vote or in any manner otherwise
control the Master Servicer or the operation and management of the Trust Fund,
or the obligations of the parties hereto, nor shall anything herein set forth,
or contained in the terms of the Certificates, be construed so as to
constitute the Certificateholders from time to time as partners or members of
an association, nor shall any Certificateholder be
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under any liability to any third person by reason of any action taken by the
parties to this Agreement pursuant to any provision hereof.
(b) No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of the continuance thereof, as hereinbefore provided, and
unless also the Holders of Certificates evidencing not less than 25% of the
Class Principal Amount or Class Notional Amount (or Percentage Interest) of
Certificates of each Class affected thereby shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name
as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the cost, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for sixty days after its receipt
of such notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding and no direction
inconsistent with such written request has been given such Trustee during such
sixty-day period by such Certificateholders; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder, the Securities Administrator and the Trustee, that no one
or more Holders of Certificates shall have any right in any manner whatever by
virtue or by availing of any provision of this Agreement to affect, disturb or
prejudice the rights of the Holders of any other of such Certificates, or to
obtain or seek to obtain priority over or preference to any other such Holder,
or to enforce any right under this Agreement, except in the manner herein
provided and for the benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 8.02. Access to List of Holders.
(a) If the Trustee is not acting as Certificate Registrar, the
Certificate Registrar will furnish or cause to be furnished to the Trustee,
within fifteen days after receipt by the Certificate Registrar of a request by
the Trustee in writing, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Certificateholders of each Class as
of the most recent Record Date.
(b) If three or more Holders or Certificate Owners (hereinafter
referred to as "Applicants") apply in writing to the Certificate Registrar,
and such application states that the Applicants desire to communicate with
other Holders with respect to their rights under this Agreement or under the
Certificates and is accompanied by a copy of the communication which such
Applicants propose to transmit, then the Certificate Registrar shall, within
five Business Days after the receipt of such application, afford such
Applicants reasonable access during the normal business hours of the
Certificate Registrar to the most recent list of Certificateholders held by
the Certificate Registrar or shall, as an alternative, send, at the
Applicants' expense, the written communication proffered by the Applicants to
all Certificateholders at their addresses as they appear in the Certificate
Register.
(c) Every Holder or Certificate Owner, if the Holder is a Clearing
Agency, by receiving and holding a Certificate, agrees with the Depositor, the
Master Servicer, the Securities
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Administrator, the Certificate Registrar and the Trustee that none of the
Depositor, the Master Servicer, the Securities Administrator, the Certificate
Registrar nor the Trustee shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the
Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 8.03. Acts of Holders of Certificates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders or Certificate Owners, if the Holder is a Clearing Agency, may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and
the Securities Administrator and, where expressly required herein, to the
Master Servicer. Such instrument or instruments (as the action embodies
therein and evidenced thereby) are herein sometimes referred to as an "Act" of
the Holders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agents shall be sufficient
for any purpose of this Agreement and conclusive in favor of the Trustee, the
Securities Administrator and the Master Servicer, if made in the manner
provided in this Section. Each of the Trustee, the Securities Administrator
and the Master Servicer shall promptly notify the others of receipt of any
such instrument by it, and shall promptly forward a copy of such instrument to
the others.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer
authorized by law to take acknowledgments or deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof. Whenever such execution is by an officer of a corporation
or a member of a partnership on behalf of such corporation or partnership,
such certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or
writing, or the authority of the individual executing the same, may also be
proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (whether or not such Certificates
shall be overdue and notwithstanding any notation of ownership or other
writing thereon made by anyone other than the Trustee) shall be proved by the
Certificate Register, and none of the Trustee, the Securities Administrator,
the Master Servicer or the Depositor shall be affected by any notice to the
contrary.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Certificate shall bind every
future Holder of the same Certificate and the Holder of every Certificate
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by
the Trustee or the Master Servicer in reliance thereon, whether or not
notation of such action is made upon such Certificate.
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ARTICLE IX
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01. Duties of the Master Servicer; Enforcement of
Servicers' and Master Servicer's Obligations.
(a) The Master Servicer, on behalf of the Trustee, the Depositor and
the Certificateholders shall monitor the performance of the Servicers under
the Purchase and Servicing Agreements, and shall use its reasonable good faith
efforts to cause the Servicers duly and punctually to perform all of their
respective duties and obligations thereunder. Upon the occurrence of a default
of which a Responsible Officer of the Master Servicer has actual knowledge
under a Purchase and Servicing Agreement, the Master Servicer shall promptly
notify the Trustee thereof, and shall specify in such notice the action, if
any, the Master Servicer is taking in respect of such default. So long as any
such default shall be continuing, the Master Servicer may, and shall if it
determines such action to be in the best interests of Certificateholders, (i)
terminate all of the rights and powers of such Servicer pursuant to the
applicable provisions of the related Purchase and Servicing Agreement; (ii)
exercise any rights it may have to enforce the related Purchase and Servicing
Agreement against such Servicer; and/or (iii) waive any such default under the
related Purchase and Servicing Agreement or take any other action with respect
to such default as is permitted thereunder. Notwithstanding anything to the
contrary in this Agreement, with respect to any Additional Collateral Mortgage
Loan, the Master Servicer will have no duty or obligation to supervise,
monitor or oversee the activities of the related Servicer under any Purchase
and Servicing Agreement with respect to any Additional Collateral or under any
agreement relating to the pledge of, or the perfection of a pledge or security
interest in, any Additional Collateral except upon the occurrence of the
following events (i) in the case of a final liquidation of any Mortgaged
Property secured by Additional Collateral, the Master Servicer shall enforce
the obligation of the Servicer under the related Servicing Agreement to
liquidate such Additional Collateral as required by such Servicing Agreement,
and (ii) if the Master Servicer assumes the obligations of such Servicer as
successor Servicer under the related Servicing Agreement pursuant to this
Section 9.01, as successor Servicer, it shall be bound to service and
administer the Additional Collateral in accordance with the provisions of such
Servicing Agreement.
(b) Upon any termination by the Master Servicer of a Servicer's
rights and powers pursuant to its Purchase and Servicing Agreement, the rights
and powers of such Servicer with respect to the related Mortgage Loans shall
vest in the Master Servicer and the Master Servicer shall be the successor in
all respects to such Servicer in its capacity as Servicer with respect to such
Mortgage Loans under the related Purchase and Servicing Agreement, unless or
until the Master Servicer shall have appointed (and the Trustee shall have
acknowledged), with the consent of the Rating Agencies and in accordance with
the applicable provisions of the related Purchase and Servicing Agreement, a
new ▇▇▇▇▇▇ ▇▇▇- or FHLMC-approved Person to serve as successor to the
Servicer; provided, however, that it is understood and agreed by the parties
hereto that there will be a period of transition (not to exceed 90 days)
before the actual servicing functions can be fully transferred to a successor
servicer (including the Master Servicer). With such letter from the Rating
Agencies, the Master Servicer may elect to continue
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to serve as successor servicer under the Purchase and Servicing Agreement.
Upon appointment of a successor servicer, as authorized under this Section
9.01(b), unless the successor servicer shall have assumed the obligations of
the terminated Servicer under such Purchase and Servicing Agreement, the
Master Servicer and such successor servicer shall enter into a servicing
agreement in a form substantially similar to the affected Purchase and
Servicing Agreement, and the Trustee shall acknowledge such servicing
agreement. In connection with any such appointment, the Master Servicer may
make such arrangements for the compensation of such successor servicer as it
and such successor servicer shall agree, but in no event shall such
compensation of any successor servicer (including the Master Servicer) be in
excess of that payable to the Servicer under the affected Purchase and
Servicing Agreement.
The Master Servicer shall pay the costs of such enforcement
(including the termination of a Servicer, the appointment of a successor
servicer or the transfer and assumption of the servicing by the Master
Servicer) at its own expense and shall be reimbursed therefor initially (i) by
the terminated Servicer, (ii) from a general recovery resulting from such
enforcement only to the extent, if any, that such recovery exceeds all amounts
due in respect of the related Mortgage Loans, (iii) from a specific recovery
of costs, expenses or attorney's fees against the party against whom such
enforcement is directed, or (iv) to the extent that such amounts described in
(i)-(iii) above are insufficient to reimburse the Master Servicer for such
costs of enforcement, from the Trust Fund, as provided in Section 9.04.
If the Master Servicer assumes the servicing with respect to any of
the Mortgage Loans, it will not assume liability for the representations and
warranties of any Servicer it replaces or for the errors or omissions of such
Servicer.
If the Seller is the owner of the servicing rights and the Seller
chooses to terminate that Servicer with or without cause and sell those
servicing rights to a successor servicer, then the Depositor shall (i) cause
the Seller to give reasonable prior written notice to the Master Servicer, and
(ii) obtain a letter from the Rating Agencies indicating that the appointment
of the proposed successor servicer will not result in a downgrade or
withdrawal of the rating of any of the Certificates, and a New ▇▇▇▇▇▇ Mae- or
FHLMC-approved Person reasonably acceptable to the Master Servicer shall be
chosen by the Seller and appointed as successor servicer with the
acknowledgment of the Master Servicer and the Trustee; provided, however, that
the Seller shall not be required to get a no-downgrade letter from the Rating
Agencies if: (i) the Rating Agencies received prior written notice of the
transfer of the servicing rights and the name of the successor Servicer, (ii)
such successor Servicer has a servicing rating in the highest category of
Fitch or ▇▇▇▇▇'▇ to the extent that Fitch or ▇▇▇▇▇'▇, respectively, is a
Rating Agency, and such successor Servicer has a servicer evaluation ranking
in one of the two highest categories of S&P to the extent that S&P is a Rating
Agency, and (iii) such successor Servicer shall service the related Mortgage
Loans under either the Purchase and Servicing Agreement together with the
related Assignment Agreement under which such Mortgage Loans are currently
being serviced or under another Servicing Agreement together with a related
Assignment Agreement that have already been reviewed and approved by the
Rating Agencies. The Depositor shall cause the costs of such transfer
including any costs of such transfer (including any costs of the Master
Servicer) to be borne by the Seller.
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At least 15 calendar days prior to the effective date of such
termination, (x) the Depositor shall provide written notice to the Master
Servicer and all information reasonably requested by the Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect
to a replacement servicer.
(c) Upon any termination of a Servicer's rights and powers pursuant
to its Purchase and Servicing Agreement, the Master Servicer shall promptly
notify the Trustee and the Rating Agencies, specifying in such notice that the
Master Servicer or any successor servicer, as the case may be, has succeeded
such Servicer under the related Purchase and Servicing Agreement or under any
other servicing agreement reasonably satisfactory to the Master Servicer and
the Rating Agencies, which notice shall also specify the name and address of
any such successor servicer.
(d) The Depositor shall not consent to the assignment by any Servicer
of such Servicer's rights and obligations under the related Purchase and
Servicing Agreement without the prior written consent of the Master Servicer,
which consent shall not be unreasonably withheld.
(e) The Trustee shall execute and deliver, at the written request of
the Master Servicer or any Servicer, and furnish to the Master Servicer and
any Servicer, at the expense of the requesting party, a power of attorney in
the standard form provided by the Trustee to take title to the Mortgaged
Properties after foreclosure in the name of and on behalf of the Trustee in
its capacity as Trustee hereunder and for the purposes described herein to the
extent necessary or desirable to enable the Master Servicer or any Servicer to
perform its respective duties. The Trustee shall not be liable for the actions
of the Master Servicer or any Servicer under such powers of attorney.
Section 9.02. Assumption of Master Servicing by Trustee.
(a) In the event the Master Servicer shall for any reason no longer
be the Master Servicer (including by reason of any Event of Default by the
Master Servicer under this Agreement), the Trustee shall thereupon assume all
of the rights and obligations of such Master Servicer hereunder and under each
Purchase and Servicing Agreement entered into with respect to the Mortgage
Loans or shall appoint or petition a court to appoint a ▇▇▇▇▇▇-▇▇▇ or
FHLMC-approved servicer as successor servicer that is acceptable to the
Depositor and the Rating Agencies. The Trustee, as successor master servicer,
its designee or any successor master servicer appointed by the Trustee shall
be deemed to have assumed all of the Master Servicer's interest herein and
therein to the same extent as if such Purchase and Servicing Agreements had
been assigned to the assuming party, except that the Master Servicer shall not
thereby be relieved of any liability or obligations of the Master Servicer
under such Purchase and Servicing Agreement accruing prior to its replacement
as Master Servicer, and shall be liable to the Trustee, and hereby agrees to
indemnify and hold harmless the Trustee (in its individual corporate capacity
and as Trustee hereunder) from and against all costs, damages, expenses and
liabilities (including reasonable attorneys' fees) incurred by the Trustee as
a result of such liability or obligations of the Master Servicer and in
connection with the Trustee's assumption (but not its performance, except to
the extent that costs or liability of the Trustee are created or increased as
a result of negligent or wrongful acts or omissions of the Master Servicer
prior to its
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replacement as Master Servicer) of the Master Servicer's obligations, duties
or responsibilities thereunder. To the extent that the costs and expenses of
the Trustee described in this Section are not timely reimbursed by the Master
Servicer, the Trustee shall be entitled to reimbursement from the Distribution
Account and the Master Servicer is hereby obligated to reimburse the Trust
promptly for such amounts by deposit thereof in the Distribution Account.
(b) The Master Servicer that has been terminated shall, upon request
of the Trustee but at the expense of such Master Servicer, deliver to the
assuming party all documents and records relating to each Purchase and
Servicing Agreement, this Agreement and the related Mortgage Loans and an
accounting of amounts collected and held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of each Purchase and
Servicing Agreement and this Agreement to the assuming party.
Section 9.03. Representations and Warranties of the Master Servicer.
The Master Servicer hereby represents and warrants to the Depositor,
the Securities Administrator and the Trustee, for the benefit of the
Certificateholders, as of the Closing Date that:
(i) it is validly existing and in good standing under the
laws of the United States of America as a national banking
association, and as Master Servicer has full power and authority to
transact any and all business contemplated by this Agreement and to
execute, deliver and comply with its obligations under the terms of
this Agreement, the execution, delivery and performance of which have
been duly authorized by all necessary corporate action on the part of
the Master Servicer;
(ii) the execution and delivery of this Agreement by the
Master Servicer and its performance and compliance with the terms of
this Agreement will not (A) violate the Master Servicer's charter or
bylaws, (B) violate any law or regulation or any administrative
decree or order to which it is subject or (C) constitute a default
(or an event which, with notice or lapse of time, or both, would
constitute a default) under, or result in the breach of, any material
contract, agreement or other instrument to which the Master Servicer
is a party or by which it is bound or to which any of its assets are
subject, which violation, default or breach would materially and
adversely affect the Master Servicer's ability to perform its
obligations under this Agreement;
(iii) this Agreement constitutes, assuming due
authorization, execution and delivery hereof by the other respective
parties hereto, a legal, valid and binding obligation of the Master
Servicer, enforceable against it in accordance with the terms hereof,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement
of creditors' rights in general, and by general equity principles
(regardless of whether such enforcement is considered in a proceeding
in equity or at law);
(iv) the Master Servicer is not in default with respect to
any order or decree of any court or any order or regulation of any
federal, state, municipal or governmental
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agency to the extent that any such default would materially and
adversely affect its performance hereunder;
(v) the Master Servicer is not a party to or bound by any
agreement or instrument or subject to any charter provision, bylaw or
any other corporate restriction or any judgment, order, writ,
injunction, decree, law or regulation that may materially and
adversely affect its ability as Master Servicer to perform its
obligations under this Agreement or that requires the consent of any
third person to the execution of this Agreement or the performance by
the Master Servicer of its obligations under this Agreement;
(vi) no litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which
would prohibit its entering into this Agreement or performing its
obligations under this Agreement;
(vii) the Master Servicer, or an affiliate thereof the
primary business of which is the servicing of conventional
residential mortgage loans, is a ▇▇▇▇▇▇ Mae- or FHLMC-approved
seller/servicer;
(viii) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Master Servicer of or compliance by
the Master Servicer with this Agreement or the consummation of the
transactions contemplated by this Agreement, except for such
consents, approvals, authorizations and orders (if any) as have been
obtained; and
(ix) the consummation of the transactions contemplated by
this Agreement are in the ordinary course of business of the Master
Servicer.
It is understood and agreed that the representations and warranties
set forth in this Section shall survive the execution and delivery of this
Agreement. The Master Servicer shall indemnify the Depositor, the Securities
Administrator and the Trustee and hold them harmless against any loss,
damages, penalties, fines, forfeitures, legal fees and related costs,
judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a material
breach of the Master Servicer's representations and warranties contained in
this Section 9.03. It is understood and agreed that the enforcement of the
obligation of the Master Servicer set forth in this Section to indemnify the
Depositor, the Securities Administrator and the Trustee as provided in this
Section constitutes the sole remedy (other than as set forth in Section 6.14)
of the Depositor, the Securities Administrator and the Trustee, respecting a
breach of the foregoing representations and warranties. Such indemnification
shall survive any termination of the Master Servicer as Master Servicer
hereunder, the resignation or removal of the Trustee and any termination of
this Agreement.
Any cause of action against the Master Servicer relating to or
arising out of the breach of any representations and warranties made in this
Section shall accrue upon discovery of such breach by either the Depositor,
the Master Servicer or the Trustee or notice thereof by any one of such
parties to the other parties.
Section 9.04. Compensation to the Master Servicer.
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The Master Servicer shall be compensated for its duties hereunder
pursuant to Section 4.02(b) hereof. The Master Servicer shall either retain or
withdraw from the Distribution Account (i) amounts necessary to reimburse
itself for any previously unreimbursed Advances, Servicer Advances and
Nonrecoverable Advances with respect to the Mortgage Loans in accordance with
the definition of "Available Distribution Amount" and (ii) amounts
representing assumption fees, late payment charges or other ancillary income
not included in the definition of "Available Distribution Amount" and which
are not required to be remitted by the Servicers to the Securities
Administrator or deposited by the Securities Administrator into the
Distribution Account and (iii) any amounts to which the Master Servicer is
entitled pursuant to 4.01(e) hereof. The Master Servicer shall be required to
pay all expenses incurred by it in connection with its activities hereunder
and shall not be entitled to reimbursement therefor except as provided in this
Agreement.
In addition, the Master Servicer shall be entitled to reimbursement
from the Distribution Account for all reasonable expenses, disbursements and
advances incurred or made by the Master Servicer in connection with the
performance of its duties hereunder and under the Purchase and Servicing
Agreements, as modified by the Acknowledgements (including the reasonable
compensation and the expenses and disbursements of its agents and counsel), to
the extent not otherwise reimbursed pursuant to this Agreement, except any
such expense, disbursement or advance as may be attributable to its willful
misfeasance, bad faith or negligence.
The Master Servicer and any director, officer, employee or agent of
the Master Servicer shall be indemnified by the Trust and held harmless
thereby against any loss, liability or expense (including reasonable legal
fees and disbursements of counsel) incurred on their part that may be
sustained in connection with, arising out of, or related to, any claim or
legal action (including any pending or threatened claim or legal action)
relating to this Agreement, the Purchase and Servicing Agreements or the
Certificates, other than any loss, liability or expense resulting from the
Master Servicer's failure to perform its duties hereunder or thereunder or
incurred by reason of the Master Servicer's negligence, willful misfeasance or
bad faith.
Section 9.05. Merger or Consolidation.
Any Person into which the Master Servicer may be merged or
consolidated, or any Person resulting from any merger, conversion, other
change in form or consolidation to which the Master Servicer shall be a party,
or any Person succeeding to the business of the Master Servicer shall be the
successor to the Master Servicer hereunder, without the execution or filing of
any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or resulting Person to the Master Servicer shall be a Person that
shall be qualified and approved to service mortgage loans for ▇▇▇▇▇▇ ▇▇▇ or
FHLMC and shall have a net worth of not less than $15,000,000.
As a condition to the effectiveness of any merger or consolidation,
at least 15 calendar days prior to the effective date of any merger or
consolidation of the Master Servicer, the Master Servicer shall provide (x)
written notice to the Depositor of any successor pursuant to this Section and
(y) in writing and in form and substance reasonably satisfactory to the
Depositor, all
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information reasonably requested by the Depositor in order to comply with its
reporting obligation under Item 6.02 of Form 8-K with respect to a replacement
Master Servicer.
Section 9.06. Resignation of Master Servicer and Securities
Administrator.
Except as otherwise provided in Sections 9.05, 9.07 and 9.10 hereof,
neither the Master Servicer nor the Securities Administrator shall resign from
the obligations and duties hereby imposed on it unless the duties of the
Master Servicer or the Securities Administrator, as applicable, hereunder are
no longer permissible under applicable law or are in material conflict by
reason of applicable law with any other activities carried on by it and cannot
be cured. Any such determination permitting the resignation of the Master
Servicer or the Securities Administrator shall be evidenced by an Opinion of
Counsel that shall be Independent to such effect delivered to the Trustee. No
resignation of the Master Servicer or the Securities Administrator shall
become effective until the Trustee shall have assumed, or a successor master
servicer or successor securities administrator, as applicable, shall have been
appointed pursuant to Section 6.07 or 9.02, as applicable, and until such
successor shall have assumed, such Master Servicer's or Securities
Administrator's responsibilities and obligations under this Agreement. Notice
of any such resignation shall be given promptly by the Master Servicer or the
Securities Administrator, as applicable, to the Depositor and the Trustee.
If, at any time, the Master Servicer resigns under this Section 9.06,
or transfers or assigns its rights and obligations under Section 9.07, or is
removed as Master Servicer pursuant to Section 6.14, then at such time ▇▇▇▇▇
Fargo Bank, National Association (or any successor thereto) also shall resign
or be removed, as applicable, as Securities Administrator, Auction
Administrator, Paying Agent, Authenticating Agent and Certificate Registrar
under this Agreement. In such event, the obligations of the Master Servicer
and the Securities Administrator shall be assumed by the Trustee as successor
or by such other successor master servicer and/or securities administrator, as
applicable, appointed by the Trustee (subject to the provisions of Sections
6.07 and 9.02(a)).
As a condition to the effectiveness of any such resignation, at least
15 calendar days prior to the effective date of such resignation, the Master
Servicer shall provide (x) written notice to the Depositor of any successor
pursuant to this Section and (y) in writing and in form and substance
reasonably satisfactory to the Depositor, all information reasonably requested
by the Depositor in order to comply with its reporting obligation under Item
6.02 of Form 8-K with respect to the resignation of the Master Servicer.
Section 9.07. Assignment or Delegation of Duties by the Master
Servicer and Securities Administrator.
Except as expressly provided herein, neither the Master Servicer nor
the Securities Administrator shall assign or transfer any of their respective
rights, benefits or privileges hereunder to any other Person, or delegate to
or subcontract with, or authorize or appoint any other Person to perform any
of the respective duties, covenants or obligations to be performed by the
Master Servicer or Securities Administrator, as applicable, hereunder;
provided, however, that the Master Servicer and the Securities Administrator
shall each have the right with the prior written consent of the Trustee and
the Depositor (which consent shall not be unreasonably
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withheld), and upon delivery to the Trustee and the Depositor of a letter from
each Rating Agency to the effect that such action shall not result in a
downgrading of the Certificates, to delegate or assign to or subcontract with
or authorize or appoint any qualified Person to perform and carry out any of
the respective duties, covenants or obligations to be performed and carried
out by the Master Servicer or the Securities Administrator, as applicable,
hereunder. Notice of such permitted assignment shall be given promptly by the
Master Servicer or the Securities Administrator, as applicable, to the
Depositor and the Trustee. If, pursuant to any provision hereof, the
respective duties of the Master Servicer or the Securities Administrator are
transferred to a successor master servicer or successor securities
administrator, as applicable, the entire amount of the compensation payable to
the Master Servicer or Securities Administrator pursuant hereto shall
thereafter be payable to such successor master servicer or successor
securities administrator. Such successor Master Servicer shall also pay the
fees of the Trustee, as provided herein.
Section 9.08. Limitation on Liability of the Master Servicer and
Others.
(a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Trustee or the Certificateholders for any action taken or for refraining from
the taking of any action in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect
the Master Servicer or any such person against any liability that would
otherwise be imposed by reason of willful misfeasance, bad faith or negligence
in its performance of its duties or by reason of reckless disregard for its
obligations and duties under this Agreement. The Master Servicer and any
director, officer, employee or agent of the Master Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted
by any Person respecting any matters arising hereunder. The Master Servicer
shall be under no obligation to appear in, prosecute or defend any legal
action that is not incidental to its duties to master service the Mortgage
Loans in accordance with this Agreement and that in its opinion may involve it
in any expenses or liability; provided, however, that the Master Servicer may
in its sole discretion undertake any such action that it may deem necessary or
desirable in respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder. In such
event, the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund and the
Master Servicer shall be entitled to be reimbursed therefor out of the
Distribution Account.
The Master Servicer shall not be liable for any acts or omissions of
the Servicers except to the extent that damages or expenses are incurred as a
result of such act or omissions and such damages and expenses would not have
been incurred but for the negligence, willful misfeasance, bad faith or
recklessness of the Master Servicer in supervising, monitoring and overseeing
the obligations of the Servicers in this Agreement and the Purchase and
Servicing Agreements.
Section 9.09. Indemnification; Third-Party Claims.
The Master Servicer agrees to indemnify the Depositor, the Securities
Administrator and the Trustee, and hold them harmless against any and all
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, liability, fees and expenses that the
Depositor, the Securities Administrator or the Trustee may sustain as a result
of
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the Master Servicer's willful misfeasance, bad faith or negligence in the
performance of its duties hereunder or by reason of its reckless disregard for
its obligations and duties under this Agreement, the Acknowledgements and the
related Purchase and Servicing Agreements. The Depositor, the Securities
Administrator and the Trustee shall immediately notify the Master Servicer if
a claim is made by a third party with respect to this Agreement or the
Mortgage Loans entitling the Depositor, the Securities Administrator or the
Trustee to indemnification under this Section 9.09, whereupon the Master
Servicer shall assume the defense of any such claim and pay all expenses in
connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or them in
respect of such claim.
Section 9.10. Eligibility Requirements for Securities Administrator.
The Securities Administrator hereunder shall at all times be a
corporation or association organized and doing business under the laws the
United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000, subject to supervision or examination by federal or state
authority and with a credit rating of at least investment grade or at least
"A/F1" by Fitch if Fitch is a Rating Agency. If such corporation or
association publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section 9.10 the combined capital and surplus of
such corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Securities Administrator shall cease to be eligible in
accordance with the provisions of this Section 9.10, the Securities
Administrator shall resign immediately in the manner and with the effect
specified in Section 6.06 hereof. The entity serving as Securities
Administrator may have normal banking and trust relationships with the
Depositor, the Seller, the Master Servicer, any Custodian or the Trustee and
their respective affiliates.
The Securities Administrator (i) may not be an Originator, Master
Servicer, Servicer, the Depositor or an affiliate of the Depositor unless the
Securities Administrator is in an institutional trust department, (ii) must be
authorized to exercise corporate trust powers under the laws of its
jurisdiction of organization, and (iii) must be rated at least "A/F1" by
Fitch, if Fitch is a Rating Agency, or the equivalent rating by S&P or ▇▇▇▇▇'▇
(or such rating acceptable to Fitch pursuant to a written confirmation). If at
any time the Securities Administrator shall cease to be eligible in accordance
with the provisions of this Section 9.10, the Securities Administrator shall
resign in the manner and with the effect specified in Section 6.06 hereof. If
no successor Securities Administrator shall have been appointed and shall have
accepted appointment within 60 days after the Securities Administrator ceases
to be the Securities Administrator pursuant to this Section 9.10, then the
Trustee shall become the successor Securities Administrator and shall, in
accordance with Article VI hereof and in such capacity, perform the duties of
the Securities Administrator pursuant to this Agreement. The Trustee shall
notify the Rating Agencies of any change of Securities Administrator.
Section 9.11. Annual Statement as to Compliance.
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The Master Servicer and the Securities Administrator shall deliver
(and the Master Servicer and Securities Administrator shall cause any
Additional Servicer engaged by it to deliver) or otherwise make available to
the Depositor and the Securities Administrator on or before March 15 of each
year, commencing in March 2007, an Officer's Certificate stating, as to the
signer thereof, that (A) a review of such party's activities during the
preceding calendar year or portion thereof and of such party's performance
under this Agreement, or such other applicable agreement in the case of an
Additional Servicer, has been made under such officer's supervision, (B) to
the best of such officer's knowledge, based on such review, such party has
fulfilled all its obligations under this Agreement, or such other applicable
agreement in the case of an Additional Servicer, in all material respects
throughout such year or portion thereof, or, if there has been a failure to
fulfill any such obligation in any material respect, specifying each such
failure known to such officer and the nature and status thereof and (C) in the
case of the Master Servicer, to the best of such officer's knowledge, each
Servicer has fulfilled all its obligations under its Servicing Agreement in
all material respects throughout such year, or, if there has been a failure to
fulfill any such obligation in any material respect specifying each such
failure known to such officer and the nature and status thereof.
The Master Servicer shall enforce any obligation of the Servicers, to
the extent set forth in the related Servicing Agreement, to deliver to the
Master Servicer and to the Depositor an annual statement of compliance and all
reports and other information required from the Servicers under Reg AB within
the time frame set forth in, and in such form and substance as may be required
pursuant to, the related Servicing Agreement The Master Servicer shall include
such annual statements of compliance with its own annual statement of
compliance to be submitted to the Securities Administrator pursuant to this
Section.
ARTICLE X
REMIC ADMINISTRATION
Section 10.01. REMIC Administration.
(a) REMIC elections as set forth in the Preliminary Statement shall
be made on Forms 1066 or other appropriate federal tax or information return
for the taxable year ending on the last day of the calendar year in which the
Certificates are issued. The regular interests and residual interest in each
REMIC shall be as designated in the Preliminary Statement.
(b) The Closing Date is hereby designated as the "Startup Day" of
each REMIC within the meaning of section 860G(a)(9) of the Code. The latest
possible maturity date for purposes of Treasury Regulation 1.860G-1(a)(4) will
be the Latest Possible Maturity Date.
(c) The Securities Administrator shall represent the Trust Fund in
any administrative or judicial proceeding relating to an examination or audit
by any governmental taxing authority with respect thereto. The Securities
Administrator shall pay any and all tax related expenses (not including taxes)
of each REMIC, including but not limited to any professional fees or expenses
related to audits or any administrative or judicial proceedings with respect
to such REMIC that involve the Internal Revenue Service or state tax
authorities, but only to the extent that (i) such expenses are ordinary or
routine expenses, including expenses of a
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routine audit but not expenses of litigation (except as described in (ii)); or
(ii) such expenses or liabilities (including taxes and penalties) are
attributable to the negligence or willful misconduct of the Securities
Administrator in fulfilling its duties hereunder (including its duties as tax
return preparer). The Securities Administrator shall be entitled to
reimbursement of expenses to the extent provided in clause (i) above from the
Distribution Account, provided, however, the Securities Administrator shall
not be entitled to reimbursement for expenses incurred in connection with the
preparation of tax returns and other reports as required by Section 6.20 and
this Section.
(d) The Securities Administrator shall prepare, the Trustee shall
sign and the Securities Administrator shall file all of each REMIC's federal
and appropriate state tax and information returns as such REMIC's direct
representative. The expenses of preparing and filing such returns shall be
borne by the Securities Administrator. In preparing such returns, the
Securities Administrator shall, with respect to each REMIC other than the
Master REMIC: (i) treat the accrual period for interests in such REMIC as the
calendar month; (ii) account for distributions made from each REMIC other than
the Master REMIC as made on the first day of each succeeding calendar month;
(iii) account for income under the all-OID method at the weighted average of
the Net Mortgage Rates; (iv) use the aggregation method provided in Treasury
Regulation section 1.1275-2(c); and (v) account for income and expenses
related to each REMIC other than the Master REMIC in the manner resulting in
the lowest amount of excess inclusion income possible accruing to the Holder
of the residual interest in each such REMIC.
(e) The Securities Administrator or its designee shall perform on
behalf of each REMIC all reporting and other tax compliance duties that are
the responsibility of such REMIC under the Code, the REMIC Provisions, or
other compliance guidance issued by the Internal Revenue Service or any state
or local taxing authority. Among its other duties, if required by the Code,
the REMIC Provisions, or other such guidance, the Securities Administrator
shall provide, upon receipt of additional reasonable compensation, (i) to the
Treasury or other governmental authority such information as is necessary for
the application of any tax relating to the transfer of a Residual Certificate
to any disqualified person or organization pursuant to Treasury Regulation
1.860E-2(a)(5) and any person designated in Section 860E(e)(3) of the Code and
(ii) to the Certificateholders and the Trustee such information or reports as
are required by the Code or REMIC Provisions.
(f) To the extent within their control, the Trustee, the Securities
Administrator, the Master Servicer and the Holders of Certificates shall take
any action or cause any REMIC to take any action necessary to maintain the
status of any REMIC as a REMIC under the REMIC Provisions and shall assist
each other as necessary to create or maintain such status. None of the
Trustee, the Securities Administrator, the Master Servicer, nor the Holder of
any Residual Certificate shall knowingly take any action, cause any REMIC to
take any action or fail to take (or fail to cause to be taken) any action
that, under the REMIC Provisions, if taken or not taken, as the case may be,
could result in an Adverse REMIC Event unless the Trustee, the Securities
Administrator and the Master Servicer have received an Opinion of Counsel (at
the expense of the party seeking to take such action) to the effect that the
contemplated action will not endanger such status or result in the imposition
of such a tax. In addition, prior to taking any action with respect to any
REMIC or the assets therein, or causing any REMIC to take any action, which is
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not expressly permitted under the terms of this Agreement, any Holder of a
Residual Certificate will consult with the Trustee, the Securities
Administrator, the Master Servicer or their respective designees, in writing,
with respect to whether such action could cause an Adverse REMIC Event to
occur with respect to any REMIC, and no such Person shall take any such action
or cause any REMIC to take any such action as to which the Trustee, the
Securities Administrator or the Master Servicer has advised it in writing that
an Adverse REMIC Event could occur; provided, however, that if no Adverse
REMIC Event would occur but such action could result in the imposition of
additional taxes on the Residual Certificateholders, no such Person shall take
any such action, or cause any REMIC to take any such action without the
written consent of the Residual Certificateholders.
(g) Each Holder of a Residual Certificate shall pay when due any and
all taxes imposed on the related REMIC by federal or state governmental
authorities. To the extent that such taxes are not paid by a Residual
Certificateholder, the Paying Agent shall pay any remaining REMIC taxes out of
current or future amounts otherwise distributable to the Holder of the
Residual Certificate in any such REMIC or, if no such amounts are available,
(A) out of other amounts held in the Distribution Account, and shall reduce
amounts otherwise payable to holders of regular interests in any such REMIC or
(B) to the extent that any such taxes are imposed on the REMIC as a result of
the breach of any representation, warranty or covenant of the Master Servicer,
the Securities Administrator or any Servicer, then the Master Servicer, the
Securities Administrator, or that Servicer, as applicable, shall pay when due
any and all such taxes.
(h) The Securities Administrator shall, for federal income tax
purposes, maintain books and records with respect to each REMIC on a calendar
year and on an accrual basis.
(i) No additional contributions of assets shall be made to any REMIC,
except as expressly provided in this Agreement.
(j) Neither the Securities Administrator nor the Master Servicer
shall enter into any arrangement by which any REMIC will receive a fee or
other compensation for services.
(k) [Reserved].
(l) The Class A-R Holder shall act as "tax matters person" with
respect to each REMIC created hereunder and the Securities Administrator shall
act as agent for the Class A-R Holder in such roles, unless and until another
party is so designated by the Class A-R Holder.
(m) The Securities Administrator, on behalf of the Trustee, shall
treat the Swap Account as an outside reserve fund within the meaning of
Treasury Regulation 1.860G-2(h) that is owned by the holders of the Class I-OC
Certificates, and that is not an asset of any REMIC created hereunder. The
Securities Administrator, on behalf of the Trustee, shall treat the rights of
the holders of the Certificates to receive Basis Risk Carry Forward Amounts
(calculated by excluding any such Amounts attributable to the excess of the
REMIC Cap over the related Net WAC Pass-Through Rate) as rights in an interest
rate cap contract written by the Holders of the Class I-OC Certificates in
favor of the Holders of the Certificates. Thus, the Certificates shall be
treated as representing ownership of not only a Master REMIC regular interest,
but also ownership of an interest in an interest rate cap contract. For
purposes of determining the issue
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price of the Master REMIC regular interest, the Securities Administrator, on
behalf of the Trustee, shall assume that this interest rate cap contract has a
value of $5,000.
(n) The Securities Administrator, on behalf of the Trustee, shall
account for the Swap Trust as an asset of a grantor trust under subpart E,
Part I of subchapter J of the Code and not as an asset of any REMIC created
hereunder. For federal income tax purposes, Net Swap Payment Amounts and Swap
Termination Payments payable to the Swap Counterparty shall be deemed to be
paid to the Swap Trust first, by the Holder of the Class I-OC Certificates
and second, by the Holders of the applicable Class or Classes of Certificates
as and to the extent that their Pass-Through Rate is limited by the related Net
WAC Pass-Through Rate.
(o) Holders of Certificates shall also be treated as having agreed to
pay, on each Distribution Date, to the Holders of the Class I-OC Certificates
an aggregate amount equal to the excess, if any, of (i) Net Swap Payments and
Swap Termination Payments over (ii) the sum of amounts payable on the Class
I-OC Interest as provided in the Preliminary Statement hereof (such excess, a
"Class IO Shortfall"), first from interest and then from principal
distributable on the Certificates. Any payments of Class IO Shortfalls shall
be treated for tax purposes as having been received by the Holders of such
Class of Certificates in respect of the corresponding Master REMIC regular
interest and as having been paid by such Holders to the Holders of the Class
I-OC Certificates through the Swap Trust.
(p) The Securities Administrator, on behalf of the Trustee, shall
treat the rights of the holders of the Group 3 Certificates to receive Basis
Risk Carry Forward Amounts from amounts on deposit in the Group 3 Reserve Fund
as rights in an interest rate cap contract written by the Holders of the Class
3-OC Certificates in favor of the Holders of the Group 3 Certificates. Thus,
the Group 3 Certificates shall be treated as representing ownership of not
only a Master REMIC regular interest, but also ownership of an interest in an
interest rate cap contract. For purposes of determining the issue price of the
Master REMIC regular interest, the Securities Administrator, on behalf of the
Trustee, shall assume that this interest rate cap contract has a value of
$5,000.
Section 10.02. Prohibited Transactions and Activities.
Neither the Depositor, the Master Servicer nor the Trustee shall
sell, dispose of, or substitute for any of the Mortgage Loans, except in a
disposition pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the
bankruptcy of the Trust Fund, (iii) the termination of each REMIC pursuant to
Article VII of this Agreement, (iv) a substitution pursuant to Article II of
this Agreement or (v) a repurchase of Mortgage Loans pursuant to Article II of
this Agreement, nor acquire any assets for any REMIC, nor sell or dispose of
any investments in the Distribution Account for gain, nor accept any
contributions to any REMIC after the Closing Date, unless it has received an
Opinion of Counsel (at the expense of the party causing such sale,
disposition, substitution or acceptance) that such disposition, acquisition,
substitution, or acceptance will not result in an Adverse REMIC Event, (b)
affect the distribution of interest or principal on the Certificates or (c)
result in the encumbrance of the assets transferred or assigned to the Trust
Fund (except pursuant to the provisions of this Agreement).
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The Master Servicer with respect to the Mortgage Loans shall not
consent to any modification of any such Mortgage Loan for which the consent of
the Master Servicer is required under the applicable Purchase and Servicing
Agreement under which such Mortgage Loan is serviced, that would (i) increase
the interest rate in respect of such Mortgage, defer for a period in excess of
six months or forgive the payment of any principal or interest, reduce the
outstanding principal amount (except for actual payments of principal),
increase the Servicing Fee on such Mortgage Loan or extend the final maturity
date on such Mortgage Loan, or (ii) result in a substitution or release of
collateral or in the provision of additional collateral for the Mortgage Loan,
unless the applicable Mortgage Loan is in default or default is reasonably
foreseeable in respect of such Mortgage Loan, or the Master Servicer has
received an Opinion of Counsel (at the expense of the party requesting consent
for such modification) that such modification will not result in an Adverse
REMIC Event.
Section 10.03. Indemnification with Respect to Prohibited
Transactions or Loss of REMIC Status.
Upon the occurrence of an Adverse REMIC Event due to the negligent
performance by the Securities Administrator of its duties and obligations set
forth herein, the Securities Administrator shall indemnify the
Certificateholders of the related Residual Certificate against any and all
losses, claims, damages, liabilities or expenses ("Losses") resulting from
such negligence; provided, however, that the Securities Administrator shall
not be liable for any such Losses attributable to the action or inaction of
the Depositor, the Trustee or the Holder of the Residual Certificate, nor for
any such Losses resulting from misinformation provided by any of the foregoing
parties on which the Securities Administrator has relied. Notwithstanding the
foregoing, however, in no event shall the Securities Administrator have any
liability (1) for any action or omission that is taken in accordance with and
in compliance with the express terms of, or which is expressly permitted by
the terms of, this Agreement or under any Purchase and Servicing Agreements or
under any Acknowledgement, (2) for any Losses other than arising out of
malfeasance, willful misconduct or negligent performance by the Service
Administrator of its duties and obligations set forth herein, and (3) for any
special or consequential damages to Certificateholders of the related Residual
Certificate (in addition to payment of principal and interest on the
Certificates).
Section 10.04. REO Property.
(a) Notwithstanding any other provision of this Agreement, the Master
Servicer, acting on behalf of the Trustee hereunder, shall not, except to the
extent provided in the applicable Purchase and Servicing Agreement, knowingly
permit any Servicer to, rent, lease, or otherwise earn income on behalf of any
REMIC with respect to any REO Property which might cause an Adverse REMIC
Event unless the applicable Servicer has provided to the Trustee and the
Securities Administrator an Opinion of Counsel concluding that, under the
REMIC Provisions, such action would not adversely affect the status of any
REMIC as a REMIC and any income generated for any REMIC by the REO Property
would not result in an Adverse REMIC Event.
(b) The Depositor shall cause the applicable Servicer (to the extent
provided in its Purchase and Servicing Agreement) to make reasonable efforts
to sell any REO Property for its
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fair market value. In any event, however, the Depositor shall, or shall cause
the applicable Servicer (to the extent provided in its Purchase and Servicing
Agreement) to, dispose of any REO Property within three years of its
acquisition by the Trust Fund unless the Depositor or the applicable Servicer
(on behalf of the Trust Fund) has received a grant of extension from the
Internal Revenue Service to the effect that, under the REMIC Provisions and
any relevant proposed legislation and under applicable state law, the REMIC
may hold REO Property for a longer period without causing an Adverse REMIC
Event. If such an extension has been received, then the Depositor, acting on
behalf of the Trustee hereunder, shall, or shall cause the applicable Servicer
to, continue to attempt to sell the REO Property for its fair market value for
such period longer than three years as such extension permits (the "Extended
Period"). If such an extension has not been received and the Depositor or the
applicable Servicer, acting on behalf of the Trust Fund hereunder, is unable
to sell the REO Property within 33 months after its acquisition by the Trust
Fund or if such an extension, has been received and the Depositor or the
applicable Servicer is unable to sell the REO Property within the period
ending three months before the close of the Extended Period, the Depositor
shall cause the applicable Servicer, before the end of the three year period
or the Extended Period, as applicable, to (i) purchase such REO Property at a
price equal to the REO Property's fair market value or (ii) auction the REO
Property to the highest bidder (which may be the applicable Servicer) in an
auction reasonably designed to produce a fair price prior to the expiration of
the three-year period or the Extended Period, as the case may be.
Section 10.05. Fidelity.
The Master Servicer, at its expense, shall maintain in effect a
blanket fidelity bond and an errors and omissions insurance policy, affording
coverage with respect to all directors, officers, employees and other Persons
acting on such Master Servicer's behalf, and covering errors and omissions in
the performance of the Master Servicer's obligations hereunder. The errors and
omissions insurance policy and the fidelity bond shall be in such form and
amount generally acceptable for entities serving as master servicers and
trustees.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Binding Nature of Agreement; Assignment.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
Section 11.02. Entire Agreement.
This Agreement contains the entire agreement and understanding among
the parties hereto with respect to the subject matter hereof, and supersedes
all prior and contemporaneous agreements, understandings, inducements and
conditions, express or implied, oral or written, of any nature whatsoever with
respect to the subject matter hereof. The express terms hereof control and
supersede any course of performance and/or usage of the trade inconsistent
with any of the terms hereof.
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Section 11.03. Amendment.
(a) This Agreement (other than the provisions of Article XII hereof)
may be amended from time to time by the Depositor, the Master Servicer, the
Securities Administrator, and the Trustee, without notice to or the consent of
any of the Holders, (i) to cure any ambiguity or mistake, (ii) to cause the
provisions herein to conform to or be consistent with or in furtherance of the
statements made with respect to the Certificates, the Trust Fund or this
Agreement in any Offering Document, or to correct or supplement any provision
herein which may be inconsistent with any other provisions herein or with the
provisions of any Purchase and Servicing Agreement, (iii) to make any other
provisions with respect to matters or questions arising under this Agreement
or (iv) to add, delete, or amend any provisions to the extent necessary or
desirable to comply with any requirements imposed by the Code and the REMIC
Provisions. No such amendment effected pursuant to the preceding sentence
shall, as evidenced by an Opinion of Counsel, result in an Adverse REMIC
Event, nor shall such amendment effected pursuant to clause (iii) of such
sentence adversely affect in any material respect the interests of any Holder.
Prior to entering into any amendment without the consent of Holders pursuant
to this paragraph, the Trustee shall be provided with an Opinion of Counsel
(at the expense of the party requesting such amendment) to the effect that
such amendment is permitted under this Section. Any such amendment shall be
deemed not to adversely affect in any material respect any Holder, if the
Trustee receives written confirmation from each Rating Agency that such
amendment will not cause such Rating Agency to reduce the then current rating
assigned to the Certificates.
(b) This Agreement (other than the provisions of Article XII hereof)
may also be amended from time to time by the Depositor, the Master Servicer,
the Securities Administrator and the Trustee, with the consent of the Holders
of not less than 66-2/3% of the Class Principal Balance (or Percentage
Interest) of each Class of Certificates affected thereby for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders; provided, however, that no such amendment shall be made unless the
Trustee receives an Opinion of Counsel, at the expense of the party requesting
the change, that such change will not cause an Adverse REMIC Event; and
provided further, that no such amendment may (i) reduce in any manner the
amount of, or delay the timing of, payments received on Mortgage Loans which
are required to be distributed on any Certificate, without the consent of the
Holder of such Certificate or (ii) reduce the aforesaid percentages of Class
Principal Balance or Notional Amount (or Percentage Interest) of Certificates
of each Class, the Holders of which are required to consent to any such
amendment without the consent of the Holders of 100% of the Class Principal
Balance or Notional Amount (or Percentage Interest) of each Class of
Certificates affected thereby. For purposes of this paragraph, references to
"Holder" or "Holders" shall be deemed to include, in the case of any Class of
Book-Entry Certificates, the related Certificate Owners.
(c) In the event the parties to this Agreement desire to further
clarify or amend any provision of Article XII hereof, this Agreement shall be
amended to reflect the new agreement between the parties covering matters in
Article XII, which amendment shall not require any Opinion of Counsel or
Rating Agency confirmations or the consent of any Certificateholder.
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(d) Promptly after the execution of any such amendment, the
Securities Administrator shall furnish written notification of the substance
of such amendment to each Holder, the Depositor and the Rating Agencies.
(e) It shall not be necessary for the consent of Holders under this
Section 11.03 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Holders shall be subject to such reasonable regulations
as the Trustee may prescribe.
Section 11.04. Voting Rights.
Except to the extent that the consent of all affected
Certificateholders is required pursuant to this Agreement, with respect to any
provision of this Agreement requiring the consent of Certificateholders
representing specified percentages of aggregate outstanding Certificate
Balance or Notional Amount (or Percentage Interest), Certificates owned by the
Depositor, the Master Servicer, the Securities Administrator, the Trustee, any
Servicer or any Affiliates thereof are not to be counted so long as such
Certificates are owned by the Depositor, the Master Servicer, the Securities
Administrator, the Trustee, any Servicer or any Affiliate thereof.
Section 11.05. Provision of Information.
(a) For so long as any of the Certificates of any Class are
"restricted securities" within the meaning of Rule 144(a)(3) under the Act,
each of the Depositor, the Master Servicer, the Securities Administrator and
the Trustee (upon instruction from the Depositor) agree to cooperate with each
other to provide to any Certificateholders and to any prospective purchaser of
Certificates designated by such holder, upon the request of such holder or
prospective purchaser, any information required to be provided to such holder
or prospective purchaser to satisfy the condition set forth in Rule 144A(d)(4)
under the Act. Any reasonable, out-of-pocket expenses incurred by the Trustee,
the Master Servicer or the Securities Administrator in providing such
information shall be reimbursed by the Depositor.
(b) The Securities Administrator shall provide to any person to whom
a Prospectus was delivered, upon the request of such person specifying the
document or documents requested, a copy (excluding exhibits) of any report on
Form 8-K or Form 10-K filed with the Securities and Exchange Commission
pursuant to Section 6.20(b). Any reasonable out-of-pocket expenses incurred by
the Securities Administrator in providing copies of such documents shall be
reimbursed by the Depositor.
Section 11.06. Governing Law.
(a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK (OTHER THAN SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW).
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Section 11.07. Notices.
All requests, demands, notices, authorizations, directions, consents,
waivers and communications hereunder shall be in writing and shall be deemed
to have been duly given when received by (a) in the case of the Depositor,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
telephone number (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Loan Trust
2006-16AX, (b) in the case of the Seller, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital
Inc., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Mortgage Loan Trust 2006-16AX, (c) in the case of the Master Servicer
or the Securities Administrator, ▇▇▇▇▇ Fargo Bank, National Association, ▇.▇.
▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or, for overnight deliveries, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇), telecopy number (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Loan Trust 2006-16AX, (d) with respect to
the Trustee or the Certificate Registrar, its respective Corporate Trust
Office and (e) in the case of the Rating Agencies, the address specified
therefor in the definition corresponding to the name of such Rating Agency, or
as to each party such other address as may hereafter be furnished by such
party to the other parties in writing. All demands, notices and communications
to a party hereunder shall be in writing and shall be deemed to have been duly
given when delivered to such party at the relevant address, facsimile number
or electronic mail address set forth above or at such other address, facsimile
number or electronic mail address as such party may designate from time to
time by written notice in accordance with this Section 11.07.
Section 11.08. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.09. Indulgences; No Waivers.
Neither the failure nor any delay on the part of a party to exercise
any right, remedy, power or privilege under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
power or privilege preclude any other or further exercise of the same or of
any other right, remedy, power or privilege, nor shall any waiver of any
right, remedy, power or privilege with respect to any occurrence be construed
as a waiver of such right, remedy, power or privilege with respect to any
other occurrence. No waiver shall be effective unless it is in writing and is
signed by the party asserted to have granted such waiver.
Section 11.10. Headings Not To Affect Interpretation.
The headings contained in this Agreement are for convenience of
reference only, and they shall not be used in the interpretation hereof.
Section 11.11. Benefits of Agreement.
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Nothing in this Agreement or in the Certificates, express or implied,
shall give to any Person, other than the parties to this Agreement and their
successors hereunder and the Holders of the Certificates, any benefit or any
legal or equitable right, power, remedy or claim under this Agreement, except
to the extent specified in Section 11.15.
Section 11.12. Special Notices to the Rating Agencies.
(a) The Depositor shall give prompt notice to the Rating Agencies of
the occurrence of any of the following events of which it has notice:
(i) any amendment to this Agreement pursuant to Section
11.03;
(ii) any assignment by the Master Servicer of its rights
hereunder or delegation of its duties hereunder;
(iii) the occurrence of any Event of Default described in
Section 6.14;
(iv) any notice of termination given to the Master Servicer
pursuant to Section 6.14 and any resignation of the Master Servicer
hereunder;
(v) the appointment of any successor to any Master Servicer
pursuant to Section 6.14;
(vi) the making of a final payment pursuant to Section 7.02;
and
(vii) any termination of the rights and obligations of any
Servicer under the applicable Purchase and Servicing Agreement.
(b) All notices to the Rating Agencies provided for this Section
shall be in writing and sent by first class mail, telecopy or overnight
courier, to the address specified therefor in the definition corresponding to
the name of such Rating Agency.
(c) The Securities Administrator shall provide or make available to
the Rating Agencies reports prepared pursuant to Section 4.05. In addition,
the Securities Administrator shall, at the expense of the Trust Fund, make
available to each Rating Agency such information as such Rating Agency may
reasonably request regarding the Certificates or the Trust Fund, to the extent
that such information is reasonably available to the Securities Administrator.
(d) The Depositor hereby represents to S&P that, to the Depositor's
knowledge, the information provided to such Rating Agency, including the loan
level detail, is true and correct according to such Rating Agency's
requirements.
Section 11.13. Conflicts.
To the extent that the terms of this Agreement conflict with the
terms of any Purchase and Servicing Agreement, the related Purchase and
Servicing Agreement shall govern.
Section 11.14. Counterparts.
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This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, and all of which together shall
constitute one and the same instrument.
Section 11.15. No Petitions.
The Trustee and the Master Servicer (not in its individual corporate
capacity, but solely as Master Servicer hereunder), by entering into this
Agreement, hereby covenant and agree that they shall not at any time institute
against the Depositor, or join in any institution against the Depositor of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to this
Agreement or any of the documents entered into by the Depositor in connection
with the transactions contemplated by this Agreement, except that the Trustee
shall not be prohibited from filing a proof of claim in any such proceeding.
Section 11.16. Indemnification by Trust.
Pursuant to the Purchase and Servicing Agreements, each of the
Originators and Servicers shall be indemnified by the Trust to the extent
specified in the related Purchase and Servicing Agreement.
ARTICLE XII
EXCHANGE ACT REPORTING
Section 12.01. Filing Obligations.
(a) The Master Servicer, the Securities Administrator, the Trustee
and each Custodian shall reasonably cooperate with the Depositor in connection
with the satisfaction of the Depositor's reporting requirements under the
Exchange Act with respect to the Trust Fund. In addition to the information
specified below, if so requested by the Depositor for the purpose of
satisfying its reporting obligation under the Exchange Act, the Master
Servicer, the Securities Administrator, the Trustee and each Custodian shall
(and the Master Servicer shall cause each Servicer, to the extent required by
the related Servicing Agreement, to) provide the Depositor with (a) such
information which is available to such Person without unreasonable effort or
expense and within such timeframe as may be reasonably requested by the
Depositor to comply with the Depositor's reporting obligations under the
Exchange Act and (b) to the extent such Person is a party (and the Depositor
is not a party) to any agreement or amendment required to be filed, copies of
such agreement or amendment in ▇▇▇▇▇-compatible form. Each of the Master
Servicer (and the Master Servicer shall cause any Servicer to notify promptly,
to the extent required by the related Servicing Agreement), the Securities
Administrator, each Custodian and the Trustee shall promptly notify the
Depositor and the Master Servicer (if the notifying party is not the Master
Servicer), but in no event later than two (2) Business Days after its
occurrence, of any Reportable Event either (i) with respect to itself or any
Affiliate of it or (ii) with respect to any Reporting Party, to the extent
that it has received notice thereof.
(b) On or prior to January 30 of the first year in which the
Securities Administrator is able to do so under applicable law, the Securities
Administrator shall prepare
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and file a Form 15 relating to the automatic suspension of reporting in
respect of the Trust under the Exchange Act.
(c) In the event that the Securities Administrator is unable to file
timely with the Commission all or any required portion of any Form 8-K, Form
10-D or Form 10-K required to be filed by this Agreement because required
disclosure information was either not delivered to it or delivered to it after
the delivery deadlines set forth in this Agreement or for any other reason,
the Securities Administrator will immediately notify the Depositor. In the
case of Form 10-D and Form 10-K, the parties to this Agreement will (and the
Master Servicer shall cause each Servicer to cooperate) prepare and file a
Form 12b-25 and a Form 10-DA and Form 10-KA as applicable, pursuant to Rule
12b-25 of the Exchange Act. In the case of Form 8-K, the Securities
Administrator will, upon receipt of all required Form 8-K Disclosure
Information shall include such disclosure information in the next Form 10-D
unless directed by the Depositor to file a Form 8-K with such Form 8-K
Disclosure Information. In the event that any previously filed Form 8-K, Form
10-D or Form 10-K needs to be amended, and such amendment includes any
Additional Form 10-D Disclosure, any Additional Form 10-K Disclosure or any
Form 8-K Disclosure Information or an amendment to any such disclosure, the
Securities Administrator will notify the Depositor and each Servicer affected
by such amendment (unless such amendment is solely for the purpose of
restating the monthly statement referred to in Section 4.05 hereof) and such
parties will cooperate to prepare any necessary Form 8-KA, Form 10-DA or Form
10-KA. Any Form 15, Form 12b-25 or any amendment to a Form 8-K or a Form 10-D
shall be signed by a duly authorized representative of the Master Servicer.
Any amendment to a Form 10-K shall be signed by a senior officer of the Master
Servicer in charge of the master servicing function. The parties to this
Agreement acknowledge that the performance by the Master Servicer and the
Securities Administrator of its duties under this Article XII related to the
timely preparation and filing of a Form 15, Form 12b-25 or any amendment to a
Form 8-K, Form 10-D or Form 10-K is contingent upon each such party performing
its duties under this Section. Neither the Master Servicer nor the Securities
Administrator shall have any liability for any loss, expense, damage, claim
arising out of or with respect to any failure to properly prepare, execute
and/or timely file any such Form 15, Form 12b-25 or any amendments to a Form
8-K, Form 10-D or Form 10-K, where such failure results from the Securities
Administrator's inability or failure to obtain or receive, on a timely basis,
any information from any other party hereto needed to prepare, arrange for
execution or file such Form 15, Form 12b-25 or any amendments to Form 8-K,
Form 10-D or Form 10-K, not resulting from their own respective negligence,
bad faith or willful misconduct.
(d) All items under this Article XII to be reviewed by the Depositor
should be forwarded electronically to ▇▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇. In
addition, for purposes of this Article XII, if the Securities Administrator or
the Master Servicer is required to provide any information or documentation to
such other party, for so long as ▇▇▇▇▇ Fargo Bank, National Association is
both Securities Administrator and Master Servicer, that delivery will be
automatically deemed to have been made.
(e) Each of Form 10-D and Form 10-K requires the registrant to
indicate (by checking "yes" or "no") that it "(1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements
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for the past 90 days." The Depositor shall notify the Securities
Administration in writing, no later than the fifth calendar day after the
related Distribution Date with respect to the filing of a report on Form 10-D
and no later than March 15th with respect to the filing of a report on Form
10-K, if the answer to the questions should be "no." In the absence of such
notification by the Depositor to the Securities Administrator, the Securities
Administrator shall be entitled to assume that the answer to the questions on
Form 10-D and Form 10-K should be "yes". The Securities Administrator shall be
entitled to rely on such representations in preparing, executing and/or filing
any such report.
Section 12.02. Form 10-D Reporting.
(a) No later than 5:00 p.m., New York time, on the 15th calendar day
after each Distribution Date (subject to permitted extensions under the
Exchange Act), the Securities Administrator shall prepare and file on behalf
of the Trust any Form 10-D required by the Exchange Act, in form and substance
as required by the Exchange Act. The Securities Administrator shall file each
Form 10-D with a copy of the related Monthly Statement attached thereto. Any
disclosure in addition to the Monthly Statement that is required to be
included on Form 10-D ("Additional Form 10-D Disclosure") shall be prepared
and filed by the Securities Administrator pursuant to the following paragraph
and the Securities Administrator will have no duty or liability for any
failure hereunder to determine any Additional Form 10-D Disclosure, except as
set forth in the next paragraph.
(b) In accordance with the respective reporting obligations set forth
on Exhibit N-1 hereto, within 5 calendar days after the related Distribution
Date, the Master Servicer and any other Reporting Party shall be required to
provide to the Securities Administrator and the Depositor in ▇▇▇▇▇-compatible
form, or in such other form as otherwise agreed upon by the Securities
Administrator and such party, the form and substance of any Additional Form
10-D Disclosure, if applicable, together with an Additional Disclosure
Notification in the form of Exhibit P attached hereto (an "Additional
Disclosure Notification"). The Securities Administrator shall notify the
Depositor of any Additional Form 10-D Disclosure with respect to itself or any
of its Affiliates and any other Additional Form 10-D Disclosure received by
it. Within one (1) Business Day of such notification, the Depositor will
approve or disapprove, as the case may be, the inclusion of the Additional
Form 10-D Disclosure on Form 10-D. The Depositor will be responsible for any
reasonable additional fees and expenses assessed or incurred by the Securities
Administrator in connection with including any Additional Form 10-D Disclosure
on Form 10-D pursuant to this paragraph.
(c) After preparing the Form 10-D, and no later than the close of
business on the 11th calendar day after the Distribution Date, the Securities
Administrator shall forward electronically a draft copy of the Form 10-D to
the Master Servicer and to the Depositor for review. No later than the 13th
calendar day after the Distribution Date, the Depositor shall notify the
Securities Administrator in writing (which may be provided electronically) of
any changes to or approve the filing of such Form 10-D. In the absence of
receipt of any written changes or approval, or if the Depositor does not
request a copy of a Form 10-D, the Securities Administrator shall be entitled
to assume that such Form 10-D is in final form and the Securities
Administrator may proceed with the execution and filing of the Form 10-D. A
duly authorized representative of the Master Servicer shall sign the Form 10-D
and return an electronic or fax
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copy of such signed Form 10-D (with an original executed hard copy to follow
by overnight mail) to the Securities Administrator. If a Form 10-D cannot be
filed on time or if a previously filed Form 10-D needs to be amended, the
Securities Administrator will follow the procedures set forth in Section
12.01(c) hereof. Promptly (but no later than 1 Business Day) after filing with
the Commission, the Securities Administrator will make available on its
internet website a final executed copy of each Form 10-D prepared and filed by
the Securities Administrator. The signing party at the Master Servicer can be
contacted by e-mail at ▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇ or by facsimile
(▇▇▇) ▇▇▇-▇▇▇▇. Each party to this Agreement acknowledges that the performance
by the Securities Administrator and the Master Servicer of its duties under
this Section 12.02 related to the timely preparation, execution and filing of
Form 10-D is contingent upon such parties strictly observing all applicable
deadlines in the performance of their duties under this Section 12.02. Neither
the Securities Administrator nor the Master Servicer shall have any liability
for any loss, expense, damage, claim arising out of or with respect to any
failure to properly prepare, execute and/or timely file such Form 10-D, where
such failure results from the Securities Administrator's inability or failure
to obtain or receive, on a timely basis, any information from any other party
hereto (other than an Affiliate thereof) needed to prepare, arrange for
execution or file such Form 10-D, not resulting from their respective
negligence, bad faith or willful misconduct.
Section 12.03. Form 8-K Reporting.
(a) As directed by the Depositor, within four (4) Business Days after
the occurrence of an event requiring disclosure on Form 8-K (each such event,
a "Reportable Event"), the Securities Administrator shall prepare and file on
behalf of the Trust any Form 8-K, as required by the Exchange Act, provided
that the Depositor shall file the initial Form 8-K (operative agreements) in
connection with the issuance of the Certificates. Any disclosure or
information related to a Reportable Event or that is otherwise required to be
included on Form 8-K ("Form 8-K Disclosure Information") shall be prepared by
the Securities Administrator pursuant to the following paragraph and the
Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Form 8-K Disclosure Information or any
Form 8-K, except as set forth in the next paragraph.
(b) In accordance with the respective reporting obligations set forth
on Exhibit N-3 hereto, no later than the close of business on the second
Business Day immediately following the occurrence of a Reportable Event, each of
the Securities Administrator, the Custodian, the Trustee, the Master Servicer
and the Depositor shall be required to provide to the Securities Administrator
and the Depositor, as applicable, in ▇▇▇▇▇-compatible form, or in such other
form as otherwise agreed upon by the Securities Administrator and such party,
the form and substance of any Additional Form 8-K Disclosure, if applicable,
together with an Additional Disclosure Notification. The Securities
Administrator shall notify the Depositor of any Form 8-K Disclosure Information
with respect to itself or any of its Affiliates and any other Form 8-K
Disclosure Information received by it. The Depositor will approve or disapprove,
as the case may be, the inclusion of the Form 8-K Disclosure Information on Form
8-K. The Depositor will be responsible for any reasonable additional fees and
expenses assessed or incurred by the Securities Administrator in connection with
including any Form 8-K Disclosure Information on Form 8-K pursuant to this
paragraph.
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(c) After preparing the Form 8-K, the Securities Administrator shall
forward electronically a draft copy of the Form 8-K to the Depositor and the
Master Servicer for review no later than 12:00 p.m., New York time, on the
third Business Day following the Reportable Event. The Depositor shall notify
the Securities Administrator in writing (which may be provided electronically)
of any changes to or approval of such Form 8-K no later than the close of
business on the third Business Day following the Reportable Event. In the
absence of receipt of any written changes or approval, the Securities
Administrator shall be entitled to assume that such Form 8-K is in final form
and the Securities Administrator may proceed with the execution and filing of
the Form 8-K. By 12:00 p.m., New York time, on the fourth Business Day after
the occurrence of the Reportable Event, a duly authorized representative of
the Master Servicer shall sign the Form 8-K, then return an electronic or fax
copy of such signed Form 8-K (with an original executed hard copy to follow by
overnight mail) to the Securities Administrator. If a Form 8-K cannot be filed
on time or if a previously filed Form 8-K needs to be amended, the Securities
Administrator will follow the procedures set forth in Section 12.01(c). With
respect to each Form 8-K prepared and filed by the Securities Administrator,
promptly (but no later than 1 Business Day) after filing with the Commission,
the Securities Administrator will, make available on its internet website a
final executed copy thereof. The parties to this Agreement acknowledge that
the performance by the Master Servicer and the Securities Administrator of its
duties under this Section 12.03 related to the timely preparation, execution
and filing of Form 8-K is contingent upon such parties strictly observing all
applicable deadlines in the performance of their duties under this Section
12.03. Neither the Securities Administrator nor the Master Servicer shall have
any liability for any loss, expense, damage, claim arising out of or with
respect to any failure to properly prepare, execute and/or timely file such
Form 8-K, where such failure results from the Securities Administrator's
inability or failure to obtain or receive, on a timely basis, any information
from any other party hereto (other than an Affiliate thereof) needed to
prepare, arrange for execution or file such Form 8-K, not resulting from their
respective negligence, bad faith or willful misconduct.
Section 12.04. Form 10-K Reporting.
(a) Within 90 days (including the 90th day) after the end of each
fiscal year of the Trust or such earlier date as may be required by the
Exchange Act (the "10-K Filing Deadline"), commencing in March 2007 and
continuing until the Trust has been deregistered with the Commission, the
Securities Administrator shall prepare and file on behalf of the Trust a Form
10-K, in form and substance as required by the Exchange Act. Each such Form
10-K shall include the following items, in each case to the extent they have
been delivered to the Securities Administrator within the applicable time
frames set forth in this Agreement and the related Servicing Agreement, (i) an
annual compliance statement for each Servicer, each Additional Servicer, the
Master Servicer, each Custodian and the Securities Administrator (each such
party and each Custodian, a "Reporting Servicer") as described under Section
9.11, (ii)(A) the annual reports on assessment of compliance with servicing
criteria for each Reporting Servicer, as described under Section 12.06, and
(B) if each Reporting Servicer's report on assessment of compliance with
servicing criteria described under Section 12.06 identifies any material
instance of noncompliance, disclosure identifying such instance of
noncompliance, or if each Reporting Servicer's report on assessment of
compliance with servicing criteria described under Section 12.06 is not
included as an exhibit to such Form 10-K, disclosure that such report is not
included and an explanation why such report is not included, (iii)(A) the
registered public accounting firm
165
attestation report for each Reporting Servicer, as described under Section
12.06, and (B) if any registered public accounting firm attestation report
described under Section 12.06 identifies any material instance of
noncompliance, disclosure identifying such instance of noncompliance, or if
any such registered public accounting firm attestation report is not included
as an exhibit to such Form 10-K, disclosure that such report is not included
and an explanation why such report is not included, and (iv) a ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Certification as described in Section 12.05. Any disclosure or information in
addition to (i) through (iv) above that is required to be included on Form
10-K ("Additional Form 10-K Disclosure") shall be determined and prepared by
and at the direction of the Depositor pursuant to the following paragraph and
the Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-K Disclosure, except
as set forth in the next paragraph.
(b) In accordance with the respective reporting obligations set forth
on Exhibit N-2 hereto, no later than March 15 of each year that the Trust is
subject to the Exchange Act reporting requirements, commencing in 2007 and
continuing until the Trust has been deregistered with the Commission, the
Master Servicer and any other Reporting Party shall be required to provide to
the Securities Administrator and the Depositor, in ▇▇▇▇▇-compatible form, or
in such other form as otherwise agreed upon by the Securities Administrator
and such party, the form and substance of any Additional Form 10-K Disclosure,
if applicable, together with an Additional Disclosure Notification. The
Securities Administrator shall notify the Depositor of any Additional Form
10-K Disclosure with respect to itself or any of its Affiliates and any other
Additional Form 10-K Disclosure received by it. Within one (1) Business Day of
such notification, the Depositor will approve or disapprove, as the case may
be, the inclusion of the Additional Form 10-K Disclosure on Form 10-K. The
Depositor will be responsible for any reasonable additional fees and expenses
assessed or incurred by the Securities Administrator in connection with
including any Additional Form 10-K Disclosure on Form 10-K pursuant to this
paragraph.
(c) After preparing the Form 10-K, the Securities Administrator shall
forward electronically a draft copy of the Form 10-K to the Master Servicer
and, upon request, to the Depositor for review. No later than the earlier of:
(x) three (3) Business Days following the receipt by the Depositor and (y)
March 25th, the Depositor and the Master Servicer shall notify the Securities
Administrator in writing (which may be provided electronically) of any changes
to or approve the filing of such Form 10-K. In the absence of receipt of any
written changes or approval, or if the Depositor does not request a copy of a
Form 10-K, the Securities Administrator shall be entitled to assume that such
Form 10-K is in final form and the Securities Administrator may proceed with
the execution and filing of the Form 10-K. A senior officer of the Master
Servicer in charge of the master servicing function shall sign the Form 10-K
and return an electronic or fax copy of such signed Form 10-K (with an
original executed hard copy to follow by overnight mail) to the Securities
Administrator. If a Form 10-K cannot be filed on time or if a previously filed
Form 10-K needs to be amended, the Securities Administrator will follow the
procedures set forth in Section 12.01(c). Promptly (but no later than 1
Business Day) after filing with the Commission, the Securities Administrator
will make available on its internet website a final executed copy of each Form
10-K prepared and filed by the Securities Administrator. The parties to this
Agreement acknowledge that the performance by the Master Servicer and the
Securities Administrator of its duties under this Section 12.04 related to the
timely preparation, execution and filing of Form 10-K is contingent upon such
parties (and any
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Additional Servicer or Servicing Function Participant) strictly observing all
applicable deadlines in the performance of their duties under this Section
12.04, Section 9.11 Section 12.05 and Section 12.06. Neither the Master
Servicer nor the Securities Administrator shall have any liability for any
loss, expense, damage, claim arising out of or with respect to any failure to
properly prepare, execute and/or timely file such Form 10-K, where such
failure results from the Master Servicer's or the Securities Administrator's
inability or failure to obtain or receive, on a timely basis, any information
from any other party hereto needed to prepare, arrange for execution or file
such Form 10-K, not resulting from their own respective negligence, bad faith
or willful misconduct.
Section 12.05. ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification.
Each Form 10-K shall include a ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification required
to be included therewith pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. The senior
officer of the Master Servicer in charge of the master servicing function
shall sign the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification and shall serve as the Certifying
Person on behalf of the Trust.
The respective parties hereto agree to cooperate with all reasonable
requests made by any Certifying Person or Certification Party in connection
with such Person's attempt to conduct any due diligence that such Person
reasonably believes to be appropriate in order to allow it to deliver any
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification or portion thereof with respect to the Trust
Fund.
Section 12.06. Reports on Assessment of Compliance and Attestation.
(a) By March 15 of each year (such date includes the expiration of
any applicable grace period), commencing in March 2007, the Master Servicer,
the Securities Administrator, each Custodian (for so long as a Form 10-K will
be filed on behalf of the Trust for the preceding calendar year) and each
other Reporting Party, each at its own expense, shall furnish or otherwise
make available, and each such party shall cause any Servicing Function
Participant engaged by it to furnish, each at its own expense, to the
Securities Administrator and the Depositor, a report on an assessment of
compliance with the Relevant Servicing Criteria that contains (A) a statement
by such party of its responsibility for assessing compliance with the Relevant
Servicing Criteria, (B) a statement that such party used the Relevant
Servicing Criteria to assess compliance with the Relevant Servicing Criteria,
(C) such party's assessment of compliance with the Relevant Servicing Criteria
as of and for the fiscal year covered by the Form 10-K required to be filed
pursuant to Section 12.04, including, if there has been any material instance
of noncompliance with the Relevant Servicing Criteria, a discussion of each
such failure and the nature and status thereof, and (D) a statement that a
registered public accounting firm has issued an attestation report on such
party's assessment of compliance with the Relevant Servicing Criteria as of
and for such period.
No later than the end of each fiscal year for the Trust for which a
10-K is required to be filed, the Master Servicer and each Custodian shall
each forward to the Securities Administrator the name of each Servicing
Function Participant engaged by it and what Relevant Servicing Criteria will
be addressed in the report on assessment of compliance prepared by such
Servicing Function Participant; however if the Master Servicer and the
Securities Administrator are the same entity, then the Master Servicer is not
required to forward to the Securities Administrator
167
its assessment of compliance with the Relevant Servicing Criteria as of and
for the fiscal year covered by the Form 10-K required to be filed pursuant to
Section 12.04. When the Master Servicer and the Securities Administrator (or
any Servicing Function Participant engaged by them) submit their assessments
to the Securities Administrator, such parties will also at such time include
the assessment (and attestation pursuant to Section 12.06(b) of each Servicing
Function Participant engaged by it.
Promptly after receipt of each such report on assessment of
compliance, (i) the Depositor shall review each such report and, if
applicable, consult with the Master Servicer, the Securities Administrator,
each Custodian and any Servicing Function Participant engaged by such parties
as to the nature of any material instance of noncompliance with the Relevant
Servicing Criteria by each such party, and (ii) the Securities Administrator
shall confirm that the assessments, taken as a whole, address all of the
Servicing Criteria and taken individually address the Relevant Servicing
Criteria for each party as set forth on Exhibit O and on any similar exhibit
set forth in each Servicing Agreement in respect of each Servicer and notify
the Depositor of any exceptions.
(b) By March 15 of each year, commencing in March 2007, the Master
Servicer, the Securities Administrator, each Custodian (for so long as a Form
10-K will be filed in respect of the Trust for the preceding calendar year) and
each other Reporting Party, each at its own expense, shall cause, and each such
party shall cause any Servicing Function Participant engaged by it to cause,
each at its own expense, a registered public accounting firm (which may also
render other services to the Master Servicer, the Trustee, the Custodian, the
Securities Administrator, or such other Servicing Function Participants, as the
case may be) and that is a member of the American Institute of Certified Public
Accountants to furnish a report to the Securities Administrator and the
Depositor, to the effect that (i) it has obtained a representation regarding
certain matters from the management of such party, which includes an assertion
that such party has complied with the Relevant Servicing Criteria, and (ii) on
the basis of an examination conducted by such firm in accordance with standards
for attestation engagements issued or adopted by the PCAOB, it is expressing an
opinion as to whether such party's compliance with the Relevant Servicing
Criteria was fairly stated in all material respects, or it cannot express an
overall opinion regarding such party's assessment of compliance with the
Relevant Servicing Criteria. In the event that an overall opinion cannot be
expressed, such registered public accounting firm shall state in such report why
it was unable to express such an opinion. Such report must be available for
general use and not contain restricted use language.
Promptly after receipt of such report from the Master Servicer, the
Securities Administrator, each Custodian or any Servicing Function Participant
engaged by such parties, (i) the Depositor shall review the report and, if
applicable, consult with such parties as to the nature of any defaults by such
parties, in the fulfillment of any of each such party's obligations hereunder
or under any other applicable agreement, and (ii) the Securities Administrator
shall confirm that each assessment submitted pursuant to Section 12.06(a) is
coupled with an attestation meeting the requirements of this Section 12.06(b)
and notify the Depositor of any exceptions.
Section 12.07. Use of Subcontractors.
168
(a) The Master Servicer shall cause any Subcontractor used by the
Master Servicer for the benefit of the Depositor to comply with the provisions
of Section 9.11 and this Article XII to the same extent as if such
Subcontractor were the Master Servicer (except with respect to the Master
Servicer's duties with respect to preparing and filing any Exchange Act
Reports or as the Certifying Person). The Master Servicer shall be responsible
for obtaining from each Subcontractor and delivering to the Depositor any
servicer compliance statement required to be delivered by such Subcontractor
under Section 9.11, any assessment of compliance and attestation required to
be delivered by such Subcontractor under Section 12.07 and any certification
required to be delivered to the Certifying Person under Section 12.05 as and
when required to be delivered. As a condition to the succession to any
Subcontractor as subservicer under this Agreement by any Person (i) into which
such Subcontractor may be merged or consolidated, or (ii) which may be
appointed as a successor to any Subcontractor, the Master Servicer shall
provide to the Depositor, at least 15 calendar days prior to the effective
date of such succession or appointment, (x) written notice to the Depositor of
such succession or appointment and (y) in writing and in form and substance
reasonably satisfactory to the Depositor, all information reasonably requested
by the Depositor in order to comply with its reporting obligation under Item
6.02 of Form 8-K.
(b) It shall not be necessary for the Master Servicer or the Trustee
to seek the consent of the Depositor or any other party hereto to the
utilization of any Subcontractor. The Master Servicer or the Trustee, as
applicable, shall promptly upon request provide to the Depositor (or any
designee of the Depositor, such as the Master Servicer or administrator) a
written description (in form and substance satisfactory to the Depositor) of
the role and function of each Subcontractor utilized by such Person,
specifying (i) the identity of each such Subcontractor, (ii) which (if any) of
such Subcontractors are "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB, and (iii) which elements of the
Servicing Criteria will be addressed in assessments of compliance provided by
each Subcontractor identified pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor determined to
be a Reporting Subcontractor, the Master Servicer or the Trustee, as
applicable, shall cause any such Subcontractor used by such Person for the
benefit of the Depositor to comply with the provisions of Sections 12.07 and
12.09 of this Agreement to the same extent as if such Subcontractor were the
Master Servicer (except with respect to the Master Servicer's duties with
respect to preparing and filing any Exchange Act Reports or as the Certifying
Person) or the Trustee, as applicable. The Master Servicer or the Trustee, as
applicable, shall be responsible for obtaining from each Subcontractor and
delivering to the Depositor and the Master Servicer, any assessment of
compliance and attestation required to be delivered by such Subcontractor
under Section 12.07, in each case as and when required to be delivered.
Section 12.08. Indemnification by the Master Servicer and the
Securities Administrator.
(a) The Master Servicer and the Securities Administrator (each, an
"Indemnifying Party"), shall, severally and not jointly, indemnify the
Depositor and the Seller for the preparation, execution or filing of any
report required to be filed with the Commission with respect to the Trust
Fund, or for execution of a certification pursuant to Rule 13a-14(d) or Rule
15d-14(d) under the Exchange Act with respect to the Trust Fund; and the
respective present and
169
former directors, officers, employees and agents of each of the foregoing and
shall hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, legal fees and expenses and related costs,
judgments, and any other costs, fees and expenses that any of them may sustain
arising out of or based upon:
(i) any untrue statement of a material fact contained or
alleged to be contained in or the omission or alleged omission to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading in (A) any
compliance certificate delivered by it, or by any Servicing Function
Participant engaged by it, pursuant to this Agreement, (B) any
assessment or attestation delivered by or on behalf of it, or by any
Servicing Function Participant engaged by it, pursuant to this
Agreement, or (C) any Additional Form 10-D Disclosure, Additional
Form 10-K Disclosure or Form 8-K Disclosure Information concerning
the Securities Administrator or the Master Servicer and provided by
either of them;
(ii) any failure by the Indemnifying Party to perform its
obligations when and as required under this Article XII; or
(iii) any negligence, bad faith or willful misconduct by the
Indemnifying Party.
In the case of any failure of performance described in clause (a)(ii)
of this Section, the Indemnifying Party shall promptly reimburse the Seller or
the Depositor, as applicable, and each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission
with respect to such Securitization Transaction, or for execution of a
certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange
Act with respect to the Trust, for all costs reasonably incurred by each such
party in order to obtain the information, report, certification, accountants'
letter or other material not delivered as required by the Indemnifying Party
or any Subservicer or Subcontractor of the Indemnifying Party.
(b) (i) Any failure by the Indemnifying Party or any Subservicer or
any Subcontractor of the Indemnifying Party to deliver any information,
report, certification or accountants' letter when and as required under this
Article XII, including (except as provided below) any failure by the
Indemnifying Party to identify pursuant to Section 12.07 any Subcontractor
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, which continues unremedied for ten calendar days after the date
on which such information, report, certification or accountants' letter was
required to be delivered shall constitute an Event of Default with respect to
the Indemnifying Party under this Agreement, and shall entitle the Seller or
Depositor, as applicable, in its sole discretion to terminate the rights and
obligations of the Indemnifying Party under this Agreement without payment
(notwithstanding anything in this Agreement to the contrary) of any
compensation to the Indemnifying Party; provided that to the extent that any
provision of this Agreement and/or any applicable Reconstitution Agreement
expressly provides for the survival of certain rights or obligations following
termination of the Master Servicer as servicer, such provision shall be given
effect.
Neither the Seller nor any Depositor shall be entitled to terminate
the rights and obligations of an Indemnifying Party pursuant to this
subparagraph (b)(ii) if a failure of the
170
Master Servicer to identify a Subcontractor "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB was attributable
solely to the role or functions of such Subcontractor with respect to mortgage
loans other than the Mortgage Loans.
(ii) The Indemnifying Party shall promptly reimburse the
Seller and any Depositor for all reasonable expenses incurred by
them, in connection with the termination of the Indemnifying Party
and the transfer of their duties to a successor. The provisions of
this paragraph shall not limit whatever rights the Seller or the
Depositor may have under other provisions of this Agreement or
otherwise, whether in equity or at law, such as an action for
damages, specific performance or injunctive relief.
171
Section 12.09. Indemnification by the Custodian.
(a) If the entity serving as Trustee is also serving as a Custodian,
such entity in its capacity as Custodian shall indemnify the Depositor, each
affiliate of the Depositor, the Master Servicer and each Person who controls any
of such parties (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act); and the respective directors, officers, and
employees of each of the foregoing (each, an "Indemnified Party"), and shall
hold each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs, judgments, and
any other costs, fees and expenses that any of them may sustain directly
relating to:
(i) (A) any untrue statement of a material fact contained or
alleged to be contained in any information, compliance assessment or
other material it is required to provide or cause to be provided under
this Article XII (collectively, the "Custodian Information"), or (B)
the omission or alleged omission to state in the Custodian Information
a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; or
(ii) any failure to deliver or cause to be delivered any
information, report, certification, accountants' attestation or other
material when and as required under this Article XII.
If the indemnification provided for herein is unavailable or
insufficient to hold harmless an Indemnified Party, then the Custodian agrees
that it shall contribute to the amount paid or payable by such Indemnified Party
as a result of any claims, losses, damages or liabilities incurred by such
Indemnified Party in such proportion as is appropriate to reflect the relative
fault of such Indemnified Party on the one hand and the Custodian on the other.
(b) In the case of any failure of performance described in clause (a)
of this Section 12.09, the Custodian shall promptly reimburse the Indemnified
Party responsible for the preparation, execution or filing of any report
required to be filed with the Commission with respect to such Securitization
Transaction, or for execution of a certification pursuant to Rule 13a-14(d) or
Rule 15d-14(d) under the Exchange Act with respect to the Trust, for all costs
reasonably incurred by each such party in order to obtain the information,
report, certification, accountants' letter or other material not delivered as
required.
(c) This indemnification shall survive the termination of this
Agreement or the termination of any party to this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers hereunto duly authorized as of the
day and year first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL I INC.,
as Depositor
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇
Title: Vice President
LASALLE BANK NATIONAL ASSOCIATION,
as Trustee and a Custodian
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Vice President
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Master Servicer
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Securities Administrator
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
Solely for purposes of Section 2.05
accepted and agreed to by:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇
Title: Vice President
EXHIBIT A
FORMS OF CERTIFICATES
A-1
EXHIBIT B
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEREE)
STATE OF )
) ss.:
COUNTY OF )
[NAME OF OFFICER], _________________ being first duly sworn, deposes
and says:
1. That he [she] is [title of officer] ________________________
of [name of Purchaser]
_________________________________________ (the "Purchaser"),
a _______________________ [description of type of entity]
duly organized and existing under the laws of the [State of
__________] [United States], on behalf of which he [she]
makes this affidavit.
2. That the Purchaser's Taxpayer Identification Number is [ ].
3. That the Purchaser is not a "disqualified organization"
within the meaning of Section 860E(e)(5) of the Internal
Revenue Code of 1986, as amended (the "Code") and will not
be a "disqualified organization" as of [date of transfer],
and that the Purchaser is not acquiring a Residual
Certificate (as defined in the Agreement) for the account
of, or as agent (including a broker, nominee, or other
middleman) for, any person or entity from which it has not
received an affidavit substantially in the form of this
affidavit. For these purposes, a "disqualified organization"
means the United States, any state or political subdivision
thereof, any foreign government, any international
organization, any agency or instrumentality of any of the
foregoing (other than an instrumentality if all of its
activities are subject to tax and a majority of its board of
directors is not selected by such governmental entity), any
cooperative organization furnishing electric energy or
providing telephone service to persons in rural areas as
described in Code Section 1381(a)(2)(C), any "electing large
partnership" within the meaning of Section 775 of the Code,
or any organization (other than a farmers' cooperative
described in Code Section 521) that is exempt from federal
income tax unless such organization is subject to the tax on
unrelated business income imposed by Code Section 511.
4. That the Purchaser either (x) is not, and on
__________________ [date of transfer] will not be, an
employee benefit plan or other retirement arrangement
subject to Section 406 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975
of the Code ("Code"), (collectively, a "Plan") or a person
acting on behalf of any such Plan or investing the assets of
any such Plan to acquire a Residual Certificate; (y) is an
insurance company that is purchasing the Certificate with
funds contained in an "insurance company general account" as
defined in Section V(e) of Prohibited Transaction Class
Exemption ("PTCE") 95-60 and the purchase and holding of the
Certificate satisfy the requirements for exemptive relief
under Sections I and III of ▇▇▇▇
▇-▇
95-60; or (z) herewith delivers to the Certificate Registrar
an opinion of counsel satisfactory to the Certificate
Registrar and the Securities Administrator and upon which
the Certificate Registrar, the Trustee, the Master Servicer,
the Depositor and Securities Administrator shall be entitled
to rely, to the effect that the purchase or holding of such
Residual Certificate by the Investor will not result in any
non-exempt prohibited transactions under Title I of ERISA or
Section 4975 of the Code and will not subject the
Certificate Registrar, the Trustee, the Depositor, the
Master Servicer or the Securities Administrator to any
obligation in addition to those undertaken by such entities
in the Pooling and Servicing Agreement, which opinion of
counsel shall not be an expense of the Trust Fund or any of
the above parties.
5. That the Purchaser hereby acknowledges that under the terms
of the Pooling and Servicing Agreement, dated as of October
1, 2006 (the "Agreement"), by and among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Capital I Inc., as Depositor, ▇▇▇▇▇ Fargo Bank, National
Association, as Master Servicer and as Administrator and
LaSalle Bank National Association, as Trustee with respect
to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Loan Trust 2006-16AX, Mortgage
Pass-Through Certificates, no transfer of the Residual
Certificates shall be permitted to be made to any person
unless the Certificate Registrar has received a certificate
from such transferee containing the representations in
paragraphs 3 and 4 hereof.
6. That the Purchaser does not hold REMIC residual securities
as nominee to facilitate the clearance and settlement of
such securities through electronic book-entry changes in
accounts of participating organizations (such entity, a
"Book-Entry Nominee").
7. That the Purchaser does not have the intention to impede the
assessment or collection of any federal, state or local
taxes legally required to be paid with respect to such
Residual Certificate.
8. That the Purchaser will not transfer a Residual Certificate
to any person or entity (i) as to which the Purchaser has
actual knowledge that the requirements set forth in
paragraph 3, paragraph 6 or paragraph 10 hereof are not
satisfied or that the Purchaser has reason to believe does
not satisfy the requirements set forth in paragraph 7
hereof, and (ii) without obtaining from the prospective
Purchaser an affidavit substantially in this form and
providing to the Certificate Registrar a written statement
substantially in the form of Exhibit C to the Agreement.
9. That the Purchaser understands that, as the holder of a
Residual Certificate, the Purchaser may incur tax
liabilities in excess of any cash flows generated by the
interest and that it intends to pay taxes associated with
holding such Residual Certificate as they become due.
10. That the Purchaser (i) is not a Non-U.S. Person or (ii) is a
Non-U.S. Person that holds a Residual Certificate in
connection with the conduct of a trade or business within
the United States and has furnished the transferor the
Certificate Registrar
B-2
with an effective Internal Revenue Service Form W-8ECI
(Certificate of Foreign Person's Claim for Exemption From
Withholding on Income Effectively Connected With the Conduct
of a Trade or Business in the United States) or successor
form at the time and in the manner required by the Code or
(iii) is a Non-U.S. Person that has delivered to the
transferor, the Trustee and the Certificate Registrar an
opinion of a nationally recognized tax counsel to the effect
that the transfer of such Residual Certificate to it is in
accordance with the requirements of the Code and the
regulations promulgated thereunder and that such transfer of
a Residual Certificate will not be disregarded for federal
income tax purposes. "Non-U.S. Person" means an individual,
corporation, partnership or other person other than (i) a
citizen or resident of the United States; (ii) a
corporation, partnership or other entity created or
organized in or under the laws of the United States or any
state thereof, including for this purpose, the District of
Columbia; (iii) an estate that is subject to U.S. federal
income tax regardless of the source of its income; (iv) a
trust if a court within the United States is able to
exercise primary supervision over the administration of the
trust and one or more United States trustees have authority
to control all substantial decisions of the trust; and, (v)
to the extent provided in Treasury regulations, certain
trusts in existence on August 20, 1996 that are treated as
United States persons prior to such date and elect to
continue to be treated as United States persons.
11. The Purchaser will not cause income from the Residual
Certificate to be attributable to a foreign permanent
establishment or fixed base of the Purchaser or another U.S.
taxpayer.
12. That the Purchaser agrees to such amendments of the Pooling
and Servicing Agreement as may be required to further
effectuate the restrictions on transfer of any Residual
Certificate to such a "disqualified organization," an agent
thereof, a Book-Entry Nominee, or a person that does not
satisfy the requirements of paragraph 7 and paragraph 10
hereof.
13. That the Purchaser consents to the designation of the
Securities Administrator to act as agent for the "tax
matters person" of each REMIC created by the Trust Fund
pursuant to the Pooling and Servicing Agreement.
B-3
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by
its [title of officer] this _____ day of __________ 20__.
---------------------------------
[name of Purchaser]
By:
Name:
Title:
Personally appeared before me the above-named [name of officer]
________________, known or proved to me to be the same person who executed the
foregoing instrument and to be the [title of officer] _________________ of the
Purchaser, and acknowledged to me that he [she] executed the same as his [her]
free act and deed and the free act and deed of the Purchaser.
Subscribed and sworn before me this _____ day of __________ 20__.
NOTARY PUBLIC
----------------------------
COUNTY OF ________________
STATE OF __________________
My commission expires the _____ day of __________ 20__.
B-4
EXHIBIT C
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEROR)
----------------------------
Date
Re: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Loan Trust 2006-16AX
Mortgage Pass-Through Certificates
_______________________ (the "Transferor") has reviewed the attached
affidavit of _____________________________ (the "Transferee"), and has no
actual knowledge that such affidavit is not true and has no reason to believe
that the information contained in paragraph 7 thereof is not true, and has no
reason to believe that the Transferee has the intention to impede the
assessment or collection of any federal, state or local taxes legally required
to be paid with respect to a Residual Certificate. In addition, the Transferor
has conducted a reasonable investigation at the time of the transfer and found
that the Transferee had historically paid its debts as they came due and found
no significant evidence to indicate that the Transferee will not continue to
pay its debts as they become due.
Very truly yours,
------------------------------------------
Name:
Title:
C-1
EXHIBIT D
[RESERVED]
D-1
EXHIBIT E
LIST OF PURCHASE AND SERVICING AGREEMENTS
1. Second Amended and Restated Mortgage Loan Purchase and Warranties
Agreement, dated as of December 1, 2005, between American Home Mortgage Corp.,
as seller and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., as purchaser;
2. First Amended and Restated Servicing Agreement, dated as of January 1,
2006, between GMAC Mortgage, LLC, as successor in interest to GMAC Mortgage
Corporation, as servicer and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., as
purchaser.
3. Amended and Restated Mortgage Loan Purchase And Warranties Agreement, dated
as of May 1, 2005, between MortgageIT, Inc., as seller and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc., as purchaser;
E-1
EXHIBIT F
[RESERVED]
F-1
EXHIBIT G
ASSIGNMENT AND NOTICE OF TRANSFER WITH RESPECT TO ADDITIONAL
COLLATERAL MORTGAGE LOANS
G-1
EXHIBIT H
FORM OF RULE 144A TRANSFER CERTIFICATE
Re: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Loan Trust 2006-16AX,
Mortgage Pass-Through Certificates
Reference is hereby made to the Pooling and Servicing Agreement,
dated as of October 1, 2006 (the "Pooling and Servicing Agreement"), by and
among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc., as Depositor, ▇▇▇▇▇ Fargo Bank, National
Association, as Master Servicer, as Securities Administrator and, in its
capacity as Securities Administrator, as Auction Administrator, LaSalle Bank
National Association, as Trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the Pooling and Servicing
Agreement.
This letter relates to $__________ initial Certificate Balance of
Class _____ Certificates which are held in the form of Definitive Certificates
registered in the name of ______________ (the "Transferor"). The Transferor
has requested a transfer of such Definitive Certificates for Definitive
Certificates of such Class registered in the name of [insert name of
transferee].
In connection with such request, and in respect of such Certificates,
the Transferor hereby certifies that such Certificates are being transferred
in accordance with (i) the transfer restrictions set forth in the Pooling and
Servicing Agreement and the Certificates and (ii) Rule 144A under the
Securities Act to a purchaser that the Transferor reasonably believes is a
"qualified institutional buyer" within the meaning of Rule 144A purchasing for
its own account or for the account of a "qualified institutional buyer," which
purchaser is aware that the sale to it is being made in reliance upon Rule
144A, in a transaction meeting the requirements of Rule 144A and in accordance
with any applicable securities laws of any state of the United States or any
other applicable jurisdiction.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Underwriter, the Certificate Registrar and
the Depositor.
------------------------------------------
[Name of Transferor]
By:
---------------------------------------
Name:
Title:
Dated: ___________, ____
H-1
EXHIBIT I
FORM OF PURCHASER'S LETTER FOR
INSTITUTIONAL ACCREDITED INVESTOR
Date
Dear Sirs:
In connection with our proposed purchase of $______________ principal
amount of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Loan Trust 2006-16AX, Mortgage Pass-Through
Certificates (the "Privately Offered Certificates") of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital
I Inc. (the "Depositor"), we confirm that:
(1) We understand that the Privately Offered Certificates have not been,
and will not be, registered under the Securities Act of 1933, as
amended (the "Securities Act"), and may not be sold except as
permitted in the following sentence. We agree, on our own behalf and
on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell any Privately Offered Certificates
within two years of the later of the date of original issuance of the
Privately Offered Certificates or the last day on which such
Privately Offered Certificates are owned by the Depositor or any
affiliate of the Depositor we will do so only (A) to the Depositor,
(B) to "qualified institutional buyers" (within the meaning of Rule
144A under the Securities Act) in accordance with Rule 144A under the
Securities Act ("QIBs"), (C) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act, or (D) to
an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act
that is not a QIB (an "Institutional Accredited Investor") which,
prior to such transfer, delivers to the Certificate Registrar under
the Pooling and Servicing Agreement, dated as of October 1, 2006 (the
"Pooling and Servicing Agreement"), by and among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Capital I Inc., as Depositor, ▇▇▇▇▇ Fargo Bank, National Association,
as Master Servicer, as Securities Administrator and, in its capacity
as Securities Administrator, as Auction Administrator and LaSalle
Bank National Association, as Trustee, a signed letter in the form of
this letter; and we further agree, in the capacities stated above, to
provide to any person purchasing any of the Privately Offered
Certificates from us a notice advising such purchaser that resales of
the Privately Offered Certificates are restricted as stated herein.
(2) We understand that, in connection with any proposed resale of any
Privately Offered Certificates to an Institutional Accredited
Investor, we will be required to furnish to the Certificate Registrar
a certification from such transferee in the form hereof to confirm
that the proposed sale is being made pursuant to an exemption from,
or in a transaction not subject to, the registration requirements of
the Securities Act. We further understand that the Privately Offered
Certificates purchased by us will bear a legend to the foregoing
effect.
(3) We are acquiring the Privately Offered Certificates for investment
purposes and not with a view to, or for offer or sale in connection
with, any distribution in violation of the
I-1
Securities Act. We have such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and
risks of our investment in the Privately Offered Certificates, and we
and any account for which we are acting are each able to bear the
economic risk of such investment.
(4) We are an Institutional Accredited Investor and we are acquiring the
Privately Offered Certificates purchased by us for our own account or
for one or more accounts (each of which is an Institutional
Accredited Investor) as to each of which we exercise sole investment
discretion.
(5) We have received such information as we deem necessary in order to
make our investment decision.
(6) If we are acquiring ERISA-Restricted Certificates, we understand that
in accordance with ERISA, the Code and the Exemption, no Plan and no
person acting on behalf of such a Plan may acquire such Certificate
except in accordance with Section 3.03(d) of the Pooling and
Servicing Agreement.
Terms used in this letter which are not otherwise defined herein have
the respective meanings assigned thereto in the Pooling and Servicing
Agreement.
I-2
You and the Certificate Registrar are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof
to any interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby.
Very truly yours,
----------------------------------------
[Purchaser]
By:
-------------------------------------
Name:
Title:
I-3
EXHIBIT J
FORM OF ERISA TRANSFER AFFIDAVIT
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is the ______________________ of ______________
(the "Investor"), a [corporation duly organized] and existing under the laws
of __________, on behalf of which he makes this affidavit.
2. The Investor either (x) is not, and on ___________ [date of
transfer] will not be, an employee benefit plan or other plan or arrangement
subject to Section 406 of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code"), (collectively, a "Plan") or a person acting on behalf of
any such Plan or investing the assets of any such Plan; (y) if the Certificate
has been the subject of an ERISA-Qualifying Underwriting, is an insurance
company that is purchasing the Certificate with funds contained in an
"insurance company general account" as defined in Section V(e) of Prohibited
Transaction Class Exemption ("PTCE") 95-60 and the purchase and holding of the
Certificate satisfy the requirements for exemptive relief under Sections I and
III of PTCE 95-60; or (z) herewith delivers to the Certificate Registrar an
opinion of counsel satisfactory to the Certificate Registrar and the
Securities Administrator and upon which the Certificate Registrar, the
Trustee, the Master Servicer, the Depositor and the Securities Administrator
shall be entitled to rely, to the effect that the purchase and holding of such
Certificate by the Investor will not constitute or result in any non-exempt
prohibited transactions under Title I of ERISA or Section 4975 of the Code and
will not subject the Certificate Registrar, the Trustee, the Master Servicer,
the Depositor or the Securities Administrator to any obligation in addition to
those undertaken by such entities in the Pooling and Servicing Agreement,
which opinion of counsel shall not be an expense of the Trust Fund or the
above parties.
3. The Investor hereby acknowledges that under the terms of the
Pooling and Servicing Agreement, dated as of October 1, 2006 (the "Pooling and
Servicing Agreement"), by and among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc., as
Depositor, ▇▇▇▇▇ Fargo Bank, National Association, as Master Servicer, as
Securities Administrator and, in its capacity as Securities Administrator, as
Auction Administrator and LaSalle Bank National Association, as Trustee, no
transfer of the ERISA-Restricted Certificates shall be permitted to be made to
any person unless the Certificate Registrar has received a certificate from
such transferee in the form hereof.
J-1
IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to proper authority, by its duly authorized
officer, duly attested, this ____ day of _______________ 20___.
----------------------------------------
[Investor]
By:
-------------------------------------
Name:
Title:
ATTEST:
STATE OF )
) ss.:
COUNTY OF )
Personally appeared before me the above-named ________________, known
or proved to me to be the same person who executed the foregoing instrument
and to be the ____________________ of the Investor, and acknowledged that he
executed the same as his free act and deed and the free act and deed of the
Investor.
Subscribed and sworn before me this _____ day of _________ 20___.
_____________________________________
NOTARY PUBLIC
My commission expires the
_____ day of __________ 20___.
J-2
EXHIBIT K
FORM OF LETTER OF REPRESENTATIONS
WITH THE DEPOSITORY TRUST COMPANY
[On File with Securities Administrator]
K-1
EXHIBIT L-1
FORM OF INITIAL CUSTODIAL CERTIFICATION
May __, 2006
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
LaSalle Bank National Association, as Trustee
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Global Securities and Trust Services - MSM 2006-16AX
Re: Pooling and Servicing Agreement ("Pooling and Servicing
-------------------------------------------------------
Agreement") relating to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Loan Trust
----------------------------------------------------------
2006-16AX, Mortgage Pass-Through Certificates, Series
-----------------------------------------------------
2006-16AX
---------
Ladies and Gentlemen:
In accordance with and subject to the provisions of Section 2.02 of
the Pooling and Servicing Agreement, the undersigned, as Custodian, hereby
certifies that, except for the exceptions noted on the schedule attached
hereto, (a) all documents required to be delivered to the Custodian pursuant
to Sections 2.01(a)(i) through (iv) and (ix)(b), (c) (solely to the extent of
the UCC-1), (g) and (h), and if delivered to it, the documents identified in
Section 2.01(a)(v) through (vii) and (ix)(c) (solely to the extent of the
UCC-3) and (f) of the Pooling and Servicing Agreement are in its possession,
(b) such documents have been reviewed by it and have not been mutilated,
damaged, defaced, torn or otherwise physically altered, and such documents
relate to such Mortgage Loan, (c) based on its review and examination and only
as to the foregoing documents, such documents appear regular on their face and
related to such Mortgage Loan and (d) each Mortgage Note has been endorsed and
each assignment of Mortgage has been delivered as provided in Section 2.01 of
the Pooling and Servicing Agreement. The Custodian has made no independent
examination of any documents contained in each Mortgage File beyond the review
specifically mentioned above. The Custodian makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any
of the documents delivered in accordance with Section 2.01 of the Pooling and
Servicing Agreement or any of the Mortgage Loans identified in the Mortgage
Loan Schedule, or (ii) the collectibility, insurability, effectiveness or
suitability of any such Mortgage Loan.
L-1-1
The Custodian acknowledges receipt of notice that the Depositor has
granted to the Trustee for the benefit of the Certificateholders a security
interest in all of the Depositor's right, title and interest in and to the
Mortgage Loans.
L-1-2
Capitalized terms used herein without definition shall have the
meaning assigned to them in the Pooling and Servicing Agreement.
LASALLE BANK NATIONAL ASSOCIATION,
as Custodian
By: ___________________________
Authorized Representative
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF FINAL CUSTODIAL CERTIFICATION
May __, 2006
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
LaSalle Bank National Association, as Trustee
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Global Securities and Trust Services - MSM 2006-16AX
Re: Pooling and Servicing Agreement ("Pooling and Servicing
-------------------------------------------------------
Agreement") relating to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Loan Trust
----------------------------------------------------------
2006-16AX, Mortgage Pass-Through Certificates, Series
-----------------------------------------------------
2006-16AX
---------
Ladies and Gentlemen:
In accordance with and subject to the provisions of Section 2.02 of
the Pooling and Servicing Agreement, the undersigned, as Custodian, hereby
certifies that, except for the exceptions noted on the schedule attached
hereto, (a) all documents required to be delivered to the Custodian pursuant
to Sections 2.01(a)(i) through (iv) and (ix)(b), (c) (solely to the extent of
the UCC-1), (g) and (h), and if delivered to it, the documents identified in
Section 2.01(a)(v) through (vii) and (ix)(c) (solely to the extent of the
UCC-3) and (f) of the Pooling and Servicing Agreement are in its possession,
(b) such documents have been reviewed by it and have not been mutilated,
damaged, defaced, torn or otherwise physically altered, and such documents
relate to such Mortgage Loan, (c) based on its examination and only as to the
foregoing documents, these documents with respect to each Mortgage Loan
accurately reflect the information contained in the Mortgage Note and Mortgage
and (d) each Mortgage Note has been endorsed and each assignment of Mortgage
has been delivered as provided in Section 2.01 of the Pooling and Servicing
Agreement. The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically mentioned
above. The Custodian makes no representations as to: (i) the validity,
legality, sufficiency, enforceability or genuineness of any of the documents
delivered in accordance with Section 2.01 of the Pooling and Servicing
Agreement or any of the Mortgage Loans identified in the Mortgage Loan
Schedule, or (ii) the collectibility, insurability, effectiveness or
suitability of any such Mortgage Loan.
L-2-1
The Custodian acknowledges receipt of notice that the Depositor has
granted to the Trustee for the benefit of the Certificateholders a security
interest in all of the Depositor's right, title and interest in and to the
Mortgage Loans.
L-2-2
Capitalized terms used herein without definition shall have the
meaning assigned to them in the Pooling and Servicing Agreement.
LASALLE BANK NATIONAL ASSOCIATION,
as Custodian
By: ____________________________
Authorized Representative
L-2-3
EXHIBIT M
REQUEST FOR RELEASE OF DOCUMENTS
[Name and Address of Custodian]
Re: Pooling and Servicing Agreement ("Pooling and Servicing
-------------------------------------------------------
Agreement") relating to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Loan Trust
----------------------------------------------------------
2006-16AX, Mortgage Pass-Through Certificates, Series
-----------------------------------------------------
2006-16AX
---------
In connection with the administration of the Mortgage Loans in the
Trust created by the above-captioned Pooling and Servicing Agreement and that
are held by you as Custodian pursuant to the above-captioned Pooling and
Servicing Agreement, we request the release, and hereby acknowledge receipt,
of the Mortgage File for the Mortgage Loan described below, for the reason
indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
__________ 1. Mortgage Paid in Full
__________ 2. Foreclosure
__________ 3. Substitution
__________ 4. Other Liquidation (Repurchases, etc.)
__________ 5. Nonliquidation
Reason: ______________________
Address to which Custodian should
Deliver the Mortgage File:
_____________________________________________
_____________________________________________
_____________________________________________
By:_______________________________________
(authorized signer)
Issuer:_____________________________________
Address: _____________________________________________
_____________________________________________
1
Date: _____________________________________________
Custodian
---------------
[insert name of appropriate Custodian]
Please acknowledge the execution of the above request by your signature and
date below:
------------------------------------
Signature
---------------------
Date
Documents returned to Custodian:
------------------------------------
Signature
---------------------
Date
2
EXHIBIT N-1
Additional Form 10-D Disclosure
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-D DISCLOSURE
-------------------------------------------------------------------------------------------------------------------
Item on Form 10-D Responsible Party
---------------------------------------------------------- --------------------------------------------------------
Item 1: Distribution and Pool Performance Information
---------------------------------------------------------- --------------------------------------------------------
Information included in the monthly statement to Servicer, Master Servicer and Securities Administrator
certificateholders
---------------------------------------------------------- --------------------------------------------------------
Any information required by 1121 which is NOT included Depositor
on the monthly statement to certificateholders
---------------------------------------------------------- --------------------------------------------------------
Item 2: Legal Proceedings
Any legal proceeding pending against the following
entities or their respective property, that is material
to Certificateholders, including any proceedings known
to be contemplated by governmental authorities:
---------------------------------------------------------- --------------------------------------------------------
o Issuing Entity (Trust Fund) Trustee, Master Servicer, Securities Administrator and
Depositor
---------------------------------------------------------- --------------------------------------------------------
o Sponsor (Seller) Seller (if a party to the Pooling and Servicing
Agreement) or Depositor
---------------------------------------------------------- --------------------------------------------------------
o Depositor Depositor
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------- --------------------------------------------------------
o Custodian Custodian
---------------------------------------------------------- --------------------------------------------------------
o 1110(b) Originator Depositor
---------------------------------------------------------- --------------------------------------------------------
o Any 1108(a)(2) Servicer (other than the Master Servicer
Servicer or Securities Administrator)
---------------------------------------------------------- --------------------------------------------------------
o Any other party contemplated by 1100(d)(1) Depositor
---------------------------------------------------------- --------------------------------------------------------
Item 3: Sale of Securities and Use of Proceeds (i) Depositor (with respect to the Closing Date) and
(ii) Master Servicer
Information from Item 2(a) of Part II of Form 10-Q:
With respect to any sale of securities by the sponsor,
depositor or issuing entity, that are backed by the
same asset pool or are otherwise issued by the issuing
entity, whether or not registered, provide the sales
and use of proceeds information in Item 701 of
Regulation S-K.
---------------------------------------------------------- --------------------------------------------------------
N-1-1
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-D DISCLOSURE
-------------------------------------------------------------------------------------------------------------------
Item on Form 10-D Responsible Party
---------------------------------------------------------- --------------------------------------------------------
Pricing information can be omitted if
securities were not registered.
---------------------------------------------------------- --------------------------------------------------------
Item 4: Defaults Upon Senior Securities Securities Administrator and Trustee
Information from Item 3 of Part II of Form 10-Q:
Report the occurrence of any Event of Default (after
expiration of any grace period and provision of any
required notice)
---------------------------------------------------------- --------------------------------------------------------
Item 5: Submission of Matters to a Vote of Security Securities Administrator and
Holders
Trustee
Information from Item 4 of Part II of Form 10-Q
---------------------------------------------------------- --------------------------------------------------------
Item 6: Significant Obligors of Pool Assets Depositor
Item 1112(b) - Significant Obligor Financial Information*
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the Form
10-D for the distribution period in which updated
information is required pursuant to the Item.
---------------------------------------------------------- --------------------------------------------------------
Item 7: Significant Enhancement Provider Information
Item 1114(b)(2) - Credit Enhancement Provider Financial
Information*
---------------------------------------------------------- --------------------------------------------------------
o Determining applicable disclosure threshold Depositor
---------------------------------------------------------- --------------------------------------------------------
o Requesting required financial information (including Depositor
any required accountants' consent to the use thereof)
or effecting incorporation by reference
---------------------------------------------------------- --------------------------------------------------------
Item 1115(b) - Derivative Counterparty Financial
Information*
---------------------------------------------------------- --------------------------------------------------------
o Determining current maximum probable exposure Depositor
---------------------------------------------------------- --------------------------------------------------------
o Determining current significance percentage Depositor
---------------------------------------------------------- --------------------------------------------------------
o Requesting required financial information (including Depositor
any required accountants' consent to the use thereof)
or effecting incorporation by reference
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the Form
10-D for the distribution period in which updated
information is required pursuant to the Items.
---------------------------------------------------------- --------------------------------------------------------
Item 8: Other Information Any responsible party for the applicable Form 8-
N-1-2
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-D DISCLOSURE
-------------------------------------------------------------------------------------------------------------------
Item on Form 10-D Responsible Party
---------------------------------------------------------- --------------------------------------------------------
K Disclosure item
Disclose any information required to be reported on
Form 8-K during the period covered by the Form 10-D but
not reported
---------------------------------------------------------- --------------------------------------------------------
Item 9: Exhibits
---------------------------------------------------------- --------------------------------------------------------
Monthly Statement to Certificateholders Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
Exhibits required by Item 601 of Regulation S-K, such as Depositor
material agreements
N-1-3
EXHIBIT N-2
Additional Form 10-K Disclosure
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-K DISCLOSURE
---------------------------------------------------------- --------------------------------------------------------
Item on Form 10-K Responsible Party
---------------------------------------------------------- --------------------------------------------------------
Item 1B: Unresolved Staff Comments Depositor
---------------------------------------------------------- --------------------------------------------------------
Item 9B: Other Information Any responsible party for disclosure items on Form 8-K
Disclose any information required to be reported on
Form 8-K during the fourth quarter covered by the Form
10-K but not reported
---------------------------------------------------------- --------------------------------------------------------
Item 15: Exhibits, Financial Statement Schedules (i) As to agreements, Securities
Administrator/Depositor and (ii) as to financial
statements, Reporting Parties (as to themselves)
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1112(b): Significant Obligors of Pool
Assets
---------------------------------------------------------- --------------------------------------------------------
Significant Obligor Financial Information* Depositor
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the Form
10-D for the distribution period in which updated
information is required pursuant to the Item.
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1114(b)(2): Credit Enhancement Provider
Financial Information
---------------------------------------------------------- --------------------------------------------------------
o Determining applicable disclosure threshold Depositor
---------------------------------------------------------- --------------------------------------------------------
o Requesting required financial information (including Depositor
any required accountants' consent to the use thereof) or
effecting incorporation by reference
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the Form
10-D for the distribution period in which updated
information is required pursuant to the Items.
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1115(b): Derivative Counterparty Financial
Information
---------------------------------------------------------- --------------------------------------------------------
o Determining current maximum probable exposure Depositor
---------------------------------------------------------- --------------------------------------------------------
o Determining current significance percentage Depositor
---------------------------------------------------------- --------------------------------------------------------
o Requesting required financial information (including Depositor
any required accountants' consent to the use thereof) or
effecting incorporation by reference
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the Form 10-D for the distribution
period in which updated information is required pursuant to the Items.
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1117: Legal Proceedings
---------------------------------------------------------- --------------------------------------------------------
N-2-1
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-K DISCLOSURE
---------------------------------------------------------- --------------------------------------------------------
Item on Form 10-K Responsible Party
---------------------------------------------------------- --------------------------------------------------------
Any legal proceeding pending against the following
entities or their respective property, that is material
to Certificateholders, including any proceedings known
to be contemplated by governmental authorities:
---------------------------------------------------------- --------------------------------------------------------
o Issuing Entity (Trust Fund) Trustee, Master Servicer, Securities Administrator and
Depositor
---------------------------------------------------------- --------------------------------------------------------
o Sponsor (Seller) Seller (if a party to the Pooling and Servicing
Agreement) or Depositor
---------------------------------------------------------- --------------------------------------------------------
o Depositor Depositor
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------- --------------------------------------------------------
o Custodian Custodian
---------------------------------------------------------- --------------------------------------------------------
o 1110(b) Originator Depositor
---------------------------------------------------------- --------------------------------------------------------
o Any 1108(a)(2) Servicer (other than the Master Servicer
Servicer or Securities Administrator)
---------------------------------------------------------- --------------------------------------------------------
o Any other party contemplated by 1100(d)(1) Depositor
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1119: Affiliations and Relationships
---------------------------------------------------------- --------------------------------------------------------
Whether (a) the Sponsor (Seller), Depositor or Issuing Depositor as to (a)
Entity is an affiliate of the following parties, and Sponsor/Seller as to (a)
(b) to the extent known and material, any of the
following parties are affiliated with one another:
---------------------------------------------------------- --------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------- --------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Any other 1108(a)(3) servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
o Any 1110 Originator Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1112(b) Significant Obligor Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1114 Credit Enhancement Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1115 Derivate Counterparty Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any other 1101(d)(1) material party Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
Whether there are any "outside the ordinary course Depositor as to (a)
business arrangements" other than would be obtained in Sponsor/Seller as to (a)
an arm's length transaction between (a) the Sponsor
(Seller), Depositor or Issuing Entity on the one hand,
and (b) any of the following parties (or their
affiliates) on the other hand, that exist currently or
within the past two years and that are material to a
Certificateholder's understanding of the Certificates:
N-2-2
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-K DISCLOSURE
---------------------------------------------------------- --------------------------------------------------------
Item on Form 10-K Responsible Party
---------------------------------------------------------- --------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------- --------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Any other 1108(a)(3) servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
o Any 1110 Originator Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1112(b) Significant Obligor Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1114 Credit Enhancement Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1115 Derivate Counterparty Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any other 1101(d)(1) material party Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
Whether there are any specific relationships involving Depositor as to (a)
the transaction or the pool assets between (a) the Sponsor/Seller as to (a)
Sponsor (Seller), Depositor or Issuing Entity on the
one hand, and (b) any of the following parties (or
their affiliates) on the other hand, that exist
currently or within the past two years and that are
material:
---------------------------------------------------------- --------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------- --------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Any other 1108(a)(3) servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
o Any 1110 Originator Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1112(b) Significant Obligor Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1114 Credit Enhancement Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1115 Derivate Counterparty Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any other 1101(d)(1) material party Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
N-2-3
EXHIBIT N-3
Form 8-K Disclosure Information
-------------------------------------------------------------------------------------------------------------------
FORM 8-K DISCLOSURE INFORMATION
---------------------------------------------------------- --------------------------------------------------------
Item on Form 8-K Responsible Party
---------------------------------------------------------- --------------------------------------------------------
Item 1.01- Entry into a Material Definitive All parties (with respect to any agreement entered
Agreement into by such party)
Disclosure is required regarding entry into or amendment
of any definitive agreement that is material to the
securitization, even if depositor is not a party.
Examples: servicing agreement, custodial agreement.
Note: disclosure not required as to definitive agreements
that are fully disclosed in the prospectus
---------------------------------------------------------- --------------------------------------------------------
Item 1.02- Termination of a Material Definitive All parties (with respect to any agreement entered
Agreement into by such party)
Disclosure is required regarding termination of any
definitive agreement that is material to the
securitization (other than expiration in accordance with
its terms), even if depositor is not a party.
Examples: servicing agreement, custodial agreement.
---------------------------------------------------------- --------------------------------------------------------
Item 1.03- Bankruptcy or Receivership
Disclosure is required regarding the bankruptcy or
receivership, with respect to any of the following:
---------------------------------------------------------- --------------------------------------------------------
o Sponsor (Seller) Depositor/Sponsor (Seller)
---------------------------------------------------------- --------------------------------------------------------
o Depositor Depositor
---------------------------------------------------------- --------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------- --------------------------------------------------------
o Affiliated Servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
o Other Servicer servicing 20% or more of the pool Servicer
assets at the time of the report
---------------------------------------------------------- --------------------------------------------------------
o Other material servicers Servicer
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
o Significant Obligor Depositor
---------------------------------------------------------- --------------------------------------------------------
o Credit Enhancer (10% or more) Depositor
---------------------------------------------------------- --------------------------------------------------------
o Derivative Counterparty Depositor
---------------------------------------------------------- --------------------------------------------------------
o Custodian Custodian
---------------------------------------------------------- --------------------------------------------------------
N-3-1
-------------------------------------------------------------------------------------------------------------------
FORM 8-K DISCLOSURE INFORMATION
---------------------------------------------------------- --------------------------------------------------------
Item on Form 8-K Responsible Party
---------------------------------------------------------- --------------------------------------------------------
Item 2.04- Triggering Events that Master Servicer/Securities Administrator/
Accelerate or Increase a Direct Financial Depositor (with respect to any agreement to which
Obligation or an Obligation under an Off- neither the Master Servicer nor the Securities
Balance Sheet Arrangement Administrator is a party)
Includes an early amortization, performance trigger or
other event, including event of default, that would
materially alter the payment priority/distribution of cash
flows/amortization schedule.
Disclosure will be made of events other than waterfall
triggers which are disclosed in the monthly statements to
the certificateholders.
---------------------------------------------------------- --------------------------------------------------------
Item 3.03- Material Modification to Rights of Security Securities Administrator
Holders
Disclosure is required of any material modification to
documents defining the rights of Certificateholders,
including the Pooling and Servicing Agreement.
---------------------------------------------------------- --------------------------------------------------------
Item 5.03- Amendments of Articles of Incorporation or Securities Administrator and Depositor
Bylaws; Change of Fiscal Year
Disclosure is required of any amendment "to the governing
documents of the issuing entity".
---------------------------------------------------------- --------------------------------------------------------
Item 6.01- ABS Informational and Computational Material Depositor
---------------------------------------------------------- --------------------------------------------------------
Item 6.02- Change of Servicer or Trustee Master Servicer/Securities Administrator/
Servicer/Depositor/Trustee (as to itself)/Successor
Trustee
Requires disclosure of any removal, replacement,
substitution or addition of any master servicer,
affiliated servicer, other servicer servicing 10% or more
of pool assets at time of report, other material servicers
or trustee.
---------------------------------------------------------- --------------------------------------------------------
Reg AB disclosure about any new servicer or master Servicer/Master Servicer/Depositor
servicer is also required.
---------------------------------------------------------- --------------------------------------------------------
Reg AB disclosure about any new Trustee is also Successor Trustee
required.
---------------------------------------------------------- --------------------------------------------------------
Item 6.03- Change in Credit Enhancement or External Depositor/Securities Administrator/Trustee (to the
Support extent action is required by the Trustee in
connection with any amendment or modification
Covers termination of any enhancement in manner other than therewith)
by its terms, the addition of an enhancement, or a
material change in the enhancement provided. Applies to
external
---------------------------------------------------------- --------------------------------------------------------
N-3-2
-------------------------------------------------------------------------------------------------------------------
FORM 8-K DISCLOSURE INFORMATION
---------------------------------------------------------- --------------------------------------------------------
Item on Form 8-K Responsible Party
---------------------------------------------------------- --------------------------------------------------------
credit enhancements as well as derivatives.
---------------------------------------------------------- --------------------------------------------------------
Reg AB disclosure about any new enhancement provider is
Depositor also required.
---------------------------------------------------------- --------------------------------------------------------
Item 6.04- Failure to Make a Required Distribution Securities Administrator/Trustee (to the extent the
Trustee has knowledge thereof)/Depositor (to the
extent the Depositor has knowledge thereof)
---------------------------------------------------------- --------------------------------------------------------
Item 6.05- Securities Act Updating Disclosure Depositor
If any material pool characteristic differs by 5% or more
at the time of issuance of the securities from the
description in the final prospectus, provide updated Reg
AB disclosure about the actual asset pool.
---------------------------------------------------------- --------------------------------------------------------
If there are any new servicers or originators required Depositor
to be disclosed under Regulation AB as a result of the
foregoing, provide the information called for in Items
1108 and 1110 respectively.
---------------------------------------------------------- --------------------------------------------------------
Item 7.01- Reg FD Disclosure All parties
---------------------------------------------------------- --------------------------------------------------------
Item 8.01- Other Events Depositor
Any event, with respect to which information is
not otherwise called for in Form 8-K, that the
registrant deems of importance to
certificateholders.
---------------------------------------------------------- --------------------------------------------------------
Item 9.01- Financial Statements and Exhibits Responsible party for reporting/disclosing the
financial statement or exhibit
---------------------------------------------------------- --------------------------------------------------------
N-3-3
EXHIBIT O
[FORM OF]
SERVICING CRITERIA TO BE ADDRESSED IN
ASSESSMENT OF COMPLIANCE STATEMENT
The assessment of compliance to be delivered by each party listed below shall address, at a minimum, the
criteria identified as below as "Applicable Servicing Criteria":
------------------------------------------------------------------------------------------ ----------------------
Servicing Criteria Applicable Servicing
Criteria/
Responsible Party
------------------------------------------------------------------------------------------ ----------------------
Reference Criteria
--------------------- -------------------------------------------------------------------- ----------------------
General Servicing Considerations
--------------------- ----------------------
1122(d)(1)(i) Policies and procedures are instituted to monitor any performance S, MS, SA
or other triggers and events of default in accordance with the
transaction agreements.
--------------------- ----------------------
1122(d)(1)(ii) If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor the
third party's performance and compliance with such servicing ` S, MS, SA
activities.
--------------------- ----------------------
1122(d)(1)(iii) Any requirements in the transaction agreements tomaintain a N/A
back-up servicer for the mortgage loans are maintained.
--------------------- ----------------------
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect on
the party participating in the servicing function throughout the
reporting period in the amount of coverage required by and S, MS, SA
otherwise in accordance with the terms of the transaction
agreements.
--------------------- ----------------------
Cash Collection and Administration
--------------------- ----------------------
1122(d)(2)(i) Payments on mortgage loans are deposited into the
appropriate custodial bank accounts and related bank
clearing accounts no more than two business days S, MS, SA
following receipt, or such other number of days specified in
the transaction agreements.
--------------------- ----------------------
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor S, MS, SA
or to an investor are made only by authorized personnel.
--------------------- ----------------------
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash flows
or distributions, and any interest or other fees charged for such
advances, are made, reviewed and approved as specified in the S, MS
transaction agreements.
--------------------- ----------------------
O-1
------------------------------------------------------------------------------------------ ----------------------
Servicing Criteria Applicable Servicing
Criteria/
Responsible Party
------------------------------------------------------------------------------------------ ----------------------
Reference Criteria
--------------------- -------------------------------------------------------------------- ----------------------
1122(d)(2)(iv) The related accounts for the transaction, such as cash reserve S, MS, SA
accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with
respect to commingling of cash) as set forth in the transaction
agreements.
--------------------- ----------------------
1122(d)(2)(v) Each custodial account is maintained at a federally insured S, MS, SA
depository institution as set forth in the transaction agreements.
For purposes of this criterion, "federally insured depository
institution" with respect to a foreign financial institution means
a foreign financial institution that meets the requirements of
Rule 13k-1(b)(1) of the Securities Exchange Act.
--------------------- ----------------------
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized S, MS, SA
access.
--------------------- ----------------------
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including custodial
accounts and related bank clearing accounts. These reconciliations
are (A) mathematically accurate; (B) prepared within 30 calendar
days after the bank statement cutoff date, or such other number of
days specified in the transaction agreements; (C) reviewed and S, MS, SA
approved by someone other than the person who prepared the
reconciliation; and (D) contain explanations for reconciling
items. These reconciling items are resolved within 90 calendar
days of their original identification, or such other number of
days specified in the transaction agreements.
--------------------- ----------------------
Investor Remittances and Reporting
--------------------- ----------------------
1122(d)(3)(i) Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements. Specifically,
such reports (A) are prepared in accordance with timeframes and
other terms set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms specified in S, MS, SA
the transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with
investors' or the trustee's records as to the total unpaid
principal balance and number of mortgage loans serviced by the
Servicer.
--------------------- ----------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in accordance
with timeframes, distribution priority and other terms set forth S, MS, SA
in the transaction agreements.
--------------------- ----------------------
O-2
------------------------------------------------------------------------------------------ ----------------------
Servicing Criteria Applicable Servicing
Criteria/
Responsible Party
------------------------------------------------------------------------------------------ ----------------------
Reference Criteria
--------------------- -------------------------------------------------------------------- ----------------------
1122(d)(3)(iii) Disbursements made to an investor are posted within two business S, MS, SA
days to the Servicer's investor records, or such other number of
days specified in the transaction agreements.
--------------------- ----------------------
1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree with
cancelled checks, or other form of payment, or custodial bank S, MS, SA
statements.
--------------------- ----------------------
Pool Asset Administration
--------------------- ----------------------
1122(d)(4)(i) Collateral or security on mortgage loans is maintained as required S, C
by the transaction agreements or related mortgage loan documents.
--------------------- ----------------------
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as required by S, C
the transaction agreements.
--------------------- ----------------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are
made, reviewed and approved in accordance with any conditions or S
requirements in the transaction agreements.
--------------------- ----------------------
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made in
accordance with the related mortgage loan documents are posted to
the Servicer's obligor records maintained no more than two
business days after receipt, or such other number of days S
specified in the transaction agreements, and allocated to
principal, interest or other items (e.g., escrow) in accordance
with the related mortgage loan documents.
--------------------- ----------------------
1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree with the
Servicer's records with respect to an obligor's unpaid principal S
balance.
--------------------- ----------------------
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's
mortgage loans (e.g., loan modifications or re-agings) are made,
reviewed and approved by authorized personnel in accordance with S
the transaction agreements and related pool asset documents.
--------------------- ----------------------
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and S
concluded in accordance with the timeframes or other requirements
established by the transaction agreements.
--------------------- ----------------------
1122(d)(4)(viii) Records documenting collection efforts are maintained during the
period a mortgage loan is delinquent in accordance with the
transaction agreements. Such records are maintained on at least a S
monthly basis, or such other period specified in the transaction
agreements, and describe the entity's activities in monitoring
delinquent mortgage loans
--------------------- ----------------------
O-3
------------------------------------------------------------------------------------------ ----------------------
Servicing Criteria Applicable Servicing
Criteria/
Responsible Party
------------------------------------------------------------------------------------------ ----------------------
Reference Criteria
--------------------- -------------------------------------------------------------------- ----------------------
including, for example, phone calls, letters and payment
rescheduling plans in cases where delinquency is deemed temporary
(e.g., illness or unemployment).
--------------------- ----------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return for mortgage
loans with variable rates are computed based on the related S
mortgage loan documents.
--------------------- ----------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as escrow
accounts): (A) such funds are analyzed, in accordance with the
obligor's mortgage loan documents, on at least an annual basis, or
such other period specified in the transaction agreements; (B)
interest on such funds is paid, or credited, to obligors in S
accordance with applicable mortgage loan documents and state laws;
and (C) such funds are returned to the obligor within 30 calendar
days of full repayment of the related mortgage loans, or such
other number of days specified in the transaction agreements.
--------------------- ----------------------
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or insurance
payments) are made on or before the related penalty or expiration
dates, as indicated on the appropriate bills or notices for such
payments, provided that such support has been received by the S
servicer at least 30 calendar days prior to these dates, or such
other number of days specified in the transaction agreements.
--------------------- ----------------------
1122(d)(4)(xii) Any late payment penalties in connection with any payment to be
made on behalf of an obligor are paid from the servicer's funds
and not charged to the obligor, unless the late payment was due to S
the obligor's error or omission.
--------------------- ----------------------
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within two S
business days to the obligor's records maintained by the servicer,
or such other number of days specified in the transaction
agreements.
--------------------- ----------------------
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are S, MS
recognized and recorded in accordance with the transaction
agreements.
--------------------- ----------------------
1122(d)(4)(xv) Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is SA
maintained as set forth in the transaction agreements.
--------------------- -------------------------------------------------------------------- ----------------------
--------------------- -------------------------------------------------------------------- ----------------------
O-4
[NAME OF REPORTING PARTY]
Date: _________________________
By: ____________________________
Name:
Title:
Key:
S = each Servicer
MS = Master Servicer
SA = Securities Administrator
C = Custodian
O-5
EXHIBIT P
Additional Disclosure Notification
▇▇▇▇▇ Fargo Bank, N.A. as Securities Administrator
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
[insert name and address of Depositor]
Attn: Corporate Trust Services - MSM 2006-16AX-SEC REPORT PROCESSING
RE: **Additional Form [ ] Disclosure**Required
Ladies and Gentlemen:
In accordance with Section [12.02(b)][12.03(b)][12.04(b)] of the
Pooling and Servicing Agreement, dated as of October 1, 2006, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
CAPITAL I INC., a Delaware corporation, as depositor , LASALLE BANK NATIONAL
ASSOCIATION, as trustee and as the custodian and ▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, in its separate capacities as master servicer, securities
administrator and as auction administrator and acknowledged by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
MORTGAGE CAPITAL INC., as seller. The Undersigned, as [ ], hereby notifies you
that certain events have come to our attention that [will][may] need to be
disclosed on Form [ ].
Description of Additional Form [ ] Disclosure:
-------------------------------- -------------
List of Any Attachments hereto to be included in the Additional Form [ ]
Disclosure:
Any inquiries related to this notification should be directed to [ ],
phone number: [ ]; email address: [ ].
[NAME OF PARTY]
as [role]
By: ______________________
Name:
Title:
P-1
EXHIBIT Q
GLOSSARY of TERMS for STANDARD & POOR'S LEVELS(R) VERSION 5.7 FILE
FORMAT
APPENDIX E - Standard & Poor's Predatory Lending Categories
Standard & Poor's has categorized loans governed by anti-predatory lending
laws in the Jurisdictions listed below into three categories based upon a
combination of factors that include (a) the risk exposure associated with the
assignee liability and (b) the tests and thresholds set forth in those laws.
Note that certain loans classified by the relevant statute as Covered are
included in Standard & Poor's High Cost Loan Category because they included
thresholds and tests that are typical of what is generally considered High
Cost by the industry.
Standard & Poor's High Cost Loan Categorization
-----------------------------------------------
---------------------------------------------------------------------------------------------------------------------
State/Jurisdiction Name of Anti-Predatory Lending Law/Effective Category under Applicable
------------------ -------------------------------------------- -------------------------
Date Anti-Predatory Lending Law
---- --------------------------
---------------------------------- ------------------------------------------------- --------------------------------
Arkansas Arkansas Home Loan Protection Act, Ark. Code High Cost Home Loan
▇▇▇. ▇▇.▇▇. ▇▇-▇▇-▇▇▇ et seq.
Effective July 16, 2003
---------------------------------- ------------------------------------------------- --------------------------------
Cleveland Heights, OH Ordinance No. 72-2003 (PSH), Mun. Code ▇▇.▇▇. Covered Loan
757.01 et seq.
Effective June 2, 2003
---------------------------------- ------------------------------------------------- --------------------------------
Colorado Consumer Equity Protection, Colo. Stat. ▇▇▇. ▇▇.▇▇. Covered Loan
5-3.5-101 et seq.
Effective for covered loans offered or entered
into on or after January 1, 2003. Other
provisions of the Act took effect on June 7,
2002
---------------------------------- ------------------------------------------------- --------------------------------
Connecticut Connecticut Abusive Home Loan Lending Practices High Cost Home Loan
Act, Conn. Gen. Stat. ▇▇.▇▇. 36a-746 et seq.
Effective October 1, 2001
---------------------------------- ------------------------------------------------- --------------------------------
District of Columbia Home Loan Protection Act, D.C. Code ▇▇.▇▇. Covered Loan
26-1151.01 et seq.
Effective for loans closed on or after January
28, 2003
---------------------------------- ------------------------------------------------- --------------------------------
Florida Fair Lending Act, Fla. Stat. ▇▇▇. ▇▇.▇▇. 494.0078 High Cost Home Loan
et seq.
---------------------------------- ------------------------------------------------- --------------------------------
Q-1
Standard & Poor's High Cost Loan Categorization
-----------------------------------------------
---------------------------------------------------------------------------------------------------------------------
State/Jurisdiction Name of Anti-Predatory Lending Law/Effective Category under Applicable
------------------ -------------------------------------------- -------------------------
Date Anti-Predatory Lending Law
---- --------------------------
---------------------------------- ------------------------------------------------- --------------------------------
Effective October 2, 2002
---------------------------------- ------------------------------------------------- --------------------------------
Georgia (Oct. 1, 2002 - Mar. ▇, ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇. Code ▇▇▇. ▇▇.▇▇. High Cost Home Loan
2003) 7-6A-1 et seq.
Effective October 1, 2002 - March 6, 2003
---------------------------------- ------------------------------------------------- --------------------------------
Georgia as amended (Mar. 7, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇. Code ▇▇▇. ▇▇.▇▇. High Cost Home Loan
- current) 7-6A-1 et seq.
Effective for loans closed on or after March 7,
2003
---------------------------------- ------------------------------------------------- --------------------------------
HOEPA Section 32 Home Ownership and Equity Protection Act of High Cost Loan
1994, 15 U.S.C. ss. 1639, 12 C.F.R. ▇▇.▇▇.
226.32 and 226.34
Effective October 1, 1995, amendments October
1, 2002
---------------------------------- ------------------------------------------------- --------------------------------
Illinois High Risk Home Loan Act, Ill. Comp. Stat. tit. High Risk Home Loan
815, ▇▇.▇▇. 137/5 et seq.
Effective January 1, 2004 (prior to this date,
regulations under Residential Mortgage License
Act effective from May 14, 2001)
---------------------------------- ------------------------------------------------- --------------------------------
Kansas Consumer Credit Code, Kan. Stat. ▇▇▇. ▇▇.▇▇. High Loan to Value Consumer
16a-1-101 et seq. Loan (id. ss. 16a-3-207) and;
--------------------------------
Sections 16a-1-301 and 16a-3-207 became High APR Consumer Loan (id. ss.
effective April 14, 1999; Section 16a-3-308a 16a-3-308a)
became effective July 1, 1999
---------------------------------- ------------------------------------------------- --------------------------------
Kentucky 2003 KY H.B. ▇▇▇ - ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇. High Cost Home Loan
Rev. Stat. ▇▇.▇▇. 360.100 et seq.
Effective June 24, 2003
---------------------------------- ------------------------------------------------- --------------------------------
Maine Truth in Lending, Me. Rev. Stat. tit. High Rate High Fee Mortgage
9-A, ▇▇.▇▇. 8-101 et seq.
Effective September 29, 1995 and as amended
from time to time
---------------------------------- ------------------------------------------------- --------------------------------
Q-2
Standard & Poor's High Cost Loan Categorization
-----------------------------------------------
---------------------------------------------------------------------------------------------------------------------
State/Jurisdiction Name of Anti-Predatory Lending Law/Effective Category under Applicable
------------------ -------------------------------------------- -------------------------
Date Anti-Predatory Lending Law
---- --------------------------
---------------------------------- ------------------------------------------------- --------------------------------
Massachusetts Part 40 and Part 32, 209 C.M.R. ▇▇.▇▇. 32.00 et High Cost Home Loan
seq. and 209 C.M.R. ▇▇.▇▇. 40.01 et seq.
Effective March 22, 2001 and amended from time
to time
---------------------------------- ------------------------------------------------- --------------------------------
Nevada Assembly ▇▇▇▇ No. 284, Nev. Rev. Stat. ▇▇.▇▇. Home Loan
598D.010 et seq.
Effective October 1, 2003
---------------------------------- ------------------------------------------------- --------------------------------
New Jersey New Jersey Home Ownership Security Act of 2002, High Cost Home Loan
N.J. Rev. Stat. ▇▇.▇▇. 46:10B-22 et seq.
Effective for loans closed on or after November
27, 2003
---------------------------------- ------------------------------------------------- --------------------------------
New Mexico Home Loan Protection Act, N.M. Rev. Stat. ▇▇.▇▇. High Cost Home Loan
58-21A-1 et seq.
Effective as of January 1, 2004; Revised as of
February 26, 2004
---------------------------------- ------------------------------------------------- --------------------------------
New York N.Y. Banking Law Article 6-l High Cost Home Loan
Effective for applications made on or after
April 1, 2003
---------------------------------- ------------------------------------------------- --------------------------------
North Carolina Restrictions and Limitations on High Cost Home High Cost Home Loan
Loans, N.C. Gen. Stat. ▇▇.▇▇. 24-1.1E et seq.
Effective July 1, 2000; amended October 1,
2003 (adding open-end lines of credit)
---------------------------------- ------------------------------------------------- --------------------------------
Ohio H.B. 386 (codified in various sections of the Covered Loan
Ohio Code), Ohio Rev. Code ▇▇▇. ▇▇.▇▇. 1349.25 et
seq.
Effective May 24, 2002
---------------------------------- ------------------------------------------------- --------------------------------
Oklahoma Consumer Credit Code (codified in various Subsection 10 Mortgage
sections of Title 14A)
Effective July 1, 2000; amended effective
January 1, 2004
---------------------------------- ------------------------------------------------- --------------------------------
Q-3
Standard & Poor's High Cost Loan Categorization
-----------------------------------------------
---------------------------------------------------------------------------------------------------------------------
State/Jurisdiction Name of Anti-Predatory Lending Law/Effective Category under Applicable
------------------ -------------------------------------------- -------------------------
Date Anti-Predatory Lending Law
---- --------------------------
---------------------------------- ------------------------------------------------- --------------------------------
South Carolina South Carolina High Cost and Consumer Home High Cost Home Loan
Loans Act, S.C. Code ▇▇▇. ▇▇.▇▇. 37-23-10
et seq.
Effective for loans taken on or after January
1, 2004
---------------------------------- ------------------------------------------------- --------------------------------
West Virginia West Virginia Residential Mortgage Lender, West Virginia Mortgage Loan
Broker and Servicer Act, W. Va. Code ▇▇▇. ▇▇.▇▇. Act Loan
31-17-1 et seq.
Effective June 5, 2002
---------------------------------- ------------------------------------------------- --------------------------------
Standard & Poor's Covered Loan Categorization
---------------------------------------------
---------------------------------- ------------------------------------------------- --------------------------------
State/Jurisdiction Name of Anti-Predatory Lending Law/Effective Category under Applicable
------------------ -------------------------------------------- -------------------------
Date Anti-Predatory Lending Law
---- --------------------------
---------------------------------- ------------------------------------------------- --------------------------------
Georgia (Oct. 1, 2002 - Mar. ▇, ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇. Code ▇▇▇. ▇▇.▇▇. Covered Loan
2003) 7-6A-1 et seq.
Effective October 1, 2002 - March 6, 2003
---------------------------------- ------------------------------------------------- --------------------------------
New Jersey New Jersey Home Ownership Security Act of 2002, Covered Home Loan
N.J. Rev. Stat. ▇▇.▇▇. 46:10B-22 et seq.
Effective November 27, 2003 - July 5, 2004
---------------------------------- ------------------------------------------------- --------------------------------
Standard & Poor's Home Loan Categorization
------------------------------------------
---------------------------------------------------------------------------------------------------------------------
State/Jurisdiction Name of Anti-Predatory Lending Law/Effective Category under Applicable
------------------ -------------------------------------------- -------------------------
Date Anti-Predatory Lending Law
---- --------------------------
---------------------------------- ------------------------------------------------- --------------------------------
Georgia (Oct. 1, 2002 - Mar. ▇, ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇. Code ▇▇▇. ▇▇.▇▇. Home Loan
2003) 7-6A-1 et seq.
Effective October 1, 2002 - March 6, 2003
---------------------------------- ------------------------------------------------- --------------------------------
New Jersey New Jersey Home Ownership Security Act of 2002, Home Loan
N.J. Rev. Stat. ▇▇.▇▇. 46:10B-22 et seq.
Effective for loans closed on or after November
27, 2003
---------------------------------- ------------------------------------------------- --------------------------------
Q-4
Standard & Poor's Home Loan Categorization
------------------------------------------
---------------------------------------------------------------------------------------------------------------------
State/Jurisdiction Name of Anti-Predatory Lending Law/Effective Category under Applicable
------------------ -------------------------------------------- -------------------------
Date Anti-Predatory Lending Law
---- --------------------------
---------------------------------- ------------------------------------------------- --------------------------------
New Mexico Home Loan Protection Act, N.M. Rev. Stat. ▇▇.▇▇. Home Loan
58-21A-1 et seq.
Effective as of January 1, 2004; Revised as of
February 26, 2004
---------------------------------- ------------------------------------------------- --------------------------------
North Carolina Restrictions and Limitations on High Cost Home Consumer Home Loan
Loans, N.C. Gen. Stat. ▇▇.▇▇. 24-1.1E et seq.
Effective July 1, 2000; amended October 1,
2003 (adding open-end lines of credit)
---------------------------------- ------------------------------------------------- --------------------------------
South Carolina South Carolina High Cost and Consumer Home Consumer Home Loan
Loans Act, S.C. Code ▇▇▇. ▇▇.▇▇. 37-23-10 et seq.
Effective for loans taken on or after January
1, 2004
---------------------------------- ------------------------------------------------- --------------------------------
Q-5
EXHIBIT R
FORM OF LOST NOTE AFFIDAVIT - LA SALLE AS CUSTODIAN
I, as _________________________ (title) of ________ (the "Custodian"),
am authorized to make this Lost Note Affidavit on behalf of __________. In
connection with the administration of the Mortgage Loans held by _______________
as Custodian on behalf of ____________ ("____") or the Trust of such mortgage
loans, as the case may be (the "Investor"), I (hereinafter called "Deponent"),
being duly sworn, depose and say that:
Custodian's address is:
[CUSTODIAN'S Address]
Custodian previously delivered to the Investor a signed Trust Receipt
with respect to the Mortgage Note referred to below;
Such Mortgage Note was endorsed or sold to the Investor by
_________________________ pursuant to the terms and provisions of a
____________________ Agreement dated and effective as of _________ ______, ____;
Such Mortgage Note is not outstanding pursuant to a Request for Release
of Documents;
Such Mortgage Note (hereinafter called the "Original") has been lost;
Deponent has made or has caused to be made diligent search for Original
and has been unable to find or recover same;
The Custodian was the Custodian of the Original at the time of loss;
and
Deponent agrees that, if the Original should ever come into Custodian's
possession, custody or power, Custodian will immediately and without
consideration surrender Original to the Investor.
Attached hereto is a true and correct copy of the (i) Mortgage Note,
endorsed in blank by the Mortgagee, and (ii) [Mortgage][Deed of Trust] with
evidence of recording thereon which secures the Mortgage Note.
Deponent hereby agrees that the Custodian shall indemnify and hold
harmless the Purchaser, the Trust, the Servicer of the related Mortgage Loan and
their respective employees, officers, directors and agents against any loss,
liability or damage, including reasonable attorney's fees, resulting from the
unavailability of the Mortgage Note, including but not limited to any loss,
liability or damage arising from (i) any false statement contained in this Lost
Note Affidavit, (ii) any claim of any party that it has already purchased a
mortgage loan evidenced by the lost Mortgage Note or any interest in such
mortgage loan, (iii) any claim of any borrower with respect to the existence of
terms of a Mortgage Loan evidenced by the lost Mortgage Note, (iv) the issuance
of new instrument in lieu thereof and (v) any claim whether or not based upon or
arising from honoring or refusing to honor the Original when presented by anyone
(items (i)
R-1
through (iv) above are hereinafter referred to as the "Losses") and
(b) if required by any Rating Agency in connection with placing such lost
Mortgage Note into a securitization transaction, shall obtain a surety bond from
an insurer acceptable to the applicable Rating Agency in an amount acceptable to
such Rating Agency to cover any Losses with respect to such lost Mortgage Note.
Capitalized terms used herein but not defined herein have the meanings
given them in the Custodial Agreement, dated as of July 1, 2006, between ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Mortgage Capital Inc. and the Custodian.
This Lost Note Affidavit is intended to be relied on by the Investor,
its successors, and assigns and _______________________ represents and warrants
that it has the authority to perform its obligations under this Lost Note
Affidavit.
IN WITNESS WHEREOF, the Custodian has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[title of officer] this _____ day of __________ 20__.
---------------------------------
[LA SALLE BANK NATIONAL ASSOCIATION]
By:
-------------------------------
Name:
Title:
On this _________ day of _______________________, ____, before me
appeared ____________________________________________, to me personally known,
who being duly sworn did say that she/he is the ______________________________
of ______________________, and that said Lost Note Affidavit was signed and
sealed on behalf of such corporation and said _____________________________
acknowledged this instrument to be the free act and deed of said corporation.
Subscribed and sworn before me this _____ day of __________ 20__.
NOTARY PUBLIC
----------------------------
COUNTY OF ________________
STATE OF __________________
My commission expires the _____ day of __________ 20__.
Signature
R-2
Typed Name
R-3
SCHEDULE A
MORTGAGE LOAN SCHEDULE
[On File with the Trustee and the Securities Administrator]
SCH. A-1
SCHEDULE B
PRINCIPAL BALANCES SCHEDULE
[Attached to Prospectus Supplement, if applicable]
SCH. B-1